Ekaterina Buzulukova Objectives of the research 1. To examine types of market entrance strategies 2. To show phases of relationship development process with new partners 3. To reveal crucial factors for relationship stability 4. To discover Russian market difficulties 5. To analyze the level of customers’ satisfaction after transaction

Research Results (1) Market entrance strategies: to buy functioning local production company to open independence Russian company which will buy products from Finnish associated company to organize subsidiary Parent Finnish Company Subsidiary Parent Finnish Company Russian Company Finnish (Russian) Company Finnish Company Russian Company Russian Company

Research Results (2) Phases of relationships development 1. Partner search 2. First meeting 3. Project draft 4. Price and details 5. Contract and future plan Growth of common operation Stabilization Mutual growth Separation Decrease

Phases additional information StageTo do listComments Partner search You should gather information about planning construction projects Use internet Place commercial offerings, visit exhibitions, Use old personnel contacts. It is necessary on this stage not only send the commercial propositions but interest client in your company First meeting Give short presentation Discuss future project, difficulties, possibilities list of different kinds of work and price Listen to your customer Show preffesionalism, be honest and conduct open dialog Show you success projects On the first meeting discussion results the subcontractor preparing the project draft Project draft Prepare professional and detailed project draft – future of your possible contract is here Give different approaches to solve the problem On this stage customer is looking on professionalism of prepared documents, list and scale of tasks and estimating the price level adequacy Price and details Be ready to prove your price Make detailed plan of what will have been done Russian customer always asks to lower price

Research Results (3) Stability drivers of the relationships a)Common factors: trust, honesty, willingness to conduct open dialog, readiness to adapt, great wish to work, activeness b)Specific: professional knowledge level, continuously improvement process, personnel relationships, to be in schedule, give all needed information in time Business relations turnover STABILITY Relationships Atmosphere Economic bonds Readiness to adapt Interest in relationships Technical bonds Knowledge bonds Social bonds Client firm turnover

Research Results (4) Russian market difficulties Common: different construction norms, difficult and complicated process of project approval, difficulties in accurately planning costs and work time, long contract agreement, bureaucracy and bribes, often changes in legislation. Specific: low labor productivity level, personnel control procedures, hard financial reporting, many paper work for accounting, general director additional low liabilities, additional construction liability, difficulties in land legalization, partners distrust, twisted legislation, co- ordination in utility allocation, failure to comply with rules, tendency to lower prices from Russian partners, doubly tenders, hard to squeeze in existing relationships in construction, thefts. Construction norms, low regulations Partners Relations Partners Relations Accounting State institution Relations State institution Relations Managing personnel High Environment Uncertainty High Environment Uncertainty Russian Market Difficulties

Research Results (5) Analysis the level of customers’ satisfaction after transaction for development long-term relationships There are no any procedures to analyze customer’s satisfaction Process of creating questionnaire or estimating the level of customer satisfaction is at the very beginning Only two of investigated companies are trying to maintain relationships with former clients Companies are ready to go to some concessions with clients, but not in price. Principles of relationship marketing are used in subcontractors’ relationships with suppliers and are very weakly adjusted in strengthening and developing relationships with customers

Findings The only way to live in crises in Russia – to maintain and develop honesty reliable relationships with partners. If you want get quick and quality result you should agreed it features with general director Be aware of additional administrative and low general director responsibility includes criminal liability Peculiarities in Managing Russian personnel: strong control, clear rules for bonus system, because money is a main motivator, pushing strategy for personnel development. You need good informal relations with state institutions for approving project, land legislation, coordinating the allocation of utilities. Or your partner should has them. Partners distrust on the first steps – everything should be on the paper, and that leads to long time of contracts agreement Russian company will always try to lower prices Result of some tenders has known before the tender take place. It is needed guard on the building yard because of thefts Very hard to get into existing relationships in construction market Finnish companies believe to Russian partners, but Russian managers in Finnish companies are not. Recommendations is very important because new manager comes to company with his old partners, to be sure in results Need for systematic control on the Russian partner contract implementing. The best way to do it is to divide contract on small stages.

Conclusion and limitations We couldn’t find real finnish networks on the Russian market (assosiation Pietary Business club) the questions of creating, developing networks and their Russian peculiarities are excluded, also network advantageous No feedback from Customers We can’t measure customer satisfaction No real Russian construction market analyses