Sollatek: Comparing UK and Ireland for Global Business Expansion

This report examines Sollatek, a UK-based manufacturer, and its global expansion strategy, specifically focusing on its potential entry into the Irish market. The report provides a detailed comparison of the UK and Ireland, analyzing their business environments using a PESTLE analysis, considering political, economic, socio-cultural, technological, and legal factors. The analysis highlights the advantages and disadvantages of each country, considering factors like political stability, economic conditions, cultural nuances, technological advancements, and legal frameworks. The report also explores Sollatek's company outline, its goals, and the rationale behind targeting Ireland for expansion. The report concludes with a recommendation for Sollatek's expansion strategy and considers the most suitable entry mode for the company's international growth.

GLOBAL BUSINESS IN
CONTEXT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Company Outline.........................................................................................................................3
Comparison on Countries (UK and Ireland)................................................................................3
Entry Mode Analysis...................................................................................................................8
Recommendation.......................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Global business can be defined as the international trade whereas global business i.e. a
company that run it’s business around the world. It is important for the company because it leads
extensive competitive advantage and high level of competition between the companies which
helps it to become highly competitive company in the global market by offering high quality
product at lower costs (Swanepoel, 2018). To understand role of global business has an example
Sollatek. It is a small-scale manufacturer and world leader which is established in UK. This
company has goal to expand it’s at global level so it targets, Ireland country for expanding
purpose. In order report will provide comparison on countries i.e. UK and Ireland EU country
based on the global business environment with the support of analytical tool i.e. Pestle analysis.
MAIN BODY
Company Outline
Sollatek is a small-scale UK-based small-scale company that manufactures tubes and
valves. It is a world leader company in the context of voltage protection, power control,
temperature control, solar energy and energy saving (Ahi and et.al., 2017). It has plan to expand
its business at global level because it wants to maximize revenue of the products by selling them
at international level which ultimately enhance approach of the business to other potential
companies. To expand its business, Sollatek targets EU country i.e. Ireland wherein it will locate
its business in Carbazone. There is a reason to select only this particular country such as it is
quite financially strong country and near by UK so there are several rules and regulations are
similar like UK so it does not have to face any cultural issue. In addition, citizens of EU country
travels, settle or work anywhere but only in the UK country. So, company is aware about EU’s
citizens requirements and needs. One of the most important factors is that company manufactures
tubes and valves that are highly demanded by people of EU’s member country Ireland. So,
Sollatek select only this particular country for business expansion purpose.
Comparison on Countries (UK and Ireland)
Different factors i.e. political, economic, cultural, environmental, technological and legal
aspects that plays vital role in developing comparison between Ireland and UK. However, there

is a particular analytical tool that encompasses all factors i.e. political, economic, socio-cultural,
technological, legal and environmental which supports company to analyse it’s external
environment of business before entering into new market. The analytical tool is pestle analysis
model that uses by most of the companies to analyse external environment of business before
entering into new market or launch new product and services (Kasemsap, 2016). This analytical
tool is used by Sollatek to develop comparison based on the global business environment in
respect of two countries, named; UK and Ireland. Factors are mentioned below:
 Political factors: Political factors are tax policy, trade restriction, tariffs, political
stability, environment law etc. which impacts company’s profitability, operations and
productivity.
Ireland: Ireland is completely controlled and leaded by local of government this country who
has chosen by local people through voting system. There are the great opportunity for the
Sollatek company because it does not have to face any political issue. It can adapt their political
policy and follows all rule and regulation of the Ireland government without worrying about
political changes because there has strong political stability. In addition, there has free trade
policy (FTP) that will support company to sell it’s manufactured product in other countries
without giving extra tax. Local government invites MNCs for generating high employment
opportunities.
UK: On the other hand, UK has strong political stability as Ireland but UK’s government has
over control on all national activities. But Brexit has led advanced change in political policies,
taxation policy etc. due to this Sollatek has already faced financial loss in it’s business because it
has to pay extra tax to get raw material for the product manufacturing. Government does not
allow any company to trade it’s product into multiple countries due to trade legislation.
 Economic factors: It includes inflation, interest rates, consumer confidence, employment
rate, disposable income etc. impacts on organization’s economical scale.
Ireland: Ireland’s current economic conditions are facing some slowdown right now due to the
corona virus pandemic. There has good education system so number of people are too much
educated in the country. It is a great opportunity for the Sollatek company because it gets highly
skilled suppliers at minimum wage because there has high unemployment rate as compared UK

