Question

Bronner’s Christmas Store is one of the largest in America. Bronner’s 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.

Should Bronner’s be concerned about German government policy? Explain.

Answer 1

Answer: Yes, Bronner’s should be concerned about the German government’s policy. The companies operate in a macro environment that contains forces that are not controlled by them but have a high impact on their operations. Political forces are one such factor. The government and its policies directly affect the success or failure of a company in a foreign market. The attitude and ideology of the government decides whether they support or oppose foreign companies. There are many governments that have protectionist approach towards their domestic industries. Hence governments policies may at times discriminate with the foreign firms and do not provide them with level playing field. Similarly, the government policies also decide the rules and regulations under which the companies are going to operate in a country. Hence the German government policies will directly impact on the Bronner’s operations in Germany and it should therefore be concerned about it.