Business in Russia

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Business in Russia

• Lance Erickson
• Assistant Director
• Center for Slavic and East European Studies

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Initial thoughts

• What is the first thing that comes to mind when
  talking about Russia?
• What are your first impressions of business
  practices in Russia?

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Center for Slavic and East European Studies

• US Department of Education funded Title VI NRC
• Provide support to all OSU students, faculty and
  programs
• Support all Ohio universities, businesses,
  communities
• FLAS
• Outreach
• Support

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Center for Slavic and East European Studies

• Oxley Hall 303
• Career Services
• Job search, internships in-country, recruiter
  visits
• Conferences, discussion groups
• Cultural events
• Language maintenance and support
• Language tables, video library, lectures

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Personal background

• Russian and East European Institute, Indiana
  University (2005 - 2007) top ranked program in
  US
• BA, Political Science, Russian East European
  Studies, University of Illinois
• MA, Russian, East European and Eurasian Studies,
  University of Texas
• Languages studied Spanish, French, German,
  Portuguese, Italian, Russian, Swedish, Ukrainian,
  Lithuanian

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Overseas work experience

• Sidvim and the Chicago Center (1997 1999, 2001
  2005)
• Lived in Moscow, Russia Kyiv, Ukraine and
  Vilnius, Lithuania
• Traveled for business to
• Russia St. Pete, Kaliningrad, Chelyabinsk,
  Nizhny Novgorod, Ekaterinburg, Irkutsk,
  Vladivostok
• Ukraine Lviv, Donetsk, Lugansk, Simferopol,
  Yalta
• Lithuania Kaunas, Panevesys, Utena, Klaipeda
• Latvia Riga
• Estonia Tallinn
• Kazakhstan Almaty, Astana, Karaganda
• Austria, Belgium, France, Germany, and Sweden

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Role within the company

• Manager of Faculty and Supplier Relations
• Marketing Support Manager
• Country Director Ukraine
• Regional Marketing Manager
• Regional Marketing and Sales Manager
• Director Ukraine and Baltic offices

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Sidvim / Chicago Center

• Private, Chicago-based
• Origins Siemens India, Universal Healthcare
• Computers / Med Tech
• Conferences
• University of Chicago, Loyola University,
  Northwestern University, University of Illinois
  at Chicago

10
Market entry

• Dental market overview
• Private vs. state-run
• Cosmetic demand
• Products available
• Educational contacts
• Training seminars
• Conferences
• Educational tours

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Initial business plan

• Strategy
• Courses
• Treatment
• Rented facilities
• Pricing
• Inventory
• Staffing
• Problems
• Establishing market
• Providing follow up
• Staffing
• Breaking old habits

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Clinical services

• Higher profit margin
• Client referrals
• Time spent working vs. teaching
• Bringing in product
• Success rate of difficult cases
• Need to establish clinic for continued growth

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Conferences

• International
• Need for new and expanded fields
• Increase network of contacts
• Promote opportunities to western vendors
• More competition on the market
• Pricing concerns

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Investment in clinic

• Build state-of-the-art clinic
• Combine with sales offices and training facility
• Materials purchased in US and shipped
• Key location
• Set trend for private clinics in the market
• Expenses and debt rose significantly
• Ever increasing competition

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Crash...

• Economy crashed in 1998
• Business struggles
• Market empties
• State of the economy
• Bank defaults
• Consumer market

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Survival and Expansion

• Stayed in market
• Explored opportunities in Ukraine
• Moved into Ukraine, Baltics and Kazakhstan
• Moscow served entire region
• Strain on resources

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Conferences and Growth

• Moscow
• EAO
• Las Vegas
• Siberian Tour
• Logistical nightmare
• Kazakh Tour

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Headaches began

• Trouble in the office
• Differing objectives
• Staff purge
• Client theft
• Start of gray market
• Renewed customer service
• Client visits, visits, and more visits
• New pricing structure

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Move to Ukraine / Lithuania

• Russia stabilized
• Young markets struggling
• Key clients
• Conference in Yalta
• Baltic market and EU entry

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Struggles

• Market competition
• Pricing issues
• Stock
• Moscow always as priority
• Expansion to India
• Changing regulations
• Move to Grushevskovo
• Corporate espionage and crime
• Orange Revolution

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Current situation

• CCAD
• Nobel Biocare Russia
• Russia
• Ukraine
• Baltics
• Kazakhstan
• India
• www.chicagocentre.com
• www.nobelbiocare.com

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Difficult business environment

• Office management
• Corruption and Blanket laws
• Customs
• Computer software
• Registration
• Company
• Employee
• Shift away from democracy
• History and insecurity
• Romanovs Soviets Yeltsin Putin Medvedev -
  ?
• Democracy vs. Kleptocracy
• WTO

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Life as an Expat in Russia

• Living conditions
• Expenses
• Travel
• Time difference
• Vacation time
• Tight-knit community
• Exciting political and business scenes

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Are business skills enough?

• Importance of language skills
• Communication is key
• Personal relationships
• Networking
• Importance of cultural knowledge
• Know your customers
• Understand the market
• History, politics, arts, literature
• Regions vs. Moscow
• Why so much corruption?
• Why so much red tape?

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What can I do to prepare?

• EM course amazing opportunity!
• Work with Experts you have available at Fisher
  and OSU
• Work closely with CIBER
• Learn the language
• Spend time in-country
• Attend cultural events at OSU
• Network with the local Russian community
• Study the culture
• Learn the language
• Learn the language!

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Questions?Contact CSEES at any time!Lance
Ericksonerickson.107_at_osu.eduPhotos from CSEES,
CIBER, CCAD, Nobel Biocare, and MicrosoftMap
from CIA