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Bloom_Consulting_case study_Latvia

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  • 1. Do you knowwho I am?How to differentiate and stand out from the crowd?Know how and why the Latvian Government commis-sioned Bloom Consulting to develop a Country Strategyto attract FDI and increase the country`s visibility abroad.Welcome to T1 Development of Countries Human Asset Management Business Strategy
  • 2. The challengeLatvias government identified the need to develop a project to increase strategic foreign direct investment.The country was attracting a substantial amount of greenfield investment, however those investments were based on low-valuestrategic variables, such as available workforce, low cost workforce, low Taxation, good infrastructure or location.These variables were not considered strategic as there was no differentiation from its neighboring countries, and more impor-tantly, as time and development progressed, quality of life would increase in the country and these variables would no longerbe available for investors. Salaries would rise, there would be a high level of employment and so on.
  • 3. The challengeLatvias government identified the need to develop a project to increase strategic foreign direct investment.The country was attracting a substantial amount of greenfield investment, however those investments were based on low-valuestrategic variables, such as available workforce, low cost workforce, low Taxation, good infrastructure or location.These variables were not considered strategic as there was no differentiation from its neighboring countries, and more impor-tantly, as time and development progressed, quality of life would increase in the country and these variables would no longerbe available for investors. Salaries would rise, there would be a high level of employment and so on.The approachBloom proposed to open a project focused on1 - Identifying unique variables of Latvia and how to "sell the country abroad”2 - Identifying and justifying which are Latvia’s strategic sectors to bring credibility to investorsFollowing our methodology, we researched what are the current perceptions in investors’ minds about Latvia, so we couldunderstand what were Latvia’s unique selling propositions.
  • 4. The challengeLatvias government identified the need to develop a project to increase strategic foreign direct investment.The country was attracting a substantial amount of greenfield investment, however those investments were based on low-valuestrategic variables, such as available workforce, low cost workforce, low Taxation, good infrastructure or location.These variables were not considered strategic as there was no differentiation from its neighboring countries, and more impor-tantly, as time and development progressed, quality of life would increase in the country and these variables would no longerbe available for investors. Salaries would rise, there would be a high level of employment and so on.The approachBloom proposed to open a project focused on1 - Identifying unique variables of Latvia and how to "sell the country abroad”2 - Identifying and justifying which are Latvia’s strategic sectors to bring credibility to investorsFollowing our methodology, we researched what are the current perceptions in investors’ minds about Latvia, so we couldunderstand what were Latvia’s unique selling propositions.The Findings Latvia’s perception Latvia’s University reputation PositiveOur findings among 300 Business leaders indicated thatalthough Latvia had no connotations or was simply associ- Noneated with “price”, it was also perceived as a country with anexcellent educational system thanks to it’s connotations Low Education Negativewith Russia and the former soviet union. With this positive Noneperception, came the Latvian Universities that ranked very Otherhigh in terms of perceptions. 42% 27% 23% 8% 65% 25% 10%
  • 5. The StrategyBased on all findings from the research, Bloom Consulting developed a project called the Polaris Process - A conjointMethodology between Latvian Universities and the Investment Promotion Agency to provide research and sectorial know howto strategic foreign direct investors.The Polaris process does not only involve two main stakeholders, but totals seven. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain processAll seven stakeholders feed the Latvian perception of an “highly educated society” by delivering true knowledge and contentto any strategic investor. This delivery is structured in the Polaris Process, where all Key stakeholders are interconnected andplay a role in the entire process... Including the Investor, thus ensuring an engagement from an early stage of contact or lead.
  • 6. The StrategyAdditionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the wholeprocess and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) externalThe first one was about identifying what were the key success factors for the process to work efficientlyThe second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain processAll foreign representatives where instructed to approach only strategic sectors for Latvia and to introduce a sales speech basedon research and sectorial findings from Latvian Universities. The focus for each foreign representative was to bring 10 strate-gic investment leads in the first Phase and convert it in real cases within 1 year
  • 7. The StrategyAdditionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the wholeprocess and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) externalThe first one was about identifying what were the key success factors for the process to work efficientlyThe second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain processThe Latvian Development agency was responsible for coordinating all stakeholders in the Polaris process, as well as structur-ing the organization to ensure the whole process would work. Moreover, they used Bloom Consulting research to choose 7select sectors for development and attraction, introducing them in the National Political agenda and cabinet of ministers.
  • 8. The StrategyAdditionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the wholeprocess and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) externalThe first one was about identifying what were the key success factors for the process to work efficientlyThe second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain processThe Universities were coupled with the Latvian Development Agency in the Investor approach and all research findings andwhite papers on the 7 select sectors would be introduced in the process and delivered to the strategic investor. Moreover oncethe investor would decide to invest in Latvia, the University would offer free of charge research projects.
  • 9. The StrategyAdditionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the wholeprocess and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) externalThe first one was about identifying what were the key success factors for the process to work efficientlyThe second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain processThe Ministry of Economy needed to assure the strategic sectors were the recommended 7 and would meet each individualinvestor personally to inspire confidence
  • 10. The StrategyAdditionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the wholeprocess and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) externalThe first one was about identifying what were the key success factors for the process to work efficiently.The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain processAll interested municipalities were asked to demonstrate their level of interest in receiving foreign investment and play an edu-cational role with the local community to explain the importance of FDI
  • 11. The StrategyAdditionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the wholeprocess and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) externalThe first one was about identifying what were the key success factors for the process to work efficiently.The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain processMost Latvian companies in the 7 select sectors (Wood processing, Metallurgical, Transportation and Logistics, IT, Healthcare,Life Sciences, Green tech) would express interest in receiving international investors or simply in cooperating and sharingsectorial information
  • 12. The StrategyAdditionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the wholeprocess and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) externalThe first one was about identifying what were the key success factors for the process to work efficiently.The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain processInternational Investors would express areas of interest with Latvian Development Agency to discuss with Universities and allStakeholders know-how and integration needs.
  • 13. The Projections and ResultsMost stakeholders had quantifiable objectives to follow, and sectors were considered strategic thanks to solid projections. Investor Ministry of Economy Level of return Municipalities Universities Latvian Private Sector Foreign Development representatives Agency Chain process 10 Leads/Y 20 visits/Y 10 Projects/Y Up to 5% Taxation Investment Higher ROI 1 Investor/Y 10 Investors/Y GDP Increase Employment More research P/ Sector

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