Pestle Analysis of Czech Republic

The assignment compares the PESTLE (Political, Economic, Social, Technological, Environmental, and Legal) analysis of Ireland and Czech Republic. It highlights the similarities and differences in these factors between the two countries, including their economic growth, social stability, technological advancements, environmental concerns, and political systems.

Strategic International
Business
Management

Table of Contents
Strategic International Business Management.................................................................................1
Introduction......................................................................................................................................3
1. Pestel analysis of macro environment factors of Czech Republic, Ireland and Lithuania......4
2. Justification of selecting the market through pestle analysis..................................................6
3 Analyzed the opportunities and threats in the firm’s industrial environment in your chosen
market..........................................................................................................................................8
4. VRIO analysis of firm's internal environment......................................................................10
5 strategies for entering into international markets...................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................14
Books and journals....................................................................................................................14

Introduction
The aim of research is to analyze the strategic international business management to
expand an enterprise into foreign segments ensuring its growth and revenue. Sainsbury company
is the leading food product company in UK and owns number of big supermarkets to increase its
sales is now expanding its enterprise into different countries. Similarly, for establishing new
enterprise in different country it's important to analyze macro and internal factors of business
environment so that it reduces the amount of risk prevailing inside business environment. The
purpose of study is to frame strategies to enter into foreign markets by examining threats,
opportunities, weaknesses, strength available under different market segments. Likewise,
measures are taken to eradicate those threats and weaknesses to expand the market
internationally and by fulfilling needs and requirements of potential buyers.
1. Cover in appendix
2. Justification of selecting the market through pestle analysis
From the above analysis of macro environment factors between 3 countries market that
should be selected for starting up a new venture is Ireland market. It is because Ireland is known
for its largest tourism consisting of three international airports and is even recognized for best
infrastructure. However, this country experiences easy trade of products and services within
Europe and has the benefit of double tax treaties, low corporate tax and many other tax
incentives. Moreover, Ireland has high literacy rate and is even known for thriving community of
entrepreneurs. For starting up an organization in Ireland various benefits from semi-state
incentives or pro-business state is practiced with financial and practical assistance. Trade policy
is flexible in Ireland because it is the member of European union that supports trades and
flexibility in business environment. Legal structure under this country prevails foreign
investment which improves its growth and is highly ranked for starting up a business under this
economy. Moreover, for starting up a new business in this country is very beneficial because
Irish people are highly skilled and are recognized for having the best work-force which will
directly contribute in business growth as well as diversification would be practiced easily under
this country (Blanco and Cohen, 2017).
Determining macro environment factors of Ireland:-

Technological factors:- technology has framed up a nation which expects results instantly.
Ireland is known for fastest technology which leads to transferring or exchanging products and
services easily with the help of air transports or roadways which will result in growth of export
and import rate. Adaption of new technologies with creative ideas and innovation with highly
skilled labor a manufacturer could easily develop high quality products and services which will
result in increasing revenue and growth of business. Moreover, starting up a business in Ireland
would be very beneficial because here the business environment is flexible which promotes
diversification in products and services which attracts more customers and leads to more growth
of an organization. By adopting internet facilities for selling manufactured products and services
is the best way to enhance productivity as well as it generates more awareness among consumers.
However, internet facilitates the consumption of desired products easily with less involvement of
time.
Economic factors:- we are well aware of the fact that every businesses are affected because of
global and economic factors prevailing in working environment as well as barriers of transport is
also the biggest drawback in starting up a business. However, opting Ireland for stating up a
business is very effective because the country consists of the best network of transport and
access over 500 million consumers and is recognized as world's largest single market. However,
GDP growth of the country is increasing over many years which enhances growth and revenue of
economy. Ireland has improved its outlook and has hired new staff's to improve or develop
existing products and services which will have a great imp-act on the economic environment.
Therefore, starting up a new venture under this country will be very effective for revenue and
growth generation (Lammoglia and et.al., 2017).
Political factors:- political factors are very crucial to be determined before starting up anew
venture in a preferred market segment. Political factors have great influence over starting up a
business in negative or positive manner. Starting up a venture in Ireland is useful because legal
structure under this country is very stable and flexible, for transferring intangible assets no tax is
levied by the Ireland government. Moreover, tax rate of this country is comparatively low which
is beneficial for starting up a business and generating more revenue with less tax exemption.
Ireland consists of high manufacturing of products and services and has established business
globally. Therefore, starting up new business under this country will generate high revenue with
tax flexibility and less tax rate. All nations follow separate legal structure as well as have

