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Market Analysis of Shopee (Essay Sample)


The paper explores external factors that can influence Shopee's expansion into Canada. It considers PESTEL and VRIO analysis, resources, competence, organizational capabilities, and decision making that stimulate the organization's achievements in new business areas. IT EXPLORES HOW THE STRATEGIES OF THE ORGANIZATION PUT IT AT AN ADVANTAGED POSITION AS COMPARED TO ITS RIVALS.


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Executive Summary
Shopee is a world-class online shopping multinational in many countries, especially in the Asian region. Having been established in 2015, it has grown so fast to compete with the old and giant online stores like Amazon. In its operations, the company, just like other business ventures, is affected by external environmental factors. In its bid to gain entry into Canada, the company is affected by political, economic, social, technological, environmental, and legal factors. Looking at the VRIO analysis of the company, it can expand and make impacts in the new markets because of its resources and core competencies such as emerging presence, diversified online presence, expanding product portfolio, diversified networks and partnerships, suitable distribution, and warehouse channels, and expertise of the personnel. It also enjoys a competitive advantage in international brands, large market capitalization, international affiliates, and artificial intelligence capabilities. The company also needs to embrace a data-driven decision-making process to make an impact in the new markets.
Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc92582527 \h 2Introduction PAGEREF _Toc92582528 \h 4PESTEL Analysis PAGEREF _Toc92582529 \h 4Political Factors PAGEREF _Toc92582530 \h 5Economic Variables PAGEREF _Toc92582531 \h 5Social Factors PAGEREF _Toc92582532 \h 6Technological Factors PAGEREF _Toc92582533 \h 6Environmental Factors PAGEREF _Toc92582534 \h 7Legal Factors PAGEREF _Toc92582535 \h 7VRIO Analysis PAGEREF _Toc92582536 \h 7Resources, Competencies, and Capabilities PAGEREF _Toc92582537 \h 9Decision-Making Process PAGEREF _Toc92582538 \h 10Data-Driven Decision Making Process PAGEREF _Toc92582539 \h 11Knowing the Data Needed PAGEREF _Toc92582540 \h 11Link the Sources to Start Gathering Data PAGEREF _Toc92582541 \h 12Analysis of the Data PAGEREF _Toc92582542 \h 12Finding Experiences to Help Make Important Decisions PAGEREF _Toc92582543 \h 12Recommendations and Conclusion PAGEREF _Toc92582544 \h 12References PAGEREF _Toc92582545 \h 14
In general, the world is the external environment of a company. To be effective, organizations need to confront, adapt, use, and protect themselves based on what is happening in the general environment. Except for global financial changes such as Canada's democratization, the e-commerce business industry has recently been radically expanding and remains optimistic for its development. Its paper explores external factors that can influence Shopee's expansion into Canada. It considers PESTEL and VRIO analysis, resources, competence, organizational capabilities, and decision making that stimulate the organization's achievements in new business areas.
PESTEL Analysis
Shopee is one of the successful internet stores operating in Southeast Asia and Taiwan. It is a locally adapted online business that provides customers with a fast and secure online shopping experience with fair prices and better services. Shopee is focused on constantly evolving its foundations and achieving the region’s proposed e-commerce business goals through continuous item optimization and limited customer-centric methodologies (Pardede, Lapian, & Pandowo, 2018). However, to enter new developing markets like Canada, the company needs careful market analysis to get the opportunity to reach a consensus on better decisions. In addition to financial and political variables, several factors affect Shopee and the global online business industry (Tran, 2021). Therefore, the report is Shopee’s PESTEL study of what the various forces mean for its entry and performance in Canada.
Political Factors
The threat to online retailers is not the same as that of physical retailers, but they are affected by political factors beyond the company's control. There are some political factors and risks that affect e-business. The policies of the Canadian government can be a significant factor for new organizations seeking to expand their essence in Canada. The political and administrative challenges of e-business in Canada are constantly increasing, just like the development of e-commerce businesses in other European nations is also being tested by political factors. Such issues can threaten the growth of online businesses in new countries. As a result, some sources assume that the pace of development of e-commerce businesses in Canada is slow. Many other political factors affect the emergence of new business ventures. When a country has some political stability, it promotes financial strength. Conversely, political instability can disrupt business operations. The value of the Canadian currency, global recession, and tax regulations work towards or against establishing new online ventures in the country.
Economic Variables
Economic factors are essential to the success or failure of any business venture within a country. Whether an e-commerce business or a physical business, economic variables can significantly impact the experience. In Canada, the spending levels of the citizens decreased during the recession. As the circulation of money and the level of work declined, individuals sought cost-saving measures. During these periods of economic easing, the revenues and profitability of an organization can decrease. E-business is also affected by these financial factors. Post-recession business differences can affect companies in ways that make them challenging to gain entry into new markets. In certain economies such as Russia, Brazil, and Canada, these recurring anomalies affect both global and neighboring businesses. The online business industry has been booming lately as the recession ends and financial movements continue again. More money circulation means faster development and higher wages in the Internet industry, but fewer financial measures mean certain oppositions. Therefore, economic variables can significantly impact the e-commerce sector, and more so, the entry of Shopee into Canada.
Social Factors
These factors also have a significant impact on online ventures. Vitally, it is easiest for retail brands to thrive locally. Development in foreign economic sectors can be complex. Pattern changes can also affect the organization. Increased use of innovation impacts e-commerce businesses in ways that had hitherto not been witnessed before. Technological innovation is so well known in many societies as many people worldwide use digital devices for shopping, among other uses. Sociocultural factors also affect organizations in many different ways. Social factors affect the marketing strategies of online businesses. Internet business is still seen as a sign of westernization in certain societies worldwide, so it has barely developed here.
Technological Factors
Unique technical variables are essential in the online business industry. This is because the Shopee is strongly driven by innovation. Everything from trading to customer care relies on retail innovation. All online business brands are ahead of the competition when it comes to innovation. From Shopee to eBay to Flipkart, all brands energetically innovating faster development. Innovation impacts the Internet business, from awareness to practicality. Shopee is very advanced in its innovation process, so it has gained popularity within a short time since its inception in 2015. Its ubiquitous nature is very high because it handles the customer experience well. It may be clear that innovation has a significant impact on our business. Innovation components are essential for online businesses.
Environmental Factors
Environmental factors are critical in the e-commerce enterprise sector. Brands like Shopee have invested heavily in innovation. In some areas, e-commerce businesses can find resource management very useful. For example, Shopee has converted resources into green energy to free them from environmentally unfriendly energy resources.
Legal Factors
Legal compliance is just as important to companies around the world. For example, for Shopee to gain a foothold in Canada, it must comply with all the legal requirements for establishing online ventures in the country. Legal issues can be costly, and even trademarks can create legal tussles if consistency and following the law are not considered. Therefore, major e-retail brands have separate groups dealing with legal issues. Failure to comply can lead to loss of image and consciousness, as well as financial misery. From labor law to manageability law, there are several areas that a trademark should be aware of.
Similarly, these laws move from one country to another and from one market to another, and consistency in each area is essential. Legislation can create a heavy burden for global organizations and increase labor costs. Trademarks also need to focus on crucial laws and their consistency.
VRIO Analysis
Shopee’s capabilities rely on the company's trusted skills and resources that align with the VRIO analysis. These include Value, Rareness, Imitability, and Organization (Knott, 2015). Many of the resources within the company and capabilities meet only one or part of these models, but they support the development of the company.
The VRIO analysis of the critical resources and capabilities of the company is shown below.
Shopee’s Organizational Resources & Capabilities





– Emerging presence

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