SWOT and FDI ANALYSIS OF BUSINESSES IN GERMANY
SWOT Analysis is a form of structural planningprocedure to identify the specific Strengths, Weaknesses,Opportunities, and Threats (SWOT) of a country. Having such planningmethod would help the country determine the main factors necessaryfor their objectives, as for this paper, the main elements forbusiness entrepreneurs to provide investments in the Germanterritory. As for the Strength of Germany, modern technologicalinnovations have become their basic foundation of great wealth andpower. Several exports and chemical industries have become itsleading foundation of high economy. According to ChemLog (n.d.),chemical industries have become the 2ndlargest industrial sector in Germany which led to severalinternational trades and capacity development. However, the mainissue and weakness that these chemical industries have been developedis the cost of supply chain and the industry`s dependence on marketvolatility regarding its progress and development. Due to logisticcosts and labor costs being used in chemical industries and othermanufacturing companies, the cost of production tend to increase to 8to 12 percent higher (ChemLog, n.d.). Moreover, there is also anincrease in the shortage of resources for different manufacturingindustries due to natural circumstances as well as insufficientreliability of other resources that the industries utilize in theirproduction. However, several Opportunities have also become its majorattraction, particularly in manufacturing industries, investments,and market system. Germany has indeed provided an advantage in termsof its location, as it is located in between the Western Europe andAsia. As such, trading and investing of businesses in this countrycan easily be achieved. One of the many opportunities for business inthe German territory is its transportation of market products andservices as it acts as a mediator between the two continents ofEurope and Asia. Lastly, possible Threats for a businessman to enterin Germany focused more on the debts as well as the neighboringdeveloped countries that can act as its major competitors forbusiness industries. General imfrastractures on waterways have alsobecome its problem for quite a long time since it has an inadequatelocation for building seaports as means of transportation. Yet,several railroad and rail transportation has also been a majorproblem in the country. The incompatibility of railwaytransport systems and the different railroad tracks within theWestern and Eastern Europe are a special problemfor chemical enterprises and other manufacturing industries. Anadditional reloading causes higher costs, abig loss and higher safety risks. Moreover, thepower of Euro to Dollar can also be a threat to German economy asthey continue to battle its self-monetary value.
On the other hand, ForeignDirectInvestmentstock statistics provide information on capital links arising fromresidents’ participating interest in a foreign enterprise or thoseof non-residents in a German enterprise at a specific point in time.As for the(FDI) Analysis in Germany, business evaluations were focused more onthe ownership, location, and internalization advantages of foreigntrades and investments (Buch, Kleinert, & Toubal, 2003).According to Bozoyan (2014), Germany presently ranked 7thin the world in terms of FDI of all the participating countriesnationwide. Furthermore, current foreign investment and trade inflowsinthe country increases as FDIcontinue to riseasthe world sees potential in Germany`s knowledge in technology andmanufacturingas 57 percent of all the FDI stocks in Germany has been achieved andoriginated from EU-27. As foreign investments continue to increase inthe whole German state, more and more benefits have been achieved bythe German government as well as the German citizens of the state.
Bozoyan, T. (2014). FDI Data. GermanyTrade and Invest. Retrieved 06, May2014 fromhttp://www.gtai.de/GTAI/Navigation/EN/Invest/Business-location-germany/FDI/fdi-data.html
Buch, C., Kleinert, J., & Toubal, F. (2003).Determinants of German FDI: New Evidence from Micro-Data. EconomicResearch Center. Retrieved 04, May 2014fromhttp://www.bundesbank.de/Redaktion/EN/Downloads/Publications/Discussion_Paper_1/2003/2003_05_14_dkp_09.pdf?__blob=publicationFile
ChemLog. (n.d.). SWOT-Analysis Chemical Logistics:Germany. Chemical Logistics Cooperation.Retrieved 04, May 2014 fromhttp://www.central2013.eu/fileadmin/user_upload/Downloads/outputlib/Chemlog_3.1.3_SWOT_FINAL_Germany.pdf