International Business Division
International Business Division
The population of Germany accounts for 80.6 million, out of which 74% population accounts for the urban population. The ethnic amalgamation is found to be extensive due to the prevalence of German population with the majority of 91.5%, Turkish population with the majority of 2.4%, whereas 6.1% population accounts for the Greek, polish, Italian and Spanish minorities. In accordance with the religious aspects, 34% population accounts for the Protestant, whereas 34% population accounts for the Roman Catholic. Similarly, 3.7% population accounts for the Muslim religion, however, 28.3% population account for the other unaffiliated religions (Statista, 2016b).
The literacy rate in Germany accounts for 99% due to the compulsory education of grade 10. It is ranked 16th in accordance with its population, however, the overall population is considered to be in the declining or aging phase with the fertility rate of 1.4%. In accordance with the social structure of Germany, the parenting of children has been incorporated by men than women, whereas women are found to be more inclined towards the development of their professional career. It has been observed that the overall population accounts 13.9% for the individuals under 14 years, 66.1% accounts for 15 to 64 years, whereas 19.6% population accounts for the individuals above 65 years. It eventually indicates that the number of adults and aging population is significantly higher than the number of young adolescents (Statista, 2016b).
The economy of Germany is considered as the 5th largest economy in the world. It is considered as the largest economy of Europe, and is considered as a significant exporter of vehicles, household equipment and chemicals. The country benefits from the high-skilled employees due to the high literacy rate and mature population. Moreover, the context of women employment is also high, which eventually makes them economically stable group in the country. The service sector of the country accounts for 60% contribution in the total GDP, whereas industry sector accounts for 25.8% in the economy. However, construction sector accounts for 4.7% and agriculture accounts for 0.6% in the country (Statista, 2016a). The increased rate of skilled-employees increases the supply of employees in the market, which eventually increases competition and reduces the employment rate. In this instance, the unemployment rate was found to be 20% in the year 2008, however, the implementation of government reform reduced the unemployment rate to 6.3% (Statista, 2016b).
The prevalence of free market has been observed in Germany, however, the integration of government regulations has been observed prominent. Moreover, social welfare programs and employee protection legislations also tend to limit the businesses to consider the welfare of the employees. Moreover, subsidies on account of technological advancements and environment friendly practices are also considered as a prominent approach to enhance the business prospects in the country. The gross domestic product of the country accounts for 2.737 trillion euros for the year 2013, whereas per capita GRP accounts for $47,815. The GDP growth rate is found to be 4.7% with the inflation rate of 2%. Moreover, the interest rate is found to be 0.4%, whereas disposable income for household accounts for $29,016 and hence, these statistics indicate that Germany is ideal for investments due to the increased level of available income to spend and low inflation rate (Statista, 2016b). The imports in the country account for the 19% tariff rate, however, non-tariff policy is also observed for food products and print media or books. Legal restrictions are observed on the import of drugs and tobacco due to the focus on the welfare of the population and foster a significant healthcare policy (Entering Europe, 2008).
Political Elements of Germany
The administration of the country is parliamentary, and a majority rule constitution underlines the security of individual freedom and division of forces in a government structure. The chancellor (leader) heads the official branch of the national government. The obligations of the president (head of state) are ceremonial, whereas the chancellor practices official power. The Bundestag (lower, main assembly of the parliament) chooses the chancellor. The president is elected on the basis of 5-year interim May 23 by the Federal Assembly, a body convened just for this reason, involving the whole Bundestag and an equivalent number of state representatives. President Christian Wulff (Christian Democratic Union - CDU) was chosen on June 30, 2010 (Pye & Verba, 2015).
The Bundestag, which serves a 4-year term, comprises of in any event double the quantity of discretionary locale in the nation. At the point when gatherings' straightforwardly elected seats surpass their corresponding representation, they may get extra seats. The quantity of seats in the Bundestag was diminished to 598 for the 2002 decisions. The upper chamber or Federal Council comprises of 69 individuals who are agents of the 16 states. The governing body has forces of restrictive locale and simultaneous purview with the in ranges determined in the Basic Law. The Bundestag has essential administrative power. The upper chamber or Federal Council must agree on enactment concerning income shared by elected and state governments and those forcing duties on the states (Pye & Verba, 2015).
Germany has an autonomous government legal comprising of a sacred court, a high court of equity, and courts with purview in managerial, monetary, work, and social matters. The most noteworthy court is the Federal Constitutional Court, which guarantees a uniform translation of established arrangements and secures the essential privileges of the individual national as characterized in the Basic Law (23 May 1949) incorporated to be constitution of the assembled Germany 3 October 1990 (Pye & Verba, 2015).
