Best in France Project Anne Laurenson Eduardo de Freitas Herve Desmeulles Marina Cvijanovic

The Company Simpo Vranje, Serbian state owned company, over 100 m €/year When did it come to France? Simpo France SA established in What’s its business? Import of furniture. Key figures: Sales of Simpo France ranging from 15 to 20 m€/year until 1998 and of 5-10 m €/year between 1998 and today. The decrease in sales is due to reduced export to France since this market is getting more competitive and to problems in raw materials supply since political and economic situation in Serbia worsened. Simpo France SA transformed into SV Linea Trade Srl in 1998.

The Company Products no production in France. only home furniture, no office furniture. High quality, well perceived by French customers, although the name Simpo has never been indicated on products. Competitive advantage Low costs of labor as production is located in Serbia. High quality raw material.

Why did it come to France? 1990 – Serbian State decision to export due to lack of foreign currency reserves. Opening of Simpo Vranje daughter export companies in France, Germany, Italy, GB, Russia, Poland, Czech Republic and USA during 1990s. Simpo France is the only daughter company of Simpo Vranje carrying the name “Simpo” since it is considered to be the leading export market. France is the biggest consumer of furniture in Europe, in quantity – not in € value – due to the “private reception” life style. French customers change furniture more frequently than other Europeans, at least some parts every two years. Furniture has a decorative function in France.

The Company’s values Core value: good quality products Low prices Production adaptable to French customer needs Impact of the added value on the domestic market: Due to the needs mainly of the French market, design and quality were improved. Even in Serbia, 90% of Simpo products are now designed according to French needs.

Customers and distribution Furniture is sold only to big retail chains like Conforama, But, Mobilier de France, Atlas, Fly, who know their customers and influence production process accordingly. Demand is rather seasonal, with peaks in September, December and March/April. Products are sold through catalogues with quality, design and price agreed prior to import. Retailers ask for participation in promoting SV Linea. Trade products. Joint marketing campaigns in magazines.

Constraints in France (1) Highly demanding market. Constraining labor laws. No exposure of the brand due to the distribution system. Dependence on retail marketing campaigns.

Constraints in France (2) French payment system Payment guarantee is bill (“traite”), not entailing personal responsibility of the persons signing it, a system that exists only in France. Necessity of establishing firm, trusty and friendly contacts with customers in order to be paid on time. Contracts for payments due 90 to 120 days after delivery.

Adaptation to France – personnel 6 person-team in the French office – 4 French employees and 2 Serbian: the General Manager and the Secretary General. Employees are recruited through interviews with company management; managers are recruited through headhunting companies. Employees have CDI contracts; additional workforce is engaged for a maximum period of 2 months during peak seasons. Seasonal workers are engaged on a short-term contract basis. Clerks and workers are paid on a fixed salary + primes basis, salesmen received a fixed salary and commissions. Motivation policy is based on performance appraisals; compensation rewards are either primes or commissions. Employees evaluation is carried out by line managers; managers are evaluated only by the General Manager. The company does not organize any formal training program.

Key constraints costs Major installation costs are the office rent, €/month and the Rungis Orly central distribution rent, of over €/month. Personnel costs are in line with French labor laws. No language learning costs 4 of the 6 employees are French, and the Serbian managers already speak French. Multicultural integration easily achieved basically due to the size of the team.

Key benefits Major benefit is foreign currency, since mother company is still 60% State owned and has a State imposed export policy. Improvement of quality and design of products. Scale economy due to the size of the French market. Continual growth of the French market.

General advice for new comers on a foreign market Understand all the opportunities and threats that a new market comprises. Plan well in advance the production, distribution and employment processes. Be adaptable. Be constantly in touch with your customers. Be aware of actions your competitors plan. Adapt your communication strategy.

Contact in SV Linea Trade Mr. Ljubisa Bulajic, GM SV Linea Trade Address: 4, rue General Lanrezac, Paris 17 Tel: