Estonia

Ksenia MolchanovaYang Ke (Eric)

Bennett Gackle

Demographics

• 1,307,605 people • Growth rate of -0.632 percent • The average age in Estonia is 39.6 years – Romania = 36.1 years– Germany = 43.4 years– Finland = 41.8 years– United States = 36.7 years

• 69 percent of the population is living in urban areas.

Government

• Very stable. • Parliamentary republic • Gained its independence on August 21, 1991• Joined the European Union in 2004. • Rated 17th in the world for ease of doing

business. • No social unrest in the political structure.

Government (cont’d)

• Economic trade barriers are low. • Huge openness to foreign direct investments. • Many investment banks from foreign nations

elect to set up firms within the countries borders.

• Analysts believe the Euro will not be adopted until 2011.– 1 United States Dollar = 11.4795 Estonian Krooni– 1 Euro = 15.6466 Estonian Krooni.

Economics

Economics (cont’d)

• GDP = $29.35 billion (in US Dollars) at purchasing power parity

• Growth rate = 7.1 percent per year • GDP per capita in US Dollars is $21,100 per a

2007 estimate • Inflation rate = 6.6 percent • Unemployment rate = 4.7 percent

Economics (cont’d)

• Tourism is currently on the rise • Growth in alternative sources for energy • Growing disparity between Talinn and the rest

of the country • Incomes of Talinn are significantly higher than

the rest of the nation

Economics (cont’d)

• Inflation rate must be reduced to 3 percent before the Euro can be introduced

• Apart of the World Trade Organization • Tariffs were put in place to protect agricultural

businesses

Economics (cont’d)

Physical Infrastructure

• Shipping goods by sea from the United States to Estonia is relatively easy and available.

• Gateway country to Russia and the city of St. Petersburg.

• The M-box can get a lot of exposure to both the Tallinn and Helsinki markets ports of both countries.

Physical Infrastructure (cont’d)

• 968 kilometers of railway stretch across Estonia.

• 56,856 kilometers of roadways in Estonia – 13,000 kilometers are paved– 99 kilometers paved as expressways

• 19 airports are scattered throughout the country (CIA Factbook).– 12 of these airports have paved runways – 7 have unpaved runways (CIA Factbook).

Communications Infrastructure

• Programmers designed the program Skype • 382 phone lines per 1000 people.• 1,236 cell phones per 1000 people. • 483 computers per 1,000 people.

Communication Infrastructure (cont’d)

• 760,000 internet users• Many bars, cafés, restaurants, and lounges

offer Wi-Fi access • 3 broadcast stations• 93 percent of households own a television

Market Assessment

• The video game industry over the next five years will be explosive growth.

• In 2005, the global video game market revenue of 29 billion U.S. dollars,

• By 2011, global video game market will reach revenues of 44,billion U.S. dollars.

Market Assessment (cont’d)

• Sony PS3 and strong growth as well as the Nintendo Wii game consoles

• But our M-BOX shall become the most important competitor in the future global video game market

• Our M-BOX can be aimed at Europe and the South African markets

Market Assessment (cont’d)

• X-box game consoles market share = 17%. • Sony Playstation market share = 68% by the

end of 2004 • Nintendo's market share = 15%.• U.S. video game market sales of 179 billion

U.S. dollars in 2006 increased by 43%.

Market Assessment (cont’d)

• Sony's PS3 game console sales of 16.71 million units.

• Nintendo's Wii console sold 36.00 million units.

• Xbox 360 game consoles sold 22.55 million units.

Global Markets

Finland• Borders with Norway, Sweden , and Russia.• Finland's population is 5,300,000. • Most of the population is living in the

southern part of a more moderate climate• GDP in 2002 is 139,700,000,000 Euros, per

capita GDP is 26,800 Euros.

Global Markets (cont’d)

• Finland, "the world's most competitive countries."

• Finland developed economy, per capita income, which is easily accessible, well-developed of network, the most important thing is our target market Estonia across the sea, to facilitate exchanges.

Global Markets (cont’d)

• Today, Finland is not only an economically developed country, but also a high-tech and well-developed information society and the world-famous.

• Finland adjusted their economic and technological development strategies, making them a world leader.

• Finland's information industry is in development

Global Markets (cont’d)

Russia• World economic power. • GDP reached 1.1356 trillion U.S. dollars, ranking tenth in

the world. • Rich in natural resources for agricultural and industrial

development. • Computer industry, aerospace aviation industry, the rapid

rise of high-tech industries, as well as a strong defense industry.

• Therefore, Russia will be another important M-BOX market.

Market Entry Strategies

• FDI• Pricing Strategy• Developing a home or “domestic” market

within the country.• Strong Marketing Strategy.• European Markets—”fair game”. • Gateway to Russia

Future Outlook/Potential

• Convert from the Estonia kroon to the Euro. • More investments coming from Russia and

Spain. • Solid Investments from Sweden and Finland.• Tense oil relations with Russia.• Slumped sales, but will recover in the future.

Recommendations

Short-term• Translate manuals and console menus into

Russian, Estonian, and English.• Price below PS3 and Xbox 360.• Improve advertising.• Develop Distribution channels.• Establish tech support specialists.

Recommendations

Long-term• Take advantage of future growth.• Offer a wireless console. • Integrate Skype software.• Expand into Russia and Finland.• Improve manufacturing efficiency.