Deutsche PostWorldNet’s Strategy for International Expansion

Subject: Strategy
Pages: 2
Words: 513
Reading time:
2 min

PESTLE analysis has been used by DPWN to analyze its external business environment. It involves the considering of political, economic, social, technological and legal factors before investing in the target market.

Political Factors

These are factors that relate to the political system and political instability of countries where DPWN markets its mailing products and services. This involves scrutinizing the system of government that such target countries have adopted. The company is required to decide whether to invest in communist or capitalist countries after careful consideration of each political system in terms of carrying out business in the chosen country of interest. It is reported that DPWN invests in foreign countries with flexible capitalist political systems because it allows labour, capital and resources to flow freely in and out of their countries thus making those destinations the best target markets for DPWN.

Economic Factors

This involves the DPWN analyzing the economic factors that hinder or augment its operations in the target countries. Such trade barriers like the restriction of imports and exports as well as foreign exchange rate systems have carefully been evaluated by the management of the company in order to carry out its operations without economic constraints. Other economic factors of importance analyzed by the company include inflation particularly anticipated inflation, the balance of payments, countertrade, fiscal and monetary policies among other significant factors. Although DPWN is not subjected to many of the above factors it has been prudent for DPWN to critically analyze deeply the factors particularly inflation and foreign exchange systems by utilizing forecasting techniques that can give the company a clear picture of the future.

Social Factors

Forces within the society such as media, family and friends have affected the way the DPWN has sold its products and services. Social factors affect the DPWN consumers’ attitudes, opinions and interests in the way they view products from certain mailing companies.

Technological Factors

Technology and innovations have taken centre stage in trying to achieve a considerable market share by firms in many industries. Technology provides an opportunity to the firm of expanding through the utilization of advanced technologies but at the same time, it may contribute negatively to market participation for example where businesses use technologies to compete unfairly. DPWN utilizes advanced technologies for example the use of internet marketing in exploring new markets. Such technologies have been useful in that it saves time and financial resources.

All businesses including DPWN must operate in a business environment deemed to be legal by the target market. The company, therefore, ensures that the mailing services are allowed by the host country in order to avoid unnecessary legal battles. DPWN observe the existing laws regarding business transactions in the target market particularly avoiding unfair competition. Also, it has been observing other legal aspects such as the areas of corporate social responsibility.