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

Introduction Southern European Country. Southern European Country. Western Side of the European Continent Western Side of the European Continent Sicily and Sardinia islands. Sicily and Sardinia islands. Etruscan, Roman, and Greek Civilizations influences Etruscan, Roman, and Greek Civilizations influences

Culture Largely homogeneous in language and religion Largely homogeneous in language and religion Diverse: culturally, economically, and politically Diverse: culturally, economically, and politically Roman, Greek, Germanic, Celtic, Norman cultures mixed up in Italy Roman, Greek, Germanic, Celtic, Norman cultures mixed up in Italy

Religion 87% of the Italian population self- identify as Roman Catholic 87% of the Italian population self- identify as Roman Catholic Famous Roman Catholic churches Famous Roman Catholic churches Vatican City Vatican City

Language The official language of Italy is the Standard Italian, a direct descendant of Latin The official language of Italy is the Standard Italian, a direct descendant of Latin 75% of Italian words are of Latin origin 75% of Italian words are of Latin origin Variations in the form of accents and vowel emphasis Variations in the form of accents and vowel emphasis Standard Italian is fully comprehensible to all throughout the country Standard Italian is fully comprehensible to all throughout the country

Business Culture Appearance Fashion 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 Cont Behavior “Time is money” is not a common phrase in Italy. Foreign businessmen/women should be punctual 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 Cont Behavior 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 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.

Politics Parliamentary democratic republic Parliamentary democratic republic House of Freedom (Silvio Berlusconi) House of Freedom (Silvio Berlusconi) The Union (Romano Prodi) The Union (Romano Prodi)

Foreign Investments Open to foreign investments with few exceptions Open to foreign investments with few exceptions Same treatment as local firms Same treatment as local firms Full foreign ownership Full foreign ownership Benefits are given in form of grants and loans Benefits are given in form of grants and loans Additional incentives are offered for investments in suffering regions Additional incentives are offered for investments in suffering regions

R&D, Exports, and Free Trade Zones R&D – easy term loans and grants R&D – easy term loans and grants Exports – low interest loans Exports – low interest loans Free Trade Zones – tax exemption, foreign employment Free Trade Zones – tax exemption, foreign employment

Market Share Before World War II Before World War IIagriculture Since Since Industrial 35% Agriculture 4% Diversification from Diversification from Food to Textiles to Automotive to Tourism

GDP/GNP & Trade GDP/GNP (2004) $1.609 Trillion GDP/GNP (2004) $1.609 Trillion GDP per Capita $27,700 GDP per Capita $27,700 Exports $336.4 billion Exports $336.4 billion Imports $329.3 billion Imports $329.3 billion External Debt $0.00 External Debt $0.00 Part of EU & G-7 Part of EU & G-7

Italian Designers  Armani Collections  Rich Textile  Exceptional Craftsmanship Super Motor Vehicles  Maserati  Power  Ferrari  World Renown  Super Fast  Lamborghini  Desired Automotive

Imports & Exports Exports: $371.9 billion Exports: $371.9 billion beverages beverages motor vehicles motor vehicles textiles and clothing textiles and clothing Imports: $369.2 billion Imports: $369.2 billion beverages beverages transport equipment transport equipment textiles and clothing textiles and clothing

Positioning Member of G8 Member of G8 Depending on exporting manufactured goods. Depending on exporting manufactured goods. Developed industrial Developed industrial north and less developed agricultural south. Lower interest and Lower interest and inflation rates. 15% of unemployment at south 15% of unemployment at south

Economies of Scope Highly dependant on exporting brand name products. Highly dependant on exporting brand name products.  Ferrari  Frattli Prada  Giorgio Armani Inroads in to China Inroads in to China Set up 30 stores in Set up 30 stores in China by 2008

Conclusions Italy ranked as the sixth largest economy worldwide in 2004, and is a member of G8 (G7 plus Russia). Foreign companies have low interest loans. Italy is open to foreign investments where full foreign ownership of Italian companies is allowed. And unemployment in the south can become a good source of human resources (labor). Italy has a very similar business culture as United States of America. Businessmen/women speak English also. This permits a better understanding between business partners. Italy already has a limit on TV advertising, but some companies are doing a really good profit in Italy. One of the great examples of International companies is of Coca- Cola. Italy is one of the largest markets of Coca-Cola.