FInancial Viability

Profit Margin breakdown for Swiss

Profit Margin measures overall efficiency of a company and shows its ability to withstand competition as well as defend against adverse conditions such as rising costs, falling prices, decline in sales or management distress. Profit margin tells investors how well the company executes on its overall pricing strategies as well as how effective the company in controlling its costs.

Swiss

Profit Margin = Net Income Revenue X 100

=

0.50 %

In a nutshell, Profit Margin indicator shows the amount of money the company makes from total sales or revenue. It can provide a good insight into companies in the same sector, as well as help to identify trends of a company from year to year.

Currency Translation

            1 Swiss Franc equals 1.06 US Dollar 

     

Profit Repatriation

• Depends if Swiss IP entity is structured as a company or branch
• Repatriation from branch tax neutral
• Profit distributions (dividends) from Swiss legal entities suffer withholding tax of 35%, which may be reduced in-full or in-part under applicable international tax treaties
• Royalties, management fees, service fees, and technical assistance fees are generally not subject to Swiss withholding tax
• Interest income accruing on inter-company loans not subject to Swiss withholding tax as long as not re-characterized as bonds or bank deposits

http://www.macroaxis.com/invest/ratio/SLW.DE--Profit_Margin

http://coinmill.com/CHF_calculator.html

http://www2.eycom.ch/publications/items/tax_intellectual_property/en.pdf

Current Managerial and Labor Climate

Intercultural Management - Switzerland

Being a Manager in Switzerland

• Formal and reserved in your behavior, and it is  expected that your Swiss colleagues will be the same. 
• Arrive on time for meetings, 
• Show the proper deference to rank and position
•  Do not attempt to become familiar too quickly

The Role of a Manager

• Cross cultural management needs to carefully study the corporate culture of specific companies

Approach to Change

• Switzerland’s intercultural competence and readiness for change is low

Approach to Time and Priorities

• Switzerland is a controlled-time culture

•  Individual’s ability to meet deadlines is important
  

Decision Making

• Managers are expected to provide explicit directions and ensure that their subordinates have the proper materials

• Cross cultural management is more likely to succeed if you understand that the Swiss are not risk takers.

Boss or Team Player?

• The role of the leader is to harness the talent of the group assembled, and develop any resulting synergies.

Communication and Negotiation Styles

• Cross cultural communication should be relatively straight forward when dealing with the Swiss.

Labor Climate

• Switzerland rates #2 among the world's national economies
• Workforce highly motivated
• Swiss labor market characterized by a liberal labor law, low regulation density
• Outstanding social stability
• Labor conflicts solved through negotiations between social partners
• Labor costs depend on direct wage and ancilliary wage costs and the total number of hours worked per year and the costs of absenteeism
• Annual working hours longer than European Countries
• Absentees due to illness low
• Strikers practically non-existent

http://www.kwintessential.co.uk/intercultural/management/switzerland.html

http://www.switzerland-4you.com/facts.htm

Local Manufacture

Switzerland--Local Manufacturing

• Switzerland is a country of an abundant source of waterpower.
• Switzerland's manufacturing sector is well-developed.
• Raw materials are imported and converted into high-value exports.
• Largest producer of textile machinery in the world.
• World leader in production of dyestuffs
• World's dominant producer of watches since the 19th century
• Well-known for making the world's bestselling plastic watch--the Swatch

http://www.countriesquest.com/europe/switzerland/economy/manufacturing.htm

Competition for Krispy Kreme in Swiss Market

Stephan Rathgeb's HOMEMADE DOUGHNUTS

Donatli's Drive-In Sales Window

Donatli is the first and only donut bakery in Switzerland.  They bake their donuts fresh daily in their bakery in Obermeilen ZH, on the right bank of Lake Zurich, which opened in March 2006.  Their first shop was a small sales window with a large pink donut.  

Donatli supplied the 500 donuts for the Simpsons premiere in Zurich recently.

Donatli's Homemade Donuts Preparation

Donatli's donuts are homemade with selected ingredients and careful preparation.

Donatli Mobile

Donatli Mobile shops are the smallest donut drive-ins in the world and are found in the metropolitan area in Zurich.  The Donatli Mobile stores are operated by independent franchises.  They also deliver donut orders to your door, and you can also order donuts over the internet.

Summer Classes for Children

Donatli also offers summer baking classes for children.

