Aspects of the Business Environment for National Floorcoverings Ltd. Expanding to Germany

Aspects of the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
COMPANY OUTLINE...................................................................................................................1
ASPECT OF BUSINESS ENVIRONMENT..................................................................................1
EXPANSION OF BUSINESSES....................................................................................................6
RECOMMENDATIONS.................................................................................................................7
CONCLUSION................................................................................................................................8
References:.......................................................................................................................................9

INTRODUCTION
Sum total of all those activities which influence the business operations are defined as the
business environment. It plays an important role in the success of any business. While any
business organisation performing the operations in any country, they should firstly analyse the
environment and then make any decision. Below mentioned report is based on National
Floorcoverings Ltd. which is a producer of fibre carpets, indoor and outdoor sports surfaces. The
purpose of making this report is to analyse the business environment when the company is
expanding their business from United Kingdom to EU country i.e. Germany. This report also
deal with the mode of expansion chosen by the National Floorcoverings Ltd.
COMPANY OUTLINE
National Floorcoverings Ltd. is a small manufacturing company which is located in
Liversedge, United Kingdom doing production of fabric carpets along with the indoor and
outdoor sports surfaces. From a recent report it is found that there are 126 employees are
working in this organisation and the revenue is they generate is $28.41 million (USD). The
organisation wants to earn high profit by covering more customers, they decide to expand their
business operations in Germany.
The management of National Floorcoverings Ltd. Select Germany for the expansion of
their business operations because they have prosperous economy (Rico and et. al., 2020). It
means that the Germany is the largest economy in Europe. Along with this, it is also analysed
that the Germany has the highest GDP. It means that Germany is the largest consumer market in
the entire Europe. This country touches the boundaries of nine countries which include Poland,
The Czech Republic, Switzerland, Austria, France, Luxembourg, Belgium, The Netherlands and
Denmark. Hence it is the best location for the shows related to the trade. Germany country is
well known because of higher reputation in innovation and productivity, it implies that their
workforce is highly skilled which always implies positive impact on the business.
ASPECT OF BUSINESS ENVIRONMENT
It is found as essential to know about the factors of business environment which implies
affect on the business operations (Pedi 2021). PESTEL analysis is a marketing tool which is used
by the companies for the purpose of doing evaluation of external factors of a business
organisation. National Floorcoverings Ltd. is working in UK and now they want to start their
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business operations in Germany. The external factors get different from country to country,
which is a huge challenge for the organisation to adopt all the changes. Below mentioned is the
detailed discussion on all the aspects of business environment:
 Political Factors: These factors has vital role in knowing about the factors which can
impact the profitability of National Floorcoverings Ltd. in a specific market or country.
They are performing business operations in more than 130 countries and expose
themselves. Germany is a democratic republic country. This organisation can take the
advantage of stability of politic. Bureaucracy bring various changes in the operations of
business organisation in United Kingdom. Expansion of business in the Germany will
remove all these changes and give a stable working environment which implies
generation of higher revenue.
Taxation policy is the another political factor which is beneficial for National
Floorcoverings Ltd. as the organisation have to pay higher taxes while they are working
in the United Kingdom but if they expand their business in Germany, it will result in
earning higher profit because of less tax rates. The organisation will pay less amount of
tax (Mann 2020). Along with this, wage legislation of both the countries are different. It
is found that the organisation have to less wages to the workforce of Germany because
of their wage legislation.
Rules and regulations regarding the pricing of products in UK and Germany are
different. The pricing strategy of Germany is much beneficial for the organisation as it
will help them in charging high prices from their customers.
National Floorcoverings Ltd. will also get the benefit of trade regulation. They
can do the business globally without paying any extra charges and fees. Basically, the
political stability of Germany attract the National Floorcoverings Ltd. to start the
business operations there. There is less availability of risk of military invasion. It can be
consider as the another political factor which implies benefit to the organisation. The
government of Germany provide various benefits regarding the contract enforcement.
The organisation will also get the benefit of several anti trust laws which are developed
by the government of Germany. The workforce of Germany can work more hours in a
week as compared to the labour of United Kingdom.
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