Question

 

Here's the context in which you should write your final exam. Bronner's Christmas store is one of the largest in America. Bronners currently has one store located in Frankenmuth, Michigan. Bronner's has decided to open up a second store in Heidelberg Germany. Reflecting on each chapter in our textbook, respond to each of the following questions as though you were hired to be a consultant to Bronner's.

 

3. How would you describe the differences and/or similarities in economic development between the US and Germany?

Answer 1

In terms of economic development, per capita income is higher in US as compared to Germany so Bronner's will have to sell products at a slightly affordable rate than it does in US. Germany also has a slightly higher percentage of population below the poverty line, thus less number of consumers to avail the products the store sells. However this might be compensated by the lower unemployment rate as compared to US it enjoys.

There are also several similarities in terms of tastes and preferences and that both are developed economies with large scale reliance on technology, however the impact on automobile sector and germany's reliance on that industry could potentially dent the healthy employment and investment figures it enjoys. Thus, Bronner should likely expect stable or lower profits once it opens its store in Germany and it will also have to factor in profits over a long run horizon.

Bronner will also face demand in specific months and not throughout the year, thus it will also have to reduce costs and maybe outsource the products from US to Germany when there is peak demand as connectivity is good between the two regions.

Thus looking at all these aspects, Bronner will have to take several points under consideration, however it could open out one more store in US, to gauge the demand and gain an experience in handling multiple locations domestically before charting overseas.