Donatli Globe and "American Christmas"

At Christmas Donatli recognizes American Christmas by making the donut featured above available in all of their outlets and coffee bars in the whole of Switzerland--Zurich, Wallisellen, Basel, Chur, Bern, Lucern, Lausanne, Geneve.  Donatli is showing their global support by respecting the American tradition. 

Breath of fresh • The classic with thin powdered sugar glaze

Dark Chocolate Dream with the finest Swiss dark chocolate glaze
Rosa Luxembourg:  Glazed with Pink Swiss Chocolate

The Story Behind Donatli Donuts

Shipley's Donuts in Livingston, Texas

The story of Donatli Donuts began when Stephan Rathgeb a journalist for the magazine of the Tages-Anzeiger in Livingston, Texas researching the death penalty in 2001.  The prison guards would not allow him to visit death row, so he had four hours to pass the time.  He ended up stopping at what he called a wooden house and was laughed at because he asked for tea.  Instead the owner brought him a box of fresh donuts.  After tasting them Stephan asked if he could see the production, and the 40-year old donut baker was proud to show him and sent him off with the words, "And maybe, one day you will open up a donut shop in Switzerland!"

http://www.donatli.ch/modx-1.0.2/index.php?id=48

Methods for Distribution

Methods for Distribution

     When the doughnuts are made, they need to be transported to all the stores.  There are not that many ways to distribute the doughnuts except by foot, bike, and car.  Having mopeds, trucks, and people distributing them will allow the name to get out.  

    Potentially, Krispy Kreme could have a system where people could order doughnuts and have a delivery boy bring them to the people.  That would open up a whole new window of opportunities for the company.











Works Cited:
http://www.cartowncustoms.com/2010/08/taco-truck-krispy-kreme.html

Methods for Marketing

   

METHODS OF MARKETING KRISPY KREME

    Doughnuts in Switzerland are called Ringlis and are known to be eaten during the Christmas holidays.  Due to the fact that not only are they served all year long but with the high demand of them during Christmas, this will allow Krispy Kreme to use Christmas to their marketing advantage.  Some of the best ways to market a new product are by TV commercials, designing a campaign that makes people want to try it, focusing on the people in the market, proving that the doughnuts are good, and personalizing it.

Above are the Swiss Ringlis that are popular during Christmas

     TV commercials is a very effective was to market the doughnuts.  The look of the doughnut will pull people into the stores with the gooeyness and the sugary glaze that draws Americans to the doughnuts.  Most of the Swiss people watch new movies or sports on the television which would help us out a lot because doughnuts are not only good for holidays such as Christmas but would be a perfect food for them to snack on while watching the game.  When people watch a commercial about food, they are more likely to buy it for the next tv outing than something else.  Marketing during the Christmas season is a must do to the fact, doughnuts are very popular this season.
      A campaign such as hot, fresh, doughnuts for the busy and cold Christmas holiday.  Campaigning the doughnuts to Christians who already eat them during the holidays could be easily done.  Since there is not very much competition, having hot homemade doughnuts on the go will be something new and popular for the Swiss people

     The doughnut market is mostly geared towards children in the United States so marketing to the children in Switzerland would be a great start.  Children can be easily influenced through social media.
     Proving the Doughnuts are good will be harder but is the best way to prove the point.  A good way of doing this is giving out free doughnuts to the public for special occasions such as the grand opening.  Another way of doing this is donating them to companies and such.

     Personalizing the doughnuts will probably be the best way to market the doughnuts.  Using the American doughnuts with Swiss chocolate on the doughnuts allows the doughnuts to have their personal touch of what they are already used to.

Works Cited:

http://en.wikipedia.org/wiki/List_of_doughnut_varieties

http://www.krispykreme.com/home

Political Climate

   

     The Swiss Political climate is much like the United States political system except for a few differences such as they do not have a full time president.  They both have a democratic government.
     Switzerland's political system is run by a two Chamber Parliament. The federal chamber consists of the National Council and the Council of States.  The National Council is like the U.S. House of representatives where there are 200 people and each person or persons represents a canton which is somewhat like a "state".  Some cantons have more representatives than others depending on how high the population is for that canton.  The Council of States can be compared to the U.S. Senate.  It consists of 46 members that are elected every four years.
     They also have Head of Departments for different departments such as Internal and Foreign Affairs, Justice, Infrastructure, Economy and Education, Finances, and Defense and Sports.  These head of departments are elected, or re-elected every four years.
     An interesting fact about Switzerland is that they do not have a full time president.  People in the government rotate as president every year.
     The seven major political parties in Switzerland which are:
Social Democratic Party
Free Democratic Party
Christian Democratic Party
Swiss People's Party
The Greens
Liberal Greens
Conservative Democratic Party or (BDP)

.

