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Table of Contents
Introduction...................................................................................................................... 3
PESTLE analysis of Brazil, India, and Germany..............................................................3
SMART analysis for Pashley Business Model.................................................................6
Entry Mode strategic analysis for Pashley Business Model...........................................10
Conclusion and Recommendation.................................................................................11
References.....................................................................................................................11
Introduction
The brand Pashley Cycles has been well-known across the population of the UK for
more than just decades. Pashley has been serving the urban and commercial
communities with trustworthy and durable carrier bicycles for nearly 90 years now
(Pashley, 2022). Bicycles like the Pashley Carrier Cycle have indeed been designed
specifically for the purpose of transporting both people and products in an orderly
and timely fashion. Research like this one can serve to create the existence of a
market in countries like Germany, Brazil, or India, for example. In the case of
Pashley Cycles, a thorough PESTLE analysis should, as a matter of fact, be carried
out in order to determine the appropriate market. In particular, the SMART approach
would be analysed during the course of this research, and recommendations for the
most effective entry plan for such a selected nation will be provided.

PESTLE analysis of Brazil, India, and Germany

Political factor: German government policy is considered one of the favourable
policy frameworks for setting up business plans. The government policy encourages
business owners to improve the country’s economic statement through diverse
business ideas. There are diverse ranges of German public banks that offer different
ranges of loan facilities, and caretaking services to their shareholders as well. There
is no restrictions or limitation for foreign investment which could be a positive sign for
Pashley Cycles (PWC, 2017). On the other hand, globally, India ranks 85th out of
180 nations in Transparency International's 2021 Corruption Perceptions Index
(Tradingeconomics, 2019). In a study, India was found to be the worst place in Asia
to start a business because of widespread corruption, government bureaucracy, lack
of finance, insufficient technologies and training, and lack of efficiency (Mahajan,
2013). Furthermore, Brazil also can not be a suitable place for Pashley to start its
business because of its complicated tax system (PWC, 2022). Imported products
and services from the U.S. as well as other markets are subject to hefty levies in
Brazil without a free trade agreement. Imports to Brazil are subject to federal and
state taxes and fees, which can more than quadruple the price of the goods.

Economic factor: Using data from the World Bank, this one has been determined
that Germany really does have the greatest GDP of $46,252.7, followed by Brazil
with 6,796.8 and India with 19,277.1 (Worldbank, 2021).

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Figure 1: World Bank Data on Brazil, India, and Germany GDP per capita
(Worldbank, 2021)

The German economy is well with its high degree of innovation and the heavy focus
on exporting for its high degree of competition and global interconnection. Many
industries rely largely on exports to provide the majority of their overall earnings,
including automobile manufacture and hydroelectric and plant building (Worldbank,
2021). As a result of this economic climate, Germany appears to be a viable
alternative for Pashley in the global marketplace. Germany, for example, has one of
the world's most pressing housing needs, which is mirrored by some of the more
advanced, customer-oriented free markets. It can also be concluded from these
statistics that German consumers are in an excellent economic position to begin a
new firm, which is fantastic news for Pashley.

Social factor: Bicycle culture is influenced by a wide range of factors, including

interpersonal, economic, and social conditions. Most Germans with just a college
degree prefer to go riding for short distances rather than those with less education.
It's not clear if there is a strong link between school and cycling (Goetzke and Rave,
2010). Bicycle education is estimated to account for a third of the government's

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budget (Goetzke and Rave, 2010). The more bikes there are, the more parking
spaces there are for cars. A truce has been reached between the two modes of
transportation: automobiles and bicycles. For the most part, Rio's bike infrastructure
is designed more for fun than for commuting (Maldonado-Mariscal, 2020). Bus, rail,
and even small trains were used by the majority of German travelers to even go to
their destinations. Options for public transportation are many. About 5.1 million
bicycles are sold in Germany each year (Statista, 2022). Traditional bicycles will
represent 61% of German bicycle purchases in 2020, according to a new report
(Statista, 2022). There will be more than 2 million electrical bikes sold in 2020 for the
very first moment in the industry's history.

Even though Indians are health-conscious, the country's road system and
surrounding environment prevent many people from riding bicycles. However, the
discretionary income in Brazil somehow doesn't allow for the use of such
transportation to get around. In other words, if Pashley wants to grow their business,
it should look to Germany.

Technological factor: The German bicycle industry is regarded as the most

important in Europe. German engineering is much ahead of the curve when it comes
to creating new features for bicycles, including lights or increased resilience, for
example (Mintel, 2022). The bicycle market in Brazil, on the other hand, is still in the
early stages of research and development aimed at enhancing the manufacturing of
the bicycle (B. R and P. S., 2021). Furthermore, the low quality of locally produced
bicycles puts the Indian bicycle sector at a competitive disadvantage. As a result of
this research, it can be concluded that perhaps the German market is indeed a
viable alternative to Brazil and India for Pashley.

