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Slovak companies are slow to harness Internet's vast marketing potential

Slovak companies are eager to adopt the Internet as a means to reach potential investors, but are failing to exploit the new medium profitably because they lack enough know-how, according to a private survey of 250 central European companies on usage of the Internet.
The new study ranks roughly 35 Slovak businesses among the least equipped in the region to productively adapt their business strategies to the Internet, increasingly seen as a key world-wide marketing tool.
"Slovak companies have done poorly" in using the Internet to optimal advantage, said the report's author, Scott McQuade, a Vienna-based financial journalist and communications consultant from New Zealand, based on research he carried out between September and November last year.


"(Slovak) companies appear to have unrealistic expectations of how much it costs to establish an effective presence on the Internet and what returns they are likely to achieve."

Scott McQuade, Communications counsultant


Slovak companies are eager to adopt the Internet as a means to reach potential investors, but are failing to exploit the new medium profitably because they lack enough know-how, according to a private survey of 250 central European companies on usage of the Internet.

The new study ranks roughly 35 Slovak businesses among the least equipped in the region to productively adapt their business strategies to the Internet, increasingly seen as a key world-wide marketing tool.

"Slovak companies have done poorly" in using the Internet to optimal advantage, said the report's author, Scott McQuade, a Vienna-based financial journalist and communications consultant from New Zealand, based on research he carried out between September and November last year.

Slovak companies are clearly interested in the Internet, McQuade said, but putting it to use has been another matter. "While the response [to the Internet] has not been bad [in Slovakia], actually finding 'live' websites is another matter," McQuade said. "Most of these companies are putting out electronic brochures and then going back to sleep and forgetting about them."

"Live" websites, McQuade explained, are strategic data platforms that give on-line entrepreneurs quick access to timely, in-depth information. He said this is important because most of the Internet's business users are affluent Americans or western Europeans looking for investment possibilities.

Slovak companies generally are unaware of the costs associated with the electronic marketplace.

"These companies appear to have unrealistic expectations of how much it costs to establish an effective presence on the Internet and what returns they are likely to achieve," McQuade said. "They also face numerous constraints, including a lack of skilled and experienced staff, expensive and unreliable telecommunication systems and language problems. They need to find help fast."

Cost really depends largely on how companies want to manage their sites. "It depends on what kind of website a company wants," said Ivan Lescek, the technical director of the Internet service-provider Eunet, Slovakia. "If a company wants to be their own web-server, it costs about 40,000 Sk per month plus about 6,000 Sk in fees to Slovak Telecom, so it can cost up to 50,000 Sk."

Alternatively, Lescek said, companies can establish a website on Eunet's local network, "which they can then manage on a remote basis. That is much cheaper [at about] 10,000 Sk per month, but it's mainly attracive for companies that want to simply have an Internet presence."

While third party service-providers like Eunet are poised to benefit from the lack of skilled technical resources at most Slovak companies, McQuade said that companies must ultimately seize the initiative themselves if they are to use the technology competitively and cost-efficiently.

This means updating information on a daily basis, providing the information in English, and making their company web pages accessible, i.e. marketable. "The Internet is not just about throwing up a brochure," McQuade said.

Case in point

McQuade presented a case in point as he "leafed" through Slovakia's largest company, the steel mill VSZ's copious webpages. McQuade said VSZ's pages lack in visual presentation and its breakdown of information is not reader-friendly, two maladies which he added are widely typical of Slovak companies' cyber-archives.

"It's very graphic-intensive and product-oriented," McQuade said. "We have an information bulletin, a fairly dull list of numbers from 1995 through 1996, which stops somewhere in 1996-there's no date [for the last item], which is all too typical, I'm afraid," he said. VSŽ Informatika, an external division of VSŽ which produced the company's website, declined to comment.

Seizing the day

There are some exceptions though to this rule. According to McQuade, Ľudová Banka, partly owned by the Austrian Volksbank, passes the test of intermediate-level innovation.

"Ľudová Banka's website illustrates the potential for creating an effective information platform," McQuade said. "They are one of the few Slovak companies with a website, although the site concentrates more on advertising than detailed financial information. It doesn't list current rates; however, it's in three languages, which is rather unusual."

Viktor Svec, a systems engineer and computer specialist at Ľudová Banka, said the bank is currently preparing to expand its website's store of information, including listing capital markets where the bank is active, and the value of the bank's equity shares.

Miroslav Bodek, the director of the Bratislava Stock Exchange's BCPB information department, said the bourse launched its own website two months ago "to provide hot new information to our [stock] issuers" through independent information services such as the U.S.-based Telrates and the British news service Reuters.

"We are preparing on-line updates with monthly statistics, daily stock prices, listed and unlisted shares, a list of the stock exchange's members and its rules, and news about our publications," Bodek said, adding that the BCPB plans to install English-language webpages "in one or two months."

For more information about Scott McQuade's report, "Using the Internet to Improve Investor Relations: The Case of Central European Public Companies," contact McQuade by e-mail at: smcquade@hotmail.com

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