Sweden In-depth Country Analysis Work Project presented as part of requirements for the Award of the Management Masters Degree from NOVA – School of Business and Economics January 22nd 2020 SME Competitiveness and Internationalization Field Lab carried out under the academic supervision of: Professor Emanuel Gomes Professor Pedro Teixeira 25936 Matilde da Silva Conde Belo The threats associated with the six environments being analyzed are extremely low. Political, economic and legal factors are highly favorable for the refurbished smartphone industry. Moreover, consumer preferences, aligned with environmental and technological forces, represent the ideal environment for a company operating in the industry, aiming to follow a global strategy with Sweden as the target market. 5. In-Depth Country Analysis 1 2 3 4 5 6 7 8 9 5.3. Sweden In-depth country analysis: Country Overview Political Economic Social Sweden has a parliamentary representative democratic constitutional monarchy1. Sweden’s GDPpc is one of the highest in EU, 54,356$ in 2018, with a 1.8% growth.6 Current population of 10 063 308 inhabitants.11 Swedish last longing politically stable government of minorities have created a high Low inflation (1.7%) and long-lasting healthy banking system, except for 1990’s when the 87.9% of the population live in urban areas.11 economic performing country with open market policies, encouraging entrepreneurial country faced a severe financial crisis.7 Gini index of 25.70% in 2018.12 activities and large flows of investments.2 Highly competitive and diverse economy by being an export-oriented country with trade The country population present a high willingness for high technological and home Sweden is a member of EU and apart from EU single market and trade agreements for its surplus.8 connected devices.13 state members, the country does not include any other Free Trade Agreement on its The currency is the Swedish Krona with relatively low fluctuations in the market for the own. As an EU state member, with free trade of people, goods and services within the The school system is Sweden, despite national governmental directives and norms, is past couple of years.9 Schengen area is highly beneficial for exports/imports between Portugal and Sweden.3 highly decentralized.14 The country had an unemployment rate of 6.4% in 2018 and a labor force participation The Swedish average labor taxation is between 40-50%.4 However, the country can The typical Swedish consumer considers price followed by quality as the main purchasing rate of 69.20%.10 provide free healthcare and education for all EU citizens living in the country. For this decision factors. Other concerns are sellers’ know-how regarding product features and matter, county councils all over the country have shared responsibility to ensure these Although there are no minimum wages legislation, the country has a highly competitive after-sales services.15 rights, under a decentralized healthcare and education systems.5 labor market, with an average salary of 133.60 SEK/hour.10 Sweden has a high rational driven purchasing behavior, with 53% of Swedes searching for information, online, before buying.15 Technological Legal Environmental 72% of the Swedish population is considered to have ready access to any connected Alongside with EU directive on WEEE, the Swedish government is hardly trying to Swedish environmental protection policies are among the strongest ones in EU, allowing device.16 promote circular economies on consumer goods. No country specific legislation are Stockholm’s CO2 emissions per capita to be one of the lowest within OECD metro implemented regarding this matter. Studies have proven that, although there is a areas.22 The main digital leading companies in Sweden, within e-commerce in 2018 and 2019 are corporate tax rate decrease for companies with circular products, a Value Added Tax electronic goods, pharmaceutical and clothing companies. 17 Greenhouse gas emissions have been strongly decreasing in the past years, without decrease is necessary.20 compromising economic growth however, solid waste recycling treatment is considered Swedish e-commerce volume is expected to reach 50%-75% of country’s total consumer Sweden average wages are relatively high, increasing labor costs for refurbishment, and to not reach its full potential. 22 goods sales by 2035, mainly for electronics, clothing, shoes, books and furniture, similar VAT taxation between circular and primary markets, require low economic representing a market of 67 billion Swedish kronor in 2017.18 Government effort to combine technology and sustainability have led to the margins for resellers with the attempt of charging low prices to the consumer who is, development of the Eco-innovation Observatory. 23 Swedish internationally agreed information and communication technologies ranked 11 generally, high price sensitive in this industry. 20 in the ICT Development index in 2017.19 There are several Student Sustainability Associations among most universities in Sweden. Minimum warranty regulations, can improve consumer’s confidence in refurbished These student’s groups are responsible for promoting activities with strong smartphones. The country has a 3-year minimum warranty however, the Swedish environmental impacts as well as measure those results, are highly conscious and aware government allows producers to decrease this time frame if product’s lifetime 20 of sustainable brands and products (a country advantage Forall Phones could benefit expectancy is lower. This can be considered as a major advantage for refurbished 24 smartphone companies since their product offer has a lifetime expectancy of 12-24 from if Forall Family is leveraged to international markets). months.21 Sources: Available in References Section. 62 Although Forall Phones has no privileged contacts in the country, the company can benefit from Swedish agents, government agencies and associations, that are highly concerned in promoting a competitive and trade- oriented environment in the country. The government’s overall effort to help fostering the presence of international companies represents large opportunities for small enterprises with poor international experience and lack of Swedish market knowledge. 5. In-Depth Country Analysis 1 2 3 4 5 6 7 8 9 5.3. Sweden In-depth country analysis: Contacts Agents and Distributors1 Government Agencies and Embassies Associations and Organizations Allow Forall Phones to obtain market knowledge with low financial Students Sustainable Action Associations in most of risk and commitment. Some recommended agents and distributors The Portuguese Embassy in Sweden and the Swedish Embassy in Portugal, the the country’s universities. These associations are: that can represent a bridge between both markets. aim to create awareness for climate change and The Swedish Agent: Sales agent of global environmental issues, promoting second-hand goods usage and circular economy. brands in Sweden The Swedish International Chamber of Commerce2 , member of the largest business organization, aiming to develop and improve trade from and for Sweden. The main organizational focus has been ensuring sustainable 6 GlobalXtend Limited: specialist sales group business growth, while fostering environmental concerned activities/ Local Chambers of Commerce under the guidance focused on business development and business. of Swedish Chambers of Commerce Association. internationalization in Europe. The The local CCs are located in most Swedish counties company has highly trained Agents and and regions such as: partnerships with large distributors. Business Sweden3 is a Government agency responsible for fostering and • Stockholm Chamber of Commerce (CC) helping Swedish companies to expand internationally as well as foreign companies aiming to invest and establish their businesses in the country. • Ostsvenska CC Castpoint is a Norwegian company with • Wermland CC large operations in Sweden. The company is known for providing export companies • Jonkoping CC The Swedish Trade Organization4 has a strong focus on electronic with the market knowledge, resources and • Norrbotten CC agent contacts needed to successfully companies and aims to promote competitiveness for this sector in the export to Scandinavian countries. Swedish market by helping international companies to operate in the • West Sweden CC country. • Central Sweden CC ScandiConnet provides market entry strategies and consulting services for The Swedish Companies Registration Office5 is a governmental institution companies aiming to establish their designed to help international and domestic companies to start their Letters of Inquiry business in Nordic countries. The business. The agency provides guidance regarding legislation and Written in Swedish is preferred. However, according to English company’s know-how and variety of bureaucratic requirements to start a business in the country. industries expertise are considered a great Proficiency Index, Swedes are the worlds’ third non-native best English 7 asset for companies that require their speakers, with 86% of the population fluent in this language . services. Therefore, Letters of Inquiry written in English are also an acceptable possibility. Sources: 1. Global Trade.net; 2. Sweden International Chamber of Commerce website accessed at https://www.icc.se/icc-english; 3. Business Sweden website access at https://www.business-sweden.se/Export/; 4. Swedish Trade Organization website accessed at https://www.svenskhandel.se/; 5. Swedish