Dunkin' Donuts Expansion in Israel: FDI Challenges and Opportunities

This essay provides an analysis of the potential for Dunkin' Donuts to expand its business through Foreign Direct Investment (FDI) in Israel. It begins by highlighting Dunkin' Donuts' global presence and franchise model, emphasizing the financial requirements for establishing a franchise. The essay then delves into the advantages and disadvantages of FDI in Israel, considering the country's liberal investment system, strong research and development sector, skilled workforce, and political stability. It also acknowledges challenges such as geopolitical instability, higher labor costs, and corporate taxes. The essay examines the Israeli government's efforts to encourage FDI through tax incentives and support for entrepreneurs. Finally, the essay concludes that Israel, being a nation of start-ups, presents a beneficial environment for Dunkin' Donuts' expansion, with potential for co-branding opportunities, expert training programs, and effective marketing strategies, while also considering the need to address the existing disadvantages. The references cited include various sources relating to the topic.

Running head: ESSAY 0
TRADE GLOBAL MARKET
JULY 19, 2019
STUDENT DETAILS:

ESSAY 1
Dunkin Donuts is a part of Dunkin brands. It is considered as one of the most identified
franchises in the world. Its restaurants sell decaffeinated coffee, ice coffee, hot coffee as well as
flavoured coffee together with donut, bagel, and muffin. The coffee with donuts makes it most
famous stop for the lovers of coffee. The first franchise was opened in year 1955; over eleven
thousand restaurants have opened in all over the world. In order to open your own Dunkin’
Donuts franchise, there are various financial demands to be fulfilled. It is required to make sure
that qualifications are met to open the store in Israel. By certain estimates, franchising is
developing faster than any other sector of the economy of Canada. In the following parts, for
opening store various challenges, issues, advantages, and disadvantages of FDI in Israel is
discussed and critically examined.
In Israel, for expanding the brand Dunkin' Donuts, various advantages, and disadvantages
are to be considered. Israel has the liberal investment system. There most of the activities are
open to the private national investors as well as international investors. After clear and noticeable
go-slow in year 2009, because of the international financial crisis and the complexities faced by
economy of USA, FDI inflows recovered to the larger scope at the same time as continuing
volatile. In this way, Israeli start-ups are highly dependent on the financial condition in USA.
According to UNCTAD World Investment Report, Israel became greatest recipient of FDI in
Middle East in 2017. Israel has various assets that appeal to international investors: the solid
research and development sector and the highly skilled staff. The hi-tech sectors, specifically
start-up, have attracted the best deals of international investment. However, the geopolitical
environment of this corporation is specifically unstable due to the tension with Palestinian
territory (Gebhart, 2018).

ESSAY 2
Israel has various solid benefits of FDI. Israel is a nation, which make investment in in
research and development. There are high skilled workers, particularly in high technology and
engineering sector. The unemployment rate is very lower. It is around four per cent. The other
advantages include increment of real wages, solid as well as constant private consumption. The
private consumption is around fifty-five per cent of GDP in year 2017 (Crawford, 2015). All the
indications are that development would not be lacking in year 2018, particularly since domestic
confidence is at the greatest. In Israel, the political stability is very strong. There is a stable
democratic system. It has great financial support of USA. Israel has developed important
offshore reserve of natural gas that will enable the nation to decrease the energy dependence. As
per these advantages, various new development opportunities can take place in Israel (Butler,
2018).
Furthermore, there are various obstacles to the growth of country. These are necessarily
to be considered before opening Dunkin Donuts store in Israel. The chronic unpredictability is
connected to the local political background. Particularly, the peace negotiation between
Palestinians and Israel are at end. In the addition of this, there are various states of Israel, which
have larger public debts. The other disadvantage of FDI in Israel is that the labour cost is higher
in comparison of the standards of region. The higher corporate taxes is a barrier for the
investment in this nation. Before opening the store of Dunkin Donuts, it is required to consider
these above-mentioned disadvantages (Brown, 2019).
Moreover, the government of Israel faces various issues and challenges to encourage the FDI. In
Israel, the foreign investment is greatly inspired under the newly revised Investment Promotion
Act (Razin, 2017). The new amendments to the law add tax incentive programme. The

ESSAY 3
government in place is also looking for rendering the significant support to entrepreneur as well
as entrepreneurial system to promote the FDI (Hallberg, 2016).
As per the above analysis, it can be concluded that in Israel, FDI has continued to rise
steeply in term of the capital, job creation, as well as number of the projects. As Israel is
considered as nation of start-up, it will be beneficial to open Dunkin Donuts Company in Israel.
This company can do well in Israel with the help of state government and federal government.
The company will be able to get co-branding opportunities. With the help of experts, training
program and marketing, the company will run effectively.

ESSAY 4
References
Brown, H. (2019). Reducing Hospital Readmission using Medical Students as Health Coaches
(Poster). New York: Routledge
Butler, L. (2018). Coffee's Dark Secrets: Linguistic Variation in Starbucks and Dunkin
Donuts. Lingua Frankly, 4.
Crawford, M. B. (2015). The world beyond your head: On becoming an individual in an age of
distraction. New York: Routledge
Gebhart, K. (2018). Climate Change is Killing Coffee: How the Paris Climate Agreement Does
Not Go Far Enough. Journal of International Business and Law, 17(2), 7.
Hallberg, A. (2016). Expecting the Unexpected: The Marginal Effect of Unanticipated Terrorist
Attacks on Foreign Direct Investment in Israel and Turkey. New York: Routledge
Razin, A. (2017). Israel Globalized: High Tech, Productivity and FDI. Oxford: Oxford
University press