European Union Business in Europe Term Paper

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European Union - Business in Europe

European Union

* Competitive advantages of a European area in a chosen

Industry and Porter's Five Forces

* Personal impressions and reflections on what was learned?

The European Union is made up of several countries, and all these countries have one single aim, which is to promote and develop business relationships within Europe and also with the rest of the world, in today's world of globalization. When one wishes to conduct business with the European Union, he would do well to study the various issues that are involved, and then proceed. The rules, the ethics, the values, and the discipline in the country where he wishes to set up operations, and the financial atmosphere, the cultural differences, and the differences in the workforce and in the methods of management must all be analyzed and researched before venturing out into the now free and open world. The Car Industry as well as the Steel industry in the European Union is marked by heavy capital investment. Whereas the car industry caters directly to the consumers at large, the steel industry serves the national economy in the form of steel output for use in different user industries. Michael Porter's concept entails a relationship within an industry, potential competitors, suppliers, buyers and optional solutions to the problem being taken care of.


The European Union today has become conducive to foreign investors wishing to conduct their various businesses in Europe, and these are the various related issues, like the laws and regulations within the EU, the role played by the European Central Banks, the several and various differences between the workforce in America and in Europe, and the best way in which to manage all these issues and organize and run the business successfully. Porter's Five Forces Analysis assists the marketer to contrast a competitive environment. It bears resemblances with other tools or environmental audit like PEST analysis, but has a tendency to concentrate on the single, independent business or SBU -- Strategic Business Unit instead of a single product or a range of products. Porter's Five Forces analysis touches upon five key areas such as threat of entry, power of buyers, the power of suppliers, threat of substitutes, and competitive rivalry.

Body of the paper

I. European Union

1. Issues related to the European Union and its impact on Trade and Businesses in the EU

Today, everyone recognizes the need for a better international agreement, and this was finally achieved when the Leaders who met at the Canada-European Union at Ottawa, in December 2002, and decided that they would create and develop a new type of 'forward looking and wide-ranging' bilateral trade agreement, which, they felt, would work well for investors in foreign business and in foreign lands. Also known as the TIEA, the agreement has been worked upon both by the government of Canada and the European Union. The TIEA, in fact, builds on the fruitful and fulfilling cooperation that had been established already between the EU and Canada, by building upon the existing framework contributed by various other agreements and statutes that had been entered into in years previously. Some of these are: the Framework Agreement for Commercial and economic Cooperation, of 1976, the Joint Action Plan of 1996, the EU-Canada Trade Initiative of 1998, and the various other bilateral agreements that had been agreed between the Parties, among them the more recent on being the September 2003 Agreement on Trade in Wines and Spirits Drinks. (Regional and Bilateral Initiatives: Canada-European Union - Trade and Investment Enhancement Agreement)

The foundation of the European Union actually took place in the year 1952, when the six countries of France, Germany, Netherlands, Italy, Luxembourg, and Belgium entered into an agreement with the European Coal and Steel Company, wherein all the members agreed to have the control of those industries under one single central authority. The arrangement seemed to wok well for all the countries that were involved, and this led to the formation of another agreement in the year 1958, and this was called the 'European Economic Community'. Several new members began to join in, and among them, were Denmark, Ireland, United Kingdom, Greece, Spain, Portugal, Austria, Sweden, and Finland. The famous 'Treaty on European Union, entered into in Maastricht in 1992, succeeded in ushering in a veritable new era of progress, and the name of the arrangement and the organization changed to the European Union. (European Union: Delegation of the European Commission to the U.S.A.)

The so-called co-decision procedure that this introduced has now, today, become the norm, and now, the European Parliament and the Council of ministers share the legislative power of the Union. Complete monetary and economic union for all the members of the European Union commenced on 1st of the month of January 1999, when the single currency for all the various European Union, called the Euro, was introduced. When the Treaty of Amsterdam was introduced in the year 1999, it brought in more strength for the Union's Foreign Policy, and introduced a better thought out strategy for the European Union so that employment would be boosted, and people would be able to move more freely across various borders. (European Union: Delegation of the European Commission to the U.S.A.)

2. Laws and regulations related to doing business with European countries

When one desires to set up a business overseas, then there are quite a few regulations and rules that one must follow if the business were to succeed. John McNamara, the national Director of International Assurance Services, states that whether one wants to set up his business independently, or with the help of a merger or as a joint venture, one must do their homework with thoroughness at first. This is because facts and figures show that several companies that were involved in mergers and cross business transactions have actually failed to increase their shareholder value as well as their profits. Business issues and rules vary from one country to another, but the fact remains that some facts are consistent, as always. Some of them are that local laws and regulations more often than not remain steady, and the local labor market also wouldn't change. The political climate may however, change, as will the market conditions. (Doing Business Overseas presents Hazards and Hopes)

There are some who feel that at the deep and at the structural levels, there is not really a structural division between the U.S.A. And Europe. In other words, what the experts mean to say is that neither country has a partnership as close as that which they share with each other. However, if the partnership were to be renewed, then a lot of thought and planning would have to go into it, and certain important facts have to be remembered. These are that, first and foremost, Europe tends to be, as far as international affairs and also in foreign and defense policies are concerned, not very united. This would have to be changed if Europe were to hope to continue to maintain a close relationship with the United States of America, and Europe would also have to become more willing and eager to take on a more important role in global leadership. Therefore, stronger foreign policies would have to be created and also stronger defense strategies in order to cope with the increasing security problems. The United States of America must also be able to share this leadership with Europe, and this would demonstrate the fact hat America is, today, more than willing to work with Europe on a global scale. (Article provided by client: Trade in the Transatlantic Relationship, p. 6)

The International Chamber of Commerce has stated that when one country wishes to conduct business with another, then it has to abide by the rules and regulations of that country, as well as of their own, and when the ICC published its '1996 Revisions to the ICC Rules' that it expected everyone involved to follow religiously, it stated that the 'Convention on Combating Bribery of Foreign Public officials', and the monitoring program, called the 'Revised OECD Recommendations', have both succeeded in curtailing the phenomenon of senior officials accepting and expecting bribes, and they also help to monitor such types of behavior on the part of these people. In addition, the World Bank, the IMF, the EU, the Council of Europe, and the Organization of American States have launched anti-bribery initiatives. The crime of corruption would also be handled by these agreements, and one would have to be careful of these regulations when conducting business in a strange land, on foreign soil. (Extortion and Bribery in International Business Transactions) In the U.S.A., exports and imports make up to 20% of the GDP, and this means that globalization has become a way of life for the average American today. The IMF predicts that the world output would probably increase by 4.4%, and this means that profits form international operation would grow between 10 to 15% soon. (English rules the world,…[continue]

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