competitive advantage in israel factor conditions & government high education level motivated...
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COMPETITIVE ADVANTAGE IN ISRAEL
Factor Conditions & Government• High Education Level• Motivated Labor Force• Well Developed Infrastructure • Knowledge• Capital Resources• Lack of Transparency• Incentives for Investment
Demand Conditions• Public Sector Dominance • Concentration in Private Sector• Decreasing Role of Government
Strategy, Structure & Rivalry
• High Exposure to Competition
• Targeting Export markets
• Good Work Relations
• Planning Short Term
Related & Supporting Industries
• Micro Electronics
• Industries Related & Supporting Agriculture
• Defense
COMPETITIVE ADVANTAGE IN EGYPT Factor Conditions & Government• Physical Resources• Strategic Location• Moderate Climate• Low Cost labor Force• Shortage of Skilled Labor• Weak Infrastructure Services• Bureaucracy• Weak Financial Sector
Demand Conditions• Lack of Sufficient Market Information • Weak Marketing & Distribution
Strategy, Structure & Rivalry
• Vertical Integration
• State Owned Enterprises
• Increasing Private Sector Participation
Related & Supporting Industries
• Textiles
• Household Equipment
• Food Processing
• Tourism
• Engineering Construction
COMPETITIVE ADVANTAGE IN JORDAN
Factor Conditions & Government• Few Natural Resources• Shortage in Skilled Labor• Young Population• Well Developed Transportation • Good Banking System• Stabilization Policy
Demand Conditions• Lack of Sophistication• Concentration, 80% Amman/Jordan
Valley
Strategy, Structure & Rivalry
• Monopolization in Key Sectors
• State Owned Companies
• Gradual Privatization
• Support to Export/Investment
Related & Supporting Industries
• Potential Cluster in Phosphates
• Limited Specialized Manufacturing
BASIC MODELS OF DEVELOPMENT
The Free Economic Zone (FEZ) is “a geographic economic area in which goods enter duty free for processing and export, and in which investors are offered a variety of incentives (WEPZA)”.
Industrial District: Firms consciously network with each other and active trade associations provide shared infrastructure. Firms merge with Community
Porter’s cluster is a “geographic concentration of an array of linked, competitive firms that either have close buy-sell relationships,
Emilia-Romagna. Some I ndicators
•Population 4.037.095
•Total labour force 53,0%
•Total unemployment rate 3,8%
•Female labour force 44,3%
•Female unemployment rate 5,3%
•GDP per head (€) 21.132
•Employees in themanufacturing industry 645,648
•Manufacturing local units 94.817
•Firms with less than 50 empl. 98%
EmiliaEmilia--Romagna: industrial districtsRomagna: industrial districts
PIACENZA
RIMINI
PARMA
REGGIO EMILIA
MODENA
FORLI ’
BOLOGNA
FERRARA
RAVENNA
Machine tools
Farm machinery
Food processing
Textile-clothing industry
Upholstered furniture
Packaging machines
Ceramic products and machines for
ceramic industry
Shoes
Biomedical products
Wood – processing machines
2
Emilia-Romagna at a glance
• Area: 22,120 km2
• Population: 4,000,000• Per capita GP: 25,733 €• Municipalities: 341• Enterprises: 415.000
•Cooperatives make up over 40% of the GDP of the ER region
•In Bologna two out of three citizens are members of a cooperative
•In Bologna over 85% of the city's social services are provided by social co-ops
•Per capita income in ER has risen from 17th to second among Italy's 20 regions
•Per capital income is 50% higher than the national average
•Of the European regions, ER is number 11 of 122 regions in terms of GNP per inhabitant
•Bologna has the highest disposable income of any of Italy's 103 provinces
•Bologna has the highest per capita expenditure on the arts of any city in Italy
•The unemployment rate of 4% is virtually full employment
•70% of Bologna's households have home ownership
ERVETERVET
The ERVET SystemThe ERVET System
I nnovation I nnovation -- Technology Transfer Technology Transfer
ASTER
ConstructionConstruction
QUASCO
CENTRO CERAMI CO
FashionFashionCITER
CERCAL
Quality Quality -- Technology Technology -- EngineeringEngineering
CERMETDEMOCENTER
CESMA
The new Players SystemThe new Players System
ERVET
TA and support to PA and Local
Authorities for Promotion and
Improvement of the regional territory
ASTER
Co-ordination, financing, managing
the Network forApplied Research and
TT
Research and TT
Laboratories
Innovation Centres
Models of Industrial Development
Community Industry Synergy
Clustering Specialization Process
Free Economic Zone
Industrial District
Porter’s Cluster
Hybrid Industrial District Cluster
Strong
Weak Strong
Hybrid FEZ-C
Hybrid ID-FEZ
COMPETITIVE ADVANTAGE IN THE MIDDLE EAST
Factor Conditions & Government• Egypt lowest labor cost• PA highest labor cost• Jordanian universities not adapted to
needs.• Israeli high skilled labor,• Knowledge sharing (QIZ)
Demand Conditions• Mutual impact of demand sophistication (irrigation)• Economies of scale for Israeli
producers• Arab software
Strategy, Structure & Rivalry
• Competition between
Jordan, Egypt and PA on
Israeli contracts
• Israeli new specializations,
product differentiation
Related & Supporting Industries
• Textiles (Egyptian upper level)
• Mining ,Chemicals(Phosphates)
• Tourism
SOCIAL AND CULTURAL ENVIRONMENTS
Culture = Way of Living Culture universals: George P. Murdock, common
denominator of culture: global not uniform Athletic sports, body adornment, cooking, rituals, religion, family feasting, medicine, meal time.
