understanding germany in a better way

1. PESTEL ANALYSIS OF
GERMANY

2. P - POLITICAL
THE PESTAL E – ECONOMIC
FACTORS
S – SOCIAL &
CULTURAL
T-
TECHNOLOGICAL
E-
ENVIRONMENTAL
L - LEGAL

3. Introduction
It’s very important that an organization considers its
environment before beginning its production, financial or
marketing process. In fact, PESTAL analysis could be and needs
to be continuous function and feed all aspects of planning.
The environment is made up from:
 The internal environment e.g. staff (or internal customers),
office technology, wages and finance, etc.
 The micro-environment e.g. our external customers, agents
and distributors, suppliers, our competitors, etc.
 The macro-environment e.g. Political (and legal) forces,
Economic forces, Socio cultural forces, and Technological
forces. These are known as PESTEL factors.

4.  Germany, officially is the Federal Republic of Germany. The country
consists of 16 states while the capital and largest city is Berlin. Germany
covers an area of 357,021 sq km and has a largely seasonal climate. With
81.8 million inhabitants, it is the most populous member state and the
largest economy in the European Union. It is one of the major political
powers of the European continent and a technological leader in many
fields.
 Germany was a founding member of the European Community in 1957,
which became the EU in 1993. It is part of the Schengen Area and since
1999 a member of the eurozone. Germany is a member of the United
Nations, NATO, the G8, the G20, the OECD and the Council of Europe,
and took a non-permanent seat on the UN Security Council for the
2011–2012 term.
 It has the world's fourth largest economy by nominal GDP and the fifth
largest by purchasing power parity. It is the second largest exporter and
third largest importer of goods. The country has developed a very high
standard of living and a comprehensive system of social security.
Germany has been the home of many influential scientists and
inventors, and is known for its cultural and political history.

5. Political Factors
 Germany is a democratic republic. The German political system operates
under a framework laid out in the 1949 constitutional document known as the
Grundgesetz. Since 1949, the party system has been dominated by the
Christian Democratic Union and the Social Democratic Party of Germany with
all chancellors hitherto being member of either party
 The Government of Germany consists of three significant wings, the
legislature, the executive and the judiciary represented by the Federal
Parliament, the Federal Government and the Federal Constitutional Court,
respectively.
 The President is the formal executive head of the State elected for a term of
five years. He appoints the Federal Chancellor (Prime Minister) and his
Cabinet. The Chancellor is the real head of the Government elected by a
majority vote of the Bundestag. He is responsible for the implementation of
the government policy. He can be removed from office only by an absolute
majority of the Bundestag coupled with an assured majority for the election of
another candidate to the post.

6. ANGELA MARKEL -
CHANCELLOR
MR. MARKEL – THE PRESIDENT

7.  The Constitution of The Federal Republic of Germany is
derived from the Basic Law which came into effect on May 23,
1949 after the consent of the USA, the UK and France to
establish the Federal Republic . It lays down the fundamental
structure of the government and the value system it should
follow. It clearly defines the principles according to which the
government is expected to function. Apart from other
important details, it describes the process and pattern of
election to the supreme legislative organ, the Bundestag. It is
the source of authority and the basic guiding philosophy to all
those who take upon the reigns of government. It is also a
stamp of justification of the freedom and rights of the German
citizens.

8. Economic Factors
 Germany is relatively poor in raw materials. Only lignite and
potash salt are available in economically significant quantities.
Power plants burning lignite are one of the main sources of
electricity in Germany. Oil, natural gas and other resources
are, for the most part, imported from other countries.
Germany imports about two thirds of its energy.
 The service sector contributes around 70% of the total GDP,
industry 29.1%, and agriculture 0.9%. Most of the country's
products are in engineering, especially in automobiles,
machinery, metals, and chemical goods. Germany is the
leading producer of wind turbines and solar power technology
in the world. The largest annual international trade fairs and
congresses are held in several German cities such as Hanover,
Frankfurt, and Berlin.

