Succeeding in a Transition Economy

Survival Strategies in Eastern Germany

By Renate Åkerhielm, Erik A. Borg, Frank-Michael Kirsch

How do companies survive when the basic conditions for their existence can change overnight? The question has a newly revived and essential actuality as a result of the recent world economic crisis. The fall of the Berlin Wall on November 9, 1989, and the launch of the German Economic, Monetary, and Social Union on July 1, 1990, radically changed economic conditions for more than 8,000 previously state-, municipal-, or party-owned companies in the former German Democratic Republic (GDR). Overnight, most East German manufacturing plants had been devalued, after having been able to survive for decades thanks to a protected market in the East. For East German companies, the monetary union meant "the introduction of a social market economy without a market," as described by Birgit Breuel, president of the world's largest holding company, the Treuhand agency. In a move without historical precedent and under considerable political pressure, Treuhand privatized 15,000 companies. Many of these companies did not survive. But for several hundred medium-sized and small businesses, the market economy provided a real upturn, and, for about one hundred companies, it opened doors to previously unimaginable opportunities. Today, several of these firms are brand or market leaders in Germany, or even globally. How did these companies succeed? For an answer, this book visits 15 of these companies in various industries and evaluates the strategies they used to survive or, more importantly, become dominant players. Succeeding in a Transition Economy examines what they did differently from the companies that failed.

253 pages

Publication Date: 12/1/2010
Format: Paper
ISBN: 9788773079805