Dental Equipment and Supplies in Croatia: A Strategic Reference, 2007
ICON Group International, July 2007, Pages: 190
How to Strategically Evaluate Croatia
Perhaps the most efficient way of evaluating Croatia is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to dental equipment and supplies are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
Framework for Prioritizing Countries
Demand/Market Potential Driven Firm
Relative Accessibility
Accessibility/Supply Averse Firm
In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market - neither a market-driven nor a cost-driven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).
Latent Demand and Accessibility in Croatia
This report provides a detailed overview of factors driving latent demand and accessibility for dental equipment and supplies in Croatia. Latent demand is largely driven by economic fundamentals specific to dental equipment and supplies. This topic is discussed in Chapter 2 using work carried out in Croatia on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for dental equipment and supplies in Croatia. I use the term “micro” since the discussion is focused specifically on dental equipment and supplies.
Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Croatia. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Croatia. The numbers are only indicative of an average firm whose primary activity is in Croatia. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Croatia. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “dental equipment and supplies”, as defined in Chapter 3. Again, while “dental equipment and supplies” does not exactly equate to “dental equipment and supplies”, it nevertheless gives an indicator of how Croatia compares to other countries for a proxy adjacent category along various dimensions.
Chapter 4 deals with macro-accessibility and covers factors that go beyond dental equipment and supplies. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Croatia:
Openness to Trade in Croatia
Openness to Direct Investment in Croatia
Local Marketing and Entry Strategy Alternatives
Local Human Resources
Local Risks
Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in the Chapter 4, which is a general overview of investment and business conditions in Croatia. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Croatia. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.
1 INTRODUCTION & METHODOLOGY 1
1.1 What Does This Report Cover? 1
1.2 How to Strategically Evaluate Croatia 1
1.3 Latent Demand and Accessibility in Croatia 3
2 DENTAL EQUIPMENT AND SUPPLIES IN CROATIA 5
2.1 Latent Demand and Accessibility: Background 5
2.1.1 Demographic Indicators and Health Risk Factors 6
2.2 Latent Demand: Market Composition 6
2.3 Latent Demand: Dynamics 6
2.4 Accessibility: Trade Barriers 7
2.5 Accessibility: The Structure of Competition 7
2.6 Market Entry 7
2.7 Key Contacts 7
2.7.1 Trade Publications 7
2.7.2 Trade Event 8
2.7.3 Distributors 8
3 FINANCIAL INDICATORS: DENTAL EQUIPMENT AND SUPPLIES 10
3.1 Overview 10
3.1.1 Financial Returns and Gaps in Croatia 11
3.1.2 Labor Productivity Gaps in Croatia 14
3.1.3 Limitations and Extensions 14
3.2 Financial Returns in Croatia: Asset Structure Ratios 15
3.2.1 Overview 15
3.2.2 Assets - Definitions of Terms 15
3.2.3 Asset Structure: Outlook 17
3.2.4 Large Variances: Assets 18
3.2.5 Key Percentiles and Rankings 21
3.3 Financial Returns in Croatia: Liability Structure Ratios 36
3.3.1 Overview 36
3.3.2 Liabilities and Equity - Definitions of Terms 36
3.3.3 Liability Structure: Outlook 38
3.3.4 Large Variances: Liabilities 39
