facilitating fdi into europe and central asia working through consulting firms

Facilitating FDI into Europe and Central Asia

Working through consulting firms

© PA Knowledge Limited 2013. Facilitating FDI into Europe and Central Asia

Presentation Overview

1. Introduction

2. The need to invest

3. Investment Operations and Consulting companies


Who we are ?


Introduction to PA


The need to invest


Why do companies invest

“PULL” FACTORS

•New markets

•Competitive advantages

•Cost factors

•Technology access

•Trade barriers

•Access to customers

•Contracts

•Skills

STRATEGIC

CHOICES

1.Expansion

2.Consolidation

3.Restructuring

4.Growth ambitions

“PUSH” FACTORS

•High base costs

•Taxation

•Labour market constraints

•Exchange rate stability

•Mergers&Acquisitions

•Customer driven Motives

•Intellectual property

•Access to supply chains

•Access to technology

HOME ECONOMY HOST ECONOMYCOMPANY


Modes of market entry

7

Once a company has decided to expand its international footprint it has a range of investment options

Type of entry to a foreign market Characteristics

Exporting High costs, low risk

Licensing Low cost, low risk, little control, low returns

Strategic alliances / Joint ventures Shared costs, shared risks, shared resources, problems of integration

Acquisition High costs, quick access to the market, complex negotiation process, advantages of economies of scale, problems of merging with domestic operations

Expansion of existing operation Advantages of economies of scale, low risks, relatively low costs, rapid expansion possible

Expanding to new markets or new clients Need to alter geographical footprint to support new markets or new clients

Company expansion New technologies, new ideas, innovations, etc


Investment operations, consulting companies and implications


Key elements of investment promotion

Three areas of investment promotion

Key elements

Strategy and Organisation National policy context

IPA objectives

Structure of investment promotion

Investment GenerationCompetitive positioning

Branding

Market analysis

Company targeting

Facilitation/Investor servicingOne-stop-shop

Project handling

Product development

Account management

Monitoring and evaluation


Strategic Framework for investment promotion


Foreign investors

Localcompanies

Best practice model in co-operation

Best practice from consulting companies

Client segmentation

Client centricity

Differentiated service offer

Key account management

Ownership of targets and activity metrics

Access to sector expertise

Understanding of supply chains and supply chain costing

CRM tools

Sector Expertise

Innovation and Training

Market and Sector intelligence

Best practice from IPA

Partnerships with private sector

Access to government

Longer term Return on Investment

Incentives

Influence on product development

Marketing of clusters

Location benchmarks

Overseas Offices

Property Infrastructure


New blended models of operation

Policy

Joined up Government

National Strategy

Single focus/dedication

Scale and impact

Industry knowledge

Technical skills

Business experience

Desire to succeed

Independent

Balanced Business

Skills

+ =

IPA Consulting BlendedTeam

Customer Ownership Efficiency and Flexibility

Targets

and

Goals


Example: Collective targeting versus FDI promotion


Example: Collective sector based targeting

IPAs have been moving towards a sector-based targeted investment strategy that allows for better prioritisation of limited resources and typically yields better results.

Sector targeting should identify sectors in which the host economy is best placed to attract investment.

FDI opportunity – sectors with the best potential for mobile FDI projects.

Competitive position – the strength of a location compared to competing locations for the sector.

Degree to which the sector meets FDI objectives – extent to which target sectors can deliver FDI strategy objectives in terms of job creation, quality of skills, integration in the indigenous cluster, etc.


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London SW1W 9SR

United Kingdom

Tel: +44 20 7730 9000

www.paconsulting.com

This document has been prepared by

PA on the basis of information supplied

by the client and that which is available in

the public domain. No representation or

warranty is given as to the achievement or

reasonableness of future projections or the

assumptions underlying them, management

targets, valuation, opinions, prospects

or returns, if any. Except where otherwise

indicated, the document speaks as at

the date hereof.

© PA Knowledge Limited 2012.

All rights reserved.

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SW1W 9SR. PA accepts no liability

whatsoever should an unauthorised recipient

of this document act on its contents.

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