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Spain Country Analysis
San Jose State University
May 9, 2015
The Spanish people are a dynamic and fascinating mix of different customs and cultures. While they are mindful and respectful of their past, they are equally as excited and proactive about their collective futures. Spain has a wealth of natural resources and an abundance of beautiful places to visit and explore. The Mediterranean climate is as alluring to foreign tourists as the outstanding Spanish cuisine.
The EU crisis of 2009 has cast an unmistakable pall over the country’s economic future, but there are good financial signs that the country has weathered the crisis and is in the process of recovering. Spain’s business and investment environment have challenges that need to be overcome, but the outlook is positive when you consider the potential for growth and prosperity that are within reach of a Spanish society that is proudly and confidently looking towards a brighter future. We feel that the EPT kit would be embraced and would be of use to the Spanish population who are progressive and strive to seize control of their lives.
General Introduction of Spain
Spain is one of the most interesting and vibrant countries in Europe. In order to evaluate if a new product, the E.P.T. pregnancy kit, would be successful in this market, our team is presenting a country analysis that includes information and data of the country in different areas. Spain is about two times the size of Oregon. The capital of Spain is Madrid, and it is also the largest city in the country followed by Barcelona, being the second largest located to the north, and Sevilla being the third largest located in the south. Spain is surrounded by the Atlantic Ocean and Mediterranean Sea. According to the census of 2014, Spain’s population is estimated to be 47, 737, 941, with a high urbanization level near to 80% (Central Intelligence Agency, 2015).
Life span in Spain is above average compared to other nations; for males it is 78.5 and 85.7 years for females, ranking in the top 18 worldwide. Women have an average of 1.5 children, so the new generation of women tend to have smaller families. Contraceptive prevalence is high, about 65.7% in average, and the mothers’ average ages at first birth is 30 years. For the Spanish government, Healthcare is a basic need and the government offers free healthcare services to their citizens and allocates 9.6% of their GDP on Healthcare, which contributes to the long life span of the Spaniards (CIA, 2015).
Christopher Columbus was sent on a voyage to discover new lands, and in 1492 he reached what today is known as the American Continent. The following centuries saw Spain become one of the strongest powers in Europe, because of all the treasures that were taken from the Americas. All the wealth Spain collected gave the nation a new economic stability. Spanish soldiers and priests continued exploring and colonizing the rich resources of the continent.The colonization included the majority of the lands from Mexico to Chile, spreading also the Spanish culture and language among the subjugated indigenous peoples (WebCite query result, 2015).
However, in the 17th century, Spain’s economy stagnated, and the kingdom went through a long period of political instability and unrest. In the 20th century, Spain faced a Civil War from 1936 to 1939 that scarred the country and Spanish society, both mentally and physically. The outcome of Spain’s Civil War saw the country endure a harsh dictatorship that lasted 36 years. Under Generalisimo Francisco Franco, Spaniards bore witness to repression and censorship. These events impacted the economic stability that Spain had enjoyed in its storied past, but with the death of the military dictator, allowed the country to enter a new political era transitioning to a democratic government with a slow but flourishing economic development (WebCite query result, 2015).
Spain occupies about 85 percent of the Iberian Peninsula, with Portugal on its western border, and with France on its northeast. The climate of Spain is generally marked by extremes of temperature that range from clear, hot summers to cloudy, cold winters with low rainfall. Spain’s terrain is made up of mostly large flat areas surrounded by some hills. Spain is known for its richness of natural resources that include coal, iron, copper, lead, zinc, uranium and mercury, among others. Spain is facing a pollution issue on the Mediterranean Sea because of raw sewage and also from oil and gas spills (WebCite query result, 2015).
Social Institutions: Family
Family is an important institution for the Spanish people, and nuclear families are more predominant in urban and large cities, with a very small number of extended families in rural areas. The dynamics of the family are changing from traditional female and male roles to more modern family roles, where women have a more active role outside their home in different professional industries, business, and the political world. Although males have a long tradition for showing “machismo,” meaning men having more power than women, and a strong sense of masculinity and pride, today these roles are changing. Spanish people have accepted the independence of women and the prominence of some of them- including their queens and noblewomen, which has allowed for a smooth transition to more equality between males and females. Due to this, there was no need for a violent or destabilizing feminist rebellion. Recently, a law passed compelling men to do their share of housework and family care, and this has motivated more men to increase their investment and participation at home and in their families (WebCite query result, 2015).
