The document provides an overview of key topics related to business environment and markets in Central and Eastern Europe (CEE). It discusses historical aspects, currencies, banking, insurance, pensions, retail, trade agreements, consumer confidence, real estate, utilities, marketing, outsourcing, investment promotion, corruption, transportation infrastructure, public relations, education, and the largest companies in the region. Key cities in CEE mentioned include Vienna, Budapest, Ljubljana, Prague, and Brussels.

1. Business Environment in CEE
Czech University of Life Sciences Prague
Martin Kolmhofer
kolmhofer@cee-portal.at

2. CEE Countries

3. CEE Countries – Historical Aspects
Maximum Extension of the Roman Empire

4. CEE Countries – Historical Aspects
OTTOMANS AND HABSBURGS (800-1914)
Imperial capital was Vienna, except from 1583 to 1611, when it was moved to Prague.

5. Market Players in CEE Banking

6. CEE Currencies

7. Debt Capital Markets in CEE

9. Vienna
Budapest
Ljubljana
Prague

10. CEE Insurance Market
• Most known European brands are present
in the CEE markets, in top positions
• Very few domestic companies left

11. CEE Pension Systems
Demographic Shock Exposure

12. The EBRD
• Founded in 1991
• Its mission was to support the
formerly communist countries in the process of
establishing their private sectors.
• Headquartered in London

13. CEE Retail Market

14. Shopping in the past…

15. …and today

16. Market Overview

17. CEFTA
• Central European Free Trade Agreement: Trade
agreement between non-EU countries in Southeast
Europe.
CEFTA is a single Free Trade Agreement (FTA) linking all the
Western Balkans and Moldova. It replaces a previous network
of more than 30 bilateral FTAs, thereby setting uniform trade
rules across the whole South Eastern Europe.

18. CEE Consumer Confidence
Index measures consumer sentiment: The figure is determined by the difference
between positive and negative answers. Therefore a headline above zero
indicates positive consumer confidence, while a negative number shows more
negative answers.

19. CEE Shopping Centre Prime Rents
Rental growth in CEE is diverging based on countries’
economic and property market performance.
“Prime Rent” = rent for high quality location
Source: Jones Lang Lasalle

20. Utilities and Energy Markets in CEE

21. Planned “southern corridor” to limit dependence from Russia. Pipeline should
bypass Ukraine and Belarus and connect EU directly with the countries of the
Caspian Sea region.

22. Russian “South Stream” project: Gas pipeline via Black Sea to Bulgaria, then split to
• Greece
• Romania, Serbia, Hungary, Slovenia and Austria
The project is seen as a political project / rival to the planned Nabucco pipeline (and
to expand Russian presence in the region). Completion is due by 2015.

23. Marketing in CEE

24. Marketing in CEE
• What business logic drives foreign
companies in CEE and how they approach
the region and manage their business in
CEE?
• Typical entry and marketing strategies
used in the region today?
• The characteristics of economies and
markets in CEE?

26. CEE Population in million

27. Number of cities with more than 150,00
residents

28. CEE Market Characteristics

29. Fairs and Events
• BRNO: Central European Exhibition
Center
• CEFA: Central European Fair Alliance
(www.cefa.biz)

30. Outsourcing to CEE

31. Outsourcing to CEE
• CEE countries are notable for technology-
oriented educational system, strong
academic background
• Cultural, regulatory and geographic proximity
to Western Europe and USA
• High-skilled multilingual labor force with good
engineering and R&D talent
• A stable and advanced legal and
infrastructure framework compared to
competing locations.

32. Outsourcing to CEE

33. Investment Promotion Agencies
Mission: To attract investment to a country, state, region or city. The agency does
this by introducing investors with local real estate developers and other
commercial service companies, by providing statistical information and by
managing any investment incentives that the country may offer to companies
which invest there (subsidies, grants, tax exemptions).

34. CPI – Corruption Perception
Index

35. CEE Real Estate Market

36. Main Players

37. CEE Real Estate Events
• CEDEM CEE in September is organized by Roberts Publishing
Media Group, publisher of CiJ, Central & Eastern Europe's leading
property investment and development monthly magazine.
• Real Vienna in spring is the CEE/SEE-focused Real Estate and
Investment Fair organized by Reed Exhibitions/Messe Wien
• Urbis Invest: Important regional Real Estate Fair in April at the Brno
Exhibition Center

38. CEE - Investment by Sector
Residential
Office
Industrial and Logistics

39. CEE Office Market
Prime Office Rents

40. CEE - Transportation and Infrastructure

41. Public Transport as a part of
socialist ideology
• Communist dictatorships ensured that
private car ownership and use would be
extremely expensive and difficult, while
public transport was widely available and
subsidized to such an extent that it was
almost free.
• There were long waiting times for
purchasing new cars (over a decade in
East Germany and Poland!)

42. Road Transport:
Road Incompatibility between Germany, Poland and
Russia

43. Road Transport:
Road Incompatibility between Germany, Poland and
Russia

44. Trans-European transport networks
• A planned set of road, rail, air and water
transport networks designed to serve the
entire continent of Europe.
• Goal: to provide integrated and intermodal
long-distance high-speed routes for the
movement of people and freight
throughout Europe.

45. 30 Priority Projects (or axes)

46. Pan-European transport corridors
• Defined at the second Pan-European
transport Conference in Crete, March
1994, as routes in Central and Eastern
Europe that required major investment
over the next ten to fifteen years.
• These development corridors are distinct
from the Trans-European transport
networks, which is a European
Union project

47. Pan-European transport corridors

48. Public Relations and the
Media Landscape in CEE

49. Historical Perspective
• Common History as part of the communist
Eastern bloc
• Lack of public awareness in the activities
of companies
• Socialist system did not allow competition
or promotion of companies, brands and
products
• Years behind the Iron Curtain and under
socialist regime have made people
suspicious, cynical and difficult to
influence

50. Media Landscape in CEE
Advertising expenditures per 4 traditional media groups

51. CEE Business Tycoons / Media
Owners

52. Human Resources Management in CEE

53. CEE Market: “War for Talents”
• Western multinationals shift emphasis away from their traditional
focus on corporate reputation and remuneration towards such areas
as international mobility, structured learning and development, work-
life balance and workplace atmosphere.
• While all the classical instruments are used for recruiting (such as
ads and partnerships with universities, etc.) the most promising
instrument are personal networks and recommendations
• The quality of applicants is assessed to be rather high, international
experience is the weakest point.
• The loyalty of the high potentials towards the own company is
expected to decrease to a long time low in the near future.
• Source: 2012

54. Recruitment Process Outsourcing
(RPO) – Main Players
= an employer transfers all or part of its
recruitment processes to an external
service provider.

55. Common Features of Education
System in Communist Nations
• After World War II, Eastern European
countries, including East Germany,
Hungary, Poland, Bulgaria, Albania,
Czechoslovakia, and Romania, all
adopted educational systems that
mirrored substantial features of Soviet
practice.
• Special importance to mathematics and
the natural sciences
• Closely linked to youth organizations -
strong elements of work-study and
practical training into school programs

56. Biggest Companies in CEE