Differences of Doing Business in Eu Compared with Soviet System

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buyers. But co-owners should still consider this option when they feel a recovery in the economy and the tourism sector in Latvia.

c) Seeking new management?

Sandis and his friends worked as a high-ranking city officials for 25 years at Soviet security establishment in Latvia. They managed Hotel Latvia to the point where it performed better than their competitors but they actually never achieved their initial target. Following the financial crisis in 2008 their revenues started going down. Sandis and his friends can use the help of a new management, especially experienced in hotel business/tourism sector in order to boost sales and marketing.

4. For each of these situations above, what would you recommend Sandis, Valdis and Kaspars? Why?

Sandis, Valdis and Kaspars should keep Hotel Latvia as the future presents hope for a recovery from the recession where they can start bringing in revenues. We know that by the beginning of 2013 the economy started to recover and there was an initial grow in the number of Russian tourists. EU was beginning to emerge from the recession as well which is a positive indicator that the austerity measures will soon come to an end. When we look at strengths of the tourism sector in Latvia, we see that the country is easily accessible by other European Union countries especially the ones in the Balkans and Russia with the infrastructure funds coming from the EU. The country has sandy beaches and nice sea resorts compared to other Baltic countries. It is a cheap European Union destination compared to other EU countries and more importantly the market is not saturated. (Exhibit 1)

Sandis, Valdis and Kaspars should also actively search for a suitable partner who will ease their financial problems and consider hiring a new management team in order to have a different perspective and implement new strategies, new marketing campaigns to attract customers looking into different tourist attractions i.e. health tourism etc.

Exhibit 1

SWOT Analysis

Strengths Sandy beaches, accessible due to the infrastructure investments, competitive prices

Weaknesses Competition from other Baltic countries

Opportunities Cheap vacation destination, non-saturated market, room for improvements in the sector

Threats Not a competitive tourism destination, high dependency on Russian tourists or neighboring countries