Analysis of AsusTek's Expansion in Finland

This paper is a detailed analysis of the company AsusTek Company Inc. This paper involves both Pestel analysis and Porters 5 forces model that will give a detailed overview of the country Finland’s market and environment, whether it is suitable for any foreign investment. This paper will access the factors AsusTek needs to take to establish a strong market in Finland.

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BUSINESS ORGANISATIONS AND ENVIRONMENTS GLOBALLY
Name of the Student
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Executive Summary
This paper is a detailed analysis of the company AsusTek Company Inc. This paper
involves both Pestel analysis and Porters 5 forces model that will give a detailed overview of
the country Finland’s market and environment, whether it is suitable for any foreign
investment. This paper will access the factors AsusTek needs to take to establish a strong
market in Finland.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Overview of the company......................................................................................................3
Business Environment of Finland..........................................................................................4
Pestel Analysis.......................................................................................................................7
Porters five forces model.....................................................................................................10
Reasons for AsusTek to expand in Finland..........................................................................11
Recommendation..................................................................................................................11
Conclusion................................................................................................................................12

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Introduction
Strategic planning of a company is not an easy task. It requires a lot of work. It
involves work like industry research, a proper understanding of the market, competitors,
consumers, the team, core competencies, changing parameter, the environment where the
company is going to operate, missions and many more. Strategic planning is not a rapid
process but takes time due to the plethora of tasks that ensure the development and growth of
the company (Wheelen et al. 2017). Effective management of employees may produce
enhanced and sustainable economic performance. Systematically structured people if
managed efficiently tend to pursue goals on a continuous basis. Every organization consists
of a management structure that ensures the relationships between positions and functions,
distributes roles and responsibility and the command to ensure the even distribution of the
task.
Globalization is a phenomenon that helps countries to interact with each other in
developing global economy. The process helps different cultures, societies and economies to
combine by the latest and current communication system. Increasing internationalization of
the distribution, production and the marketing of services and goods is also known as
globalization (Steger 2017). This paper talks about the company AsusTek Computer Inc. and
the expansion of its current operations in Finland that is the chosen country for this paper.
Discussion
Overview of the company
AsusTek Inc. Computer is a multinational phone hardware, computer and an
electronics company based in Taiwan. Currently the headquarters of the company is in the
Beitou district, Taipei, Taiwan.Founded in the year 1989 the founders of the company are
Ted Hsu, T.H Tung, Wayne Hsieh, Wayne Tsiah and M.T Liao. The products available under

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the company include laptops, desktops, mobile phones, netbooks, monitors, networking
equipment, projectors, motherboard, Wi-Fi routers, wearable’s, peripherals, workstations,
servers and multimedia products. AsusTek Computers Inc. boasts a share of 9.3% and leads
in PC shipments in the world. AsusTek primarily distributes their products in Asia, Canada,
the United States, Africa and Europe (Asus.com, 2019).
Business Environment of Finland
Finland is excelling in competing with the global market. The infrastructure has
developed and upgraded and the productivity rate is growing rapidly.Finland compared to
other Nordic countries ranks in terms of welfare that is measured by the social, economic and
the environmental indicator factors. The following points help in assessing the current
business environment in Finland.
1. Prominent reconstruction of industry
The labour productivity has been strong and growing for more than twenty years. This
has been a blessing for the manufacturing sector. However, by international standards
the growth of productivity has grown in the service sector as well. The high
productivity growth can be seen in Finland with the production and extensive usage of
information and communication technologies.The improvement in the expertise and
skills, technological development has replaced the productivity growth that is based
on intensity of capital. This shows the increasing knowledge and understanding
intensity of the industry structure. The industry structure change has been one of the
fastest and profound in the world. The manufacture sector has become strong and
driven by the production of communication equipment. The structural change of the
service sector has been slower when compared to the manufacture sector however in
comparison to the international standards the GDP rate of knowledge concentrated
services have been growing swiftly.

