Tyler Meyer
Badm 407
Dr Looney
We are living in a world that is full of diversities. There is diversity in the way people relate, diversity in culture, diversity in environmental issues, diversity in policy and political environments and even diversity in natural surroundings of different regions. Diversity in culture is one of the most interesting phenomenona that exist concerning people from different regions. The further people are from each other the more diverse their cultures can be. The farthest the countries or regions are from each the more different their cultures will be. Even businesses that are considering transferring their operations into foreign countries must realize that they will have to deal with great variances in different countries. Different countries present different business and market environments and consequently different business risks. The determinants of how attractive a country may be for investments includes factors such as political stability of that particular country, the status of businesses competition and the regulations governing competition, level of technology, the availability of market and finally the cost of entering and becoming sustainable in that market. This report explores and outlines the culture, businesses environment dynamics, the socio-political influences, and the impacts they have on the businesses environment in the country of Greece. The analysis bases its findings on parameters such as geographical location, demographics, political stability, attractiveness to investors, types of industries that can attract investments and the general people’s culture in the country.
Greece is located in the continent of Europe and specifically Southeast Europe and covers an estimated area of about 309,050 KM² within the Balkan Peninsula. Greece is one of the countries that border the Mediterranean Sea. It is specifically bordering the Mediterranean Sea to the Northeast. The county also borders countries such as Albania, Macedonia, and Bulgaria to the south and Turkey to the North West. The latitude and the longitude in which the country of Greece lies are approximately 35* N to 42* N and 19* E to 29* 38’ E respectively. The country is made up of a mainland, 3000 islands, and the Aegean basin and which exhibits three distinct climate types namely the Mediterranean, the Alpine, and the Mid-European Temperate climate. Greece is quite a mountainous country and is ranked amongst the most mountainous countries in continental Europe. The land is also endowed with several natural geographical features such as valleys, water bodies such as lakes and rivers and water features such as gulfs and bays that have made Greece a tourists spot for ages past. Greece experiences, adequate supply of sunshine and rainfall that makes it an agriculturally productive country with fertile soil that has greatly contributed to the outstanding viticulture (grape farming) practice. The Natural resources found abundantly in Greece include, bauxite, lignite which is a form of coal, the ore form of magnesium known as magnesite, crude petroleum, marble, and ores of lead, nickel and zinc. Because of its vast water bodies, the country also has great potential for hydropower and the flourishing of farming practices such as those engaging in fruits, vegetable, tobacco, and cotton.
The greatest industries that support the Greek economy are the agriculture and tourism industries. The cultivation of grapes in Greece and value addition through the manufacturing of wine has become a renowned identity of the Greek people and has given Greece a global footage in the wine making industry. Only about 10% of the total volume of wine made in Greece is sold in other countries, otherwise the rest is consumed within the Greek market. Similarly, Greece is one of the countries that experience the greatest influx of tourists in the continent of Europe with over 16 million tourists recorded almost every year. Of requisite for any global company that may consider entering the Greek wine industry is that, the Greek wine consumer is a wine aficionado, and is thus well educated about wine and wine quality and as a result will trust their domestic brands, which have been hailed as being of very high quality. The wine industry is a significant part of the Greek people and as of the year 2008, the Greek wine market was forecasted to reach volumes of around 30,379`0009L. Applying the Porter’s National Diamond Analysis developed by Michael Porter, the Greek wine industry exhibit strong elements of demand conditions, factor conditions, related, and supporting industries and firm strategy, structure and rivalry. The Porter’s National Diamond Analysis correlates the global competitiveness of the market of a country much like that of a company . For example when it comes to the exhibition of the , related, and supporting industries factor, The wine industry has also received great support and sustainability ability from the Greek tourism industry, with tourists comprising of a significant portion of the Greek wine market. On demand conditions, the domestic market plays a great role in the sustainability of the Greek wine industry in which domestic brand loyalty and love grants the domestic wine brands up to 90% of the total wine sales in Greece. The utmost loyal of the Greeks to their native wine is exhibited by the fact that they will readily pay for an expensive Greek wine than go for a cheaper alternative that is imported. This loyalty has also greatly contributed to the stabilization of the Greek industry in the midst of the financial crisis the country has faced in the recent times.
