INTERNATIONAL BUSINESS MANAGEMENT

Department of Business Administration

International Business Portfolio

Industries: Swords and Cutlery
Countries: Czech Republic

Submitted by

Aqsa Ziaulhaq
Roll No: BB15143
Arj Fatima Khan
Roll No: BB15130

Submitted to
Mr. Rehan Ahmad

Department of Business Administration

Punjab University Gujranwala Campus

May 18, 2019

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TABLE OF CONTENTS
Introduction ......................................................................................................................... 4
1.1 Company’s Profile........................................................................................................ 4
1.2 Why we took the decision to go international? ............................................................ 4
2 Host Country................................................................................................................. 4
2.1 Why we took the decision to go there? ........................................................................ 5
3 Operational Factors....................................................................................................... 5
3.1 Political Factors ............................................................................................................ 5
3.1.1 Macro Factors ......................................................................................................... 5
3.1.2 Political System (Marco Analysis) ......................................................................... 5
3.2 Economical Factors ...................................................................................................... 5
3.2.1 Trade Policies and Restraints ................................................................................. 6
3.2.2 Trade Restraints...................................................................................................... 6
3.2.3 Trading Bloc ........................................................................................................... 6
3.2.4 Level of Economic Integration ............................................................................... 6
3.2.5 Cutlery and sword in the host country ................................................................... 6
3.3 Technology ................................................................................................................... 7
4 Cultural Profile ............................................................................................................. 7
4.1 Cultural Business Etiquette .......................................................................................... 8
4.2 Hofstede’s Cultural Dimensions .................................................................................. 8
4.2.1 Decision .................................................................................................................. 8
5 Porter’s Five Force ....................................................................................................... 9
6 Customer Profile ........................................................................................................... 9
6.1 CPM ........................................................................................................................... 10
7 Communication Problems .......................................................................................... 11
8 Operational Strategies................................................................................................. 12
8.1 Strategies .................................................................................................................... 12
8.1.1 The pressure of Local Responsiveness................................................................. 12
8.1.2 The pressure of Cost Reductions.......................................................................... 12
8.1.3 Decision ................................................................................................................ 12
8.2 Planned Entry ............................................................................................................. 13
9 Marketing.................................................................................................................... 13
9.1 International marketing decisions .............................................................................. 13
9.1.1 Adaption strategies ............................................................................................... 13
9.2 Marketing Mix............................................................................................................ 13
9.2.1 Product ................................................................................................................. 13

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 9.2.2 Price...................................................................................................................... 13
9.2.3 Place ..................................................................................................................... 14
9.2.4 Promotion ............................................................................................................. 15
10 Staffing Policy ........................................................................................................ 16
11 CSR ......................................................................................................................... 16
11.1 How to ensure the long-term cooperative relationship .............................................. 16
Bibliography ..................................................................................................................... 17
Appendix 1 ........................................................................................................................ 20
Appendix 2 ........................................................................................................................ 23
Appendix 3 ........................................................................................................................ 24

Figure 1: Google Ad ............................................................................................................................ 15

Figure 2: Email Marketing ................................................................................................................... 15

Table 1: Company's Profile................................................................................................................... 4

Table 2: Overview of Sword and Cutlery Industry in Pakistan ............................................................. 4
Table 3: Market Overview of the Czech Republic ................................................................................ 4
Table 4: Macro Factors .......................................................................................................................... 5
Table 5: Political Risk and Strategies .................................................................................................... 5
Table 6: Trading Bloc ............................................................................................................................ 6
Table 7: Technological Factors .............................................................................................................. 7
Table 8: Cultural Profile ........................................................................................................................ 7
Table 9: Cultural Business Etiquettes .................................................................................................... 8
Table 10: Hofstede's Cultural Dimensions ............................................................................................ 8
Table 11: Porter's Five Forces ............................................................................................................... 9
Table 12: Customer Profile .................................................................................................................... 9
Table 13: CPM ..................................................................................................................................... 10
Table 14: Communication Problem ..................................................................................................... 11
Table 15: Pressure of Local Responsiveness ....................................................................................... 12
Table 16: CSR ...................................................................................................................................... 16

