Case: Walter Hundhausen Gmbh
Final Exam 691G
Case: Walter Hundhausen Gmbh
4/17/2007
Question 1:
Size up Germany’s foundry Industry? Is WH well positioned in it now and in the future?
The beginning of the new millennium has presented Walter Hundhausen (WH) with a big hurdle to jump. The German economy is experiencing economic stagnation, an aging population and a German labour market that is filled with many intrusive government regulations.
The German economy has been growing at an average rate of 0.6 percent per year for the last 4 years; making it one of the slowest growing economies in the Euro Zone. However, study’s suggests in 2004, the domestic economy is expected to grow above 2 percent. Moreover, one-third of Germany’s economy is comprised of exports.
In performing a Pest Analysis (see Diagram 1 below), there are many macro factors affecting the German Foundry Industry.
MACRO FORCES
The acronym stands for Political, Economic, Social and Technological concerns that could affect the strategic development of the casting foundry industry in Germany. By identifying PEST influences it helps gage the external environment in which the casting foundry industry operates.
Political
Strict Layoff Regulations: Government regulations had strict policies in place on how organizations could layoff employees. Before employees were laid-off, management had to advise the Works Council and they had to agree to the nature and timing of the plan. In addition, the management team had to develop a social plan for each employee on how the layoff would affect them and what remedies the organization would put in place for them. If a social plan was not presented, employees could claim for compensation through the courts. This could prove to be costly in time, money and reputation.
National Bargaining on Wages: The current German industrial relations policy was based on a duel model. One part dealt with the collective bargaining, while the
Case: Walter Hundhausen Gmbh
4/17/2007
Question 1:
Size up Germany’s foundry Industry? Is WH well positioned in it now and in the future?
The beginning of the new millennium has presented Walter Hundhausen (WH) with a big hurdle to jump. The German economy is experiencing economic stagnation, an aging population and a German labour market that is filled with many intrusive government regulations.
The German economy has been growing at an average rate of 0.6 percent per year for the last 4 years; making it one of the slowest growing economies in the Euro Zone. However, study’s suggests in 2004, the domestic economy is expected to grow above 2 percent. Moreover, one-third of Germany’s economy is comprised of exports.
In performing a Pest Analysis (see Diagram 1 below), there are many macro factors affecting the German Foundry Industry.
MACRO FORCES
The acronym stands for Political, Economic, Social and Technological concerns that could affect the strategic development of the casting foundry industry in Germany. By identifying PEST influences it helps gage the external environment in which the casting foundry industry operates.
Political
Strict Layoff Regulations: Government regulations had strict policies in place on how organizations could layoff employees. Before employees were laid-off, management had to advise the Works Council and they had to agree to the nature and timing of the plan. In addition, the management team had to develop a social plan for each employee on how the layoff would affect them and what remedies the organization would put in place for them. If a social plan was not presented, employees could claim for compensation through the courts. This could prove to be costly in time, money and reputation.
National Bargaining on Wages: The current German industrial relations policy was based on a duel model. One part dealt with the collective bargaining, while the