Over the past to the present, Greece has experience both dictatorship and democratic leadership in her history. Between the years 1967 and 1974, Greece experience a stretch of dictatorial rule that collapsed in the year 1974 and was finally replaced by a democratic political rule and thus the current Greek political environment is significantly stable with a democratic form of political leadership . One of the greatest political parties of all time in Greece that has caught great attention is the power of the socialist (PASOK) party. The party came into power in the year 1981 for which it held on to power over a greater part of the nineteen eighties and nineteen nineties years with what is considered as dismal performance in improvement of the economy and few jobs creation for the youth leading to a high level of youth unemployment. The high level of youth unemployment prompted the occurrence of the 2008 riots in Athens, which is the capital city of Greece. Other significant political parties in the Greece political arena include the New Democracy (ND) Party, The communist (KKE) party amongst other small political parties. The political system in Greece is repeatedly marked with a very conspicuous display of patronage and clientele networks over the years, which has drawn great analysis and studies from different scholars of politics and political parties’ behaviors.
The economy of Greece features the presence of laws that promote foreign direct investments through the availing of investment incentives for investors. For instance, Greece laws favors the domestic wine over other imported brands and other alcoholic beverages available in the Greek market and thus those who may wish to invest in domestic Greek companies can harness these advantages.The businesses regulatory framework in Greece is very diverse and is mostly industry related. For example, the kinds of legal regulations encompassing the wine industry may slightly vary from those governing other industries such tourism. A keen outlook at the regulations on the Greek wine industry reveals that, the economic policy levies zero excise tax on Greek wine. For this reason, the Greek wine is purchased at a consumer friendly prices compared to other alcoholic beverages that fetch high taxes making it the most consumer preferred alcoholic beverage. Other alcoholic beverages like spirits attract excise taxes with foreign spirits attracting the highest excise duties making spirits to be generally expensive. While imported spirits are double taxed, the local spirits are also taxed but only half as much as the imported spirits . Nevertheless, the Greek 1952 post-war investment development policy was meant to align the country towards investments attraction and capital generation, attraction of direct foreign investors, advanced product development facilitating the development of industries across the whole of Greece and not just in urban areas. The government has also set investment incentives for persons wishing to invest in Greece especially those interested in direct foreign investment in some of its industries. The fact that Greece is a member of the European Union, its investment policies are also aligned to the attractiveness of the European Union block investment opportunities.
Being a part of the European Union member countries, Greece does not suffer from the implication of devalued currency of offering cheap exports irrespective of public financial crisis. This is because the euro is the common currency of this region. Trouble in one country does not affect the value of a common currency being shared by other member countries of a common economic region. This prevents loss of investment that would have otherwise resulted if products were sold at a lower price than they had initially been projected. With a stable currency, businesses in the member countries are stable. With the European Union membership, some of the Greek wine producers have continued to become beneficiaries of agri-business project funding from the European Union. The European Union has also continued to provide production subsidies for its members that have encompassed areas such as farming, research, asset finance, construction, and marketing.
Since foreign direct Investments normally encompasses huge investments, the risks involved are also usually high and may result to huge losses for investors if such investments are injected in economically and financially unstable countries. In the case of Greece, there was a public outcry experienced in the year 2008 as a result of the outstanding huge public that almost led the country to a brink of bankraptcy. Further more, the fiscal troubles escalated more in the year 2013 when the public debt was recorded to an all time high of 175.7% against the country’s Gross domestic Product (GDP). Since then, the economy has been on the steps of recovery despite the debt crisis. Of importance, the debt cisis has not affected the tourism industry which has remained robust in the nidst of these challenges. The fact that the tourism industry which is a complimentary indutry of the wine industry has remanied on its feet, has also helped to stabalize the wine industry as a result.
Availability of avorable business environment is important for any businesses that is envisioning to conduct business in another country. Infrastructure, labour and reduced costs of doing businesse are paramount. For instance, Greece as a country has a well established infrastructure systems and rtoad networks. The wine industry and the tourism players are well acquainted with their trade and thus readliy offers a workforce that can gurantees smooth business opertions as far as local labour is concerned. For those interested in the wine processing indutry, there is plenty supply in grapes from the vast viticultue farms within Greece. The availability of these raw materials also cuts the logistical costs associated with importation and duty clearing of raw materials. Consequently this makes the domestic Greek wine industry very attarctve because of the diminished opereations costs. Considering that most of the wine in volume produced in Greece is consumed within the Greek market, this also reduces the logistical cost associated wit exportation and thus guarantee high income magines than in instances where countries greatly depend on international markets. Investors can consider buying of stakes in local companies or a total buyout of the local companies for an eased operation transistion.
In general, Greece is one country that readily welcomes investors. The leadrship there have ensured that the environment for such investements have benn made conducive and as profitable as possible. Be it investement in tourism sub-sectors like hotels and retaurants, camping or hiking and holiday activities or even the wine industry, Greece has it all. The country is just awaiting any interested investors to make a move.
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