The Economic Environment Of Sweden Essay

Geography and ClimateThe location of the state is perfectly astonishing. It is situated in Northern Europe and lies in the west way of Baltic Sea and Gulf of Bothnia therefore organizing a stretched coastline. It lies to the E of Norse Peninsula. Sweden is separated from Norway with the aid of a mountain scope called Norse Mountain Chain which is the west way. To the West of the state Norway surrounds it, to its north east way Finland exists, in the south west way Skagerrak, Kattegat and Oresund straits surrounds the state and in the E of the state lies the immense Baltic Sea.

Oresund Bridge connects Sweden and Denmark which is located in the south west way.Nautical Boundary lines are shared by Denmark, Russia, Germany, Lithuania, Estonia, Poland, and Latvia. Sweden comes at the fifty-fifth place when big states in the universe are compared with a land country of 449,964 kilometre square. When the comparing is made among the states of Europe, it stands at 5th place.

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The population nose count in Sweden found the population in 2008 to be 9.2 million people. Lake Hammarsjon is located at the -2.41 m below sea degree and is the lowest tallness in Sweden. On contrary, the highest point is Kebnekaise which is 6926 foot above the sea degree.There are 20 five landscapes in Sweden which are characterized depending on geographics, civilization, and history.These states play an of import function in placing one ego though there is no political or administrative thought behind it.

These states are categorized in three countries calledNorthern Norrland,Cardinal Svealand andSouthern GotallandAmong these Norrland covers about 60 % of entire population.To the North of Arctic Circle, 15 % of the country of Sweden lies. The South of Sweden encourages agribusiness and the denseness of woods addition in the northbound part. The Oresund part along with Lake Malaren has got the highest denseness of population. The largest lake of Northern Europe exists in Sweden called Vanern.

Talking about the clime of the state, it is temperate. Though the state lies in the northern latitude, it has got four different seasons and the temperature is mild wholly along the twelvemonth. The portion of the state lying in the northern part experiences subarctic clime, portion of the state in the southern part experiences pelagic clime and the cardinal portion of the state experiences humid Continental clime. Climate of Sweden is more dry and warmer than the other states lying at the same height. The ground is the presence of the Gulf Stream.To warrant the ground of Gulf Stream we can take the illustration of Central and Southern Sweden which experience heater winters as compared to most parts of Russia, northern United States, and Canada.

There is a great variableness in the period of daytime because of high place of Sweden in Northern Latitude. The northern portion of the state near the Arctic Circle is non able to see sundowns for some clip during summers and during winters for some portion of it, the Sun ne’er rises. If we analyze the statistics so Sweden experiences sunlight for about 1800 hours about during a twelvemonth. Summers are warm and winters are cold for both western and cardinal portion of the state. The temperature goes to a upper limit of 20 degree Celsius to 25 grade Celsius and the minimal temperature goes to 12 grade Celsius to 15 grade Celsius in summers. In winters, the temperature scope is -4 degree Celsius to 2 grade Celsius.The northern portion of the state experience summers which are short and cool. Winters over here are stretched, marked with snowfalls and are colder.

From September to May, the temperature remains below stop deading point many times. Up till now, the highest temperature of 38 degree Celsius is measured and was of Malilla. This happened in 1947. Vuoggatjalme in 1996 recorded the minimal temperature of all time for Sweden and that was -52.6 degree Celsius.

Rain, every twelvemonth the recorded rainfall falls in between the scope of 500 to 800 millimeter. therefore the state is drier when compared to planetary norm. 1000 to 1200 millimeter of rainfall is measured in the southwesterly portion of the state and rainfall of above 2000 millimeter merely happens in the mountain countries in northern part. Time period from December to March is prone to snowfall in the southern portion of Sweden, the cardinal portion of Sweden can see rainfall between November and April and the maximal scope from October to May is prone to snowfall in the Northern portion of Sweden.Socio Cultural Environment of SwedenIn Sweden, out-migration existed before World War 2 and from World War 2 onwards, in-migration becomes popular. The in-migration rate in 2008 was 101,171 people. Immigrants from Finland, Iraq, Poland, Denmark, Chile, Lebanon, Former Yugoslavia, Thailand, Bosnia, and Somalia have settled in Sweden and the entire population is about 7 hundred thousand people.

