International Marketing Project: Iceland Emma Sutphin

Crater School of Business May 18, 2012 Emma Sutphin Iceland

Table of Contents Introduction ...... 2 Issue ...... 3 Nonprofit ...... 5 Geographical Area Analysis ...... 7 Economic Analysis I ...... 9 Economic Analysis II ...... 12 Political System ...... 16 Trade Laws and Legal Analysis ...... 19 Population ...... 20 Diet and Nutrition ...... 25 Housing ...... 28 Transportation ...... 30 Labor ...... 32 Education ...... 34 Clothing ...... 37 Recreation and Leisure ...... 38 Language ...... 40 Religion ...... 42 Bibliography ...... 44 Appendix ...... 46 ICE Print Ad ...... 46 ICE Brochure ...... 47 Kleinúr Recipe ...... 49 Etiquette ...... 50 Country Selection Letter ...... 50

1 Emma Sutphin Iceland

Introduction

Although there are many countries in the world that need a helping hand from a nonprofit organization, there is one country in particular that is ideal for such a nonprofit. That country is Iceland, and the reasons for choosing it range from its ideal shipping location to its pristine natural beauty. Iceland is a country that is not often offered assistance, since it is considered a highly developed country. However, the best way to start a successful business is to find a niche that provides services no one else can. Small African countries are already inundated with nonprofits that provide basic services, but Iceland has virtually no international assistance from nonprofit organizations. The time is right to help Iceland become independent and self-sufficient, and the way to do that is through a nonprofit by the name of ICE.

ICE stands for the International Coalition for the Environment, and it is an organization that is firmly committed to making the world a better place through education and legislation to reduce our impact on the environment. Currently, ICE is focused on an environmental issue in Iceland that has gone unresolved for too long. No other group or organization has taken action to solve Iceland’s environmental problems, and that is why ICE has stepped up and taken on Iceland as the latest country to gain assistance. The issue that is currently plaguing Iceland’s wilderness and the world’s skies is the practice of smelting aluminum. This is a major industry in Iceland that produces a large percentage of the national income by itself, but it is extremely dangerous and must be stopped. Because of these smelting operations, the greenhouse gas emissions of Iceland have increased by twofold over the last twenty years, a rate that even surpasses the United States (earthtrends.wri.org, 2007). As Iceland obtains 80% of its electricity from geothermal or hydroelectric power, the only explanation for this drastic increase is the rapid expansion of the aluminum smelting industry (nationsencyclopedia.com, 2007). The smelting plants also cause extensive damage to the surrounding flora and fauna, and this land does not recover for a long time. Iceland’s wilderness is a major tourist attraction, and that revenue may disappear altogether soon if smelting plants are allowed to continue to destroy the environment in Iceland (savingiceland.org, 2011).

In order to fully understand the effects that the aluminum smelting plants have on Iceland, an overview of Iceland is necessary. Iceland is a very small country, with a population of only 317,000 (citypopulation.de, 2012). Over half of those people live in or around the capital city, Reykjavík. So many more people live in this area because of the more temperate climate and extensive infrastructure. In the more northern regions of Iceland, roads are often unpaved and there are few stores. Due to Iceland’s northerly location, the country receives only about four hours of sunlight per day in the winter but over twenty hours in the summer (travelnet.is, 2009). The climate is cold, which means that few crops will grow there. This leaves fishing and sheep farming as the two major agricultural industries in Iceland, and over 70% of jobs are in the service industry (cia.gov, 2012). The only other major industry is aluminum smelting. Shutting down or slowing the production of these plants may be made more difficult by the fact that it is a major source of revenue, but those difficulties will be offset by Iceland’s political climate. Iceland is a very liberal country, with cradle to grave free health care and free education from age six to twenty. They also have strict environmental regulations on every industry and activity except for aluminum smelting. The majority that currently holds the Icelandic Althingi, or parliament, is a coalition between two left-leaning parties: the Left-Green movement and the

2 Emma Sutphin Iceland

Social Democratic Alliance. These two groups hold enough votes to pass regulations that would help stop the smelting plants, and ICE is confident that laws can be passed to provide a permanent fix for the issue (nationmaster.com, 2011).

There are several ways that the issue may be addressed, and ICE believes that a multi-pronged approach is the best way to resolve this issue. First, the damage that the smelting operations cause to the surrounding land can be offset by trees and native grassed that will be plated in the area. These plants will provide a barrier to chemicals leaching any further into the soil as well as improve the aesthetics of the land. The trees will also remove carbon dioxide from the atmosphere, which will minimize the environmental harm caused by the release of greenhouse gases from the plants. The trees can be grown as saplings in greenhouses, which will require Icelandic jobs in order to build and maintain the facilities. This would help improve Iceland’s unemployment rate, as long term workers would be needed to grow the plants. Also, a line of Icelandic sweaters will be marketed overseas, with all sales profits going toward the restoration project. ICE believes that this approach will be the most effective one to produce positive and lasting change for Iceland, and we hope that you will join us in completing this goal.

Issue

As an advanced first world country, Iceland is often viewed as not being in need of any assistance or foreign aid. However, this assumption is highly incorrect. Iceland has several issues that need addressing, most of them caused by the banking collapse in 2008. Iceland has a high rate of alcoholism as well as a relatively high unemployment rate, but the issue that is currently most important to the country is concerning the aluminum smelting plants currently operating there. The plants began expanding their operations after the financial collapse, and some argue that the plants must remain open in order to provide jobs to Icelanders. However, the plants cause extensive environmental damage to Iceland’s pristine countryside. This issue has divided the country for too long. Through decisive action, the pollution of these plants can be stopped in its tracks.

The issue at stake is derived from the process of aluminum smelting itself. First, an ore called bauxite, which contains aluminum, is mined. This mineral usually comes from Australia, South America, or Africa, as Iceland does not have any natural bauxite deposits. The bauxite is shipped by boat to one of Iceland’s several smelting plants, where it is refined into pure aluminum. The aluminum contained in bauxite is in the form of aluminum oxide, or alumina, because pure aluminum is highly reactive and not found in nature. The alumina is broken down by the process of electrolysis, which involves using an electric current to separate the positive and negative ions in a compound. The alumina is placed in an iron vat lined with graphite and heated to over 1000 C. Then an electric current is passed through the vat, which separates the oxygen from the aluminum. However, this reaction also produces a lot of carbon dioxide, which is released directly into the atmosphere. Additionally, fluoride waste can easily contaminate the ground surrounding the plant. This waste is highly toxic to vegetation, and it may have a detrimental effect on animal life as well (howitworks.com, 2009). This environmental impact is at the heart of the debate over aluminum smelting.

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The impacts of smelting have divided Iceland. Some may argue that the plants provide an important boost to the Icelandic economy after the banking meltdown in 2008. Others have researched the impacts of aluminum smelting, and they are concerned by what they found. Although the plants currently employ several hundred workers, most of those are foreigners. The major companies pay their highly skilled workers to come and work in Iceland, so the plants create very few local jobs (savingiceland.org, 2011). The environmental concerns far outweigh any economic benefit that the smelting operations bring to Iceland. The greenhouse gas emissions from these plants have a huge impact on both Iceland and the entire globe. Iceland produces over 5 more metric tons on average per capita every year than the rest of the EU (unstats.un.org, 2012). Since Iceland is very green in many ways, such as with geothermal and hydroelectric energy, this difference in emissions cannot be accounted for in any other way than because of the aluminum smelting plants. These plants also use up much of Iceland’s available geothermal power, which drives up energy costs for Icelanders. There has been a large change in Iceland’s carbon footprint since the aluminum smelting industry expanded radically in the last decade. The graph below shows the percent increase in greenhouse gas emissions for several representative countries. As you can see, both Germany and the UK had a decrease in emissions in the past 20 years, whereas the US and Iceland increased their emissions. Iceland had by far the worst increase in emissions, with over a 50% jump since 1990. This increase is due to the increased production of smelted aluminum. Iceland has twice received a waiver from the strict emissions standards imposed on the rest of Europe, and there is no reason that it should not be able to meet these standards with the abundance of clean, renewable energy that Iceland has available.

Percent Change in Greenhouse Gas Emissions Since 1990

60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Iceland United States Germany United Kingdom -10.00% -20.00% -30.00%

(unstats.un.org, 2012)

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This issue affects people all across the world, which is why it needs to be resolved. Rising levels of greenhouse gases in the atmosphere cause unstable weather, rising sea levels, and warmer temperatures. This can damage the coastal areas of the US and other lowland countries as well as damage the global economy by making it harder to grow crops due to extreme weather fluctuations. Every person must do all that they can do to slow or stop greenhouse gas emissions and the damage they cause. In particular, it is important to arrest the increase of greenhouse gas emission in Iceland because of the alarming rate at which it is growing. Iceland has experienced a rate of increase that is over twice that of the US in the past 20 years. If aluminum smelting was slowed or stopped, Iceland’s carbon footprint would drop drastically. Even so, this is only half the reason to assist Icelanders in shutting down the plants. The local environmental damage done by these plants is significant. The vegetation surrounding the plant typically dies due to fluoride exposure, and the land becomes contaminated for years to come. Pristine wildernesses have been razed by aluminum smelters, and this will only continue if the plants’ production is not stopped. Tourists will not want to visit Iceland on vacation if all they see is a wasteland where there used to be life. Icelanders do not have the means to shut down the industry all on their own, which is why foreign aid is necessary.

The aluminum smelting industry is the single biggest environmental issue in Iceland, and it will not be solved without help. The plants emit nearly all of Iceland’s greenhouse gas pollution, and these plants have caused Iceland’s carbon footprint to rise by 50% over the last 20 years. Greenhouse gas emission is a large, global issue, but kind-hearted donors can have the opportunity to be part of the solution instead of the problem if they assist in the interruption of the aluminum smelting industry in Iceland. If decisive action is taken now, the future of Iceland’s pristine wilderness as well as the fate of the entire world can be altered for the better. The best method for tackling this issue is to plant trees in Iceland in order to rebuild ravaged land as well as offset the greenhouse gases released by smelting plants. Global warming may seem like an overwhelming issue that cannot be easily solved, but it is possible, one step at a time.

Nonprofit

International Coalition for the Environment

Mission Statement- Our mission is to promote awareness and action to combat global warming and the release of greenhouse gases. This is done by repairing and replanting damaged ecosystems and stopping carbon emissions at the source.

What we do- The International Coalition for the Environment promotes action to combat global warming in several ways, but our current project is located in Iceland. Our mission in Iceland is to slow and eventually stop the smelting of aluminum in Iceland’s remote fjords. This industry releases harmful waste products into the atmosphere that remain for years as well as fluoride products that leach into the ground surrounding the plant and kill plant life. This is extremely damaging to Iceland’s tourism industry, as tours cannot be held near damaged land (savingiceland.org, 2011).

