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Porter's Five Forces Analysis - PESTLE Analysis

   

Added on  2020-10-22

11 Pages3253 Words323 Views
PROJECT

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY ..................................................................................................................................1Overview of company.................................................................................................................1Establishment of company in Denmark through foreign direct investment ..............................1PESTLE Analysis.......................................................................................................................5Porter fiver forces analysis .........................................................................................................6CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9

INTRODUCTIONForeign direct investment is the form of investment in which the company invest in thefirm of company located in another country. With the help of foreign direct investmentcompanies are able to expand their business in another country to grow their business. FDI takeplace when the investor or firm establishes foreign business operation to acquire foreignownership or controlling interest in a foreign company. The benefit of foreign direct investmentis that it assist in entering a foreign market. In this assignment the company Tesla is going toexpand it business in Denmark and for that it is required to identify the foreign direct investmentof Denmark in order to identify the decision which is made by Tesla is correct or not. Tesla is anAmerican based car manufacturing company. Moreover, this study will include Pestle and porterfive forces analysis of Denmark to identify the environment and industry analysis of Denmark tosupport the decision.MAIN BODY Overview of companyTesla is an American based Automotive and energy company. It is specialised in electriccar manufacturing. The company is having headquarter in Palo Alto, California , US. Thecompany is involved in car manufacturing and have different models for car. It is ranked asworld's best selling plug- in passenger car in 2017. The company provides different productssuch as electric vehicles and energy sources. The primary goals of this company is to provideelectric car. The company focus on creating innovative products to change the automotiveindustry. With the use of technology the company is growing its sales and now it wants toexpand its business through investing in companies located in Denmark through use of Foreigndirect investment which assist in entering the company to enter the foreign market throughinvesting in companies located in that country.Establishment of company in Denmark through foreign direct investment The company in order to establish it business must complete the registration process tothe company in the allocated country by its name and all the formalities regarding establishmentsare required to be completed by the Tesla according to the procedure followed in Denmark(Spence, 2016). Tesla in order to establish its business operations in Denmark must understandthe foreign direct investment of that country in order to identify if the decision made by them issupportive or not by understanding the foreign direct investment of that country Tesla will be1

able to make an effective decision regarding its foreign direct investment in Denmarkmanufacturing. There are various organisation of different countries investing in the companiesof Denmark through foreign direct investment to enter those market to increase their profitabilityand maintain the day to day operations in that country (Denmark, 2017). Tesla decision to investin the Denmark through foreign direct investment is beneficial for the company as country havem ore foreign direct investment and there are more scope for growth. Also, the county have skilled and multilingual workforce which help the companiesentering in Denmark to have better workforce. Tesla by foreign direct investment in Denmarkwill have advantage of political stability as the country have political stability due to which manycompanies are attracting towards this country to expand their business. The foreign directinvestment is the best way to enter the market as it provide easy entry mode. Tesla is involved inmanufacturing industry and it is going to expand its business to Denmark and for that it isrequired to understand the market of Denmark and the main invested sectors of Denmark thatwill helps the company to make the decision regarding foreign direct investment in that country. Tesla by foreign direct investment in Denmark will be able to have relatively lowcompany taxation rate of about 25%. Moreover, the Tesla is involved in energy industry and thecountry provide varieties of energy resources which will be beneficial for the company to investin foreign direct investment of Denmark to acquire the energy resources of that country. Thepeople of this country also have high purchasing power which will be beneficial for the firm andwill support to the foreign direct investment made by Tesla in Denmark. But on the countrythere are various disadvantages which are against the foreign direct investment of Tesla becausethe county 's economic system in more dependent on the international fluctuations. Also, thecountry have small domestic market. The level of FSI in Denmark is still far below the potentialof country.The following shows the FDI Stock by Country Main Investing Countries 2017, in %Netherlands 14.6Sweden 16.6Luxembourg10.1France 11.6United states 4.82

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