Chapter 2: Estonia
(continued)
From this point of view, domestic manufacturers of environmental technologies enjoy a competitive advantage because they understand the local conditions, can offer cheaper products, lower installation costs and local technical service.
When a foreign technology is preferred by end-users, it is usually because of its unique features which are unmatched by local products and because it is not available on the domestic market. Foreign technologies are viewed as being more advanced, of higher quality and more reliable than local products.
Local environmental companies tend to buy the exact technology they need to provide environmental services. The country of origin of the product plays a very small role in the decisionmaking process.
While price is a key decision factor, Estonian purchasers of environmental technologies also look for quality. Many of these technologies are expensive one-time investments, so companies tend to be careful in choosing the best to suit their needs. Therefore, the price of foreign technologies is often offset by the quality, reliability and expected life span of the product.
Local suppliers enjoy the advantages of close proximity to their customers, especially since it relates to pre-purchase marketing and after-sales service. Domestic environmental technology providers have the ability to establish a reputation and presence more readily than a foreign company. Local technology providers, as a result of their lower pricing, can also use delivery and warranty conditions to their advantage.
When asked to comment on the strengths of foreign suppliers, some 41 percent of respondents indicated "high product quality." The next most important advantages were "reliability and durability of products" (37 percent) and "good value for money" (37 percent). One-third of the respondents mentioned that foreign technologies were "user-friendly and easy to operate," while one-third also indicated the advantage of "available credit or financing." "Good training opportunities" was barely mentioned as a strength of foreign technologies.
Note that the term foreign technologies was interpreted to mean "Western technologies." Technologies from other Central and Eastern European countries are not considered to be competitive with Western technologies but instead with local Estonian technologies. The products generally fall into the same price range and quality standards; therefore, Estonian customers will tend to choose domestic products.
Foreign environmental technology providers enjoy an advantage over domestic providers when manufacturing highly specialized products not available on the domestic market. Such specialized technologies often include equipment for nuclear waste handling, transport and storage. Additionally, multi-purpose technologies (such as waste salvage trucks, loaders and incinerators) which can be applied to many different sectors and modifications may also give foreign technology suppliers a competitive advantage.
With regard to purchasing foreign environmental technologies by far the greatest barrier is the high price. This was mentioned by 41 percent of survey respondents. Unfortunately, the price is considered so high that foreign environmental technologies are sometimes considered uncompetitive from the outset. Another barrier to buying foreign technologies mentioned by a third of the respondents is that products are "not suitable for the local conditions and technical culture." "Difficult to ensure authorized technical service and maintenance" was noted as a barrier by 27 percent of the surveyed experts, while finally, the most obvious obstacle, "import restrictions/high customs duties" was also indicated as a significant barrier to purchasing foreign environmental technologies. The problems related to import customs and duties are expected to decrease in the coming years, especially for products manufactured in the EU.
