Evaluation of Germany’s Business Environment for Global Business Expansion

This report evaluates the business environment in Germany for global business expansion, focusing on political, economic, social, technological, legal, and environmental factors. It discusses the opportunities and threats for a UK-based company, DoorMate, planning to expand their business in Germany.

Global Business in Context

Table of Contents
INTRODUCTION...........................................................................................................................3
Evaluation of Germany’s business environment.............................................................................3
PESTLE analysis....................................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Global business refers to international business within numerous countries where in a
company is willing to expand their business across the globe. For this businesses are required to
adopt various strategies so as to make the business successful. This report includes various
aspects which are related to expansion of business of DoorMate which is a UK based company.
They deal in door hardware and currently willing to expand their business in Germany. So this
report is the sum of their opportunities within business environment so as to make the company
aware about threat and market opportunities (Ajmal, Helo and Kassem, 2017).
Evaluation of Germany’s business environment
Business environment is the sum of all external and internal factors which are having
impact over business such as political factors, customer needs, suppliers, social trends, market
trends etc. There are various factors which are to be analysed when a business is having global
expansion and those factors are analysed with the help of PESTLE analysis.
PESTLE analysis
PESTLE analysis is a framework which can be use so as to examine political, economic,
social, technological, legal and environmental factors those are having impact over businesses.
These are external factors which are having prominent impact over business operation. As
DoorMate is planning to expand their business within Germany so they are required to analyse
external environment of Germany which is elaborated as under:
Political factors
As everyone knows that Germany is a republic of democracy with chancellor as head of
the government. Germany is a member of big organisations such as IMF, G20, World Bank etc.
That means the country is having ample power and hold over other nations which makes it a
financial strong country that is able to take decision on their own behalf. Brexit is having major
impact over their political stability as the country is facing disruption within their political
aspects. The country is having high their past history of high political stability so this is giving
them high end power to deal with this upheaval. In the context of DoorMate they are planning to

expand their business over Germany, so this nation is having political stability and this is giving
the company immense opportunity to initiate their business. Germany supports their external
investors so this is rendering DoorMate huge opportunities to grow within that market. political
factors involves fiscal policy and trade tariffs so this is the major threat for DoorMate as this may
be high and they will have to lose their profits. So it can be concluded that political factors are
having both opportunities and threats for them to expand their business in Germany (Boshyk,
2016).
Economic factors
Germany is one of the largest countries within globe and stands at number four when it is
about economy. The country is having high GDP rate which resultantly make the country a
robust economic sound country. Germany is consists of mix economy and contains huge skills
labour within their country due to which their production rate is higher than other countries. On
the other hand Germany is having very strong infrastructural facilities which are rendering
growth to any of the business within country itself. Whereas country is having very fluctuating
economic environment due to exchange rate effects. So DoorMate is having huge opportunities
to flourish as they are having innovative products of door hardware and economy of Germany is
keen to give entry to new and innovative technology. Whereas rules of FDI in Germany have
huge impact over DoorMate as they are planning to expand their business in Germany.
Furthermore economic factors includes power of purchasing of country and due to sound
economy per capita income in Germany is more than average so they are not having any
implications from this (Kara and Fırat, 2018). On the contrary due to high fluctuations in
exchange rates DoorMate is having threat as this may hamper their profitability and it is not a
multinational company so they do not have much funds to take burden of losses. So it has been
seen that economic factors within Germany is having large opportunities and threats for
DoorMate within their expansion.

Social factors
These factors include cultural trends and taste and preferences of customer or mass
population within a country. Germany stands at number one position when it is about technology
and sue of technology advanced machines or methodology within their businesses and other
areas. People of Germany are keen to use new technologies and upgraded products which are
innovative in nature and have some technological advanced features. Furthermore life
expectancy rate of germens are very high as it stands at 83 for female and 78n for men. This
proves that they have a culture where people are encouraged and healthy lifestyle is followed by
them. In context of DoorMate, the company is willing to get enter into German markets with
their door hardware, the company is having high expantancy to survive within global business
environment of Germany as the citizens of Germany are prone to use and encourage that product
which are having some specific features and have some distinct advancement. DoorMate is
manufacturing high class quality door hardware which can be used by people so as to enhance
beauty of their houses and other places. On the contrary in Germany technology may become
obsolete in a very short span of time as the country is highly advanced. So this is a threat for
DoorMate to grow their business within the country (Buckley, Doh and Benischke, 2017). In
order to deal with this situation company is required to focus on their product at all the time and
upgrade it as per the requirement of their potential customers.
Technological factors
These factors include any innovation within technology which is having positive or
negative impact over business operations. Germany is a well-known country for their science,
innovations and technology. Their manufactured machines are recognised in the globe at a very
prominent identity. Germany is the hub of best automobile and mobile manufacturer and their
quality can never be beat by any other competitors. Germany has enhanced their expertise in
various sector such as engineering, infrastructure, medicine and many more which is the super
power of country and due to this the latest technologies are adapted by businesses in Germany.
In the background of DoorMate, the company is planning to get enter into markets of Germany
with their door hardware. The company is having opportunity within Germany in such a manner
that they will have chance to use highly upgraded manufacturing equipment which will render
them highest capacity and best quality within their products. So by this DoorMate is having a

