Internat’l Bus
Norway Paper

NORWAY – Land of the Midnight Sun Signing the New Constitution on May 17, 1814 marked the beginning of Norway’s mission to gain independence. Sweden had forced a union with Norway on January 14, 1814, after 400 years of Norway being dominated by Denmark. It was in 1905, 108 years ago, before Norway could claim a secured, full independence and become a sovereign nation. Another important event in Norway’s history is their liberation from occupation by Nazi forces after five years, on May 8, 1945. So, it’s easy to understand why the people of Norway value their independence so much. Since Norway signed the Constitution in 1814, legislation resulted in the Prime Minister position. The Prime Minister and Cabinet (consisting of all the most senior government department heads) are collectively accountable for their policies and actions to the Monarch, to Storting (Parliament), to their political party, and ultimately the electorate. As of 2013, the political leader of Norway and the Head of His Majesty's Government is Prime Minister, Erna Solberg, of the Conservative Party. The King of Norway, Harald V, also Prince of Denmark and Prince of Schleswig-Holstein-Sonderburg-Glücksburg, succeeded to the throne of Norway upon the death of his father Olav V on January 17, 1991. Norway is a constitutional monarchy that divides responsibility between the parliament (Storting) and the King's Council of State, consists of a prime minister and other ministers of state. The Storting has 165 representatives, is the supreme authority and controls finances. Representatives are elected for a four-year term with a direct vote. One-quarter of the representatives serve in the upper chamber (Lagting), and the rest form the lower chamber (Odelsting). Local government is represented by 450 municipalities in eighteen counties. In 1999, the Government and the Storting adopted new guidelines for economic policy. It concerned the petroleum revenues; i.e. 4% of the fund, to be equivalent to the expected real return on the Government. There are good reasons why the monetary policy is oriented towards keeping inflation low and stable. The costs associated with high and variable inflation increase uncertainty about future income and household expenses and leads to bad investments and bigger fluctuations in the economy. Today, Norway’s economic freedom score is 70.5, making its economy the 31st freest in the 2013 Index. Its score has increased by 1.7 points since last year. This is due to noticeable improvements in half of the 10 economic freedoms. These freedoms include the management of public spending, investment freedom, and freedom from corruption. The gains in economic freedom have pushed Norway into the “mostly free” category. The government is focusing itself on getting the welfare programs under control. Public debt remains under control as well, with the budget deficit growing smaller. The Norwegian economy is a heavy mix of socialism and capitalism with state ownership in major industries still substantial. Norway’s economy is competitive, built on openness with policies in place that support trade and investment. The rules of law are well kept, with a minimum tolerance for corruption. Twice Norway has applied to the European Union (EU) only to fail. The people voted against becoming an EU member in two separate national referendums. Instead, it maintains close economic interaction with EU members under the European Economic Area agreement, with 80% of its trade among EU member states. Norway is a member of the EFTA, EEA and the WTO. Norway is considered to be the “richest nation in the world”, with fisheries, metal, and oil being the most important commodities. Norwegians are a people who enjoy outdoor summer and winter sports very much. There is a national trails system throughout the country for people to use and trails to hike, keeping with their love of the outdoors. The most important cultural attributes that you see Norway businesses using are informal style, individual interests, transactional relationships and direct communication. Norwegians are not emotive speakers and their body language is subtle. Norwegians are transactional and do not require long personal relationships to do business with you. However, they would like to do business with people they can trust, so providing information to them about yourself and the company you’re representing before meeting with your businesspeople is important. Norwegians are direct communicators. The official language spoken is Norwegian. There are two written forms of the language, “Bokmal” (Book Norwegian) and “Nynorsk” (New Norwegian). However, most Norwegians speak English and conduct business in English. Minority languages are Finnish, spoken by .2%, and Sami, spoken by .9%of the population. This is a low context culture which suggests its use of the monochronic time. Norwegians like punctuality, scheduling, and hold a belief in human equality with respect to social, political, and economic affairs. In fact, European workers are going to Norway for higher paying jobs. As Europe’s biggest oil producer, Norway enjoys an unemployment rate of 4% since 2009 and is seeking more and more skilled workers. The workers in Norway are paid an average of $80,000 a year and work an average of 20% fewer hours than most of Europe. While North America has Native Americans, Norway has “Laplanders”, or Sami’s; and, like the North America natives, the Laplanders are different in their culture from the rest of Norway. Lapland is the given name to the most Northern parts of Norway, Sweden, Finland or Russia. The Sami’s, who have been there for hundreds of years, call themselves “The Unknown Folk”, because their early history is not known. Some “Laps” are fishermen; other Laplanders are hunters, with big herds of reindeer; and others are reindeer herders. There are some Norwegian Sami’s who are wealthy, and others who migrated to the cities and found work. These people speak a different dialect than do other Norwegians and also, depending on where they live, there are different dialects spoken among the Laps. Religion among the Norwegians is 86% Evangelical Lutheran (state church), other Protestant and Roman Catholic 3%, other 1%, none and unknown 10%. Old tradition of religion is the reason so many Norwegian’s go to the state Evangelical Lutheran Church of Norway. Giving an equal right to education to children, young persons and adults, regardless of where they live, gender, social and cultural background or any special needs. Education for all is a basic concept of Norwegian educational policy. Approximately 143,000 students in Norway receive support from the State Educational Loan fund. Also, there are 14,000 students who receive support to take a full load of studies abroad and 8,000 students who participate in the exchange student program. In Denmark, students from Norway and Iceland, (Nordic countries) and EU countries are treated like domestic students and therefore, pay no fees, as their education is fully subsidized. Most international students from non-EU or non-European Economic Area (EEA) countries, however, have to pay the full tuition fee. Women in business world in Norway are respected, usually get equal pay and have access to senior positions in the company. Norwegian women are direct and expect to be treated with respect