DOING BUSINESS IN ITALY Irfan Ali Irfan Ali Christopher Kamt Christopher Kamt Chong (Susie) Park Chong (Susie) Park Asahi Suzuki Asahi Suzuki.

DOING BUSINESS IN ITALYDOING BUSINESS IN ITALY

Irfan AliIrfan Ali

Christopher KamtChristopher Kamt

Chong (Susie) ParkChong (Susie) Park

Asahi SuzukiAsahi Suzuki

IntroductionIntroduction

Southern European Southern European Country.Country.

Western Side of the Western Side of the European Continent European Continent

Sicily and Sardinia Sicily and Sardinia islands.islands.

Etruscan, Roman, and Etruscan, Roman, and Greek Civilizations Greek Civilizations influencesinfluences

CultureCulture

Largely Largely homogeneous in homogeneous in language and religionlanguage and religion

Diverse: culturally, Diverse: culturally, economically, and economically, and politicallypolitically

Roman, Greek, Roman, Greek, Germanic, Celtic, Germanic, Celtic, Norman cultures Norman cultures mixed up in Italymixed up in Italy

ReligionReligion

87% of the Italian 87% of the Italian population self-population self-identify as Roman identify as Roman CatholicCatholic

Famous Roman Famous Roman Catholic churchesCatholic churches

Vatican CityVatican City

LanguageLanguage The official language of The official language of

Italy is the Standard Italy is the Standard Italian, a direct Italian, a direct descendant of Latindescendant of Latin

75% of Italian words are 75% of Italian words are of Latin originof Latin origin

Variations in the form of Variations in the form of accents and vowel accents and vowel emphasisemphasis

Standard Italian is fully Standard Italian is fully comprehensible to all comprehensible to all throughout the countrythroughout the country

Business CultureBusiness CultureAppearanceFashion design are trademarks of Italy.

Therefore, in the business world, good clothes are a signature of success.

Men should wear fashionable, high quality suits.

Shirts may be colored or pin-striped with an Italian designer tie.

Women dress in quiet, expensive elegance.Quality accessories such as shoes and leather goods will make a good impression with the Italians.

Business Culture ContBusiness Culture ContBehavior“Time is money” is not a common phrase in Italy.

Foreign businessmen/women should bepunctual for business appointments.

Handshakes are common for both sexes.

Do not expect quick decisions or actions to take place.

Italian companies often have a rigid hierarchy.

It is common for everyone to speak simultaneously at Italian gatherings.

Do not exchange business cards at social occasions.

Business Culture ContBusiness Culture ContBehavior

Italians often have two different business cards.

Italian cards are often plain white with black print.

When entering a business function, the most senior or eldest person present should always be given special treatment.

When invited to someone’s home, bring gift-wrapped chocolates, pastries, or flowers.

If you bring wine as a gift, make sure that it is of excellent vintage.

Avoid giving anything in a quantity of 17.

Business Culture ContBusiness Culture Cont

Communications or Conversational Topics

English is spoken by many businesspeople.

Avoid talking about religion, politics, and World War II.

At social gatherings, it is considered insulting to ask someone you have just met about their profession.

Good conversational topics include Italian culture, art, food, wine, family, and films.

PoliticsPolitics

Parliamentary democrParliamentary democratic republic atic republic

House of Freedom (SilHouse of Freedom (Silvio Berlusconi)vio Berlusconi)

The Union (Romano PrThe Union (Romano Prodi)odi)

Foreign InvestmentsForeign Investments

Open to foreign investments with few Open to foreign investments with few exceptionsexceptions

Same treatment as local firmsSame treatment as local firmsFull foreign ownershipFull foreign ownershipBenefits are given in form of grants Benefits are given in form of grants

and loansand loansAdditional incentives are offered for Additional incentives are offered for

investments in suffering regionsinvestments in suffering regions

R&D, Exports, and Free Trade R&D, Exports, and Free Trade ZonesZones

R&D – easy term loans and grantsR&D – easy term loans and grants

Exports – low interest loansExports – low interest loans

Free Trade Zones – tax exemption, Free Trade Zones – tax exemption, foreign employmentforeign employment

Market ShareMarket Share

Before World War II Before World War II

agricultureagriculture Since 1950-1990 Since 1950-1990

Industrial 35% Industrial 35%

Agriculture 4%Agriculture 4% Diversification from Diversification from

Food to Textiles to Food to Textiles to

Automotive to Automotive to TourismTourism

GDP/GNP & TradeGDP/GNP & Trade

GDP/GNP (2004) GDP/GNP (2004) $1.609 Trillion $1.609 Trillion

GDP per Capita GDP per Capita $27,700$27,700

Exports $336.4 Exports $336.4 billion billion

Imports $329.3 Imports $329.3 billionbillion

External Debt $0.00 External Debt $0.00 Part of EU & G-7Part of EU & G-7

Italian DesignersItalian Designers Armani CollectionsArmani Collections

Rich TextileRich Textile Exceptional Exceptional

Craftsmanship Craftsmanship

Super Motor VehiclesSuper Motor Vehicles MaseratiMaserati

PowerPower FerrariFerrari

World RenownWorld Renown Super FastSuper Fast

LamborghiniLamborghini Desired AutomotiveDesired Automotive

Imports & ExportsImports & Exports

Exports: $371.9 Exports: $371.9 billion billion beverages beverages motor vehicles motor vehicles textiles and clothing textiles and clothing

Imports: $369.2 Imports: $369.2 billion billion beveragesbeverages transport equipment transport equipment textiles and clothingtextiles and clothing

PositioningPositioning

Member of G8Member of G8 Depending on exporting Depending on exporting

manufactured goods.manufactured goods. Developed industrial Developed industrial

north and less north and less developed developed

agricultural south.agricultural south. Lower interest and Lower interest and

inflation rates.inflation rates. 15% of unemployment 15% of unemployment

at southat south

Economies of ScopeEconomies of Scope

Highly dependant Highly dependant on exporting brand on exporting brand name products.name products. FerrariFerrari Frattli PradaFrattli Prada Giorgio ArmaniGiorgio Armani

• Inroads in to ChinaInroads in to China• Set up 30 stores in Set up 30 stores in

China by 2008China by 2008

ConclusionsConclusions

Italy ranked as the sixth largest economy worldwide in Italy ranked as the sixth largest economy worldwide in 2004, and is a member of G8 (G7 plus Russia). 2004, and is a member of G8 (G7 plus Russia). Foreign companies have low interest loans. Italy is Foreign companies have low interest loans. Italy is open to foreign investments where full foreign open to foreign investments where full foreign ownership of Italian companies is allowed. And ownership of Italian companies is allowed. And unemployment in the south can become a good unemployment in the south can become a good source of human resources (labor). source of human resources (labor).

Italy has a very similar business culture as United Italy has a very similar business culture as United States of America. Businessmen/women speak States of America. Businessmen/women speak English also. This permits a better understanding English also. This permits a better understanding between business partners.between business partners.

Italy already has a limit on TV advertising, but some Italy already has a limit on TV advertising, but some companies are doing a really good profit in Italy. companies are doing a really good profit in Italy. One of the great examples of International One of the great examples of International companies is of Coca-Cola. Italy is one of the largest companies is of Coca-Cola. Italy is one of the largest markets of Coca-Cola.markets of Coca-Cola.