Both Britain and Germany were dominant powers, industrially and economically. Before the 1870's both Britain and Germany were on good terms. They fought France, both of their royal families were closely related, their relationship was on good terms.
There are three main reasons as to why their relationship became strained. Firstly was economically, in 1870 Britain was the dominant industrial power in Europe and in the world. By the 1900's Germany had caught up with them, both of the governments had noticed this situation and wanted to protect both of their positions. Britain became anxious as Germany had become very keen and caught up with her. However the British Empire gave Britain the edge.
Another reason why their relationship was strained was imperial rivalry. The British Empire had been built up over 300 years; it took up 25% of the globe. It was the biggest empire; the phrase 'sun never set on the empire' gives you the idea of how big the empire really was. However the German empire was the complete opposite to the British Empire. It was small and insignificant and only in 1870 did it begin to develop overseas. Colonies were vital to an empire because economically it provided raw materials and resources such as metals, minerals, rubber etc. It could import food and export goods to sell and make more money so it was good for trade. It was good militarily as it could reserve man power for war. Lastly it was a political advantage as it was a status symbol and it showed power.