Country Analysis

CBA 396 - International Business

Executive Summary
Germany is an attractive country for foreign direct investment, but the global recession and subsequent
eurozone crisis have hampered the flow of foreign direct investment in recent years.

Germany is increasingly attractive to foreign companies, Companies from abroad are given good
infrastructure and a strong position in the European market.

Intercultural awareness highlights the cultural risks business organizations may face when doing
business in Germany, also the awareness that may come across strong departmental rivalry.

Pharmaceutical products are the fastest growing among the top 10 export categories, in the second
place was the category of iron or steel materials, Machinery including computers are estimated at,
lagging from articles made of iron or steel.

Business culture in Germany is characterized by: business communication, work ethics, work ethics,
internships and student placements, cost of living, work-life balance and social media guide.

Germany is one of the Europe's largest economy and leading a global source that benefits from a highly
skilled workforce and an appropriate exchange rate for the euro. The social welfare system defies
fertility decline and rise Migration rates
Germany history, geography and location
Germany is a primary member of the Europe continent's economic, political and defense organizations.
Its largest economy in Europe and the second most populous country. The European powers sank
Germany into two destructive world wars in the first half of the 20th century and left the country under
the victorious Allied forces of the United States, Britain, France and the Soviet Union in 1945. With the
Cold War, two German states were formed in 1949: FRG) And the East German Democratic Republic
(GDR). The Democratic Revolutionary Democratic Front (RUF) has established itself in major Western
economic and security organizations, the European Commission (EU) and NATO, while the GDR is on the
front line of the Warsaw Pact led by the Soviets. The retreat of the USSR and the end of the Cold War
allowed the reunification of Germany in 1990. Since then, Germany has spent considerable money to
achieve eastern productivity and wages according to Western standards. In January 1999, Germany and
10 other EU countries introduced a common European currency, the Euro.

A strategic location of Germany is on the plain of northern Europe and along the entrance to the Baltic
Sea; most of Germany's main rivers - the Rhine, Visser, Oder, Elb - flow north; the Danube, which grows
in the Black Forest, flows eastward.

Germany is in west- Central Europe, bordering the Baltic Sea and the North Sea, between the
Netherlands and Poland, south of Denmark.

its territory covers a total area of 357,022 sq. km divided in two parts of 349,223 km2 of land and
7,798 km2 of waters.

With an estimated 80,457,737 million (July 2018 estimates), Germany is the most populous country in
the European Union and ranks 15th in the world according to population size. The population density is
225.4 inhabitants per square kilometer. about 77.3% of the population of Germany are urban, rate of
urbanization: 0.27% annual rate of change (2015-20 est.)

The most populous country in Europe; fairly evenly distributed in most parts of the country, where
urban areas attract most of the populations, especially in the far western part of the North Rhine-
Westphalia Industrial State.

The climate of Germany is temperate and marine; cool, cloudy, wet winters and summers; occasional
warm mountain (foehn) wind.
the minimum wage in Germany was introduced by the government in 2015, which rose to $ 9.79
(8.84 euros) in January 2017.

in 2016 Labor force - by occupation was agriculture: 1.4% industry: 24.2%services: 74.3% (2016)

The attitude of the German is more open and positive for the us products. Germans appreciate us
products specially when they receive convenient customer service. They are very loyal when they see
that you go above and beyond.
Natural Resources
The primary natural resources of Germany consist of coal, lignite, natural gas, iron ore, copper,
nickel, uranium, potash, salt, construction materials, timber, arable land.

The terrain of Germany is diverse. The area along the Baltic coast is sandy, with sand dunes
and small hills. Next to the coast are forest hills and many lakes in the Mecklenburg Lake
Plateau. About 37 percent of the country's land is arable. 17 percent consists of meadows and
grasslands. 30 percent were forests and woodlands. Germany's geographers divide the country
into four distinct topographic areas: Northern German territory; Central German highlands;
Southern Germany and the Alps in the Alps and the Alps.
Waterways come to 7,467 km along the Rhine River and Main-Danube Canal ,Rhine River carries most goods;
Main-Danube Canal links North Sea Atlantic Ocean to Black Sea.

Economic resources and factors

German economy is the fifth largest economy in the world in PPP terms and Europe's largest - is a leading
exporter of machinery, vehicles, chemicals, and household equipment. Germany benefits from a highly skilled
labor force, but, like its Western European neighbors, faces significant demographic challenges to sustained
long-term growth. Low fertility rates and a large increase in net immigration are increasing pressure on the
country's social welfare system and necessitate structural reforms.

According to (UNCTAD) Germany is one of the leading countries for foreign direct investment with 731 billion
euro. According to Germany central bank 59% of all FDI stocks in Germany are oriented from within EU.

Germany reputation is one of the most attractive business locations of the world, there are no restrictions or
barriers to capital transactions or currency transfer, real state purchases, repatriation of profit or access to
foreign exchange

The German economy has suffered from low levels of investment. the government plan to invest € 15 billion in
the period 2016-2018, basically in infrastructure, is aimed at stimulating the necessary private investment.
Domestic consumption, investment and exports are likely to drive German GDP growth in 2018, and the
country's budget and trade surpluses are likely to remain high.

Economic Factors
The monthly inflation rate in Germany was 0.09% in December 2018. There is no change compared to
November 2018 and 0.55 less than December 2017.

the underground economy plays a major role in many countries. People avoid taxes and regulations by working
in the underground economy or by employing people illegally. The underground economy share od GDP since
2003 to 2018 was 14.3 %.

On 1 January 1999, the European Monetary Union introduced the euro as a common currency used by
financial institutions in member countries; on 1 January 2002, the euro became the only currency of
day-to-day transactions within Member States.

