Business Environment in CEECzech University of Life Sciences PragueMartin Kolmhoferkolmhofer@cee-portal.at
CEE Countries
CEE Countries – Historical AspectsMaximum Extension of the Roman Empire
CEE Countries – Historical AspectsOTTOMANS AND HABSBURGS (800-1914)Imperial capital was Vienna, except from 1583 to 1611, ...
Market Players in CEE Banking
CEE Currencies
Debt Capital Markets in CEE
ViennaBudapestLjubljanaPrague
CEE Insurance Market• Most known European brands are presentin the CEE markets, in top positions• Very few domestic compan...
CEE Pension SystemsDemographic Shock Exposure
The EBRD• Founded in 1991• Its mission was to support theformerly communist countries in the process ofestablishing their ...
CEE Retail Market
Shopping in the past…
…and today
Market Overview
CEFTA• Central European Free Trade Agreement: Tradeagreement between non-EU countries in SoutheastEurope.CEFTA is a single...
CEE Consumer ConfidenceIndex measures consumer sentiment: The figure is determined by the differencebetween positive and n...
CEE Shopping Centre Prime RentsRental growth in CEE is diverging based on countries’economic and property market performan...
Utilities and Energy Markets in CEE
Planned “southern corridor” to limit dependence from Russia. Pipeline shouldbypass Ukraine and Belarus and connect EU dire...
Russian “South Stream” project: Gas pipeline via Black Sea to Bulgaria, then split to• Greece• Romania, Serbia, Hungary, S...
Marketing in CEE
Marketing in CEE• What business logic drives foreigncompanies in CEE and how they approachthe region and manage their busi...
CEE Population in million
Number of cities with more than 150,00residents
CEE Market Characteristics
Fairs and Events• BRNO: Central European ExhibitionCenter• CEFA: Central European Fair Alliance(www.cefa.biz)
Outsourcing to CEE
Outsourcing to CEE• CEE countries are notable for technology-oriented educational system, strongacademic background• Cultu...
Outsourcing to CEE
Investment Promotion AgenciesMission: To attract investment to a country, state, region or city. The agency doesthis by in...
CPI – Corruption PerceptionIndex
CEE Real Estate Market
Main Players
CEE Real Estate Events• CEDEM CEE in September is organized by Roberts PublishingMedia Group, publisher of CiJ, Central & ...
CEE - Investment by SectorResidentialOfficeIndustrial and Logistics
CEE Office MarketPrime Office Rents
CEE - Transportation and Infrastructure
Public Transport as a part ofsocialist ideology• Communist dictatorships ensured thatprivate car ownership and use would b...
Road Transport:Road Incompatibility between Germany, Poland andRussia
Road Transport:Road Incompatibility between Germany, Poland andRussia
Trans-European transport networks• A planned set of road, rail, air and watertransport networks designed to serve theentir...
30 Priority Projects (or axes)
Pan-European transport corridors• Defined at the second Pan-Europeantransport Conference in Crete, March1994, as routes in...
Pan-European transport corridors
Public Relations and theMedia Landscape in CEE
Historical Perspective• Common History as part of the communistEastern bloc• Lack of public awareness in the activitiesof ...
Media Landscape in CEEAdvertising expenditures per 4 traditional media groups
CEE Business Tycoons / MediaOwners
Human Resources Management in CEE
CEE Market: “War for Talents”• Western multinationals shift emphasis away from their traditionalfocus on corporate reputat...
Recruitment Process Outsourcing(RPO) – Main Players= an employer transfers all or part of itsrecruitment processes to an e...
Common Features of EducationSystem in Communist Nations• After World War II, Eastern Europeancountries, including East Ger...
Biggest Companies in CEE
Business Environment in Central and Eastern Europe
Business Environment in Central and Eastern Europe
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Business Environment in Central and Eastern Europe

  1. 1. Business Environment in CEECzech University of Life Sciences PragueMartin Kolmhoferkolmhofer@cee-portal.at
  2. 2. CEE Countries
  3. 3. CEE Countries – Historical AspectsMaximum Extension of the Roman Empire
  4. 4. CEE Countries – Historical AspectsOTTOMANS AND HABSBURGS (800-1914)Imperial capital was Vienna, except from 1583 to 1611, when it was moved to Prague.
  5. 5. Market Players in CEE Banking
  6. 6. CEE Currencies
  7. 7. Debt Capital Markets in CEE
  8. 8. ViennaBudapestLjubljanaPrague
  9. 9. CEE Insurance Market• Most known European brands are presentin the CEE markets, in top positions• Very few domestic companies left
  10. 10. CEE Pension SystemsDemographic Shock Exposure
  11. 11. The EBRD• Founded in 1991• Its mission was to support theformerly communist countries in the process ofestablishing their private sectors.• Headquartered in London
  12. 12. CEE Retail Market
  13. 13. Shopping in the past…
  14. 14. …and today
  15. 15. Market Overview
  16. 16. CEFTA• Central European Free Trade Agreement: Tradeagreement between non-EU countries in SoutheastEurope.CEFTA is a single Free Trade Agreement (FTA) linking all theWestern Balkans and Moldova. It replaces a previous networkof more than 30 bilateral FTAs, thereby setting uniform traderules across the whole South Eastern Europe.
  17. 17. CEE Consumer ConfidenceIndex measures consumer sentiment: The figure is determined by the differencebetween positive and negative answers. Therefore a headline above zeroindicates positive consumer confidence, while a negative number shows morenegative answers.
  18. 18. CEE Shopping Centre Prime RentsRental growth in CEE is diverging based on countries’economic and property market performance.“Prime Rent” = rent for high quality locationSource: Jones Lang Lasalle
  19. 19. Utilities and Energy Markets in CEE
  20. 20. Planned “southern corridor” to limit dependence from Russia. Pipeline shouldbypass Ukraine and Belarus and connect EU directly with the countries of theCaspian Sea region.
  21. 21. Russian “South Stream” project: Gas pipeline via Black Sea to Bulgaria, then split to• Greece• Romania, Serbia, Hungary, Slovenia and AustriaThe project is seen as a political project / rival to the planned Nabucco pipeline (andto expand Russian presence in the region). Completion is due by 2015.
  22. 22. Marketing in CEE
  23. 23. Marketing in CEE• What business logic drives foreigncompanies in CEE and how they approachthe region and manage their business inCEE?• Typical entry and marketing strategiesused in the region today?• The characteristics of economies andmarkets in CEE?
  24. 24. CEE Population in million
  25. 25. Number of cities with more than 150,00residents
  26. 26. CEE Market Characteristics
  27. 27. Fairs and Events• BRNO: Central European ExhibitionCenter• CEFA: Central European Fair Alliance(www.cefa.biz)
  28. 28. Outsourcing to CEE
  29. 29. Outsourcing to CEE• CEE countries are notable for technology-oriented educational system, strongacademic background• Cultural, regulatory and geographic proximityto Western Europe and USA• High-skilled multilingual labor force with goodengineering and R&D talent• A stable and advanced legal andinfrastructure framework compared tocompeting locations.
  30. 30. Outsourcing to CEE
  31. 31. Investment Promotion AgenciesMission: To attract investment to a country, state, region or city. The agency doesthis by introducing investors with local real estate developers and othercommercial service companies, by providing statistical information and bymanaging any investment incentives that the country may offer to companieswhich invest there (subsidies, grants, tax exemptions).
  32. 32. CPI – Corruption PerceptionIndex
  33. 33. CEE Real Estate Market
  34. 34. Main Players
  35. 35. CEE Real Estate Events• CEDEM CEE in September is organized by Roberts PublishingMedia Group, publisher of CiJ, Central & Eastern Europes leadingproperty investment and development monthly magazine.• Real Vienna in spring is the CEE/SEE-focused Real Estate andInvestment Fair organized by Reed Exhibitions/Messe Wien• Urbis Invest: Important regional Real Estate Fair in April at the BrnoExhibition Center
  36. 36. CEE - Investment by SectorResidentialOfficeIndustrial and Logistics
  37. 37. CEE Office MarketPrime Office Rents
  38. 38. CEE - Transportation and Infrastructure
  39. 39. Public Transport as a part ofsocialist ideology• Communist dictatorships ensured thatprivate car ownership and use would beextremely expensive and difficult, whilepublic transport was widely available andsubsidized to such an extent that it wasalmost free.• There were long waiting times forpurchasing new cars (over a decade inEast Germany and Poland!)
  40. 40. Road Transport:Road Incompatibility between Germany, Poland andRussia
  41. 41. Road Transport:Road Incompatibility between Germany, Poland andRussia
  42. 42. Trans-European transport networks• A planned set of road, rail, air and watertransport networks designed to serve theentire continent of Europe.• Goal: to provide integrated and intermodallong-distance high-speed routes for themovement of people and freightthroughout Europe.
  43. 43. 30 Priority Projects (or axes)
  44. 44. Pan-European transport corridors• Defined at the second Pan-Europeantransport Conference in Crete, March1994, as routes in Central and EasternEurope that required major investmentover the next ten to fifteen years.• These development corridors are distinctfrom the Trans-European transportnetworks, which is a EuropeanUnion project
  45. 45. Pan-European transport corridors
  46. 46. Public Relations and theMedia Landscape in CEE
  47. 47. Historical Perspective• Common History as part of the communistEastern bloc• Lack of public awareness in the activitiesof companies• Socialist system did not allow competitionor promotion of companies, brands andproducts• Years behind the Iron Curtain and undersocialist regime have made peoplesuspicious, cynical and difficult toinfluence
  48. 48. Media Landscape in CEEAdvertising expenditures per 4 traditional media groups
  49. 49. CEE Business Tycoons / MediaOwners
  50. 50. Human Resources Management in CEE
  51. 51. CEE Market: “War for Talents”• Western multinationals shift emphasis away from their traditionalfocus on corporate reputation and remuneration towards such areasas international mobility, structured learning and development, work-life balance and workplace atmosphere.• While all the classical instruments are used for recruiting (such asads and partnerships with universities, etc.) the most promisinginstrument are personal networks and recommendations• The quality of applicants is assessed to be rather high, internationalexperience is the weakest point.• The loyalty of the high potentials towards the own company isexpected to decrease to a long time low in the near future.• Source: 2012
  52. 52. Recruitment Process Outsourcing(RPO) – Main Players= an employer transfers all or part of itsrecruitment processes to an externalservice provider.
  53. 53. Common Features of EducationSystem in Communist Nations• After World War II, Eastern Europeancountries, including East Germany,Hungary, Poland, Bulgaria, Albania,Czechoslovakia, and Romania, alladopted educational systems thatmirrored substantial features of Sovietpractice.• Special importance to mathematics andthe natural sciences• Closely linked to youth organizations -strong elements of work-study andpractical training into school programs
  54. 54. Biggest Companies in CEE
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