Central Europe and Hungary: Logistics System

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Case Study
Question 1
Central Europe and Hungary:
Changes in logistics Systems

ABSTRACT
in an increasingly globalizing setting, many of the newly nationalised buffer states of the soviet Union, have been faced with the pressure to integrate themselves with exogenous market forces, from western Europe as well as other parts of the world. The ability for them to adapt lies in their ability to manage their fiscal policies, their societal views and market theories that form many of the xenophobic belifs that hindered initially their ability to accept foreign investment and the sale of their enterprise to foreigners. Their logistics systems will only develop provided that globalization takes place within these Central European countries as according to Matsson 2003, the globalization involves changes in the distribution process of goods and services in local markets. Hungary, being relatively responsive to open markets and FDI has seen relatively faster reconstruction and development of its logistics system when compared to other eastern countries and its prospects of being a global logistics hub rests contingent on its continued international integration.

TABLE OF CONTENTS

cover page| I|
Abstract – question 1| II|
Content page| iii|
Introduction| 1|
The CULTURAL BARRIERS OF Globalization| 1|
transport and infrastructure in the region| 2|
Logistics Challenges: At company level| 3|
conclusion| 4|
cover page| 5|
Abstract – question 2| 6|
Introduction| 7|
Warehouse investments| 7|
warehouse operations| 8|
conclusion| 10|
refrencing| 11|

INTRODUCTION
Over the last few decades, the logistics systems in Central Europe and in Hungary have developed and evolved. From being buffer states to the Soviet Union to being sovereign nations, these countries have undergone several political , social and economic reforms that have on the whole, encouraged more privatization within the domestic market, increased foreign direct investment and begun to form strategic alliances with the more industrially mature and developed Western European countries. These changes have had many implications for logistics in Eastern Europe. This paper will discuss the political, social and economic changes that the central European countries and Hungary have made after the 1990s and the impact they have on their logistics systems, the challenges of the reorganization of distribution channels driven by globalization and also the future prospects of Eastern Europe as a global logistics hub. CHANGING PATTERNS OF TRADE

Since the fall of the Berlin wall in 1989, former communist nations sought to revolutionize their social political systems but interms of logistics, they remained far behind Western European countries. Countries like Poland, Czech republic and Hungary however, showed relatively faster reconstruction and reorganization in their logistics systems than countries further east. The transition from a centrally planned economy to a market economy involves mainly the privatisation of many state-controlled enterprises. In Central Europe and Hungary, most privatization opportunities came in the form of Foreign Direct Investment. As Western Countries developed and their wages increased, they saw the need to find low cost production solutions. Before, for political and other reasons, Western trade with the east accounted for only 3.5% of Western countries’ imports. Since then, the trend has been a growing shift from east-east trade to east –west trade. Hungary in particular, increased its’ exports to unified Germany by 76%, making it one of Hungary’s most important trading partners. As Eastern European Countries move their trade eastward, more demand for improvements in intermodal capabilities and channels of distribution become more urgent. (Joseph O'Reilly 2007) THE CULTURAL BARRIERS TO GLOBALIZATION

According to matsson,2003, it is cultural differences and culture that pose...
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