Global Business Expansion Strategies

This assignment analyzes a company's strategy for expanding into the Swedish market. The company faces challenges such as low profit margins, product failures, and security concerns related to online shopping. However, it also has opportunities in the new market. The analysis examines the PESTLE environment of Sweden, customer service strategies, and necessary modifications to the payment system for successful market entry.

BUSINESS
ORGANISATIONS AND
ENVIRONMENTS IN
GLOBAL CONTEXT

TABLE OF CONTENTS
Summary..........................................................................................................................................3
PESTLE analysis.............................................................................................................................4
SWOT analysis................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

Illustration Index
Illustration 1: Overview of Sweden.................................................................................................7

Summary
Businesses are set in various parts of country to gain more advantages and make profits at
a larger level. This objective is attainable due to globalisation which gives opportunities to
business organisations to set up their business in different parts of world. In present report,
'Amazon' company is taken to understand concept of various types of environment that can affect
existence of a company. Amazon is an e-commerce website that is accessed by millions of users
to do online shopping of various products. The organisation is basically an American company
but have its websites for US, UK India, China and so on. In such scenario, now cited business
firm is intending to establish its business in Sweden. This report will focus on same subject with
emphasis on political, social, cultural and all other environment that can impact business of
company at new place. Mentioned firm use to sell a wide range of products with almost all types
of brands. Enterprise is quite popular for its services in all countries where it operating currently.
So, its possible that company will do better at Sweden as well (Hill, Cronk and Wickramasekera,
2013). This country is considered to be very engrossing for business as environment of the nation
is favourable. Apart from this, report will analyse all this environment through application of
various models so that a complete examination of business environment can be done. Further, it
is evident that scope for said entity is broad as goods and services in Sweden are expensive in
local markets. Shipping any product from outside country is also not a good option as it also
bears a high cost. Hence, Amazon shopping will be the best option where customers can get their
products delivered at home. Besides this, company also provides option of easy return on its sold
products. So customer base will be large due to its strong basic facilities. Moreover, by applying
SWOT and Pestle analysis, assessment of organisation's strength and weakness along with
available opportunities and threats included in it will be discussed. This will help the company
to make their strategies according to available information. Any product from a small book to
essential goods are available at reasonable prices which can be ordered through online website.
Further more, these goods are available in all brands of market so customers have large choice
which makes the scope for company very broad. So, present report will help in making decisions
to Amazon for placing business in Sweden so that it can come up with innovations and can be
aware of its competitor firms as well.

PESTLE analysis
Sweden which is officially known as kingdom of Sweden is a Nordic country in northern
Europe. In present time Sweden has a limited constitutional monarchy and has recorded with a
highly developed economy in present time. For establishing Amazon in this country, PESTLE
analysis will be helpful so that external business environment can be known.
 Political: The political structure of a country is largely affected by tax structure and other
tariffs that are imposed by the government. Besides this, other kinds of tariff and trade
barriers are also imposed by the government which is aimed at protecting interests of
local market. The political stability of any country is also a major factor that can impact
any business in that nation. Here, Amazon will have to face a challenge as its
development may affect the local markets. This may also lead to opposed by local people
and as their market will go down due to increasing trend of online shopping among
customers (Trompenaars and Hampden-Turner, 2011). On other hand the government of
said country is very stable which will create a great opportunities for said business. The
country has made many laws and policies that helps in abolishing the corruptions and
they are implemented fully as well. Moreover, the country attracts the investment
opportunities as well which will be helpful for present business of Amazon.
 Economical: The financial crisis that happened in 2008-2009 has made the GDP growth
rate slower for the country. Yet Sweden was able to recover the position soon and hence
by looking the present position, it is estimated that country will have a very high rate of
GDP growth till the end of 2018. These major turns have come up due to government's
fiscal policy measures which has made capital markets to be efficient and attractive for
foreign investors (Ferraro and Brody, 2015). The country has made policies which allows
the foreign investors to invest in an unbiased way. This makes a gateway for Amazon to
establish within country in easier way. However, the country is also suffering with
unemployment due to Euro debt crisis, so cited firm can be helpful by generating
employments in country as well.
 Social: The Sweden is a country where people are aware of their democratic rights and to
maintain their cultural values in an appropriate way. The country has also been able to
maintain unity with various kinds of diversities as more than 13% of population residing
in country were born abroad. The academic performance of these migrant students is very

