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Belgium Pepsi – Spadel Alliance

Belgium Pepsi – Spadel Alliance. By: Chae Torres, Kelley Regan, Mary Hayes, Brynn Curry. Introduction to Belgium. Kelley Regan. Introduction. Belgium A small country in Western Europe Capital: Brussels Belgium’s Borders France Germany The Netherlands The North Sea Area

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Belgium Pepsi – Spadel Alliance

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  1. BelgiumPepsi – Spadel Alliance By: Chae Torres, Kelley Regan, Mary Hayes, Brynn Curry

  2. Introduction to Belgium Kelley Regan

  3. Introduction • Belgium • A small country in Western Europe • Capital: Brussels • Belgium’s Borders • France • Germany • The Netherlands • The North Sea • Area • 11,787 square miles • about the size of Maryland

  4. Introduction Cont’d • People • Population 10.4 million • 79.8 year life expectancy • 99% literacy rate • Labor force: 5.189 million • Religion • Approx. 75% Roman Catholic • Approx. 25% Protestant and other religions • Currency • Euro

  5. Economy • Economy • Developed ,depends heavily on world trade • Modern, open, and private-enterprise- based • Capitalizes on geographic location, and transport network • Industries • Engineering , metal products, motor vehicle assembly, processed food and beverages, chemicals • Agriculture • Sugar beets, fresh vegetables, fruits, grains, beef • Exports • Machinery and equipment, chemicals, diamonds, metals, and metal products

  6. Economy Cont’d • Natural resources • coal and natural gas • Imports • raw materials • Three quarters of trade is with other EU countries • 2012 • Reduced budget deficit to 3.3% of GDP, Goal of 3% • GDP (PPP) $427.2 billion; GDP (per capita PPP) $38,500 • Exports: $315.4 billion • Imports: $322 billion • External debt: $1.424 trillion • exchange rate: euros per dollar .7778

  7. Political and Legal System • Government system • Federal parliamentary democracy under a constitutional monarchy • October 4, 1830 provisional government declared independence from the Netherlands • July 21, 1831 King Leopold I ascended to the throne • Current King, Philippe, son of King Albert II, is Chief of Staff • Prime Minister, Elio Di Rupo is the Head of Government • Legal system • Civil law system basedon French Civil Code

  8. Political and Legal System Cont’d • Judges • Appointed for life by the monarch • 1993 • Constitution revised to create a federal state • Legislative powers • national, regional, and community levels • Giving political representation to French, Dutch and German cultures • Europe’s most costly political system • 6 governments, 57 ministers and state secretaries ,seven parliaments and a dozen provincial government • Increasing national debt may be due to this system

  9. Country Risk • Country Rating • A2, political and economic situation is good • Business environment: stable and efficient • Corporate default probability: low on average • Business Climate Rating • A1, business environment is very good • Corporate financial information: available and reliable • Debt collection: efficient • Institutional quality: very good • Intercompany transactions: run smoothly

  10. Technology • Brussels • Home to main EU institutions, key decision-making center and hotbed of economic activity • Many lobbyists, ranking it second ,behind Washington DC • Recent interests • Scientific research, space travel, medicine, biochemistry, pharmaceuticals and IT

  11. Human Rights • Promotion and protection of human rights • Priority at the national level and in relations with other countries • Priority subjects in Belgian human rights • Abolition of the death penalty • Protection of the rights of women • The fight against discrimination of all forms especiallysexual orientation • Department of Foreign Affairs in Brussels works withdefenders of human rights • Pioneering at international level to defend andadvance human rights

  12. US-Belgian Relations • US – Belgian diplomatic relations • Began in 1832 independence declared from the Netherlands • US provides no development assistance to Belgium • Goal • diversify and expand trade opportunities with non-EU countries • Many US firms have their European headquarters in Belgium • US companies have investments in • the chemical sector • automotive assembly • petroleum refinery • pharmaceutical sector • Property rights • Well protected by law, as is the right to acquire or sell interests in business enterprises

  13. Belgian Culture Mary Hayes

  14. Family and Home Life • Family • Priority • Stay in town • Close extended family • Close Community • Home Appearance • Sweep/Scrub sidewalks • Tidy homes • Tidy gardens • Good lawn care

