MPM735: Analysis of France for Nature Valley Expansion

This country analysis report evaluates France as a potential market for Nature Valley Muesli Bars, examining various factors influencing international business operations. The report delves into France's economic landscape, including GDP growth, unemployment rates, and the impact of structural reforms and tax policies. It also assesses the political environment, considering the country's hybrid government system, political culture, and the influence of nationalism and social divisions. Furthermore, the report explores the legal framework, including civil laws, labor laws, and tax regulations. The analysis extends to the investment and trade environment, highlighting government policies, trade agreements, and the impact of European Union regulations. Foreign exchange issues and financial factors are also examined. Finally, the report considers cultural factors, including social and economic gaps, and potential challenges for businesses. The report concludes with recommendations based on the analysis, providing insights into the opportunities and challenges of expanding Nature Valley into the French market.

Running head: COUNTRY ANALYSIS REPORT
COUNTRY ANALYSIS REPORT
Name of the Student
Name of the University
Author Note

1COUNTRY ANALYSIS REPORT
Table of Contents
1. Introduction................................................................................................................2
Background of the chosen product.............................................................................2
2. Analysis of the chosen country..................................................................................3
a. Economic factors of the country............................................................................3
b. Political factors of the country...............................................................................5
c. Legal factors of the country....................................................................................6
d. The investment and trade environment of the country...........................................7
e. Foreign exchange issues.........................................................................................9
f. Financial factors of the country............................................................................10
g. Cultural factors and challenges faced by the country..........................................10
Conclusion....................................................................................................................11
Recommendations........................................................................................................11
References....................................................................................................................12

2COUNTRY ANALYSIS REPORT
1. Introduction
As discussed by Adekola and Sergi (2016), international expansion of organizations is
considered to be an important factor that affects the ways by which they are able to increase
the awareness levels in the industry. The customer base of the organization is also increased
in an effective manner with the help of effective international expansion based activities.
However, for an effective international expansion an organization needs to analyse the
environment of the country in which it is planning to start the operations. The effective
analysis of external environment is considered to be an important factor that has an impact on
the strategies that are developed by the organization (Borrás 2018).
The report will be based on the analysis of the country in which an organization
named Nature Valley plans to launch its product named Nature Valley Muesli Bars. The
country that has been chosen for expansion by the organization is France. The organization
will aim at targeting the market with the help of its unique products that can play a major role
in increasing awareness based on the products that are offered to customers.
Background of the chosen product
Nature Valley is a brand of Granola Bars that is manufactured by General Mills. The
slogan of the organization is “The Energy Bar Nature Intended”. The company offers a wide
range of cereals, granola bars and snacks. Nature Valley mainly produces the Common Bars
that include, “Oats and Honey”, “Peanut” and “Fruit and Nut”. The selection of the products
that are offered to the organizations mainly includes, protein bars, nut bars, crunchy bars and
fruit bars. Nature Valley had developed its first granola bar in the year 1975.

3COUNTRY ANALYSIS REPORT
2. Analysis of the chosen country
a. Economic factors of the country
France has been successful in developing its position as one of the major economic
power in the world. The country has been able to develop its position as a major economy
like, the US, Germany, Japan, Italy and the UK. The financial position that has been
developed by France is based on extended unprecedented growth of the country which lasted
for a long time after the war period. The increase in levels of GDP was high between the
years 1960 and 1973. After the oil crisis that had taken place in the country, rates of growth
had reduced and unemployment also increased (Coluzzi, Ferrando and Martinez-Carrascal
2015).
However, after the 1980s the expansion rates had started increasing in a huge manner.
The structure of the economy had also changed after the war period and the agricultural
industry had provided major contribution to the economic growth of the country. The
economic growth of France is expected to continue at the speed of 1.5 percent in the year
2019 and 2020. The business investment is however expected to be highly supportive for the
financing based conditions and the cuts in business taxes as well (Corcoran and Gillanders
2015).
The flexible labour market, improvement in training based opportunities will be able
to play a major role in the ways by which jobs can be created in the country. The fiscal deficit
in the country is expected to decline in the next few years. The economic activity in France
has improved after a slowdown that had taken place on a temporary basis. The rates of
unemployment had decreased due to effective growth of the economy. The shortage in skill
sets for the high-skill based jobs have however been considered to be an important factor that

4COUNTRY ANALYSIS REPORT
affected the operations of the organization in the respective industries (Theguardian.com
2019).
Figure 1 – Growth in market
Source – (Oecd.org 2019)
The structural reforms that have taken place in the country have provided major levels
of support to the inclusive growth. The tax reduction that has taken place in the year 2019 has
led to the increase on fiscal deficit of the country. The consumption growth in the French
economy is expected to increase in the next few years. However, the impact of changes in tax
rates on behaviour of consumers cannot be analysed in an exact manner (Crifo and Mottis
2016). The GDP of France rose at a rate of 0.6% from the year 2008. The shock of global
recession has not been able to affect the growth levels of the French economy in a huge
manner. However, the growth can be considered to be quite sluggish in nature in comparison
to the other developed countries in the world. The entry of a new and innovative organization
like, Nature Valley will be effective and the organization will be successful in increasing the
awareness levels based on products that it offers to the consumers (Theguardian.com 2019).

5COUNTRY ANALYSIS REPORT
Figure 2 – GDP growth of France
Source – (Export.gov 2019)
b. Political factors of the country
The government of France has been developed as a hybrid of parliamentary and
presidential systems that reflects rich culture and traditions. The conflict based political
culture that has been formed in France is based on the past condition of the country. The
political culture of France is influenced in a huge manner by the social, geographic and
economic characteristics of the country. The characteristics of French population has been
able to shape political culture of France in a huge manner (Crifo, Escrig-Olmedo and Mottis
2018).

6COUNTRY ANALYSIS REPORT
The French citizens mainly live in the urban areas of the country and the agricultural
areas of the country have become strong in nature. The economic and social gap that exists
between the Parisiens and other citizens of the country is huge. The French revolution had led
to increase in distrust levels on the government. This had also been a major cause of conflicts
that had been developed between the republicans and monarchists. Nationalism is able to
affect the legitimacy levels of the government in France. Disagreement levels in the country
are quite high in the French culture in comparison to the other countries in Europe (Ducassy
and Montandrau 2015).
The French political culture is considered to be an important factor that affected the
operations of various organizations in the country. The regulations and the bureaucratic
procedures can be considered as major barriers related to the entry of new organizations or
products in the country. The trade barriers are considered to be highly important factors that
have an impact on the policies and procedures that are implemented by the organizations
(France, Merrilees and Miller 2016). The safety based standards that have been developed by
the organizations are also affected by the ways by which they operate in the industry. The
political opinions of French people are divided into two parts are able to affect the leaders.
This also creates a turmoil in the political environment and organization is affected in a huge
manner by the changes that take place in the environment on a frequent basis (Hamilton and
Webster 2018).
c. Legal factors of the country
The legal structure of France is based on then Civil laws that have been formed by the
government. The basis of the legal system is mainly based on the document that had been
written in the 1804 named Code Civil. The two major branches had developed French law.
The Public law or Droit public has played a major role in the ways by which they have been
applied to the private bodies and the private individuals as well. The legal system that has

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been developed in France is quite modern and is equipped in order to enforce the contracts
that is below OECD average (Oecd.org 2019).
The requirement of documentation in France is quite high and the expatriates need to
take care of the legal environment. The labour laws are also considered to be important
factors that have an impact on the ways by which international organizations are able to
operate in the industry (Oecd.org 2019). The dismissal process in France has been developed
with respect to the standardised dismissal based letter template is drafted and further
published on government website. The levels of transparency in the developed labour laws
are also considered to be highly important for the effective operations of different
organizations (Kaya 2016).
The tax based laws in France have been formed in such a manner that has an impact
on the business investments that have been made by the international organizations. The
employment based laws have been updated in order to make them more effective based on
the requirements of the organization. The rank that has been provided to France based on
Financial Complexity Index the is 6th. This is mainly based on the levels of complexities
based on tax rates and different financial transactions that are made in the organizations
(Hamilton and Webster 2018).
The corporate tax rates in France had dropped from 33.33% to around 28% in the last
few years. The rates are further expected to drop in within 2022. The VAT rate in France is
20% and the personal tax based rates have gone up to 45%. The business organizations need
to make the tax based payments nine times every year. The taxation based policies that have
been formed in the country can take a huge chunk of the incomes and revenues that are
gained by the organization. Nature Valley needs to consider the tax rates in order to analyse
the levels of profitability that will be gained in the market (Theguardian.com 2019).

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d. The investment and trade environment of the country
A balanced trade based policy has been developed and is followed by the French
Government. The policy is able to ensure that French business organizations are able to
access the foreign markets easily. The government aims at ensuring fair competition and high
levels of reciprocity in the markets as well (Shanker et al. 2017). The trade defence of France
is being strengthened in order to protect the strategic sectors by increasing the anti-dumping
duties and also improving the process of monitoring its foreign investments as well.
Government of France has made many different commitments based on the ways by which
the trade defence can be strengthened and different strategic sectors can be protected as well
(Khan 2018).
The global market that has been developed is based on the ways by which global
supply chains can be established and interconnection of the markets can be achieved as well.
The government assures that French business organizations are able to access the foreign
markets in order to develop the exports and to ensure that the market outlets of the products
help the company to remain competitive in nature. The access levels of small as well as big
organizations are increased with the help of proper trade policies that are developed by the
government of France (Kolk 2016).
The regional and bilateral agreements that have been formed by the organizations are
able to play a major role in the negotiations that are developed in WTO. The policies that are
developed by European Union have been helpful in the development of a broad network
based on regional preferential agreements that have been formed in different countries
(Theguardian.com 2019). The trade polices developed by European Union were first focussed
on the neighbours and the development partners. However, a major turning point has taken
place in the agreements that have been developed by the countries that are a part of the
European Union (Manninen et al. 2018).

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The Global Europe Strategy that has been implemented in different countries have
been helpful for the development of trade agreements on a large scale. The policy further
resulted in the development of agreements that have taken place recently including, South
Korea (2009), Colombia and Peru (2012) and Singapore (2012). The negotiations that are in
the process of completion on the other hand include, Mexico, Chile and Mercosur. The
French has however been highly careful that the policies that are being developed do not
weaken the sectors and are always aligned with the agricultural policies that are developed at
European level (Meyer and Peng 2016). The provisions developed by French government are
able to ensure fair competition and further encourage introduction of the safeguard based
clauses or the adjustment mechanisms as well. The effective trade environment will be able
to provide major growth opportunities to Nature Valley in order to increase the levels of
profitability (Naqshbandi and Jasimuddin 2018).
e. Foreign exchange issues
The French government had abolished all its controls on the foreign exchange based
activities from the year 1990. This was considered to be a major step that was taken by the
government in order to ensure free movement of goods, capital and people in Europe. The tax
policies that have been introduced recently in France have caused a battle in the community
that is able to push the uniform tax based policies om investments and savings. The economic
strategy that has been developed by France after the war has proved to be highly effective for
the country for the purpose of attracting foreign investments from different parts of the world
(Oecd.org 2019).
The trade partner of France is Germany and the partners have been able to develop
high levels of economic integration in order to become attractive for investments that are
made by the organizations. France has recently faced some major issues that are based on the
fiscal challenges and stagnating growth levels as well (Oecd.org 2019). The European nations

10COUNTRY ANALYSIS REPORT
have tried to develop an environment that is helpful for the development of trade and
business by the foreign organizations. A huge current deficit was maintained by France since
the year 2005 and the deficit started reducing in the year from the year 2010 (Noe et al.
2017).
France had received the tenth rank in the amounts of FDI that have been received by
the country. FDI has been able to play a major role in the ways by which France is able to
develop a competitive environment for the organizations. Foreign exchange policies
developed by the French government have played a major role in the export and import based
activities that have been performed in the country (Quinton and Wilson 2016). France is the
biggest exporter of farm based and agricultural products that include, spirits, wines and
cheeses. Tourism can be termed as a primary export as a service that is provided to the
customers. The major imports that are a part of the France trade related activities include,
machinery, crude oil, aircrafts and vehicles. The services that are imported include, travel and
transportation based services (Rizos et al. 2016).
f. Financial factors of the country
The economic growth of France has fallen from around 2.3% to 1.7% in the year
2018. The main focus of the French Government currently is to cut the levels of spending and
maintain the position of France in the European Union. The Finance Minister of France
Bruno Le Maire has suggested that the growth depicted by the country has been quite solid in
the last few years. The GDP of the country is expected to rise by 0.3 percent in the following
years. The growing economy will be able to provide an effective operating environment to
organizations like Nature Valley (Oecd.org 2019).

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g. Cultural factors and challenges faced by the country
France has provided business opportunities to greater than 20,000 foreign
organizations that operate under different types of legal forms. English is used as the official
language in most of European countries. However, the French people prefer using their own
language in order to communicate among themselves and also people who are from other
countries or backgrounds. The knowledge related to French language is considered to be
highly important for the employees of Nature Valley in order to communicate with the local
people and communities in an effective manner (Schaltegger, Lüdeke-Freund and Hansen
2016).
Conclusion
The report can be concluded by stating that France can prove to be an effective option
for Nature Valley to expand its operations outside Australia. The external environment based
factors have been able to play a major role in the ways by which Nature Valley will be
successful in the country. The economic stability of France will provide support to the future
growth based plans that have been developed by Nature Valley.
Recommendations
France will be a suitable destination for expansion of Nature Valley due to the
following reasons,
The economic stability of France will increase the profitability levels and
revenues of Nature Valley.
The international presence of Nature Valley will be increased with the help of
its operations in France.