Analyze international and external market factors, political factors, and cultural factors and use this information to predict communication challenges that your organization could

Sample Milestone 3 : NHL to Portugal

Target Market Factors.

Internal and External Market Factors. Portugal has internal and external market

factors that affect business operations. The internal market factors are variables within a country

that can be anything affecting economic development, infrastructure, natural disasters, and

corruption (Jensen, 2017). Any variable within the financial, physical, or human recourses such

as investments and funding, locations and facilities, and employees and target audiences. The

external factors are variables outside of the country that affects their success such as political,

economic, social, competitive, environmental, and technological factors.

Internal Factors As the NHL enters Portugal, it will encounter some internal challenges.

Portugal is the 15th country in the world with the best infrastructures (República

Portuguesa, 2022). They are ranked fourth for the quality of the roads, twenty-fifth for quality of

ports, twenty-fourth for quality of air transport, and twenty-fifth for railroad infrastructure. This

shows that Portugal is a reliable supply chain and can effectively and efficiently import and

export goods and services across its border. This will be a benefit in bringing the NHL to them as

they can be easily transported safely and quickly to any hotels, public spacing, or care centers

they may need. The innovation of bringing the NHL to Portugal is also a new idea that can

benefit the overall success rate. The introduction of new and improved technology to an

underdeveloped country can increase productivity, brand value, and competitiveness.

External Factors. In Portugal, the external environment has factors that affect the

organization but is out of the organization’s control. It is important to acknowledge all possible

external factors otherwise it can be damaging to a company since they do not know how to

monitor, handle, or adapt to the situation. It is also vital to be well-informed about the economy

because it is hard for businesses and organizations to survive in poor economies. Over the past

few years, Portugal has been in an economic downfall that was caused by the government’s

inability to find foreign capital in their country. The process of importing and exporting products

into their country has been slow and is slowly improving. The competition in Portugal is also

extremely because it is not a free market, so bringing the NHL into the market benefits them in

certain aspects. There are similar market sectors all around the world, whether they are a new

entry into the market, or have been there for a while, the organizations will always be

challenging similar markets.

Political Factors. The expansions of sports internationally can deal with political factors

affecting the business. The political environment that countries create can generate risks and

impact the organization in many ways. Depending on the type of environment, it can impact the

friendliness of that business in a new country. The government overlooks and has a lot of power

over the importing businesses, but there is nothing the businesses or organizations can do if they

want to expand to another country. Some political factors can arise for the expansion of the NHL

to Portugal. One political factor is the current tax policy in Portugal. Generally, corporations pay

a flat tax rate of 21% of all taxable profits. This is significantly lower than previous years,

however, when an organization enters a foreign market many operating expenses need to be paid.

The Portuguese government can raise or lower the corporation tax, which will benefit the profit.

They also have the power to “increase value-added tax on products or business rates” which can

provide a stable base of revenue and give a stronger incentive for the business to control the

costs. The government also has the authority to “create subsidies, tax the public to give back to

the organization, add taxes to foreign products or services to increase the process and make the

domestic products and services more appealing” (Hall, 2021). A way in which the NHL can

approach these factors to the Portuguese government is by showing them the forecasted attention

and popularity the country will get because they are expanding the NHL to them. It expands the

culture and creates more brand recognition and grows a presence in foreign markets.

Cultural Factors. There are not many cultural factors for the NHL to take into

consideration when expanding to Portugal. A vast majority of Portugal is Catholic (81%);

however, they are non-practicing meaning they don’t show their religion or take cultural steps in

expressing themselves (OECD, 2022). The only ‘cultural aspect’ to consider is the soccer culture

they have created throughout the nation. Portugal’s National Soccer team is consistently in the

top ten over the past years and is sometimes top five in FIFA world-ranked positions. The rituals

that this team has brought to the nation created a tight-knit culture that will forever leave a

legacy. As soccer had peaked over the years, any time there is a game being played, it is aired on

every television across the nation. One consideration that the NHL would have to take is to make

sure that the schedules lined up and there is not a hockey game played on the same day as

Portugal’s men’s soccer game. This would allow the futebol culture to continue and gain the

interest of those fans to NHL games that are played on the off days.

Communication Challenges Predictions. When expanding internationally to a foreign

market, there are always going to be new challenges that arise, the main one being

communication. The linguistics from the United States and Portugal vary, although there is an

“89% lexical similarity”. There are over 41 million people who speak Spanish, or have Spanish

as a second language, and can compare the similarity of Portuguese and Spanish (IMF, 2022).

Portuguese is also the official language in nine other countries, where ancestors of some players

in the NHL may already know how to speak it and have taught others. Portuguese is the 6th most

spoken language worldwide and is predicted to grow to an additional 75 million people in the

next twenty-seven years. Aside from the language spoken, facial and body expressions are used

very often. Americans are known to talk with their hands a lot, however, in Portugal, certain

hand gestures may take it as offensive as they generally use faster and louder tones to express

feelings. The way to overcome their communication challenges is to discuss the cultural

differences and learn more about their culture, use visuals to better comprehend words and

phrases, and communicate slowly with gestures for repetition purposes.

