The Business Environment of Europe

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The Business Environment of Europe

• Dr. Jeffrey Johnson

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European Experience

• Lived and taught in Scotland for six years
• Conducted several research projects in the U.K.,
  Germany and Greece
• Managed four business consultancy projects in
  Europe
• Traveled extensively through 23 European
  countries
• Taught the Business Environment of Europe in U.S.
  and Innsbruck, Austria

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Single European Market

• Free movement of
• Goods
• Services
• People
• Capital
• Mutual recognition of standards

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Benefits of the EU Single Market

• Trade within the EU much easier
• No border bureaucracy
• No tariffs or trade restrictions
• Mutual recognition principle eliminates need for
  expensive/ lengthy retesting in each country
• Creation of a single market encompassing 27
  countries and 494 million people
• Achieve economies of scale

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Benefits of the Euro ()

• Elimination of exchange rate fluctuations
• Reduced risk and uncertainties for importers and
  exporters
• Elimination of transaction costs
• Foreign exchange
• Hedging
• Management of multiple currencies

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Costs of the Euro ()

• Price transparency
• Consumers can more easily compare prices, putting
  downward pressure on price points and squeezing
  margins
• Enhanced competition
• Stemming from price comparisons and fostering
  competition
• However, creates opportunity for lower cost
  sourcing

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European Marketing

• Single European market provides opportunities for
  standardized products and economies of scale
• However, legal, economic, technical, social, and
  cultural differences may necessitate product
  differentiation and segmenting into clusters

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Strategic Issues

• Fortress Europe
• Circumvent trade barriers through foreign direct
  investment
• Rationalization of production across Europe to
  reduce costs (due to lower prices)
• Competitive environment
• Large, stable, growing economy represents great
  opportunity

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Strategic Issues (cont.)

• Low value of the dollar relative to the Euro
  creates export opportunities
• Competitive environment of Europe (SEM, Euro) has
  stimulated efficiency and created stronger
  competitors
• Diversity creates challenges
• 23 official languages, cultural differences,
  economic differences

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Thank You!

• Questions?