Jonathan Obregon
BUS 570 - International Business
Professor: Sand
Due: October 10, 2013

Midterm - Atlantic Ocean Islands

International Business focuses on a variety of topics which include understanding one’s host country environment, being sensitive to cross-cultural differences and being able to manage operations separated by the barriers of distance, language, time, and culture. By focusing and comprehending these topics, individuals and firms will help future international business economically and politically between countries. There are multiple countries and regions that practice international business. I will discuss several regions and islands within the Atlantic Ocean, and its emphasis on international business. There are several islands located throughout the Atlantic Ocean. Most of the large islands, such as such as the British Isles, Greenland, Newfoundland, and the main islands of the Greater Antilles, were once connected with the continents. Other islands, especially those far out at sea, were formed by successive eruptions of volcanic material far below the water's surface. Examples of such islands in the North Atlantic Ocean are the Faeroe Islands, the Azores, Madeira, the Canary Islands, the Cape Verde Islands, and Sao Tome. Islands of the South Atlantic include St. Helena, Ascension Islands, Saint Peter, Tierra del Fuego, and many more. Since there are so many islands located in the Atlantic Ocean, I will only discuss three of the primary islands which are Azores, Madeira, and Canary Islands. Azores is a chain of nine volcanic islands located near Portugal. The Azores Islands have a subtropical climate with high humidity and often experience fluctuations in weather patterns. The official language in Azores is a Portuguese dialect depending on the island. Having an understanding that English is not well spoken by the more mature population there can be beneficial when doing business. Individuals and firms looking to invest in Azores, should first correspond in Portuguese. There current currency they use is in Euros. From an international business aspect we view currency as an important factor. International business requires having a very good sense of how your local currency is affected by other currencies and how that, in turn, has an impact on your exports and imports. 1 Euro is equivalent to $1.30 in USD. We also look at Gross Domestic Production in the Azores Islands, which is worth $3.7M in USD. GDP, is important within international business because economic growth can create more business opportunities. The Azores Islands are known for its deep sea fishing, local cheeses, red and white wine production, and many varieties of tropical fruit. Pineapple greenhouses are unique to the Azores. The island of Sao Miguel which is apart of the Azores, has over 6,000 greenhouses. They also export products such as cheese, butter, and dairy products and import products such as cereals, fuels, machinery, and transportation material. The most significant export for the Azorean economy are fish preserves. The principal product, canned tuna is marketed mainly in Italy. Some of there main trading partners are with countries such as Germany, Spain, France, UK, Italy, US and more. Some cultural facts an investor or business may want to consider when doing business with the Azores Islands, is that they place importance on showing respect to age and social status. It is also common to invite business contacts for lunch or dinner, lunch is usually at 1pm and dinner for them is at 9pm. Also, you do not want to use direct criticism and want to avoid displaying impatient behavior as it can be perceived as offensive. Catholic religion remains at the heart of the Azores Islands culture. They have numerous festivals and celebrations all throughout the year. Next we discuss another Atlantic Ocean Island, Madeira Islands. Madeira is very similar in culture to the Azores Islands. It is also a chain of islands located near Portugal and was discovered by the Portuguese in 1418. It is made up of the islands of Porto Santo, and the uninhabited islands of Selvagens and Desertas. The population is about 268,000 making Madeira one of the European Union’s most populated regions with an estimated average population density of 195 persons per square mile. Fishing and farming are the traditional industries of Madeira, along with wine productions. Madeira is also known for its tourism, visited by about 1 million tourists a year. Economically, the official currency in Madeira is Euros, as well. Madeira is part of Portugal, which sees foreign investment as an essential part of its overall strategy to modernize the economy. A key objective of the government's 1994-1999 Regional Development Plan was to boost international business through increased foreign investment in transport, telecommunications, energy, agriculture, fisheries, and tourism.
Portugal applies some percentage limits to ownership of entities in certain sectors, including air transport, television and telecommunications. The Canary Islands of Spain, consists of a chain of 7 major islands in the Atlantic Ocean. The nearest island being 67 miles off the northwest African mainland. The islands include Tenerife, Fuerteventura, Gran Canaria, Lanzarote, La Palma, La Gomera and El Hierro. The beaches, climate and natural attractions especially Maspalomas in Gran Canaria, and Mount Teide (3rd largest volcano in the world), make it a major tourist destination with over 12 million visitors per year. The islands have a subtropical climate with warm summers and moderately warm winters. Gran Canaria is the Canary Island’s most popular island with a population of about 865,000 people. Overall, the Canary Islands have a population of about 2 million people. Also pointing out that the Canary Islands are the last territory between Europe and Africa to have access to the United States, this can be considered an important factor for U.S businesses for foreign investments. The official language spoken in the Canary Islands, is Spanish but with a dialect. Economically, the currency of the Canary Islands is also in Euros. The economy there is based primarily on tourism, which makes up 32% of the GDP. Construction and Agricultural productions also make up a large percentage of the economies GDP there. The islands experienced continuous growth, mainly because of foreign direct investments. Many foreign countries have developed tourism real estate there such as hotels and apartments. Another industry which is a great opportunity for international business and foreign investments to enter there is the water sector (desalination and purification of water). Major trading partners for the Canary Islands, include France, Germany, Portugal, Italy, China, and Africa. In conclusion international business focuses on a variety of topics which include understanding one’s host country environment, being sensitive to cross-cultural differences and being able to manage operations separated by the barriers of distance, language, time, and culture. By comprehending these topics, individuals and firms will help future international business economically and politically between these Atlantic Ocean Islands with other countries. There is great opportunity for global economic growth if we can do this.