Chapter 6: Slovenia

(continued)

6.6 Advantages and Disadvantages of Foreign Suppliers

The following section examines the strengths and weaknesses of foreign suppliers as revealed by the survey. Specifically, it presents Slovenian buyers' preferences for domestic and foreign suppliers, means of purchasing environmental technologies, and their strengths and weaknesses as well as barriers to buying environmental technologies from abroad.

Purchasing Preferences

Table 6.24 provides a summary of responses to the question on purchasing preferences.

TABLE 6.24: SUMMARY OF RESPONSES ON PURCHASING PREFERENCES
When making purchasing decisions, does your organization prefer to buy domestic or foreign environmental technologies?
Only use best-technology or best-practice criteria	70%
Prefer domestic products	21%
Prefer foreign products	9%
When buying foreign-manufactured environmental technologies, do you buy from local representatives of foreign companies, or go directly to the producer abroad?
Buy from local representative in-country	44%
Buy directly from the producer abroad	32%
Use both options	24%
Note: Some companies considered this information confidential.

Most experts (about two-thirds) rely on the use of best-technology or best-practice criteria when making purchasing decisions. Among most other participants in the survey, a preference for domestic products prevails.

As indicated in Table 6.24, there is a slight preference for buying foreign-manufactured environmental technologies from domestic representatives compared with buying directly from the producer abroad. A considerable number of organizations, however, combine both approaches. This depends to a great extent on the availability of domestic representatives for a particular technology and on the quality of their service.

Strengths of Foreign Environmental Technologies

Table 6.25 presents a summary of responses to the question about the strengths of foreign environmental technologies. It is worth noting that many respondents considered this information confidential.

TABLE 6.25: STRENGHTS OF FOREIGN ENVIRONMENTAL TECHNOLOGIES
Within your area of expertise, what are the strengths of foreign environmental technologies compared to domestic products?
High product quality	80%
Reliability and durability of products	50%
Good value for money	38%
Good after-sales service	33%
User-friendly and easy to operate technology	29%
Available credit/funding from the foreign country	21%
Other	17%
Easy to customize and adapt to specific local needs	4%
Low price	-
Note: Some companies considered this information confidential. Only two-thirds of the interviewed experts answered the question on the strengths of foreign products.

High product quality is considered the most important strength of foreign environmental technologies. Also among the most highly ranked qualities of foreign technologies are reliability and durability of products, and good value for money. Available credits and funding from the country of origin are obviously not very important. Also interesting is the fact that low price was never referred to as one of the strengths of foreign environmental technologies.

Some experts ("other" in Table 6.25) also noted that a foreign technology which had been verified by several users in other countries had an advantage over domestic products. Only a limited proportion of respondents regarded foreign environmental technologies as user-friendly, and easy to customize and adapt to specific local conditions.

Perhaps most importantly, only one in three respondents considered the quality of after-sales service as a strength of imported environmental technologies. Problems with ensuring prompt technical services and maintenance by authorized representatives were also ranked high among barriers to purchase, and was found to be almost as important as the high price and lack of information on suppliers.

Barriers to Buying Environmental Technologies from Abroad

Table 6.26 presents a summary of responses to the question on the main barriers to buying environmental technologies from abroad.

TABLE 6.26: BARRIERS TO BUYING FOREIGN ENVIRONMENTAL TECHNOLOGIES
What do you see as the greatest barriers to buying environmental technologies from abroad?
Lack of reliable product information	58%
Too expensive	46%
Scarcity of information concerning suppliers	42%
Lack of authorized technical service and maintenance	38%
Products not suited to local conditions and technical culture	21%
Communication problems with foreign suppliers	17%
Import restrictions/high customs duties	13%
Changing environmental regulations	13%
Note: Some companies considered this information confidential. Only two-thirds of the interviewed experts answered the question on barriers to buying foreign technologies.

The preference for buying the best available technology in many cases results in difficulties because of the relatively high cost of imported technologies. As evident from Table 6.25, this is the second most important barrier to buying environmental technologies from abroad, while the most important is the lack of reliable product information. Interestingly, Slovenia was the only surveyed country from the region where the high price of foreign products was not the most significant barrier.

Other important barriers included the lack of authorized technical services and maintenance, the scarcity of information about suppliers, and non-suitability of products to the local conditions and technical culture. Changing environmental regulations have been an obstacle in the past during the transition of regulations from those established by the former Yugoslavia to those more modern introduced for independent Slovenia. That transition has now been largely completed and regulatory change should pose little problem to technology purchases in the future. Import restrictions and associated high customs duties and communication problems with foreign suppliers also are expected to become less important in the future.

REC * PUBLICATIONS * ENVIRONMENTAL TECHNOLOGY MARKET * SLOVENIA