Coursework: Economic & Political Environment of International Business
Is the End of the German Beer Industry Near?
Discuss how the changing technological environment present international threats and opportunities to the German beer industry.
To discuss how changing technological environment presents international threats and opportunities for the German beer industry, the term of changing technological environment has to be explained. The literature distinguishes between a micro environment and a macro environment. Micro environment concludes factors, which are directly influenced by a company. These factors are organizational – Marketing-Mix, Structure, processes etc. Macro environment contains political decisions, cultural and social changes and technological changes (Lee and Carter, 2009).
Technological changes can include three sections to improve business processes of companies. The First is through technological innovations in products and processes. For instance producing processes in different Industries are much easier and faster today than before 30 years. Product life cycles are less long today – modern technology allows permanent improvements and innovative new products detach older products. That is a Development of modern Industries, which can be observed (Dicken, 2011).
The second one is through communication and information. Technology increases productivity by time saving devices and allowing companies to work in collaboration with team members within a Network, who are not present or the ability of fast access to data from anywhere of the world (Obele, 2004).
Furthermore modern Technology allows companies to do consumer or market research in a very short time, especially through the internet which provides opportunities for companies to enter new markets across several countries and regions in a very fast and easy way now (Litan et al., 2010).
The third one is through mobility and innovation in transportation. Today manufacturers are able to transport products with the help of airplanes, trains and ships in a geographical freedom without losing quality of products (Dicken, 2011).
By increasing productivity generally through time and space saving devices modern technology provided the German industry opportunities to increase general production output. Improved Information and communication technology (ICT) and innovative transport systems results a less complex of processes to enter new markets by aimed communication and fast distribution. But one of the most important international opportunities that changing technological environment presents to the German beer industry is the improvement in production processes. Process optimisation and increased efficiency are priorities of the most companies. For Instance high-gravity wort fermentation or efficiency of wort sugar uptake are process activities resulting in reduced capital expenditure and gains in economies of scale (Stewart, no date). Economics of scale eventuates when a decline in average cost can be achieved through an increase in output of one product (O’Sullivan A. and Seffrin S., 2003). In addition many of the big global players are leveraging from innovated brewing and fast fermentation processes. There are heavy investments in brewing development to produce more efficient for instance to exploit ingredients or save water and gain economies of scale. In the USA breweries like Anheuser-Busch, Miller and Coors managed to dominate the mass-producing sector and gained in economies of scale (Tremblay et al., 2005). World market leader AB InBev from Belgium owns more then 200 beer brands today, undaunted Becks, a German beer. Local breweries did not attempt to expand in the past and today they are suffering from acquisition of big global players. The device of big breweries is to produce efficient and cheap. But many German customers are struggling against this mass-production provided by modern technology....
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