University of Northampton: PESTEL Analysis - Germany Pollution Bikes

This report provides a PESTEL analysis of the German market for pollution-eating bikes, focusing on economic, social, and environmental factors. It highlights the growing bicycle industry in Germany, driven by increasing health consciousness and government initiatives promoting cycling. The analysis identifies opportunities for pollution-eating bike companies, given Germany's high bicycle usage and concerns about air quality, particularly PM10 and PM2.5 particulate matter. The report also notes the German government's active role in promoting cycling infrastructure and eco-mobility. It concludes that the market conditions in Germany are favorable for the entry of pollution-eating bikes, offering potential for economic growth and societal acceptance, while addressing environmental concerns.

UNIVERSITY OF NORTHAMPTON
STRATEGIC MARKETING
[MKTM028]
PESTEL ANALYSIS FOR POLLUTION EATING BIKES
GERMANY
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Table of Contents
1.0 EXECUTIVE SUMMARY.......................................................................................................2
2.0 INTRODUCTION.....................................................................................................................3
3.0 PESTLE - THEORETICAL APPROACH................................................................................3
4.0 PESTEL ANALYSIS – GERMANY........................................................................................5
4.1 ECONOMIC..........................................................................................................................5
4.2 SOCIAL FACTORS..............................................................................................................7
4.3 ENVIRONMENTAL FACTORS..........................................................................................8
5.0 RECOMMENDATIONS.........................................................................................................11
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1.0 EXECUTIVE SUMMARY
Pollution eating bike is quite new and unique concept that helps in reducing the pollution from
the environment. The purpose of this report is to assess opportunities and threats of the market of
Germany with the help of PESTEL analysis as a strategic marketing tool. The bicycle industry in
Germany is growing rapidly as mentioned in the report; Germany has secured second rank in
sales of the bicycles among European countries. People in Germany tend to utilize bicycle more
often as a main mode of transportation. Along with the growth in the industry bike sharing
system is also raised in the Germany over the years.
The market of the Germany is economically growing and attracting several companies in the
industry but the quality of air is rapidly decreasing in the major cities of the Germany. The main
concerns are the primary and secondary sources of the air pollution that contain PM 10 and PM
2.5 particulate matter. But the pollution eating bike is designed to diminish both form the
environment which can be considered as a problem solving move for the government of
Germany. In addition, government is readily involve in the various activities to promote the
cycling in the country and enhance the infrastructure of the cycling. So the pollution eating bike
company will get desired attention from government as well.
Moreover, the pollution eating bike entering into the market of Germany seems to be gratified
with market conditions. Considering the economic scenario, it is the right time for a company to
enter into the market as bicycle industry is rapidly growing. Further, the concept is unique and
problem solving so it will easily get acceptance from government as well society of the country.
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2.0 INTRODUCTION
The report portrays an evaluation and assessment of the market of Germany for seeking the
opportunities to benefit the entry of “pollution eating bike company” in Germany. To accomplish
the above-mentioned objective the company is using PESTLE analysis as a strategic marketing
tool which will incorporate the relevant factors that will influence the operations of a company in
Germany. The report is going to explore three major elements of the PESTLE that are economic,
environmental and social elements. Lastly, the final part of the assignment comprises of the
possible recommendations for the firm by involving the scenarios where it is most benefited for
the pollution eating bikes project.
3.0 PESTLE - THEORETICAL APPROACH
Basically, a PESTEL analysis refers to a tool or framework extensively used by the marketers
and owners of the businesses to monitor and assess the external or macro environmental factors
that affect the organization. PESTLE is the acronym of Political, Economic, Social,
Technological, Environmental and Legal (Jurevicius, 2013). For any organization, it is quite
impossible to control each and every factor of PESTEL but it is important to understand the
implication of them. In addition, PESTEL analysis provides an eye bird view of the external
busies environment of the company form several different angles of the industry (Peichl and
Pestel, 2013). Considering the viewpoints of different scholars and marketers, PESTLE analysis
is one of the easiest frameworks to understand and use for different facets of the business such as
it can be helpful in strategic decision making and planning (Jurevicius, 2013). Majorly
companies use PESTEL analysis when they either launch a new product or entering into the new
market because in both conditions it is essential to assess the external factors affecting on the
operations and products of the business (Srdjevic, et al. 2012). There are basically two tasks
performed through the PESTEL analysis; initially it helps in identifying the business
environment in which company is operating or will be operated. Secondly, the information
collected through analysis is help in forecasting the future and predicting the outcomes (Issa, et
al. 2010).
