AGRANA - From a local supplier to a global player

Topics: Western Europe, Europe, Western world Pages: 8 (2844 words) Published: October 15, 2013
Question 1: From an Institution-based view, what opportunities and challenges have been brought by the Integration of EU markets in both Western Europe and CEE?

The home market from the European Union is one market which everyone has free movement with goods, services, capital and people. This was not always the way if we look back before the time of the EU we had a Europe which was overfilled with conflicts and wars. Because of the foundation of the EU we got a lot of opportunities in the Western Europe and in Central and Eastern Europe but also challenges because it’s not easy to bring so many different countries together with different rules, cultures, norms and ethics under one big Union.

Western Europe
The Western Europe refers to the countries in the west of Europe, where the distinction is different depending on the context. But the borders between Western Europe and CEE were once determined by the ratio of power between USA and UDSSR during the Cold War. Europe was then divided in half by the Iron Curtain. Opportunities:

One big opportunity for Western Europe is that the firms can get cheap human capital for their own work. Even today a blue-collar worker in Germany earns a lot more than in Poland. Another point is that the firms can invest in other enterprises from the CEE. So they can grow extremely fast as we have seen this with the AGRANA Company. With the difference in culture between Western Europe and CEE the firms can enter in a new market which can be really profitable. Challenges:

But the fact, that the firms can get so cheap human resources, is on the other hand also a problem. Because of the cheap human resources, the own home country workers will lose their job and the unemployment rate of the country will rise. Another challenges is, that firms from the CEE area can expand to the Western Europe area, so there is the danger, that it will get dumping prices. The other culture and norms makes the whole situation a lot harder. The firms have to consider lots of different aspects. When they don’t do that the new branches cannot rise and flourish in the CEE countries. These are a few challenges for the Western part of Europe and it is not easy to solve these problems. Central and Eastern Europe

The Central and Eastern Europe countries include all the Eastern bloc countries west of the Iron Curtain, which was collapsed in 1989-90. Also included are the three Baltic States Estonia, Latvia and Lithuania. Opportunities:

For the CEE states the integration of EU markets brought with it many opportunities to grow economically and politically. One of the big opportunities is that the CEE countries can benefit from the higher level of living from the Western Europe countries. Everybody can work easier and live in another country. So if you want to leave your home country and settle down somewhere else that is no longer a problem. We still see this phenomenon to this very day in the Western European countries. More and more people are coming to live in the country than emigrate. The firms which can make business in the CEE countries are creating new workplaces and paying taxes on the profit. So the whole country and the government have the chance to raise their level of living. Challenges:

Of course there are on the other side also challenges for the CEE countries. One of them is that the countries have to pay attention to their own experts in the country. A lot of firms in the Western part of Europe want to win the elite of the country over. This can be very dangerous for the own economy. The second aspect is that because of the globalization the poverty gap is getting bigger and bigger every day. The CEE countries have to be very careful that they don’t lose the access to the industry states.

Question 2: From a resource-based view, what is behind AGRANA´s impressive growth?

“AGRANA was founded in 1988 as a holding company for the Austrian sugar and Starch...
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