Italy and USA Analysis COUNTRY A: Italy

Introduce country

PEST-C

Political Environment

Legal Environment

Economic Environment

Business Environment and Activities

Analysis of Exports and Imports

Balance of Payments and Exchange Rates

Social Environment and Demographics

Technological Environment

Cultural Environment

Hofstede's Country Characteristics

Power Distance Index

Individualism/Collectivism

Masculine/Feminine

Uncertainty Avoidance Index

Long-Term Orientation

Realistic Idea

Rationale and Support

COUNTRY B: United States

Introduce Country

PEST-C

Political Environment

Legal Environment

Economic environment

Business environment and activities

Analysis of exports and imports

Balance of payments and exchange rates

Social environment and demographics

Technological Environment

Cultural Environment

Hofstede's Country Characteristics

Power Distance Index

Individualism/Collectivism score91 13

Masculine/Feminine 13

Uncertainty Avoidance Index 14

Long-Term Orientation 14

Realistic idea 14

Rationale and support 15

SECTION 3 -- What type of business do you suggest to develop between COUNTRY A and COUNTRY B? Support your idea with the research you have gathered to complete this assignment. 15

References 16

Italy and USA Analysis

Executive Summary

Italy is located in Southern Europe encompassed of numerous islands like Sardinia and Sicily and boot-structured Italian peninsula. The industrial economy has become varied in Italy which is comprised of a developed industrial north where private companies are dominant and a less-developed, agricultural south i.e. dependent on welfare. The political background attained by Italy along with its regions is thought to be cracked. The country has faced consistently under mafia, corruption as well as dependent governments which have to do with its own good, since the economic growth in 1960s. The trade of Italy is dominated by the machinery and automobiles. United States is founded on the equality's fundamental belief and is a multicultural mosaic of more than 290 million people of different cultural heritage and race. Conversely, USA possesses high political stability because of well defined procedures of succession. The federal government elections are held after every four years. Total trade of United States with foreign countries was 5.02 trillion USD in 2013. This includes the imports of 2.744 trillion USD and exports of 2.272 trillion USD of both services and goods. The foundations of U.S. are equality. United States score of PDI is 40. This is an evidence of the equal rights of American government and society. Business in USA is opening of door to growth and success. The capital economy of the country helps investors in getting the best outcome.

SECTION 1 - COUNTRY A: Italy

Introduce country

Italy is mainly situated in Southern Europe encompassed of numerous islands like Sardinia and Sicily and boot-structured Italian peninsula. The neighbouring countries are San Marino, Austria, Slovenia, Holy See, Switzerland and France. Furthermore, with the dominance of central Mediterranean and southern sea and air perspectives to Western Europe, Italy has tactical location. There is republic system of the government found in Italy. The head of the government is said to be the Prime Minister while the chief of the state is called as the President. The industrial economy has become varied in Italy which is comprised of a developed industrial north where private companies are dominant and a less-developed, agricultural south i.e. dependent on welfare. Italy is included in the European Union (EU) as a member (Marzano, 2007).

PEST-C

Political Environment

The political background attained by Italy along with its regions is thought to be cracked. In the country, several small and micro parties resist for authority in the country as well as the ruling association which comprises of numerous parties who have developed a kind of strategic alliance in anticipation of the next election. The country has faced consistently under mafia, corruption as well as dependent governments which have to do with its own good, since the economic growth in 1960s. In Italy, disappointments and tensions portray the political ambience allowing the overriding of robust, power-hungry as well as populist politicians such as Silvio Berlusconi. There is a need to inspect with apprehension into which direction country as well as its political system would progress in the forthcoming (Duggan, 2013).

Legal Environment

Protection of rational property and privacy are the two main legal apprehensions in ICT. By European Union directives, Italy is directed in these regions and it has acquired some steps in order to complement its own strategies to these areas. The pertinent directive is "2002/58/EC Directive on Privacy and Electronic Communications" in the area of privacy and "2001/29/EC" is the pertinent directive in the area of rational property protection. In this area, the protections of EU are said to be surrounded by the powerful in the world. On the other hand, operative strategy does not itself certify the effective enforcement. In 2004, the BSA research indicates that fifty percent of the software used was copied illegally in Italy. Significantly, this is excessive than the EU average and it suggests that further enforcement interest is needed (Duggan, 2013).

Economic Environment

The industrial economy in Italy is said to be diversified...

