Projects / Programmes
New entry and economic performance of Slovenian' firms on SouthEast markets (markets of former Yugoslavia)
| Code |
Science |
Field |
Subfield |
| 5.02.00 |
Social sciences |
Economics |
|
| Code |
Science |
Field |
| S180 |
Social sciences |
Economics, econometrics, economic theory, economic systems, economic policy |
| S183 |
Social sciences |
Cyclical economics |
| S185 |
Social sciences |
Commercial and industrial economics |
| S186 |
Social sciences |
International commerce |
| S191 |
Social sciences |
Market study |
economic growth, foreign trade, border effects analysis, entry into the emerging markets, business strategies, costumer behavior in emerging markets, business-to-business relations in emerging markets, industrial policies to support entry into the emerging markets.
Researchers (26)
Organisations (1)
Abstract
Export demand represent the fundamental force of economic growth for small yet open economies such as Slovenia. However, research shows that Slovenian companies do not consider marketing expenses on foreign markets as an investment (Domadenik, Prašnikar, Svejnar, 2001). Considering the level of competition and the high entry costs in western markets, Slovenian companies have typically competed based on their cost efficiency, using price adjustments as the primary strategic approach. Dynamic changes in the emerging Southeastern European markets (former Yugoslavia) are opening up unique opportunities for Slovenian companies to gain "the first mover advantage" in the region, particularly due to Slovenian historical ties with these markets as well as its geographic proximity. However, the existing business conditions in Southeastern European countries make the expansion into this region a relatively risky venture (uncertainties such as the political risk, risk of sustainable government policies, balance of payments risk, risk of doing business with oparticular enterprise). The purpose of this study is to explore the advantages and disadvantage of the various alternative entry modes and business strategies Slovenian companies may choose to utilize in their potential expansion into the markets of Southeastern Europe (former Yugoslavia). The study consists of two distinct parts. The first part involves a thoughtful analysis of the external business environment in the countries of the former Yugoslavia, including the macro-economic analysis, analysis of financial and legal systems and analysis of barriers for trade among different countries in the region which lead to market fragmentation. Market fragmentation and its sources will be explored using the so called "border effect analysis" (Head, Mayer, 2000). Considering that the characteristics and behavioral patterns of the markets in Southeastern Europe have remained unexplored in previous research, the second part of this study entails an investigation of the characteristics of the business as well as final consumer behavior. The planning of a successful entry strategy into the these emerging markets requires an understanding of the behavioral aspects of the companies with a potential to become either suppliers for or buyers of Slovenian business, their products and services. As indicated in existing research in countries in transition (and regions having been recently exposed to serious national and ethnic conflicts), the impact of national identity in consumer purchasing process should not be underestimated when making decisions with respect the effective marketing positioning (Vida, Fairhurst, 1999: Herche, 1992). The analysis of consumer behavior in the region will focus on the buying processes and consumer attitudes towards the products of Slovenian origin. The findings of both parts of this research will facilitate the decisions making relative to specific entry strategies into individual countries under investigation. Various alternatives will be proposed and evaluated using a cost-benefit analysis approach. This analysis will focus on the pluses and minuses of various entry modes (trade approach by the individual firm, trade approach by clusters of firms; investment approach) and the effectiveness of alternative financial arrangements (standard approaches: paying by cash, open account, acreditives; counter trade; barter trade; financing and insuring business by the Slovenian export financing company, SID) The results should have important implications with respect to the activities of Slovenian companies and their market entry and positioning strategies in the countries of Southeastern Europe. Furthermore, the findings of this study should prove useful to the Slovenian government agencies in when planning economic policy for the countries of the former Yugoslavia.
