A recent post on LinkedIn prompted me to ask ChatGPT: Why buy at higher prices in Germany when it's cheaper elsewhere?
And this question is not coming from just anywhere, because rising prices for electricity are acutely threatening the competitiveness of German industry. BASF prefers to invest in China or China buys German companies on, or recently the USA also bought Viessman (whose heat pump division is the strategic future of the company, since gas heating is soon to be a thing of the past).
In the post then came the question, why should you still buy in Germany, when you can buy cheaper elsewhere as a foreign company? And many will know a test here, namely the "sell me the pencil" test, intended for prospective salesmen and salesman, this test is perfect to ask ChatGPT why a foreign company should buy in Germany, if the cost of German products are higher than compared to other countries with lower labor and electricity costs.
And here is ChatGPT (GPT-3.5) answer
Sell me a pencil which was produced in Germany. I am a company in the USA and I would like to know why I should buy a pencil produced in Germany and accept a higher cost.
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Absolutely, I totally understand that as a company you are looking for the best products for your business. I have a pencil for you here that is made in Germany and has some advantages that are worth considering.
First of all, many customers, especially in the U.S., want to, High quality products buy. The pencil I offer you is made in Germany, a country with a renowned reputation for the production of high quality goods. You can be sure that this pencil is made of the best materials and precisely crafted to provide excellent writing and drawing results.
Another advantage of this pencil is its Environmental friendliness. More and more companies today place great emphasis on sustainability and want to ensure that their products are manufactured in an environmentally friendly way. This pencil is made with the environment in mind, which means that it is made from materials that are Biodegradable are, and that at its Production so little energy as possible is consumed.
After all, a pencil made in Germany can be a special selling point for your company be. Many customers appreciate it when companies offer products from different countries and thus stand out from other companies. If you have this pencil in your assortment, you can show your customers that you care about the quality of your products and the diversity of your offer.
Of course, it is true that a pencil made in Germany may be a bit more expensive than a pencil made in other countries. But if you consider the advantages I have mentioned to you, I think you will agree that the higher price is reasonable. When you buy a pencil that is made in Germany, you can be sure that you will get a high quality, environmentally friendly and unique product that your customers will appreciate.
So if we were to work with what ChatGPT suggests, the core arguments for buying in Germany are the high quality and reputation for producing high quality goods, as well as environmental friendliness. The argument that the pencil was made in Germany, just to say what a diversified company you have, will probably not interest the customer of the foreign company.
The problem here is, these two core arguments of high quality and environmental friendliness are slowly but surely falling by the wayside for the following reasons:
- Skilled worker and labor shortage: Due to the reversal of the population pyramid, Germany is no longer able to raise enough people to fill the jobs that become available and need to be filled, consequently companies have a manpower and therefore a performance problem. Older workers leave the company and the new generation or people who come from other countries to fill the places, the values such as thoroughness, quality, performance, punctuality, are imparted less strongly, as the generation before, consequently, the quality has been going down for several years.
- Environmental protectionGermany is in the happy position to be a country that has relatively little waste lying on the road, there are, there are countries where it looks different and where waste from production also sometimes end up in the river and companies do not have high environmental protection requirements, as in Germany. The problem is however the traffic light government conditions 2023, because due to the German special way to switch off the nuclear power, while all others build in addition or only like Poland into the nuclear power enter, Germany needs nevertheless much river, must this at present by dirty brown coal and gas to be produced, which provide now times the basic load for Germany, plus the volatile energy source wind and the Tagesabhängiger energy source sun. The whole world actually wants to cause less CO2, so can you as a company then say that you buy products in Germany, which have a higher CO2 footprint, than for example in France?
While it is easy to criticize and not have to be responsible to present solutions, I, on the other hand, present solutions:
- German quality and performance must be maintainedTo ensure that quality does not continue to decline, we need to invest heavily in communicating values again, reminding young people at school/vocational school how Germany managed to become an economically strong nation again after World War II. Values such as thoroughness, quality, performance and punctuality must once again be the focus of attention.
- Nuclear power ramp up: One should do what is obvious, ramp up nuclear power again, ramp down coal and gas and keep in reserve, because cheap electricity is a key element for industry, only after that comes the labor, where already today in industry much is automated, the electricity must be cheap so that industry remains competitive and does not see a reason to invest in other countries. Because the industry must also run at night and for this also requires a base load supply at night (I think this was around 40GW power).
I think it's clear to see what needs to be done to solve the problems so that Germany can still play a role in the international market, because there's not much room there, because other countries have more resources, better trade relations or stay out of international war affairs.