05 January 2006 | Anusha Bradley

Eastern Europe is the most important emerging market, according to a survey of Western European businesses.

Accenture quizzed 143 supply chain, sales and marketing executives and found that more than two-thirds consider Eastern Europe to be the most important market for manufacturing - ahead of China and India.

While participants said the area was now vital in manufacturing goods for Western Europe, 59 per cent said it was also providing the greatest competition because it produced its own goods for export.

Jaume Ferrer, managing partner for Accenture's supply chain practice in the UK, said although Asia offered cheaper products and labour, there were hidden costs such as transport and quality issues.

"Many European companies are looking to Eastern Europe as their preferred source for manufacturing and tier-one suppliers," he said.

"This is because they often provide a better balance between cost, flexibility, product availability and quality."

But the report, Global Operations Survey, carried out by S Radoff Associates on behalf of Accenture, found that many firms are missing out on opportunities in these emerging markets because they lack a well-designed or executed global operations plan.

A third admitted they had an inadequate operations strategy and more than half said they lack global or regional procurement, manufacturing and distribution networks that could ensure products were delivered on time and to budget.

Ferrer added that companies including Procter & Gamble, Zara, Nokia and Dell had been successful because they had well-designed strategies and their international divisions worked cohesively.

SMjan2006