In: Economics
On your own words, write a brief details
should be consider focusing on CAGE framework to study the Cultural, Administrative, Geographic and Economic differences with respect to the Germany country they want to invest in.
Cultural: - people`s language, values, behaviors and quality of life.
Administrative: - Rules and regulation related to the business in selected country.
Geographic Distance: - The size of the country, differences in climates, and nature of transportation and information networks. You can think of geographic distance as absolute, in terms of the miles or kilometers that separate a firm from another market or supplier.
Economic:- Income level, and the relative purchasing power and GDP of the country
ANS
Germany wants to invest more and more in the economy of India as Germany is a developed country and the economy of India is still developing and Germany is 7th largest investor for India and which also Germany has established many automobile sections in India and this shows the interest of Germany in the economy of India. The language of people in India is hindi for the majority of population and other popular languages are tamil, urdu, malyalam etc and in Germany majority of people use German or Deutsch. The values and behaviours of both people in Germany and people in India are very similar as both of them tend to preserve their culture and also they respect their traditional values but the standard of living of people of Germany is better than people of India as they have access to better facilities than people of India as Germany is a developed nation. India favours free trade and with the emergence of new economic policy of 1991 India has made it easier for the foreign investors to come and invest in India and India has no requirements for permits and there is less amount of quota when compared to other nations which makes it easier to invest in India also if an investor invests the project in the backward location in India then there is also the relief from taxes.
Size of India is way larger than that of India as India is 3.287 million km² and Germany is only 357,386 km² which is relatively very small than India , Germany has basically colder climate throughout the year but India witness all types of climates like summer, winter, rainy , spring and autumn which makes it harder to know the seasonal consumer demand., the nature of transportation in Germany is far better than that of India as it has well developed road transportation connectivity but the transportation network of India is affected by poor transportation quality and badly connected roadways which makes it hard to connect the market to the supplier in India.The income level of people of India is lower than that of Germany as the GDP of India is 2.72 lakh crores USD and its per capita income is 2,009.98 USD and that for Germany is 3.95 lakh crores USD and 47,603.03 USD respectively which means that average earning of Indian population is way lesser than Germany and the relative purchase power parity of germany is 0.737 against US dolllar and that of India is 21.107 against US dollar.