Analysis of Business Environment in Finland for Seiko

This report analyzes the general business environment in Finland for Seiko, a Japanese manufacturing company. It discusses the factors affecting business in Finland and provides insights into the type and nature of the organization. The report also includes a PESTLE analysis and Porter's Five Force Model to evaluate the market conditions in Finland.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Analysis of general Business Environment in Finland...........................................................4
Type and Nature of Organisation...........................................................................................4
Factors affecting business in Finland.....................................................................................5
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment can be said to be a collection of every internal and external factor that
have ana impact on business. Internal factors consist of owners, employees, product,
opportunities, strengths etc. On the other hand, external factors include customer needs, political
factors, environmental factors suppliers, legal factors, technological changes, social trends,
economic changes, market trends and so on (Hamilton, L. and Webster, P., 2018). Global
economy is world economy which is economy of all humans present all over world, it includes
all the international exchange of services as well as goods which are then mentioned in monetary
aspect.
The following report is based on a company named Seiko. Seiko is a Japanese
manufacturing company, it manufactures clocks, watches, some other electric devices,
jewelleries etc. This company started in 1881in Tokyo Japan. It was first a watch and
jewellery shop. In 1892 production began, and company was called Seikosha. Company
consists of more than 13000 employees working under it. Seiko group is parent group to a
number of subsidiaries which are namely Seiko Watch Corporation, Seiko Instruments INC.,
Seiko Solutions INC., Wakoco LTD and some more. Over the years of its existence, Seiko
have setup its business in United States as well. There products are sold by fine jewellery
stores as well as 19 other stores of their own.
Finland is situated in Europe. It has its boundaries with countries like Russia, Norway
and Sweden. Majority people over there speak Finnish. Unitary parliamentary republic is
ruling in country. Economy of Finland is equal to other countries in Europe such as
Germany, Belgium, France and so on. Service sector in country contributes to 66% of GDP.
Largest industry in Finland is related to electronics.
In the following report discussions are made regarding Seiko establishing its business in
Finland. Seiko is expanding its business in global economy a foreign nation. Therefore,
before entering into business it is necessary for Seiko to critically analyse all the factors
present in Finland’s economy which may directly or indirectly have an impact over
functioning of company in the nation. In order to conduct this analysis company is learning
about environment related to business in Finland. Nature of business is also required to be
analysed. To conduct these various models such as PESTEL, Porter’s five force model,

demand and supply scheme etc. are studied. Only after all these steps once undertaken,
company will decide whether to invest FDI in Finland or not.
Analysis of general Business Environment in Finland
Finland stays to be a member in European Union. The business operating environment in country
stays to be stable as well as foreseeable. Corporation tax in Finland is very low that is 20%. It
deals in euro as its currency. Country provides with a highly skilled and qualified labour-force. A
company venturing into Finland can find excellent labour force, easy business culture, high level
of education, a smooth public sector, a number of start-ups etc. All these factors together make it
a perfect destination for start-ups and multinationals to set their businesses here and earn profits
(Keivanpour, Ait Kadi and Mascle, 2017).
Also, there is no differentiation done in national and international companies while distributing
grants and benefits. All multinationals get same benefits as Finnish companies. Finland is
forward in terms of technological advancements as well. Country have 5G wireless networks, AI,
imagining, patent monitoring etc. Finland also have very good credit ratings from some of the
best credit ratters around the world. Moody’s rated it Aa1, Fitch rated it AA+ whereas it was rate
AA+ by S&P.
Country is fir for doing business and starting a new venture as it provides with ample
opportunities to international as well as domestic companies. It is also named as most educated
and innovative country in world. It has been said to have the best primary education in whole
world. Seiko can easily setup its business in country and focus on earning profits. however,
company will have to face a number of competitors as there are a number of foreign companies
working in Finland.
Type and Nature of Organisation
Seiko is a Functional Organisation trying to venture into Finland. Functional
organisation is those in which people are distributed in groups as per the areas of their
specialization. Seiko here is divided into such groups which include marketing, production,
logistics, operation etc. Company even have distribution as per the area of its functioning.
Company have different groups for Japan, USA and now while venturing In Finland they will
create on for Europe.

