1. Review and Recommendations
AMEX, Hungary
Review and Recommendations

2. Summary AMEX Petroleum Hungary
Project to establish operations in Central Hungary
Initial Project goal to establish a business office and gas stations
Project manager was to establish stations by:
Building new gas stations
Purchasing Existing stations
Setting up franchise agreement with owners of existing stations.

3. Summary cont. Current Status Project is behind schedule
Only one station purchased vs. 3 projected at this point
Retrofit of station is behind schedule
Only ¼ of necessary positions filled in business office
Construction on business office is behind schedule

4. Risks Project facing several risks: Personnel constraints
Cultural Constraints
Governmental and Legal Constraints
Weakened Hungarian Economy
Security Issues
Timeline

5. Personnel Issues
Current staff is not sufficient to handle operations at the business office or support the gas stations
No staff exists to research opportunities for station acquisition
No staff exists to deal with governmental issues
Current staff is not reliable or well trained

6. Cultural Issues Current staff operates inefficiently
Fails to report to work consistently
Female employees often required to be away from work to care for family members
Unemployment is high but large percentage of the available workforce is not sufficiently educated
Large percentage of workforce unprepared for work in the private sector due to years under soviet rule

7. Governmental/Legal Issues
Construction on only gas station that has been purchased is behind due to issues with supplies clearing customs
Construction on business office halted awaiting clearance from city historian

8. Weakened Hungarian Economy
Only 1 in 5 Hungarian families currently owns a car
Original decision to establish was based on a projected growth in first time car buyers
Current economic downturn threatens growth
Inflation rate in Hungary currently at 32%

9. Security Risks Security risks are low but do exist
Growing presence of Russian and Ukrainian Mobs
Organized crime currently focused on money laundering and weapons trafficking
Some extortion of foreign companies has been reported

10. Addressing Personnel Issues
Personnel represents most pressing issue
Assistant Project Manager should be hired to act as liaison between company and local businesses
Position would also research opportunities for station acquisition
Person with knowledge of Hungarian business practices and familiarity with corporate America would be best
A Hungarian educated in the U.S. would be beneficial
Services of an international recruiting agency should be sought

11. Addressing Personnel Issues cont.
A Governmental Liaison position should also be created
Position would coordinate with local and national government agencies
Streamlining of customs clearances and receiving approval to complete construction of business offices should be issues immediately addressed by position
A displaced former government worker would be ideal in filling this position
Individual should have knowledge of the workings of Hungarian bureaucracies

12. Addressing Cultural Issues
Training curriculum should be developed for Hungarian employees
Attendance expectations and requirements should be stated
Training should be sensitive to cultural issues but clearly convey company policies

13. Addressing Economic Risks
Economic factors pose greatest risk to project while representing an area over which the company has the lowest level of control
Project Manager should plan to strategically place stations in areas with lowest potential for economic impact
An alternative strategy would be to focus cornerstone stations in more stable neighborhoods and smaller stations in middle and lower class neighborhoods

14. Addressing Security Risks
Security Risk is currently low
Security firm should be contracted to perform security threat assessment
Plan should be developed to address issues should they arise

15. Timeline Original project timeline 18-24 months
The project has fallen behind schedule
Failure to address timeline issues could be detrimental to companies operations in Hungary
The longer the company goes without operational gas stations the more damage to future expansion in Hungary and Eastern Europe

16. Financial Assessment
This project represents a major investment on the part of AMEX
Projected purchase price of $150,000 per station with additional funds slated for retrofitting
Franchising represents lowest financial exposure for company
Project represents first step of AMEX into Eastern Europe

17. Project Tracking Current project tracking is inadequate for the task
Project Manager should begin using some form of tracking
Gantt Chart represents a convenient method for tracking project and communicating info to headquarters
Headquarters should be updated at least weekly on the project status

18. Conclusion The AMEX, Hungary is a major investment for AMEX Petroleum
The project is currently behind and facing major risks
The risks can be addressed and overcome
If successful this project will establish AMEX petroleum in Hungary and provide a launch point for further expansion in Eastern Europe
The suggested changes should be immediately implemented to ensure the success of the project.