Smog-Free Bike Company: A Strategic Entry into the French Cycle Market

This report analyzes the potential market entry of Smog-Free Bike Company, a pollution-eating bike manufacturer, into the French cycle market. Utilizing the PESTEL framework, the report examines the political, economic, social, technological, environmental, and legal factors influencing the market. It highlights the growing cycling culture in France, the government's focus on reducing air pollution, and the increasing demand for eco-friendly transportation solutions. The report concludes with recommendations for Smog-Free Bike Company to successfully enter the French market, including strategic partnerships, targeted marketing campaigns, and leveraging the existing cycling infrastructure.

STRATEGIC MANAGEMENT

EXECUTIVE SUMMARY
Growth is observed in the cycle market in France. There is an increase in the sale of the
bicycle in France since the year 2014. The market shares of France in Europe in cycle
industry represent the potential growth in the same. Cycling culture and trends have
become increasingly popular in urban as well as rural area as a common means of
transportation. As there is growth in the market, the bike market also grows. France is
facing the issue of air quality as there is an increase in the economic bike market. EU
legislation and WHO AQG register a high level of air pollution, majorly concerning PM10 and
PM2.5 as there are hazardous to human health.
The aim of the French government is to reduce to manage the pollution level while
complying with EU legislation. Favourable conditions in France enable to smog-free bike
company to enter French cycle market. The critical issue highlighted here is the pollution
issue for which it is essential for the French Government to perform effectively. The mission
of the France Government is to allure the French people to adopt cycling culture. The
objective of French Government is to improve the cycling infrastructure in order to promote
the usage of the bicycle in France.
The design of pollution-eating bikes is specific to capture both PM10 and PM2.5 which will
trigger the action to solve the problem to the current pollution situation. The smog-free bike
company will collaborate with the public organization in order to inform the presence of
pollution-eating bikes and its working.
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Table of Contents
EXECUTIVE SUMMARY...............................................................................................................1
INTRODUCTION..........................................................................................................................3
PESTEL REVIEW..........................................................................................................................4
ADVANTAGES AND DISADVANTAGES OF PESTEL ANALYSIS..................................................5
ECONOMIC.............................................................................................................................6
ENVIRONMENTAL...................................................................................................................8
POLITICAL.............................................................................................................................10
RECOMMENDATIONS...............................................................................................................12
REFERENCES.............................................................................................................................13
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INTRODUCTION
The business report represents the potential market entry of the product pollution-eating
bikes with the name Smog-Free Bike Company in France using the concept of marketing
principle. This report comprises of the PESTEL review tool which is used by the marketers to
analyse the impact of external factors on the business and on its products (Molnár and
Lendvay, 2016). Three factors have been considered to analyse the impact of external
environmental factors on pollution-eating bikes. It includes advantages and disadvantages
of PESTEL analysis. At last, recommendations are given in order to select best suitable idea
for the successful entry of the project.
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PESTEL REVIEW
PESTEL analysis is the concept of marketing principles and used as a framework or tool to
analyse and monitor the impact of the external environment while planning to launch a new
product, service or project or on the organization. PESTEL framework has different variants
such as PEST, PESTEL, STEEPLE, SLEPT, STEPE, DESTEP. Marco environmental factors that
are external marketing environment highly impact the organization. It is very crucial for any
organization to conduct situational analysis that is PESTEL analysis before implementing any
kind of strategy or tactical plan (Molnár and Lendvay, 2016). Through PESTEL analysis, an
organization can identify the factors that cannot be controlled by the organization.
Organization conduct PESTEL analysis at regular intervals in order to identify the changes in
the macro-environment in order to be recognised in the competitive market as well as gain
competitive advantage through differentiation.
PESTEL is an acronym which stands for political, social, environmental, economic,
technological and legal factors. PESTEL analysis plays a very crucial role in determining the
steps to be taken while initiating or conducting the business. PESTEL analysis helps in the
suitability of market to execute various types of strategies such as growth strategy, product
development or differentiation strategy, acquisition strategies and so on (Grünig and
Morschett, 2017). Effective strategies are planned by the organization through PESTEL so as
to meet their goals as well as objectives thereby minimising the errors that might be causing
a gap between expectation and performance.
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ADVANTAGES AND DISADVANTAGES OF PESTEL ANALYSIS
ADVANTAGES DISADVANTAGES
It helps in identifying and reducing the impacts
as well as effects of potential threats in the
external environment.
