Strategic International Business Management Report: Mexico & Norway

This report provides a comprehensive analysis of strategic international business management, focusing on market entry strategies for a company expanding into Mexico. It begins with a PESTLE analysis of Mexico, evaluating political, economic, social, technological, legal, and environmental factors to assess market stability and potential. The report then applies Porter's Five Forces model to analyze the competitive landscape of the Mexican retail sector, assessing the threats of new entry, substitute products, competitive rivalry, and the bargaining power of suppliers and buyers. A value chain analysis is conducted to evaluate the company's primary and support activities, including inbound and outbound logistics, marketing, sales, service, human resources, technology, and procurement. Finally, the report discusses various market entry methods, offering strategic recommendations for successful international expansion. The report emphasizes the importance of understanding the local market dynamics and adapting business strategies accordingly.

Running Head: Strategic international business management
Strategic international business management

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Table of Contents
Task 2..........................................................................................................................................................1
Task 3..........................................................................................................................................................3
Task 4..........................................................................................................................................................5
Task 5..........................................................................................................................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9
Appendices................................................................................................................................................12
Task 2
The main focus of the organization is to expand the business globally. In this paper, the
focus is given on two countries which are Norway and Mexico. Mexico is chosen in order to
expand the business in the new country. Pestle analysis will be based on Mexico.

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Political Factor
By focusing on the political conditions of Mexico it is analyzed that it has stability. The
government of Mexico has introduced many reforms that are based on economic, educational
and economic. It is analyzed that reforms help the company to enter the new market (De Villa et
al., 2015).
In the recent scenario, the competition level has enhanced and also it the environment has
brought change and helps to enhance the economy. The reforms that are introduced by the
government help to enhance the activities of the organization. The main focus of the company is
to maintain proper relations with the countries like Australia (Wang et al., 2016).
Stability is also analyzed in the countries like Australia, as it is one of the developed
countries. The laws and policies which are imposed by the government have given impact on the
retail sector and also on the overall activities of the organization (Hatch, 2018).
Economic environment
It is evaluated that Mexico depends more on the US as it is considered as one of the
biggest trading partners. The exports are done more as compared to other countries. The banking
sector of this country is increasing with the rates that are given as a loan to the individuals. Also,
there are agencies who give money to the companies. If the focus is given on growth rate it is
analyzed that the growth rate more in 2017 is more than the growth rate in 2016.
Social factors
In the country, the household income of the individual is enhancing and they are
spending more on expensive products and services on a routine basis. It is seen that
approximately 18% of the population is below the poverty line. The customers who give more
preference to the luxury products are always ready to give more or to spend more on purchasing
the products or services. Also, it is analyzed that the country focuses on considering latest
technologies so that changes can be made effectively. Western culture is more adopted by the
cities (Van Rompay et al., 2016).
Technological Factors

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To conduct the activities of the organization, one of the best sectors is telecommunication
sector which is considered by the country. By focusing on internet and digital media it is seen
that company is in the top 15 countries. Latest technology adopted by the organization helps to
enhance the success in the market. Marketing and distribution strategy is considered by the
organization so that demand for the products can be enhanced (Shao, 2016).
Legal Factor
It is seen that Mexico takes an active part in World trade affairs by taking into
consideration various forums like NAFTA so that the legal process of the country can be
liberalized effectively. At the time of establishing the business, the foreign organizations have
many options like joined venture and purchase of shares. To give proper assistance to the
company it is important to consider federal law so that labor law can be protected (Laufs and
Schwens, 2014).
Environmental factor
The country is facing various challenges which are related to industrialization growth.
One of the negative factors is related to pollution. To manage the issues related with the
environment there are various plans which are considered by the Mexico government so that
activities can be conducted in a smooth manner. To renew the energy resources the government
is focusing on considering the initiatives so that companies can easily achieve success (Vogl,
2014).
Task 3
It is evaluated that there are many changes in the retail sector and it has simplified the
process of foreign players to enter the market. Porter five force models will be taken into
consideration in this part to evaluate the retail sector of Mexico.