Environment factor: Nearly 739 million metric tons of CO2 were avoided each year
by increasing the number of trips made by bicycle (Appunn, Eriksen and Wettengel,
2021). Germany is ranked "good" in terms of environmental effect and market
competitiveness because of its environmental protection regulations. The campaign
aims to reduce German bike mortality by 40% over the next ten years (Egiguren,
Nieuwenhuijsen, and Rojas-Rueda, 2021). This assessment was made for each and
every one of the country's 2,278 billion tonnes of CO2 emissions. A study was used
to highlight the health benefits of biking. Indian air pollution costs the nation an

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average of USD 505,103 million in financial losses per year, as well as an additional
USD 55,390 million in lost productivity (World Bank, 2021). Forest degradation,
illegal hunting, and environmental pollution, Brazil's environment somehow don't
allow the establishment of firms in this industry. Compared to Brazil and India, the
German market may be a better fit for Pashley.

Legal factor: Biking is a favourite pastime among Germans. Without worry, cyclists
may enjoy the roads and surroundings (PWC, 2017). In Germany, the average
commute time was cut in half (PWC, 2017). Car ownership is uncommon among the
general population. Sales of bicycles spiked during the pandemic. After this
occurrence, Germany's bike rules underwent a major revision (PWC, 2017). An
awareness of the Brazilian business climate, including the significant expenditures
and expenses that might jeopardize the Pashley model. Senate Indian Cabinet had
passed the Motor Vehicle Rules Bill 2016 to address this issue (PRS Legislative
Research, 2021). For the sake of road safety, Pashley has been forced to change its
business strategy in the wake of this new law. Compared to Brazil and India, the
German market may be a better fit for Pashley.

SMART analysis for Pashley Business Model

An analysis of Pashley's business model and aims has been conducted using the
SMART approach. Maintaining a sense of urgency and completing the development
of the firm in a timely manner will be made easier by this instrument.

1. Objective: It is Pashley's goal to build up worldwide commercial operations at a

lesser cost. As a result, Pashley is able to sell its bicycles at a reasonable rate to its
market segment.

2. Alternative outcome: With new technologies and green purchasing in place,

Pashley's firm in Germany can expect to maximize income while reducing
manufacturing costs.

3. Ability determination:

Cost- Rent, Electricity, and Machinery

Benefits- Politics, Financial, Industrial and Ecological

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4. Values:

Attribute Germany Brazil India

Politics 75 65 80

Financial 80 75 70

Industrial 85 60 65

Ecological 65 35 45

5. Weight determination:

Germany Brazil India

Attributes Values Weight Values Weight Values Weight

Politics 75 28 65 22 80 31

Financial 80 26 75 24 70 21

Industrial 85 21 60 16 65 12

Ecological 65 16 35 12 45 14

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6. Weighted Average Analysis:

Germany Brazil India

Attributes Values Weight Value*We Values Weight Value*We Values Weight Value*We
ight ight ight

Politics 75 28 2100 65 22 1430 80 31 2480

Financial 80 26 2080 75 24 1800 70 21 1470

Industrial 85 21 1785 60 16 960 65 12 780

Ecological 65 16 1040 35 12 420 45 14 630

Benefit in total 7005/100 4610/100 5360/100

=70.05 =46.10 =53.60

Cost-benefit analysis:

Rent Electricit Machineri Total

y es cost
German 30 20 10 60
y
India 40 30 20 90
Brazil 50 40 30 120
270

Cost Total
benefit
German 60 305
y
India 90 235

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Brazil 120 260

7. Provisional decision: According to the foregoing calculations, Germany has the

maximum benefits in terms of price and overall benefit, at 60 and 305, respectively.
Furthermore, a value and weight study revealed that Germany had the greatest
characteristic advantage, at 70.05. This means that instead of expanding to Brazil
and India, Pashley must focus on a move into Germany.

8. Sensitivity analysis

Increase the
expenditure by
5%

Cos Total
t benefit
Germany 63 305
India 94.5 235
Brazil 126 260

Increase the
expenditure by
5%

Cos Total
t benefit
Germany 57 305
India 85.5 235
Brazil 114 260

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 Cost-benefit analysis
350
305
300
260
250 235

200

150

100

50

0
50 60 70 80 90 100 110 120 130

Total benefit Linear (Total benefit )

According to the sensitivity study, Germany still has the lowest cost-to-benefit ratio of
60 even despite raising costs by about 5% in the following year. India and Brazil, on
the other hand, have charges that are 90 and 120 dollars, correspondingly. As a
result of Germany's greater overall sales, Pashley's firm stands to benefit from the
country's highest sales growing industry.

Entry Mode strategic analysis for Pashley Business Model

Pashley's German market entry strategy should be based on exporting their
products. As a low-risk technique, Pashley may use it to understand better the
German market prior to actually establishing a real presence there in the first place.
The German market will be a mature one, so it's important to get a handle on it first
(Laufs and Schwens, 2014). This plan allows Pashley to do market surveys within
nearby regions, as well as to determine the best way to approach the business
model. This methodology allows Pashley to expand their business abroad, such as
in Germany.

