International Business Environment, Italy

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BUSINESS SCHOOL

International Business Environment

Assignment 1

Student ID:

November 2012
CONTENTS

Executive Summary3

Introduction 4

Analysis of industry (sector)5

Analysis of country (economy)13

Recommendations20

List of references 21

Executive Summary

This work is a presentation of a short review of the current general economic situation in Europe, which includes a description of current trends, a description of the crisis in the economically strong countries in Europe. Most detailed information is presented on the state of the hotel industry in Europe and Italy in particular. This material is based on a demand of AZIMUT Hotels - the biggest Russian Hotel chain by the number of rooms, and its possibility of entering in Italian hotel industry. Current major markets are Russia, Germany and Austria. As it is shown in the data it allows to make a conclusion about the possibility to be presented in Italy key market - Milan, on the current stability of this segment and a good potential for the company AZIMUT Hotels, from the point of view of further expansion on the European market.

Introduction

This is consultancy report produced to a company AZIMUT Hotels which intends to continue expansion into the European market. The decision makers in the company consider the possibility of entering into Italian market. This is report examine the business environment for making right decision. AZIMUT Hotels is the Russian chain measured by the number of beds, market leader in Russia. Today, 22 hotels with over 5,500 beds belong to the international AZIMUT Hotels family. Founded in 2004, the international hotel chain AZIMUT Hotels entered the European marketplace in 2008. There are 10 hotels in the portfolio of AZIMUT Hotels Management Europe today. The business class hotels are positioned in the 3- and 4- Star categories and are located in the most attractive cities in Germany (Berlin, Dresden, Cologne, Munich, Nuremberg, Erding) and Austria (Vienna, Salzburg and Sattledt). (Azimut webpage, 2012)

Analysis of industry (sector)

Europe is at a crossroads. Recession has once again returned to haunt many economies, the Eurozone crisis continues and the dynamics of the global economy grind relentlessly onwards from west to east, and north to south. With policy-makers beset by limited funds and facing an ever-increasing chorus of protest from voters, the prospect of achieving sustainable economic growth seems, on the surface at least, out of reach. But despite this tide of negativity, Europe’s fundamental strengths endure. While the spotlight has focused on the world’s rapid-growth economies, Europe, too, remains a hotspot for investors. Ernst & Young’s European attractiveness survey, which measures the reality of Foreign Direct Investment (FDI) and the perceptions of more than 800 decision-makers, found that after a sharp dip in 2009, Foreign Direct Investment (FDI) into Europe has returned to growth. In 2011 there were 3,906 inward investment projects (Up 4%). Even more striking, the average project was markedly larger and FDI job creation surged 15% to 157,824. There was also a 13% surge in sales and marketing projects, which totaled 1,977. Manufacturing ranked second, creating 97,229 jobs, with R&D in third place. Share of Europe’s global FDI inflows increased from 26.9% to 28.2% (Ernst & Young's, 2012) The perception of Europe, too, appears positive. That survey found that investors see Western Europe as second only to China as the most attractive destination for global FDI, with Central and Eastern Europe ranked third. Investors also remain confident about Europe: 81% say Europe will overcome its current economic problems. Such results demonstrate that in these times of global economic difficulty, stalling growth, high...
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