Group-7

MCE PROJECTPESTLE GERMANY

PESTLE

Political

Environment al

Economical

Germany

Technologic al

Social

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

Bundesrat (Federal Council)

Bundestag (Parliament)

Federal Government

Bundestag is the central institution of the political system with 603 members Elected by all Germans

Representation of the Lnder (States) Participates on the legislation It is often used as a party-political instrument

Formed by Ministers and the Chancellor Chancellor determines policy guidelines Normally formed by a coalition Accountability to the Bundestag

for 4 years

Elects the Federal Chancellor, passes laws and controlls the government

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. Worlds 3rd largest exporter & account for more than 1/3rd of their national output

GDP by sector

Sectors

1% 29%
agriculture industry services

70%

Region wise Distribution

Rank
Germany Germany

11% 10% 9%

1% 1% 2% 12% 0% 3% 4% 4% 5%
6% 7% 7% 10% 8%

North Rhine-Westphalia Bavaria Baden-Wrttemberg Lower Saxony Hesse Rhineland-Palatinate Berlin Saxony Hamburg Schleswig-Holstein

Brandenburg

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

Worlds 6th largest and Europes 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

Bayerische Motoren Werke

BMW
THE ULTIMATE DRIVING MACHINE

BMW The Company

History

1981 1916 1962 BMW becomes the first RMW (Rapp Motoren The 1500 model European carmaker to 1928 Werke ) is founded as establishes the trend for establish a subsidiary in The first BMW an aircraft-engine the "new class" of sporty Japan. automobile, the Dixi 3/15, factory in Munich. In compact touring cars. is developed in Munich. 1917, Changed to 1977 1989 1955 BMW. In the year the Iron The BMW 503 and 507 BMW introduces the 1923 Curtain fell, BMW sports cars are todays first 7 Series car. The The first BMW motorcycle 733i sets new standards has another first by 'golden oldies'. R32 leaves the Munich in technology, design producing half a production site. and equipment. 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.

Global Markets
Japan

Brazil

North America

South Africa

Europe

India

China

Russia

Products
Automobiles
Motorcycles Bicycles

USP
The Ultimate Driving Machine
Innovations Designs Brand Value Global Leader in Premium Cars

22

Strategy Number ONE

Strategy Number One focused on the four pillars

Growth Future Access to technologies and customers

Profitability

Sales
RollsRoyce 796 805 1,010 1,212 1,002 2,711 3,538 3,575

Year
2005 2006 2007 2008 2009 2010 2011 2012

BMW
1,126,768 1,185,088 1,276,793 1,202,239 1,068,770 1,224,280 1,380,384 1,540,085

MINI
200,428 188,077 222,875 232,425 216,538 234,175 285,060 301,525

Motorcycle
97,474 100,064 102,467 115,196 100,358 110,113 113,572 117,109

Revenues

Amount In Million Pounds Revenues

2010 60477

2011 68281

2012 76848

Capital Expenditure

3263

3692

5240

Depreciation & Amortization

3682

3646

3541

Operating cash Flows PBT Net Profit

8149 4853 3243

8110 7383 4907

9167 7819 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 BMWs 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

Weaknesses

Brand reputation Environment friendly vehicles Quality products

High cost structure Weak brand portfolio Perception of high prices Too few acquisitions and strategic partnerships

Highly skilled workforce

Corporate Social Responsibility (CSR) Strong brand presence in China

SWOT

Opportunities

Threats

Increasing fuel prices Positive attitude towards green vehicles

Intense competition Rising raw material prices Decreasing fuel prices Growing euro exchange rate

Expand brand portfolio

Changing customer needs

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.