Being aware of peculiarities, features and, above all, requirements of German companies is very important in order to approach the major European market as for the manufacturing industry. Italian companies exporting to Germany should therefore act not only as simple suppliers but also as an integral part of a production process requiring high technological and organizational skills in terms of corporate structure.
Italy is Germany’s fifth largest supplier. Talking about Germany does not simply mean to export or rather succeed in ensuring that Italian technology is sufficiently accepted by German companies. In fact, Italian exports to Germany have completely different characteristics and are strong enough to talk about production interdependence. This is necessary for Germany to increase its high technology in many sectors also due to technological growth of Italian supplies.
Exporters or trade partners?
Italian companies that export to Germany should therefore not only be considered as simple suppliers but also as an integral part of a production process requiring high technological and organizational skills in terms of corporate structure that often turns into Italian direct investments in the third nation.
It is no coincidence that about 2,100 companies involved or controlled by Italian capital are currently located in Germany, with about 81,000 employees. In addition to the export flows that Italy can boast in Germany, Italian companies will have to take into account these important foreign direct investments coming from our country and already present in the German production industry as possible Italian customers abroad.
Another important concept to look at Germany with high interest is the presence of important industrial groups with international ramifications, especially in Europe, but more and more often worldwide. In Germany we found headquarters of many multinationals and their purchasing offices. When it comes to dealing with a German subsidiary in the rest of the world, often we shall go to Germany for quality control from a technological point of view or rather to discuss the price of important orders, the latter quite a relevant aspect for Italian companies.
Germany and Italy: two close cultures
On the other hand, although the export statistics of Italian mechanical goods in Germany show the importance of this nation as the world’s first importer of mechanical goods, with a higher business volume than the United States, it should be noted that Germany influences and often conducts purchases for the vast majority of European and international branches. Germany therefore has a key role for those seeking foreign markets that are close, technologically advanced and accustomed to grow, thus creating strong partnerships with Italian companies.
Often, speaking of Italian mechanical goods, sales statistics are analyzed aiming to define through the numbers the degree of acceptability of Italian culture and, therefore, of its products. Although German companies are searching for reliable partners who may measure their internal organization with German internal organization, characterized by standard procedural protocols and greater capitalization, it is good to remember that most foreign tourists in Italy come from Germany. In particular, in recent years, this number has reached the peak of more than 10 million people. Such a figure, besides interrupting the boring series of numbers and macroeconomic statistics, aims to emphasize how close these two cultures can be, talking about a totally different sector, like tourism.
In addition – as often stated by Galileo Business Consulting – it may be easy to forget about the importance of being close, also culturally, to the market to be approached. Sometimes people decide to export to countries that are increasingly far from Europe, following, we may say, the trend of the moment.
The right attitude to export towards Germany
Companies may perceive Germany as an already known country. We have experienced two totally different attitudes among companies that export to Germany. Some companies seem to know the country well, have exported with some spot projects and tend to look for new markets elsewhere; some other companies, on the other hand, rely on quite strong relationships and business figures with Germany, although they feel they have not yet thoroughly strengthened their marketing activities in a country that will always be too big to be totally discovered.
Our analysis tend to support the second attitude for all those Italian companies willing – while adapting to more stringent standards of industrial cooperation – to develop close foreign markets.
Trade exchange higher than 111 billion
Germany has to be still discovered, then, especially in the field of Italian mechanical goods, which exports to the country about 8.8 billion euro each year, an extremely important figure compared to 8.2 billion exported to 50 states in the US. It would be a quite reductive vision indeed, but if a company’s strategy were to find a single nation to address its exports for the next few years, it would be worthwhile to deepen the knowledge of the German market. In 2016, trade exchange between Italy and Germany was higher than 111 billion euro, compared for instance with 11 billion euro recorded on the whole range of exported and imported products with a close nation, the Czech Republic.
When we speak of Germany, we should take into account two factors that are often considered as risky elements. The analysis is concerned with the degree of competitiveness when compared to other markets. It is clear now that technological level, production capacity and internal organization of companies looking for a foreign market in Germany should be quite advanced before facing potential customers. However, as sales of Italian mechanical goods in Germany account for 8.8 billion a year, it is good to remember that where opportunities are, then great competition and, ultimately, great sales can be achieved. Thinking deeply about this concept may lead to redefine competition and revenue opportunities as synonymous, not contraries.
Different industrial fabrics between the two countries
Such an analysis should be developed on the capitalization level enjoyed by companies in Germany, especially in mechatronics; the smallest German company working in mechatronics might have higher revenues or employ even more people than a large Italian company.
A concept like this can be interpreted negatively in terms of market opportunities to be found in Germany: if not properly capitalized, it is not possible to compete in the market.
We should rather think about something extremely important when strategically managing a long-standing international marketing plan and even reversing such a vision. The level of capitalization of companies in Germany is higher compared to other countries. Besides, in Germany both local and international competitors are capable of serving the market efficiently. Perhaps the most capitalized companies in a given industry are in Germany because they sell in Germany. In other words, through their sales, the market triggers over the years the capitalization of German companies. Being in the German market is therefore necessary to enhance a company’s business structure. This market is certainly more complex, but on the other hand keeping away from these opportunities is likely to ensure competitive advantage to active German companies or international competitors. Therefore, competition becomes a synonym for opportunity; similarly, capitalization of German companies implies continuous market opportunities. Then, these can be considered not only as entry barriers, but rather as positive elements to deal with in the effort of attracting new customers and develop company’s sales and capitalization by means of a closer contact with structured players.