Catherine Houghton SCO Vienna, Austria

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The Heart of High Tech Europe AUSTRIA

• Catherine HoughtonSCO Vienna, Austria
•  
• Trade Winds Conference
• May 14-15, 2007
• Arlington, VA

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Overview

• AUSTRIA AT A GLANCE
• PLUSES AND OPPORTUNITIES 
• LEADING SECTORS
• GETTING STARTED
• MARKET ENTRY STRATEGIES THREE SUCCESSES

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I. Austria at a Glance
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Small but dynamic

• Population 8.2 million
• GDP 320 billion
• Growth 3.3 percent
• Per capita income 38,631
• Unemployment 4.9 percent
• Close historical and economic ties to the 8
  countries surrounding it, boosting its economic
  vitality and flexibility.

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U.S. Business in Austria

• U.S. exports to Austria 4.0 billion
• U.S. imports from Austria 6.7 billion
• After Germany and Italy, U.S. is Austria's
  third most important trading partner, and its
  number one partner outside Europe.
• U.S. FDI in Austria 6.2 billion (11.3)
• Austria FDI in U.S. 2.3 billion
• U.S. is the number two investor in Austria
  after Germany, with 370 U.S. firms invested
  there, of which 150 have regional
  responsibilities for Central and Eastern Europe.

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II. Pluses and Opportunities

• To overlook Austria would be to overlook one of
  the world's most prosperous nations on a per
  capita basis.
• Strong export and investment market with no
  significant barriers.
• Excellent test market for companies seeking
  access to the rest of Europe.
• Qualified agents and distributors for nearly
  every kind of product.
• Many distributors sell regionally, and cover
  several Central and Eastern European markets.

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Four Distinct Advantages

• 1. Austria is an international crossroads,
  bordering Germany, Italy, Switzerland,
  Liechtenstein, Slovenia, Hungary, Slovakia, and
  Czech Republic.
• It is at the center of the enlarged EU.
• It has strong financial and transportation
  links to Eastern Europe.
• U.S. firms can partner with Austrian firms
  having a regional presence.

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Four Distinct Advantages

• 2. Austria has a well-diversified and resilient
  economy.
• High-potential industries with substantial
  investment include telecom, non-agricultural
  biotech, research-based medical and
  pharmaceutical, automotive, and electronics.
• The corporate tax rate was lowered to 25
  percent in 2005 under competitive pressure from
  newest EU members, whose rates were lower.

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Four Distinct Advantages

• 3. Austria is an EU member and belongs to the
  Euro currency zone.
• U.S. companies can manage pricing, balance
  accounts, and move products within Austria and
  throughout unified Europe.
• A company meeting EU regulations can sell in
  Austria and any other EU country.
• The increasingly favorable Euro-dollar exchange
  rate gives U.S. goods and services a competitive
  advantage in European markets, including Austria.

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Four Distinct Advantages

• 4. The U.S. is Austria's third largest supplier
  of goods and services, and its largest outside of
  Europe. This strong existing trading
  relationship gives U.S. companies a leg up, with
  their
•  High product quality
• Excellent after sales service
• Competitive prices
• all of which are important to the Austrian
  buyer.

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III. Leading Sectors
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Best prospects for U.S. firms

• Medical equipment
• Pharmaceuticals (research-based)
• Scientific equipment
• Security equipment
• Telecom
• Travel and tourism

• Automotive
• Aviation
• Energy (alternative fuels)
• Finance and banking
• IT equipment, software, and services

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IV. Getting Started

• Evaluating possible market opportunities
• Understanding the requirements business
  license, registration, proof of proficiency.
• Meeting technical and other EU standards.
• Selecting one distributor or agent for the entire
  market (that distributor might be in Germany).

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Working with the U.S. Commercial Service

• Market briefs and in-depth sectoral reports
• Gold Key or International Partner Search
• Matchmaker meetings during a trade mission or at
  a trade fair
• Single Company Promotion
• Expansion from an existing base Increase to
  market
• Platinum Key

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V. Market Entry StrategiesThree Successes
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Success Number 1
Industry Advanced automotive diagnostic
equipment Strategy Sending the local Austrian
buyer to a major European trade fair to meet the
U.S. exporter CS programs Showcase Europe and
Automotive Team, with CS automotive specialists
from Germany and neighboring countries
coordinating
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Success Number 1
Players U.S. exporter sells to over 150
countries worldwide. Was already selling in
Austria, but had yet to strike this rich vein of
business.   Austrian buyer was the largest
importer of automobiles, representing more than
ten automakers, with sales of over 500 million a
year. Had already bought from the U.S. company,
but had yet to discover certain interesting
products sold by the firm.
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Success Number 1
Strategy and success Austrian buyer had
participated in IBP trips. Was given list of
U.S. exhibitors at Frankfurt's Automechanika
Fair, visited several stands including that of
successful firm, and found new products sold by
company. Through his Austrian distributor,
doubled his orders from company.   Lesson
learned IBPs are still important, but putting
local buyer together with U.S. seller at leading
European trade fair for an industry is an
excellent formula for success.
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Success Number 2
Industry Advanced security equipment for
detecting explosives Strategy Organizing an
event to introduce U.S. technology to select
audience of Austrian buyers CS programs
Counseling, coordination between USEAC Boston and
overseas offices of Commercial Service in
Netherlands and Austria, and Single Company
Promotion
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Success Number 2
Players U.S. exporter was security equipment
division of Fortune 500 company, employing 1,000,
selling internationally, and looking to enter
Austrian market.   Austrian buyers were UNIDO,
OSCE, and the Austrian Federal Ministry of
Justice.
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Success Number 2
Strategy and success USEAC Boston and CS
Netherlands worked with U.S. company and
contacted CS Austria, which organized technical
seminar, arranged import of explosive devices for
demo, and invited hand-picked audience of 50
security specialists from intl. org.s, dip.
missions, and Austrian Govt. Seminar led to
sales of three highly sensitive trace
detectors. Lesson learned Success may take time
and come from an unexpected quarter Two years
of follow-up with company led to sale, even after
key contacts had changed and company even had a
new name.
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Success Number 3
Industry Water and waste treatment equipment
Strategy Overcome market saturation to find
right distributor by narrowing focus CS programs
Regional Gold Key Service and coordination
between CS Austria and CS Germany
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Success Number 3
Players U.S. exporter was NTM producer of
communal wastewater treatment pumps and
equipment.   Austrian distributor was the only
company the U.S. firm met with, and now
represents them in several Central and Eastern
European countries.
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Success Number 3
Strategy and success Undaunted by many pumps in
market from Europe and Asia, CS Austria searched
German and Austrian specialty distributors, got
one meeting, and that distributor signed on to
represent U.S. company in entire CEE
region. Lesson learned U.S. firm may only get a
few meetings or just one, in a saturated market,
so regional approach makes the trip worthwhile,
and may produce regional success.
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For More Information

• MAIL Manfred Weinschenk, Senior Commercial
  Advisor
• U.S. Commercial Service Vienna
• 9900 Vienna Place
• Dulles, VA 20189
• TEL [phone]
• FAX [phone]
• E-mail Manfred.Weinschenk_at_mail.doc.gov