Market Expansion Plan Analysis

The assignment focuses on analyzing the impact of a company's current business situation on its market expansion plan. It utilizes Porter's Five Forces model to assess competitive forces within the industry and PEST analysis to examine macro-environmental factors. The report integrates both analyses to provide an overall business assessment, supporting informed decision-making for market expansion.

Business Organisations
and Environments in a
Global Context

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Background information on orange S.A.................................................................................1
Background information on the business environment in Belgium ......................................4
Analysis of business scenario.................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
ILLUSTRATION INDEX
Illustration 1: Orange S.A.: A telecommunication company of France..........................................2
Illustration 2: Porter's five force analysis........................................................................................3
Illustration 3: Key competitors in Europe........................................................................................4

INTRODUCTION
Internationalisation has become an important factor in the present day business. In order
to sustain in the present era it has become crucial for organisations to went globalisation. There
exist different factors that has made this process simpler. In addition to this, in organisational
context, all the companies seeks for achieving the maximum profit that can be generated by
expanding the market (Kolios, and Read, 2013). This expansion in the size will help in
increasing the business value. However, before entering new market places, there requires some
assessment which are to be done positively. This report covers, all the major analysis which
firms should perform before entering new market places on global platforms. This undertaking is
focused on the market expansion of Orange S.A. in Belgium. In this way, external and internal
factors that will affect the global market entry will be analysed.
Background information on orange S.A.
Orange S.A. is a French multinational telecom company headquartered in Paris and
belongs to private sector. The customer base of the firms is really larger, 256 millions. In
addition to this, the employees' size of the entity is 95,000 in the France and 59,000 in other
places. According to the business reports of the company, the revenue of year 2016 is €40.918
billion. The chosen firm is founded before 29 years in 1988. In order to attain the desired
profitability, company should pay focus on effective globalisation strategies. The cited firm is
the global provider for the mobile phones, internet services, landlines, internet mobile services,
etc. At present, there are 33 countries in which it is operating. The company is however, owned
by the French government.
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It is necessary for an organisation to analyse the internal business factors and overall
situation of the company so that barriers in the market expansion can be crossed. There exists
different elements associated with the cited firm which may impact the effectiveness of the
Belgium Plan (Hosseinzadeh, and et. al., 2016). The major five forces that can effect on the
business value of the chosen firm are explained further:
Porter's Five force Analysis: This model helps in identifying the influence of key forces that can
impact on the operations and functions of Orange S.A. In organisational context they are as
follows:
 Threat of new entrants: The threat of new entrant is the sector is very low. It is due to
the fact that the telecommunication company set-up has several barriers. Two major of
them are: technological aspects and large capital of investment in the instalment. From
past 9 years, no new player in the sector is detected.
 Threats of substitutions: In the selected sector, various innovations took place in the
recent years. Also, they are taking place consistently. This thing may harm the existing
services of the firm . Hence, the threat of substitution of Orange S.A. is high. For
instance: Addition of internet and mobiles has impacted the landlines phones Hu, Y. and
Yang, S., 2016
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Illustration 1: Orange S.A.: A
telecommunication company of France
Source:

 Bargaining power of customers: Bargaining power of buyers is high in the sector.
There exists good number of network providers with varied features. Two major
parameter that influence the consumer buying behaviour are speed and usage. Orange
S.A. is recommended to focus on them to increase consumers.
 Bargaining power of suppliers: It is another factor that exerts pressure on the entity.
However, it is favourable as the bargaining power of the supplier is very low. It is
because of the fact that there are more suppliers and hence, a full competition is present
in the suppliers. The major supplier of the Orange S.A. is EE, a UK based network
agency. Some other suppliers includes Ericsson, LTE, etc. (Qi, Sun, and Chen, 2014).
 Industry Rivalry: The level of competition in the telecommunication is really high.
There are 14 major competitors of the selected organisation. However, its should be
recognise that with the 34% of total market share, Orange S.A. is the leader in the sector.
This reflects the strong competitive advantage of the company. On the other hand, in
Europe the company has less share than other entities such as T-mobile, Vodafone, etc.
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Illustration 2: Porter's five force analysis
Source:(Qi, Sun, and Chen, 2014)

