Introduction
Before starting a business abroad, one should pay close attention to the political, economic, social, and technological environment of a specific state. Furthermore, it is critical to focus on the cultural values and behavioral norms which are established in a particular country. These steps are essential for identifying and eliminating possible risks. Moreover, in this way, one can better understand the competitive environment of a particular market. In turn, the company named Quebec Wood Export Bureau intends to start its operations in Germany. This research paper will include the use of such tools as PEST analysis and Hofstede’s theory of cultural dimensions since they are very helpful for the analysis of a foreign environment. These are the main details that should be examined in greater detail.
Political factors
Overall, Germany can be described as a representative republic which lays stress on the liberal values such as freedom of the press, unlimited trade, and respect for the rights of an individual (Anderson, 2000, p. 8). The legislative power in this state belongs to the two divisions of parliament, namely Bundesrat and Bundestag. In turn, the authority of the president is very limited. Thus, one can say that the policies of the government do not depend on the decisions of only one individual. Furthermore, one should keep in mind that Bundesrat is composed of people who represent various federal lands of the country. In turn, this structure ensures that the interests of different regions are adequately protected by the state. Furthermore, the functioning of this government is based on the division of powers. For instance, the courts of this country are not dependent on the executive and legislative branches of the government. On the whole, this division is vital for upholding the democratic rights of citizens. Similarly, this safeguard is also vital for the functioning of various enterprises that often have disputes with one another.
In turn, when speaking about the political environment of the country, one should speak about the protection of individual and property rights in this country. This is one of the reasons this state has attracted considerable investment from various countries. In turn, the investments made by the Quebec Wood Export Bureau will be effectively protected by the state. This is one of the points that can be made. Additionally, Germany is a country with a high degree of political stability. Its political course may not be reversed dramatically. This is another reason why many entrepreneurs choose to bring capital to this state. So, the political environment of Germany promotes the development of economy in the country. Therefore, the Quebec Wood Export Bureau can operate in this country since the interests of this organization will be effectively safeguarded by the state. Overall, Germany can be viewed as a well-developed democracy in which the rights of entrepreneurs are well-protected by the state.
Economic factors
It is also important to speak about the economic environment of the country. One should note that the country is characterized by the presence of very skilled labor force (Moody, 2013, p. 91). Therefore, a new company that enters this country can quickly find competent employees and administrators who can ensure effective quality control and organization of labor. This is one of the aspects that can be identified. More importantly, the economy of Germany is renowned for its high productivity (Moody, 2013, p. 91). This is why local companies often gain a competitive advantage over their major rivals in other countries. In turn, the Quebec Wood Export Bureau can also benefit from this opportunity.
Furthermore, the economy is mostly driven by innovation and extreme competitiveness. However, governmental administrators remain impartial while resolving the conflicts or disputes existing between businesses. This opportunity is of great important for foreign companies that often suffer from protectionist policies of the state. Moreover, the products manufactured in this country are famous for their superior quality, and this reputation of German manufacturers can also be viewed as an advantage.
Apart from that, this country is the largest exporter in the European Union. Moreover, German companies have unlimited access to the market of the European Union. The purchasing power of German citizens is also very high. Therefore, the Quebec Wood Export Bureau may derive significant benefits from starting its operation in Germany, since the products of this organization can enjoy considerable demand in the markets of various countries. Nevertheless, the managers of this Canadian company should keep in mind that they will face considerable competition. Their rivals will be experienced in such a field as manufacturing of wood products. Therefore, they need to identify the resources that will help this organization gain the loyalty of clients. Otherwise, this venture may not be successful. These are some of the main issues that should be taken into account.
On the whole, it is possible to say that the economy of Germany can offer many opportunities for Quebec Wood Export Bureau. Nonetheless, the managers of these businesses should be ready for considerable challenges. Thus, this country can be described as one of the most advanced economies; it is characterized by high intensity of competition, the strong purchasing power of customers, and well-developed labor market.
Reference List
Anderson, M. (2000). Practicing Democracy: Elections and Political Culture in Imperial Germany. Princeton, NJ: Princeton University Press.
Moody, A. (2013). Germany In An Interconnected World Economy. New York, NY: International Monetary Fund.