P - POLITICALTHE PESTAL E – ECONOMIC FACTORS S – SOCIAL & CULTURAL T- TECHNOLOGICAL E- ENVIRONMENTAL L - LEGAL
Introduction It’s very important that an organization considers its environment before beginning its production, financial or marketing process. In fact, PESTAL analysis could be and needs to be continuous function and feed all aspects of planning.The environment is made up from: The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc. The micro-environment e.g. our external customers, agents and distributors, suppliers, our competitors, etc. The macro-environment e.g. Political (and legal) forces, Economic forces, Socio cultural forces, and Technological forces. These are known as PESTEL factors.
Germany, officially is the Federal Republic of Germany. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 sq km and has a largely seasonal climate. With 81.8 million inhabitants, it is the most populous member state and the largest economy in the European Union. It is one of the major political powers of the European continent and a technological leader in many fields. Germany was a founding member of the European Community in 1957, which became the EU in 1993. It is part of the Schengen Area and since 1999 a member of the eurozone. Germany is a member of the United Nations, NATO, the G8, the G20, the OECD and the Council of Europe, and took a non-permanent seat on the UN Security Council for the 2011–2012 term. It has the worlds fourth largest economy by nominal GDP and the fifth largest by purchasing power parity. It is the second largest exporter and third largest importer of goods. The country has developed a very high standard of living and a comprehensive system of social security. Germany has been the home of many influential scientists and inventors, and is known for its cultural and political history.
Political Factors Germany is a democratic republic. The German political system operates under a framework laid out in the 1949 constitutional document known as the Grundgesetz. Since 1949, the party system has been dominated by the Christian Democratic Union and the Social Democratic Party of Germany with all chancellors hitherto being member of either party The Government of Germany consists of three significant wings, the legislature, the executive and the judiciary represented by the Federal Parliament, the Federal Government and the Federal Constitutional Court, respectively. The President is the formal executive head of the State elected for a term of five years. He appoints the Federal Chancellor (Prime Minister) and his Cabinet. The Chancellor is the real head of the Government elected by a majority vote of the Bundestag. He is responsible for the implementation of the government policy. He can be removed from office only by an absolute majority of the Bundestag coupled with an assured majority for the election of another candidate to the post.
ANGELA MARKEL - CHANCELLORMR. MARKEL – THE PRESIDENT
The Constitution of The Federal Republic of Germany is derived from the Basic Law which came into effect on May 23, 1949 after the consent of the USA, the UK and France to establish the Federal Republic . It lays down the fundamental structure of the government and the value system it should follow. It clearly defines the principles according to which the government is expected to function. Apart from other important details, it describes the process and pattern of election to the supreme legislative organ, the Bundestag. It is the source of authority and the basic guiding philosophy to all those who take upon the reigns of government. It is also a stamp of justification of the freedom and rights of the German citizens.
Economic Factors Germany is relatively poor in raw materials. Only lignite and potash salt are available in economically significant quantities. Power plants burning lignite are one of the main sources of electricity in Germany. Oil, natural gas and other resources are, for the most part, imported from other countries. Germany imports about two thirds of its energy. The service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Most of the countrys products are in engineering, especially in automobiles, machinery, metals, and chemical goods. Germany is the leading producer of wind turbines and solar power technology in the world. The largest annual international trade fairs and congresses are held in several German cities such as Hanover, Frankfurt, and Berlin.
Of the worlds 500 largest stock market listed companies measured by revenue, the Fortune Global 500, 37 are headquartered in Germany. In 2010 the ten largest were Volkswagen, Allianz, E.ON, Daimler, Siemens, Metro, Deutsche Telekom, Munich Re, BASF, and BMW. Other large German companies include: Robert Bosch, ThyssenKrupp, and MAN (diversified industrials); Bayer and Merck (pharmaceuticals); Adidas and Puma (clothing and footwear); Commerzbank and Deutsche Bank (banking and finance); Aldi, Lidl and Edeka (retail); SAP (computer software); Infineon (semiconductors); Henkel (household and personal consumer products); Deutsche Post (logistics); and Hugo Boss (luxury goods). Well known global brands are Mercedes Benz, BMW, Adidas, Audi, Porsche, Volkswagen, DHL, T-Mobile, Lufthansa, SAP, and Nivea. Between 1991 and 2010, 40 mergers & 301 acquisitions with an involvement of German firms with a total known value of 2,422 bil. EUR have been announced. The largest transactions since 1991 are: the acquisition of Mannesmann by Vodafone for 204.8 bil. EUR in 1999, the merger of Daimler-Benz with Chrysler to form DaimlerChrysler in 1998 valued at 36.3 bil. EUR, Deutsche Telekom acquired VoiceStream Wireless Corp for 30.8 bil. EUR in 2000, the sale of T- Mobile USA Inc by Deutsche Telekom to AT&T Inc for 27.6 bil. EUR in 2011.
Socio – Cultural Factors Germany has about 82 million inhabitants. It is by far the largest country in the EU in terms of population. Germany is a modern, cosmopolitan country. Its society is shaped by a plurality of life styles and truly different ethno- cultural diversity. Forms of coexistence have become more varied. Traditional gender roles have been dispensed with. Despite the social changes, the family remains the most important social reference unit and young people have very close bonds with their parents
Architecture: The varied styles, the precursors of Romanesque contributed to thearchitectural styles of Germany. The diverse architectural styles of the country is aresult of fragmentation of the country during centuries. Abbey Church of St.Michaels, Speyer Cathedral and the Cologne Cathedral are the major architecturalsites that are the prototype of German architecture.
