Evaluating International Market Opportunities

Introduction

Businesses are always looking to develop abroad in the globalized era. The Internet and digital technology have made worldwide market exploration easier for enterprises of all sizes. This study examines a U.S. electric vehicle (EV) manufacturer like Tesla that is seeking worldwide expansion. The company’s flagship electric automobile is under discussion (Forbes, 2023). A thorough market analysis of Sweden and Argentina is the goal of this study. The examination will include each country’s legal and regulatory environment, geography and infrastructure, cultural and social elements, economic issues, and political factors. Compare these two countries’ market potential using the Market Potential Index (MPI). Each market’s strengths, weaknesses, opportunities, and threats will be assessed using a SWOT analysis. The goal is to provide a detailed and evidence-based suggestion on which market is best for business startups. Ten important factors for entering a new market will guide the study and recommendations. These criteria cover economic, political, legal, infrastructural, technological, cultural, competitive, and consumer aspects of the market.

Criteria for entering a new market

Technology Capabilities: A country’s technology growth might affect product demand and commercial ease. High technical advancement might increase demand for high-tech products. Cultural Compatibility: Country culture affects customer choices. Understanding and responding to local culture can help a corporation customize its offerings to local tastes. Competitive Landscape: Market competition affects sales potential and strategy. A market with few rivals may be an opportunity, but it may also signify low product demand. Consumer Behavior: Knowing how people buy helps a company target its marketing. Understand consumers’ needs, interests, and buying habits. Market Growth: Market growth potential is important. Despite its tiny size, a significant growth potential may attract investment.

Market analysis for Sweden and Argentina

Sweden: Sweden’s high level of living and strong economy make it a prospective electric vehicle market. The World Bank’s Ease of Doing Business Index ranks the country 10th for legal stability and business friendliness. Businesses entering the Swedish market have fewer risks and barriers. Sweden’s roads and ports make car distribution easy. Swedes are environmentally conscious culturally. This matches the eco-friendliness of EVs and could boost demand. Sweden has a strong economy and high GDP per capita, suggesting EV buyers. Sweden is a stable parliamentary democracy. Political disturbances that could affect corporate operations are reduced by this stability (Admin, 2023).

Argentina: Despite its economic problems, Argentina is a promising emerging market. Businesses may face barriers in the country’s complicated legal and regulatory framework. However, overcoming these obstacles may prevent competitors from entering. Argentina’s landscape and infrastructure are good, yet many places require upgrading. A corporation seeking a physical presence in the country may face both problems and opportunities. A strong national identity defines Argentinians culturally. Consumer tastes may change and require a marketing plan that reflects this national identity. Argentina’s economy has fluctuated and had high inflation. However, economic challenges can spur innovation and prosperity. Argentina has a political and economic history of instability (Roy, 2022). While risky, organizations that can negotiate this complexity may discover less competition and more opportunity.

Market Potential Index (MPI) (Globaledge, (2021)

SWOT Analysis

Sweden: Strengths: Sweden has a solid economy, stable legal and regulatory environment, well-developed infrastructure, environmentally sensitive customers, and political stability. Businesses selling eco-friendly items like electric autos find it appealing. Sweden has certain disadvantages despite its numerous benefits. The company and customers may face hurdles from high taxes and living costs. These factors may affect product pricing and affordability. Opportunities: Sweden’s growing interest in electric vehicles and sustainability offers a great opportunity. Electric vehicle demand may rise as people grow more eco-conscious. Threats: Electric vehicles are competitive. Other local and foreign firms are a major threat. It must differentiate its product and offer compelling reasons for consumers to choose it over others (Market Research Reports, 2017).

Argentina: Strengths: Argentina has huge natural resources and great education. The company may benefit from these things. For instance, industries might employ abundant natural resources. The complex legal and regulatory system, economic instability, and corruption in Argentina are major limitations. These variables may hinder the company’s operations, pricing, and business strategy. Opportunities: Argentina’s electric vehicle sector can flourish despite economic issues. Electric vehicles may become more popular as the country struggles economically. Argentina’s financial crisis and political unrest pose risks. These variables may interrupt company and product demand (Helms et al., 2011).

Modes of Entry

Sweden: Sweden’s well-developed infrastructure makes exporting possible. The U.S. produces and ships items to Sweden under this entry method. This strategy reduces risk and investment because it does not require a foreign market presence. It may increase transportation costs and trade obstacles. Joint Venture: Working with a local company might help navigate the market and regulations. A joint venture shares resources, risks, and profits with a local enterprise. This technique shares control and earnings with the partner company but provides local knowledge and resources. Direct Investment: A Swedish subsidiary might give full ownership. Establishing a full overseas market operation needs the most investment and risk. However, it offers the most control and earning potential (Foreign, 2023).

Argentina: Exporting may be a safer market entry. Exporting to Argentina, like Sweden, would have reduced risk and investment but greater transportation costs and trade obstacles. Another possibility is licensing a local company to create and market the goods. A local company is granted the right to produce and sell the goods for a charge or royalty (International Trade Administration, n.d.). It needs less investment and risk than direct investment, but it may reduce product control and earnings. A joint venture with a local enterprise could ease the business environment. A joint venture in Argentina would share resources, risks, and earnings with a local partner, like Sweden.

Swedish economic and political stability, well-developed infrastructure, and growing interest in electric vehicles suggest that Sweden may be a better market for the business venture based on initial criteria, SWOT analysis, MPI market potential, and entry mode. The high Ease of Doing Business Index, excellent infrastructure, and consumer environmental sensitivity are Sweden’s assets. The country’s stable economy and politics lessen business risks. Electric vehicles are becoming more popular in Sweden, and the well-developed infrastructure makes exporting a viable option. Due to its natural resources and electric vehicle market potential, Argentina offers prospects. Argentina’s electric vehicle market has tremendous potential despite economic issues. As the country struggles economically, electric vehicles may become more popular. In conclusion, Sweden’s stable and supportive climate gives it a better market for starting a firm.

References

Admin. (2023, June 28). The Swedish economy. sweden.se. https://sweden.se/work-business/business-in-sweden/the-swedish-economy

(Roy, 2022) Council on Foreign Relations. Argentina: A South American power struggles for stability. https://www.cfr.org/backgrounder/argentina-south-american-power-struggles-stability

Forbes, (2023). Powering a Personal Wealth Movement. Tesla: A history of innovation (and headaches). https://www.forbes.com/sites/qai/2022/09/29/tesla-a-history-of-innovation-and-headaches/?sh=41fe9c518735

Foreign, C. & D. O. (2023, August 22). Entry requirements – sweden travel advice. GOV.UK. https://www.gov.uk/foreign-travel-advice/sweden/entry-requirements

Global edge, (2021). Market potential index (MPI) – 2021. Globaledge: Your source for Global Business Knowledge. (n.d.). https://globaledge.msu.edu/mpi/data/2021

Helms, M. M., Rodríguez, M. A., Ríos, L. de los, & Hargrave, W. (Bill). (2011, May 31). Entrepreneurial potential in Argentina: A SWOT analysis. Competitiveness Review: An International Business Journal. https://www.emerald.com/insight/content/doi/10.1108/10595421111134859/full/html

International Trade Administration. (n.d.). Argentina – market entry strategy. https://www.trade.gov/country-commercial-guides/argentina-market-entry-strategy

Market Research Reports, Inc. (2017, December 18). Sweden Pestel Analysis, SWOT analysis and Risk Analysis Market Research Report launched. SBWire. http://www.sbwire.com/press-releases/sweden-pestel-analysis-swot-analysis-and-risk-analysis-market-research-report-launched-903863.htm