9.  Of the world's 500 largest stock market listed companies measured by revenue,
the Fortune Global 500, 37 are headquartered in Germany. In 2010 the ten
largest were Volkswagen, Allianz, E.ON, Daimler, Siemens, Metro, Deutsche
Telekom, Munich Re, BASF, and BMW. Other large German companies include:
Robert Bosch, ThyssenKrupp, and MAN (diversified industrials); Bayer and
Merck (pharmaceuticals); Adidas and Puma (clothing and footwear);
Commerzbank and Deutsche Bank (banking and finance); Aldi, Lidl and Edeka
(retail); SAP (computer software); Infineon (semiconductors); Henkel (household
and personal consumer products); Deutsche Post (logistics); and Hugo Boss
(luxury goods). Well known global brands are Mercedes Benz, BMW, Adidas,
Audi, Porsche, Volkswagen, DHL, T-Mobile, Lufthansa, SAP, and Nivea.
 Between 1991 and 2010, 40 mergers & 301 acquisitions with an involvement of
German firms with a total known value of 2,422 bil. EUR have been announced.
The largest transactions since 1991 are: the acquisition of Mannesmann by
Vodafone for 204.8 bil. EUR in 1999, the merger of Daimler-Benz with Chrysler
to form DaimlerChrysler in 1998 valued at 36.3 bil. EUR, Deutsche Telekom
acquired VoiceStream Wireless Corp for 30.8 bil. EUR in 2000, the sale of T-
Mobile USA Inc by Deutsche Telekom to AT&T Inc for 27.6 bil. EUR in 2011.

11. Socio – Cultural Factors
Germany has about 82 million inhabitants. It is by far the
largest country in the EU in terms of population. Germany
is a modern, cosmopolitan country. Its society is shaped
by a plurality of life styles and truly different ethno-
cultural diversity. Forms of coexistence have become
more varied. Traditional gender roles have been
dispensed with. Despite the social changes, the family
remains the most important social reference unit and
young people have very close bonds with their parents

13. Architecture: The varied styles, the precursors of Romanesque contributed to the
architectural styles of Germany. The diverse architectural styles of the country is a
result of fragmentation of the country during centuries. Abbey Church of St.
Michael's, Speyer Cathedral and the Cologne Cathedral are the major architectural
sites that are the prototype of German architecture.

14. Music: One of the leading music markets in the world,
Germany is home to some of the most well-known classical
music composers, including Ludwig van Beethoven, Johann
Sebastian Bach, Johannes Brahms, and Richard Wagner.

15. Literature: German literature is world-famous and dates
back to the Middle Ages. Johann Wolfgang von Goethe
and Friedrich Schiller, Thomas Mann, Bertolt Brecht, and
Hermann Hesse are some of the most renowned German
authors. Germany hosts the Frankfurt Book Fair annually;
it is the biggest book fair in the world.
Sports: Germany has been represented in various
international sporting events including Formula One, FIFA
World Cup, Summer Olympics, ice hockey, and tennis
tournaments. One of the leading motor sports countries in
the world, Germany is known for the manufacture of
motor brands such as BMW and Mercedes.
German Art: Germany has produced some of the best
pieces of art work and has a long tradition in visual arts.
Hans Holbein the Younger, and Matthias Grunewald were
the major Renaissance artists. Print making, wood
engravings and Gothic art of the sixteenth century are
some of the major German innovations.

17. Technological Factors
 Germany supports national science and technology at many levels. There are
independent laboratories, comprised of both the national laboratories and
private research. In addition, German industry supports many important
types of research and development, and the German states, provide still
more resources for scientific research. The Ministry for Science and
Technology, an organization coordinates and sets priorities for the entire
national science and technology program for Germany. Finally, Germany's
participation in the European Union also has a significant science and
technology component—Germany provides funding, scientists, and
laboratories for broad European research and development.
 Germany has numerous universities and colleges offering courses in basic
and applied sciences. The Natural History Museum in Berlin has geological,,
mineralogical, zoological, and botanical components. The country has
numerous specialized learned societies concerned with agriculture and
veterinary science, medicine, the natural sciences, and technology.

