Bloom_Consulting_case study_Bulgaria


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Bloom_Consulting_case study_Bulgaria

  1. 1. Let me take youfor a new rideHow to transition from a destination perceivedas not business friendly into a new oneassociated with entrepreneurship and creativityWelcome toT1Development of CountriesHuman Asset ManagementBusiness Strategy
  2. 2. The challengeThe Bulgarian Government hired Bloom Consulting in a critical moment of its history: Bulgaria’s entrance into the EuropeanUnion.Thanks to the vision of the Prime Minister and former King H.M. Simeon Saxe-Coburg-Gotha (pictured previously), Bulgariahad made remarkable progress on both economic and social fronts. Nevertheless, the same government was aware the countrycould not sit on its achievements. Although the entrance into the EU was positive, it would also bring limitations, especiallyfor investors seeking competitive labor costs for greenfield investments, as costs would become higher and other regionswould become more appealing.Bloom Consulting was hired to develop a strategy geared towards positioning the country internationally for strategic keyinvestors who would be interested in what the country had to offer in terms of value added.The approachThe first step Bloom developed was to understand what current perceptions the country held for international investors, dis-cover how they heard about the country, and if they already had or were interested in investing in Bulgaria.Additionally Bloom researched the most important upcoming sectors and their stage of development, as well as the mainneeds for their sustainable growth.The Findings Disparity between the potential and the available fundingThe conclusions demonstrated that the most vibrant sectorswere ICT-related, and the most interesting and strategic stagesof development were in a seed or expansion stage. The biggest Available Potential Available Fundingissue was that there was no venture capital in the country andvery few private equity firms as well as entrepreneurs. Thus,there were very few or no funds whatsoever to invest in the newgeneration of startups and mid-size companies that were eagerto grow and expand.)
  3. 3. The StrategyBloom Consulting recommended that the Bulgarian Government establish a medium to long term strategy, and focus mainlyon attracting strategic investors that would foster entrepreneurship and bring investments to small and medium size companiesin the country. Impact in the economy Strategic investments Corporate investments Time (Years)The vision was not to create a visible and loud strategy, but rather a specific one geared mainly at attracting venture capitaland private equity firms as well as entrepreneurs. This strategy was basically focused on quality rather than quantity invest-ments and would start to have visible results on a medium time frame.)
  4. 4. The Projections and ResultsIn conjunction with the Bulgarian Government, Bloom Consulting created a short to medium term strategy projection of asteady venture attraction of €50 million a year.The results were spectacular as the 10 year projections were achieved in only 3 years. The lack of trend or negative trend in2005 (when Bloom started the project) improved dramatically from nearly 0 to €560 million the following year – 10 timesmore than expected - Bulgaria moved from CEE position number 13 to number 1 in 2010.) Investments in Bulgaria vs. CEE Ranking of Bulgaria vs CEE Ranking of Bulgaria vs CEE (no bank leverage included) 2005 2010 Rank 1 01 Hungary 01 Bulgaria2.00% 02 Bosnia-Herzegovina 02 Poland 03 Estonia 03 Estonia 04 Czech Republic 04 Czech Republic1.50% 05 Romania 05 Serbia 06 Lithuania 06 Romania 07 Latvia 07 Ukraine1.00% 08 Slovakia 08 Hungary 09 Poland 09 Latvia Rank 2 Serbia and Montenegro Rank 5 10 10 Croatia0.50% Rank 3 Rank 1 11 Slovenia 11 Slovakia Rank 13 12 Croatia 12 Slovenia 13 Bulgaria 13 Lithuania 14 Bosnia-Herzegovina 15 Macedonia 2005 2006 2007 2008 2009 2010 16 Moldova 17 Montenegro Investment as % of GDP in Bulgaria (no bank leverage included) Investment as % of GDP TOTAL CEE (no bank leverage included) Bulgaria Ranking compared to all CEE (15 countries) Bloom Consulting Projections Sources: European Venture Capital Association and European Union