Labor market Policies hindered the in-migration of people from outside the Nordic Countries. Nowadays, Indians, Chinese, and Americans form major portion of labour market immigrants in IT sector. In the clip period of 110 old ages from 1820 to 1930, 1.3 million people in Sweden went to North America, largely US. Swedish people are in astronomical Numberss of 1000000s, both in Canada and in US.

Socio cultural factors encompass the demographics of the state which majorly decide the consumer behaviour and purchasing forms. The entire population of the state was expected to be about 9,263,872 in 2009. Stockholm is the capital of the Sweden and the population of assorted nucleus metropoliss is listed in the tabular array below.In every square kilometre of the country, 20.6 people live on an norm. The population denseness is more in south than in north.

The major concentration of the population is in urban country, about 85 %Swedish is the official linguistic communication, accepted by the Government in 2009, which is a North Germanic linguistic communication. It differs from Danish and Norwegian merely in footings of pronunciation and writing system. The largest lingual minority of Sweden is Sweden Finns. 3 % of the population forms a portion of this minority and Finnish, in Sweden, is known as a minority linguistic communication. Meankiele, Yiddish, Sami and Romani are other linguistic communications that are treated as linguistic communications of Minority.English is decidedly used and is a gift of trade links.

Organizations in Sweden usage English as a criterion concern linguistic communication. After World War 2, immigrants entered, celebrity of foreign people increased and therefore linguistic communications they brought in came into image. English was made a compulsory capable right from 1849 in secondary schools. Now it ‘s compulsory for all Swedish pupils to larn English. Schools besides offer pupils to larn more linguistic communications other than English like German, Danish, Spanish, Norwegian, Gallic etc.Approximately 73 per centum of the entire population associated themselves with Church of Sweden. Largely people in Sweden do non believe in God or are against God.

This proportion is about 45 % to 85 % . 275000 people are members of legion free churches, 92000 are Roman Catholics, and Hundred Thousand people are Eastern Orthodox Christians. Other prevailing faith in Sweden is Islam because in-migration brought in Muslims. Merely 25000 people worship Islam though 500000 Muslims live in Sweden. Sweden has got really low infant mortality rate and therefore its place is amongst the top five states holding low infant mortality rates.

Market behaviourBuyers and Sellerss involve themselves into concern pacts and negotiate to come in into a concluding understanding. Focus is on both long-run and short term net incomes. Negotiation manner is co-operative. Peoples of Sweden like to work in an orderly mode and they do n’t wish any perturbations and breaks while they work.

Negotiation manner is monochromatic and hence people of Sweden face jobs while pass oning with polychromatic work manner states like Arabs, Asians, and South Europeans. ( Making Business in Sweden, 1974 ) Peoples of Sweden hatred bargaining. Peoples are more concern for fidelity instead than monetary value negotiants. Honesty and to the point conversation is of import for them.For an International Organization, it is really of import non to utilize aggressive tactics while dialogues or seting people of Sweden in any irresistible impulses and force per unit areas because they do n’t wish it. Peoples of Sweden involve other states in promises and follow defensive tactics like inquiring inquiries and look intoing before come ining into pacts. They are non diffident and are blunt and speak openly.

Gifts and other pecuniary benefits to persons for intent are referred to as bribing in Sweden and therefore people should avoid this tactic. Organizations in Sweden are level constructions ; therefore determination devising process involves engagement of most of the members of organisation. Participative determination devising is witnessed. They believe in groundss and do n’t anticipate much while doing any determinations.Organization CultureOrganizations in Sweden maintain friendly relationships with the concern spouses. But there is a particular tendency in doing those relationships. Two Business Organizations are into a relationship if and merely if there is certain trade between them or contracts.

