Reference no: EM133055367

Refer to the following excerpt to answer the questions below. Germany Situated in the heart of Central Europe, Germany straddles the border of Western and Eastern Europe. Neighboring countries include the Netherlands, Austria, Belgium, France, Luxembourg, Switzerland, Denmark, Poland, and the Czech Republic. Slightly smaller than the state of Montana, the country maintains shipping routes through its access to the North and Baltic Seas. Major natural resources include coal, lignite, natural gas, iron ore, copper, nickel, uranium, potash, salt, construction materials, timber, and arable land.

Germany, with a population of 80 million, is the second-largest nation in Europe, behind only Russia. Like most of Western Europe, its population is slowly declining at 0.24 percent annually. The country is quickly aging; in 2018, the median age reached 47.4 years old. The two largest age segments of the population are 25- to 54-year-olds (40 percent) and 65 or older (22 percent). The country is not very ethnically or religiously diverse. Over 90 percent of the population is of German descent, and the country is primarily Protestant or Roman Catholic. Only 5 percent of the population identifies as Muslim.

European power struggles immersed Germany in two devastating world wars in the first half of the 20th century, leaving the country occupied by the Allied powers of the U.S., the U.K., France, and the Soviet Union in 1945. Tensions between the Soviet Union and the other Allied powers resulted in the division of Germany in 1949 into two states: the western Federal Republic of Germany (FRG) and the eastern German Democratic Republic (GDR). The democratic FRG embedded itself into key Western economic and security organizations, the European Commission, and NATO, while the communist GDR was the front line of the Soviet-led Warsaw Pact. The decline of the Soviet Union in the 1980s allowed for German reunification in 1990. Although 40 years of economic isolation left former East Germany with significant deficits in education, productivity, and wages, unified Germany has expended considerable funds to raise the entire country to Western standards.

In the wake of World War II and its fairly recent unification, Germany has emerged as the largest economy in Europe and fourth-largest in the world. The country's GDP stood at US$4.211 trillion in 2018, resulting in a high GDP per capita of US$50,842. Despite stagnant economic growth across much of Europe, Germany's GDP is expected to expand at 2 percent over the next several years. Germany is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force.

International Management Consultant

In a January 2019 announcement, Switzerland-based battery company Blackstone Resources AG disclosed plans for major future investments in Germany. According to the company, it would spend 200 million euro to construct a research and manufacturing facility in Erfurt, Germany, to design and produce electric batteries for the German automobile market. Blackstone Resources AG plans to eventually produce between 25,000 and 100,000 automobile batteries annually at the facility.

With its highly educated workforce and lengthy automotive history, Germany offers a unique appeal for companies that are interested in developing new technology for the rapidly evolving electric car industry. In recent years, the country has heavily invested in adding car-charging infrastructure across its road system, and the government has increased subsidies on electric vehicles sales.

Questions

1. As a management consultant, what opportunities do you see for Blackstone Resources AG in Germany?

2. What are some benefits companies can gain by partnering with public-sector entities and foreign governments of developed nations as opposed to ones in emerging nations?