Music: One of the leading music markets in the world,Germany is home to some of the most well-known classicalmusic composers, including Ludwig van Beethoven, JohannSebastian Bach, Johannes Brahms, and Richard Wagner.
Literature: German literature is world-famous and datesback to the Middle Ages. Johann Wolfgang von Goetheand Friedrich Schiller, Thomas Mann, Bertolt Brecht, andHermann Hesse are some of the most renowned Germanauthors. Germany hosts the Frankfurt Book Fair annually;it is the biggest book fair in the world.Sports: Germany has been represented in variousinternational sporting events including Formula One, FIFAWorld Cup, Summer Olympics, ice hockey, and tennistournaments. One of the leading motor sports countries inthe world, Germany is known for the manufacture ofmotor brands such as BMW and Mercedes.German Art: Germany has produced some of the bestpieces of art work and has a long tradition in visual arts.Hans Holbein the Younger, and Matthias Grunewald werethe major Renaissance artists. Print making, woodengravings and Gothic art of the sixteenth century aresome of the major German innovations.
Technological Factors Germany supports national science and technology at many levels. There are independent laboratories, comprised of both the national laboratories and private research. In addition, German industry supports many important types of research and development, and the German states, provide still more resources for scientific research. The Ministry for Science and Technology, an organization coordinates and sets priorities for the entire national science and technology program for Germany. Finally, Germanys participation in the European Union also has a significant science and technology component—Germany provides funding, scientists, and laboratories for broad European research and development. Germany has numerous universities and colleges offering courses in basic and applied sciences. The Natural History Museum in Berlin has geological,, mineralogical, zoological, and botanical components. The country has numerous specialized learned societies concerned with agriculture and veterinary science, medicine, the natural sciences, and technology.
Germany’s greatest strength is its automobile industry. In the years to come, many emerging technologies, from optical communication links to nanotech mate-rials, will find their way into cars. Technological innovation will be critical to creating the opportunities that will lead German carmakers and their suppliers out of their current trouble. In particular, German carmakers are betting on computer-based assistance systems that could make driving safer and more comfortable. Example: BMW is working on wireless networks for cars that will automatically set up connections among vehicles in order to exchange critical sensor information; a car that detects a slippery stretch of pavement, for instance, could relay that information to other cars on the same road. The goal is to create networks of intercommunicating cars that could someday form a sort of automotive Internet. Researchers at the University of Stuttgart, in collaboration with other German carmakers, are also designing and testing systems to assist drivers at intersections. Such systems might combine information from traffic lights or signs with onboard-sensor data about other vehicles and their speed or distance in order to get the drivers safely across.
Environmental factorsChanges in the atmosphere and climate system are amongthe greatest environmental and political challenges of the21st century. Climate change, which has largely beencaused by human activity, is the global challenge. In theinternational arena, Germany is a forerunner in climateand energy policies and seeks to achieve ambitiousemission-reduction goals. With the 2011 decision to optout of nuclear energy and to decommission the lastnuclear power station by 2022 at the latest, Germany issending out a signal that has been respected throughoutthe world.
As a well-developed industrialized nation with a highpopulation density, Germany finds itself particularlydependent on natural resources. Understanding theseresources are limited and the impact the continual drainextracting those resources has on the environment,Germany continues to take steps to ensure that not onlyare those resources available for meeting their everydayneeds, but that the country’s needs are met withoutleaving any long-term negative impact on theenvironment. Today, Germany has reached a high level ofenvironmental protection. According to an EnvironmentalPerformance Review Programme of Germany performed afew years ago, Germany held a top position inenvironmental protection worldwide.
Legal Factors The modern German legal system is a system of law which is founded on the principles laid out by the Basic Law for the Federal Republic of Germany, though most of the important laws as for example most regulations of the civil code were developed prior to the 1949 constitution. It is composed of public law which regulates the relations between a citizen and the state or two bodies of the state (including criminal law) and the private law which regulates the relations between two people or companies and the criminal law.
Public law Public law rules the relations between a citizen or private person and an official entity or between two official entities. E.g., a law which determines taxes is always part of the public law, just like the relations between a public authority of the Federation and a public authority of a state (Land).• Administrative law The administrative law is the law of the Executive. It covers most kinds of legal relations between the state and the citizens, but also between different bodies and/or levels of government but not those legal relations, when the state closes contracts like any other private citizen. Private law Private law rules the relations between two private legal entities (for example a buyer and a seller, an employer and an employee, a tenant and a landlord or two entities that act on the same level as private persons. In contrast, whenever a state agency exercises official power, private law is not to
Criminal law Criminal law in the narrow sense of the word is a matter of Federal law in Germany. No one under 14 years old is held responsible for crimes at court, and for people under the age of 18 and in case of missing maturity under the age of 21 there are special courts and some adjustments to the criminal law as well. German law does not know juries. Sentences stretch from fines to life imprisonment. The actual death penalty is explicitly forbidden by the constitution. Extremely dangerous persons can be turned over to psychiatric treatment or have to stay in prison as long as necessary in addition to their punishment. Civil law Civil law determines the relationships among persons and/or legal entities, i.e. those who do not fall into a special category (like merchants or employees). The most important reference of this area is the Civil Law Book is for 5 major parts: the common/general part, the law of obligations, property law, family law and law of succession.
Conclusion With the help of these analysis, we understand that Germany is a technically advanced country, it spends a great amount of money on Research and development. German culture gives importance to Music, Literature and its Family and these factors still have a strong hold in their lives. Germany is also considered to have a vey god scenic beauty. Germany is a peaceful nation to conduct business, but German Law is very particular when it deals with the organizations who cause any kind of harm to its nature and people. We need to understand that Germany still has a great potential to grow as their people are very much educated and scientifically advanced due to their research and strive