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(Source: Mindtools, 2018).
Threats of New entry
There are various competitors in the foreign countries. So, it is difficult to establish the
business as more investment is required to conduct the activities of the organization. The
companies who have existed in the market have captured a large market share and also it has
created a hindrance for the new players to enter the market. The growth of the retail sector is
very limited just because of the finance. To establish a new market is one of the costly processes
but is seen that Lidl has already created a good market. The supermarket can easily attain the
economies of scale as they purchase the products in large quantity (Cameron et al., 2015).
Threat of substitutes
The threat of substitution is high in the retail sector. It is seen that there are few market
players. It is seen that there are many retail outlets who sell their products easily in a managed
form. The products are displayed in a proper manner so that demand can be enhanced. There are
also many new players who try to induce the customers so they create substitute product and
offer to the customers at a low price. The concept of retail is changed by them only by offering
products at a low price (Berardi et al., 2017).
Competitive rivalry
The competition is high in the retail sector of Mexico. To induce the customers the
organizations, take into consideration innovative strategies like discounts and good services to
the customers (Chatterjee, 2017). There are varieties of products offered to the customers on the

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retail outlet. The organizations that are local have the benefit to sustain in the market. To
enhance the competition level in the market it is important to take into consideration the
innovative strategies like aggressive advertisements and offers to promote the products (Berman,
2015).
Bargaining power of suppliers
In the retail sector, the bargaining power is low as it is seen that it is not possible to
differentiate between the retailers. The behavior of the customer is dynamic and they purchase
different items where there can get attractive discounts. It is seen that the customers who are
loyal give benefit to the suppliers. So, bargaining power is low in the retail sector.
Bargaining power of Buyers
It is analyzed that for every organization customers are considered as an asset. The
bargaining power of the customers is strong if the comparison is made with the competitors.
Consumers are ready to purchase new products so that switching cost is high and the products
can be easily availed at competitive prices (Giri and Maiti, 2014). The buying decision of the
customer is affected by the offers and discounts offered to the customers. So, it is essential for
every company to evaluate the activities of the buyers.
So, by focusing on the above evaluation, it is seen that Lidl has to face a high level of
competition in the country. To minimize the barrier, it is important to take into consideration
proper strategies so that competitive advantage can be achieved in an effective manner. There are
many companies in Mexico who has a good image and the connection is also good for the
customers (Moshiri and Santillan, 2018).
It is important to consider proper marketing strategies so that business can be expanded.
The company can easily earn profits in the market. There are many foreign companies who enter
the market by taking into consideration joint venture. This will help the local players to capture
large market share (Smith and Thanassoulis, 2015).

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Task 4
The value chain of the company assists to conduct the activities of the organization and
also it helps to enhance the image of the company. It focuses on the operations concerned with
manufacturing and procuring so that delivery of the products can easily be done. The figure
states the value chain process of Lidl.
(Source: Humanresource, 2018).
Primary activities
Inbound logistics
The process of inbound logistics of the company is complex and the products of the
company are supplied all over the world. The organization is focusing on enhancing the overall
scope of the activities. The organization is making the investment so that the activities related to
logistics can be enhanced effectively. It also takes into consideration the initiative's to simplify
the supply chain management (Schoenherr et al., 2015). In the distribution system of the
company, the products are sent so that packaging can be done properly. Good relation also helps
to enhance the value of the company.
Outbound logistics

