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Setting A Logistics Company Up In Romania And Bulgaria

1165 words - 5 pages

Business report : ContentsI) Introduction* Report Presentation* History and contextII) Purpose* Market opportunities* Methods of entry* Risks and issuesIII) ConclusionIV) Bibliography and referencesI) IntroductionReport Presentation.As you know, the EU25 is going to accept Romania and Bulgaria into the European Union from 1 January 2007.Our German Company, DOYLEON would like to take advantage of this acceptation in order to develop its logistics approach on a new strong market.We are a German logistics services provider located in Berlin, implanted all over Western Europe.The new, main aim of the company is to add some new partners from Eastern Europe in order to cover and create a European logistics network, in particular thanks to the future acceptation of Romania and Bulgaria within the EU.During this short presentation, we will show you market opportunities that Romania and Bulgaria can provide us, then, how we can enter this market, and finally, determine risks and uncertainties we could be confronted with.But before that, let us have a look at the context. We must understand and analyse this before setting up our activity.History and context.Before both applied to integrate the European Union in 1995, Romania and Bulgaria were almost in the same political and economical environment. (www.economist.com)Indeed, they began to establish close relations with Western Europe after the Cold War in 1989. They both needed to recover an economic stability after the loss of the COMECON market.Gradually, governments undertook many reforms in sectors of their economy; we will discuss later, to show you more of their historical background.The results were that, negotiations and talks about their acceptation within the EU started in 2000.The aim issue is to find money, in order to increase the exchange with the EU. To solve this problem, the EU will provide them some funds, in exchange; they have to make some reforms in order to improve public services... (http://en.wikipedia.org/)This agreement between Europe, Romania and Bulgaria is going to be realised, they have a macroeconomic stability, as we can see with their unemployment rate (for example 5.1 % for Romania in July 2006) which is one of the lowest in Europe, with their GDP: 8.4 % in 2004 for Romania, and Bulgaria's increased by 5.3% in 2005 to 6.0% in 2006. (www.economist.com).Since 1994, their growth rate has increased, we can see that their inflation has fallen, and since 1997, they recovered their life standard level, which they had lost in 1994 when COMECOM left.Accordingly, more and more companies are attracted in Foreign Direct Investment (FDI): that is to say, to provide operational guidelines on how those investment activities should be measured according to internationally agreed standards (http://www.oecd.org/LongAbstract /0,2546,fr_2825_35728892_33742497_1_1_1_1,00.html).The amount reached 5.2 billion in Bulgaria for 2005, 26.8% more than Romania, this permits them to put more weight in...

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