Global Business Plan Essay Example

and first-class services in the leisure motorcycle tour industry.

Moto-Europe Tours offers a customized itinerary for individuals and groups wanting to experience Italy on motorcycles. The tours can be guided or independent, depending on the preferences of the riders. Guided tours include a bilingual guide who will give insights on Italy's sights, culture, and language. In group packages, a chase vehicle and driver are included for carrying extra luggage and providing assistance in unexpected situations. The guides are knowledgeable in motorcycle mechanics and first aid. Independent tours provide a general itinerary and map for riders to go at their own pace. Various options and experiences are available to ensure an unforgettable experience in Italy.

Host Country Synopsis: Map of Italy (Kwintessential, n.d.)

Italy maintains a stable political environment and enjoys a robust partnership with the United States.

The incentives for businesses to expand their products and services are strong.
Moto-Europe Tours, with its picturesque country scenery and vibrant culture, adds a captivating allure to the tourist destinations in Italy.

By providing opportunities to explore local areas and engage with the locals, Moto-Europe Tours enriches the Italian experience.
Moreover, as Italy heavily relies on imports due to limited natural resources, Moto-Europe Tours can make a significant contribution to Italy's economy.
Furthermore, by immersing themselves as temporary Italians and supporting Italian culture, Moto-Europe Tours nurtures business relationships with native Italians.

The European Union (EU) is committed to fostering economic integration and forging relationships among its members. Initially comprised of 7 countries, the EU has expanded to encompass an additional 5 nations, resulting in a total of 25 member countries with 20 different languages. The EU's headquarters are situated in Brussels, Belgium

(Wikipedia, 2006). Italy, one of the founding members, joined the EU on November 1, 1993. The origins of the EU can be traced back to the establishment of the European Coal and Steel Community (ECSC) in 1951 (Wikipedia, 2006).

The European Community (ECSC) was renamed the European Union (EU) in 1967, according to Wikipedia (2006). The EU's objectives include fostering cooperation among member states in areas such as economics, trade, social issues, foreign policy, security and defense, and judicial matters, as stated by Encarta (2006). All residents of the 25 EU nations were granted European citizenship, enabling them to pursue employment opportunities or reside and study in any EU country (Wikipedia, 2006).

The European Union (EU) seeks to standardize currency by implementing the Economic and Monetary Union (EMU) among its member countries. As of 2002, the euro has taken over national currencies in 12 of these nations. Nevertheless, certain recent additions to the EU, along with Sweden, the United Kingdom, and Denmark have made the decision not to adopt the euro (Wikipedia, 2006). In addition to this, the EU possesses a parliament responsible for creating legislations that impact member states. The president leads this parliament and holds office for a term lasting two and a half years.

According to Wikipedia (2006), the main duty of the president is to supervise parliament and serve as its representative in international affairs and official visits. Parliament consists of 732 elected members from the 25 EU member states, with a term of five years. However, the president's term is only two and a half years. It is worth noting that parliamentary members are organized based on political affiliations rather than nationality.

According to

Wikipedia (2006), the parliament currently has seven political groups. Additionally, there are 20 parliamentary committees with varying sizes of members ranging from 25 to 78. Each committee consists of a chair, secretary, and bureau. The main purpose of these committees is to meet regularly in Brussels for discussions, debates, and the creation, approval, and modification of legislative proposals and initiative reports. It should be emphasized that these committee meetings are open to the public.

The European Union (EU) is expected to see economic growth as more countries join the Union, resulting in a projected 2% growth exclusively in the euro zone. This expansion is anticipated to create around 3.5 million job opportunities for the EU's economy as a whole.

Eurostat predicted a growth rate of 2.7% for the European Union in 2006, which was in line with the implementation of the Lisbon Strategy. This strategy aimed to transform the EU into a competitive and innovative knowledge-based economy while achieving sustainable economic growth, improved employment prospects, and enhanced social cohesion.

The Lisbon Strategy seeks to enhance the economic status in the EU through initiatives such as job creation, growth opportunities, and alliances for economic reform. Italy transitioned into a democratic republic in 1946 and adopted its constitution in 1948.

Italy operates as a centralized state with the appointment and accountability of prefects in each province lying with the central government. While regional governments have been instituted to decentralize some powers from the national government, numerous regional authorities continue to pursue additional autonomy (U. S. Department of State, n.d.).

