This is the detailed PESTEL or PEST Analysis of France which is important for understanding the external factors that affect the industry’s growth and profitability.
Introduction
France, officially known as French Republic, is the land where famous French Revolution took place. Fashion starts here and it is known for its wines and fragrances. Paris is the capital city of France and one of the 7 wonders is found there i.e. Eiffel Tower. It is the world’s fifth largest economy and second largest European economy, a major chunk of revenues come from tourism as it is the world’s most visited place. Analysis of this happening country is done below:
Political
Unfortunately since the beginning French did not get wise leaders who could feel for them and bring the country on the road of development without any fear of going bankrupt. The ever widening gap between the rich and poor led to French Revolution where the royalty was hanged in public by common people. Since then the government is highly centralized and maintains a tight administrative control. When Francois Hollande took over as the President of Fifth Republic he said that he doesn’t want to be locked in his palace while his people are out on roads protesting against gay marriages and ever increasing unemployment level, but unfortunately the same has happened. The government debt has reached 90% of its GDP (Rohr, 2013). France is unable to come out of its glorious past and accept the reforms in its political and economic structure and the reality that Germany has started dictating the terms in their continent.
Political elite share privileges to the extent of absurdity it’s like period before French Revolution has dawned again. The rightest and leftest seems as wide apart as they could be. Capitalism has failed to strengthen its roots in France. EU has lost its standing in France.
Economic
When after world recession all the European countries were going bankrupt it was expect of France to follow the same suite but due to strong Governmental intervention in the banking and finance sector, it did not face the problem as severely as expected but it does not mean the economy is doing well, deficits have been mounting over the years except for during the rule of Raymond Barres who was an economist himself. The government continues to impose heavy taxes on its people and spend that income on state expenses like development projects so much so that in 2010 public expenditure reached 56% of GDP (Outline of the French Economy, 2015).
The tax rate is around 40% higher on business community as compared to the rest of the world. As a result of this high taxation France had high level of unemployment because the disparity put companies out of competition against their foreign competitors and they outsource the laborious jobs.
This country has potential of doing great as it has heavy industries to manufacture machinery, aircrafts, electronics and automobiles besides being agricultural. They have chains of supermarkets all over the world. Their luxury goods and cosmetics are raved upon. France has an extensive network of railways and roads, so the infrastructure is there. As far as education is concerned France has the highest number of graduates each year in Europe, in all the fields of life.
Social
Most pressing issue faced by French is of income and social class disparity and formation of permanent underclass. This gave rise to crime rate where youth started falling prey to criminal activities and destroying their potential future. Unionized activities are the norm in business community and most of the time workers are on strike due to one reason or the other, hampering the productivity. (Global Issues)
Another issue is that around 80% of the population of France is Roman Catholic and they treat immigrants, particularly Jewish immigrants unfairly. Racial violence is witnessed every now and then through graffiti and graves demolition etc (People and Society, Social Issues). Recently in France same sex marriage was legalized which the French believed proved equality in their society. Euro crisis, although not as severe as before, still haunts the nation, the GDP has increased after being stagnant for five years.
Technological
When we think about nuclear powers we think about nuclear power we think about USA and Russia but surprisingly France is the leader in this technology export. So many electric devices like fridge, generator etc were invented in France. When we go on vacations to our favorite place what do we care about most? Pictures and we owe this technology to French people. In 1995, total research and development expenditures of France amounted to 190 billion francs, or 25% of GDP. In 1998, high-tech exports were valued at $54.2 billion and accounted for 23% of manufactured exports (France – Science and technology). It is doing several projects with other countries for sustainable and renewable energy generation to protect the environment and avoid any kind of energy crisis.
Health is another sector where France is focusing its research budget. It is generally accepted in France that all citizens should be provided with quality healthcare. Number of universities and research institutions are training young scientists who could establish the technological supremacy of France in the world.
Environmental
In the future the world is going to face water crisis the most, there will be scarcity of clean drinking water. France being an industrial economy faces the issue of water pollution. There is Ministry of Environment which makes and implements related laws. In the past France experienced acid rain due to water contamination which destroyed its forests. It was the world’s eleventh highest level of industrial carbon dioxide emitting nation in 1992, totaling 362 million metric tons, a per capita level of 6.34 metric tons (France – Environment).
Beside all these environmental issues France has 1/3 of its land covered by forests and enforces protection laws that could prevent the endangered species from becoming extinct, its flora faces this threat the most. Mainly Ecophyto action plan by the government and designation of nitrate vulnerable zones have lead to major agricultural breakthroughs. Moreover the infrastructure development programs include wastewater treatment plants which have turned out to be really helpful. (Smith, 2015)
Legal/Law
In France the main law enforcement body is Police which include CRS, the gendarmerie nationale and the national police. The national police take care of local crime control and come under Interior ministry, whereas the gendarmerie is the army which comes under the supervision of Ministry of Defense. If one gets arrested at France it is advisable to ask for an attorney and give no statement without his supervision. The police can only fine the law breakers; the case is run in the court like all other countries. England takes keen interest in the law and order situation in France because of being a neighbor.
Bibliography
France – Environment. (n.d.). Retrieved December 04, 2015, from Nation’s Encyclopedia: http://www.nationsencyclopedia.com/Europe/France-ENVIRONMENT.html
France – Science and technology. (n.d.). Retrieved December 04, 2015, from Nation’s Encyclopedia: http://www.nationsencyclopedia.com/Europe/France-SCIENCE-AND-TECHNOLOGY.html
Global Issues. (n.d.). Retrieved December 04, 2015, from Global Issues: http://franceglobalissues.weebly.com/major-issues.html
Outline of the French Economy. (2015, February). Retrieved December 4, 2015, from About-France.com: http://about-france.com/geo/french-economy.htm
People and Society, Social Issues. (n.d.). Retrieved December 04, 2015, from Countries Quest: http://www.countriesquest.com/europe/france/people_and_society/social_issues.htm
Rohr, M. v. (2013, June 05). Bonjour Tristesse: The Economic and Political Decline of France. Retrieved December 4, 2015, from Spiegel Online International: http://www.spiegel.de/international/europe/economic-decline-in-france-the-failed-leadership-of-hollande-a-903732.html
Smith, B. (2015, July 02). France: Environmental Issues, Policies and Clean Technology. Retrieved December 04, 2015, from Azocleantech: http://www.azocleantech.com/article.aspx?ArticleID=550