different taxation policies. Therefore, it is the biggest challenge faced by Sainsbury company to
cope up with those policies effectively to overcome every risks prevailed due to political
environment.
Social factors:- such factors focuses on the needs and preferences of different segments of
society in terms of friends, families, caste, culture, tastes, media etc. however, focus on starting
up the business under this country is beneficial because literacy rate is comparatively higher, that
results in more demand for diversified products and services and are comparatively more flexible
in adopting variety of newly manufactured goods (Rothaermel, 2016). Such attributes helps the
newly established business organization in achieving growth and generation of revenue.
However, as we know that Ireland is famous for tourism and attracts more travelers which effects
or improves the sales of business by providing quality products and services to the respected
customers. Therefore, starting up new business under the Ireland market is the most effective
strategy of expanding the business and generation of revenue.

3 Analyzed the opportunities and threats in the firm’s industrial environment in your chosen
market.
Sainsbury is a leading food company which is recently established in Ireland to occupy a
target segment of potential costumers and aims to fulfill their demands and needs. All businesses
consist of certain threats as well as opportunities to expand in different market segments.
Similarly, after establishing business in Ireland the industry now faces various threats and
opportunities prevailing under industrial environment which will be predicted by
analyzing.Porter five force model is very effective as it used for investigating the environment in
which a product and business operate its business in respect to gain competitive advantage.
Along with this, it is based on the corporate strategy which meets the threats and opportunities.
After analysing the five competitive forces it becomes easy for the manager of Sainsbury to find
out option which influences these forces in their organisation interest. Poster five force model is
effective in respect to identified threat which creating barrier and opportunities which company
have for expanding its business in new market. Further this model assist in reducing the threat of
new entrants and provide opportunity to expand business in new sector. Porters five force model
Illustration 1: Pestle analysis
(Source:Teh, 2016)

allow a systematic structure. Further it helps in differentiating the product from its competitor.
To enter in new market in new country is not easy for Sainsbury but with the help of this model
it becomes easy to understand the new market and all the barrier which are creating problem
from entering into new market. It helps, business in choosing the direction in which company
can shield itself. Supplier plays significant role within an organisation as they provide raw
material so it is important for the firm to make good relation with supplier in new country so that
they can get raw material on time. Porter's 5 forces analysis such as:-
Competitive rivalry:- Ireland being the tourist's destination consists of many competitors under
business environment selling similar products and services. Therefore, for increasing demand of
Sainsbury's food products company has to create different innovative and exceptional products to
achieve growth among competitors and generate more revenue (Mahat and Pettigrew, 2017). The
threat of the industry lies in market competition among big companies such as Tesco which is
among leading supermarkets in Ireland. However, sainsbury,s have build up the strategy of
reaching towards many convenient stores which are easily approachable for targeted consumers.
The firm has adopted new technologies to create diversification in existing products and has
developed new products and services with creative or innovative ideas to enhance business in
Ireland with a motive to attract more consumers which results in generation of more profits and
sales.
Barriers for entry:- this factor results in threats as well as opportunity for Sainsbury
organization established in Ireland because significant barrier in entering new enterprises in the
potential market can reduces the risk of competition among existing industries. However, if there
would be a barrier in entering the Ireland market than a manufacturer would not be able to
establish an enterprise within the desired market and would not be able to generate more revenue
and growth and therefore, cannot provide new technology products to the potential buyers by
fulfilling their needs and preferences. Such barriers have a negative impact over the business
organization because it reduces the opportunities of enterprises in expanding their business
globally and limits the choices of buyers (Nguyen, 2017).
Threats of substitutes:- it is the biggest threat involved under the industrial environment of
Ireland. Generally under food industry threats of substitutes is comparatively low as compared
because consumers are very choosy in selecting the food products and prefers products of high
quality. For enhancing growth as well as sale of the enterprise a manufacturer must innovates

