In My Opinion
Rolfe, Lucy Neville, European Business Forum
The European Business Forum article--based on a PricewaterhouseCoopers report--provides a welcome summary of how business views EU enlargement. But it is a polite report. It is analytical and objective. It does not give a feel for the challenge and colour, the frustration and excitement of operating in the emerging markets of Hungary, Poland and the Czech and Slovak Republics. The cut and thrust of business in Central Europe sometimes seems a long way from the enlargement negotiations between the Commission and the acceding states.
When we at Tesco analysed each diverse society strategically we found huge potential for customer-serving businesses. We were able to create a powerful mixture of local, culturally sensitive marketing (based on information from customers), service, people and management. We combined this with world class store formats, systems and retail expertise--not only in 'dry' things like IT and logistics, but in coaching people, for example, to smile at the check-out.
In each case we bought a local operation and expanded it. We now have sales of nearly [pounds sterling]1bn and 96 stores including 24 hypermarkets and we are the UK's biggest regular investor in the four countries.
How have we found it? The growth of the economy has matched our expectations. The political will that put enlargement on the agenda and maintained the economic, political and strategic momentum after Copenhagen in 1993 has certainly been impressive.
The people of newly democratic Europe are also a fantastic asset for our business. Without being a household name as we are in the UK we are able to attract well educated and enthusiastic and flexible staff who share the Tesco core purpose of 'creating value for customers to earn their life time loyalty'. We have benefited from the lack of an established retail structure. This has attracted several of the world's leading retailers including the French and the Germans. It is a competitive market, but we like it that way because it is the right climate for growth and development. As Mark Ambler says, local businesses do not always appreciate the nature and extent of potential opportunities for them that enlargement and the single market will bring. Instead they tend to overstate the competitive threats and think defensively, rather than exploiting the huge opportunities that a colossal market offers the entrepreneur with local knowledge.
What's not so good--and where the enlargement process must help--is the administrative system. The culture is very bureaucratic and paperwork can assume more importance than the end result. A person's word may not be acceptable. Notarised original documents may be called for, reflecting a less trusting heritage but causing difficulties in a world of instant communication. In the Czech Republic there are inadequate bankruptcy laws which are taking a long time to reform. Ownership can be 'sold' to nominal owners who take over debt-ridden companies and disappear, leaving creditors with no hope of recovery. …