Germany- overview
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Transcript of Germany- overview
GERMANY
Understanding
To analyze and understand the economic, social, and cultural climate that impacts business practices in Germany. The following analysis will highlight the opportunities and threats for introducing the client’s product into the German market.
Overview History Demographics Geographical Location Trade Industry Economy Technology Education Labor Force
• Political Structure Legal Structure Religion Culture Business Environment SWOT Analysis
History
1871: German Empire formed 1914 - 1918: World War I 1929: Global Depression 1939 - 1945: World War II 1934 – 1945 : Hitlar’s Rule 1949: Germany divided into East and West regions 1990: Germany joins the EU 2008: Germany officially declares recession 2009 (Aug): Germany comes out of recession
Demographics Population: 80,683,250 Population is equivalent to 1.1% of the total world
population. Ranks number 16 in the list of countries by population. Population growth rate: -0.061% Birth rate: 8.21 births/1,000 population Life expectancy: 79 years Population density: 230 per sq.km = 597 per sq.mi
Geographical Location & Map
Total: 357,022 sq km
Land: 348,672 sq km
Water: 8,350 sq km
Located in central Europe
Bordering countries: Austria, Belgium, Czech Republic, Denmark, France, Luxembourg, Netherlands, Poland, Switzerland
Water: borders the Baltic Sea and the North Sea
Germany is made up of 16 different “states” Baden-Württemberg, Bavaria Berlin Brandenburg Bremen Hamburg Hessen Mecklenburg-Vorpommern Lower Saxony North Rhine-Westphalia Rhineland-Palatinate Saarland Saxony Saxony-Anhalt Schleswig-Holstein Thuringia
Climate: temperate and marine; cool, cloudy, rainfall during summer and winter
Terrain: lowlands in north, uplands in center, Bavarian Alps in south
Natural hazards: flooding Major cities: Berlin, Hamburg, Munich, Cologne
Geographical Location
Trade Exports $1.159 trillion (3rd highest in the world)
Machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles
Export Partners: France 10.2%, US 6.7%, Netherlands 6.7%, UK 6.6%, Italy 6.3%, Austria 6%, China 4.5%, Switzerland 4.4%
Imports $966.9 billion (3rd highest in the world) Machinery, vehicles, chemicals, foodstuffs, textiles,
metals Import Partners: Netherlands 12.71%, France 8.3%,
Belgium 7.19%, China 6.89%, Italy 5.88%, UK 4.76%, Austria 4.55%, US 4.25%, Switzerland 4.07%
Trade
Industries One of the world's largest and most
technologically advanced producers of: Iron, steel, coal, cement, chemicals, machinery,
vehicles, machine tools, electronics, food and beverages, shipbuilding, textiles
Industry and construction accounted for 29% of gross domestic product in 2008, and employed 29.7% of the workforce.
Major Companies
Major Companies Volkswagen Allianz Daimler Siemens Metro Deutsche Telekom BMW
Mercedes Benz Audi T-Mobile Nivea Porsche Merck Adidas
Economy Largest national economy in Europe
and 5th largest in the world Currency: Euro established in 1999 GDP: $3.353 trillion GDP (PPP): $2.81 trillion (6th in
the world) GDP per capita: $34,100 GDP growth rate (2009): -4.9% GDP growth rate (2005): 2.5% FDI: 503 billion EUR (2009)
Technology
105 million mobile cellular phone users (8th in the world) 61.973 million internet users (6th in the world) German companies represent 15.6% of research advanced
goods worldwide, ranking 2nd in the world (following US)
The Federal Government provides funding through annual grants or endowment capital In 2010 the Federal Ministry of Economics and
Technology created a budget of 2.3 billion euros for technology research and development
Education and Labor Force 99% literacy rate
among males and females
Approximately 4.4% of GDP invested in education
250 universities, 100 of which focus on applied sciences
95% of universities and higher education are public
School life expectancy: 15 years
Labor force: 43.5 million Labor force by occupation:
Agriculture: 2.4% Industry: 29.7% Services: 67.8%
Unemployment rate: 7.5% (2009) Much higher unemployment rate in Eastern
Germany than Western Germany
Political & Legal Structure Government type: Federal
Republic Chief of state: President
Joachim Gauck Head of government:
Chancellor Angela Merkel
Elections: president is elected for a 5 year term
Legal system: civil law Value added tax: 19% Value added tax for food:
7% Corporate tax: 15% Profit generated in
Germany can be subject to corporate tax, solidarity surcharge, and trade tax
Religion• Religious freedom• Protestant (33%), Roman Catholic (33%), Muslim
(4%), 108,000 members of Jewish communities, and others
Culture Germans have a strong sense of regional pride Reputation for being industrious, thrifty, and
orderly Germans usually express their thoughts and
opinions in a direct way Separation between private and public relations Interest in academic credentials but not personal
life Formal communication and greetings
Business Environment Starting a business in Germany is ranked 88 out of 183 economies
by The World Bank To start a business in Germany:
It will take approximately 15 days 9 different procedures 4.8% of income per capita
German-American business groups: German American Business Association American-German Business Club Germany-USA Career Center
SWOT Analysis
Strengths• Increasing consumer consumption• Efficient and educated work force• Largest European economy
Weaknesses• High tax rates• Slow negotiations• Demanding employees
Opportunities• Location• Tax incentives• Introduction into European market
Threats• Mature market• Competition
Indian Companies entering German markets. Tech Mahindra Expands its Presence in
Germany – inaugurates its near shore delivery centre in Düsseldorf, Germany.
Hyderabad-based Rain Commodities acquired Rütgers Group, German’s leading manufacturer of chemical raw materials made from coal tar.
Acquisition of REpower by Suzlon Energy Limited, is a wind turbine supplier based in Pune.