THE ENLARGEMENT OF THE EUROPEAN UNION: NEW POSSIBILITIES FOR REGIONAL DISTRIBUTION. The case of Brightpoint Inc. in Bulgaria

Abstract

The globalization of business lead not only to accessibility to bigger markets for the companies, but also increased competition and imposed high requirements on their performance. Thus, many firms implemented outsourcing as a strategy for their international expansion. However, decisions on outsourcing locations are quite complex. The accession of Bulgaria and Romania into the European Union, presents new opportunities for firms to move operations to stable and yet low-cost countries. The purpose of this thesis is to explore the conditions which make Bulgaria a suitable location of a regional distribution centre for a handset distributor. Porter’s Five Forces model was used to describe the market situation in the region and in the country. Other theoretical concepts were utilized to determine the factors measuring the attractiveness of prospect locations for distribution facilities. The empirical results show that there is a significant market potential in the region. Further assessment of Bulgaria as a host country proved that it rates high as an outsourcing destination and fulfils the logistics criteria for location of a facility. Cost calculations on the prospect distribution centre revealed that such a facility is needed only if the company considers increasing its market share in the region and close attention should be paid to the sourcing options. Key