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Through the distribution centers, the customers purchase the products easily. Online sales
also enhanced the demand and helped the company to distribute its products. Retailers and
wholesalers of Lidl help to add value to the logistic system. The free delivery option is also given
to the customers (Surdu et al., 2018).
Sales and Marketing
Lidl invests more on the strategies concerned with marketing so that activities can be
conducted smoothly. The campaign of products is done so that products can be introduced in the
market. The statement of the company is to give surprise to the customers. The products of the
company are also promoted through Facebook, , and YouTube. Strong distribution channel of the
company is created just because of the various strategies related to digital. There is more
marketing strategy that will help to connect the brand with a variety of the products. Lidl is
considering both online and offline channel so that sales can be enhanced by the products.
Services
The employees of the company offer superior customer service and also has taken into
consideration cost leadership strategy so that goals and objectives can be accomplished
effectively. The primary activity will help to enhance the value of the overall image of the
company.
Support activities
Human resource
The human resource department of the company emphasizes on the people who are
conducting the activities of the organization. The company focuses on the people who are
talented and can manage the activities in a smooth manner (Marchington et al., 2016). Training
is offered to the employees so that they can manage the activities and can conduct the activities
according to the expectation level of the customers. Lidl emphasizes on giving rewards to the
employees by analyzing their performance (Bratton and Gold, 2017).
Firm structure

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Flat hierarchy is considered by the organization and it helps to conduct the activities of
the company in a proper manner. It helps the company to operate the activities smoothly.
Technology
By focusing on latest technology, the company offers attractive services to the customers
like pick and packaging services that help to enhance the overall satisfaction level. Through
online services also the customer can purchase the product by sitting anywhere. The information
is searched with the help of Google analyst that help to increase the demand for the products.
Taste and preference of the customer can easily analyze by proper considering the strategy. It
will help to enhance the goodwill in the market and also enhances the overall satisfaction level of
the customers.
Procurement
The organization emphasizes on enhancing the sales and it is evaluated that most of the
suppliers are from British. This states that the suppliers have a good connection or belong from
the UK and the products are also taken from other countries and as well from the UK.
Task 5
It is important for the organization to evaluate the market entry at the time of planning to
enhance the activities of the business in the international market. There are many methods by
which the organization can easily enter the market (Kraus et al., 2015).
The organization can take into consideration various methods to enter the market. It is
important to choose one of the best methods so that the company can easily enter the market
(Fong et al., 2014). To enter into Mexico, it is seen that company should focus on the modes of
entry so that business can be established in a proper manner. There are some entry modes that are
elaborated below:
Joint venture
There are many advantages of a joint venture in Mexico that can be implemented on Lidl.
It is seen that organization does not require stressing about the lack of knowledge of local market
(Xie and Li, 2017). The organization can consider the local market so that image can be

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enhanced in Mexico. By focusing on joint venture it is seen that delivery of services can be
handled easily (Hernández and Nieto, 2015). It is important that the people involved in the
business should take care of after sale services. It is important that company should provide
proper training to the employees so that the activities can be conducted managed form. The joint
venture is considered as a cost-effective method as it emphasizes on enhancing the overall
quality standards.
Export
Lidl can easily offer the products to the customers in Mexico. The major factor is related
to service delivery. The products can be given to the customers by focusing on online and
offline mode. After sale service can also be a major issue so it is important to take corrective
steps in a proper manner so that activities can be conducted smoothly.
Franchising
This is one of the methods of enhancing the business on the international platform. This
method can be taken into consideration by the company to enter the market. In this method, the
organization has to make a proper agreement with the large companies and the products can be
sold by considering the trademark. It will assist the company to evaluate the new consumers and
market in an effective manner (Hussain et al., 2018).
Full owned subsidiary
In this method, the organization can face problems just because of the lack of knowledge
about the legal procedures. Also, it is seen that company should conduct the activities according
to set policies and rules that can be considered in the innovative process.
So, by the above information, it is analyzed that joint venture can be one of the best
options that should be taken into consideration by the company to enter the market. If company
take into consideration the method of joint venture then it can be easy to achieve the overall
benefits and opportunities prevailing in the retail sector.

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Conclusion
It is analyzed that every organization should evaluate the market so that expansion can be
made on the international level. Mexico is one of the best countries for the organization to
expand its business. Also, it is evaluated that joint venture will be the best option to enhance the
overall activities of the organization.
References

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Chatterjee, S., 2017. Two efficiency-driven networks on a collision course: ALDI’s
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