Business Environment: Comprehensive PEST Analysis of Germany

This report provides a comprehensive PEST (Political, Economic, Social, and Technological) analysis of Germany. It examines various factors impacting the business environment, including Germany's political landscape, economic indicators like GDP, unemployment rates, and trade relations. The report delves into the social aspects, considering the country's culture, population, and lifestyle. Furthermore, it explores the technological advancements, such as research and development spending, telecommunications, and innovation. The analysis highlights Germany's strengths, such as its strong economy, technological prowess, and skilled labor force, while also acknowledging challenges like the Eurozone crisis and political factors. The report emphasizes the importance of understanding these factors for businesses operating or planning to operate in Germany, offering insights into market opportunities and potential risks. It also references several academic sources to support its findings, making it a valuable resource for students studying business and international markets.

Running head: Germany
Germany

Germany
PEST ANALYSIS OF GERMANY
BACKGROUND
This paper will highlight the information about Germany. The different factors of PEST
ANALYSIS will be elaborated such as political, economic, social and technological. These
factors are essential to be considered at the time of managing the operations of the business in
the country. Germany is a Western European country with a landscape of forests, rivers and
North Sea beaches. The capital of Germany is Berlin and the currency is Euro. Therefore, the
different factors will be explained in reference to Germany. These factors are essential to be
analyzed so that the activities of the companies can be managed smoothly.
PEST ANALYSIS
ECONOMIC ANALYSIS
The Germans also consider the power plants like lignite as the essential source in reference to
the market. In Germany, the resources are comparatively low if the comparison is made with
countries such as Potash and Lignite. It has been examined that country imports two third of the
energy and is one of the biggest energy importers on the 3rd position. The service sector also
contributed to approximately 70% of the GDP and the cities of Germany like Berlin and Hanover
maintain the trade fairs on the international platform. The national unemployment rate is
approximately 6.8% and also 50 Billion is according to the economic stimulus plans that offered
the opportunity to the different companies operating their operations in Germany. The companies
operating the activities in Germany have a wide scope of growth in the different sectors such as
Automobiles, metals, and machinery (Dusonchet & Telaretti, 2015).
The country Germany emphasizes on maintaining the social market economy and in context to
the nominal GDP it is on the 4th position. The growth rate of the country is 1.8% and the GDP
ratio is of $3.747 Trillion. Europe is known as the largest national economy and the country has
captured the second position in exporting the products with $1.408 Trillion which is exported in
2011. Germany also maintained the trading relations with the different countries such as USA,
Netherlands, France and Great Britain. The country also has many large brands which exist in
the market such as Mercedes, Benz, Bosch, and Benz (Martin, Muûls & Wagner, 2015).

Germany
Germany is also known as the modern economy that offers average employment scope and also
they have an essential role in maintaining the knowledge-based economy with different concepts.
The rate of investors is also one of the essential factors that take place in the business
environment of the country. The ratio of direct investment from different countries is now in the
highest position as it covers almost EUR 460 Billion. Germany is considered as the country that
has a huge coverage of the industrial capabilities that emphasizes managing the operations of the
business. In context to the economic ratio, the country stands on the fifth position that positively
impacts the sales and also the profits of the business operating the business environment. In
relation to the total world trade, the country has a share of 9% but there are different economic
challenges due to the reason of the Euro-zone Crisis. Germany also has the best infrastructural
provisions that emphasize the growth of the business in the highly competitive market. The GDP
growth is approx 0.6% in 2012. Just due to the highly predictable environment in relation to the
external environment, it has been seen that an adverse effect will be on the operations (O'connor,
2017). Therefore, it can be said that the demand for the domestic platform has an important role
in boosting the growth ratio of the economy.
The skilled labor in Germany is also sufficient that helps the businesses to manage the activities
in an effective manner. The industries focus on the boosting the production rate and in the
present case, the production growth rate is approximate of 6.7% that assist the companies to
achieve success in the market (Koopmans, 2016).
(Source : EPM,2019) )

