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Mabetex

Introduction

Mabetex based on many years of experience in business management and promotion, in 1990 created Mabetex Project Management Company, and in 1991 the company became known as Mabetex Project Engineering. The company was established by Behxhet Pacolli who is the president of the Mabetex Group and by Max Gygax in Switzerland with a small capital of just 100'000 Swiss Francs (in Dec 31, 1992, in Swiss franc was 0.73 dollars)[1] and one secretary. After completing successfully their first project with Russia they start a new project in Siberia, which also was considered successful. In 1993, Mabetex was chosen to build the Former Russian Parliament Building, also known as the White House. They also constructed Russian Federation Houses of Parliament, Presidential Residences in Sochi, Moscow, Wolski Utus, Krasnojarsk, Irkutsk, Petrozavodsk and as a result they won the international tender for the renovation of the Kremlin. Mabetex received the Russian Federation's highest award in this field.

Since then Mabetex Group had many other constructing projects but also Mabetex functions through other service companies such as: CRS-financing, Diamond Travel Agencies, Astana Air, Commercial Airlines, ATV Media - television broadcasting, Eksklusive-a weekly magazine, B&G Entertainment - musical production and promotion, Interfin Ltd in London and Lugano. The Group is also consisted of different luxury hotels such as Swiss Diamond Hotel in Moscow and Lugano.

Mabetex is an international company with eighteen subsidiaries in sixteen countries of the world such as:Headquarters in Lugano -Switzerland, Moscow, Athens, Vienna, Madrid, USA, Germany, Italy, Astana, capital of Kazakhistan and in its ex-capital, Alma-Ata, at Prishtina in Kosovo, in Tirana, in Sarajevo, in Lubiana, at BMO in the Tzchek Republic, at Yakutsk in the Sakhs Republic, at Dnepropetrovsk in Ukraina, and at Tashkent in Uzbekistan.1

Based on their professionalism, skill and enthusiasm of their loyal staff enabled Mabetex to maintain its constant growth and to be able to resist the challenges and be able to take Mabetex always one step further.

Mission and Objectives

The mission statement of the Mabetex Company is:

"Customer satisfaction is behind everything we do"

The main objective has always been the same: "To create and execute projects in order to improve the standard of living. All projects are state of the art, specifically fitted to the customer's satisfaction". The last nine years have been characterized with: Continued solid growth, excellent financial results, diversification of activity, and new sales markets.

Constant growth happened because of the new organizational policies which increased market share and forecast a permanent growth in the Mabetex Group. Diversification of activity meaning that in the past they used civil engineering, but the last few years they were more open to new industries such as: fashion, hotel business, air traffic, tourism and others. And in the future is expected to participate in industries such as: mass media, through their own TV channels and modern communication systems. Mabetex uses the phrase new markets in relation to their relationship with different countries such as China, Kazakhstan and other countries during the past years and they want to continue expanding in the future.

Analyses of PEST

Mabetex has its headquarters in Lugano, Switzerland but from the year 2000 its headquarters are also in Moscow, Russia and Kazakhistan. Taking in consideration that this is an international company I decided to examine the country were the company was formed in first, and that is Switzerland.

Political:

Switzerland is connected with Italy in the south, France in the west, Germany in the north, Lichtenstein kingdom in north east, and Austria in the east. Switzerland is not in the European Union yet but they have an ultimatum until 2006 to be part of the European Union. Switzerland is a stable country which gives companies the opportunities to conduct business inside the country and abroad. "The Swiss Government has created an economic environment that encourages foreign direct investors in the country". Switzerland's taxation laws give autonomy to the Federal Government, the Cantons (Swiss is divided into small districts called Cantons) and the municipalities. Each Canton has its own tax laws such as: tariffs, tax rates and exemptions. The municipality may raise additional taxes. In the cantons, "income tax is usually calculated on a progressive scale - the ratio of the taxable net income relative to the capital resources plus reserves". However, minimum rates are relevant in all cases. The federal taxes are about 8.5% of taxable income. On average a Swiss citizen pays approximately 25% total taxes, however nominal taxes are higher because in Switzerland taxes can be deducted as an expense. In Switzerland, the business is divided into: Operating Company, Holding Company and Domestic Company. As a result, the Swiss law will tax the Company based on the kind of the company. Mabetex is a Holding company because is a company engaged in trading, expanding in other countries and providing services. So they are subject to be taxed in their profit and capital.

The Government in Switzerland made many treaties with other countries. There is the trading agreement between European Union and Swiss bilateral agreement in 1999; there is the EFTA- European Free Trade Agreement which was lastly updated in June 2002. There is also the WTO- World Trade Organization which deals with the rules of trade between nations at a global or near- global level. It deals with different industries i.e. agriculture, textiles and clothing, banking, telecommunications, government purchases, industrial standards and product safety etc. Thus Mabetex Group is affected by the WTO because it deals with the type of industry they work which is engineering mainly but also clothes industry, fashion etc. in Switzerland also applies the GATT (general agreement on Tariffs and trade), GATS (general agreements on trade in Services), and TRIPS (agreement on trade-related aspects of intellectual property rights). So I must conclude that the tax policies, trade laws, political stability in Switzerland influence Mabetex positively and encourage the company to trade and expand globally.

Economical:

Mabetex is based in a country such as Switzerland that has a prosperous and stable market. They traditionally have: low inflation, low long term capital cost and good investment climate for the outsiders. Switzerland is ranked fourth in the world for Gross Domestic Product (GDP) per person employed 74,033 USD.[2] This is as a result of "the high level of motivation of employees, the strong link between its industry and trade with foreign countries, and the achievements of the services industry". Switzerland invests directly in foreign markets and that explains why they are ranked first as foreign direct investors in the world after Hong Kong.[3] As about economic freedom, Switzerland performs well in attracting international firms to settle in Switzerland and one of the main reasons is the "liberal business environment and the country's market- oriented economic policy". [4]I must also say that the interest rates in Switzerland are the lowest in the world. In a forecast that has been done by the Credit Suisse, Global investor 3/04 it has been discovered that from 0.53% in the beginning, after three months the rates go up from 0.65-0.85, and after twelve months they go up for 1.40-1.60. And in other countries such as United States after twelve months is 3.10-3.30. In addition, the inflation rates in recent years have remained below 1%; this is so because of the high savings rate and large inflows of foreign money.

All of the above influence my company and especially the part that Switzerland attracts international companies, because we need to take in consideration that the president of Mabetex Mr. Behxhet Pacolli is from Kosovo, and went to Switzerland to start up his business after working with a Swiss company called Intercom. Now he is a Swiss resident, and all the political effects and changes affect him. But also the low interest rates, the great relationship between Swiss and Europe, the high GDP, all of these economical factors make of Mabetex Company an excellent one and give them an opportunity to expand.

Social Factors:

The social factors influence Mabetex Company because they affect the customers. Based on a research of Mercer Human Resource Consulting LLC, the two largest cities in Switzerland (Zurich and Geneva) have the best quality of life; they score 106.5.[5] As I mentioned before in this project, Switzerland has a high safety. The social life style in this country influences my company, because if people have a high living standard this means that they can afford luxuries, or that it is safe for them to build a house or to invest in building a Hotel, and since my company has brand loyalty for thirteen years now, they will have a profit.

Technology

Technology is developing fast these last decades and has become almost impossible to live without. In the company the new technology might have positive or negative effects. Some positive effects for my company may include: speed - it is faster to build a palace or a hotel with new technology because you don't carry everything until the 20th floor but the machine does it for you automatically; safety- it is safer to build a house because the person controls the machine from down, doesn't need to go up; stronger- the building is stronger; It gives the company competitive advantage. But there are also some negative effects and they include: technology can lower barriers to entry because if a person has money to buy the technology then they can start up the business and compete; technology is hard to keep in touch with because nowadays it changes frequently and when it first comes out is very expensive. I must say that Mabetex has a special department of information about technical and technology. So as I can understand they try to keep up with the latest technology of the world, even though this might be too hard and too expensive.

Analyses of SWOT

Strength: The Strengths of Mabetex company are:

high quality is the primarily goal of my company; they have specialized employees which results in high quality;

Speed - they analyze the customer needs and they are much more "focused" in planning, with shorter production time and a higher degree of Customer's satisfaction.

Ethical: Mabetex is also a humanitarian organization, they help people from all over the world, especially children.(I will talk about it more in a while)

Technology: modern, highly developed carefully proportioned, high efficiency.

Human resources: they have expertise, labor workers, very efficient and effective; they are innovated and managers are part of decision making.

Weakness: the weakness of the company is that they manage not related industries.

The advantage is that they have a contingency planning meaning that if one industry fails they have the other remaining.

The disadvantage is that it is very hard to concentrate and focus on spreading, and they might lose control and lose the main objective and goal.

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Opportunity: An opportunity for Mabetex company:

Expansion: in new areas and specifically Mabetex is interested in expanding in Asia, more exclusively China.

Threats: Some threats might be:

Political effects: Switzerland is going to use Euros from 2006 and this might create an economical instability.

Competition: Mabetex is a constructing company, and it is faced with many competitors, and some small ones might be a threat in the future.

Analyses of BCG Matrix

Fashion, hotel business, air traffic, tourism- all these industries which are recent and new for Mabetex company need money for promotion in order to succeed.

Food and Chemical industry: these industries have too many competitors and have low market share. They need investment from the cash cow in order to gain market share.

Cash Cow :

For Mabetex company the cash cow is the construction:Industrial and civil buildings, refurbishing global urban planning.

Dogs

No dogs!

Mabetex as I mentioned earlier is a company that uses unrelated diversification. They are involved in media, tourism, entertainment, and transport industry. The president of the company Mr. Behxhet Pacolli explains this diversification: "If a person were to say, Mr. Pacolli I have this idea and this business, I am at business let's work together; I would answer "Why not." Mr. Pacolli likes to create and he could be called a conglomerate.

Industry Life Cycle

Taking in consideration all the information available I would be to conclude that Mabetex is in a Maturity stage. It is in the maturity stage firstly because Mabetex during the last few years had constant solid growth. As a second reason is the brand loyalty they have created by having high quality, flexibility, modern technology, and efficient human resource.

Task Environment

Suppliers:

My Company, as I mentioned before is diversified in many industries and for each industry has different suppliers. In the internet site it is written that Mabetex has 3000 suppliers, all over the world. In part this is a good thing because the suppliers do not have bargaining power over Mabetex, the company can demand low price and high quality; but on the other hand, because Mabetex has so many suppliers they cannot keep a close relationship between each other, and suppliers might not be reliable.

Distributors

: Mabetex uses vertical integration- backwards in some industries such as:

"The plants furnished by the company perform all stages of processing according to the availability of produce. The process commences with selection and cleaning and subsequently the produce is submitted to the treatments required to yield the finished product (cutting, grinding, pasteurization, drying and so forth), and is usually packed in dried or precooked form assuring easy transportation and long preservation periods, or homogenized; or in another form which is easily digested by infants and the elderly. All types of packaging are used: trays, bags drums, jars, bottles, bins and so forth."[6]

But mostly they from the supplier get what they need, then produce it; and afterwards they sell it to different distributors. They have many distributors, not an exclusive one.

Customers

: Being an international company Mabetex has to deal with many customers. Until now they had one-hundred and fifty main engineering contracts executed.

Competitors

: Mabetex has had few competitors since the beginning of their business, but because of the technology now it is easier to start a construction company so there are new potential entrants. The barriers to entry in engineering, construction business are low and are getting lower with the development of the technology. But we also must take in consideration that Mabetex has gained Brand loyalty, they have been in business for fifteen years now and they have experience, their employees are more efficient then those of the new entrants.

External Environment

The external environment of Mabetex is pretty stable. There are few competitors, and other potential competitors but that does not affect that much Mabetex in their industries. So in the internal environment the company is pretty centralized, the president makes all the decisions, task and rules are clear; so they use mechanistic internal environment. But as I was analyzing this company I noticed that not all the industries are centralized, as I mentioned before the president of the company likes diversification, likes new ideas and creativity of the employees. In an interview with the online magazine Winne he said: "In my life I have never ignored the small people, in order to go up in levels, each step is very important...I do not like playing the boss or the big chief..."[7] I believe that the company is more centralized in construction and the labor (builders), but at the same time, the engineers, the internal designers are left alone in order to create; they use the organic internal environment because they need to be flexible, fast, and are motivated by the company.

Mabetex uses Functional Structure, as shown in the Mabetex Chart, it is divided into Administrative, Financial, Commercial Department, Project CEP, and Marketing. There are many lines so this means that is pretty bureaucratic. When I was analyzing the chart I noticed that Administrative and Financial departments work together. The Commercial department and Project CEP work together and share information. And lastly, the Marketing department. The Administrative and Financial take care of the internal work such as: financial papers, legal disputes, managing personal disputes, relations with banks. They have a President and a Management board. So the company uses a mechanistic internal environment, in order to avoid corruption. The Commercial Department and Project CEP take care of the analyses, projects, price analyses, sales. If we look closely we will understand that these departments work closely together, use knowledge management, synergy. These two departments are not closely supervised, therefore here it is used organic internal environment; in order for the employees to be more efficient and effective. The Marketing department's job is to search information for new technology, new funding world wide, marketing and engineering. This branch does the research that the company needs in order to be in the same step with technology. In conclusion, the structure of my company is functional and the internal organization is mechanistic and organic. The problem is that there are too many industries in which my company is involved and there are 16 countries in all over the world in which my company is present. So I believe that my company is using a complicated structure, because if the structure becomes taller then it will be harder to control and it might lose the main goal, the quality might fall, or even the company could gain a bad reputation.

Organizational culture:

Mabetex Company uses two different organizational cultures: The Role culture and the Task culture. The role culture consists of rules, procedures, bureaucracy and is used by the financial and administrative departments because it is more efficient for the company. The task culture is used by the commercial department, project CEP and the Marketing department because for these departments to be efficient they have to work in teams, share experiences and ideas; using synergy (1+1=3).

Human Resource

The employees play a very important role in every company; however in Mabetex they are necessary in order to achieve their long term goals. The recruitment and selection is done by the Human resource department, and most of the time they use external recruitment because they believe it's important to bring new ideas into the Company, and it is proven to increase flexibility. They use media, internet, and newspapers to attract the external employees to submit an application in their Company. In the selection process, depending from the position, they require experienced employees in the field that they are applying, since it is an International Company, the knowledge of many languages is an immense benefit, of outmost importance is also to be outgoing, to like working in teams (if applying for a manager or working in the areas of: marketing, Project CEP, and commercial department). In relation to development, Mabetex uses the formal education development, in which they pay tuition of their employee, mostly MBA after working for Mabetex for one or two years. They believe that by using educational development they give an incentive to the employee to do more for the Company, feeling that they belong. This seems expensive when looked at it for the first time, but when I analyzed it in more depth I understood that by using this method the company gains a faithful and motivated worker; socially they are seen as the 'good guys' because they are financing a person to raise academically

,

on the other hand the investment in that person will be of higher benefit to the company. Furthermore, Mabetex for the employees that already work there uses on-the-job training. This way it is cheaper, and the employees benefit because they get to be more familiar with the surrounding. The payment varies from the position; Mabetex uses relatively low wages for the construction employees, average wages for the departments, such as: secretary, department managers, and relatively high wage for the Top manager. The employees also get 20-25 days vocation in a year, but not all used at the same time.

Management and leadership style

Leadership is a key ingredient for managerial success in a company. Mabetex is a company which has a combination of individualistic and collectivistic perspective always varies from the position and the department. I believe that managers in Mabetex use mostly dynamic leadership style; however the exception is always the financial and administrative department. The leader or the president of Mabetex is an empathetic person, and uses referent power. The Board of Directors is made of two brothers of the president (Pacolli) and three other co-investors, and one of the three is a woman; which shows that Mabetex is a company that does not discriminate.

The bottom-up communication channel is used by Mabetex Company. The employees are able to suggest if they do not like something by the communication means of: face to face, e-mail (if in other branches), telephone.

Controlling

Since I am researching this company through internet, it is hard to know for sure what kind of control they use, but based on the information that I have I will try to express my opinion in this matter. I believe that Mabetex uses Total Quality Management as a control mechanism because their aim continuously is to improve quality of their services. Feedback is used to understand the reaction of the customers, and to be able to understand when something is unsatisfying and fix it. The measurement of performance I believe is done in teams, so they will evaluate the team not the individual; this helps the team to be united. Since it is an international company, it is very hard to have the proper controlling system, because it depends from the culture of the people and the country were they are operating.

Social Activities

Mabetex is also very much active in the social activities, they have created their non-profitable organization and programs which supports and initiates projects that provide assistance to children and families who have become the victims of war and persecution. Very early in the year 1993 Mr. Pacolli established "Les Enfants du Sakha", a fund set up for the aid of children and which is still today our major help organization. More then fifty children from Ex-Yugoslavia and Russia, with serious diseases have been sent to western hospitals to be cured.

Mr. Pacolli contributed immensely to the "Together for peace Foundation", which is one of Italy's major humanitarian organization, founded by Mrs Maria Pia Fanfani and operating in the whole world. And as a sign of gratitude, the Together for Peace Foundation nominated Mr. Pacolli asPATRON OF THE NETWORK AND SOLIDARITY.

Furthermore, the President Mr. Behgjet Pacolli has always been the first promoter in supporting young student organizations, (for example. the YA-YE European trade fair), but he is also sustaining institutions for handicapped children in Ticino supporting the restoration of an old church until the sponsoring of the biggest horse-riding champion chip in the area. Mabetex Group sponsors Raoul Meyer from Milan who is a speed car driver and Mabetex has its own basketball team in Kosovo, Prishtina since 2002.

Foundation: Children of Sakha

"The Foundation for the Children of Sakha has been extremely active during and after the war in Kosovo, where it provided a great deal of trucks, full of food, clothing and medicine. Mabetex itself sent, using its own structure and resources many tons of goods to refugee camps in Albania and helped other institutions in Italy and Switzerland to send goods using the company's trucks.

In June 1993, Mr. Behgjet Pacolli the President of Mabetex Group-Lugano has created the foundation for the children of Yakutia (Republic of Sakha). The initial scope of the foundation is the establishing and the strengthening of the good relations between the Sakha Republic and the Canton of Ticino/Switzerland.

The foundation helps children in poor health under 15, suffering from hereditary and other diseases, that for some reasons cannot be cured in their homeland and necessitate the specialist help on international level."

Foundation: FORK (

Foundation for the organization and reconstruction of Kosova)

"In the meantime, FORK, with its own offices and trained personnel has distributed goods of about 270 tons in the refugee camps. Several foreign companies have contributed to this initiative...Besides it FORK helped to rebuild many plants destroyed by bombardment. Brickyards, cement factory and others, nowadays production lines are operative

."

[8]

Conclusion

In conclusion, I would say that Mabetex is an example of how a small company, with a small capital because of its efficient management and employees has achieved to be a successful International company. With its eighteen subsidiaries in sixteen countries of the world, and the diversity of the product, they are at the top. However, it is never enough; Mabetex long term objectives are to expand even more, to have higher market share and market growth in the future. I understood that the leader of a company is the basis by which and through which a company functions; If the leader has empathy, works harder then the employees then the employees will be motivated to work as well. Mabetex gives human resources an essential role, they participate in decision making and are free to express themselves if any critics. Another indispensable part is the controlling because it is the only way to keep track and anticipate what might occur; also it determines how efficient, what quality, and the level of innovation of employees. Lastly, after analyzing Mabetex, I would really like to work there!

References

"A short resume about Mabetex history" online posting, Powered by IBO Group, March 12, 2005, www.mabetex.com

"Economic Freedom of the World" online posting, Cato Institute, April 6th, 2005, www.cato.org

"Food Industry" online posting, online posting, Powered by IBO Group, March 12, 2005, www.mabetex.com

"Gross domestic Product(GDP) per person employed" online posting, IMD the world competitiveness Yearbook 2004, April 6th, 2005, www.imd.ch/wcy

"Interview with Mr. Behgjet Pacolli" online posting, Winne-online since 1996, July 24th,2002, 2004 World Investment news, Multimedia Information Company, March 10th, 2005, http://www.winne.com/topinterviews/pacolli.htm

"Living quality of major cities-worldwide comparison" online posting, Copyright by seco, April 6th, 2005, http://www.standortschweiz.ch/seco/internet/en/geo_eco/economic_situation/prosperity/index.html

"Social Activities" online posting, , Powered by IBO Group, March 12, 2005, www.mabetex.com

"World investment report" online posting, Credit Suisse Economic & Policy Consulting, April 6th, 2005, www.csg.com

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[1] "A short resume about Mabetex history" online posting, Powered by IBO Group, March 12, 2005, www.mabetex.com

[2] "Gross domestic Product(GDP) per person employed" online posting, IMD the world competitiveness Yearbook 2004, April 6th, 2005, www.imd.ch/wcy

[3] "World investment report" online posting, Credit Suisse Economic & Policy Consulting, April 6th, 2005, www.csg.com

[4] "Economic Freedom of the World" online posting, Cato Institute, April 6th, 2005, www.cato.org

[5]" Living quality of major cities-worldwide comparison" online posting, Copyright by seco, April 6th, 2005, http://www.standortschweiz.ch/seco/internet/en/geo_eco/economic_situation/prosperity/index.html

[6] "Food Industry" online posting, online posting, Powered by IBO Group, March 12, 2005, www.mabetex.com

[7] "Interview with Mr. Behgjet Pacolli" online posting, Winne-online since 1996, July 24th,2002, 2004 World Investment news, Multimedia Information Company, March 10th, 1005, http://www.winne.com/topinterviews/pacolli.htm

[8] "Social Activities" online posting, , Powered by IBO Group, March 12, 2005, www.mabetex.com