Govenrment and Business Environment Case Study

Central and Eastern Europe: A Missed Opportunity for Outsourcing?

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Abstract:
Since 1990s, a number of countries and regions had emerged and profiled themselves worldwide as popular destinations for outsourcing. Central and Eastern Europe (CEE), China, India, central and South America were the notable ones. Among these major offshore regions, there existed differences in terms of cost competitiveness, growth potential, productivity and business environment. China was a major manufacturing base. For most of the global companies, China was an important market, a low cost sourcing and manufacturing base and a source of talent. However, it was noticed that for the companies serving Western Europe, CEE had competitive edge over China in terms of overall costs, transportation, market opportunity, talent pool and a favorable business environment. Analysts opined that, contrary to the popular belief, CEE as a whole had become the home of outsourcing operation for a large number of European and US companies with increasing forays of companies from Asia. This case will explore the comparative investment opportunities of CEE vis-à-vis China. It also highlights how China and CEE countries positioned themselves to the companies of US and Western Europe as a preferred outsourcing destination.

Pedagogical Objectives:

• To discuss the competitive advantages of the Central and Eastern Europe over other outsourcing destinations
• To understand the evolution of the Central and Eastern European countries as an outsourcing destination
• To understand the rise of India and China as outsourcing destination
• To debate whether the Central and Eastern European countries would outweigh the other outsourcing giants such as India and China.

Keywords : Central and Eastern Europe, Outsourcing, Offshoring, European Union, Velvet Revolution, Berlin Wall, Rise of India and China, Oracle Corporation, Nokia, Biatel, Czech Republic, Hungary, Poland, Carpathian Mountains, Regional language vendors