Strategic Management in the German Brewing Industry: Are There Still Differences Between East and West

Zusammenfassung

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Despite the reunification of Germany more than 15 years ago, substantial differences remain between the regions that once comprised the market-driven West and the socialist, centrally planned East. Although today's Eastern German economy is less competitive than the Western German economy, there are important exceptions to the rule. One exception is the food and beverage industry in which Eastern German companies have gained strong competitive positions. Did they reach this position by mimicking Western German blueprints, or did they go their own way? These questions are addressed in this paper by referring to a large-scale empirical study in the German brewing sector.

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Auszug

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Strategic Management in the German Brewing Industry: Are There Still Differences Between East and West

1. Introduction

In its transition from a centrally-planned socialistic to a market-driven economy, Eastern Germany is in a very special position compared to other transition countries in Central and Eastern Europe. This is because, first, the economy of the German Democratic Republic was fully absorbed by the economic system of the Federal Republic of Germany and, second, the transition process from a command to a market economy took place in a very short period of time (Clarke-Hill/Robinson 1996).

Within the CIS, Russia has been the leading country in terms of their share of the private sector in a country's economy from the very beginning of the transition period. Although the reunification of Germany took place more than 15 years ago, there are still fundamental disparities between the western and the eastern parts of the country. Macroeconomic parameters such as the unemployment rates and per capita gross national product still vary remarkably between the two regions. In general, the productivity in Eastern Germany lags behind that of Western Germany (DIW Berlin/IAB/IfW/IWH/ZEW 2003), but at the same time foreign-owned and Western German subsidiaries achieve 40 percent and 12 percent respectively higher productivity than the German average (Industrial Investment Council 2005; Günther/Gebhardt 2005).

Earlier research on the economic structure of Eastern Germany was based predominantly on the social sciences and focused mainly on the transition process and on industrial relations in particular. (Cf., for example, Breu 1996; Pohlmann/Gergs 1996; Steinhöfel 1996; Dyck 1997; Gergs 2002; Lohr 2003) Other authors, such as Günther and Gebhardt (2005), analysed the role of foreign and Western German investors in the technological renewal of Eastern Germany. Little research, however, has been carried out with regard to the strategic management of Eastern German companies. In particular, the food and beverage industries have been neglected in this context although these sectors are, compared to other sectors of the Eastern German economy, more successful when measured in terms of such factors as growth rates and market shares and, hence, could represent a benchmark for other sectors of the economy. Bearing in mind that during the first period of the reunification process the food and beverage industries in the former German Democratic Republic were anything but competitive in a market economy (Schwartau 1990), this is a r...

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