International_Business

International Business Culminating TABLE OF CONTENTS TOPIC PAGE Introduction.……………………………………………………………………………….3 Background Information……………………………………….………………………..3-4 Political Information………………………………………………………………………5 Legal Information…………………………..…………………………………………...6-7 Economic Information………………………………………………………………….....' Cultural Information……. ………………………………………………………………...' International Information…….………………………………………………………...….' Global Impacts…... ……………………………………………………………………….' Trading Product Advantages……………………………………………………...…...…..' Recommendations and Conclusion………...……………………………………….....…..' Bibliography……………………………………………………………………………….' Introduction: Germany is a one of the most powerful countries and has huge economic influence on the world. If a company can make it in Germany it will have huge economic success. In this report we will highlight Germany and discuss if a Canadian company Leon’s will succeed if they expand to Germany. We will highlight every aspect that can effect a company entering Germany that could make it or break it. Background Information: The background information gives our investor Leon’s the starting point with which to study Germany. The flag of Germany (seen in the title page and below) is a tricolour consisting of three equal horizontal bands displaying the national colours of Germany, black, red and gold. The colours of the flags were to represent German freedom and unity after WWII. Germany is located in Central Germany bordering 9 different countries. Germany’s territory was divided up after WWII and got its shape that it has today but when the Berlin Wall was put up and Germany was divided up into two countries, East and West Germany they had to redraw Germany’s map (as seen to the right). When Germany was reunited and the Berlin Wall was taken down and Germany was made into one country again they went back to the drawing board and drew the map of Germany we have to day (to the left). Germany is now 357,021 sq km, which is 28 times smaller than Canada Germany has 4 major cities in which most of the population lives in, Berlin the biggest and capital, then Hamburg, Munich, and Frankfurt. If expanding to Germany those are the cities where you would want to put stores. The majority of the population lives in the 4 major cities, nearly 97% of the population lives in those 4 cities and the surrounding area around them. Germany’s population is 82,329,758, nearly 50 million more people than Canada. They also have a population density of 230people/sq km. Germany’s age structure graph: As you can see Germany’s sex ratio is almost the same as it is 0.97 males/1 female. Also the median population age is 43.8 years old and the life expectancy is 79.26 years old for every one but for females 82.42 years and males 76.26 years old. The German population is decreasing at a rate of -0.053% a year. Germany’s literacy rate is 99% and has one of the worlds best education, like Canada they have free public which the states (like Canada’s provinces) run, schooling is from kindergarten (which is optional) to grade 12. After that Germany has some of the top post-secondary schools in Europe but they are privately owned and you must pay to study there. Germany’s healthcare system is not free as it is privately owned, but if you make a salary of 46,000 euros a year you must buy health insurance and if you don’t make that amount (10% of the population doesn’t) the government provides health insurance. As housing conditions in Germany they are very similar to Canada’s, Germany has some of the top housing conditions in the world and is a fully developed country. If you go to Germany to strike business deals or when if you want to put up a store you should learn their primary language German. In Germany all citizens speak, read, and write German, but you can usually find someone on any major street corner that can speak English. Although German is the only national language a huge portion of the population at 51% speaks English, also French, Turkish and Russian are common languages spoken. Germany much like Canada has the freedom of religion and speech. The major religion break down goes like this: Protestant 34%, Roman Catholic 34%, Muslim 3.7%, unaffiliated or other 28.3%. Also like Canada you don’t work on Saturday and Sunday and most people on Sunday go to church. Also like Canada most jobs and you work usually Monday-Friday. The ethnic groups in Germany break down as so: German 91.5%, Turkish 2.4%, other 6.1% (made up largely of Greek, Italian, Polish, Russian, Serbo-Croatian, Spanish). Some additional background information you may want to know before doing business in Germany is the climate, the climate is temperate and marine; cool, cloudy, wet winters and summers; occasional warm mountain (foehn) wind. The only natural disasters they have is flooding. You also might want to know the natural resources, they are, coal, lignite, natural gas, iron ore, copper, nickel, uranium, potash, salt, construction materials, timber, arable land. That is good for Leon’s because the have many items you need to make furniture if you want to open a factory such as timber, construction resources and metals. Political Information: The type of government in Germany is a federal republic, the same type they have in the United States of America. They are also have free capitalist system like the USA, in the system they encourage entrepreneurs and companies to start up and the government has very little involvement. The government use to be a monarchy and had a king when it was created through WWI, after WWI the king was over thrown and they installed a fascism government. A fascism government is a radical, authoritarian nationalist ideology that aims to create a single-party state with a government led by a dictator who seeks national unity and development by requiring individuals to subordinate self-interest to the collective interest of the nation or race. The leader of that was Hitler, after WWII the USA and Britain took control of West Germany and the Soviet Union (or Russia) took control of East Germany. Then in the Cold War when the Soviets and Americans had tension they divided up Germany and put up a wall dividing the two sides apart. The West became communism and the East became democratic, then when the Soviet Union collapsed they Berlin Wall was tore down and Germany became united again and one nation, they then took the American federal republic as their nation. Now Germany is a very stable non-corrupt nation like Canada or the USA. Germany has five political parties but the two main ones are the Social Democratic Party (SDP), and