germany final

Presented By -

Neel Lalwani Dilip Jain

Deepank Sahai P.S.Chaithanya Purushottama

GERMANY

INTRODUCTION TO GERMANY

Capital and the largest city -BerlinOfficial Language -German Government - President - Chancellor

-Federal Parliamentary Constitutional Republic-Joachim Gauck -Angela Merkel

Area -357,168 km2

Population- 2014 82,282,988- Density 230 per sq.

kmGDP (ppp) 2015 estimates - Total $3.815 trillion

- Per capita $46,896 GDP (nominal) 2015 estimate

- Total $3.413 trillion- Per capita $41,955

Currency Euro (€)United Nations membership Joined on 18th September

1973

GERMAN HISTORY

• Throughout The years , Germany has gone through

endless separation and unification.

1871

• unification of southern & northern German states by chancellor otto won Bismarck

unification

1919• Germany defeated

in WWI & forced to sign the treaty of

versailles

seperation

1933• Hitler becomes chancellor of

Germany & began dictatorship rule in German

1939

•Germany invades Poland & out break

of WWII

1945 Germany surrenders & separated into E &

W Germany, Berlin fall under 4 power’s ruling

1961 communists build the Berlin

wall, separated eastern & western Berlin

separation

1990• Berlin wall collapsed &

Germany reunited

HISTORY INFLUENCE NATION

1.Extreme Nationalism -> racism 2. Aryan race VS Jews-> Concentration camps

@ WWII 3.totalitarian rule VS democracy-> great

leaders

THE FALL OF THE BERLIN WALL

After the fall of Berlin fall (9, November, 1990)->Famous Tourists SpotNumber Of Tourists In Berlin increased 370% from 1993 to 2008

Attract tourists -> Tourists Are attracted by the historical wall-> Many hotels have been built since thenNowadays: 1,095 hotels in Berlin

Favor the relationship between Germany and other countries->Segments have been given to various institutions around the worlds

PLACES TO VISIT Neuschwanstein Castle• In the Bavarian Alps the former home of Ludwig II .• This beautiful castle is a throwback to romantic

period in German history .

Leipzig• Leipzig is the city

known for its vibrant arts and culture scene.

• Tourists from different places come to St. Thomas Church to enjoy the performances of Bach’s music .

Philharmonic Orchestra• The Philharmonic Orchestra is considered one of the best in the world

.• There is no better place to sample the delightful sounds of classical

and contemporary

German music than in berlin’s opera house.

Cologne • The city offers a vibrant array of attractions, buzzing nightlife and a stellar arts and culture scene .• The city is situated on the Rhine River in the German federal state of North Rhine-Westphalia .

Oktoberfest• Germany's most

famous festivals.• Munich's annual

Oktoberfest beer festival which actually begins in September .

• From Weiss wheat beers to alt dark ales, you'll be able to sample any type of tipple that takes to individual’s fancy.

Pest analysis of Germany

P - Political Factors E - Economic FactorsS - Socio-cultural FactorsT - Technological Factors

Political factors

Political overview

• Germany is a federal parliamentary republic and federal legislative power is vested in the Bundestag (the parliament of Germany).

• Norbert Lammert is the current president of the Bundestag and the representative is directly elected, usually every 4 years.

• The German political system operates under a framework laid out in the 1949 constitutional document known as the grundgesetz (Basic Law).

• The legislature, the judiciary, and the executive are the 3 wings which make up Government of Germany.

• German electoral system makes it very difficult for any one party to form a government on its own.

Political system :• The political system of the country is guided by the

Constitution of The Federal Republic of Germany which lays down the fundamental structure of the government.

• It dictates what value system the nation should follow.• In this the characteristics of a capitalism and parliamentary

are mixed together .• The president, Joachim Gauck , is the head of state and

invested primarily with representative responsibilities and powers.

• The chancellor, Angela Merkel is the head of government and exercises executive power i.e. it takes almost all the decision in the country with consensus .

• Due this political system corruption in Germany is to a limit .

• The structure of German political system –

Political climate :• Since 1949, the party system has been dominated by

the Christian Democratic Union and the Social Democratic Party of Germany ( strong political groups ).

• Other political groups such as Alliance '90/Greens, Free Democratic Party, Christian Social Union have played important roles in influencing government policies.

• The political pressure groups are business associations and employers' organizations, trade unions, religious, immigrant, expellee, and veterans groups.