5 Emma Sutphin Iceland

The pure and pristine wilderness of Iceland is fast disappearing because of the aluminum smelting industry that is rapidly expanding there. Iceland’s greenhouse gas production has increased over 50% in the last 20 years, which is over twice the rate of the United States. Iceland is currently in violation of Europe’s emissions requirements, and it has received an exemption for the past 10 years (earthtrends.wri.org, 2007). That is unacceptable, as every country needs to do their part to reduce our impact on the planet and preserve the Earth for future generations.

A two-pronged strategy will be used in order to combat the effect of aluminum smelting plants in Iceland. First, trees and other native plants will be reintroduced to the areas where they have been decimated by the pollution of the smelting plant. First, a cleanup will be staged to detoxify the environment and make it suitable for plants to live in. Then, a variety of plants will be purchased and planted in a location where they will thrive. With a little luck, as well as help from our donors, ICE will be able to recreate the natural Icelandic ecosystem and preserve it for years to come. The trees planted will also reduce air pollution by drawing excess carbon dioxide out of the atmosphere, thereby reducing global warming. The other strategy that will be employed to reduce global warming is to reduce the production and expansion of aluminum smelting plants. Currently, at least five more plants are planned to be built in the next three years. This would drastically increase Iceland’s release of greenhouse gases even more, and that must be stopped. By staging protests and raising awareness of the problem within Iceland, our goal is to pass laws that would severely restrict aluminum production and eventually stop it altogether. This cannot be done without the support of native Icelanders, and a first step toward this ultimate goal is to produce and distribute material within Iceland that exposes the truth about the aluminum smelting companies and their operations. By putting these two strategies into effect, we can fulfill our mission statement and stop global warming, but we can’t do it without you.

Ways You Can Help- First and foremost, the best way to help combat global warming is by donating to our cause. By giving in denominations of $10, $20, or even $50, our organization will be capable of assisting Icelanders in defending their home country from the disease of smelting operations. Your donation can make a bigger difference than you think: a single planted tree can remove over 1 ton of carbon dioxide in its lifetime. These trees are inexpensive and easy to plant, and the plating process will also create local Icelandic jobs to grow and plant the trees. Any amount of money donated can help us achieve our ultimate goal of halting aluminum smelting in Iceland altogether, and each dollar donated can do a little bit more than the last.

The second way that you can help ICE is by buying one of our local handcrafted products. In order to promote awareness and assistance, we have created a line of wool sweaters for sale in the United States. These sweaters are produced entirely in Iceland, and local workers are hired to make them. This offsets the jobs that may be lost in the smelting industry if it is shut down. Most workers in the smelting plants are foreigners that were paid to travel to Iceland and use their expertise to run the plant, so few Icelandic jobs would be lost from the companies ceasing production. The few jobs that would be lost are regained through ICE’s effort to hire Icelandic workers to make sweaters and work in greenhouses to grow the trees that will be planted. These sweaters are environmentally friendly, and the wool comes from Icelandic sheep. They are very

6 Emma Sutphin Iceland

warm and water-resistant, and we offer a wide variety of color and design options. One of these sweaters can be obtained for just $40, and all profits directly benefit ICE’s operations.

Another easy way to contribute to our cause is to volunteer your services and your time. Anyone can help, as we need volunteers to create advertising material to promote the shutdown of the smelting industry as well as to spread the word about ICE throughout the United States as well as the rest of the world. A few specialized volunteers may even have the opportunity to travel to Iceland in order to oversee and assist with restoration projects. Every single volunteer is valuable, and you never know what you can do to help until you try. If you think volunteering is right for you please visit our website or call to obtain more information.

Partnerships- • Icelandic government- the government is a crucial ally in the passage of laws meant to stop the smelting companies from expanding their operations in Iceland. The government supports ICE fully because they realize that we provide local jobs as well as preserve their country’s natural beauty for all to enjoy. The smelting plants provide few local jobs, and they have caused nothing but strife and division within the country. By partnering with ICE the government can do the right thing for its people and at virtually no cost to them. • Earth Policy Institute- This is a nonprofit that plans how to get from an unsustainable future to a sustainable one through education and implementation of green policies. This mission lines up closely with that of ICE and the two organizations should be able to work together closely in order to achieve the goal of sustainability in Iceland. • Environmental Defense- This nonprofit promotes the passage of laws and regulation that protect the ocean, wildlife, and wilderness areas. The support of this group could be a key in the passage of limiting laws in Iceland, since it has volunteers who are experienced in the legal world. • Worldwide Fund for Nature- This organization seeks to reverse degradation of the environment by promoting biodiversity and sustainability, while minimizing pollution and consumption. This organization could be very helpful in providing additional funding and manpower for the tree-planting and restoration phase of ICE’s project. Our hope is that this organization will partner with us in order to achieve our mutual goals.

Geographical Area Analysis

The country of Iceland has many unique geographical features that BIS Inc. will need to take into consideration in order to successfully open a nonprofit there. Iceland is a large island, which could complicate trade and shipping routes. On the other hand, there are many ports in Iceland due to the large fishing industry. This will be to the advantage of BIS Inc. because there are many easily accessible locations to transport supplies from. Although shipping to an island country may present challenges, Iceland’s unique features make it ideal to expand BIS Inc. to.

Iceland is the second largest island country in Europe, and this is an advantage to BIS Inc. It is located between Northern Europe and North America, which means that supplies could easily be transported to either location.

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There are three major ports in Iceland; (CIA World Factbook, 2012). These ports are all located in the southwest portion of Iceland, which may make shipping to Canada or the US more practical than Europe. Once the supplies reach Iceland, there are few problems with transport. All major cities and towns are located on the coast, with no need to transport supplies inland. From the three ports listed above, supplies may be shipped by truck or a smaller sea vessel to their final destination. The myriad of options available to BIS Inc. regarding shipping will ensure that a significant profit is made from this business venture.

There are several issues regarding Iceland’s climate that need to be addressed. The average temperature in January is -0.4° C and the average in July is 11.2°C (travelnet.is, 2012).This means that Iceland, although warmer than other countries at comparable latitude, is cold most of the year. Drifting ice such as icebergs could be a problem when shipping by boat at such high latitudes during the winter. Also, all products shipped to Iceland will need to be cold and weather resistant to prevent damaged goods. The annual precipitation in Reykjavik, on the southern coast, is about 3,000 mm, while the precipitation in the northern highlands is only 400 mm (travelnet.is, 2012). This extreme variability in weather patterns means that caution should be taken when transporting goods on land, and shipping routes may need to be customized based on the weather of the final destination. Wind can also be an issue in the southern coastal area, as gales frequently blow from Greenland. In the summer, there are nearly 24 hours of daylight. In the winter months, there are only about 4 hours of light per day (travelnet.is, 2012). This makes the summer months ideal for transporting products within Iceland.

Additionally, volcanic activity can be a major factor in transporting supplies. Iceland is home to over 200 volcanoes, and over 30 have erupted in recent history (travelnet.is, 2012). The eruption of Eyjafjallajökull in 2010 disrupted flights to and from Europe for several weeks (wikipedia.org, 2011). Although eruptions on such a large scale are uncommon, there is a volcanic eruption every five years on average. This may cause delays in the shipments of items by air, but major problems are unlikely. BIS Inc. will probably be shipping items by boat due to the lower cost and easy accessibility. Iceland also has the highest level of geothermal activity in the world, which is a boon for BIS Inc (travelnet.is). These geothermal hot springs ant vents make the energy costs within Iceland very low, as 80% of their energy is produced by geothermal and other renewable energy sources. Iceland has many unique geographical features that need to be considered when expanding a company to this country, but they will benefit BIS Inc. in the end.

The topography of Iceland is also a major factor ibn the distribution of supplies. Over 10% of inland Iceland is glaciers, which makes trasportation there unfeasible (travelnet.is). Most of Iceland is uninhabitable due to lava flows, sand, and wasteland. Only 1% of the country is arable land (travelnet.is). However, transportation in these remote areas will not cause any issues for BIS Inc. Due to these harsh conditions, few people reside in the interior of the country. This means that supplies will not need to be shipped there. The coastal roads in Iceland are mostly well- maintained, with 4,438 km of paved roads and 8,431 km of unpaved roads (CIA World Factbook, 2012). If suppies are transported during the summer months, these roads should not (emapsworld.com, 2012) pose a problem to BIS Inc.

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All of these factors need to be considered in order to run a successful, competitive nonprofit organization in Iceland. The strategic location between Europe and North America means that there are lots of options for shipping supplies to and from Iceland, as shipments to and from either continent are entirely feasible. Supplies will need to be shipped by boat to Iceland, and once there a truck, small boat, or aircraft can transport the goods. However, these activities will need to take place in the summer months, as Iceland’s climate can be quite harsh in the winter. There are only four hours of daylight in the winter, and the average temperature is -0.4° C. On the other hand, the summer months receive over twenty hours of daylight. Other factors that may affect shipping include volcanoes and earthquakes. Iceland has over 200 active volcanoes, and large eruptions of ash and lava are not uncommon. If the supplies are shipped by boat, however, the shipments will not be disrupted. Also, the condition of Iceland’s roads could factor into transportation costs. With about one-third paved roads and two- thirds unpaved roads, supplies will need to be shipped in the summer to avoid slick or muddy roads. Iceland has many geological features that are entirely unique. These factors may complicate shipping and distribution of supplies, but some of these features may work to the advantage of BIS Inc. The rich supplies of geothermal energy, extra hours of daylight in the summer, and strategic location will all contribute toward lower costs for shipping.

Geographical Benefits • Located halfway between Europe and North America, making shipping easy and convenient. • Few residents inland, meaning supplies only need to ne shipped along the coast • Three major ports to ship to: Grundartangi, Hafnarfjordur, and Reykjavik • 20 hour days in the summer months, giving lots of time to transport goods safely • Abundant geothermal energy, making energy costs lower

Economic Analysis I

Capitalism- Iceland is mostly a capitalistic country. Most industries and goods are privately owned, such as the fishing industry and construction. However, it has a lot of socialistic tendencies. For instance, there is free, government-provided health care for all citizens of Iceland. Also, there is free daycare for all children. They also have library and postal systems that are provided by the government. Iceland is about half capitalistic and half socialistic. They have a lot of socialism, which means that products are shared by the entire society. I think they have a good balance of these two programs.