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 INTRODUCTION

1.1 COMPANY’S PROFILE

Sr. No Company Details
1 Name Evershine Enterprise
2 Products Swords and Hunting Knives
3 Owner Ziaulhaq
4 Firm Size 50
5 Age of Firm 1989
6 Head Office Wazirabad
7 Phone No. +92-300-8649922
Table 1: Company's Profile

1.2 WHY WE TOOK THE DECISION TO GO INTERNATIONAL?

The Sword and Hunting Knife industry is recognized all over the world. The industry of "lord
and cutlery of Pakistan (Wazirabad) is recognized all over the world (StagePakistan, 2017). In
Wazirabad, SME's deal in handmade products such as; pocket knives, hunting knives, swords, military
knives, household, and light industry products. The emerging competitors of Pakistan are Taiwan,
India, and China, as they have grabbed a large chunk of the export market of Swords and Cutlery
industry (Pakistani Cutlery Industry, 2014). The following facts and figures are collected from the
report of Pakistan Institute of Trade and Development;
Sr. No Year Condition of Pakistan’s Industry
1 1990 Stable condition
2 2009 Exports increase from $25m
3 2011 Total exports worth $84.2 Million
4 Current Exports increased from $55 Million
Table 2: Overview of Sword and Cutlery Industry in Pakistan

2 HOST COUNTRY
The economy of the Czech Republic is expected to sustain a solid pace of expansion in the
upcoming years (Focus Economics, 2019). In 2019, the GDP of the Czech Republic growing by a
percentage of 2.9. The Czech Republic is an export-driven economy, as it's economy is highly
dependent on foreign demands (from Eurozone) (export.gov, 2018).
Market overview of the Czech Republic
2015 2016 2017
GDP per capita (EUR) 16,008 16,726 18,193
Unemployment Rate 5.1 4.0 2.9
Inflation Rate (CPI, annual variation in %, eop) 0.0 2.0 2.4
Exports (EUR Billion) 116 118 128
Imports (EUR Billion) 109 109 119
Current Account (% of GDP) 0.2 1.6 0.9
Table 3: Market Overview of Czech Republic

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2.1 WHY WE TOOK THE DECISION TO GO THERE?
Ivan Jancarek ( Deputy Minister for foreign affairs of the Czech Republic) has announced that
they are going to sign an agreement with Pakistan. The agreement will be on the foreign affairs and
trade cooperation, that will help to tie up and strengthen the economy of Pakistan and the Czech
Republic (Business Recorders by M.A. Zuberi, 2018). On the other hand, the Czech Republic has a
strong hold over the demand of Swords, Hunting Knives, Damascus Pendants, and e.t.c.

3 OPERATIONAL FACTORS
Following will depict the operational plans to forecast future common factors influencing
business activities;

3.1 POLITICAL FACTORS

3.1.1 Macro Factors
Factors Details
Type of Government Parliamentary Democracy
Judicial System It is independent of legislative branches and executives. The
criminal defendants are entitled to be open public and fair trials.
Government Corruption Rank: 38 / 180 Score: 59 / 100
Table 4: Macro Factors

3.1.2 Political System (Marco Analysis)

Political Risks Details Strategies
Taxes Taxes are applied on the behalf of Integrative techniques are best to
importers in the host country; although overcome these political factors.
we need to pay heavy taxes in Pakistan. Rather than staying out of the
Terrorism The index of terrorism decreased by 1.56 bubble, it will be better to become
in 2017 from 1.89. part of the country's infrastructure.
Industry The packaging must be appropriate. So, The use of these strategies can help
Regulations the sharp edges of swords may not harm to enhance product expansion for
any of the workers in the host country. generating growth.
Table 5: Political Risk and Strategies

3.2 ECONOMICAL FACTORS

The economic condition of the Czech Republic is strong and stable as Czech is one of the best
places for tourists. Czech GDP is increasing in every year as most of the economic growth's elements
are in the favor of the republic. The current growth GDP rate of the country is 2.9%. if we look at the
financial and economic factors the Per Capita income in the Czech Republic is 18193 Euros. According
to an economic forum, the inflation rate of the republic is 2.7 % (Trading Economics, 2019). Foreign
direct investment in 2017 was $185 billion (estimated).

