Global and International Business Contexts Assignment 2
Part 1: Porter’s National Diamond Analysis (60 marks)
When looking into the factor conditions of Tunisia it becomes clear that there is scope for investment. With a wine history dating back 2,000 years there is already an abundance of wine making knowledge throughout the country; this originated from the Carthaginian era whom placed a huge emphasis on wine making amongst other agricultural practices. The nation’s ability to produce great wine has led to it being referred to as a ‘new world wine’ due to renowned wines such as ‘Passum de Magon’. Furthermore, Tunisian wine production developed into a larger scale with the coming of the French in 1881 as they established several large vineyards, and again in 1956 after the country gained their independence. Despite the countries wine growing area still being relatively small, the soil and Mediterranean climate make it ideal for producing wine. The importance of having the right temperature to make high quality wines is stressed in Boyd’s report who refers to it as a ‘necessity’ as opposed to an ‘optional extra’ (Boyd, 2009). Tunisia’s infrastructure is also constantly improving; with over 20,000 kilometres of road, 6 airports and 2 modern highways (Nations Tunisia, N/A) the nation’s transportation links are developing quickly. It’s important to note that if the company decide to invest in Tunisia, strong transportation links to ensure logistic ease and boost competitiveness will be required. As already highlighted the need for skilled winemakers are already in place and with a minimum wage of only 286 TND ($207.25) a month (State Gov, 2012), the potential for business opportunities is there for all to see. Additionally, foreign investments generate one-third of Tunisia’s exports and continues to be a significant source of growth (Bureau of Economic and Business Affairs, 2012), thus suggesting overseas investments in the country are likely to be beneficial.