International Business and Globalisation - Bulb Energy

This report explores the opportunities for Bulb Energy, a UK-based energy supplier, to expand its business internationally through a PESTLE analysis of the external environment and a review of Germany and Denmark's economic and demographic profiles. The report also discusses the importance of global trading and the energy supply industry.

Business and
Globalisation

Table of Contents
1. INTRODUCTION ................................................................................................... 3
MAIN BODY.............................................................................................................. 3
2. BULB Energy Overview........................................................................................ 3
3. Energy Supply Industry....................................................................................... 3
4. The Importance of Global Trading.......................................................................5
4.1 International Drivers.......................................................................................... 5
5. Expansion opportunities in Europe......................................................................6
5.1 Germany Overview............................................................................................ 6
5.2 Danish Overview............................................................................................... 7
6. External Environment PESTEL.............................................................................9
6.1 PESTLE analysis for Europe............................................................................... 9
6.2 Entry into Denmark......................................................................................... 10
Table Three: PESTEL Score by country out of 10............................................10
7. Competitive Forces............................................................................................ 11
8. Porter's Generic strategies ............................................................................... 11
9. Entry Mode and Market Selection......................................................................12
10 Conclusion........................................................................................................ 12
Appendixes............................................................................................................ 13
References............................................................................................................. 15

1. INTRODUCTION
Globalisation of a business is concerned with a movement towards conducting the operations in
various nations in order to reach the new segments of the markets as well as reducing the production cost.
This concept facilitates in enhancing the flow of products as well as services, human resources, capital
along with the ideas across the boundaries of the other countries. The process of globalisation also
enables the businesses to get specialize and to extend the intensity of research and development,
innovation along with the capital in their output (Bakhru, 2019). In this project, Bulb Energy is an
organization which is taken into consideration for demonstrating different aspects of this report. This
project includes the ways to identify the opportunities of the business expansion at international levels. It
mainly concentrates on 2019 information before the pandemic situation in order to gauge a proper
measurement of the market-place. Within this report two countries have been identified and these are
Denmark and Germany. There will also be a review on their financial health, demographic profile as well
as compatibility to both NK and UK space.
MAIN BODY
2. BULB Energy Overview
Bulb Energy is a UK-based organisation registered in England and deals in supplying the energy.
The growth of the respective company is quite impressive from the time of its launch in the year 2013 and
claimed to supply gas as well as electricity from the off-set or renewable sources. In the year of its
foundation, the organisation attracted venture capital and ran at a fiscal loss when it is acquiring the
growth at a fast rate within its customers (Bakour, Abadli and Yassine, 2020). The company has also
shared around 5 to 6 % of the energy markets of United Kingdom in the year 2021 and was considered as
the seventh largest organisation within the nation. Within the year 2021, the respective organisation has
also sought a bailout because of its financial issues which are caused by the increasing prices of the
natural gas.
3. Energy Supply Industry
Because of the regulatory pressures, the energy supply industry is expected to show the
opportunities on a large scale in the area of renewable energy. Within the year 2020, the predicted
revenue of the industry was £123.6 billion (Energy Supply in the UK, 2022). The renewable energy
accounted for the largest share in the main energy production within European Union in the year
2019 was 36.5% which was followed by the nuclear heat at 32.0%, solid fossil fuels at 16.2% ,
natural gas at 8.5%, oil as well as petroleum products at 3.7% and the waste which is non-renewable
at 2.2% (Energy Statistics, 2022). The energy economy in the European Union in the year 2019 was
based on the annual data and provides the trtends for the commodities which are consuming energy.
The gross available energy in the Europe in 2019 has slightly decreased in comparison to the year
2018. The use of oil was again declining after a slight rise in the period between the year 2014 and
the year 2017. contrary to it, a slight fluctuation has been observed in the natural gas, with the levels

back on the increase in the year 2019. The contribution of the sources of renewable energy depicts a
stable growth in the year 2018 and achieving further in the year 2019 (Energy Statistics Overview,
2022).

