Selling and Operational Adaptation in Croatia

Apart from adapting to the Croatian culture, you may find yourself having to reassess the way you traditionally operate and conduct business in Croatia. Here are some things to think about when you're planning to expand a business to Croatia:

• Will you be able to easily obtain the raw materials you require?
• Will you be able to import all the materials you need?
• Will you be able to find skilled workers in Croatia?
• Will you be able to take current employees, if needed?
• Are you obliged to employ nationals?
• Are you prepared, if necessary, to increase workforce and productivity?
• Are you familiar with the laws, regulations and trade barriers that could affect your business in Croatia?

Selling and getting your goods to market

To improve the chances of successful business expansion in Croatia, you need to consider a few key issues. Sales presence, for instance, should be a top priority. Will you sell directly? Will you trade over the internet? Perhaps trade shows are more suitable? Could you benefit from a local partner who knows the market? Here are a few fundamental choices:

• Get yourself a Croatian distributor who has a proven track record of selling on a local or national level.
• Find sales agents who can either sell your products or services, or alternatively acquaint you with potential clients or customers.
• Joint ventures with local companies have gained in popularity, primarily because of their knowledge and established presence in the market. It is often a pricey option but lessens the risk.
• Set up your own Croatian office, ensuring maximum control on all operations. This is obviously the most expensive of all your options.

When considering the distributional needs of your business, it is essential to account for the logistical factors which could affect it. These include things, such as:

Infrastructure

The infrastructure of a country could prove integral to the success of your business. Consider logistical reasons that your business found domestic prosperity: was it the ease of which you could run it? Reliable distributors, maybe? An efficient transportation network?

It is important to contextualise these issues with the country you are expanding to: ultimately, can it offer the same logistical benefits? The Croatian transportation system by sea is based on the ports of Rijeka, Ploče, Split and Zadar. There is also a network of river transport, based on Sava, Danube and, to a lesser extent, Drava. The largest seaport with the deepest channel to a port in the Adriatic is Rijeka, followed by Ploče in southern Dalmatia. The port of Ploče is of strategic importance for the industries of Bosnia and Herzegovina. The largest Croatian passenger port is Split in Dalmatia, also called gateway to the islands, followed by Zadar. There are 66 inhabited islands along the Croatian coast which means there is a large number of local ferry connections.

Croatia has 68 airports. The biggest are located in Zagreb, Split, Rijeka, Osijek, Zadar, Dubrovnik, Pul and Bol.

The British International Freight Association (www.bifa.org) is the trade association for UK-registered companies engaged in international movement of freight by all modes of transport, air, road, rail and sea. They can provide information and contacts. www.businesslink.gov.uk provides useful advice and more details.

Wholesale

Traditionally, wholesalers are used for selling low-value directly to retailers and, occasionally, the public and businesses. It is an economic way of targeting and reaching vast numbers of people quickly, and frees you from the burden of contacting retailers individually.

Distributing products in bulk not only means products sell faster than one-at-a-time, but it also allows your business to grow at a quicker rate.

Dispensing products and collecting money is generally considered more manageable and easy than dealing with a variety of customers. However, both the wholesaler and retailer will add their own mark-ups, meaning your profit margin will be less than full potential.

Just like with distributors, do some meticulous research into the wholesalers available. Here are some things to think about when choosing an appropriate wholesaler: