[2021] Solved: Deutsch Motors PESTEL / STEP / PEST Analysis & Solution
Deutsch Motors (South Korea) PESTEL / PEST / STEP Analysis
PESTEL / PEST / STEP Analysis of Deutsch Motors
The PESTEL / PEST Analysis of Deutsch Motors will cover all macro environment factors that impact Retail (Specialty) - political factors, economic factors, social factors, technological factors, environmental factors and legal factors. Deutsch Motors (67990) is listed on KOSDAQ stock exchange and has a market capital of 149.18B.
PESTEL Analysis is a strategic management tool that Deutsch Motors management can use to make better decisions. PESTEL stands for – Political, Social, Economic, Technological, Environmental and Legal factors that impact the macro environment of the company that it operates in.
Deutsch Motors operates in a dynamic environment where it is influenced by – increasing regulatory framework for environmental factors, government decisions, regulatory framework, collective social trends, increasing environmental activism among consumers, technological changes, consumer spending behavior, and ever evolving legal system.
Deutsch Motors PESTEL / PEST Analysis
Political Factors that Impact Deutsch Motors
- Political stability in the existing markets – Deutsch Motors operates in numerous countries so it has to make policies each country based on the Retail (Specialty) industry specific requirements. Given the recent rise in populism across the world I believe that South Korea can see similar trends and may lead to greater instability in the South Korea market.
- Regulatory Practices – Deutsch Motors has to manage diverse regulations in the various markets it is present in. Over the last few years South Korea and other emerging economies have changed regulations regarding not only market entry but also how companies in Retail (Specialty) can operate in the local market.
- Government of South Korea has come under increasing global pressures to adhere to World Trade Organization’s regulations on Retail (Specialty) industry.
- Armed Conflict – There are no imminent threats to South Korea from the disruption in the business environment because of military policies, terrorist threats and other political instability. Deutsch Motors has experience of handling operations in difficult circumstances.
- Taxation policies – Over the last two decades Deutsch Motors has benefitted from lower taxation policies throughout the western hemisphere. It has resulted in high profits and increasing spending in the research and development. The increasing inequality in South Korea can lead to changes in the taxation policies. Secondly local governments are also looking into Retail (Specialty) specific taxation policies to contain the carbon footprint of the Services sector.
Economic factors includes – consumer disposable income, the stage of economy of countryname, interest rate, economic performance of countryname, taxation rate, labor market conditions , inflation rate, exchange rate etc.
Economic Factors that Impact Deutsch Motors
- Increasing liberalization of trade policy of South Korea can help Deutsch Motors to invest further into the regions which are so far offlimits to the firm.
- Availability of core infrastructure in South Korea – Over the years South Korea government has increased the investment in developing core infrastructure to facilitate and improve business environment. Deutsch Motors can access the present infrastructure to drive growth in Services sector in South Korea.
- Efficiency of financial markets in South Korea – Deutsch Motors can access vibrant financial markets and easy availability of liquidity in the equity market of South Korea to expand further globally.
- Skill level of workforce in South Korea market – The skill level of human resources in South Korea is moderate to high in the Services sector. Deutsch Motors can leverage it to not only improve services in South Korea but also can leverage the skilled workforce to create global opportunities.
SWOT Analysis and Solution of Deutsch Motors
Porter Five Forces Analysis of Deutsch Motors
Each society and culture has its own way of doing business. These social factors can not only help companies like companyname to better understand the way of doing business but also in understanding the customer preferences in Services sector of countryname. Social factors include – gender roles, health & safety attitudes, acceptance of entrepreneurial spirit, societal roles and norms, attitude towards certain products and services, demographics, traditions, culture, and leisure interests.
Social Factors that Impact Deutsch Motors
- Societal norms and hierarchy – the society of South Korea is different from the home market of Deutsch Motors. It should strive to build a local team that understands the societal norms and attitudes better to serve the customers in South Korea.
- Media outlets play a critical role in influencing the public opinion South Korea. Both traditional media and social media are rapidly growing in South Korea. Deutsch Motors can leverage this trend to better market and position its products.
- Leisure interests – the customers in the South Korea are giving higher preferences to experiential products rather than traditional value proposition in Services sector. Deutsch Motors can leverage this trend to build products that provide enhanced customer experience.
- Migration – The broader attitude towards migration is negative in South Korea. This can impact Deutsch Motors ability to bring international leaders and managers to manage operations in the country.
Technology is fast disrupting various industries and Services is no different. There are numerous ways technological factors are impacting the Deutsch Motors & Retail (Specialty) in South Korea. Some of the technological factors are – access to greater information, population access to technology, rate of technology driven change, innovation in customer services, access to mobile phones driving empowerment, nnovation in product offerings, supply chain disruption because of technology etc.
Technological Factors that Impact Deutsch Motors
- Technology transfer and licensing issues for Deutsch Motors – In the Services sector there is no strong culture of technology transfer and companies often are reluctant to transfer or license technologies for the fear of creating competitors out of collaborators.
- Empowerment of supply chain partners – Technology has shortened the product life cycle and it has enabled suppliers to quickly develop new products. This has put pressure on Deutsch Motors marketing department to keep the suppliers happy by promoting diverse range of products. It has added to the cost of operations of the Deutsch Motors.
- Maturity of technology – The technology in the Retail (Specialty) sector is still not reached maturity and most players are vying for new innovations that can enable them to garner higher market share in South Korea.
- Latest technology based innovations implemented by competitors of Deutsch Motors – This can provide a good insight into what the competitors are thinking and where Retail (Specialty) business model future is.
Over the last decade sustainability and environmental factors are becoming critical for businesses. Government and pressure groups are fast asking organizations to adhere to environmental standards. Some of the environmental factors are – limiting carbon footprints, climate change, laws regulating pollution, safe waste disposal, safe disposal of hazardous material, increasing focus on sustainability, safe water treatment, insurance policies etc.
Environmental Factors that Impact Deutsch Motors
- Paris Climate Agreement has put real targets for the national government of South Korea to adhere to. This can result in greater scrutiny of environmental standards for Deutsch Motors in South Korea.
- Customer activism – Greater awareness among customers have also put environmental factors at the center of Deutsch Motors strategy. Customers expects Deutsch Motors to adhere to not only legal standards but also to exceed them to become responsible stakeholder in the community.
- Renewable technology is also another interesting area for Deutsch Motors. It can leverage the trends in this sector. South Korea is providing subsidies to invest in the renewable sector.
- Extreme weather is also adding to the cost of operations of the Deutsch Motors as it has to invest in making its supply chain more flexible.
- Regular scrutiny by environmental agencies is also adding to the cost of operations of the Deutsch Motors.
Legal plays an important role in the development of Retail (Specialty) sector in any economy. Deutsch Motors management has to consider following legal factors before entering international market – intellectual property rights protection, system of justice, time taken to deliver justice, data protection laws, copyrights law, discrimination laws, biasedness toward home players etc.
Legal Factors that Impact Deutsch Motors
- Health and safety norms in the South Korea and what Deutsch Motors needs to do to meet those norms and what will be the cost of meeting those norms.
- Employment law in the South Korea and how they are impacting the business model of the Retail (Specialty). Can these conditions be replicated or bettered in international market?
- Data protection laws – Over the last decade data protection has emerged as critical part of not only privacy issues but also intellectual property rights. Deutsch Motors has to consider whether South Korea have a robust mechanism to protect against data breaches or not.
- Time take for business cases in court – some countries even though follow international norms but the time for resolution often run in years. Deutsch Motors has to carefully consider average time of specific cases before entering an international market.
- Environment Laws and guides – The level of environmental laws in the South Korea and what Deutsch Motors needs to do to meet those laws and regulations.
What is the PESTEL Analysis Framework and How to Conduct PESTEL Analysis for Deutsch Motors
What is the difference between PESTEL and SWOT Analysis of Deutsch Motors
References for Deutsch Motors PESTEL / PEST Analysis
Deutsch Motors (2018), "Deutsch Motors Annual Report", Published in 2018.
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