Global Business in Germany: Factors to Consider

This report discusses the various aspects of the business environment in Germany that Morgan Motors should consider before moving its production to the country. It covers political, economic, legal, technological, and environmental factors and provides recommendations for the company.

Global
Business
In Context

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Overview of company..............................................................................................................................3
Business environment.............................................................................................................................3
Aspect 1: Political aspect in Germany......................................................................................................3
Aspect 2: Economic aspect in Germany...................................................................................................4
Aspect 3: Legal aspect in Germany..........................................................................................................5
Aspect 4: Technological aspects in Germany...........................................................................................6
Aspect 5: Environmental aspects in Germany.........................................................................................6
Recommendations.......................................................................................................................................7
CONCLUSION...............................................................................................................................................7
REFERENCES................................................................................................................................................8

INTRODUCTION
Global business refers to international trade in which an organization which is based in a
particular country can trade with other companies in different parts of the world (Bhagra and
Sharma, 2018). Globalization has made it possible to conduct global business. This assessment is
based on Morgan Motors which is a British company dealing in manufacturing of cars. Morgan
Motors Company is considering moving its production to Germany. Therefore before it does so
it has to consider various aspects. These aspects relate to the business environment of Germany.
Thus a detailed discussion will be made on these aspects in this report.
MAIN BODY
Overview of company
Morgan Motor Company is a British motor car manufacturer which has its headquarters
in Malvern, United Kingdom. It produces cars suiting to the tastes and preferences of a wide
variety of customers.
Business environment
Business environment is the sum total of all the external as well as internal factors which
are facing a business enterprise. Morgan Motors’s decision to move on to Germany will be
impacted by the influence of business environment factors in Germany.
Aspect 1: Political aspect in Germany
Political climate can influence the decision-making of any enterprise (Brannen, Piekkari
and Tietze, 2017). Germany is a federal republic consisting of 16 states. The power here is
distributed between the federal and state government. The head of the government here is the
Chancellor who is chosen by the Federal Assembly for four years. Thus, Germany is a
democratic country.
For Morgan Motors, it becomes highly necessary to consider the political aspects of
business environment in Germany before expanding its operations there. There is also political
risk present in Germany. However it is quite low. Germany has faced a blow after the
implementation of Brexit as its trade relations with the U.K. have been impacted due to its
implementation. However, because of stable currency value and a massive base of customers
present in the country who have a demand for the cars produced by the company the political
conditions in the country can be termed as relatively stable for doing business. Therefore,
expanding business in the country has proved profitable for many of the businesses. Thus, after
considering these factors Morgan Motors can determine whether moving the production in
Germany would be feasible for it or not.
The detailed political framework for Germany has been provides as follows-

Current political leaders-
President- Frank-Walter Steinmeier
Chancellor- Angela Merkel
Next election dates-
Presidential- February 2022
Federal Parliament (Bundestag) - 2021
Current political context- Germany is a democratic country.
Example of influence of political factors on Morgan Motors-
The political factors can create an influence on Morgan Motors because its decision to
expand its production to Germany can be impacted by these factors. The company needs to take
various decisions effectively before moving on to the country. If the political conditions are good
in the country then it will surely positively influence Morgan Motors. However, if the political
conditions are not good then it will create a negative influence on Morgan Motors Company.
Aspect 2: Economic aspect in Germany
Economic factors are the most important factors in a business environment. The details
about the economic aspect in Germany are as follows-
Economic freedom- Economic freedom means factors which determine the
accumulation and distribution of national income (Brenner, 2018). The economy of Germany is
one of the strongest in the world. The disposable income of customers here is quite high. This
makes it an attractive location to expand the business. Therefore, a high level of economic
freedom gives Morgan Motors an excellent opportunity to expand its production in the country.
Standard of living- Due to high disposable incomes, the standard of living of people in
Germany is very high (Chahal, Jyoti and Rani, 2016). They make expenditures on purchase of
expensive products and services. Thus Morgan Motors will find a great scope here as the demand
for its sports cars will be quite high here. Thus it has an excellent scope for expansion of
business in the country.
Economic system- In Germany, a free market system is followed (Tallman, Luo and
Buckley, 2018). In this type of market system the export and import of goods is freely allowed.
Therefore, due to the liberal system followed in the country it has become the top choice for
different investors around the world. Thus, Morgan Motors will find a lot of scope here for
expansion of business and the country can be considered suitable for expansion of production.

