The Mavrovic Companies

The Mavrovic Companies story has four ongoing challenges:

• Managing Supply: Zeljko wants all his baked products to be organic, but his farm doesn’t produce enough organic grain to meet his demand. So at this point, Zeljko uses 40% of his own organic grains in his bakery and supplements the rest with conventional locally grown substitutes. He is disappointed that he must supplement, but plans to expand production. “Although our baked goods are not made of 100% organic ingredients, they are the only such product on the Croatian market,” says Zeljko. “I hope that one day, when we succeed in increasing the fertility of our soils, we will be able to produce a larger amount of organic bleached flour to make our baked goods one hundred percent organic.”
  
  
• Operating in a Depressed Economy: Croatia’s economy was ravaged during the war and has yet to recover. This has made it difficult for Zeljko to find good employees. “It was challenging to find motivated workers among the people who lost the sense of life,” he notes. “It was also challenging to find people with certain skills, who are available in larger urban centers, and bring them into an area where life is very simple and the consequences of the war are still present.”
  
  
• Distrust of Cooperatives: Zeljko has dreams of transitioning the ownership of his businesses into a cooperative model where his employees can become co-owners. But the reputation of cooperatives was sullied during the Communist regime. Rather than being independent, cooperatives were just additional instruments of state oppression and control. Farmers were required to join the cooperative system, but had no incentive to maximize their own production. Even though significant reforms have occurred in the post- Communist and post-war eras, many Croatians are still leery of participating in a cooperative.
  
  
• Learning New Skills: Starting a food enterprise was a major career shift for Zeljko and posed for him a steep learning curve. But drawing from his previous life as a professional athlete, he was able to focus on what he needed to master quickly. “I needed to learn a lot of technology that was new to me. While I already knew about producing organic grain, I had to pick up a tremendous amount of knowledge about processing, sales, education, branding, and everything else necessary for a successful business. But, my philosophy of being able to do anything with a lot of hard work, dedication, courage, and self-motivation helped me to overcome the challenges, just like it once helped me as a boxer. ”

Despite these challenges, Zeljko has shown how even in a very tough, war-torn environment, an integrated business focused tightly on a market niche can succeed. To be sure, his name allowed him quickly to become a familiar brand, establish consumer trust, and secure market share. But the key element of his business strategy—to create four integrated businesses that could support one another and create a smooth local supply chain—could be easily replicated by others. “My personal experience and business practice is to create a whole value chain, from production of raw material to processing into a final product,” Zeljko says. “In that way one can form business sustainability.”