Keimyung Unviersity

International buissnes

Electroncek Group d.d

For: Jae-Woong BYUN (Dept' of International Trade & Commerce)

From: Nejc Zupan

Date: Daegu,5.4.2011
Introuduction of Electroncek d.d.

Elektronček d.d is wordwide lead manufacturer slot machines. Company

belongs to bigger group called Elektronček Group. Elektronček Group
consists of more sucessful companies and each one of them has an active
role on different international businesses. Head company is in charge of
development and construction of slot machines. Other companies are
working on marketing, sales and distribution activities. Those are companies
as Interblock, Interblock ZDA, Interblock Canada, Interblock Asia and
Pacific. The group also consists of Kongo Hotel and Casino ( The Slovenian
Roulette)

Electroncek Group has more that 130 emplyees and more owners. In 2005
they sold 50% of company to Avstralia ( stratetic partner is Aristocrat
Leisure Limited from Sydney ) meanwhile other 50% is still in hold of Jože
Pečečnik (90%) and Tomaž Žvipelj (10%)

Brands, which are under the company are Interblock ( slot machines),
Organic ( generation of slot machines) , euroblock ( slot machines) and
Electroncek member of Electroncek Group.

In early starts company Electroncek was engaged mostly in develepoment

and production of alarm machines. After few years they redirected their
activites in information technology.

Company Electroncek at start of buisness was engaged in develepment and

production of alarm machines. Later they started a buisness in infromation
technology, which proved to be a good move. Sales of these increased
significantly between 1990 and 1995. Due to the emergence of the general
downturn in the market of computer science in 1995, the offer extended to
computer systems intended for restaurants and retail store.
In the field of gaming, the company set foot in 1997 and 1998. They
developed the first gaming machine with the name Princess, and have been
very helpful experience in the computer industry. Princess was first
presented in London's gambling world fair slot machines in 1998, where he
reaped instant success and was welcomed by all sides in the market refresh
gaming machines.

Until next year, the gaming device Princess has become the number one,
which was confirmed by the gold medal at lasvegaškem Gaming Expo. Total
sales of Elektronček then consisted of 91% in foreign markets. In September
1998 the company introduced the first generation of electromechanical
gaming machines under the name Supernova, Dice and Megastar. In the
following years, the company Elektronček continued development and
improvement of electromechanical gaming machines. The achievements of
their technical department are regularly presented at major international
gaming trade shows in Las Vegas, London, Sydney, Macau, etc..
Elektronček by 2003 has already surpassed its competitors. In addition to
developing new products of the company and quite focused on exploration
of promising foreign markets and laws and regulations on gambling in each
country. But became the main shareholder of Kongo Hotel and Casino
Company and to expand its business to the area of tourism.
The third-generation product, which was introduced to the market in 2004,
Elektronček position in the market firm. With the development of next
generation, known as Organic, it goes to further consolidate the market
leader in electromechanical gaming machines.Organic innovation opens up
tremendous opportunities for growth Elektrončka.
At the end of 2008, the company received a license for gambling in the U.S.
state of Nevada (and therefore also in Las Vegas), which is considered the
most sought-after gaming license in the world. Elektronček sale of slot
machines and electronic roulette almost everywhere in the world, mostly in
Chinese Macau. Their slot machines also stand still in the casino in Monte
Carlo, Spain, the Netherlands, Czech Republic, Portugal, Malta, Cyprus,
Turkey, Great Britain, Slovakia, Bulgaria and Sweden. They also have a
little something in the former Yugoslavia. Exclusive to cover most of
Canada and the U.S. and Australia. Some of their roulettes is found in South
America and South Africa.
Today, a leading consumer electronics company therefore has a single
market: the whole world. The role of international trendsetters intend to
further upgrade and continue the success story of the development,
production and marketing innovation luxury gaming devices.

Where to place and what is Electroncek d.d?

Company Elektronček d.d. are among the gazelles. In 2007 the company
won the gold gazelle. Recognition of gazelles among the best Slovenian
employers has received for compliance as most dynamic and sustainable
development at the same time. Also, the company in 2008 was on the list of
Gazelle. It is a dynamic and rapidly growing and it is evolving rapidly. It
Elektronček Group has always been ahead of the competition.
The company has created many new jobs. Average number of employees in
2003 was 51, until 2008, this number had risen to 105. It also increased sales
significatly, as well as exports and profits. The company produces large
quantities of products which also increased after sales service. Due to
increasing number of customers in the newly opened markets, the company
also increased production capacity. Their income was from 10.3 million in
2002 increased to almost 51mio euros in 2006, while they are very well
brought up other indicators of business.

Company Elektronček d.d. can certainly be classified as high-growth

companies, since their objective is profit maximization business and increase
sales. It will also aim to increase the share income from profit sharing with
slot parols, to enter new markets and add new games in the range of
products. The company has already formed diversified organizational
structure is also characterized by their mode of governance. The company
has formed a team within which dominated flexible forms of work. Also, the
company created profit centers by individual company departments.

