Strategic Planning for Klarna: Environmental & Competitive Analysis

This report provides a comprehensive analysis of Klarna's business strategy, focusing on the impact of macro environmental factors, internal environment, and competitive landscape. It uses tools such as PESTLE, VRIO framework, and Porter's Five Forces to evaluate Klarna's position and strategic options. The report examines political, economic, social, technological, legal, and environmental factors affecting Klarna, along with an internal analysis of its resources and capabilities. Furthermore, it assesses the competitive forces shaping Klarna's industry and suggests strategies for achieving a competitive advantage. The analysis helps in understanding the opportunities and threats Klarna faces and provides insights for strategic decision-making. Desklib provides access to similar reports and solved assignments for students.

BUSINESS-STRATEGY

Table of Contents
TASK 1 ...........................................................................................................................................4
P1: Impact of macro environment factors on the organisation..............................................4
M1: Critical analysis of of macro factors to determine the management decisions...............6
TASK 2............................................................................................................................................6
P2: Analysis of internal environment of a business and its capabilities of the organisation .6
M2 Evaluation of capabilities on internal environment of businesses...................................8
TASK 3............................................................................................................................................8
P3: Analysis of competitive environment of the organisation...............................................8
M3 : Appropriate strategies for achievement of competitive advantage in market.............10
TASK 4..........................................................................................................................................10
P4: Concepts, theories and models helping in strategic planning........................................10
M4: Strategic marketing plan...............................................................................................13
D1: Critical analysis and interpretation of data and information.........................................14
CONCLUSION....................................................................................................................15
REFERNCES.................................................................................................................................16

INTRODUCTION
Strategies are regraded as a action plan that is undertaken with a view for achievement of
long term goals that are related with actions and -plans of a business. It is helping organisation in
improvement of employee performance and taking benefits of competitive advantage in the give
period of tine. It is helping in determination of the overall path that organisation have to
implement in order to reach their desired goals. Present report is based on Klarna that was
founded in the year 2005 & is having its headquarters in Stockholem, Sweden it has helped in
evolving of technology in the last 14 years. It is one of largest banks and is serving approx 80
million customers. Present report is discussing about macros environmental factors that are
affecting a organisation. Various factors such as VRIO framework, PESTLE, Porters five force
model in order to analyse various external factors.
TASK 1
P1: Impact of factors of the macro environment on various organisations
A business is operating in a fast changing environment that is changing very fast and is
posing influence on its functions (Hawkins and Gray, , 2019). Organisation is making analysis of
various external factors that can provide various opportunities and also threat at the same time. In
present scenario, Klarna is discussed as a part of report and its macro environment is studied as
presented below:
Political: Political factors are those that play a important role in banking industry. They
posses power to influence these financial institutions.
Positive: The overall level of scrutiny of government may lead to Klarna changing their
policies ta a very frequently it leads to customers trusting and enhancement of positive of image
in external market.
Negative: There are leading repositories related with public savings in Klarna and
because of this banks have to be regulated by very strict regulations.
Economic: Economic factors can be regarded as those that have a affect on the economic
performance and operations of a company. It includes different functions such as interest rates,
exchange rates etc,

Positive: In situations when economy is growing overall economic factor posses a
positive impact on working of a organisation such as especially the banking industry such Klarna
bank.
Negative: Many times in situations of recession when there is low monetary supply in
the economy may create a emergency situation when bank does not posses enough case to meet
the requirements of their customers.
Social: Social factors consist of different trends that are part of external environment of
market.
Positive: Social factors if are in favour of banking industry will result into positive
impact in working of Klarna. Such as if there is change in saving habits of people and they are
willing to invest more in bank deposits then it will help in increasing of sales for Klarna.
Negative: With the increase in practices of products offered by Klarna such as increase in
overall increase rates of loans lead to decrease in overall rates of bank loans as a option for
raising funds.
Technological: These are the factors that are associated with up-gradation of technology
that are taking place in the external environment of a business(Fontdevila, Verger and Avelar, ,
2019).
Positive: With use of updated technology Klarna will be able to offer digital services to
present base of customers. It will help in enhancement of speed and cost effectiveness in the way
services are being offered to their present as well as future customers.
Negative: There is huge amount of investment that has to be done in adoption of latest
technology by organisation.
Legal: There are certain factors that are related with various legal procedures. All these
have to be compulsorily followed by a organisation.
Positive: Many times such regulations are very helpful in making customers trust a
particular brand that is offering various services to their customers especially in case of Klarna as
it is part of banking and financial industry.
Negative: There are increased number of regulation that might lead to increase in number
of regulations that are governing Klarna and this may lead to high amount of policies that have
to be followed by various stakeholders.