Above is a chart that compares some of the parties such as Swiss People's Party (SVP), the Conservative Democratic Party (CVP), Social Democratic Party (SP), and the FRee Democratic Party (FDP)

Every year, the tables turn and one party is more popular.  Recently the Greens have been very popular

Works Cited:

http://swiss-government-politics.all-about-switzerland.info/

http://newsaction.tigweb.org/article/elections-show-switzerland-s-changing-political-climate

http://en.wikipedia.org/wiki/List_of_political_parties_in_Switzerland

Taxation in Switzerland

Taxation in Switzerland

• Because of federal structure does not have a uniform taxation system.
• Taxes may be levied at federal, cantonal and communal levels.
• Value Added Tax (VAT) levied exclusively by Federal State.
• Commercial activities tolerated if do not exceed 20% of company's income.
• Some cantons require companies not to exceed 20% of total expenses.
• Exemption of foreign source income subject to Swiss tax normally lower

http://www.ocra.com/solutions/taxation_switzerland.asp

http://www.agentschapnl.nl/sites/default/files/bijlagen/Zwitserland%20D&B%20november%202011.pdf

Imports

• Trade key to prosperity in Switzerland via Rhine River
• Relies on large quantities of imported raw materials for industry
• Exports mostly machinery, chemicals, cars, metals; agricultural products and textiles
• EU largest trading partner accounting for 79% of imports
• Import prices heavily affected by exchange rates
• It takes five documents and nine days to import a standardized shipment of goods.

Tariffs 

• Import duties are generally low at under 3% for most raw materials and industrial
• Duties are specific--based on weight, rather than value
• 90% of its imports from WTO member countries, extends MFN tariff treatment
• Information Technology Agreement under WTO eliminating tariffs on IT products
• Preferential duties for development countries
• Imports of agricultural products higher import duties, supplementary duties, and tariff-rate quotas.

Licensing

• Import licenses are required for certain products not subject to quotas.

Non-Tariff Barriers

• Non-Tariff barriers are more common in Switzerland than in EU
• Permits legally manufactured EU products to circulate freely
• Lifted ban on parallel imports--patent protected goods

http://www.ocra.com/solutions/taxation_switzerland.asp

http://www.agentschapnl.nl/sites/default/files/bijlagen/Zwitserland%20D&B%20november%202011.pdf

Legal/Bureaucratic Environment in Switzerland

Business Environment Overview

Switzerland is the most competitive country in the world and offers one of the most favorable business environments in the world.  Because of their natural environment, it causes virtually no risks to businesses and the quality of the infrastructure is very high. The rule of law is strong and there is very little corruption, the authorities generally work efficiently, the tax and regulatory burdens on the economy are low, while industrial relations are very peaceful and the labor market is highly efficient. Accordingly, Switzerland regularly performs strongly in cross-country comparisons of competitiveness. For example, the World Economic Forum’s Global 2012-13 Competitiveness Report has ranked Switzerland the most competitive country, out of more than 130 included in the survey.  Below are the Top 10 countries.

Small and medium-sized enterprises form the backbone of the economy and dominate sectors 

such as manufacturing and retail trade. The country also hosts an impressive roster of multinational corporations, including two of Europe’s top pharmaceutical companies, Roche and Novartis, the bio-technology giant Serono, and the world’s largest food company, Nestle, while UBS is among the world's largest banks. 

Weaknesses in the business environment include: inefficient government bureaucracy, complex tax regulations, high labor costs and prices, a lack of competition in certain sectors regulatory differences vis-a-vis neighboring countries (Switzerland is not a member of the EU); and relatively weak disclosure requirements for companies, reflecting an attachment to secrecy in financial matters.

http://www.agentschapnl.nl/sites/default/files/bijlagen/Zwitserland%20D&B%20november%202011.pdf

http://www.weforum.org/news/persisting-divides-global-competitiveness-switzerland-singapore-and-finland-top-competitiveness