QUESTION 1 [50 MARKS] Read the case study below and answer to the following questions. Zafar Ltd {ZL} is one of the largest mobile network operators in the world. Its growth /s mainly through acquisition of companies with extensive knowledge in the field. ZL investg continually substantial funds in research and development. Recently, ZL has beon focusing on a new business opportunity, which is acquiring a new company. ZL is very competitive into the market and produces networks that are quicker, more reliable, and cheaper to install and maintain. It also has other subsidiaries that produces latest branded mobile phones. The latter are high-technology phones which offers a very Compared to its other acquisitions, it is the company is in a country named WF. Complition of a company with hish regulations. While gathering information on WF,ZL was informed that a new government has recently come into power. The newly elected government increased the prices of goods and commodities by 5% and increased the taxes. There were also welfare benefits that were cut off and as a results people became very angry and started creating riots The increase in prices also resulted in a lot of families having difficulties to buy food and other basic needs, resulting in lots of shoplifting, and violence in this city. Upon further research, Z L found that WF has a lot of social gatherings with the population of WF. Those gatherings were with very powerful persons and this puts lots of pressure on the government. But the problem is that legal matters are very time-consuming and expensive in WF. Moreover, the government has also passed the minimum wages laws which makes it more labour cost more expensive. (compared to other acquired companies) to hire employees and, difficult to terminate the employment contract of an employees (due to severe employment protection laws). The demand for mobile devices and networks has drastically increased in the last 7 years in WF even though there has been a decline in the economy. As a results, new latest up. to-date technology has become a very important criteria while buying new mobile phones especially among youngsters. They are looking for new sophisticated mobiles along with appropriate upgrades and good networks bandwidth and speed for a better communication. Also, old mobile phones are handed over for recycling upon purchase of new ones to promote an eco-friendlier environment. The government in WF grant licences to operators for a period of 8 years. However, the licences are granted based on several criteria. The financials performance of bidding company needs to show a sound liquidity position and an acceptable gearing ratio. Recycling of old mobile phones is compulsory and environmental targets should be set to show how lower carbon emissions are being optimised. Lastly, the government need to ensure that the new bidder would not be dominating the mobile industry of WF. The government of WF can impose fines if they feel that the licence operators are not abiding to the rules set while granting the licence. (a) Explain how PESTEL can be used to analyse the macro-environmental factors that will be affecting Zafar Ltd if it acquires the company in WF. (25 Marks) (b) Porter's five forces model is used to analyse competition in the industry. By making use of your own examples, explain through Porter's Five Forces model, the problems that Zafar Ltd may have by acquiring the company in WF. (25 Marks)