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3.2.1 Trade Policies and Restraints
 The trade policy of the Czech Republic is much enhanced as compared to the last few decades.
 The GDP growth of the Republic shows that the economy and the country's benefits are being
taken through lenient and less strict policies.
 Most of the goods are related to the agricultural sector. These products don't have to face strict
policies.

3.2.2 Trade Restraints

The Czech Republic basically isn't facing the intensive rules or hurdles but they have to follow
up rules and restrictions set by the European Union. As Czech is not liable for the adoption of such
rules but somehow, somewhere political influence changes the track and mind of the Republic. In fact,
the Czech is the economy free country and it is considered as the safest place in Europe (export.gov,
2018). Every good or service has to go through under the supervision of the customs office.

3.2.3 Trading Bloc

Variables Pakistan and the Czech Republic
Investment The bilateral investment agreement of Pakistan is with Azerbaijan, Australia,
Agreements Bahrain, Morocco, Belarus, Mauritius, Netherlands, Oman, Philippines,
Belgo-Luxemburg Economic Union, Bosnia, Bulgaria, Qatar, Portugal,
Czech Republic, Yemen, Laos, U.A.E, Germany, Sweden, Iran, Uzbekistan,
China, Singapore, Romania, Turkmenistan, Kazakhstan, Turkey, Kuwait, and
e.t.c.
Free Trade Malaysia, China, Sri Lanka
Relations
SAARC and Pakistan is the part of SAARC and the Czech Republic is the part of
European Union European Union Countries. Czech Republic became the member of WTO in
Countries 1995 and later on became the member GAAT apart from this European
Union and its alliances are the trading bloc of the Czech Republic.
Table 6: Trading Bloc

3.2.4 Level of Economic Integration

The relations of the Czech Republic with its neighbor and alliances are too good. Because the
republic is exporting top quality goods to other countries and they are also earning money through
their import in the Czech Republic. (export.gov, 2018)

3.2.5 Cutlery and sword in the host country

Czech Republic is already exporting swords and cutlery items to neighbor countries and all the
alliances of EU, the large part of the Czech republic's export is cutlery items. Which are used at a large
scale in the country? Swords are made to be used in the war and at the border side where the army and
the border petrol use these all to protect the republic.

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3.3 TECHNOLOGY
Technological Home Country Host Country
Factors
Advance Although Pakistan is not that far in The Czech Republic has the
Technology, in Swords Industry, most advanced technology.
customers prefer Handmade products.
Knowledge People are now becoming aware of IT Still in the developing stage, but
Management management, KMS is becoming more the intervention is still requiring
System advanced and efficient day by day. long-term processing.
Quality and Pakistan is Quality efficient but not price Pricing strategies are affordable
Pricing efficient. Pakistan still carries low-cost in the Czech Republic, but
management. Pakistan can provide high- seller at the Czech Republic
quality handmade swords of any design, want them to be less in cost and
sharpness, and quality (customized) just high in quality.
according to the requirements of the buyer.
R&D Sword industry is still working on old Czech Republic has advance
business strategies. R&D departments are R&D.
still in process.
Designing Pakistan is moving towards the modern The Czech Republic has
and mean of designing (AI-3D designing), advance designing and
Photography which reduces the chances of error in photographic services but they
designing. are highly expensive.
Table 7: Technological Factors

4 CULTURAL PROFILE
Cultural Home Host Country Cultural Solution
Elements Country Barrier
Language Urdu Czech (95%) Different Translator(the English
Languages Language can be a common
language)
Religion Muslims Atheist, Catholics, Religious Avoid religious arguments
and Christians Content
Socio- Asian East European Geographical Effective research on cultural
Economic Differences and customer preferences
Identity
Power High Low Perceptual Effective Communication
Distance Barrier
Work Habits Tough to deal Highly focused Perceptual HR Management and
with labor towards Barriers Techniques
perfection
Risk Low Low Perceptual Effective Communication
Tolerance Barrier
Table 8: Cultural Profile

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4.1 CULTURAL BUSINESS ETIQUETTE
Home Country
Social structure and individual identity
are based upon the extended family
Greetings are appreciated between the
same gender.
Hierarchical Society
Positive Nepotism
People exchange business cards after
introducing each other
Table 9: Cultural Business Etiquettes
Host Country
Business is conducted slowly and maintained over
individual identity
Greetings include direct eye contact and a firm handshake,
weak communications are not considered positive
Decision making is held at the top management
Weak Nepotism
Business appointments must be maintained in advance.

4.2 HOFSTEDE’S CULTURAL DIMENSIONS

Cultural Pakistan Czech Details
Dimensions Republic
Power High High Top management of an organization makes decisions
Distance and status of a leader is acknowledged in both
countries. It must be noticed that in both countries, a
businessman might have to go to the top for answers.
Individualism Low (More High The people of the Czech Republic don't mix business
into deals with their social lives. Czechs encourage
Collectivism) debates and idea sharing. With a very low score of
14, Pakistan is considered to collectivist society.
Masculinity High Low By precise targets, Czechs feel motivated. Work-life
balance and workplace flexibility are important for
Czechs. The society of Pakistan is driven by
achievement, success, and competition.
Uncertainty High High Both countries have a strong coverage over
Avoidance uncertainty avoidance, rigid codes and behaviors are
maintained. People have an urge to be precise, ward
working and busy.
Orientation Long-term Long-term In both countries, people are concise and clear about
Orientation Orientation their goals and expectations. Gestures are considered
to be part of the conversation and depict loud and
clear messages.
Table 10: Hofstede's Cultural Dimensions

4.2.1 Decision
Pakistan and the Czech Republic carry similar cultural dimensions, according to Hofstede's
cultural dimensions. Managers can clearly manage their personal needs, goals, and expectations.
Meetings will be managed in a modest way. Other than social interaction, nothing different in both
countries. Nonverbal communication is more critical then verbal communication in the Czech
Republic; so, we need to be well aware of that.

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5 PORTER’S FIVE FORCE
Overall industry rating of the Czech Republic, after analyzing Porter's Five Forces, is given
below; (for Further details; see appendix 1)

Favorable Moderate Unfavorable

The threat of new entrants --
Bargaining power of buyers --
Threat of substitutes --
Bargaining power of suppliers --
The intensity of rivalry among competitors ++
Table 11: Porter's Five Forces

6 CUSTOMER PROFILE
WULFUND PAGAN SHOP
Customer Profile #1 Krack Wulfund

Demographics
Age 47
Country Czech Republic
Work Experience Established in 2005
Psychographics
Education MBA

Decision Making Quality Oriented, Does not like to make decisions quickly
Likes & Dislikes Dislikes end users who violate security policies

Behavioral
Media Consumption Email, Social Media Marketing Tools
Habits & Skills Strick towards deadlines, interest in low cost and supreme quality
Environment
Buying Power Coverage over a large number of a potential buyer in the Czech Republic
with amazing feedback and goodwill.
Purchasing Process Identifies trends, requirements, designs and quick deliveries
Table 12: Customer Profile