• The political climate is also affected by the international participation such as BSEC, BIS, CBSS, Arctic Council, ITUC, etc.

• The government of Germany has changed several times but all the parties aim effective functioning of business.

Political stability in the country :• The political stability of a country is all the more

determined by the stability of government policies.

• Though the political parties in Germany has changed several times the major change in rules came only during reunification.

• German political groups continue to maintain ODA to help business to group mostly helpful to MNC’s.

• Recently the chancellor Angela Merkel decided to use government spending to stimulate growth and to pump some money into the lethargic German economy.

• In principle, business activates are free from regulations restricting day-to–day business.

Politically sensitive products :

• Political sensitive goods in Germany are referred to those that invariable affects its economy and also proves to hamper the welfare of its people.

• Germany does not have a very long range of goods in politically sensitive products but few of it are :- - products that have focus on racial or class discrimination.

- violating national flag or national anthem of the country, etc.

International financial flow :• Germany is a country that efficiently attracts the

foreign investment and being the fifth largest economy it has high rate of return on investment .

• Germany has very low taxes charge for the return on investment and therefore several investors invest in Germany.

Law :• Germany has a civil law system based on Roman law with some

references to Germanic law. • The Bundesverfassungsgericht (Federal Constitutional Court) is the German Supreme Court responsible for constitutional

matters, with power of judicial review.• Germany's supreme court system is specialised: for civil and criminal cases.• For other cases such as labor issues, financial issues, etc.,

there are separate courts such as Federal Labour Court, Federal

Administrative Court, etc.• For resolution of the business related issue the victim company

has to go either for international judiciary such as ICJ or ICCT or respective courts.

• Germany has similar laws for international as well as national business.

Foreign relation :• Germany maintains a network of 229 diplomatic missions

abroad and holds relations with more than 190 countries.• Germany having strong business bond with other countries

such France, USA, Italy, etc.• Germany is a member of the NATO defence alliance, the

Organisation of Economic Co-operation and Development the World Bank, the International Monetary Fund, European union.

• Germany also has diplomatic representation in US and diplomatic representation from US.

• Germany’s foreign relations are sound also because of its indiscriminate laws towards international business .

• Germany had been funding many countries and one of them is Greek, France, etc.

Economic factors Economic Overview :

• The fifth largest economy of the world.• Worlds 2nd largest exporter in machinery, vehicles, chemicals, and

household equipment and benefits.• The country has highly skilled labor.• After the launch of several reforms to reduce the unemployment

rate and the decrease to 5.3% in 2013 the new government decided to provide $11 per hour.

• Till may 2011 Germany relied on nuclear power for 23% of its electricity but now Germany is more dependent on renewable energy.

• By 2022 Germany expects to shut down all of its nuclear reactors.

GDP and GDP per capita :

• The 2014 GDP of Germany is $3.486 trillion and the per capita is $39717.70.

• The 2015 estimates of GDP as per PPP is - Total $3.815 trillion

- Per capita $46,896 • The service sector contributes approximately 70% of the total

GDP (including information technology), industry 29.9%, and agriculture 0.9% .

• The estimated GDP growth is 1.6% 2015 and 1.5% recorded in the forth quarter of 2014 .

69%

30%

1%

GDP contribution

sevice sector

industry

agriculture

GDP: Gross domestic product (million current US$) 2012 3425956



GDP: Growth rate at constant 2005 prices (annual %) 2012 +0.7



GDP per capita (current US$) 2012 41376.2



Unemployment rate :

• The total labor forces of Germany as per the data of 2013 was 44.2 million.• This labor force is occupied in three different sectors as :- service sector

- 73.8% industry - 24.6% agriculture - 1.6%• The unemployment rate of Germany is 4.8% as per count on January 2015.

This 4.8% includes 7.1% of the youth ( age 15-24).• Reforms launched by the government deemed necessary and has

contributed to strong growth and falling unemployment, government subsidy, reduced working hour scheme, etc.

• 3.1 million workers in Germany receive below country’s poverty threshold. In 2013 the German poverty line was a salary of about $1,097 per person .

year % Age group

Unemployment (% of labor force) 2015 4.8 Age group 15 to 74 years.



Unemployment (% of labor force) 2005 11.2 Age group 15 to 74 years

Inflation rate :• The current inflation rate that was recorded in June 2015

was 0.30% .• This is the lowest figure in this year due to the decline of

energy price and a slow down in cost of food and services.• Germany over the period has experienced hyper-inflation,

glopping inflation and mild inflation.• The average inflation rate in Germany is 2.45% from 1950

to 2015.• The highest inflation in Germany was at 11.54% in

October of 1951.

