Global Business: Morgan Motor Company's German Market Entry Analysis

This report analyzes the potential for the Morgan Motor Company to enter the German market. It begins with an introduction to globalization and the importance of international market expansion. The report then delves into a PESTLE analysis of the German market, examining political, economic, and social factors. Political factors include tax structures, export duties, and the legal landscape, while economic factors focus on labor costs, economic growth, and competition. Social factors consider the high standard of living and consumer preferences in Germany. Furthermore, the report uses Porter's Five Forces to evaluate the competitive environment, including barriers to entry, the threat of substitutes, competitive rivalry, and the bargaining power of buyers and suppliers. Finally, the report offers recommendations based on the analysis, considering the company's strengths and weaknesses in the context of the German market. The report concludes by summarizing the key findings and the strategic implications for Morgan Motor Company's global expansion plans.

Global Business in
Context

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................2
ASPECT 1........................................................................................................................................2
ASPECT 2........................................................................................................................................3
ASPECT 3........................................................................................................................................5
ASPECT 4........................................................................................................................................6
Recommendation....................................................................................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9
1

INTRODUCTION
Globalization is the process in which company expand their business in other country and
they started operating their business on the international Level. International market have more
potential as compare to the domestic market and organizations can earn more profit and increase
their growth. They have to use some market strategies which can be helpful for the company to
expand their business on the global level. There are lot”s of opportunity in the global market but
they have to do marketing in a other countries then only they can be successful on this market.
They need more capital and proper market entry strategies and to enter in a global market This
report will cover the strategies to enter in German market for 'Morgan Motor company' and this
report will analyze the market of the Germany and it will cover the overview of this company ,
with this all report will cover pestle analysis and Ansoff matrix of the German Market . This all
will cover by this report.
ASPECT 1
Political Factors
Germany is a democratic country and Germany Market have interest tax stricture If this
company wants to enter in a German market then they have to pay more tax to the German
government. Different market means different in their tax structure. But German government
takes 10 percent of export duty for vehicles which is due to the increasing polarity of the motor
car in the Germany. this can be disadvantage for this company. Because of High tax and more
export duties can have effect on the company's profitability. With the change of government, tax
structure of the Germany will also change (Steger., 2017). They can face high competition in this
market because Germany is an one of the leading car manufacturer industry in the work this will
have effect on the probability on the profitability of the Morgan Motor company. Relation
between UK and Germany are not good and because of this they can charge more, and they can
take more tax from this company. Germany is an legal landscape of the country . From the
German low they do not compare with the Foreign national and German national concerning
with the investment or companies establishment. They promote all type of business equally, and
they support every busyness . It will effect the company, and they can easily establish their
business in the German country because the approach of the German government is very open
and regardless of weather or not the business involve German national or any other foreign
country. They have to follow the rules which other company's are following they do not make
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different rules for foreign business. They all are equal for the German government they all have
to follow rule equally. Germany is democratic country with the federal government, and they are
having three different levels of the government and one of them is state level government, local
government and Federal level. The government at the local level decide the business politics of
the location which also included taxation under it. And they are also a prominent member of the
international companies like UN and IMF. If company will establish their business on the local
level of the German market then they have to may tax to the local government. Local system of
this market prescribed strict labor rules and regulation and it will be important for the Morgan
moter to follow the legal rules of the government, and they have to pay minimum wages
according to the labor low of the German government. The German low will also make it
compulsory for the Morgan Motor company to publish their financial report ever if they are not
publicly listed. This all political factors will effect the Morgan Motors.
Illustration 1: (PESTEL analysis of Germany, 2019)
ASPECT 2
Economical Factors
Germany is an 4 largest economy in the world and most of the employees in the Germany
(why is needed the repetition of Germany here for?) is employees. Employees in the Germany
take high salaries. Germany is the country where employees get high salaries as compare to the
other countries in the world. Because of high salaries of the labor in this company can surfer
from loss and they have to give high amount of the salaries to their employees in the Germany.