Italy's parliament is made up of two chambers: the Chamber of Deputies and Senate. In addition to these chambers, there are also a

judiciary branch and an executive branch overseen by a Council of Ministers led by a prime minister. The president of Italy is elected for a seven-year term during parliamentary elections and holds the responsibility of appointing the prime minister. The selected prime minister then chooses the other ministers (U.S. Department of State, n.d.).

The judicial system of Italy is grounded in Roman law and has been shaped by the Napoleonic code and other statutes (Wikipedia, 2006). In Italy, the constitutional court evaluates the legality of laws but lacks the same level of authority or volume of decisions as the U.S. Supreme Court (U.).

The U.S. Department of State, n. d., states that Italy has experienced numerous government changes since 1945 while noting that the postwar era has seen relatively stable and consistent political conditions in Italy due to the influential role played by the Christian Democratic party.

During the years 1992-1997, Italy experienced political instability due to discontented voters calling for change. Scandals and a decline in voter trust resulted in significant changes within political parties. The March 1994 elections marked the rise of new political forces and shifts in power throughout Italy (U.S. Department of State, n.d.).

Giorgio Napolitano became president in May 2006 after being elected by parliament. Before becoming president, Napolitano had various roles such as lifetime senator, Minister of the Interior, and Member of the European Parliament. When his term ends in May 2013, his successor will be chosen by the Senate and regional representatives (U.S.).

The Department of State (n. d.) underscores the significance of Italy's close proximity to conflict areas in the Balkans, Eastern Mediterranean, and North Africa as a crucial partnership with the

United States. Thus, due to its strategic importance, Italy holds great significance for the United States.

Italy, a founding member of NATO, has collaborated with the United States to promote democracy in Central and Eastern Europe and peace in the Middle East. Italy has also partnered with NATO to strengthen efforts for economic and political stability in Albania. Additionally, Italy has been instrumental in advancing the European Union. Following World War II, Italy experienced a significant shift in its economy, moving away from agriculture and emerging as the world's sixth-largest market economy (Industry Canada, 2006).

Italy is a member of multiple international organizations, such as the European Union, G-8 industrialized nations, and the Organization for Economic Cooperation and Development (U.S. Department of State, n.d.). However, due to its predominantly unfarmable land, Italy has limited natural resources like fish and natural gas. As a result, Italy relies on imports to fulfill its energy requirements and obtain raw materials for manufacturing.

According to the U.S. Department of State (n.d.), Italy's key sectors encompass precision machinery, motor vehicles, chemicals, pharmaceuticals, electrical goods, and fashion and clothing.

Italy's economy has been slowly recovering since the September 11th terrorist attacks, but its average economic growth in the past five years has been remarkably low. The country is still struggling with significant budget deficits and public debt. In response to this situation, the European Commission has warned Italy to decrease its budget deficit to less than 3% of its Gross Domestic Product (GDP) by 2007. Currently, Italy's budget deficit exceeds 4.3% of GDP (U.

Italy has a strong trade relationship with other EU countries and maintains a close collaboration with the United States, according to the

U.S. Department of State (n.d.).

The U.S. Department of State states that Italy has encountered difficulties in managing globalization and its effects on the lower-end products industry. These challenges arise from the influence exerted by trading partners like China.

The Italian cultural environment is characterized by the utilization of the Italian language as the official language of the nation. Approximately 93% of Italy's population are native Italian speakers, and about 50% can also converse in a regional dialect. Family values hold great significance in Italian culture and play a pivotal role within family dynamics. Immediate family members typically reside together, while extended families frequently cohabitate. An noteworthy trait of Italian families is their provision of support, both emotionally and financially, for all members (Kwintessential, n.).

In Italy, Catholicism is the dominant religion and holds significant influence, despite low church attendance. Naming children after saints and celebrating their saint’s day, similar to a birthday, is a common practice. Religious symbols, such as crosses and statues, are commonly found in office buildings, and each profession has its own patron saint.

Italian relationships are hierarchical, so respect is shown to older individuals and successful business professionals. The church supports these relationship perspectives (Kwintessential, n.d.). In Italy, appearances hold significance as they can reveal one's social status, family background, and level of education. First impressions are enduring in Italy and are highly valued, as native Italians are extremely fashion-conscious when it comes to attire, footwear, and accessories (Kwintessential, n.d.).

In Italy, business etiquette and customs strongly influence meeting etiquette, table manners, gift giving, and dining etiquette (d).

Italians have a tendency to express their greetings with enthusiasm, but in a formal manner. As a relationship

develops, it is customary for them to exchange kisses on both cheeks. When it comes to business, Italians place importance on familiarity and trust. They prefer face-to-face interactions and consider appointments necessary. It is recommended to make appointments in writing well ahead of time. Italians disapprove of aggressive sales tactics and hold respect for authority and seniority in business negotiations (Kwintessential, n.).

