Task 1: Criteria of choosing the best nations to internationalize to the PESTLE analysis
For Lidl supermarket chain the best environment to internationalize will be analyzed by the application of the PESTLE analysis, VRIO analysis framework, and Porter’s five forces model. These kinds of approaches will separate the analysis within the fundamental elements which are important for the organization operations. The shops of grocery in the Norway are accessible. Outlets are small compare to UK and USA. The store idea was inspired by the German super market chain known as the Aldi. Businesses of supermarket in Norway have the big business compare to the Mexico. Market is open in the night and often open on Sundays. Big cities within the Norway have the setup of supermarket through the enterprising immigrants. The supermarkets have the imported foods around the globe. Organization like Norway should keep the prices low and offer the special discount which will be rotate typically on the weekly basis. It should provide the best offers with the existing offers in supermarket application. This organization should provide the adequate space of parking which make the shopping easy and pleasing activity. The organization should be located within the big premises and center of the city with the effective public transportation facilities which will invite the huge number of customers and Lidl become more capable to gain the huge market share in Norway.
- Political factors
The political factors can affect the chances of more profitability and survival of the Lidl which are quite diverse. It varies from the quick changes within the present political regimes to the civil unrest to the prior decisions taken by government (Kamarazaly, Mbachu, and Phipps, 2013). In the situations of possible multinationals, political factors affects the host nation and all nations that have business operations and may engage in business with Lidl. There is stable political and government climate in the Mexico. The head of the nation is the democratically elected president. For being a president legally elected and requires gaining more than 50 percent of vote. It rarely experiences the conflicts violence and friction regarding the political nature as witnessed within the many nations (Anon, 2016). Norway is known as the democratic nation that not has the political or regulatory issues within the past decade. This nation has experienced the higher level of the stability and specially piece within the elections and many other political engagements. In the analysis of two nations it can be concluded that Norway is the stable nation and government.
- Economic factors
Task 2: PESTLE analysis
The economic conditions are in the center of the Lidl in which organization operates the businesses. This includes the elements like rates of interest, rates of inflation, and rates of unemployment, disposable income level, and general decline and growth of economy. The economy of the Norway’s has stabilized and developed to introduce the policies and support to the strong system and institutions which functioned to deliver the product and services within the nation. The nation like Sweden is economically advanced as achieved the politically and financial stability and interdependence compare to the Norway (Anon, 2017). Nations have experienced the big standing political and social strife and problems ensure the issues within the economic arena as these are connected. The Mexico had the steady economy. This has progressively increased in the past five years. The nation per capita has increased to the 70600 dollar in 2017 (Armstrong, 2017). The economy of the nation Mexico experienced the decline in the great depression and in the recession. It was not solely affected as all the nations in the globe suffered the losses from the event. As per CIA world fact book, in Norway export includes the seafood, financial services, and petroleum. Norway and Mexico have the many active industries like shipping, construction and water desalination that have the part to develop the economy. These are very lucrative market for the chain of supermarket to venture into.
- Social factors
Norway is the European county which known for the many reasons like sports. It has moved from being the nation which is unknown in the financial and social paths. This has grown-up to accomplish the level of the symbol of the change to the nations which have experienced or still undergoing political and economic conflict (Broomfield, 2016). Mexico has the same setup regardless geographical variability. This nation is rich in the minerals like production of agriculture. Mexico has engaged to interactions and programs which are aimed to enhance the organization image in the globe and allows to increasing the foreign direct investment to support more than 124 people. Norway with the 5 million people has the emerging market within the many aspects.
- Technological factors
Both the nations are within the same position regarding the technical exposure. The Norway has been reported to have the more than 4500 research group that specializes within the technology. The supermarket chain Lidl could offer and bring research experience to understand products and market. It can be used to position the market entry as benefit the local businesses with the information and diverse thinking (Brown, 2015). Norway and Mexico both have the requirement for the presence regarding the diversified products. Norway has the good economic standing and essentially the better position to invite the more established business to satisfy the requirements.
- Legal factors
Task 3:
In Norway and Mexico the legal infrastructure has the effective existence from the many centuries and grown. This has the sign regarding regular growth and accommodation regarding business opportunities. Legal structure covers the requirement to set the businesses, problems regarding ownership and leasing, labor and employment laws which govern business and many industries. These are stronger within the Norway compare to the Mexico. Mexico has the more stifling laws of labor compare to the Norway (Cahill, 2016). This is very important to note that legal perspective cannot be purely effective to the business aspect. The Mexico has the legal infrastructure but fails to the other aspects like adherence to the rule of laws and minimized the rates of crime which are equally important.
