Build your wealth in Ukraine

If you were a marshal of army, you would probably seek to attack when the opponent is weak. Similarly, when it goes about international business, you need to choice right time for your intervention to another country.

In despite of economic boom in Ukraine during 2004-2008, the vast majority of markets are still far from saturation. The competition is much more fragmented comparing with countries to the West. Many local players, dependant on lending, were knocked out by economic turmoil. Management culture as well as service level in Ukraine do not meet European standards. Thus, foreign firms with midterm and longterm strategies can take advantage by positioning themselves in Ukraine these days.

Market saturation

Ukraine consumes 2-5 times less products and services per capita comparing to European countries. There are quite perspective markets in Ukraine, which due to different reasons, remains untouched by competition.
One can hardly name “competition” situation on the most of Ukrainian markets. Companies do not see their rivals. When planning or developing products, they can afford not to take their competitors into account.
That becomes especially obvious outside Kiev City. Specifically regions are missing wide retail networks with modern goods and services. Such things as customized software, brokerage services, broadband Internet, logistic premises, modern hotels are in deficit countrywide.

Concentration Level

Immature Ukrainian markets are characterized by high level of fragmentation. This, however, may be different in one given region, where one company controls everything.
The barriers for entering the markets are rather low. There are no big fishes, impacting your pricing policy and overall strategy, except mobile phone sector and few state-owned sectors.
Ukraine provides many niches, which can be taken up and secure long-term sustainable earnings. On the other hand, there is a good opportunity for big foreign players to become a big fish by bringing effective and efficient technologies and management approaches to the markets.

Share of foreign capital

There is no transparency of books in Ukraine. Companies, except those from financial field, usually do not comprehend the advantages of shareholding form of ownership. That’s why big joint-stock corporations unhurriedly come to Ukraine. Simultaneously, smaller nimble firms from Germany, UK, Poland are finding application to their better technologies and systems. If we look at PR agencies, Health Care Organizations, Hotels, Parcel Delivery Agencies, we will discover that foreign capital constitute less than 15% of overall capital in sector. That means that Ukraine unlike, say, Baltic States, is far from being the battlefield of foreign business monsters.

Management and Service Standards

Amazingly, how little Ukrainian managers know about business. Like in communism era they are good at knowing their product, but lack knowledge of strategy, motivational systems, project management, measurement and finance. Quick, emotional, living today, very ineffective and vulnerable to changes they are an easy meat for foreign well-organized companies. Lack of planning and excessive ambitions made many of them today stuck overloaded with loans and helpless.
Customer satisfaction was not at all a priority of Ukrainian firms. No trainings for front-offices, primitive IT, absence of loyalty programs, all this restrains their further development. In such a way service level will be the first differentiation point for foreign firms to gain Ukrainian customers.