2. 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.
3. Overview
History
Demographics
Geographical Location
Trade
Industry
Economy
Technology
Education
Labor Force
• Political Structure
Legal Structure
Religion
Culture
Business Environment
SWOT Analysis
4. 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
5. 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
6. 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
7. 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
Geographical Location
8. 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%
10. 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.
12. Major Companies
Volkswagen
Allianz
Daimler
Siemens
Metro
Deutsche Telekom
BMW
Mercedes Benz
Audi
T-Mobile
Nivea
Porsche
Merck
Adidas
13. 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)
14. 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
15. 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
16. 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
17. Religion
• Religious freedom
• Protestant (33%), Roman Catholic (33%), Muslim
(4%), 108,000 members of Jewish communities,
and others
18. 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
19. 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
20. 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
21. 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.