PESTEL Analysis of International Expansion of Barker and Stonehouse in Croatia

CROATIA PESTEL
ANALYSIS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTEL analysis.........................................................................................................................3
Marketing strategy......................................................................................................................5
Recommendations.......................................................................................................................9
CONCLUSIONS............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
International expansion is basically the strategy which helps the organizations to devise
various plan for entering the overseas market and establish their position in that market. In short,
this is the approach through which organizations takes their products and services to another
market segment for gaining competitive advantage. The main aim of this report is to study
international expansion of Barker and Stonehouse in Croatia by conducting PESTEL analysis of
country.
Barker and Stonehouse is primarily British furniture retailer and SME being established
in 1946 and headquartered in England, UK. This organization deals in furniture and offers sofas,
beds, chairs, dining tables etc.
This report gives an overview of PESTEL analysis, marketing strategy and
recommendations.
MAIN BODY
PESTEL analysis
PESTEL analysis is basically the framework which helps organizations to analyze the
various external factors that have bearing on their operations and functions.
Political factors
The various political factors consist of political stability, tax rate, corruption etc,.
Negative- The political stability of Croatia is not highly well-developed and the country is
politically unstable thus this has given rise to high rate of corruption within the country. Due to
high corruption, it will be difficult for Barker and stonehouse to expand in this country.
Positive- Due to the entry of Croatia in European union, the interest rates within the country
have eventually reduced to more than 23.4% and now most of the financial institutions and banks
have lowered their interest rates. This will affect the expansion of Barker and stonehouse in
Croatia positively as it will be easier for them to borrow funds and take loans for their expansion
and operations (PAN, 2017).
Economic factors
These factors consist of exchange rates, GDP, unemployment rates, economic growth etc.
Positive- The GDP of Croatia has increased from past few years and has increased to around
45.5% due to its great economic stability. This will be highly beneficial for Barker and

stonehouse during their expansion as due to the high GDP, the exchange rate has become high
and this will help the company to increase their overall profit.
Negative- Although the GDP of country has increased from few years but still the
unemployment rates in Croatia has increased from around 34.5% to more than 78.6%. There is
thus lack of proper education and skilled workers in the country and this will pose a great
challenge for the company as it will be difficult for company to hire the experienced employees.
Social factors
These consist of attitudes, lifestyle, cultural barriers, health consciousness etc.
Positive- The population in Croatia is around 4.17 million as reported in the year 2016 and thus
this high population growth will affect the company in positive way. Due to great population,
there will be higher options to company to target the different market segment and will help in
their expansion (Vidjak, 2019).
Negative- Due to high unemployment rates in the country, people in Croatia are highly oriented
towards living luxurious life and thus their disposable income is also low. This will affect the
expansion of company in negative way and might affect its overall profit ratio.
Technological factors
These factors consist of innovation, automation level, online sites etc.
Positive- The emergence of the advanced technology due to globalization like artificial
intelligence, robotics will help company to communicate with the customers in Croatia in real
time basis.
Negative impact- As there is high level of illiteracy in Croatia, thus people in this country are
not much oriented towards using digital technology and have low interest in it. This will affect
Barker and stonehouse in negative manner and there are chances that people might not take
much interest in technology during their expansion (Maslarić, Brnjac and Bago, 2016).
Legal factors
These factors mainly consists of discrimination laws, patents, copyrights, health and
safety laws etc.
Positive- the government of UK has reduced the tax and thus have relaxed the restriction on
trading across various country and this will eventually help Barker and stonehouse to expand
their business in Croatia (SHTAL and et.al.,2018).