STUDY: RESTRUCTURING SURVEY CROATIA 2010

Shift towards growth and continuing cost reductions needed urgently

Roland Berger Strategy Consultants conducted its fifth study on trends in restructuring in Croatia. The research was conducted among directors and managers of approx. 50 Croatian small and mid-sized companies from 7 different industries. According to the study results Croatian managers are more pessimistic regarding a soon bottom-out of the economy – whereas managers in Western Europe and CEE believe that the economic crisis peaked end of 2009, as many as 60 per cent of Croatian managers expect this to happen end of 2010 or even next year. Croatian businesses still focus on reducing costs and safeguarding liquidity, whereas in other parts of the world managers are now returning to growth and strong sales initiatives.

Dr. Vladimir Preveden, Managing Partner of the Roland Berger office in Zagreb, explains that the crisis also presents a chance for restructuring and that companies should consider opportunities in new markets and regions. He also adds that despite all the drawbacks, useful lessons can be learned from the crisis: "Businesses need to improve their liquidity buffer, build a comfortable equity position, create greater flexibility in cost structures and not allow cost cutting to be the major anti-recession measure. At the same time strategic guidelines for growth through internationalization should be defined. This is the only way Croatian companies can prepare themselves to face future challenges."