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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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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 Markets Suitable for Small and Medium Companies from Central Europe

  • Background

  • Introduction

  • Virtual office as a marketing tool

  • Case studies

  • Summary


Background
Background Markets Suitable for Small and Medium Companies from Central Europe

  • 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 Markets Suitable for Small and Medium Companies from Central Europe:

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 Markets Suitable for Small and Medium Companies from Central Europe

  • 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? Markets Suitable for Small and Medium Companies from Central Europe

  • 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 Markets Suitable for Small and Medium Companies from Central Europe 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 Markets Suitable for Small and Medium Companies from Central Europe

  • 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! Markets Suitable for Small and Medium Companies from Central Europe

Ing. Petr Král, Ph.D.

Department of International Trade

E-mail: [email protected]


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