International Business Environment


Contents

1. Introduction

2. List of Criteria

3. Market Environment Study

3.1. Danish Market

3.2. Czech Market

3.3. Portuguese Market

3.4. Greek Market

4. Comparative Market Attractiveness Analysis

5. Proposed Market Entry Strategy

6. List of References

1. Introduction

Nowadays business becomes more challenging and requires more and more efforts to prosper. Very often manufacturers produce too much products and thus domestic markets become oversaturated. Thus companies search for additional markets. In order to do that companies became international and expand their business overseas. In order to success it is important to provide marketing research in order to identify the best opportunities from the available.

This report is devoted to the preliminary research of the marketing environment of four European markets: Denmark, Czech Republic, Portugal and Greece in order to identify which one of them is the most attractive and suitable for products of ‘The Olde Distillerie’ company.


2. List of Criteria

In order to provide a comparative market analysis there was developed a list of criteria to use while performing the analysis in accordance to which two most attractive markets will be identified. So here it is:

1. Country’s general economic indexes. This indicator is analyzed in order to identify whether average statistical citizen of the country can afford drinking whiskey at all.

1. Drinking preferences of citizens. This factor plays a very significant role because if people do not drink spirits it would be very significant obstacle for entering such market.

1. Investment Climate

a. general information

b. taxation

c. legislation

d. corruption

e. competition

f. entering barriers and other disadvantages


3. Market Environment Study

Before expanding business overseas there must be provided a thorough marketing research of all potential markets. This research should consists of several stages each of which has its own methods, targets and results. This research is primarily targeted on a collection of the secondary data about the potential European markets before collecting primary data in order to avoid too much expenses.

This part of the research provides a detailed market environment study of the selected markets (Denmark, Czech Republic, Portugal and Greece) one by one in accordance to the above identified list of criteria.


3.1 Danish Market

General economic indexes:

General information about Denmark and its economics shows that this is economically developed and successful country, member of European Union, with GDP equal to $174,400,000,000 USD[1] and GDP per capita equal to $32,200 USD in 2004 (by the way it is one of the highest indicators in the world), unemployment rate equals to 5.3 percent, inflation rate equals to 2.4 percent; Denmark external debt equals to 21,700,000,000 USD. The same source claims that there is not a single man in Denmark, who lives in poverty. Quite high salaries, high living standards and good social policy (almost free medicine, financial help to elders and unemployed, almost free education) of the government provide high purchasing capacity in Denmark. Researches shows that typical family expenses in Denmark include 17 percent on food, drink and tobacco[2]. From this information it can be assumed that average statistical Dane can afford drinking malt whiskey that is provided by ‘The Olde Distillerie’ company.

Drinking preferences:

As it is stated in the traveling guide “…beer, the most popular Danish drink, at all levels of society …”[3] but it was also mentioned that Danes do not neglect spirits at all and often accompany beer with spirits. Moreover Danes like alcohol and it is widely available to the citizens. Applying to the statistics it is important to mention that “Danes now drink an average of 11.5 litres of pure alcohol each year”[4]. Youth (16 – 24 years) is the most widely presented age category in alcohol drinking statistics and thus national health organization is worried much about that problem – they claim youth consume more and more alcohol. The second large category is elders (after 60), adults (30-35) do not drink a lot of alcohol.

So it can be concluded that Danes drink whiskey in spite of the fact that beer is their national drink.

Investment Climate:

a. General information:

Denmark has quite stable and dynamic economics, political stability and developed legislation – as the evidence of stability Denmark is a member of European Unity (which in turn lays down strict conditions for its members), WTO (World Trading Organization), WCO (World Customs Organization), OECD (Organization for Economic Cooperation and Development) and other international trading organizations. Thus Denmark is quite open country for foreign investors (for instance 375 companies from the United States of America have opened their subsidiaries in Denmark!). Many international corporations establish their headquarters in Copenhagen, the capital of Denmark, because its liberal legislation and developed infrastructure. Moreover Danish government established ‘Invest in Denmark’ agency in order to attract potential investors to the country. Foreign companies can receive credits on the same conditions as domestic. Country can be characterized by stable and developed banking system and financial market.

b. Taxation:

Income taxation system in Denmark bears progressive character (it means the more you earn the more taxes you pay). Corporate taxation is one of the lowest in the European Union (28 percent of the taxable profit) and is a subject to be paid twice a financial year, “Dividends paid by foreign subsidiaries in Denmark to their parent company are not subject to Danish taxation provided the parent company has owned at least 20 percent of the share capital for a continuous period of at least one year”[5]. In the opposite, personal income taxation is one of the highest in the world and takes almost a half of taxable income.

Moreover, value added tax (VAT) is paid by enterprises while producing goods and services (25 percent from the ”difference between VAT paid on purchase and VAT levied on sales”[6]).

The excise duties on alcohol are imposed in accordance to European Union rates: minimum 2.2 Euro per litre of a product (considering spirits).

In order to establish a corporation its capital must be approximate to 75,000 USD. In order to establish a company with limited liability its capital must be approximate to 20,000 USD.

Employers do pay very low rate of social contribution (1.37 percent only[7]) and thus workforce cost is decreased significantly.

One more important trait of the Danish taxation system is that in 2002 it was frozen – it means that tax rates can not be increased any more.

c. Legislation:

Legislative system of Denmark has all necessary laws and regulations for developing business in the country as well as for domestic and foreign companies, and does not make any serious obstacles for entering the market and operating on it. All regulations are transparent, consistent and correspond to the international law standards.

d. Corruption:

“According to the Transparency International, Denmark has the third lowest level of corruption in the world”[8]. Thus this question will not raise while making business in Denmark probably.

e. Competition:

Competition in Denmark is extremely high. There are almost all whisky types and marks. There are plenty domestic (Danish Distillers, Juul’s Vinhandel etc) and foreign competitors (Irish, Scottish, USA etc) in each price segment. Competitors sell whiskey online, in shops and have good distribution networks already. Thus it will be quite difficult to enter this market and it will take a lot of money to provide corresponding marketing support.

f. Entering barriers and other disadvantages:

Unfortunately, there is only one place in Denmark where duty-free (tax-free) products can be sold – Copenhagen Free Port.

Notwithstanding the fact that European Union members closely collaborate with each other, Danish legislation requires all foreign companies to open bank accounts in one of Danish banks.


3.2 Czech Market

General economic indexes:

Czech Republic is a quite young country from the point of independency, situated in the Eastern Europe, and a very young member of European Union (entered 1 May, 2004). Its GDP equals to $172,200,000,000 USD approximately (this is quite large indicator for such country), GDP per capita equals to 16,800 USD approximately, inflation rate equals to 4,7 percent, unemployment rate equals to 8,5 percent; Czech external debt equals to 24,600,000,000[9]. Czech economy has overcame a crisis recent years but now it is a stable country splendid. Now Czech Republic can be characterized as a quite stable country concerning policy, legislation and economics.

It is difficult to imagine that average statistical Czech can afford drinking expensive whiskey (70 pounds per litre), but obviously Czechs can afford whiskey from cheap and average price segment especially taking into consideration Czech ‘passion’ for spirits and alcoholic beverages.

Drinking preferences:

Czechs are one of the world’s leaders in consumption of beer (they are beer lovers) and do not drink lot of spirits as a rule. There is even a category of ‘beer culture’ exists in Czech Republic. Researchers claim that Czechs consumed 9.9 litres of 100 percent alcohol per capita in 1999th, 159 litres of beer and 8.3 litres of spirits per capita the same year[10]. It looks like Czech market can consume a lot of whiskey if there would be an effective marketing strategy developed because spirits can be found at any bar, restaurant or supermarket and statistical indicators prove that.

Investment Climate

a. General information:

After the collapse of the Soviet Union, Czech Republic gained independency along with economic crisis but Czechs surmounted it and were good to attract lots of investors. Large foreign investments restored the economy, reduced unemployment and inflation rates, and brought stability to this country. Nowadays there are plenty investments from the world (USA, European Union countries, Russia etc) and this is the indicator of the openness to the investments. Country is a member of WTO, ITC (International Trade Council), Organization for Economic Cooperation and Development (OECD) and other international organizations. In addition there are eleven duty-free (tax-free) trade zones and free ports in this country – this makes favor to the distribution system of ‘The Olde Distillerie’ company.

b. Taxation:

It is an interesting fact that both foreign and domestic companies in the Czech Republic are subjects to the same taxes. Income taxation system bears progressive character. Personal income tax rates vary from 15 percent – 32 percent from taxable income, corporate income tax 26 percent from taxable profits, in addition there is “15 percent tax imposed on dividends paid by Czech corporations”[11].

Employers have to pay large social contributions – 35 percent from the wages fund (gross salary).

