Globalization has changed the ways everything is done today. Organizations are expanding their operations across all continents in order to have competitive edge (Razin and Efraim, 10; Harrison, 16). The world is integrated and intertwined that companies today have a larger global market than before. Foreign direct investments opportunities exist in virtually all countries. Countries are focused on sustainable economic growth and development. In this regard, in this age, countries have devoted their focus on streamline business environment in order to attract more foreign direct investment. This paper conducts an analysis as to why General Electric should expand its operations to Denmark. General Electric according is an American multinational conglomerate that operates in many continents and deal in oil, gas, water, aviation, transportation and healthcare among other ventures. The company over the years has been expanding its operations across the world to gain a competitive advantage in the global market. Denmark is a Scandinavian country found in Northern Europe. The country is a high income country and ranks high in the world. The country also has several economic opportunities that have attracted several multinational companies over the years.
SWOT Analysis
The business environment in Denmark according to Nielsen and Claus (198) has been favorable for foreign direct investment. This is not to mean that it is very perfect. There are certain shortfalls that may make other regions of the world favorable depending on the nature of the venture. Given that General Electric is interested in expanding into another country, this analysis provides reasons why it may be a good plan to go into Danish market or why it may not be very advisable.
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The World Bank according to Nielsen and Claus (199) ranks Denmark as the easiest place to do business in Europe. The country has one of the leading free trade environments in the world. This is because of some of the legislation the government has put in place. Nielsen and Claus (198) argues that the government has eliminated some of the requirement and procedures that make it hard to do business in a foreign country. Denmark has one of the highest levels of education in the world, this enables it to have competent workforce. Multinational such as GE expanding to Denmark have the advantage of having the best staff. According to Nielsen and Claus (198), corruption is non existence in Denmark making it very easy to do business. The last in the list is access to a wider readily available market. Denmark has access to the European Union.
The energy sector in Denmark however has seen several energy companies especially construction of offshore wind turbines. GE in this regard maybe faced with stiff competition in its attempt to penetrate the market. These companies according to Everett (12) are Danish based and have local support which may prove it hard for GE to gain acceptance. There is increasing competition in the energy sector in Denmark. This is due to the increasing interest in green energy that has seen the government invest heavily on offshore wind production. DONG Energy is one company that will give GE stiff competition since the company is well established in the European market and has constructed some of the biggest wind farms in Denmark. GE will in this regard have to contend with stiff competition.
There are opportunities however in Danish market. The current energy production cannot fully meet the energy demands of Denmark (Kaldellis and Zafirakis, 1888). In this case, given the government support for green energy, GE will be able overtime to establish itself. The major threats in doing business in Denmark just like any other western country is increased terrorism threats (Dunning, 2013). Besides that, there are increased hostilities between Russia and Denmark which may not be good for business.
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- Everett, Robert, et al. Energy systems and sustainability: power for a sustainable future. Oxford Univerity Press, 2012.
- Hamilton, Leslie, and Philip Webster. The international business environment. Oxford University Press, 2012.
- Harrison, Andrew. Business environment in a global context. Oxford University Press, 2013.
- Kaldellis, John K., and D. Zafirakis. “The wind energy (r) evolution: A short review of a long history.” Renewable Energy 36.7 (2011): 1887-1901.
- Nielsen, Morten Ebbe Juul, and Claus Strue Frederiksen. “Political Institutions and Corporate Social Responsibility: A Nordic Welfare State Perspective from Denmark.” Corporate Social Responsibility in Europe. Springer International Publishing, 2015. 197-208.
- Razin, Assaf, and Efraim Sadka. Foreign direct investment: analysis of aggregate flows. Princeton University Press, 2012.