Resources • Geothermal power- renewable resource that is very common in Iceland because of high volcanic activity, harnessed and used to heat homes (globaledge.msu.edu, 2011) • Hydroelectric power- renewable resource used to harness the power of rivers in order to produce electricity, hydroelectric and geothermal are used for over 80% of Iceland’s energy needs (oecdbetterlifeindex.org, 2011)

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• Water- nonrenewable resource; fresh water is abundant in Iceland because of the country’s many glaciers, and it is not treated at all. It is often exported because of the good quality. Once the glaciers are gone, there will be very little fresh water left (wikipedia.org, 2012)

Industries • Fishing- makes up 40% of Iceland’s exports and employs 7% of the country’s workforce. Some of the major companies are Varma & Vélaverk, Sæmark, Samherji, Lysi, and Sildarvinnslan. Fishing exports account for about $3 billion in revenue (wikipedia.org, 2012). • Aluminum smelting- Aluminum is imported from Australia and refined in to a useable product in a smelting plant. The three companies with operational plants are Alcoa, Century Aluminum, and Rio Tinto Alcan (savingiceland.org, 2011).

Currency- There are 130 Icelandic Króna per US dollar (cia.gov, 2012).

Total GDP (PPP)

14

12

10

8 GDP (US Dollars, billions) 6

4

2

0 Iceland The Bahamas Barbados Belize

(CIA World Factbook, 2012)

Iceland is in a unique position in regards to its total GDP. It is the most highly developed nation of its size and population, making it hard to compare with other countries. Its GDP is higher than all of the comparison countries, which are similar in size and depend on tourism as a major source of revenue like Iceland. All three comparison countries are smaller than Iceland and they are tropical, which is the opposite of Iceland. There are no other countries in the world like Iceland that are small and yet highly developed in terms of GDP and government. This makes Iceland a very good place to invest, as it has a very high GDP for its size.

10 Emma Sutphin Iceland

GDP Growth Rate

3.00%

2.50%

2.00%

1.50%

1.00%

0.50%

0.00% Iceland The Bahamas Barbados Belize

(CIA World Factbook, 2012)

Iceland has a fairly steady growth rate in terms of GDP. A rate of nearly 2.5% annually means that the economy is still growing and expanding, but not at such a high rate that it will make Iceland prone to huge fluctuations in growth and general instability. Iceland’s rate of growth is higher than both the Bahamas and Barbados, but slightly lower than Belize. This does not mean that Iceland’s growth rate is low, however, because Belize is a third-world country that is growing at a higher rate due to increases in the use of natural resources. Iceland’s average GDP growth rate is steady, making it the perfect place to invest.

Gross National Income per Capita

$45,000

$40,000

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0 Iceland The Bahamas Barbados Belize

(CIA World Factbook, 2012) 11 Emma Sutphin Iceland

Iceland has the highest income per capita relative to the other three comparison countries. An income of over $40,000 per person means that Icelanders tend to enjoy very good benefits and a higher standard of living in comparison to most other countries. They have both universal health care and an extensive welfare system, which none of the comparison countries have. Overall, this high income per capita contributes toward the high level of infrastructure and development that Iceland has.

Economic Analysis II

Iceland’s economy is highly trade based, and it has free trade agreements with most of Europe as well as the US and Canada.

Major Exports- • Seafood- Seafood and fish products make up 40% of Iceland’s exports and provide over 70% of the country’s export revenue. Commonly exported fish are salmon, cod, herring, and halibut (wikipedia.org, 2012). • Aluminum- Aluminum and other metals account for 40% of Iceland’s exports. Aluminum is exported in the form of ingots, which are shipped to another factory for making the finished product. This sector has the highest growth rate of all Iceland’s exports (cia.gov, 2012). • Wool- Iceland is famous for its sheep’s wool, as it is especially warm and soft. It is exported in the form of raw wool or sweaters, mittens, scarves, or other textiles (cia.gov, 2012).

Iceland’s exports totaled about $5.3 billion in 2011 (cia.gov, 2012).

Export Partners 2% 2% 2% 3% European Union 4% United States 5% Norway Japan Russia Switzerland

82% Nigeria Other

(statice.is, 2011)

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Major Imports- • Machinery- Heavy construction equipment, cars, and some electronics cannot be manufactured in Iceland, so they are always imported (wikipedia.org, 2012). • Petroleum- Iceland has no oil reserves within its boundaries, so all petroleum products must be imported. Iceland uses very little coal or natural gas because most energy comes from geothermal power. However, oil is imported for cars at the rate of 15,530 barrels per day (cia.gov, 2012). • Food- Due to Iceland’s cold climate and lack of arable land, lots of food must be imported. Greenhouses can provide some fresh vegetables, but all exotic foods and most fruit must be imported. The Icelandic diet is very high in fish and meat because of this lack of fertile land (iceland.is, 2012). • Textiles- The only major textiles and clothing that Iceland produces consists of sheep’s wool products, so most clothing must be shipped in from foreign countries. Popular clothing brands and foreign clothes are always imported (iceland.is, 2012).

Iceland’s annual imports totaled $4.5 billion in 2011 (cia.gov, 2012).

Import Partners

3% 2%

European Union 7% Norway 9% Brazil United States 10% China 59% Japan 10% Canada Other

(statice.is, 2011)

Scarcity- Iceland is rich in natural resources in many ways, such as its abundance of fresh water and geothermal power. However, there are quite a few products that Iceland lacks and must import due to scarcity. The most commonly imported product is cement for construction work, as Iceland does not have the resources to make its own cement. There is also a scarcity of fresh fruits and vegetables. This is due to Iceland’s harsh climate and limited amount of sunlight in the winter. Vegetables can only be grown in a specialized greenhouse, and only hardy vegetables usually thrive. Therefore, almost all fruits and some vegetables must be imported. This makes it

13 Emma Sutphin Iceland very difficult to obtain fresh food. Another scarcity in Iceland is oil. There are no natural gas reserves within Iceland, so all fuel for cars must be imported. Although Iceland is conducting research to determine the feasibility of introducing hydrogen-powered cars, for now they are heavily dependent on foreign oil. Overall, Iceland is a highly import and export driven country, and their economy would collapse if either the imports or the exports were stopped.

Balance of Payments- Iceland currently has a trade surplus of $805 million, as it had exports worth $5.3 billion and imports worth $4.495 billion (cia.gov, 2012).

Trade Balance- Iceland has a very good trade balance, as it takes in a surplus of over $800 million each year. This means that it can use that money to pay off its enormous debt, which is over 130% of its GDP (cia.gov, 2012). Overall, however, Iceland is a safe place to invest since its debt is being reduced each year instead of increased as in the United States.

Exchange Rates- An exchange rate is the value of one currency when exchanged for another. In Iceland, the króna is relatively weak, since there are 129 króna in one dollar. This currency has undergone significant inflation in the past several years, making much weaker against the dollar and the euro than it has historically been. The Icelandic government carefully controls currency exchange in order to prevent further collapse financially. The only place to exchange currency within Iceland is in a major airport, as most shops will not accept anything but krónur (cia.gov, 2012). This weakness of the króna in comparison to the dollar makes it very easy for businessmen and tourists in Iceland, and everything will be relatively cheaper than it is in the United States. However, this makes it difficult to market internationally produced items in Iceland, as most Icelanders will not be able to afford the cost of the item unless it is heavily discounted.

Name of Currency- Iceland’s currency is called the króna, or krónur if it is plural (cia.gov, 2012).

Current Rate of Exchange- There are 129 Icelandic króna in one US dollar, and one króna is equivalent to 0.01 US dollars (cia.gov, 2012).

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Inlation Rate

8.00%

7.00%

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00% Iceland The Bahamas Barbados Belize United States

(CIA World Factbook, 2012)

Iceland’s inflation rate is very low, as it is only 2.8%. This is about the rate of inflation that is healthy for a country to have, and it is not in danger of becoming too volatile, since it is nowhere near the rate of 5%, the danger zone. It is also lower than the rate of the United States. Although the inflation in rate is under control currently, Iceland has had very high inflation rates for the past few years due to the 2008 financial collapse that took place there. Due to government intervention, it is now very stable and should continue to remain that way.

Unemployment Rate

16%

14%

12%

10%

8%

6%

4%

2%

0% Iceland The Bahamas Barbados Belize United States

(CIA World Factbook, 2012) 15 Emma Sutphin Iceland

Iceland’s unemployment rate is very low at under 6%, which is the lowest out of all the comparison countries. Iceland has traditionally had very low unemployment, but the rate increased drastically after the 2008 financial collapse. Even though it is very low, a 6% unemployment rate is considered high by Icelandic standards, and it should drop even further as the economy continues to improve.

Political System

Introduction- The structure of Iceland’s government is very similar to the US’s in most ways. Iceland’s government has an executive, legislative, and judicial branch, as well as a constitution that lays down the basic format of government. Most of Iceland’s political leaders and many political parties are left-leaning and very progressive. This means that there are many environmental protection laws passed as well as increased government welfare and a heavily unionized work force. The unions are so powerful that the unions for each industry determine all minimum wages, and the government does not set any baseline wages (cia.gov, 2012). The power of unions may make negotiations for labor and manufacturing in Iceland much more difficult than it might be in a nonunionized country. However, the workforce is generally happy and productive, and having more highly skilled workers will benefit BIS Inc. in the end. Major restructuring in the banking industry after the 2008 financial collapse may make it more difficult to obtain a loan within Iceland, as there is only one major bank, and it is owned by the government (wikipedia.org, 2012). However, as long as loans are taken out in the US, this will not pose a problem. Since Iceland has a very stable government with no wars or military and the same person in power for over 15 years, there is virtually no risk of loss of goods to a coup or military action. With all of these factors taken into consideration, Iceland is an optimum place to start a business.

Government Type- Iceland has a constitutional republic, which is when leaders are elected to govern the people, but their actions are restricted by a constitution (cia.gov, 2012).

Branches of Government- Iceland has the same three branches of government as the United States: executive, legislative, and judicial. Iceland’s government is modeled after that of the US, and it is nearly identical. The executive branch is made up of the Chief of State, or president, the Chief of Government, or prime minister, and the cabinet of advisors appointed by the prime minister. This branch makes decisions about public relations, deals with diplomatic visits, and signs laws into effect. The legislative branch is made up of the Althingi, a type of parliament. The Althingi consists of 63 members who are elected by popular vote every four years. They pass laws that the executive branch signs into effect. The judicial branch consists of the Icelandic Supreme Court, or Haestirettur. There are 9 justices on the Haestirettur as well as 8 district judges. All judges are appointed for life by the president. This system of government is extremely similar to the one in the US, with the exception of the difference in size of the legislative branch (iceland.is, 2011).

