The Seattle based BEIED (Business Education for International Economic Development) organization recently organized the next of its seminars, dedicated to the development of successful corporate strategies in the changing international business environment. The seminar was led by Earl Sedlik, Harvard MBA and a co-founder of BEIED. How to understand Consumer Behaviors, and how to develop a message that resonates with the targeted consumer were among the topics addressed in the seminar. The audience was young, competent and enthusiastic. This provoked the interest of “Bogatstvo” to the impressions of the lecturer, who had visited Bulgaria before as well. What are the changes that he notices in Bulgaria, and what is his assessment to those changes; how does he see the perspectives for our country in the changing world, and what are the perspectives for the private investor – on the local and international markets.

Which are the essential lessons that businessmen in transitional economies should learn in order to be competitive?
We have learned several things in this seminar: first, that each company should compete with the others, which means that it should possess a unique trade proposition, second – that it should meet the needs of its consumers. Companies often put too much focus on their own product, instead of emphasizing on their customers` needs. But in a society in which people have many opportunities, they need help in the process of making their choice. This is why each proposition should be unique. For this reason, we strongly recommend that managers should put attention and emphasis on their competitive advantages.

Is this difficult to achieve?
This is a difficult task for everyone. Each enterprise that offers a product or service to meet a particular need has competitors that do the same and are also competing. For the consumer, there should be a point of difference, which gives him or her a reason to choose us. It is not easy, as each company wants to please everyone and at the same time be the one they choose. So, this is a hard task. But it is also a challenge – why should you buy from this producer, or from the other, why should you choose this bank or that one? If we transfer the topic in the private finance sector – why should we buy these shares or others, why choosing this consensual fund and not the other one, or an insurance company – they all offer the same range of services, but they should give a client a clue on why choosing exactly them.

Are there any sound differences in taking decisions in corporate management or in personal finance management? What is the difference in these approaches?
In personal finance, one should avoid high risk. The primary goal in personal finance management is protecting your capital. When you invest, you choose something with lower return on investment rate, even when you have an opportunity to choose a higher one, because it is safer. Along with the feeling that some shares may mark a significant price growth and make you rich, there is the concern that the price may fall and this would hurt you badly. So, instead of shares, you invest in obligations or something more stable, although it will bring you lower revenue. In the industry however, companies are inclined to take risks, because they want to use all opportunities. They want to be the first to offer a special product, to be the first to expand geographically, first in developing or modifying a new product, generally, to use all the opportunities. So, during the day you can be a manager in an enterprise that wants to expand – in other words you can spend thousands of dollars on traveling and contacts hoping that this will pay off. And when you come back with no result you can lose these thousands of dollars. In your private life, however, you want to be more cautious. That’s the way it should be.

Managers, who own their business, know that they take risks all the time. They are trying to be aggressive. In part of their private life they want to feel safe, while in another part they can afford to take risks. In private finance, they always teach people how to balance their portfolio. And the reason is that for the larger part of his personal funds, one would prefer to secure lower risk. So they only risk with part of their funds, in order to try the odds. As a result about 80% of the resources are invested in stable companies and obligations, while 20% are allocated in shares of new technology ad FCMG to see if they will work or not. The truth is that when you buy a new share, there is a chance that it will raise from 10 to 80 dollars and then you are a genius. But sometimes it moves down to 10 cents per share. And this is the reason for which consultants advise people to examine the investments and the segments, to and compare big and small companies, the technology sector, the consumer sector etc. We know that big companies from the public sector cannot mark significant growth, but they will continue to produce revenue for a certain period, while a new company in the software business or in mobile communications may mark significant and quick growth, but may also collapse.

Do you have any particular impressions to share for the development of the Bulgarian market? How do we move towards open-market economy – slowly, rapidly or just normally?
I have been here several times by now. I came here for the first time in the beginning of 1997. I see dramatic changes since then. I see many of he signs of the free-market economy – a lot of advertising, better choice of goods, of telecommunication services and things like that. Yes, there is a significant change and it is positive. Bulgaria is very close to its accession in the EU and this membership will happen. The high requirements in the Union will only help the development. New opportunities for export will be open. Even now an increased number of tourist travels to your country can be noticed. Soon they will be looking for Bulgaria and they will prefer it for vacations compared to the already familiar Spain and Portugal. Bulgarian economy has another very important advantage – many intelligent, educated people here.

