International Business: A Comparative Country Analysis for TAKIMAKI

This report provides a comparative country analysis for TAKIMAKI to enter into international markets. The report uses PESTLE analysis to assess the external factors of three countries- UK, China, and France. The report concludes that UK has a favorable environment for TAKIMAKI to enter into internationalization.

International Business

Executive summary
Internationalization is an important aspect for every business which is operating the
business activities at global level. Internationalization includes the maximization of international
relations and trades for the purpose of global integration. By considering the importance of
internationalization, the current company TAKIMAKI is going to enter into foreign market for
the expansion of business. A PESTLE analysis discloses the external factors of selected countries
to assess the international market so that TAKIMAKI can enter into that country. From the
analysis, it has been found that UK market has favorable external factors for TAKIMAKI to
enter into internationalization.

Table of Contents
1.0 INTRODUCTION.....................................................................................................................1
2.0 IDENTIFYING THE FACTORS FROM THAT TAKIMAKI SHOULD COLLECT THE
INFORMATION.............................................................................................................................1
2.1 Company analysis..................................................................................................................2
3.0 APPLYING AN ANALYTICAL FRAMEWORK- COMPARATIVE COUNTRY
ANALYSIS......................................................................................................................................3
3.1 PESTLE analysis...................................................................................................................3
4.0 CONCLUSION..........................................................................................................................9
REFERENCES..............................................................................................................................10
List of Tables
Table 1: SWOT analysis of TAKIMAKI company.........................................................................2
Table 2: Country Comparative table................................................................................................8
List of figures
Figure 1: Country analysis- PESTLE analysis................................................................................5

