The Fleet Sheet

The Fleet Sheet

Answer 1

The potential difficulties of starting a business in a transition economy was on the first hand creating a small business out of large enterprises and launching new ventures where no business had been before, this is difficult because a small business doesn't attract as much people as big ones and it could result in a loss of money and bankrupt of the business and also because by placing a new product in a new country it could happen that the product you are offering nobody demands it or find it useless for the place you are selling it to (Daems & Thomas, 1994). On the other hand, in some cases the business was only additional work added to other jobs to keep the entrepreneur afloat with higher inflation rates and also increasingly stationary wage rates. Also some of the businesses were forced into operating illegally to deal with unfair and non-legal procedures in the regulatory environment, or to avoid the attention of the mafia or corrupt officials (Daems & Thomas, 1994).In transition economies it is also very difficult to work out a secure contract for lease of property, and also the banking system in these kind of economies is not equipped to deal with the needs of small businesses. For this case, another problem that occurred was the lack of experience in the private businesses that occurred at those times in Eastern Europe, also the population had lived all of their life in a Socialist economy and had no knowledge on how to be a businessperson, or how to act in western society's types of businesses. When you create a business in a transition economy, you will face for instance, robberies, extortion, problems to get business license, high input price, low production capacity and many numerous obstacles that will make it difficult for a business to succeed. The potential difficulties include the following (Horovitz, 2004):

High inflation rates that characterized the first years of the free market economies in the countries of Eastern Europe before the respective governments could take steps to bring burgeoning prices under control

Unfair and cumbersome legal procedures in the regulatory environment

The growing presence of the Mafia and corrupt government officials

The lack of secure contracts for the lease of property

Banking systems that were experiencing difficulties in moving from state-owned banks to privatized banks.

Answer 2

The following is a SWOT analysis of the Fleet Sheet:

Strengths (Walzer, 1969)

A unique product that met a market need

The timeliness with which the product was distributed

The effective use of discriminative pricing

Erik Best's facility with Slavic languages

The company's “first mover” advantage in the country

Low start-up costs

The perceived high quality of the product

Weaknesses (Walzer, 1969)

Low barriers to entry into the industry

Increased competition because of the profitability of the company

The closing down of some international offices in Prague

The weakness of Asian economies, which would affect their investments in the Czech Republic

Problems within the Russian economy which would affect their investments in the Czech Republic

The fact that Erik Best took little thought initially to the ...