"Made in Germany" The world's most popular label
Germany is the largest economy in Europe and the fourth-largest economy in the world. Driven by industrial production, the country is the third-largest exporter and maintains the highest trade surplus in the world. The country also houses nearly 40 of the world's 500 most valuable publicly-traded companies, which makes it an increasingly attractive country for international investors.

Germany's largest companies can be found in the DAX 30 Index, which is similar to the Dow Jones Industrial Average in the United States. It contains the 30 largest German companies by market capitalization trading on the Frankfurt Stock Exchange. The index contains some household names like Adidas AG, BASF SE, BMW AG, Bayer SE, Siemens AG, MAN SE, and many others.

Made in Germany
The "Made in Germany" label
According to a recent study, goods from Germany and the EU are the most popular worldwide.

Germany. High-quality and durable is what people all over the world associate with products bearing the "Made in Germany" label.
In existence for 130 years now, it was originally intended as a warning about cheap copies from Germany: Back then, knife manufacturers in Sheffield were complaining about inferior-quality copies of their products from Germany; this marked the beginning of the label, which within a very short space of time changed completely and became a quality seal.
For many people/customers all over the world, 'Made in Germany' has been a sign of the highest level of quality and German craftsmanship for decades. On the other hand, almost all German manufacturers are proud to be 'Made in Germany'.

What manufacturer doesn't like boasting the 'Made in Germany' label on its products?

The Made-In-Country-Index describes how positively designations of origin from different countries are perceived. In this ranking, the Made in Germany seal is first.

The 'Made in Germany' label indicates to consumers that a product actually delivers what "Made in Germany" promises because the term has now become a legally robust label of geographical origin for the first time. Companies benefit because not only they can differentiate themselves from foreign competitors, but they can also use Germany's reputation for their business/brands.

But when is a product allowed to be described as 'Made in Germany'? What are the legal requirements for a Made in Germany label? How can you use the official 'Made in Germany' seal? To be labeled "Made in Germany", what percentage of your production chain should be located in Germany?

How does the incorrect use of the Made in Germany label cause warnings that threaten to result in high costs?
The geographical origin label "Made in Germany" or "Hergestellt in Deutschland" has been clarified more than ever before. The criteria for the award of the label not only stipulate that the core service for the manufacture of the product is carried out in Germany but also define in detail which parts are manufactured in Germany and what this core service involves.

In addition, products labelled with 'Made in Germany' will have to meet specific requirements with respect to quality for the first time and compliance with these requirements will be monitored.

Find out here how our experts can help you meet the "Made in Germany" label requirements?
Case Study
How not to enter the German market: The Example of Walmart

Wal-Mart is the biggest food retailer in the world and has a presence in several nations. In some nations (e.g. the US, Canada, China), Wal-Mart is a great success. However, Wal-Mart has failed in some countries (e.g. Germany, South Korea). First, we describe Wal-Mart's failure in Europe's largest economy. Second, we use Wal-Mart's experiences in Germany to illustrate some key principles related to product failure and product deletion. Wal-Mart's experiences are also an example of the importance to adapt to culture and rules when starting a business in a new country.

The German grocery industry
There is fierce competition in the German grocery industry, due to the increasing number of discount supermarket chains (KPMG 2006). As a result, there is low profitability in the food retail sector; profit margins range from 0.5 per cent to 1 per cent which is one of the lowest profit margins in Europe (Frankfurter Rundschau 2007). By contrast, profit margins in Great Britain are 5 per cent, in this same sector. In particular, Metro is a tough competitor, and it already applies some of Wal-Mart's successful strategies (e.g. related to economics of scale and low prices). Of course, Wal-Mart is interested in other metrics beyond profit (e.g. shareholder wealth, market share), but, as indicated above, profitability and margins are of key concern to retailers.