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6.1 CPM

Industry Success Factors Weight Pakistan China India

Rating Weighted Rating Weighted Rating Weighted
Average Average Average
Traditional Blade Curves 15 5 75 4 60 3 45
Demand for Leisure 10 4 40 2 20 3 30
attractions
Advance Amusement 10 4 40 3 30 4 40
Equipment
Economic Growth 15 3 45 3 45 3 45
Target Market 10 4 40 4 40 4 40
Handmade Finishing 10 5 50 5 50 4 40
Quality 15 3 45 4 60 3 45
Forging 15 4 60 5 75 4 60
Total 100
Table 13: CPM

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7 COMMUNICATION PROBLEMS
Communication Home Country Host Country Solution
Problems
Perceptual People of Czech People of Pakistan talk Be concise, and
Barrier Republic talk less more, and business concrete, while
because their actions deals are based upon conversations, and
speak louder than words. satisfaction, trust and learn about their
convincing power of perceptions.
dealers.
If Czechs leave a If Pakistanis leave a
conversation silently and conversation silently
look downward, then this and look downward,
means they do not agree that is considered to be
with your point of views. rude and unethical.
Language English, Prague (Czech), English, Urdu and English Langauge is
Latin and German other provincial common, and it’s
Languages unlikely that we
would be needing a
translator.
Business Businesswomen visits Most of the Pakistani Appointments must
Etiquette can encounter women feel be managed before
communication a little, discriminated on business meetings.
that might be gender workplaces, despite Time Punctuality can
biased. the increased lead to a good
participation of impression.
women (Atiqa
Rehman, 2017).
While conducting Body language is Avoid schedule
business meetings, body considered to be meeting for Friday
language is minimal and maximal, and meeting afternoon.
can convey mistaken appointments are
Decisions are made
impressions. Post- considered rarely.
by top management,
Meeting Appointments
don't waste time
are considered to be
while having a
compulsory.
discussion with
middle management.

Table 14: Communication Problem

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8 OPERATIONAL STRATEGIES

Global Standardization Transactional Strategies

Operational Strategies

International Strategies Localization Strategy

Low Pressure of Local Responsiveness High

8.1 STRATEGIES
8.1.1 The pressure of Local Responsiveness
Analysis Result Details
Differences in Taste High We need to optimize regionally optimize our products,
Preferences according to the taste and preferences of customers. (Christoph
Dörrenbächer, 2016)
Difference in Low
-
Infrastructure
Demand in Host High To create market share we need to respond towards their local
Country competition (product features, price level, designs and etc).
Differentiate Low It is easy to access customers, as it doesn’t vary in Host and
Distribution Channel Home Countries.
Table 15: Pressure of Local Responsiveness

8.1.2 The pressure of Cost Reductions

The PCR in the Czech Republic is low, because of the low threat of competitors. Because
people of the Czech Republic have high differences in designs and preferences of Swords as compared
to Pakistan, companies don't prefer creating market theirs. Customer's preferences are more into
historical designs. But it is easy to gain market share in the Czech Republic.

8.1.3 Decision
Decisions
The pressure of Cost Reduction Low
The pressure of Local Responsiveness Moderate
We will use a personalized approach to market and sell our products and offer services in the
Czech Republic. Localization Strategy will help our organization to expand the business, by entering
other European countries.

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 It is easy to identify and adapt the product to the market. this strategy will help us to addresses
purchasing habits, general cultural differences and customer behaviors in each country.

8.2 PLANNED ENTRY

We will manufacture products in Pakistan and export them to the Czech Republic. Following
are the reasons to opt for this entry strategy;

 Less cost of Production in Pakistan

 Increased Profits
 A large Number of Audience
 Tax Reliefs

9 MARKETING

9.1 INTERNATIONAL MARKETING DECISIONS

9.1.1 Adaption strategies
The decision is made on the basis of high pressure of local responsiveness because Product
differentiation is high and we will sell our products in different markets as well by knowing customer
preferences and customer behavior and demand of host country.

9.2 MARKETING MIX

9.2.1 Product
 Our products are differentiated on the basis of life span, local rules, weight, efficiency,
sharpness, excellent quality material used, high-quality metal and etc.
 Our company is concerned about metal finishing and the use of technology. Knives are sharp,
clean, clear cut and effortless.
 Our company is concerned about branding and packaging and its impact on consumers. Its
packaging is highly attractive, colorful with product details.
 With features mentioned on it. Mistakenly sold products or damaged products will be replaced
with a new one.