1.0 INTRODUCTION
The businesses that are carried at global levels and involved in business among multiple
countries are considered as international businesses (Dunning, 2013; Beamish, 2013; Dunning,
2013). All the business activities such as exchange of goods and services has taken place beyond
the national boundaries in internationalization. In this context, the present report is related to
internationalization of TAKIMAKI company which deals in consumer electronic products. The
company targets to enter into international market. For this purpose, three countries have been
selected such as UK, France and China and accordingly, a country analysis framework like
PESTLE (Political, Economic, Social, Technological, Legal and Environmental) analysis has
been applied to analyze the external factors of all three countries. Further, a SWOT (Strengths,
Weaknesses, Opportunities, Threats) analysis has also been done to assess the internal
environment of TAKIMAKI company.
2.0 IDENTIFYING THE FACTORS FROM THAT TAKIMAKI SHOULD COLLECT
THE INFORMATION
There are several factors which can be considered by TAKIMAKI to analyze the
competitive market and external factors of the country. The factors can be political, economic,
technological, legal, social and environmental factors which directly affects the business in any
country. In this regard, Wang, Chen and Chen (2012) asserted that political conditions majorly
affect the business activities because political disputes create barriers for regular activities of a
business. Moreover, high political risk negatively affects the business activities and discourage
the multinationals. Similarly, Sheng, Zhou and Li (2011) stated that more political uncertainty
reduces the chances of Foreign Direct Investments (FDI)because the foreign investors do not
enter into internationalization by considering the instability of political environment. On the
other hand, Dunning (2013) mentioned that information technology is one of the essential tools
for the development of a country and expansion of economy. Further, it also increases the
chances for high competition in the country as per the industry. Apart from this, Kwon and Wen
(2010) asserted that social factors have a contribution in development of company as well as
internationalization because social factors are associated with human beings. Moreover, if the
people will be more advanced and technology adopted then it can be useful for the companies to
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produce the innovative technological products and generate higher profits. Therefore, it reveals
that a company should intentionally measure and analyze all the external factors with respect to a
country where it is going to expand. Here, a country analysis has been done with respect to UK,
China and France so that TAKIMAKI would be aware about all three countries external
environment and on the basis of analysis, a country will be selected by TAKIMAKI for
internationalization.
2.1 Company analysis
As per the case study of TAKIMAKI, it has been found that company is dealing in
electronic products in Japan at local market. Here. a SWOT analysis has been done to analyze
the internal and external capacities of the company so that concerning company can estimate the
scenario that whether it is able to enter into international market or not. In this context, SWOT
analysis can be helpful to know about the TAKIMAKI as follows-
Table 1: SWOT analysis of TAKIMAKI company
Strengths
 Diversified range of products
 Qualified management team
and staff members
 Strong contact with
multinationals
 Availability of local suppliers
 Cost-effective price
Opportunities
 To develop contact with
multinationals
 Access technological experts
 Golden opportunity to enter
into internationalization
 Possibility to develop new
products/services
Weaknesses
 Lack of knowledge of
internationalization
 Need to pay high wage rate to
workers
 No contact with overseas
markets
 Lack of optimum resources
Threats
 Large number of competitors
 Low profitability
 Availability of substitute
products
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On the basis of SWOT analysis, it has been resulted that TAKIMAKI company is having
a strong position in the local market of Japan. Here, it shows that the company can enter into
international market because TAKIMAKI has qualified management team which would be
helpful to frame the international level business strategies for the growth and success. Moreover,
SWOT analysis reflects that the company has capabilities to enter into global market because
diversified range of products and availability of local suppliers which would provide the material
at cost-effective price. Hence, here may be a possibility to earn more profits.
3.0 APPLYING AN ANALYTICAL FRAMEWORK- COMPARATIVE COUNTRY
ANALYSIS
Country analysis- Country analysis is used to interpret the economic, political,
technological and social environment of a nation which shows a complete overview of a
particular country (Gambacorta, Hofmann and Peersman, 2014). Additionally, country analysis
is helpful in several aspects such as if a company has an intention to enter into a new market,
planning for developing subsidiaries etc. Here, a comparative country analysis has been done to
interpret the external environment so that concerning company TAKIMAKI can enter into
international markets on the basis of superiority of the country. Further, according to country
analysis, TAKIMAKI can select a specific country for the expansion of business at global level.
3.1 PESTLE analysis
With the help of PESTLE analysis, it can be easily assessed that which country is having
the strong position in compare to other nations (Zalengera et al., 2014; Makos, 2015). At this
juncture, three countries such as China, UK and France have been selected for the country
analysis with respect to TAKIMAKI company.
 Political factors- Currently, Chinese government is focusing on the regulation of a new
legal system by involving around 300 laws in constitution regarding economic areas.
China is a 4th largest country in context of large land area and powerful nation in the
world. Apart from this, China’s political conditions are stable in nature (Rahman, M.,
2017). Here, it may be favorable for any organization to enter into market with minimum
regulations. Similarly, the government of UK is also stable and proactive in nature.
However, due to Brexit, the political environment was become totally unbalanced and
there was not a certainty to stay in the EU. Apart from this, the UK government has
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revised a tax rate for high income group from 45% to 50%. (Thomas, B., 2016). On the
other hand, France is also a developed country and having the stable political situations.
There are less political conflicts, wars and no political crisis which is a positive point for
new business entry as well as investors etc. (Scribed Inc., 2018). Moreover, the
government of France has decided for businesses to pay specific amount of tax as per the
decided rate which can be used for further developments in the country. Therefore, it
shows that the political conditions of all three selected countries are supportive for the
new entry. Here, TAKIMAKI company can operate the business in any country (UK,
China, France) by considering the political stability.
 Economic factors- On the basis of current analysis, it has been found that Chinese
economy is sound in nature due to extensive GDP (Gross Domestic Product) growth rate
and if the country continuously stick on the ratio of escalation than rapidly it may surpass
the economy of UK. Moreover, more positivity with Chinese economy is that higher rate
of savings and availability of skilled labor (Digitaljournal.com 2018). On the other hand,
UK has strong economic conditions in comparison to other countries because it is a 5th
largest country in context of GDP. Further, there is a free entry in UK market for the
businesses due to involvement of Foreign Market Investment (FDI). However, there is a
slow recovery of the economy due to recession of 2008-2009 (Digitaljournal.com 2018).
Chinese growth rate can be reduced with a reason that higher rate of interest and
availability of properties on highest rate (Rahman, 2017). Apart from this, economy of
France is dealing with three major issues such as higher rate of unemployment, slow
growth rate and a greater number of competitions in the market (Scribed Inc., 2018). The
growth rate of France has been estimated to increase by 1.6% in 2019 but from the
collected data of last month, has been derived that rate of growth may reduce by 0.15 in
2020 (France Economy., 2018). Thus, it indicates that each of the selected country has a
varied economic condition which depends on the growth rate of the country. In compare
to all three countries, UK economy is strong due to high and stable growth rate.
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Figure 1: Country analysis- PESTLE analysis
(Source: Researcher’s own diagram)
 Technological factors- France is an excellent in technological sector because it is
possessing 4th industrial power along with a leadership in technology including computer
science, engineering, environmental protection etc. Moreover, France invest a large
amount on the growth of technology and development of industries around 2.2% of GDP.
Further, France is exporting its electrical products such as computers, instruments,
electrical machineries etc. and earning huge amount of profit (France Economy, 2018).
On the other hand, China always focuses on the development of new technological
products, new systems for internets and extranets and emphasizing on the updated
telecommunications etc. However, in B2C industry, China has unsafe online payment
system which increases the cases of fraud and crimes in the nation in context of buyers
(Rahman, 2017). Besides these, UK is advanced in technological sectors but less than
other countries because it has a slow technological development, However, UK has
innovative people which is large in size and people are expertise in technology as well as
science which offers more opportunities for growth of economy (Aliki, 2013).
Furthermore, in UK people are more associated with technology availability of internet
facilities. UK is based on more telecommunication infrastructure because it involves
5
Country
analysis
framework
(PESTLE
analysis)
Political
factors
Economic
factors
Technolo
gical
factors
Legal
factors
Social
factors