(Klossek, 2020). As resulted company will get raw material with standard quality at lower costs
then it will enable to gain high profit margin on it’s final products from the customer. In
addition, disposable income of people is good so it is good opportunity for the Sollatek because
it can manufacture some premium products like valve and tubes and sells at higher costs.
UK: UK also has strong economical position because it has a high GDP rate. There has large
population that allows small market also to be more profitable. But there has low unemployment
rate so manufacturing company i.e. Sollatek have to pay wage to the suppliers because only
limited suppliers are available in the market who are highly skilled. Interest rate of mortgage
payment is too high which also directly impact on organization’s profitability.
 Socio-cultural factors: It includes various factors such as demographical changes, cross
culture differences, income level, education and population that drastic impact on
company’s decision-making process.
Ireland: Social factors of Ireland are very favourable to businesses for different MNCs, because
education level of Ireland people is too high because they are highly trainable and educated.
Another is that there is highly awareness in the customer about market trends so it can be big
challenge for the Sollatek company because it has to bring advancement in it’s existing product
segment then it can survive in the business market. In addition, income level of people in the
Ireland is stronger because there are most of the companies are operating in healthcare sector,
agriculture and finishing which ultimately have boost up country’s economy. Due to this income
level of people also increases per year (Passera, Kankaanranta and Louhiala-Salminen, 2017).
With the support of this opportunity, company can production of it’s product segment at large
scale with good quality then it can sell them at higher costs to the Ireland people without facing
any bargaining issue. Country enable to develop economy from several sectors i.e. corporates,
hospitality industry, agriculture sector, pharmaceutical and hospital industry so it denotes that
there has stiff competition between these sectors. But electronic manufacturing industry is not
developed at that level in which other sectors. So, it is great opportunity for the company to
establish it’s business at small scale or large scale and offers their manufactured products i.e.
valves and tubes to the potential costs at higher costs without compromising with the profit
margin. Valve and Tubes are the one of the most essential products that are used by all sectors
i.e. corporates, hospitality industry, agriculture sector, pharmaceutical & hospital industry and

travel & tourism etc. Thus, Sollatek will get positive impact from the socio-cultural factors on
it’s business.
UK: United Kingdom is considered world’s biggest consumer market because there are multiple
region people lives. In this market, insurance sector, real estate and healthcare industries have
already gained lots of commercial benefits. However, electronic manufacturing industry is also
more success business in the UK so there Sollatek often have to face stiff competition in the
business market. Another reason is that there are various electronic manufacturing companies
which manufactures and sales similar products like Sollatek so it has to face tough competition
due to this it often gets negative impact on it’s profit margin. The education system of UK is also
strong like Ireland. Government of UK emphasizes over the updating people about technology so
they update annually with the latest information. But Sollatek has got negative impact due to
Brexit because it has led advanced changes in the political policies and currency exchange rate
etc. due to this most of the small-scale businesses have to shut down their business because they
are not getting sufficient financial resources (Peng, 2016). It directly impacts on employment
rate that means most of the people have lost their business which ultimately decreases their
spending behaviour. As resulted, Sollatek unable to sell it’s proposed product segment to the
customers at higher costs which directly impacts on it’s profit margin.
 Technological factors: It includes development in technology, emerging technology etc.
that impacts on organization’s economical scale as well as business operations.
Ireland: This country is highly strong in the context of technology development because people
of Ireland have good education system. Government of Ireland annually invest in information
technology sector in order to develop good technology through which existing companies can
offer better product and services to the people and in exchange generates high revenue over
them. In this country, all people have own cellular phones with the internet facilities so people
always up to date about new product trends and demands to the company for the similar
products. This strong technology development will bring positive impact on Sollatek profitability
because it can use advanced technology in the business in order to develop best quality products
i.e. valves and tubes through which it can automatically influence customers to buy it’s product
and people will also ready pay extra for the quality.But the major drawback of the factor is that
company will have to upgrade it’s technology time to time or adapts new technology constantly

accordingly market trends through which company can face employee resistance. Such changes
will lead financial loss in the business because when company will use different technology in
the manufacturing department then it will ultimately increase production costs so, it has to sell its
product at higher costs which may impact it’s profit margin negatively.
UK: In UK people are up to date for the emerging technologies and most of the companies
adapts these technologies in order to gain competitive advantage in the business market.
Technology sector has given great contribution towards the UK’s economy. So, UK has become
one of the major hubs for the online shopping market. Most of the UK’s companies have taken
initiatives to make business digitalized (PESTLE Analysis of UK, 2020). So, they are adopting
different emerging technology which supports them to run their business in the e-commerce
market. In modern world, e-commerce market has become economic booster market because
customer’s purchasing trends are changed time to time. For example, people prefer to buy
product from traditional shopping but current generation people prefer to buy products from the
online platform. Due to this Sollatek company has get positive impact on it’s business such as it
sells it’s product from the online platforms like social media, email marketing etc. on which it
gets lots of benefits. But UK has slow technological development as compared to the Ireland.
 Legal factors: It includes Employment Act policy, Equality Act, Wage Act and legal
factors that directly impacts on organization’s productivity and operations.
Ireland: Foreign direct investment (FDI) policy of Ireland is quite liberal like country allows
multinational companies and foreign companies to invest huge capital in the country for
establishing new business. in the other word, foreign companies do not have to face more
difficulties to expand it’s business in this nation (Schellenberg, Harker and Jafari, 2018). In
addition, now government has become too much strict with the legislation laws such as
employment law such as according to law, no company can hires children and kids for the
employment purposes. If any company or factory hires such people for the job then in against,
they have to pay huge cost in the form of penalty to the government. In this country, government
has imposed law to set a level, at which any corporation can hold market share in the Ireland.
Sollatek will have to follow all legislation of the Ireland which have sated by the government
then it can successfully incorporate it’s business in the market.