Average inflation Inflation (%)

CPI Germany 2015 0.30




AVERAGE INFLATION GERMANY (CPI)-BY YEAR

Consumer and investor confidence :

• Germany is a social market economy.• The companies in Germany are highly innovative and

the competition takes place on the bases of innovations and technology.

• Germany is part of the European single market which represents more than 500 million consumers.

• Germany in terms of business has several successful brands world wide.

• Germany is the 2nd largest exporter of the world.• Resources – high skilled labor with large capital

resources.

Currency exchange rate :• The rate of euro is 1 Euro (EUR) = 1.11

USD .• The currency of Germany is not only

dependent on German economy but also on 18 other sound functioning countries .

• The Euro Dollar Exchange Rate- EUR/USD averaged 1.35 from 1957 until 2015 .

• The currency of Germany also has an backing from the European union (EU).

Balance of payment :

• Germany has business spread world wide which makes its international transaction large in number.

• The current account surplus that is recorded in may 2015 was 11,100 EUR million.

• Exports of Germany account for more than one-third of national output. This makes its credit high .

• Germany has exports in motor vehicles, machinery, chemicals, computer and electronic products, electrical equipment, pharmaceuticals, metals, transport equipment, foodstuffs, textiles, rubber and plastic products.

• Due to low resources availability Germany has to make high amount of imports and the as per recent data it is 76340 EUR million .

• Germany’s imports have largely been in machinery, data processing equipment, vehicles, chemicals, oil and gas, metals, electric equipment, pharmaceuticals, foodstuffs, agricultural products.

• Germany was in deficit for a quite a period because of its 2008-09 recession and its reforms to reduce unemployment .

• Germany does not have a very high degree of self-sufficiency.Germany Trade Last recorded on may 2015

(EUR MILLION)Balance of trade 19,600

exports 11,100

Imports 76,340

External debt 49,42,767

Foreign direct investment 3,991

Gold reserves 3,383.41

Foreign exchange reserve 19,0705 ( US dollar in millions)

Tourists arrival 32,999

Structure of the economy :

• Talking about the structure of the economy three pillars are most important :- Primary sector Secondary sector Tertiary sector• The primary sector of Germany is weak as it has less fertile land but its secondary and tertiary sector function most efficiently .• The skilled labor of Germany is mostly occupied in secondary and tertiary sector.• Germany’s principal agricultural products are potatoes, wheat, barley, sugar beets, fruit, and cabbage which take care of 90% of its nutritional needs.• German automotive companies enjoy an extremely strong position in the so-called premium segment with a combined world market share of about 90%.

Economic policy of Germany :

• Germany’s economic policies such as - monetary policy is set by the European

Central bank. - domestic commercial policies are

determined by agreements among European union. - Germany has very cooperative export and

import policy. - Countries fiscal policy is designed to help business grow and therefore 2.6% of the

GDP is provided for RnD. - Taxes include personal and corporate

income tax , value added taxes, excise taxes, and

tariffs. - official development assistance (ODA)

Socio – cultural factors Socio – cultural overview :• Germany can be described as a modern, multicultural

country. The society is molded by a variety of lifestyles.• There are traces of some truly different ethno cultural

diversity. • Even though a lot of social changes took place, the family

is still a important social reference unit . Young people have really good relationships with their parents.

• Local architecture, music, literature, art and sports are fields which reflect the socio-cultural scene of Germany.

• Some of the best art pieces were made in Germany. It is also popular for its old tradition in visual arts, German literature, etc.

Language :

• German is the official and predominant spoken language in Germany. It is one of 24 official and working languages of the European Union.

• The most used immigrant languages are Turkish, Kurdish, Polish, the Balkan languages, and Russian.

• Germans are typically multilingual: 67% of German citizens claim to be able to communicate in at least one foreign language and 27% in at least two.

• The above statistics show that if business wants to communicate with German populace then language is of at most important.

• German language is a combination of several languages such as Latin, Greek, French, etc.

• the situation is much better for business as all German's follow a common language compared to countries such as India, Bhutan, Italy, nether land, etc.

Consumer preference and mind set :

• Trend for the world.• The German's are technological are very sound

and therefore they leave in advance type of world.

• German’s have expertise in designing appeals, handicrafts, show pieace,etc.