in the office. Also, women are able to take up to one year of maternity leave at 80% pay or 10 months at 100% pay. Those women who choose to stay home with their young children will receive a monthly “stipend” from the government. Norway is located in Northern Europe. It borders Finland, 453 miles, Sweden, 1,006 miles and Russia, 122 miles. The country has a total area of 125,181 square miles. As of January, 1, 2013, Norway houses approximately 5,051,300 people. Much of the country is dominated by rugged mountains or coastal landscapes that make tourism an important industry. The dominant feature of the topography is a backbone of mountains extending down the Scandinavian Peninsula, with fjords, or long inlets of the sea, penetrating inland on the west and south. Interestingly, about 3% of the land is suitable for raising crops with nearly half of that land situated near Oslo, in the east. This is where open valleys produce grain and root crops. The west coast supports smaller farms along the fjords or in mountain valleys. Farming and fishing are major operations in this region. The northern region is the largest part of the country. It has 35% of the land area and only 12% of the population. Fishing is the major occupation in this region. Oslo, the capital, which was called “Kristiania” before the nation gained independence is associated with major governmental functions The climate is mild when you consider its high northern latitude. The high mountain ranges, which run north to south, play an important part in Norway’s climate. Winter is from December to February and the coast temperatures are above freezing in the winter months. The southern and northern parts have very low temperatures in the winter, around 0 to 5 degrees F. Spring is from March to May with temperatures in the 55 to 60 degree F range. Summer comes from June to August. The warmest summer months are in the southern part of Norway, where it gets to 70 degrees F. It’s because of the midnight sun that Northern Norway can enjoy temperatures above 86 degrees F. During the fall months from September to November, the coastal areas have the highest temperatures. Norway’s natural resources include petroleum, natural gas, the sea, and hydro (water) power as of 2013. Since almost every part of Norway is close to the sea or a fjord, many Norwegians have jobs as fishermen or sailors. Hydroelectric power is easily produced from the Mountain Rivers, which produces almost all the electricity in the country. The country’s main exporting partners are UK at 25,6%, Germany at 12.6%, Netherlands at 12%, France at 6.7%, Sweden at 6.3% and the US at 5%. (2012) The country’s main importing partners are Sweden at 13.%, Germany at 12.4%, China at 9.3%, Denmark at 6.3%, the UK at 6.1% and the US at 5.4%. Norway’s main exports are petroleum oils, crude (34%), petroleum gases (21%), petroleum oils, refined (4%), fish, excluding fillets (3%), unwrought aluminum (3%), while their main imports are cars (5%), cruise ships and similar vessels for the transport of persons (5%), petroleum oils, refined (3%), nickel mattes and other products of nickel metallurgy (2%), automatic data processing machines (2%). Total exports are 47% of GDP, including oil and gas exports at 23% of GDP. Fish and oil is the main reason that Norway is one of the richest countries in the world and Norway is Western Europe's most important source of natural gas. Norway has a very open economy, and their prosperity and high level of employment are dependent on trade with other countries. Today they export goods and services, such as fish and fish products, oil, metals and maritime services, to all corners of the world. At the same time Norwegians purchase goods and services from other countries on a daily basis. In 1960, Norway became one of the founding members of the EFTA (European Free Trade Association). The EFTA countries are highly competitive, open economies representing a sizeable market with strong per capita purchasing power. You would have thought that the case for the European Free Trade Area (EFTA) didn’t need making. After all, the four EFTA members, Norway, Iceland, Liechtenstein and Switzerland, are measurably better off than the 25 EU members. People in EFTA are more than twice as rich as those in the EU. They also enjoy lower inflation, higher employment, healthier budget surpluses and lower real interest rates. Interestingly, they also export more per head than EU states, selling $16,498 per capita to overseas markets – the highest ratio in the world. EFTA concerns itself with goods and services that circulate among its members, not within them, making it a better deal than joining the EU. Even though Norway has twice applied, the citizens have decided not to join the EU. At the risk of stating the obvious, a country is generally more influential if it has a foreign policy in the first place. Norway, f has one of the most active diplomatic services in the world. Its representatives are playing a leading role in, among other places, the Middle East, Sri Lanka, Sudan and South East Asia. Being outside the EU’s cumbersome development programs, it is able to use overseas aid as an instrument of foreign policy. Norwegians are regarded as reliable, neutral arbitrators of third country disputes. How much of this, one wonders, would be true if they were one of the EU’s smaller members? After performing a Country Risk Assessment (CRA) on Norway I found, in 2013, the banks are expected to slightly toughen the conditions for access to mortgage loans for first-time buyers in order to curb the excessively rapid growth of credit. Also, the more difficult conditions surrounding loans (costs, duration) to businesses, in place since mid-2012, are expected to continue in 2013. Credit will, however, grow significantly. The economic context will be particularly favorable to the metals industry, oil platform and ship construction, engineering and services linked to the oil industry and building (public spending for the reconstruction of government buildings) and public works (roads and wind power installations). Industries devoted to the domestic market are expected to benefit from the dynamism of household consumption (food products, beverages, furniture, electrical and IT equipment). However, prospects are less favorable in the timber and non-ferrous metals sectors (fall in export prices) and in basic chemical products. The healthy state of the economy is reflected in the 9% fall in the number of bankruptcies over the 12 months to October 2012, compared with the same period in the previous year. Co-face payment incidents index remains very satisfactory. To curb the expansion of credit, and if inflationary pressures intensify, the Norges Bank could raise its key rate in 2013, at the risk of strengthening the Norwegian krone’s exchange rate. But inflation is expected to remain below the Central Bank target. It should also be mentioned that Norway is the least corrupt country in the world. In order to expand our business, Peabody Enterprises, Inc., we have chosen to sell our skis, snowboards and accessories by exporting directly through distributors, at first. This is to acquire knowledge about how well our product is received. If our product is received well, I would then like to open a business in Norway using a joint venture with an individual living in the area.