Social Institutions: Education
The education system and literacy levels in Spain are remarkable. Education is free in Spain. Pre-primary education is voluntary, and there is only a small cost for daycare. Primary and Secondary levels are for students 6 to 16 years of age. Primary is for those aged 6 to 11, and Secondary is for students between 12 to 16 years old. At age 16, students may choose either a vocational training course for one or two years, or a two-year baccalaureate-style (bachillerato) course designed to prepare them for higher education. There is a small number of private schools run by the Catholic Church, and they charge tuition, but most of it is subsidized by the Spanish government (WebCite query result, 2015).
There are 60 main universities in Spain, and some students decide to attend business or vocational technical institutes that specialize in engineering. Since 1980, the number of students enrolled in higher education has significantly increased leading to overcrowding issues in Spain’s universities. The oldest University institution in Spain is the University of Salamanca that opened its doors to the public in 1218. The government invests 5% of their GDP in education. According to a 2012 report, Spain has a nearly 98% literacy rate, males with 98.6%, and females with a 97.2% rate (CIA, 2015).
The Spanish government is a parliamentary monarchy, meaning a monarchy having a parliament (CIA, 2015). A Monarchy is an autocracy governed by a monarch who usually inherits the authority to rule. A parliament is a representative body having supreme legislative powers within a state or multinational organization. There are about 12 to 13 political parties in Spain, and the top two are The Popular Party (Partido Popular, or PP), and the Socialist Workers Party (Partido Socialista Obrero Español, or PSOE) (CIA, 2015). In some of the latest political news, according to the Wall Street Journal, the Prime Minister says the economic growth target for this year will be raised from 2.4% to 2.9%.(The Wall Street Journal [WSJ], 2015). Currently, there is some political turmoil due to the economic crisis, high unemployment rate and slow ineffective efforts from the government to establish a significant political and economic stability (WSJ, 2015).
Spain’s legal system is a civil law system with regional variations (The World Factbook, 2015). The civil law legal system originated in Europe, with its influences were laid down by ancient Rome. The legal system consists of three branches, the executive branch, the legislative branch, and the judicial branch. The executive branch consists of Spain’s King who is known as King Felipe VI, he has been king since June 19, 2014. There is also a head of the government who is Mariano Rajoy; he has been the head since December 20, 2011. Moreover, there is also a cabinet which consists of the council of ministers designated by the president (The World Factbook, 2015). The elections in Spain work quite differently from the system in the United States, because in Spain “the monarchy is hereditary; following legislative elections, the leader of the majority party or the leader of the majority coalition usually proposes a president by the monarch and elected by the National Assembly” (The World Factbook, 2015).
Spain has a variety of different social organizations with different purposes. One of the organizations is The Association for Victims of Terrorist or AVT. This group’s purpose is devoted to support victims of the Basque Fatherland and Liberty (ETA) terrorist organization (The World Factbook, 2015). On the 15th of May every year, there is also a protest movement (The World Factbook, 2015). The movement is known as the Indignados, in Spanish it stands for “indignant ones” (The World Factbook, 2015). The root of this movement is to advocate for greater accountability and transparency in Spanish politics. It is also meant to increase social justice as well as increase and create jobs. Another noteworthy social organization is the Spanish Confederation of Employer’s Organization of CEOE. It is a Spanish institution that was founded in June 1977, representing the Spanish business community. It supports both private and state-owned companies in all sectors (The World Factbook, 2015).
Business Customs and Etiquette
When conducting business in Spain, it is expected that the traditions, values, and customs be respected (Meeting Etiquette, 2014). During business meetings, it is unlikely that the starting point of conversation will directly be about business. As a matter of fact, the topic of business may not even be brought up until much later in the negotiation process (Meeting Etiquette, 2014). The reason being is the Spaniards value getting to know each other on a personal level before jumping into the actual negotiation process itself. After taking some time to get to know your partner, is when the negotiation phase can then start. In this process, the negotiation presentation must be concise and not stray away from the topic at hand (Meeting Etiquette, 2014). The executive summary that is to be handed out after the presentation should be printed in Spanish. It is said that the Spaniards will not admit to having a difficult time understanding the business proposition as they are afraid to lose “face” (Meeting Etiquette, 2014). Moreover, business decisions are always made by the most senior managers in the company and you may never actually get to formally meet this person in charge (Meeting Etiquette, 2014). This is normal in the Spanish business culture, and should not discourage you from proposing in the business negotiations. On another note, if you are the one to run the business meeting, be aware that decisions are not made during the time of the meeting since the Spaniards consult with their managers afterwards. It is crucial to pay attention to body language as these are cues on how the business meeting is going (Meeting Etiquette, 2014). Lastly, if you find yourself in a meeting where everyone is talking at once and disruptions occur, this simply means that they are interested and no offense should be taken (Meeting Etiquette, 2014).
