Introduction
The international business has experienced extensive growth over the years. This growth has been primarily attributed to the peace, stability, and cooperation among the different countries and regions of the world. Nonetheless, it is evident that businesses thrive in some countries more than others; different factors about the specific countries influence this, and they are comprised of legal liabilities and political, economic, and technological factors. Similarly, a Widget depends on the success of the international business; as such, its performance is influenced by the same factors. Therefore, this study will compare South Korea and Germany based on their description, political stability, risk management, economic, infrastructural, and currency comparison.
Country Description
The Federal Republic of Germany is a Western European country that is a member of the European Union (EU). It has the largest population after Russia and is the most populated EU member state. Being an EU member, it has developed a comfortable business environment, subsequently facilitating its growth while attracting more investors (Feinstein, 2021). It has maintained strong relations and ties with the neighboring countries, which has promoted peace and stability within the country. The country’s meager corruption rate allows new and foreign businesses to grow and become profitable quickly (Park, 2021).
On the other hand, South Korea is considered one of the most developed countries in East Asia, hence the term Asian tiger. After the Korean War, South Korea allied with the United States, facilitating peace and stability. Subsequently, the economy proliferated, thus registering the fastest-growing economy (Park, 2021). The country has since maintained its growth by ensuring a favorable economic environment.
Additionally, South Korea has created a broad market for many products ranging from technology to chemicals, which has and continues to attract more investors and foreign companies. As of 2019, it has recorded a total of $ 9.63 billion in foreign investments; therefore, the country has a suitable environment for business (Business Environment, n.d.). Despite their diverse locations, these countries have developed free and open markets, which facilitate the growth o and development of the respective countries.
Political Stability
Germany and South Korea are democratic republics with three arms of government: the executive, legislature, and judiciary. The parliament can amend the constitution and assent to new laws. In Germany’s case, the federal government comprises the Federal Diet and the Federal Council, and they both form the legislature (Feinstein, 2021). The Federal Diet is comprised of elected officials, while the Federal Council is made up of appointed members from each Federal state.
In Germany, the government has three top-ranking central officials: the President, the President of the Bundestag, and the Chancellor. The party elects the Chancellor with the most members in parliament. This power differentiation has allowed for independence between the states, consequently promoting unity and stability in the country.
The executive and legislative arms of the South Korean government only perform at the national level except for a few branches. However, the judge can perform its operations at national and local government levels. Local authorities in the country are autonomous, and thus, they have local legislature and executives. The country has high regard for its democracy and thus has revised the constitution to meet the needs of the country and its citizens.
Based on the CIA Factbook, this country is a functioning democracy, which signifies essential growth for the country since dictator governments initially characterized it during the 1980s and 1990s (Park, 2021). The country has eight provinces that are independent of each other but governed by the same constitution. The strict adherence to the constitution and emphasis on the judiciary has promoted a just and stable environment, consequently promoting political stability.
Risk Management
Foreign investment is without risk; as such, Widget has established strategies to minimize the risk of the challenges it is likely to encounter while operating in foreign markets. For instance, the South Korean market is known for its high competition from local manufacturers (Seth, 2019). Therefore, the company has ensured that its products are produced at lower prices to remain relevant in the Korean market while maintaining profits. On the other hand, the German market has a very different business culture from the United States, which may expose the firm to possible losses due to unsatisfied clients (Goebel et al., 2019). Therefore, the company has invested time and resources to understand the German market and customers’ needs; this will help ensure the company meets the target market’s needs.
Economic Comparison
Germany is ranked fourth among the countries with the largest economies in the world and the largest economy in Europe. As of 2021, Germany had a gross domestic product of $4.22 trillion and a GDP per capita of $4.82 trillion; this followed a 2.1% GDP growth from the previous year. Germany majors in exporting vehicles, machinery, and chemicals with skilled human resources (Countryeconomy, 2022).
On the other hand, South Korea is ranked tenth in world economies with a GDP of $1.8 trillion per capita of$2.43 trillion, following a 4.0% growth in GDP from that of the previous year (Countryeconomy, 2022). This country has developed an industrial economy based on exportation and free trade agreements with large economy countries. Based on the data collected, investing in the South Korean market is more profitable because of the rapid growth recorded. Even though Germany has a large economy, its growth has declined over the years, posing a danger to businesses that operate in the country.
Infrastructural and Educational Comparison
Germany and South Korea have invested in infrastructural development; these countries have adopted infrastructure technology to facilitate efficiency. Germany occupies a central position and thus operates as a hub for transport (Heuermann & Schmieder, 2019). Germany has a well-established transport network to ensure its dense population operates easily using structures like the ICE train, which serves significant cities and neighboring countries (Heuermann & Schmieder, 2019). Education systems vary in different states, and primary education is compulsory.
Secondary education is a structure that depends on the student’s specialization and academic or vocational training. University education is free and thus is ranked third as the best international study (Grund & Brock, 2020). According to Lim et al. (2019), South Korea has developed infrastructure with high-speed trains and well-developed road networks.
Each major city is served with efficient train services (Eichengreen, 2018). It has developed nuclear energy, which produces most of its electric power (Eichengreen et al., 2018). A central body manages education from kindergarten to high school. School years are divided into two semesters.
Currency Comparison
Germany uses the Euro as its currency; compared to the United States dollar, these two currencies are almost equal. However, the Euro is stronger than the dollar, meaning that Germany’s economy is more extensive than that of the United States. On the other hand, South Korea’s winnings are weaker than the dollar. Based on the current valuation, the dollar equals 1327.28 South Korean Won. This means that the Korean economy is smaller than that of the US.
Conclusion
Germany and South Korea are the most developed countries due to their favorable business environments. The comfortable environment has allowed international companies to invest in these countries. Despite their regional differences, they have adopted strategies that have allowed businesses to thrive.
Political stability in the regional blocks has promoted cooperation between the countries and their neighbors, thus ensuring an available market for the company. Both countries have witnessed significant development, but Germany has recorded a reduced growth rate compared to South Korea, which has recorded progressive growth. Both countries have an established infrastructural development and education system, which has promoted growth.
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