Political risks for Moto-Europe Tours' expansion into Italy are minimal as there are always potential risks and outliers in business and foreign affairs that could impact a company. However, in the case of Moto-Europe Tours, the risks involved in transitioning and expanding into Italy are expected to be minimal.

The company from the United States does not pose a significant social or governmental threat when entering Italy. The stable political environment in Italy, as well as its close partnership with the U.S., provide strong incentives for businesses to expand their products and services. Italy has recognized the potential of new businesses in revitalizing and growing its already thriving economy, hence offering incentives and various contributions. To support new businesses, Italy has implemented the "State and Regional laws for incentives, which allow various kinds of contributions and concessions" (Business Italia, 2005).

These incentives and contributions can vary, ranging from subsidized loans to grants or even tax credits. However, the grants must be utilized within the territory where they are awarded. This strategy aims to encourage the expansion of businesses and services into underdeveloped territories. Moto-Europe Tours intends to hire native Italian speakers with diplomatic knowledge. The company recognizes the importance of understanding Italy's political culture in order to thrive in a new environment.

The company is ready to

handle the risks associated with expansion by utilizing employees as valuable assets. Moto-Europe Tours will hire individuals who have experience in dealing with political matters and are knowledgeable about the political dynamics at the local level. There are legal and regulatory risks to consider as well. On January 1, 2004, Italy made significant revisions to its startup rules and regulations in order to modernize its system and align with other developed nations. This resulted in simplifying decision-making processes, making it easier for corporations and organizations to expand their operations in Italy.

Previously, the government used to be in charge of regulations, but now the focus has shifted to companies as providers of wealth. Self-regulation is the main element of the reform, giving companies extensive powers to establish specific rules in their memorandum and articles of incorporation, with less strict obligations. Italy has also undergone significant regulatory changes, particularly in bankruptcy laws. In the past, entrepreneurs or sister companies would face severe punishment. However, the new regulations prioritize saving struggling companies. Local, state, and regional officials will intervene and negotiate with creditors, while also providing judicial support to protect and prevent the collapse of such companies.

The legal and regulatory risks for Moto-Europe Tours are deemed to be low, although if there were any changes in the legal and regulatory landscape in Italy that could negatively affect the company's operations, it would be necessary to cease operations in Italy and relocate to a nearby country. Fortunately, Europe offers numerous favorable locations for motorcycle enthusiasts to enjoy tours. In order to successfully expand into a foreign market, it is crucial for Moto-Europe Tours to gain support from the

local community in terms of social and cultural aspects. This can be achieved by showing commitment to local business owners. Despite this, Moto-Europe Tours will not overlook the knowledge and hospitality provided by local bed and breakfast hotels, as it does not intend to partner with a large hotel chain.

The company's main purpose is to offer temporary Italian citizenship to customers by immersing them in the local social and cultural scene of Italy. It is expected that there will be competition from local hotels and restaurants for Moto-Europe Tours' business as it will have a positive impact on the local economy. The company must be tactful in its decision-making process to avoid creating any animosity. There may be unforeseen circumstances where the company needs to change lodging locations, so it is important to establish strong relationships with surrounding hotels. These relationships will serve to protect Moto-Europe Tours and its clientele from any negative attitudes and behaviors of other customers.

There are potential cultural risks for Moto-Europe Tours involving the dissatisfaction of locals and differences in clienteles' cultures. Some locals in Italy may perceive tourists as invaders who do not appreciate the traditional ways and people of the country. Consequently, the cultural risks faced by Moto-Europe Tours are considered moderate. To minimize these risks, the company will employ brochures and local advertising as marketing strategies. These approaches aim to convey to the locals that the company's objective is to educate customers about Italy's rich heritage and culture, while also providing them with an authentic, non-commercialized experience of Italian life.

Moto-Europe Tours aims to offer an authentic representation of Italy from the perspective of Italians, rather than an

outsider's point of view. Exchange rate fluctuations pose a minimal risk to Moto-Europe Tours, given its position in the service industry. The only potential risk would arise if the euro gains strength, causing the dollar's value to decrease. This could lead to financial losses for the company if the cost of providing services becomes greater than what was originally negotiated. However, the exchange rate risks for Moto-Europe Tours are low. The euro, being backed by stable economic conditions, is more resilient to external exchange rate fluctuations compared to previous national currencies. Additionally, the euro's significant presence in the economy makes it a prominent currency for transactions.