Cultural Elements of Germany
Germany is multicultural nation and the general public is formed by an assortment of ways of life. There are hints of some genuinely extraordinary ethnocultural assorted qualities. Despite the fact that a great deal of social changes occurred, the family is still the most critical social reference unit. Youngsters have decent associations with their folks. Neighborhood design, music, writing, craftsmanship and games are fields which mirror the socio-social scene of Germany. The exceptional design styles of the nation are the consequence of the fracture amid hundreds of years. Some mentionable destinations incorporate the Abbey Church of St. Michaels, the Speyer Cathedral, and the Cologne Cathedral. Germany has been home to numerous famous traditional music authors like Ludwig van Beethoven, Johannes Brahms, Johann Sebastian Bach and Richard Wagner. It is prospering in the music showcase (Gottlich et al., 2013).
The cultural amalgamation is considered as a consequence of the prevalence of immigrants, due to which a national culture has been developed where the differences in culture are accepted. The prevalence of individualism has been observed due to women empowerment in the society and high literacy rate. It has resulted in the context of single parenthood, lack of dependency on marital relations and high focus on personal development. The cultural amalgamation has resulted in the diffusion of cultural differences, which is considered highly beneficial for the global organizations to expand their business operations. Moreover, cultural amalgamation has resulted in the acceptance of diversified products and hence, these factors indicate Germany as an ideal country for business expansion (Gottlich et al., 2013).
Potential for Business
The potential for business is highly dependent on the potential customers and according to the economic elements of the Germany, it is observed that the population a has significant amount of disposable income to spend on luxuries and other products. Moreover, increased employment rate also indicates the prevalence of potential customers due to the increased per capita income. The strong prevalence of women in the employment sector indicates the availability of potential customers due to the increased household income. It also provides a significant niche for businesses to attract and retain female population in the Germany. The political aspects also indicate the prevalence of a stable government for the duration of 5 years and hence, it eventually indicates favorable prospects for businesses. This is due to the fact that stable government tend to implement the policies in an effective manner and ensure the economic development due to their focus on the welfare of community and economic prospects of the country.
The stable government also hinders the prevalence of social turmoil and increases business prospects in an effective manner. The cultural aspects also indicate that the population has a high degree of acceptance of cultural diversification and accepts the global businesses and products. However, the population of Germany is considered to be aging, whereas most prominent group of population accounts for young-adults and adults, and due to the increasing rate of employment and per capita income, it eventually makes them significant customers for the businesses. Moreover, there are no trade barriers to hinder the decision of business expansion in the Germany, whereas value-added tax may increase the price of the product to some extent, however, strong buying power of customers can overcome the barrier related to the potential increase in price. In this manner, the overall analysis indicates that Germany is favorable for the business expansion of the GCC company with high local responsiveness.
Market Entry Strategy
The proposed market entry strategy accounts for joint ventures in order to reduce the prevalence of value-added cost to the products of the company. In this instance, the business can penetrate into the local market with the knowledge of its local partner and can understand the market dynamics in an effective manner. The most prevalence barrier accounts for GCC company is the difference in culture and language and hence, these barriers can be hindered with the prevalence of a joint venture partner that can prove to be an intermediary in the business operations. The GCC company can learn and become familiar with the local market and can focus on enhancing the business operations across Germany rather than considering the prevalence of business risks due to lack of market knowledge. This strategy will also reduce the risk for the GCC company as the risk will be mutually shared with the local partner. The GCC company can consider either a permanent or temporary joint venture and can hence, it provides the company with an option to overtake its business operations after becoming acquainted with market and ensuring the profitable prospects for the business.
References
Entering Europe. (2008). Germany's import and export. Entering Europe. Available from: http://www.entering-europe.eu/germany/import-export-germany.php
Gottlich, U. (2013). Cultural Studies and Sociology of Culture in Germany: Relations and Interrelations. Culture Unbound: Journal of Current Cultural Research, 5(1), 33-41.
Pye, L. W., & Verba, S. (2015). Political culture and political development. Princeton University Press.
Statista. (2016a). Germany: Share of economic sectors in gross domestic product (GDP) in 2015. Statista. Available from: https://www.statista.com/statistics/295519/germany-share-of-economic-sectors-in-gross-domestic-product/
Statista. (2016b). Statistics and facts on Germany. Statista. Available from: https://www.statista.com/topics/1903/germany/