Value added tax (VAT) rate equals 22 percent and applies to all goods and services sold in Czech Republic. The excise duties on alcohol are imposed in accordance to European Union rates: minimum 2.2 Euro per litre of a product (considering spirits).

Thus taxation is quite heavy in this country.

c. Legislation:

Most Czech laws and regulations correspond to the legislation of the European Union and international law, they are transparent and consistent. Thus there is not expected any troubles with jurisdiction in this country except for bureaucracy.

d. Corruption:

In spite of strict punishments and penalties corruption in Czech Republic still exists and prospers – especially when registering foreign companies, obtaining licenses etc. Government struggles with bribery but results are not visible still.

e. Competition:

There is expected a high competition in the Czech Republic because there are 11 tax-free trade zones where most whiskey producers sell their products and taking into consideration that Czechs consume lots of alcohol yearly it is very profitable to sell alcohol in this country.

Regardless of the fact that Czech Republic is a member of European Union all foreign corporations have to open bank accounts and perform all transactions in Czech banks.

f. Entering barriers and other disadvantages:

While making business in this country many companies faced with bureaucracy and corruption which slowed down their prospering and business activities (especially in registering companies).


3.3 Portuguese Market

General economic indexes:

Located in the South-Western Europe Portugal serves as a gateway to Europe. Its GDP equals to 188,700,000,000 USD, GDP per capita equals 17,900 USD; inflation rate equals to 4.4 percent, unemployment rate equals to 4.4 percent, Portuguese external debt equals to 13,100,000,000 USD[12]. Portugal is a member of European Union since the previous century. Its economy is stable and transparent. Thus people can make business in accordance to the laws of market economy. It can be assumed that the average statistical Portuguese can afford drinking whiskey from average and expensive price categories if other things being equal.

Drinking preferences:

Portuguese Madeira is a symbol of wine. Portuguese prefer drinking wine, but spirits consumed with pleasure too. A statistical research in 1997 – 1998th discovered that “In Azores about 15 percent of population over 14 (190.000) drink from one to more than five times a day (and it is estimated that at every time 2 to 3 drinks are consumed), while other 15 percent drinks 2-3 times a week, also with 2-3 drinks a time”[13]. Consequently it can be assumed that Portuguese market can consume lots of spirits and alcoholic beverages.

Investment Climate

a. General information:

Portugal is considered to be open for foreign investments and its government even established an Agency for investment in Portugal, which “acts as a one-stop shop for investors with projects over 25 million Euros”[14]. This agency provides all necessary steps to improve Portuguese investment climate, prints articles and guides about its economy, provides different kinds of incentives (subsidies, credits and tax cuts) etc. Moreover Agency for investment in Portugal has developed very flexible conditions when determining which subsidies and grants should be given to each foreign investor depending on amount of investments, business sector and other factors (detailed information can be found at agency’s web-site http://www.investinportugal.pt/). Most Portuguese industries are open for foreign investments except for several (defense, water supply, transport, telecommunications etc) which require additional licensing and other procedures but this situation is typical for all countries of the European union.

About 74 percent of investments in Portuguese economy come from European Union, then from United States and Japan. Political risks are minimal in Portugal.

Portugal is a member of World Trading Organization, World Customs organizations, Organization for Economic Cooperation and Development and other international economical and trading organizations.

b. Taxation:

Portuguese income taxation system bears progressive character: individual income tax rates varies from twelve up to forty percent of the taxable income; corporation income tax rate equals 27.5 percent (consists of 25 percent federal rate plus 2.5 percent local rate) of the taxable income. A good news that companies which operate in free-trade zone of Madeira pay reduced income tax (5 percent – 12.5 percent).

Value added tax (VAT) applied to all goods and services sold within Portuguese but in free-trade zones it is significantly reduced. Its rate varies from 5 percent to 21 percent: standard rate – 21 percent, intermediary rate – 12 percent and reduced rate – 5 percent; in free-trade zones these rates are 15 percent, 8 percent and 4 percent correspondingly[15].

Excise duties on alcohol and alcoholic beverages are driven by European Union’s one: minimum 2.2 Euro per litre of a product (considering spirits).

Social obligations are quite significant and equal to 27.5 percent of the wages fund.

Moreover, 25 percent of tax is levied from the corporation dividends.