Edward T. Hall: Low context culture (paper work, US), High context culture (persons’ value, Japan-Saudi Arabia)
CONTEXT ORIENTATION IN MAJOR CULTURES
Japan
China
Arab
Germany
Scandinavia
United States
High Context
Low Context
THE CULTURE ENVIRONM ENT
A rtifac tsh earm sm e ll,tas te , tou ch
V a lu esR u les
L azy
V a lu e
H u m anN atu re
R ig h ts
O b lig a tion s
R e la tion sh ip
D om in a te
S u b m iss ive
E n viron m en t
C rea te P lan
R eac t
A c tivity
O b jec tive
S oc ia l
Tru th
A ssu m p tion sR oots
E S S E N C E O FTH E C U L TU R E
IMPACTS OF CULTURE ON MANAGERIAL BEHAVIORS
Culture Context Explicit Implicit
Negotiations Planning Non Task Time
Time, Location Short Formal Long Informal
ParticipantsSame Level LargeRelevant level Small
Decision Making Position Consensus
HOFSTEDE’S CULTURAL TYPOLOGY
Power
Distance
Equal
IndividualMasculinityUncertainty
Power
Distance
Unequal
CollectivistFemininityPredictability
HOFSTEDE INDEX
Power Distance
IndividualismMasculinityUncertainty
Avoidance
Germany 35 67 66 65U.K. 35 89 66 35France 68 71 43 86Japan 54 46 95 92
USA 40 91 62 46Arab Countries
80 38 53 68
Israel 13 54 47 81
EMERGING CULTURAL PROFILES
Village Market(Anglo-Nordic)
Decentralized, Entrepreneurial,
Flexibility, Delegation, Output Control
Family (Asian)
Centralized, Paternalistic, Loyalty, Personal relations
Well-oiled Machine (German)
Decentralized, Narrow Control, Compartmentalized, Routines & Rules
“Pyramid of People”(Latin)
Centralized, Elitist, Less Delegation, Input Control
HighLow
``
HighHierarchy
Uncertainty AvoidanceLow(Formalization)
HOFSTEDE’S MAPS
Uncertainty AvoidanceLow
High
Power Distance Small Large
DEN
SEW IRE GBRNZL NOR USA CAN
SIN HOK IND MAL PHI
AUT SWI FIN GER, ISR
IRA THA PAK
JAP SPA KOR
TUR FRA MEX POR
CULTURE & BUSINESS PROCESSESPolicy & Procedures:US, low u.a., high formal reportingUK, low u.a., detailed jobs descriptionGermany, high u.a., well internalized Systems & Controls:French = control(hierarchy), British=coordinate)US-UK reporting proceduresFrench: hiring elites German operational planning Planning strategic(UK)
Information & Communication:
French: Compartmentalized
Sweden: Communication open informal, transparency
Decision Making:
Participation in decision making (Sweden, Germany-
less hierarchy)
PDG in France –Italy (Zanussi)
CUSTOMS IMPACTS
TAX
LOCAL CUSTOMER
PURSHASING
POWER
LOCAL
MANUFACTURER
PROTECTION
INCOME
ALLOCATION
CHANGE
IMPACT OF CUSTOMS UNION AGREEMENTS
ProductLocal Country
Foreign Partner
Country
Foreign Third Country
Trade Flow
Results
A Cost
Prior CU
After CU
20
20
20
14
21
14
12
18
18
Import Source
Change
Trade Diversion
B Cost
Prior CU
After CU
17
17
17
12
18
12
14
21
21
Import
Trade Creation
IN T ER N AT IO N AL EC O N O MIC IN T EG R AT IO N
F R E E TR A D E A G R E E M E N TA b o lit ion o f Tariifs & Q u ota
M O N E TA R Y U N IO NC om m on M on etary
P o lic y
E C O N O M IC U N IO NH arm on iza tion o fE con om ic P o licy
C O M M O N M A R K E TR em ova l o f R es tric t ion son F ac to rs M ovem en ts
C U S TO M U N IO NA b o lit ion o f Tariffs & Q u otas
C om m on E xte rn a l Tariffs
THE EUROPEAN UNION MILSTONES
• 1945 Two Super Powers
• 1948-52 Marshall Plan
• 1951 Schuman Declaration
• 1951 Paris Agreement ECSC
• 1957 Roma Agreement EC
• 1968 Custom Union
• 1985 Cockfield’s White Paper
• 1987 Single European Act
• 1991 Maastricht Treaty
• 1992 SEA Implementation
• 1997 Amsterdam Treaty
• 1999 Monetary Union
• 1999 Nice Treaty
• 2002 Euro
ENLARGEMENT OF THE EUROPEAN UNION
1956: Germany, France, Benelux, Italy 1971: UK, Ireland, Denmark 1981: Greece 1986: Spain, Portugal 1995: Sweden, Austria, Finland 2004: Poland, Hungary, Tchek Republic,
Cyprus, Slovakia, Malta, Slovenia, Lithuania, Latvia
THE INSTITUTION OF THE EUROPEAN UNION
THE COUNCIL• Commission Proposals
• Legislative Power
