Our market priority is South-Eastern Europe

InterviewSouth-East European INDUSTRIAL Мarket - issue 2/2007

Eng. Peter Polileev, Chairman of the Directors’ Board of TeleTek Group Holding

Mr. Polileev, after having mastered the specifics of making business in Bulgaria for 15 years, how would you comment the situation on the market of electric equipment and security systems in Bulgaria?

At this stage the market is showing symptoms of maturity, but it is still marked by signs of ongoing development. All kinds of products are available: good quality products as well as cheap products. Both large and small brands are represented. Although there are some gaps, the main product range is available on the market. What brings a feeling of immaturity is the unclear role of the entities operating on the market. Many of the market players do not have a clear vision and would play different roles to make a sale. In the short-term this may work for them but in the long term it is a losing strategy.

The market is continuously changing; new foreign players have been entering it. Current players express serious market ambitions. How a Bulgarian company like TeleTek Group will fight the competition locally?

If we are saying that we want market relations, we have to be ready to accept competition from its positive aspect - a force compelling us to develop. The fact that the Bulgarian market was isolated and small had provided a protected environment for the development of Bulgarian companies for many years. This is not the case anymore. Big players are revising their marketing and instead of a representative in Bulgaria speak of a regional office in Southern and Eastern Europe. As far as we are concerned, Teletek group will be competing with some and seeking strategic partnership with others. This is the way for Bulgarian companies to become part of the matrix of the European and why not the world business.

In parallel with trade, you are developing production and engineering activity. The market in the country has become small for you a long time ago, where geographically are your market priorities mainly directed?

With regard to our strength as manufacturers, there are no geographic limits to the manufacturing company Teletek Electronics. As far as strategy and specific goals are concerned, we speak of markets of priority. In the short-term perspective, the focus is on the European market. We have already established serious contacts and made initial sales on the markets of other regions as well. With reference to Teletek Group holding as a whole, the main priority is the achievement of significant market presence in the region of Southern and Eastern Europe.

You speak about regional presence. But the markets in Southern and Eastern Europe are very different as a degree of development and style of conducting business. What is the winning formula for Teletek Group, aimed at making the company a factor of regional significance?

We often think that in this part of world we are very different from everyone else. We think so because it is difficult to see ourselves in the eyes of the rest of the world. The world sees in us, the Balkan countries, more common than different traits. It is the same with business. The experience of a successful Romanian company may be much more useful for a Bulgarian company than attempting to copy models from Germany and England that have been established and developed over a long period of time, in other economic environment and at different value system and mentality. On the other hand, we should not disregard the fact that new, modern rules in business come from the developed world.

Aren’t you afraid that if you “grow” enough to “get in the way” of big players in your business segment, they will “devour” you?

„Devouring” depends more on the combination of two other factors – the development of the market on which the respective company is operating and the trends in the development of the respective business. If the market of the company is large or has big potential and the specific business segment is getting more large-scale, then the company size and quality put it in the focus of big companies. In my opinion the Bulgarian companies should not be afraid of this, and should do what is required to make use of these processes.

Some Bulgarian companies target rich central European markets directly. You rely on regional presence. Is it possible for a stable company as Teletek Group to “jump” directly there?

If this means export of products, developed and manufactured in Bulgaria, this is a great thing and should be happening. But if it means business presence, I think in the general case it is a difficult task at this stage. Show me a reason why should I develop business opportunities on markets with an annual growth of 2-3%, furious competition by companies with traditions, experience and large resources and turn my back to markets with growth of 7-9% where competition comes from companies not older than our own. Why, for example, ten years ago Greek companies did not make a decision for expansion in Western Europe but directed their strategic moves to Eastern Europe? I think this is answered above.

Even now, best business plans would remain just intentions without a team of skilled people to implement them. Given the present “hunger” for experts how do you build your team?

This problem is now at a peak. We, business people, are used to looking at an obstacle as most significant until we get tired and find a substitute for it. This is the case now. There is a problem and it is obvious, anyone could have predicted it 5 years ago by just looking at our education system and being aware of the number of young people leaving Bulgaria. Our solution is to develop our people. The way we do this is within the competence of the Human Resources expert. What I would add is willingness, patience and open dialogue with people who have great potential. Willingness to remember that the human resource is the most important one for success, patience because it is the most inert resource and open dialogue in order to avoid creating “big-headed and useless stars”.

According to some studies, about 20% of the price of a company is formed by its market image. Has the Bulgarian business reached the degree of maturity to invest in this direction?

Yes, the question about image has two aspects. One aspect refers to how image facilitates the company business operations by suggesting positive attitudes in clients and partners. In this way it affects the value of the company indirectly and adds these 20%. The other aspect is public opinion. This aspect is often disregarded in our country. Civil society is becoming more mature in Bulgaria and companies should make consideration of this. A sustainable company development cannot be ensured without taking into account its image in professional and social aspect.

A few months ago you said that one of the strategic aspects in the development of TeleTek Group was listing the company on the stock market. Why have you decided to take this step and do you think that other Bulgarian companies in your sector will follow you?

In most cases, participation on the stock market is an achievement and a measure of the success of a company. The stock market has its strict requirements but it also provides some unique opportunities for company development. Yes, stock market listing has been planned in our medium-term strategy. When will this happen depends on many factors. Teletek Group’s shareholders see this as a good prospect.

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