  15. Home Socializing • Written invitations and RSVP • Flowers or quality chocolate • Liquor and wine

  16. Business Etiquette • Bureaucratic meetings, paperwork • Socialize before business • Subtlety vs. directness vs. confrontation • Appearance • Difference of men and women • Never remove your jacket

  17. Business Etiquette Cont’d • Meetings • Greeting • Appointments • July, August, Holidays • Language • Business Cards • Dutch and French

  18. Employment and Business • < 90 days: Declare arrival, U.S. passport accepted • > 90 days: Visa, electronic residence card • Eligible for residency in 3-7 years

  19. Doing Business • Easy Access • Central location is gateway for exports • Antwerp, Leige river port, Leige Airport,Brussels Airport- Keys to export • U.S. Embassy in Brussels • Support to American firms • Banks • Top 5 hold 80% of deposits

  20. Doing Business Cont’d • High urbanization, dense transportation • 3/4th of trade is with EU • U.S. ranked 5th in trade with Belgium • Corporate taxes 33% • Innovation, quality, competitive pricing

  21. Belgians as Negotiators Brynn Curry

  22. Culturally Accepting • Foreign business experienced • Culturally open-minded • Two cultures • Flanders (Flemings) • Wallonia (Walloons) • Avoid discussing differences

  23. Interpersonal Relationships • Build lasting, trusting relationships • Respect: Education and achievement • Gifting is rare • Invites to home, consider flowers

  24. Communication • Flemings and Walloons dislike being addressed in others language • Use English • Ask for language preference • Tone, emotion, and personal space similar to U.S.

  25. Meetings • Schedule well in advance • Send agenda proposal • They may add items • Allows information gathering time • Follow agenda • Be punctual

  26. Overall Business Atmosphere • Easiest to stay formal • Similar to U.S. • DO NOTs • Use exaggerations • Use sarcasm • Use overly aggressive approach • Precise facts

  27. Joint Problem-Solving • Both sides create agreements • Cooperative • Open to compromise • Believe in Win-Win • Logical reasoning for disputes

  28. Pace of Negotiations • Long information gathering time • Belgians share some information • OK with asking for information(not about salaries) • Use list of objectives(Ensure an effective agenda)

  29. Final Decision Making • No haggling • Bargain for common-ground • Belgian pressure techniques • Opening with best offer • Serious final offers • Do not try to manipulate No haggling!

  30. Post-Meeting Document • Create document of meeting • Meeting details • Main points • Decisions made • Corrects misunderstandings • Complete this step before creating legal contracts

  31. US and Belgian Company Alliance Chae Torres

  32. Spadel Group • Family owned • Free of chemicals and does not undergo treatment • Beneficial health effects • Export to 6 of the 28 EU countries • 1925 introduced carbonated drinks • Just acquired Carola Water • Newest packaging is 100% recyclable • Sustaining health and the environment http://www.spadel.eu/images/header.jpg

  33. Packaging

  34. Packaging Cont’d http://www.levensmiddelenkrant.nl/uploads/foto/Spadel.jpg

  35. PepsiCo • Beverages and food industry • Expanding global market with large distribution • Global campaign “Live for now” • $13 million net revenues in Europe • Aquafina • Utilizes public water • HydRO-7 • Eco-Fina • 50% less plastic http://ecoki.com/wp-content/uploads/eco-fina.jpg

  36. Formalizing an Alliance • Joint venture agreement • Non equity • Continue the Spa Water product • PepsiCo resources willbe used to distribute • Contract on detailsand profits • Increase globalcompetitiveness

  37. Marketing Strategy • Spa Reine for nursery water • Safe for preparing formula • Free from pollutants • Low mineral contents ofnitrates and sodium • Continue European marketing • Customize American marketing for nursery water and ahigh-end pure water http://www.spadel.eu/images/biberonDessin01.jpg

  38. Organizational Structure • Staffing may need to increase • Organizational structure and culture are similar • Employee Representation Council • Both companies have awards for their business strategies http://www.docnews.fr/data/classes/actualite/actu_5199_vignette.jpg

  39. Future Possibilities • Including Spadel’s sodas and flavored waters • Including Wattwiller, Bruand Brecon-Carreg bottled waters http://popsop.com/wp-content/uploads/bru_03.jpg

  40. Questions? http://www.spadel.eu/magazines.html

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