Group-7

MCE PROJECT- PESTLE

GERMANY

PESTLE

Germany

Political

Economical

SocialTechnological

Environmental

Political Environment

Germany is a federal, democratic and socially responsible state

Consists of 16 states

Head of State: Federal President Joachim Gauck(Mostly representative)

Head of government: Chancellor Angela Merkel

Political Break up of Germany

Bundestag (Parliament)

Bundestag is the central institution of the political system with 603 members

Elected by all

Germans for 4 years

Elects the Federal Chancellor, passes laws and controlls the government

Bundesrat (Federal Council)

Representation of the Länder (States)

Participates on the legislation

It is often used as a party-political instrument

Federal Government

Formed by Ministers and the Chancellor

Chancellor determines ‚policy guidelines‘

Normally formed by a coalition

Accountability to

the Bundestag

Economical

Largest Economy of European

RelativelyPoor in Raw Materials

Only Ignite & Potash available in significant quantities

GDP: $ 3.197 Trillion (2012), GDP Growth: 0.9%

Inflation: 1.44% (Sep 2013)

Unemployment rate: 5.4%

Exports : $1.492 trillion (2012 est.)

Imports : $1.276 trillion (2012 est.)

Economical

Out of Fortune 500 companies 37 are headquartered in Germany

Between 1991 & 2000  40 mergers & 301 acquisitions with an involvement of German firms with a total known value of 2,422 bil. EUR have been announced.

World‘s 3rd largest exporter & account for more than 1/3rd of their national output

GDP by sector

1%

29%

71%

Sectors

agricultureindustryservices

1%1%2%3%4%4%

5%6%

7%

7%8%10%

9%

10%

11%

12%

Rank

Germany Germany North Rhine-Westphalia Bavaria Baden-Württemberg Lower Saxony Hesse Rhineland-Palatinate Berlin Saxony Hamburg Schleswig-Holstein Brandenburg Saxony-Anhalt Thuringia Mecklenburg-Vorpommern Saarland Bremen

Region wise Distribution

Major Industries

Automobiles

Iron, Steel

Coal, Cement

Chemicals, Machinery

Electronics, Food and Beverages

Shipbuilding, Textiles

Demographics

Population : Approx 82 million

Population growth rate : 0.061%

Birth rate : 8.33 births/1000 inhabitants

Life expectancy : 80.19 years (77.93 years for males and 82.58 years for females).

The 2nd most populous country in Europe after Russia, and ranks as the 16th most populous country in the world

Its population density stands at 225 inhabitants per sq km

Socio-Cultural factors

Architecture

 Music

 Literature

Sports

German Art

Technological Analysis

World's most technologically advanced telecommunications systems

Germany ranks 8th out of 139 countries for innovation in the World Economic Forum (WEF)

According to WEF, Germany is the international leader in terms of capacity for innovation, occupies 4th place for the company spending on R&D, & secures 6th spot for quality of scientific research institutions

Technological Analysis

Germany ranks 3rd after Japan & Sweden, for patents filed simultaneously with the US, Japanese & European Union trade offices

Germany is among the top five of 17 analyzed countries including US & UK for the development & marketing of high technology.

Collaborations between the Federal Government, federal state & the economy to invest 3% of GDP in R& D until 2015

Technological Analysis

Greatest Strength is in Automobile Industry

Owns World Leading Chemical Industry

The neuroscientist has made important contribution in the research of brain implants, also working on noninvasive brain machine interfaces

The main funding for R&D comes from the private sector. Businesses financed 68% of R&D expenditure in 2007

Legal

Germany uses an inquisitorial system where the judges are actively involved in investigating the facts of the case, as compared to an adversarial system where the role of the judge is primarily that of an impartial referee between the prosecutor and the defendant

The independence of the judiciary of Germany is historically older than democracy in Germany

The organization of courts is traditionally strong, and almost all federal and state actions are subject to judicial review

Environment

World’s 6th largest and Europe’s largest Carbon emitter – 2011

After signing Kyoto Protocol: 23% reduction in carbon emissions

39% of wind energy of worlds requirement

• Committed to use renewable energy sources

BMW“THE ULTIMATE DRIVING MACHINE”

Bayerische Motoren Werke

BMW – The CompanyHistory

1916RMW (Rapp Motoren Werke ) is founded as an aircraft-engine factory in Munich. In 1917, Changed to BMW.

