sunnuntai 5. helmikuuta 2012
"Finland - the place to be"
Waiting for April to come...@ Helsinki-Vantaa airport
In the meanwhile...@ Antwerp
Hazelnut Hot Chocolate..mmm...
If this Starbucks cafe was in Finland, my name would be spelled correctly (Kosti)
To kick off my great plan, I will start by describing why Finland is such an attractive market for Starbucks.
Starbucks serves coffee. As it happens, we Finns like to drink coffee – a lot. There you go! It’s a match made in heaven.
Despite that you’re probably jumping out of excitement at the moment, I’m guessing you need more proof than that so here you go: In 2010 the average Finn consumed 10 kg of coffee (1) ( ; that is, 4-5 cups per day. (That means, one Latte to kickstart the morning, a Macchiato for lunch, a Frappucino for dessert and a nice espresso after dinner. Can you already see the dollar signs blinking in front of your eyes?)
Finns were also listed as the top coffee drinking nation in Bloomber Businessweek in 2010: The top 50 coffee countries. (2)
One could say that we Finns are world champions in coffee drinking.
In comparison, according to Harvard School of Public Health, Americans drink 3.1 cups of coffee per day on average.(3)
There are, Starbucks stores in US. In Finland, the number is 0. Now look again at the coffee consumption statistics. Are you getting my point?
Okay, let’s get serious for a while.
Besides Finns’ coffee addiction, there are many other factors that make Finland such a great place for doing business. We may be a small country in terms of population (5.3 million) but we are a rather affluent country: in 2010 our GPD per capita was $ 44,489 which is slightly lower than in US but higher than in UK for example. Our GDP has been rising steadily with other advanced economies excluding a couple of hiccups such as the depression in the beginning of the 90’s and the financial crisis.
According to World Economic Forum’s 2011-2012 Global competitiveness report Finland is the 4th most competitive country in the world, beating the US by one rank. What makes Finland so competitive and more importantly, why is Finland a great place for a company like Starbucks?
First of all, Finland has a stable macroeconomic environment. Sure the financial crisis has left its marks in government debt and budget balance but the country credit rating is still high (92,5/100). Businesses also appreciate the reliable legal and political institutions and highly protected property rights.
Secondly, importing to Finland is child’s play. Being an EU country, Finland has low barriers to trade. As a port city, Helsinki is an attractive location for Starbucks when considering the importing of coffee. Besides ports, the quality of railroads and overall infrastructure is high in Finland. Customs procedures are highly efficient which saves time and money.
Finland is known for its educated workforce and the quality of primary education in Finland is considered best in the world. What about potential customers? Finns are sophisticated buyers that are used to good service and being attended to by businesses which is good news for a coffee shop that wants to offer an experience for its customers with higher than average prices (yes, I’m talking about Starbucks). Consumers particularly in Helsinki are trend wise and the city itself is becoming more international. New international brands are welcomed with open arms and Starbucks is likely to be no exception.
However, with qualified workforce comes restrictive labor conditions and high wages. Hiring and firing practices are more regulated than in the US and wages are set as a result of a centralized bargaining process, not freely by individual companies. Tax rates are also high, however, the total tax rate is still lower than in the US (44,6% < 46,8%). (4)
4. http://reports.weforum.org/global-competitiveness-2011-2012/ “