The process of PESTEL analysis is effective only
when it has been conducted at regular interval.
It provides an opportunity for developing the
strategic thinking within the organization.
The simplicity of this model restricts the
generation of strategies for growth and
development of organisation for long-term.
It provides a mechanism that enables the
organization to identify as well as exploit new
opportunities in the market at both national and
international level.
PESTEL analysis results lead to paralysis by
analysis as the process subjects to regular data
accumulation which deviate the main objective
of this tool that is the identification and
corrective actions to be taken for issues.
It is simple, easy to use a framework that is time
as well as cost-effective for analysing external
environment framework.
It is based on the assessment of external factors
but it is also essential to consider internal
organizational factors as well as the action of
competitors and industry trends.
Fig 1 (Grünig and Morschett, 2017)
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ECONOMIC
There is a continuous growth in cycle market in France since 2014. More than 3 million of
were sold in the year 2016 reporting 1.3 per cent of increase as compared to that of the
year 2015. The annual turnover of French Cycle Market amounted to 1.023 billion euros
which is increased by 6.4 per cent as a company to 2015 (CONEBI, 2017). Current trends in
the French cycle market leads to increase in mobility as well as sports bikes. The sales of
EPAC bikes increased to 33 per cent that is more than 130,000 units were sold in the year
2016. The performance of mountain bike is even better recording increase by 72 per cent to
15,000 units (CONEBI, 2017).
The considerable rise was reported in all the categories of mobility bikes that are electric,
folding, mountain and so on (Frandsen, 2017). At the same time, the addition of parts and
accessories in the cycle, the global French cycle amounts 1.795 billion euros in the year 2016
which is 6 per cent more as compared to that of in 2015.
Fig 2 Bicycle Sales in France (1000 units)
[Source: CONEBI, 2017]
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The introduction of national financial support mechanism resulted in the continuous growth
of EPAC bike’s sales in 2017. With the expansion of French cycle market, the entire
distribution channels were benefited (EEA, 2017).
Fig 3 France’s share in European bicycle sale
[Source: CONEBI, 2017]
It was noted that the share of France in Bicycle sales recorded was 15 per cent for the year
2016. The rank of France was positioned at third number with more than 3 million bicycle
sales. In the year 2015, negative trends were observed in the sales of bicycles and MTB for
children decreasing by -4 per cent and -1 per cent respectively (France AQP, 2017). Hence it
can be said that cycle market has gained popularity since 2014 in French people.
It is also observed that cycling trends are increasing among French people. It will result in an
increase in market value for bikes in French cycle market (Norcliffe, 2016). The rank of
France in cycle market proves that bikes are being used by French people as a transport
vehicle (Shaheen, et al. 2017). This makes it clear that cycle market of France has strong
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points as well as new opportunities. Hence it is suitable for the company to launch the
smog-free bike in French cycle market.
9

ENVIRONMENTAL
Air pollution has become increasing environmental as well as social issue in France. It has
become a complex problem in terms of mitigation as well as management of harmful air
pollutants (Pucher and Buehler, 2017). This has affected the overall health of the French
people. Emission of C0, NO2, ground-level 03 and PM2.5 has led is the harmful impact on the
health of French people. This section will point out only PM10 as well as PM2.5. European
Union Legislation and World Health Organization have set European standards as well as Air
Quality Guidelines in order to reduce the emission of air pollutants (Dupont, 2017).
Fig 4 PM10 concentrations, daily limit value of France in 2015
[Source: EEA, 2017]
According to WHO Air Quality Guidelines, estimated reference level for Pollutant PM10 is 50
μg/m3. Though the level of pollutant PM10 is lower than the estimated reference level, it is
essential for the people in France to maintain this level by continuously focusing on the
emission of PM10. The people in France should not only control the use of cars but also limit
the burning of cheap materials such as trash to heat their homes (Popescu and Bulearca, M.,
2016). In the year 2015, for PM10 annual mean, WHO AQG’s stricter value was exceeded at
54 per cent of the station as well as in all the reporting countries except Estonia and Ireland.