vast opportunity to cater within markets of Germany and enhance their market share. Further
Germany is having high focus on using AI and machine learning within their businesses so this
increases the overall cost (Civelek and et. al., 2016). Being a small company DoorMate may not
be able to invest their high proportion of `capital over technology so this can create threat for
them. So from above discussion it can be concluded that DoorMate is having opportunities and
threat within technological aspect in Germany.
Legal factors
Legal factors includes impact of legal laws exist in a country over business environment
and business operations. These laws are related to labour, food safety and consumer safety which
are required to be enforced by each and every business so as to stay away from any legal suit
which may cause them loss of goodwill and market share. Germnay is having policy that they
promote business of their own citizen and foreign investors as well. The country is having strong
norms to protect their investors and their citizens. On the other hand this support encourages any
foreign investors to invest in Germany and enhance their market share and expand their business
within foreign boundaries. In the light of DoorMate the company is having huge opportunity
within germnay as the country is not having such rigid rules for their foreign investors instead
they welcome them. So DoorMate can get into the country with their production plant and
enhance their customer capture base so as to serve foreign clients and earn immense profit by
becoming prominent company within Germany. On the contrary Germany is a highly developed
country so number of competitoes will also be huge so DoorMate is required to make strategies
to deal with them. So in context of this factor DoorMat is having high opportunity to grow within
German market due to less intervention of governmental laws and high power to foreign
investors (Hamilton and Webster, 2018).
Environmental factors
These factors are associated with environmental surroundings which is having high
impact on business operation and its profitability. In the present case Germany is facing
problems of global warming, changes in environmental conditions and environmental pollution.
As the country is high on technology so it is natural that they have to face its negative
implication such as environmental pollution. Country is having high industrial wastages as they

have huge number of industries which is resultantly affecting environment in adverse manner. In
order to deal with this solution the country is focusing on solar plants as by this Germany has
become the largest manufacture of wind farms, wind turbines and solar park due to which they
are saving high energy and adopting sustainable business practices. In context of DoorMate the
company is already a business which believes in sustainable business practices, in their UK plant
they are adopting such practices so as to reduce waste and minimise their cost so as to earn high
profits. So in Germany the company will have high opportunity to grow their business with the
use of such practices as they will not feel any problem in using those practices. This will assist
the country to enhance their climate level and due to which environmental harm can be
minimised (Doh and et. al., 2017). Furthermore DoorMate is having option to use fossil fuel
within their business during production process, this will render them low cost production
technique and alternative over energy sources. So this acts as an opportunity for DoorMate so as
to start their production in Germany. But in contrary alternative energy sources are having
additional investment over capital which may lead the company to earn lesser profit and this may
prove as a burden to the company. So it can be concluded that this factor is having negative and
positive implication their production decision within Germany.
So above it the discussion related to business environment of Germany, all these factors
are having prominent effect on the business of DoorMate as they are acting as important aspect
within business. With high political stability Germany is having robust hold over their economy
and they contain an effective position in world’s economy as well. On the other hand their
technological skills and expertise makes their economy more robust due to which they are
welcoming any foreign investors without unnecessary interventions. With these factors
DoorMate is having huge opportunities to decide about moving their production within Germany
so as to capture more market and expand their business in such a country which is having high
values for their businesses and industries (Meyer and Peng, 2016)
.

CONCLUSION
From the above detailed discussion it can be concluded that business environment is
required to be analysed when business is ready for their expansion so as to analyse growth and
possibilities of failure in order to make preventive strategies to deal with those situations.
Business environment is the dynamic in nature which includes all the factors that are having
significant impact over industry or business such as political, legal, environmental, economic,
technological, social factors (Ductor and Leiva-Leon, 2016). Business environment analysis
helps to tap for useful resources so as to cop up with any significant changes which may occur
within business operations. Further business environment helps the business to get their
improvement so as to stay updated with latest trends and make their planning.

REFERENCES
Books and journals
Ajmal, M., Helo, P. and Kassem, R., 2017. Conceptualizing trust with cultural perspective in
international business operations. Benchmarking: An International Journal.
Boshyk, Y. ed., 2016. Business driven action learning: Global best practices. Springer.
Buckley, P.J., Doh, J.P. and Benischke, M.H., 2017. Towards a renaissance in international
business research? Big questions, grand challenges, and the future of IB
scholarship. Journal of International Business Studies. 48(9). pp.1045-1064.
Civelek, M., Ključnikov, A., Dobrovič, J. and Hudáková, M., 2016. A model of measurement of
the quality of business environment in SME segment. Journal of International Studies.
Doh, J., Rodrigues, S., Saka-Helmhout, A. and Makhija, M., 2017. International business
responses to institutional voids.
Ductor, L. and Leiva-Leon, D., 2016. Dynamics of global business cycle
interdependence. Journal of International Economics, 102, pp.110-127.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Kara, M.E. and Fırat, S.Ü.O., 2018. Sustainability, risk, and business intelligence in supply
chains. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications (pp. 1424-1461). IGI Global.
Meyer, K. and Peng, M.W., 2016. International business. Cengage Learning.
Peng, M.W., 2016. Global business. Cengage learning.