16 Emma Sutphin Iceland

Political Parties- There are five major political parties in Iceland that currently hold power in the Althingi: the Social Democratic Alliance, the Left-Green Movement, the Independence Party, the Progressive Party, and the Citizens’ Movement. The Social Democratic Alliance, or SDA, was formed in 2000 as a joining of three different parties in order to form a stronger challenge to the Independence Party. This party is left leaning and liberal, and it is the party wit the strongest support for joining the EU. It currently holds a majority in the Althingi with the Left-Green Movement. The Left-Green Movement was founded in 1999 as an alternative to the SDA. It is heavily focused on environmental issues, as it supports a more socialist government. It holds a majority in the Althingi with the SDA, as it holds 14 seats. Another political party is the Independence Party, which was Iceland’s biggest party for several decades. It is Iceland’s oldest political party, as it was formed in 1929. The party is center-right, and it had a majority in the Althingi for many years. However, the Independence Party has lost support in recent years, and it only holds 16 seats now. The Progressive Party is a centrist agrarian party, and it supports workers’ rights. Its popularity has varied widely through the years, and they went from a high of 15 seats to the 9 seats held now. The last major party is the Citizens’ Movement. This party was formed after the 2008 banking collapse, but it has since dissolved due to arguments between its members. Overall, Iceland’s political parties are progressive and leftist, with no far right parties (iceland.is, 2011).

Leadership- • Prime Minister- Jóhanna Sigurðardóttir • President- Ólafur Ragnar Grímsson • Minister of Economic Affairs- Steingrímur Jóhann Sigfússon • Minister of Finance- Oddný G. Harðardóttir • Minister of the Interior- Ögmundur Jónasson • Minister of Foreign Affairs and External Trade- Össur Skarphéðinsson • Minister of Industry, Energy, and Tourism- Oddný G. Harðardóttir • Minister of Education, Science, and Culture- Katrín Jakobsdóttir • Minister of the Environment- Svandís Svavarsdóttir • Minister of Welfare- Guðbjartur Hannesson • Minister of Fisheries and Agriculture- Steingrímur Jóhann Sigfússon • Director of the Central Bank of Iceland- Már Guðmundsson (iceland.is, 2011) All of the ministers mentioned above are members of a cabinet that is appointed by the Prime Minister, which is why the Prime Minister has more power than the President in Iceland.

Stability of Government- For the most part, Iceland is a very peaceful and stable nation. The position of President is chosen by popular vote every four years, and the current President, Ólafur Ragnar Grímsson, has been President since 1996. There were no presidential elections held in 2000 or 2008 due to a lack of challengers to the incumbent president (iceland.is, 2011). Iceland has no military forces, and there have been no wars in recent memory. The US provides military protection to Iceland in times of need, but this has never been necessary (cia.gov, 2012). Iceland had no major problems

17 Emma Sutphin Iceland at all until the banking collapse in 2008. This collapse resulted in the dissolution of all three of Iceland’s major banks due to difficulty refinancing foreign debt. This led to the worst economic recession in Icelandic history, and the collapse was the worst in the entire world in 2008. Several citizen protests have taken place since in protest of the government’s lack of accountability for the collapse both before and after. These protests resulted in several political leaders resigning as well as the formation of the Citizens’ Party political movement (wikipedia.org, 2012). The value of the Icelandic króna has improved greatly since the collapse, and unemployment is much lower than it was. However, there is still a great deal of dissatisfaction with the government in general. Other than the fiscal crisis in 2008, Iceland has an extremely stable government.

Legal System- The government must obey the laws set down in Iceland’s constitution, and additional laws are passed by the Althingi and signed into law by the President (cia.gov, 2012).

Suffrage- All Icelandic citizens are allowed to vote universally at age 18 (iceland.is, 2011).

Flag-

(CIA World Factbook, 2012)

Iceland’s flag is mostly blue with a red and white cross that is slightly off-center. The vertical stripe is offset because it copies the Danish flag, which was originally the country that controlled Iceland. The colors were chosen to represent important aspects of life in Iceland. The red stands for volcanoes, the white represents snow and ice, and the blue is the ocean (cia.gov, 2012).

18 Emma Sutphin Iceland

Trade Laws

Iceland has relatively few trade restrictions on both imports and exports compared to the US and other similar countries. Iceland’s economy is so dependent on international trade that there are few restrictions in order to promote businesses in Iceland. Iceland has free trade agreements with the EU as well as the US and Canada, which makes it much easier to import and export goods between those countries. These countries make up most of Iceland’s imports and exports due to the cheaper rate of trade (cia.gov, 2012). Iceland has very few taxes on imported goods for the most part, but there are a few important exceptions. Goods that can be easily manufactured in Iceland have heavy tariffs, such as fresh vegetables and meat. Both of these items are a major part of Iceland’s agricultural industry, and the government has heavily taxed imported goods in order to keep local prices competitive (tollur.is, 2012). Goods that need to be imported are rarely taxed to encourage companies to bring their products to Iceland. Overall, Iceland has fairly loose trade laws and importing most goods should not be an issue.

Tariffs- Iceland has fewer tariffs on imported goods than many other countries, and that is mostly due to the fact that it is an island country and needs to import almost everything. There are no tariffs on goods that always need to be imported, such as cement and fresh fruit. However, there are very high taxes on goods that can be produced locally. This is in an effort to keep the prices of goods from local merchants competitive with cheaper, internationally produced goods. One such tariff is the tariff on imported meat. For all edible meat or meat offal, there is a 30% tariff rate. This is because meat is one of Iceland’s main agricultural products, and it can easily be produced and sold entirely within Iceland with no dependency on foreign goods. A second tariff is one on most flowers and live plants. There is a 30% tariff on plants such as roses, carnations, potted plants, bushes, and trees. There is no tariff on mushrooms or plants in bulb form. There is also a 30% tariff on fresh vegetables such as potatoes, lettuce, tomatoes, beans, and pumpkins. This is to prevent cheaply grown vegetables of poor quality from running local farmers out of business. It encourages Icelanders to buy local food as well as discourages international food chains from bringing their products to Iceland. Food items such as nuts and fresh fruit that cannot be grown in Iceland have no tariff (tollur.is, 2012).

Trade Laws- There are many products that are either severely restricted or banned altogether from entering Iceland. For most travelers, products that are banned under all circumstances include narcotic drugs, raw meat, large knives, and most guns. Products that are allowed only under rare circumstances with a special permit from the Icelandic government are live plants, guns, tobacco, drugs, horse riding gear, communication equipment, and live animals. The live plants and animals as well as the riding gear is restricted in order to prevent the spread of disease within Iceland. Drugs and weapons are restricted to prevent acts of violence. Otherwise, there are very few restrictions on imports (kefairport.is, 2012).

Iceland has many free trade agreements with countries all over the world. Because its economy is so dependent on the import and export of goods, Iceland has put several trade agreements into place. They are a part of the European Free Trade Association along with the EU, which makes trade with other European countries very easy. The US and Canada have open trade agreements

19 Emma Sutphin Iceland as well, and these agreements account for most of Iceland’s imports and exports (tollur.is, 2012). Iceland has many of the rights and benefits of a country in the EU, and talks are in the works about possible full membership. However, Iceland has the best of both worlds now due to the extensive trade with Europe but still with the freedom to leave at any time.

There are also several embargoes that Iceland observes because of membership in the UN and treaties with the EU. These embargoes are mostly to prevent misuse of firearms by terrorists or dictators. Some countries that have arms embargoes are Myanmar, the Congo, Eritrea, Guinea, Iran Iraq, and North Korea. Other restrictions include travel bans for Belarus, Croatia, Libya, North Korea, Syria, and Zimbabwe. These bans are in place due to unstable political situations. Overall, Iceland does not have any specific embargoes on other countries. The only embargoes that Iceland observes are as a result of international agreements (tollur.is, 2012).

Population

Introduction- Although there are many reasons to expand BIS Inc. into the Icelandic market, there are three statistics that best make the case. First, Iceland has an average life expectancy of 81 years (cia.gov, 2012). That means that there are 81 years in which to sell products to customers. This life expectancy is over 5 years longer than that of the US, which gives companies extra time to sell their goods. Secondly, 199,000 people, or over half of Iceland’s total population, live in the Reykjavík area (iceland.is, 2011). Since Reykjavík is the largest port in Iceland, this means that most customers are easily accessible with minimal transport necessary. This will cut costs dramatically, making Iceland a very convenient place to sell goods. Last, there are only 0.53 migrants per 1000 people, which is extremely low (iceland.is, 2011). That means that most people who live in Iceland will live there for their entire lives, and moving is rare. Once a firm client base is established, that base will remain for years to buy from the business. Because of these three factors, Iceland is an ideal place to start a business.

Total Population- There are 313,183 people living in Iceland according to an estimate for July 2012 (cia.gov, 2012).

20 Emma Sutphin Iceland

Growth Rates- 2.50%

2.00%

1.50%

1.00%

0.50%

0.00% Iceland The Bahamas Belize

(CIA World Factbook, 2012)

Iceland has a very low rate of growth compared to other similar countries. The Bahamas have a rate only slightly higher than Iceland’s, but Belize’s annual growth rate is over twice that of Iceland. Iceland’s growth rate is low compared to other first-world countries as well, partially due to a lack of interest in having children as well as having easy access to birth control due to a universal health care system. On the other hand, although The Bahamas and Belize have a similar population to Iceland now, they will soon have a much higher population due to their increased growth rates. These higher rates are due to a high birth rate and lack of education about having children. Iceland’s population will remain low into the foreseeable future due to the factors mentioned above, which means that the client base for businesses will not see much growth.

21 Emma Sutphin Iceland

Birth Rates- 30

25

20

15

10

5

0 Iceland The Bahamas Belize

(CIA World Factbook, 2012)

Iceland has a much lower birth rate than the other two countries that are comparable in size. This is mostly due to the fact that both the Bahamas and Belize are considered underdeveloped nations that have limited access to birth control and other medical services. Iceland has free health care for all citizens, which includes contraception and other reproductive services. In Iceland, as with many other first-world nations with health care services such as Norway, Sweden, and Canada, birth rates are low because citizens are more educated about the decision to have children and many simply choose not to.

22 Emma Sutphin Iceland

Life Expectancy Rates- 85

80

75

70

65

60 Iceland The Bahamas Belize

(CIA World Factbook, 2012)

The life expectancy for an Icelander is about 10 years more than either of the countries with a similar population. This is due to many factors, but the most prominent one is health care. In the Bahamas and Belize, health care is not easily available. AIDS and other diseases account for a very high proportion of deaths in these countries. Also, many people living in Belize or The Bahamas are severely impoverished, which means they may die from malnutrition or starvation. Iceland, on the other hand, has free health care available to all citizens from cradle to grave. This means that serious diseases are more likely to be treated before they cause serious harm to anyone. Also, Iceland has a fairly high average income, which prevents deaths from malnutrition. In addition, there is a very low crime rate in Iceland, with almost no homicides.