Citations: "Prime Minister of Norway." Wikipedia Free On-Line Encyclopedia. 2013. 1. Wikipedia. Web. 19 Nov. 2013. <http://en.wikipedia.org/wiki/Prime_Minister_of_Norway>.

Aulkins, Douglas C. "Culture of Norway." Countries and Their Cultures. Advameg, n.d. Web. 24 Nov. 2013. <http://www.everyculture.com/No-Sa/Norway.html>.

2013 Index of Economic Freedom. Heritage Foundation, 2013. Web. 7 Dec. 2013. <http://www.heritage.org/index/country/norway>.

Northern Norway. Northern Norway Tourist Board, 22 Aug. 2013. Web. 18 Nov. 2013. <http://www.nordnorge.com/en/sami-culture>.

"Religion in Norway. " Wikipedia. Free On-Line Encyclopedia, 2013. Wikipedia. Web. 15 Nov. 2013. <http://en.wikipedia.org/wiki/Religion_in_Norway>. Ball, et al. "Hall's High and Low Context." The Challenge of Global Competition. International Business, 13th ed. New York: McGraw-Hill/Irwin, 2013. Pp. 98-99. Print. "Norway." Wikipedia Free On-Line Encyclopedia. 2013. Wikipedia Web. 8 Nov. 2013. <http://en.wikipedia.org/wiki/Norway>

World Fact book. CIA, 23 July 2013. Web.10 Nov2013.<https://www.cia.gov/library/publications/ the-world-fact book/fields/2050.html#no>.

Mohsin, Saleha. "Europe's Workers Flock to Norway for Better Paying Jobs." Bloomberg. Bloomberg, 2 Sept. 2013. Web. 26 Nov. 2013.<http://www.bloomberg.com/news/2013-09-02/europe-s-workers-flock-to-norway-for-better-paying-jobs.html>.