Germany
One of the benefits of the country is also related with technological advancement in the
telecommunication system and it has been examined that effective sources of broadcasting is
related with Television and Radio which penetrates in almost 90% in the household sector. In
Germany, there are approx 20.416 Million individuals who are using the internet and the country
is in the 5th position. The business also focuses on managing the activities by transferring the
products from one place to another (Laegreid et al., 2016). So, for the companies, Germany is
considered as the best platform to conduct the activities as it can assist in enhancing the sales of
the products and services in the market.
TECHNOLOGICAL ANALYSIS
There are different US projects that emphasize on maintaining research and development that
boost the growth of the business activities. It is observed that there are different technological
inventions that are done in 2008 in Germany. The country has spent almost 2.6% of the GDP in
the sector related to research and development. There are different sectors that focus on the
contribution in the technology sector such as NANO-TECHNOLOGY, electrical Engineering,
and Biotechnology. There are different manufacturing units that are taken into consideration in
reference to the latest technology to maintain the robotics system to minimize the manual
methods and to maintain the productivity level in the competitive market. It is examined that
Germany provides a fund of broad European research and development that helps to boost the
activities of the different businesses (Coccia, 2015).
In the country, there are different national laboratories and also the research centers on the
private platform that offers direction to the business. In the Ministry of Science and technology,
the focus is given on boosting the coordination and also the standards are set for the different
programs related to science and technology. In Germany, the museum is mineralogical,
geological and botanical factors. Germany is also on the 3rd position in context to the automobile
sector and also the country maintains a position in the European Union and also there are various
components in relation to science and technology (Reichardt & Rogge, 2016)
The German car makers and the suppliers have the opportunities related to technological
innovation that helps in enhancing the opportunities. It is analyzed that there are many
companies who are engaged in managing the activities in relation to the wireless networks for
the cars and it will help in boosting the connections in context to censor the information.

Germany
Germany also considers the technology which is innovative and also it assists in enhancing the
opportunities in the highly competitive market. The companies have the scope to maintain the
infrastructure in an effective manner. It is defined that Germany emphasizes on technology
advanced telecommunication system that assists the business to boost the broadcasting medium
with different sources such as television and radio. The different sources have also penetrated in
the household sector and also the internet population is approx 20.416 Million which boosted the
opportunity for the business operations. In relation to the transportation system, there are
different activities which are developed in the country such as Airways, roadways, and ports.
Also, the image of the country in relation to Germany emphasized designing and innovation. The
factors such as innovation and new technologies have an important role in maintaining the
competitiveness on the economic platform. The WEF stated that Germany is the international
leaders in the field of innovation and also in the research and development field. The scientific
research and institution define that Germany is on the 6th position in terms of boosting the
products quality in the highly competitive market (Schiebahn et al., 2015).
In terms of development and marketing, Germany is on the fifth position out of the 17 countries
and also the emphasis is on enhancing the collaboration between the different government sector
such as federal government, federal state and also the economy has invested in 3% of the GDP in
the sector of research and development in 2015. The research and development contributed
approximately 2.8% of the share in reference to Germany. There are different businesses in
Germany that have a partnership with the different universities. The country emphasize on the
cooperation in the different sectors such as in the field of Microelectronics, power electronics
and the process of engineering (Weyl, 2017).
There are approx 31,000 companies in Germany that are engaged in the activities of research and
development and it also boosts the positive climate in terms of innovation. It has been stated by
Euro-stat that research and development are present in the private sector and also in 2007 the
organizations financed 68% in the sector of R&D. Germany environment technology has a
leading position in the sector of air pollution and recycling. The traditional service in the water
management sector focuses on the products and services in relation to the technology that assists
in promoting the orientation in the sector of economics and sustainability. The country also

