Greece's Political System
Greece's political system is currently in a stable state. Additionally, the country has been experiencing worsening ties with former allies like Turkey and Cyprus. However, the situation has improved through their new found friends like China and America. There's also enhanced relationship between the UK and individual EU. The implications are improved trade and entrepreneurship. The right political alliance with the newly found friends is also showing promise of better infrastructural investment and development alongside the incorporation of large foreign companies (Michalopoulos, 2017). Therefore, it will result in the creation of more opportunities for the Greece shipping industries.
Economic
The last decade has seen Greece enter a period of financial crisis with a significant amount of Domestic Product having been lost between 2008 and 2013. By 2016, the country was still experiencing a recession with minimal slow growth in some quarters due to political uncertainties and policy constraints put forward by the Eurozone. However, it managed to begin of recovering and improving in 2017. In the summer of 2015, capital restrictions were imposed on Greece though it recently managed to loosen. Thereby improving the investment climate and creating a boost to private consumption.
Similarly, the country has also improved the percentage on the amount of money that can be withdrawn from personal bank accounts during a month. The country is striving to lower the levels of poverty within its borders by finding employment creation methods and alternatives (Export Entreprises SA, 2018). The adjustments in economic standards and conditions are rendering business better and more interesting for all stakeholders especially for the shipbuilders who may create more employment due to their dire need for labor. The Greek shipping industry rose to prominence in the 1960s and contributed significantly to the GDP. The cruise vessels are amongst the product types of top priority from the VARD companies. They are specifically designed for adventure all over the world. Thus, the increased trends in tourism is a boost to the business operations of the company since the ships will be in much more demand. It is because of these types of vessels being designed for adventures in whole world environments.
Social-cultural
The population is mostly literate with more than a third of the people being graduates of Secondary Education. Additionally, both women and men are readily available and free to engage in employment. The percentage of the inactive workforce in Greece has grown with time. It may be necessary for multinational businesses to employ local staff to facilitate communication and business dealings (Lucintel, 2018). The unique nature of Greece's cultural environment requires international enterprises to adapt to the existing social-cultural environment to effectively penetrate the market. VARD shipbuilding companies have a very high employee demand. Fortunately, the demand can be sustained comfortably by the high numbers of unemployed people in the population. The large population is a source of cheap labor for businesses operating in Greece.
Technological
To develop local industries, Greece has been increasing investments in Research and Development. In 2018, Research and development spending amounted to 1% of the GDP. The main focus is on the improvement of technology for industrial growth (Lucintel, 2018). Increased investments in research and development will enable companies or industries like the VARD shipbuilding companies to have access to a wide range of research information which will facilitate their performances.
Legal
The government maintains a significant presence through the legislation and rules it has incorporated in many areas. There are legal factors that have been implemented in the country in the past that may influence how businesses conduct their activities including the consumer protection, financial system, privatizations of companies in the industry, organizational modernization, and programmatic agreements with the Greek state. Additionally, the contracts, tax and fiscal/wage systems are rigid and face mounting pressure (Lucintel, 2018). It ensures that the VARD shipbuilding companies deliver quality materials to the market, submits revenue to the government and stipulates the shareholding, recruitment and relocation terms to all employees.
Environmental
Environmental laws guide business operations in the country. Some of the statutes include EU environmental law that has greatly influenced Greece's laws. Businesses operating in different industries are required to adhere to environmental regulations. Companies like Yata, Kongsberg, and Vard collaborated to work towards the creation of new solutions and green jobs which are considered environmentally friendly (Giannakourou, 2016).
Porter's Five Forces
The degree of rivalry within the industry
VARD Company faces a strong force of competition for companies like Hellenic shipyards, neurions ship yards, and salamis ship yards. Competition in the industry is reasonably stiff with large firms occupying a significant market share. However, VARD Shipbuilding Company is one of the world's leading shipbuilding companies. And thus, it will face minimal levels of rivalry or competition from the few existing more substantial market shareholders.
Bargaining power of buyers
The buyers have a strong bargaining power since they have access to other market players apart from the VARD shipbuilders company. Therefore, they can easily switch to offers from other companies at very low switching costs.
Bargaining power of suppliers
Suppliers have high bargaining power since VARD delivers a broad range of quality and highly specialized vessels that fit and sort the needs the customer in different fields like fisheries, and aquaculture business. Again, Greece's shipping industry market has a small number of suppliers including local, national and overseas suppliers.
Threats of substitutes
VARD shipbuilding companies face minimal threats from substitutes. The threat of substitutes is low. Few substitutes provide a cheaper option to shipping. Again, the company established a strong relation and reputation with its customers to the extent that they greatly trust it.
The threat of new entry
VARD Shipbuilding Company faces minimal threats from new entry since the industry requires huge startup capital/capital investment and expertise. Additionally, the industry also demands a higher maintenance cost, and low-margin. Besides, the company competitive landscape is tilted towards large companies that can sell large volumes to operate efficiently. Therefore, it is difficult for a new chain to emerge and compete effectively. However, even small businesses can compete with large firms.
Bibliography
Export Entreprises SA, 2018. Greece: Economic and political outline. [Online]
Available at: https://en.portal.santandertrade.com/analyse-markets/greece/economic-political-outline
[Accessed 6 December 2018].
Giannakourou, G., 2016. Environment And Planning - Introduction. [Online]
Available at: http://www.greeklawdigest.gr/topics/physical-cultural-environment/item/275-enviromental-and-planning-introduction
[Accessed 6 Document 2018].
Michalopoulos, S., 2017. Business chief: Greece is politically stable and now needs productive investment. [Online]
Available at: https://www.euractiv.com/section/economy-jobs/interview/greek-business-chief-the-country-is-politically-stable-and-now-needs-productive-investment/
[Accessed 6 December 2018].
