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Pest

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PESTEL ANANLYSIS OF FRANCE

INTRODUCTION
France, officially the French Republic, is a sovereign country in Western Europe that includes overseas regions and territories. Metropolitan France extends from the Mediterranean Sea to the English Channel and the North Sea, and from the Rhine to the Atlantic Ocean. France is a developed country and has the world's fifth-largest economy by nominal GDP and seventh-largest by purchasing power parity. French citizens enjoy a high standard of living, with the country performing well in international rankings of education, health care, life expectancy, civil liberties, and human development. According to OECD, about 73% of the top 20% of the adult population in France rated their health as good or very good, compared to about 60% for the bottom 20%, and the top 20% of the population earn $45,292/ year,and the bottom 20% live on $23,069/ year. It is one of only three countries- besides Morocco and Spain, to have both Atlantic and Mediterranean coastlines. France remains a great power with significant cultural, economic, military, and political influence in Europe and around the world. It has the world's sixth-largest military budget, and third-largest stockpile of nuclear weapons, along with second-largest diplomatic corps, after the US. France is one of the largest economies in the EU, with GDP of $2.26 trillion in 2013 (constant 2005 prices). The country's well-developed infrastructure and strong services sector support the economy. But although France has low levels of poverty and income inequality, it suffers from relatively high levels of unemployment and high labor costs. The term of international business is taking an important place in the world today and many factors are related to international business. A through external environment analysis is very important before a business is started in a particular country. France Country Information (Source: OECD) | Population | 65.70 million (2012) | GDP | $2.613 trillion (2012) | Renewable Energy Utilization | 8.07% | Life Expectancy | 82 | Visitors/ Year | 77.1 million |

IMPORTANCE OF PESTEL ANALYSIS * Understand how PESTEL analysis can be used to plan business investments or market entry through a holistic view of the country. * Gain an understanding of the political situation in France, including key figures in the country and governance indicators. * Understand customer demographics in France through analysis of income distribution and the rural-urban split, as well as healthcare and education. POLITICAL FACTOR
Considering the political part many factors have to be taken into account. France is a developed country; the political environment there is stable in the sense that there is no political trouble, no war, no political crisis, and no conflict; this is a good factor which can attract investors and new business entry. In another way setting up a business in France required a lot of capital from the investors.
In 1789, France got rid of monarchy and became a republic, whin in historical events known as French Revolution. Considering the political part many factors have to be taken into account. France is a developed country; the political environment there is stable in the sense that there is no political trouble, nowar, no political crisis, and no conflict; this is a good factor which can attract investors and new business entry. In another way setting up a business in France required a lot of capital from theinvestors. The French government is semi-presidential system determined by the French Constitution, the nation declares itself to be an indivisible, secular, democratic, and social Republic. National government is divided into a legislative and judicial branch. The President shares executive power with the Prime Minister. In certain territories in France such as Mayotte, Saint Pierre and Miquelon, Wallis and Futuna, Monaco, the government has fixed an INVESTMENT limit of $2 million for foreign enterprises. In fact the government has elucidated a precise list of tax or mandatory contributions which have to be paid by business people in France. The government of France has no and any control on religions or culture, there is no policy stated by the government to restrict any new entry of any business which is not matching with the beliefs of the French population.