impressive as well. Initially the country was not in favour of FDIs but after joining EU in
1995 the climate of country for investment has improved a lot (Needle, 2010). The
structural policies and legislations in this regard have been simplified more liberal
attitude has been adopted by nation. Thus, for Amazon, it will be a added advantage to
establish business there. Moreover, people of the nation have good educational level and
living standard, hence popularising online shopping in this environment will be easier
and beneficial for cited business.
 Technological environment: The country has a very qualitative education and training
system. In recent years, the mentioned country has developed training based on
improving skills of employees and acquaintance of technical education (Farndale,
Scullion and Sparrow, 2010). This has made the workforce of country highly skilled and
tech-savvy as well so that they can meet the changing requirements in competitive
environment. It is estimated that about 4% of GDP in country is invested towards
research and development activities. All these factors make a very favourable
environment for cited company. The business concern will be able to employ skilled
employees which are also very efficient in technological aspects. The respective firm
runs online business where the importance of technical knowledge is more. Hence, labour
will be available for company easily. In addition, the engineering industry is also growing
up in Sweden which will help the mentioned organisation to come up with innovations in
their website and serving customers efficiently (Mellahi and Collings, 2010). Many
patents have been registered by country as well which implies the development of
country in technological field.
 Legal: The major legal factor in service industries are affected by consumer protection
acts. The act serves the purpose of customers where they have right to acquire products of
good quality and in case of failure, consumer can also file a complaint to compensate the
losses. In this direction, sales of goods act 1979 made by UK government describes
various rights of a consumer (Crane, Matten and Spence, 2013). The legislation clearly
mentions that products that are being served to customers should be of high quality
without any faults that can harm the client in any way. In such condition, responsibility of
Amazon increases as the whole business is dependent on relationship of trust between
organisation and customer. Aforesaid firm should ensure that products being delivered to

customer is right and exactly same as ordered by client. The said company has a good
brand image due to its good customer service and easy return policy. Hence, it will not be
a big trouble for quoted business entity to maintain legal requirements in Sweden
(Gilbert, Rasche and Waddock, 2011). In addition to this, for registering the business in
mentioned country, various rules have been made. The information regarding this can be
collected by Amazon through various websites and other bodies like Swedish companies
registration, Swedish Migration Board's website and so on. This will help in ensuring that
no other company can run business in the name of Amazon without its permission.
 Environment: The environmental concerns for any business is defined under terms of
their responsibility towards the environment where they are operating (Bachmann and
Inkpen, 2011). Many business firms are engaged in manufacturing of products which
results in emission of various harmful gases and carbons. This affects the environment to
a great extent and may be very hazardous for life of people. This has necessitated the
government of UK to construct some strict rules that can restrict such practises from
damaging the environment. Amazon is not involved in such activities of manufacturing
of goods hence there is no possibility of polluting the surroundings by this way. While on
other hand, while delivering the products ordered by customers, vehicles used by delivery
persons may add pollution in environment (Garavan and McGuire, 2010). This can be
kept to the minimum by using vehicles that release less smoke and do not give much
sound. Moreover, packaging of ordered products can be done in paper bags and other
substitute materials instead of plastic. This will helps in keeping check on pollution
through waste materials as well.
(Source: PEST Analysis of Sweden,2016)
Illustration 1: Overview of Sweden

SWOT analysis
The SWOT analysis is conducted to know the various facets of business that are
favourable and unfavourable. The SWOT model applied on Amazon company will help in
knowing various strength, weakness, opportunity and threats of mentioned organisation that
should be considered by firm while enhancing the business in Sweden.
 Strength: The mentioned enterprise has a very strong brand value in market which it has
achieved through dealing in various range of products. Since the last 10 years company
has become a leader in e-commerce field. The company has made its processes based on
customer centred approach due to which it has been successful in making large number of
customers (Trompenaars and Hampden-Turner, 2011). It has been recorded by the said
organisation that more than 50% of buyers are frequent customers of company which is
the result of efficient customer service. The network of cited firm is also very strong with
all its partners which has helped the enterprise to fulfil the delivery at specified time in
remote areas as well. In Sweden, country can come up with all its present strategy that are
helpful in meeting demands of customers. Other strategies that are acting as a strength of
mentioned firm and can be helpful in new market as well are:
 Go global and act local mission of business will help in competing the domestic and
international e-commerce sites as well.
 Acquisitions with Junglee.com, Zappos.com etc. have contributed in generating more
revenues. Efficient delivery and customer care service will help in adding more number of brand
loyal clients (Needle, 2010). Weakness: The mentioned business organisation has very efficient delivery system and
also having a fierce competition from various other e-commerce sites. This has made the
firm to adopt cost leadership strategy where it has maintained its price levels at lower
level with less delivery charges. As a result, the profit margin of company has also sunk a
lot. Besides this, the enterprise has also faced a negative publicity due to tax shunning in
UK where it has been successful in earning most of the revenues than any other country.
Hence, the company has borne many losses in the direction of making expansion of its
services and increased debt as well affecting overall profitability of business. Many