- Environmental factors
These include the physical conditions in which organization work. These include the factors like natural disaster, levels of populations, and patterns. Different industries have the different standards regarding the protection of environment as the norm. Norway is affected by the changes in season like warm summers and cold winters. Mexico is the tropical nation with the moderate weathers (Cowburn, 2017). For both the nations that increased the awareness regarding the environmental management. The operation level and inclusion of the environmental abilities in the nation allows the people to be aware and keep the environmental capability of the businesses in the high regard and much value. The Mexico as the developing nation is within the info and enlightenment phase of growth. In it information and knowledge are concerning that environmental leadership are considered highly. Supermarket chain Lidl should ensure that it has strong environmental management procedures and processes.
Five forces model or porter’s differs according to the industry. In the business of consumable product it includes the issues which are intense organization difference within the industry dominant players and same as the many products supplier which introduce the aspect of the forces which affect the organization capability to deliver (Pestle, et al., 2015). There is high threat regarding the entry in the strongly knit industry, and many other aspects come within the play like substitute threat and suppliers power. The common idea is possible while possible to start the small supermarket in the community. It is not possible for the supermarket chains like Lidl to offer the tangible threat to industry. Arguments within the consideration are that it will require reaching and competing between the present players in the industry (Felsted, 2014).
- Suppliers bargaining power
Task 4:
The key suppliers within the supermarket are at low level and very few. These all supplies the products and services to the suppliers (Grave, Vardiabasis, and Yavas, 2012). The manufacturers of the products have the high influence as the providers of the facility because of the frequency of the interactions. The buying order servicing arrangements that organization do must offer the interactions with the providers of facilities to settle the obligations of lease. The interactions with the suppliers are highly frequent. The increased interactions frequency makes the suppliers bargaining power very high with the highest possibilities in the industry.
- Buyers bargaining power
The consumer and clients plays the biggest role and simply wields the most power (Meier, and Spector, 2013). Customers are accorded with the most power of bargaining and limited by the cost which is incurred by the business. The competition is very high in the industry of supermarket as power of buying is transferred to customers. Customers choose the organization which offers the best and optimum products. The world is within the middle of the economic empowerment. It simply argues that economy is responsible regarding the changes and developments within the regions. Organizations which focus on economy of the consumers will easily gain the high market share and win (Fleming, 2016).
- New entrant threat
This is very typical to have the new entrant within the supermarket industry. The new entrant is known as the new organization which is built by the scratchy. The new businesses are required to have the new product which is not previously recognized and marketed to the workers that are not borrowed by the previous organizations. Existing corporation threats within the industry can be worsened within the different approaches in which existing organizations can seek to merge and buy the small businesses. Supermarket of Lidl is required to ensure and maintain the high level of goodwill and trust from the existing clientele. Owing to goodwill is achieved the business will challenge the local business and could pose the challenge to the organization and share within the market.
- Substitute threat
There are few substantial threats to the supermarket industry as issue of substitute is concerned (Njagi, and Kombo, 2014). Services of the supermarket industry are implemented to serve the requirement and close the gap which cannot be replaced. This presents the avenue to consumers to access the product including the substitute. The short distances with the few requirements, extensive network regarding convenience outlets in the neighborhood will easily substitute the consumables. It is the short time endeavor and cannot within the way which affects the industry regarding long-term perspective. Consumers have the option to find the combination regarding the services and affordability which is attractive for the customers and contemplate to move to the other competitors. It is embodiment regarding goodwill and good reputation that are businesses intangible resources.
- Competitive rivalry
Task 5:
Competitive rivalry force of the porter model applies in all industry except the monopolistic that are mostly owned by the government. This kind of competitiveness objectives presents that how target businesses takes other businesses that might be in similar businesses. It is within the proactive and reactive ways of engagement. The approach of the Lidl supermarket has ensured organization is financially enough capable to manage the sources and invest within the new and better avenues which can satisfy its customers. The supermarket chain of Lidl has the competition at high level in the supermarket industry. It focuses on the reduction of the cost as have the main competitor in Norway known as the Fotex. This is not only largest supermarket in the nation but recognized as the second largest within the Europe and measured through the number of people served. It focuses to reduce the costs for the customers and have the positive services to consumers (Gwynn, 2016). The Lidl supermarket employees and staff are renowned for the informative and friendly nature. These have the robust respect regarding the diverse culture and hold the very robust skills of communication. The teams within the organization have the good knowledge within the financial field which ensures to build the effective and beneficial investment within the region. The supermarket chain Lidl have seen the effective acquisition of the best physical sources that provide the long term profit to the organization.
- The question regarding value
The supermarket chain Lidl is known as one of the biggest and profitable business currently. This organization sees the values within the particular market which is involved to obtain the values as satisfy the market requirement. The question regarding value needs that organization should analyze its strength as have neutralized and external threat in the industry by using the resources. This organization is ranks highly as have the enough sources to manage the threat from the competition and as the aforementioned, there is a little to no threats within other external areas that the business interacts with. There are values within the product and services which supermarket of Lidl bring to the market of Norway. The organization and policies are valuable within the market and give the valuable option to the target population (Hanbury, 2017).