9.2.2 Price
Cost consideration

 Setting prices is a crucial step in every business.

 In the European side, selling price is 3 times of the direct material and labor cost. if less than
that. It won't be able to run the business then it will be going to fail.
 As a businessman, it is necessary to check on competitors prices in order to change our prices
accordingly.

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Selling pricing objective
In business, it is essential to look after competitors business activities what they are doing or
they are going to do in the future that helps us to know the trends and compete in the market. Prices
are set according to services provided or on the basis of high quality delivered.

Pricing strategy

 In industrial products, the motive as a businessman is to make money or save money. Prices
will vary according to customers purchasing power and competitors prices.

Category Specifications Amount (approx.)

Level C Length: 40 cm, Blade: 32 cm, historical fencing 100 €
Level B Length: 96 cm, Blade: 77 cm, historical fencing 120 €
Level A Length: 96 cm, Blade: 77 cm, historical fencing (2 Pieces) 160 €

9.2.3 Place
Channel concentration
We will focus on fragmented retailing because every customer can approach there easily
demand will be high, and there will be fewer chances of competitors.

Channel quality
The selected distribution strategy is applicable because the equipment is placed on selected
online stores where the buyer can interact easily because the buyer is unwilling to go to home country
to buy products of its interest. The prospective customer is aware of the quality products and has used
competitive products already. We will convince our prospective customer. Our agent is responsible
for the goods delivered.

Channel length
As we are highly concerned about goods delivered to customers from manufacturing to retailers
and then consumers. Goods are transferred to the warehouse for shipments.

Channel exclusivity
We are not only delivering products in that geographical area but there are also few competitors
in that area which are restricted to fixed quotas either financially or on the basis of exclusive rights of
distribution.

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9.2.4 Promotion
Advertising
Ads will appear on different content and context related websites, that will help us to reach our target
market. i.e. Google Adwords and Adsense (will allow us to manage our advertising network). We will
manage our business structure online, and advertise through for PPC (Pay Per Click).

Figure 1: Google Ad

Direct Marketing
We will be directly communicating our
products, services, discounts, packages and
special offers to our customers through email
marketing. This will make us able to increase
our sales, capture new customers, upgrade our
loyalty strategies, and for creating new
business opportunities.

Push Strategy
We will promote our products via the push
strategy, we will push our products and
services through various sales channels. Push
strategy will help us to carry higher service
level, decrease inventory level and lower over
carrying the cost.

Figure 2: Email Marketing

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10 STAFFING POLICY
For the alignment of interest and perspective of Business (Home Country) with all foreign
subsidiary, we will adopt the Ethnocentric staffing policy. As we will hire local management in Head
Quarters, this will not create any language or cultural barriers in Pakistan, and this will create effective
communication between managers and employees.

11 CSR
Concerns of Host CSR Details
Country
(Indirect)
Preserve Tree Plantation Friends of Earth and Arnika (non-government
Environment organizations that promote environmental solutions and
(indirect) natural wealth).
NGO Donation Camps ARDA Adventist Relief (a humanitarian agency)
Media Awareness Zeleny Kruh (aware people through awareness programs
campaigns on education, and rights mobilization.
Government Legal advice and Frank Bold (Provides legal assistance, that guide for
assistance corruption, citizen's rights and environmental issues).
Pollution Cleaner Nadance Partnerstvi (promotes developmental projects in
Reducing Production the Czech Republic). (Jochum, 2018)
Measures Methods
(Direct)
Socially Manage the Člověk v tísni (Helps to manage corporate social
Responsible interest of responsibilities inside an organization).
Corporations shareholders
Customer The strategy of National Quality Policy for 2011-2015, by
the government; promotes developmentation and
specification and promotes policies for quality of life and
competitiveness in the Czech Republic. (Forum, 2013)
Table 16: CSR

Source: ( CSR strategies and practices: the case of the Czech Republic, Quigley, 2014)

11.1 HOW TO ENSURE THE LONG-TERM COOPERATIVE RELATIONSHIP

We will allow our clients to experience our brand, engage them with our services and products.
Our customers will feel special while working with us, as we will provide value to them. To get the
attention of our customers we will explore their social media influence. We will try to respond to every
concern of our customers (Aalto University, 2018).