ECONOMICAL FACTOR
One important factor which contributes a lot in doing a business in another country is the economic position of this country. Talking to economic situation is related to many factors such as: interest rates, level of inflation and employment, gross domestic product of the country(GDP), per capita income and so on. The GDP real growth rate of France has increased from(0.3% in 2008 to 8% in 2009), this reveals a better economic situation of the pays although the phenomenon of recession; in fact France weathered the economic crisis (recession) better than the other big countries of Europe. The GDP per capita has shifted from $33800, $33700 to$32800 in 2007, 2008 and 2009 respectively, this shows that a quite standard position of GDP per capita of France which reveals a good economic situation of the country. The unemployment rate has quietly increased from 7.4% in 2008 to 9.7% in 2009 and the population poverty line was 602% in 2004. Considering all these aspects it seems that the economic position in France is favorable to setting up a business.
Economic growth is projected to rise gradually from the trough in the level of real GDP reached in the first quarter of 2013 to about 1½ per cent in 2015, given less fiscal consolidation and improving economic prospects in the euro area. The national unemployment rate should stabilise slightly above 11% in 2014 before declining slowly. Despite VAT hikes, inflation pressure is likely to remain subdued. Fiscal policy has been less tight in 2013 than initially planned, and the pace of fiscal consolidation is to be reduced further in 2014 and 2015. The automatic stabilisers should be allowed to play fully around the new structural consolidation path. Future fiscal efforts should focus on restraining public spending, especially by cutting inefficient and non-priority items. Accelerating the implementation of a wide range of structural reforms to boost medium-term productive capacity would facilitate consolidation and strengthen the credibility of fiscal policy.
SOCIAL
France population in 2010 is 65,056,792. The age structures of France population are 0-4years 18.5%, 15-64 years 65% and 65 years above have 16.5%.The population growth rate of France is 0.549%.The life expectancy of France, male average age is 77.78 years and female average age is 84.34 years. The literacy rate of France has 99% of total population. France is highly developing country there are 75 percent of the people staying in the cities. There are two languages spoken by people one as French and another is Catalan. The French people of very proud of their language which is famous worldwide and also shown their identity..There are different religions, Roman Catholic, Jewish and Muslim. In France Islam is the 2nd largest religion. The French people share a great passion of food. France is very famous for cuisine, wines and cheese.
TECHNOLOGICAL
France has an excellent scientific and technological environment. As being the world’s 4th industrial power, one of the world leader in space technology, in nuclear energy, in computer engineering, in environmental protection. All the credit France owes to its quality education system which includes 230 engineering colleges and 87 universities which are well known for their research. Technological and industrial growth FUNDED by the government helps in increasing the standard of living of people. France spends about 2.2% of its GDP for the development of its technology and industrial growth (on research and development). Number of patent application in a country indicates how a process or product offers anew technical solution to a problem. There are about 14743 new patents in 2009. The number of technical journals articles published in France is about 30,309 in the year 2009.The amount France gets by exporting its R & D such as in computers, scientific instruments; aerospace and electrical machinery is about $93,209,237,841(2009).There is research credit tax (CIR credit import research), its a corporate tax relief which government forgoes the expenditure of the firm on its R & D operations.
France has an excellent scientific and technological environment. As being the worlds 4th industrial power, one of the world leader in space technology, in nuclear energy, in computer engineering, in environmental protection. The literacy rate of France has 99% of total population. All the credit France owes to its quality education system which includes 230 engineering colleges and 87 universities which are well known for their research.Technological and industrial growth FUNDED by the government helps in increasing the standard of living of people. France spends about 2.2% of its GDP for the development of its technology and industrial growth on R&D. Number of patent application in a country indicates how a process or product offers anew technical solution to a problem. There are about 14743 new patents in 2009. The number of technical journals articles published in France is about 30,309 in the year 2009.The amount France gets by exporting its R & D such as in computers, scientificinstruments; aerospace and electrical machinery is about $93,209,237,841(2009). There is research credit tax , it's a corporate tax relief whichgovernment forgoes the expenditure of the firm on its R & D operations. Amongst all inventions, France’s best advancement has been the introduction of the TGV High Speed Rail Network. It is one of the leading exporters of Nuclear Technologies which is also world’s 4th industrial power.France has developed the first plant for the disposal of radioactive wastes. And France is the third largest wind resource in all of Europe.
ENVIRONMENTAL
In France, forest covers about 30.3% of land. France is the first country to have a separate ministry for environment. France is been ranked 17th for carbon dioxide emission. The EPI score for France is 78.2 and it holds 7th rank. This could be achieved as Frances 78% of energy production comes from nuclear power. France has even imposed a carbon tax. Its about 17 Euros per tone of carbon dioxide emitted. It contributes about 4.5 billion Euros per year. France carbon emission is about 382,870 kt. Being a member of G8 France has decided to cut short its carbon emission by about 20%2012.
LEGAL
Employment laws
Hiring: Written contract are mandatory to all grades and levels. It should be in French.
Firing: cannot be removed unless the organization specifies one of the claws mentioned in the French law. The dismissal process on disciplinary basis is very official and failing to pursue the practical steps, even where the firing is clearly reasonable on the merits, May effects in the Courts overturning the firing and ordering the recall of the employee.
Taxation
The current standard rate is at 19.6%. The reduced rate (for food and books) is 5.5%. A specific rate of 2.1 % applies only to the drugs taken in charge by the Social Security. The net revenue of VAT in 2008 is 126 billion euro.
Subsidy policy is applicable only to agricultural and green revolution products.
FDI: Policies on direct INVESTMENT flows are there since 1984-1985. Both inward and outward flows are at a higher rate.
Future Trends in France
Being a developed contrty; the political environment is stable in the sense that there is no political trouble, nowar, no political crisis, and no conflict; this is a good factor which can attract investors and new business entry. In another way setting up a business in France required a lot of capital from the investors. The areas of France in which forest covers about 30.3% of land. France is the first country to have a separate ministry for environment. France is ranked 17th for carbon dioxide emission. The EPI scorefor France is 78.2 and it holds 7th rank. This could be achieved as France's 78% of energy production comes from nuclear power, and it has even imposed a carbon tax which is about 17 Euros/ tone of carbon dioxide emitted. And this contributes about 4.5 billion Euros/ year. France carbon emission is about 382,870 kt, and being a member of G8 France has decided to cut short its carbon emission by about 20% 2012 and also continue the reduction in the future as well.
CONCLUSION
France being at the heart of Europe has a great advantage. It has world’s largest consumer market consisting about 500 million consumers. France also is the leading destination for tourism. France government provides a great support for foreign investment.

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