4. The Importance of Global Trading
The increase in the globalisation in the past two decades has been impacted by the developing
countries notably, China as the development of such countries has also influenced the consumption, prices
of the consumer from those imports which are cheaper. Along wit it, this has also enhanced the surplus
beyond the demand in market (Collier, 2018). The main driver of gloablisation that influences a lot of
social economic groups as well as the human capital of a country is considered as the technological
revolution along with the development at a fast rate in the artificial intelligence and robotics.
4.1 International Drivers
The principle drivers within the internal trade are very complex and Bulb Energy is required to
analyse those drivers with the help of frameworks like George Yip's global strategies.
 Cost drivers: Through increase in sales beyond the opening retail outlets as well as national sales
in new foreign markets, Bulb Energy will become a international business with a favorable scale
of economy (Das, 2021).
 Market drivers: The impact of BREXIT has also created a new global consumer in the European
Union because UK is not the part of Union. Such independence helps in increasing innovation
within business through agreements of trade with international countries.
 Government drivers: The host nation should be compatible with Bulb Energy as well as UK
because regulations and laws of country can be barriers to do trade.

 Competitive drivers: Respective industry gas risen at an increased rate and rivalries of Bulb
Energy become globalised and putting emphasis on requirements to adopt strategies of global
level (Francioni, Musso and Masili, 2021).
5. Expansion opportunities in Europe
EU has 28 nations and is considered as the largest economy of world that is doing competition
with China and US. Although rise in EU has decreased the European Commission in maintaining open
culture of EU which is a benefit for the organisation in trading at international level and includes other
advantages like 440 million customer-base, largest market in the world, secured as well as safe tool for
the legal investments, transparent regulations and rules and many more (Groenland, 2018). Bulb Energy
can evolve international trade through EU and it is reviewed that Germany the nation with less
productivity and Denmark from higher productivity as possible nations to expand.
5.1 Germany Overview
Germany is considered as the fourth largest economy of the world which gets renowned in order
to export the manufactured goods at superior quality and is also having a trained and talented manpower.
It is the most powerful member of the European Union with the better GDP and largest consumer market

driven through a beefy purchasing power (Linnhoff, Smith and Smith, 2020). The country is operating a
mixed economy which is highly maintained by the great levels of business freedoms with more than 45
preferential agreements of trade. Within the force the country has scored 72.5% in the year 2021 as
Economic Freedom Index as well as the 9th in the Corruption Perception Index. In the year 2019, the
growth rate of the economy was 0.56% which has got declined from 0.71% in the year 2018 and in the
year 2020, the unemployment rate has increased to 4.2% in comparison to 1.4% which is stating a slight
force on the economy (Michie, 2019). The score of manpower in the EFI had gone below the average and
may lead to the strict employment laws in the Germany that helps in protecting as well as safeguarding
the rights of human resources and can need businesses to plan the budget accordingly.
5.2 Danish Overview
Denmark is one of the most attractive country of the world in relation to the modern and open
economy. The economy of the Denmark is open economy which welcomes all types of business
organisation to set up their business organisation in the market of the country. One of the greatest
advantage of the country is that the income structure of the country are equally distributed to all the
stakeholders of the country by the efforts of the government. This feature of the country helps the nation
to becomes the highest GDP per capita country in the European Union. The country of Denmark has
include most of the honest person so it becomes those country which are least corruption and all the
activities can be done without bribery (Nguyen and Tran, 2021). The biggest contributor of the economy
is the service sector of the country because it holds more than 60 percent of total economy. Most of the
populatnion iof the country are engaged in banking and financial services so the country are highly based
on their service sector.
The growth rate of rthe country in the year 2019 was 2.85 percent which is 0.67 percent more than the
GDP of 2018 which reflects positive growth in the economy. The impact of pandemic are negative on the
economy of the country as it shrink to 2.4 percent after the pandemic which enables different stakeholders
to focus on the development of their economy by their business activities. All the agencies of the county
expecting that their economy will recover and reflects the growth of 2.8 percent in the year 2021. one of
the negative impact of pandemic are based on the unemployment rate in the industry and it was 5.6
percent in the year 2020 which is not suitable for the growth of their economy (Ogbonna and Adeleke,
2021). The government of the company has focused on the issue and develops many measure to stable the
issue and it also helps the organisation to develop effective development in the country.
The population of the country are increased day by day and the reason analyzed behind this activity is that
in the increase of life expectancy by 4 years. The growth rate estimated in the year 2020 was 0.48 percent
along with the high purchasing power of the country. It is very important for the management of the
country that it operates their operation with honesty.
Table Two: Danish Economic Summary (Heritage.org. 2021)