According to the European Communities (2006), the euro is intended to promote economic growth. In order to safeguard against the potential risks of fluctuating exchange rates, Moto-Europe Tours would have to establish alliances or partnerships with local establishments, such as shops and restaurants. By reaching an agreement to maintain stable prices for a set period of time, both parties would be protected. This arrangement would allow shops and restaurants to adjust prices if needed, while also providing Moto-Europe Tours with sufficient notice to make any necessary adjustments to package prices.

Moto-Europe Tours needs to account for gas prices and inflation of the exchange rate by adding a discrepancy factor to each package's rate. It is also important for the company to partner with a transportation carrier. To ensure the company's protection, it is recommended that Moto-Europe Tours handle flight and rail travel bookings for clients separately as an additional cost. This way, the company is not responsible for any price changes imposed by transportation companies. When it comes to repatriation of

funds, the risk is low as Moto-Europe Tours offers a service rather than producing goods. The company will utilize goods and services provided by Italians.

The main focus of our business is motorcycles, which are currently sold, if not produced, in Italy. We believe that the Italian government should welcome our company into the country as it promotes tourism and generates an economic surge in small cities. The only aspect we need to discuss further is regular corporate taxes. Fortunately, starting a business in Italy is easy and since Moto-Europe Tours is service-oriented, there is little risk of funds being repatriated. In 2003, the Italian Parliament reformed the tax system to make it more manageable for corporations and individuals. The aim is to create a favorable tax situation to attract both local and foreign business investment. The new tax structure consists of five main types of taxes: personal income tax, corporate income tax, value added tax (VAT), taxes on services, and excise taxes (Sviluppo Italia, 2004).

The taxation and double taxation risks for Moto-Europe Tours are low since the main corporate components of the new tax structure include a reduction of the corporate income tax rate to up to 33%, exemption of capital gains from the disposal of qualified participations into Italian and foreign corporations, and abolition of the full imputation system on distribution of corporate profits, i.e. the dividend tax credit, with the introduction of a 95% exemption on dividend distributions. In addition, there is the introduction of a group taxation regime for Italian/foreign corporations belonging to the same group to consolidate their tax base at the level of the Italian parent, and the implementation

of the 'thin capitalization rule' which aims to avoid thin capitalization of Italian corporations. If the taxation situation in Italy were to change and negatively impact the company’s business, it would need to cease operations and move to a nearby country with a more favorable corporate tax environment. This would allow them to continue providing enjoyable experiences as tourists for motorcycle enthusiasts. Overall, throughout the EU, tourism is a strong industry and there are three moderate risks for Moto-Europe Tours when entering the Italian tourism market.

There are two main risks associated with choosing Moto-Europe Tours for tourism in Italy: the range of choices available to consumers and competition from other motorcycle touring companies. Consumers have the option to choose from various forms of tourism in Italy, such as independent travel, guided bus tours, cruises, and specialty motorcycle tours. Moreover, the presence of other motorcycle touring companies poses a risk to Moto-Europe Tours. One notable competitor in the Central Italy region is Beach's Motorcycling Adventures, Ltd., which offers similar services. However, the inclusion of "Ltd." in Beach's name implies a limitation in its capabilities.

Due to Moto-Europe Tours' provision of comprehensive concierge services, it believes that Beach's primary appeal will target unadventurous tourists. For those individuals or groups seeking to escape tourist traps and experience life as a temporary local in small towns, Moto-Europe Tours will set the trend. Another market risk to consider is terrorism, with the World Trade Center bombings in New York City having a long-lasting impact on global tourism. Even a year after the terrorist attacks, vacationers continued to deviate from their usual vacation habits. Most opted for shorter trips closer to home

or combined their vacation with a honeymoon, instead of taking two separate vacations (Klancnik, 2002).

Mitigating any of these risks would require relocating back to the United States or moving to a neighboring country. When it comes to distribution and supply chain risks, Moto-Europe Tours is not heavily concerned since they provide a service rather than a tangible product. However, it is important to maintain marketing and sales channels in order to optimize performance. The company's website serves as the main point of contact for customers and travel agencies, so it must be regularly updated with current contact information and general company details. To create a sense of exclusivity without high costs, Moto-Europe will partner with travel agency chains like the Automobile Association of America (AAA), publications like Hot Bike Magazine and Conde Nast Travel trade magazines, as well as motorcycling enthusiast clubs such as the Ducati Owners Club. It should be noted that Italy's road and highway system may occasionally present concerns due to construction or unforeseen natural events like flooding or extreme weather that might make travel unsafe or unappealing to tourists.