In general taxation in Portugal is quite significant but it can not be considered as too heavy. But taking into consideration possible benefits from subsidies, grants and tax cuts available for foreign investors, Portuguese taxation can be considered as moderate.

c. Legislation:

Unfortunately legislation and all other ‘nodes’ (court system, registering committees etc) which are closely connected to the law can be characterized with bureaucracy and extreme slowness. For instance, as it is stated in the “2005 Investment Climate Statement – Portugal” by US Department of State: “It takes, for example, an average of 420 days for a bounced check case to wend its way through court system, double the EU average”. However Portuguese legislation includes all the laws regulating economy and its issues (bankruptcies, mergers etc) in accordance to European Union’s laws and international law. In general Portuguese regulation are transparent and consistent enough.

d. Corruption:

“Corruption is a relatively limited but enduring aspect of the business culture in Portugal … Portugal ranked 27th out of 145 countries considered (listed from least to most corrupt)”[16]. In the same source it is stated that American companies facing bribery and corruption do not consider it to be serious obstacles.

e. Competition:

There are all major whiskey producers presented in the Portuguese market in supermarkets, restaurants, bars and free-trade zones. It is possible to buy almost any kind of whiskey online with delivery within several days. So competition is quite serious but of course there is a space for new ‘players’.

f. Entering barriers and other disadvantages:

There often occur problems with Value added tax (VAT) calculations and foreign companies registration in Portugal.

One more disadvantage of the Portuguese market is that there are only two tax-free (duty-free) trade zones (Madeira and Azores) but they are developed enough.


3.4 Greek Market

General economic indexes:

This country is quite economically and politically developed and stable recent years, but it is the fact that it is one of the poorest members of the European Union members. Moreover, some European representatives consider that Greece is a drain on the overall European Union’s economic results. The GDP of Greece equals to 226,400,000,000 USD approximately, the GPD per capita equals to 21,300 USD approximately (these are good indicators for Greece); inflation rate equals to 3.4 percent, unemployment rate equals to 11 percent (quite large indicator), external debt equals to 57,000,000,000 USD, industrial growth rate in Greece makes 7 percent a year[17]. All these indicator prove that Greece is a developed country and its average statistical citizen can afford drinking expensive spirits such as whiskey from most price categories.

Drinking preferences:

Greece is a very ancient country with long and interesting history. From the very beginning of a Greek history its population consumed alcohol especially wine. Wine was an essential attribute of the meals. Of course spirits are not alien to Greeks.

So malt whiskey are completely compatible with the Greek market of spirits.

Investment Climate

a. General information:

Greece is a member of many international business organizations such as World Trading Organization, World Customs Organization and others. Its major investors are European Union members and the United States of America. Greek economy is not so open to the foreign investments as other countries are even though there was established an agency which has to attract investments to Greece (the Hellenic center for investments or ELKE). However Greek government makes steps and improvements to make investment climate in Greece more attractive to foreign investors (for instance subsidies and other incentives). Domestic investors have privileges comparing to the foreign one. But despite of investor’s origin they receive significant incentives if operating in the less developed Greek regions.

Banking system and financial sector correspond to the norms of the European Union and developed enough. Getting a credit in Greece is not very complex procedure both for domestic and foreign investors.

b. Taxation:

Greek income taxation system bears progressive character. Personal income tax rate varies from 5 up to 40 percent of personal taxable income. Corporate income tax rate equals to 32 percent from the taxable profits (but there is an exception for partnerships – income tax rate equals to 25 percent).

Social contributions from employers equal to 28 percent of the wages fund.

From 2005th year value added tax (VAT) in Greece equals to 19 percent (this is not too much for European country). VAT is imposed on all goods in services which sold within a country. Additionally there is a reduced VAT rates exist in Greece (9 percent and 4.5 percent).

Dividends paid are not subject to Greek taxation provided[18].

So taxation rates are quite moderate in Greece.

c. Legislation:

There is an expropriation of private property possible in Greece under certain conditions but in such case all costs will be refunded to the owner. All commercial laws are harmonized with international law and the legislation of the European Union. Thus Greek legislations and regulations can be considered as transparent and consistent so-called: “Foreign companies, however, report that they have encountered cases where there are multiple laws covering the same issue, resulting in confusion over which law applies in which situation”[19], and very complicated! Very often Greek courts often make controversial and not logical decisions.

d. Corruption:

The problem of corruption obviously exists in Greece. The officials of all ranks are involved in bribery (up to ministers). Greek legislation provides severe punishment and penalties for corruption and bribery, the government actively struggles against these phenomenon.

e. Competition:

One of the most significant Greek branches of economy is tourism. Hence tourists consume lots of Greek goods and services each year and fulfill the budget significantly. This factor makes all major producers of alcohol and alcohol beverages to sell their products in Greece. Consequently competition on a Greek market is quite developed and it would not very easy to enter this market without the appropriate marketing strategy and finances.

f. Entering barriers and other disadvantages:

A disadvantage of Greece market is that there are only three free-trade zones “located at the Piraeus, Thessaloniki, and Heraklion port areas”[20].

