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Transcript of Israel
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Israel
Presentation by:Abhishek Das (02)Khitish Kakar (28)Ruchir Shukla (42)
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Israel: Evolution as a Nation
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Israel: Evolution as a Nation
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Israel: Culture
• Heterogeneous
• Low – Context (Straight talk)
• Monochronic Time
• Low Power distance
• Individualism
• High uncertainty avoidance
• Gender Equality
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Implications for MNE in Israel
Pride in culture and history Do not openly criticize Show interest in their culture & history
Relationship oriented Build relationships in business
Business commitment Business deals tend be detailed and contracts are strictly adhered to. Less scope of later change
Gifts & Bribes Advisable to not offer gifts in initial business meets
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Implications for MNE in Israel
Pace of Negotiation Expect deals to be slow
Decision Making: Individualistic Individual decision makers are appreciatedPersonal feeling and opinion are considered rather than set rules only
Group membership : Acquired Appreciate education and achievement of people
Gender equality Not much problem for visiting businesswoman
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Demographics
Population 74,73,052 Jerusalem 7,47600 Urban population 92%
Age Distribution
Pop. growth rate 1.58% Birth rate 19.24 births/1000
populationDeath rate 5.47 deaths/1000
population
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Demographics
Religions Total pop. 7.5 millionJewish 5.7 million
Languages Hebrew (official),
Arabic, English
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Demographics
Sex ratio 1.05 male/female
Infant mortality rate 4.12 deaths/1000 live births
Life expectancy at birth 80.96 yrs
Literacy Rate 97.1%
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Israeli system of government
• Parliamentary Democracy
• 11 Basic Laws
• Israel does not have a written constitution.
• The Legislative Branch: Knesset is Israel's unicameral legislature and is seated in Jerusalem.
-It has 12 standing committees. -Knesset elects the prime minister and also
holds power to remove the president.
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Political Risks
• Since its establishment in 1948, Israel has been in almost constant conflict with its Arab neighbors.
• These conflicts, particularly the conflict over the Gaza Strip and the West Bank, have had a negative impact on the country’s stability and its international relations.
• This social unrest has brought about a decline in investor confidence in much of the region.
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Legal System
Israel's legal system combines • English common law• Civil law• Jewish law
Marriage & divorce are under the jurisdiction of the religious courts: Jewish, Muslim, Druze, and Christian
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Jewish/Israeli Influence on US
• Jews & the Jewish religion has a great influence on US
• It’s often said that the fundamentals of US are Jewish and not Christian
• American Israel Public Affairs Committee (AIPAC) is an important influence
• A large number of Jews hold important offices in the US
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Major Economic Indicators
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World Vs Israel GDP (Growth %)
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GCI Rankings
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Economic Sectors
• Hi–Tech Industries: Highly qualified labor
force, scientific institutes, and R&D centers.
• Diamond Industry: Multi-faceted, world leader in both cutting-edge technologies and craftsmanship.
• Agriculture: Intensive system of production, close cooperation between researchers, farmers, and agriculture-related industries.
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Economic Sectors
• Construction: Residential building accounts for 84 percent of total construction output, necessary to meet the demands of renewed immigration.
• Transport & Communications: Contributes 7 percent to GDP and employs 5 percent of the country's labor force.
• Tourism: Tourists attracted by Israel's geographical diversity, its archeological and religious sites.
Foreign currency added value of 85 percent export and employs some 80,000 persons.
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ISRAEL: Exports
Export of Commodities: Exports to Regions:
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ISRAEL: Imports
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Major Highlights
• Market Economy: Technologically advanced Market Economy
• Silicon Wadi: High concentration of High-Tech industries & strong venture capitalist industry
• Berkshire Hathaway, Intel & Microsoft
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ISRAEL’S FREE TRADE AGREEMENT
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International Organization Membership
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Some MNE’S in Israel
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ISRAEL: High IPR Compliance
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ISRAEL'S COMPETITIVE EDGE
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Israel : Relative Advantage
Hi Tech Industries• Relative advantage : No. 2 after Ireland. • Grew by 100 % between 1995-2000• Skilled workforce Highest % of population as
researchers and scientists in the world• Capital Large VC and government investments in
Hi Tech industry since late 80’s• Investment as % of GDP in R&D 4.7 %, highest in
the world
• 50 % Israeli exports are Hi Tech Products• Microsoft & Intel opened their first outside R&D
centres in Israel
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Israel : Relative Advantage
Chemical Industry• Chiefly due to pharmaceutical companies• Teva, world’s leading pharma company, $16
bn annual sales
Reason• Favorable government policies for Pharma
companies• Relative abundance in minerals• High capital availability• Skilled workforce: researchers, scientists
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Recent Achievements
• Year 2000 – Zero inflation rate.• Year 2009 – Balance of Trade deficit less
than 1% of total trade • Industrial exports grew almost six-fold in
the past two decades, from $6 billion in 1985 to $34.6 billion in 2009.
• Foreign debt was eliminated, from being 1.6 times the GDP in 1985 down to zero by 2003 with Israel since then becoming a creditor .
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Recent Achievements
• With a GDP per capita of $29,500 (PPP) in 2009, it ranked 24 out of 34 OECD members
• Ranked higher - 15 out of 169 countries (in 2010) - on the United Nations Human Development Index
• Growth of exports from $175 million in 1987 and $16.9 billion in 2009
• Achieved positive growth (0.7 percent) in 2009(Recession)
• Country's civilian labor force, from 1.65 million in 1990 to 3 million in 2010
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Challenges for Israel
• Maintaining national security
• Absorbing large numbers of immigrants
• Establishing a modern economic infrastructure
• Providing a high level of public services (health, education, welfare, etc.)
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Country’s Future Transformations
• First is a political settlement of the Israeli-Palestinian conflict
• The second transformation needed is in the field of education
• The third transformation needed: a long-term investment policy that centers not only on high-tech and finance, and not only in the Tel Aviv area
• Israel’s most significant failure is the poor public image which she portrays in the international community
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ATTRACTIVENESS OF ISRAEL
Maximize Commitment
Collaborations
Individualized Strategies
Individualized Strategies
Minimize Commitment
HIGH
MEDIUM
LOW
HIGH MEDIUM LOW
Cou
ntr
y
Att
ract
iven
ess
Competitive Strength
GE Country Attractiveness Matrix
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