Morgan Motors: Analyzing German Business Environment Factors

This report provides a comprehensive analysis of the business environment in Germany, focusing on factors relevant to Morgan Motors' potential relocation of its production facilities. The report examines political stability, economic growth, social trends, technological advancements, legal regulations, and environmental considerations within Germany. It highlights key aspects such as Germany's stable political climate, strong economic growth, high GDP rate, and the market for luxury goods, which are all favorable for Morgan Motors. Furthermore, it assesses the impact of social factors, including lifestyle attitudes and cultural barriers, and technological factors, such as technological change and awareness. The legal and environmental factors, including adherence to German laws and environmental policies, are also discussed. The report concludes with recommendations for Morgan Motors, suggesting that the company should consider moving its production to Germany to capitalize on the market potential and achieve a strategic edge over competitors. This report provides valuable insights into the German business environment, supporting the decision-making process for companies considering international expansion.

Global
Business in
Context

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Company Overview.................................................................................................................................3
Political environment in Germany...........................................................................................................3
Economic environment in Germany........................................................................................................4
Social environment in Germany..............................................................................................................4
Technological environment in Germany..................................................................................................5
Legal environment in Germany...............................................................................................................6
Environmental factors in Germany..........................................................................................................6
Recommendations.......................................................................................................................................7
CONCLUSION...............................................................................................................................................7
REFERENCES................................................................................................................................................8

INTRODUCTION
Globalization refers to integration of several economies in the world into one
comprehensive economy (Bartsch and et.al., 2016). This has led to promotion of global business.
Global business means dealing in international trade with a company which is not located in the
home country of the company. In this report, Morgan Motors Company has been chosen which is
a car manufacturer based in Malvern, United Kingdom. The company wishes to move its
production to Germany. In this project, specific analysis will be made on multiple aspects of
business environment in Germany and how they will affect the company.
MAIN BODY
Company Overview
Morgan Motor Company is based in Malvern, United Kingdom. It specializes in
manufacturing of cars. It is planning to move its production to Germany. It wishes to do so for
expansion purposes and aiming for maximization of profits. It seeks to profit from moving to
another country so that it can acquire market share there.
Political environment in Germany
Political environment includes a multitude of factors which are required to be considered
by a business organization (Poltical Factors Affect Business Environment, 2018). These factors
are government policy, political stability, corruption, foreign trade etc. In the context of Morgan
Motors, it can be said that it needs to consider all these factors before deciding to move its
production to Germany. Germany is a country which has stable political environment. It is a
democratic country where elections are held regularly. Thus in terms of political situation it is a
very stable country and that is the reason why it regularly attracts various investors who wish to
invest in the country so that they can maximize their returns on the products and services which
they are producing.
Also, another reason for attraction of investors towards the nation can be the incentives
which are provided by the government to boost business growth. Various incentives are provided
by the government in Germany to boost the growth of business and attract foreign investment.
These incentives are-
 Tax benefits- Tax benefits are offered to industries (Cumming and Zahra, 2016). Thus
this helps the industries as they have to pay lower tax on their incomes. Thus they would
be able to maximize their profits easily.
 Ease of procedures- Procedures for grant of permission to set up an industry in Germany
are eased so that new businesses do not face any problem.

Thus, in terms of political environment Morgan Motors should face no problem at
all in moving to Germany. For example- It can avail tax benefits and can use other
incentives in the country.
Economic environment in Germany
Economic factors include economic growth, exchange rates, interest rates, inflation rates
etc. These factors can affect the economic environment of any country (Dyllick and Muff, 2016).
Morgan Motors needs to consider these factors because they are critical in ensuring its success in
a dynamic global business environment which is ever-changing in nature. Thus the company
needs to consider these factors before it takes the decision of moving in Germany.
Germany’s GDP growth rate is among one of the best in the world. It ranks among top
economies in the entire world. Therefore, its excellent GDP growth rate and rapid economic
development attracts a lot of businesses and investors towards the country. Furthermore, the per
capita income of the people in the country is high and the people there like to spend their money
on expensive products and services. Therefore, the sales of expensive cars made by Morgan
Motors can increase rapidly facilitating the company to increase its overall revenues and
maximize its profits effectively. Thus there is a lot of scope for the company in German market.
The reasons to invest in Germany in terms of economic environment are-
 High GDP rate- The GDP rate in the country is quite good which attracts the investors to
invest their funds in businesses in the country.
 Market for luxurious products- German market is a market for luxurious goods. Thus
the cars of Morgan Motors can be sold here at higher prices allowing the company to
achieve its aim of maximization of profits.
Thus, it can be said that economic environment of Germany is conductive for
Morgan Motors.
For example- In Germany, people have a fascination for automobiles. Thus it is
an excellent opportunity for Morgan Motors which is a car manufacturing company to
increase its profits.
Social environment in Germany
Social factors include population growth rate, age distribution, career attitudes and
various other social factors (Gereffi and Lee, 2016). These factors can impact the business of any
company. In the context of Morgan Motors these factors hold importance because these factors
can affect its decision to shift to Germany.
In Germany, these factors are quite important. The population of rural areas in the
country is still quite conservative and may not like to spend a large amount of money on luxury
cars. However the urban market is a good investment option for the company.

