DOING BUSINESS IN EUROPE

BY- GEORGIA USA

 Understanding the Market

• European Union comprise 27 nations, which has a population of

over 500 million

• It constitutes the largest trading bloc in the world. Generating

almost $17 trillion of GDP in 2007 (common trading policy)

• Variations do exist from country to country, and certain cultural

norms and traditions while dealing with specific nations
• Many countries speak English as well as a second-language,
such as French , Spanish , and Italian

• In most of Europe, the market possess government regulation

and generous social welfare programs and protections. Most
nations emphasize quality, making marketing extremely
important.

• The largest markets for Georgia goods include the United

Kingdom, Germany, the Netherlands, Belgium, Italy, and
France
 Distribution and Sales Channels
• Direct Sale-Industries with few customers that need specialized
technical support from the manufacturer
• U.S. Distributor-Most European firms opt to work directly with the
manufacturer or European-based distributor rather than a U.S.
distributor.
• European Contract Manufacturer-To protect their intellectual
property, U.S. companies will need a European patent
• European Distributor- It allows the manufacturer to build on the
expertise and client base of an established European business.
Most of them expect a solid market entry strategy, competitive
pricing and marketing support.
• Agent/Representative- Most efficient option for reaching
smaller cities and remote locations

• Wholesaler-Efficient for consumer products along with

business and industrial consumables

• Franchising-No barriers to the franchising of any product or

service in Europe.
 Opening an Office in Europe

• As Europe contains multiple cultures, belief systems,

and lifestyles, deciding on whether to open an office
in Europe varies from country to country. According
to the U.S. Commercial Service, most exporters
choose to become limited liability corporations.
 Pricing a Product
• The price on a product depends on the country to which you
wish to export.
• Every nation has different policies.
• Price is increasing as a competitive factor, but quality, timely
delivery and service remain equally important, especially in
business-to-business relations.
• U.S. exporters can compare U.S. and European retail prices by
taking the net U.S. retail price and comparing it with the
respective European retail price without the Value Added Tax
(V.A.T.), currently between 15 and 25 percent.
 Essential Factors for Success
• High quality products at competitive prices
• Contact with the State of Georgia Europe Office or the U.S.
Commercial Service, who can provide a wealth of knowledge
on specific markets
• Export and market entry strategy, financing, delivery, brand
name recognition, marketing, before and after sales support
and customer service
• Efficient business culture
• Strong personal relationships in all business transactions
 Due Diligence
• Companies interested in taking over European firms should
always conduct their own due diligence before entering into
business ventures.
• Once the U.S. company has identified several potential
representatives, it should contact them directly in writing and
obtain a detailed description of their company.
• The U.S. firm is then advised to obtain at least two business
and credit reports to ensure that the distributor or
representative is reputable.
 Import Requirements
• Products require a “CE” marking before they can be sold
within the European market
• This mark mean product has to meet the requirements of the
EU Directives, such as health, safety and environmental
protection legislation, and the mark must be placed on it by
the manufacturer.
• It is generally required for medical devices, machinery,
industrial installations, toys, electrical equipment and
electronics, but does not apply to cosmetics, chemicals,
pharmaceuticals and foodstuffs.
 Government Procurement
• The European Tender Information Center, public
procurement in the EU amounts to approximately $2.1
trillion and the market is regulated by both the EU and its
member states.
• Current legislation provides procurement of public
authorities and utilities authorities a legal framework for
tenders above certain thresholds.
• These tenders must be published European-wide, and all
contracts must be awarded in a competitive, trans-
European bidding.
BUSINESS AND CULTURAL PRACTICES IN THE
UNITED KINGDOM
• The UK plays its role as one of the major economies
in Europe. It considers itself to be separate from the
core of Europe, It has still not adopted the Euro and
is unlikely to do so in the foreseeable future.

• The country has changed over the past 20 years and

rapid change is now fully part of life and the
economic system, were has traditional ways are still
valued.
 Punctuality, Appointments, and Local
Time
• Always be punctual.
• Schedule your visits at least a few days ahead of
time and then confirm your appointment upon your
arrival in the United Kingdom.
• There are several days designated as national
holidays in the U.K., including individual days of
holiday (termed “bank” holidays).
• The English are on Greenwich Mean Time, which is
five hours ahead of U.S. Eastern Standard Time
(E.S.T. +5).
 Negotiating
• Business in the U.K. is now generally quite informal and
approaches can be made directly to senior executives without
any necessity for third parties. Frequently business people will
move to first names during a first meeting or when
telephoning or emailing.
• The British are now more increasingly given to showing their
emotions, which was not the traditional way, but reflects the
increasing multi-cultural nature and socio-economic upward
mobility of British life.
• The British traditionally underplay dangerous situations.
Similarly, they refrain from extravagant claims about products
or plans.
• Avoid the hard sell
• Expect meetings to be polite and reasonably casual. Coffee,
tea, water or juices will always be offered at the start of
meetings
• Declining refreshment is acceptable and will not cause a
problem
• Small talk about family, friends, hometown, etc. is welcomed,
as the British like to understand the background and interests of
those they meet with
• They do not like to be too direct at the start or end of meetings
• The British apologize often, they have a habit of adding a
question to the end of a sentence; for example: “It’s a lovely
day, don’t you think?”
• Do not rush the British toward a decision

• It is wise to send your senior executives to the United Kingdom, as

they may be received with more respect and are usually more
restrained in conduct

• Avoid controversial topics such as politics or religion, and do not

discuss comparative work ethics

• Speak in complete sentences

• While the British are often self-critical, visitors should simply listen if
they share their complaints with you, do not participate
 BUSINESS AND CULTURAL PRACTICES IN
GERMANY

• Germans prefer sticking with the plan. Unexpected changes

are often unwelcome
• Germans value consensus and unanimity while making
decisions. This can slow the business process
• speak in complete sentences
• The trade fair was invented in Germany. Germany hosts
almost two-thirds of all international trade fairs, making your
company’s participation essential
Punctuality, Appointments, and Local Time

• Be on time for every appointment, whether for business or

social engagements
• Germans rarely speak about private matters in a business
setting. Avoid enquiring about family and friends and limit
small talk as much as possible
• Schedule appointments well in advance. One week’s notice is
customary
• Germans appreciate consensus in business decisions. If two
Germans sign a business letter or if more than one German is
consistently copied on an e-mail, this indicates that both of
them must be in agreement before reaching a decision.
• Do not schedule appointments on Friday afternoons and keep
in mind that many people take long vacations during July,
August and December. Also be aware of regional festivals,
such as Oktoberfest in Munich or Carnival in Cologne and
Southwest Germany
• Germany is one hour behind Greenwich Mean Time (G.M.T.
-1). This makes it six hours ahead of U.S. Eastern Standard
Time (E.S.T. +6)
• When writing the date, Germans write the day first, then the
month, and finally the year (e.g.,December 3, 2010 is written
3.12.10)
 Negotiating
• Directness is appreciated and not meant to criticize. Try not to
take it personally
• Germans abhor hype and exaggeration. Be sure to back up
claims with data, case studies and examples
• Be prepared to supply reams of information on short notice
• Germans require time to establish close business relationships
• Even if German executives speak your language, they
appreciate receiving all promotional materials and instruction
manuals in German
• When a problem arises, explain it clearly, unemotionally, in
detail and in writing if possible
Thank You