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& Marketing. Challenges for the Knowledge Society, 11(1), 341-354. Retrieved from
https://www.degruyter.com/downloadpdf/j/mmcks.2016.11.issue-1/mmcks-2016-
0001/mmcks-2016-0001.pdf

TDAP Statistics. (2019). Tdap.gov.pk. Retrieved April 4, 2019, from http://tdap.gov.pk/tdap-

statistics.php

The World Bank. (2019). Ease of Doing Business Score. Retrieved from
http://www.doingbusiness.org/en/data/exploreeconomies/czech-republic

Trading in Economics. (2019). The Czech Republic of Corruption Rank. Retrieved April 2019, from
https://tradingeconomics.com/czech-republic/corruption-rank

Wendy Zeldin. (2017, September 5). Czech Republic: Draft Law on Putting Rights of Weapon
Owners in Constitution. Retrieved from http://www.loc.gov/law/foreign-news/article/czech-
republic-draft-law-on-putting-rights-of-gun-owners-in-constitution/

World Bank Group. (2019). Doing Business 2019 (Economy Profile From Czech Republic).

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 APPENDIX 1

Porter's Five Forces Analysis

Threats of new entry
-1 0 1
Cost or performance advantage to High Neutral Low -1 Starting and entering into business is easy. The Rank of Czech
Large Firms Republic is 35/190; as the easiest economies to enter (The World
Bank, 2019)
Proprietary product differences in Much Neutral Little -1 Its an over-supply, perfect competition, because product
the Czech Republic differentiation is high over limit supply. (Garbelli, 2005)

Established brand identities High Neutral Low 1 Low Established brand identities, because people are most
concerned about designs, quality weather they get it from anywhere.
A lot of capital needed to enter Much Neutral Little -1 Cost and paid-in minimum capital to start a company or enter the
market. (The World Bank, 2019)
Licenses/qualifications difficult to High Neutral Low -1 The company must register for the social security registration (which

Results in
obtain is referred to in Czech law as “the Register of Employers”) within 8
days of the date when the first employee starts work. (World Bank
Group, 2019)
Newcomer expect strong relation on Much Neutral Little 1 Newcomer covers little expectations of strong entry, because of
entry perfect competition and high differentiation in demand. (Garbelli,
2005)
Our product or service have Many Neutral Low -1 Customization can't be done over low cost, building a sustainable
proprietary features on low cost differentiation is a costly procedure.
Newcomer have any problems in Many Neutral Few -1 Many Newcomers has any problems in obtaining skilled people,
obtaining the skilled people, materials or suppliers, because of difficult labor management.
materials or suppliers (Clark, 2019)
Expensive Serviceable equipment High Neutral Low -1 Serviceable equipment is highly expensive.
the newcomer face difficulty in Many Neutral Few 0 Register with the Trade Licensing Office and obtain an extract of the
accessing distribution channels trade license (2 Days and CKZ 1000) or local courier/shipping
companies. (Garbelli, 2005)
--
Bargaining power of buyers
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A large number of buyers relative to Many
the number of firms in the business
A large number of customers each Big
with relatively small purchases
Neutral Few 1 The market is characterized by controlling buyers is highly
competitive for businesses as they are under the pressure of losing
customers. (Bc. Kateřina Šromová, 2018)
Neutral Smal 1 Nature of Market carries a small number of customers, as it is a
l niche market product.