existing products and generates new ideas in establishing quality products to develop the tastes
of the consumers, also builds up a strategy to expand potential market segments for generation of
growth and revenue in Ireland. Further, only threat prevailing under food industry is an internal
threat in which supermarket can lap up their businesses with one another.
Buyer power:- it creates the opportunities under industrial environment of Sainsbury because
potential buyers consists of wide variety of products and can select the best among them. The
buyers can differentiate one product from another according to their choice and preferences.
Therefore, an enterprise can expand their growth and revenue by serving high quality products
and services to their targeted consumers by creating and innovating the existing products or
manufacturing new products by adopting the latest technologies by fulfilling needs and
preferences of targeted consumers.
Supplier power:- it is generally the most complicated aspect of industrial environment in Ireland.
Suppliers are the person who supplies products and services towards potential costumers. If
suppliers delays its supply than it would affect the sale volume of the industry (Bamiatzi and
et.al., 2016). However, supplier power results in threat as well as opportunity for Sainsbury such
as if a supplier fails to supply products on time than it will creates a negative impact among the
consumers and maybe they get diverted towards their competitor products. On the other hand if
suppliers supply the manufactured products to the targeted consumers on time, then it increases
morale of consumers towards that products and this will generate more growth and revenue for
the enterprise and even would increase the GDP growth of Ireland.
From the above analysis it is concerned that sainsbury can attract more consumers and can
generate growth of enterprise as well as can increase revenue by providing high quality food
products and services with creative and innovative packaging in such a way that it attracts more
and more consumers towards the enterprise (Najaf, Najaf and Shah, 2017). As we have studies
that Ireland is recognized as best destination for rural tourism and this can be observed as
opportunity for an enterprise to develop quality products to attract costumers and increases their
morale towards the manufactured products which increases sales and also generates profits for
the country as well as for an enterprise.
By adoption of the latest technologies and generation of high quality products attracts more
consumers. Not only this, managers of cited company can enhance the product design by

applying creative as well as innovative ideas which will encourage the competitiveness among
Sainsbury company which will directly impact on profitability and growth of the organization.
4. VRIO analysis of firm's internal environment.
VRIO analysis is done to analyze the internal environment of an enterprise. It evaluates
and identifies companies resources and even specifies the competitive advantages or
disadvantages of Sainsbury established in Ireland. However, it identifies the strength and
weaknesses in internal environment of the enterprise.
Value of Resources:- resources are used as an advantage of the enterprise and should be utilized
very efficiently as per the needs and demands of consumers. The strength of company lies under
this factor because if there will be no optimum utilization of resources than it decreases the
growth of an enterprise as well as incur a great amount of loss whereas effective utilization of
resources develops the strength of Sainsbury and expands its products and services to different
market segments in order to generate more growth and revenue (Guggenheim, 2016). Ireland is
a developed country with expertise technologies available in market likewise adoption of such
technologies while utilizing those resources would result in manufacturing the best quality
products which will attract more consumers and likewise more profit will be generated by
Sainsbury.
Rarity of resources :- another factor that indicates strength and weaknesses of internal
environment of Sainsbury is scarcity of resources. This is a main drawback or weakness of the
enterprise which affects internal environment of an organization because lack of resources would
affect sales of an enterprise and cannot fulfill needs and demands of consumers which may
create a false image of an enterprise among potential buyers. Decreasing morale would divert
targeted consumers towards its substitutes and can affect the production as well as sales of the
Sainsbury products. However, resources must be effectively utilized in such away that it does not
result in scarcity of resources and therefore doesn't affect the sales of an organization.
Imitability of resources:- this factor can result in strength as well as weaknesses of an enterprise
under Ireland market segment because it includes identification of power and technologies as
well as available resources effectively and likewise generating the effective production by
utilizing the resources efficiently (Bull and et.al., 2016). This will result in manufacturing quality
products with creative ideas and innovation to attract more consumers towards the manufactured