There are 20 operators in the Europe and thus, the market share of the leader is less than
20%.
Background information on the business environment in Belgium
In order to expand market in a country, it is highly required by Orange S.A. to conduct an
in-depth research on the external environment that can impact upon the effectiveness of the
company. The country selected of the market expansion is Belgium. There are about 11 million
people living in the country and thus, company can target a greater size by attractive offers at the
time of business commencement in the nation. It will help in drawing the attention of people. It
shares boundaries with the France and hence, it is easy for the Orange S.A. to develop its roots
effectively in the chosen nation (Cuervo-Cazurra, Inkpen, Musacchio, and Ramaswamy, 2014).
For this, the tool that can be used by company is PESTLE analysis. It is described further:
PESTLE Analysis of Belgium
Political factors: There is a highly structured and hierarchical structure followed in the country.
This helps the entity in understanding the exact procedure to be followed while performing
business activities. In addition to this, the political condition of Belgium are stable from past few
years due to which the company will not have to alter the policies regularly.
Economical factors: The country selected for the market expansion is among the most highly
industrialised countries in the Europe. The economical condition of the people living in the
country is good. As per a recent report, it has been observed that people of Belgium have fourth
highest standard of living. This parameter is beneficial for the company, it will help in increasing
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Illustration 3: Key competitors in Europe
Source: (Cuervo-Cazurra, Inkpen, Musacchio,