UK: On the other hand, UK’s government has imposed rule of Wage act. According to this act,
no company can hire a labour or employee at lower wage or in a case if company break this rule
then it has pay huge penalty against it. Sollatek has more than 42 employees in the company who
gets good salary over their working hours or designated posts.
 Environmental factors: Climate change, weather, pollution etc. are environmental factors
that also impacts on company’s profitability and growth in the business market.
Ireland: There are environmental factors, like; climate change, natural disaster etc. are uneven in
Ireland because peoples are not highly up to date about environment concerns. Most of the
companies are using harmful chemicals in order to produce products so climate change and
natural disaster are uneven (Tallman, Luo and Buckley, 2018). But Government in Ireland still
not taking this issue in priority. It denotes that local people are not completely up to date about
environment issue like UK.
UK: UK’s government and people has become highly concerned for the environmental issue. So,
government in UK has imposed eco-friendly product production for all company’s weather
manufacturing or retail industry. Due to this law, Sollatek has received negative impact on it’s
business economical scale because it have to integrate environmental friendly business practices
as well as products which increases costs of the products due to this only fewer people enable to
afford it’s products. Thus, this factor gives negative impact on company’s profitability.
Entry Mode Analysis
There are various international marketing entry options such as strategic alliance, joint
venture, Merger & Acquisition, licensing etc. These marketing options can be used by Sollatek
to enter into Ireland. Strategic options are described below such as:
 Joint venture
Joint venture is considered as one of the great market entry options for the Sollatek because it
is small scale company so it needs large capital investment in the Ireland. So, it can find some
potential parties with whom it can invest in the Ireland that will help it save from financial risk.
Company is well established in UK at local market but it does not have strong financial position
so it can become bit difficult for the organization to find a potential party who can invest with the

company in the targeted place. It manufactures valves and tubes and considers world leader in
term of energy saving, temperature control etc. It will support company to find potential party
who will provide financial support and provides greater access of resources such as technology
and staff. Overall company can get positive aspects if country select this strategic option for
business expansion purpose (Bessière and et.al., 2019). However, this strategic market entry
option posses’ fewer drawbacks such as when company works with highly potential business in
the contract of joint venture then it has disclosed their business secretes with the local firm in the
foreign nations.
 Strategic Alliance
Strategic alliance is another market entry option that also uses by companies to enter into
foreign market. It is a form of contract or agreement between two parties or companies that
undertakes by them for the mutual benefits. However, each company keeps own independency
that is one of the major advantages of the method. This contract is highly complexed and binding
together rather than joint venture because both companies try to pool resources towards them in
order to establish isolate business. Sollatek can use this marketing entry mode for entering into
Ireland because it also provides political advantage (Fargani, Cheung and Hasan, 2017). For
example, if Sollatek will come in contract with the targeted nation company then ultimately it
achieves local favour. This strategy also supports Sollatek to gain financial advantage because it
can get reduce operational costs of manufacturing by distributing duties of raw material
receiving across the member of strategic alliance. Thus, it is also great opportunity for the
company to gain commercial benefits by picking this option for international entry purpose.
The management of Sollatek have to select strategic alliance market entry option because
it will support company to successfully entry into Ireland. There is a reason select only this
particular strategic option such as in this entry mode company legally come in contract with
Ireland company which already has established in the country and offers its services (Hans,
2018). Due to this contract, Sollatek will enable to use resources of alliance company and can
understand culture of the country more effectively. Apart from this, it will support to build good
brand image in the business market because strategic alliance company already has established
good brand image in the Ireland market so people will attract towards company’s product and
services. So, this option is select for the expansion purpose (Shtal and et.al., 2018).

Recommendation
 The upper management of Sollatek should adopt effective international marketing
strategies like multidomestic or standardization in it’s business because it will support to
create uniqueness in it’s business through which company can differentiate it’s product
and services from other companies in Ireland. Standardization approach will not only be
supported company to enter into targeted country for the internationalized purpose but
also it will support to differentiate it’s brand image from other companies which already
exist in the Ireland.
 The SWOT analysis is another effective tool for the company because it will support to
identify it’s strengths, weaknesses, opportunities and threats which will support Sollatek
to use them in Ireland in order to build strong image in it’s sector (Huo, Levchenko and
Pandalai-Nayar, 2019). So, it can use this strategic tool as well for entering in to the new
market place of Ireland.
CONCLUSION
On the basis of above findings, it can be concluded that this report has been given brief
overview about Sollatek which is going to make to its business internationalize. It has
summarized comparison and challenges between two countries i.e. UK and Ireland with the
support of following points i.e. political, economic, socio-cultural, environmental, technological
and legal aspects. Entry modes for the international market has been summarized in this report.

REFERENCES
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Online
PESTLE Analysis of UK. 2020. [Online]. Available Through: - <
https://www.marketingtutor.net/pestle-analysis-of-uk/ >.