products. However, if resources are effectively utilized and quality product is manufactured than
this will strengthen the position of the produced product under the potential market and this will
generate more profits and growth of the enterprise whereas if there would be lack in proper
utilization of resources and by manufacturing low quality products would reduce the morale of
the consumers towards that product and this will decrease the sales of product which will affects
the growth and revenue of an enterprise.
Value of organization:- under this factor value, rarity and imitability is determined. After
passing all the above requirements the selected enterprise has to be well organized related to
there work or manufacturing process to produce effective qualitative products to increase sales of
manufactured products and also fulfills the requirements of targeted consumers which will
generate more growth and profits and likewise would eradicate all the weaknesses of firms and
strengthen it for future expansion (Kangas and et.al., 2016).
Sainsburys company owns about 1200 stores which caters several needs and want of consumers.
These stores include convenience stores, mixed use developments, concessions, supermarkets
etc. further, this organization has adopted several technologies in order to provide online services
to their potential buyers. Not only these consumers can even generate information regarding
manufactured products and services and can even buy them easily by sitting at home. All such
facilities encourages sustainable development of the cited firm and likewise enhances the trust
and loyalty of potential consumers towards the brand.
5 strategies for entering into international markets.
Company can enter into international market by variety of ways such as:-
Direct Exporting :- first and foremost strategy to enter into foreign market is prevailing direct
exporting into the preferred country. However, many companies after a good start up with sales
are now expanding their businesses by exporting products into different countries or even acts as
a distributor or supplier in regard to enter into a desirable foreign market and generate more
revenue and growth and creates a recognition among global market.
Licensing :- sophisticated arrangement of entering into foreign market is done with the help[ of
licensing (Dixon-Fowler, Ellstrand and Johnson,, 2017). A large market share is included under
licensing which means the person or manufacturer can enter into different markets without any
restrictions. Licensing is generally made for marketing and production.

Partnering :- for entering into international market or any parts in the world partnership is
necessary. Where the culture and social factors of businesses are completely different to
understand than partnering is beneficial to understand the strategies and hindrances prevailing
under the particular business environment.
Buying a company:- most appropriate strategy to enter into a new market is buying the local;
company. It is helpful because a company would be developed as per the laws which will reduce
all legal risk factors and even reduces the competition under the preferred market segment.
Greenfield investing:- it is the most expensive criteria to enter into international market because
under this strategy a person has to buy a land , build up an industry and later on start up with the
manufacturing process which will incur more time and investment. This strategy also involves
high rate of risk and should not be adopted by any small enterprises (Zhao and et.al., 2016).
Franchising:- in order to expand the market among foreign segments this strategy was
established by the North Americans. It is beneficial for those firms who have repeatable model of
business. Example food outlets. For adopting this strategy it should be determined that the
existing product must be unique and attractive that would be useful for foreign expansion.
Joint Ventures:- under this strategy two or more companies are merged together to enter into
international market for expanding the business and for generating more revenue and growth. It
involves certain benefits which includes- less government interruption which reduces risks in the
business, sharing of capital outlay, control over manufacturing activities, production etc.
however, joint venture strategy includes major disadvantages such as conflicts among two or
more ventures which result in increasing risk and affects the manufacturing activities
undertaking in the enterprise.
Piggybacking:- this is a unique strategy of entering into international market. This includes
selling the unique or interesting products under international market to attract more consumers
and generate growth by increasing revenue and enhances the morale of targeted consumers by
fulfilling their needs and demands.
Turnkey projects:- companies that provide various services such as architecture, engineering,
construction, environmental consulting etc. follows this strategy to enter into international
market. It is the most effective way to enter into foreign market because under this strategy a
manufacturer enters the market as a client of government and the projects are generally financed