Labor rate is very high and they will bring labor from the other country then they have to pay for
their food, leaving and many more. This all will cost more and this will affect on their
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profitability. One of the major limitation will be the expected price of the Morgan life car.
Green are very expensive and not everyone car afford this cars and the Morgan life car will
going to be Exception . there is very less information is available about this car. previous car of
this company take almost 2.5 million pound to build this car. The company is facing the high
growth in the US economy and the company would also face the high competition in the market.
The economy of the US is increasing continuously and the macro environment of the country
would affect the company in the effective manner. High growth rate in the developing market is
the positive factors for the company for entering the market of the Germany. The company is
entering the global market and the Germany market but the company would face the high
competition in the market. Many of the motors Companies have entered the global market. Due
to the entry of the companies in the global market the economy of the country is rising
effectively. Due to the high growth rate in the developing market the revenue is generated and
the US dollar is gaining the strong position in the market.
Due to the other Companies the Morgan motors would face the strong competition In the
market. The market is increasing due to the variety of the things but the company has look after
the various factors which would affect the company in the negative and positive way. There are
various opportunities for the company in the market and also there are various threats for the
company in the market. The threat of the high competition and the threat of the recession is
affecting the Morgan motor company whether the company would be dealing from the any
country. In the case of the global country the company would not enter the market after looking
the threats. So the company must look after the factors which would affect the performance of
the company in the market.
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(Illustration 2: Market analysis and development in Germany for a Dutch
organization: a case study for 4Everyware Stocklots b.v. 2015)
ASPECT 3
Social Environment
People in the Germany have high stranded of leaving. They all use famous brand they
buy cars which is already famous in their country. Germany is an one of the most motor car
manufacturer in the world there are many famous brand of the motor car is established in the
Germany (Pieterse., 2019). Morgan Motor is New brand and they do not have that much
reputation in the market. They will take time to establish their business in the Germany and they
have high chances to fail in this market. People in Germany buy a expensive cars and this
company do not make expensive motor cars. It will be hard for them to establish their brand
name in the Germany. They need to satisfy customers from this country and they have develop
their product which can satisfy demand of the Germany people. If they will develop their cars
according to them then it will take high amount of cost in the manufacturing and new design. It
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will hard for them to enter in this market. This company is specialist in making Eco friendly cars
and there are lot’s competitive pressure coming from this other companies who used to make
green vehicles. most of the companies started making Eco friendly cars and now they all are
giving condition to the Morgan Motors. The pressure which is coming from the competitors are
bound to affect on this company negatively because those competitors are bound to compete
with similar market shares as the company (Rodrik., 2018). Vehicles of the this company is quid
expense as compare to the other Eco friendly vehicles, there are many companies in the German
market who started making Eco friendly vehicles and if this company enters in German market
then they face high competition in third market. Market of the united kingdom is going to be no
expansion because of this condition this company is expected to be face stiff competition from
the other hybrid car market. Germany is one of the most populous country in the whole European
countries. People in the Germany are well-educated and modern. There is fair amount of the
plurality in the lifestyle of the German people and diversity in the culture as well. If Morgan will
establish their business in the country then they have top pay more wages as compare to the UK
people. Because they all are well-educated and they can expect more salary from the company
and it will affect the probability of the Morgan because it will be non-profitable for them because
they will be new in the German market and it will not possible for them to give high salaries to
the employees.
ASPECT 4
Porter's Five forces Model
Barriers to entry : Barriers to entry is the first force which is difficult for new entrants to enter
into the industry. It involves high cost, access to production input and financing and required
capital investment. This will effect the probability of the Morgan motors because they have
limited Financial resources. They will need huge amount of money to enter the German market,
it will take time and money for this all process. German government can also create a problem
for the Morgan Motors because relation between the UK government and EC are not good.
Threat of Substitute : This is the another force which can be influence company system or
functions. It can be analyzed through switching customer competing product or services. There
are many companies in the German market who are making same product and it will put negative
impact on the company and there are many companies who are having good respect in the
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market. It will be important for the leaders of the company6 to make new strategies for the enter
the market and they cannot enter in the market without any strategies.
