Impact of country on competitor Essay
A multitude of external factors always affect a company’s success and failure.
At most times, issues such as politics, population, culture and history could be important determinants as to whether a company would survive, given that it is surrounded by other competitors that aim for the same target market. Two companies would be examined in this case, and the different entities surrounding them would be tackled in order to determine how competitive they are both in their respective and regional economies.These companies would be Deutsche Bahn and TGV, two railway companies coming from Germany and France, respectively. Deutsche Bahn: The Deutsche Bahn AG is one of the biggest railway companies in the world, and it hails from Germany. It is a government owned company, but plans of having it privatized are already taking place.
Deustsche Bahn was founded in 1994 and succeeded three former railway companies, the Deutsche Bundesbahn of West Germany, Deutsche Reichbahn of the German Democratic Republic and VdeR of West Berlin.The company operates rail services between Frankfurt and Bonn, Cologne, Dusseldorf, Freiburg, Hamburg, Hanover, Manheim, Munich, Nuremburg, and Stuttgart. Deustsche Bahn is currently the largest railway enterprise in Germany, and about two billion passengers are served every year. Factors that Affect Deustche Bahn’s Success An Instrument for National Unity Deutsche Bahn is a state-owned company that has not only served people through transport services (lcweb2.
loc. gov, 2005), but it has also contributed a lot to the improvement of the country’s employment by giving providing jobs in the public sector.This has been an important factor for the company because it served as an instrument in Germany’s drive for national unity. The country has once been separated due to political conflicts, and apart from that it is a federation of different states yet they had themselves collected under one flag. Germany is still on the developmental stage of uniting its people, breaking socio-political and cultural distinctions by opening up highways of interaction especially through physical technology such as transportation, and the railway system has served this purpose. Political StructureThe country’s political framework is another factor that affects the German railways.
Germany has adapted a Federal Parliamentary form of government in order to obtain equal representation from the different states that comprise the republic but at the same time preserve each state’s cultural identity. Therefore each state would have different demands in order to sustain its needs and prosper on its own. Deutsche Bahn would thus be catering different forms and degrees of railway services to these states in accordance to their needs (lcweb2. loc. gov, 2005).
Corollary to Germany’s government structure is its internal cultural differences. The country is divided into states, thus each state performs to develop its own sovereign prosperity. At the same time, these states coexist with each other in obtaining different goods and services, and this has to be sustained by an efficient transport service only the railway system can provide. Thus Deutsche Bahn’s services come to be very important. Population and Demographics In addition, railway systems have been part of Europe’s tradition and history, and that includes Germany’s.Cross-country and intra-country traveling has always been common for all kinds of people at different timeframes in recent history- from refugee transportation, migration, to today’s employment and education, the railroads have served its utmost purpose (cia.
gov, 2002). The country’s demographics have also contributed an important role in Deutsche Bahn’s competitive advantage. Germany has the biggest population in Europe, with 82 million inhabitants. As of 2006, it has been tallied that 19% of Germany’s population are made up of foreigners.Germany has also ranked the third highest percentage of international immigrants worldwide, at about 10 million of all 191 million migrants. Economics The country’s economy itself is a big factor in Deutsche Bahn’s existence as a major transport service.
The German economy is one of the strongest economies in the world, next to the United States and Japan. It also is the largest economy in Europe, and focuses mostly on exporting goods and services to the different parts of the globe.Region wise, railway systems serve to be the most efficient mode of transportation especially in the delivery of goods to the different parts of Europe, and because of this Deutsche Bahn is placed in a very important position in Germany’s export trade (Hunt, 2001). Deutsche Bahn and Its Competitive Gauge with France’s TGV As compared to Train a Grande Vitesse or TGV, one of the major railway systems of France, Deutsche Bahn is on a more competitive position in catering railway services (Zeilinger, 2003).First is because in the domestic scenario, Deutsche Bahn enjoys sole provision of railway transport in Germany, whereas TGV, although it takes part of the most extensive railway network in Europe, it shares with two other railway services, which in turn limit its target market.
Despite its high-speed technology, neighboring countries such as Belgium, Switzerland and Italy have already built up their own high speed lines, creating another limitation to TGV’s service stretch. TGV also focuses its railway services in Paris and Lyon, leaving the other networks to the other systems such as Eurostar and Thalys (Bouley).Both countries also have a high regard for tradition and history. Railway transport has been one of the main modes of transportation not only for humans but also for cargo, and its efficiency has continued to be popular despite the existence of more modern modes of transport. (http://www.
cia. gov/cia/publications/factbook/geos/fr. html). Germany and France have almost equally structured economies, regardless of ranking. Their respective governments still retain influence, if not ownership of major enterprises such as infrastructure, electricity, railway and telecommunications.
However, their economies differ in the areas of investment, for Germany’s stronghold is on the export of goods and services to other countries, while France is into receiving foreign direct investments as well as developing other transport technologies such as airplanes. What puts TGV in a better position than Deutsche Bahn is that the tourist industry of the country is at the heart of Paris and its nearby cities, which happen to be TGV’s location, and thus obtains more passenger turnout than Deutsche Bahn’s when it comes to city-based services.Like Germany, France is also home to cultural diversity fluid migration. Aside from tourists, students and workers, settlers coming from other parts of Europe have also added to the mobility of the French populace. However, France has a lower population as compared to Germany, giving a lower passenger turnout. This entails a more competitive advantage for Deustsche Bahn because Germany’s demographics consists a more fluid flow of passengers in and around the country.
ConclusionDifferent factors and concerns greatly affect any business enterprise, especially when it serves a whole country as its target market. Deutsche Bahn’s success and longevity as a railway company has indeed been supported by external factors that are continuously changing over the years, depending on the trends of politics, economics and mainstream issues such as culture, migration and population. Government policies also take important roles in this success, such that if and when alterations within any of these factors occur, the company’s existence might be on a raucous too.However, since most of these factors, aside from politics, take on slight, cyclical balanced fluctuations, changes affecting the company would not really be because of these, and would still be placing the company in an advantageous position as compared to its cross-country competitors.
Sources: Zeilinger, Stefan. “On the Fast Track: French Railway Modernization and the Origins of the TGV,” 1944-1983 (review); Technology and Culture – Volume 44, Number 3, July 2003, pp. 613-614. Hunt, Jennifer.“From Reunification to Economic Integration: Productivity and the Labor Market in Germany” (with Michael Burda).
Brookings Papers on Economic Activity, Volume 2 2001. Bouley, Jean. “A Short History of “High Speed” Railway in France before TGV. ” http://www. jrtr.
net/jrtr03/pdf/f49_bou. pdf. lcweb2. loc.
gov. “Country Profile: Germany. ” Library of Congress Research Division, December 2005. http://lcweb2. loc.
gov/frd/cs/profiles/Germany. pdf. cia. gov. 2002. http://www.
cia. gov/cia/publications/factbook/geos/fr. html.