KLARNA's Strategic Analysis: Developing a Business Strategy Plan

This report provides a comprehensive analysis of KLARNA's business strategy, employing various frameworks and models. It begins with a PESTEL analysis to evaluate the impact of political, economic, social, technological, environmental, and legal factors on KLARNA's operations. The report also includes a stakeholder analysis to understand the influence of different stakeholders on the business. An internal assessment is conducted using the McKinsey 7S model and VRIO analysis to identify KLARNA's internal strengths and capabilities. Furthermore, Porter's Five Forces model is applied to examine the competitive forces within the industry. Finally, the report discusses the implementation of strategic management theories and concepts to develop an effective strategic plan for KLARNA, focusing on sustainability and growth.

Business Strategy

Table of Contents
Introduction......................................................................................................................................3
TASK 1............................................................................................................................................3
P1 Application of Framework and analyse their impact on KLARNA..................................3
TASK 2............................................................................................................................................7
P2 Assessment of internal environment &capabilities...........................................................7
TASK 3............................................................................................................................................8
P3 Porters five force Model....................................................................................................8
TASK 4..........................................................................................................................................10
P4 Implementation of theories aswell as concept in order to develop strategic management
plan.......................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

Introduction
Business strategy refers to combination of ideas and thoughts and decisions through
which firm goals and objectives can be achieved. Strategies are important for every business to
be unique and different from others. Entity without strategies cannot sustain in this competitive
market (Johnson, 2016). Business strategies act as backbone of the business and support them in
achieving their target. Adopting of business strategy guides entrepreneur to take decisions in
appropriate manner. KLARNA is a financial institution headquartered in Sweden. This report
comprises of different framework affecting external as well as internal factors, porters 5 force
model, theories and methods of developing strategy. With the aid of these models effective
strategies will be developed so positive response will be gained. Along with this, the present
report also includes SWOT as VRIO analysis with the help of which internal strength and
capabilities of the organisation can be identified.
TASK 1
P1 Application of Framework and analyse their impact on KLARNA
Framework are important for every business and entity. They help in analysing internal as
well as internal factors which affects the business and activities. Also, using of frameworks help
planning of activities and decision making process. So, in business it is important to use
appropriate framework for reliable output. KLARNA is a leading financial institution in Sweden
and is having its presence within 14 locations. There are many factors which are uncontrollable
and affect financial institution performance and management operation activities. So, to tackle
these factors KLARNA uses PESTEL analysis to determine impact of these factors in business.
PESTEL is a tool used by marketers and organisation to track the situation and activities in
market which affect business operations and is discussed below-
Political Factors- Political factors affects business at deep level. Because they include
interference of government, trade restrictions, labour law etc. These factors are uncontrollable
and difficult to measure their impact on business. In relation with KLARNA, certain rules and
regulations imposed by government has affected business and its performance. No matter what
FDI (foreign Direct Investment) is most appropriate method of developing business but due to
excess of FDI by some countries and organisation, UK government has changed their policies for

foreign companies so that misuse and irrelevant use of resource could be prohibited or minimised
(Blidholm and Johnson, 2018). This will impact over the strategy of KLARNA in a manner such
that it will be able to ensure its sustainability in market place for a long period of time in future.
Economical- Further come the economical factor. These includes wage rates,
unemployment, inflation and deflation rate etc. these factors slower the growth of business in
achieving desired goals and objectives. In context to KLARNA, wage rates are increasing due to
rapid growth and development of country's economy, so, profit and sales of financial institution
is getting low (Blidholm and Johnson, 2018). Thus, this factor affects at broad level.
Social Factor- Social factors are crucial to analyse and determine in business. These
social factors comprise of status, cost of living, community, culture etc (Ibegbulem and
Andersson, 2017). Making money and profit is the main motive of every organisation but entity
can only achieve goals and objectives when they contribute to welfare of society. It needs to
invest in those products and services that aim to ensure the welfare of public at large. Therefore,
it has been concluded that social factor of a country highly influence overall business operations
at the marketplace in both positive as well as negative manner.
Technological factor- Technology has become necessity in today's life. Technology
factors includes advance use of AI (Artificial Intelligence), hologram system etc. Technology
affects the business at wide and broad level. To adapt this dynamic changes of factors
organisation requires manpower and efficient resources (Blidholm and Johnson, 2018). Due to
access of technology, resources are becoming rare. KLARNA has developed financial institution
operations both online as well as offline. They have customer service which is active all the time
and helps the customers at any time to solve their problems. KLARNA does not have its
branches.
Legal- Every country has its own laws, rules and regulation. Legal factors comprise of
safety laws, consumer rights, labour law etc. Laws are dynamic in nature thus it is important for
organisation to be active toward such information. In context to KLARNA, there are policies and
procedures that are followed by financial institution which increases creditability of financial
institution in market (Larsson, 2018.). Thus, all the credentials related to customers are managed
and protected by financial institution in an effective manner. Further, e-commerce strategy
strives to act as an opportunity for the firm. This will impact over the strategy of the financial