Competitive Rivalry : Company should need to estimate the level of competition availed within
the market or a industry, In automotive industry the competition is high by huge number of
brands. There are many compositors in the German market who are manufacturer of the Eco
friendly cars, and they have well-established business in the German market so it will be hard for
them to enter ion the German market.
Bargaining power of buyers : This power can also influence customer decision making process.
The example of bargaining power is competitive price, how loyal are customers to the brand,
price sensitivity, threat of backward integration. People in the Germany market are well-
educated and they all are having luxury lifestyle so it will be profitable for the Morgan company.
Bargaining power of suppliers : this force can be beneficial for the company or risky too. It
depends on the relationship between company or suppliers.
Recommendation
This company cars is very Eco friendly and they have expand their business in all over
the Uk and other country as well but if they are thinking to establish their business in German
market then this can affect on their probability because there are many famous brand who are
making Eco friendly cars in the German market (Stearns., 2016). They will face to much
competition their because they are selling their cars in high coast, and in a German market there
are many car manufacturer who are making Eco friendly cars in Low price. Company have
chances to fail in German market. They have to give high salaries to their employees. This will
be risky for them to enter in German market.
CONCLUSION
As per the above report has been analyzed the definition of the globalization and this
report has been briefly explain this case study of The Morgan Motors and this report has been
analyzed the political , economical , environmental , technological and legal factors which can
impact on the company during the German market entry, then it has been analyzed the strength ,
weakness , threats and opportunity of the Morgan motor company. Companies are required to
understand the actual condition of external market, that aids business in managing operations in
significant manner. If companies have good knowledge about politics, economic condition of
nation then it may support business unit in framing effective strategies through which firm can
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gain success in the market and can sustain in the market for longer duration. Firm is required to
conduct market research and also must keep eye on the market fluctuation. This help in the
making effective strategies by forecasting future. This is the best way through which issues
related to external factors can be managed in significant manner. Study can be summarized as
suppliers relationship is the great way through which entity can produce high quality goods and
services and can serve its customers well in the market. Firm needs to make relationship with
many suppliers so that it can get raw material on time and on affordable prices as well. It can be
articulated that porter five forces are the great analytical tool that supports business in analyzing
its position in the market. By using this approach firm can make effective tactics and can sustain
in the market for longer duration. Firm needs to ensure that it serve its consumers so that they
become positive, that will be beneficial in order to retain consumers and controlling over power
of consumers.
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REFERENCES
Books and Journal
Eriksen, T. H., 2018. Globalization. In Handbook of Political Anthropology. Edward Elgar
Publishing.
Hirst, P. and et.al., 2015. Globalization in question. John Wiley & Sons.
Steger, M. B., 2017. Globalization: A very short introduction (Vol. 86). Oxford University Press.
Pieterse, J .N., 2019. Globalization and culture: Global mélange. Rowman & Littlefield
Publishers.
Crane, D., Kawashima, N. and Kawasaki, K. I. eds., 2016. Global culture: Media, arts, policy,
and globalization. Routledge.
Milanovic, B., 2016. Global inequality: A new approach for the age of globalization. Harvard
University Press.
Bourguignon, F., 2017. The globalization of inequality. Princeton University Press.
Crane, A. and et.al., 2019. Business ethics: Managing corporate citizenship and sustainability in
the age of globalization. Oxford University Press.
Rodrik, D., 2018. Populism and the Economics of Globalization. Journal of International
Business Policy. 1(1-2). pp.12-33.
Martell, L., 2016. The sociology of globalization. John Wiley & Sons.
Croucher, S., 2018. Globalization and belonging: The politics of identity in a changing world.
Rowman & Littlefield.
Stearns, P. N., 2016. Globalization in world history. Routledge.
PESTEL analysis of Germany. 2019. [Online]. Available through
<https://www.howandwhat.net/pestel-analysis-germany/>
Market analysis and development in Germany for a Dutch organization: a case study for
4Everyware Stocklots b.v. 2015. [Online]. Available through
<https://pdfs.semanticscholar.org/fc6f/9bdf3f2e4b967462e230e0f1b3c60498954b.pdf>
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