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

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

6.     Competitive Strategy

PERIODS OF DEVELOPMENT

Keegan

Porter

Stage 1

Very Low

Stage 2

Low

Stage 3

Medium

Stage 4

High

Phase I

Factor Driven

Period I

Basic

Period II

Low Cost Input

Phase II

Investment

Driven

Period III

Specialized

Phase III

Innovation

Driven

Period IV

Innovate

IDENTIFICATION PARAMETERS

PRODUCT

LEVEL

FIRM/SECTOR LEVEL

COUNTRY LEVEL

RELATIVE IMPORTANCE OF FIRM IDENTIFICATION PARAMETERS IN EACH PERIOD

0

1

2

3

Period I Period II Period III Period IV

Research

Manufacturing

Marketing

Research Manufacturing Marketing

High

Medium

Low

RELATIVE IMPORTANCE OF PRODUCT IDENTIFICATION PARAMETERS IN EACH PERIOD

0

1

2

3

Period I Period II Period III Period IV

Quality

Attributes

Design

Price

Efficiency

Quality Attributes Design Price Efficiency

High

Medium

Low

PERIOD OF DEVELOPMENT OF INPUT AGRICULTURAL BASED INDUSTRIES ACCORDING FIRM/PRODUCT INDENTIFICATION PARAMETERS

Rese

arc

h

Ma

nufa

ct

.

Ma

rketi

ng

Quali

ty

Att

ribute

s

Desi

gn

Pri

ce

Eff

icie

ncy Period III

Period IV

0

1

2

3

Period III Input ABI Period IV

High

Medium

Low

PERIOD OF DEVELOPMENT OF OUTPUT AGRICULTURAL BASED INDUSTRIES ACCORDING FIRM/PRODUCT INDENTIFICATION PARAMETERS

Re

sea

rch

Ma

nu

fact

.

Ma

rke

tin

g

Qu

ali

ty

Att

rib

ute

s

De

sig

n

Pri

ce

Eff

icie

ncy Period III

Period IV

0

1

2

3

Period III Output ABI Period IV

High

Medium

Low

FORCES DRIVING INDUSTRY COMPETITION

Potential

Entrants

Suppliers Industry Buyers

Competitors

Substitutes

Threats

Threats

Bargaining Power Bargaining Power

7. Business Culture

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)

9. Customs Theory and Trade Agreements

CUSTOMS IMPACTS

TAX

LOCAL CUSTOMER

PURSHASING

POWER

LOCAL

MANUFACTURER

PROTECTION

INCOME

ALLOCATION

CHANGE

PARTIAL EQUILIBRIUM ANALYSIS OF A TARIFF

S D

Pw1

Pw2

Q2 Q4 Q4 Q1

Sw1

Sw2

Price

Quantity

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

10-11. The European Union

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

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 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

Germany, France, Italy, United Kingdom 10 votes

Spain  8 votes

Belgium, Greece, Netherlands, Portugal  5 votes

Autriche, Suède  4 votes

Danmark, Finland, Ireland  3 votes

Luxembourg  2 votes

QUALIFIED MAJORITY

Commission proposals must receive 62 votes out of a total of 87 in order to be approved. To amend a Commission proposal without the Commission’s consent, unanimity among Council members is required

POLICIES AND DGS

• Agriculture • Audiovisual• Biotechnology• Civil Society• Competition• Consumers• Culture• Custom Union• Economic & Monetary

Union

• Education & Training

• Employment &Social Affairs

• Energy

• Enterprise

• Environment

• Fisheries

• Food Safety

• Freedom, Security & Justice

• Information Society

• Internal Market

• Public Health

• Regional Policy

• Research & Development

• Space

• Sport

• Taxation

• Trans European Networks

• Transport

• International Affairs: Development, Enlargement, External Assistance, External Trade Foreign Policies, Humanitarian Aids

• Institutional Affairs

• Finance: Budget, Fraud, Public Procurement

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

Total

PPE-DE 6 1 53 9 28 21 5 34 2 9 7 9 5 7 36 232

PSE 5 3 35 9 24 22 1 16 2 6 7 12 3 6 30 181

ELDR 5 6 3 1 8 1 8 5 4 11 52

Verts /ALE

7 4 4 9 2 2 1 4 2 2 2 6 45

GUE/ NGL

1 7 7 4 11 6 1 2 1 3 43

UEN 1 3 6 10 2 22

EDD 4 9 3 2 18

NI 2 1 12 11 5 2 33

Total 25 16 99 25 64 87 15 87 6 31 21 25 16 22 87 626

THE EUROPEAN UNION PARLIAMENT 1999-2004

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

COMPETITION AND EUROPEAN LAW