Another disadvantage of investing money in Greek economy is that intellectual rights are not protected on adequate level, trademarks are not protected too. Thus there can occur misunderstandings and frauds.


4. Comparative Market Attractiveness Analysis

So finally all potential markets thoroughly researched and all disclosures can be analyzed and assessed adequately. This part of the report is devoted to the detailed comparison of the above described marketing environments with the purpose of identifying which one of them is the most suitable and attractive for ‘The Olde Distillerie’ company to provide more detailed marketing research before entering.

First of all the general economic indexes will be analyzed and assessed. All the countries are the members of the European Union, one of the most developed unions in the world by the way. European Union has strict requirements to its members related to economic indexes, legislation, regulation and many others. So Denmark, Czech Republic, Portugal and Greece satisfy these requirements and thus their economical environment is quite developed and prosperous and these countries do not live in poverty. Taking into consideration GDP per capita, GDP and population, the best economic indexes are in Denmark (because such a small in comparison population makes such a great GDP and GDP per capita) and it is obvious that the average statistical Dane can consume malt whiskey of any price segment depending on their tastes and preferences. Other countries have almost equal population but different GDPs. Of course Greece takes the second place in comparison of economic indexes. After Greece there go Portugal and Czech Republic (see Table 1: Comparison of general economic indexes).

Country


GDP


GDP per capita


Population

Denmark


174 400 000 000 USD


32 200 USD


5 432 335

Greece


226 400 000 000 USD


21 300 USD


10 668 354

Portugal


188 700 000 000 USD


17 900 USD


10 566 212

Czech Republic


172 200 000 000 USD


16 800 USD


10 241 138

Table 1: Comparison of general economic indexes.

Secondly, drinking preferences will be analyzed and assessed. Of course it will be quite abstract assessment, because secondary data can not give very accurate results and there was no available the latest and the uttermost secondary data for free usage. Danes do drink a lot of beer, but spirits are consumed a lot too. Czechs are ‘beer lovers’ too and Czech Republic is a world leader in consuming beer, but Czechs do drink spirits. Portugal is a very ‘drinking’ nation: they drink a lot of wine (including fortified wine) and spirits of course. Greeks do drink a lot of alcohol and beverages too, but the amount of consumed alcohol is increased because there are many tourists in Greece and they make their contribution to the statistics. From these assessments Portugal is the most suitable candidacy for drinking malt whiskey; then go Greece, Denmark and the last number – Czech Republic. Denmark and Czech Republic shared the last places because their national drink is beer and it is not very like that suddenly Danes and Czechs will shift beer for malt whiskey. Wine is more strong drink and is much more closer to spirits. That is why Portugal and Greece took the first places.

Thirdly, there will be investment climates of each candidacy compared and analyzed thoroughly. Investment climate is a very important factor, because in order making business overseas is a quite hard and risky action. Many international companies faced a lot of obstacles on the international market: some of them survived another failed. Very often companies failed because of inaccurate and not thorough analysis of the marketing environment. For these reasons this section can be considered as the most significant from all.

All the concerned candidacies except for Czech Republic have their own agencies for attracting foreign investments but some agencies work more efficiently and provide more incentives than others do. ‘Invest in Denmark’ agency works efficiently but does not offer any incentives at all. Czech Republic has lots of foreign investments already and this tendency goes on but Czechs do not make a lot to improve the situation and do not offer significant incentives for foreign investors. The Portuguese ‘Invest in Portugal’ agency offers the largest amount of incentives for the foreign investors, including tax cuts, subsidies, grants, credits and much more. Greece has also its agency for attracting foreign investments but it does not work in the most effective way. All the countries are members of numerous international trading organizations such as WCO, WTO etc. Considering the openness of economics to foreign investments the most attractive country is Portugal, then goes Denmark, Czech Republic and Greece.

