Flamingo puts foreign expansion plans on hold

Flamingo has managed to climb to the third position in the top of IT companies selling computers on the Romanian market, after HP and IBM, with more than 15,000 Flamingo-built systems sold, the company officials say quoting independent, yet preliminary surveys. On the other hand, it decided to put the bold international expansion plans it was talking about two years go, on stand-by.
The company gave up opening the branches in Italy and Greece it was planning to establish last year. “We developed business relations with companies in those countries, though. A very good opportunity for us to make new business contacts is the CeBIT fair,” Dan Topala, Flamingo Computers chairman said.
The company’s 2000-2001 strategy stressed on opening branches abroad, with seven of them actually established in the end, in Bulgaria, Croatia, Moldova, Serbia & Montenegro, Holland, Hungary and Macedonia. The company officials say there has been no change of direction in 2002, yet admit their decision to stop opening branches abroad was partly due to the recession on the international IT market.
On the other hand, Flamingo will continue to expand nationwide and has 20 more stores set to open this year. This explains Flamingo’s development in 2002. The company focused on an aggressive domestic expansion strategy and promoted its own computer brands first of all.
“Flamingo has become the top domestic computer assembler, accounting for more than 10% of the local market,” Dan Topala told Ziarul Financiar. He estimates approximately 150,000 computers (PCs, laptops and servers) to have been sold on the Romanian market last year. The company posted $63.7 million turnover last year, up from the $47 million in 2001. The company revised this index forecasting a more realistic figure in 2002, therefore reducing estimates from the initial $72 million to approximately 65 million euros.
Flamingo was fifth among the companies selling computers on the Romanian market last year. “It wasn’t exactly about a change in strategy. What any company wants is to grow. This growth can be achieved in two ways. Intensively and extensively. What really showed this year was our extensive development in Romania by opening new shops. The international distribution business has matured, and the development of the branch in Holland showed us we can very well cover the demand from the European space,” Topala said.
Flamingo will focus on stores that provide a large area to display products, that is above 200 sqm, such as the one dedicated in Lahovary Square in Bucharest last year.
“The further development of our retail chain is intended to educate the market, as well. The store in Lahovary Square for instance, organises an IT club every Thursday evening. We will open such stores both in Bucharest and in the provinces,” the official added.
Flamingo is also preparing a special offer for the business clients, that is the possibility to buy computers by a leasing plan.