Social factors which can impact the company in Germany are-
 Lifestyle attitudes- Lifestyle attitudes have an impact on people while making a buying
decision (Korpela and et.al., 2016). In Germany, people have a fascination towards high-
end automobiles. Lots of car manufacturers have headquarters there. Thus it is a highly
suitable country from investment point of view. The urban market in country can spend
high amount on cars as they enjoy a high income. Thus these factors can influence the
decision of Morgan Motors to move into the country.
 Cultural barriers- Cultural barriers can have an impact on people while they make a
decision related to buying a particular product (Laplume, Petersen and Pearce, 2016). The
cultural barriers in rural areas of Germany can force people to refrain from spending a
high amount on purchasing a car. Therefore, for Morgan Motors it is required that it takes
into consideration all of these factors before making a decision. These factors can impact
its level of profits.
Thus, it can be said that in terms of economic environment Germany is quite
stable because of high GDP growth and high-level of income of the people residing in the
country. Thus, it would be suitable for Morgan Motors to make a decision to shift there.
For example- High buying power in market is a plus point which Germany offers
to business investors. Thus, the investors can identify an opportunity to maximize their
profits here by taking the benefit of a developed economy.
Technological environment in Germany
Technological factors are technology incentives, level of innovation, R&D activity,
technological change etc. These factors can put their impact on any business and the profits of a
business can be influenced by these factors (Meckling and Hughes, 2018).
In Germany, technological innovation is at a higher stage. Germans are very conscious
about the use of new technology and thus they adopt it as soon as it comes into the market. Thus
the firms which bring products with new technology in the dynamic business environment of the
country are in advantage because this will lead to higher profits as the Germans are willing to
pay higher prices also for purchasing products with new technology.
The technological factors which can impact the company in Germany are-
 Technological change- Technological change can impact a firm as it needs to adopt the
new technology quickly so that it can maintain its strategic edge within the market. In
Germany’s market, dynamic changes take place very quickly and thus these changes are
required to be adopted quickly by the company so that it can maintain a strategic edge
over its competitors and also maintain its level of profits.

 Technological awareness- Technological awareness can impact a firm’s operations in a
particular country. It is so because being technologically aware is quite necessary for an
organization to stay in the market of a country for a long time. Since Germany is a
technologically-advanced country and Germans are highly aware about technology it can
result in increase in profits of Morgan Motors since the company’s cars are according to
the new technology.
Therefore, the technological environment in Germany can be said to be highly
suitable for the firm to invest its funds. If the company adopts new technology, it can
easily target the customers in market and can maximize its level of profits both in the
short-run as well as the long-run. Therefore it is a suitable country for the company.
For example- Technology in Germany is quite advanced and Morgan Motors can
take advantage of it. It can benefit by reducing its overall costs and maximizing its level of
profits in the future.
Legal environment in Germany
Legal factors include discrimination laws, business laws etc. These laws are amended
from time to time by the government of different countries (Nambisan, Zahra and Luo, 2019). In
Germany, the rules and regulations are quite strict and have to be adhered to by the businesses
operating there. Thus, Morgan Motors needs to adhere to the laws made by the German
Government.
The legal factors impacting the company are-
 Change in rules and regulations- A change in rules and regulations of business can
impact the business of any firm in the country as it needs to follow rules and regulations
which have been changed.
 Change in laws- A change in laws related to business can impact the business as it needs
to follow the new laws related to doing business in the country.
Thus, from legal environmental point of view it can be said that in Germany rules and
regulations are quite strong and are required to be followed by the enterprises setting up a
base there. Thus Germany is a suitable country for Morgan Motors.
For example- If the German government makes the business laws then it will positively
impact Morgan Motors.
Environmental factors in Germany
These factors are weather, climate, environmental policies etc. These factors can impact
the profitability level of any business enterprise (Peng and et.al., 2017).

In Germany, these factors are given importance because Germans are self-conscious
about the environment. Therefore, Morgan Motors needs to make a note of these factors while
considering its decision to shift to Germany.
The environmental factors which can impact the company are-
 Environmental policies- The policies framed by the government for environment can
create an impact on profits of a firm (Verbeke and Kano, 2016). In Germany these
policies are quite strict and thus Morgan Motors needs to follow them.
 Attitude of people towards environment- The attitude of people in Germany is eco-
friendly. Thus the company needs to develop its cars in such a manner so that they emit
less pollution.
Thus, the people in Germany are environment-conscious and therefore eco-
friendly policies are required here. Therefore from environmental factors point of
view Germany is the right country for Morgan Motors to consider investment in
production facilities due to eco-friendly nature of the people there.
Recommendations
Thus on the basis of various factors it can be said that the business environment of
Germany is quite stable in nature. Thus it attracts a lot of investors towards the country.
Therefore Morgan Motors should consider moving its production facilities in Germany because
doing so will allow the company to tap the huge potential that the market of the country offers to
it. If it manages to tap the potential effectively and efficiently by using the right tactics then it
will be able to get a strategic edge over the competitors. Also, it would be able to raise its level
of profits effectively. This will lead towards achievement of maximum potential of the company
in its production and it will achieve higher growth rate in the future.
CONCLUSION
From the above report, it can be concluded that global business allows the company an
opportunity for maximization of their level of profits. Morgan Motors can consider the political,
economical, social, technological, legal and environmental factors of the business environment
of Germany before taking a decision of moving there. Analysis of these factors will allow the
company to take a right decision which can impact its short-term and long-term future. The
management of company has to take the right decision in this situational context so that the firm
can achieve its short-term and long-term goals.

REFERENCES
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Korpela, K. and et.al., 2016, January. Digital business ecosystem transformation--towards cloud
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Online
Poltical Factors Affect Business Environment. 2018. [Online]. Available through:
<https://www.marketingtutor.net/political-factors-affect-business/>