Environment: All business organisation are working in a external environment that is providing
them with various resources to function. So, it becomes the responsibility of Klarana to
contribute to environment in terms of fulfilment of their responsibilities (Zhou, and Wen, 2020)
.
Positive: When all the measures for making positive contribution towards environment is
adopted then it leads to creation of a goodwill in the market.
Negative:Environment imposes lot of restrictions and this might leads to frequent
changes that will be creating a very high resistance from their employees in the organisation.
M1: Critical analysis of various macro factors for determining the decisions of management
To get a competitive advantage it is very important for a organisation to understand
various opportunists & threat that are part of external business environment. These are factors
are influencing overall strategy formulation. In case of Klarna, this is a part of banking industry
that is majorly focussing on how to reduce the threats and maximization of various opportunities
present for this organisation.
TASK 2
P2: Analysis of overall internal environment of a business & its capabilities for organisation
Internal environment is a part of business that consist of its members, cultures,
management and others (Theoharakis, Bicakcioglu, and Tanyeri, ., 2019). It has a effect on
decision making process in the organisation. For making analysis of these internal factors it is
essential for identifying the overall competencies of a organization. Internal analysis helps in
identification of competence of a organisation related with size, product etc. below discussed is
the VRIO analysis of Klarna.
Value This is a factor that consist of capability and
resource of a organisation that are valuable for
them. Resources such as number of products,
competent staff, advertising strategies and
loyal base of customers are some of the
resources that are very valuable for Klarna.
Rareness Rareness is related with identification of
capability so for a organisation that are very

rare and cannot be easily found in other similar
organisations. Such resources include loyal
customer base, competent workforce and
product offerings.
Iimitability It is used for identifying that whether resources
can be imitated by other competitors or not. In
present scenario, Klarna has resources such a
loyal customers and large product offerings as
resources that cannot be imitated by
competitors.
Organisation All resources have to be kept organised by a
organisation so that it can proved them with
long term competitive benefit. But in case of
Klarna product offering is resource that is not
found in their various competitors and is
helping them in gaining of a competitive
benefit in the external market.
After making a detailed analysis of internal factors it can be said that for Klarna their
product offerings are the most attractive strength for this business which can help them in
gaining a competitive benefit in the long run (Szőcs, and Schlegelmilch, 2020).
Resources offering competitive advantage
Loyal customer
base
Advertising
strategies
Product offerings competent staff
Valuable Yes Yes Yes Yes
Rare Yes No Yes Yes
Imitabel Yes No Yes No
Organisation No No Yes No

M2 Evaluation of capabilities on internal environment of businesses
Internal environment is very useful in providing organisation by identifying of various
strength and weakness. If capabilities are identified than it helps in availing of various
opportunities for minimization of overall threats (Saura, Palos-Sanchez,. and Correia, 2019).
The expansion opportunity is helping in utilisation of efficiency of marketing team of Klarna.
TASK 3
P3: Analysing the overall competitive environment of organisation
Ports five force model: This is a model that was founded by Michel porter and is helping
a organisation in analysis of different forces that are competitive can posses influence on
business operation's. This is a model that is used for analysing of various factors that are part of
every business organisation. For Klarna this model is used for formation of strategies and
making a analysis of industry by evaluation of these factors (Leischnig, ., Woelfl, . and Ivens,
2016). The model is based on five forces that are used for determination of strengths and
attractiveness of the industry.
Below discussed is the five force model for Klarna:
Potential new entrants : When new entrants are entering a marker it si affecting the
exiting working organisation. Threat of new entrant is very low of Klarna reason is that it belong
to banking industry and it is not easy for any new entrant to establish themselves and a brand
image they posses and loyal base of their customers.
Powers of the suppliers : This is a force that is used for identification of the ability of
suppliers to influence a particular business. In case of banking industry there is not much
signifiant role played by suppliers hence it can be said that Klarna posses low power of barging
of suppliers (Johnson, 2016) .
Powers of the customers :This is one of the most crucial force for any organisation as
success or failure is completely dependent on how much concern customers are posing for a
particular product or service. In case of Klarna group they are serving approximately 80,000,000
customers and there is about 1,000,000 transaction per day that are taking place by this bank.
These figures clearly indicate that there is a highs satisfactory amount of services that are
provided by this brand as compared to other competitors as serving are for customers is very

high. Hence, when it becomes difficult for customers to switch to nay other competitors then it
leads to low bargaining power of customers in the market.
Threats of the Substitutes Products : This activity is associated with the threat of
substitutes that is present in market. When other competitors are also offering similar services
with equal amount of benefits to their customers then it leads to a situation where it is easy for
present customers to switch to such substitutes (Kitsios and Kamariotou, 2019). In Klarna, there
are certain services such as direct payments, paying after delivery options, instalment payment in
one click after purchase all this services are leading to unique benefits that are gained by this
Bank. All such features make it very difficult for customers of Klarna group to switch from their
product or services.
Competition in the industry : This is a factor that is related with organisation have to
identify various competitors that can posses impact on their operations and functions. This is a
fore that is present in every sector and in case of banking sector also there is very high amount of
competitive rivalry that is present for this business organisation (Idemudia, 2017). In Klarna,
there is a policy that is offering the function of direct payments that is not easily present in other
different type of banks. Hence, it becomes very important for Klarna back to maintain their
competitive advantage to increase their differentiation feature from other competitive rivalries.

