Course Code- EBSC 7380

Course Name- Strategy and Decision Making

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Table of Contents
Introduction...................................................................................................................... 3
Analysis of PESTEL on Brazil, India, and Germany.........................................................3
SMART technique analysis..............................................................................................6
Entry mode- Pashley international strategy....................................................................11
Conclusion and recommendation...................................................................................12
References.....................................................................................................................12
Introduction
For more than a century, Pashley Cycles has been a household name in the United
Kingdom. There are almost 90 years of Pashley providing urban and business clients
with dependable and robust carrier bicycles. For ensuring that people and goods are
transported in a proper and timely manner, bicycles such as the Pashley Carrier
Cycle have been developed. If a marketplace can be found in Germany, Brazil, or
India, such a study can help to establish that. Regarding Pashley Cycles, the
PESTLE analysis will indeed be performed to identify the suitable market. In
addition, the SMART strategy will be examined in this study, and suggestions for the
best entrance method for the chosen nation would be made.

Analysis of PESTEL on Brazil, India, and Germany

 Political:

The German political environment can be considered stable due to its good level of
government and proper initiative toward violence. For Germany's 2020 Percentile
Ranking, the World Bank gathered data from legitimate sources and reported
68.87% of the country's population (Tradingeconomics, 2021). For Brazil’s 2020
Percentile Ranking, the World Bank gathered data from legitimate sources and
reported that 43.75% of the country's population (Tradingeconomics, 2021). And
lastly, for India’s 2020 Percentile Ranking, the World Bank gathered data from
legitimate sources and reported 66.83% of the country's population
(Tradingeconomics, 2021). Because of the government's political uncertainty,
countries like Brazil and India appear to be unable to contribute. In spite of this,
investing in Brazil is still challenging owing to a number of adverse factors, such as
high taxes, bureaucratic red tape, and restrictive labour laws. The tax climate in
Germany is competitive, the investment climate is favourable, and the political and
economic structure is solid. High-quality infrastructures and a well-trained workforce
ensure that the judicial system is well-protected. In some locations, there is a
scarcity of trained labour. After weighing all of the options, Pashley may decide to
put money into the international market by investing in Germany.

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  Economic:

Figure 1: GDP per capita of Brazil, India, and Germany (Worldbank, 2021)

From the above-given graph, it has been found from the World Bank source that
Germany has the highest GDP which is the US $46,252.7, and Brazil and India's
GDP was respectively about 6,796.8 and 1927.7 (Worldbank, 2021). Because of its
high level of competitiveness and global interconnectedness, the German economy
is well-known for its high level of innovation and a strong emphasis on exports.
Automobile manufacturing, hydraulic and plant construction, the chemistry industry,
and healthcare equipment all rely heavily on exports to make up the majority of their
overall revenue. In such a business environment, it can be stated that Germany
could be a suitable option for Pashley in this international marketplace (Schlösser,
Schuhen and Schürkmann, 2017). One of the world's greatest housing demands is
shared by other better evolved, customer social free markets like Germany. Gross
national income (GNI) in the United States is $45,127, upwards of three times the
OECD average ($14,459), and almost four percent of the global average of $38,992
(Comen, 2018). So, from this data it can also be included that German consumer
hold a good economic state to purchase cycle for their purpose which is good for
Pashley to start its business.

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  Social:

Interpersonal communication and body language are commonplace in German

business relationships. There is a common practice of swapping contact information
at meetings (Simpson and Associates, 2014). People in Brazil tend to be laid-back
and well-educated. Within Brazil's vertical working arrangement, only the largest
employee has the power to make decisions (Raiser and Economico, 2016). The
practice of bringing presents to corporate gatherings is wholly superfluous. Men and
women are often not treated equally in the office. They place a high value on long-
term commercial ties. Bicycling is more popular among Brazilian males than among
Brazilian women (Raiser and Economico, 2016). Integrity is well-known among
Indians. Moreover, it has also been found out that throughout India, hand signals are
strictly prohibited (Godigit, 2022). German people are much more knowledgeable
and quite well over than their Brazilian and Indian counterparts. Germans also enjoy
riding bicycles most frequently. As a result of this investigation, it can be concluded
that Germans have a favourable attitude toward the purchasing cycle, which is a
good thing for Pashley.