Economic indicators- Germany’s GDP growth rate is among the best in the whole world
and it is one of the top economies in the world. Thus it influences the confidence of investors to
invest their funds in the country and Morgan Motors will find a great scope if it expands its
production here.
Examples of influence of economic factors on Morgan Motors-
Germany’s economy is quite strong. If the economy of the country goes on strongly then
Morgan Motors will be able to maximize its profits easily. However, if the economy of the
country faces a slowdown in growth then it will lead to reduction in the profits of the company.
Aspect 3: Legal aspect in Germany
Legal factors refer to the laws made in the different countries in world and a business
operating in these countries has to abide by these laws (Kasemsap, 2016). Thus Morgan Motors
needs to abide by the legal rules and regulations in Germany before taking a decision to expand
here. The details about the legal environment in Germany has been discussed as follows-
The German Legal System is driven by the constitutional law but is also influenced by
International law and the law of the European Union. The legal codes here are divided in two
categories- General and Specific. In terms of legal stability, the country ranks second. Therefore,
it can attract several of the foreign investors easily.
However, there are certain issues which are faced by international firms here-
 Getting permission for business- It is not easy getting a permission to start a business in
Germany. There are several legal procedures involved. Thus it takes time to get a
permission to start a business in the country. This problem is faced by many international
firms here who wish to expand their business in the country. Thus Morgan Motors
Company needs to arrange all the requisites for getting a permission to expand operations
in the country.
 Registration of assets- Registration of assets is not an easy process in Germany. There
are procedures which have to be followed particularly for the registration of property of
the business. Therefore, Morgan Motors Company needs to make sure that it gets its
assets registered in the country so that it does not face any problem in the future.
 Taxation system- The taxation system in Germany has quite high rates from the point of
view of a business (Kasemsap, 2017). Thus Morgan Motors Company needs to adjust
according to the prevailing taxation system in the country and also needs to earn a
sustainable amount of profit to survive among the high-level competition operating
within the country.
Example of influence of legal factors on business-

If the laws of a country are strict then it can create various problems for a company.
However, if the laws of the country are lenient towards businesses and several concessions are
provided to the businesses then it will be suitable for a company to invest in a business. Thus
Morgan Motors need to take a suitable decision after analyzing the legal factors of Germany and
needs to decide whether it would be suitable for it to expand its production there.
Aspect 4: Technological aspects in Germany
Technology is quite important in the world nowadays (Manning, Kannothra and
Wissman‐Weber, 2017). It is one of the most powerful dynamic forces operating within a
business environment. It can be termed as dynamic because it keeps on changing. For Morgan
Motors, it is important to analyze the technological environment in Germany before making a
decision to move there.
Germany is the 5th most technologically advanced country in the world (Søderberg,
2017). It is a leader in a number of markets such as medicine, scientific research, infrastructure,
military technology, engineering and design. Therefore, technology is an important factor which
is required to be considered by the company before it moves on to Germany. Thus, it can be said
that Germany is a technologically advanced country and its citizens are well-versed with it.
Therefore, Morgan Motors will face no problem there in introducing cars with new technology.
Therefore, after analyzing all the factors it can be said that Morgan Motors can introduce
new cars with advanced technology in Germany. It will help the company in effectively raising
its level of profits.
Examples of impact of technological factors on business-
The technological factors create a strong influence on the business operations. If the firm
is able to adjust according to these factors they benefit its business. If the firm is not able to
adjust according to these factors then they can result in decrease in the overall profits of the firm.
Aspect 5: Environmental aspects in Germany
Environment is an important aspect to be considered in Business Environment (Strange
and Zucchella, 2017). In Germany, it is provided specific attention. Germans are eco-friendly
however there are still various environmental problems facing the country such as water
pollution, air pollution etc. Therefore, Morgan Motors needs to consider all these factors before
taking a step of moving into Germany.
Most of the products of Morgan Motors are eco-friendly and emit less pollution. Thus it
will have no problem in abiding by the environmental laws of the country. If the company is able
to abide by the environmental laws then it will surely be able to maximize its level of profits.
Thus, it is an important consideration.
Examples of impact of environmental factors on business-

If a company is able to abide by the environmental factors then it will lead to more sales
and reduction in costs because of the use of the new technology. This will help in maximization
of profits. However, if a company is not able to abide by the environmental factors then it will
significantly impact its turnover level and its profits will reduce significantly.
Recommendations
From the above discussion, it can be recommended that Germany can be preferred by
Morgan Motors for investment and setting up of its business. The country has a stable political
structure, has a booming economy and has a good legal structure. Also, it has the best technology
in the world and its citizens comply with the environmental laws by purchasing eco-friendly
products.
Therefore, the company can invest in Germany and can set up its production there by
expanding there. It will incur some expenses in expansion but it will be very much beneficial
from its point of view. As it is already a successful car manufacturer in U.K. it can be also
similarly successful in Germany as well due to the high-disposable incomes of the customers
there. Thus, it is recommended that Morgan Motors expands its business in Germany by taking
the required steps for expansion and completing all the legal formalities required for the same.
This will benefit the company as it will attain a strategic edge in the market and will get ahead of
the level of competition.
CONCLUSION
From the above report, it can be concluded that globalization refers to integration of
several economies in the world into one. Global business has made it possible for expansion of
international firms. Morgan Motors has to consider different aspects of business environment of
Germany such as political, economic, legal, technological and environmental. These aspects will
help it in getting a comprehensive review of the position of the country in terms of ease of
business and its managers can take a decision related to expansion.

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