AGRANA - From a local supplier to a global player
Question 1: From an Institution-based view, what opportunities and challenges have been brought by the Integration of EU markets in both Western Europe and CEE?
The home market from the European Union is one market which everyone has free movement with goods, services, capital and people. This was not always the way if we look back before the time of the EU we had a Europe which was overfilled with conflicts and wars. Because of the foundation of the EU we got a lot of opportunities in the Western Europe and in Central and Eastern Europe but also challenges because it’s not easy to bring so many different countries together with different rules, cultures, norms and ethics under one big Union.
Western Europe
The Western Europe refers to the countries in the west of Europe, where the distinction is different depending on the context. But the borders between Western Europe and CEE were once determined by the ratio of power between USA and UDSSR during the Cold War. Europe was then divided in half by the Iron Curtain.
Opportunities:
One big opportunity for Western Europe is that the firms can get cheap human capital for their own work. Even today a blue-collar worker in Germany earns a lot more than in Poland. Another point is that the firms can invest in other enterprises from the CEE. So they can grow extremely fast as we have seen this with the AGRANA Company. With the difference in culture between Western Europe and CEE the firms can enter in a new market which can be really profitable.
Challenges:
But the fact, that the firms can get so cheap human resources, is on the other hand also a problem. Because of the cheap human resources, the own home country workers will lose their job and the unemployment rate of the country will rise. Another challenges is, that firms from the CEE area can expand to the Western Europe area, so there is the danger, that it will get dumping prices. The other culture and norms makes the whole situation a lot harder. The
The home market from the European Union is one market which everyone has free movement with goods, services, capital and people. This was not always the way if we look back before the time of the EU we had a Europe which was overfilled with conflicts and wars. Because of the foundation of the EU we got a lot of opportunities in the Western Europe and in Central and Eastern Europe but also challenges because it’s not easy to bring so many different countries together with different rules, cultures, norms and ethics under one big Union.
Western Europe
The Western Europe refers to the countries in the west of Europe, where the distinction is different depending on the context. But the borders between Western Europe and CEE were once determined by the ratio of power between USA and UDSSR during the Cold War. Europe was then divided in half by the Iron Curtain.
Opportunities:
One big opportunity for Western Europe is that the firms can get cheap human capital for their own work. Even today a blue-collar worker in Germany earns a lot more than in Poland. Another point is that the firms can invest in other enterprises from the CEE. So they can grow extremely fast as we have seen this with the AGRANA Company. With the difference in culture between Western Europe and CEE the firms can enter in a new market which can be really profitable.
Challenges:
But the fact, that the firms can get so cheap human resources, is on the other hand also a problem. Because of the cheap human resources, the own home country workers will lose their job and the unemployment rate of the country will rise. Another challenges is, that firms from the CEE area can expand to the Western Europe area, so there is the danger, that it will get dumping prices. The other culture and norms makes the whole situation a lot harder. The