23 Emma Sutphin Iceland

Distribution of Population- 40.00%

35.00%

30.00%

25.00%

20.00% Males Females 15.00%

10.00%

5.00%

0.00% 0-14 15-64 65+

(CIA World Factbook, 2012)

The ratio of males to females in Iceland is fairly close troughout all age groups. However, there are slightly more males than females in the younger age groups, and slightly more females than males in the 65+ age group. This means that if senior cisizens are a target group, it would be slightly more beneficial to market to women instread of men. However, since seniors only make up 12.7% of the total population, it would be easier to market towards the age group of 15-64 years of age, since there is a broader market demographic. Although there are about 2,000 more males than females in this age group, this difference is so slight that it would be best to make a product that could appeal to both men and women. The product that would sell most successfully in Iceland is one that has universal appeal to both men and women and all working age groups. Although a product may be developed specifically for the very young or the elderly, these age groups represent only a small portion of Iceland’s total population. With such a small total population to begin with, it would be in the best interests of BIS Inc. to appeal to as broad of a market as is possible.

24 Emma Sutphin Iceland

Most Populated Cities- 140,000

120,000

100,000

80,000

60,000

40,000

20,000

0 Reykjavík Kópavogur Hafnarjörður Akureyri Kelavík og Njarðvík (Reykjanesbær)

(citypopulation.de, 2012)

Reykjavík, the capital of Iceland, is by far the most populous city. The city itself has a population of over 117,000 people, and the greater urban area has a total of 199,000 people, which is over half the total population of Iceland. Reykjavík is located on the southern coast of Iceland, and it also has the country’s largest port. This makes it especially easy to reach a large base of clientele the moment cargo is unloaded from the boat. The other two largest cities, Kópavogur and Hafnarfjörður, are located just south and southeast of Reykjavík, respectively. These cities both have less than a quarter the population of the capital, so they would not be particularly profitable to do business in. However, since they are both located within 20 miles of Reykjavík, goods would be very easy to transport directly from the capital to these cities. Most of the populous cities in Iceland are located on the southern coast, and the largest town in the northern region has less than 18,000 people. Due to the lack of residents and large distance between towns in the northern regions of Iceland, it is recommended that goods be sold mainly in the southern region.

Diet and Nutrition

Typical Meals- Modern Icelandic meals can vary widely in content and style, but there are several popular dishes that are served frequently at meals. For breakfast, pancakes, cereal, fruit, bacon, eggs, and coffee are among the common meal choices. For lunch, a wide variety of whatever is on hand is typical. Dinner is the largest meal of the day, and that is when meat is consumed. Common choices are lamb, fish, or other meat, with few vegetables (iceland.is, 2011). Due to the harsh climate, not many greens would grow traditionally. Since the introduction of greenhouses vegetables have become more readily available, but meat still remains a staple of the Icelandic diet. Very few

25 Emma Sutphin Iceland herbs or spices are used with meals, as they are hard to grow and expensive to import. The modern Icelandic diet includes many elements of a typical Western meal, and the diet has been modified since ancient times to include more foreign food (wikipedia.org, 2012).

Traditionally, the Icelandic diet relied heavily on lamb, fish, and horsemeat, with every part of the animal being used. Delicacies included cured shark, puffin, and singed sheep’s head. One example of a common meal is slátur, which is sheep intestines minced with blood and served in a sheep’s stomach. The best meat was reserved for feast days and special occasions. Some of the only vegetables that grow in Iceland’s climate include rutabaga, cabbage, turnips, and barley. Since these vegetables were scarce and not readily available, the traditional Icelander would subsist mainly on meat and other animal products. Although meat is still consumed in abundance, the modern Icelandic diet reflects a more balanced and nutritious lifestyle (iceland.is, 2011).

Meat Consumption per Capita (kg)

140

120

100

80

60

40

20

0 Iceland United States Germany Ireland

(nationmaster.com, 2012)

Since Iceland’s climate is not conducive to growing vegetables or fruits, meat is a major staple in a typical diet. Iceland’s meat consumption is about even with that of Germany, but below the US and Ireland. All four of the countries are well-off first world countries that consume a lot of meat. Although Iceland’s consumption is less than two of the comparison countries, it is still higher than the average around the world by far.

26 Emma Sutphin Iceland

Obesity Rate

40.00%

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00% Iceland United States Germany Ireland

(CIA World Factbook, 2012)

Iceland has an obesity rate that is consistent with the other two comparison countries in Europe. This is mostly due to the healthy, active, outdoor lifestyle that is prevalent among these countries. On the other hand, the US has a rate that is over twice that of Iceland. Although the US is also a first world country, its residents tend to be more sedentary than most. Iceland’s obesity rate is low, and it has remained that way for years.

Calorie Supply per Capita per Day 4000

3500

3000

2500

2000

1500

1000

500

0 Iceland United States Italy Belize

(nationmaster.com, 2012)

27 Emma Sutphin Iceland

The calorie supply per day in Iceland is about the same as that which would be available in a middle-income country. The highest income country that was compared, the US, had over 500 more calories available per day than Iceland did. Iceland was higher than Belize, a relatively poor country, but it was lower than Italy. Icelanders are getting plenty of calories, however, since the average person needs from 2000-2500 calories per day. The problem of hunger in Iceland is virtually nonexistent, and there are very few malnourished or underweight people living there. The calorie consumption per capita in Iceland seems to be a happy medium, as it prevents hunger while maintaining a low obesity rate.

Housing and Communication

Introduction- Iceland has a large variety of housing options available to its residents as well as an extensive communications network. More modern housing, such as the apartments located in cities like Reykjavík, are likely to have a need for only one TV or other major appliance per household. These apartments would also not require maintenance on the part of the tenant, so home improvement supplies would be in low demand. However, 84% of Icelanders own their own homes, so the vast majority of the population would welcome an opportunity to make improvements to their homes themselves instead of hiring a contractor (epp.eurostat.ec.europa.eu, 2012). This type of store would do best when located in a small town, in order to give rural farmers as well as city dwellers easy access to the store. Other types of stores, such as car dealerships, would be best located in the city of Reykjavík. Most Icelanders drive, since the country is so spread out, and the capital would receive the most exposure. It would also be easy to import cars into Iceland, because Reykjavík is one of Iceland’s major ports.

Any sort of business in Iceland needs careful consideration before a decision to open is made. For instance, Icelanders tend to have smaller than average houses. That means that having only one TV, phone, or computer per home is common. This type of electronics business would be best left to another country. However, one business that I predict would have a great demand is furniture. Since Iceland has no forests, all wood and wood products must be imported from a foreign country. This is often an expensive process, and if BIS Inc. could provide Icelanders with bargain furniture, it would be a very successful business venture. In many ways, Icelanders tend to live in a more Spartan way than most Americans are used to living, so any sort of business that sells only unnecessary items like extra kitchen appliances would not fare well. If all of these considerations are carefully taken into account, however, the right business in Iceland could be extremely successful and profitable for all involved.

Typical Housing Structures- One of the most traditional types of housing in Iceland is the turf house, or burstabær. This type of house originally developed because timber was too valuable to use on housing and turf insulates better. This type of home usually has a stone foundation and a wooden frame with turf covering the walls and roof. The floor was made of dirt, wood, or stone. The roof is typically covered in growing grass (iceland.is, 2011). The burstabær is not quite as popular today as it was

28 Emma Sutphin Iceland in the past, but it is still fairly common in rural areas. In larger cities like Reykjavík, concrete apartments are common. In the suburbs and some more rural areas, houses are made out of wood with a concrete foundation (epp.eurostat.ec.europa.eu, 2012). The houses may be painted bright colors, since the Icelandic climate can be so dreary and gray. Iceland has a large variety of housing options across the country.

Rooms per Person Comparison- 2.5

2

1.5

1

0.5

0 Iceland United States Ireland Germany

(oecdbetterlifeindex.org, 2012)

Home Ownership Comparison- 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Iceland United States Germany Ireland

(oecdbetterlifeindex.org, 2012)

Communications- Iceland’s telephone system is very extensive and up-to-date. In 2010, there were 204,000 landlines and 348,100 cell phones in use (cia.gov, 2012). Since there are only 313,000 people living in Iceland, that means that most people have both a landline and a cell phone. Cell phone coverage is very good due to satellite stations and some cell phone towers. In the places where there is no reception, landlines are very common. This means that it is always possible to contact

29 Emma Sutphin Iceland someone in Iceland at any given time, since they will usually be near a landline at home and have cell phone service in their place of work. There is extensive broadband Internet coverage in most of Iceland, and over 301,000 people in Iceland use the Internet, which is essentially the entire population that is old enough to use it. Iceland also has a lot of Internet host sites for other countries, with 360,910 total. That is ranked number 57 in the world (cia.gov, 2012).

There are several options available for TV and radio. There is one publicly owned TV station and about 10 privately owned ones. In addition to that, more channels are available through satellite TV. The government also operates 2 nationally broadcasted radio networks, and there are about 15 privately owned radio stations that operate locally (cia.gov, 2012). Overall, Iceland has a very modern technologically advanced communication network.

Transportation

Iceland’s modes of transport have several unique features about them. First, all transport must take into account the fact that Iceland is an island country, so any international travel must take place by boat or plane. There are seven airlines that fly to Iceland, as well as a few passenger boats. Icelanders who live on one of the many small islands surrounding the mainland must take a ferryboat in order to get to Reykjavík for shopping and other major purchases (iceland.is, 2011). In Iceland, over 90% of residents live in the urban area surrounding Reykjavík and other southwestern cities (oecdbetterlifeindex.org, 2012). This drastically decreases the need to own a car, as many Icelanders may simply walk wherever they need to go within Reykjavík. Since Iceland is sparsely populated outside of the Reykjavík area, cars a re necessary for all rural residents. They need at least one car in order to pick up supplies in Reykjavík or another major town. The rate of car ownership is 672 vehicles per 1000 people, which is slightly higher than the average rate throughout Europe (econ.nyu.edu, 2012). Many Icelanders like the freedom of owning a car even if it is not needed, and fuel is relatively cheap due to the abundant geothermal energy in Iceland. For transportation between some of Iceland’s larger cities that are located farther apart, some domestic flights are available. This may be faster than driving a car along Iceland’s sometimes narrow, windy roads along the coast.

Traditionally, Icelanders used a small, hardy breed of horse called the Icelandic horse. These horses are small (13-14 hands), but they are strong and sturdy. They grow thick coats in the winter and have very long manes and tails to protect against the elements. The horses were brought to Iceland around the 9th century, and they have been selectively bred to have up to 6 different gaits: the traditional walk, trot, and canter, as well as the tölt and the flugskeið. They were used for war, farm work, and transportation around the country (wikipedia.org, 2012). They (wikipedia.org, 2012) are still sometimes used today for pleasure

30 Emma Sutphin Iceland riding as well as guided tours on horseback. Iceland’s modes of transportation form a wide variety of options for getting around in style.

Transport Analysis- By looking at the following graph, it can be observed that Iceland has many more unpaved roadways than paved roadways. This is partly due to the fact that this estimate does not include urban areas, and over 2/3 of Iceland’s population lives in an urban area. The rest of Iceland’s roads are mainly made up of a loop that travels along the coast and circles the entire country. In more remote and infrequently traveled areas, paved roads are not necessary and are no inhibition to transporting goods. All major transport would take place within the areas that are paved, because that is also the area with the largest customer base. It would simply not be cost effective to deliver a small quantity of goods by truck to remote and unpaved areas to reach a small village. Due to these factors, Iceland’s unpaved roadways are not an issue in regards to transporting goods.