Taxation is one of the most influential indicator because it directly affects the profitability of the business and many other economic indicators. Since the European Union is a very developed region the taxation in its countries is quite heavy but varies a lot from country to country. In this report only major taxes covered which can directly affect the profitability of ‘The Olde Distillerie’ company’s business. Among them there are the following: Value added tax (VAT), excise duties on spirits, corporate income tax, personal income tax, tax on dividends and social contributions of employers tax. All those taxes can be reviewed in the Table 2: Taxation Analysis.

Country


Taxation



Personal


Corporate


VAT


Excise (per litre min)


Dividends


Social Contribution

Denmark


up to 50%


28%


25%


2,2 Euro


0


1,37%

Greece


5-40%


32%***


19%****


2,2 Euro


0


28%

Portugal


12-40%


27,5%*


21%**


2,2 Euro


25%


27,50%

Czech Republic


15-32%


26%


22%


2,2 Euro


15%


35%

Table 2: Taxation analysis.

* Reduced rates can be applied for the companies which operate in the free-trade zones at the rates 5% – 12.5%.

** It is the maximum rate but there are reduced rates also exist 12% and 5% (8% and 4% are reduced VAT rates for the companies operating in the free-trade zones correspondingly).

*** Reduced rate equals to 25% for some kinds of partnerships.

**** There are reduced rates also exist 9% and 4,5% correspondingly.

Denmark can be characterized with quite serious and heavy taxation system for private persons and quite light taxation considering corporate taxation. Greece taxation rates are somewhere in the ‘golden middle’ and are moderate both for personal and corporative businesses. Portuguese taxation system is very close to the ‘golden middle’ and its tax rates can be considered as moderate enough. But with some efforts it will not be very difficult to receive incentives from ‘Invest in Portugal’ agency and thus the Portuguese situation in taxation rate turn around and reach ‘light’ category. Czech taxation system can be characterized as heavy especially taking into consideration its economics (it is very developed in comparison to other countries and takes the last place in GDP per capita rating). In addition there are no any interesting incentives for investments in this country. Consequently, the most attractive taxation rates by the right belong to Portugal, then go Greece, Denmark and Czech Republic takes the last place.

Imperfect legislation can bring many problems for companies as for domestic as for foreign. In order to make a good business in the country there should be transparent and consistent legislation and regulations. Danish legislation has all the necessary laws which are harmonized with international law and European Union’s requirements. Thus there are no problems expected in Denmark. Czech legislation is transparent and consistent too: all the regulations satisfy European and international requirements. Portuguese regulations can not be characterized as absolutely transparent and consistent despite the fact that they correspond to the international and European standards. There can some problems occur but they are not serious (especially when registering foreign companies). Greek legislation is the worst from the list of concerned countries but all the problems can be solved with bribes.

Corruption is a factor which can create many problems and obstacles but only in case when the bribery rates are too high. Denmark has the lowest corruption level from the concerned countries and the third lowest corruption level in the world. Then go Portugal, Czech Republic and Greece. In general corruption is not a serious obstacle in the concerned countries.

Competition is a very serious indicator too because it makes companies to struggle for the clients using different approaches: from damping to marketing programs. Inasmuch as all concerned countries are the members of the European Union, competition is approximately on the same level in each country (for example there are plenty on-line spirits shops which claim to deliver any kind of the malt whiskey to any country of the European Union within several days). In general secondary data analysis can not give the appropriate and adequate facts about competition – it gives just general concept about competition. So obviously all major spirits’ producers are presented on the European market. Greece and Portugal are more attractive than Denmark and Czech Republic from the point of competition.

Considering other barriers and disadvantages Denmark has only one free-trade zone; Czech Republic can be characterized with bureaucracy and slow court system; Portugal has some problems with the calculation of the Value added tax; Greece has problems with protection of the trademarks and so on.

From all researched countries Portugal seems to be the most attractive because of the main following reasons:

1. it is economically developed country;

2. Portuguese consume wine and spirits a lot;

3. Portugal is a very attractive place for investment;

4. Taxation level is moderate;

and some other factors. So in any way Portugal is worth of more detailed research in order to successfully enter its market. After Portugal there can be researched in details Greek market.

5. Proposed Market Entry Strategy

As far as ‘The Olde Distillerie’ is a small company it will be a good practice to establish a joint venture in Portugal. Because all the risks and investments will be shared among partners. If the partner will be a domestic company then it would be much easier and cheaper to collect primary data and provide a complete marketing research. Partners can share their experience and develop an efficient distribution system together. Easier and cheaper logistics and transportation and much more benefits can be shared.

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