Identification of countries and their analysis
Billabong International Limited is a surf company, which is dealing in cloth retail business. Billabong produces the accessories like watches and backpacks and stake board products under the other brand names. Billabong was found in 1973 by the Gordon and Rena Merchant. The company is performing well in the market. Billabong has acquired many brands and retail outlets to move beyond the wholesale business. The company is currently operating its business in Queensland, Australia. The company is having the large employee’s base of 6000. The company is having its subsidiaries named elements skateboards, Von Zipper etc. (Reuters, 2018).
The two countries selected for the expanding the business in Norway and Afghanistan. In both the countries, Billabong can expand their business. Norway is considered the fourth best country for doing the business and is the richest countries of the world. On the other hand, Billabong can also enter Afghanistan due to its geopolitical reasons (Bloomberg, 2018).
Billabong has the capability to explore its business in other regions also. This will help the company to attain the long-term objectives and goals of the company. Billabong can use various methods to enter into the market of Norway and Afghanistan. These modes of entry include exporting, joint ventures, and franchising, licensing, and foreign direct investment (Derudder and Witlox, 2016).
Political Factors
Norway is the constitutional monarchy, which is based on the parliamentary democracy. The political environment in Norway is finding to be stable in nature. The situation of the political environment of the country can be analyzed through information describing the state of public institutions. For establishing the business by Billabong, it is essential that the country should have the stability in its political environment, which is there in Norway. Billabong can start its business in Norway (The Asia Foundation, 2012).
Economic Factors
Norway is considered the economy, which has, raised its GDP in the previous year with a great speed. At present, the economic condition of Norway is found to be strong and stable in nature which influencing other country businesses to invest in the country. Although the country is facing the problem due to the recession faced by, the country, a country can able to manage with this recession by involving the FDI in their country. Billabong can start its business in Norway as the situation is in control and revenues can be earned by the company (Thrift and Amin, 2017)
Macro environmental and geopolitical forces affecting Norway
Social Factors
The societal factors include the cultural and demographic factor of the country. This factor includes the living condition, the difference between the rich and poor and the literacy and education level in the country. From the research, it was analyzed that Norway has the high literacy rate, which makes them ready to accept the new product, or service introduced in the market. Billabong has the wide scope to expand their business in Norway market (The Asia Foundation, 2012).
Technological Factors
The technological factors in Norway are finding to be increasing day by day. The access to the innovation and technology has found to be growing in nature. The technology factor in Norway is taking a great pace in increasing the growth of the country. A company like Billabong can also their techniques and ways in Norway and can get their objectives achieved (Research Gate, 2014).
Legal and Environmental Factors
The legal factors include the issues influences the trading and operations of the company. This affects the profit earning of the company. Billabong can enter the market of Norway due to advantages in the market, which include the few legal obligations in the market (Chimni, 2017).
Political Factors
Afghanistan follows a Unitary Presidential form of government where the head of government, state are the same person and are leading the executive branch. Recently Afghanistan is found with the stability of its environment, so other counties businesses can expand their business. Billabong can explore their business operation in Afghanistan (Gulati, 1998).
Economic Factors
The economy of Afghanistan is improving day by day due to the infusion of investments from the foreign and the country is getting the remittances. Currently the country is finding with the improving the economy by doing the central planning and heavy regulations. Companies, which are planning to expand their business in Afghanistan, should have to wait for some time and then invest in the country (The Asia Foundation, 2012).
Social Factors
The societal factors include the demographic factors, cultural factors, and factor, which affect the social life of the people. The country at present has an improved standard of the living and social status of people. Billabong has to wait for some time to invest their funds in Afghanistan as they are improving their standard of living now, so it takes some time to explore and grow in the market (Research Gate, 2014).
Technological Factors
Macro environmental and geopolitical forces affecting Afghanistan
The technology in Afghanistan is not found updated in nature and country is developing them in the near future. From the research, it has been analyzing the technology is updating in the near future so the expansion process of Billabong should have to wait for some time to explore in the market of Afghanistan.
Legal and Environmental factors
The economy of Afghanistan has been found to have a dispute in the resolution and informal justice. There are various other conflicts has been finding on Afghanistan due to which the stability in the business is not possible. There is certain Islamic law also operating in the country that makes the entry of new firms difficult. Billabong should not be expanding its business operation in Afghanistan (Rowell, 2017).
Norway has specific trade and investment barriers and has some level of investment barriers too. There are few barriers and challenges have to be faced by the Billabong in entering the market as there is less restriction in trade in the entry and exit of the firm so that the stability in the market. The market in Norway is monopolistic in nature, which allows all the sellers to operate ion the market. The restriction in the market of Norway is found in the capital investment and entry barriers.
The government trade policy can affect the business policy in the country. The trade policy in Norway makes the difficulties in developing the business. In Norway, these trade restriction and policies are found to be low in nature. The tariffs on the import and export are less due to the free= trade policy in the market of Norway. Norway has made the free trade agreement with some of the countries in which one is Australia. Billabong is an Australian company, which makes the entry free in the market of (Norway Santander, 2018).
The trade policy in the country like Afghanistan is found to be difficult to manage due to the harsh implementation of the policies by the government. There are various restrictions find in inviting the new business and companies from the other countries due to the involvement of trade barriers in the countries. The Afghan National Trade Policy aims to increase the domestic production rather than taking the goods from other countries (MPRA, 2018).