the business value by influencing people on the basis of their high standard of living. Besides
this, the GDP growth rate of the nation since 2012 is also effective Bourreau, M., Sun, Y. and
Verboven, F., 2016.
Source: (Ferraro, and Briody, 2017).
Social factors: The selected country for the market expansion is most urbanised and around 97%
population of Belgium is living in cities. This implies that there is greater connectivity. In this
way, the societal influence of Belgium is favourable for the growth of Orange S.A. in the nation.
In addition to this, the increased rates of urbanisation and modernisation is influencing societies
to use social networking sites, and other internet running tools. This raised interest of people is
regarded as the key source using which company can develop its business. Besides its, French is
considered as the main language in the country and therefore, Orang S.A. is not having any
barrier in the diversification.
Technological factors: The country is going well in the terms of technologies. This
advancements in the digital technologies will put both positive and negative impacts on the
Orange S.A. In context with the positive influence, it will simplify the operations of the company
in Belgium. In addition to this, the modern culture having digital advancements will influence
people to take the telecommunication services. However, the drawback is that the Orange S.A.
should have calibre to meet up the highly advanced technologies. Further, the competition will
be more due to this (Nahavandi, 2016).
Legal factors: The legislations of the Belgium are highly effective for the European countries. It
has been observed that the as per the laws of the nation, that no tax taken for important for EU
countries. This will help in saving expenses of Orange S.A. Set-up of telecommunication
company requires a lot of raw materials. Belgium does not have these raw products in their
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nations. Hence, Orange S.A. can take them along without paying any charge for the importation.
In addition to this, revenue structure of the country is also very lenient. However, Orange S.A. is
required to follow some other laws such as equal rights act, health and safety laws, etc. in their
company.
Ecological factors: Its should be recognise that the maximum population of the country is
living in cities. There thus, exists various environmental issues that are being faced by the
people. The ecological conditions of Belgium is not good. In addition t this, it has been observed
that quality of some of the natural resources of Belgium is observed to be lowest as compared to
the other countries. These factors has forced the parliament to impose strict laws against the use
of harmful activities that affects the environment of the country. This issues can create problems
for the Orange S.A. As the telecommunication equipments emits harmful radiations to the
environment. It may occur that the entity has to limit its operation. This reduction in the business
functions will then affect the sales and profitability (Ferraro, and Briody, 2017).
Analysis of business scenario
From the above assessment it has been observed that the Orange S.A. can effectively
develop its market roots in the Belgium. However, impelling business expansion plans are
required to e prepared by the organisation. From the above assessments that were performed to
identify the internal and external environment factor that will impact the global expansion the
selected company in the Belgium, it has been observed that there are some strengths and
weaknesses present in the way of achieving the goals. By making appropriate use of its strengths,
such as quality services, reliable network connectivity, etc. the company can prepare a good
marketing plan featuring all these points. In addition to this, it has been found as per the PESTLE
analysis of Belgium, there exists some factors which are highly favourable for the development
of the selected form. The legal factors will allow company t import and export between Belgium
and France without any revenue. In addition to this, the increase modernisation and societal
influence will help entity in increasing its sales in the Belgium. Further, the stable and highly
structure political factors of Belgium will allow Orange S.A. to grow effectively without any
expenses associated with the alterations in the policies (Geppert, Matten, and Williams, 2016).
Most importantly, generally global level expansions have to face some cultural and language
barriers which are absent in the present case. The main language of Belgium is also French and
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its culture is quite similar to the France. However, it should be recognise that there are some
drawbacks also which will impact the firm. For this, Orange S.A should plan effective strategies
to deal with. For instance: the increased advancements in the technologies will bring additional
cost with the development of planning innovating ideas. Besides this, the environmental factor of
the country will limit the operation o0f the firm which will reduce the overall business
effectiveness. It has been further observed that the global level competition is the
telecommunication sector is high and this the selected organisation will require huge investments
in the promotional activities. These advertisements will harm the financial condition of the
company (Ferraro, and Briody, 2017). Hence, these are the outcomes of the assessments of
internal and external environment that company can utilise before growing its business roots in
the market of Belgium.
CONCLUSION
From the above report it can be concluded that before entering into new market, it is
necessary for an organisation to assess all the internal and external factors that can impact on the
expansion plan. In the present report, the influence of present business situation of a company on
the market expansion plan has been analyse with the help of five force analysis. In addition to
this, the external environmental analysis has also been performed to analyse the impact of macro
factors o0f the selected country. Lastly, integrating the outcomes of both the assessment, the
overall business analysis has also been performed.
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REFERENCES
Books and Journals
Bourreau, M., Sun, Y. and Verboven, F., 2016. Market Entry and Fighting Brands: the Case of
the French Mobile Telecommunications Market.
Cuervo-Cazurra, A., Inkpen, A., Musacchio, A. and Ramaswamy, K., 2014. Governments as
owners: State-owned multinational companies.
Ferraro, G. P. and Briody, E.K., 2017. The cultural dimension of global business. Taylor &
Francis.
Geppert, M., Matten, D. and Williams, K. eds., 2016. Challenges for European management in a
global context: Experiences from Britain and Germany. Springer.
Hosseinzadeh, S. and et. al., 2016. Using PEST as a framework for analyzing open mobility
dataz. In 11th ITS (Intelligent Transport Systems) European Congress (pp. 1-10).
Hu, Y. and Yang, S., 2016, June. The competition situation analysis of environmental service
industry in China: Based on Porter's Five Forces Model. In Service Systems and Service
Management (ICSSSM), 2016 13th International Conference on (pp. 1-5). IEEE.
Kolios, A. and Read, G., 2013. A political, economic, social, technology, legal and
environmental (PESTLE) approach for risk identification of the tidal industry in the United
Kingdom. Energies, 6(10), pp.5023-5045.
Nahavandi, A., 2016. The Art and Science of Leadership -Global Edition. Pearson.
Qi, X. J., Sun, M. T. and Chen, M., 2014. The Corporate’s Credit Evaluation of Engineering
Supervision Based on Porter's Five Forces Model. In Applied Mechanics and
Materials (Vol. 638, pp. 2450-2454). Trans Tech Publications.
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