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2. Favorable environment for innovation
According to many indicators, the innovation environment of Finland is outstanding.
Highly educated people in the workforce are high and research of resources are of top
level. The relation and the cooperation between research institutes and business is
good that paves way for innovative activities that are internationally oriented.
Financial market of Finland functions efficiently and the venture capital is available
that is very good by the standards of the international market (Alasoini 2015). The
innovation environment is favorable that promotes the reconstruction of the economy
and the rapid growth of technology driven production. The increasing competitions in
the market encourages companies and firms to sustain and improve their efficiency
and manufacture new innovative products.
3. Potential of productivity growth in the service sector
Finland is a labour intensive country. People are more equipped in the manufacturing
sector. Competing in the market requires strengthening of the productivity growth and
expanding the growth of the company. The productivity growth is low in the
industries with a considerable GDP rate or share (André and Chalaux 2016). These
companies are transportation, real estate, health care, social services, education and
some service industries. There is great potential for growth in the productivity of
construction and in service sectors. Service provisions are now open to private firms.
However, the lack of obtaining skills has become the major factor that comes in the
way of necessary change.
4. Rank in international evaluation
According to the World Economic Forum and International Institute for Management
Development Finland ranks high in international evaluation. These institutes’ research
and form annual evaluations of competitiveness of the less developed and developed

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countries that measures the economics and views of people from different business
from different countries.
5. Well-being of the country
Well- being of a country is estimated by two factors that is the well-being of the
human being and the environmental well-being. In Finland, it has been that the
standard of living of people is high due to the effective welfare measures taken by the
government.
The Environmental well-being has improved and in good shape currently in Finland.
The health sector and the education sector has developed that paves way for positive
environmental well-being (Frésard and Valta 2016).
6. Productivity growth
Productivity growth has been seen in Finland due to the expansion of the market. The
increasing growth and the demand for business services and outsourcing of service
activities of various business enterprises has paved way for the development
(Pavlović and Ljumović 2016).
7. Education level of the population
Education has become the part of the society that determines the welfare. The level of
education of the Finnish population is very good. Measures has been taken to improve
the quality of education (Inkinen, Kianto and Vanhala 2015). Finnish students rank
top due to their writing and reading proficiency and also their scientific and
mathematical literacy. Moreover, this has been accomplished cost efficiently.High
educated people are important for new innovations. The capacity of higher education
provides commercialization of new developments and innovations and the utilization
of these at a wider range (Kyyrä, Pesola and Rissanen 2017). This makes the business
environment favorable for the company to establish here to recruit deserving

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candidates that will help to contribute in the profits and the development of the
company (Kumpulainen and Lankinen 2016).
8. High R&D financing
The share of firms in Finland are higher than USA. The finances by the central
government for R&D have grown rapidly. The share of high-technology sectors in
terms of R&D, the disbursement of manufacturing is higher than USA and Japan and
highest among the EU Member States.
9. Decent equity ratio of companies
The equity ratio of companies is the best in Finland. Self-sufficiency of small firms
and enterprises in Finland are high and are at the same level as that of USA
(Kumpulainen 2018).
Pestel Analysis
This will help in monitoring and analyzing the macro-environmental or external factors
that may have an impact on AsusTek Computer Inc. in Finland.
Political factors
Finland has a smooth political environment (Pesonen and Riihinen 2018). Finland is
open to foreign investment. Finland has high industrialized and free market economy with
output per capita that of Netherlands, Sweden, Belgium and Austria. Finland exports
petroleum products, telecommunication equipment’s, medical equipment, transport
equipment’s, refined petroleum and few agricultural products(Rantala and Kievari 2016)
The political factor of Finland is suitable for foreign investment thus making it suitable
for AsusTek to expand their business here. The free market economy is going to be beneficial
for the company. The exportation of technological equipment’s show that AsusTek can
export their products due to their high export market and generate more revenues.

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Economic Factors
Finland is a country that is highly industrialized with high GDP rate. More than 40% of
the GDP is contributed because of exportation. In Finland, the tax system is different from
other countries. The country holds their very own tax card in order to avoid the cardholder
from being taxed by their own government. For the longest time the most significant
company in Finland was Nokia. Nokia was one of the largest manufacturer of mobile phones
in the world. Due to the huge success of the mobile phones people in Finland, starting owning
phones and they connected internet to their phones before other countries like USA. Nokia
now has lost its relevance in the market thus making the manufacturing of products relatively
low.
The economic factor of Finland proves to be favorable for the business of AsusTek.
Finland is highly industrialized that will help the company in establishing an industry of their
own. The downfall of the company Nokia has paved way for AsusTek to introduce
themselves to the market in Finland. AsusTek may replace the popularity of Nokia in Finland
as they provide same products and AsusTek provides a wider range of products compared to
Nokia.
Social Factors
The estimated population Finland has is 5.56 million. Most people are employed. The
popular sector where the Finnish contribute is the manufacturing sector. The public sector is
growing here.
Finland’s education system is strict and systematic. Once childrenreach, the age of nine it
is obligatory for them to get admission in a school thus paving way for high literacy rate.
They have flexible schemes for students that helps to ensure they are provided with proper
food and less tuition fee is charged(Garbe et al. 2016).