 Technological:

In the Europe marketplace, the German bike industry is considered the largest
industry (Scherer, 2021). Because German technologies are much ahead in terms of
coming up with improved features in bicycles such as lighting, robustness, and so on
(Scherer, 2021). Moreover, it can be stated that on the other hand, Brazil's bicycle
industry is still on the edge of research towards improving the manufacture of the
bicycle. Moreover, it can be stated that the Indian bicycle marketplace is on a tough
competition platform due to the poor production of local bicycles (B. R. and P. S.,
2021). So, from this analysis, it can be stated that the German marketplace could be
a good option for Pashley compared to Brazil and India.

 Environment:

It's clear that becoming green is good for the economy in Germany. According to
KPMG's "Competitive Alternatives: KPMG's Guide to International Company
Location 2010," Germany ranks "excellent for sustainability impact and for having
environmental protection laws that don't really hamper market competitiveness

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(Bolgar, 2021). On an annual basis, air pollution in India costs the country an
estimated USD 505,103 million in economic damage and a total forgone labor
productivity of around USD 55,390 million. In terms of PM2.5 emissions, businesses
trail only biomass burning in this regard (Nagpure, 2019). So, in India Pashley should
not starts it business. Moreover, Brazil's environment does not support setting up
businesses due to deforestation, illegal poaching, and also water pollution which
could raise the maintenance of Pashley's business model in this market (Trade,
2021). So, from this analysis it can be stated that the German marketplace could be
a good option for Pashley compared to Brazil and India.

 Legal:

By breaking traffic rules, bicycle riders may be held responsible for an accident that
they cause. This is the case in Germany. Bikes might well be held liable for a
collision if they are shown to be at fault. Getting a business off the ground in India is
difficult because of the plethora of policies, guidelines, and restrictions that exist. The
Factories Act of 1948, for example, has 8,682 imprisonment provisions when read
with 58 regulations. In terms of protecting employees, this is a significant statute
(Chikermane and Agrawal, 2022). An understanding of the local environment, as well
as a familiarity with the high costs and expenses of conducting business, known as
the "Custo Brasil" or "Brazilian Cost." Doing Business 2020 puts Brazil 124th out of
190 nations in ease and accessibility of conducting business, according to a World
Bank assessment (trade, 2021). As a result of this research, it can be concluded that
the German market is a viable alternative to Brazil and India for Pashley.

SMART technique analysis

Pashley's business has been analysed with the SMART technique to organise the
business model and reach the developed goals. This tool will help to stay motivated
towards the developed goals and will also help to complete the business expansion
within the right time-frame (Swann et al., 2022). In below the SMART technique has
been analysed in eight different stages:

First stage: Objective

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The objective of Pashley is to set up business operations in the international
marketplace at a lower cost. So that Pashley can sell their bicycles to its targeted
customer at a competitive price range.

Second stage: Alternative outcome

The alternative outcome for Pashley business in Germany will be to maximise

revenue through adopting innovative technology and also the implementation of
green supply chain management to minimise the production cost.

Third stage: Determining attributes

Costs:

 Rent
 Electricity
 Machinery

Benefits:

 Political and legal

 Economic
 Social and technological
 Environmental

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Fourth stage: Values

Attribute Germany Brazil India

Political and legal 80 70 85

Economic 85 80 75

Social and 90 65 70
technological

Environmental 70 40 50

Figure 2: Values

Fifth stage: Weight determination

Germany Brazil India

Attributes Values Weight Values Weight Values Weight

Political and 80 30 70 24 85 33
Legal

Economic 85 28 80 26 75 23

Social and 90 23 65 18 70 14
Technological

Environmental 70 18 40 14 50 16

Figure 3: Weight determination

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Sixth stage: Weighted average analysis

Germany Brazil India

Attributes Values Weight Value * Values Weight Value * Values Weight Value *
Weight Weight Weight

Political and 80 30 2400 70 24 1680 85 33 2805

Legal

Economic 85 28 2380 80 26 2080 75 23 1725

Social and 90 23 2070 65 18 1170 70 14 980

Technological

Environmental 70 18 1260 40 14 560 50 16 800

Total Benefit 8110/100 5490/100 6310/100

= 81.1 = 54.9 = 63.1

Figure 4: Weighted average analysis

Cost Benefit Analysis:

Rent Electricit Machineri Total

y es cost
German 40 30 20 90
y
India 50 40 30 120
Brazil 60 50 40 150
360

Cost Total
benefit
German 90 325
y
India 120 280
Brazil 150 255

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 Figure 5: Cost Benefit Analysis

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Seventh stage: Provisional decision

From the above analysis, it can be stated that Germany carries the highest amount
of benefit in terms of cost and total benefit which are respectively 90 and 325.
Moreover, from the value and weight analysis, it has also been found that Germany
has the highest amount of attribute benefit which is 81.1. So, it can be stated
Pashley should go for international expansion to Germany instead of Brazil and
India.

Eighth stage: Sensitivity analysis

Sensitivity analysis
5% increase in cost

Cost Total benefit

Germany 94.5 325
India 126 280
Brazil 157.5 255
Figure 6: Sensitivity analysis- 5% increase in cost

5% decrease in
cost

Cost Total
benefit
Germany 85.5 325
India 114 280
Brazil 142.5 255
Figure 7: Sensitivity analysis- 5% decrease in cost

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 Cost-benefi t analysis
350 325

300 280
255
250

200

150

100

50

0
80 90 100 110 120 130 140 150 160

Total benefit

Figure 8: Cost benefit analysis graph

From the sensitivity analysis, it has been found that after increasing the cost by
almost 5% for the upcoming year, it can be clearly seen that Germany has the lowest
cost compared to benefits which are 94.5. But still, India and Germany have costs
respectively 126 and 157.5. Germany carries a larger sales growth within its market
and due to this reason, this country carries the largest revenue increase opportunity
which is good for Pashley's business.

Entry mode- Pashley international strategy

Exporting entry mode is the appropriate strategy for Pashley to start their business in
the German marketplace. This strategy is considered a low-risk strategy which would
be beneficial for Pashley as this strategy would help this new venture to understand
the market in Germany before setting up its physical operation (Oliveira et al., 2018).
As this will be a mature product in the German market, so it is crucial to understand
the domestic market at first. Through this strategy, Pashley will get the chance to
research the local market and they need to find out how they should go for sales
strategy this process will increase their growth opportunities overseas like in
Germany.

Firms that are subject to fluctuating local demand may opt to diversify their revenue
sources by selling their products in other countries (Oliveira et al., 2018). As a result,
some Pashley may be exported to countries with less competition. Exporting is a
popular strategy for smaller businesses because it allows them to remove obstacles,

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expenses, and top management support. Only when an unsolicited foreign order
comes through do smaller enterprises export, which is likewise considered low risk.

Conclusion and recommendation

There are several factors to consider when selecting a main international market for
Pashley Cycles, and the accompanying study focuses on highlighting Germany is
the right place for expansion. Compared to Brazil and India, which continues to
remain much behind in these sectors, Germany carries the highest point
to establish a market for bicycles, per this research. Moreover, this study examined
the data, and that discovered Germany, India, and Brazil were the three countries
with the highest incomes.

Nevertheless, Germany seems to be a democratic state, and also its FDI regulations
and protocols are also suitable. The entering foreign markets strategy of the
corporation might begin in Germany. This one has a range of benefits, notably
economic, political, social, and a lot quicker from two regions.

References
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Bolgar, C. (2021) Environment — Smarter Business in Germany — Presented by

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Chikermane, G. and Agrawal, R. (2022) Jailed for Doing Business: The 26,134
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