The company is aim to export the goods and has other restriction too in exporting the goods. From the research, it has been analyzed that the Afghanistan trade policies are standardized to incorporate the domestic and foreign trade and are dealing only with the limited countries and nations. Billabong is an Australian based company, which has its headquarters and branches in Australia only. The expansion of the Billabong Company in Afghanistan is next to impossible due to the high trade restriction present in the country (Cohn, 2016).
Trade and business policy in Norway
The potential risk and danger the Billabong will face is related to the entry barriers only and understanding the cultural factors of the country. The market of Norway is not full of risk and dangers as like another market of the world. Due to the free trade policy I the country, other countries can easily enter the market and establish their business (Santander, 2018).
There are various opportunities available in the market of Norway due to the high acceptability of the new product or service in the market. There is trade liberalization in the country makes the easy for the Billabong and other companies to expand their business easily in the market (Collins et al., 2011).
The economy of Afghanistan has been improving day by day but still there are various restrictions have been finding out in the market. Due to this restriction, the entry of new firms will get difficult. Afghanistan makes the bilateral agreements with India, China, Pakistan, and other countries. This implementation of the bilateral trade agreements makes the enhancement in the trade and technology to reduce the barriers in the country (Invest in Afghanistan, 2018).
To improvise the situation of the economy, other agreement with the SAFTA (South Asia Free trade Area) has been made but is of no use for the long term due to the other restrictions imposed in the country trades (Sassen, 2016).
Conclusion
From the above discussion, it can be concluded that the Billabong should evaluate the foreign market situation before expanding their business operations. The Billabong wants to expand its operation in the European and Asian market such as the Norway and Afghanistan. Analysis has been made which include the PESTLE analysis, and other potential risk and opportunities company will have in Norway and Afghanistan market. The macro environmental factors have been analyzed in both the countries. Apart from this other business policy and trade measures has been evaluated in both the countries. This will help to attain the long-term objectives of the company.
Billabong should focus on the marketing strategies and policies to conduct the survey in the foreign market for doing the business. To enter the market of Norway, this time will be considered the best time as there is there is the demand for the clothing in the market. Norway is considered to be the leader in the present market and have various opportunities to invest in the market. In addition, the company can use the updated technology in its business operation so that the economies of scale can be achieved in the business. As compared to Afghanistan, Norway is a much better option for the Billabong to invest and expand their business. Billabong should invest money in the Norway market as soon as possible due to the early detection of the opportunities has been analyzed from the research done on the country. The political and economic stability of the country will help Billabong Company to have a good market share.
References
Bloomberg. (2018) Company Overview of Billabong International Limited [Online] Available from: https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=1061739 [Accessed on: 23rd August 2018]
Chimni, B.S. (2017) International institutions today: an imperial global state in the making. In Globalization and International Organizations (pp. 41-78). Oxon: Routledge.
Cohn, T.H. (2016) Global political economy: Theory and practice. Oxon: Routledge.
Collins, P.Y., Patel, V., Joestl, S.S., March, D., Insel, T.R., Daar, A.S., Bordin, I.A., Costello, E.J., Durkin, M., Fairburn, C. and Glass, R.I. (2011).Grand challenges in global mental health. Nature, 475(7354), p.27.
Derudder, B. and Witlox, F. (2016) International business travel in the global economy. Oxon: Routledge.
Gulati, R. (1998) Alliances and networks. Strategic management journal, 19(4), pp.293-317.
Invest In Afghanistan. (2018) About us [Online] Available from: https://investinafghanistan.af/about-afghanistan/ [Accessed on: 23rd August 2018]
MPRA. (2018) Macroeconomic instability in Afghanistan: causes and solutions [Online] Available from: https://mpra.ub.uni-muenchen.de/37658/1/MPRA_paper_37658.pdf [Accessed on: 23rd August 2018]
Research Gate. (2014) A macro-environment approach to civil aviation strategic planning [Online] Available from: https://www.researchgate.net/publication/261296442_A_macro-environment_approach_to_civil_aviation_strategic_planning [Accessed on: 23rd August 2018]
Reuters. (2018) Global Markets News [Online] Available from: https://in.reuters.com/finance/markets [Accessed on: 23rd August 2018]
Rowell, A. (2017) Green backlash: Global subversion of the environment movement. Oxon: Routledge.
Santander. (2018) Norway: Economic And Political Outline [Online] Available from: https://en.portal.santandertrade.com/analyse-markets/norway/economic-political-outline [Accessed on: 23rd August 2018]
Sassen, S. (2016) The Global City: Strategic Site, New Frontier. In Managing Urban Futures (pp. 89-104). Oxon: Routledge.
Sassen, S. (2016) Global networks, linked cities. Oxon: Routledge.
The Asia Foundation. (2012) The prospects for economic development in Afghanistan [Online] Available from: https://asiafoundation.org/resources/pdfs/ProspectsofEconomicDevelopmentinAfghanistanOccasionalPaperfinal.pdf [Accessed on: 23rd August 2018]
Thrift, N. and Amin, A. (2017) Neo-Marshallian nodes in global networks. In Economy (pp. 159-175). Oxon: Routledg
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