Global business concepts and practices

German TP

Environmental Analysis and Market Entrance Strategy: Bringing Biodegradable Toilet Paper to Germany

The drive to "go green" -- making consumer choices that take environmental stewardship into account -- has been increasing hugely over the past decade, and is more rampant in Europe than in North America and other parts of the developed world, according to many accounts. Germany is no exception to this trend, and with a relatively dense yet stable population, the country is ripe for internal changes rather than expansions to drive innovation and business. Bio-degradable toilet paper is the type of innovation that could go over quite well in the country, and it is expected that in the development of a market entry plan for this product in this country, a great deal of country-specific information as well as more general deduced correlations between environmental factors and marketing strategies will be developed. Exporting the product to the country is viewed as the most viable method of market entry, which will be borne out by an examination of the country's current level of industrialization.

Environmental Factors

Germany currently has a population of just under eighty-two million people, with the vast majority of these (over ninety percent) identifying as ethnic Germans. The country does have sizeable minority populations, however, having long been a preferred immigrant destination due to work opportunities, strongly supported social programs, and a highly ranked educational system. Population growth has been very low over the past decade, and almost two thirds of the current population is between the ages of fifteen and sixty-four, inclusive. With Europe's largest economy and the fifth largest in the world, there is plenty of money in Germany to go around; only eleven percent of the country's population lives at or below the poverty line, the tope ten percent of earners control only twenty four percent of the nation's wealth, and there is a large and dominant middle-class made up of more than half the country. Three-quarters of the country's population live in urban areas.

Germany's government has been remarkably stable given its history in the twentieth century, especially following the reunification of East and West Germany, and the democratic system no in place allows for a great deal of economic freedom while carefully regulating consumer safety and ethical practices. The country is also fairly open to foreign direct investment, though with an export surplus and a still-strong industrial sector, there simply isn't much room in the economy for foreign producers operating in Germany. As one of the earliest members of the European Union and an adopter of the Euro as its official currency, the country is well poised for internal business and currency convertibility. The company also has a very well developed transportation infrastructure, which allows for the continued importing and exporting of goods on major scales as well as assisting in intrastate commerce. All of this contributes to the per-capita GDP of over thirty-four thousand that is estimated for the country as of 2009; GDP growth has been relatively stagnant in the past few years, but will likely improve as the global economy recovers. Communication infrastructure is comparable to that which exists in North America, with a near-total spread of fixed and wireless telephones and the majority of the country regularly utilizing the Internet, as well.

Strategic Research

Toilet paper is a product used by virtually everyone in modern society, and this the potential market size for biodegradable toilet paper in Germany is limited only by the size of the German population, for all practical purposes. As the offered product is highly differentiated, it will have a distinct advantage over competitors at least insofar as appearing obviously different from standard toilet paper rolls. At the same time, the lack of familiarity of the new product might be off-putting for German consumers, and with a commodity at once as necessary and yet as cheaply and readily available as toilet paper, there really is no way to create extra demand, expand markets, etc. Differentiation, then, is the key selling point of biodegradable toilet paper, and the environmental sensibilities of the average German consumer will likely be a major factor in their decision to change to the new product.

Tactical Research

There are several different viable options for the introduction of this product to the German market, including joint agreements and foreign direct investment by setting up manufacturing and distribution facilities in the country itself. For both short-term costs and to minimize risks, however, exporting the product to the country is seen as the most profitable alternative. This will allow for the manufacture of the product in a country with a lower business tax rate and different employee regulations and expectations, contributing to a significant cost savings when compared to building and maintaining manufacturing within the country itself.