PESTEL Analysis Of Germany For Smog Free Bicycle Company

Evaluation and Review of PESTEL Model

The report helps in the overall analysis along with the determination of the project related to smog free bicycle wherein the main aim is towards the reduction of the pollution along with proper development of the smog free kind of cities with proper innovation of the bicycles which helps in inhaling the polluted air and releases the fresh and clean kind of air. This kind of cycle is required to be introduced in Germany which will be of huge advantage for the company. Furthermore, in order to investigate the overall feasibility along with the success of the entire project which will be started and established in Germany, proper external analysis of Germany along with the impact of the same is required to be analysed in an efficient manner.

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As hypothesized by Benjamin Franklin, “If you fail to plan, you are planning to fail”, which helps in analysing the overall strategic planning along with the importance of the same for any kind of business wherein this allows the managers and owners in order to make the better kind of decisions along with avoiding to be confronted by the different kinds of difficult situations which have been anticipated in the past.

The first section of the entire report helps in the overall critical review of the model of PESTEL as the strategic tool of marketing which helps in involving the different strengths along with weaknesses. Furthermore, the second section deals with evaluation of the PESTEL analysis which is inclusive of Social, Environmental and Legal aspects. Lastly, the report helps in the recommendations which are required to be provided in order to support the decisions of the smog free bicycle company in order to enter the market of Germany.

The analysis of PESTEL Model is essential in nature which is being used by the different kinds of businesses while launching a new product or service along with when they are entering into the new market or region (Ellingsen, Singh and Strømman 2016). The analysis of PESTEL model helps in allowing the business to evaluate and examine the overall external environment analysis of the specific kind of city, region or country (Figure 1) with the proper investigation of the impact of the different external kind of factors on the organization (Figure 2 and Appendix 1).

Furthermore, with the help of PESTEL analysis, this has allowed proper exploitation along with identification of the different kinds of opportunities which may not be detected by the organization along with anticipation of the different kinds of difficulties along with threats which may arise (Federal Ministry of Transport, Building and Urban Development BMVBS, 2008). Moreover, with the help of the PESTEL analysis, this allowed the business to maintain and obtain the competitive advantage over the different competitors.

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PESTEL Analysis of Germany

Additionally, in order to conduct the PESTEL analysis, the business needs to follow the simple kind of process which will be starting from the brainstorming of the different external factors which can cause and effect the organization which will be in relation to the factors of the PESTEL. Furthermore, identifying, evaluating and analysing the implications is required to be done. Finally, profitability rating of the different issues which are happening is required to be analysed in an efficient manner.

Figure 1: External Analysis

(Source: Leonidou et al., 2015)

Figure 2: PESTEL Model

(Source: Leonidou et al., 2015)

On the other hand, this has been analysed that there are various studies which have argued that when the PESTEL analysis will be allowing the identification of the various external factors which may affect the overall business, PESTEL Model do not provide any kind of insight on analysis of the dealing with the different kinds of factor, wherein PESTEL analysis becomes more diagnostic tool rather than being the most effective kind of solution. Furthermore, as to increase the overall percentage of the business success, the PESTEL analysis is required to be conducted, however this is not enough as this is required to be combined with the different other marketing tools which are strategic in nature.

Additionally, there are different other strategic kind of tools along with techniques which is inclusive of SWOT, Porter’s Five Forces Model Analysis along with the different variations of the PETSEL model. However, this can be noticed that there can be several kinds of weaknesses in the PESTEL analysis, however this is the most suitable kind of tool which is being used in order to conduct the external environment analysis. The main reason is because this helps in representing the static kind of report which helps in analysis of the position of specific kind of environment by considering the different kinds of external factors which is essential in nature.

PESTEL Analysis



PESTEL analysis helps in providing the efficient along with appropriate kind of framework which helps in the reporting and analysis of the external environment of the business

The analysis of PESTEL has to be carried out in a regular manner as there are various kinds of changes which takes place in the frequent manner

PESTEL analysis helps in the overall determination and identification of the different kinds of potential problems along with opportunities in the entire environment

There is huge cost of carrying out PESTEL analysis can be high as there should be done in a frequent manner

PESTEL analysis helps in providing proper insight on whether the market is favourable in nature which will be allowing the business to gain competitive advantage over the other different other competitors

The quality of the PESTEL analysis will be depending on the different skills along with knowledge and abilities of the people which is conducting the analysis

Based on the PESTEL analysis, there are several recommendations of management which is required to be provided by the company

PESTEL analysis is subjective in nature and there is biasness which will depend on the person who is responsible for the conducting the analysis

Proper analysis of PESTEL model is required to be done which will help Smog free Bicycles Company; this will be helpful in managing the different kinds of factors which is responsible for analysis of legal, environmental and social factors respectively.

In the last few decades, this has been seen and analysed that Germany is one of the most eco-friendly and sustainable kind of country in the European Union, however on the other hand, this has been seen that as per the international investment organization named RobecoSAM, Germany has been positioned among the top 13 countries which are considered as the most sustainable countries in the entire world.

