Global risk

OUTLINE 8

Comprehensive Analysis Outline

Harold Osborne

Ken Cromer

MGT/448

April 10, 2017

Introducing a passenger car in Germany

Thesis statement: Germany has a large consumer market and a growing economy which would favor selling a passenger car in its market.

1. Introduction

1. Regional analysis of Germany is essential in ensuring success in selling passenger car in Germany

2. Identifying the country risks is essential in the managing them and turning them into opportunities

3. Organizational and product analysis will enhance an effective entry strategy

1. Regional analysis

1. Alliances

1. Alliances would be essential in the selling of the passenger car through enhancing market seeking.

2. Alliances would be effective in the region in sharing benefits and outputs

3. Managerial control over processes in the sale of the car will be enhanced

1. Physical environment and effects on trade

1. The region of Germany faces rising temperature and frequent heat waves which due to climate change which hinder productivity and hence low sales

2. More frequent weather extremes surrounding the region have an indirect effect on the profit of most products including automobiles

3. The changing physical environment in the region can delay business operations which would affect the sale of the passenger car

1. Political stability

1. The region is historically politically stable, prosperous, secure which will favor the sale of the passenger car

2. However, the economic crisis experienced in the region could cause political instability in the region due to blame game which would affect the sale of the passenger car

3. The sale of the passenger car may also be affected by the potential-motivated violence surrounding some regions of Germany

1. Economic conditions

1. The economy of the Germany region is growing significantly since the economic crisis of 2008 which would favor the sale of the passenger car

2. The level of unemployment in the region remains a major public concern which will significantly affect the sale of the passenger car.

3. The region experiences a considerable rate of inflation which has contributed to the high cost of goods which is a challenge to the sale of the passenger car.

1. Finance options available

1. The region is well served by finance options from various players which would facilitate the sale of the passenger car

2. The terms of the financing packages are friendly which would have an effect of increasing the sales of the car in the region.

1. Social

1. The region is culturally diverse and thus the passenger car would have a wide range of diverse customers

2. The level of literacy in the region is high and the income level is also favorable to the sale of the passenger car

3. The region has low birth rate and an aging population and this may reduce the market share of the passenger car

1. Health

1. The region is healthy whereby most of the population are covered which favors the sale of the passenger car because the medical costs are low leaving people with money for expenditure

1. Environmental conditions

1. The region has a significant air pollution challenge but has increased the efforts to control further pollution which favors the sale of a passenger car because it is environmentally friendly.

1. Terrorism threats

1. The region have high-security measures and thus it does not have increased terrorist threats which favor the sale of the passenger car

1. Country risk analysis

1. Political stability

1. Germany has the likelihood of its government being destabilized by violent or unconstitutional means including terrorism and politically-motivated violence.

2. This poses a threat to the sale of the passenger car due to political instability

1. Economic conditions

1. The aging population in Germany is a threat to the passenger car because the low birth rate would reduce its demand in the future

2. The dependence on export combined with the high possibilities of inflation can destabilize the market of the passenger car

1. Finance options available

1. The financial options have hidden costs which would reduce the overall profitability of the passenger car

1. Physical environment and its effect on trade

1. Due to the heavy pollution and global warming in Germany, the physical environment pose the hydrogeological risk such as landslides and floods which would adversely affect the sale if the passenger car

1. Cultural considerations

1. The business culture follow strict hierarchical structure which has the impact of slowing the sale process of the passenger car

2. Negotiations and meetings leading to sales of the car also face the risk of costly expenses by taking longer than expected

1. Social

1. The poor distribution of income in Germany poses the risk on the sale of the passenger car whereby it would reduce the market share

2. The low population growth rate is a risk to the sale of the car in future

3. Social classes and the small family size in Germany also pose a great risk to the sale of the passenger car

1. Health

1. The requirement for full coverage of employees is a risk to business considering that when one of the sales team is hurt or killed in the course of duty would involve the public prosecutor

1. Organization and product analysis

1. Description of the organization

1. MOTOVISE Company would be selling passenger cars with headquarters in Munich

2. It will operate two other branches in Hamburg and Cologne each headed by a managing director and each will have sales representatives

3. The CEO will be based in Munich and will oversee the overall organization

1. Product needs assessment of the target country

1. Germany need passenger cars with petrol powered engines

2. The medium-sized engines passenger cars are highly demanded

3. Fuel economy

1. Description of product to meet the need

1. Toyota Highlander Hybrid 2016 model 7-passenger car with a 3.5-liter V6 engine

2. It has economical gas mileage and it’s a battery-assisted vehicle when making a cut and a 280 horsepower

1. Entry strategy

1. Acquiring an already existing company dealing with passenger cars

2. Forming strategic alliance with non-passenger cars dealers to stock the Toyota Highlander Hybrid 2016 model in their showrooms

1. Conclusion

1. Selling a Toyota Highlander Hybrid 2016 in Munich, Hamburg and Cologne will be successful for MOTOVISE Company due to the high population in demand for efficient passenger car

2. Acquiring an existing company would be a quick entry strategy and reduce marketing costs

References

Description of the German automotive industry critical analysis of the. (2007). Place of publication not identified: Grin Verlag.

In Kourtit, K., In Nijkamp, P., & In Stimson, R. J. (2013). Applied regional growth and innovation models.

Schroll-Machl, S. (2011). Doing business with Germans: Their perception, our perception. Göttingen: Vandenhoeck & Ruprecht.