Critical Analyses of International Business: Pestle and Culture Analyses

This study conducts a critical analysis of international business, focusing on Pestle analyses for environmental analyses and culture analyses. It explores the potential of the German market for Swiggy, an Indian online food delivery company, and provides insights into the differences in culture between India and Germany. The study also discusses the mode of entry options for Swiggy in the German market.

INTERNATIONAL BUSINESS

Contents
INTRODUCTION......................................................................................................................3
CRITICAL ANALYSES...........................................................................................................3
Pestle analyses for environmental analyses...........................................................................3
Culture analyses.....................................................................................................................3
Mode of entry.........................................................................................................................6
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................9
Books and Journals....................................................................................................................9

INTRODUCTION
International businesses are such companies that are engaged in trading of goods and
services globally (Hamilton and Webster, 2018). In order to run operations in the
international market successfully companies need to develop bridge in global market place.
Political, economic conditions of nation affect the sustainability of business to great extent.
Present study is based on Swiggy that is the Indian online food delivery company. It delivers
food at home to all consumers and provides them services accordingly. Firm is planning to
enter into Germany market. Germany has great economic condition and there is high demand
of such kind of products and services. Present study will conduct environmental scanning of
Germany market to evaluate the potential of this market for company. Further ore, it will
conduct culture analyses to understand differences in culture of host and guest county.
CRITICAL ANALYSES
Pestle analyses for environmental analyses
India is the developing country and Germany is highly developed nation. There is
huge difference between macro environmental factors of both these countries (Cravino and
Levchenko, 2017).
Political factor
This is the element that has great impact over online food delivery services globally.
Health and safety guidelines of Germany are very strict and tax reforms create pressure on
existing business those who are operating in the same industry as well. These government
regulations affect sustainability of firm (Kolk, 2016). There is no much political risk will
have to face by Swiggy in Germany market because government is very supportive towards
such business.
Government across the globe have the development of the expansive regulatory strategy and
framework in every aspect of developing the food industry. This have the impact on the
online delivery system. Germany is the democratic public which lays done the fundamental
level of structure for the government. The country has proper dictating of vale system which

is needed to followed. On the Swiggy have to analyse the impact of government policy in the
food industry by following the current trends of markets.
Economic factors
The Germany have been identified as the 5th largest economy who is leading the export of
machinery, vehicles and other house hold occupants which is benefits the highly skilled
labours. The Germany policy palsy as important roles on providing the new level of subsidies
in certain sectors while promoting the competition and free enterprises. This can turn to be
golden opportunities for Swiggy to establish the business in order to have subsidies in
business. on the other hand, increase in labour cost can be negative impact as it effects the
margin. Economic factor There is no level of denying industry the online food industry has
the clear level of dependence on the developing food industry which is one of strongest in the
world In the Pestle analysis, Swiggy have the need to look more level of Political, Economic,
Sociocultural, Technological, Legal, and Environmental factors in online food delivery
system establishment. This can be led into their restaurants and the respective food
distributors who have been affected by current trends.
Social factors
Germany have the 82 million residents as largest EU country in term of population which
have description of modern, multicultural country. The revenue of the online delivery food
segment in gemmary is expected to be US$2,257m in 2020 which is been identifies as the
grated level of opportunity to Swiggy to expand in Germany. On the other hand, people of
Germany ae health conscious which is indirectly affect the business of food delivery system.
Technological factors
This one is favourite for the Swiggy as in the state Germany there is increase level of
automation. Indeed, there are more level of dynamic changes which plays an important role
in space such as rising development in technology which makes it unclear to be profitable for

business. ordering food online will have the allowing of business with profitability and
reduction errors.
Legal factors
Germany is having policy in food related industry for maintained the high standard safety
matters. The people have using the robotics is more away to have the increase in level of
accuracy have also the foundation of legal aspects. As such, those in the food business need
to be extremely careful to ensure that they stay within the bounds of these rules to prevent
costly lawsuits.
Environmental factors
Germany is advanced country paying focus in reduce the uses of more level of fuel that are
non renewable resources. The Swiggy should have the understandability to use online
services in such way which can have minimum negative impact on environment.
Culture analyses
Culture of each county is different from others. Firms have to understand culture of
guest nation before entering into new international market (Kostova and Hult, 2016). This
may help the business in conducting operations in the new market successfully and
generating positive results as well.
Power distance
This is the element that believes the extent to which there is inequality in the society
or less powerful person get acceptance in society. If value of PDI is high that reflects that
companies are centralised and there is complex hierarchy system. There is huge gap between
authority and employees. If there is low PDI value that reflects that company work with flat
organisational structure (Bullough, Moore and Kalafatoglu, 2017). Firms treat all its workers
equally and give supervision to all workers. India has 77 score and Germany has 35 PDI
score. That reflects that In India people are addicted to follow instruction but When Swiggy
will enter into Germany market then it will have to allot responsibilities to all workers and
will have to treat them equally. Firm will have to involve its workers in decisions so that

they support the Swiggy to sustain in international market successfully (Malyarets And et.al.,
2017).
Figure 1country culture comparison
(Source: COUNTRY COMPARISON, 2020)
Individualism vs Collectivism (IDV)
This is another dimension of culture model. If value of IDV is high that means people
give more time and value to their privacy. They like to live with freedom. They enjoy new
challenges and like to get rewards for their hard workers. Whereas if value of IDV is low that
shows that people like to concentrate on one task to become master of it. They need intrinsic
rewards and they pay more attention on harmony rather than freedom. India is the country
where score of IDV is 48 and in Germany it is 67 (Geppert, Becker-Ritterspach and
Mudambi, 2016). That reflects that in Germany people like to work freely hence Swiggy
needs to create business environment in such manner where people are getting involved in
decision making process. They must get all kinds of rewards against their hard work. This
will help in retaining atlent in Germany and sustaining in market for longer duration.
Masculinity vs Femininity (MAS)

This is another dimension that emphases on distribution of role among men and
women. High MAS means people live with strong egos and they give more importance to
their status. They like to earn more money and like to get achievements. Whereas if score is
low that reflects that relations are more important for people than money. They focus more on
quality life rather than spending too much time on their work only. India has 56 score and
Germany has 65 score (Bullough, Moore and Kalafatoglu, 2017). Swiggy needs to create
atmosphere in Germany in such manner so that employees like to work well. Customers like
to get 24*7 services and immediate services. If Swiggy is fulfilling their need then it would
be better for business to generate profit greatly. Swiggy needs to set target for its consumers
so that they work better and serve consumers soon. It will have to provide some rewards to
them so that people feel better. If discounts are given to customers then they will be attracted
that will be helpful in generating more sales in Germany market (Kostova and Hult, 2016).
Uncertainty avoidance Index (UAI)
India has 40 and Germany has 65 score in it. Germany’s people like flexibility they do
not want to work with rigid policies. There is high energy in society hence Swiggy needs to
take care needs of buyers and deliver them services with good gestures. This will make
consumers loyal towards the brand. This would be better in developing brand image and
sustaining in market for longer duration (Cravino and Levchenko, 2017).
Long vs short term orientation
India has 51 and Germany has 83 score in it. Modesty is more important for this
culture hence firm needs to make such policies where consumers and employees both
requirements can be met (Hamilton and Webster, 2018).
Indulgence vs Restraint (IVR)
Germany has 40 and India has 26 score. People are optimistic and they like to test
innovative ideas. They concentrates more on personal happiness hence they support each
others. Swiggy needs to give freedom to its consumers to share their feedback with firm , this
will make them positive towards the brand and they will like to have its services in near
future as well (Kostova and Hult, 2016).
Mode of entry

This is very essential for Swiggy that to select appropriate route to enter into
international market. If wrong routed is selected then it may create problem in sustaining in
Germany market successfully.
Franchising
This is the option available to Swiggy in which enterprise can give franchise of
Swiggy to existing firm which is operating in local market since longer duration. By giving
franchise to that business Swiggy will get royalty or commission from profit (Modes of Entry,
2020).
Advantage
 This is considered as low cost entry mode because Swiggy will need not to spend too
much capital to setup office there. As franchisee firm already exists there hence it can
manage operations properly.
 Franchise partner has great knowledge about market and needs of consumers. Hence
it can help in enhancing sales in that market (Kostova and Hult, 2016).
 This is great strategy because risk of failure is very less because franchise partners are
already working in that area.
Disadvantage
 In the franchise option Swiggy will have to depend on franchise partner hence it can
be complicated sometime.
 Firm many times lose its control over market because of high dependency on
franchise partner. There is a high chance of leaking the confidential details hence
option franchise is not that much suitable (Hamilton and Webster, 2018).
Merger and acquisition
Swiggy can also operate kits business in Germany market by getting merged with
other firm. As there are many restaurants those who need food delivery services. Swiggy can
contact with these restaurants and can come in merger with them.
Advantage
 As firm with whom it is planning to merge is well settled firm hence there are high
chances to earn good amount of profit there.

 This will help in minimising risk and capital investment of business because risk will
be shared between both companies (Cravino and Levchenko, 2017).
Disadvantage
 Merger is the complex process as Swiggy will have to bear many government
restrictions
 If there is poor coordination between both companies then it may affect sustainability
of company.
From the above analyses it can be recommended that Swiggy should go with
franchise option. That is better in order to understand need of local market and creating
operations in such manner so that these requirements can be met successfully. Franchise will
help in gaining more opportunities in Germany market and entity will have great control over
spending as well (Kostova and Hult, 2016).
CONCLUSION
From the above study it can be concluded that entering into internal market is not
easy, it requires proper planning and effective strategies. Before entering into new market
company needs to scan environment of that nation. This will help in framing proper strategies
so that it can sustain in global market for longer duration. Culture is the major factor that may
create problem to business hence it is essential evaluate culture differences and accordingly
make changes in operations so that it can gain profit in the international market.

REFERENCES
Books and Journals
Bullough, A., Moore, F. and Kalafatoglu, T., 2017. Research on women in international
business and management: then, now, and next. Cross Cultural & Strategic
Management.
Cravino, J. and Levchenko, A.A., 2017. Multinational firms and international business cycle
transmission. The Quarterly Journal of Economics. 132(2). pp.921-962.
Geppert, M., Becker-Ritterspach, F. and Mudambi, R., 2016. Politics and power in
multinational companies: Integrating the international business and organization studies
perspectives. Organization Studies. 37(9). pp.1209-1225.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Kostova, T. and Hult, G.T.M., 2016. Meyer and Peng’s 2005 article as a foundation for an
expanded and refined international business research agenda: Context, organizations,
and theories. Journal of International Business Studies. 47(1). pp.23-32.
Malyarets, L. And et.al., 2017. Theory and practice of controlling at enterprises in
international business. Економiчний часопис-XXI. 165(5-6). pp.90-96.
Online
COUNTRY COMPARISON. 2020. [ONLINE]. AVAILABLE THROUGH
HTTPS://WWW.HOFSTEDE-INSIGHTS.COM/COUNTRY-COMPARISON/GERMA
NY,INDIA/
Modes of Entry. 2020. [Online]. Available through
<https://www.tutorialspoint.com/international_business_management/
modes_of_entry.htm>