Legal Factor

Figure 3: Sustainability Ranking of Germany

(Source: De Leeuw et al., 2015)

It has been able to achieve the different kinds of laws, policies, and procedures along with programs which were implemented by the government at both local along with federal level. From the 1970s, the governments tried to play a major role in promoting along with encouraging the usage of the transport which is sustainable in nature along with made the ownership of the car users costlier. Furthermore, when Germany has increased the car ownership costly in nature, they have provided different convenient kind of options by development of the different kinds of policies and regulations which will improve the usage of cycle and other kinds of public transportation (Ellingsen, Singh and Strømman 2016).

At the local stage, the different kinds of German have tried in implementing the several policies along with regulations which have tried in increasing the usage of the bicycles which tried to increase the usage of bicycles along with the country tried to restrict the usage of the cars among the different cities and there are various rules and regulations which are as follows:

Restrictions of Speed is one of the aspects which is required to be analysed in which this has been seen that there are many cities which have traffic calmed areas. The speed limits of the cars in these cities are around 30km/hour and wherein there are different homes, the limit of speed is 7km/hour and this is promoting and encouraging the walking and the pedestrians have the priority regarding the traffic.

The regulations related to traffic is the other option in which the different cities in German have tried in allowing the cyclist to utilize one-way streets in the different directions which will help in shortening the distances of travel and the usage of the different cars are restricted in nature.

The different parking stations of bike along with garages is the other option in which there are several kinds of German cities which have tried to create bike parking in different universities, businesses along with residencies in an appropriate manner.

The car free neighborhoods  such as Hamburg, Frankfurt along with Munich have the different regions and neighborhood’s car free which helps in promoting and encouraging the walking along with cycling.

On the other hand, in the federal stage, the Germany Country has tried in introducing the different kinds of rules along with regulations which helps in restricting the usage of the different cars along with promoting the usage of cycling in the various areas effectively. The different aspects are as follows:

  • Traffic Laws is one of the aspects in which this helps in restricting the usage of the cars along with protecting the different cyclists and the pedestrians in order to ensure their safety.
  • The law related to anti air pollution is the aspect in which this has been seen that the entire law helps in dictating that the different cars must be registered along with an analysis of environment green sticker which will help them in entering the green zone and this was seen that any such kind of car without such stickers will be fined (Barfoot and Brookes 2014).
  • The CO2 based vehicles tax is the other aspect in which this can be analysed and identified that this kind of tax was introduced in the year 2009 which was related to the CO2 related emissions car and this was being addressed that when the emission will increase, this will increase the rate of taxes as well (Barfoot and Brookes 2014)
  • The environmental kind of tax which was being introduced in the year 1999 and this is being imposed on mineral oils, electricity along with gas (Chen and Kockelman 2016).
  • The gasoline tax is the other aspect in which this kind of tax is being imposed of the sale of the fuel. This has increased continuously from the 0.40 in the year 1980 to about 0.50 and this is three times higher than Germany than in USA (Chen and Kockelman 2016)

Additionally, the National Cycling Plan of Germany of 2020 is based on the different kinds of different kinds of policies and strategies which will help in promoting and encouraging the cycling concept in an efficient manner (Chen and Kockelman 2016). These kinds of policies and strategies are being based on the major nine areas which is inclusive of the following:

Infrastructure- The main aim of NCP to finish and expend the German Autobahn

Cycling Innovation- The main aim and purpose to implement the different kinds of campaigns along with contests along with implementation of the different technologies related to cycling (Barfoot and Brookes 2014).

Safety of the Road- NCP is aiming to further improve the overall safety of the different cyclists by properly organising the different kinds of safety cyclists’ campaigns

Tourism and Cycling is the other option in which NCP is aiming to increase the overall cycling tourism by more than 15% (Barfoot and Brookes 2014).

Electric kind of mobility is the option in which NCP is aiming along with promoting the usage of the cycling combination with walking and public transportation for the different kinds of trips (Pasaoglu et al. 2014).

Infrastructure of Germany

In the present scenario, Germany tried to provide more than 18550 km of cycle tracks with the federal highways along with more than 200 to 300 km are required to be added in the subsequent years. Additionally, Germany tried to launch the new bike Autobahn, the entire roadway which is being dedicated exclusively to the different cyclists (Jeong and Kim, 2014). This will help in connecting more than 10 cities along with removing the roads wherein around 50000 cars (Figure 4). Autobahn is being planned in order to cover more than 100 km between the cities of Duisburg and Hamm and 5 km of it has already been launched in an appropriate manner.

Figure 4: Autobahn in Germany

(Source: Leonidou et al., 2015)

In addition, Germany tried to provide different convenient along with secure parking stations of parking stations (Figure 5) along with the different facilities for the repair, shipment of the bicycles.