Roadways in Iceland (km)

9000

8000

7000

6000

5000

4000

3000

2000

1000

0 Paved Unpaved

(CIA World Factbook, 2012)

Iceland has no railway system for either passenger or cargo transport. This is due mainly to the fact that terrain is often rugged, and the cost to make tunnels, bridges, and level ground for a train system would not be worth the small amount of traffic that the railway would receive. There is simply no need for such a system because there are so many ports in Iceland that goods can usually be delivered directly to their intended destination or very close. Also, there are no navigable rivers in Iceland, so there is no way to transport goods inland by boat. The rivers are typically, narrow, rough, and fast moving, with frequent large waterfalls (iceland.is, 2011). However, as with a railway system, Iceland has no need to navigate any of its rivers. There are no towns located inland, as most of the country’s infrastructure is located on the coast. Most of the inland is inhabitable due to volcanoes, lava fields, and glaciers. The fact that goods may be

31 Emma Sutphin Iceland delivered to a port and arrive directly at their final destination is beneficial for any corporation trying to expand into Iceland, as there is no need to worry about additional transportation by boat, train, plane, or truck in most cases.

Iceland has an abundance of ports and airport terminals across the country, as can be seen in the graph below. There are 99 airports in Iceland, but only 6 of them are paved (cia.gov, 2012). The other 93 are privately owned and not practical for using to carry goods in by plane. However, the 6 airports that are paved may prove very useful in carrying goods to those few areas that cannot be reached by boat. This network of runways is quite extensive, leaving no area of Iceland unreachable. Iceland is also home to 31 seaports that goods may be delivered to (cia.gov, 2012). The major ports are in or near Reykjavík, and foreign goods may be easily imported to these locations. However, there are ports located all around the island that may be accessible for a cargo ship. Six of these ports are very small, as they are primarily used for local fishing operations, but the rest of the ports may be used to import goods. This variety of options will significantly reduce the cost of transport in Iceland.

120

100

80

60 Small Large 40

20

0 Airports Ports

(CIA World Factbook, 2012)

Labor

Job Market and Availability- The method for obtaining a job in Iceland is the same as in the US. The process typically includes the employer placing an ad for a position and applicants being interviewed. The minimum working age in Iceland is 16, which is when mandatory school ends. Young adults from 16-18 can only work limited hours due to labor laws (nationmaster.com, 2012). Employers and employees generally have a close relationship, since Iceland is such a small country.

32 Emma Sutphin Iceland

Businesses are usually small enough that lower ranking employees will still speak to and work with their bosses every day. Employees have many more rights in Iceland than they do in the US due to unions. Strong unions are able to set the minimum wage, maximum work hours per week, minimum break times, and rest times for each industry (nationmaster.com, 2012). This gives the employees collectively a huge amount of power over how and when they work. Employees don’t have some benefits that US companies may provide, but in some cases those benefits are simply not necessary. For instance, Iceland has free, government-provided health care for all residents, so there is no reason for companies to provide insurance. Overall, Icelanders have about the same amount of benefits as US workers, just not necessarily through the workplace. The workforce is made up of mostly native Icelandic, Christian workers. This group accounts for 85% of Iceland’s population, so it is not unusual that it is also the main workforce (statice.is, 2011). More women work in Iceland than in the US, mostly due to more readily available childcare for working mothers. Preschool is available for Icelandic children from age 1-6, and then they enter formal schooling. This removes a major inhibitor to having women in the workforce, and many women are employed because of this. Most of the workforce is between the age of 20 and 65 (cia.gov, 2012).

Industries- There are a wide variety of jobs and job sectors available in Iceland. Over 70% of Icelandic workers work in the service industry, but there are many types of service jobs in Iceland (cia.gov, 2012). These jobs may include working for a government agency, running stores and businesses, biotechnology, and Internet agencies. The two other major industries are fishing and aluminum smelting. These account for about 15% of the workforce. Iceland has many jobs available, and unemployment is very low as a result (cia.gov, 2012).

Workday- Typical office hours in Iceland are from 9:00 am to 4:00 pm on Monday through Friday, although businesses may close early in the summer since business tends to be slower. Some larger chain stores stay open until 7:00 pm, and a few are open 24 hours a day (globaltrade.net, 2011). Business is usually conducted in the afternoon or in the evening over dinner, and a businessman may even be invited over to his host’s home for dinner. Icelanders tend to take business a little less seriously than Westerners, and mixing business and pleasure is typical. There are quite a few public holidays in Iceland. Many holidays, such as Maundy Thursday, Good Friday, Easter Sunday, Easter Monday, Whit Sunday, Whit Monday, Christmas Eve and Christmas Day, are based off of the Christian faith, as that is the official religion of Iceland. The other major holidays include New Year’s Day, Labor Day, the first day of summer, Independence Day, Boxing Day, and New Year’s Eve. On these days, most businesses in Iceland close, but a few grocery stores and restaurants may stay open (globaltrade.net, 2011). The customs involved in exchanging information and doing business in Iceland are similar to those of the US and other Western countries. Icelanders typically shake hands and exchange business cards on first meeting. Icelanders can be more direct than Westerners, and they get down to business faster. Most Icelanders prefer to be addressed by their first names due to the patronymic naming system. Business may be discussed over dinner, in which case a suit and tie should be worn. Most Icelanders speak English well, and translators are available if necessary. Icelandic workers usually wear fairly casual clothes to work, such as nice pants and a wool sweater

33 Emma Sutphin Iceland

(globaltrade.net, 2011). More formal businesses may require suits, as well as government agencies. Icelanders are generally thought to have a fair and easy workday, and most Icelanders are happy with their jobs.

Education

The educational system in Iceland is divided into four main categories: preschool, compulsory, upper secondary, and higher education. Preschool is available for children from the ages of 1-6 years old for up to 9 hours a day. The parents must pay for preschool, but subsidies are available for working and single parents. The compulsory level of education is from age 6-16, and it is required for all Icelanders (nationmaster.com, 2012). The school is completely free, and the system is similar to that of the US. The third level of education in Iceland is called the upper secondary level. It takes place from age 16-20, and it is not mandatory. All Icelandic students who have graduated from compulsory school are guaranteed admission to upper secondary school. The school is completely free except for registration fees and textbooks. The last level of education is higher education, which takes place at a university. This schooling typically lasts four years, depending on which field of study is chosen. There are no tuition fees for public universities, but students are expected to pay registration fees as well as provide their own textbooks (iceland.is, 2011). All Icelandic students can receive some form of student loan from the government in order to pay for housing and the cost of living. The average student attends school for 16 years, which is completion of upper secondary school (cia.gov, 2012). This makes the average resident of Iceland extremely well educated.

Enrollment Levels- 100.00%

90.00%

80.00%

70.00%

60.00%

50.00% Iceland United States 40.00%

30.00%

20.00%

10.00%

0.00% Secondary Tertiary

(nationmaster.com, 2012)

34 Emma Sutphin Iceland

Iceland has somewhat lower levels of secondary and tertiary education than the United States. This is mostly due to the fact that school is not mandatory in Iceland after age 16, whereas it is mandatory in the US until age 18. The upper secondary level of schooling in Iceland is completely optional, and many students choose not to attend or drop out. Additionally, with the 14 years of school that is required of Icelanders before entry to college, there is a much lower tertiary education rate in Iceland than the US. This is because Iceland provides more pre-tertiary education than the US, and it is seen as unnecessary to attend a university as long as the student does not intend to become a doctor or other highly specialized professional. Although Iceland has lower secondary and tertiary education rates than the United States, Icelandic students are actually getting a comparable, if not better, education.

Literacy Rates- 100%

98%

96%

94%

92%

90%

88% Iceland United States China Germany

(CIA World Factbook, 2012)

Iceland has an extremely high literacy rate of 99%. Due to the mandatory education for 10 years, nearly all Icelanders can read and write very well. This rate is the same as in the United States and Germany, where education is also required for several years. China has the lowest literacy rate out of the four at about 92%. That is still fairly high, but China is lagging behind other first- word countries. Literacy in Iceland has been very high since the end of the 1700s, so there is no problem posed for a business due to lack of comprehension on the part of the customer.

35 Emma Sutphin Iceland

Education Expenditure (% of GDP)- 8.00%

7.00%

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00% Iceland United States United Kingdom Germany

(CIA World Factbook, 2012)

Iceland has one of the highest expenditures on education in the world in terms of GDP. It is higher than the rate of the US, the UK, and Germany. The high rate of expenditure is due to the fact that Icelandic students can obtain up to 18 years of school at no cost. Overall, the amount of money spent on education is much less than the other countries, because all three of the comparison countries have much higher GDPs than Iceland does. However, Iceland also has a much smaller population, so they spend a comparable amount of money per student as the United States. No data was available for China, so the UK was used as a comparison country.

Evaluation- Any company looking to expand into Iceland should be able to take full advantage of the first- class educational system in this country. With school available from age 1-24, and most of it free, there are virtually no issues regarding the intelligence and education levels of Icelandic people (iceland.is, 2011). With a 99% literacy rate, written advertisements are not a concern (cia.gov, 2012). Also, written reply mail may be used since there are very few residents who cannot write. In this way, Iceland matches closely with the US. Iceland has a better continuing education system, however, since up to 8 additional years of school are available at no cost to students. This encourages continuing education for Icelanders, which gives them the edge over the United States.

Most Icelandic students are also employed at least part time, and the unemployment rate for teens is only 18% (iceland.is, 2011). That means that very few teenagers would have free time in order to shop for products. This makes it hard to reach teenagers as a market, although a high employment does mean that teens are more likely to have extra income to spare on purchasing items. Icelanders are typically well paid for their jobs, especially with lots of higher education.

36 Emma Sutphin Iceland

This gives the average Icelander more disposable income to spend on items strictly for pleasure. With the right marketing campaign, BIS Inc. should have no trouble reaching out to teenagers as well as educated middle-aged workers.