DANISH OVERVIEW 2019
POPULATION 5.8 million
GDP 2.4%
ANNUAL GROWTH 2.5%
UNEMPLOYMENT 4.9%
INFLATION 0.7%
GROSS PUBLIC DEBT 30.3%

6. External Environment PESTEL
According to Pankaj Ghemawat (2001) in addition to the attractiveness of a nation compatibility is
equality important to gain the best competitive advantage (Osinubi and Olomola, 2020).
Compatibility is based on removing barriers through the CAGE framework an acronym for:
 Cultural – Religion, ethnicity and social aspect are contributes towardfs desires of the
customers.
 Administrative – Institutional weakness an political distance are the inclusion of legal
framework.
 Geographical – Shrinking and expanding physical distances.
 Economic - Wealth of nation and the best market for international trade.
It is analyses from the comparison of both the country Germany and Denmark that effective
and compatible market for the business of Bulb Energy which operates their business in united Kingdom
(Roccu and Talani, 2019). It is very important to conduct external analyses so that the opportunities and
threats present in the market can be evaluated and determined. The brief discussion related to the same are
given below:
6.1 PESTLE analysis for Europe
Political:
The stability and growth of the country are impacted by the level of debts taken by the government
and if the borrowings of the country are not related to fiscal spending then it becomes unsustainable
for the country. It is very important for the government of the country that they manage their
national debts because the mismanagement of this can cause many serious problem in the country.
Further borrowing, stagnation and extensive restructuring inn the country
Economic:
if the level of inflation in country are low then it impacts both business spending and consumer
spending (Tanner and et.al, 2019). It positively impacts the purchasing power of the different
stakeholders so that the number of resources can be utilized in the company.
The inflation rate in the country of Denmark are very low which becomes the in indicator of growing
economy of the world and the people of the country has high standard of living due to the low living
expenses in the country. Germany inflation rate met the central bank target rate which is below 2% .
the consumer behavior the country are based on value for the money which is completely different
with the Denmark under which the people prefer luxury good.
Social
The life expectancy of the country are increases due to effective lifestyle and different development
plan of the government. All the people of the country has provide healthy meal and lifestyle so that

different types of diseases can be minimized. It is very beneficial for the management of Bulb Energy
as the people in the country has spend more and more amount so that their lifestyle can be maximized.
Technological
It is one of the most important factor which is related to the technological advancement on the
business organisation (Upadhyay and et.al, 2019). The trend of technological advancement are very
positive on the businesses in Europe so it is very beneficial for the management of Bulb Energy.
Environmental –
This factor of the pestle analyses are related to the impact of environmental factors on the business
of the organisation. The people of Europe are based on the environmental factors which becomes
positive for Bulb Energy if they provide green gas in the market.
Labor Laws – There are number of laws and regulations are developed by the government of the
area where the business organization has operated their business so that most of the law and order can
be maintained in the country.
Thus, the economy of Denmark is relatively smaller than the Germany and the UK according to
their demographic environment and profile that makes ideal for the Bulb Energy in effective manner.
6.2 Entry into Denmark
Image Five: Overall Score Comparing Denmark and Germany Economic Freedom
(heritage.org/index, 2021)
Table Three: PESTEL Score by country out of 10.
Score Germany Denmark Recommended
Political 5 7 Denmark
Economic 6 8 Denmark
Social 5 5 Neutral
Technical 5 5 Neutral
Legal 5 8 Denmark