business experts have commented that the quoted company operates on zero margin
model of business where though it is generating large revenues, still the translated profits
of organisation is not significant (Mellahi and Collings, 2010). Moreover, focussing only
on online retailing in new markets may not be much helpful for the mentioned business. Opportunities: Amazon may make some new modifications in online payment system to
make it more secure as privacy and security is very common issue due to which
customers do not prefer online payments. The company use to sell the products of third
party brands in which it can bring changes. The firm can start coming up more fiercely
with its own brand in market. This strategy can help in capitalising more profits for the
company. Specially in case of emerging in new market of Sweden, this plan can be very
beneficial (Gilbert, Rasche and Waddock, 2011). For expansion strategy in new market,
the aforesaid business institution can emerge by opening more sites. Acquisition
strategies of some other rival firms can also be a good move so that competition can be
brought down. The mentioned brand can increase the stocking of more companies that
can be helpful in popularising the site more in new market and in generating substantial
revenues.
 Threats: The concerns regarding hackings of personal informations of customers while
having online shopping has increased. This has made the consumers to stay away from
online purchasing and preferring other mediums to shop. The said company should focus
on this side so that it can assure customers about secure way of doing online shopping
(Garavan and McGuire, 2010). Cited venture has adopted aggressive pricing strategy
which has lead to face various legislative issues file by its competitors and accused of
taking their business to a great extent. Moreover, the quoted entity is getting a tough
competition from its various local level e-commerce sites as well which has made the
company to share its pie from the cake. Therefore, Amazon should be alert in this regard
and make some strict strategies so that it can compete with domestic sites of Sweden.
CONCLUSION
The current report carried out by studying various features of Sweden and Amazon has
concluded many aspects. The report has focussed on expansion plan that is intended by Amazon
which is a famous e-commerce site that gives online services. The cited enterprise is going to
establish in Sweden where it has many opportunities and threats as well. The report has

conducted PESTEL analysis which has revealed that the political condition is stable and
favourable for company. Further, economic growth rate is impressive and technological field is
also very developed in country that makes it a good place for investment. Moreover, the legal
conditions like consumer protection act should be kept in mind by company to achieve
successful establishment of business concern in new market. The aforesaid venturer's SWOT
analysis has also done in the report which articulates that company has a strong brand image and
efficient customer service that will make a good start of business in new country. In addition, the
organisation has less profit margin and various products that have failed in market due to which
it has faced some losses. Besides this, some security issues in online shopping has also impacted
the business of firm. Yet it has opportunities in new market to flourish by making its process
well organised and making some modifications in payment system.

REFERENCES
Journals and Books
Bachmann, R. and Inkpen, A.C., 2011. Understanding institutional-based trust building processes
in inter-organizational relationships. Organization Studies. 32(2). pp. 281-301.
Crane, A., Matten, D. and Spence, L.J., 2013. Corporate social responsibility in a global context.
Chapter in: Crane, A., Matten, D., and Spence, LJ,'Corporate Social Responsibility:
Readings and Cases in a Global Context. 2, pp. 3-26.
Farndale, E., Scullion, H. and Sparrow, P., 2010. The role of the corporate HR function in global
talent management. Journal of World Business. 45(2). pp. 161-168.
Ferraro, G. and Brody, E.K., 2015. Cultural Dimension of Global Business. Routledge.
Garavan, T.N. and McGuire, D., 2010. Human resource development and society: Human
resource development’s role in embedding corporate social responsibility, sustainability,
and ethics in organizations. Advances in Developing Human Resources. 12(5). pp. 487-
507.
Gilbert, D.U., Rasche, A. and Waddock, S., 2011. Accountability in a global economy: The
emergence of international accountability standards. Business Ethics Quarterly. 21(01). pp.
23-44.
Hill, C.W., Cronk, T. and Wickramasekera, R., 2013. Global business today. McGraw-Hill
Education (Australia).
Mellahi, K. and Collings, D.G., 2010. The barriers to effective global talent management: The
example of corporate elites in MNEs. Journal of World Business. 45(2). pp. 143-149.
Needle, D., 2010. Business in context: An introduction to business and its environment. Cengage
Learning EMEA.
Trompenaars, F. and Hampden-Turner, C., 2011. Riding the waves of culture: Understanding
diversity in global business. Nicholas Brealey Publishing.
Online
PEST Analysis of Sweden.2016. [Online]. Available through:
<http://www.marketresearchreports.com/countries/sweden>. [Accessed on 24th November
2016].