Customer Relationship Management (CRM) Software in Germany: A Strategic Reference, 2006
ICON Group International, July 2007, Pages: 194
How to Strategically Evaluate Germany
Perhaps the most efficient way of evaluating Germany is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to customer relationship management (CRM) software are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
Framework for Prioritizing Countries
Demand/Market Potential Driven Firm
Relative Accessibility
Accessibility/Supply Averse Firm
In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market - neither a market-driven nor a cost-driven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).
Latent Demand and Accessibility in Germany
This report provides a detailed overview of factors driving latent demand and accessibility for customer relationship management (CRM) software in Germany. Latent demand is largely driven by economic fundamentals specific to customer relationship management (CRM) software. This topic is discussed in Chapter 2 using work carried out in Germany on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for customer relationship management (CRM) software in Germany. I use the term “micro” since the discussion is focused specifically on customer relationship management (CRM) software.
Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Germany. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Germany. The numbers are only indicative of an average firm whose primary activity is in Germany. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Germany. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “prepackaged software”, as defined in Chapter 3. Again, while “prepackaged software” does not exactly equate to “customer relationship management (CRM) software”, it nevertheless gives an indicator of how Germany compares to other countries for a proxy adjacent category along various dimensions.
Chapter 4 deals with macro-accessibility and covers factors that go beyond customer relationship management (CRM) software. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Germany:
Openness to Trade in Germany
Openness to Direct Investment in Germany
Local Marketing and Entry Strategy Alternatives
Local Human Resources
Local Risks
Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in the Chapter 4, which is a general overview of investment and business conditions in Germany. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Germany. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.
1 INTRODUCTION & METHODOLOGY 1
1.1 What Does This Report Cover? 1
1.2 How to Strategically Evaluate Germany 1
1.3 Latent Demand and Accessibility in Germany 3
2 CUSTOMER RELATIONSHIP MANAGEMENT (CRM) SOFTWARE IN GERMANY 5
2.1 Latent Demand and Accessibility: Background 5
2.2 Latent Demand: Market Composition 5
2.3 Major Players 6
2.3.1 U.S. Players 7
2.4 Latent Demand: Target Buyers 7
2.5 Latent Demand: Leading Segments 9
2.5.1 CRM On-Demand 9
2.5.2 Analytical CRM 9
2.6 Accessibility: Distribution Strategies 10
2.7 Market Issues and Obstacles 11
2.7.1 Public Procurement 11
2.7.2 Tariff and Non-Tariff Barriers 11
2.7.3 Standards 11
2.8 Key Contacts 12
2.8.1 Trade Magazines 12
2.8.2 Trade Events 12
2.8.3 Trade Associations 13
3 FINANCIAL INDICATORS: PREPACKAGED SOFTWARE 14
3.1 Overview 14
3.1.1 Financial Returns and Gaps in Germany 15
3.1.2 Labor Productivity Gaps in Germany 18
3.1.3 Limitations and Extensions 18
3.2 Financial Returns in Germany: Asset Structure Ratios 19
3.2.1 Overview 19
3.2.2 Assets - Definitions of Terms 19
3.2.3 Asset Structure: Outlook 22
3.2.4 Large Variances: Assets 23
3.2.5 Key Percentiles and Rankings 26
3.3 Financial Returns in Germany: Liability Structure Ratios 41
3.3.1 Overview 41
3.3.2 Liabilities and Equity - Definitions of Terms 41
3.3.3 Liability Structure: Outlook 43
3.3.4 Large Variances: Liabilities 44
3.3.5 Key Percentiles and Rankings 47
3.4 Financial Returns in Germany: Income Structure Ratios 60
3.4.1 Overview 60
3.4.2 Income Statements - Definitions of Terms 60
3.4.3 Income Structure: Outlook 63
3.4.4 Large Variances: Income 64
3.4.5 Key Percentiles and Rankings 67
3.5 Financial Returns in Germany: Profitability Ratios 82
3.5.1 Overview 82
3.5.2 Ratios - Definitions of Terms 82
3.5.3 Ratio Structure: Outlook 84
3.5.4 Large Variances: Ratios 85
3.5.5 Key Percentiles and Rankings 88
3.6 Productivity in Germany: Asset-Labor Ratios 103
3.6.1 Overview 103
3.6.2 Asset to Labor: Outlook 104
3.6.3 Asset to Labor: International Gaps 105
3.6.4 Key Percentiles and Rankings 108
3.7 Productivity in Germany: Liability-Labor Ratios 123
3.7.1 Overview 123
3.7.2 Liability to Labor: Outlook 124
3.7.3 Liability and Equity to Labor: International Gaps 125
3.7.4 Key Percentiles and Rankings 128
3.8 Productivity in Germany: Income-Labor Ratios 141
3.8.1 Overview 141
3.8.2 Income to Labor: Outlook 142
3.8.3 Income to Labor: Gaps 143
3.8.4 Key Percentiles and Rankings 146
4 MACRO-ACCESSIBILITY IN GERMANY 161
4.1 Executive Summary 161
4.2 Economic Fundamentals and Dynamics 162
4.2.1 Social Security Reforms 162
4.2.2 Labor Market 162
4.3 Political Risks 163
4.3.1 Basic Government Structure 163
4.4 Marketing Strategies 164
4.4.1 Services 164
4.4.2 Trade Fairs 165
4.4.3 Advertising Options 165
4.4.4 Associations 166
4.4.5 Public Procurement 166
4.4.6 Marketing to the New Federal States 166
4.5 Import and Export Regulation Risks 167
4.5.1 Self-Certification 168
4.5.2 Value Added Tax/Turnover Tax 170
4.5.3 VAT Applicable to Online Sales 170
4.5.4 Custom Regulations/Tariffs 170
4.6 Investment Climate 170
4.6.1 Openness to Foreign Investment 170
4.6.2 Conversion and Transfer Policies 171
4.6.3 Expropriation and Compensation 171
4.6.4 Dispute Settlement 171
4.6.5 Performance Requirements and Incentives 171
4.6.6 Right to Private Ownership and Establishment 173
4.6.7 Intellectual Property Risks 174
4.6.8 Transparency of Regulatory System 174
4.6.9 Capital Market Risks 175
4.6.10 Political Violence 175
4.6.11 Corruption 175
4.6.12 Bilateral Investment Agreements 175
4.6.13 OPIC and Other Investment Insurance 176
4.6.14 Labor 176
4.6.15 Free Trade Zone Options 177
4.7 Trade and Project Financing 177
4.8 Travel Risks 178
4.8.1 Country Data 178
4.9 Key Contacts 179
4.9.1 Trade Associations and Chambers of Commerce 179
4.9.2 Market Research Firms 181
4.9.3 Commercial Banks 181
4.9.4 Other Contacts 183
4.9.5 Contacts in Washington D.C. 183
4.9.6 U.S.-Based Multipliers 184
4.9.7 Useful Web Sites 184
5 DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS 186
5.1 Disclaimers & Safe Harbor 186
5.2 Icon Group International, Inc. User Agreement Provisions 187
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