In Sweden, organisations therefore prefer come ining into trades foremost and so keep healthy and friendly relationships. These relationships stand on the pillars of justness, honestness, unity, and dependence. Swedish civilization is all about being informal, polite, diplomatic, humourous, and friendly so maintain concern relationships is non a large trade.

Business relationships are nurtured by carry oning frequent concern parties which are informal by nature and every individual and little accomplishment besides is celebrated which encourages employees to work harder and joy the felicity of accomplishing ends. The relationship between the director and his sub-ordinates is besides friendly. They prefer team work and seek to affect themselves into the working of the squad. This motivates the spirit of co-ordination amongst the squad members. ( Making Business in Sweden, 1974 ) There is no feeling like lower degree and higher degree alternatively there are seniors and juniors. Seniors lead the juniors on the way of success and ever give a back uping manus to the juniors to surpass in the undertaking given to them. Below is statistics supplying utile informations.Geert Hofstede ‘s Framework for cultural dimensions1The above graph shows the value of five dimensions of Hofstede ‘s to mensurate cultural prospective of Sweden.

These five dimensions are:Individuality and Bolshevism: This dimension determines extent to which an person think of himself as a portion of a group or how good he is integrated into a group. Individualism is developed inside the person as a consequence of carelessness in an organisation. The knot between the persons is non tight in a society and that leads to individuality.

By looking at the above graph, Individualism is has got the greatest value among all other dimensions. So HR directors in Sweden value person ‘s clip and their demand for freedom. Challenges are really good acknowledged by persons. Persons are besides given wagess. Persons like privateness and therefore directors should non inquire for personal information.Power Distance Index: determines an extent to which members of an organisation or a steadfast possessing less power thinks that employees are given unequal powers. PDI is non much in the graph for Sweden. Frankincense companies are non centralized, organisations are more planate.

There is no favoritism to a great extent between supervisors and employees.Masculinity ( MAS ) : It determines the function distribution between males and females. The self-asserting poles mean males and modest and caring pole signifies females. Well it ‘s merely the occupation distribution factor and determines the importance of the several genders in several states. It has got the lowermost value. Thus there is no favoritism at all between work forces and adult females in Sweden at work.Uncertainty Avoidance Index: What is the endurance bound of the society for uncertainness and vagueness? Basically it ‘s a Hunt of truth for work forces. Uncertainties can be avoided by implementing rigorous regulations and ordinances, safety and security cheques.

This step shows a bound to which a state civilization can develop or fix its members to experience comfy with the uncertainnesss. Sweden carries informal attitude towards concern, long term planning instead than short term additions and people are good adapted to any alteration and hazards.Long-run Orientation: Opposite to Short Term Orientation. The values that are considered under this dimension are thrift and doggedness and values that come under Short Term Orientation are regard for tradition, societal responsibilities fulfilment, and one ‘s face protection.

It has got 2nd highest value in the graph and therefore moralss, household, equality, higher instruction, and preparation are promoted good above other factors in concern.Economic factorsThe GDP value when considered as PPP is 342,682 billion dollar and per capita GDP is 37,333 dollar while the nominal GDP is 478,961 billion dollar and the per capita is 52, 180 dollar billion. The GNP is $ 35,840 ( in U.S. dollars ) . The Gini is low and the value is 23. The currency is Swedish krona and the HDI is.963 which is really high.

The state exports a batch and it is assorted economic system. It has got work force which is extremely skilled. Country is characterized with good installations of internal and external communicating.Sweden is blessed with lumber, hydropower, and Fe ore and therefore the resource based economic system attracts high foreign trade investings.

Engineering sector constitutes half of the end products and exports. Industries that hold a great importance in Sweden are telecommunication sector, car sector and pharmaceutical sector. The answerability of agribusiness in the gross Domestic merchandise of Sweden is 2 per centum.

