Environmental Analysis

•S•T•E•P

Environmental Analysis

•SOCIAL–Cultural–Environmental–Demographic

•TECHNOLOGICAL–Level of Technology– Infrastructure

Environmental Analysis

•ECONOMIC–Stage of Development–Macro-Economic factors–Type of System–Resource availability– Industry factors–Competitive influences

Environmental Analysis

•POLITICAL–Legal system–Governmental factors–Regulatory influences–Long-range trends

STEP Analysis: Israel

•Social–Culturally unique–Educated / highly skilled workforce

–Relatively small population•Relatively lower salaries than comparable

STEP Analysis: Israel

•Technological–Highest Science / Engr. per capita •Focus on technology / training

–Relatively small population

STEP Analysis: Israel

•Economic–High GDP per capita–Government programs•Venture Capital•Tax incentives•Emphasis on “intangible” assets–“Intellectual”

STEP Analysis: Israel

•Political–Trade agreements–Goals of increasing exports•Govt. backed programs

Reasons to Enter Israel ?

•Skilled Workforce–Educated, Technologically competent, “World Class”

•Global Trade “Bridge”–Linkage to other markets

“Jumping Off Place”•How Illustrating issues?– Identifying reasons for entry– Identifying means of risk mitigation•Local partner

–On-site support–Personnel hiring–Legal assistance–Governmental negotiations

•U.S. Firm–Capital–R&D Technology–Training

“Jumping Off Place”•Strategy?– Initial entry with local partner–Subsequent expansion to Italy•Use as jumping off point for Central and Eastern European markets•Cultural similarity of Spain & Italy

–Later expansion into Northern France (only AFTER success!)•Jumping off point for Northern Europe & other Major EU countries.