PESTLE Analysis of Sweden

Sweden, which occupies the eastern part of the Scandinavian Peninsula, is the fourth-largest country in Europe and is one-tenth larger than California. The country slopes eastward and southward from the Kjólen Mountains along the Norwegian border, where the peak elevation is Kebnekaise at 6,965 ft (2,123 m) in Lapland. In the north are mountains and many lakes. To the south and east are central lowlands and south of them are fertile areas of forest, valley, and plain. Along Sweden’s rocky coast, chopped up by bays and inlets, are many islands, the largest of which are Gotland and Oland. This country is having the area of 449964 sq km slightly larger than California. STOCKHOLM is the capital.They are having the Constitutional monarchy type of government and also have parliamentary democracy.

PESTEL ANALYSIS OF THE SWEDEN:

As in this country the government is having the constitutional monarchy and has parliamentary democracy. In the economy of the there is a big swap after 1991.

This economy is enriched by the sources of the timer, hydropower and iron ore.

POLITICAL ANALYSIS:

Ordinary general elections to the Swedish Parliament are held every fourth year on the third Sunday in September. County council and municipal council elections take place at the same time. A party must receive at least 4% of the votes in the entire country or 12% in a single electoral district to qualify for any seats in Parliament.Sweden is a constitutional monarchy in which King Karl XVI Gustaf is main head of the state. Sweden is the unitary state currently divided into the 21 countries.Each country has a country administrative board, which is a government appointed board. Its led by a governor appointed for period of six years. The main responsibilities of the County Administrative Board are to coordinate the development of the county in line with goals set in national politics. In each county there is also a County Council or landsting which is a policy-making assembly elected by the residents of the county.

Constitutionally, the 349-member Riksdag (Parliament) holds supreme authority in modern Sweden. The Riksdag is responsible for choosing the prime minister, who then appoints the government (the ministers). The legislative power is only exercised by the Riksdag.

Legislation may be initiated by the cabinet or by members of Parliament. Members are elected on the basis of proportional representation for a four-year term. The Constitution of Sweden can be altered by the Riksdag, which requires a simple but absolute majority and two decisions with general elections in between. Sweden has three other constitutional laws:

The Act of Royal Succession,

The Freedom of Press Act and

The Fundamental Law on Freedom of Expression.

ECONOMIC ANALYSIS:

GDP (2010 est., nominal): $438.8 billion.

GDP (2010 est., per capita purchasing power parity): $37,032.

GNI (2009, per capita purchasing power parity): $38,560.

Annual GDP growth rate (2010 est.): 4.5%.

Exchange rate (September 2010): Swedish kronor (SEK) per U.S. dollar = 7.073.

Exchange rate (January-September 2010 avg.): Swedish kronor (SEK) per U.S. dollar = 7.3475.

Inflation rate (2010 est.): 1.4%.

Natural resources: Forests, hydroelectric power, iron ore, copper, lead, zinc, gold, silver, tungsten, uranium, arsenic, feldspar, timber.

Industry (2010): Approximately 26.6% of GDP.

TYPES: machinery/metal products (iron and steel), electrical equipment, aircraft, paper products, precision equipment (bearings, radio and telephone parts, armaments), wood pulp and paper products, processed foods.

Services (2010): Approximately 71.8% of GDP. Types–telecommunications, computer equipment, biotech.

Trade:

Exports (2010)–SEK 728.2 billion (U.S. $102.9 billion).

Major trading partners, exports (2010)-Germany,

Norway,

U.K.,

U.S.,

Denmark,

Finland,

France,

Netherlands,

China.

Imports (2010)–SEK 687.6 billion (U.S. $97.2 billion).

Types–machinery and transport equipment, 41.8%; food, clothing, textiles and furniture, 19.6%; mineral fuels and electric current, 13.5%; chemicals and rubber products, 12.8%; minerals, 9.2%; wood and paper products, 3.1%.

Major trading partners, imports (2010)-

Germany,

Norway,

Denmark,

Netherlands,

U.K.,

Finland,

Russia,

France,

Belgium,

China.

The typical worker receives 40% of his income after the tax wedge. The slowly declining overall taxation, 51.1% of GDP in 2007, is still nearly double of that in the United States or Ireland. The share of employment financed via tax income amounts to a third of Swedish workforce, a substantially higher proportion than in most other countries.

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REAL GDP GROWTH IN SWEDEN IN BETWEEN 1996-2006

SOCIAL ANALYSIS:

Sweden has one of the most highly developed welfare states in the world. The country has a higher level of social spending to GDP than any other nation. Additionally it provides equal as well as comprehensive access to education and health care.

Sweden provided solid support for free trade (except agriculture) and mostly relatively strong and stable property rights (both private and public), though some economists have pointed out that Sweden promoted industries with tariffs and used publicly subsidized R&D during the country’s early critical years of industrialization.

From the 1970s and onwards Sweden’s GDP growth fell behind other industrialized countries and the country’s per capita ranking fell from the 4th to 14th place in a few decades.

Sweden adopted neo-liberal agricultural policies in 1990. Since the 1930s, the agricultural sector had been subject to price controls. In June 1990, the Parliament voted for a new agricultural policy marking a significant shift away from price controls. As a result, food prices fell somewhat. However, the liberalizations soon became moot because EU agricultural controls supervened.

