Germany pest analysis

Introduction Germany is located in the centre of Europe. It is one of the largest countries in Europe. Neighbour countries are Poland, the Czech Republic, Austria, Switzerland, France, Luxembourg, Belgium, the Netherlands and Denmark.

The capital of Germany is Berlin. However, the main business areas are Hamburg, North-Rhine Westphalia (Cologne, Dsseldorf), Frankfurt, Stuttgart and Munich. International airports are located in all of these cities. Furthermore, Germany has access to the North Sea and the Baltic Sea. The Port of Hamburg is one of the largest container transhipment centres in Europe

Germany is a parliamentary democracy with a very pronounced federal structure. The legislative and executive powers are divided between the federation and the 16 federal state. The federal parliament has responsibility for national matters such as international affairs, defence and economic policy and taxation. The legislatures of the 16 federal states are responsible for issues such as education and property Population, Size and Language Population: 81.8 million inhabitants Area: 357,112 square kilometres; measuring 885 kilometres from North to South and 595 kilometres from East to West. Population density: 229 inhabitants per square kilometre. Currency: Euro (EUR) Language: Official language is German. Economy Germany is a founding member of the European Union. Furthermore, Germany is part of the United Nations, the OECD, NATO, G8 and G20 and the European Monetary Union (EMU). Based on the nominal Gross Domestic Product (GDP), Germany is the third largest political economy and the second largest export nation. The German GDP was 2,404 billion EUR in 2009. For 2009, the service sector accounted for 72.4% of total employment in 2009 compared to agriculture which amounted to 2.1% and industrial production which accounts for 19.4%. Unemployment figures

vary year to year. However, in spite of the financial crisis in 2009, the rates are better than in previous years. The average rate of unemployment during 2009 was 8.2% (2008: 7.8%, 2007: 10.1%, 2006: 12.0%, and 2005: 11.7%). In July 2010, the rate of unemployment was 7.6%. The annual average inflation rate was around 0.4% in 2009, in June 2010 this index was 0.9% (2008: 2.6%, 2007: 2.2%, 2006: 1.7%, and 2005: 2.0%). The German economic model is to be a functioning social market economy,in which free market economics are blended with solidarity and social compromise

PEST
The PEST analysis examines changes in a marketplace caused by Political, Economical, Social and Technological factors.

Political change, from one party to another in control- for example the rise in private healthcare and privatisations under Conservative governments.
Political factors can have a direct impact on the way business operates. Decisions made by government affect the operations of units within the university to a varying degree. Political refers to the big and small p political forces and influences that may affect the performance of, or the options open to the unit concerned. The political arena has a huge influence upon the regulation of public and private sector businesses, and the spending power of consumers and other businesses, both within UCC and outside of UCC. Political factors include government regulations and legal issues and define both formal and informal rules under which UCC and units must operate. Depending on its role and function within the university a unit may need to consider issues such as: How stable is the internal/external political environment? Will government policy influence laws that regulate third level education? What is the government's policy on the education? Is the government involved in trading agreements such as the Bologna Agreement? The impact of employment laws The impact of environmental regulations Trade restrictions and tariffs Political stability (internally and externally Decision-making structures

Trade restrictions and tarrifs

There are several German companies, which derive more than one-third of the revenues from the foreign trade. This is one of the chief reasons why Germany is dedicated to reduce the trade restrictions in Germany that involves tariffs and the non-tariff barriers, the access to public works projects and improving the transparency of its foreign markets. The trade restrictions in Germany started with the Danish National Bank's Foreign Currency Department, according to which the Danish goods are commanded to put all the payments for the various export sales to the disposal of the National Bank. All the importers of the foreign goods must also apply in advance to Foreign Currency Department for the import permits before they enter their foreign goods into Denmark. Germany at that juncture took a strong decision in the trade restrictions in Germany. The import duty on the Danish butter was doubled by the German Government, which highly endangered the Danish butter import. Lately, United States is the country's second-largest trading partner right after France. In 2000, the two-way trade in goods equaled to $88 billion with the US imports to Germany being $29.2 billion. The main exports to USA from Germany include motor vehicles, chemicals, machinery and heavy electrical equipment. In spite of the Trade Restrictions Germany, imports from the USA include aircraft, telecommunications, electrical and data processing equipments, motor vehicles and its parts.

Govt structure Germany is a parliamentary democracy with a very pronounced federal structure. The legislative and executive powers are divided between the federation and the 16 federal state. The federal parliament has responsibility for national matters such as international affairs, defence and economic policy and taxation. The legislatures of the 16 federal states are responsible for issues such as education and property

Economic change, for example a recession creating increased activity at the lower ends of product price ranges. Rate of interest rises depressing business and causing redundancies and lower spending levels.
All businesses are affected by economical factors nationally and globally. Whether an economy is in a boom, recession or recovery will also affect consumer

confidence and behaviour. The dramatic impact of reduced funds upon UCC is already very apparent. This will impact upon the nature of the competition faced by the university and particular units within the university, upon service provision, and upon the financial resources available within UCC. Economic factors affect the purchasing power of potential customers, and the state of the internal/external economy in the short and long-term. The unit may need to consider: Economic growth Interest rates Inflation rate Budget allocation The level of inflation Employment level per capita Long-term prospects for the economy and the impact upon funding of third Level Education etc

Social change involves changing attitudes and lifestyles. The increasing number of women going out to work, for example, led to the need for time-saving products for the home
Social factors will include the demographic changes, trends in the way people live, work and think and cultural aspects of the macro environment. These factors affect customer needs and the size of potential markets (inside and outside of UCC). Population growth rate Age distribution Career attitudes Internal/external emphasis on safety Internal/external attitudes to change What is the stakeholder expectation of the unit? What is the perceived impact of the unit upon UCC and external stakeholders? How are views expressed? How does the unit respond to such views?

Technological change - creates opportunities for new products and product improvements and of course new marketing techniques- the Internet, e-commerce
New approaches to doing new and old things, and tackling new and old problems do not necessarily involve technical factors, however, technological factors are vital for competitive advantage, and are a major driver of change and efficiency. Technological; factors can for example lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. New technology is changing the way business operates. The Internet is having a profound impact on the strategy of organisations. . Academics and administrative staff can now access UCC 24 hours a day comfortably from their homes. Expectations in relation to response times, for example, have altered dramatically. This technological revolution means a faster exchange of information beneficial for businesses as they can react quickly to changes within their operating environment. Those businesses, which are slow to react, will fall at the first few hurdles. What are the implications for the unit? Do we exploit the available technology to the advantage of the unit and UCC? Automation Technology incentives Rate of technological change Perception of technological change within the unit

 Stakeholder expectation Does technology allow for the services provided by the unit to be created cheaply and to a better standard of quality? Do the technologies offer users / stakeholders more innovative services from the unit? How is information / decision-making distribution changed by new technologies? Does technology offer the unit a new way to communicate within UCC and with external users / stakeholders? Does technology offer the unit an opportunity for CRM (Customer Relationship Management) etc?