Solar Etree project - Economic analysis

INTERNATIONAL BUSINESS
DEVELOPMENT STRATEGIES
Lylya Djenane – Sixtine Boulard- Névine Chatila – Axel Barat

Agenda
 Context
 Project Presentation
 Parameters of influencing costs
 Quality
 Operation and ranking
 Risk analysis
 Corruption
 Analyze results
 Matrices
 Conclusion

CONTEXT
E Tree is a social company which aims to promote
environmental awareness and sustainability, to create a link
between the community environment.
Powered by solar panels directly from the sun
Independent unit that produces green energy
Provide a wide variety of services
Docking station to charges smartphones, tablets
Night illumination
Free Wi-Fi
A water trough the animals

PROJECT PRESENTATION
TURKEY
ISRAEL
TUNISIA
TUNISIA
Area: 163 610 M²
Population: 10 982 754
GPD: 47 Bn (2014)
GDP Growth: 2,6%
% Unemployment: 15%
TURKEY
Area: 783 762 M²
GPD: 799,5 Bn (2014)
GDP Growth: 3,0%
% Unemployment: 9,3%
ISRAEL
Area: 20 770 M²
GPD: 304,2 Bn (2014)
GDP Growth: 2,8%
% Unemployment: 5,3%

I S R A E L
P Does not have peaceful relation with Palestine
Representative democracy
E Natural resources: 77Bm (2012)
Israel export reached 64,74Bm (2012)
S 75,5% of the population are Jewish – 20,6% Arabic
92% of Israelis live in urban areas
T Leader in water technology
90% of Israelis homes use solar energy
E Does not have peaceful relation with Palestine
R&D represent 4,7 of its GDP
L Unemployment represent 5,3%
Tensions and conflicts with the others country

I S R A E L
STRENGTHS
Israel’s workforce is highly
educated
Major industries include high-skill
manufacturing
Israel’s start-up scene has been
described as “The world’s other
Silicon Valley”
WEAKNESSES
Israel lacks a global banking
presence
Israel processes little in the way of
natural resources
The domestic market is small, so
companies must focus
internationally
Technology
Health care
Security
OPPORTUNITIES
Almost 40% of Israelis report
considering emigration
Hostile relationships with
neighbouring countries
On-going unrest and the constant
possibility of war
THREATS

T U R K E Y
P Policies on liberalisation
Turkey has known violent terrorist attack
E High flow of foreign investments
7th economy of Europe
S
Important growth of young population
High level of unemployment
Religion: Islam and Christianism
T
Significant development for Information Communication
and Technology
Low expenditure cost on Research and Development
E
Affluent natural resource
Ranked as the 9th on biodiversity throughout Europe
High pollution level – Use of chemical and detergents
products
L
Unemployment represent 9,3%
Comprehensive legal structure
Robust framework for the business entities

T U R K E Y
STRENGTHS
Rapid credit growth in the economy
 Entrepreneurial business expansion.
Steady regulatory improvements make
it easier to set up and run a business in
the country
Government helps and supports start-
up businesses
WEAKNESSES
Innovation is weakened by the lack of
intellectual property rights protection
The desire of investing is still weak
compared to other big markets
Located between key markets (Europe,
the Middle East, Russia, Central Asia)
High evolution of the Turkish Economy
these last 10 years  Potential of
growth in many industries.
Turkey bet on technology researches 
Possibility of expansion
OPPORTUNITIES
Dangerous borders (especially with
Syria now)
Very competitive environment for
entrepreneurs because of a strict
slowdown of the economic growth
recently.
Lack of the skills given by the education
system  Harder to innovate
THREATS

T U N I S I A
P Constitutional Republic, with guarantees rights for women
Included in the European Union’s European Neighbourhood
Policy (ENP)
E EU’s 30th largest trading partner
One of the most competitive economy of Africa and the 40th
in the world; quite high unemployment rate (15,2%)
S A mixed culture
98% of Arab population
High education level (6% of the GNP)
T Electricity used is produced locally
Few investment in research and development
E Between tropical and temperate climate ; Humidity and
dryness alternate
The water is unequally shared out, rare resource
L Consumer protection law, environmental etc. very strict

T U N I S I A
STRENGTHS
Strong relations with the European
Union
The government help and
supports outsourcing and offshore
activities
High education Level
WEAKNESSES
Very few investment in Research &
Development
Weak economy of scale
It is a growing economy
Strong development of
democratic principles
New recent regulations to
facilitate trade by reducing trade
barriers
Economy of scale
OPPORTUNITIES
Strong competition between local
and international companies  To
build a start-up becomes very
difficult.
Progress on trade facilitation
Growing bargaining powers of
customers
THREATS

