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Strategic International Business Management | Report

   

Added on  2021-04-21

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Running head: Strategic international business management Strategic international business management

Strategic international business management 1Table of ContentsIntroduction...........................................................................................................................................2Mexico PESTLE.......................................................................................................................................2Competitive intensity of the industrial environment of Lidl..................................................................5Internal environment............................................................................................................................8Modes of Entry....................................................................................................................................11Conclusion...........................................................................................................................................13References...........................................................................................................................................14Appendices..........................................................................................................................................18Comparison table for the Mexico and Norway................................................................................21

Strategic international business management 2Introduction In this report, the external factors for the setting up new busienss in Mexico and Norway have been taken into consideration. This report divulges the PESTLE of the Mexico, competitive intensity of the country and available modes of the entry for the LIdl Company. Mexico PESTLE The organization is focusing on the global expansion. In this report, the two countries are taken into consideration which is Mexico and Norway. Mexico is taken into consideration in order to enhance the share in the new country. Pestle analysis will be conducted of Mexico in this section. There are various micro environmental factors that state that Mexico is the best country for expansion. Selection of the countryThe main reason of selecting the country is based on their increased national income, GDP rate and positive intervention for setting up new ventures. The GDP of Mexico shows 8,201.31 USD(2016) which is 2% higher as compared to last two years data. The government support program for the foreign entity is also very positive. If the growth rate is taken into consideration, it has been evaluated that the growth rate in 2017 is more than 21% and in 2016 the growth rate was more than 2.3 %. The super market industry of the Mexico has also shown the 6% growth rate in super market retail business. It is positive indicator for setting up new business in Mexico (Ibarra and Blecker, 2015). In the below discussion the attractiveness of the country in terms of PESTLE analysis will be discussed. Political Factors In this section, the focus will be given on understanding the political system of the country. By taking into consideration the political conditions of Mexico it is evaluated that it is favorable and stable. There are various reforms that have been created by the government of Mexico (Atkin et al., 2018). The stable political environment of Mexico and strengthen foreign direct investment supporting policies will be positive indicator to set up new business in Mexico.

Strategic international business management 3The policies and laws for creating strategic alliance and cartel in Mexico is positive which will assist in creating effective competitive advantage in the market and also enhanced the economic growth. It can be evaluated that the changes and reforms and supporting busienss laws for new ventures will assist the organization to grow effectively (Eloranta and Turunen, 2015). The political stability is there in the developed countries. Due to the laws and policies that political factors have given impact on the retail companies. Stability in political factor helps to enhance the increment in the overall market share of the organization (Bettis et al., 2016.). Economic environment Mexico is known as 15th largest economies globally. It is analyzed that country is dependent more on the US as it is the largest trading partners of Mexico and also exports are done. Also if the growth rate is taken into consideration, it has been evaluated that the growthrate in 2017 is more than 21% and in 2016 the growth rate was more than 2.3% (Torres‐Preciado et al., 2017). It is also analyzed that GDP of the country is enhancing and this is only the major reason for entering the market for expansion. In this country, it is also analyzed that banking sector is enhancing with the high rates for offering corporate loans to the people. There are many credit agencies who offer funds to the organizations. The positive Economic factors of the Mexico and positive balance of trade showcases that company would be positively affected by the foreign exchange exposure on international levelSocial Factors In this factor, it is analyzed that environment of the country take into consideration some of the factors like demography, culture, habits, and preferences. All these factors impact the overall demand and supply of the products in the country. When the focus is givento retail and supermarket sector it is seen that it depends on the preferences of the individuals.This sector mainly considers the consumer products that are sold on a routine basis (Van Rompay et al., 2016). It has been evaluated that the area of the country is large as compared to other European countries. The populations of Mexico lives in cities and towns and the customers who are targeted are living in cities and towns (Voigt et al., 2017). The people in Mexico are more inclined towards the quality of the products and services. In addition to this,use of advance technologies by the company will also be another symbol of attraction in Mexico.

Strategic international business management 4Technological Factors Technological factors play a great role in the organization as it is seen that the activities are conducted after analyzing the technologies used by the organizations. Technology also gives direct impact on the overall marketing and distribution strategy adopted by the company (Grundy, 2017). Mexico has a good process of telecommunication. This affects the organizations in a positive manner and also helps to overcome the problems prevailing in the company. It can be easy for the organization to set the organization and takehelp from Mexico related to technology. The use of cyber computing communication plan and availability of the advance technologies in Mexico will be the positive outlook for organization to create core competency in the product differentiation strategy.Legal Factors Every country has its own legal and administrative system and it is important for the company to consider the rules and regulations given by the organization. By focusing on Mexico it is seen that the process of importing has been made easy with the help of government and administration system. It has been analyzed that the organizations require more time in learning about the overall system of Mexico so that expansion can be done easily. This is necessary as it helps to understand the difference considered by the organization. This assists the organization to set up a good business in Mexico as it helps to enhance the market share in an effective manner. The traits and tariff rate imposed by the Mexico government on the import and exports of goods is very less. It wants to promote the international trade with other countries. Therefore, this kind of legal program may be undertaken as positive factors for setting up new busienss in Mexico (McCay et al., 2014). Environmental Factors These factors emphasize on the overall surroundings of the country that has given impact on the activities of the organization. By focusing on Mexico it is seen that the organization has considered various rules and regulations that help to make the activities sustainable. Also by considering the reforms, it is evaluated that one of the reforms are energy reforms that help the organization to realize the value of the resources. The motive of the country is to make rule and regulations so that proper technologies and regulations can be considered effective. The environmental factors of Mexico are very positive and would assistorganization to set up its business plants in positive environment. However, there are several

Strategic international business management 5industrial areas in which company could set up its business in Mexico (Lechman and Marszk,2015). Competitive intensity of the industrial environment of LidlMichael Porter's Five Force Model In the recent scenario, it is analyzed that marketing plays a great role and helps the companies to achieve competitive advantage in an effective manner. It is analyzed that one ofthe best strategies that should be taken into consideration by the companies is global businessexpansion. Also, the report emphasizes on five force analysis of the market so that the competitive situation of a specific market can be evaluated. Also, there are many changes in the retail industry of Mexico that helps the company to survive for a long time in the market. There are many small companies who are facing a high level of competition but the new tradeconcepts are considered.(Source: Porter five force analysis, 2018).The intensity of Competitive Rivalry The level of competition is very high in the retail sector of Mexico. High level of competition is faced by Lidl and it is important for the company to emphasize on the external factors of the market. There are large firms who are conducting their activities on large scale and also varieties of products are offered in the retail sector (Porter and Heppelmann, 2014). The level of competition is high so it is important for the company to remain competitive and

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