fibre-optic systems whereas global telephone is depending on the satellite stations.
Hence, it reflects that China has a strong competition in technological field because UK
and France are also connected with technological advancements which can be higher than
China.
 Social factors- Government of China is more concerned about the population so it has
applied a limited birth rate policy to control the population. Currently, the government of
China increases the minimum wage rate by 13% which is beneficial for the public to
improve the living standard. China is based on the collectivistic culture which involves
all the cultural people as same level (Fogel, 2010; Digitaljournal.com 2018). On the other
hand, UK has vast population ranging from higher edged group. People have a high
living standard and open migration is existed in UK. Moreover, the country offers a large
number of free services to public for better such as free health services. However, public
is more dependent on family members which maximizes the social unrest in groups.
Further, the cost of education might be increasing in future by considering the high social
standards (Digitaljournal.com 2018).
Apart from this, society of France is based on the individualism culture in which
everyone has freedom of opinion. The people are free to operate a business at own and no
obligations towards the family. Further, Frence has a low tolerance level because the
country is closer to rules and regulations (Global Alliance of SME’s, 2016). Although,
any company invest in a business then county will not be responsible for the risk because
the company has to take risk for expansion. It shows that social factors of UK are more
favorable for the new entrance because there is huge population which has interest in
innovative products due high living standards.
 Legal factors- UK has a specific law for labor in which working hours has been
mentioned that 48 hours in a week. Although, UK also permitted the people who has a
desire to work for over time and pay the extra amount for each hour (Aliki, 2013).
Further, UK has also mentioned the policies as per national minimum wage, benefits
related to maternity and less discrimination among people. On the other hand, China is
affecting by the number of laws and business regulations which is drastically affecting
the economy of country. According to labor law 1995, the country has mentioned several
regulations such as employee remunerations, labor standards, rules regarding
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employment practices etc. (Fogel, 2010). Moreover, China has supportive laws for the
foreign investors and established a complete law system joint venture regarding
termination, operation as well as liquidation of enterprises who invested in China
(Foreigners in China, 2017).
France has own employment laws which includes the written contracts from all
hiring’s. Everything will be mentioned in French language that cannot be removed by
unknowns. The legal conditions of France are strict in nature because everyone is obliged
by legalities. Hence, nobody can breach the law, if anybody is found to break the rules
then it would be a punishable act in eyes of the French government (France Economy,
2018). Therefore, it indicates that every county has its own rules and regulations which
affects the business criteria of companies because they have to follow the policies of
government for smooth running of business. Further, it has been identified that Laws of
China are appropriate because these are based on the convenience level of people which
have to follow as per the nature of businesses.
 Environmental factors- The government of UK has established a department as Defra
which is responsible for all actions related environmental protection. It is specially
related to food industry, welfare of animals. Further, it also associates with drastic
environmental complexities such as flood and natural calamities etc. Furthermore, the
UK government is always focused towards the maintenance of sustainable development
in environment by considering the biodiversity, control on natural resources and waste
etc. (Jordan, 2012; Aliki, 2013). However, China is heavily focusing on the industrial
development which has negative impact on environment and increasing the pollutions in
nature. Moreover, it is also affecting the natural resources which are going to diminishe
(Economy, 2010;). By considering the significance of environmental protection, now
emphasizing on environmental safety by including environmental protection act 1998
(Edmonds, 2012).
China has active participation in protection of natural resources and also
involving the public protection of environment. On a contrary, France has own
regulations regarding the conservation of water resources and maintain sustainability in
the environment so that economy can deal with the issues of water pollutions. For
example, before years ago, France face the issue of acid rain due to infection in water. It
7

