Social environment analysis Norway

Running head: STRATEGIC BUSINESS MANAGEMENT
STRATEGIC BUSINESS MANAGEMENT
Student’s Name
University Name
Author note

1
STRATEGIC BUSINESS MANAGEMENT
Table of Contents
Introduction –.............................................................................................................................2
TASK 1. : Comparative Pestle analysis of Mexico and Norway...............................................3
Scoring systems of two countries...............................................................................................5
TASK 2. : Rationale for the selected country............................................................................7
TASK 3. : 5-Forces model.........................................................................................................8
TASK 4. : VRIO framework)...................................................................................................10
TASK 5: Modes of Entry.........................................................................................................12
Conclusion................................................................................................................................14
References................................................................................................................................15

2
STRATEGIC BUSINESS MANAGEMENT
Introduction –
Lidl is a discount supermarket which aims to expand its business operations in the
global market. In the domestic market, the business organization has gained much success
and fame. Therefore, presently, the company has been planning to expand its operations in
the foreign market to gain exposure and increase its presence in the international market. In
order to expand its business operations in the global market, the company has chosen two
countries that are Mexico and Norway (Lidl.com. 2020). The purpose of this report is to
analyze and determine which among the two countries are most appropriate for business
organization to carry out its operations. The report will be taking into consideration the
political, economical, social, technological, environmental and legal aspects of both the
countries. The two countries will be scored on the various business aspects and one country
will be selected for business expansion. Further, the report will provide a rationale for the
selected country and state the reasons for the chosen country. The competitive environment
of the selected country will be determined with the help of five force analysis. This model
will provide a detailed description of the competitive environment prevailing in the country.
It will provide a VIRO framework to determine the feasibility of the company and its ability
to operate in the foreign country. Lastly, the report will provide recommendations on the
modes of entry into the foreign country. The most appropriate modes of entry will be
suggested for the company to expand its operations. Lastly, it will sum up the main points
and conclude the report.

3
STRATEGIC BUSINESS MANAGEMENT
TASK 1. : Comparative Pestle analysis of Mexico and Norway
In order to have a better understanding of the business environment in Mexico and
Norway, PESTLE analysis has been implemented to understand the political, social,
economic, technological, and legal and environment aspects (Arslan, Tarba and Larimo
2015).
Comparative pestle
Political environment:
Barutçu and Tunca (2015), suggests that Norway has a stable political landscape with
low rate of opposition from other parties. The citizens of the country have stable lifestyle
with the current political landscape of the country. Hence this makes it suitable for the
country as there is no political corruption involved in the country. Further, the country is a
member of European Free Trade Association (EFTA) and European Union (EU), which
provides tariff rates to the members of European Economic Area (EEA) members. The
country has favorable rules and regulations as per EU (Eckstein 2015). On the other hand,
Mexico has a presidential democracy with good trading relations with Canada and USA as
evidenced by NAFTA agreement. However, there is strained relationship with USA.
Moreover, there are growing concerns over assertion of leaders in the region. This suggests
an unstable political environment as compared to Norway (Foladori and Lau 2014).
Economic factors:
Availability of rich resources in Norway contributes to economy financial. The
country has low unemployment rate as compared to other countries like Sweden. The
economy of the country is mixed with high standard of living. The country is financially
comfortable with good welfare system (Foladori and Lau 2014). However, the country is

4
STRATEGIC BUSINESS MANAGEMENT
dependent on the oil and gas industries. The GDP of the country is $395.9 billion (2019).
Norway has a population of 5.3 million with 1.4% growth rate. The inflation rate of the
country is 2.8% (Heritage.org. 2020).. On the other Mexico, has a population of the country
is 124.7 million with 2.0% growth rate. The inflation rate of the country 4.9%. However, the
economic freedom of Mexico is 66.0 and Norway scores 73.4 (Heritage.org. 2020). This
makes Norway rank 28th freest economy as per 2020 index (Heritage.org. 2020).
Social Factors:
It has been identified by Laufs, Bembom and Schwens (2016), that Mexico faces
some social challenges due to economic affluence with high rate of disparity between the rich
and the poor. There is high gap between poverty and richness in the country. As per statistics,
53% of the country’s population is poor with widespread corruption (Laufs, Bembom and
Schwens 2016). On the other hand, Norway has a rich lifestyle supported with stable political
environment. The country also has a beautiful landscape with majority of the population
speaks in English.
Technological factors:
Norway is a country that is most desirable for technologically advanced companies;
the economy thrives in tech industry with abundant availability of 'A' grade software
engineers and other talents (Barutçu and Tunca 2015). Abundant availability of skilled and
talented labors in the country makes it situated for business expansion. On the other hand,
Mexico has recently turned into a global center for research and development (Foladori and
Lau 2014). However, the country has various barriers and uncertainty regarding technologies
and crowd funding.
Legal Factors:

5
STRATEGIC BUSINESS MANAGEMENT
Norway has been accused on various issues with legal system. However, as per there
local businesses, the country has a strong banking systems, pensions systems and welfare
systems. On the other hand, Mexico is free and independent (Foladori and Lau 2014).
However, the image of the country is questioned due to high level of corruption and political
instability.
Environment Factors:
As per research, it has been identified that Norway has higher environmental goals
with hefty promises to be carbon neutral by the year 2050 (Foladori and Lau 2014). The
country also aims to reduce gas emissions to 100% (Hallenstvedt 2014). Therefore, the
companies need to be takes measures and act accordingly. On the other hand, Mexico faces
various environmental challenges. High pollution in the country makes it potentially
dangerous for both businesses and human health.
Scoring systems of two countries
Norway Mexico
Population 5.3 million 124.7 million
GDP (PPP) $395.9 billion $2.6 trillion
Growth 1.4% 2.0%
Per Capita Income $74,356 $20,602
Employment 3.9% 3.3%
Inflation (CPI) 2.8% 4.9%
FDI inflow 18214.7 million $31.6 billion