PESTEL Analysis GERMANY

Presented by Abhishek Puri 207/12 Shrey 227/12 Ankit Saxena 235/12 Ratika Sood 239/12 Prachi Singhai 268/12

Flow Of Presentation
Introduction Political Economy Social Technology Environment Legal References

GERMANY

Capital Area Population(2010) Density GDP (PPP) GDP (Nominal) Per Capita Currency President Chancellor

- Berlin - 357,021 km2 (63rd) - 81,799,600 (16th) - 229/km2 (57th) - $3.194 trillion (5th) - $3.367 trillion (4th) - $39,059 (17th) - Euro () - Joachim Gauck - Angela Merkel

GERMANY
Officially the Federal Republic of Germany , it is a federal parliamentary republic in west-central Europe. Germany comprises sixteen states which are collectively referred to as Lnder. Each state has its own state constitution and is largely autonomous in regard to its internal organisation. Germany was a founding member of the European Community in 1957, which became the EU in 1993. It is part of the Schengen Area. It is a member of 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 20112012 term.

Germany is a federal parliamentary republic, and federal legislative power is vested in the Bundestag (the parliament of Germany) and the Bundesrat (the representative body of the Lnder, Germany's regional states). The German federal state is a complex entity. It consists of a central Federal Government and 16 federal states. The German electoral system makes it very difficult for any one party to form a government on its own. This has only happened once in 56 years. An alliance of parties is the general rule.

The Basic Law for the Federal Republic of Germany is the constitution of Germany.[4] It was formally approved on 8 May 1949, and, with the signature of the Allies of World War II on 12 May, came into effect on 23 May

Head of State : President of Germany

The duties of the Bundesprsident (Federal President) are largely representative and ceremonial. He is not a member of the government. The President is elected every five years by the Federal Assembly (Bundesversammlung)

Head of Government : Chancellor of Germany

The Bundeskanzler (Federal Chancellor) heads the Bundesregierung (Federal Government) and thus the executive branch of the federal government. He or she is elected by and responsible to the Bundestag, Germany's parliament.

Cabinet
The members of the government are the Federal Ministers; they are chosen by the Chancellor.

Political Structure

Foreign relations

Germany maintains a network of 229 diplomatic missions abroad and holds relations with more than 190 countries. It is the largest contributor to the budget of the European Union (providing 27%) and third largest contributor to the United Nations (providing 8%). Germany is a member of the NATO defence alliance, the Organisation of Economic Co-operation and Development (OECD), the G8, the G20, the World Bank and the International Monetary Fund (IMF).

Germany has maintained a strong alliance with France since the end of World War II. The governments of Germany and the United States are close political allies. The 1948 Marshall Plan and strong cultural ties have crafted a strong bond between the two countries. The two countries are also economically interdependent: 8.8% of German exports are U.S.-bound and 6.6% of German imports originate from the U.S.

Economy
German GDP $3.577 trillion and GDP growth of 0.7% (2012). It is a social market economy. It is the largest national economy in Europe and is the world's second largest exporter with $1.408 trillion exported in 2011. The most important trading partners are France, the Netherlands, the USA and Great Britain.

Contdd..

Exports account for more than one-third of national output. Most of the country's products are in engineering, especially in automobiles, machinery, metals, and chemical goods. Well-known global brands are Mercedes Benz, BMW, Adidas, Audi, Porsche, Volkswagen, Bayer, BASF, Bosch,Siemens, Lufthansa, SAP and Nivea Germany is the leading producer of wind turbines and solar power technology in the world. Germany is relatively poor in raw materials and imports about two thirds of its energy. Germany currently spends around 2.6 percent of its GDP , clearly above the EU average of 1.9 percent on R&D. Export goods-motor vehicles, machinery, chemicals, computer and electronic products,. Import goods - machinery, agricultural products ,data

Sector wise contribution to GDP Contribution to total GDP(%)

1 29

Service

Industry
Agriculture
70

More than 29 million people work in the service sector. Banking and insurance are a pillar of the service sector. The most important sectors of industry are automotive manufacture, mechanical engineering, electrical engineering and chemicals. Automotive manufacture is the innovation engine room : Around 30 percent of all internal company spending on R&D is in this

Culture and Creative industry on the up

This sector embraces fields such as music, literature, art, cinema and the stage, as well as radio/TV, the press, advertising, design and software and numbers some 238,000 companies employing almost one million people. It is a model for a modern economy: It offers above-average employment opportunities, is playing a pioneering role on the way to a knowledge-based economy and is a significant source of original innovative ideas. International investors rate Germany as one of the most attractive centre. Direct investment from outside the country now stands at EUR 460 billion

Demographics
Population: 82,282,988 Population growth rate: -0.061 % Birth rate: 8.21 births/1000 population Life Expectancy: 79 years 2nd most populous European country Population density: 230 per sq km

Demographics (Conttd)

Median age (male): 42.6 Median age (female): 45.2 Age Structure: 0-14 years: 13.7% 15-64 years: 66.1% 65 years and over: 20.3%

Population of capital city of Berlin: 3,440,441 Urbanization: Urban Population: 74% of population Rate of Urbanization: 0.1% annual rate of change

Labour Force
Average work week: 37.5 hours Normal business hours: 9 am 5pm Retail hours vary, limited hours on Sunday Average wage: 27.9 EUR (Western Germany) and 17.4 EUR (Eastern Germany) Typical Annual Leave: 20-30 working days

German Consumer
The typical German consumer rejects the idea discounts shops and places value on quality. Emphasis on safety , quality , comfort and reliability Household consumption (2008): 1,143,489 USD Household consumption per capita (2008): 13,926

Religion
Religious freedom Protestant (33%), Roman Catholic (33%), Muslim (4%), 108,000 members of Jewish communities, and others

Culture

Germans have a strong sense of regional pride. Reputation for being industrious ,thrifty , and orderly. Germans usually express their thoughts and opinions in a direct way. Separation between private and public relations. Interest in academic credentials but not personal life. Formal communication and greetings.

