Spain Culture Report

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Spain culture report

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  • Spain Business Culture Report Page 1 of 15 April 2008

    COUNTRY REPORT FOR SPAIN

    Map of Spanish regions Background and Introductory Facts about Spain Spain occupies an area of more than 500,000 square kilometres in South West Europe and its size is two and a half times the area of the UK. Spain has a population of just over 45 million. It is a markedly urban society. Approximately 20% of the population live in cities of around 500,000 inhabitants or more. The capital, Madrid, with its population of around 3 million, is the administrative and business centre of the country around which many modern industries have grown, and where many large companies have their headquarters. Barcelona and Bilbao are also at the heart of major areas of industry and commerce. There are also important business centres in other regions, including Valencia, Sevilla, Mlaga, Zaragoza, Valladolid and Vigo. Spain is a parliamentary monarchy. The King is the Head of State and his primary mission is to arbitrate and moderate the regular functioning of the countrys institutions in accordance with the Constitution. The Constitution of 1978 enshrined the fundamental civil rights and public freedoms as well as assigning legislative power to the Parliament (Cortes Generales), elected every 4 years. The March 2008 elections were won by the Socialist Party (PSOE), under the leadership of Jos Luis Rodriguez Zapatero, current President of the Government.

  • Spain Business Culture Report Page 1 of 15 April 2008

    The Spanish economy grew by 3.9% in 2006 (up from 3.5% in 2005). Between 1997 and 2004 Spain has created over 7 million new jobs and unemployment has fallen from 20% to 8.7%. On annual average, the inflation rate was 3.5% in 2006. UK-Spain commercial bilateral relations are very strong. Spain is the UKs 7th largest export market. UK exports of goods to Spain in 2006 were worth 12.4

    billion and UK exports of services to Spain in 2006 accounted for 4.2 billion. Increased living standards have raised consumer expectations and high demand for consumer goods and services. Over 17 million Britons visit Spain each year and an estimated 750,000 residents (mainly around the coasts) provide a major market for UK products and services. Spain is a highly developed, competitive market. Almost anything sold in the UK is likely to sell well in Spain. The Spanish government is committed to opening up the Spanish market and Spain, therefore, offers many opportunities to the British exporter across a range of sectors. The main UK Exports to Spain include telecoms equipment, road vehicles, office machinery, medicinal & pharmaceutical, electrical machinery and various manufactured articles. Imports from Spain are largely in the same sectors with the addition of fruit and vegetables. The high level of UK imports of services from Spain is mainly accounted for by travel and transportation. Spanish companies are becoming increasingly competitive and are looking more and more outside their home base for opportunities to enable them to globalise their business. Indeed, Spanish Ministry of Trade figures show an upward trend in the level of outward investment from Spain (2.47 billion in 2003 to 21.42 billion in 2006). Nevertheless, the majority of Spanish FDI has come from 20 or so major players in the banking, automotive, telecoms and infrastructure sectors. Other major Spanish investors include hotel chains, retailers and companies in the renewable energy sector.

  • Spain Business Culture Report Page 1 of 15 April 2008

    Ten Top Tips Try a few words in Spanish. Making the effort to learn

    some greetings will get meetings off to a good start. Arrive at meetings on time but do not be surprised if

    you are kept waiting for a short time. Do not plunge straight into discussion on business. Discuss football, family, and

    the weather. If there is an agenda for a meeting do not expect to stick to it rigidly. Interruptions

    by your Spanish interlocutor are not seen as rude but demonstrate interest in what you are saying.

    Be flexible when it comes to timings of meetings. The Spanish work a long day

    and you may be offered an appointment early evening. Accept it. Try to be flexible in adapting to working practices around meals. Lunches

    normally last 1 2 hours and are an important part of the business process. A sandwich at the desk is seen as very English. Dinner can be late, possibly starting at 21:30 or 22:00. Enjoy the very important social element of business.

    Personal contact is paramount in Spain. Pick up the phone rather than email.

    Demonstrate your commitment by making frequent visits to your customers/ distributors.

    Make sure some of your literature and your website is in Spanish. Do not assume

    that Spanish business people will speak English. If in doubt, offer to bring an interpreter to a meeting with you.

    Make sure you are dealing with a person at the right level if you are looking for

    decisions and do not expect quick decisions. The Spanish will not be rushed. Learn a little about the region you are in and recognise the potential sensitivities

    between regions.

  • Spain Business Culture Report Page 1 of 15 April 2008

    Spain Business Survey

    1) How important is it to speak Spanish to do business in Spain? There was unanimous agreement on the importance of speaking Spanish, especially in Madrid and the other large cities. Many British people whose experience of Spain has largely been from holidays in the coastal areas expect the level of English to be high in the main cities which it is not. The main business language used throughout Spain is Castillian Spanish (although several of the autonomous regions throughout Spain have their own language, i.e. Catalan, Basque, Gallician). Most large Spanish firms will have people who can do business in English particularly in sectors such as ICT, but in general English is not widely spoken especially amongst smaller agents or distributors. In a business context, speaking Spanish enables greater understanding of the characters of the locals. It will generally be possible to find a person who can read printed material in English however the Spanish will expect British companies to produce material in Spanish if a long term working relationship is to be established. Company brochures should be translated into Spanish and where possible websites should be available in Spanish or at least have a summary page in Spanish. If you write to a company in English, if all your Trade Literature is in English, and if you expect to conduct all your business in English you will be at an immediate disadvantage. British firms will therefore need to be prepared to consider methods of communicating in Spanish. We advise against using a stock letter format in correspondence (i.e. one that looks as though it will be sent to a number of companies). It will be thrown away. The same is true of unsolicited emails. However much English is the language of choice for the business community, there is no substitute for being able to discuss and converse with potential clients/ suppliers/officials, etc., in their own language. The Spanish are patient with people who make an effort to speak in their language and even a few stock phrases will break the ice at meetings. 2) What are the differences between Spain and the UK in a general business

    context? Visitors to Spain should realise that there are two quite distinct business cultures in Spain. On the one hand there are the bigger and newer, or reformed, industries that have received significant amounts of foreign investment and embraced modern, international management techniques. On the other, there are the traditional SMEs and family businesses that account for the majority of Spain's GDP. The leading banks, which still constitute the business elite, are situated somewhere in the middle.

  • Spain Business Culture Report Page 1 of 15 April 2008

    There are wide differences in many aspects as a result of the UK being an Anglo-Saxon culture and Spain a Latin culture. A mistake companies frequently make is to send off an email with details of their offer and then wait to hear back. Usually, they wont. Spanish businessmen and women expect you to pick up the phone and talk to them. And then if things look like they are progressing, they expect you to come and visit them. This applies when you are dealing with potential customers but also with distributors. Spain is an easy place to get to. And with low cost airlines springing up all the time, a visit to the market need not be expensive. The Spanish are more apt to negotiate from starting positions (on things like price) at levels, which in the UK one might think unrealistic, but this doesnt mean that they will not change a lot, if the deal needs to get done. The human relationship of the people at the negotiating table matters more to get you to being able to close the deal but it will not get you the deal. Spain is a very price sensitive market. It may be quite difficult for a UK company if their sales pitch is focused solely on quality. Which is not to say that Spaniards will buy low quality products, they wont. But they certainly want to know how much it costs and they will then try to knock the price down. This applies particularly when dealing with the bigger companies and in some sectors firms have virtual monopolies and they act like it.

    One striking difference for most British exporters is protracted payment terms. 90 days is common and in some sectors, for example healthcare, 180 days is not unusual. Some Spanish companies seem less ordered/regimented in their approach to doing things and at times give the impression of improvising. De