8.1 New chances for competitive advantage in Poland

The future enlargement of the European Union (EU) by up to 13 member states ^[1] will offer new opportunities to Western companies that choose to operate in these countries . From an economic perspective, special attention has to be paid to the markets of the future members . The first Central and Eastern European (CEE) candidate states will be integrated into the EU by 2004. Poland is expected to be among these entrants, provided no unforeseen difficulties emerge in respect of the required budget stabilization and economic consolidation.

With a population of 38.6 million Poland is the largest economy to apply for EU membership. Although currently facing a recession , which is ascribed to internal problems, Poland is considered one of the most successful transition economies. The ˜ shock therapy programme implemented during the past decade has changed the economy to a market system and privatized numerous state-owned companies. Today the private sector accounts for more than 70 per cent of economic activity. On the whole Poland offers an attractive sales market for West European companies (Manrai et al., 2001; Tewes, 2001) but in order to capitalize on this a systematic strategical approach is needed by new entrants and established companies alike.

Against this background, the key question of our research is how foreign companies can gain competitive advantage in the Polish market and thus reach the position where customers perceive their products and services as superior to their competitors offerings, that is, of better quality or better value. To answer this question we shall first outline the concept of strategic planning. Then a theoretical foundation is derived from John Dunning s ˜eclectic paradigm of international production (Dunning, 1988, 1993, 1995), which enables in-depth analysis of competitive advantages and strategy parameters. As the CEE markets, which were isolated until the late 1980s, provide a unique opportunity to test theories of internationalization (Peng and Heath, 1996, p. 493), the results of a survey of market entry behaviour by Western companies in CEE are used to validate our theoretical findings.

^[1] The applicants include Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, Malta, Cyprus and Turkey. Most applicants are expected to complete their contractual negotiations by the end of 2002. Turkey, however, will not be able to start membership negotiations until certain reforms have been implemented (Ausw rtiges Amt, 2001).