Total 26 33
According to the pestle analyses Denmark is one of the most suitable country for the
expansion of Bulb Energy because of positive economic variable and also on the basis of
effective and efficient government policies (Walsh, 2018). The culture and the high level of
income of their population makes the place more sustainable for company business as the
purchasing power of the people. The demand of the luxury items in the country are very high
which provide many benefits to the business of the organization.
7. Competitive Forces
It is very important for the management of the Bulb Energy that they analyses the level of
competition present in the market of the Denmark effectively so that the chances of failure can
be minimize. The porters five forces are used here to demonstrate the same. The key forces
include:
The Threat of: New entrants is high because there are large number of barriers are present in the market
of the country so that new entrant cannot set up their business easily in the market. The management of
the Bulb Energy has to face extensive competition in the market as they operates their business in the
power sector of the country.
Substitutes to the market is low Because the number of gas providing companies are limited in the
market so the chances of substation in the market are very less. It is beneficial for the organization that
they does not face the substitute.
Buyer power is low Because the number of gas service provider in the market are limited so that the
bargaining power of the customers are low and sellers dominate the price of the product.
Supplier power is low As the Bulb Energy also a producer of the gas so the question does not arises as
connected to the presence of suppliers in the market.
Competitive rivalry is low as there are only few companies are present in the market which provides gas
services so that the competitive rivalry are low in the market.
8. Porter's Generic strategies
In 1985, Michael Porter defined the three generic strategies according to the supply of customer
demands that are cost leadership, differentiation and focus. The cost leadership makes the company to
become the low cost producer in their industry. The differentiation strategy makes the company to
become unique and different in its industry along with the some factors that are most valuable for the
buyers. The focus strategy makes company to use both the strategy in order to seek certain target
segments. The management of Bulb Energy operates a focused differentiation strategy that shows the
value of the products as well as sell them in premium prices. In accordance with Ansoff matrix grid, it
allows Bulb energy to create the market offerings with their present products in new geophysical

locations which contain low risk. This approach helps them to expand successfully in similar countries in
effective manner.
9. Entry Mode and Market Selection
Market entry strategies allows company to offer their goods and service in international and
foreign market in effective manner. There are many methods that help companies to use to sell their
goods globally.PESTLE analysis helps Bulb Energy to analyse possible new territory as Denmark with
the help of Differentiation strategies as well as Market Development. This make management of Bulb
Energy to adopt an effective entry mode that help in minimising the vulnerability to assets as well as
provides an opportunity to establish the brand and increase their competitive advantage in effective
manner. The different types of entry modes that help Bulb Energy to enter in new market are Exporting,
Joint Ventures, Franchising, Licensing, Alliances, Greenfield, Foreign Direct Investment and Turnkey.
From the above discussion, it is analysed that franchising is the best method for the Bulb
energy to expand their business in Denmark effectively because it contains low cost and less risk
as well as provides partnership with a committed interested party. It requires high level of due
determination in order to find an proper partner as well as management to comprehend difficult
contractual problems. It is most successful for the franchisee and franchisor in effective manner.
In 2020, entrepreneurial kind of business generate income from franchising is £15 billion to the
UK economy and it achieve 97% success rate according to the Franchise Supermarket 2021.
10 Conclusion
It is concluded from this report that the Brexit has made negative impact on the companies of the
United Kingdom to operate their business in European countries. This report concludes brief
discussion related to the expansion process of Bulb Energy on Denmark. This report also concludes
brief discussion related to the advantages of establishing a business in market of Denmark

Appendixes
Appendix One: Financial Freedom Index:
WWW.HERITAGE.ORG/INDEX/PDF/2021/COUNTRIES/2021_INDEXOFECONOMICFREEDOM-
DENMARK.PDF> [Accessed 20 May 2021]. https://www.heritage.org/index/
Appendix Two Labor Freedom Index: Available at: Heritage.org/index/2021 [online] :
TPS://WWW.HERITAGE.ORG/INDEX/PDF/2021/COUNTRIES/2021_INDEXOFECONOMICFREEDO M-
DENMARK.PDF> [Accessed 15 May 2021].

Appendix Three: Fiscal Health Index: Available at Heritage.org/index/2021 [online]
TPS://WWW.HERITAGE.ORG/INDEX/PDF/2021/COUNTRIES/2021_INDEXOFECONOMICFREEDO M-
DENMARK.PDF> [Accessed 15 May 2021].
Appendix Four: Gross household adjusted disposable income per capita, 2018, available online at Eurostat, 2019
https://ec.europa.eu/eurostat/statistics-explained/index.

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