3.3.5 Key Percentiles and Rankings 42
3.4 Financial Returns in Croatia: Income Structure Ratios 53
3.4.1 Overview 53
3.4.2 Income Statements - Definitions of Terms 53
3.4.3 Income Structure: Outlook 55
3.4.4 Large Variances: Income 56
3.4.5 Key Percentiles and Rankings 59
3.5 Financial Returns in Croatia: Profitability Ratios 72
3.5.1 Overview 72
3.5.2 Ratios - Definitions of Terms 72
3.5.3 Ratio Structure: Outlook 74
3.5.4 Large Variances: Ratios 75
3.5.5 Key Percentiles and Rankings 78
3.6 Productivity in Croatia: Asset-Labor Ratios 93
3.6.1 Overview 93
3.6.2 Asset to Labor: Outlook 94
3.6.3 Asset to Labor: International Gaps 95
3.6.4 Key Percentiles and Rankings 98
3.7 Productivity in Croatia: Liability-Labor Ratios 113
3.7.1 Overview 113
3.7.2 Liability to Labor: Outlook 113
3.7.3 Liability and Equity to Labor: International Gaps 114
3.7.4 Key Percentiles and Rankings 117
3.8 Productivity in Croatia: Income-Labor Ratios 128
3.8.1 Overview 128
3.8.2 Income to Labor: Outlook 128
3.8.3 Income to Labor: Gaps 129
3.8.4 Key Percentiles and Rankings 132
4 MACRO-ACCESSIBILITY IN CROATIA 145
4.1 Executive Summary 145
4.2 Economic Fundamentals and Dynamics 145
4.2.1 Infrastructure Development 145
4.3 Political Risks 147
4.3.1 Economic Relationship with the United States 147
4.4 Marketing Strategies 148
4.4.1 Distribution Channel Options 148
4.4.2 Agents and Distributors 148
4.4.3 Franchising Activities 149
4.4.4 Direct Marketing Options 149
4.4.5 Joint Ventures and Licensing Options 150
4.4.6 Creating a Sales Office 150
4.4.7 Selling Strategies 151
4.4.8 Advertising and Trade Promotion 151
4.4.9 Pricing Issues 154
4.4.10 Public Sector Marketing 154
4.4.11 Hiring Local Counsel 155
4.5 Import and Export Regulation Risks 155
4.5.1 Trade Barrier Risks 155
4.5.2 Valuations on Imports 156
4.5.3 Licenses Required for Imports 156
4.5.4 Controls on Exports 156
4.5.5 Documentation Required for Trade 156
4.5.6 Entering Temporary Imports 157
4.5.7 Labeling Issues 157
4.5.8 Restrictions on Imports 157
4.5.9 Local Standards 157
4.5.10 Free Trade Zone Options 157
4.5.11 Adherence to Free Trade Agreements 158
4.5.12 Trade Relations with the European Union 158
4.6 Investment Climate 158
4.6.1 The U.S.-Croatian Bilateral Investment Treaty 158
4.6.2 Conversion and Transfer Policies 159
4.6.3 Expropriation and Compensation 160
4.6.4 Dispute Settlement 160
4.6.5 Performance Requirements and Incentives 162
4.6.6 Right to Private Ownership and Establishment 163
4.6.7 Protection of Property Rights 164
4.6.8 Intellectual Property Rights 164
4.6.9 Transparency of the Regulatory System 165
4.6.10 Capital Market Risks 165
4.6.11 Political Violence 166
4.6.12 Corruption 166
4.6.13 Bilateral Investment Agreements 167
4.6.14 Labor 168
4.6.15 Free Trade Zone Options 168
4.6.16 OPIC and Other Investment Insurance 168
4.7 Trade and Project Financing 169
4.7.1 The Banking System 169
4.7.2 Foreign Exchange Control Risks 169
4.7.3 General Financing Availability 169
4.7.4 Financing Exports 170
4.7.5 Financing Export Strategies 170
4.7.6 Banks with Correspondent Banking Arrangements 173
4.8 Travel Risks 174
4.8.1 Local Business Practices 174
4.8.2 Travel Issues 175
4.8.3 Local Holidays Observed 175
4.8.4 Infrastructure for Conducting Business 176
4.8.5 Country Data 177
4.9 Key Contacts 177
4.9.1 U.S. Government 177
4.9.2 Business Associations 178
4.9.3 Croatian Government Contacts 178
5 DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS 181
5.1 Disclaimers & Safe Harbor 181
5.2 Icon Group International, Inc. User Agreement Provisions 182
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