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3.6: Testimony from Alexander Sixt (Member of the Managing Board - Sixt)

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Doing Business in Europe

4.4 (52 ratings) | 1.7K Students Enrolled

Welcome to the MOOC “Doing Business in Europe”! Europe is a major world trade partner as well as a place where to acquire significant business experience. This is the reason why this MOOC has been designed with the view to explaining and guiding you in doing business in Europe. Do you really know Europe? How should you consider and approach the European continent? What business lessons can be drawn in a European perspective? With a dozen contributions from academics in the various domains of management (marketing, supply chain, finance, human resources management or strategy) and as many testimonials from business leaders operating in Europe, this course will help you enrich your knowledge and business competences within the European context. The MOOC is divided into 5 topics corresponding to 5 major issues when doing business in Europe: 1. Approaching the European market(s) 2. Innovating in Europe 3. Investing in Europe 4. Building the value chain 5. Integrating the diversity There are no prerequisite for this course. At the end of the coursework, participants will be able to understand how to design a European-scale development strategy. Please enroll and thank you in advance for choosing this course!

Skills You'll Learn

Strategic Management, Negotiation, Business Strategy, Market (Economics)

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From the lesson

Unit 3: Investing in Europe

Where and how to invest in Europe? This unit “Investing in Europe” deals with location and entry mode choices in the European context. You will be trained to ask the right questions to choose the right location in Europe. You will discover that Europe is the largest market for franchising with a great potential for development, an opportunity to rapidly develop corporate positions in various European markets. And you will get insights on how to complete successfully a company acquisition process in Europe.

3.6: Testimony from Alexander Sixt (Member of the Managing Board - Sixt)4:45

Taught By

Prof. Dr. Florence Pinot de Villechenon
Associate Professor
Prof. Dr. Béatrice Collin
Associate Professor

Transcript

Good morning my dear fellow ESCP students. I'm a proud Alumnus of the year 2006 from ESCP Europe. Today, I'm member of the board of director for Sixt SE. It's a 60% family-owned business based out of Munich in Pullach. We have revenues in the range of €2.3 billion, earnings about €240 million and about 5 000 employees worldwide. The company was founded in 1912 by my great grandfather Martin Sixt and he started with a small Limousine chauffeur company, mainly targeted towards american clients. Today, we are active in more dans 105 countries, and one of the key success element was scaling our business from a small regional player in Munich into a global competitor. And how did we do that? First of all, we became part of a larger international network of budget franchise system. After our short introduction to the budget franchise system, we scaled rapidly through our own franchise development. In 1998, we started our own franchise operations, starting in Austria and Switzerland and now scaling in over 105 countries worldwide. The franchise system is mainly driven by independant entrepreneurs who come from a large variety of cultures, languages and ideas. We provide them with our know-how, with our IT, our infrastructure and obviously our brand-name. They are independant operators, accountable only for themselves, true entrepreneurs, and we try to guide them over the years to come. We generate an excess of €1 billion revenues through our franchise network and we are proud to announce that the franchise network is almost 30% of our yearly incomes. I think one of the key success elements for a franchise network, that we understood very early on, is that you need local knowledge with local flavor and local territory to be successful. We, as Germans, have a very hard time understanding the true customer demands, especially in territories where we were not active. So I think that one of the key success elements, we daily based our success on is the knowledge of the individual market, the customer segments, the marketing needs and the respect of market needs. And I think a truly independant entrepreneur in one of those independant countries can only achieve that rather than a company like us can do. As the world changes and the mobility becomes an urban need and is getting more and more commoditized, we find it particulary accretive, especially for businesses that are in the business of selling cars, reparing cars, or along the value chain, to enter an additionnal part of the business is renting out mobility. For instance, our largest franchises worldwide come from car importing businesses, come from car reparing businesses who want to enlarge their value-chain and have a different valuable proposal to actually make money on mobility and renting out cars. So that has been prooven to be an incredibly successful business model, leveraging the synergetic effect with your existing businesses. When I graduated from ESCP in 2006, our share from non-German business was only 30%. Today, almost 10 years after, our share from international business is almost 70%. So we increased our international business by almost 2,5 times. Our spontanious brand recognition in non-German countries is more than 80% right now. So we truly are a pan-european brand now that is known in all european countries with more that 80 to 85%. I do believe that one of the core strategies for Sixt to grow up is, on the one hand, evolve to a true mobility provider that integrates all three forms of mobility: car rental, car sharing and ride hailing. But first and foremost to increase our international expansion. I do believe that our corporate market, especially in France, Spain and the UK will continue to grow as they did in the last year with almost 20 to 25% in each corporate market. So, I do believe that Sixt can eventually be a truly pan-european and a truly global company. As a true European, obviously, the tendencies in continental Europe, worry me to my bones. We, as a business, are not exposed to a tremendous risk there, because we buy in local currency and we sell in local currency so the currency effect on our business is really minimal.

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