Expanding a company and taking it into the international market is a challenge that needs thorough consideration implemented by its strategic management division. This analysis typically includes assessing various commercial, cultural, political, and institutional factors that could impact the new operation. The purpose of this paper is to consider the best option for a record label company to enter the international market.
LP Record Label Company
LP is the name of the record label company, which is considering a new international operation. The reason behind this decision is that over several years the company has gained success in North America, scouting, signing, and developing new local artists and successfully promoting and representing them. It has attracted a considerable amount of funds, and the label itself has achieved a world reputation. Therefore, the next logical step would be to expand the label’s operations, concentrate on new markets, and create opportunities for a more convenient client discovery. However, while the pool of candidate countries is vast, due to various reasons, it has to exclude the United States, New Zealand, and the Czech Republic.
Factors for Consideration
To determine the potential locations for opening a new LP office, it is essential to consider several factors that could determine their viability and appropriateness. As the global expansion is associated with “its own unique set of obstacles”, the company’s strategic management division has determined several criteria to be evaluated (Brooks, 2019). They are the country’s position in the World Bank’s ease of doing business ranking that includes several economic indicators, local competition and infrastructure, political climate, language, and cultural environment.
Estonia as a Potential Candidate
After careful evaluation of different factors, Estonia was chosen as the most appropriate candidate country for LP to start their international operations. Estonia is positioned 18th in the Ease of Doing Business ranking (The World Bank, 2020). However, in comparison with some candidates whose ranking is higher, Estonia has other advantages. First, it is the fourteenth country where starting a business is relatively easy. Second, the country has favorable conditions for registering property and paying taxes (The World Bank, 2020). Moreover, Estonia’s economy is stable, and its economic growth has been strong for a few recent years (Organisation for Economic Co-Operation and Development, 2019).
Another advantage of Estonia as a potential country for LP’s expansion is its advanced digital infrastructure. The country’s data handling policies create additional opportunities for the music industry (Westcott Grant, 2019). For the LP label, opening a business in this environment would also mean innovating its operations. Moreover, its geographical and geopolitical position allows easy access to other European Union countries, including Denmark and Sweden, where the label’s representatives could do the necessary fieldwork.
Moreover, Estonia has a relatively stable political climate. Its average political stability index is above the world’s average and has been around 0,7 points (“Estonia: Political stability”, n.d.). The country has also been ranked quite highly in the English language proficiency, making it easier to establish an international business (“EF-EPI: Estonia”, 2019). Finally, the country’s culture is similar to other Eastern and Northern European countries, which would not create any additional difficulties.
Conclusion
Estonia can be the right country candidate for the LP record label company to open its first international branch. The country’s stable economy and political climate, geographical position, and advantageous digital and cultural environment make it a good fit. Entering the Estonian market would allow LP to develop its operations in Europe, get access to other countries, and potentially innovate its business by acquiring Estonian and overall Northern European digital experience.
References
Brooks, C. (2019). Going global: How to expand your business internationally. Business News Daily.
EF-EPI: Estonia. (2019). English First.
Estonia: Political stability. (n.d.). The Global Economy.
Organisation for Economic Co-Operation and Development. (2019). OECD economic surveys: Estonia.
The World Bank. (2020). Ease of doing business rankings.
Westcott Grant, K. (2019). What the music industry can learn from Estonia as an e-nation. Forbes.