18.  Germany’s greatest strength is its automobile industry. In the years to come,
many emerging technologies, from optical communication links to nanotech
mate-rials, will find their way into cars. Technological innovation will be critical
to creating the opportunities that will lead German carmakers and their
suppliers out of their current trouble. In particular, German carmakers are
betting on computer-based assistance systems that could make driving safer
and more comfortable. Example: BMW is working on wireless networks for cars
that will automatically set up connections among vehicles in order to exchange
critical sensor information; a car that detects a slippery stretch of pavement,
for instance, could relay that information to other cars on the same road.
 The goal is to create networks of intercommunicating cars that could someday
form a sort of automotive Internet. Researchers at the University of Stuttgart,
in collaboration with other German carmakers, are also designing and testing
systems to assist drivers at intersections. Such systems might combine
information from traffic lights or signs with onboard-sensor data about other
vehicles and their speed or distance in order to get the drivers safely across.

20. Environmental factors
Changes in the atmosphere and climate system are among
the greatest environmental and political challenges of the
21st century. Climate change, which has largely been
caused by human activity, is the global challenge. In the
international arena, Germany is a forerunner in climate
and energy policies and seeks to achieve ambitious
emission-reduction goals. With the 2011 decision to opt
out of nuclear energy and to decommission the last
nuclear power station by 2022 at the latest, Germany is
sending out a signal that has been respected throughout
the world.

21. As a well-developed industrialized nation with a high
population density, Germany finds itself particularly
dependent on natural resources. Understanding these
resources are limited and the impact the continual drain
extracting those resources has on the environment,
Germany continues to take steps to ensure that not only
are those resources available for meeting their everyday
needs, but that the country’s needs are met without
leaving any long-term negative impact on the
environment. Today, Germany has reached a high level of
environmental protection. According to an Environmental
Performance Review Programme of Germany performed a
few years ago, Germany held a top position in
environmental protection worldwide.

22. Legal Factors
 The modern German legal system is a system of law which
is founded on the principles laid out by the Basic Law for
the Federal Republic of Germany, though most of the
important laws as for example most regulations of the civil
code were developed prior to the 1949 constitution. It is
composed of public law which regulates the relations
between a citizen and the state or two bodies of the state
(including criminal law) and the private law which
regulates the relations between two people or companies
and the criminal law.

23.  Public law
Public law rules the relations between a citizen or private
person and an official entity or between two official entities.
E.g., a law which determines taxes is always part of the
public law, just like the relations between a public authority
of the Federation and a public authority of a state (Land).
• Administrative law
The administrative law is the law of the Executive. It covers
most kinds of legal relations between the state and the
citizens, but also between different bodies and/or levels of
government but not those legal relations, when the state
closes contracts like any other private citizen.
 Private law
Private law rules the relations between two private legal
entities (for example a buyer and a seller, an employer and
an employee, a tenant and a landlord or two entities that act
on the same level as private persons. In contrast, whenever
a state agency exercises official power, private law is not to

24.  Criminal law
Criminal law in the narrow sense of the word is a matter of
Federal law in Germany. No one under 14 years old is held
responsible for crimes at court, and for people under the age of
18 and in case of missing maturity under the age of 21 there are
special courts and some adjustments to the criminal law as well.
German law does not know juries. Sentences stretch from fines to
life imprisonment. The actual death penalty is explicitly forbidden
by the constitution. Extremely dangerous persons can be turned
over to psychiatric treatment or have to stay in prison as long as
necessary in addition to their punishment.
 Civil law
Civil law determines the relationships among persons and/or legal
entities, i.e. those who do not fall into a special category (like
merchants or employees). The most important reference of this
area is the Civil Law Book is for 5 major parts: the
common/general part, the law of obligations, property law, family
law and law of succession.

25. Conclusion
 With the help of these analysis, we understand that
Germany is a technically advanced country, it spends a
great amount of money on Research and development.
 German culture gives importance to Music, Literature and
its Family and these factors still have a strong hold in their
lives.
 Germany is also considered to have a vey god scenic
beauty.
 Germany is a peaceful nation to conduct business, but
German Law is very particular when it deals with the
organizations who cause any kind of harm to its nature
and people.
 We need to understand that Germany still has a great
potential to grow as their people are very much educated
and scientifically advanced due to their research and strive

26. Thankyou
 Caroline Dsouza 04
 Sahil Desai
 Manoj Singh
 Rajesh Dubey 09