Expanding a Small-Medium Manufacturing Company in Germany: Critical Evaluation of Macro Factors Impacting Business Expansion

RESIT MODULE
ASSESSMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Reasons for expansion.................................................................................................................3
Porter's five force model..............................................................................................................4
Critical evaluation of the four most immediate factors of macro business environment that
impacts the expansion of company:.................................................................................................4
Brexit............................................................................................................................................4
Culture..........................................................................................................................................5
COVID-19....................................................................................................................................6
Labour Law..................................................................................................................................8
Modes of entry.............................................................................................................................9
Recommendation over mode of entry..........................................................................................9
CONCLUSION & RECOMMENDATION....................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business expansion refers to that phase under which the business experience growth and
success. Expansion of business is important because it attracts new customer's in the new market
in terms of using products or service of business(Albers and Rundshagen, 2020). The current
study revolves around the concept of expanding a small- medium manufacturing company of UK
in European country that is Germany. AZIO LTD that is located at Reading is an electronic
keyboard manufacturing company that deals in manufacturing keyboard in different style. The
company was founded in 2009. The company has 50 number of employees at current and
looking forward to make further expansion.
This study will discuss the concept of expanding AZIO LTD In EU County and that is
Germany. Also, the reason for expansion will be highlighted in report. Furthermore, ways in
which external factors such as, Brexit, COVID-19, Inflation and labour law impacts the
expansion of the firm will be discussed in the report. Also, in order to analyse competition in
market of Germany porter's five forces analysation will be done. Moreover, the report will shed
light on the mode of entries and recommendation will be made.
MAIN BODY
Reasons for expansion
AZIO LIMITED is a small medium enterprise as it have a total of 50 employees adding up the
total of 3 outlets because of the less revenue earning as well as less number of employees the
firm is said to be a small medium enterprise. The main reasons for expansion of the AZIO LTD
is that, the firm wants to increase its customer base, the firm wants to increase its profit and the
firm want to make itself a global firm SME 100 list unveiled, 2020. The main motive of firm is to
become a larger firm in regard with manufacturing electronic keyboard which may give them
huge benefit in running the business outlet in Germany. Also, the organization manufacturers
effective set of keyboard that that creates the higher utility in customer. It has been found from
various studies that, Germany is one of digitalized EU country. Thus, expansion of AZIO LTD in
Germany leads to create the number of opportunities for firm to increase the sell of keyboards.
As a result, higher growth and success will be experience by the company. Thus, this is the main
reason for expansing AZIO LTD in Germany.

Porter's five force model
It has been considered as one of the best analytical tool that helps in analysing the extent up-to
which competition is available in market. Thus, here is the competitor analysation of the AZIO
LTD in order to expand business in Germany.
Competition rivalry- This refers to the rate at which current competition is available in market.
Thus, In Germany, the technology is expanding in high manner and therefore, demand for
electronic items has been increased on a high note. Moreover, many firms are concerned with the
profession of manufacturing keyboards. Thus, it clearly states that, competition is high for AZIO
LTD.
Power of buyer- This is concerned with changing the taste of customers in terms of using
products and services. As AZIO LTD is new in Germany. Thus, there is a chance that customer
may shift to another electronic manufacturing firms (Anker, 2021). In order to solve this issue,
the company needs to assure focus over adding immense design and feature in manufacturing of
keyboard that leads to attract customers.
Power of suppliers- This is consists of power of suppliers, from this threat AZIO LTD is free as
they approach large number of suppliers that assure them input. In case, price of input increases
by one supplier then, the firm can approach another supplier.
Threat of new entrant- As the firm is on a developing note therefore, firm has the threat from
new entrants. Thus, effective analysation techniques in order to understand the market
competition is required.
Threat of substitute- Number of electronic keyboard manufacturers are available in Germany.
Thus, there is a threat of shifting by consumer to another products. However, effective design
and feature in keyboards can help AZIO LTD to attract the faith of customers towards them.
Critical evaluation of the four most immediate factors of macro business
environment that impacts the expansion of company:
The four most immediate factor that leads to affect the expansion of AZIO LTD in Germany are
described below:
Brexit
Brexit refers to the withdrawal of the UK from the EU. The Brexit has completely
changed the formal relationship that exist among the UK and the EU. This is the most keen