by the financial agency including world bank. Therefore, this is the best strategy to enter into
foreign market without any risk.
For entering into the international market Sainsbury should adopt 'partnering' strategy. It
is because it is the most sophisticated strategy to enter into foreign market which differs in
culture, taste, business environment, policies, laws etc. Partnering reduces such risks because
local partners are well versed about the environment strategies, hindrances, policies and
procedure etc which result in starting up or expanding the foreign business with less risk and can
enhance production effectively to attract targeted customers and likewise generate revenue.
Further, for entering into international market with no financial or legal risk Sainsbury can even
adopt the strategy of 'turnkey projects' which eliminates all risks and provides financial funds to
start up or expand the businesses (Chergui and et.al., 2016).
Conclusion
From the above study it is concluded that for starting up the business internationally effective
strategies must developed to increase or expand the growth of enterprise under preferred market
segment. For expanding Sainsbury company into different market segments it is important to
analyze the macro as well as internal market environment to reduce the chances of risks.
Likewise, manufacturing of products should be done in the most effective and creative manner
which attracts more costumers towards them and generates more growth and revenue. Lastly, it
is crucially determined that before entering into the market strength, weaknesses, threats as well
as opportunities must be determined so that it results in expansion of products with less amount
of risk involved.

References
Books and journals
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Lammoglia, S. K. and et.al., 2017. Sensitivity analysis of the STICS-MACRO model to identify
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Appendix
Pestel analysis of macro environment factors of Czech Republic, Ireland and Lithuania.
Macro-environmental
factors
Czech Republic Ireland Lithuania
Political environment The country has under
taken economic
reforms and majority
of sectors such as
telecommunication,
banking etc. has been
privatized. Czech
Republic economy
impacted global
downturn and has
improved its business
environment (Igliński
and et.al., 2016).
However, its political
situation is remarked
by continuous struggle
among invigorated
position and center-
right coalition
government. By
increasing overall
government
performance and
public disenchantment
among political parties
the country's political
environment is
Ireland has become
both Europeanized and
Urbanized. They are
politically rich and
known as master of
artistic conversations.
Factors such as
strategic development
objectives, rural
tourism development,
political stability,
regulatory policy,
small and medium
business promotions
etc. are included in
political environment
of Lithuania. For
developing more of
rural tourism legal and
bureaucratic
restrictions are the
major obstacles.

developed.
Economic
environment
Economy of Czech
Republic increased
around average of 5%
and in 2006 it
increases by 6.8%
which was recorded as
highest growth within
last 15 years. Due to
improvement of
government fiscal
measures and global
recovery the economic
growth increased by
2.3% in 2010.
The country has mixed
economy. State
companies operates
rail and road transport,
radio and television
system , peat industry
etc. it is active in
health insurance and
air transport too
(Reinhardt, Domingo,
García and
Christodoulou, 2017).
The country has the
greatest influence of
rural tourism which
generates growth in
revenue. However,
economic factors are
highly dependable on
sustainable and
environmental factors.
Social environment It is regarded as
economically growing
as well as politically
stable country.
However, it is
expected that investors
will mitigate cultural
differences and can
establish competition
among other countries.
Ireland name comes
under worlds leading
computer software
exporters. Moreover,
chemicals, machinery
and transport
equipment's, textiles ,
food products etc are
the principal import of
this country.
Social factors of
Lithuania includes
family and community
relationship, health
and education aspects,
lifestyle characteristics
etc. the growth of
healthy tourism is
experienced under this
country as there are
number of heritage
places as well as
ethnographic spots
that attracts travelers.
Technological Czech electricity Ireland consists of 3 Use of new

environment production increased
consumption about 10
TWh per year, that is
exported. Czech lands
consists of rich and
long scientific
tradition and has the
largest power resource
named Nuclear Power
station in Temelin.
international airports
and is recognized for
best infrastructure as
well as network of
public transport is
improving.
tourism,modernizing
servicing systems,
appropriate quality
and innovation of
technologies,
competitiveness are
the factors that
influences
technological
environment under
this country. However,
adoption of the latest
technologies has
developed tourism
which generates more
and more revenue for
country's growth
(Song, Sun and Jin,
2017).