As of 2004, Italy had a total of 479,688 km of paved roadways, including 6,478 km of expressways, which could be used to redirect tours (CIA, 2006). Regarding trade barrier risks, Moto-Europe Tours is a service company operating in the tourism industry, so there are currently no significant trade barrier risks. Thus, the risk of encountering trade barriers is low. In terms of competitive risk assessment, while there are various tour companies specializing in motorcycle-based transportation, none of them offer the same level of concierge service as Moto-Europe Tours. Catering to tourists from

all over the world with diverse traffic laws, signs, and conditions, Moto-Europe Tours provides clients with a comprehensive guide that addresses these specific issues concerning Italy.

Safety is the top priority for Moto-Europe Tours. Hence, clients will receive a riding skills checklist to enhance their preparedness for potential situations. For instance, one such example is learning a weaving strategy to evade a rockslide. By ensuring safety in a foreign nation, guests can fully relish their motorcycle adventure without ending up in a hospital. Additionally, Moto-Europe Tours provides concierge services, including assistance with luggage and packages.

Motorcycles lack ample storage space, which is part of their appeal to enthusiasts who value the ability to quickly set off without the hassle of packing. The concierge will handle the transportation of clients' luggage from different locations. While customers usually prefer a casual dress code, Italy is known for its fashion-conscious culture.

Transporting luggage to different destinations and shipping purchases to a customer's home address is essential. Additionally, the World Wide Web will play a significant role for travel agencies and consumers in obtaining general information and communicating with Moto-Europe Tours. To effectively manage customer information, distribution channels, and up-to-date culture venue and hotel information, a specialized management system must be developed. Another system should be created to help customize clients' itineraries. This system will provide riders with a pocket-sized booklet containing a map of their preferred route, contact information for lodging, and tickets or passes for various excursions. As the Internet is widely available and Moto-Europe Tours is a service-oriented company, the risks associated with technology are minimal.

Internet providers have backup storage systems that allow retrieval of information from any location

with web access. Motorcycles will be equipped with a European Navigational System powered by satellite technology, which is crucial for rider safety. This system can inform Moto-Europe Tours in case of a motorcycle collision or upset, indicating a potential accident and the need for medical assistance and towing services.

The global positioning system (GPS) will enable Moto-Europe Tours to provide medical assistance and locate stolen motorcycles. Additionally, each motorcycle will have a satellite phone system for emergency and communication purposes. This system allows the tour operator to inform riders about road closures and provide alternative routes. It also allows riders to request assistance from a Moto-Europe Tours concierge for purchasing show tickets or making dinner reservations. The strengths of Moto-Europe Tours are their experience in bike tours, name recognition, and success in the United States.

Through extensive knowledge and planning, Moto-Europe Tours has established itself as a reputable provider of motorcycle tours in the United States. This positive reputation will be advantageous as the company expands into a new international market. However, there are certain weaknesses that need to be addressed, such as limited international experience, service capacity, and financial resources. These weaknesses are primarily linked to the team's lack of experience in the international market. Despite having knowledge of different cultures, conducting business in a foreign market presents its own set of challenges. Additionally, the company's operational capacity is another area that can be identified as a weakness.

Tours for groups who desire pre-planned services are typically arranged in advance. However, fulfilling last-minute requests can be difficult due to limited qualified staff and financial resources. Although Moto-Europe Tours has a reputable character, there are risks associated with

entering international markets. Initially, joint ventures may be necessary to establish Moto-Europe Tours. The opportunities for expansion into Italy are based on various factors, including the local business environment, flexible tour options, tourism potential, economic benefits, and cultural knowledge. Additionally, the tours offered by Moto-Europe Tours go beyond typical tourist destinations.

The tours offered by Moto-Europe Tours will take tourists to outlying areas, exposing them to the local business environments and ultimately helping to boost the economy in Italy. With a flexible range of tour options, an increase in tourism can be achieved for Italy. Some of the staff at Moto-Europe Tours have already traveled extensively in Italy, and the initial tours offered will be tailored to reflect their experiences. The overall goal of these tours is to give tourists a cultural experience in Italy that makes them feel like citizens. Identified threats to the expansion into Italy include local competition, weather conditions, and the potential for accidents.

Local competition poses an immediate danger to Moto-Europe Tours. The solution to counter this threat is to offer unique services that the competition lacks. The tours may be impacted differently due to varying weather conditions, including rainy conditions.