• When it is about food and cuisine Germans' like to have healthy food as Germans' are very concerned about there health.

• International varieties such as pizza, sushi, Chinese food, and doner kebab are also popular and readily available.

Values and beliefs :• Values of Germans have strong religious

foundation. • This values are important to German's as

it guides there day to day living.• Business if want to do successful

business in Germany the must note that German’s are well organized people.

• German’s value time to a very higher degree and therefore they believe that there is system and time for every activity.

Social trends :

Women in work force

Seats held by women in national parliament

Women are provided with equal opportunity to work (56.5%).36.5%(2014).

Education level Primary and secondary level- basic level

Sex ratio 1.06Life expectancy 79 yearsIncome level USD 31,252 per annum ( Average

income level )Birth rate 8.21 births/1000 populationInfant mortality rate (per 1 000 live births)

3.1 (2010-15)

Internet connectivity High connectivity to internet

population pyramid-age and sex structure of German population

Demographic factors :

Age structure 0-14 years: 13.7%15-64 years: 66.1%65 years and over: 20.3%

Family type Usually nuclear family

Occupation pattern Agriculture- 0.9%Industry- 29.1Service sector:70%

Rural urban distribution Urban: 74% of populationRural :26% of population

Rate of Urbanization 0.1% annual rate of change

Labor supply 44.2 million (constant)

Urbanization and modernization :• Statics of 2014 show

that 74% of the population of Germany is urban category but the rate of change from rural to urban is too low in Germany.

• Though a huge mass of people live in rural atmosphere modernisation is very much connected to them.

• In rural areas as well people are equipped with knowledge of modern activities, tools and equipment's.

Culture :

• Cultural background of Germans is very rich as it had great philosophers, architects, artists, etc.

• Germans have a very strong sense of regional pride .• Reputation for being industrious, thrifty and orderly.• Interest in academic credentials but not personal life.• Time cultures of Germans.• Germans usually express their thought and opinions in a

direct way.• Germans have a very strong view points and hold strong

stand points.

o Corporate culture :

• Highly hierarchal with strongly defined roles.• Once the roles are assigned to the employee they continue

to perform there roles and in the stated company rules.• Commands are more from top to bottom then from bottom

to top.• German teamwork is perceived as consensus seeking.• Decision making process slow in business as opinions are

taken from both employers and employees.• Continuous investment in human resources.• Highly quality and innovation orientated. • Companies seek market share rather than market

domination.

Religious affiliation :• Religion provides the insight as why do people

behave in a particular way .

• In Germany there is complete religious freedom.• Protestant (33%), Roman Catholic(33%), Muslim

(4%), 108,000 members of Jewish communities, and others.

Medical care and old age scheme :• German government has made proper medical facilities

available for its public.• Germany is one of the countries with best medical care.• Health care is the largest employment sector in Germany.• Key pillar is the Health fund.• Federal government’s long term aim is to enable more

autonomy with regard to contributions and greater regional differentiation.

• Old pension and schemes are always there for government employees.

• “Riester pension” and “Rurup pension” are models for self-employed already in existence.

Germans personality

• Stubborn & Argumentative

• Tradition• Coldness• Humor • Creative• orderly

Technological factors Technical overview :• Germany is an advanced technological nation• Germany backs many nations in the field of

technology & science• Germany has numerous universities and many

colleges offering courses in basic as well as applied sciences

• The major technical strength of this nation is its automobile industry

Infrastructural efficiency :

• Germany has the best of the best infrastructure in various fields

such as :

Transport Communication

Energy

Technology transfer :

• Since Germany is an Advanced Technological nation only there is an Outgoing process

Of technology and Germany shall not import any of the foreign technology

• Germany is known as the HUB of Research & Technology

• Even though Germany being one of the largest & innovative Economies in the world

Some amount of AUTOMOBILE TECHONOLOGY is recently being transferred from JAPAN

Germany – R & D

• R&D is the cornerstones of the future of the German Economy

• Both Public & Private sectors have made a significant commitment to spend around 3% of the national GDP per year on these R&D activities

• The German government spends on an average of 70 billion Euros annually for the R&D assistance

Change in production process and productivity :

• The Industrial produce in Germany has increased from 0.66 to 1.55 in the month of June 2015

• With the help of the increased investments & productions German Trade Surplus hits the record

• This has gradually decreased the INFLATION has increased the EMPLOYMENT rate by 4.7 %

EFFECT OF TECHNOLOGICAL CHANGE

Reference