Nature of organisation includes organisation as a process and as a structure. Objective of Seiko is
to gain maximum market share in Finland. The company is following a horizontal structure in
which internals in a company can easily communicate in similar posts (Thanetsunthorn and
Wuthisatian, 2016). Structure discusses network in an organisation. While working in Finland,
Seiko will follow horizontal structure for networking in an organisation.
Factors affecting business in Finland
There are a number of factors which will affect business functions of Seiko in Finland.
Below mentioned are some of those factors:
 Guides: There are a number of guidelines to be followed by a company while
starting their business in Finland. It includes registration in Finland, they need to
learn about overseas business risk, there is a guide prepared by Moore Stephens, by
local UHY network, there is also a guide which is published by Lex Mundi.
 Exporting: There are a number of trade forecasts, guides and political as well as
economic updates which will affect functioning of a business in Finland.
 Corporate Governance: European Commission, European Corporate governance
have some rules, codes, principles and recommendations which are to be followed
by companies doing business in Finland.
 Laws and regulations: Laws and regulations for doing business in Finland
includes the legal system, e-commerce, data protection, product liability,
intellectual property, tax, competition, employment, business vehicles etc.
 Forums and support networks: The forums to be taken care of while doing
business in Finland are: The Finnish- Japanese Chamber of Commerce, Enterprise
Europe Network, Finnish- Japanese Trade association, Central Chamber of
Commerce of Finland etc.
 Embassies and consulates: There are also a number of embassies with which
Seiko have to take approval before entering into business in Finland. These include
Japanese- Embassy in Finland, List of embassies for Finland around the world and
various foreign embassies in Finland.
PESTLE ANALYSIS

It is basically an acronym for a tool that is used to evaluate all those factors which have a
negative or positive effect on the organisation’s functioning either directly or indirectly. It stands
for political factors, legal factors, environmental factors, economic factors, technological factors
and social factors (Wei, Thurasamy and Popa, 2018). Companies conduct this analysis before
forming strategy in order to speculate future happenings. Before entering into Finland’s market,
a PESTLE of Seiko in Finland’s economy needs to be conducted, below mentioned is this
analysis:
 Political Factors- The factors included under political criteria which ay have an impact
on business may include, governmental policies, taxation policies, fiscal policies, funding
grants as well as benefits, Terrorism and military etc. Factors amongst this affecting
functioning of Seiko are governmental policies, taxation policies, funding grants. It is
important for Seiko to keep up with ruling party in finance this will help them to
positively carry on their business in country. Not working together with country might
lead to negative effects on business of Seiko.
 Economic Factors- Economic factors in PESTLE analysis consist of every factor related
to economy of company that business is dealing in. It may include economic growth,
exchange rates, interest rates, taxation, wages, inflation, disposable income etc. From all
these above-mentioned factors those points that will impact Seiko are exchange rates,
custom, duties and wages. These are the places Seiko is required to employee its fund.
Too much of fluctuations in this area may lead to functional imbalance while Seiko runs
its business in Finland.
 Social Factors- Social factors are all those factors that are related to society in which a
business carries out its functioning. These may include age distribution, consciousness
about health, customer preferences, cultural and market trends, organisations reputation,
demographic factors etc. In context of Seiko the factors which will affect its functioning
in Finland are, trends and consumer behaviour. It is important to understand demand and
then set up its business in Finland. It is also required by company to set up a good
organisational image in order to attract customers towards it.
Technological Factors- Technological factors simply refers to all the scientific advancement,
innovations and upgraded technologies, which come into market each new day (Anderson and et.
al., 2017). The pointers which lead to technological factors are, distributing goods and services,

emerging new technologies, potential copyright, processes of production, emerging technologies
and maturing old technologies. Out of all this hi-tech factor some factors which have an effect on
Seiko are change in technologies, conversion from analogue to digital. As Seiko deals in
electronic products it is important for company to be technologically advanced and updated.
Environmental Factors- Environmental factors are all those factors which are related to
environment and surrounding in which a business conducts its business. Factors under this are
decline in raw materials, reduction in carbon footprint, accessibility of geographical location,
promotion of positive business ethics, climatic and weather changes etc (Falkner, R., 2017)
(Michael, 2018). The factors which are needed to be taken care of by Seiko are environmental
legislation, positive business ethics and sustainability, reducing their carbon footprints, recycling
wastes etc.
 Legal Factors- Legal factors are important because not following any of this may lead
company into great losses as company can be sued for it. It includes various laws related
to advertising standards, labour laws, consumer rights, health and safety etc. the factors
amongst this which may affect Seiko are advertising standards, labour laws, equal
opportunities, product labelling and safety etc. if company is found violating any od this
law legal complaint can be filed against it.
From the above analysis it is clear that what all factors are needed to be taken care
of by Seiko before venturing into Finland and also this analysis will help
company to create its strategy for Finland.
PORTER’S FIVE FORCE MODEL
Porter’s five force model consists of five forces which impact a business and with the
level of its effect on businesses, the strengths and weaknesses of business can be described. In
order to determine a strategy for a company this analysis helps in study of industry as a whole.
The five factors which are included in this analysis are mentioned below:
Bargaining power of customers: Market of outputs can be called bargaining power of buyers.
This explains how much power does a consumer have to pressure its company to reduce prices
this power with customer increases when they are less in numbers and there are many such
companies available in market. It is also required to be easy for them to switch companies easily.
In today’s scenario it is very easy for customers to use advance technology and check prices of
products online (Hakanen, Helander and Valkokari, 2017). They can easily switch to companies