The company follows the technological changes that have been developed,
the research and the only source of many new innovations. The market is
open and the company also has access to foreign markets. Growth in the
years, made company as it strived to become the best company in its market
niche and their own slot machines trying to cover the entire global gaming
market and that's what they did. They are lead company in creating and
making sales of slot machines. They have high goals and ambitions in
Europe, where they want to change the gaming tables in Europe and become
the lead gambling company in Europe. They are intensively expanding into
foreign markets and they were working well in foreign markets.

In 2008, they expanded to markets from Asia through Europe to Central and
North America, planning to have a permit to sell in the remaining markets of
North America and other foreign markets and therefore to increase their
exports. Prospects for growth in the coming years also created a new
generation of gaming machines Organic, which in three years, company
revenues potrojilio. The company is therefore able to offer a product that is
exclusive to casions and other companies. Company Elektronček dictates
trends in the international market of electromechanical and electric gaming
machines. The leading consumer electronics company, Elektronček,
although in the single market, is lead productor in the whole world. The role
of international trendsetters, efforts have been upgraded and continue the
success story of the development, production and marketing innovations
luxury gaming devices.

Future business growth in the first step hampering effects of the recession
and the adverse conditions in the loan market, as purchasers (casinos)
problems with the leases for the investment and were subsequently
abandoned at present. At the same time casinos are popular especially at
times when people have more money. Looking at this and thinking on this
from a slightly different way, people in times of crisis are seeking for more
money and are therefore involve in various activities like gambling. Also,
barriers to future growth is competition. The company has exported more
than 80% of total output, since the products under the trademark FC-
established almost everywhere, where gambling is allowed and legally
regulated.
On the business are quite influenced by the effects of the economic
crisis. This is a company that operates in the highly cyclical industry that is
strongly respond to economic developments.

In the EU markets, where companies created 87 percent of total revenues,

revenues from sales declined by 39 percent. The biggest drop was recorded
in Spain and was 79 percent. On the Asian market they have Elektroncek's
revenue in 2008, due to the smaller number of new casinos open, and lower
investment in the existing casinos in Macau, fell by 66 percent. Reduction in
sales to two major markets made Electorncek able to partially offset by
increased sales in emerging markets, particularly in Eastern Europe, by 175
percent. The share of total sales of Electroncek on new and emerging
markets in 2007 was four percent, while in 2008 it had risen to 22 percent.

Nevertheless, the company expects investments of past years in developing

new markets and new products become firmly established and thus
significantly improve performance despite the crisis that has hit the world
and reduce investment in gambling in all global markets. For 2011, revenue
growth was planned for 30% to more than 66 million and 40% growth in
profits, which amounted to more than 15 million. The company shall
endeavor to select the right development strategy and product markets,
which will allow for further development and growth in both revenue and
profitability. Elektroncek intends to their international trendsetters continue
to upgrade and continue the success story of recent years ago in the
development, production and marketing innovation, luxury gaming devices.

(Joc Pečečnik, the start owner of Electroncek Group

http://najbogatejsislovenci.finance.si/galerije/53/4/)

What does Electroncek wanna become and which models is its

organisation using?

Is the relationship of Electroncek group with growth, active or

passive? 1
1
http://www.springerlink.com/content/h3758u2gnj54035u/
The company dominates an active strategy of growth since the company is
high-tech nature of market which is actively expanding into new markets
and create new technologies in their activities. The company generated
profits reinvested in the company in the form of purchase of new machinery
and technology and the company itself creates new tools to help you follow
orders from major manufacturers for the development and production. Self-
care for a new design and introduce a variety of small solutions to boost
performance. The introduction of new IT solutions to help reduce red tape
and time administrative tasks, thus lowering costs. To reduce costs, while
achieving optimal growth and companies are contributing to introducing
innovations in their own production. The company is based on their own
ideas to design a electronic roulette, for which company has obtained
several patents. There will be more patents to other gaming machines, for
example: electromechanical black jack. Also, the company has further
opportunities to present it resized, because we do not yet reach the maximum
profit and still has potential for growth. Also an activity which is engaged in
business Elektronček d.d. (Manufacture of other electrical equipment) is
growing, which may also have a positive impact on growth in selected
companies.

The passive strategy involves mostly a particular expansion of sales on

foreign markets.
The fundamental reasons why the company does not maintain the current
size-by microeconomic theory of the optimal size is following: Elektronček
d.d. is in the market which is a growing market. By examining the
competition at home and abroad, the company moved a step forward and by
certain technological innovations, giving them a competitive advantage, they
still did not reach maximum profit and therefore they did not reach the
optimal size of the company.

The fundamental reason why the company does not maintain the
current size, is as follows (continued):
1) the theory of transaction costs in that market is that Elektronč
representers are those who wish to successful business growth. We can find
the reason for that in administrative costs. The company has a well-defined
payment system, paying their employees according to their realization. In
addition, workers have the company's shares, and are interested in that
business to grow.
2) the theory of industrial organization: the company falls in
technology-intensive industry, market is a flexible and demand is
stable. Another reason a higher level of competition and less changing tastes
of customers. The company is able to grow in a way that develops new
products in order to obtain new large customers. The company can grow
with expanding on new markets. Even with the upgrading of existing
products in this way, is reaching new uses. Their appliances can also enrich
the screen instructions and allow easier use for beginners.
3) the theory of dynamic models of growth of the reasons is that the
company followed the organizational and technological change. With the
rapid progress of technology, older machine does not make sense to use ands
buyers are looking for something new. Technological innovations such as
LED lighting, displays, operating the touch, etc..shorten the life of older
machine. The company constantly invests in development.