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Figure: PESTEL framework
Source: Jurevicius, 2013
ADVANTAGES DISADVANTAGES
Initially, the PESTEL analysis is easy to
understand and use, which provides effective
implementation of the same
Initially, the nature of PESTEL analysis is
subjective due to difference in opinion as
different people will view external factor
differently
Secondly, it helps the organization in making
usage of beneficial opportunities which is
raised time to time due to the changes in
external environment
Secondly, sometimes decision made through
PESTEL may go wrong as the business
environment is rapidly changing
Lastly, it helps the company in getting
prepared for threat
Lastly, it involves valuable resources of firm
such as manpower, time and money so if the
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PESTEL
Political
Economic
Social
Technologi
cal
Environme
ntal
legal

cost of benefit is less than that cost, there is no
is no use of PESTEL
Table 1: Advantages and disadvantages of PESTEL analysis
Source: Yuksel, 2012
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4.0 PESTEL ANALYSIS – GERMANY
The analysis of three major elements of the PESTEL of Germany for pollution eating bikes is
described below:
4.1 ECONOMIC
Individuals of Germany own approximately 72 million bicycles, which mean almost everyone in
Germany has a bike. The Germany had two successful years (2014 -2015) in which highest sales
have been observed (Norcliffe, 2016). According to the figure 2, it is shown that bicycle market
of Germany is growing increasingly as Germany has secure first ranking in selling the bicycle
among European countries. The German cycling market has shown the growth of 9.6% over the
years (Pucher nand Buehler, 2017). This information documents that the Germany has become a
huge market leader in the bicycle industry.
Figure 2: 2016 EUROPEAN BICYCLE SALES
Source: CONEBI, 2017
Germany has observed a decline in sales of the bicycles but still sold the more bicycles than
other countries as Germany has sold more than 4 million bicycles in 2016 (figure 3). The
Germany has reached to the 1st rank of EU bicycle sales which states that the popularity of
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cycling in Germany is dramatically increasing (Gylling, et al. 2015). It is very good time and
opportunity for the pollution eating bike to enter into the German bicycle market.
Figure 3: Bicycle Sales (x 1,000) in Europe
Source: CONEBI, 2017
Further figure 4 shows cycling as a main mode in different European countries, so considering
the figure Germany has significantly high mode share (approximately 14%) which leads to the
greater opportunities for pollution eating bike firm in Germany (Fyhri and Fearnley, 2015).
There is an immense growth is observed in the cycling industry in Germany which seems to have
a market forte in bicycle market.
Figure 4: cycling as main mode of transport in European countries
Source: ECF, 2015
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Germany

Moreover, the economy of the Germany is the largest national economy in Europe and it is
fourth largest in across the globe by GDP. According to the IMF, approximately 28 per cent of
the euro area economy in 2017 is accounted by the Germany along with high trade surplus. So all
the above furnished information shows that, this would be accurate time for the pollution eaten
bike firm to enter in the German’s buckle market because the industry is heavily growing and
people are using bicycle as main mode of transport (Pucher and Buehler, 2017). Also the facts of
the economy show that the company will get an immense economic support from the movement
of the Germany.