GDP for Germany was $3.3773 trillion in 2018 while GDP - per capita (PPP):This entry shows GDP on a
purchasing power parity basis divided by population as of 1 July for the same year 47,254 (in 2018.
 Figure 1 GDP for Germany

Source: world bank

in 2017 GNI was 4,274,017.18 and GNI per capita was 51,680.00

According to the Federal Bureau of Statistics, the largest part of household income, went on housing, energy
and household maintenance, by 34.5 percent - or 796 euros from the average monthly expenditure of 2,310
euros.

More than 14 per cent of household funds were spent on transportation, at about € 329 per month, and food,
drink and tobacco were behind € 321, or 13.9 per cent of the budget.

Reforms initiated by Chancellor Gerhard Schroeder's government (1998-2005), which were necessary to
address high unemployment and low average growth, contributed to strong economic growth and
declining unemployment. These developments, combined with the government's subsidized plan and
the reduction of working hours, Under German labor law employees allow to work eight hours a day (48
hours per week) The German government introduced the minimum wage in 2015, which rose to $ 9.79
(8.84 euros) in January 2017.

Germany, the world's third-largest exporter, has shipped $ 1.401 trillion of products around the world in
2018. This number represents about 8.9 % of total world exports, where this number was around

$ 17.546 trillion in 2017.total imports was $1.104 trillion.

Germany exports are machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles.
Imports are machinery, vehicles, chemicals, foodstuffs, textiles, metals.

The major trading partners of Germany are France, US, UK, Italy, Netherlands, China, Belgium, Austria,
Czech Republic and Spain.

the West Germanic language is the official language in Germany, which is also the most common
language in the European Union. More than 95% of the population speaks German. This includes Danish,
Frisian, Sorbian, and Romani as official minority languages.

Central bank discount rate is 0% (31 December 2017),this is the European central bank lending rate to
the banks , while Commercial bank prime lending rate: 1.67% in 31 Dec 2017 .
In 2017 the employment rate was 3.8%.

Social/demographic factors
Life expectancy at birth is 80.9 years, this figure indicates the number of years a newborn infant

would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout
its life.

for 1,300 years of Christian tradition, Christianity is still the dominant religion in Germany. Christianity in
Germany is present in the country's cultural heritage. About 28.2% Roman Catholic, 26% Protestant,
Muslim 5%, Orthodox 1.9%, other Christian 1.1%, other .9%, none 37%.

Germany has equitable distribution in most parts of the country, urban areas attract larger populations
and are more intense (77.3% of total population are urban), while the rate of urbanization 0.27% annual
rate of change (2015-2020 est.) particularly in the far western part of North Rhine-Westphalia Industrial
State. According to the world bank data there is no data about people living in slums area.

Political system and political forces in the

country.

Germany is one of the most capitalist countries in the world. Capitalism in Germany is found in its
institutions such as banking and educational systems. German industries flourished because the country
made its priorities to train the workforce to succeed in various industries. These different systems
worked together to create a strong capital market for the country.

Germany is a democratic republic, federal, parliamentary, it has a rule that asserts the protection of
individual liberties.

According to Transparency International organization, Germany occupied 11th position obtaining a score
80 out of 100.
Legal and Trade Analysis
on September 1, 2013, German government issued new versions of the German Federal Law on Foreign
Trade and the German Foreign Trade Ordinance, (the "German Foreign Trade Law"). the purpose of this
law was to simplify the existing law and to conform it to the European regulations. Under this law
Mergers and acquisitions transactions become subject to review by the German Federal Ministry of
Economics and Technology if a person or entity is Foreign Buyer.

Germany is a member in EU, EEA, EFTA

culture using Hofstede’s dimension:

German society "work and families treat people with equality" promote cooperation and a fair cultural
environment. German managers and employees are often close because they think they are working
together to create a good product.

Businesses tend to build flat structures with relatively small numbers of supervisors, yet they are also
known to be divided into sections and centers.

the rules for business etiquette

When doing business in Germany, it is important to appreciate that work ethics are of great importance
to your German perspective. Germany is a strongly individual nation, demanding the utmost respect at
all times, and therefore expects the highest standards. Any immoral behavior will seriously reduce all
future business negotiations.

corruption and transparency

Corruption is not a major obstacle to companies in Germany, and companies are unlikely to face bribery
or other corrupt practices. The risk of fraud and corruption is most prevalent in the construction and
public procurement sectors. Germany has strong institutional and legal frameworks to combat
corruption.

Germany is a very safe country. Crime rates are very low compared to southern European countries, and
the law is strictly enforced. It ranks 14th among the safest countries in the world.

References
The World Factbook, Field Listing: Imports – Commodities, Central Intelligence Agency. Accessed on
march 10, 2019
Marketing in the US vs Marketing in Germany: Key Differences You Have to Know [Web log post]. (n.d.).
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Germanculture. (2015, December 21). German Geography. Retrieved from

https://germanculture.com.ua/germany-facts/german-geography/

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2016/economies/#economy=DEU

https://unctad.org/en/PublicationsLibrary/wir2018

https://www.statbureau.org/en/germany/inflation

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World Bank national accounts data, and OECD National Accounts data files
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security/terms-of-employment.html

(n.d.). Retrieved from https://www.state.gov/

IMPORTERS.com The Online Market for G20 Importers, Germany Import Export Directory.

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spoken-in-germany.html

The Five Most Capitalist Countries in the World - Who Are They? (2014, October 27). Retrieved from
http://blog.peerform.com/the-five-most-capitalistic-countries-in-the-world/

E.V., T. I. (n.d.). Transparency International! Retrieved from https://www.transparency.org/country/DEU

Economies. (n.d.). Retrieved from http://reports.weforum.org/global-competitiveness-report-2015-

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