Pensions in the private sector companies are extremely encouraged. After the revenue enhancement is levied, an employee receives 40 per centum of his income. Aftre the acceptance of reforms of globalisation and liberalisation Sweden encountered a fast growing in GDP.The GDP growing rate of Sweden is shown in the graph below. the estimated figures for the GDP in 2008 were $ 478.961 billion and Per capita was $ 52,180.The exchange rate is 1 Euro is equal to 9 – 9.

5 SEK.Regulatory EnvironmentLabors in Sweden are members of Unions. Swedish Trade Union Confederation ( LO ) provides association to brotherhoods of which wage-earners are members. Swedish Confederation of Professional Employees ( TCO ) offers association to Unions of which salaried workers are the members.Assorted revenue enhancements like corporate income revenue enhancement, personal income revenue enhancement, Value Added revenue enhancement and assorted other royalties are levied on individual. Corporate income revenue enhancement is cut from the net income that an organisation makes. The rate is 28 per centum.

If 25 per centum of the net income is deposited into revenue enhancement allotment militias than lower corporate income revenue enhancement in levied on company. Sweden ‘s repute is of a high-taxation state because of high income revenue enhancement. The personal income revenue enhancement is approximately 29 to 35 per centum. Income which is apt to income revenue enhancement is above SEK 340,900, people pay a revenue enhancement of 20 per centum.

Income of SEK 507100 is subjected for 25 percent revenue enhancement. Income generated from capital net incomes, dividends and capital involvement is charged 30 per centum.The decrease in the revenue enhancement sums for shortages of value greater than SEK 100000 is 21 % . Tax alleviations are for foreign people who become executives experts, research workers and many more. The Vat rate is 25 per centum but on nutrients and hotel leases merely 12 per centum of VAT is valid.

Transportation system, Newspapers, cultural events, athleticss activities, books, and magazines are feasible to pay merely 6 per centum of VAT. ( Roland Dahlam, 1995 )The Government of Sweden is divided into Parliamentary democracy and Constitutional Monarchy. The Prime Minister of the state is Fredrik Reinfeldt and the Monarch is King Carl XVl Gustaf.State EvaluationSWOT AnalysisStrengths: The country construction of the company is good built and high proportion of population is populating in urban countries. Transport system is developed and therefore non many jobs are faced sing big labour markets. The presence of Baltic Sea can be seen as a medium to transport. Population addition is stable and in-migration is good for the state. The productiveness of the state is singular and an increasing tendency is seen in the GDP growing rate.

It is a assorted economic system and export play a major subscriber to the economic prosperity. Iron ore, lumber and other resources are available in copiousness.Regional Economic differences are non important from Europe ‘s point of position. Employment ratio of work forces and adult females is high. Labor market available with Sweden is immense and the labour is skilled besides. Southern Sweden has got faster agencies of conveyance.

Capital metropolis can be accessed with every agency of conveyance. International connectivity because of flights is comprehensive. Sweden has got advent IT solutionsFailings: The distribution of population is uneven and even regional distribution is uneven.

Southern Sweden and Norrland cost is dumbly populated. Division of parts in footings of Functional and administrative facets differs. Northern Sweden experiences bad climatic conditions and therefore cost of substructure and service costs are high over at that place. Rural countries are shriveling and urban countries are turning.The age proportions are really weak. Almost 75 per centum of aged people are populating in little parts. Smaller parts are dawdling behind in economic prosperity. Entrepreneurship is non a major concern.

Areas of structural alterations and certain parts of Norrland part has high unemployment rate. Industrially one sided countries are prone to market sensitiveness. Specific group of employees are non available in the state required to execute a specific undertaking. Labor market is stiff. In international facet, Sweden has got higher sickness degree.Opportunities: In the parts of Sweden where there is high population denseness, polycentric constructions are strongly concentrated. Relationship between municipalities and vicinities is strong where population is non heavy. Less population and clime airss chances for touristry sector.

