Doing Business in Italy Essay -- International Business

Doing business in Italy is very different than in the United States. â€Å"Set to move onto a slow, but steady, path of economic growth;† Italy, at first glance, seems to be a promising business environment with projected increases in GDP per capita in the coming years, according to Business Monitor International (â€Å"Italy Autos Report† 30). However, there are many cultural, administrative, geographic and economic differences that make the business environment much different than that in the US. Generally dominated by domestic carmakers, mainly Fiat S.p.A., the auto industry in Italy doesn’t look very appealing for new firms because of the high barriers to entry. However, foreign carmakers like Ford have managed to penetrate the Italian market, with vehicles like the Fiesta, by focusing on small fuel efficient cars. Furthermore, Italy faces many problems that makes it a less attractive place for business; such as â€Å"low business productivity, insuff icient investment in high technology industries, disadvantageous demographics, and the labour market.(â€Å"Italy Autos Report† 31)† Although the automotive market in Italy doesn’t show much room for sales growth as shown by a high car ownership per capita. In 2009, mostly due to government incentives, the auto market saw a more moderate drop in sales than in the previous year (fig. 1). According to the Business Monitor International total auto sales is forecasted to surpass 2.58 million units by 2014 (â€Å"Italy Autos Report† 27). Taking into account Ghemawat’s four dimensions of distance; culture, administrative, geographic and economic shows that while there are costs and risks associated with doing business in Italy there are also advantages. English is taught early as a secondary languag... ... both advantages and disadvantages. The current auto market, mostly dominated by domestic players due to the consumers loyalty toward domestic brands, shows very little appeal for new entrants. Some foreign carmakers, Ford for example, are showing signs of growth in this market. Ford has been able to do this by appealing to the consumers desire, for small affordable cars. Works Cited "Italy Autos Report - Q1 2010. " Italy Autos Report 1 Jan. 2010: ABI/INFORM Trade & Industry, ProQuest. Web. 28 Feb. 2014. Italy - Labor. Encyclopedia of the Nations. 28 Feb. 2014. . Potesta, Sandra. How to do Business in Italy. Feb. 2007. 28 Feb. 2014. . Welcome to Italy. 28 Feb. 2014. .