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Advantages of Doing Business in Barcelona
December 1, 2017
Describe your top 10 reasons a US-based company might want to expand operations to Barcelona.
Some of the reason why a U.S. Based company might want to do business in Barcelona is obviously to extend its market share and obtain new clients in a new market. Barcelona is a capital of one of the most industrial regions of Spain which is Cataluña so the central and strategic location makes a very good viable option for expanding into Barcelona. Some of the biggest Spanish firms like Inditex, Seat are all headquartered in Barcelona. Culturally Barcelona has always been business oriented and there is a good business culture. There is a good number of qualified work force with global qualities and global business oriented mentality. Logistics wise Barcelona is positioned very well in terms of city infrastructure and what it has to offer to residents as well as tourists. Barcelona has excellent public transportation, one of the biggest European sea ports, airports, bus system, train, etc. Barcelona is very conveniently positioned and located with transportation going in and out to Europe, express trains going to different countries such as France and providing a good alternative to air travel. The world leading port is a hub to many sea lines and connects Europe with Northern Africa. There is a great number of international firms already doing business in Barcelona . There is a young and educated work force and a number of world recognized and renowned universities. Barcelona seems to be a very competitive choice for doing business in. The quality of life in the city is very high and the city is very well planned out with many different ambitious urbanization projects.
Barcelona is currently suffering a very strong un employment which is approximately 21%. The average minimum wage and professional salaries are much lower than the standard in the United States, yet the capacity and the education level as well as the capabilities and Human resources are very competent in Spain. This means that American firms can take advantage of those host country advantages and use them towards making hire profits and getting more market share. There are also amazing infrastructure and benefits that European union has to offer while doing business in Barcelona. Just to summarize as the western mentality, business minded culture, great infrastructure and an educated work force are just some of the things that doing business in Barcelona might make very attractive.
Barcelona also has different business clusters in biomedical engineering as well as architectural and fashion. Inditex Zara, Masimmo Dutti, are all from Barcelona. Fashion capital of Spain, creates very positive climate for fashion designers and manufacturers as well as all the businesses that revolve around Fashion. Another words it is a business cluster for fashion designers, retailers, home for Zara, Massimo Dutti, and a truly Design capital.
2. Expand your search beyond the attached website. Why might a US-based company hesitate to invest in Barcelona?
After speaking with and interviewing Nacho Postigo who at one point was a Naval Sailing advisor to the King of Spain I have received a very accurate and concise information about the situation in Spain and particularly in Catalonia which is the most industrial region of Spain. Ever since the situation of separation has arisen close to a few thousand of Spanish companies have fled the Catalan region. There is serious instability in terms of market situation, and an unpredictable political situation. Even though Carles Puigdemont the leader of separation in Catalan is currently awaiting trial, the damage to the reputation has already been done. Many multinational companies would definitely be hesitant in investing right now as well as doing business in the region of Cataluña. Barcelona has always been the industrial center of Spain. Companies such as Seat, Zara, and many others were headquartered in Catalan region. Many of those firms have since moved because they want to have ties to the European union and receive benefits of free trade as well as monetary and fiscal incentives. If Catalan were to separate it would cut off any possible economic ties to the European Union. In other words if separation were theoretically possible than the status of Cataluña would have a status similar to the Prednistrovie region in Moldova, or Abkhazia region in Georgia. In the event of separation the Cataluña region would have a status of a semi legal state with all economic ties from abroad would be severed. With all of that sad it creates a very unstable and mostly uncertain climate for investing at this particular moment would not be advisable.
As an international director of Juan Valdez Cafe business development team I am thoroughly determined that expanding to Barcelona at the moment is viable option. Our company already has presence in Spain and we have 5 locations of which 3 are located in Madrid. Barcelona being a modern international city with a developed infrastructure would serve as great platform to further increase our market share and develop brand loyalty in Spain. In comparison to Madrid, Barcelona is a city that has more universities and therefore the population of students who are in need of part time jobs is very high. Finding qualified work force in Barcelona would be relatively easy. At the current moment there are over 31,000 Colombian Nationals living permanently in Barcelona. These are most likely potential clients that will enjoy the same brand that they have in their home country. Colombians are known for the love of their heritage and even when abroad if there is a local brand in many cases they will be very happy in being able to choose the local brand of coffee in their host country. According to the “ Forum Del Café”, Colombia is already the third largest importer of coffee into Spain and Barcelona is the largest Port of Entry for coffee in Europe. Barcelona port is often referred to as Mediterranean coffee hub. This further strengthens the argument of expanding our forces and establishing not only several points of sale which will be retail coffee shop, but also a wholesale division of roasted coffee. It would also be feasible to open up a distribution center for Juan Valdez roasted coffee products. Barcelona historically has always been a coffee town and coffee in Barcelona is traced back to the late 17th century. There is also a very strong local culture of roasting coffee and coffee drinking. As an example café Saula which is a Catalan coffee firm only last year had made over 8.5 Million Euro in profits and sells over 1.2 Million tons of coffee. They are not growers, but roasters and retailers who operate a small coffee shop right in the center of Barcelona. Most of the coffee that Saula imports already comes from Central and South America as well as Caribbean and only a minor part comes from Africa. This further fortifies the argument that setting up a point of retail for Juan Valdez in Barcelona can be a profitable venture. Juan Valdez would be able to integrate both horizontally by opening more location and purchasing smaller coffee shops, as well as vertically by auto importing green coffee and self-roasting it in Barcelona.
Being the biggest port of entry for Café and even nicknamed the Café port, the port of Barcelona offers a strategic location for green bean coffee imports. Juan Valdez could establish a roasting operation and a sorting / packing facility right here in Barcelona where it would be conveniently distributed not only throughout Spain, but also taking advantage of the European Union and distributed all over Europe.
The current political situation in Colombia and the rise of the FARC party into the ruling parliament is not the most favorable for business. Being minded that FARC is an extremely left oriented party and has tendencies to bring a regime similar to that of Hugo Chavez in Venezuela it is important to consider the near future consequences that it could bring to Colombia. This will ultimately result on negative impact for coffee farmers, firms that are involved in coffee business and overall business in general. The Colombian Peso is also much more volatile than the Euro and establishing a strong operation in Barcelona can mean obtaining more security.
The labor costs in Barcelona are relatively in expensive and there is a very high level of qualified work force. In the last few month there have been minor issues in terms of the Catalan separation movement and certain level of social and economic instability. Being myself as boots on the ground and studying the situation I actually see this as a potential opportunity rather than a threat. According to the “El Pais”, there are “more than 1700 firms have moved their headquarters”. More than 1700 firms have abandoned Cataluña and changed their headquarters. If we analyze those firms they are multinationals and mediums size firms that are dependent on the European Union monetary policies and fiscal policies as well as the free trade agreements and import exports. This also means that there is going to be a greater labor opportunities as more than likely some of the work force will become unemployed. In our particular case as we are first trying to take advantage of the Barcelona market and huge tourists influx which according to the “Statista” in 2016 was roughly 9 million tourists. Entering the market at this particular tricky time could definitely be an opportunity rather than a threat and taking advantage of the cheap labor costs, void in market share of multinational firms and medium size firms it is very possible that Barcelona will start providing incentives for international firms who are entering the market at this time, it is not happening yet, but is somewhat foreseeable that as many firms leave certain benefits and advantages will be encouraged for new players that will come in or the old ones that will decide to stay.