institution in the manner that it will ensure that KLARNA does not carry out any activities over
internet which is against the interest of law.
Environmental Factors- Environmental factors are crucial as they include surroundings,
climate, sources of raw materials etc. It is important for organisation to take into account these
factors in order to maintain sustainability and to increase goodwill of firm. In relation with
KLARNA, it has reduced the use of paperwork and running its operating activities online which
saves time and manpower effort. This has impacted over the human resource strategy of
company in the sense that it now has to recruit less number of employees (Blidholm and
Johnson, 2018).
Stakeholder Analysis
Stakeholders are those who has interest and influence in business. Stakeholders are
crucial because they help in organisation to expand business and market. Every firm has different
types of stakeholders such as customer’s government and shareholders. Stakeholder analysis of
KLARNA financial institution is discussed below-
Stakeholder Effect on KLARNA Interest
Customer
Government
Shareholders
KLARNA believes in satisfaction of
customers and always ready to handle
their objections and queries.
KLARNA follows rules and
regulations which are governed by
laws so they can perform all the work
in an effective and efficient manner
(Maj, 2019).
Another important stakeholder is
shareholders. These are the people
who assist financial institution to
expand and increases overall growth
Provision of superior quality and
timely payment services by the
organisation.
Assurance of law compliance by the
association at all times
Earning of high profits by the company
so as to maximise their share in profits

and development
With the help of above mentioned, it is said that stakeholders are one of the most essential
element of a business entity which assist in developing as well as growth of the company at
marketplace. In the present context of KLARNA, it has been identified that the company having
high market existence and for this it is essential to develop good relationship with the
stakeholders

TASK 2
P2 Assessment of internal environment &capabilities
The responsibility of KLARNA is to adopt McKinsey 7S model and VRIO in such a way
that can analyse its micro environment.
 Strategy: The strategy of Klarna is to keep the overall cost of operations low by
incorporating effective technologies and systems. Managers of the organization modify
strategies and policies according to the changing situations of the outer environment so
that they can maintain their position.
 Structure: Klarna follows functional structure whereby organization is segmented into
functions such as finance, marketing, sales, HR and many more. It is said that,
management team of KLARNA adopt systematic structure where they follow top to
bottom and bottom to top communication structure.
 Systems: The HR department of Klarna stipulates a working system whereby compliance
with laws and legislation is given supreme importance. All the rules and regulations
developed by the legal authorities of the country has been followed by the managers of
KLARNA so that they can perform all the operations in ethical manner.
 Shared values: Transparency, honesty and integrity are the values which are found to be
at the heart of Klarna. It is very essential for a company to be transparent in front of their
investors so they can retain them for a longer period of time at the marketplace.
 Style: The leader of Klarna adopts participative leadership whereby views and opinions
of all the employees are taken into due consideration.
 Staff: Klarna provides training to employees at regular intervals so that their existent
capacity and skill set can be enhanced in an effective manner. Management team of
KLARNA provide training and development session to their new and existing staff
members on a regular basis so they can perform all the operations related to the company
can perform in an effective manner.
 Skills: The employees of Klarna are proficient and skilled to carry out the tasks
associated with this organization.
All the above internal skills and capabilities of the company help management team of
KLARNA in order to gain competitive advantage at the market place. Along with this, it has also

been analysed that all these internal skills help in maintaining long term sustainability at the
competitive market area and enhance their overall sales as well as profitability.
VRIO Analysis: It is a framework used by organisation to analyse internal factors which
affect the business. Thus, VRIO is elaborated as value, rare, inimitable and organized. It is very
essential for every organization to have enough amount of resources so they can run their
business in a smooth way. In the present context of KLARNA, it has been said that there are
mainly four factorswhichare considered as valuable, rare, organized and imitable. All these
elements include some resources which are goingto be discussed as follows:
Valuable: Every businessentity has some valuable element which assists them in order to
accomplish their goals and objectives within given time period (Larsson, 2018). In reference to
KLARNA, it is said that the organization operates its functions in around 17 countries which aid
them in gaining more profitability at the marketplace. Therefore, the most essential as well as
valuable thing for KLARNA is their global presence at the competitive marketplace.
Rarity: Incase of rarity, products and services offered by KLARNAare rare at the
market area. It has been observed that company offers smart, unique as well as possible solutions
at very affordable prices to their customers. Apart from this, HR manager of the company
provides training and development to their existing staff members on a regular basis so they can
easily adapt advanced technologies whichis one of the rare characteristic.
Imitable: In reference to KLARNA, they offer unique financial solutions which are quite
inimitable for other organisations deals in similar industry (Larsson, 2018). Apart from this,
human resource managers adopt some strategies and policies to provide training to their
customers which cannot be copied by some rivalry organizations. Thus, this tends to make the
resource inimitable and stand unique amidst the competitors.
Organised: It is essentialfor every organization to organize its resources in such a
manner that the business entity can perform its business functions in a smooth manner.
Resource Valuable Rare Inimitable organized
World wide
Existence
Yes
Human resource Yes Yes
Differentiation Yes Yes Yes Yes