The environment is suited and locations are fabulous and therefore pulling immigrants. Unemployed people are guided to populate in countries where there is scarceness of human resources. Municipality services encourage cleanliness therefore bettering environment of vicinities. Sweden is going a mark of assorted International organisations. Fresh labour market is benefited from the development of demographics making chances for them.Productivity and Economic Growth Rate is increasing and therefore good industrial environment can be build up. Industries in the part can be renewed when amalgamate invention systems in Universities, industries and public organisations apply it together.

Younger coevals is more inclined towards Entrepreneurship. Adaptive educational system promotes flexibleness. Clean milieus and hygienic ambiance does n’t welcome diseases and therefore absenteeism is less in Sweden. Financial solutions promote more investings in telecommunication sector. High velocity trains connect cardinal portion with the outskirts. Advanced IT solutions can assist in bettering the conditions of little countries. Low cost bearers are increasing in Sweden advancing fast conveyance agencies.Menaces: there is weak fluctuation between administrative and functional countries because of dead ends of political and regional nature.

Menaces to environment are increasing pollution and industrial development. They are destructing the attraction of the location in Sweden. Uneven age distribution because of migration forms of immature people. Recession threw the state in convulsion and caused population motion. Globalization poses menace of rivals from abroad to local companies.

Productivity within service sector is non high and therefore competition from abroad is tough.Price addition for resources presenting menace to resource based industry. Labor market is inflexible and development in demographics doing labour market deficit. Trained work force is in scarce and hence concerns are acquiring relocated and investings are shriveling. Petro monetary values are billowing and therefore conveyance is acquiring costlier. Oil monetary values daze affected touristry, conveyance and besides exports. Sweden has non got good co-ordination from cross boundary line states for conveyance agencies.

Phase of Product Life CycleThe analogy behind the merchandise life rhythm is same as that of the biological life rhythm. A merchandise besides is foremost launched in the market merely like the seed is planted in land. Then there is growing of both the merchandise in the market and the seed in the land. The growing of the merchandise is in the footings of clients it is able to pull. Then there is the phase of adulthood in which the works becomes an grownup and the merchandise reaches a stable place in the market.

Then there is a worsening age in which the works dies of age and the merchandise in market can non contend with the more powerful rivals and resignations and diminutions. If a merchandise is able to last the debut stage so it becomes easy for it to capture the market and make stabilisation. While it reaches to worsening age, it can last if promoted, to prolong the everlasting competition.Sweden ‘s industrial sector has passed the debut stage and is on the stoping border of the growing stage. It will shortly come in into the adulthood stage. VOLVO, ERICSSON, ELECTROLUX are some of the major trade names originated from Sweden executing concerns worldwide.

Industrial promotion is certain because of promotion in IT and therefore the turning stage is yet to finish for Sweden.Main Focus AreaTechnology is progressing twenty-four hours by twenty-four hours and promotion in IT sector is apparent. Thus the country in Sweden which is pulling foreign direct investings is telecom sector, electronic sector, automotive sector, and biological Fieldss. World Bank and International Finance Corporation placed Sweden in the top 10 states which was characterized on the footing of how easy is it to get down and shut a concern in the state, handiness of human resource and protection of concern money. The regulative environment of Sweden does non enforce any trade barriers and therefore concern grows good.

Sweden provides platform to companies implementing Wireless Technology to execute researches.The list unveiled in 2003 by World times Information Society Index gave figure 1 place to Sweden in footings of taking advantage from the industrial revolution taking topographic point. Sweden scored highest points because of its high digital entree.

The costs of operation incorporate electric power costs, telecommunication costs and country costs. This operational cost is low in Sweden. The merchandise penetrates the market four times faster than other European states.

Thus the chief focal point countries are telecommunication and IT. Compaq, Hewlett-Packard, Microsoft, Nokia, IBM, Intel, Siemens, Sun Microsystems, and Motorola are some of the elephantine companies holding runing centres in Sweden.