Large corporations in crisis: Germany's economy is shaky!

Large corporations in crisis: Germany's economy is shaky!

An analysis of large companies shows that they are vulnerable despite impressive sales and employee numbers. According to a detailed report by the F.A.Z. The world of large corporations and their structures are not as stable as it seems at first glance. Crises such as wars and trade conflicts increasingly threaten exports, especially for export-oriented German industry.

International business is crucial for Germany, but the environment for companies is becoming increasingly harsh. Innovative competitors, primarily from China, are increasing the pressure on large German companies. A look back at the first ranking of large German companies from 1959 illustrates that the collapse of large companies in the past had profound economic consequences, but also led to new ways of adapting.

The importance of resilience

Invulnerability through size is increasingly being questioned. Large companies such as Volkswagen, Mercedes and BMW in particular are facing challenges that can affect not only themselves but also their small suppliers. The need for resilient adaptability becomes clear, as large companies often do not have the required flexibility and speed of reaction.

In addition, a report from the Economic service that in recent years, crises such as pandemics and trade disruptions have exposed the vulnerability of global value chains. These events speak to the urgent need to rethink dependencies and implement risk management strategies.

Challenges and strategies

Geopolitical tensions and pressure to achieve a carbon-neutral economy are exacerbating risks for companies. German industry in particular is heavily dependent on imports of critical raw materials, which makes it vulnerable to disruptions. Around 46% of EU companies report significant logistical challenges and more than half rely on purpose-built products, making it difficult to diversify supply chains.

A key finding from the current reports is that competitiveness can be secured in the long term by adopting four key levers to increase resilience: robustness, agility, visibility and a continuous learning process. These concepts include, but are not limited to, diversifying suppliers and investing in well-known data management systems that can help better understand supply chain dynamics.

Amid these complex challenges, supporting “too relevant to fail” companies must also be considered to mitigate systemic shocks in supply networks. The need for increased transparency and optimized risk analyzes will be of central importance for the political and business discussion.