Strategic International Business Management PDF

RUNNING HEAD: Strategic International Business Management
Strategic International
Business Management

Strategic International Business Management 1
Contents
Introduction......................................................................................................................................2
Task 2: PESTEL analysis of Mexico for Lidl.................................................................................2
Task 3: Five Forces Model..............................................................................................................4
Task 4: Resource and Capabilities analysis for Lidl.......................................................................6
Task 5: Entry Mode for Lidl............................................................................................................8
Conclusion.......................................................................................................................................9
Reference.......................................................................................................................................11
Appendices....................................................................................................................................14
Task 1.........................................................................................................................................14

Strategic International Business Management 2
Introduction
The objective of the report is to enlighten the reader with the information about the company
Lidl in the international market. This report explain the details about the business expansion
strategy of the company Lidl in order to enter in the market of Norway or Mexico. The internal
and external environmental analysis of the organization has been highlighted in the paper. The
report also explain the entry mode for them to enter in the international market. The organization
Lidl is supermarket retail chain store based in Germany that operates with more than 10,000
stores in the worldwide environment.
Task 2: PESTEL analysis of Mexico for Lidl
Below mentioned is PESTEL analysis of Mexico as the organization aims to enter in this market
so as to increase growth and productivity of Lidl.
Political: the political factors of the country explain that the government plays a major role in
taking crucial actions for different companies present in several industries. There are several
policies defined in the interest of people that help the company to perform business actions using
right activities and initiate effective trade agreement with different nations. The federal
government is the one that take all the crucial decisions in the nations (Cervantes, Lemus, and
Montalvo 2017). The decisions of federal government are encompassed as a legislation which is
then abided by all the people present in the nation. The presidential Federal republic
(government) is segregated into three aspects that are union, state and municipal government.
Economic: the economy of the nation is strong and stable that provides an opportunity to the
people to invest in the nation and earn profitability from it. The economy of the country comes
under top 15 nations with strong economic capacity. Also, it should be noted that the nation has
good relations with US that helps the government in improving its economic value. The
companies in nation work to help the government in increasing its growth per capita. The
country is also comes under the NAFTA agreement (North American Free Trade Agreement)
that explain the free trade agreement with different countries present in the world (Geppert,
Williams, and Wortmann 2015).

Strategic International Business Management 3
Social: the social factors states that the country is influenced by the North American and Spanish
culture. The people of nation works with the objective to attain globalization in the environment.
The country shows high population which means that there is available of human resource for
the companies in the nation. Mostly urban cities are present in the Mexico environment as 80%
per cent of the land in Mexico comes under developed cities. Also, the nation has high degree of
literacy rate of 95% which shows that the people live a good living Mexico and hold the capacity
to spend on several goods as well (Appendices 1).
Technological: again, it should be noted that the alliance of the nation with US helps the country
under this case. US is a high technology equipped nation, therefore, countries having strong
relations with US also make effective use of technology in their regular day to day working.
Technology also introduces several possibilities for the nation for promote the business function
and increase the scope of profitability as well. Technology helps in finding the loopholes in the
system and working on them to increase the scope of growth for the nation. It also helps in
increasing the degree of client satisfaction by initiating effective communication with them and
making the products and services technologically equipped (Hançerlioğulları, Şen, and Aktunç
2016).
Environmental: the environment of Mexico is one of the most negative factors for the companies
to enter in this market. It should be noted that already existing organization have created high
pollution in the nation due to which government resist the international companies in entering in
such market. The lifestyle of people is getting degraded due to pollution in air and water. Air
pollution is one of the major reasons due to which people do not want to liv in Mexico. The
government is taking several actions in the nation improve the health of environment; however,
they need to strictly regulate the companies to prevent their actions that harm the environment
and pollute it (Kapoor, and Khanna 2016).
Legal: the legal environment Mexico is strong and stable, it does not allow any company to cheat
from the government or initiate unethical actions. The regulations of the nation lay strict
penalties on the companies that they do not think of cheating the people in the business
environment. The rules in Mexico are formed independently by the government and these rules
are influenced by the Civil Law traditions. Although, the rule are flexible enough to help the
companies perform their business actions. These rules performed by the government increases