had a huge impact on forests which affects the living beings. Here, France is emphasizing
on control of water pollution and level of industrial carbon as per the environmental act
so that industries can grow as well as living beings do not get affected (France Economy,
2018). Furthermore, the country is also focusing on infrastructure development programs
by involving the treatment of wastewater so that can be used for further usage (Jasper,
2014). Thus, it indicates that environmental factors have major effects on the
development of industries because most of the industries releases the carbons and
harmful elements. These elements negatively affect the environment that restricts the
countries to establish the new industries which harms the nature.
Table 2: Country Comparative table
Factors China UK France
Political Stable Stable Stable
Economic Sound in nature More than China and
France
Average
Social-Cultural Collectivism Huge aging
population
Individualism
Technological Innovative in technology Slow technological
developments
More concerned
towards science and
IT in compare to
China
Legal Specific labor and industry
laws
Specific labor laws Employment laws
Environmental Environmental protection
acts 1998
Environmental
protection act and
departments
More degradation of
natural resources
On the basis of PESTLE analysis, it has been concluded that TAKIMAKI can
internationalize in UK because all the conditions are favorable in context of politics, legal,
technological, social, economic and environmental factors. Further, there are stable political
conditions and free entry for the new entry. On the basis of SWOT and PESTLE analysis, it has
been resulted that UK market is vast in size and has huge edging population which are demanded
8

for innovative and advanced technological products for increasing the living standard. Apart
from these, there is low technological growth which would be better for TAKIMAKI to establish
the business in electrical products UK by adopting the growth and expansion strategies.
Moreover, with the expansion strategies, the company would be able to focus on the demanded
areas and accordingly produce the products.
4.0 CONCLUSION
On the basis of report, it has been concluded that TKAIMAKI has a strong position in
local market of Japan because having local suppliers as well as cost-effective pricing of products.
On the other hand, it has been derived that company has a capability to enter into international
market due to contact with multinationals. Apart from this, on the basis of analytical framework
of PESTLE, it has been summarized that all the factors affect the company on equal basis.
Additionally, by ignoring the external factors a company cannot exist in a competitive business
environment. By considering analysis of all the factors, it has been concluded that TAKIMAKI
company can enter into UK market for the internationalization because all the factors of UK are
supportive for a new entry.
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