Strategic International Business Management

This report analyses the market entry options for Lidl in Norway and Mexico, and suggests the most feasible market for market entry. It includes a PESTEL analysis of the wholesale market factors in Mexico, implications for market selection, and a detailed discussion of the PESTEL factors. The report also includes a Five Forces analysis and VRIO analysis of the Mexican market, and recommendations for market entry strategies.

Running head: STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Strategic international business management
Student’s Name
University Name
Author’s Note

2STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Table of Contents
Introduction................................................................................................................................3
Task 1: PESTEL analysis of the wholesale market factors in Mexico......................................3
1.1 Mexico..............................................................................................................................3
1.1.1 Social.........................................................................................................................3
1.1.2 Technological.............................................................................................................4
1.1.3 Political......................................................................................................................4
1.1.4 Economic...................................................................................................................4
1.1.5 Environmental............................................................................................................5
1.1.6 Legal..........................................................................................................................5
1.2 Norway.............................................................................................................................5
1.2.1 Political Factors.........................................................................................................5
1.2.2 Economic Factors......................................................................................................6
1.2.3 Social Factors.............................................................................................................6
1.2.4 Legal Factors..............................................................................................................6
1.2.5 Technological Factors................................................................................................7
1.2.6 Environmental Factors...............................................................................................7
Task 2.........................................................................................................................................7
2.1 Detailed discussion of the PESTEL factors and implications for the selection of Mexican
Market........................................................................................................................................8
2.1.1 Political Factors.........................................................................................................8

3STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
2.2.2 Economic Factors......................................................................................................9
2.2.3 Social Factors.............................................................................................................9
2.2.4 Technological Factors..............................................................................................10
2.2.5 Environmental Factors.............................................................................................10
2.2.6 Legal Factors............................................................................................................10
Task 3: Porters Five Forces analysis........................................................................................11
3.1 Bargaining power of suppliers........................................................................................11
3.2 Threat of Substitutes.......................................................................................................11
3.3 Threat of new entrants....................................................................................................12
3.4 Bargaining power of Buyers...........................................................................................12
3.5 Market Rivalry................................................................................................................13
Task 4: VRIO analysis of the Mexican Market.......................................................................13
4.1 Valuable..........................................................................................................................13
4.2 Rare.................................................................................................................................14
4.3 Costly to Imitate.............................................................................................................14
4.4 Organised to capture value.............................................................................................15
4.5 Strengths as well as mitigation of threats.......................................................................15
Task 5: Recommendations.......................................................................................................15
5.1 Direct Strategies.............................................................................................................15
5.2 Indirect Strategies...........................................................................................................16
5.2.1 Online Selling..........................................................................................................16

4STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
5.3 Contractual entry medium..............................................................................................16
5.3.1 Licensing..................................................................................................................16
5.3.2 Franchising...............................................................................................................17
5.4 Investment entry modes..............................................................................................17
5.5 Other important entry strategies.....................................................................................17
Conclusion................................................................................................................................19
Reference List..........................................................................................................................20
Appendices...............................................................................................................................23
Appendix 1: Evaluation of the countries..............................................................................23
Appendix 2: The location advantage of the Supermarkets in Mexico.................................24
Appendix 3: Maximum Supermarket Chain.........................................................................24
Appendix 4: The growth of the purchase of products from whole sale markets..................25
Appendix 5: Business background of Mexico......................................................................25
Appendix 6: Factors influencing Buying Behaviour............................................................26

5STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Introduction
This report makes an attempt to analyse the market entry options for the stock
discount supermarket chain, Lidl. The market options of Norway and Mexico would be
compared in the course of this report and as an outcome, the most feasible market would be
suggested for the market entry. Hence forth after the selection of the best market a rationale
would be created for justification of the most important factors that can help the company to
achieve future sustainability. After considering the entry options, the external challenges as
well as benefits that the company would be enjoying in the business market of the country
would be assessed by means of the Five Forces model. After that the VRIO model have also
been implemented in this report for the analysis of the most important competitive
advantages that the company can enjoy, working in the business domain of the country.
Task 1: PESTEL analysis of the wholesale market factors in Mexico
1.1 Mexico
1.1.1 Social
The consumption pattern of the Mexican population is going to largely affect the
business nature of the discount supermarkets in Mexico. Currently in Mexico, it is visible that
the market of children’s products is feasibly high. Again, as per Laufs and Schwens (2014),
another important factor is that this is a sustained trend observed over last 5 financial years.
Aged population in Mexico is also on the rise. That is why the demand for health and
medical supplements would be naturally high. Again, the median age of the basic population
in Mexico has dramatically shifted from 27.3 years to 42 years in the last 15 years (De Villa,
Rajwani and Lawton 2015). This trend has actually proved to be favourable for the
supermarket chains in Mexico as the income parity and then range of disposable income of

6STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
the second group is supposed to be at least 25% higher. This would definitely increase the
purchase rate and thus directly impact the rate of revenue generation.
1.1.2 Technological
Technological aspects have recently been quite entangled with the spread of business.
Most of the wholesale groups’ sales channels are being operated over internet nowadays. The
fast growth of ecommerce and the rapid acceptance of the gadget frenzy by people of all age
groups would provide the customers of all sorts a lucrative chance of shopping from home.
The trend of usage of various gadget based kitchen and home appliances is on the rise. As an
impact, the sales of such products would increase. As per Åslund, Forslund and Liljeberg
(2017), this boost of the electronic industry would give a tertiary thrust to the sale of products
in the supermarket chains also. This would become more feasible for the supermarket brands
because the customers generally prefer to buy electrical appliances from the discount
supermarket stores.
1.1.3 Political
The exchange rate of the Mexican Peso is in stable position that would facilitate the
expansion of business of the supermarkets. Again the formal sector unemployment and the
poverty of the educated youth would force the government to allow bigger supermarket
chains to make market entry in the country (Shao 2016). As an outcome, mass recruitment
options would be open in the country and more scope of income in the organised sector
would be generated.
1.1.4 Economic
The International Monetary Fund (World Bank) classifies Mexico as a country
inhabited by upper middle class. As an outcome, the income and expense parity of this class
of people in the country would be automatically high. The annual average growth of

7STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
economy in the country is taking place by 4.3% and as an outcome, by 2020, the business of
supermarkets in the country would reach s standard position. However, as Glowik (2016),
observes, the unemployment rate of the country have been escalating, although. This would
entice the government to invite more large firms like Lidl with opportunities for mass
recruitment.
1.1.5 Environmental
The Mexican government have proposed that 35% of the energy should be generated I
the country should be generated from clean energy sources. As an outcome, this is going to
provide a feasible advantage to the Lidl Company, since they use dry waste and solar panels
as a source of 80% of their energy production. The weather compatibility of the country also
allows the scope for smooth manoeuvring of the delivery cars and the inventory chain also.
1.1.6 Legal
In terms of Index of Economic freedom, Mexico is ranked 55th above countries like
Portugal, Brazil as well as Italy. This implies that majority of the people of the country have
the choice to choose the products they desire in order to fulfil their lifestyle. Besides, this also
implies that business organisations in Mexico would enjoy business freedom, trade freedom
as well as freedom from corruption and also labour freedom.
1.2 Norway
1.2.1 Political Factors
The most feasible factor in Norway that is going to support business growth in the
country is the government stability. As an outcome of which the spread of business in the
country would be facilitated and take place at a smooth rate. However, there is low demand
for the entry of foreign companies, especially from the European genre (Paulin, Perrien and

8STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Ferguson 2015). As an outcome, market scope is much open for the companies of Asian or
Latin origin. The latest reform of the trade policies by the government would also allow the
market based companies like Lidl to conveniently open stores all around the country. Again,
the corporate tax rate that they would be paying for operating in Norway would be at least
2.5% lesser. This is an added opportunity for the spread of business because, Mexico offers
ample scope of spread of virtual business. However in Norway, there is ample scope for
spread of business by direct contact. The stable international relations of the country with the
neighbours would also facility the country to make potential exports to other countries basing
their core business in Norway.
1.2.2 Economic Factors
The GDP growth rate of Mexico is also stable. However, inflation in the market based
economy is taking place at a high rate. This alternative trend might suggest that economically
Mexico is a more stable market than Norway. The per capital income of Norway is stable, yet
much lower than Mexico. As an outcome of that the people in Mexico would turn out to be
more active shoppers than that in Norway. However, there is one important factor and that is
the FDI rate is quite high in the country. Yet in the last two financial years there have been
very less penetration of foreign direct companies in the country.
1.2.3 Social Factors
One positive factor in the market of Norway is that rate of urbanisation is high. That is why,
people in the upcoming years would be more enticed to buy daily utility products from
supermarkets. This is where the role of discount supermarkets come in to play (Chelleri,
Schuetze and Salvati 2015). However, there are some negative aspects like high corruption
rate, lesser unemployment rate (less chance of getting worker at a low rate) and moderate
growth of the population.

9STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
1.2.4 Legal Factors
The Corporate Tax and Value Added Tax rate is stable in the country. However, the
tax incentives rates are increasing under the new reform policies of the government. This is
why new market entrants would be enticed to join the market.
1.2.5 Technological Factors
The rate of penetration of internet for the purpose of business interaction is high in the
country. Besides the mobile connectivity in the country is also high. As an outcome of that
the business expansion over internet would be facilitated in the future. However, as Rosas et
al. (2017) states, the expanse of business over the internet is quite higher in Mexico under the
current market conditions and as an outcome of that considering the current scenario, Mexico
seems to be bearing a better prospect of virtual business.
1.2.6 Environmental Factors
Norway has received highly positive rating from the Kyoto Protocol and the Euro
Emission standards. As an outcome, any new market entrant would have to take the
responsibility of making lesser than stipulated carbon footprint. Again, Pedraza et al. (2017),
opines that in the recent years of a business of a company in a new country, the carbon
footprint is natural high ad it takes a company at least 5 years to reduce the amount of carbon
output in the country. The government also imposes tax on polluting water beyond a certain
level in the country. It generally takes more than 3 years for a big company to settle in the
market and as such it requires generally more than 3 years to consolidate the business
(Hernandez, Berdegué and Reardon 2015). After than they can start monitoring their
pollution level or carbon output. In such a consequence he corporate and green tax amount
would suffice the corporate tax rebate benefits that the company could have enjoyed in the
country. His suggests that Mexico is a more feasible choice for market entry by the company.

10STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Task 2
2.1 Detailed discussion of the PESTEL factors and implications for the selection of
Mexican Market
2.1.1 Political Factors
Trade factors seem more alluring in Mexico compared to that of its neighbouring US.
America’s cross border trade has fallen about 10to 15% owing to the trade that have been
waged between US and other major exporters like China, Australia, France and so on. As an
outcome, Mexico is being highly prioritised for cross border trade. In this condition, the
Mexican is also ready to invite as much giant wholesale supermarket brands in order to drag
the country higher in the FDI index.
The local governments in Mexico are also actively participating in the trade run. Strict
laws against unionisation and political demand for mass recruitment for local area
urbanisation and economic development is going to offer a big chance to the company for
expanding in the cities of Mexico that have the highest income purchase parity. It is recently
visible that in order to facilitate the spread of business, the local government of the Mexican
cities are focusing on development of industrial parks, better transportation facilities like
intercity truck services and new roadmaps and are also developing low interest trade bonds so
that most of the big companies come to the cities for business expansion. The World Bank
have been suggesting structural adjustment policies because there is lack on integration
among the central and the local governments (Davis, McRae and Bejarano 2018). This is
again, the prime reason because of which policy implementations for the successful urban
development is not accomplished in Mexico. In this situation, the government urgent wants
any big organisation to enter the business market and create mass recruitment opportunities.
The WTO membership of Mexico would also offer the company c chance to conduct

11STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
business at a lower rate of corporate taxes and as it seems there is adequate protection of the
government towards the companies to expand business.
2.2.2 Economic Factors
Since 2013, Mexico have done massive economic recovery and after that the GDP
rate of the country is increasing at a rate of 4.3 % per annum (Rudnick and Velasquez 2018).
This implies that the people of Mexico now have higher purchasing power and they are
investing more for the purchase of packaged and branded products. This is a positive sign for
the organisation that would enjoy the benefits of a recently ripening market.
On top of that, the statistics of 2015 shows that Mexico have attracted 35,188.4
million dollars in terms of Foreign Direct Investment (FDI). This is a positive implication
that global brands are considering Mexico to be a lucrative market. Other than that Lidl
would enjoy benefits of the fact that the country shares free trade area benefits with 40
countries who share free trade area with the country. Hence with the market in the Mexican
market, Lidl will be benefited with the allowances of making duty free export and import
from and with 40 countries. There by the company can enhance their inventory strength and
bring about product diversification including the specialised products from these countries.
On the contrary, this would open up the market of these countries for sales expansion also
(Machado et al. 2018). The US as well as Canada are two of the biggest importer of the goods
of Mexican market.
2.2.3 Social Factors
The evolution of Mexican consumer shows that purchasing power of the people have
enhanced and conclusively they have become time-poor. The customers are nowadays not in
the mood of bargaining or making transactions. Rather they are interested in developing
loyalty with a certain brand as an outcome, beneficial customer service in the country can

12STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
help the company to develop a high level of brand equity. Besides, Amazon, Mercado-Libre
and Walmart there are no big discount supermarket chains in the country. As an outcome,
there is very low market saturation rate in the country. Hence, the market acquisition would
be easier for the company.
2.2.4 Technological Factors
Nanotechnology and Bio-freezing technology is being greatly used by the
supermarket chains in Mexico recently. This is helping the companies to enhance their
inventory strength as well as keep the products fresh for a longer time. Moreover, the
Mexican government is also helping the companies financially to include technologies in
their services. Besides, ecommerce is growing faster in the country also. These factors
suggest that supermarkets can make the best use of the technological advantages in the
country.
2.2.5 Environmental Factors
The large expanses of protected forests in the country is beneficial for keeping the
carbon output low (Shah et al. 2016) . Hence, this would facilitate the company in managing
their carbon output, definitely.
2.2.6 Legal Factors
Under the General Law for commercial organisations, stock corporations enjoy
maximum benefits of the NAFTA. Being a company of this genre, Lidl would enjoy
maximum benefits of operating in the country. On one hand, the foreign assets that cause
damage to the resources of the country are penalised heavily. In this context, one important
benefit that the company enjoys is that of the fact that the business vehicles that the company
would be using for the transportation of goods are all directly registered under the
government and 60% of these vehicles are supplied by the government to the stock

13STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
corporation organisations like Lidl (Reardon and Timmer 2015). This is why the damage
expenses and the liabilities of the company would be much lesser in the Mexican domain.
Task 3: Porters Five Forces analysis
3.1 Bargaining power of suppliers
The bargaining power d suppliers in weak in the supermarkets industry of the country.
The suppliers of individual products is high in the country. That is why large discount
supermarkets can highly affect these suppliers and acquire the products at their desired rate
(Valenzuela and Studer 2016). The weak force of the suppliers in the Mexican market is
owing to these factors:
 Large number of suppliers against individual products
 High level of competition among the suppliers
 High availability of alternative suppliers
As an outcome of this market scenario, the individual suppliers cannot influence the
business of these giant supermarkets. There is also the fact that large number of suppliers are
competing to occupy the market consisting of only few large supermarket brands (Bryner
2016). That is why there is low risk of influence from the suppliers if Lidl enters the Mexican
market.
3.2 Threat of Substitutes
The threat of substitute is also quite low for the market of the Mexico. Lidl offers a
large variety of products that hardly any other brand offers in the Mexican market. Hence,
any B2B customer who have partnered with the Lidl Company would automatically develop
a relation of brand loyalty. The following factors are responsible for the weak threat of
substitutes from the other major market players:

14STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
 Moderate influencing power of the substitutes
 Low variety of products with the substitute brands compared to Lidl
 Higher cost (lesser discount) from the end of the substitutes
Factors like Brand Loyalty and low price of the products of Lidl gives it a subtle competitive
advantage and as such the company enjoys the benefits of low threat of substitutes.
3.3 Threat of new entrants
There is a high threat of market entry of new competitors. In Mexico, the internet
based business prospect is quite high. As an outcome, there is high chance that new internet
based supermarket firms would come up and occupy shares of the most lucrative Canadian
market. Entrants can compete in the Mexican market against Lid on the basis of convenience,
market specialisation, as well as other factors like feasible sales channels and physical
location (Davenport, F., Steigerwald and Sweeney 2016).
The most feasible factors that makes the threat of new entrants higher in the Mexican market
are as follows:
 Moderate cost of brand development owing to internet
 Low cost of setting up a new business market in the country
 Moderate capital costs
 Lucrative market options and high chance of market entry to direct foreign markets
like Canada and USA.
Small wholesalers in Canada are engaging themselves in a particular specialisation of
product and as an impact, many new brands in the whole sale market are emerging very
fast.
3.4 Bargaining power of Buyers

15STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
The bargaining power of the buyers in the Mexican market is going to be very low.
This is because there is a major chance that the heavy discount rates that the company offers,
would be the lowest in the market. As Kucher, Burnett and Lacombe (2016), states, the
following external threats are faced by the company in terms of the bargaining power from
the end of the buyers:
 Large target market of consumers
 Highly diverse customers (this is why specialised wholesale brands cannot exert much
influence)
 Small amount of individual purchases from the product market.
The weak buyer diversity is a huge benefit that diminishes the bargaining parity of the
customers. The high diversity of buyers makes it rather difficult for the buyers to
accumulatively impose pressure on the organisation (Ibarra-Yunez 2015).
3.5 Market Rivalry
Although there are very few leading brands in the market, the range is competitive
rivalry is quite strong in the country. There are actually various firms in the whole sale
market of the country. In the face of this competition, the most significant considerations are
as follows:
 There are very few firms in the whole sale market with such massive business scape
 Most small firms have specialisations over a single or few products of the same genre
 Low aggression of the whole sale firms owing to less market competition.
Task 4: VRIO analysis of the Mexican Market
4.1 Valuable

16STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
There is a whole lot of low cot items in the Lidl supply chain and as an outcome of
that customer loyalty is attained at a great extent by the company. The inventory turnaround
ratio of the company is very high. This implies that the company have naturally high rate of
sales. Again in order to do so, the company needs to have a highly spread and energetic sales
network (Knittel, Meiselman and Stock 2017). Besides that the business capital of the
company is huge and as an outcome of that there are seldom any recurring or fixed expenses
like as rent or pending charges. This greatly helps the company in reducing the net cost of the
operations.
The stock discount trading experience in the wholesale sector is the biggest asset of
the company as an outcome of which the large demographic prospect can be easily utilised by
the company. The company have always have an eye for the tenured and sustained profits as
an outcome of which the market acquisition rate of the company is going to be high and they
would follow a stealth market entry format.
4.2 Rare
The company can choose many cities which have a moderate rate of average income.
However, the presence of large whole sale super markets is scarce in these regions. The retail
business of these regions can flourish further if the company spread discount retail in these
regions. Another important factor is that the Lidl stores are generally located in premium
locations where they can base their business statutorily.
4.3 Costly to Imitate
Since the company have a location advantage, as an outcome, no big company can
compete with the organisation within the same location where they are operating. This gives
them superior access to all sorts of business inputs. The rivals would find it very difficult to
imitate the same model of sourcing in the company. There are also certain network effects of

17STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
this non-imitability. The customer base becomes highly loyal, and as it seems, the customers
cannot provide sufficient incentive to the customers for switching to their brand
(Chamberlain, Ginger and Emery 2016). Early entry to the remote locations has given this
facility to the company that they can enjoy the local advantages.
4.4 Organised to capture value
Lidl has showed their potential to use the resources very efficiently. That is why in the
markets of stock corporations, they have very less rivals of similar scale. In fact they have
very less substitute who are strategically substitute to the organisation. The rivals would be
severely subjected to cost disadvantages if they try to imitate the business model of the
organisation.
4.5 Strengths as well as mitigation of threats
There are threats coming the way of the company in the form of whole sale internet
based companies who provide the products at a highly competitive rate. As an outcome of
that, the physical stores that offer the same services in Mexico would be at stake. This is why,
the company would be beneficial of they choose to open stores where the ecommerce have
not yet been able to expand its popularity (Alvarez 2015). These are the suburban and the
obscure areas. Having a loyal customer base is the basis of whole sale business in the
country. Lastly, the company can also benefit if they open an ecommerce shopping channel
and also cater to services like individual home delivery.
Task 5: Recommendations
5.1 Direct Strategies
Since the company is aiming at expanding over a large share of the market in the
country, taking a span of over 5 years in an average, they should aim at developing end user

18STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
sales channels. This would help in the elimination of the middlemen and thus the company
can keep the product prices compatible and thus also understand the real demand of the
company’s products. They can also understand from this, how active are the sales channels
which are vending the products of the company, actually (Zamora-Tavares et al. 2015).
Hence, the market expansion would be more authentic and the grip over the market would be
stronger.
The company should also employ locality based sales representatives who would be
liable for the promotion of the products of the company. Thy can operate in the local market
without taking the ownership of the sales channels completely. While approaching directly to
the end users, the organisation would be able to:
 Conduct marketing research
 Implement marketing activities
 Conduct market distribution
 Would be liable for local area warehousing as well as delivery of products/services
 Implement micro-customer based service
 Accumulate sales order
5.2 Indirect Strategies
5.2.1 Online Selling
The organisation can take up the following online selling strategies:
 Set up personal websites that would be used for conducting Business to Customer
activities
 Sale the whole sale products to the other ecommerce retail sites, thus setting up an
online business chain

19STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
 By opening an online B2B portal, the company can also cater to any third party store
or any online retail supermarket also. Peers in the market like Walmart can be
selected as retail partners
5.3 Contractual entry medium
5.3.1 Licensing
The company can enter in to business contract with the government or other exporting
licensees. They can thus adopt the strategy of parasitic market acquisition. Profit would
be acquired in the form of royalties.
5.3.2 Franchising
The genre specific sales channels can be of much help for the organisation as this is
an emerging trend in the industry. As an outcome of that the company can achieve
maximum sales parity against the products of individual genre (Casanueva-Reguart
2015).
5.4 Investment entry modes
On local basis they can form a smaller concern with parental control under them. His
company would be liable for market survey and market acquisition. This company would
be a direct market feeder to the Lidl.
Another important strategy that the company can undertake is that like royalty
partners in the export chain of the government, the company can launch their own retail
segment in collateral basis with the major retail stores that are operating in the country.
This can reduce the risk of market segmentation to a great extent. Again, while doing do
the company have to be alert of the internal conflict that arises between partners and this
can amount to potential business loss.

20STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
5.5 Other important entry strategies
The company also needs to figure out the most economical operational channels that
could help them accumulate the maximum financial benefits. They can adopt for the transport
subsidy strategy for the company as an outcome of that the company can operate the
transportations channels without any liabilities. Om top of that if they emerge as royalty
partners with the government, they can enjoy the advantage of royalty partnership. More so,
they can enjoy the advantages of heavy rebates on corporate and specific taxes like Green tax
and emission taxes. They can also enjoy the credit insurance strategy of the government as an
outcome of which they would be conducting business with the enlisted beneficiaries only, but
on a .tax free basis.

21STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Conclusion
In the course of this report, the market entry options for the Lidl Company have been
suggested. At first comparing entry options in the Mexican and the Norwegian market, it
seems that the company can enjoy high financial benefits on working in the Mexican market.
This is because of the fact that the additional tax rates are lesser in Mexico and as it seems
Mexico is much more investment friendly and ready market for big companies. In this
context, it deserves mention that the factors like steady urbanisation, steady growth of GDP
and lack of major market players would facilitate the success of the company in the country.
The political conditions are highly favourable in the country and on top of that the
government policy is lucrative for companies that support mass recruitment. The five forces
analysis of the market suggest that there is high chance that the company can enjoy the
benefits of low customer power, high purchase parity and lesser market competition. Under
these conditions, it is most expected that the company can emerge as one of the exponential
organisations in Mexico.

22STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Reference List
Alvarez, S., 2015. The Mexican debt crisis redux: international interbank markets and
financial crisis, 1977–1982. Financial History Review, 22(1), pp.79-105.
Åslund, O., Forslund, A. and Liljeberg, L., 2017. Labour market entry of non-labour
migrants–Swedish evidence. Nordic economic policy review, pp.95-130.
Bryner, N.S., 2016. People of the Sun: Leveraging Electricity Reform to Promote Renewable
Energy and Climate Change Mitigation in Mexico. Natural Resources Journal, 56(2),
pp.329-350.
Casanueva-Reguart, C., 2015. Institutions, Telecommunications Reform, and Universal
Service Policy in Mexico (1990–2014). International Journal of Communication, 9, p.27.
Chamberlain, J., Ginger, C. and Emery, M.R., 2016. Migrants, Markets, and the
Transformation of Natural Resources Management: Galax Harvesting in Western North
Carolina. In Latinos in the New South (pp. 83-102). Routledge.
Chelleri, L., Schuetze, T. and Salvati, L., 2015. Integrating resilience with urban
sustainability in neglected neighborhoods: Challenges and opportunities of transitioning to
decentralized water management in Mexico City. Habitat International, 48, pp.122-130.
Davenport, F., Steigerwald, D. and Sweeney, S., 2016. Open trade, price supports, and
regional price behavior in Mexican maize markets. Economic Geography, 92(2), pp.201-225.
Davis, L.W., McRae, S. and Bejarano, E.S., 2018. An Economic Perspective on Mexico's
Nascent Deregulation of Retail Petroleum Markets (No. w24547). National Bureau of
Economic Research.
De Villa, M.A., Rajwani, T. and Lawton, T., 2015. Market entry modes in a multipolar
world: Untangling the moderating effect of the political environment. International Business
Review, 24(3), pp.419-429.

23STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Glowik, M., 2016. Market Entry Strategies: Internationalization Theories, Concepts and
Cases of Asian High-Technology Firms: Haier, Hon Hai Precision, Lenovo, LG Electronics,
Panasonic, Samsung, Sharp, Sony, TCL, Xiaomi. Walter de Gruyter GmbH & Co KG.
Hernandez, R., Berdegué, J.A. and Reardon, T., 2015. Modernizing wholesalers and guava
farmers in Mexico. Agricultural economics, 46(S1), pp.41-52.
Ibarra-Yunez, A., 2015. Energy reform in Mexico: Imperfect unbundling in the electricity
sector. Utilities Policy, 35, pp.19-27.
Knittel, C.R., Meiselman, B.S. and Stock, J.H., 2017. The pass-through of RIN prices to
wholesale and retail fuels under the renewable fuel standard. Journal of the Association of
Environmental and Resource Economists, 4(4), pp.1081-1119.
Kucher, O., Burnett, J.W. and Lacombe, D., 2016. Spatial spillovers in US wholesale
gasoline markets. Papers in Regional Science.
Laufs, K. and Schwens, C., 2014. Foreign market entry mode choice of small and medium-
sized enterprises: A systematic review and future research agenda. International Business
Review, 23(6), pp.1109-1126.
Machado, E.R., Maldonade, I.R., Riquette, R.F., Mendes, V.S., Gurgel-Goncalves, R. and
Ginani, V.C., 2018. Frequency of Enteroparasites and Bacteria in the Leafy Vegetables Sold
in Brazilian Public Wholesale Markets. Journal of food protection, 81(4), pp.542-548.
Paulin, M., Perrien, J. and Ferguson, R., 2015. Organizational Culture and Services
Management in Canada, Mexico and the United States: An Empirical Study of Commercial
Banking. In Proceedings of the 1998 Multicultural Marketing Conference (pp. 191-191).
Springer, Cham.
Pedraza, L.S., Salgado-Hernandez, J.C., Tallie, L.S. and Popkin, B.M., 2017. Household
Food and Beverages Purchases by Retailer Type in Mexico and Socio-economic Disparities.
The FASEB Journal, 31(1_supplement), pp.312-1.

24STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Reardon, T. and Timmer, C.P., 2015. Transformation of the Agrifood Industry in Developing
Countries. FOOD, POLITICS, AND SOCIETY, p.795.
Rosas, F.H., Rodriguez, K.A.F., Henneberry, S. and Sandoval, B.F., 2017. Knowledge
Creation and Learning in a Sugarcane Industry in Veracruz, Mexico. In Advances in Human
Factors, Business Management, Training and Education (pp. 241-249). Springer, Cham.
Rudnick, H. and Velasquez, C., 2018. Taking stock of wholesale power markets in
developing countries: A literature review.
Shah, M., Valenzuela, J.M., Beltrán, H.A., Mora, K.M.P., Hasselager, A., Friis-Jensen, S.,
Vingaard, M., Wigand, F., Tiedemann, S., Bird, L. and Zinaman, O., 2016. Clean
Restructuring: Design Elements for Low-Carbon Wholesale Markets and Beyond.
Shah, M., Valenzuela, J.M., Mora, H.A.B., Moller Porst, K., Hasselager, A., Friis-Jensen, S.,
Vingaard, M., Wigand, F., Tiedemann, S., Bird, L. and Zinaman, O., 2016. Clean
Restructuring: Design Elements for Low-Carbon Wholesale Markets and Beyond. A 21st
Century Power Partnership Thought Leadership Report (No. NREL/TP-6A50-66105).
National Renewable Energy Lab.(NREL), Golden, CO (United States).
Shao, A., 2016. Global market entry regulations for nutraceuticals, functional foods,
dietary/food/health supplements. In Developing New Functional Food and Nutraceutical
Products (pp. 279-290).
Valenzuela, J.M. and Studer, I., 2016. Climate Change Policy and Power Sector Reform in
Mexico under the Golden Age of Gas. The Political Economy of Clean Energy Transitions,
p.410.
Zamora-Tavares, P., Vargas-Ponce, O., Sánchez-Martínez, J. and Cabrera-Toledo, D., 2015.
Diversity and genetic structure of the husk tomato (Physalis philadelphica Lam.) in Western
Mexico. Genetic resources and crop evolution, 62(1), pp.141-153.

25STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Appendices
Appendix 1: Evaluation of the countries
Factor + [Reference] Mexico Mexico
Score
Norway Norway
Score
GDP (PPP) $ billions
[A] 1 = largest
29 / 137
($8,902.83
USD )
2 / 2 57 / 137
($75,504.57
USD)
1 / 2
GDP real growth rate
(2014/15/16) - % [C]
3.8/4.3/4.8 2 / 2 3.0/2.5/3.0 1 / 2
GDP per capita (USD)
[C] / GINI Index (149 =
lowest inequality) [C]
7,700 / 36 1 / 2 46.600 /
132
2 / 2
Population not below
the poverty line
[July
2016]
89 million
2 / 2 [July 2016]
12 million
1 / 2
Labour force [C] 58 million 2 / 2 14.9
million
1 / 2
Unemployment rate [C] 8% (i.e.
2.8
million)
2/ 2 4.2%
(i.e. 0.1
million)
2 / 2
Labour market
efficiency [A] (1 = most
92 / 137 2 / 2 19 / 137 2 / 2

26STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
efficient)
Economic Risk –
Country Risk Tier [B]
(1 = Lowest risk)
3 / 5 1 / 2 2 / 5 2 / 2
Financial System Risk
– Country Risk Tier
[B] (1 = Lowest risk)
4 / 5 1 / 2 1 / 5 2 / 2
Economic Subtotal 16 / 18 14 / 18
Appendix 2: The location advantage of the Supermarkets in Mexico
Appendix 3: Maximum Supermarket Chain

27STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Appendix 4: The growth of the purchase of products from whole sale markets
Appendix 5: Business background of Mexico

28STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Appendix 6: Factors influencing Buying Behaviour