Wal-Mart: strategic concept
Wal-Mart is the world's largest retailer with approximately 6,500 stores worldwide (Business 2006). The main feature of Wal-Mart's business model is to cut costs (continuously) and therefore offer lower prices than their competitors. For instance, Wal-Mart has introduced new logistical technologies such as radio-frequency identification (RFID) to optimize its logistic processes. RFID is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. Wal-Mart tries to minimize labor costs by offering minimal health care plans. Wal-Mart pressures its suppliers to cut costs, on a continuous basis. In brief, Wal-Mart's managers are constantly seeking out ways to cut costs, and some of their successes are passed on to shoppers, in terms of lower prices.

Wal-Mart's entry into the German market
In 1997, Wal-Mart acquired over 21 stores from the supermarket chain "Wertkauf." One year later, Wal-Mart bought an additional 74 stores from the supermarket chain "Interspar". As a result, Wal-Mart became the fourth biggest operator of supermarkets in Germany (Lebensmittelzeitung 2006). The objective was to expand to 500 stores in Germany. However, the number of stores never exceeded the 95 stores that were originally purchased in the first two years. Wal-Mart's position in the marketplace deteriorated over the years. In 2002, Wal-Mart had some financial difficulties due to a low turnover which resulted in the dismissal of some employees. At the end of 2006, Wal-Mart was bought out by "Metro", one of Germany's largest retail groups. Finally, Wal-Mart left the German market with a loss of one billion dollars before tax (Manager-Magazin 2006).
Mis-steps in the german market

In general, there are six key issues related to Wal-Markt's ultimate withdrawal from Germany:
- Business (Business Model/Concept)
- Brand
- Product and Service
- Market (Market Culture/Structure)
- Cultural and communication
- Rules, politics and regulation

Please note: This example, text, or information is not part of our portfolio, and it is only intended to provide an overview and help the reader better understand this issue. We do not guarantee that the information given is accurate or complete. Since update cycles change, statistics and data can also change. We assume no responsibility for the completeness or accuracy of the information provided.
Brand in Germany
The 50 most valuable brands in Germany (in 2018) have a combined value of €263 billion, according to a new study, which places Germany's top companies ahead of their peers in the UK and France. SAP, Deutsche Telekom, BMW, Daimler and Deutsche Post lead the way, with automotive the country's standout sector.
The analysis, conducted by professional services giant WPP, assessed the 'brand value' of Germany's top companies – which is a measure of how much a brand alone contributes to corporate value, both in terms of financial value and non-quantitative components. The data found that similar to in other countries, but more so in Germany, value is concentrated at the top of the ranking, with the top two brands – SAP and Deutsche Telekom – between them accounting for 29% of the value of the leading 50 brands combined. In comparison, in the UK, the top two brands provide 21% of the top 50's value.

Unsurprisingly, the automotive industry plays a key role in Germany's brand elite. There are five leading global car brands in the German Top 50, a feat which is unmatched in any other national WPP ranking for Western economies. Combined, BMW, Mercedes-Benz, Porsche, Audi and Volkswagon account for a staggering 22% of the total €263 billion brand value. "Germany itself has become synonymous with the design and engineering of the many automotive brands it has produced. These are brands that have made consumers all over the world willingly pay a premium for "Vorsprung durch Technik", without even knowing quite what it meant," said David Roth, CEO of The Store, WPP's division that serves the retail and fast moving consumer goods sectors.

Germany is also the only European market to be led by a technology brand. With a brand value of $48.9 billion, SAP is the undisputed leader in Germany, alone accounting for 16% of the value of the entire German top 50. The company, which was founded in the early 1970s by five entrepreneurial engineers with a vision to change the way companies do business, is today a world leader in enterprise applications – 87% of Forbes Global 2000 companies are a user of SAP software.

Given the strength of Germany's reputation as a leader in the sector in finance, the relatively small influence of financial services brands is apparent – there are only a handful of banking and insurance businesses in the top 50, including Deutsche Bank and Allianz. Across the board, the top 50 is comprised of brands from 19 different categories, spanning home appliance, apparel, beer, travel, aviation, grocery and media, among others. © consultancy
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