Political Science

This paper addresses the question whether a company should expand its operations to Israel. For this purpose, a secondary research was carried out. The research revealed that Israels economy is increasing fast which is also benefitting the businesses operating there. The educational system of Israel is very strong enabling companies to obtain quality work force easily. It is technologically very advanced country. But with these factors, it also have had tensed relations with the Muslims and Muslims do not recognize Israel as a state. All in all, our research suggests that it profitable to do business in Israel.

Our company has decided to expand its operations internationally. Following our decision, we are planning to begin our operations in Israel.  For that to happen, we would need additional funding and our highly valued investors like you who have always shown confidence in our abilities to succeed in our endeavors have a major part to play in this regard. We are sure that you will invest in our operations in Israel and help us in successfully starting and running operations in Israel. Here we would provide you with necessary information about Israel and why you should help us in establishing our business in Israel. It is highly imperative that we will identify and explain some very important factors about doing business in Israel.

Israel A Brief History
After the World War 2, England gave up on its mandate of Palestine which led to UN dividing Palestine into two parts- one for Muslims and another for Jews. Muslims in Middle East never recognized Israel, the Jewish territory, which eventually led to various wars between Muslims and Jews (The World Fact Book, 2010). The truth is that the tensions in this part of the world have never subsided despite many agreements reached between Palestinians and Israelis resulting from the efforts made by international community. Many Muslims do not consider Israel a state.

Keeping the tensions between Palestinians and Israelis aside, Israel is the only Jewish majority area in the world with 5.7 million Jews out of a total population of 7.5 million. Israel is one of the most developed countries in the world and practices parliamentary form of government.

Israels Economy
Israels economy can be classified as a market economy where firms compete on the basis of their strengths and little intervention from the government. This kind of environment favors forms which are strong enough to face the competition on the basis of their competencies. This would favor our business as we have the experience and resources to compete in international markets.

The unfortunate thing about Israel is that it is not rich in natural resources compelling it to import oil, coal, food, diamonds, and other materials important in the production process. But, Israel is a technologically advanced country as the some of the worlds technological innovations occur here. Academicians in Israel are actively involved in Research and Development. This is evident from the fact that Israel is at number four in the scientific activity (Ilani, n.d.). Israel being poor in natural resources and technologically advanced country is actually advantageous to us as we are specialists in developing processed packaged food items by means of state-of-the-art machinery. We pointed out earlier that Israel imports food items but at high rates. Once we establish a our business there, we will be able to produce at a cost that will enable us to price it lower than the price at which food items are imported.
 
Israel is an attractive destination for foreign investors and in 2006 the FDI totaled an astounding amount of 15 billion (Israeli Growth, 2007). Companies that had left Israel after the tensions between Muslims and Jews increased but they are now returning back as they observe growth prospects for themselves. Even the tension exists till this day yet the Israeli economy is growing. Conditions for doing business are especially favorable to US companies as both the countries are very active trading partners. The US and Israel signed a Free Trade Agreement in 1985 which enabled the companies from both countries to get actively involved in trade.

Business Etiquettes
If a business is staring its operations in a new country, it is very important that culture and business etiquettes of that country be understood. Here we will discuss the common business etiquettes practiced in corporate Israel. In Israel, the official week is from Sunday through Friday. Most of the Israelis can understand English so it is normal to exchange business cards in English. In formal business meetings, formal attire is preferred and for non-business meeting, casual clothes would do too (Emma, 2005). Women have to especially take care of their dressing. They have to dress-up decently with clothes having sleeves. As the Israelis love to talk, the meetings begin with a general discussion before the main topic is discussed.

Handshakes are a common form of greeting if individuals are meeting for the first time. But if individuals meet frequently, hugs and cheek-kissing is the norm. If one is a guest, heshe will usually be asked for refreshments and a small discussion on light topics will generally follow. The guest is escorted by host to the door when leaving. In case, host escorts guest to the elevator, it is a sign that the guest is of importance to the host.  At some places, the norm will be to enter with naked feet so the norm has to be followed.

The Demographics of Israel
Israels population is approximately 7.5 million and it is constituted of approximately 76 Jews, 20 Muslims and remaining are categorized as others (Central Bureau of Statistics, 2009). The three main ethnic groups living in Israel are Jews, Muslims, and non-Arab and non-Jew residents. Male and female residents form almost the same percentage of population having the ratio of 0.99 (malefemale). The age structure of the population suggests that 15-64 years olds constitute 64 of the population, 0-14 years old approximately 28 while remaining percentage consists of people above the age of 65 years.

Israel is one of the most multicultural and multilingual countries in the world as many people have migrated to this land. Arabic and Hebrew are the official languages but some fifteen more languages are spoken in Israel.

A huge market exists for our products in Israel. It will save us lot money as we would invest in researching about the demographics of Israel because the demographic information is available with the government which will enable us to segment the market and target the best segments.

Education in Israel
The literacy rate of total population in Israel is 95.4 with male literacy rate at 97.3 and female literacy rate at 93.6. It is important to note that literacy in Israel is defined as the people above the age of 15 who can read and write. The government spends around 10 of its GDP on the education thereby making education subsidized so that more and more Israelis can benefit from it. Education is compulsory for the children aged between 5 and 18. Many renowned universities are present in Israel which is imparting quality education to the Israelis. This results in high quality manpower for the companies operating in Israel.

This is advantageous to our business as we would not have any problem choosing the quality human resource for our company. And, it is very clear from our experience that Human Resources play a crucial role in the success of our business operations. If we start our operations in developing countries, it would make it imperative for us to invest heavily in the development of quality human resource. Israel offers us the best opportunity and we should exploit this opportunity to our advantage.

Political System of Israel
Israel is a democratic country where the head of the state, the prime Minister is selected by the vote of the people. In Israel, the executive is the government, Knesset holds the legislative power and the judiciary is independent from both the systems enabling it to work in a just way. Knesset is situated in Jerusalem and has 120 Israelis as its members who are elected to parliament for a period of four years. The judiciary is independent and the interesting thing is that it has both religious and secular courts to cater to the different groups residing in Israel.

A strong political system in Israel makes it less prone to violence. But the problems between the Muslims and Jews results in violence which is an unfavorable condition. But this is something that has been happening since so many years but the business in Israel has continued as usual.

Conclusion
Having discussed all the factors above, it can safely be concluded that it is in our interests to expand our operations to Israel.   There are various reasons that have been discussed here support our conclusion. Israel is a growing economy and is offering many benefits to companies who are already engaged in business there. Not only does the local demand exists for the products created in Israel but the international demand for the products created in Israel is also high as people perceive the products from Israel as high-quality. The Israelis are technologically very advanced country. They not only produce the machinery for the warfare only but also create machinery and software which support the business processes. This is because the Israelis are deeply involved in research and Development.

Israel is also a very literate country in comparison with other Middle Eastern countries. It has a very literacy rate as government spends a significant portion of the GDP on educating Israelis. This makes it easier for the companies to find the qualified workers whose productivity is high and add real value to the company. Israel faces some problems as well especially because of tensions between Israel and Muslims world. Almost every Muslim country has not yet recognized Israel as a country as they believe it has wrongly occupied the territory of Kashmir. But from the business point of view, Israel is one of the best countries in the world.