Companies that are vulnerable to fluctuations in consumer spending may choose to

market their stuff in these other nations to diversify their revenue streams (Smith et
al., 2021). Some Pashley may now be sold to nations where there is less
competition. Exporting is a preferred option for small firms since it removes
impediments, expenditures, and assistance from senior management (Smith et al.,
2021). Smaller businesses only export when they receive an unexpected order from
a foreign customer, therefore doing so is seen as minimal risk.

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Conclusion and Recommendation
When it comes to choosing a primary foreign market for Pashley Cycles, there have
been a number of considerations to take into account, and the study concentrates on
emphasizing the reasons why Germany is the best area for development. According
to this research, Germany has the most potential to build a marketplace for bicycles,
particularly in comparison to Brazil and India, which continue to lag far behind in
these industries. In addition, the data were analysed and the results, and it was
found that Germany, India, and Brazil were the three nations with the greatest
earnings.

Despite this, Germany appears to be a democratic country, and both its restrictions
on foreign direct investment and its methods for handling such investments are
appropriate. The corporation's plan for accessing overseas markets may begin with a
push into the German market. Now this offers a number of benefits, the most
important of which are economic, political, and social, in addition to being a great
deal faster from different regions.

References
Appunn, K., Eriksen, F. and Wettengel, J. (2021) Germany’s greenhouse gas
emissions and climate targets. [online] Clean Energy Wire. Available at:
https://www.cleanenergywire.org/factsheets/germanys-greenhouse-gas-emissions-
and-climate-targets.

B. R, P. and P. S., N. (2021) Bicycle Industry in India and its Challenges – A Case
Study. IT and Education (IJCSBE) A Refereed International Journal of Srinivas
University, [online] 5(2), pp.2581–6942. Available at:
https://srinivaspublication.com/journal/index.php/ijcsbe/article/download/799/488.

Egiguren, J., Nieuwenhuijsen, M.J. and Rojas-Rueda, D. (2021) Premature Mortality

of 2050 High Bike Use Scenarios in 17 Countries. Environmental Health
Perspectives, 129(12). doi:10.1289/ehp9073.

Goetzke, F. and Rave, T. (2010) Bicycle Use in Germany: Explaining Differences

between Municipalities with Social Network Effects. Urban Studies, 48(2), pp.427–
437. doi:10.1177/0042098009360681.

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Laufs, K. and Schwens, C. (2014) Foreign market entry mode choice of small and
medium-sized enterprises: A systematic review and future research agenda.
International Business Review, [online] 23(6), pp.1109–1126.
doi:10.1016/j.ibusrev.2014.03.006.

Mahajan, P. (2013) Doing Business in India. SSRN Electronic Journal.

doi:10.2139/ssrn.2841211.

Maldonado-Mariscal, K. (2020) Social Change in Brazil Through Innovations and

Social Movements. Journal of Developing Societies, 36(4), pp.415–438.
doi:10.1177/0169796x20963332.

Mintel. (2022) Technology Habits of Gen Z - Germany - 2022 : Consumer market

research report : Mintel.com. [online] Available at:
https://store.mintel.com/report/germany-technology-habits-of-gen-z-market-report
[Accessed 10 Jun. 2022].

Pashley. (2022) Pashley Cycles | Classic Ladies & Mens Bikes UK. [online] Available
at: https://www.pashley.co.uk/.

PRS Legislative Research. (2021) The Motor Vehicles (Amendment) Bill, 2016.
[online] Available at: https://prsindia.org/billtrack/the-motor-vehicles-amendment-bill-
2016#:~:text=The%20Bill%20amends%20the%20Motor.

PWC. (2017) Doing business and investing in Germany. [online] Available at:
https://www.pwc.de/de/internationale-maerkte/doing-business-in-germany-guide-
2017.pdf.

PWC. (2022) Brazil - Overview. [online] Available at:

https://taxsummaries.pwc.com/brazil.

Smith, C., Ogutu, M., Munjuri, M. and Kagwe, J. (2021) The Effects of Foreign
Market Entry Strategies on Financial Performance of Listed Multinational Firms in
Kenya. European Journal of Business and Management Research, 6(3), pp.216–
225. doi:10.24018/ejbmr.2021.6.3.517.

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Statista. (2022) Germany: bike sales 2013-2019. [online] Available at:
https://www.statista.com/statistics/561654/bicycle-sales-statistics-for-germany/.

Tradingeconomics. (2019) India Corruption Rank. [online] Available at:

https://tradingeconomics.com/india/corruption-rank.

World Bank. (2021) Catalyzing Clean Air in India. [online] Available at:
https://www.worldbank.org/en/country/india/publication/catalyzing-clean-air-in-india.

Worldbank. (2021) GDP per capita (current US$) - Brazil, India, Germany | Data.
[online] Available at: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?
locations=BR-IN-DE [Accessed 10 Jun. 2022].

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