As of 2007, total tax revenue was 47.8% of GDP, the second highest tax burden among developed countries, down from 49.1% 2006. Sweden’s inverted tax wedge – the amount going to the service worker’s wallet – is approximately 15% compared to 10% in Belgium, 30% in Ireland, and 50% in United States. Public sector spending amounts to 53% of the GDP. State and municipal employees total around a third of the workforce, much more than in most Western countries. Only Denmark has a larger public sector (38% of Danish workforce). Spending on transfers is also high.

TECHNOLOGICAL ANALYSIS:

The traditional engineering industry is still a major source of Swedish inventions, but pharmaceuticals, electronics and other high-tech industries are gaining ground. Tetra was an invention for storing liquid foods, invented by Erik Wallenberg. Losec, an ulcer medicine, was the world’s best-selling drug in the 1990s and was developed by AstraZeneca. More recently Hakan Lans invented the Automatic Identification System, a worldwide standard for shipping and civil aviation navigation.

Swedish inventors hold a total of 33,523 patents in the United States as of 2007, according to the United States Patent and Trademark Office. As a nation, only ten other countries hold more patents than Sweden.

In 1991 the government announced it would begin taking applications from private television companies wishing to broadcast on the terrestrial network. TV4, which had previously been broadcasting via satellite, was granted a permit and began its terrestrial broadcasts in 1992, becoming the first private channel to broadcast television content from within the country.

Around half the populations are connected to cable television. Digital terrestrial television started in 1999 and the last analogue terrestrial broadcasts were terminated in 2007.

Sweden’s energy is largely privatized. The Nordic energy market is one of the first liberalized energy markets in Europe.

The traditional engineering industry is still a major source of Swedish inventions, but pharmaceuticals, electronics and other high-tech industries are gaining ground. Tetra Pak was an invention for storing liquid foods, invented by Erik Wallenberg. Losec, an ulcer medicine, was the world’s best-selling drug in the 1990s and was developed by AstraZeneca. More recently Hakan Lans invented the Automatic Identification System, a worldwide standard for shipping and civil aviation navigation. A large portion of the Swedish economy is to this day based on the export of technical inventions, and many large multinational corporations from Sweden have their origins in the ingenuity of Swedish inventors.

LEGAL ANALYSIS:

The supreme court of Sweden is the last step for all civil and criminal cases. The Supreme Court consist of 16 councilors of justice which were appointed by government, but the court as an institution is independent and the government cannot interfere in the decisions of the court. The Swedish police service is government agency concerned with police matters. All the matters are solved by the national police as there is municipal police. The entire police is under national government from 1 January 1965.

Here courts are divided in 2 parallel courts

General court-for criminal and civil case

General administrative court-for administrative cases.

Mainly the justices for these courts are appointed by government.

ENVIRONMENTAL ANALYSIS:

Environmental protection laws: These are mainly upgraded to have control over the environment from different factors.

Disposal of wastes in a proper and specified manner.

SOURCES OR POTENTIAL SOURCES OF COMPETITIVE ADVANTAGE FOR SWEDEN BY USING PORTER DIAMOND MODEL:

The potential sources are related with the competitive advantage for the various countries in the world. Porter diamond model (1990) shows direct relation of the growth of the different economies of the world.

POTERS DIAMOND- THE DETERMINANTS OF THE NATIONAL ADVANTAGE:

As the market in Sweden is growing at a stagnant growth. The economy is fastly growing in technical sector such as in computer equipments, biotech and telecommunications. Using the porter’s model the potential of Sweden can be analyzed not only separately but in combined form also.

As the different countries have their combined technology with the Sweden to create the better form of product and services. As the incomes from these sources are up to the 71%of the total income. As the country started growing in the era of 1990’s.

Porter model shows us that how various nation grow up in the various clusters of the various industries and developing the different work groups which develops the country.

Sweden has developed the potential sources of the telecomm and various sectors so as to increase the income and growth rate of the country.

CONCLUSION:

From this we conclude that the country is growing at a faster rate. The country is having the dynamic growth in the field of the telecom and the computer sector.

As the net income is increasing at the higher rate and they are many businesses at the better rate.

ANALYSIS OF THE PESTLE MODEL:

As we have seen in PESTEL analysis of SWEDEN that how all the factors are closely related to the country .In start Sweden was not so grown country but after that government played a very important role in growth of Sweden and Foreign Direct Investment gave a big booster to sweden due to it Sweden started to use technology and it has become labor-intense economy from Agriculture economy.

GDP of Sweden is also growing with a rapid speed and is near about 9%, inflation rate is very low 1.50% which is plus point for Sweden. Per capita income is also $ 16423 per annum because of it the standard of living of people has increased and people are living a luxurious life and If we talk about the social welfare so Sweden’s govt. is very helpful in social welfare, it is running many social welfare programs.

For providing all these facilities every country need good Govt. Revenue so Sweden has a very strong taxation policy that’s why Sweden easily raises funds and then it provides all the facilities to people, Education level of people has also increased and now people have become more literate.

If we talk about legal and environmental factors then we can say that the production level of Sweden has increased that’s why the energy consumption level has also increased so to make a balance in environment Sweden govt. has some rules and regulation which are helpful for Environment these rules.