- The question regarding value
This seeks to uncover whether the significant sources which businesses requires are within the hand of very few person or whether can be controlled through the many person. It will address ease in which it can be accessed and price can be attached by seeing that it will be expensive if in hands of few and relatively cheaper to access if within the hands of the many people. In the market of Norway organization like Lidl should capture the resources effectively which are within the hands of diverse people. It will make easy to operate within the market and coupled within the laws presence which regulate the control and allocation of resource. It is in the position to ensure that organization is effective within the operations. The products will not rare within the market as the approach of the organization in the delivery of the services and product within the market can be rare regarding the warrant the change within the industry in nation. The company can see to be rare within the development of the appropriate organization values and structures which can be used to develop the strong base of market and effectively capable which will be the force within the market. This will be evident while organization and product could not be rare as the approach they bring to capture and market and develop its product absolutely will be rare and unique (Hyde, 2015).
- The question of the Imitability
This refers to the business product and services. This seeks to answer the question whether this is conceivable to intimate services and products which the business delivers and indeed, even businesses’ model itself. The imitability at lower level of the product is better place to exercise the competitive advantage within the market. Lidl is imitable within the product which organization sells and founded across the industry. The support of customers and model of business which organization employs is not imitable as it particularly developed by the Lidl. Organization aforementioned values and manner serve the customers and reckon within the industry and aspect of the business which is not imitable. It will increase the organization value and market presence. The imitability of the business will be the added advantage for the business due to the uniqueness of its products and services and serve to attract the more people to business from the competing organizations. It will turn to improve the market share within the industry (Kantar Worldpanel, 2017).
- The organization question
The organization questing seek that is organization ready and structured enough to exploit the capabilities of the resources. Lidl have the enough sources to enter in the any market that include the research team and inform the organization best approaches to employ within new and existing marketplace. This organization has the sufficient financial sources and disposal to expand the operations and perform more effectively within the market. It has developed the approach to capture the new opportunities and plan which will propel the management and organization in the future. This organization is regularly undertaking the consumable market very seriously and developing the share of market within the objectives. It has seen and developed the appropriate measure that regularly empowers employees and provide the approach that allows analyzing and serving the market (Smith, 2016).
The industry of supermarket is known as the hard industry to make the entry. There are only few forces that make the concentrate to make the effective entrance and keep as the leading organization in the industry. The buyer’s bargaining power should be considered as the first force. The reason to consider as the prior focus is customers. These have the lot of power to control the product prices within the industry. The customer likes the services which supermarket industry offers. It gives the upper hand to control the product and service quality. There are many organizations which are already involved within the provision of products and services. The capability of the buyers and consumer affect and determine the quality and values of the product and services which received and first concern which the business has in the industry. Lidl should design the approach which allows the organization to serve the particular market in the Norway. This had emerged as the potential positive endeavor. This market will help the organization and support to grow and prove the appropriately supportive to the target market. The competition in the Norway market would be welcome seeing that there has been the sense regarding monotony within the industry in Norway as it stands.
The market of Norway has the many organizations and chains of supermarket which are in present and model is employed by the Lidl which is unlike any approach which is seen within the region. The supermarket chains have existing operations within the independent manner. It allows the individuals to operate in one branch as it become tough to maintain the approach and consistent with the buyer which will start buying relationship with the organization. Lidl will have the opportunity to open that account as supermarket which is usable and employed within the many branches of the globe. It will provide the opportunity to the customers in different operation areas to develop the relationship with business, shop, and work with many chances.
Another organization presence within the similar industry in the nations should not be utilized as the excuse regarding not venturing within the marketplace. It should undertake the holistic approach for ensuring the best decision that is made. The legal and regulatory measures within the organization should not be assumed for business to expand. The business should easily understand the approach to regularly prevent the unscrupulous organizations from venturing within the market. The idea is to present the arguments to employ within the decision making. The decision should be made holistically and took within the consideration of many factors combination as the essential to make the decision. This will be easy to note that nations have attractive resumes as the potential to invest. Destinations with the real time cost of investment will be incurred within the internationalization activities. It will be easy to set apart as the good option. The best options will be the attractive analysis of cost-benefit and one is beneficial within the long and short runs. It will advise on then tax and legal requirements of the individual nations and how apply to the Lidl supermarket chain.
The best region will be thee one which has the high possible profit within the cumulative sense which has lowest losses. Choice will be identified according to the one that improve the position of the Lidl supermarket chain within the cumulative analysis. There are aspects which poorly positioned and ranked. The effective management will capitalize the strength and see the ways to cover and hide the weaknesses regarding aggregated values of the organization that is high.
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