Clothing

Business Attire- The typical business attire of an Icelandic native is a suit and tie, similar to the expected dress of a Western businessman. This choice of clothing was heavily influenced by the Western world, and Iceland has adopted many of the clothing styles and rules of business from the US (iceland.is, 2011). It may be cold in Iceland, so a warmer than usual jacket is worn sometimes. Otherwise, the business attire of Iceland is standard: slacks, leather shoes, and a professional collared shirt and a tie under a jacket. A few Icelandic businessmen may choose to dress in more causal attire, such as jeans and a nice sweater, but this is uncommon and formal attire shows more respect to the other businesspeople.

t1.gstatic.com, 2012

Ceremonial Attire- Þjóðbúningurinn is the official name of the traditional Icelandic costume. This costume is regulated by the National Costume Authority, which instructs people about how to wear the costume properly and makes changes to the costumes. Traditional clothing is most often worn for weddings, birthdays, and National Day. There are several variations of traditional clothing for the people of Iceland. The oldest women’s costume, which was worn from at least the 1600s through the 1800s, is called the Faldbúningur. It was clothing that a typical Icelandic woman would wear in her day-to-day life. The Faldbúningur consists of a colorful bodice under a long dress. The dress has a wide collar in order to support the intricate hats that were typically worn with the costume. Women usually wore either a tail-cap, which was a tight-fitting cap with a tassel hanging from the end, or a spaðafaldur, which had a feather-shaped ornament that protruded from the top of the hat. Another commonly worn women’s costume was the Peysuföt, which was popular from the 1700s to the 1800s. It was much simpler than the Faldbúningur, since women wanted less cumbersome clothes to work in. The Peysuföt was made of a twill skirt and a tail cap. A thick wool jacket was also worn, which was originally considered male clothing (iceland.is, 2012).

(wikipedia.org, 2012) 37 Emma Sutphin Iceland

There are also several types of male Þjóðbúningurinn that are considered part of the National Costume. The most traditional men’s wear is the Þjóðbúningur karla. It was the attire that a typical Icelandic man would wear in his day-to-day business. It was made up of thick wool pants, a double-buttoned vest, a jacket, and a tail cap. Colors of the Þjóðbúningur karla were usually black, blue, or dark green with a brighter vest. Another popular men’s costume is the Hátíðarbúningur, which was designed in 1994 as an updated version of the Þjóðbúningur karla. It is used in place of a tuxedo at formal events, such as weddings and funerals. It looks similar to the Þjóðbúningur karla, but it is lighter weight and easier to make. All of the above costumes are recognized by the National Costume Authority as traditional Icelandic wear, and Icelanders take great pride in showing off their heritage by wearing the national costume on National Day (iceland.is, 2012).

Expected Visitor’s Attire- Since Iceland is so cold for most of the year, visitors should wear lots of warm clothing. Several layers of insulated undergarments, sweaters, and waterproof outerwear is typical attire for a tourist in Iceland. Thick gloves and either a hood or a hat are also necessities if you will be spending extended periods of time outside. Warm waterproof boots are also typical, since regular tennis shoes are not warm enough and water can leak through. For the more adventurous tourist, they may wear more native clothing, such as an Icelandic sweater. These sweaters are made of warm sheep’s wool, and they usually have an intricate pattern on the collar. The sweaters are famous for being warm and soft, and they are often exported to other countries to be sold. Jeans may be worn in the summer months, but waterproof pants are more common in the winter. Icelanders are fairly open to other cultures, so there is no clothing that will be highly frowned upon as long as it is warm (iceland.is, 2012).

Recreation and Leisure

There are many places all over the world where one can relax and enjoy the outdoors, but Iceland is by far the best of these places. With its relatively temperate climate and large wilderness, there are a myriad of activities that can be enjoyed in Iceland. Iceland is a land of extremes, from icy glaciers and cold oceans to erupting volcanoes and steaming mineral pools. There is something in Iceland for everyone who enjoys the great outdoors. Native Icelanders tend to be active and physically fit due to the wealth of outdoor activities available to them. The obesity rate in Iceland is only about 10%, which is much lower than that of the United States (cia.gov, 2012). Iceland has many recreational activities available for tourists and locals alike, and the three most popular ones are outlined below. These activities prove why Iceland is the best place to go for outdoor recreation. (extremeiceland.is, 2012)

38 Emma Sutphin Iceland

One of the most popular tourist activities in Iceland is visiting a mineral hot spring. Due to Iceland’s location along the Atlantic Ridge, it experiences a lot of volcanic and geothermal activity. There are many steam vents and hotspots throughout Iceland, and these create hot springs. Some hot springs can reach temperatures of up to 170 degrees Fahrenheit. However, some springs are about 95-105 degrees, which is perfect for bathing (nationsencyclopedia.com, 2012). There are several mineral hot springs that are open for bathing, but the largest and most popular is the Blue Lagoon. It is located about an hour away from Reykjavík, and the pool is fed from heated water that comes from a nearby geothermal power plant. The water has a lot of trace minerals such as sulfur and silica, and these minerals have a restorative effect on skin (iceland.is, 2011). This activity may be enjoyed by anyone in Iceland at any time of the year, making it one of the best recreational activities that Iceland has to offer.

Another outdoor activity that is very popular in Iceland is horseback riding. Iceland has its own native breed of horse, the Icelandic Horse. These horses are short and stocky, with very heavy coats. They are known as very brave horses, as they have no predators on Iceland. They are very surefooted since they have had to evolve to navigate the steep and rocky sections of Iceland. Almost all rural Icelanders own horses, as they can be more convenient for (adventures.is, 2012) off-road travel. Horseracing is very popular, and many Icelanders enjoy betting on races. There are many tour companies that offer guided horseback tours around Iceland’s fjords and glaciers. The horses are strong enough to carry almost anyone, so most tourists can enjoy this attraction. Icelandic Horses were the only form of transportation in Iceland for hundreds of years, and many Icelanders still have a soft spot in their hearts for their native horses. Horseback riding keeps you fit and active, and it is one of Iceland’s finest outdoor activities (iceland.is, 2011).

A third activity that can be experienced in Iceland is ice fishing. Fishing is one of Iceland’s key industries, and it has been necessary for subsistence for hundreds of years. Types of fish that are commonly found near Iceland include cod, herring, salmon, halibut, char, and eel (wikipedia.org, 2012). There are lots of small fishing ports scattered all around Iceland’s coast, and many boats are available for chartered excursions. Fishing

(anglingdirectholidays.com, 2012) 39 Emma Sutphin Iceland has been on the decline for native Icelanders since fishing restrictions have been imposed on the waters surrounding Iceland. Most urban Icelanders only fish on rare occasions for pleasure, but some rural people fish for a living. When tourists catch fish, they can often be cooked and served once they are brought back to land. The fish may not be brought back to the US, but they can be eaten in Iceland. The fish are considered very fresh and good tasting, and they can grow very large (iceland.is, 2011). Fishing for big fish can be physically very difficult, which helps keep fishermen in shape. This activity is fun for experienced fishermen and those who are looking for a challenge.

Although there are many other popular activities in Iceland, these three are the most popular events that Icelanders participate in on their free time. Other common activities include rock climbing, river rafting, ice hockey, and handball. Almost all Icelanders participate in one or more of these events, which makes Iceland a very healthy nation. There are very few places in the world that have such a variety of activities in one small area, and Iceland is one of the best. Everyone can find something to enjoy, as regulations make many areas wheelchair accessible. All of these attractions are the main reason that tourists visit Iceland, and the natural beauty of this small island is the key to many aspects of Iceland’s culture and industry (iceland.is, 2011). With so many outdoor activities available for recreation and leisure, there is no doubt that Iceland is one of the best places in the world for spending spare time.

Entry and Exit Requirements US citizens are allowed to travel to Iceland for up to 90 days without obtaining a travel visa. (A visa is a document similar to a passport that some countries, such as the US, require for foreigners to enter the country). A visa is still required for stays that are not for the purpose of business or pleasure, such as temporary residency. It is also required to have a passport that is good for at least 3 months beyond the planned period of travel and enough money for a return airline ticket. The worst travel problem that has come up recently is a volcanic eruption, which may occur again and would stop all air travel to and from Iceland. Otherwise, there are few travel restrictions for US citizens who have a valid passport and no criminal history (kefairport.is, 2012).

Language

Introduction- There are a large variety of languages that are spoken in Iceland. The official language is Icelandic, which originated from Norse. Other languages that are widely spoken are English, Dutch, and German . As a visitor speaking English, one would be understood by most Icelanders well enough to hold a basic conversation or ask for directions. In business meetings, English is the chosen language, so no translator is necessary for doing business in Iceland (cia.gov, 2012). Many Icelanders also speak some German or Dutch due to the trade agreements between these countries as well as the fact that Iceland used to be a Dutch colony. A foreign visitor should find

40 Emma Sutphin Iceland plenty of signs and labels that are in English. It is considered polite but not necessary to learn a few phrases in Icelandic in order to be able to make polite conversation (iceland.is, 2011). Overall, language should not be a barrier at all to conducting business in Iceland.

Official Language- The official spoken language in Iceland is Icelandic (cia.gov, 2012).

Minor Languages- • English- English is taught in all schools in Iceland, and it is widely spoken and understood. It is also the language of business, so there is no need to hire a translator in order to conduct business. English is not as widely spoken as Icelandic, but due to the influence of tourism, most Icelanders have learned at least a little English to be able to communicate with foreigners (iceland.is, 2012). • German/ Dutch- Both German and a dialect of German spoken in Denmark are commonly spoken as a second or third language in Iceland. This was originally because Iceland was a colony of Denmark up until the end of WWII, when it gained independence. The language is still spoken by merchants and others who have a lot of contact with Europeans, as it makes business transactions easier when an Icelander speaks the foreigner’s native language. These two languages are on he decline in Iceland due to the fact that speaking English is viewed as more important than speaking another language (iceland.is, 2012). There are no widely varying dialects of Icelandic that are spoken, and any person should be able to understand any other Icelandic person no matter where they live (iceland.is, 2012).

World Languages- Number of Speakers (millions)

1200

1000

800

600

400

200

0

(www2.ignatius.edu, 2012)

41 Emma Sutphin Iceland

World's Most Inluential Languages

40 35 30 25 20 15 10 5 0

(www2.ignatius.edu, 2012)

Religion

The main religion in Iceland is Lutheranism. It is the official national religion, and it is practiced by 87% of Icelanders (iceland.is, 2011). The name of the official church is the Evangelical Lutheran Church. There is one bishop who resides in Reykjavík and makes decisions on religious matters, and there are 281 parishes throughout the country. Even though Lutheranism is the overwhelmingly dominant religion, Iceland has complete religious freedom that is constitutionally protected. An Icelander does not have to belong to the state church, and they are free to practice any religion they want to when they are in their own homes. The minor churches are the Roman Catholic Church, the Pentecostal Church, Jehovah’s Witnesses, Buddhists, and Muslims. These religions make up about 8% of Icelanders, and the rest do not belong to any religious group (iceland.is, 2011).

42 Emma Sutphin Iceland

Icelandic Religions

300000

250000

200000

150000

100000

50000

0 Evangelical Free Lutheran Free Other None Church Church

(iceland.is, 2012)

Lutheranism is by far the most popular religion in Iceland. The reason for this is that the Evangelical Free Church is the official church of Iceland. This came about because when Iceland was ruled by Denmark, the king ordered everyone to convert. When Iceland gained independence, Lutheranism was chosen as the official religion since so many people already followed that religion. Although most Icelanders are not devout Lutherans, most do believe in a higher power.

