InternationalManagement SWOTAnalysisSpain ChrisAlberti, BrandonMartinez, MelissaSmith, ArunAlagappan, Leadinguptothe2007recession,therewasnoquestionthatSpainpossessesagreatabilityto growthroughtheprovisionofbusinessopportunities.Withover11,000foreigncompaniesandroughly 1.3billionconsumers,Spainhastheexperiencetoleadthemarketthroughitsmodernizationofboth socialandeconomicresourceswithstrongadvancementsintheBiotechsector.Spainiscurrently rankedsecondinitstransportationsystem.ThisacclamationoftransportationexcellencethatSpainhas earnedisbasedonthenumberofkilometersinthedevelopmentofahighspeedrailtransportation systemthatwillpropelpublictransportationintothefuture,surpassingothercompetitiveEuropean systems.Spainsgeographiclocationplaysamajorroleinitsabilitytomanageimportsandexports, supportingitsexpansiveagriculturalindustries.

LocatedalongtheStraitofGibraltar,Spainsits strategicallyalongsidethegatewaytothewonderfulshippingpossibilitiesthattheMediterraneanSeahas tooffer. SpainsnativelanguageofSpanishisoneofthemostwidelyspokenlanguagesintheworld,and itprovidesSpainwithawaytoconverseeasilyandtransparentlywithmuchofthebusinessworld. Spainpossessesmanynaturalresources,oneofitsmostwellknownisitsstockpileoffreshfoods.The abundanceoffreshfoodshasthepotentialtobothfeeditspeopleandexportitsgreatexcesstoa myriadofothercountries. AlthoughwecanseethatSpainisindeedacountryofhighpotential,itisalsoplaguedbyalack ofmotivationandpoorleadership,assuggestedbyColinTsolis.Thebarforleadershiphasnotbeenset

highinSpain.Manyleaders,suchasSpainsroyalfamily,havesetabadexampleofwhatagood leadershouldbe,andthispoorbehaviorofleadersiscontinuingtotrendtothisday.Manypeoplein Spainwantjobsbutarenotmotivatedtoworkthecurrentlyrequiredamountnecessarytoacquireor keepthesejobs.Thespecializationofjobopportunitiesisrestrictinginsuchsectorsasresidential construction.Therearemanyhighlyskilled,educatedlaborershowever,thedemandforthesetrades arecurrentlyinaslumpduetothedoublediprecession.Spainhasenteredadoublediprecessionwith thecollapseofthehousingmarketaswellasthebudgetdeficitplayingamajorrole.Unemploymentasa result,hasrisentoashighas25%ofallSpainspeoplebeingoutofwork.Thisstatisticdoesnteven accountforthenumberofpeoplewhoareunderemployed.Also,duetotherecession,thereisa weakenedspendingpoweracrossallsectors.Therecession,ineffect,hascreatedaweakconsumer base,aswellasrestrainedinvestmentpotential.Theseimplicationsaremakingbusinessesthinktwicein offeringtheirservicestoSpain,hinderingSpainsoverallgrowth. TaxesinSpainarehighwithamarginalincometaxratethathasclimbedtoastaggering52%, accordingtoKPMGconsultants.AccordingtotheKPMGstudy,Spainsratehasbeenreportedtobe thefifthlargestintheworld.Thishightaxrateiscripplingtheeconomyandtyingupfundsthat businessesneedtobesuccessful.Duetotheextremelyhightaxrate,theblackmarketisbeingprovided withthefuelneededtodriveitsimpacthomeinSpain.Businessesaredesperatetoevadethesetaxes thatarecripplingtheiroperationsandarelookingforawayoutthroughutilizationoftheblackmarket. Theblackmarketcomprisesapproximately40%oftheSpanishbusinessesandisgrowingbyleapsand bounds.Theblackmarketinspirescorruptionanderodestheethicsneededforprosperousbusinesses torunbothfairlyandprogressively.Thesefactorsareconvergingtogetherandarenotonlyhinderingthe progress,butdestroyingtheeconomythatSpainhaslaboredtobuild.

AlthoughtherecessioninSpainhashadadevastatingeffectontheeconomy,thereareafew glimmersofhope.AccordingtotheEconomist,ECBhashelpedreducelongtermbondyieldsbackto precrisislevels.Also,sharpfiscalconsolidationhastrimmedthebudgetfrom11%ofGDPin2009to 7%thisyearaswellasanextratwoyearstoreducethedeficitbelow3%.Manyprovisionsarebeing madeinordertoincreaseopportunities,asseenbythepreviousstatistics.Thegovernmentsplanof actionhasslowlybutsurelystartedtosurface.Thereare38financialinstitutionsthathaveemergedand theremainingbankshavebeenabletorecapitaliseandtransfertheirworstassetstoSareb(abad bank).AmajoropportunityfactorthatSpainpossessistheabilityforothercountriestohirea workforceforextremelycheapprices.Reformslastyearmadeiteasiertofireworkerssothatthe industryiseasiertohireagain.Anexampleofthisnewlabourmarketflexibilityisseenthroughcar manufacturersmovingproductionfromotherEuropeancountriesdirectlytoSpain. Creativeanddynamicindividualsandcompaniesprovideopportunitiesforsignificantexpansion intonewmarketsectors.CompanieswishingtoexpanddevelopmenttoSpainenjoythebenefitofa hugeunemployeddemographicdesperateforlowpayingjobs.AsamemberoftheEuropeanUnion, thereisalotofpotentialfornetworkandtradeamongneighbouringcountries.Easeoftransactionwith neighboringcountriesthroughtheadoptionoftheeurogivesSpainanimmediateadvantageovermany othereconomicgiants. ThegreatestthreattoSpainisthecurrenteconomiccrisisandaslowrecovery.Drowningin over3.2trilliondollarsofdebtowedtovariousfinancialinstitutes,thereisnosingleorsimplesolution. TheeconomyinSpainisvulnerabletotheeverchangingmarket.Asothercountriesbecome economicallystableagain,Spainwillbecomelessattractivetoforeignbusiness.Itisdifficulttopredict whenbusinesseswillbecomeconfidentintheSpanisheconomyagainbutthecurrentlackofconfidence

willaddtoaslowrecovery.TheEconomistsuggeststhatmorereformsareneededfromtheSpanish government.Welfarereforms,alowerminimumwage,andreducingtheburdenofpensionswillcut costsforbusinessesandencouragethemtohirenewemployees.Thesereformsarecrucialinreducing thenationalunemploymentbutthereisspeculationofwhetherornotthegovernmentwillpursuesuch reforms.TheEconomistalsosuggeststhatwithpublicspending,consumptionandinvestment constrained,thegovernmentisrelyingonrisingexports.WithalackofdemandwithinSpain, businessesarecountingonincreasingtheirexportstoothercountries.Relyingongrowingexports, however,maynotmakeupforweakdomesticdemand. Sowhatmightthefuturehaveinstore?OverthenextcoupleofyearsSpainwillstrivetoregain itsoncevibrantglobalimage.ProjectionsonthecountriesGDPshowsubstantialgrowthbytheyear 2050.Ifexportsareabletorevivethenationseconomy,Spainwillbeabletobegingrowingbackinto itseconomicpotential.Ifradicaleconomicreformsareadopted,Spainwillbecomemoreattractivefor internationalbusiness.Spainmusttackleitsweaknessesthroughthefullutilizationofitsstrengthsto prosperasanation.