398). As crude oil is a commodity of large significance, an increase in oil prices might bring many economical effects – an increase of transportation costs, increase in prices, or decrease in demand.
Legislation is another factor that has enormous effect on marketers' decisions. This includes trading policies, tax laws, employment laws, competition laws, environmental laws and position of trade unions in a country. The growing importance of the European Union means 'there are now few areas of economic or commercial policy-making where the EU does not enjoy at least a measure of involvement and several areas where its supranational institutions have established exclusive competence.' (Mercado et al., 2001, p. 76).
Article 81 bans cartels, price-fixing and other forms of collusion, where such has the effect of restricting competition within the common market. (Mercado et al., 2001, p. 166). ASDA had to sell 47 of its 194 Netto outlets, which were bought from Danish company Dansk, to rivals to ensure that there is sufficient competition. (Economist, accessed February 2011). Furthermore, The Office of Fair Trading found evidence of collusion by 10 firms during 2002 and 2003. ASDA had admitted price-fixing of milk and cheese. Having admitted liability in principle; it faced smaller fines as a result. (BBC, accessed February 2011).
Economical.
As the world is globalised this means that 'geographical distance is of declining relevance, and that territorial boundaries are becoming less significant' (Heywood, 1997, p. 140), businesses are affected by economic trends, business cycles and fiscal decisions of governments which take place in different countries. As ASDA operates in the British market, its operations are subject to 'an increase in the standard rate of VAT from 17.5 per cent to 20 per cent effective from 4 January 2011.' (HMR & Customs, accessed February 2011).
The attitude of local authorities and citizens towards foreign companies represents another factor to consider when moving to a new market.