Germany
emphasizes on maintaining the latest technology that helps in boosting the innovation criteria in
Germany (Yeager, 2018).
POLITICAL ANALYSIS
It is examined that there is three division related to the government of Germany. The divisions
are the legislature, judiciary, and executives. The local government maintains the policies of the
business by considering the different taxes. The country also maintains the wide scope of the
network between 229 diplomatic missions and it maintains the relationship with more than 190
countries. It can also be one of the biggest contributors that help to maintain the budget of the
European Union with the biggest contributor to the United Nations. The country is also known as
the member of NATO that emphasizes on the defense alliance which also focuses on maintaining
the economic cooperation and development (Jones, 2015).
It is seen that the country focuses on maintaining a large alliance with France. Germany also has
a role with international businesses such as the UN and IMF. To manage the activities of the
business, it is important to emphasize on considering the different factors that can help to
enhance the market share of the company. The Germany constitution also emphasizes on
maintaining the basic structure of the government. In the recent case, the parties of Germany can
easily negotiate with the government. There are different countries that focus on considering the
different factors inside and outside the European Union. The commission of the European has
focused on the different current surplus and also it is examined that the government of Germany
has not given any response in relation to the rules break of the EU. The country also emphasizes
on austerity and also its effect on the system of EU (Myrdal, 2017).
The debt crisis aroused of the EU has also been criticized by the policies of the Merkel's. The
president of France "Emmanuel Macron" also showcased that skill in relation to diplomacy and
also considered the political struggles in context to Merkel's. So, it can be said that this has
affected the operations that are conducted in the European country. The country also focused on
maintaining the strong alliance with France when World War II ended and also it is seen that the
close allies have been made (Kraus et al., 2015).
So, the changes also have impacted the operations of Germany. But it is observed that to invest
in boosting the growth, it is necessary for the organizations to manage the operations effectively.

Germany
It will also help in boosting the customer base that will positively impact the operations of the
company. In Germany, there are problems that took place in context to the political situation, so
it is important to focus on the difference as the companies have the chance to boost their market
share in the highly competitive market (Krause & Battenfeld, 2017).
SOCIO-CULTURAL FACTOR
It is examined that in Germany country, there are more than 82 Million residents and also the
society of the country focuses on different lifestyles. The culture of the country consists of local
architecture, music, and sports that maintain the positivity within the society of the individuals.
Germany is also stated as the renowned classical music that is followed by the people. There are
different art pieces that are related to Germany and also it relates to the old traditions in the
visual arts. The innovation in relation to the Germans consists of different aspects such as
printmaking and wooden engravings. The country is one of the famous countries of the EU. The
population of the country is educated as they have different views and opinions. Also, it can be
seen that there are different demographic challenges that are faced by the country like the aging
population, the problem related to immigration and also it reduce in the incomes. The culture of
the country is different and also the managers are given appreciation. The people of Germany
have good command over the language that boosts the opportunity for the business to appoint the
talented candidates. It is observed that the roles and responsibilities of the Germans are foxed
and also the activities of the business are structured in an effective manner. Due to this the
change in the behavior of the people has been evaluated and now the people are emphasizing on
maintaining the communication process. In Germany, there are approx 82 Million people who
focus on maintaining the terms of population. The country also has the ethnocultural diversity
that affects the activities of the company in a positive manner (Fraune, 2015).
There are also many forms in context to the co-existence that also varies from nature and also it
has been seen that traditional gender is dispersed in an effective way. It is necessary for the
companies to focus on maintaining the needs of the customers so that it can be easy to compete
with the competitors present in the market. The Germans also have support in the regional pride
and also they elaborate the ideas in an effective way. At the time of entering into the new market,
such as in Germany it is necessary to focus on introducing the products and services in the
market according to the needs of the customers. Germany also has good medical care and it is

Germany
one of the largest sectors in context to the employment (Hajro, 2015). Therefore, it can be stated
that the companies can conduct their business in the German market as there is a scope of
achieving large market share.
Conclusion
Therefore, by analyzing the four factors it can be concluded that Germany will be one of the best
platforms that will help the business to set up its operations in the market. Germany will be a
good choice to conduct the activities as it has been seen that the service sector contributed to
approximately 70% of the GDP which is a wide scope to boost the operations. Also, in context
to technical analysis, it is observed that Germany provides a fund of broad European research
and development that helps to boost the activities of the different businesses. The Political
scenario of the country states that the country has a strong alliance that assists in boosting the
relation of businesses with different companies. At last, in relation to the socio-cultural factor, it
has been observed that the lifestyle of the people keep of changing so that business has the
chance to introduce the products and services in the market. Therefore, to conduct the business in
the German market can be one of the beneficial decisions for the company.

Germany
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