MKTM028 Strategic Marketing: PESTEL Analysis Germany Market

This report presents a PESTEL analysis of Germany to evaluate the feasibility of a smog-free bicycle company entering the market. The analysis focuses on legal, environmental, and social factors. Germany is highlighted as an eco-friendly country promoting bicycle usage and public transportation through various laws and policies at both federal and local levels. These include the development of car-free zones, bike parking stations, speed restrictions, and increased gasoline taxes. The report also notes Germany's investment in cycling infrastructure, such as cycle tracks and dedicated bike routes (Autobahn). Based on the PESTEL analysis, the report suggests that Germany could be a favorable market for the company due to the high bicycle usage, supportive government policies, and extensive cycling infrastructure.

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