What the NHL Can Offer to Portugal That is Missing. The NHL has a lot to offer as a

for-profit organization that has thirty franchises. Currently, Portugal only has the rights to Sports

TV to watch the NHL games, however, there could be other alternatives to air live games and

create more television traffic. Portugal has also been a part of the International Ice Hockey

Federation since 1999, so Hockey is known, however, the NHL can further promote or sponsor

an event to increase their brand recognition. Additionally, their economy is not that strong, and

they only have a strong emphasis on Futebol (soccer) because it is the most popular sport

throughout their nation (Bree, 2021). All their money funds the football teams there and

promotes them as much as possible. One thing that the NHL can offer to Portugal is the emphasis

of being a professional hockey team that is ranked one of the top four sports in the world. If

another sport enters their country and is just as popular as futebol is now, it will generate more

flow into their country and build their economy and infrastructure. Portugal is lacking the

variation and diversity of sports in their country, which is why the NHL can strongly help them

and show them a new sports culture.

Direct and Indirect Competitors. Direct competitors are two or more businesses that

offer the same product or service and compete for the same market (Wix, 2019). The direct

competitor that the NHL would face is the Portugal Men’s National Ice Hockey Team with the

same target audience, producing and delivering the same product. They are not as popular as the

futebol team because the futebol team has made it to the Euro World Cups and has competed at

high levels, creating a winning and intense culture for the futebol fans, however, they are similar

to the NHL. The indirect competitors are those that offer different products or services but are

competing with the same market to satisfy the same customer needs (Wix, 2019). In Portugal,

their indirect competitor is the Portugal National Futebol team. They deliver a different product,

but target the same people in their nation as you group them as ‘sports fans.’ This is also the

most practiced sport in their country as they are one of the higher-rated teams internationally.

Their passion for the nation follows this sport for over one hundred years. They follow traditions

they have done since the start of the teams and are very superstitious.

Demographics. The current population in Portugal stands at 10,115,053 residents. It is

split almost perfectly with 4,901,081 males which are 48.5% of the population and 5,213,971

females which is 51.5% of the population (Country Meters, 2022). This is a decrease of -0.45%

compared to the 2021 year. Christianity is the dominant religion in Portugal with 93.8% of the

total population (Country Meters, 2022). The next highest percentage is 4.4% of the population

which is religiously unaffiliated, and the rest being Buddhism at 0.6%, Islamic at 0.6%, Folk

Religions at 0.5%, and Hinduism at 0.1% (Country Meters, 2022). Most of the population,

65.8%, ages from 15 and 65 years old, 16.2% are under 15 years old, and 18% are over 65

(Country Meters, 2022). The women typically live until 82, whereas the men live to about 75.

Media Usage. The biggest competitor for the NHL is the Portugal futebol team. The way

they use social media platforms to promote themselves has benefitted them tremendously,

creating a great following. Instagram is their largest platform with 9.1 million followers. All their

games are also televised on Premier Sports, Free Sport, and BT Sport, where they also get fans to

subscribe to these channels. Portugal’s National Futebol team is also sponsored by Nike and

have a partnership since 1997 (Pitts, 2020). Nike has a following of 92 million followers, being

the second-largest brand, and Portugal’s largest supplier. Portugal also has smaller sponsorships

with six Portuguese brands that mainly target European countries. These media usages are

effective with the Portuguese demographics because typically all social media platforms are used

by children at the ages of 11 or 12 and used by about 40% of people over the age of 65

(Breeding, 2021). Depicted in Exhibit A, you can see the Portugal age structure as of 2022. The

65.8% of 15-to-64-year-old, plus the 40% of 65 and older and approximately 40% of the 15

years or younger population shows that approximately 80% of Portugal’s population uses social

media, which is why their forms of promotion have benefitted them tremendously (Hendersen,

2022).

How the NHL is Different from Competitors in Portugal. The NHL differs greatly

from the competition that is already established in Portugal. The NHL, unlike the National Ice

Hockey team in Portugal, has international players scattered throughout their 30 franchises. This

creates large brand recognition in many nations as players across 20 countries contribute to the

league. The ice hockey team in Portugal is restricted to Portuguese players only which can limit

the talent level and the culture others bring to the game. The NHL promotes the idea that

everyone is welcomed, and they want to “improve lives and strengthen communities globally”

(NHL PR, 2017). They also differ from their indirect competitors as they would offer variety to

their country. Although their futebol team is the most popular, having multiple options and

opportunities for fans and players gives more support as to why the NHL can benefit their nation.

Pricing. Event prices for attending sporting events in Portugal can vary based on who is

playing, what seats are chosen, and what venue the game is played at. It also depends on what

type of game they are competing in, whether it is preseason games, regular-season game play,

Nations League, or World Cups. The closer you are to the field, the more expensive the tickets

will be which average from $75 to $400. Currently, the cheapest tickets are $111 in the top

sections, $158 behind each goal, $171 to be center field, and $261 to have platinum seats by the

benches (Seat Pick, 2022). The three main arenas in Portugal hold about 40,000 to 50,000 people

with an additional parking fee as well. As for the hockey arena, this space holds 20,000 fans with

tickets around $50 to $150. As the seats are closer to the ice the prices are $130 to $150 and have

the seats are higher, they are closer to $50 to $85 (Smith, 2022).