Establishing A Subsidiary In Greece

INTRODUCTION

Venanet Soda Incorporated is a soft drink company located in the city of Richmond, Virginia, United States of America. The Company has established a customer base in the United States and is now seeking global expansion opportunities. The following report delineates information for consideration in relation to expansion by establishing a subsidiary in Athens, Greece.

GENERAL BACKGROUND

Geographic Location and Features

Formally known as the Hellenic Republic, Greece is situated in Southeastern Europe. The country is slightly smaller than Alabama covering approximately 132,000 square kilometers. Greece is one of the most mountainous countries in Europe. It consists of a mountainous mainland at the southern end of the Balkans, the Peloponnesus peninsula which is separated from the mainland by the canal of the Isthmus of Corinth, and approximately 2,000 islands, including Crete, Euboea, Lesbos, Chios, the Dodecanese, the Cycladic groups of the Aegean Sea, and the Ionian Sea islands. Greece has the tenth longest coastline in the world.

Mount Olympus forms the highest point in Greece at 2,919 meters above sea level. Western Greece contains a number of lakes and wetlands and it is dominated by the Pindus mountain range which is a prolongation of the Dinaric Alps. The range continues through the western Peloponnese, crosses the islands of Kythera and Antikythera and makes its way into southwestern Aegean, in the island of Crete where it ends. Pindus is characterized by its high, steep peaks which are dissected by canyons and a variety of other landscapes including the impressive Meteora formation consisting of high, steep boulders.

Greece’s climate is mostly mediterranean, but because of its unique geographical location and landscape, Greece has a large range of smaller areas of climates and variations. To the west of the Pindus mountain range, the climate is generally wetter, and to the east, the climate is generally drier and windier during the summertime. The climate of Greece can be divided into four different types of climates: dry mediterranean, humid mediterranean, continental mediterranean and alpine mediterranean.

In the dry mediterranean areas the summer is dry and any precipitation falls in the form of showers or thunderstorms from cumuliform cloud. Winters are wet and any falling snow doesn’t last too long, especially in the south facing slopes. Rain in winter is often persisting and can cause flash floods. In the humid mediterranean winters are generally mild with very few and sparse snowfalls, though frost can occur. Summer is hot and there is a lot of precipitation throughout the year. Where the climate is classified as continental mediterranean, Winters are cold, often harsh with locally abundant snowfalls and summers are hot, locally sometimes very hot, with somewhat more frequent thunderstorms. Most rain tends to fall in late autumn. Where the climate is classified as alpine mediterranean, the climate consists of harsh winters with abundant snowfalls and cool summers with frequent thunderstorms. (http://en.wikipedia.org/wiki/Greece)

History of Colonialism

Colonies in ancient Greece were founded by people vanquished from foreign enemies, from areas that were insufficient to handle the current population, and to formulate trade with foreign countries. There were two basic types of colonies. The apoikiai were city-states that were operated on their own. The second, emporia, were Greek trading colonies. Around 800 BC the city-states began establishing colonies Al Mina on the coast of Syria and the Greek emporium Pithekoussai at Ischia in the Bay of Naples.

When a Greek city sent out a new colony an oracle, such as the Oracle of Delphi, was consulted. Those chosen to participate in the colonization of new areas were chosen from every house. In instances where the house had more than one son the participants were chosen by lot. Founders of colonies were honored as heroes. Differences between the mother-city, metropolis, and the spun off colonies were settled peacefully. Colonies used the constitutions of the mother-cities but were politically independent.

Trade factories in foreign countries that were established by a special class of Greek colonists known as cleruchs were different than other colonies. Residents retained domicile rights of their home land and usually confined themselves to their own section of the foreign city.

Population Size; Socioeconomic, Cultural Characteristics of Inhabitants

The current population of Greece is 10,964,000. Athens is the capital of Greece with a population of 3,192,606. The government states there are no ethnic divisions in Greece and 98% of the population is made up of Greeks. The official language is Greek and the predominant second language is English. By the year 2030, 39.0% of the population will be over the age of 65 and Athens will be one of the hardest hit areas. (The World Fact Book 2008)

Grecians possess a strong sense of commitment to their past. They are extroverted and friendly people who are recognized for their hospitality. The Greeks live by an almost “live and let live” approach to life and in some geographic regions this necessitates the afternoon siesta. The work ethic exhibited is moderate in nature.

Form of Government, Currency, Cost of Living

Greece is a parliamentary republic. The head of state is the President of the Republic, who is elected by the Parliament for a five-year term. In 1986 a constitutional amendment was amended making the president’s duties mostly ceremonial. The Constitution was adopted in 1975 and has been revised twice since that time. Consisting of 120 articles, the constitution provides a separation of powers in to three branches similar to those of the United States.

A 300 member unicameral Parliament exercises legislative power and passes statutes that are promulgated by the President. Elections are held every four years but the President is obligated to dissolve the Parliament if proposed by the Cabinet or if the opposition passes a motion of no confidence. Since the 1986 amendment to the constitution the head of government, Prime Minister, is the current leader of the political party that obtains a vote of confidence by the Parliament. The President appoints the Prime Minister and members of the Cabinet.

In 1981 Greece became a member of the European Union. The Euro is utilized as the nation’s currency. The exchange rate between the U.S. dollars and euros is 1.57986 as of April 2008. The Greek economy adopts