What do you think about young people who attend your lections here? How do you assess their background and their chances to be competitive abroad?
Our seminars are targeted to the Executive Management and Middle Management - people, who are in the process of building their careers. We have organized several seminars so far. I find these people very intelligent. I have seen employees with the same profile in other countries and it is my contention that the Bulgarians are extremely talented. You are facing the challenge of transition from a controlled economy to economy of supply, from social planning to free entrepreneurship. This change is dramatic and it happens at accelerated rates. I find here people who have very strong talent, generating interest and generating response. They comprehend and are ready to immediately apply the new knowledge. I am very impressed. At the last seminar we discussed eight different topics. Some of them were interesting, others – not that much. At the end of the week we continued in a close circle and I found that the people attending were already using the same terminology, that we speak the same language.

During your stay in Bulgaria you met the Bulgarian Harvard Club. What was the impression from this meeting as you are a Harvard graduate yourself?
It was a pleasure to meet them at lunch and talk to a small gathering. Most of the people are still in the process of their education. With the members of the club we share a lot of impressions from Boston and Cambridge. But what was most impressive is that we share common view on the world economy and the influence of the United States on the world, the other nations and their economies. We talked about the state of the US dollar and its impact in different regions of the world. The Harvard Graduates in Bulgaria have very profound knowledge. This is not surprising, because when someone puts efforts in education and self-development, this person becomes very informed. But when you go to Harvard, you get transformed, you undergo a true change. These people come from various Harvard programs and they increase significantly their competence. This transformation is part of their goal there – not only to receive information but to learn how to apply it in practice. It is pleasant to see that the Harvard Graduates in Bulgaria keep in touch.

At the end we will ask you to give some advice to the private entrepreneurs. What will happen during the coming year? Where should they invest?
I watch CNN, keep track on the financial news, read newspapers all the time and teach economics. And I find that this is all very confusing. The high risk rates, and respectively the high return on investment rates are now in Asia. Companies in Asia are being pointed out as a source of high return on investments, but there is a risk because the opinions on how things are going to evolve are controversial. China marks incredible growth. It does not, however, develop independently, but uses resources from the whole continent. At home there is a great concern about the payment balance between the US and China, and at the same time China has this problem within the Asian community – they import more than they export for Malaysia, Indonesia and Japan for example. The Chinese growth has a long-term potential and this is something we have never been aware of before.

I think that the US dollar will continue to be weak. Everyone can decide on his/her own if he/she is interested in investing in the US or in Europe, but if the concern is that if one buys property in the States the price may go down because of the dollar – this concern is most probably right. We have a president who claims that he supports the strong dollar and that he will do anything to make the dollar strong.

Is there anything he can do for real?
Absolutely nothing. You can write this – Nothing. This president cannot and had already shown that he cannot control the dollar. The previous Financial Minister made a claim that he prefers the weak dollar because it supports the exports, and he was changed. The administration wants a strong dollar, but we are not in the position to create it. Not with this huge deficit. It will take time for us to become attractive again.

What is the advice bottom-line - to pursue lower levels of risk in investments?
I think that the American shares will have a stable growth. People in the States are not concerned about the low rate of the Dollar towards the Euro. They do not depend on the European, but on the Chinese imports, but the Chinese currency if fixed to the dollar and as a result Chinese producers will always have advantage in importing to the states. Some control will be exercised on China to slow down the economy growth.

For the Bulgarians, the European economies are very attractive. The integration is a process that will have a very positive impact. Now is the moment to buy land. Bulgarians should buy land in Bulgaria. Also they should start building facilities in the resort areas. Around the world everyone tries to offer what they have, but the truth is that tourists are always trying to broaden their horizons and to visit new places. If I was a Bulgarian economist or a manager I would study the experience of Portugal – to see what they have done ten years before and to apply it in Bulgaria. Every significant growth starts with individual efforts, when single people are taking unusual steps. Ordinary people make unordinary things and then these unordinary things happen – this is what we see and describe afterwards.

The Harvard Club in Bulgaria unites present and former Alumni of one of the most prestigious universities in the world – Harvard University. The members of the club have as a mission to imply the values acquired at Harvard to the Bulgarian society. What does that mean? The members of the club have saddled themselves with the task to play active role in the Bulgarian social, economical and political life and they claim to require from leaders in each of these areas to meet the expectations of the society.

• In social life – to use their power for the social prosperity and not for personal purposes.
• In business - to have responsible and transparent behavior, with clearly defined duties to the personnel, suppliers, and consumers; and to have personal engagement in the struggle against corruption.
• In political life – to sustain the democracy, to fight against corruption, to take responsible decisions, because trust is something you build over the years and lose overnight.

The current President of the Harvard Club in Bulgaria is Stamen Tasev. Formerly, this post was taken by Georgi Velchev and Lewis Druke.