Mr Rauf

Topics: Strategic management, Price elasticity of demand, Supply and demand Pages: 32 (11041 words) Published: March 14, 2013

PESTLE analysis is a view on external environment companies operates in. There are five external factors that influence life of organizations: Political environment, Economical environment, Socio-cultural environment, Legal environment and Environmental factor. The below PESTLE analysis focuses on CEP companies in European market.

Political Environment

         European region is stable environment that is not affected by any significant political crisis in countries and no major changes in political structure are expected in near future. More than half of European states are integrated into European community, European Union and create one of the biggest single markets for trade and investment in the world. EU enlargement has removed border lines and has made trade and business more accessible for its members. It has brought greater opportunities for businesses, wider range of companies and benefits for their customers.          EU has created closer links with immediate neighbors and enables bigger exports, free movement of services, payments and capital for trade and investment. Prior liberalization in 90's there were many national postal operators acting as monopolies. EU decided to start postal reform that firstly completely liberalized CEP market. Liberalization has enabled both national postal operators (Post Offices) and private postal companies to enlarge their business portfolio into parcel and express market. This happens through acquisitions of well-established companies and smaller national companies. Exactly, as it happened to DHL through acquisition by Deutsche Post in 2002. Full liberalization in Europe will be completed by 2012 which gives current companies time to strengthen their positions, build new networks and gain wider portfolio of customers. EU has also built up confidence in European political and economical future of each member which enables companies to make longer term decisions, strategies and investment plans. Currently the CEP market is highly competitive and companies have to have capital to establish strong and powerful position in such an environment and have to have built up networks supported by the modernist technologies.


Europe is stable environment where no major political changes are expected. Full liberalization of European postal market that will be finished by 2012 will bring more competition especially on domestic level. However, there is a potential to merge or acquire those companies operating in the local markets and increase market share. Big companies operating on international level have an advantage of built global networks and modern technology behind them.

Economical Environment

CEP is highly potential market and its growth is directly related to the level of GDP. Global trade is on the rising level and together with industrialization has made CEP services more important for majority of industries. Additionally, product life cycles have been reduced, quality awareness among customer is growing and in order to succeed companies are forced to maintain high quality standards. The global economic crises caused decline in economy and it has affected the entire logistics sector. Volume of shipments decreased and the recession slowed down the whole market. Even the big corporations have to fight with decreased revenues and change their investment plans and business strategies. Governments around Europe support investment plans by structural reforms and programs that encourage investors to invest. During the big economic crisis in 30's this did not happen and governments tended to act individually without multinational or even global cooperation. Today's economies learnt from those mistakes which help to lower the implications, increase customer demand and support start of growth. Due to the crisis companies changed their investment plans but did not stop them. Merges with smaller companies, agreements and strategic acquisitions represent...
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