PARAMETERS OF INFLUENCING
COSTS
5.30%
7.14%
-0.40%
Tunisia Turkey Israel
Inflation 2015
Inflation 2015
38 34
109
Getting Electricity Rank 2014

25%
20%
26.50%
Taxe Rate %
Taxe Rate %
COSTS
15.4
18.1
23.2
Profit tax (% of commercial
profits) 2014
Profit tax (% of commercial profits) 2014

COSTS
145.44
425.17
1063.56
Minimum Wages Eur/Month 2015
Minimum Wages Eur/Month 2015

PARAMETERS OF
INFLUENCING COSTS
0.89 €
0.11 €
0.06 €
Israel Turkey Tunisia
Price (Eur) of electricity / KWh
Price (Eur) of electricity / KWh

805
990
620
Costs of Export (US dollar per
container) price 2014
Costs of Export (US dollar per container) price 2014
910
1235
565
Costs of Import (US dollar per
container) price 2014
Costs of Import (US dollar per container) price 2014
PARAMETERS OF
INFLUENCING COSTS

ISRAEL TURKEY TUNISIA
Inflation rate
Profit Tax
Getting Electricity
Price of Electricity
Labour and
Social
Database
Minimum Wages-
EUR/Months
Economic
Policy and
Debt Database
CONCLUSION
KEY SUCCESS FACTOR #1
Costs to export
Costs to import
Private sector

QUALITY
79.65
94.92 97.76
Literacy rate, adult total (% of
people ages 15 and above)
Literacy rate, adult total (% of people ages 15 and…
47.6 49.4
63.4
Tunisia Turey Israel
Labor force participation rate
(% of female population ages 15+)
Labor force participation rate (% of population ages…

QUALITY
0
5
10
15
20
25
30
Long-term Unemployment (%)
Long-term Unemployment (%)
NC

QUALITY
International Human Development Indicators

QUALITY
ISRAEL
YES!
* For Israel sees energy revolution as an
opportunity to seize, creating wealth and
employment
TUNISIA
YES!
* Environment? A priority area of work with
Tunisian civil society
* Companies and associations participate
independently in the dynamics of the sector
know-how and investments.
TURKEY
YES!
* Istanbul 2020 reinforces its commitment to
ecology by announcing a tree will be planted for
each person participating in the 10th United
Nations Forum on Forests in Istanbul; (already
more than one million trees in Istanbul since 2011)
Sensitive to Sustainable Development / Green Tech

CONCLUSION
TUNISIA TURKEY ISRAEL
HDI
Literacy
Labor force participation
rate
Labor Force Female
Long Term
Unemployment

OPERATIONS AND RANKING
20
14
10
Time to import (days) 2014
Time to import (days) 2014
16
13
10
Time to Export (days) 2014
Time to Export (days) 2014

OPERATIONS AND RANKING
47.7
40.5
Average usual weekly hours worked 2014
Average usual weekly hours worked 2014
NC

Countries Risk Analysis
Sovereign
Risk
Currency
Risk
Banking
Sector Risk
Political
Risk
Economic
structure
Risk
Country
Risk
France
A B BBB AA A A
Tunisia
CCC B CCC CCC B CCC
Turkey
B B BB B BB BB
Israel
BB1 A+ NC NC NC A3
RISK ANALYSIS

Perception Index 2014
40
45
60
Corruption Perception
(score 2014)
Corruption Perception (score 2014)Ranking (out of 174 countries)
37 e – Israel
64 e – Turkey
79 e – Tunisia
CORRUPTION

TUNISIA TURKEY ISRAEL
Time to Import
Time to Export
Global Country
Risk
Av. Hours worked NC
Corruption
CONCLUSION

MATRICES - ISRAEL
MC KINSEY 1/5
We’ll assign weighted coefficients 1 to 3 shades representing low, medium, high.
Parameters Coefficient Notes
Growth potential in this
market
3
The company is structured
for large series. The growth
potential in the green tech
market is very important.
Margin potential 1
It's not really the focus of
the company because it is
in a growth period.
Risk in this market 2
Risk inherent in all types of
market, however it has to
be limited because the
goal is the sustainability of
the business.
Geographical location 3
It is the company's
differentiator.