Figures 5: Images of Bike Stations in Germany

(Source: Leonidou et al., 2015)

Change in the Climate

The change in the climate is one of the major critical issues in the entire world and all the governments have tried in acknowledging the fact that the different emissions of CO2 from the different transportation, congestion in the traffic along with air pollution are the various essential factors in the change in the climate (Barbarossa et al. 2015). On the other hand, the public transportation along with bicycles are sustainable in nature along with efficient in nature. These kinds of public transportation are sustainable along with this helped in providing healthier modes of the transportation (Katsikeas, Leonidou and Zeriti, 2016).

As the different kinds of social, economic along with the environmental issues which are triggered in such a manner with the crisis related to oil of the year 1973 (Markiewicz et al. 2015). Furthermore, Germany tried to introduce various types of changes which led to numerous kinds of enhancements in the system of the transportation and land the usage of the policies. These kinds of improvements which have favoured the usage of cycling along with the public transportation that led to decrease the motorisation level in comparison to the different countries (Figure 6) along with the per capita emissions of the CO2 from the transport.

Figure 6: Level of Motorisation in Germany and USA

(Source: Romanova, 2016)

The entire shift from the cars to bicycles has tried to create positive effect on environment which will help in decreasing the emissions of CO2 (Figure 7), reduction of the pollution along with allowing people to have a better kind of life which is better along with better health opportunities (Romanova, 2016).

Figure 7: Impact of Public Transportation and Cycling

(Source: Heidenreich, Spieth and Petschnig, 2017)

The entire population of Germany does not drive less; however, this has access to the different and numerous kinds of destinations all over Germany through the help of public transportation and cycling which will increase the mobility and make them favour the usage of bicycles over the different cars. As per Federal Ministry of Digital and Transport Infrastructure along with Zweirad Industrie Verband Association from the entire present population of Germany that is more than 82 million individuals and more than 72 million individuals own or use the bicycle (Figure 8) and approximately more than 10% of the trips are made by the different bicycles in the Germany (Leonidou et al., 2015).

Figure 8: Number of Owners of Bicycle in Germany

(Source: Boulay et al. 2015)

Additionally, in the city of Freiburg, the percentage of the different trips by bicycle has been doubted from more than 15% to more than 27% and trips percentage by the different cars has been decreased from 38% to 32% over the last few decades (Figure 9). Additionally, the trips percentage by bicycle in Freiburg is larger in number in number of cities of the same size of the population (Sörqvist et al., 2015).  

Figure 9: Percentages of trips by car, bicycle and foot in Freiburg

(Source:  Heidenreich, Spieth and Petschnig, 2017)

Figure 10: Percentages of Trips by Bicycle, Public Transport and Foot in Freiburg Compared to other cities of same size of population

(Source: Chen and Kockelman 2016)

Moreover, the governments of Germany at both local along with national level have been working to improve the cyclist’s safety. Furthermore, Germany has become one of the third countries with both highest bicycle travels along with lowest number of fatalities of cyclists (Figure 11). Moreover, the number of fatalities of cyclists has been decreased by more than 80% in Germany over the last few decades.

Figure 11: Number of Bicyclists Fatalities and Travel in Germany and Other countries (Source: Thakur and Thakur, 2015)

These are the different kinds of statistics which are mainly due to the different kinds of improvements in the system of transportation along with the usage policies of land which have been implemented with proper participation of the different citizens who are living in Germany. For example- More than 900 individuals in Germany have tried to work with the government as this helped them in developing plan for land use (Meraz et al., 2016). Additionally, there are few other citizens who have tried in collaborating with the government along with the local administration of Vauban as this helps in improving the neighborhoods along with turning them in the car free zones which makes it more sustainable and ecological.

With the help of PESTEL analysis, the smog free bicycle company tried to decide in order to enter country of Germany which is because of the following reasons:

  • The different rules, laws, regulations along with policies which are being implemented by the government at local and federal level in Germany have tried to play a significant role in promoting and encouraging the usage of the bicycles along with trying to make the ownership of the car most costly in nature
  • More than 72 million people in Germany tries to use bicycles for the different kinds of trips and more than 10% of the individuals try to make the different trips by the bicycles
  • Germany tries to provide more than 18550 km of the tracks of cycle with the federal highways along with more than 200 to 300 km to be added in each subsequent year
  • Germany tried to launch new bike Autobahn wherein the entire roadway is dedicated exclusively to the different cyclists.
  • There are large stations for bike parking along with car free neighborhoods which helped in calming down the traffic areas in Germany and this is favorable for the entire market as well
  • The different German cities namely Freiburg, Frankfurt along with Munich tries to represent proper examples of sustainability in Germany and this is favorable in nature for Germany as well
  • The Germany population helps in driving less along with numerous providing proper accesses to numerous destinations in the entire Germany through public transportation and cycling. This will help in increasing the mobility and this is favorable for the usage of bicycles over cars


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