CURRENT SITUATION
2.1 PEST Analysis
Political-Legal Factors
Control and Regulation
• The Health Sciences Authority was established to ensure the quality, safety and efficacy of drugs, medical devices, cosmetics and other health-related products in Singapore.
• Centre for Drug Administration is to further simplify and streamline the evaluation and registration processes of pharmaceuticals in Singapore (Gross and Weintraub 2005).
• From manufacturing to packaging of drugs and healthcare products, Watsons has to follow the rules and regulations implemented.
Importing Food Products
• The Agri-Food and Veterinary Authority of Singapore (AVA) and Food Control Department are the major governing bodies of Food trade. The exports to Singapore are primarily controlled through regulations imposed on the importers”.
• For importing or manufacturing of food products, Watsons has to adhere to the regulations.
Economic Factors
Higher Inflation Rates
• Inflation in Singapore is likely to remain high before easing in mid-2012 as the economy slows. The inflation will average above 5% for the rest of 2011 and may fall to around 4% in the first half of 2012. It may ease further to 2% in the second half of 2012 (Xinhua 2011).
• Inflation rates will affect the prices of goods sold. Hence, it will affect Watsons’ sales if customers are price sensitive.

GDP Growth
• Singapore’s GDP growth is expected to be 5.5% in 2012. Economists have upgraded their outlook for Singapore’s economic growth to 6.2% for the full-year 2011 (Singapore builder 2011).
• The economy is expected to remain on a sustainable growth path in 2012-16, when real GDP is forecast to grow by an average annual rate of 5% (The Economist Intelligence Unit Limited 2011).
Retail Rental Prices
• Singapore’s retail rental remains unchanged for prime and suburban space in the first quarter of 2011