Spain’s religion is predominantly made up of Roman Catholics (Countries and Their Cultures, 2015). Although the country consists of mainly Catholic practicing individuals, it is noteworthy to add that there is a division of practicing Catholics. To emphasize, even though the vast majority of Spaniards practice Catholicism, many of them are still segregated by social class (Countries and Their Cultures, 2015). There are collective forms of Catholicism as well as more private forms. Overall, it is important to understand that holistically, as a country, Spain’s religious culture is based off of Christianity and they take it seriously as it shows throughout their entire country. Their historical buildings are filled with beautiful shrines and they have many religious holidays that they celebrate annually (Countries and Their Cultures, 2015).
Art and literature is enormously appreciated and fostered in Spain. Artists are seen as celebrities as there are many famous artists that originate from Spain. According to the Countries and Their Cultures, under the Arts and Humanities section, the webpage states: “The arts receive both government and private support; major artists are treated as celebrities, and the humanities and fine arts are all firmly instituted in universities and professional academies, along with a multitude of local, regional, and national museums”. Tourists love to come to Spain to see their beautiful architecture, especially the famous architecture of Antoni Gaudi (Countries and Their Cultures, 2015). The majority of his work is placed in Barcelona, including his magnus opus, the Sagrada Familia. The inspiration behind his work stems from architecture, nature, and of course religion. The Sagrada Familia is a large Roman Catholic Church in Barcelona, Spain.
Currently Spain’s living conditions have been on a downward trend due to the economic crash back in 2009. The economic crash led many people to become unemployed and homeless (Mortgaged to the hilt, 2013). However, according to The Guardian in an article called “Growth-up, joblessness falling – is Spain’s crisis finally over?”, things are looking up for Spain. According to the article, it states that “The Bank of Spain announced on Thursday that economic growth this year would be 2.8%. That would double last year’s figure, which was the first time the country had recorded annual growth since the crisis hit” (Bergen, Stephen 2015). New homes and apartments are now being built, which is a sign of economic growth.
Spain’s diet is easiest to explain by the different times of the day. Traditionally Spaniards have about five to six meals a day (Brogaard, Berit 2011). Their breakfast consists of “Café con Leche”, which is traditional coffee with frothy milk on top (Brogaard, Berit 2011). They also accompany their breakfast with churros sprinkled with powdered sugar and dip it into chocolate (Brogaard, Berit 2011). Their lunch time is called a Siesta and occurs from two to five pm (Brogaard, Berit 2011). This lunch time is very important in Spain and is a time for Spaniards to get a chance to rest and even sleep if they want to (Brogaard, Berit 2011). Their lunch time consists of light dishes called “tapas” which is Spanish for small dishes. These small dishes normally consist of cured meats, cheeses, as well as fruit. Their appetizer dishes always come with olive oil and have an abundance of garlic (Brogaard, Berit 2011). For dinner, they normally have a traditional soup called Gazpacho, which is a cold tomato soup. They also almost always accompany their dinner with a glass of red wine as well as small salad (Brogaard, Berit 2011).
Spain has three main pieces of clothing that are most traditional and goes back to the 16th Century (Traditional Spanish Dress, 2015). These pieces are known as the mantilla, the peineta and the gilet. The mantilla is a traditional veil that is worn during religious gatherings. The Peineta is a large comb that is intricate in design and is used to hold the traditional veil. Lastly, the gilet is a sleeveless armcoat and is used to keep warm (Traditional Spanish Dress, 2015). All of these items were worn in the past, but are also still being worn today.