• Co-decision with the Parliament
• Foreign & Security
• Ministers
• The European Council
THE COMMISSION• Executive Power
• Proposes Amendments
• Manages Policies
• Controls Policies Implementation
• President(Prodi) + 20 Ministers, 24 DG
From 1 November 2004, a qualified majority will be reached if the following two conditions are met:
1. if a majority of member states approve in some cases a two-thirds majority);a minimum of 232 votes is cast in favour of the proposal, i.e. 72.3 % of the total (roughly the same share as under the previous system).
2. In addition, a member state may ask for confirmation that the votes in favour represent at least 62% of the total population of the Union. If this is found not to be the case, the decision will not be adopted.
Distribution of votes for each member state (from 01/11/2004)
Germany, France, Italy, United Kingdom 29
Spain, Poland 27
Netherlands 13
Belgium, Czech Republic, Greece, Hungary, 12 Portugal
Austria, Sweden 10
Denmark, Ireland, Lithuania, Slovakia, Finland 7
Cyprus, Estonia, Latvia, Luxembourg, Slovenia 4
Malta 3
TOTAL 321
POLICIES AND DGS
• Agriculture & Rural Development
• Competition• Economic & Financial
Affairs• Education & Culture• Employment, Social Affairs
and Equal Opportunities• Enterprise and Industry• Environment• Fisheries and Maritime
Affairs
• Health & Consumer Protection
• Information Society & Media
• Internal Market & Services
• Joint Research Centre
• Justice Freedom & Security
• Regional Policy
• Research
• Taxation & Custom Union
•Transport & Energy
• External Relations
Development, Enlargement, EuroAid, External Relations Humanitarian Aid ofice, Trade
• General Services European anti fraud office,
Eurostat, Press & Communication, Publication Office, Secretariat General
• Internal Services
Budget, Bureau of European Policy Advisers, Informatics, Infrastructure & Logistics,, Internal Audit service, Interpretation, Legal service, Personnel and Administration,
Translation,
Vice President
Institutional Relations and
Communication Strategy
Vice President
Enterprise and Industry
Vice President
Transport
Vice President
Administrative Affairs, Audit and
Anti-Fraud
Vice President
Justice, Freedom and Security
Information Society
and Media
THE PARLIAMENT• Legislative Power co
decision with the Council
• Assent Procedure(int.)
• Adoption of the Budget
• Approval of the Commission
• Participation to the European Council
THE COURT OF JUSTICE
• 13 Judges for 6 years
• Request from Private, Country, Firm
• Unique Legal Power
POLITICAL GROUPS IN THE E.U. PARLIAMENT
-DEPPE Group of the European People's Party and European Democrats
PSE Group of the Party of European Socialists
ELDR Group of the European Liberal, Democrat and Reform Party
Verts / ALE
Group of the Greens/European Free Alliance
GUE NGL
Confederal Group of the European United Left/Nordic Green Left
UEN Union for Europe of the Nations Group
EDD Group for a Europe of Democracies and Diversities
NI Non Attached
THE ECONOMIC &
SOCIAL COMMITTEE• Representative of Economic
Forces
• 222 Representatives
• Sectorial Commissions
• Social & Economic Commissions
THE COMMITTEE
OF REGIONS• Consultative Power
• 222 members
• Trans European Network, public, Health, Education, Economic Cohesion
Court of JusticePresident
(6 chambers each comprising 3 or 5 juges)
•Action for failure Treaty obligations(Commission against a Member State or Member State against another Member State)•Actions for annulment(judicial review of the legality of Community acts) •Actions for failure to act(against the Parliament, Council or Commission •Actions for damages(against Community institutions or servants) •Preliminary rulings on the interpretation or validity of Communitylaw (references from national courts) •Appeals against judgments of the Court of First Instance