4.2 SOCIAL FACTORS
To stay fit and healthy, cycling is one of the best exercises and today, countries and the
governments are forcing people to use more cycles in their regular work as it will give numerous
benefits to all. In terms of cycling transport, Germany is one of the countries which has
transformed its major city traffic on cycles as it reduces the pollution level and resources of the
country (Ringshausen, et al. 2015). According to the road safety department of Germany, the
number of bicycles in cities has increased with a very big rate. With the government programs
and seeing the increasing air pollution, the people in Germany are more prone to take their
bicycles rather than any other vehicle for daily purpose (Heyen-Perschon, 2017.).
Figure 5: population of Germany by age group
Source: Barrett, 2016
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Evidences document that, the trend of cycling the in the European countries especially in the
Germany is readily growing as people with high income are using cycle frequently. In Germany,
it is noticed that people of age group of 20 – 50 are more often use bicycle so people fall into this
group are the poetical customers for the population eating bike firm (Ringshausen, et al. 2015).
Considering the census, the current population of the Germany is approximately 80 million and
majority of the population is young (shown in figure 5). So, majority of the population of the
Germany is target market of the pollution eating bike organization (Ringshausen, et al. 2015).
There are several cities in Germany such ad Cologne, Hamburg, Munich, Stuttgart, Kassel,
Karlsruhe etc. which have bike sharing system which shows that the country has an attractive
cycling infrastructure and also this kind of system could be seen as a part of viable urban
mobility. Germany is one of the European countries who have formulated strategy and tactics for
promotion of cycling since 2002 (Cox, 2017). Recently government of the Germany has
launched “2020 National Cycling Plan – Joining forces to evolve cycling” to promote the
cycling in the country. The purpose of the national cycling plan is to make cycling safer and
attractive and to lift eco-mobility which involves cycling, local public transport and walking.
Also, the government of Germany has introduced several policies and legislations for the cyclist
of the country which give them a sense of security and freedom (Mondello, et al. 2018).
So it is very much clear that the individuals in Germany are using bicycle as a main transport
mode and also the industry is growing notably. So the perceptions of the local community and
individuals will definitely favor the operations of the pollution eating bike firm and also the
company will have huge opportunity in sales of the products.
4.3 ENVIRONMENTAL FACTORS
Germany is among nine among European centuries who are facing fines for dodging the
legislations on air pollution. According to the figure 6, the particulate 10 matter in the air of
Germany is increasing regularly and according to the facts, there is a necessity of actively
implement strategies to reduce them (Neale Blackburn, 2017). The major sources of air pollution
in Germany are mobile sources such as aircraft, motor vehicle and aircraft, and stationary
sources such as smoke slack of factories (Lelieveld, et al. 2015). In addition, Germany has
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dirtiest vehicles on the road (figure 7) which causes high air pollution (Krämer, 2016.). So here
the pollution eating bike can be used as a problem solving tool for the country.
Figure 6: PM 10 level in EU countries
Source: EUROSTAT, 2013
Source 6: countries with dirtiest vehicles in road
Source: Transport and environment and EEA, 2016
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The government of Germany is readily involved in pollution reduction activities for the
betterment of the cities of the Germany. Through some initiatives, the Germany has become the
renewable energy leader and climate change union leader in the Europe union. For this, the
government of the country has implemented numerous plans that force people to use cycles
instead of any other mode of transport (Clifford, et al. 2016). After the use of cycles in cities, it is
found that there is a significant reduction in the pollution rate in the whole country. Further, in
all over Europe governments have woken up and now focused on more use of bicycles for the
betterment of present as well as next generations. Environmental concerns are raising
significantly day by day but the impacts can be diminished by using pollution eating bikes in day
to day operations of the country (Norcliffe, 2016).
Considering the environmental factors, government of Germany has a partnership agreement
with the EU environmental authorities to reduce the air pollution and promote people to use
cycle as a main mode of transportation (Gylling, et al. 2015). So, the pollution eating bike firm
should enter into the venture with the government to promote the brand as well as product of the
company. The outcome of the pollution eating bikes is matched with the vision of the
government of the Germany due to which the company will get huge attention from the
government of the Germany (Fyhri and Fearnley, 2015).
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