An analysis of challenges and potentials western European B2B companies face when establishing themselves in the Georgian market and how they can overcome and utilize them

Abstract

This thesis adresses the challenges and potentials Western European companies face when entering the Georgian market. Additionally, market barriers, entry strategies and digitalization in Georgia are examined. Georgia’s ongoing economic reforms and integration efforts with the European Union make it an attractive destination for doing business. Despite these advantages, western European companies have not fully utilitzed the opportunities, due to perceived and actual market entry barriers. Even though there is a vast amount of literature on Georgia’s market conditions, there is a lack of comprehensive studies that combine empirical sresearch with theoretical insights specific to western European B2B companies. This thesis aims to fill this gap by providing a detailed analysis of both the challenges and opportunities in this growing market. Research questions: • What current and future entry barriers do western European b2B companies face in the Georgian market and how can they be overcome? • What potentials and challenges does the Georgian market hold for Western European B2B companies? • Which aspects of the entry strategy need to be considered and emphasized when entering the Georgian B2B market? • What is the level of digitalization and how does it support B2B businesses in setting up their operations in Georgia? The thesis is structured into four main parts: background, literature review, empirical research and findings. The methodology is a combination of qualitative and quantitative research, including indepth interviews with industry experts and a review of existing literature and market data. Insights: The primary barriers include market size and regulatory challenges. Language as a barrier is rare. Establishing local partnerships and networks, and deep relationships can help mitigate these obstacles. Georgia’s strategic location, business-friendly environment and digital infrastructure in government services and banking offer significant opportunities. However, companies must navigate a small market size, bureaucratic delays and financing difficulties of local enterprises. Key sectors with potential include infrastructure, especially hydropower, tourism and services. No direct relation between market entry strategies and Georgia have been found. Georgia’s advanced e-government services and online banking facilitate business operations, however, there is still room for improvement. Additionally, managers should be prepared for bureaucratic delays, especially in capital-good industries. Limitations: The study’s limitations include a small sample size, only two western European nationalities and a focus on B2B companies. Implications for Future Research: Future research should consider a larger sample, sectoral analyses, the difference between entries from two or more different regions or longitudial studies to track market evolution over time. Outlook: The outlook for western European B2B companies in Georgia is cautisly optimistic. Continued economic reforms and the potential EU memeberhsip could enhance the business environment.

Date of Award	2024
Original language	English
Supervisor	Monika Pleschinger (Supervisor)