In terms of basic design phase of growth the firm is in growth phase. The
company is developing new and innovative products. Also, the company in a
growth phase due to changes in organizational structure, and a new
relationship, the entrepreneur is no longer an independent owner. The
company does not operate everything with just one person, but are left to
individual business functions in the management of individuals. The
growing number of employees is one of the reasons that the company can be
put in a growth phase.The company is a fact in 2007 created many new jobs,
increasing the volume of sales, exports and profits. Company to reinvest and
invest, helping to increase the company's assets. One reason is the entry of
company into foreign markets.

From the perspective of the business phase of the model the company is
located in a managerial or professional stage. It is hard to put it in either of
category. The stage managers and companies can not be directly assigned to
specific strict division of managerial and owner functions. Owner and
manager functions are seperated. CEO is the owner and perform managerial
functions. Also, 90 percent owner Pečečnik Joc performs some professional
features. In addition to these functions have the human resources function of
the entrepreneur as choose a professional team. The professional phase also
calls for appropriate diversification of business organization, and thus the
company is creating more divisions.

In terms of Churchill-Lewisov model 2company has following features:

2
http://www.tameer.org.pk/images/The_Five_Stages_Of_Small_Business_Growth.pdf
It mainly has to deal with properties in 4th degree
-evel departure. The company is a style of
departmental management. Each of the sections have a leader, the
basic decision stilldepends on the owners. Processes are formalized. The
company pursues a strategy of growth, invest in good ideas and
knowledge. The company penetrate new markets and
has ambitions to increase sales as well as their own casinos. The
company is also actively preparing for entry into new
markets and invest in new technology and
newproducts developed formalization. Business and owner are quite related.

Evoultion of small companies by of Churchill-Lewisov model of critical

points3:

3
http://www.tameer.org.pk/images/The_Five_Stages_Of_Small_Business_Growth.pdf (page 5)
In this stage the key problems are how to grow rapidly and how to finance
grotwh. The most important questions are in the following areas:

Delegation – Can the owner delegate responsibility to others to improve

manegerial effectiveness of a fast growing and incresingly complex
interprise?

Cash – Will there be enough to satisfy the great demans of growth brings?

Employees in the company

In Slovenia, the company received the award for Elektronček being one of
the best employers.The selection was based on a survey.
The company dominates teamwork. That is why organizational structure of
the company itself does not have a typical hierarchy, it is complex and
composed, as this way the company easier and faster comes from the idea to
their own performance. For innovation in the enterprise and to ensure a close
team work that is responsible for the development of electro-blackjack-a,
which has in London (in 2008) received the award for most innovative
product in the world.
In Elektrončk they are aware of the importance of relations between
employees, so their view prevails optimal level of conflict. The company
encourages innovation and employees a clear view of the future of the
company, so only they can be self-critical to their work.
The objectives are clearly set in the company. Allowing employees an
additional challenge, to show their skills and knowledge. Despite the fact
that employees are guided by top management, it does not mean that top
management will not listen to their ideas, just the opposite. Hence their
employees to work the freedom and independence in performing their
duties. Employees are rewarded on all levels with good pay, because the
company believes that the payment is a big motivator.

Organizational Structure

The organizational structure of the company is in the form of »a functional

organizational structure«. For company such a structure gives more
flexibility, coordination and efficiency in the targeted areas. It also seeks to
align corporate goals with the goals of individual business departments.

Business functions, coordinates the main manager (usually the owner) who
is directly responsible for the success of the company itself, but this is a
result of all business functions together. This structure is suitable for
companies at the stage of formation, it can venture into growth quickly
becomes too large to be controlled from one location. However, despite this
type of structure in the company Elektronček works well.

Elektronček company should be organized as a matrix organization. The

company would be horizontally divided into several sections. The work
process would not take place within them, but in the individual programs
and products company. These programs would be lead by product manager,
who in his group including those employees who are necessary to achieve its
production target. Such a structure can vary according to different market
and production goals. In the event that the market and the production are
built of a more stable structure can be such a constant. Matrix organization
enables the company to quickly adapt market and the appropriate balance
between consumer requirements and cost control in production. Given that
technology is so advanced and so rapidly evolving, in my opinion could be
organized as an array Elektronček organization, precisely in order to quickly
adapt to market changes and maintain competitive advantage.

RESOURCES:

• http://multipraktik.blog.siol.net/index.php?s=gazela
• Tajnikar Maks. 2006. Risked international buissnes. Ljubljana:
Ekonomska fakulteta

• http://www.dnevnik.si/poslovni_dnevnik/276202

• http://www.interblock.si/

• http://www.elektroncek.eu/_static/_up/files/2009/07/115fbdd0bc0f5ba
b8cb95ff48c50f4fc.pdf

• http://www.elektroncek.eu/