the Christian Democratic Union (CDU), the SDP is like Canada’s Liberals and the CDU is like Canada’s Conservatives. The Parliament of Germany has a plurality system of parties, it has three minor parties, the Free Democratic Party, The Left, and Alliance '90/The Greens. The federal government of Germany always consists of a coalition made up of one of the two major parties with one of the three minor parties as the opposition. Germany has elections every five years and the two major vote getters make up the Parliament, they also vote for a President who will control the coalition. Almost every time the CDU and SDP make up the coalition and they currently do so. The two major parties most agree to make anything pass, they usually do, and the President is like the spokesperson representing the country at meetings and to talk to the people of Germany, the current President is Horst KOEHLER. Like Canada the other branches of government are municipal and the ones representing each State. The Constitution was made May 23rd, 1949, known as Basic Law; it became the constitution of the united Germany October 3rd, 1990. Germany is a very free country and encourages free trade, the do have tariffs on one item, that is the energy. They have Feed-in tariffs on energy so Germany encourages the use of new renewable technologies which are from Germany instead of “dirty” electricity that comes from outside the nation. Other than that Germany has no other tariffs, and encourages trade with foreign nations, as they are in many trade groups such as the EU. After WWII Germany’s military was not aloud to have any power over the nation and are not aloud to fight in wars and are suppose to be just peace keepers. It remains that way today although today they are aloud to enter wars but only if NATO(a military alliance in which Germany is in, Canada is also in it) does, their military has a similar system and role as Canada’s military. Legal Information: The laws of a country are the principles, rules, and regulations that guide Germany and its citizens. It is important for Leon’s to understand the structure and enforcement of the laws before investing in Germany. Germany makes laws much like Canada does, the basic laws are in the constitution that was created in 1949 but modified many times and most recently in 2006. In the constitution it says all new laws made must be created into an idia (like a bill in Canada) then the parliament votes them on. Therefore like Canada the government creates the laws. With all of this the legal system is not corrupt because it is elected officials the make the laws. The police like in Canada then enforce the laws. Laws are enforced differently depending on how serious a crime is, for example they enforce strictly on laws on banned guns but they don’t enforce strictly on laws like littering. With all of this the legal system is not corrupt because it is elected officials the make the laws. Under legal provision children under the age of fifteen are not aloud to be employed, although they are aloud to do minor jobs such as delivering newspapers and babysitting as long as the work is considered “light”. “Light” is defined as not involving uncomfortable postures or dangers from animals or machinery that a child may not assess accurately or may not have experience in averting. Those below the age of thirteen may not be required to lift objects repeatedly that weigh more than 7.5 kilograms or to lift objects occasionally that weigh more than 10 kilograms. None of these occupations of children may interfere with their attendance at school. For this reasons, daily work is limited to two hours per day during the school year (three hours for farm work), and to four weeks during vacation. Violations of the protective labour provisions for children and minors are punishable primarily by administrative fines, but short prison sentences can be imposed on employers who hurt a youngster by disobeying the rules. In addition, the German Criminal Code makes it a criminal offence to abuse, maltreat, or neglect a minor or helpless person who is in the custody of a teacher, employer, or other person who is in a position of responsibility. So as you can see they have very strict laws on child labour. Germany also has a high standard when it comes to Human Rights, as they have done a lot of work to improve not only there standards but the world standards as they don’t want what happened to them and the Holocaust happen to anyone else. They improve standards and they treat everyone equal and they are very strict in enforcing their human rights. They also have a German Human Right Board and a commissioner, they board investigates every complaint and try to finds a solution to every problem. Therefore Leon’s will have to hold their managers to very high standards and make sure they don’t violate the Human Rights, epically the employer ones. Women in Germany play a huge roll in the country since there are just as many women as men. One law is all women should be aloud an equal opportunity as men at every job, they also must have equal pay to men, if they have the same job and experience they must be paid the same. Therefore women have the same role as men in the country. A separate national office for women's affairs was created in West Germany in 1980 to get women equal, and it has been very successful. Women have almost every right that men have in Germany including rights like voting, Germany is one of the top countries for Women rights in the world, they are even way a head of other European nations in which women who do not have even rights. Since Germany is capitalist they do not have any laws on investment or exports or international businesses. Exporters to Germany are generally free to conduct export transactions. The government offers no specific incentives or laws, although export assistance is offered to German businesses or branches of foreign-owned businesses, which operate in Germany and are involved in exporting to certain markets. There are restrictions on strategic goods and agricultural commodities. Trade in listed goods is subject to licensing by the Bundesamt fur Wirtschaft (Federal Office for the Economy). International businesses are aloud to enter the country as long as they comply to all laws and pay taxes like any other business or company. There is no laws on investments either in Germany besides one; the one is the European Union law, it protects from monopolies and you cannot invest or own a certain amount (pending different in every type of business) of a various companies. For example you cannot buy all the newspaper companies in Germany.