Strategic International Business And Management

Running head: STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Name of the student
Name of the university
Author note

STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT1
Table of Contents
Background of the organization.......................................................................................................2
Rationale for choosing the target market.........................................................................................2
Competitive intensity of the market................................................................................................5
Internal environment of the organization........................................................................................9
VRIO analysis..............................................................................................................................9
SWOT assessment.....................................................................................................................12
Market entry mode.........................................................................................................................13
Conclusion.....................................................................................................................................18
References......................................................................................................................................19
Appendices....................................................................................................................................22
Appendix 1: PESTLE analysis of the two countries- Norway and Mexico(1250 words).........22
Appendix 2- VRIO analysis.......................................................................................................38
Appendix 3: Economic state of Norway....................................................................................39
Appendix 4- Economic state of Mexico....................................................................................40

STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT2
Background of the organization
The concerned organization, Lidl, is a global discount supermarket and a German based
organization which has been operating since the year 1930 (Lidl.com 2020). The concerned
organization operates through 10,800 stores across markets of Europe and the US (Lidl.com
2020). The diverse range of low cost propositions that are made by the organization permitted
the same in gaining a competitive edge over the existing market players. The purpose for
undertaking the report is to identify the market competition that might be encountered by the
business and determine the market entry mode that might be considered for a preferred market
expansion of the business.
Rationale for choosing the target market
The chosen market for the concerned organization is Mexico even though there is a
partial instability in the political scenario. It has been observed that the corruption and crime
rates in the economy might be restrictive forces affecting the growth of the business in the
markets. However, Andrés Manuel López Obrador has taken the initiative of remodeling the
measures and practices for minimizing the crime rates in the public and non- public
organizations. Moreover, Obrador also took the initiative of promoting FDIs in the economy
through different trade options. It would allow the organization in making a dynamic growth in
the Mexican markets (Weforum.org 2019). The regeneration of the NAFTA agreement held a
growing scope for the organization in improving its supply chain related operation in the
Mexican markets (Jano-Ito and Crawford-Brown 2017).
The minimization of the corporate taxation and excise duties enabled the Mexican
government in empowering the FDI scheme while attracting the attention of the foreign

STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT3
companies to invest in their markets. The stabilizing political situation in the market and lower
rate of government intervention in the different organizational operations would increase the
scope of Lidl while making a market expansion in Mexico. Mexico is considered to be ranking
fifteenth among the G20 nations and is experiencing a GDP growth of 4.25% (estimated)
(Lieberman, Lee and Folta 2017). The growth of the GDP in the nation and the national
productivity index indicates a growth prospective for the concerned organization in the Mexican
markets.
The increased affordability of the customers is reflected through their increased
disposable income. The rate of unemployment in the economy is reducing exponentially, which
would support the affordability of the customers in the markets. The increased affordability of
the Mexican customers would allow the concerned organization in finding potential customers in
the economy. Bladowski and McCowan (2017) opined that the increased affordability of the
customers in a market supports an organization in increasing the scope of marketing while
attracting and proposing their offerings to potential customers. Therefore, the increased
affordability of the customers would allow the concerned organization in finding potential
customers in the Mexican markets.
The calculated GDP of the nation was US$ 1,223.36 billion and US$ 1,158.23 billion in
years 2018 and 2017 respectively which would significantly contribute to the success factors of
the venture (Huang et al. 2019). The social factors of the economy is specifically based on the
changing preferences of the customers and their orientation towards the use of online platforms.
It has been noticed that there are specific issues that are being faced by the Mexican communities
relating to the insufficiency of education. However, Obrador has taken the initiative of enforcing

STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT4
different reforms with the purpose of improving the educational setting of the residents in
Mexico (Okabe and Gómez 2018).
The improvements in the lifestyle of the people in Mexico might be attributed to the
minimization of joblessness in the economy. The concerned organization might face significant
issues in sourcing skilled workforce from the economy. However, the educational reforms that
are being made by the government, over the years, would support the organization in sourcing
skilled workforce from different consultancy services. It has been noted that the Mexican
markets upholds intense competition in the retail sectors through the existence of Walmart,
Superama, Soriana and the like (Toledo and Barrera-Bassols 2017). However, the FDI related
empowerment and the legislations that are imposed by the Mexican government for increasing
the growth of the foreign organizations in the nation would operate as a prospect for the
concerned organization (Puzo, Mehlum and Qin 2018). The nation is still facing a backlog in
the field of technology.
The development of ICT and the service sectors in Mexico are speeding up the process of
technological growth in the different aspects (Weforum.org 2019). The innovativeness and
infrastructural growth in the industry is being observed within the last two years where internet
penetration and broadband service related aspects were elevated. The nation has already
developed technology for improving the transportation and logistics related concerns which
would allow the concerned organization in improving their scale of operations. The
improvements in the transportation and logistics would allow the organization in improving the
supply related operations.
The growth of different service sectors in the economy also permitted the venture in
gaining a competitive edge over the existing players. The legal and environmental protection

STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT5
related legislations that are imposed by the Mexican government would empower the growth of
the business in Mexico. The imposition of different legislations under General Law on
Ecological Equilibrium and Environmental Protection would allow the concerned organization in
gaining knowledge of the different frameworks. Therefore, Mexico would be an efficient target
market for the expansion of Lidl while increasing their competitiveness and sustainability.
Competitive intensity of the market
Competitive rivalry
(strong force)
 The retail sector is facing intense
competition from the existing market
players like Walmart, Superama and
Soriana in Mexico. The intense
competition has increased the market
competition in the market. The
frequent innovations that are made by
the organizations and the loyalty of
the customers towards the existing
players might affect the capability of
the concerned business, Lidl, in
making a market growth in the
Mexican context (Schmid et al. 2018).
The intensity of market competition
acts as a strong force on the
organizational operations while
operating in the different regions in

STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT6
Mexico.
 The higher rate of differentiation
between the propositions that are
being made by the businesses and the
technological innovations that are
being made by the same in the sectors
would restrict the organization in
gaining a competitive edge over the
existing players in the Mexican
markets (Sun et al. 2018)
Bargaining power of the suppliers
(weak force)
 The existence of wider range of
suppliers in the market would
influence minimization of the
bargaining power of the suppliers. The
existence of wider range of suppliers
in the Mexican markets and the
proposition of similar offerings to the
companies would allow the
organization in negotiating with the
suppliers on the supplies. Moreover,
the propositions that are made by the
suppliers are fairly standardized which
would allow the concerned

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organization in switching between the
suppliers while increasing the
resources as per the needs of the
venture (Tulung 2017). Moreover, the
negotiation with the suppliers would
allow the organization in increasing
the feasibility of minimizing the cost
of operations in accordance with the
demand of the customers. Therefore,
the bargaining power of the suppliers
have proved to be a weaker force for
operating in the different markets.
Bargaining power of the buyers
(strong force)
 The bargaining power of the buyers
are strong in the Mexican economy
due o the presence of companies like
Wal-mart and other reputed retail
organizations (Xie and Li 2017). The
availability of wider range of
alternatives in the retail industry in
Mexico has influenced the growth of
the bargaining power of the buyers.
The increased bargaining power of the
buyers might incapacitate the