Spain has many types of sports. Of course, their main sport is soccer, better known as fútbol in Spain, but it is noteworthy to add that their recreational sports are similar, if not exactly the same as those in the United States. They enjoy water skiing, tennis, basketball, and even racing cars. Their second most favorite sport is bullfighting. Bullfighting has been in their tradition for centuries and is considered a sport in their culture.
Spain’s healthcare is considered one of the best healthcare systems in the world. According to the article on expatica.com called The healthcare system in Spain, it states: “The Spanish healthcare service is regularly rated among the world’s best, guaranteeing universal coverage and no upfront expenditure from patients, apart from paying a proportion of prescription charges” (The healthcare system in Spain, 2015). There are also both private and public healthcare systems in Spain. It is stated that the private system allows for faster service, however (The healthcare system in Spain, 2015). If you are an expat you can also be seen by a healthcare professional and it is free of charge (The healthcare system in Spain, 2015).
The main language spoken in Spain is Spanish, which is also known as Castilian (Languages in Spain, 2015). It is one of the languages with the most speakers in the world. Although, Castilian is the main Spanish language spoken, as time has passed there are now many different types of variations (Languages in Spain, 2015). The main dialects of Spain are Galician, Catalan, and Basque.
The Spanish worker in Spain and their territories work roughly 9 in the morning to 8 in the evening. They break for lunch and to rest from 2-5 in the afternoon. The average worker works a 40 hour week, with 3o days of vacation annually. The summer months of July and August are traditionally when Spaniards will take their vacations; this coincides with the slowing of business and the shortened working hours for these months (Expat Employment in Spain, n.d.).
Due to the European Debt Crisis of 2009, there have been dramatic changes to the national working conditions. Unemployment is at a high 24% and many younger people are without work or prospects. While the debt crisis has severely taxed the country’s different social assistance programs (Spain Youth Unemployment Rate, 2015), there are a number of other factors such as a dramatic decline in agricultural employment, the lack of specialized skills in the available work-force and prevailing high unemployment, that have added to Spain’s labor woes. Compared to the rest of the European Union, the Spanish labor market is actually one of the lowest paid in Europe. Over 35% of the work-force is contracted workers that can be laid off or fired by their employers with no warning or recourse (OECD, 2010, p. 99).
Unemployment is most concentrated in the regions of Andalucía, Extremadura, Ceuta and Melilla, with the highest areas of gainful employment being Catalonia and Madrid.
An important component of the working conditions in Spain is the pay gap between men and women. Spanish women make 19.3% less than their male counterparts. This is higher than the European average of 16.6% and is all the more alarming because it Spain is one of a few EU countries where this wage disparity is getting worse. More alarming is that women have to contribute for 11.5 years more than men to qualify for the same pension (Valera, 2015).
Spain has a diverse industry base, with principal trade and production in machine tools, metal manufacturing, chemicals, pharmaceuticals, textiles, shipbuilding, and foodstuffs (Industries, n.d.). The country’s GNP was 1.5 trillion dollars in 2014 and was divided amongst three main sectors: Agriculture, Industry and Services (Mundi, n.d.). Spain has also become a major player in aerospace, automobile manufacturing, information technology and high-speed rail.
Spain’s greatest source of income is its booming tourism industry. In the last 50 years, international tourism to Spain has developed into a 40 billion Euro business, with almost 61 million people visiting per year (Instituto, E. R., 2006). The surging popularity of Spain as a tourist destination is due to different factors. People travel to Spain to visit its museums, historical treasures, diverse cultural events, regional cuisines, religious observance and the wonderful weather.
The Business Council for Competitiveness, a Spanish government entity, has identified six sectors that it feels are promising to foreign investors. These sectors are: automotive, biotech, food and agriculture, Information and Communications Technology, aerospace and machine-tooling. These sectors have been singled out due to the following criteria: they can compete internationally, they have highly qualified personnel and they have lower labor costs than other countries such as Great Britain and France. It is worth noting that these six sectors generate about 35% of exports and employ more than 2 million workers (Dirección Ejecutiva de Invest in Spain. ICEX España Exportación e Inversiones, pp.54-56, 71-102). These findings are corroborated by record exports in 2013 and the continuous improvement in infrastructure within the country, to facilitate these impressive gains. The challenge for Spain will be to maintain the momentum and remain competitive in the long-term.
