Strategic Responses to the Global Financial and Economic Crisis in Central and Eastern Europe - The Foreign Multinational Company Perspective

Publication: Chapter in book/Conference proceedingChapter in edited volume

Abstract

Purpose: This paper contributes to the discussion of the effects of the global financial and economic crisis of 2008-09 (GFEC) on strategies of multinational companies (MNC) in the unique regional context of Central and Eastern Europe (CEE).
Methodology/approach: The considerations are based on secondary data and accessible studies dealing with corporate responses to the recent economic downturn.
Findings: The author argues that the business model which guided the expansion into CEE still remains valid. The huge market potential did not disappear and the advantages stemming from a skilled workforce and favorable resource situation were not eliminated by the crisis. What markedly changed is the perception of risk of doing business in CEE. As a consequence, foreign investors follow a more cautious and selective approach in their regional strategy. Regional players will try to stay in CEE and benefit from the exit of weaker competitors. Multi-tier brand strategies and affordability initiatives will gain in importance.
Research limitations/implications: As this is a discussion paper further research is necessary to validate the propositions.
Practical implications: An external shock such as the recent crisis forces management to conduct a comprehensive review of the pillars of their strategy. This paper offers a guideline for review of a regional strategy.
Originality/value of paper: The paper provides a comprehensive review of the business model for CEE in the light of the recent global crisis and highlights probable strategic responses of foreign MNCs.
Keywords: Central and Eastern Europe, Economic crisis, Multinational company, Regional strategy, Strategy review.
Paper type: Conceptual paper
Original languageEnglish
Title of host publicationProgress in International Business Research - Volume 7: New Policy Challenges for European Multinationals
Editors Rob Van Tulder, Alain Verbeke, Liviu Voinea
Place of PublicationBingley
PublisherEmerald Group Publishing
Pages393 - 419
ISBN (Print)978-1-78190-020-8
Publication statusPublished - 2012

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