The European Marketplace T h e European Marketplace James Hogan M © The Macmillan Press Ltd, 1991 Contributions © The contributors, 1991 Softcover reprint of the hardcover 1st edition 1991 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied, or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 33-4 Alfred Place, London WClE 7DP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First edition published 1991 by THE MACMILLAN PRESS LTD London and Basingstoke Associated companies in Auckland, Delhi, Dublin, Gaborone, Hamburg, Harare, Hong Kong, Johannesburg, Kuala Lumpur, Lagos, Manzini, Melbourne, Mexico City, Nairobi, New York, Singapore, Tokyo. British Library Cataloguing in Publication Data The European Marketplace. 1. European Community countries. Economic integration I. Hogan, James 337.1'432 ISBN 978-1-349-11346-0 ISBN 978-1-349-11344-6 (eBook) DOI 10.1007/978-1-349-11344-6 For WILLIAM POETON and THE UNION OF INDEPENDENT COMPANIES • • • • 1-\1-' BARC=LAYS 1992 HAS • l~LRI~i\DY START1~D. • • • No one can afford to ignore the dramatic implications of 1992. The Single European Market. The removal of tariffs. 320 million potential customers. • • But it may be difficult to see exactly how your business can take advantage. • That's where we can help. • With experts on everything from electronic cash management to international finance. From cross border leasing to exchange risk • • management. To give you all the specialist advice you need. • We've also been established in Europe for many years. So we'll • have someone on hand to help, wherever you decide to trade. But you don't have to go abroad to draw on our wealth of • • experience. As we've now set up Business Centres all over the UK. And with 327 in total, that's more than any other bank. • We can make 1992 work for you. If you start work on it • now. By filling in the coupon. Or calling into your local Barclays Business Centre. • • Please send me details of my nearest Barclays Business Centre. • Name _________________________________________ __ • )'( II '/, / COmpany _______________________ _ • H / I / / /, (1/ f- Address _________________________ _ • 1,1//,/.\'(,/(1 • ~, BAR CLAYS PPOOS BTO TXIl lNSO C.O 1U63P. O'IVNE TYOIIR: BIDAGJlE.C. LSAUYRS. RINEYfO KRTMIJA 'TUIHON. OCRE NFTRlElEE . • PHONE _ muo. MEN BEll OF IMIlO Contents Foreword Sir Leon Brittan ........................................................ xiv Acknowledgements ........................................................................ xv Contributors ............................................................................... xvi Introduction ............................................................................... xx PART ONE: THE EUROPEAN DIMENSION 1 People and products Mike Rosser ........................................ 3 Cultural differences .................................................................... 4 Marketing approaches ................................................................ 6 Opportunities and problems ......................................................... 8 The role of advertising agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Developing a European attitude .................................................... 9 2 The New Europeans James Hogan ...................................... 11 Origins of European unity .......................................................... 14 The Single Market .................................................................... 15 Key events in uniting Europe ...................................................... 16 3 Corporate Strategy Caroline Bentley ................................. 21 Single Market implications for corporate strategy ............................. 21 1992: A catalyst for change ......................................................... 22 Acquisitions and alliances ........................................................... 26 4 Winners and Losers Barry Baldwin .................................... 31 Options for major companies ....................................................... 32 Action for smaller businesses ....................................................... 33 5 The National Wealth William Poeton .................................. 39 The German experience ............................................................. 41 The Economy and business confidence .......................................... 42 Response to the Single Market programme ..................................... 44 vii Contents PART TWO: SELLING FROM THE UK 1 The European Sales Team Kelly Dow ................................ 51 I 2 A Shop Window in Europe Peter Webster ........................... 58 3 The Market for Inventions British Technology Group ....... 74 Eurotech ................................................................................ 74 4 Electronic Data Interchange Richard Wakerley .................. 81 5 The Mark of Quality Sir Derek Hornby .............................. 89 Role of certification bodies ......................................................... 89 PART THREE: MANAGEMENT, WORKFORCE AND COMPANY SKILLS 1 A New Breed of Bosses Anthony Saxton ............................. 97 The search for the Euro-executive ................................., ............... 97 Recruiting Euro-executives ......................................................... 98 Qualities of the Euro-executive .................................................... 99 Demand for Euro-executives ..................................................... 100 2 The Making of Managers George Bain and Janet Temple. 102 University management school courses ........................................ 104 3 Universities and Industry Hugh Thomson ........................ 108 Benefits of collaboration .......................................................... 110 Pre-competitive research .......................................................... 110 4 Polytechnics and Business Committee of Directors of Polytechnics .................................................................. 114 European business-related services ............................................. 114 viii Contents 5 The European Student Timothy F. Beyer Helm ................ 121 Student societies ..................................................................... 122 ERASMUS ........................................................................... 123 COMETI ............................................................................. 123 6 Languages and Business Nigel Reeves 126 7 Bureaucracy Untrained James Hogan 135 8 Training the Workforce Peter Morgan ............................. 139 Vocational training ................................................................. 141 Training schemes . .... . . . . . . . ... . . ... . . .. ... .. ... . . ... .. .. . .. ..... . . .. . .. ...... 142-156 PART FOUR: CASH FLOW AND PROFITS 1 Maximising Profits - I Anthony Pierce ........................... 159 Competitive pressures ............................................................. 161 Economic factors .................................................................... 163 The risks............................................................................... 165 Role of management ............................................................... 167 2 Maxmimising Profits - II Anthony Nolan ...................... 169 The product .... . .. ... . . ... . ... . . ... . . .. ... . . .. . . ... . .. .... . .. .. . . . ... .. .... . . . .... . .. 170 The tender ............................................................................ 171 The contract .......................................................................... 171 3 Money for Business Ted Ettershank ................................. 173 Bank overdraft ....................................................................... 174 Invoice discounting ................................................................. 175 Packaged lending .................................................................... 175 4 Export Credit Insurance Charles McCartan ..................... 179 Safer open account trading ........................................................ 181 Financial discipline .. . . .. . . ... . .... .. .. ... . .... . .... . .. .... .. .... . . ........ .. . . ... .. 182 ix Contents 5 Banking Services Barclays Bank Pic ................................ 187 Impact of changes in the European Banking system ........................ 188 Electronic banking .................................................................. 190 Free movement of capital ......................................................... 191 Monetary union . ..... ......... ...... .. ...... ....... ............. .... ........ ........ 191 6 Investment Incentives Monica Brebner and James Hogan. 195 7 EC Grants and L~ans ......................................................... 208 Part I - Structural funds .......................................................... 209 European Regional Development Fund ....................................... 211 European Social Fund ............................................................. 215 European Agricultural Guidance and Guarantee Fund .................... 216 Community Financial Instruments .............................................. 218 Part II - Research and Development Programmes .. ......... ........... . 222 Activities under the Framework Programme 1987-91 ...................... 223 Activities under the Framework Programme 1990-94 ...................... 253 PART FIVE: THE ECONOMIC AND TRADING ENVIRONMENT 1 Coporate Structures John Brebner .................................. 265 Appointing an agent ................................................................ 268 Appointing a distributor ........................................................... 269 Franchising ........................................................................... 272 Licensing a product or know-how ............................................... 275 Joint venture ......................................................................... 277 Setting up a subsidiary ............................................................. 278 Establishing a branch office ....................................................... 282 2 Doing Business in Eastern Europe Edward Dolling, Neil Payne, Susanne Schalk ............................................... 285 Problems and cultural barriers ................................................... 286 Eastern European states ...................................................... 285-295 x