Virtual Office as an E-based Mode of Entry to Foreign Markets Suitable for Small and Medium Companie...
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Virtual Office as an E-based Mode of Entry to Foreign Markets Suitable for Small and Medium Companies from Central Europe. Ing. Petr Král,Ph.D. Department of International Trade Krakow , 10 June 2008. Outline. Background Introduction Virtual office as a marketing tool Case studies

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Ing. Petr Král,Ph.D. Department of International Trade Krakow , 10 June 2008

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Ing petr kr l ph d department of international trade krakow 10 june 2008

Virtual Office as an E-based Mode of Entry to Foreign Markets Suitable for Small and Medium Companies from Central Europe

Ing. Petr Král,Ph.D.

Department of International Trade

Krakow, 10June 2008


Outline

Outline

  • Background

  • Introduction

  • Virtual office as a marketing tool

  • Case studies

  • Summary


Background

Background

  • Small and medium companies are under pressure:

    • Salaries grow relatively fast:

      • Average salary 900 EUR/ month

      • Increased for 10,4 %

  • Appreciation of the Czech currency

    • 1999: 1 EUR = 36,882 CZK

    • 2007: 1 EUR = 26,73 CZK

    • Yesterday: 1 EUR = 24,655 CZK

  • Czech SMEs are losing competitiveness


Competitiveness of czech smes on the european market

Strengths:

Flexible response to market changes

Individual customer care

Personal enthusiasm of the owners

Ability to operate small market segments effectively

Weaknesses:

Capital resources

Market knowledge

Main competitive advantage- Price

Marketing

Marketing communications

Advertising

Competitiveness of Czech SMEs on the European market

Based on research: EU Entry from the point of view of managers of small and medium companies, University of Economics, Prague, 2004


Introduction

Introduction

  • Relatively young marketing tool

  • Almost no interest from researchers

    • Presentation based on my own experience and field research

  • Sometimes called mailbox companies

    • Rather negative impression

  • Some similarities with call- centers

  • Virtual office = specific entry mode to foreign market, marketing communication tool

  • Definition of virtual office (outsourced foreign representation of the company)


Virtual office as a marketing tool how it works

Virtual office as a marketing tool- how it works?

  • Capital- intensive mode of entry

  • Communications´ tool:

    • Personal selling

    • Public relations

  • Ex: Business Center Regensburg

    • 130 companies from different countries

    • Just 22 offices

    • Back office and call- center service provided by four assistants

    • Main advantage: Cost sharing, cross- cultural knowledge

    • Monthly costs for one company: 79 EUR

Source: Personal interviews with the owner of BCR Mr. Schießl


Case studies

Czech Producer:

Well established producer of wiring systems

Fully owned subsidiaries abroad

New concept for German market

Objective: to overtake existing wholesaler

Result: Succeeded

Total costs: 7000 EUR

Slovak Service Provider:

Planning and designing industrial networks

Outsourcing solutions

Some projects already in the German market

Objective: To enter the German market

Result: Did not succeed

Total costs: 6.000 EUR

Case studies


Conclusions

Conclusions

  • Virtual office:

    • Mode of entry

    • Marketing communication's tool

    • Market research (market test)

  • Advantages:

    • Lower costs = lower risk

    • Cross- cultural competence and knowledge

    • Direct presence on the foreign market

  • Success factors:

    • Strategy

    • Organization and calculations created in advance

  • Suitable for:

    • Small and medium companies

    • Sectors: B2B, E- business, IT, E- shops….


Thank you for your kind attention

Thank you for your kind attention!

Ing. Petr Král, Ph.D.

Department of International Trade

E-mail: [email protected]


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