1923The first BMW motorcycle R32 leaves the Munich production site.

1928The first BMW automobile, the Dixi 3/15, is developed in Munich.

1955The BMW 503 and 507 sports cars are today’s 'golden oldies'.

1962The 1500 model establishes the trend for the "new class" of sporty compact touring cars.

1981BMW becomes the first European carmaker to establish a subsidiary in Japan.

 

1977BMW introduces the first 7 Series car. The 733i sets new standards in technology, design and equipment.

1989In the year the Iron Curtain fell, BMW has another first by producing half a million cars.

BMW – The Company

Mission

To become most successful premium manufacturer in the car industry

Vision

Uniqueness through diversity, leadership, taking risk, courteous.

Competition

• Mercedes Benz

• Jaguar

• Audi

Customers

• The person that appreciates, and is willing to pay for, the “Ultimate Driving Machine.”

•

Japan

Brazil North America

South Africa

Europe IndiaChina

Russia

Global Markets

Products

Automobiles

Motorcycles

Bicycles

USP 22

The Ultimate Driving Machine

Innovations

Designs

Brand Value

Global Leader in Premium Cars

Strategy Number ONE

Strategy Number One focused on the four pillars

Growth

Future

Access to technologies and customers

Profitability

Sales

Year BMW MINI Rolls-Royce Motorcycle

2005 1,126,768 200,428 796 97,474

2006 1,185,088 188,077 805 100,064

2007 1,276,793 222,875 1,010 102,467

2008 1,202,239 232,425 1,212 115,196

2009 1,068,770 216,538 1,002 100,358

2010 1,224,280 234,175 2,711 110,113

2011 1,380,384 285,060 3,538 113,572

2012 1,540,085 301,525 3,575 117,109

Revenues

 Amount In Million Pounds

2010 2011 2012

Revenues 60477 68281 76848

Capital Expenditure 3263 3692 5240

Depreciation & Amortization

3682 3646 3541

Operating cash Flows 8149 8110 9167

PBT 4853 7383 7819

Net Profit 3243 4907 5122

       

R&D Network

The Driving Force: Passion for Innovation.

The innovative power of the BMW Group is confirmed by approximately 60,000 design utilities and protective rights – thereof some 13,000 patents –already in place and almost 900 new or extended patents made out in the year 2008 alone.

Innovations

BMW: Touchpad iDrive. My BMW Remote. Near Field Communication Key. Remote-Controlled Parking. Lateral Collision Avoidance. Micropause Apps. Emergency Stop Assistant.

Failure of Rover Acquisition

In 1993 BMW introduced a new strategy to increase its market share by widening its product base.

Acquisition of ROVER group in Jan 1994 for 1.7billion pounds including MINI & Rover Brands.

Losses increased after Rover Acquisition Financial aid of 150 million pounds by

British Government to avoid increase in unemployment rate

Turnaround Success

1998 Pischetsrieder purchased ROLLS ROYCE for 40billion pounds

Milberg became the New CEO in Feb 1999.

In 2000 sold ROVER at the loss of 3.2 billion euro however it was able to recoup 2.9 billion euro by selling Land rover to Ford but kept MINI brand as part of it strategy to enter compact car market.

Milberg set 4 strategic goals Small BMW model

Development of BMW’s own brand market for SUV

Employing 10,000 workers in 3 factories and relocating production of MINI to Oxford

Preparation for the complete take over of rolls Royce brand

SWOT

Strengths Brand reputation

Environment friendly vehicles

Quality products

Highly skilled workforce

Corporate Social Responsibility (CSR)

Strong brand presence in China

Weaknesses High cost structure

Weak brand portfolio

Perception of high prices

Too few acquisitions and strategic partnerships

SWOT

Opportunities Increasing fuel prices

Positive attitude towards “green” vehicles

Expand brand portfolio

Changing customer needs

Threats Intense competition

Rising raw material prices

Decreasing fuel prices

Growing euro exchange rate

Ethics & Social Responsibility

Spends more than 1% of Net income in CSR activities Has been ranked No. 1 in CSR activities in 2012 by

Forbes Actively participates in the social interest of the

employees and society as a whole. BMW won the Corporate Responsibility Reporting

Award for best carbon disclosure. BMW has won awards in 2011 and this for the

Efficient Dynamics idea. BMW is also actively involved in various other social

causes.