GROWING PAINS: Entrepreneurship in a State-Controlled Economy Harvard Case Solution & Analysis

This case describes the process of establishing and developing an U.S.-Belarus joint venture that produces wood pellets in Belarus for sale in countries in the European Union. The mix of the possibility of producing a good product at a low price in Belarus and high demand for biofuels in EU states, provides a compelling business opportunity for brothers Victor and Aleksey Kruglov. Victor, who lives in the U.S., had experience in company in the U.S., and has access to capital. Aleksey, who lives in Belarus, has experience in wood-products production in Belarus, and has access to qualified workers. Having a well organized business and constant demand for its products, the business grew rapidly. Yet, growth get the business in danger in state controlled Belarus.

Local associations (city and regional authorities) seen successful companies as sources of revenue for solving city infrastructure problems. Successful businesses were seen by Essential associations as potential parts of their system of the larger government-managed market. Authorities involvement would most likely require the company to follow specific directives, execute specific procedures for export operations, and share sales. Three choices were seen by the associates, to prevent the danger of government control. Staying its course, their company could continue to grow and accept the part of major donor for the needs of the city, and become part of the larger government-managed wood processing industry. A third alternative was to relocate businesses entirely, to a country that provides a friendlier environment for business operations, yet has similar ethnic and economic edges.

PUBLICATION DATE: July 15, 2010 PRODUCT #: NA0015-PDF-ENG

This is just an excerpt. This case is aboutĀ GLOBAL BUSINESS

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