Policies
Cost strategy Yes Yes Yes
TASK 3
P3 Porters five force Model
It is a framework coined by Michael Porter whichhave the motive to examine various
competitive forces have influence over operational functions of the company. Porters five forces
is a model whichis adopted by abusiness entity to examine different factors which influences the
whole operation of the company. It includes five forces which are going to be discussed in detail
manner are as follows:
Threat of new entrants: It refers to a threat which is mainly faced by an organization if
there is any new company enter into the same industry. In the present context of financial
institution sector, it has been analysed that threat of new entrants is quite low as the company
mainly serves high quality service solutions to the customers. Apart from this, the biggest
advantage gain by KLARNA is that customers trust them as they fulfil all their requirements in
an effective manner which enhances the trust of individual person.
Threat of Substitutes at marketplace: Itis the case mainly happens when there are large
number of companies offer similar products and services to their customers. High number of
substitutes available at the marketplace influences the performance and profitability in a negative
manner. In reference to KLARNA, there are limited organisations available at the marketplace
which is quite beneficial for the organization (Petrovski and Pestana, 2017). Company provides
high financial solutions to their customers which are quite different from their competitors which
keeps the threats of substitutes as low.
Bargaining power of buyers: Key asset for every organisation is their customers,
therefore, it is essential to develop positive and strong relationship with consumers so they can
leads towards successfully growth. In reference to Klarna, there are very limited organisations
who provide similar services to their customers which says that the bargaining power of buyers
are quite low (Maj, 2019). This as a result help them in enhancing their goodwill and profitability
at the competitive marketplace.

Bargaining Power of Suppliers: Suppliers refers to those individuals who provides
rawmaterials, services as well as resources tothe organisation. In reference to KLARNA, they
majorly have only four suppliers whichare loan, securities, mortgages and deposit of customers.
In this context influence of suppliers over the company is high as it depends on the satisfaction
level of customers (Romānova and Kudinska, 2016).
Competitive Rivalry: It refersto the total amount of competition available at the
marketplace which reduces the profitability of the company in a negative manner. High level of
competition affect the operation of business which includes reduce customer base, decrease in
profit margin and many more. In the present context of KLARNA, it has been analysed that the
competition level within this industry is quite high which influence development and growth of
the company in a negative manner. In order to compete with the rival firms, KLARNA start
providing online services to their customers which helps them in maintaining positive and strong
relationship with them.
With the assistant of above analysis, it is said that managers of KLARNA is
required to maintain positive and good relationship with customers as well as suppliers so they
can maintain their sustainability at the competitive marketplace for a longer period of time.
Furthermore, top management team of the organization focuses on providing high quality
financial service for enhancing their profitability at the competitive marketplace.
TASK 4
P4 Implementation of theories aswell as concept in order to develop strategic management plan
For creating an effective strategic plan, it has been analysed that top management team of
KLARNA use Porter's generic strategies so they can easilydeal with the market situation. It is a
framework which consists of three essential factors so that they can effectively handle the market
environment as well as target right consumers accordingly. All these three components of
Porter's generic strategyare going to be discussed as follows:
Cost Leadership: It is the first component of Porter’s generic strategy where the main
motive of an organization is to attain top position at the marketplace as well as to
grabcompetitive edge. In this context, main focus of the company is to produce high quality
products and services within less and affordable price. In reference to KLARNA, the managers
of business entity can implement this strategy by focussing on gaining competitive position at the
marketplace by offering low or affordable price services to their customers. This will assist them

in attracting new customers as well as retaining old and potential consumers for a longer
duration.
Differentiation: In this strategy it is decided by the management team of an organization
to bring innovation and unique service and goods according to the market situation so they can
attract ample number of people towards their business entity (Ibegbulem and Andersson, 2017).
In the present context of KLARNA, top management team of the company can adopt this
strategy by focussing on providing unique services in order to enhance their sales at competitive
marketplace. By adopting such strategy company can easily attain growth at themarketarea and
can beat the level of competition.
Focus: It is the last strategy where two strategies are included which are cost focus as
well as differentiation focus. If this strategy is adopted, it can be said that manager of KLARNA
can gain competitive advantages at the marketplace and effectively beat the rivalry present at the
market.
Withthe aid of above discussion, it is said that higher authority of the organization can
make use of Cost focus strategy so they can gain positive response from customers at the
marketplace. This is the organisation mainly focuses on offering high quality service to their
clients at low cost so they can influence ample number of individuals towards their organization.
Along with this, by achieving this strategy they can also attain growth at marketplace as well as
enhancement in profit ratio of the company.
Ansoff Matrix
Market penetration: This implies launch of existent products in current markets. The adoption
of this strategy by Klarna would imply increment in customer base and revenues within the
domestic market.
Market Development: This means introduction of same products in new markets. By adopting
this strategy, Klarna can provide payment services in locations whereby its financial solutions
are currently not provided.
Product Development: This implies the introduction of new products in current market. If this
strategy is adopted by Klarna, it would imply expansion of product and service portfolio of
company, thereby increment in the scope of enhancing organisational revenues (Tidebrant,
2013).