International Business Strategy
Foreign Investment in Norway
June 30, 2016 - International Business Strategy
This study investigated the potential investment of a small pharmacetical company in Norway. The study looked at the potential that the country could offer in terms of location advantage, then it proposed a recommendation on the best mode of entry that would suit the organisation.
The study showed the competitive environment with the Porter’s five forces and a SWOT analysis of the organisaton investing in the country. It showed the advantages and disadvantage of the local healthcare market structure with their current expenditures. The study provided a competitor analysis with how local competitors and international key players already competed while doing business in the country.
Because the pharmacetical company had the idea of a Foreign Direct Investment in Norway (creating a branch), the study presented the different formal institutions in place in the country with presentation of the business and labour system that differed significantly from their home country, the legal system with how the proprietary right are re-inforced and the various risks that the company could face on their investment.
In addition to the formal system, the study presented the informal institutions such as the business values and their differences with the organisation, the norms and ethics as well as the main cultural aspects that the organisation managers had to be aware of.
The study showed that with regards to the level of life, the expenditure in healthcare coupled with an age evolution of the population, Norway could be a good country to invest in. This report was useful to ensure that Norway was a good target to develop their business. The study also tried to stress the organisational fit in terms of similarities in culture and values, and whether the organisation could provide added values in the products and services provided. However, the analysis of formal institutions highlighted some factors that could be difficult to overcome for a foreign company, and this necessitated a good knowledge of the local legal business and labour system.
Considering all the points of the study, I recommended a mode and a scale of entry for the organisation with an adequate startegy to be put in place to succeed.