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The social environment of Finland will help AsusTek reach their goals and generate profits.
Most people here belong to the working class that means there will not be any lack of
employees (Castaño, Méndez and Galindo 2015). The other aspect is that the literacy rate of
Finland is very high which indicates intelligent people who can join the company to make
effective strategies to fulfill the company’s goals.
Technological factors
Finland has always been recognized for the achievement of the work they have done in
order to promote innovation and the positive results speaks for themselves. Innovations that
have been introduced in the country has helped them stay ahead of many countries.Finland
has many international links that needs to be strong in respect to business and research. This
means that competition is necessary to exist in the market.This will pave way for innovations
that will cater to the market.
AsusTek Computer Inc. is a leading brand though it has seen immense competition. To
sustain in Finland AsusTek has to come up with unique innovations that they already do.
Environmental factors
The Finnish Funding Agency for Technology and Innovation has put emphasis on making
durable products to reduce unnecessary wastage of natural resources. In order to protect
natural resources companies are going to come up with innovative products.
This will be positive for AsusTek as the company already has innovative products thus
not much has to be changed to expand their business.
Legal factors
Finland is known to be a welfare state. The state offers everyone equal opportunities. People
are educated enough to know about their rights and responsibilities. Mainly Finland follows

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Welfare State and Rule of Law that mainly cater to the population (Hyppönen, Hämäläinen
and Reponen 2015). These laws ensure societal stability, good quality of judicial system and
effective legal body that is important in integrated and global markets.
These factors play huge role for an establishment of a company in a new country.
AsusTek will be protected as the law in the country ensures the protection of the country.
Porters five forces model
The Porters five forces model will help to assess and analyze the competitive
environment that will help to make the company profitable.
Competitive Rivalry- AsusTek is a global company and has many customers around the
world. The sudden expansion in Finland is going to be difficult as there are brands who have
already established themselves and created a brand loyalty in Finland. People depend on
brands like Nokia and Samsung.
Supplier Power- Finland is an expensive country. This automatically indicates that the
supplier power will be high. The product will be unique where new systems will be required
which will not be accessible all the time thus making AsusTek spend a lot of money.
Buyer Power- Finland being an expensive country proves that the standard of living in this
country is high(Dertwinkel-Kalt, Haucap and Wey 2015). Cost of the products would not be
an issue here; AsusTek can survive the market and generate good revenues if good.
Threat of Substitution- Finland is a place with high literacy where people need innovations.
AsusTek has a reputation of creating and manufacturing products with innovations that other
brands have not been able to imitate(Christensen, Karjalainen and Lundell 2016).However,
there are brands that have already established in Finland and make replicas of products by
AsusTek.

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Threat of New Entry- Finland is flourishing paving way for new business and industry
entries. The existing brands Nokia and Samsung can give a stiff competition to AsusTek as
they have already created a fan base in Finland. There are many companies coming up with
products that AsusTek offers andas Finland is open to business the competition will be high
in the market making companies difficult to survive. However, AsusTek will thrive in the
market due to the products they offer.
Reasons for AsusTek to expand in Finland
Finland is known for the flow of FDI. The geographical location, multilingual
population,industrialized economy, the high and heavy expenditure in R&D, presence of
popular industries and the political stability have paved way for companies to establish here
(Halme and Maukonen 2017).Finland has acquired a place amongst the top ten competitive
economies in the world (World Economic Forum, 2019). Government has taken effective
measures in order to motivate FDI. Considering these factors AsusTek Computer Inc. has an
advantage of expanding their business here in order to ensure and generate revenue and
profits. AsusTek is going to open a franchise in Finland to make sure there is increase in sales
and revenues.
Recommendation
By the above analysis, it can be assessed that Finland is favorable and open to foreign
expansion. It will be an advantage for AsusTek to establish their business here. AsusTek
needs to make effective strategic plans that will help them to establish and acquire
competitive advantage in the market. AsusTek needs to come up with new products that will
distinguish their products from other brands and innovative products that will attract people
for good revenues. However, Finland is expensive that will affect AsusTek financially thus

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they should expand by making a proper budget or negotiate effectively so that they can
sustain in the market without any loss.
Conclusion
In conclusion, this paper states that AsusTek Computer Inc. has opportunities to establish
their company in Finland due to the positive factors that pave way for business. AsusTek if
good then can survive in Finland and sustain a good position in the market that will help the
company in making profits. However, there are constraints as Finland is an expensive
country. This can be both the strength and the weakness as high cost will result in high
expenditure of the company but then the company can sell the products at a higher rate in
Finland to make profits and acquire high position in the market.
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