PESTEL Analysis of Germany for Smog Free Bicycle Company

This report provides a PESTEL analysis of Germany for Smog Free Bicycle Company to determine whether they should enter the market. The report analyzes legal, environmental, and social factors and provides recommendations. The report finds that Germany is an eco-friendly country with laws, policies, and regulations that promote cycling and restrict car usage. The report recommends that Smog Free Bicycle Company enter the market due to the high usage of bicycles, the development of bike infrastructure, and the decrease in cyclist fatalities.

Running head: STRATEGIC MARKETING
Strategic Marketing
Name of the Student
Name of the University
Author note

Executive Summary
The main aim and the purpose of the assignment is to conduct PESTEL analysis of Germany
which will help in analyzing whether the company of smog free bicycle requires to decide
whether they should be entering into the market or not. The three different factors which are
required to be analyzed in this respective report is inclusive of environmental aspect, legal
aspect along with the social aspect.
Germany is one of the eco-friendliest kind of countries in EU and they are trying to
implement the proper usage of the different eco-friendly products such as usage of the
different bicycles along with usage of such objects as public transportation. This has been
done through the usage of different laws, policies along with regulations at local along with
federal level.
The proper development and enhancement of the car free zones along with the different
stations of parking of bikes along with there is restriction of the speed of the cars along with
there should be proper increase in the gasoline and CO2 based taxes. The respective country
has started this approach which will help in supporting the safety of the different cyclists.
Furthermore, based on the PESTEL analysis, the respective company needs to decide the
different factors as to enter into Germany due to the following reasons:
● This has been noticed that more than 72 million individuals in Germany use bicycle
along with more than 10% of the different trips are taken by bicycles as well
● There are various laws and legislations along with programs and policies which are
being implemented by the government at local along with the federal level and this

helped in promoting the usage of the bicycle among the different individuals and
making the ownership of the car very costly in nature
● The Germany Country has provided more than 18550 km of the tracks of cycle in the
federal highways and there will be addition of more than 200 to 300 km which is
required to be added in subsequent year.
● Germany has tried to launch new kind of bike named Autobahn (Radschnellweg)
which is being dedicated to the cyclists in the entire market
● The huge number of stations for parking of bikes, neighborhoods for free car along
with the traffic areas in the entire Germany which is making it favorable for the
company
● The number of fatalities of cyclists has ben decreased by more than 80% in Germany
over the last few decades.

Table of Contents
Introduction................................................................................................................................4
Evaluation and Review of PESTEL Model...............................................................................5
PESTEL Analysis of Germany..................................................................................................8
Legal Factor...........................................................................................................................8
Environmental Factor...........................................................................................................12
Social Factor.........................................................................................................................15
Recommendations....................................................................................................................19
References................................................................................................................................20
Appendices...............................................................................................................................23
Appendix 1: Mechanism of PESTEL Analysis....................................................................23
Appendix 2: Development of Gasoline Taxes in Germany.................................................23

Introduction
The report helps in the overall analysis along with the determination of the project
related to smog free bicycle wherein the main aim is towards the reduction of the pollution
along with proper development of the smog free kind of cities with proper innovation of the
bicycles which helps in inhaling the polluted air and releases the fresh and clean kind of air.
This kind of cycle is required to be introduced in Germany which will be of huge advantage
for the company. Furthermore, in order to investigate the overall feasibility along with the
success of the entire project which will be started and established in Germany, proper
external analysis of Germany along with the impact of the same is required to be analysed in
an efficient manner.
As hypothesized by Benjamin Franklin, “If you fail to plan, you are planning to fail”,
which helps in analysing the overall strategic planning along with the importance of the same
for any kind of business wherein this allows the managers and owners in order to make the
better kind of decisions along with avoiding to be confronted by the different kinds of
difficult situations which have been anticipated in the past.
The first section of the entire report helps in the overall critical review of the model of
PESTEL as the strategic tool of marketing which helps in involving the different strengths
along with weaknesses. Furthermore, the second section deals with evaluation of the PESTEL
analysis which is inclusive of Social, Environmental and Legal aspects. Lastly, the report
helps in the recommendations which are required to be provided in order to support the
decisions of the smog free bicycle company in order to enter the market of Germany.