Catholicism is the second-most popular faith in Iceland, although only about 2.5% of Icelanders follow it. There is currently a diocese in Reykjavík with Pierre Bürcher as bishop. About half of the Catholics in Iceland are foreigners who kept their religion when they moved. Only about 1% of native Icelanders are Catholic. Catholicism is currently on the rise, and membership has more than doubled in the past 10 years.

Effects of Religion- Although Iceland has an official religion, it is not particularly influential. Most Icelanders reported going to church never or less than once a year. Although it is a common belief that a god exists, only 40% believe in a benevolent god that they can pray to. Religion plays a very minor role in most Icelanders’ lives, and 60% of people thought that religion was not important to them (wikipedia.org, 2012). It also plays a very minor role in the Icelandic government. Religion is only used for official events such as inaugurations and other formal ceremonies. There is a tax in Iceland that is given to the church every year, but it is not a lot of money. Most people are friendly and open toward other religious belief than their own, and there are nearly no cases of religious persecution in Iceland. Religious freedom is guaranteed by the Icelandic constitution, so no one has to participate in government-run religious functions if they do not wish to do so (iceland.is, 2011). Overall, religion plays a very minor role in both politics and private life in Iceland.

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Works Cited

“Background Note: Iceland.” US Department of State, November 2011. Web. 26

March 2012.

“The Big Picture.” iceland.is. Web. 3 March 2012.

“Century Aluminum Tag Archive.” savingiceland.org, March 2011. Web. 10 May

2012.

“Climate and Atmosphere.” earthtrends.wri.org. World Resources Institute, 2007.

Web. 7 May 2012.

“Customs Regulations.” kefairport.is. Web. 9 May 2012.

“Customs Tariff.” tollur.is. Directorate of Customs, January 2012. Web. 24 March

2012.

Dargay, Joyce. “Vehicle Ownership and Income Growth, Worldwide: 1960-2030.”

January 2007. Web. 16 March 2012.

“Doing Business in Iceland.” US Commercial Service, 2012. Web. 5 May 2012.

“Economy of Iceland.” wikipedia.org, March 2012. Web. 5 March 2012.

“Education stats: Iceland vs. United States.” nationmaster.com. Web. 19 March 2012.

“Enterprises and turnover.” Statistics Iceland, April 2012. Web. 6 May 2012.

“Environmental Indicators: Greenhouse Gas Emissions.” United Nations Statistics

Division, July 2010. Web. 5 May 2012.

“Housing statistics.” Eurostat. European Commission, October 2011. Web. 16 March

2012.

“Iceland.” nationsencyclopedia.com. Encyclopedia of the Nations, October 2011.

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Web. 22 March 2012.

“Iceland.” oecdbetterlifeindex.org. Web. 2 May 2012.

“Iceland: Introduction.” globaledge.msu.edu. Michigan State University, February

2011. Web. 4 March 2012.

“Iceland Information.” travelnet.is. Web. 15 March 2012.

“Iceland: Major Urban Settlements.” Citypopulation.de, January 2012. Web. 1 May

2012.

“Religion in Iceland.” wikipedia.org, February 2012. Web. 17 March 2012.

“Sanctions.” mfa.is. Ministry for Foreign Affairs, January 2012. Web. 3 May 2012.

Turner, M. “The World's Most Widely Spoken Languages.” St. Ignatius High School,

January 2012. Web. 29 March 2012.

“The World Factbook: Iceland.” Central Intelligence Agency, May 2012. Web. 2

March 2012.

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Appendix

ICE Print Ad

46 Emma Sutphin Iceland

ICE Brochure What is the ICE?

ICE stands for the International Coalition for the Environment. We are a nonprofit group dedicated to protecting the environment on a global scale. Our mission is to promote awareness and action to combat global warming and the release of greenhouse gases. This is done by repairing and replanting damaged ecosystems and stopping carbon emissions at the source. Our current project takes place in Iceland, a small island country in the middle of the Atlantic Ocean. Iceland is currently besieged by a storm of large corporations such as Alcoa and Century Aluminum that want to use and abuse Iceland’s natural resources for their own personal gain. These companies operate aluminum smelting plants in Iceland’s remote fjords that release the majority of Iceland’s greenhouse gas emissions as well as contaminate the surrounding land for years to come.

Why support us?

With your help, there is a solution. ICE’s plan is to plant native trees and grasses on the damaged land surrounding the smelting operations in order to restore Iceland’s once pristine wilderness. These trees will be around for generation of tourists and natives to enjoy, but they serve a dual purpose. The trees also remove excess carbon dioxide from the atmosphere, thereby reducing or eliminating the impact the operations have on the global climate. The second phase of our strategy is passing legislation in the Icelandic Althingi in order to prevent aluminum smelters from expanding their operations and further damaging the environment. Through successful passage of laws, these large corporations can be shut down entirely and prevented from ever taking advantage of Iceland again.

How to Help ICE offers several ways for concerned citizens to help with this problem. We offer a line of fine wool products for sale that are used to support our mission. This wool is from native Icelandic sheep, and it is handcrafted by expert local knitters. Products such as scarves, hats, mittens, and sweaters are offered for sale, and all profits go toward our restoration efforts. The plants will be grown in greenhouses in Iceland, providing many local jobs and boosting the Icelandic economy. As you can see, there are lots of reasons to help the ICE and provide a brighter future for Iceland and the rest of the world. To volunteer or learn more, please visit www.icenow.com for more information. See you there!

47 Emma Sutphin Iceland

Percent Change in Greenhouse Gas Emissions Since 1990

60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Iceland United States Germany United Kingdom -10.00% -20.00% -30.00%

With Your Generous Donation to ICE, You Will Receive: • $10- Handmade patterned wool scarf, perfect for cold days! • $20- Icelandic sheep’s wool hat, available in several colors! • $30- One pair of woolen winter mittens with removable cover! • $50- Patterned wool sweater, fully customizable!

STOP Big Polluters Now!

Help us preserve Iceland’s pristine wilderness!

48 Emma Sutphin Iceland

Recipes

Icelandic Fried Dough or Kleinúr

Ingredients: (goldilocksfindsmanhattan.com, 2012) 6 cups flour ½ liter buttermilk 1 cup sugar 1 egg 3½ ounces butter 1 tsp. cardamom, ground 1 tsp. cream of tartar ½ tsp. baking soda canola oil for frying.

Preparation: Sift the flour and cream of tartar onto the table or board. Cut the butter in, put in the sugar and then add the cardamom. Mix the baking soda and the buttermilk, add the egg and the buttermilk mixture to the flour mixture and knead. Knead into a fairly soft dough; do no over-knead. Flatten dough thinly, cut into 2-3 inch strips and then cut it into diamond shapes. Cut a small slit in the center of each diamond and gently pull one end through the slit, to make the twist in the doughnuts. Heat Canola oil for frying. It must be very hot, and will have reached the right temperature when a doughnut browns and cooks through in about 1-1½ minutes. Let browned doughnuts rest on paper towels; serve when cool. These can be stored in a tin for a whole week. (goldilocksfindsmanhattan.com, 2012)

49 Emma Sutphin Iceland

Etiquette

• Always address Icelanders using their first name, as last names are based on the first name of the father, not a family name. Even the Icelandic phone book lists residents by first name and then last name. • Do not discuss business if you are invited to dinner with a host and one or more spouses are present. • Always give right of way on the road to farmers, pedestrians, slow-moving vehicles, and wild animals: the car is the least important item out of the aforementioned things to Icelanders. • Clean up after yourself: Icelanders appreciate their wilderness, and it ruins it for others when trash or tire tracks are left behind. An Icelander observing this behavior in a foreigner may get very upset and ask that the person leave the area. • Although most Icelanders speak English well, it is seen as polite to make an attempt to learn a few phrases in Icelandic to show that you respect and appreciate their unique culture. (globaltrade.net, 2012)

Country Selection Letter

Emma Sutphin International Market Research Specialist, BIS Inc. 655 North Third Street Central Point, OR 97502 (541) 494 - 6300 February 13, 2012

Dr. Johnny Allen Hendrix Human Resources Director, BIS Inc. 845 United Nations Plaza New York, NY 10017

Dear Dr. Hendrix:

INTERNATIONAL MARKETING OPPORTUNITY

I believe that there is a potential to make a significant profit from investing in a critical social issue of a foreign country. Through investing a nonprofit organization to assist people in need, BIS Inc. can donate money to a good cause as well as bring in a profit by reaching out to a new customer demographic. By marketing this new

50 Emma Sutphin Iceland product along with bonus material such as an informational packet and a small prize, we can increase profits even more. Although this opportunity may be taken advantage of with any country, my recommendations are to market specifically for Iceland, Australia, or Ireland.

My first recommendation is Iceland. This is an island country located in northern Europe that has gone unnoticed by many for too long. Iceland currently receives little foreign aid, yet there is an increasing need to solve the social problems currently gripping this country. Child sexual abuse and violence towards women are on the rise, and we can help stop it. In addition to this, Iceland is a beautiful country that will entice customers to donate based on the beauty of the country. I have always dreamed of visiting Iceland, and I believe that many others share this dream. They can feel like they are visiting Iceland themselves by donating to our cause.

Secondly, I would recommend Australia as a potential country to fundraise for. This country has many social issues for an industrialized nation, such as domestic violence and alcoholism. I have personal experience with this country, as my aunt and two cousins came from Australia. I have learned from them firsthand about the need to stop these issues from spreading throughout the country and the rest of the world. I believe that potential customers would be highly willing to donate to a nonprofit fund assisting Australia, since the country has the same language and a similar culture to the US.

The final country that would be a profitable venture to invest in is Ireland. Ireland has one of the biggest alcoholism problems in the world, and I believe that BIS Inc. can profit from this and help solve the problem at the same time by founding a nonprofit to assist Ireland. Ireland is a beautiful country that I would love to visit and even go to school in someday. Many Americans also would like to visit Ireland because they have relatives there or simply because it is a wonderful country to visit. Sales materials for this nonprofit might show how their donations can help the Irish and in turn make Ireland a more appealing and affordable place for them to visit.

All of these countries would make excellent choices for a nonprofit group. These countries are all thought of as highly industrialized nations that do not need assistance from foreign aid groups, but they are often severely underfunded due to the popularity of African and Asian charities. I believe that is assisting an industrialized nation, BIS Inc. can fill a need as well as carve out a niche in the nonprofit world that will be very profitable. I would appreciate hearing your thoughts on this proposal, and if I do not receive a call or email within two weeks, I will make a follow-up phone call to your office. I may be reached during business hours at (541) 494 - 6300 or at [email protected]. Thank you for your time, and I look forward to your reply.

Sincerely,

Emma Sutphin, International Market Research Specialist

51