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Fig 5 PM2.5 concentrations, daily limit value of France in 2015
[Source: EEA, 2017]
Estimated reference levels for PM2.5 for 1 day is 25 μg/m3, according to WHO Air Quality
Guidelines. It was recorded that there was exceed of the level of PM2.5 annual mean at 75
per cent of the stations, located in 27 of 32 countries as per WHO guidelines (Reigner,
2016). France recorded exceed of WHO AQG for PM2.5. EU limit was defined by red line and
WHO limit value was defined by blue line. France has exceeded WHO AQG limit value but
did not exceed EU legislation limit value.
PM2.5 is more hazardous as compared to PM10 therefore; France has to reduce the emission
of PM2.5 by the year 2030. Various air quality programs and activities have been initiated in
France to promote the usage of the cycle. Launching smog-free bike will help in reducing the
air pollutant levels to a great extent. Improvement in cycling infrastructure will help to
increase the usage of bicycle thereby contributing to the cycling trend in France.
The smog-free bike is designed to capture the harmful pollutants such as PM10 and PM2.5. It
has the technology that will solve the problem of air pollution for France (Emanuel, 2017) ..
Entrance of smog-free bike company in French Cycle Market will result in information about
the existence of the products and creation of awareness among the French people by
contacting with public firms. Thus Smog Free Bike Company will get potential attention from
the French government owing to their vision.
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POLITICAL
Fig 6 EU AQD and WHO AQG
[Source: EEA, 2017]
UNEP conducted research in the year 2015 in response to the Resolution 7 of the UNEA in
which country-level policies have described that impact the air quality. Various programs
and policies were organised by the government in France Air Quality Policy Matrix (Dallago,
2017). National Ambient Air Quality Standard harmonizes with European Union Air Quality
Legislation. Clean Air for Europe (CAFE) and the Fourth Daughter Directives are current
standards which include rules on the monitor, manage as well as assess the ambient air
quality by member states.
The aim of the EU air quality policy is to develop as well as implement suitable mechanisms
to improve air quality, emission control from mobile sources through improvement in fuel
quality as well as promoting as well as integrating protection mechanism for the
environment in transport and energy sector (Carter, 2016). New air quality objectives for
new Clean Air Programme are for the period up to 2030.
There are stricter national emission ceilings for six main air pollutants as revised National
Emission Ceilings Directive. Transport, industry and heating in households and business.
Road transport is considered as one of the major problems in them in France (Cheng, et al.
2017). It is estimated by WHO that 4900 premature death is caused due to outdoor air
pollution every year. 53 per cent of nitrogen oxide, 15 per cent of the volatile organic
compound and also 25 per cent of the particles are produced due to increase in a number of
diesel vehicles in transport (Dallago, 2017).
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France is one of the countries from EU where there is an increase in the rise of cycling
culture. Continuous growth as well the government policies initiated by France will be
suitable also providing a sense of protection from air pollution by using bikes. It is observed
that there is a considerable increase in the usage of the bike by a large number of people
and also French cycle market is growing at a considerable rate (Carter, 2016). Thus this gives
an opportunity to smog-free bike company to enter and potentially grow in French cycle
market.
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RECOMMENDATIONS
Various locations in France have good cycling infrastructure as well as there are high
numbers of bike user in both urban as well as the countryside of France. There is a
significant expansion in bike sharing market as well as normal bike market in France.
Auramania is a French company that which sells one of the most expensive bikes in France
(Meng and Han, 2016). Smog Free Bike Company should collaborate with the Auramania a
French company leading in the bicycle industry. The operations of both smog-free bike
company and Auramania should be collaborated to work as a business partner. The aim of
the smog-free bike company is to increase the popularity among the target market by
reaching to the group of urban and rural cyclist who uses a bike of Auramania, Alcyon, and
B’TWIN and so on.
The aim and objective of pollution-eating bike developed by smog-free bike company are to
improve the air pollution issues in the city scale and is a new player in French cycle market.
EU highly impacts the decision taken by the French government and is able to force a
member state to comply with the rules (Cheng, et al. 2017). Smog-free bike company can be
partners with a public organization to create awareness regarding the presence of pollution-
eating bike by explaining them to support through funds, they feel worth investing. Various
campaigns and programs are to be organised by smog-free bike company in order to market
the products by offering free trials as well as making them aware of the advantages of the
products that is pollution-eating bikes (Meng and Han, 2016). These are some of the
recommendations given in order to the successful frame strategic management plan to
enter the cycle market in France.
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