Global Business Context: Business in Poland

Global Business Context

Assignment task 3

Tutor: Mahfuzur Rahman

Doing Business in Poland

Terms of reference

This is a formal report. Global Ventures PLC is regarding the set-up new business. The company would like to operate its furniture factory in the Poland and majority (70%) of its production will be exported to the EU countries.

I suggested to my employer, Global Ventures PLC that we should establish a presence in the furniture industry. EU market size is enormous. The wealth of EU citizens and single market without trade restrictions between the European Union countries makes great opportunity to start-up business (Webster, 2009). “In the year 2004, the EU total consumption of furniture was €68 billion or €162 per capita” as stated by an EU furniture market study (2006) yet European Union countries imported around € 10 billion value of furniture from outside EU countries in year 2006. Recent financial crisis which caused economic recession in Western hemisphere is concern for the furniture industry which is observing lower general sales within EU markets just 80 – 85% of sales that were before economic downturn (Furniture Retailing, 2010). The furniture product cycle can span over 10 years and customers are aware and sensible of any furniture price fluctuations upwards. For that reason the furniture market is highly elastic. If the company can cuts its production and transport costs then it makes good profit margin that will allow the company to invest into R&D and offers big market opportunity vs. others competitors. After we made research, where to locate furniture facility, the company chose Poland which is located in the Central Europe and is well connected to rail, road and seaport infrastructures within rest of EU to deliver good to any part of EU within a single day. Another recommendations made to company was sustainable pricing e.g.: good furniture for good value, and last but not last better implantations of marketing strategies

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