SWOT analysis, also known as SWOT Matrix which shows a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in any project or in a business venture. A SWOT analysis can be carried out for a product, place or person.
Agriculture is one of the biggest strengths of Israel. The country is having most of its region covered in desert area, yet it produces good quantity of agricultural products. It forms the major part of its exports after high-tech industry. The major exports of Israel in agricultural products include avocados, citrus fruits, water melons and other melons, vegetables, cotton and lint. Apart from agricultural products, Israel is also a leading manufacturer of the agricultural tools in the world.
Even though Israel’s agriculture sector employs less than 6% of its working population, it adds on a good sum of income to its GDP.
Apart from this, Israel promotes International Agricultural Cooperation program. Since its inception nearly six decades ago, the Extension Service has taken an active and key role in providing training to emerging experts and farmers in countries worldwide through Israel’s Agency for International Cooperation (MASHAV) and the Center for International Agriculture Development Cooperation (CINADCO).
In Israel, water is regarded as a national asset protected by law. Israel uses pressurized irrigation method for using water. And through this method water use becomes much more efficient as opposed to surface irrigation. Pressure irrigation systems enable better control and monitoring of supply of water throughout the nation.
The Agricultural sector in Israel put away 1.2 billion cubic meters of water yearly, of which 900 million is clean. The leftover water comes from effluents, flood water, salt water or salty wells. Israel has developed wide range of irrigation methods which make maximum use of its limited water resources.
The military of Israel can be considered as its strong weapon because it employs strict rules for every citizen in the nation. Every person including women after the attainment of 18 years of age has to undergo the military training for at least 3 years in their selective job. Such law and service of military not only provides technological training to young adults, but also assists them in the improvement of their work habits, ethics and styles. Although Israel is a democratic nation, such imposition of military training is difficult to be digested, but it is believed that it is beneficial for the citizens as it improves the sense of team building and team work among the citizens, which motivate them to build networks and communities, making them a strong and fit citizen. Thus, such training aims at enabling the youth in excelling in their respective fields in the military and making a smooth transition into civilian life, including obtaining a university education.
One of the most important resources, which can be considered as strength for any nation is- Human resource. And Israel is very lucky in the same. Or it can be said that it has developed its luck in the same.
Total labour ForceOf the Israel’s total population of around 8 million, 97.1 % of the people fall under literate population and of them majority of the people are highly sophisticated and well skilled professionals. This abundance of skilled labour has allowed the country to compensate for its lack of other types of resources. Israel has the highest per capita population of engineers affianced in research and development in the world and they have paid significantly to the development of the high-tech industry.
Figure 1- Labour force; total in Israel
Years israel labor force total wb data
Israel’s economy is on rise and carry on to thrive due to its sturdy multinational corporate and defence industry and its exports. Due to its strong economy it has recovered in a better way and up to a great extend from the 2007-08 global recession, compared to other advanced economies in 2010. The International Monetary Fund found that Israel’s fiscal strategies helped it avoid the global crisis, and its economy remained strong when other major economies around the world were struggling with recession, debt and unemployment.
The IMF’s annual inspection of Israel’s national accounts concluded that “Israel’s economy remains strong,” and gave the government and central Bank of Israel some gold stars for key economic policies. Not only had Israel weathered the global economic crisis well, but Israel’s economy continues to grow at acceptable rates while inflation is down and unemployment is at its lowest level ever.
Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The well known measures of Inflation are the CPI which measures consumer prices, the GDP deflator, and the whole of the domestic economy. When we analyse some facts and figures about Israle’s Inflation rate, it is clear that it has struggled continuously in bring inflation down and has also succeeded greatly.
The inflation rate of Israel, recorded in october 2012, was 1.80%. Taking an average from 1952 to 2012, Israel Inflation Rate is 32.0% reaching an all time high of 486.2% in November of 1984 and the lowest record was -2.7% in March of 2004.
Israel is home to some of the world’s leading biotechnology research centres, renowned for their excellence in areas such as autoimmune diseases, cancer, and neurology. Not surprisingly, growth in the Israeli medical device and biotechnology industries has been tremendous. Between 150 and 200 new life science companies are established in Israel every year.
Before 1996, Israel was an inland to 186 Life Sciences companies. By 2010, this number had increased to 1,100. With some 50-60 original companies being moulded each year, 41% of all Life Sciences companies operating in Israel today were well known during the last 5 years. In a short span of time, a surprizing 34% of these companies have already instigated to engender revenue, indicating that Israel has crossed the dawn from a striking start-up arena to a source of advanced commercially viable and talented businesses. Thus, a bridge connecting excellent science to revenue generating companies has been established by Israel.
Israeli economic policy has created a climate that is conducive to venture capital investment by liberalizing foreign currency and by offering significant government incentives and tax breaks for investors. In 1991, there was only one venture capital fund in Israel; today, there are over 65 venture capital funds investing in new companies. Israel-based venture capitals have approximately $2 billion at their disposal for new investments.
Science and Technology
Israeli scientists have contributed to the advancement of agriculture, computer sciences, electronics, genetics, medicine, optics, solar energy and various fields of engineering.
Israel is home to major players in the high-tech industry and has one of the world’s technologically most literate populations.
Its high-tech is on the way to lead world technology in terms of knowledge and development. Israeli don’t think that the high-tech industry will be a lead to themselves only but will give a bright future to its neighbouring countries also The high-tech industry is no more a gamble -it has shown its ability.
One of the reason for which Israel is proud of is the end numbers of innovations and inventions which were rooted 63 years before by overcoming various hurdles like geography, size and diplomacy. The evergreen Israeli researchers in science and technology have gifted us drip irrigation, the cherry tomato, the electric car grid, the Disk-on-Key and much more.
Israel is one of the world’s leading producers of cut & polished diamonds. It imports rough diamonds, doubles their value by cutting & polishing, and exports them world wide via hubs in London, Antwerp, HK, NY & Mumbai. In 2011 Israel’s net export of diamonds was worth $10 billion (30% of Israel’s manufacturing export). 40-50% of diamonds purchased in the US in dollar terms are from Israel. The United States, the world’s largest market for polished diamonds, imports over half of its polished diamonds from Israel.
Preference for Foreign Players
Israel is highly considered as a place which has more number of foreign firms. The resource which Israel attracts to these players include highly-skilled engineers, good geographic location and some tax and custom benefits, which helps the foreign firms to sell products manufactured in Israel to European markets without paying duty. Moreover, the government of Israel is considered a liberal partner for help to foreign investors who establish operations in the northern or the southern parts. The government help which will be provided can in the form of a cash refund or long-term tax-waivers. Because of such facilities provided by the government of Israel, many firms desire to be in agreement of trade with Israel.
Distance from Markets
Although demand for various technologies is very high per capita but due to geographically broaden location of the country, many a times the markets fail to reach the customers. But due to the technological advancement, which means Internet has created the free flow of information and decreased the gap and distance for the communication between countries, the physical distance between Israel and its consumers is a definite weakness for the country.
Slow e-commerce adoption
Although B2B and B2C activity is increasing in Israel, but practice of the same is still behind the other sectors of the high-tech industry. E-commerce practices have been rather slow due to Israeli hesitancy to provide credit card information over the web and because of the culture preference to touch items before purchase.
Limited Arable Land and Its Use
Israel has a lack of arable land, which increases their cost. Israel must either import many products, or develop them at a higher cost domestically.
Although it has limited natural resources, there’s a huge development and growth in agriculture and industrial sector over the past decades, which made it sufficient enough in production of food apart from grains. But although Israel is a largely self-sufficient food production, they lack in arable land use. This increases Israel’s demand of outside assistance and causes any home produced goods to be more expensive. Increased expensive of goods diverts resources from more productive areas of the economy, which slows long-term growth rates.”
Geography of country
Israel falls in the Middle East of the world and in the western part of Asia. Many of its neighbours lack both financial capital as well as infrastructural facility to contribute in the IT industry. This makes it difficult to develop the export sector of these countries. If the region surrounding Israel was developed, local trade would have greatly increased the market potential of the industry and its contribution to the national income.
Health of Citizens
The health of the citizens of Israel is always a question mark. Because of its culture and anti-vaccination sentiments most of the times citizens refuse to take vaccinations and required medical treatments. Smallpox vaccine has historically endured a notorious reputation for poor safety and quality. Its earliest detractors voiced their objections at the time of first use of cowpox vaccination, ridiculing the use of bovine pus in a medical procedure. In 2002, smallpox vaccine was regarded by many as outdated, obsolete, sub- standard and perhaps even dangerous. The risks involved in its administration were not universally acceptable in the post-eradication age. While the inherent risks of smallpox vaccination were unavoidable and thus was acceptable in the pre-eradication era, compromising with its side effects in post-eradication stage of human life.
Israel has such a less amount of medical remedies available that it even recommends foreign visitors to obtain the necessary vaccinations against Diphtheria, Tetanus and Hepatitis A prior to beginning of their journey to Israel. In most of its regions including Gaza, the medical treatments are limited and disrupted.
The tourism industry is well managed by the tourism ministry of Israel. There are various places to explore, they have national parks, archaeological tells, natural reserve, museums, restaurants, hot springs etc. The people from U.S and Europe are the major visitors of Israel. The ministry of tourism have various subsidiary departments like tourism marketing department, ministry economic unit and tourism service department. These departments organise various training programs & seminars, so as to have more skilled and professional man force in this industry.
