IBC Research Report.docx - Research Report Unit BEO2002...

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Research ReportUnit : BEO2002 International Business ContextGroup Members Name & ID : Yong Shin Dii (4596409),Jordan Hiew Tze Fung (4590310),Goh Win Zhi (4622487)Tutorial Group : Tutorial 02, Tuesday Tutor : Ms.Samantha Liew Chosen Country : Germany Due Date : 21st of March 20191
I.Executive SummaryThe purpose of this research report is to ascertain the fitting mode of entry for a newbusiness set-up in Germany, either a wholly owned subsidiary or a joint venture. The highlightnational, cultural, political, legal, environmental and economic factors of Germany has beenstudied and researched thoroughly to better understand which factors may have potential impactson the set-up of the operation there. Germany’s cultural traditions, changes, and expectations arealso stated along with a detailed comparison between Germany’s and Malaysia’s culturaldimensions.The plan is to develop a new business that focuses on selling mineral fuels coming fromMalaysia into Germany. This is because there are not many mineral fuels that can be found inGermany itself and thus large amount of those resources were imported from other countries. Soif a mineral fuel business is to start up in the country, domestic demand should be sufficientlysecured. Besides that, the report highlights ways the German government intervene in business inorder to attract more foreign direct investment (FDI). One example is by supporting andencouraging business operations from foreign investors by imposing lower tax rates that mayseem more attractive for them. The government places loads of efforts into supporting FDIs forits country, however, operations that are perceived to have negative impacts on the nation’sbusiness environment and its citizens may be subjected some punishments such as bans orrestrictions.With all of these factors combined, it is concluded that operating as a joint venture (JV)in Germany will be for the better. Instead of carrying the burden of risks all by one company, it is2
far better to share it with a partner and figure out suitable solutions with each other to improvethe business conditions. Furthermore, penetrating the market will be made easier when there arelocal partners who understands their own cultural factors better than others. 3
Table of ContentsI.Executive Summary……………………………………………………………………..2-31.0Introduction 1.1Objectives ……………………………………………………………………….51.2Country’s Background …………………………………………………………..51.3Product’s Background …………………………………………………………..61.4Justifications of country’s selection …………………………………………….62.0Germany’s National Business Environment - PESTEL Analysis & impacts on setting up wholly owned subsidiary and joint ventures2.1Political factors of Germany …………………………………………………....72.2Economic factors of Germany ………………………………………………….72.3Social factors of Germany ……………………………………………………...82.4Technological factors of Germany ……………………………………………..82.5Environmental factors of Germany……………………………………………..92.6Legal factors of Germany ……………………………………………………....92.7Germany’s environmental impact on business set-up ………………………….103.0

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