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In international business, making decisions is more intricate compared to local businesses operations. In addition to the general economic and market considerations which determine the viability of a business, an understanding of the political society, as well as demographic factors, play an important part in making decisions. Investments made in foreign countries are considered riskier because the investors may not fully internalize the conditions prevalent in the host country. In this case, there is a need to conduct extensive inquiries on the social-political as well as economic conditions to make informed decisions. Expanding the hotel industry into Germany is a wise decision taking to account the interplay of all the factors in play.
The demographic constitution of the country provides a complete interaction of the factors affected by demographics. First, Germany is a vast country with the second largest population size in Europe. This provides for a sizeable market ready to tap into. More importantly, the country is dominated by citizens above the age of fifty years. This portion of the populace has high-income levels as well as accumulated wealth ready for use in travel and tours. Again, about 74% of the population lives in urban areas. This means that the top-notch hotels can attract adequate high spending customers, a good platform for improving margins for the business. In doing this, the focus must be on establishing restaurants in the urban areas as opposed to the rural areas as this is where the rich population resides. On the other side, labor is readily available through the labor costs are relatively high. Expectations are that the older generation populace is to increase in size, a factor which will expand the already huge market. An important consideration in hiring workers is the fact that there should be a mix between the younger and older generation. This will facilitate the exchange of ideas and enable learning for the younger generation. It is also good to take to account the ethnic composition of the country’s population. Germans should take the largest share of the employees as they dominate the country while Turks and other minorities take a small portion. This is in consideration of the fact that Germans are very sensitive to race. In this regard, attracting them will require a labor force composed largely of their race.
On the political front, the country has a history of tension but the recent history has proved otherwise. The coalition government has proven to be stable enough to ensure good relations between the East and the Western part of the country. This means that investments made in the country are safe and will yield returns without interruptions by political and social instabilities.
The economy is free and there exist minimal restrictions in conducting business. This means that as a foreign firm we will be able to establish operations in the country without having to fulfill any legal requirements. This means that less time will be spent in establishing the new restaurants in Germany.
On the economic aspect, the country is a high-income country hence we must make proper decisions in establishing high-class restaurants to make the most returns from the country. Estimates show that the German food industry was worth $46.8 billion in 2003 the average growth rate is estimated at 3.1% yet the setting up of new restaurants was at a much slower rate. This means that there exists a clear opportunity to invest in the hotel industry and succeed.
Still, the country is performing well economically despite the ongoing global recession. In the year 2008, the growth rate had dropped to 1.3% while in 2009, the growth rate rose to 5.3%. This means that the country is on a recovery path after the ravaging effects of the recession. Indeed, this is the right time to enter the country. As confidence in the economy is restored, it is possible to introduce a new business with the anticipation by the time the economy fully recovers, the restaurants set up will have fully integrated and adapted to the economic environment in Germany.
Germany is a developed country and the level of infrastructural development is very high. Communication channels are well developed and constantly improved. The populace is also highly literate. Therefore, it is possible to make use of cost-cutting measures through the use of facilities like the internet.
In conclusion, Germany is a stable and economically performing country with accommodative social-political factors. In this regard, it is economically feasible to move and invest in the country in the hotel business. Analysis shows that the market has clear opportunities to be exploited. It is a free economy meaning that the process of establishing operations there will not be tedious. Again, demography portrays the fact that the market will grow. The most important consideration will be in ensuring the hiring process will be sensitive to race.
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