Culture (Conttd)
Business deal is usually mutually beneficial and the central focus is just the task. Attention to be paid to targets and time schedules. Appointments are to be taken before meeting someone. Decision making is a slow detailed process. Correspondence should be in

Medical Care
Germany is one of the countries with the best medical care Health care is the largest employment sector in Germany Key pillar is the Health fund Federal governments long term aim is to enable more autonomy with regard to contributions and greater regional differentiation

Pensions
Fundamental changes in provisions for old age Riester pension and Rurup pension are models for self-employed already in existence Reform of the accident insurance scheme is still outstanding

What do aspirin, the electron microscope, the MP3 music format, and LCDs have in common? Germanys reputation for engineering excellence and innovation means that consumers buying German goods are typically looking for that little bit extra: be it cutting-edge technology or that special, perfectly designed something that simply cant be found elsewhere.

Innovation and new technologies are of vital importance for maintaining Germany's international competitiveness as an economic performer. Germany ranks eighth out of 139 countries for innovation in the World Economic Forums (WEF) Global Competitiveness Report 20102011. According to the WEF, Germany is the international leader in terms of capacity for innovation, occupies fourth place for company spending on R&D, and secures sixth spot for quality of scientific research institutions.

Germany ranks third, after Japan and Sweden, for patents filed simultaneously with the U.S., Japanese and European Union trade offices. Germany is among the top five of 17 analyzed countries including the U.S. and U.K. for the development and marketing of high technology. Collaborations between the Federal Government, federal state and the economy to invest three percent of GDP in R&D until 2015.

Germany R&D

In 2009, research and development accounted for a 2.8% share of German GDP. This is one of the highest R&D rates in the world, surpassing the United States for the first time since 1989. German companies work in close partnership with universities and research institutions. They cooperate in a number of areas including mechatronics, microelectronics, power electronics, telematics, environmental and process engineering, and materials research.

Over 31,000 companies in Germany engage in ongoing R&D activities, and this provides a strong basis for a positive climate of innovation.
The main funding for R&D comes from the private sector. Businesses financed 68% of R&D expenditure in 2007, according to Eurostat, the EUs statistical body.

Germany - Automobile
Due to the world wide popularity towards German cars, Leading automobile manufacturers in this segment including Audi, BMW, Daimler or Porsche are domiciled in Germany and each produce with several production plants locally. Also volume-manufacturers like Ford, Opel/GM, and Volkswagen each produce with several plants in Germany. Germany follows a concept of Lust auf Technik (Passion for Technology) to raise the count of innovative and researching companies in Germany.

Environmental Technology
Germany's environmental technologies industry is expected to reach a higher sales volume than automotive or mechanical engineering by 2020. The German environmental technology industry has an internationally leading position, particularly in the fields of air pollution control, noise mitigation and recycling. In addition to traditional services in the areas of waste management and water resources management, the field of environmental technologies includes all technological products and processes that promote a sustainable and forward-looking economic orientation.

The relevant fields of technology in this context are

environmental protection, air pollution control, water conservation and water resources management, waste management, soil conservation and the protection of limited resources.

2011- Germany is worlds 6th largest and Europes largest carbon emitter After signing Kyoto Protocol: 23% reduction in carbon emissions 39% of wind energy of worlds requirement Committed to use renewable energy sources 2013 Initiative for SMEs, Energiewende to boost transformation of German energy system

Legal
Law enforcing system is divided at 3 levels Federal, State & Local More powers at state level whereas federal police intervene only at National & international level The German Supreme Court namely the Federal Constitutional Court monitors maintenance of rights and preservation of justice.

Legal System
Historically speaking German law in part goes back to Roman law The administration of Justice is divided into 5 branches: -Ordinary -Labor -Administrative -Social & -Financial Courts In surveys on political and legal stability foreign investors put Germany second only to Britain This legal stability attracts foreign companies and benefits entrepreneurial activities in

Business Environment

Policy towards private enterprises and competition 2012-13 Retains its involvement in financial sector through ownership of two bad banks 2014-16 State continues to be involved in banking sector but gradual liberalization in others electricity, gas, petrol ,rail Policy towards FDI 2012-13 Welcomes FDI; hostile takeovers create controversy 2014-16 -Centre left parties might discourage some investment Foreign Trade & exchange controls 2012-13 Eurozone crisis bears risk of trade and flow of capital if it leads to break up of currency area; global trade deal unlikely 2014-16 EU likely to shift to bilateral free-trade

References
http://www.tatsachen-ueberdeutschland.de/en/headnavi/home.html http://performance.ey.com/2012/08/16/ germany-business-environment-at-aglance/ http://www.bundesregierung.de/Webs/ Breg/EN/Homepage/_node.html http://en.wikipedia.org/wiki/Economy_ of_Germany