Results in
Customer face significant costs in Many Neutral Few -1 Penetration pricing is most commonly associated with this market,
switching suppliers with an objective of increasing market share or sales volume. So
forth, switching cost increases. (Garbelli, 2005)
Buyer needs a lot of information High Neutral Low 1 Rather then product specifications, and shipping services, customer
don’t require any specific information. (Fern for university, 2016)
Buyer aware of the need for the Many Neutral Few -1 Many Buyers are aware of the need for additional information,
additional information because of the clear and proper understanding of the market.
Anything which prevents our Many Neutral Few -1 The laws for keeping/purchasing weapons are distinctive for
customer from taking our function Europeans and for foreign members. A license is required to have
in house Swords/hunting Knives or any weapon in the house. (Wendy Zeldin,
2017)
Customers are not highly sensitive to Many Neutral Few -1 People of Czech Republic fall in High-income category, Adjusted
price? for inflation, the average gross monthly wage in the Czech Republic
increased 6.2 percent year-on-year.
-1 --
Supplier power
Buyers cost of purchases has no Few Neutral Man -1 The significant influence will be maintained; the power to
significant influence on my overall y participate in the operating and financial policy decisions will be

Results in
costs. controlled.
Buyers business is important to High Neutral Low -1 When there is an emotional aspect for the customer, the decision
suppliers goes with rational deliberations. (Tahal, 2016)
Buyer has many potential suppliers Very Neutral Not -1 Suppliers have a tendency to provide raw material in order to
very strengthen their competitive position. (Bc. Kateřina Šromová, 2018)
Buyer can switch between suppliers Very Neutral Not -1 A large number of suppliers in the market provide satisfying needs
quickly and cheaply very of companies the lower bargaining power
Suppliers would find it difficult to High Neutral Low 1 Market entry is easy. (The World Bank, 2019)
enter the business.
--
Threat of substitution

Page 21 of 24
The customer will incur costs in High Neutral Low -1 Penetration pricing is most commonly associated with this market,

Results in
switching to a substitute. with an objective of increasing market share or sales volume. So
forth, switching cost increases. (Garbelli, 2005)
The customer has no real substitute High Neutral Low -1 A large number oganizations are availale in market. (Fern fort
university , 2016)
-1 --
Rivalry among existing competitors
Competitors are all of Many Neutral Few 1 All are approximately the same size as I am. (The Industry Analysis,

approximately the same size as I am.
The industry is going rapidly.
There are significant product
differences and brand identities
between the competitors.
The competitors are diversified
rather than specialized.
It would not be hard to get out of
this business because there are no
specialized skills and facilities or
long term contract commitments,
etc.
Customers will incur significant
costs in switching to a competitor
Product is complex and requires a
detailed understanding of the part of
my customer.
Economies of scale are the cost advantage that arises with increased output of a product.
TOTAL=
Results in
2019)
High Neutral Low 1 The industry is not going rapidly. Some business owners succeed in
maintaining a competitive edge while others fail to do so makes the
research interesting. (John Watson, 2019)
High Neutral Low -1 There are highly significant product differences and brand identities
between the competitors. (StagePakistan, 2017)
Big Neutral Smal 1 Small numbers of competitors are diversified rather than
l specialized. (John Watson, 2019)
Big Neutral Smal 1 It is not hard to get out of this business because there are no
l specialized skills and facilities or long term contract commitments,
etc. (Garbelli, 2005)
High Neutral Low -1 High chances that customers will incur significant costs in switching
to a competitor. (John Watson, 2019)
High Neutral Low 1 ++ Low chances that product won’t be complex or requires any detailed
understanding on the part of the customer. (The Industry Analysis,
2019)
-5 --

Overall Analysis;
Favorable Moderate Unfavorable
Page 22 of 24
The threat of new entrants 
Bargaining power of buyers 
Threat of substitutes 
Bargaining power of suppliers 
The intensity of rivalry among competitors 

APPENDIX 2

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APPENDIX 3

Page 24 of 24