By the manufacture of high-standard consumer goods that are manufactured by small and medium-sized companies, most of which are owned by families indicating that Italian economy is operated in large part. Italy also has a substantial underground economy, estimating as much as seventeen percent of Gross Domestic Product. Within service sector, construction and agriculture, these activities are widespread. In the euro-zone, Italy is the third largest economy. However, its remarkably high public debt as well as structural hindrances in the way of growth has caused it to be exposed to the scrutiny by the financial markets.
Business Environment and Activities

Italy is at the seventh position in the most industrialized countries in the world. There are some large companies and many small and medium-sized companies present in Italy which are specialized in various activities. Due to high labour costs as compare to the less industrialized countries, industry is now being declined whereas the service activities are increasing. About 74% of Gross Domestic Product (GDP) is represented by the service activities including communications, transportation, commerce, banking, insurance and property rental. The manufacturing industry characterizes almost 24% of Gross Domestic Product (GDP) that comprises textiles, construction, apparel, chemicals, machinery, pharmaceuticals, non-metal minerals, vehicles and transportation. Two percent of the GDP is represented by the agricultural industry where its major products are rice, wheat and other cereals, fruits, vegetables, olive oil, wine as well as dairy products (Marzano, 2007). In some of the sectors, the Italian labour market is exemplified by the lack of skills and prominent unemployment in other sectors. For 2012, the official average unemployment rate was 10.7 representing active population. Official statistics do not manifest the condition exactly because of the high level of unofficial employment although the level of employment is different between the regions.

Analysis of Exports and Imports

The trade of Italy is dominated by the machinery and automobiles. Although, the recession in 2008 affected the volumes of trade yet economy of the country is remained strong and for export volumes in the world Italy is ranked on 8th (Duggan, 2013).

The major export commodities are:

Nonferrous metals and minerals

Beverages and tobacco

Food

Chemicals

Transport equipment

Motor vehicles

Production machinery

Clothing and textiles

Engineering product

Major export partners of Italy include:

UK

US

Spain

France

Germany

The imports of Italy fell from 546.9 billion dollars in the year 2008 to the 358.7 billion dollars in year 2010.

Following commodities are imported by Italy:

Tobacco

Food and Beverages

Textiles and clothing

Minerals and nonferrous metals

Energy products

Transport equipment

Chemicals

Engineering products

Major imports partners of Italy include:

Russia

Libya

Netherlands

China

France

Germany

Balance of Payments and Exchange Rates

In November 2013, Italy reported an unseasonal adjusted surplus worth 3.5 billion Euros. Due to the weak household spending the lower oil prices the current balance of the country is estimated to be remained in surplus.

Social Environment and Demographics

Of the social structure the family is the center in Italy. In many cases, the unmarried children live with their parents mostly till their 20's.

Population of Italy is 61,680,122. Other demographics are:

Age structure 0-14 years: 13.8% (female 4,154,547 / male 4,340,943)

15-24 years: 9.8% (female 3,028,190 / male 3,046,202)

25-54 years: 43% (female 13,405,812 / male 13,107,098)

55-64 years: 12.4% (female 3,942,261 / male 3,703,329)

65 years and over: 21% (female 7,403,693 / male 5,548,047) (Sassoon, 2014).

In Italy ethnic groups includes Slovene-Italians, French, German in the north while in the south there are Greek Italians and Albanian Italians

Technological Environment

The technology in Italy is prevailing long. Many scientific and technological innovations were made by Italy. Technological products are everyday part of Italians. Market of technology is changing at the lightening speed.

Cultural Environment

As seen the recreational activities of Italians, family time posses a major role. Italians enjoy with their families visiting museums all over the county, driving to the mountains or the seashore, and taking the Sunday passeggiata (traditional family stroll). Soccer is loved by people of Italy ranging from children to adults. It is one of the most popular sports in Italy with having professional teams by every major city (Marzano, 2007).

Hofstede's Country Characteristics

Power Distance Index

The northern Italy posses a score of 50 and tends to prefer decision making, decentralization of power and equality. Among the younger generations in Italy, formal supervision and control is normally not being liked, rather they prefer open management system and teamwork. The consequences of PDI are relatively higher in southern Italy.

Individualism/Collectivism

Italy has individualistic culture with the score of 76 especially in the rich and big cities of Northern Italy where people might have the…