asking for lower prices. Bargaining power of customers are very high when taking Seiko into
consideration. This is clear as company have a number of competitors. Customers can find a
number of brands selling similar products in prices cheaper than that of Seiko. Its only the brand
loyal customers who wont shift to other brands. Population of such customers for Seiko is less. It
will face this problem in Finland.
Bargaining power of suppliers: This is basically power with suppliers of company to decrease
quality of their products and services or raise its prices. The number of suppliers available with
company and substitute of raw materials are another major factor affecting bargaining power of
suppliers (Falkner, 2017). The smaller number of suppliers the more power bargaining they
incur. Bargaining power of suppliers is low for Seiko. This is a benefit for company as their
suppliers do not have control over them. Seiko have its production unit in Japan and they can
easily get resources and raw materials from any other supplier. Seiko maintain good relation with
their suppliers and do not let them exploit their rights. They can neither decrease quality of goods
nor can ask for higher prices. There will be no difference while working in Finland because all
suppliers are from Japan.
 Rivalry among competitors: Another important factor of porter’s five force is the
rivalry which is present amongst competitors in a market. The more number or
competitors supplying similar goods in market are present the more is risk to a company.
Concentration ratio is used in order to indicate rivalry in a competitive market. In order to
deal with competitors a lot of money is spent on promotion. Rivalry is high when there
are major barriers to exit from an industry. There are a number of competitors available
for Seiko in market. TAG Heur, Breguet, Omega, Tissot, Rado, Hublot, Cartier are all
competitors of Seiko. Company have to be aware of all of them in order to stay in market.
Concentration ratio in this industry is too high. Finland have a number of companies
dealing in similar product range.
Threats from new entrants: With new entrants in industry they bring on a wish to achieve
maximum share and contribute towards growth of market as well. The amount of threat a new
entrant possess depends upon the barriers laid by industry on its entrants. Economies of scale,
loyal customers, high investments, government interventions and so are some of the barriers
which make it difficult for companies to enter market. In context of Seiko, the threat from new
entrants is high (Kasemsap, 2020). The reason behind this is that investments required for this

company is not that high. So, any new company can launch same lines of products. Also, there
are a number of big fashion brands which can easily diversify or increase their product line in
this industry.
Threats from substitute products: When there are similar products which can be used as
replacement for your product in market are high the threat to your company increases. Every
product which serves a similar requirement is considered for this factor. For example- there are a
number of substitutes present for coffee in market. This affects companies’ profitability and its
revenues directly. When taking Seiko into consideration, there are no substitutes of product
(Ronit, 2018). Jewellery, watches and electronics cannot be replaced with any other product.
Firm has this benefit of low threats from substitutes as even in Finland there are no substitutes
available.
CONCLUSION
From the following report it can be concluded that there are a number of huge opportunities
for businesses venturing in Finland. Finland is a country providing with good labour force, a
number of grants and benefits along with all required technological advancements. This makes it
easy for Seiko to venture into Finland. They need to make proper strategies before venturing into
the country because there are a number of competitors present in market. Following reports
states all the major steps and procedures which must be kept in mind by Seiko before setting up
its business in Finland. Following these analysis creating strategies there on Seiko can gain
profits and increase its revenue.

REFERENCES
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Keivanpour, S., Ait Kadi, D. and Mascle, C., 2017. End-of-life aircraft treatment in the context
of sustainable development, lean management, and global business. International
Journal of Sustainable Transportation. 11(5). pp.357-380.
Wei, L.H., Thurasamy, R. and Popa, S., 2018. Managing virtual teams for open innovation in
Global Business Services industry. Management Decision.
Thanetsunthorn, N. and Wuthisatian, R., 2016. Current state of corporate governance: global
business and cultural analysis. Management Research Review.
Anderson, W. and et. al., 2017. The dialogue and advocacy initiatives for reforming the business
environment of the tourism and hospitality sector in Tanzania. Tourism Review.
Hakanen, T., Helander, N. and Valkokari, K., 2017. Servitization in global business-to-business
distribution: The central activities of manufacturers. Industrial Marketing
Management.63. pp.167-178.
Kasemsap, K., 2020. The role of strategic outsourcing in global business. In Foreign Direct
Investments: Concepts, Methodologies, Tools, and Applications (pp. 236-268). IGI
Global.
Ronit, K., 2018. Global business associations. Routledge.
Falkner, R., 2017. Business power and conflict in international environmental politics. Springer.
Michael, P.D., 2018. Toward a global business standard for supply chain ethics. IEEE
Engineering Management Review.46(4). pp.112-121.