Strategic International Business Management

Strategic international business management

Table of Contents
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................5
International Business Opportunities of Mexico and Norway (Refer to Appendix)....................5
Task 2...............................................................................................................................................5
Rationale of selecting the chosen market along with critical analysis of the external factors.....5
Political........................................................................................................................................5
Economic.....................................................................................................................................6
Sociological..................................................................................................................................6
Technological...............................................................................................................................7
Legal.............................................................................................................................................7
Environmental..............................................................................................................................7
Task 3...............................................................................................................................................8
Application of Porters 5 Forces Model for analysing Industrial competitiveness......................8
Threats of New Entrants:.............................................................................................................8
Bargaining Power of Supplier:.....................................................................................................9
Threat from Substituted Products:.............................................................................................10
Rivalry among existing industry:...............................................................................................10
Task 4.............................................................................................................................................11

Application of value chain model for analysing the internal value adding activities................11
Primary activities:......................................................................................................................12
Inbound Logistics:......................................................................................................................12
Operations:.................................................................................................................................12
Secondary activities:..................................................................................................................14
Infrastructure of a company:......................................................................................................14
Management of human resource:...............................................................................................14
Development of Technology:.....................................................................................................14
Procurement:..............................................................................................................................15
Task 5.............................................................................................................................................15
Evaluation of various modes of entry available to Lidl with suitable recommendations and
selecting the best option for international market entry.............................................................15
Franchising:................................................................................................................................15
Acquisition:................................................................................................................................16
Greenfield Venture:....................................................................................................................16
Best fit option (Green field investment)....................................................................................16
Conclusion.....................................................................................................................................17
Reference List................................................................................................................................19
Appendix........................................................................................................................................22

Introduction
The term international marketing refers to the function of marketing standard that is used to
persuade the varied wants and needs of different customers that exists across the countrywide
borders. In this assignment, the evaluation of two countries (Norway and Mexico) with respect
to Lidl (a supermarket company) based in Germany has been taken into consideration to identify
the target market for international strategy expansion. Lidl is a global super chain market
founded in the year 1930 with its headquarters based in Germany (Lidl.de, 2019).

Task 1
International Business Opportunities of Mexico and Norway (Refer to Appendix)
Task 2
Rationale of selecting the chosen market along with critical analysis of the external factors
Based on the Pestle analysis in Appendix 1 , the score of Mexico is 34/60 and that of Norway is
49/60 which suggests that Norway will be the ideal international market expansion choice due to
its economic feasibility and the country uses more advance technology in production and
manufacturing process of a product. In Mexico, the business environment is relatively unstable,
as the political structure is bureaucratic by nature. Moreover, Mexico also has higher prevalence
of crime rate that makes the business environment vulnerable. Also, from the above table it is
quite clear that, Norway is a highly developed economy having higher Human Development
Index. The environmental hazards in Mexico are considerably higher than that of Norway.
Therefore, from the above discourse, it can be said that Norway is more suitable for international
business expansion of Lild. Critical analyses of the external factors are detailed below.
Political
One of the major constraints associated with the political environment of Mexico is its
Bureaucratic structure which could make the internal business expansion of Lild unstable.
Irrespective of having a relatively safe political environment, the bureaucratic environment refers
to a set of complex rules and regulations which might be challenging for an international
business expansion. Chances of duplication and imperialism are quite common with Bureaucratic
environment which could be challenging for Lild. Furthermore, it is prone to conflicts, which

triggers instability within the business environment. In comparison, Norway has a democratic
political environment where the rules and regulations are much simpler, thus assisting foreign
market entry with ease. Furthermore, a democratic environment tends to be more supportive
towards free trading (Fleximize, 2019). It is usually responsive towards the altering requirements
of business as it is subjected to fair laws and tax regulations.
Economic
As mentioned, Mexico ranks 15th in terms of nominal GDP in the year 2018, however, economic
disparity is also visible within the economic environment of Mexico. Enhanced rate of inequality
has resulted in economic disparity for Mexico, which ultimately gives birth to poverty. In
contrast, Norway is subjected towards a developed economy having the highest per capita
income, which makes it a preferential choice for Lidl for its international market expansion
(En.portal.santandertrade, 2019).
Sociological
Openness, gender equality and provision of equal rights have a positive influence on the life style
of individuals residing in Norway (Norway, 2019). Individuals with physical disabilities are
also subjected to equal opportunities and the cultural intolerance is relatively less in Norway as
well. The broader cultural perspective will be an ideal situation for international business
expansion of Lidl. In case of Mexico, there is a lot of cultural clash and there is a disparity
between rich and poor.
Technological
The technological connectivity amongst Mexico and USA are strong in handling mechanical
constraints, however, it directly highlights the dependency of Mexico over US. While technical