Developments in Science and Technology
Spain is becoming a recognized leader in aerospace, renewable energies, water treatment, rail, biotechnology, civil engineering and industrial machinery. It has accomplished this by its ability to innovate and to generate advanced solutions. The government and private sector are determined to intensify its productive specialization in the technology, medical and manufacturing (ICEX, n. d.).
An important area where Spain has made great strides in innovation is in its flourishing ICT sector. Since 2008, all national identity cards have been issued via an electronic format. Spain was one of the first countries within the EU to adopt this technology, and has become a leader in electronic signatures, with over 25 million e-ID cards issued to their population. Spain has also adopted this technology for their electronic health records (ICEX, n. d.).
Another technology success for Spain is in their smart electrical grid. Information and communications companies manage huge amounts of data from electric utilities together with consumer usage information in order to conserve energy and save money. According to the World Bank, Spain invests 1.30% of GNP in research and development, with funding going toward basic research, applied research and experimental development (World Bank, 2015).
Although Spain has a burgeoning science and technology sector, they have a critical issue that they are struggling to address. They have a skills shortage across all technology fields, with an estimated 50,000 positions that need to be filled. There is a dearth of technical competence and foreign language skills in the work force. The reasons for this shortage are many, but the main reasons are: they do not have enough workers getting the training and degrees necessary to do the programming/ technical work, there is an overall lack of qualified candidates and salaries were considered too low- qualified personnel were more prone to immigrate to other countries where the compensation was higher for their skill sets (European commission, pp.1-5).
Nationally, the government is trying to aid the labor market integration of the unemployed and dispossessed by matching labor needs with training being offered. This, coupled with vocational training and targeted actions to help the most vulnerable, has resulted in 3.2 million people benefiting from these actions.
Channels of Distribution
With the growth of the Spanish economy, distribution is a key factor in supplying the consumer market. Sales channels to consumers have grown significantly in the 21st Century, ranging from traditional distribution methods, in which wholesalers sell to brick and mortar shops and they in turn sell to the public, to modern methods such as online sales and central purchasing hubs (Spain: Doing Business for Everyone Guide, p.96). For all the layering that exists in the Spanish market, the basic organization is quite streamlined. The distribution is made up of regional markets and two central hubs, located in Madrid and Barcelona. The bulk of agents, distributors, subsidiaries and foreign trade groups operate in these hubs or has some degree of presence there ( U.S. Commercial Service, 2010).
There are 475 retailers across all Spanish sectors. While the Spanish market used to be controlled by family-owned business, historically, this changed due to the development and proliferation of large shopping complexes. There are four business groups that run both distribution and production; these groups are: Inditex, Cortefiel, Punto Group and Induyco. The Spanish market is very competitive, with each distribution/ production cartel closely monitoring their interests (Van Der Pols, pp. 19-20).
The Spanish media of today owes its existence to two important events in Spain’s recent history: the death of the dictator, Francisco Franco in 1975 and the adoption of the Spanish Constitution in 1978. After 35 years of censorship and repression, the Spanish people and the country’s media were now able to speak their minds and express their views openly (Albarran, A., pp.18-22).
Spain has the full complement of radio shows, television stations, newspapers and magazines that one would expect of a free and democratic society. Moreover, all media types are available in the local/ regional languages and dialects. Castilian Spanish may be the official language but Catalan, Basque, Galician and Valencian are allowed and can be found throughout the country. Over 90% of Spanish citizens watch television daily and the average person watches more than 3 hours of television programming a day. The Spanish watch and listen to an assortment of programs, but they have an overwhelming passion for watching football matches and normal life will come to a virtual standstill for a football match between arch-rivals Real Madrid and Barcelona.
Social media and internet usage have experienced substantial growth, with over 4 million consumers owning smartphones and tablets. Today’s Spain is as savvy and hungry for media content as any developed country (Rodriguez, M. 2014).
SPAIN COUNTRY ANALYSIS
2to conserve energy and save money. According to the World Bank, Spain invests 1.30% of GNP in research and development, with funding going toward basic research, applied research and experimental development (World Bank, 2015).
With the growth of the Spanish economy, distribution is a key factor in supplying the consumer market. Sales channels to consumers have grown significantly in the 21st Century, ranging from traditional distribution methods, in which wholesalers sel