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The Warsaw Voice » Business » May 31, 2012
Business & Economy
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Helping Businesses Expand Abroad
May 31, 2012   
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Polish cities will be supporting the expansion of local businesses into foreign markets.

The total value of Polish investment abroad is 30 billion euros, according to the Polish Information and Foreign Investment Agency (PAIiIZ). Britain, Germany and the Czech Republic are the main markets for the expansion of Polish businesses. But research shows that few foreign consumers recognize Polish businesses and their products.

“The only way to successfully promote Poland as a brand is to promote it through Polish products,” says Ryszard Petru, partner at professional services firm PricewaterhouseCoopers (PwC). “Polish products are undervalued as far as their image is concerned. Polish firms often sell their products under foreign brands, especially in the West.”

The Polish Champion program, launched by the authorities of the southwestern city of Wroc³aw and the Wroc³aw Agglomeration Development Agency (ARAW), is designed to promote Polish brands. The program has been developed and is coordinated nationwide by PwC, while the PAIiIZ is the strategic partner of the undertaking. “Wroc³aw wants to build its image as a city supporting Polish business,” says ARAW President Dariusz Ostrowski. “Our economy has given rise to several companies that stand a chance of becoming global players. We know how to build investment attractiveness. We are determined to apply the model for supporting Polish powerhouses on a national scale.” So far 11 companies have joined the program: Impel, Selena, Kruk, Clarena, Hasco-Lek, Xantus, AB, Rec Global, Koelner, Toya, and TelForceOne.

Recently, the mayors of several cities and province chairmen, together with the ARAW, PwC and the PAIiIZ, have signed a declaration to support Polish businesses which aspire to operate globally. The move is expected to make the program more popular. Under the program, the local authorities will support businesses by promoting their operations on international markets and by helping them in relations with local educational and research and development institutions.

The program is targeted at companies that have already begun the process of expansion on foreign markets and those that are thinking of doing so as well as business associations, research communities and educational institutions interested in seeing Polish business expansion abroad.

“There are anywhere between 60 and 100 companies in Poland that conduct operations on a global scale,” Petru says. “Although Polish products and services are highly rated on Eastern European markets, in Western Europe the image of Poland as a brand is less positive.” Additionally, many Western European still think the quality of Polish products and business management is poor.”

As part of the Polish Champion program, PwC has conducted a survey among Polish businesses about their operations on foreign markets. The survey shows that, despite the uncertain economic situation, Polish companies continue to invest abroad. The largest number of them focus on Germany, Ukraine, the United States, the Czech Republic, Russia and Romania. Asian countries, especially China, also attract a relatively large number of Polish investment projects. A single project carried out by a Polish company is worth 10 million euros on average.

In most cases, Polish companies invest abroad because they want to expand, the PwC report says. Other companies decide to do so because of limited opportunities on the Polish market. Cost and efficiency considerations are less important in their decisions to invest abroad. Most of the Polish investment projects are made because the companies want to expand on the local market of the country where they invest. As a result, the size and potential of the market is the most important factor behind the investment decision. Other factors taken into account include the level of competition, proximity to Poland, local resources and the level of risk and political stability.

Like investors from other countries, Polish companies have to cope with many problems associated with expansion on a foreign market. Cultural differences and administrative and organizational constraints are the main barriers. They also face problems associated with human resources management and the availability of qualified workers, both in Poland and in the host country. In many cases, strategies and procedures that have proven their worth in Poland turn out to be inadequate abroad.
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