comparative market analysis finland vs romania
TRANSCRIPT
Market Analysis
• Competition from established brands: Rieker, Vagabond, Gabor...
• Lower income level than Northern Europe
Business Advantages
• 15 years work experience in the Romanian leather goods industry
• Knowledge of local culture• Connections with local
companies & suppliers
Barriers To Entry
• Rival companies could have factories which may compete with us
• Cultural differences
• Bureaucracy
Power Distance: Finland
• Romania: strong culture of power hierarchy
• Finland: accessibility and transparency of hierarchical structure
• => implementation of Finnish culture
Individualism: Romania
• Romanian culture based on:– Interaction and communication– Sharing– Companionship
• => Implementing the Romanian culture will benefit productivity
Masculinity: Romania
• Romania: competitive stimulation
• => Encourage healthy competition• => Acknowledge high quality work and
professionalism• => Promote knowledge sharing
Uncertainty Avoidance: Romania
• Romania: higher uncertainty avoidance
• Positive effects: people are less likely to initiate job changes
• => Higher stability for the company• => Less investment in training new
employees
Pragmatism: Romania
• Higher level of pragmatism in Romania
• => Better ability of accepting societal change and innovation
Indulgence: Finland & Romania
• High level => instability• Low level => rigidity
• Right balance of indulgence leads to:– Empowering people through freedom of
self expression– Clear managerial direction through strong
and healthy leadership
PESTEL Analysis
• PESTEL analysis is used to create an overview of the external environment of the market we want to enter
PESTEL Analysis - Polytics
• Stable political environment
• Growing support of new enterprises and local producers
PESTEL Analysis - Economy
• Stable economical environment• Cheaper raw materials than in the rest of
Europe• Supporting local suppliers• Prices set in Euros
PESTEL Analysis – Socio-Cultural
• Centuries old tradition in the leather industry
• Skilled employees
PESTEL Analysis - Environment
• Adopt a socially responsible business strategy business model
• Become involved in the community by supporting the local animal breeders and supply chain
• => ”Customer loyalty, employee commitment and business performance”
PESTEL Analysis - Legal
• Quality working conditions
• Attractive salary scheme based on professionalism
• Higher salary than the competition, still creates savings for the company compared with salaries in Finland
Porter’s 5 Forces Model
• Analysis of the competitive power in the industry through:– Supplier Power– Buyer Power– Threat of Substitution– Threat of New Entry
The 5 Fs – Supplier Power
• Raw supply materials: leather, lining, thread, glue, dyes, zippers, accessories...
• Local suppliers
• Strategy: developing long-term relationships with suppliers based on mutual trust and gain
The 5 Fs – Employee / Buyer Power
• Business values promoted and valued in the Romanian market:– Environment protection– Ethical behaviour– Supporting local companies and suppliers
• Strategy: creating an employee / customer loyalty programme to minimize the buyer / employee power
The 5 Fs – Threat of New Entries and Substitution of Products
• Strategies to gain an advantage over the potential competition and new products:
– Creating a brand recognised for social awareness and support of local suppliers
– Customer loyalty strategy– Lower prices than the competition– Quality products
Market Entry Mode• Direct Investment entry mode =• Wholly Owned Subsidiary (WOS) = • Private Limited (PL)
• => A sole venture with full ownership by the parent Finnish company
Marketing MixProduct / Price
• Lower production costs due to:
– Cheaper labor– Cheaper raw materials– Cheaper equipment maintenance– Shorter distance to the client
Marketing MixPlace / Promotion
• Good working conditions:
– Clean and safe work environment– Quality equipment– Better salaries– Job flexibility: training and job rotation– Financial reward schemes