Euromoney Country Risk. Euromoney Institutional Investor, 2013. Web. 6 Dec. 2013. <http://www.euromoneycountryrisk.com/Wiki/Norway>. Berglund, Nina. "View and News from Norway." News in English.no. Cloudberry.no, 13 Dec. 2013. Web.13 Dec. 2013. <http://www.newsinenglish.no/2013/12/13/norways-currency-may-take-a-dive/>. Norway: Powered by Nature. Innovation Norway, 22 Nov. 2013. Web. 9 Dec. 2013. <http://www.visitnorway.com/us/Product/?pid=101795>. "Norwegian Snow Reports and Snow Forecast." CBI: Ministry of Foreign Affairs. J2Ski, 16 Dec. 2013.Web. 16 Dec. 2013. <http://www.j2ski.com/snow_forecast/Norway/>.

BUSINESS PLAN

In an effort to grow our business and invest in foreign markets, we decided to begin with Norway. Norway has a favorable, friendly business climate, which we see as a logical first step in world market penetration. We are going overseas with our products to expand the market and increase sales. There is a lot of snow in Norway with a terrain ideal for snowboarding and skiing.
Analysis:
A) My firm is Peabody Enterprises, Inc.. I am selling outdoor sports equipment and accessories; specializing in handcrafted skis, snowboards, boots and all accessories that go with these products. B) I am using the Hybrid Organization form to run my company. This may or may not change as I expand further in the overseas market.
Market Screening: A) First screening – Since Norwegians are outdoorsy types, and love all outdoor sports, in the summer and winter. I feel there’s a market for high quality ski and snowboard equipment and accessories. B) Second screening – Financial and Economic 1) Norway has a GDP (PPP) of $265.9 billion, with a 1.7% growth, 0.7% 5-year compound annual growth and a GDP of $53,471 per capita. Unemployment rate is 3.0%, inflation (CPI) is 2.5%, and FDI Inflow is $3.6 billion. 2) Norway has a free floating exchange rate. Norway’s currency, the “krone” is expected to take a dive, according to Jens Nordvig, a currency expert from New York. “We’re beginning to see other European countries that have been hit hard by the crisis go from downturn to growth,” Nordvig told DN. “In light of that, I think the Norwegian krone will weaken further.” 3) Target Market – 10 to 70 year olds persons who enjoy outdoor sports. C) Third screening – Political and Legal Forces The Norwegian government is pro free trade while generally being positive toward all investments, foreign and local. There are few trade barriers to foreign trade with the possible exception of agricultural products. Product standards and quality are high, the public’s attitude toward American and foreign goods and serviced is good and well received. For this reason, Invest in Norway, an official and nationwide body for attracting foreign investments, was established in 1993. Invest in Norway is an affiliate of the Norwegian Industrial and Regional Development Fund (Staten’s Narings og Distriktsutviklingsfond – SND), whose main purpose is to enhance profitable business and economic trade development throughout the entire country. It will contribute to product developmtent and new establishments as well as expansion. The SND provides aid through loans, guarantees, subsidies, and investments with share capital stocks. Competitive forces The Norwegian ski and snowboard market accounts for approximately 8% of worldwide sales. The competitive market for sales is limited in comparison to the world market this is because a very small number of manufactures that Export to Norway.

Marketing Plan As Norway is a well-educated, affluent country, most if not all Norwegians learn to speak and read English in school. We do not anticipate incurring any additional manufacturing or production costs upon entering the Norwegian market. While participating in trade shows is not an accepted method of market entry, we see it is as a means to promote the company and showcase our products and services in the Norwegian market. Participating in trade shows will allow our corporate officers and sales staff to meet potential buyers, agents and distributors. We see the Internet and E-commerce as another avenue to promote and generate sales. Competing with rival manufactures; by following the high standards set in our U.S. markets of using the finest quality materials and production methods and Customer Service relations. In the U.S. market found that our Lifetime warranty and exceptional customer service is leading the market in customer retention and referrals. Financing will be arranged through U.S. bank loans and negotiations with the Norwegian SND office. Price points will remain the same as in the US market with adjustments for the exchange rate between the Norwegian Krone and the US dollar.
Contingency plans Two worst-case scenarios would be and inability to secure adequate financing or poor sales performance, Poor level of financing can be addressed by looking into other means of financing say through independent investors, or transfer of capitol from our US market. Poor sales performance can be improved with a more aggressive sales campaign, price adjustments, or reevaluating in country sales agents. The absolute worst-case would be to leave the Norwegian market altogether.
Performance evaluation After running intensive market simulations and evaluations, we feel that first year gross sales should run about 5 million dollars or ½% to 1% of the total market share. Quarterly sales goals will be set to evaluate overall performance. In five years I expect to make 50 million dollars and have 5% of total market sales.

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