Evaluation and Review of PESTEL Model
The analysis of PESTEL Model is essential in nature which is being used by the
different kinds of businesses while launching a new product or service along with when they
are entering into the new market or region (Ellingsen, Singh and Strømman 2016). The
analysis of PESTEL model helps in allowing the business to evaluate and examine the overall
external environment analysis of the specific kind of city, region or country (Figure 1) with
the proper investigation of the impact of the different external kind of factors on the
organization (Figure 2 and Appendix 1).
Furthermore, with the help of PESTEL analysis, this has allowed proper exploitation
along with identification of the different kinds of opportunities which may not be detected by
the organization along with anticipation of the different kinds of difficulties along with
threats which may arise (Federal Ministry of Transport, Building and Urban Development
BMVBS, 2008). Moreover, with the help of the PESTEL analysis, this allowed the business
to maintain and obtain the competitive advantage over the different competitors.
Additionally, in order to conduct the PESTEL analysis, the business needs to follow
the simple kind of process which will be starting from the brainstorming of the different
external factors which can cause and effect the organization which will be in relation to the
factors of the PESTEL. Furthermore, identifying, evaluating and analysing the implications is
required to be done. Finally, profitability rating of the different issues which are happening is
required to be analysed in an efficient manner.

Figure 1: External Analysis
(Source: Leonidou et al., 2015)
Figure 2: PESTEL Model
(Source: Leonidou et al., 2015)
On the other hand, this has been analysed that there are various studies which have
argued that when the PESTEL analysis will be allowing the identification of the various
SocialLegal

external factors which may affect the overall business, PESTEL Model do not provide any
kind of insight on analysis of the dealing with the different kinds of factor, wherein PESTEL
analysis becomes more diagnostic tool rather than being the most effective kind of solution.
Furthermore, as to increase the overall percentage of the business success, the PESTEL
analysis is required to be conducted, however this is not enough as this is required to be
combined with the different other marketing tools which are strategic in nature.
Additionally, there are different other strategic kind of tools along with techniques
which is inclusive of SWOT, Porter’s Five Forces Model Analysis along with the different
variations of the PETSEL model. However, this can be noticed that there can be several kinds
of weaknesses in the PESTEL analysis, however this is the most suitable kind of tool which
is being used in order to conduct the external environment analysis. The main reason is
because this helps in representing the static kind of report which helps in analysis of the
position of specific kind of environment by considering the different kinds of external factors
which is essential in nature.
PESTEL Analysis
Strengths Weaknesses
PESTEL analysis helps in providing the
efficient along with appropriate kind of
framework which helps in the reporting and
analysis of the external environment of the
business
The analysis of PESTEL has to be carried
out in a regular manner as there are various
kinds of changes which takes place in the
frequent manner
PESTEL analysis helps in the overall
determination and identification of the
different kinds of potential problems along
with opportunities in the entire environment
There is huge cost of carrying out PESTEL
analysis can be high as there should be done
in a frequent manner

PESTEL analysis helps in providing proper
insight on whether the market is favourable
in nature which will be allowing the
business to gain competitive advantage over
the other different other competitors
The quality of the PESTEL analysis will be
depending on the different skills along with
knowledge and abilities of the people which
is conducting the analysis
Based on the PESTEL analysis, there are
several recommendations of management
which is required to be provided by the
company
PESTEL analysis is subjective in nature and
there is biasness which will depend on the
person who is responsible for the
conducting the analysis
PESTEL Analysis of Germany
Proper analysis of PESTEL model is required to be done which will help Smog free
Bicycles Company; this will be helpful in managing the different kinds of factors which is
responsible for analysis of legal, environmental and social factors respectively.
Legal Factor
In the last few decades, this has been seen and analysed that Germany is one of the
most eco-friendly and sustainable kind of country in the European Union, however on the
other hand, this has been seen that as per the international investment organization named
RobecoSAM, Germany has been positioned among the top 13 countries which are considered
as the most sustainable countries in the entire world.

Figure 3: Sustainability Ranking of Germany
(Source: De Leeuw et al., 2015)
It has been able to achieve the different kinds of laws, policies, and procedures along
with programs which were implemented by the government at both local along with federal
level. From the 1970s, the governments tried to play a major role in promoting along with
encouraging the usage of the transport which is sustainable in nature along with made the
ownership of the car users costlier. Furthermore, when Germany has increased the car
ownership costly in nature, they have provided different convenient kind of options by
development of the different kinds of policies and regulations which will improve the usage
of cycle and other kinds of public transportation (Ellingsen, Singh and Strømman 2016).
At the local stage, the different kinds of German have tried in implementing the
several policies along with regulations which have tried in increasing the usage of the
bicycles which tried to increase the usage of bicycles along with the country tried to restrict
the usage of the cars among the different cities and there are various rules and regulations
which are as follows:

Restrictions of Speed is one of the aspects which is required to be analysed in which
this has been seen that there are many cities which have traffic calmed areas. The speed limits
of the cars in these cities are around 30km/hour and wherein there are different homes, the
limit of speed is 7km/hour and this is promoting and encouraging the walking and the
pedestrians have the priority regarding the traffic.
The regulations related to traffic is the other option in which the different cities in
German have tried in allowing the cyclist to utilize one-way streets in the different directions
which will help in shortening the distances of travel and the usage of the different cars are
restricted in nature.
The different parking stations of bike along with garages is the other option in which
there are several kinds of German cities which have tried to create bike parking in different
universities, businesses along with residencies in an appropriate manner.
The car free neighborhoods such as Hamburg, Frankfurt along with Munich have the
different regions and neighborhood’s car free which helps in promoting and encouraging the
walking along with cycling.
On the other hand, in the federal stage, the Germany Country has tried in introducing
the different kinds of rules along with regulations which helps in restricting the usage of the
different cars along with promoting the usage of cycling in the various areas effectively. The
different aspects are as follows:
● Traffic Laws is one of the aspects in which this helps in restricting the usage of the
cars along with protecting the different cyclists and the pedestrians in order to ensure
their safety.

● The law related to anti air pollution is the aspect in which this has been seen that the
entire law helps in dictating that the different cars must be registered along with an
analysis of environment green sticker which will help them in entering the green zone
and this was seen that any such kind of car without such stickers will be fined
(Barfoot and Brookes 2014).
● The CO2 based vehicles tax is the other aspect in which this can be analysed and
identified that this kind of tax was introduced in the year 2009 which was related to
the CO2 related emissions car and this was being addressed that when the emission
will increase, this will increase the rate of taxes as well (Barfoot and Brookes 2014)
● The environmental kind of tax which was being introduced in the year 1999 and this
is being imposed on mineral oils, electricity along with gas (Chen and Kockelman
2016).
● The gasoline tax is the other aspect in which this kind of tax is being imposed of the
sale of the fuel. This has increased continuously from the 0.40 in the year 1980 to
about 0.50 and this is three times higher than Germany than in USA (Chen and
Kockelman 2016)
Additionally, the National Cycling Plan of Germany of 2020 is based on the different
kinds of different kinds of policies and strategies which will help in promoting and
encouraging the cycling concept in an efficient manner (Chen and Kockelman 2016). These
kinds of policies and strategies are being based on the major nine areas which is inclusive of
the following:
Infrastructure- The main aim of NCP to finish and expend the German Autobahn

Cycling Innovation- The main aim and purpose to implement the different kinds of
campaigns along with contests along with implementation of the different technologies
related to cycling (Barfoot and Brookes 2014).
Safety of the Road- NCP is aiming to further improve the overall safety of the
different cyclists by properly organising the different kinds of safety cyclists’ campaigns
Tourism and Cycling is the other option in which NCP is aiming to increase the
overall cycling tourism by more than 15% (Barfoot and Brookes 2014).
Electric kind of mobility is the option in which NCP is aiming along with promoting
the usage of the cycling combination with walking and public transportation for the different
kinds of trips (Pasaoglu et al. 2014).
Environmental Factor
Infrastructure of Germany
In the present scenario, Germany tried to provide more than 18550 km of cycle tracks
with the federal highways along with more than 200 to 300 km are required to be added in the
subsequent years. Additionally, Germany tried to launch the new bike Autobahn, the entire
roadway which is being dedicated exclusively to the different cyclists (Jeong and Kim, 2014).
This will help in connecting more than 10 cities along with removing the roads wherein
around 50000 cars (Figure 4). Autobahn is being planned in order to cover more than 100 km
between the cities of Duisburg and Hamm and 5 km of it has already been launched in an
appropriate manner.

Figure 4: Autobahn in Germany
(Source: Leonidou et al., 2015)
In addition, Germany tried to provide different convenient along with secure parking
stations of parking stations (Figure 5) along with the different facilities for the repair,
shipment of the bicycles.

Figures 5: Images of Bike Stations in Germany
(Source: Leonidou et al., 2015)
Change in the Climate
The change in the climate is one of the major critical issues in the entire world and all
the governments have tried in acknowledging the fact that the different emissions of CO2
from the different transportation, congestion in the traffic along with air pollution are the
various essential factors in the change in the climate (Barbarossa et al. 2015). On the other
hand, the public transportation along with bicycles are sustainable in nature along with
efficient in nature. These kinds of public transportation are sustainable along with this helped
in providing healthier modes of the transportation (Katsikeas, Leonidou and Zeriti, 2016).
As the different kinds of social, economic along with the environmental issues which
are triggered in such a manner with the crisis related to oil of the year 1973 (Markiewicz et
al. 2015). Furthermore, Germany tried to introduce various types of changes which led to
numerous kinds of enhancements in the system of the transportation and land the usage of the
policies. These kinds of improvements which have favoured the usage of cycling along with

the public transportation that led to decrease the motorisation level in comparison to the
different countries (Figure 6) along with the per capita emissions of the CO2 from the
transport.
Figure 6: Level of Motorisation in Germany and USA
(Source: Romanova, 2016)
The entire shift from the cars to bicycles has tried to create positive effect on
environment which will help in decreasing the emissions of CO2 (Figure 7), reduction of the
pollution along with allowing people to have a better kind of life which is better along with
better health opportunities (Romanova, 2016).
Figure 7: Impact of Public Transportation and Cycling
(Source: Heidenreich, Spieth and Petschnig, 2017)