MATRICES
Parameters Growth
Potential
Margin
Potential
Risk Location ∑ X
Coefficient 3 1 2 3 9 2.25
Tree Trunk
Creation
1
(Introduction
/ Launching
product)
1
(Launch,
reduced
profit)
1 (weak) 3 (very important) 6 1.5
Assembling
photovoltaic
panels
3 (growth in
the green
tech market
is important)
1
(reduced
profit)
1 (weak) 3 (responsiveness,
cost optimization)
8 2
Accessibility to
electricity
1 (basic
service)
1 (no marge) 1
(no-existent)
3
(Cost optimization)
6 1.5
Assembly
Terminal Wifi
2 (medium) 1 (no marge) 1
(no-existent)
3
(Cost optimization)
7 1.75
Production of
fresh water
2 (medium) 1 (no marge) 2
(no-existent)
3
(Cost optimization)
8 2
MC KINSEY 2/5

1 to 3 : low, medium, high (= good)
MATRICES
Strengths of the business sub-segments: (KFS)
- Costs : ability to master the costs and offer
competitive prices
- Deadlines : ability to master supply chain and
master delays
-Quality : ability to deliver the expected quality
- Location : Closeness
- Reactivity : responsiveness to changes and schedules
Parameters Costs Deadlines Quality Location Reactivity X
Coefficient 3 3 3 3 3 15/5 =3
Tree Trunk
Creation
1
(non
competitive
company)
2 (medium) 3 (would be
good)
3 (important
because
many imports
from France)
3
(would be
good)
(1+2+3*6) =
12/5 =2.4
Assembling
photovoltaic
panels
1
(non
competitive
company)
2 (medium) 3 (Good) 3 (Strong
point : at the
heart of
market)
3
(would be
good)
2.4
Accessibility to
electricity
3 (important) 3 (important) 3 (would be
recognized
by customers)
3 (important) 3
(would be
good)
3
Assembly Terminal
Wifi
recognized
by customers)
3 (important) 3
(would be
good)
3
Production of fresh
water
recognized
by customers)
3 (important) 3
(would be
good)
3
MC KINSEY 3/5

MATRICES
MC KINSEY 4/5
Strength of E-Tree
Competitive position
/ Market attractions
Strong Medium Weak
Strong
Maintain its position Invest to increase Invest selectively
Medium
Invest selectively Selective profitability Limited expansions
Weak
Protect and stay
focus
Selective profitability Abandon

MATRICES
ANSOFF 1/1
The matrix Ansoff is one of the most used in the decision on growth strategies.
Product /
Market
Existent New
Existent Market Penetration Product Development
New Market Development Diversification
E-tree Project?
New market + new product = new product diversification
-Involves the development of new activities.
-The new strategic business area (SBA) comes from the creation of the company.
- Our start-up has a 'diversification' strategy as we are affected by costs of new product
development as well as trying to break into the marketplace.

I
S
R
A
E
L
WHICH COUNTRY DO WE CHOOSE?
According to our various analyzes, it was found that Israel wins!
The Israeli economy is an atypical case in the Middle East:
 Economically isolated from the others
 The only truly developed to join the OECD
 Economic & Technological performances
 Vital Resources (water, electricity, weather)
https://www.youtube.com/watch?t=38&v=gCAdxeH0ITg

S
O
U
R
C
E
S
http://www.imf.org/external/country/TUN/index.htm
http://www.tradingeconomics.com/morocco/gdp-growth (indicators)
http://data.worldbank.org/country/turkey?display=default (data, countries,
indicators)
http://www.tradingeconomics.com/country-list/inflation-rate
http://www.doingbusiness.org/Rankings (Data, rankings, methodology)
http://www.unicef.org/
http://epi.yale.edu/epi/country-rankings
http://ec.europa.eu/eurostat/statistics-
explained/index.php/Labour_cost_structural_statistics_-_levels (statistics)
http://www.insee.fr/
UNESCO Institute for Statistics
http://www.indexmundi.com/
http://www.bls.gov/
http://hdr.undp.org/
International Labour Organization
https://stats.oecd.org
http://country.eiu.com/
https://www.kpmg.com/Africa/en/KPMG-in-Africa/Documents/Tunisia.pdf
http://www.coface.fr/
http://www.transparency.org/cpi2014/results
http://chohmann.free.fr/fp_kinsey.htm
Ansoff, I. (1957). Strategies for Diversification, Harvard Business Review, 35, 5
(Sep-Oct), 113-124
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Solar Etree project - Economic analysis

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