Global International Business - Tunisian Wine Market

Topics: Foreign direct investment, International trade, Investment Pages: 17 (4056 words) Published: May 1, 2015


Global & International Business Contexts

SM0269

Global & International Business Contexts Individual Report
(Word count - 3696)

Due date: 08/01/2015

Hugh Mongan

Student ID: W14035879

Contents

Introduction – Page 3

(PND) Factor Conditions – Pages 4-5

(PND) Government – Pages 5-6

(PND) Structures of Firms & Rivalry – Pages 6-7

(PND) Demand Conditions – Pages 7-8

(PND) Related & Supporting Industries – Page 8

(PND) Chance – Page 9

Contemporary Management Issue 1 – Page 10

Contemporary Management Issue 2 – Page 11

Market Entry Strategy 1 – Pages 12-13

Market Entry Strategy 2 – Pages 14-15

Summary – Page 15

Bibliography – Page 16

Introduction

On behalf of the Boston Consulting Group (BCG), this report will investigate the opportunities for new business overseas, specifically regarding wine production in Tunisia, located in North Africa. Wine production is defined as, “the procedures and processes carried out in the making and maturing of wine” (Dictionary of The English Language, 2011). This broad definition allows for wide research methods and covers many aspects of the wine production industry. The report will therefore analyse and evaluate the magnetism and competitiveness of the Tunisian wine industry, specifically using the extended version of Porter’s National Diamond model (PND), followed by two possible market entry strategies based on the information that has been found and evaluated.

Porters National Diamond Analysis

In this section of the report, an analysis of Tunisia and their wine industry will be applied to Porters National Diamond (PND) in order to illustrate how it is structured, but additionally to help form two possible market entry strategies with a competitive advantage.

Factor Conditions
Factor conditions include: A) the quantity, skills and costs of personnel; B) the abundance, quality, accessibility and cost of the physical natural resources; C) the amount and cost of capital resources that are available to finance industries; D) the type, quality and user cost of the nations infrastructure: and E) the nations stock of knowledge resources. (Hodgetts, 1993).

It is important to outline in this section, that Tunisia is unique among Arab nations, this is due to woman being granted equal rights by the Constitution. However not much ground has been made in relations to woman in the workplace. (Sinha, 2011). This is an important factor to know when organizing employment in a new company development. Previous investors came to Tunisia because of relatively low-cost, skilled labor along with access to the EU market and other Maghreb markets.

Like the majority of countries, Tunisia was affected by the economic crisis in 2008. Although the labour market is recovering at a slow rate, opportunities for foreign direct investment (FDI) have been negatively affected. In the first 9 months of 2008, Tunisia received investments of 2.2793 billion Tunisian dinars, in the same time period in 2009, only 1.5957 billion dinars where invested, a considerable decrease of 30% (Ilham Haouas, 2014). This is important information as FDI is a hypothetical market entry strategy.

Tunisia’s infrastructure is good, set over 156,000 sq km, including ports facilities and good air/sea links with Europe and neighboring countries. The main exports from the country include; crude oil, olive oil, agricultural products and apparel (U.S. Commercial Sercive, 2010). Additionally in 2008 there was 77,000 acres of vineyards in Tunisia, this statistic confirms that the wine industry is very much present within Tunisia.

It is important to understand the geography and natural composition of Tunisia, and weighing up the advantages and disadvantages towards the wine industry. Because of Tunisia’s location, vine health can struggle in tropically humid conditions and the...

Bibliography: Dictionary of The English Language. (2011). The Free Dictionary by Farlex. (Farlex, Producer) Retrieved December 10, 2014, from www.thefreedictionary.com/Wine+production
Euromonitor International
Findlaw UK. (2013). Findlaw UK. Retrieved January 3rd, 2015, from Findlaw UK: www.findlaw.co.uk
Hodgetts, R
Ilham Haouas, M. Y. (2014). The Effect of Financial Crisis on Hiring and Seperation Rates. The Journal of Developing Areas , 48 (3), 110.
Kwintessential. (2014). Intercultural Management - Tunisia. Retrieved December 29th, 2014, from Kwintessential: www.kwintessential.co.uk/intercultural/management/tunisia.html
Observatory of Economic Complexity
PKF International Tax Committee. (2013). Tunisian Tax Guide 2013. 1.
Santander. (2014). Santander. Retrieved December 30th, 2014, from Santander: en.santandertrade.com/analyse-markets/tunisia/reaching-the-consumers
Sinha, S
Slideshare. (2013, September 25t). Slideshare. Retrieved January 2nd, 2015, from Slideshare: www.slideshare.net
Trading Economics
U.S. Commercial Sercive. (2010). U.S. Commercial Service. Retrieved December 27th, 2014, from U.S. Commercial Service : www.export.gov/middleeast/Tunisia
VR Business Sales
Wine-searcher. (2013, December 3rd). Tunisia and Tunisian Wines. Retrieved December 29th, 2014, from Wine-searcher: www.wine-seracher.com/regions-tunisia
World Health Organisation
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