How to do business with German companies
Dorothea Wohn, from eco Member Development, explains the challenges and rewards of making business contacts in German industry.
Due to high rates of productivity and sustainable employment, Germany is attractive for many companies as a business location. And yet, there can be significant challenges for international companies trying to get a foothold in the German market.
Key to Germany’s economic success is the German Mittelstand with its multitude of small and medium-sized family-owned companies. These companies quietly make their name for being innovative and export-oriented, and maintaining excellent quality in a B2B environment. You will find a lot of hidden champions in Germany, operating in global niches especially in engineering and electro-technology.
Business relationships in local regions
It is the spirit of entrepreneurial responsibility in terms of the company finances that determines the philosophy of the German Mittelstand: Business owners usually accept full liability. That requires a willingness to take risks and to take on responsibility – not only for the business itself but for the employees and the region as well. This thought is true not only for a small company but also for a larger one. As a result the German Mittelstand is the most important guarantor of the continued growth of business activities in Germany. Apart from the qualities listed above, the Mittelstand is also characterized by
- Excellent support and customer service
- The desire to build up business relationships in local regions
- Traditional values like reliability, punctuality and predictability
In order to do business with German companies it is necessary to understand the long history and the established structures of the traditional, family-owned companies. Business relationships are fundamental to their operation. In particular, a strong relationship will normally be built between the supplier and the customer – often over many years – ensuring the provision of excellent and reliable customer support. This makes it difficult for the non-German outsider to break into this market.
Breaking through the barriers
What should already be clear is that as an outsider trying to gain a foothold in Germany, it is necessary to build relationships and do lots of networking, because
- Germans like to do business with people they know and trust
- Personal contact ensures that the quality of the products and services is good
- Companies optimize their workflow by building up a sustained and individual network, often in the local region
One way of achieving this breakthrough is by making use of trade associations. An association, as a meeting-point for players from one business sector, functions in many ways as the contact point, service provider and driver of the entrepreneurial spirit. Associations play a key-role in business-relations as they help to integrate companies into new markets through networking. Through regular participation in association activities, the outsider becomes an insider, a known force and knowledgeable specialist, a reliable associate.
Integrating new players in a challenging market
Networking enables you to get in touch with suppliers, service providers and business partners from the chosen sector. At the same time, regular industry meetings provide participants with information and specialist knowledge exchange, and make the market more dynamic and transparent for suppliers and users.
In short: Versatile linkages and relationships hold together the German Mittelstand. Associations form one of these links and are a welcoming force for integrating new players in a challenging market.
Find out more about how membership in the eco Association can help your business activities in Germany – contact dorothea.wohn@eco.de or judith.ellis@eco.de for further information.