Social Factor
The entire population of Germany does not drive less; however, this has access to the
different and numerous kinds of destinations all over Germany through the help of public
transportation and cycling which will increase the mobility and make them favour the usage
of bicycles over the different cars. As per Federal Ministry of Digital and Transport
Infrastructure along with Zweirad Industrie Verband Association from the entire present
population of Germany that is more than 82 million individuals and more than 72 million
individuals own or use the bicycle (Figure 8) and approximately more than 10% of the trips
are made by the different bicycles in the Germany (Leonidou et al., 2015).
Figure 8: Number of Owners of Bicycle in Germany
(Source: Boulay et al. 2015)
Additionally, in the city of Freiburg, the percentage of the different trips by bicycle
has been doubted from more than 15% to more than 27% and trips percentage by the different
cars has been decreased from 38% to 32% over the last few decades (Figure 9). Additionally,

the trips percentage by bicycle in Freiburg is larger in number in number of cities of the same
size of the population (Sörqvist et al., 2015).
Figure 9: Percentages of trips by car, bicycle and foot in Freiburg
(Source: Heidenreich, Spieth and Petschnig, 2017)
Figure 10: Percentages of Trips by Bicycle, Public Transport and Foot in Freiburg
Compared to other cities of same size of population

(Source: Chen and Kockelman 2016)
Moreover, the governments of Germany at both local along with national level have
been working to improve the cyclist’s safety. Furthermore, Germany has become one of the
third countries with both highest bicycle travels along with lowest number of fatalities of
cyclists (Figure 11). Moreover, the number of fatalities of cyclists has been decreased by
more than 80% in Germany over the last few decades.
Figure 11: Number of Bicyclists Fatalities and Travel in Germany and Other countries
(Source: Thakur and Thakur, 2015)
These are the different kinds of statistics which are mainly due to the different kinds
of improvements in the system of transportation along with the usage policies of land which
have been implemented with proper participation of the different citizens who are living in
Germany. For example- More than 900 individuals in Germany have tried to work with the

government as this helped them in developing plan for land use (Meraz et al., 2016).
Additionally, there are few other citizens who have tried in collaborating with the
government along with the local administration of Vauban as this helps in improving the
neighborhoods along with turning them in the car free zones which makes it more sustainable
and ecological.
Recommendations
With the help of PESTEL analysis, the smog free bicycle company tried to decide in
order to enter country of Germany which is because of the following reasons:
 The different rules, laws, regulations along with policies which are being
implemented by the government at local and federal level in Germany have tried to
play a significant role in promoting and encouraging the usage of the bicycles along
with trying to make the ownership of the car most costly in nature
 More than 72 million people in Germany tries to use bicycles for the different kinds
of trips and more than 10% of the individuals try to make the different trips by the
bicycles
 Germany tries to provide more than 18550 km of the tracks of cycle with the federal
highways along with more than 200 to 300 km to be added in each subsequent year
 Germany tried to launch new bike Autobahn wherein the entire roadway is dedicated
exclusively to the different cyclists.
 There are large stations for bike parking along with car free neighborhoods which
helped in calming down the traffic areas in Germany and this is favorable for the
entire market as well

 The different German cities namely Freiburg, Frankfurt along with Munich tries to
represent proper examples of sustainability in Germany and this is favorable in nature
for Germany as well
 The Germany population helps in driving less along with numerous providing proper
accesses to numerous destinations in the entire Germany through public transportation
and cycling. This will help in increasing the mobility and this is favorable for the
usage of bicycles over cars
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Appendices
Appendix 1: Mechanism of PESTEL Analysis
 Political factors help in examining the different kinds of taxes relating to government
along with the effect of the same on the company
 Economic factors help in examining economic viability of the specific market.
Furthermore, this helps in considering the different kinds of alterations such as the
inflation rate along with exchange rates and process of working
 Social factors are inclusive of the population of the target market such as
demographical aspects along with religious beliefs.
 Technological factors are inclusive of potential changes which are taking place in the
organization and impact of the same on the company
 Legal factors are inclusive of potential and current changes in the legislation which
may impact the company
 Environmental factors are inclusive of environmental factors of the city or region
which may affect the company due to the geographic changes
Appendix 2: Development of Gasoline Taxes in Germany
(Source: Katsikeas, Leonidou and Zeriti, 2016)