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COMPETITIVE ADVANTAGE IN ISRAEL

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  1. 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

  2. Factors driven Investment Driven Innovation Driven

  3. 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


  4. 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

  5. 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,

  6. QUALIFIED INDUSTRIAL ZONE (QIZ)

  7. 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

  8. Models of Industrial Development Strong Hybrid Industrial District Cluster Industrial District Community Industry Synergy Hybrid ID-FEZ Free Economic Zone Porter’s Cluster Hybrid FEZ-C Strong Weak Clustering Specialization Process

  9. 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

  10. 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)

  11. CONTEXT ORIENTATION IN MAJOR CULTURES High Context Japan China Arab United States Scandinavia Low Context Germany

  12. IMPACTS OF CULTURE ON MANAGERIAL BEHAVIORS

  13. HOFSTEDE’S CULTURAL TYPOLOGY

  14. HOFSTEDE INDEX

  15. EMERGING CULTURAL PROFILES Uncertainty Avoidance Low(Formalization) High Low `` Hierarchy High

  16. HOFSTEDE’S MAPS Uncertainty Avoidance Low SIN HOK IND MAL PHI DEN SEW IRE GBR NZL NOR USA CAN AUT SWI FIN GER, ISR IRA THA PAK JAP SPA KOR TUR FRA MEX POR High Small Large Power Distance

  17. CULTURE & BUSINESS PROCESSES Policy & Procedures: US, low u.a., high formal reporting UK, low u.a., detailed jobs description Germany, high u.a., well internalized Systems & Controls: French = control(hierarchy), British=coordinate) US-UK reporting procedures French: 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)

  18. CUSTOMS IMPACTS

  19. PARTIAL EQUILIBRIUM ANALYSIS OF A TARIFF Price S D Pw1 Pw2 Sw1 Sw2 Quantity Q2 Q4 Q4 Q1

  20. IMPACT OF CUSTOMS UNION AGREEMENTS

  21. 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 THE EUROPEAN UNION MILSTONES

  22. 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

  23. 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 THE INSTITUTION OF THE EUROPEAN UNION

  24. From 1 November 2004, a qualified majority will be reachedif 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.

  25. 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

  26. POLICIES AND DGS • Health & Consumer Protection • Information Society & Media • Internal Market & Services • Joint Research Centre • Justice Freedom & Security • Regional Policy • Research • Taxation & Custom Union • Transport & Energy • Agriculture & Rural Development • Competition • Economic & Financial Affairs • Education & Culture • Employment, Social Affairs and Equal Opportunities • Enterprise and Industry • Environment • Fisheries and Maritime Affairs

  27. 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,