Pest analysis of Germany

Pest analysis of Germany (European country)

GERMANY
Introduction
Germany exports and imports various types of products in the market and it is on the 2nd
position in relation to the exports and also on the 3rd position in terms of the imports. Germans
also maintain a high standard of living and social security. Berlin is the capital of Germany
(OEC, 2019). In this paper, the discussion will be related to the PEST ANALYSIS of
"GERMANY" which is the part of the European country. This paper will evaluate the different
factors such as political, economic, social and technological, as it could help to attain the large
market share in the competitive market. These `factors are essential and it should be considered
as it can assist in enhancing the market share.
PEST ANALYSIS
Political factor
It has been observed that the country is considered as a democratic republic and the
political system which operated is named as "Grundgesetz". The Democratic Party which is
linked with society and also the Christian unions led the political system in 1949. It is seen that
government of the country is divided into three parts such as the legislature, judiciary and
executives. The local government decides the entire business policies of the location including
the taxes (De Vreese, Esser & Hopmann, 2016). It has been examined that the country also focus
on the wide network of 229 diplomatic missions and it also manage connections in 190 countries.
It is also the biggest contributors to the budget of the European Union and the third largest
contributor to the United Nations. The country is considered as the part of the NATO defense
alliance, which is also company of development and coordination in the overall economy (Watts,
2016).
Germany has also maintained the alliance with France. The country has a membership of
the global companies like the UN and IMF. If the business has to be conducted in the country, it
is necessary to focus on these aspects so that it could be easy to attain a large market share in the
competitive market. The constitution of Germany focuses on the fundamental structure of the
government. In the present scenario, the political parties are negotiating with the government
(Gabriel, Kerrouche, Schüttemeyer & Siefken, 2018). The European Commission has considered
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GERMANY
taking action against the rising current account surplus. But the German government has not
responded, even though the overall size of its surplus breaks the rules of the EU. Germany
focused on austerity and also of the implications of the entire EU (Mayer & Schultze, 2018).
From the starting of the European Debt crisis, it has been analyzed that France criticized the
macroeconomics of Germany without influencing the policy of Merkel's. Also, the French
president Emmanuel Macron showed diplomatic skill and also the overall understanding of the
political struggles in relation to Merkel's.
Therefore, this has impacted the activities or the operations in the European country. It is
necessary for companies, to emphasize on different political aspects as it could be simple to
consider accurate decisions in relation to manage the operations (Muir, 2015). Germany boosted
the good alliance with the other country such as France at the time of the World War II. It is
analyzed that government of Germany and the United States have close political relations. In
1948, the Marshall Plan and strong cultural ties have also maintained good relation with the two
countries (Baynes, 2016). The two countries can be considered as the economically
interdependent as 8.8% of the German exports are from the US bound and 6.6% of the German
imports are originated from U.S (Gilpin, 2016).
Therefore, the changes made in the political system have affected the overall operations
that are taking place in Germany. But to invest in the growth, it is important for the companies to
emphasize on considering the political factors so that it could be easy to manage the operations
in the market (Bekker, Hipp, Leschke & Molitor, 2017). It will also assist in maintaining the
customer base which can enhance the overall customer base and maintain the operations of the
business in an effective manner. But in Germany, there are many issues which took place in
relation to the political scenario, so it is necessary to consider all the aspects as it helps to boost
the market share of the company (Welch, 2016).
Economic factor
In comparison with the other countries, it has been seen that the raw materials are
comparatively low. The country has only potash and lignite in a sufficient amount. The power
plants such as lignite are considered as one of the important sources for the Germans. It is one of
the leading producers of solar power technology and also of the wind turbines. There are many
other resources such as natural gas and oil that are from different countries (Friedman, 2017).
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GERMANY
The country imports two third of the energy and then only it is known as the 3rd largest energy
importer on the global platform. It is seen that the service sector have 70% of the GDP and the
German cities such as Berlin and Hanover manage the biggest annual international trade fairs. It
has been observed that Germany has a social market economy and is on the 4th position in
nominal GDP. The GDP of $3.747 trillion and the GDP growth is of 1.8% (Kraus, Richter,
Papagiannidis & Durst, 2015). The average national unemployment rate is 6.8% and 50 Billion is
approved as the billion economic stimulus plans which boosted the overall fortune of the 500
companies in Germany. There are more than 500 companies with headquarter in Germany and
the country has a large market share of Automobiles, metals, machinery and also chemical
goods. Also, the biggest national economy in Europe and it is on the second position in relation
to the exporter with the $1.408 Trillion exported in 2011 (Lehmann & Wohlrabe, 2017).
Company has significant trading partners that are France, Netherlands, USA and also
Great Britain. The popular brands that exist are Mercedes, Benz, BMW and Bosch. Germany is
considered as the modern economy which provides above average employment opportunities and
it has an important role in relation to the economy of the knowledge and has an important role in
the generating the innovative ideas. The investor's rate on the international level in Germany is
the important aspects which in the country. Direct investment from the outside of the country is
now on a high position with EUR 460 Billion. Germany is the developed nation with the huge
industrial capability (Jones, 2015). It is on the 5th position in relation to the largest economy
which serves the companies to boost their sales and also it helps to earn more profits in the
highly competitive market. Germany also shares 9% of total world trade but there are various
issues which are faced as the economic challenge just because of the Eurozone Crisis.
Infrastructural provisions are good in Germany that shows that business growth in the market
(Vu, 2016).
By having a wide scope of infrastructure, it could be simple for the companies to invest
in the companies as it boosts the sales and also the operations of the business in the market. The
overall GDP growth is approximately 0.6% in the year 2012 (López Prol & Steininger, 2018).
Due to the highly predictable external environment, the negative impact is on the overall
operations. So, it is stated that the domestic demand has played a important role in the entire
economy growth (Fritsch, Kritikos & Pijnenburg, 2015).
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