# Presentation: 752254

## Catherine HoughtonSCO Vienna, Austria

Trade Winds Conference
May 14-15, 2007
Arlington, VA 

**Trade Winds Conference**
**May 14-15, 2007**
**Arlington, VA **

**The Heart of High Tech Europe:  AUSTRIA **

## Overview

**  ****AUSTRIA AT A GLANCE**
**  ****PLUSES AND OPPORTUNITIES **
**  ****LEADING SECTORS**
**  ****GETTING STARTED**
**  ****MARKET ENTRY STRATEGIES: THREE SUCCESSES**** **

**Overview**

## I. Austria at a Glance

## Small but dynamic:

- Population 8.2 million
- GDP $320 billion
- Growth 3.3 percent
- Per capita income $38,631
- Unemployment 4.9 percent
- Close historical and economic ties to the 8 countries surrounding it, boosting its economic vitality and flexibility.

## U.S. Business in Austria: 

-   U.S. exports to Austria $4.0 billion
-   U.S. imports from Austria $6.7 billion
-   After Germany and Italy, U.S. is Austria's third most important trading partner, and its number one partner outside Europe.
-   U.S. FDI in Austria $6.2 billion (11.3%)
-   Austria FDI in U.S. $2.3 billion
-   U.S. is the number two investor in Austria after Germany, with 370 U.S. firms invested there, of which 150 have regional responsibilities for Central and Eastern Europe.

## II. Pluses and Opportunities

- To overlook Austria would be to overlook one of the world's most prosperous nations on a per capita basis.
- Strong export and investment market with no significant barriers.
- Excellent test market for companies seeking access to the rest of Europe.
- Qualified agents and distributors for nearly every kind of product.
- Many distributors sell regionally, and cover several Central and Eastern European markets.

## Four Distinct Advantages: 

**1.  Austria is an international crossroads**, bordering Germany, Italy, Switzerland, Liechtenstein, Slovenia, Hungary, Slovakia, and Czech Republic.
-   It is at the center of the enlarged EU.
-   It has strong financial and transportation links to Eastern Europe.
-   U.S. firms can partner with Austrian firms having a regional presence.

## Four Distinct Advantages: 

**2.  Austria has a well-diversified and resilient economy.**
-   High-potential industries with substantial investment include telecom, non-agricultural biotech, research-based medical and pharmaceutical, automotive, and electronics.
-   The corporate tax rate was lowered to 25 percent in 2005 under competitive pressure from newest EU members, whose rates were lower.

## Four Distinct Advantages: 

**3.  Austria is an EU member and belongs to the Euro currency zone.**
-   U.S. companies can manage pricing, balance accounts, and move products within Austria and throughout unified Europe.
-   A company meeting EU regulations can sell in Austria and any other EU country.
-   The increasingly favorable Euro-dollar exchange rate gives U.S. goods and services a competitive advantage in European markets, including Austria.

## Four Distinct Advantages: 

**4.  The U.S. is Austria's third largest supplier of goods and services, and its largest outside of Europe.  **This strong existing trading relationship gives U.S. companies a leg up, with their:
-  High product quality
-  Excellent after sales service
-  Competitive prices
- ...all of which are important to the Austrian buyer.

## III. Leading Sectors 

**III. Leading Sectors **

## Best prospects for U.S. firms: 

- Automotive
- Aviation
- Energy (alternative fuels)
- Finance and banking
- IT equipment, software, and services

- Medical equipment
- Pharmaceuticals (research-based)
- Scientific equipment
- Security equipment
- Telecom
- Travel and tourism

## IV. Getting Started

- Evaluating possible market opportunities
- Understanding the requirements:  business license, registration, proof of proficiency.
- Meeting technical and other EU standards.
- Selecting one distributor or agent for the entire market (that distributor might be in Germany).

## Working with the U.S. Commercial Service: 

- Market briefs and in-depth sectoral reports
- Gold Key or International Partner Search
- Matchmaker meetings during a trade mission or at a trade fair
- Single Company Promotion
- Expansion from an existing base: Increase to market
- Platinum Key

## V. Market Entry Strategies:Three Successes

## Success Number 1: 

**Industry:** Advanced automotive diagnostic equipment
**Strategy:** Sending the local Austrian buyer to a major European trade fair to meet the U.S. exporter
**CS programs:**  Showcase Europe and Automotive Team, with CS automotive specialists from Germany and neighboring countries coordinating

## Success Number 1: 

- Players:
**U.S. exporter** sells to over 150 countries worldwide.  Was already selling in Austria, but had yet to strike this rich vein of business.
**Austrian buyer** was the largest importer of automobiles, representing more than ten automakers, with sales of over $500 million a year.  Had already bought from the U.S. company, but had yet to discover certain interesting products sold by the firm.

## Success Number 1: 

**Strategy and success**:  Austrian buyer had participated in IBP trips.  Was given list of U.S. exhibitors at Frankfurt's Automechanika Fair, visited several stands including that of successful firm, and found new products sold by company.  Through his Austrian distributor, doubled his orders from company.
**Lesson learned**:  IBPs are still important, but putting local buyer together with U.S. seller at leading European trade fair for an industry is an excellent formula for success.

## Success Number 2: 

**Industry:** Advanced security equipment for detecting explosives
**Strategy:** Organizing an event to introduce U.S. technology to select audience of Austrian buyers
**CS programs:**  Counseling, coordination between USEAC Boston and overseas offices of Commercial Service in Netherlands and Austria, and Single Company Promotion

## Success Number 2: 

- Players:
**U.S. exporter** was security equipment division of Fortune 500 company, employing 1,000, selling internationally, and looking to enter Austrian market.
**Austrian buyers **were UNIDO, OSCE, and the Austrian Federal Ministry of Justice.

## Success Number 2: 

**Strategy and success**:  USEAC Boston and CS Netherlands worked with U.S. company and contacted CS Austria, which organized technical seminar, arranged import of explosive devices for demo, and invited hand-picked audience of 50 security specialists from intl. org.s, dip. missions, and Austrian Govt.  Seminar led to sales of three highly sensitive trace detectors.
**Lesson learned**:  Success may take time and come from an unexpected quarter:  Two years of follow-up with company led to sale, even after key contacts had changed and company even had a new name.

## Success Number 3: 

**Industry:** Water and waste treatment equipment
**Strategy:** Overcome market saturation to find right distributor by narrowing focus
**CS programs:**  Regional Gold Key Service and coordination between CS Austria and CS Germany

## Success Number 3: 

- Players:
**U.S. exporter** was NTM producer of communal wastewater treatment pumps and equipment.
**Austrian distributor **was the only company the U.S. firm met with, and now represents them in several Central and Eastern European countries.

## Success Number 3: 

**Strategy and success**:  Undaunted by many pumps in market from Europe and Asia, CS Austria searched German and Austrian specialty distributors, got one meeting, and that distributor signed on to represent U.S. company in entire CEE region.
**Lesson learned**:  U.S. firm may only get a few meetings or just one, in a saturated market, so regional approach makes the trip worthwhile, and may produce regional success.

## For More Information

- MAIL:  Manfred Weinschenk, Senior Commercial Advisor
- 		 U.S. Commercial Service Vienna
- 		 9900 Vienna Place
- 		 Dulles, VA 20189
- TEL:	 011 (43-1) 31339-2285
- FAX:	 011 (43-1) 310-6917
- E-mail: Manfred.Weinschenk@mail.doc.gov