Environmental analysis

Macro-environment analysis (PEST)

Germany
1 Political factors
- Corporate Tax rate is around 30%, including an income tax rate of 15%. Thus, 21,2 %
represents the total labor tax rate, which is an important factor when hiring employees.
(KPMG, 2015 /PWC, paying taxes 2015, 2015) (Dont know if it is relevant for us as a mini
company)
2 Economic factors
+ Germanys economic policies extended the country to have a reliable economic
environment, in 2014, the World Bank Ranked the country 14th worldwide in terms of ease of
doing a business (The World Bank Group, 2015).
+ Germanys economy is the fourth largest in the world and an annual grow rate in concern to
GDP (Gross Domestic Product) of 1,20%, when forecast projection expect it to expand by
1,3% during 2015. (Germany Trade & Invest 2015).
+ Germany has a flexible labor market, which leads to innovation for small and medium
companies and therefore provide a stability regarding unemployment rate. This can be
represented by 73% of the people aged 15 to 64 having a paid Job, above the OECD
(Organisation for Economic Co-operation and Development) unemployment average of 65%
(OECDindex.org, 2015)
+ The market economy in Germany is considered as social, as it is hugely supporting free
enterprises (PWC, doing business in Germany, report 2014) and in general, employees in
Germany are High disciplined, dynamic and hardworking, which is an asset for any start-up
company that want to begin its operations there.
+ Germanys average household disposable income per capita is 30721 USD a year in
Germany (more than the OECD average which stand at 23 938 USD) (OECDindex.org,
2015).
+ Euros current exchange rate is currently at 1.07361 USD
+ The standard VAT rate is 19%, as for oil and the majority of goods and services within the
country. A 7% VAT is applied on for example: books, public transport and services, while
some services are VAT exempted (NRW.Invest, 2015).
+ The online retail sector value has also a significant importance, as it was around 25 billion
in 2013 and because forecasting tend to evaluate it raising 40 billion by 2018. With electronic
and related product occupying more than 28 % of those figures, selling on Internet is
definitely a relevant idea. (Statista / Market line)

- Weaknesses that derivate from the European financial crisis in 2008 are still affecting the
countries and by that, still affecting our potential customers, which could decline the demand
for our products.
-The financial environment within the Eurozone is expected to be unfavourable in the near
future, and the impact of austerity measures on Germany will still remain a risk. Unfavourable
economic trends could still impact the business in a negative way.
3 Socio-cultural factors
+ Germany counts around 82 million residents, which lead the country to be the largest
European country in terms of population (Statista, 2015).
+ The consumer confidence in Germany is facing a major reborn since 2014 and increased 8,4
to 10 since October of the previous year.
+ The consumers total spending, which grew from 375,53 EUR Billion to around 383 EUR
Billion at the end of 2014 (Trading economics, 2015).
- Demand is partly influenced by the economic stability of Germany and therefore is subject
to change really fast over time.
-With regards to long lasting and high quality products, consumers perspectives are also
reaching a high standard level which means that nowadays, goods and services sold have to
worth their prices and be significantly high in term of quality.
4 Technological factors
+ The rising of Social media, the expansion of Internet and, the online retailing market growth
provide to our company an extraordinary way and environment to sell our product.
+ Germany is one of the most innovative countries in Europe, ranked third by the European
commission in terms of innovation. (Research office, 2015)

The Netherlands
1 Political factors
+ The Netherlands is a parliamentary democracy, as well as a constitutional monarchy, which
lead to a stable political environment.
+ The government policy regarding corporate tax rate stand around 20% for income 200.000
and is up to 25% for exceeding incomes.
+ The country aims to develop successful environmental policy. Government is for example
very active in cleaning rivers, reducing carbon emissions, cleaning contaminated soil, etc
(Belastingdienst, 2015)
+ The Governments social legislation is one of the most extensive in the world. They put the
emphasis on equality between all members of the Dutch society (Belastingdienst, 2015).
+ The Government priorities are to stabilize the economy, to avoid insecurity and to fight
crime (The social state of The Netherlands, 2011).

2 Economic factors
+ Netherlands is the sixth largest economy within the Eurozone (Forbes, 2015)
+ The country has a predominant geographical position
+ The Netherlands has an open economy, which means that the level of trade with other
countries is considered crucial. The country earns almost 30% of its income from the export
of goods and services (Holland Trade, 2015).
+ The Netherlands score with regard to economic freedom stand around 73, which place the
country at the 17th place in the 2015 index. This position implies that the country does not
have to deal with a lot of corruption, and that citizens are relatively free compared to other
places (Heritage, 2015)
+ GDP in The Netherlands is forecasted to stand around 842.76 Billion $ by the end of this
quarter and to stand around 987.30 in 2020 (Trading Economics, 2015)
+ The Netherlands is ranked at the 11th position worldwide as best country for business
(Forbes, 2015)
+ There are 3 different V.A.T tariffs in The Netherlands: 0%, 6% (For food, pharmaceutical
products, medical equipment,) and 21%. (Belastingdienst, 2015)
+ Euros current exchange rate is currently at 1.13587 USD
+ Current unemployment rate in The Netherlands stand around 6,7% (Heritage, 2015)

+ The country has a high quality labour force

- Households in the Netherlands suffer from a high debt level, mainly driven tax incentives,
but are expected to decline slowly in the coming decades (European Commission, 2015)
3 Socio-cultural factors
+ In comparison with other countries, social an political trust are relatively high within the
country, the Dutch are known to have a relatively positive opinion about social and economic
developments (The social state of The Netherlands, 2011).
+ The Netherlands has a high level of cultural participation within its population. 58% of
citizens participate actively in culture. Which class the country at the fourth place in European
ranking. (Cultural policies, 2015)
+ Dutch citizens are really interested in popular art forms like classical music, visual art,
literature, dance, (The Netherlands. Nation of art-lovers?, 2013)
+ Cultural index score in the Netherlands stand at 36%, which is the 3rd place in Europe
(European Commission, 2015)
+ Most of the Dutch people have received high education, which can be as an asset. Thus,
they usually speak at least one or 2 foreign languages.
+ Citizens are very interested in latest technologies.
4 Technological factors
+ The Netherlands has a strong global position in different areas, such as in the Agri-Food, in
Horticulture, in High-Tech equipment, in Energy, in Logistics, in Creative industries,
+ The country held the 9th position in 2011 in the Global Innovation Index, thus it ranks 2nd in
the world in terms of number of academic publications per capita (Holland Trade, 2015).

References
Articles
OECD Economic Surveys: Germany 2014. (2014). OECD Economic Surveys: Germany, (9),
1-115.
European commission: The Netherlands, Country Report 2015 (2015)
European commission: European Economy, Macroeconomic imbalances. Country report: The
Netherlands. Occasional paper 221, June 2015
Online Retail Industry Profile: Germany 1-30. (2013).
"The Netherlands. Nation of art-lovers?" page 26 (2013).
Reports, Guides & brochures:
PWC, Paying taxes: The global picture 2015. Retrieved from:
http://www.pwc.com/payingtaxes [Accessed 10th October 2015]
PWC, Doing Business and investing in Germany 2014. Retrieved from:
http://www.pwc.de/de_DE/de/internationale-maerkte/assets/fachbuch-doing-businessgermany-2012.pdf [Accessed 11th October 2015]
Research Office: Legislative Council Secretariat, Development of innovation and technology
in Germany 2014-2015. Retrieved from:
http://www.legco.gov.hk/research-publications/english/1415fsc13-development-ofinnovation-and-technology-in-germany-20150225-e.pdf [Accessed 10th October 2015]
UNDP, Sustaining Human Progress: Reducing Vulnerabilities and Building Resilience,
Germany, Human Development Report 2014. Retrieved from:
http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/DEU.pdf
[Accessed 14th May 2015]
Websites
Country review, Best country for business [Internet]
http://www.forbes.com/places/netherlands [Accessed 11th October 2015]
Belastingdienst, Business, VAT Tariffs [Internet]
http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/business/vat/vat
_in_the_netherlands/calculating_vat/vattariffs [Accessed 11th October 2015]

http://www.culturalpolicies.net/web/netherlands.php?aid=821 [Internet] Cultural policies and

trends in Europe [Accessed 11th October 2015]
http://www.bankrate.com [Accessed 11th October 2015]
European Central Bank (2015) Euro foreign exchange reference rates [Internet] Available
from: https://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html
[Accessed 11th October 2015]
European Commission (2015) Cultural access and participation: Report [Internet] Available
from: http://ec.europa.eu/public_opinion/archives/ebs/ebs_399_en.pdf
[Accessed 11th October 2015]
Euromonitor international (2015), Consumer lifestyle in Germany [Internet] Available from:
http://www.euromonitor.com/consumer-lifestyles-in-germany/report
[Accessed 25th April 2015]
Germany Trade and Invest (2015), Economic structure & Activity, General overview
[Internet] Available from: http://www.gtai.de/GTAI/Navigation/EN/Invest/Business-locationgermany/general-overview,did=213908.html [Accessed 10th October 2015]
Holland Trade (2015), Economic profile [Internet] Available from:

http://www.hollandtrade.com/business-information/holland-information/economicdevelopment/ [Accessed 10th October 2015]

KPMG (2015), Global corporate tax rate by country [Internet] Available from:
http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-taxrates-table.aspx [Accessed 11th October 2015]
Make It in Germany (2015), five reasons for setting up a business in Germany [Internet]
Available from: http://www.make-it-in-germany.com/en/for-qualifiedprofessionals/working/setting-up-a-business-in-germany/five-reasons-for-setting-up-abusiness-in-germany/strong [Accessed 11th October 2015]
NRW. Invest (2015), Value-added tax in Germany [Internet] Available from:
http://www.nrwinvest.com/Business_Guide_englisch/The_tax_system/Value_Added_Tax/inde
x.php [Accessed 9th October 2015]
OECD (2015), Better life index: Germany [Internet] Available from:
http://www.oecdbetterlifeindex.org/countries/germany/ [Accessed 10th October 2015]
OECD (2015), Germany, disposable income per capita [Internet] Available from:
http://www.oecdbetterlifeindex.org/countries/germany/ [Accessed 11th October 2015]

http://de.statista.com/statistik/daten/studie/171897/umfrage/haeufigkeit-zeitung-lesen-in-derfreizeit [Accessed 10th October 2015]

Statista (2015), Statistics and Facts on Germany [Internet] Available from:
http://www.statista.com/topics/1903/germany/ [Accessed 10th October 2015]
The social state of The Netherlands (2011) [Internet] Available from:
http://www.scp.nl/dsresource?objectid=30050&type=org
Trading Economics (2015), Germany consumer confidence [Internet] Available from:
http://www.tradingeconomics.com/germany/consumer-confidence [Accessed 10th October
2015]
World Bank Group (2015), Ease of doing a business in Germany [Internet] Available from:
http://www.doingbusiness.org/data/exploreeconomies/germany/ [Accessed 10th October 2015]