Israel should also focus on safety issues of the travellers to attract more number of tourists from other countries apart from US and European countries.
The Israeli construction industry is characterized by a high level of mechanization, quality building materials, modern design, coupled with a chronic shortage of skilled workers. The industry of construction in Israel includes more than 10000 registered contractors but there is always a shortage of workers. This need is generally filled by foreign workers, who are employed under contract for limited or specified periods.
Thus, one opportunity which lies with Israel is to attract its own nationals to this field of construction removing the foreign workers. And, the second opportunity lies with the companies specializing in building products, floor coverage and green construction as they can have good futures prospects in construction industry of Israel.
The Israel’s chemical industry came to notice when it extracted potash and later bromine from the Dead Sea. By 1946, the manufacture of potash fertilizers had begun in Haifa and with the establishment of the State, the new government created several state-owned companies to mine raw materials. The export of the chemicals started from the year 1960.
Israel has been blessed with one of the world’s unique spots- the Dead Sea. Extremely dry conditions have created an inland sea with high evaporation and resulting salt and minerals of extraordinary quality. These products have led to grow magnesium and potash industry, and the export of Black mud and Dead Sea salts for therapeutic and cosmetic purposes.
However, this opportunity is still not as efficiently grabbed by Israel as it should have been. Chemical companies of Israel have significant opportunities to improve the efficiency in core operations of chemicals as the overall chemical industry of world is the main supplier of materials that make global economy more energy-efficient and enhances the development of new renewable energy-generation market. But somewhere, it seems Israeli chemical industry is unaware of such opportunity.
Israel really enjoys good market position in cosmetic and toiletries industry. They still have opportunity to grow in this industry as they have direct access to the natural resources from Dead Sea. As Israel is very much advanced in its technology, research and development and science it can ensure further growth in this field. Dead sea minerals provide the healthiest production environment on earth and grants Israeli companies like Dead Sea Beauty Products, an incredible competitive edge in the cosmetics market. They provide unique health and spa sites. Slats, black mud and rich minerals of Dead Sea have enhanced growth of the cosmetic industry of Israel which it can carry on further.
Israel is the country which is located in the area which always suffers the tension of terrorism. Terrorism is an above average threat not only throughout Israel but also in its neighbouring regions. In such a situation it is extremely necessary for any country to develop a strong security system. But the terrorism in Israel is so intensive that Israel fails to maintain the security.
Most of the times, the circulars of political and military tensions are issued. Such circulars also address to the safety of residents and the travellers and visitors. The travellers are asked to avoid any large demonstrations or protests which could potentially turn violent.
Apart from terrorism, Israel also suffers petty issues of security which include theft problems and kidnapping. Although relatively low, the reports on incidents of petty theft keep on coming. All the foreign travellers and visitors are urged to keep their passport and other valuable items in a safe location at all times throughout their visit and avoid any obvious displays of wealth which could attract unwanted attention.
According to the British Foreign Commonwealth Office site, “Israelis living in the illegal settlements in the West Bank occasionally organise demonstrations on West Bank roads: these sometimes turn violent, with the settlers throwing stones at passing Palestinian and international vehicles. Take particular care if hiking near any of these settlements, including those in the hills around Nablus and in the South Hebron hills”.
Because of the fear of terrorism, there is also a threat of less tourists turning up to Israel. Therefore there is a fear of loss of income from the visitors from foreign countries.
The Loss of Jerusalem
The preservation of Jerusalem as the political and spiritual capital of the Jewish state is vital to Israel’s existence. It has been the target of the Arab countries since years. When it was attacked simultaneously on all fronts by six Arab armies, Israel managed to deal with them by breaking bulk of Israeli forces for the protection of Jerusalem.
Israel has to be alert and prepared all the time because such threat and terror from Arab countries remain constant due to scratched and wounded history of the Arabs and Jews.
A Nuclear-Armed Iran
Israel faces terror fear from Iran as they have great amount of nuclear weapons and power. The time when the Islamic Republic will be capable enough to have nuclear capability, there is an estimate that the terror will be diversified to a great extent. The nuclear power which is with Iran does not create threat to only Israel but also to various other nations. This threat gives rise to many other questions like: What if it transfers its nuclear capabilities to some terrorist group? What if some terrorist group takes over the control of the nuclear powers of Iran? Apart from these assumptions of threats there also exists the fact which says that, Iran has threatened Israel by saying that it will be wiped off from the map.
There is a conformity in the Israel Defence Forces (IDF) that the most unsettled front in Israel today is the Gaza Strip. This is a dead lock where the military is currently losing its determent capability. There is an increase in numbers of rockets launching and mortars into Israel by Gaza terrorist. Israeli forces have reciprocated with preventive war against these terrorists.
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