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East to West

A major part of our company resources are dedicated to assisting Eastern European companies with market leading products in their home markets, which, consequently, are now facing the new challenge of having to expand internationally in order to achieve sustainable long-term growth.

In an increasingly globalized economy, market-driven growth is mandatory, and we believe that this is the most powerful development strategy.

Growing naturally is a natural process sustained by the inherent market conditions in a developing country, but growing intentionally, in a healthy and sustained way, gives companies the competitive advantage over their competitors. Consistency in the local market, as well as a continuous increase in the share of other relevant, targeted markets, will ensure healthy growth with long term profits.

Unfortunately there are many entrepreneurs from Eastern Europe that are getting to that point in their companies development where they face two options; either to continue through a market-driven growth based on a clear development strategy or to struggle in reacting to market circumstances.

Naturally, a few questions arise :
Why do I need Strategy Consultants at this particular moment? Why can I not develop my company as I did up to now?

Question: Why Strategy Consultants ?
A company is like a living organism, with its own internal structures ruled by the corporate strategy and culture.

The strategy of an organization has a life cycle: a "latent phase" and a "development phase". In most cases, after the initiation of the start-up strategy, SMEs enter into the latent phase, losing their grip on the external and internal environmental factors. In this situation, strategic issues are not going through a periodic review process and the focus of the management team slides into a classic routine, carrying out only their immediate functions resulting from the daily administrative pressures.

Only when a new product or service is added to the agenda are the strategic mechanisms reactivated, and then there is justification for investment in the company's future. Of course, when Strategic Planning and Management are done internally, owners often find it difficult to be fully objective. Unfortunately, in many cases, the result is a company-development crisis. For large firms, this monitoring activity is performed by the in-house Strategic Management department, but the small and medium sized business cannot afford such large organizational structures and the resulting overhead.

As Mr. Elliott Davis reveals in his November 2005 article from Growth Business, "a staggering 80 percent of SME business owners and managers regularly worry about work, with many turning to their partners (rather than professional advisers) for counsel".

Perhaps the biggest surprise of all, however, regarding the sources for, and types of help, almost fifty percent of those polled said that they relied on their husband, wife or partner for advice, with a further 15 per cent keeping their concerns to themselves. Only two per cent of the respondents turned to their accountants for advice. And in a blow for the bank managers, not a single individual deemed them worthy counsel in such situations. Eastern European SMEs that have relatively short firm-histories show the same pattern of behavior, a problem made more critical by the fact that the natural development of these companies, heavily rooted in their local-market growth, have reached an impasse. An even greater challenge, the accession into the EU is forcing managers of such companies to identify new solutions for the new business environment. Are we now facing the turning point in the old, local business lifecycle? Will we continue with healthy business development, or will we face two to three years of stagnation, followed by a crash?

Answer: Because so many businesses do fall victim to both market-based, as well as self-made traps by attempting to tackle strategy issues internally, more and more businesses are looking to employ the part-time, or limited-term services of external Professional Strategy Consultants.

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