M3 : Appropriate strategies for achievement of competitive advantage in market
Strategies help a organisation to make plans in advance various activities that are related
with achievement of overall goals. Porters fie force analysis is a model that is helping new
entrants and reduction of bargaining power of their buyers and suppliers. This analysis is very
helpful in acting as a strong force for dealing with industrial rivalry (Harrison and Wicks, .,
2019). This is a force which is also helpful in formation of strategies by using the information
provided from such a analysis. Different strategies that can be formed by Klarna is discussed
below:
 Klarna can focus on promotion of their product by use of digital media platforms so that
their competitive position can be maintained.
 Incandescing their focus on the differentiation ability which they are providing in their
products .
TASK 4
P4: Concepts, theories and models helping in strategic planning
Strategic planning is a basic process that is used for determining the strategic direction
that is used for making various decision in a organisation. Usually decision are based on
allocating the resources in a most optimum manner, it is a process that is helping Leaders and
managers of the organisation to determine the vision and mission of the company (Gattorna,
2017). It is also used in providing strategic direction so that overall productivity can be increased
for klarna bank. Below discussed is the visor & mission of Klarna bank that is used for
formation of their future strategies:
Mission: Mission of Klarna is to make payment simple, safe and smooth for their
customers .
Vision: They posses a aim to make it easier for people to shop from online mediums.
This is also very helpful in transformation of world from a offline medium to online platforms.
Objectives: There are some objectives that have been formed by the management of
Klarna group:
 To enhance their present customer base by 10 percent.
 Increase the market sales by 5 percent in coming quarter.

Bowman's Strategy clock: This is a tool that is based on various aspects that how a
company can position their product and services in market. It is based on two dimensions. First is
related with the prices of product and another is the perceived value of product , service and
overall brand:
1. Low price & Low added value: This is a strategy that is related with keeping the price
of product low and is helping in attainment of a competitive position. It is also very
helpful in deciding the prices of various product or services (Fontana, Sastre-Merinoand
Baca, 2017). It is basically related with the competitive position for a particular
organisation.
2. Low price: This strategy is having relation when there si production in large quantities
then it leads to products getting effective position in the market. Products are sold at low
prices that may lead to low profit margins fir the organisation. It helps in attainment of
position of a market leaders in terms of pricing strategy.
3. Hybrid strategy: Strategic position of a company involves having focus on aspects of
product differ nation. It helps in making a product high valued in the external market.
This is a strategy that keep focussing on value being perceived by customers in the
market. It is a combination strategy as there is dual aspects such as low pricing and value
perceived that are being focussed by organisation (Borland, Bhatti, and Lindgreen.,
2019).
4. Differentiation Strategy: In this strategy the company is focussing on offering the best
product to their customers that are high in quality and also providing highest value to
their customers. After focussing in quality of products the next step is to work for
retaining of loyal customer base. Customers are willing to pay more also in such cases as
they posses very high satisfaction levels.
5. Focussed differentiation: In bowman's Strategy clock this strategy applies to brands that
are having focus on exclusive products that are high in quality and in terms of process as
well. It leads to earning of very high profit margins by organisation. It may posses a
threat from various competitors who may attack the Market position by keeping their
prices low.
6. High margins: In this strategy there are high prises that are being charged by customers.
This strategy is very risky as it may posses attack on the competitive position of a

organisation in long term. If another entity is offering better quality of products and at
low prices then it may lead to easy switching of customers.
7. Monopoly pricing: this strategy related to Bowman's strategy clock is helping companies
in creating a position that helps them in attainment of a monopoly leader. Customers
have a pressure as they have to either buy or not buy depending on their choices. It is
very difficult to build up a monopoly position in market (Belz, and Binder, , 2017).
8. Loss of markets share: This is not a desirable market position for any organisation as it
denotes to company not able to offer their product and services according to customer
requirements It leads to customers not willing to make purchases as either the prices are
too high or product is not according to its prices being paid by customers.
From above discussed strategies it can be said that most suitable strategy for Klarna is
differentiation strategy as it will help them in attainment of a different position in the external
market. It is also very helpful in making the organisation completely different from other banks
who are offering similar products.
Ans off matrix: This is a matrix that can be used by management for the purpose of
identification of various strategies that can be achieved by a organisation. Such strategies are
discussed below:
Market penetration: This is a strategy in which there is use if existing products in the
exiting market base that can be used by organisation as a strategy for increasing their overall
revenue (Arif. and Lukmandono, 2020). In Klarna this strategy can be adopted as the present
offerings of Products are very satisfactory for their customers this is leading to enhancement of
satisfaction level of these customers.
Market development: In this strategy there is exiting products that are sued as a tool by
marketers for approaching a completely new market. This is also a very attractive strategy that
can hep organisation in increasing their customer base. This strategy is suitable for Klarna as
they can target a new segment of customers so that their overall sales can be increased.
Product development: The strategy is having association with introduction of a
completely new product in a exiting market. For this there is a requirement of research that has to
be conducted according to taste and preferences of their customers. This strategy is not that