Italy business environment and culture
International Business- Italy
Italy is currently recovering from the global economic crisis and is taking steps toward a positive GDP. Boosted by low
oil prices and a more competitive euro, Italy is expected to have a positive GDP next year with annual growth of 1%. With
upcoming tax cuts and labor reform, consumption is expected to grow steadily and push the service based economy forward.
In terms of the political environment, Italy is presented with a few challenges that tend to hinder the business
environment. First, the labor market is highly inefficient because of stringent hiring and firing policies amongst other
issues. Labor reform has been recently passed and will include incentives to hire youths to curb the 40% youth
unemployment rate. Second, Italy struggles to control private action from the mafia that causes further market
inefficiencies. A third hurdle for Italy is the rampant tax evasion that results in higher taxes that are essentially
expected to not be paid in full. Finally and arguably most important when considering foreign investment is the debt
crisis which is now 135% of GDP. Defaulting on their enormous debt would have profound impacts on the Italian market and
society as a whole.
However, Italy has a Foreign Investment Index (based on economic stability, growth, economic risk, and business and
investment climate) of 8/10. For comparison, the United States has a 9/10. Italy is widely considered to be a highly
transparent country with a favorable business environment.They have a skilled labor force with a very large pool of
qualified applicants to choose from. For Walmart, there is a large need for intro level workers that would stay on staff
for a long time. This need could be served by the enormous population of youths looking for work.
Italy in the global economy
Italy is primary divided into two parts. The Industrial north and the agricultural south. The Italian economy is driven in
large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them
family-owned. Italy also has a sizeable underground economy, which by some estimates accounts for as much as 17% of GDP.
Italy’s economic growth and labor market conditions are continuing to deteriorate the unemployment rates are
rising.Additionally, Italy is the third-largest economy in the euro-zone, but its exceptionally high public debt and
structural impediments to growth have left it vulnerable to scrutiny by financial markets.
Walmart’s global strategic position
Walmart is the world’s largest retailer and intends to exponentially enlarge its retail network through the expansion of
stores in the international market. In 2015 the company invested (US)$3,936 million in its Walmart International segment.
It opened 183 new stores in international market including 91 stores in Mexico, 29 stores in Central America, 24 stores in
Chile, 17 stores in Africa, 16 stores in the UK, six stores in China, five stores in Canada and one store each in
Argentina and Brazil. Additionally Walmart is expanding its supercentres in Canada, thus expanding its multiple access
points for the Canadian consumers.
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