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International Business Country Analysis Germany

2061 words - 9 pages

This report was commissioned to do an analysis of Germany and make a recommendation as to
whether or not to a large Canadian company should expand its foreign operations in Germany.
The country was analyzed based on its Macro Environment – country description, Political
situation and stability, Legislation, Economic conditions and Cultural issues, as well as on its
Factor Endowments. The findings show that Germany has an overall stable and healthy economy
with excellent advanced factors of production – especially in regards to productivity and
innovation. With new ties to Canada, through CETA, legislation will be easier to deal with. The
country also has a similar ...view middle of the document...

latter was due to the Eurozone Crisis [30]. Four of the twenty largest transnational companies are
German – Volkswagen, Siemens, Deutsche Telecom and E.ON [27]. Germany is also one of the
world’s least corrupt nations according to Transparency International. With a CPI of, they are
12th on the list and only 2 behind Canada [26]. The main type of corruption present is bribery in
relation to winning public contracts in the private sector [12].

Political Situation and Stability: Germany has a democratic government. It operates in a
parliamentary fashion and emphasizes protection of individual liberty and division of powers
[17]. It is known for the stability of its politics. During the financial and economic crises since
2008, Germany remained strong while many countries in that continent were in political turmoil
[5]. Germany is working towards integration among members of the EU and sees its ties with the
United States, as well as membership in NATO as important to maintain [17].
Legislation: Germany’s highest tariffs are on agricultural goods at 13.7 while the average tariff
on all goods is 5.2 [32]. Germany has one of the least restrictive regulatory processes in regards
to FDI [11], though it can restrict non-residents from taking over domestic companies, real estate,
vessels, securities etc. It has the most restrictive antitrust legislation of the G-7 countries. It also
has one of the most significant competition policies but never uses it to block FDI as it is limited
enough by informal trade barriers [11]. Subsidies in Germany come from both the Federal
Government and the Lander. There is concern from experts and economists due to the fact that
certain industries – such as coal and steel – are dependent on subsidies. The subsidies are higher
now, after unification [20]. Low productivity and efforts to avoid unemployment in East
Germany are the primary motivators. Intellectual property protection is amply covered by the
GRUR. It has been devoted to protecting intellectual property since 1891 and internationalized
its association and established a position for international affairs in 2004 [1].

Economic Conditions: Germany has a mixed economic system that allows for private freedoms
while also having centralized economic planning and government regulation [17]. GDP growth,
however, has been on a downward trend since 2010 (Appendix 3). At the same time, the value of
European countries together and is known to be relatively stable and to contribute to low inflation
[29]. Philippe Legrain, however thinks that Germany has an economic mirage – weak
productivity gains, falling investments, ageing demographics and deficient growth all point to a
dysfunctional economy [25]. An article in The Economist also brings up concerns over the euro
crisis, German’s fears of inflation and Germany’s reluctance to lead that are concerning [28].
Cultural Issues: Germans may come across as a bit more reserved and may take...

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