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Turkey - fast growing bridge

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Thaesis is continuously expanding her international advisory activities. In the past five yeas, Thaesis has worked in Belgium, Germany, England, China, Kenia. As of april 2012, Theo Huibers and Eelco ...

Thaesis is continuously expanding her international advisory activities. In the past five yeas, Thaesis has worked in Belgium, Germany, England, China, Kenia. As of april 2012, Theo Huibers and Eelco Eerenberg visited Istanbul, Turkey, in order to understand the fast growing economy that Turkey currently is. In 2011, the Dutch economy encountered a small decline, whilst the Turkish economy grew with 8.5%. Apparently, Turkish companies know how to deal with the world wide economic crisis. Three companies have been interviewed (Figensoft, Sestek and Artronic) on their strategy and their view on the Turkish success. In this presentation, Theo Huibers and Eelco Eerenberg summarize their findings on the success of Turkish companies.

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    Turkey - fast growing bridge Turkey - fast growing bridge Presentation Transcript

    • Turkey Fast growing bridge between East and West Utrecht, The Netherlands, 1st of MayTHEE/20120501
    • Introduction As a respected strategic consultancy firm, Thaesis is continuously researching new developments, technological innovations and emerging markets. In 2012, Thaesis will research several markets in a number of different promising countries all over the European continent. In April 2012, Thaesis visited Istanbul to research the general Turkish business landscape as well as the technological sector. Utrecht (NL) Three executives have been interviewed regarding their business, their view on the Turkish business landscape and their strategy. Additionally, Thaesis conducted a document study on the Turkish key economic indicators. This report provides a one-page factsheet on Turkey, a description of the three companies that have been researched and the key findings. Istanbul (TR)THEE/20120501 2
    • Sources: World Bank, Turkish Bureau of Statistics, OESO, IMF (all: 2012) Factsheet GDP growth General Facts 10% •  Turkey has 79.7 million inhabitants, living on 5% 783.562 km2. 0% •  The official language is Turkish, the currency the Turkish Lira (TRL) -5% -10% 2007 2008 2009 2010 2011 2012F 2013F Economic Facts GDP growth Turkey GDP growth Netherlands •  The unemployment rate had dropped from 12% (2010) to 10.3% (2011), ranking 115th in the world Turkish GDP per sector Dutch GDP per sector •  The inflation rate dropped from 8.6% to 7.8% Agri- Agri- culture (2011) culture 9% 3% Industry •  The trade balance shows an export worth $111 Industry 24% 27% billion and an import worth $ 152 billion (2010). Services 64% Services •  Key export partners are Germany (10.1%), UK 73% (6.4%) and Italy (5.7%) •  Biggest export sector is manufacturing (77%) Foreign investments into Turkey $25 Billions $20 Population Facts $15 •  16.9% of the Turkish people lives below the UN $10 poverty line $5 •  The median age is 28.5 years. •  Population growth is estimated for 2012 on 1.2% $- 2007 2008 2009 2010 2011 •  70% of all Turkish people lives in an urban Foreign investments from Netherlands Foreign investments total environmentTHEE/20120501 3
    • Three companies have been visited Figensoft is a young and innovative company, founded in 1997 by three brothers. Figensoft started as a developer of geographic information systems, followed by bulk text messaging services. As of 2002, Figensoft solely focuses on the development of mobile applications for the business to business market. Their applications can be used for mobile marketing, mobile payment and mobile security. In 2005 Figensoft opened an office in the Turkish Republic of Northern Cyprus and in 2009 in Azerbaijan. Sestek is a small-sized company that focuses on speech and communication technologies, call center applications and customer services automation. It was founded in 2002 by professor Levent Arslan, who is a well-known scientist in the field of language technology. The company owns unique technological solutions (including patents) and builds applications around this language technology. Furthermore, Sestek helps clients with the implementation of their applications. Artronic is a medium-sized company, founded in 1995 as a manufacturer of UPS. Their products range from UPS’s for consumers to large systems for demanding clients like the Turkish customs and hospitals. In 2002 Artronic changed their strategy and they outsourced large parts of the manufacturing process to China focusing on marketing and selling the UPS’s. Artronic sells their products all over the world, to 43 countries ranging from Europe to Asia and Africa.THEE/20120501 4
    • Figensoft Success story Strategy Figensoft tried many different product market Figensoft focuses on the core: they only have the combinations, allowing them to fail. They also allowed up resources in house that they really require. Graphic to six years for new innovations to gain customers. designers are –for example- hired via the Internet. Furthermore they realized that some products have a Figensoft has a growth strategy which is implemented by short life cycle and they use their revenues to invent new opening new offices, both in Europe and in the Caucasus products and services. (the latter being of primary interest). Threats and counter measures Innovation strategy The implementation of the strategy faces two big threats: Employees are encouraged to invent new ideas. If those 1) new laws that prevent certain aspects of mobile ideas lead to revenues, the inventers share in the applications and communications, 2) disruptive revenues. Figensoft has created a board that makes technology. Figensoft has contacts with law makers to decisions on innovation and that comprises respected influence new laws. Additionally; an innovation process external businessmen, to allow for a broad perspective. keeps Figensoft ahead of possible disruptors. Turkey and Europe Interviewee Figensoft notes that the economic growth in Europe is lagging behind Turkey. Turkey had a couple of devaluations (last in 2001) that made companies realize İsmail Bayrakta that they should really be productive and explains the CEO current economic growth. Turkey shifted its focus from cheap labor to sustainable technology.THEE/20120501 5
    • Sestek Success story Strategy Sestek has its own products for voice verification, Sestek is focusing on finding new applications for the speech synthesis, speech recognition and speech analytics technology that it holds. These new applications will be technologies. Furthermore, Sestek was the first company ready for the international market, although exporting is to offer Turkish speech technology. The applications of not Sestek’s primary concern. This means that Sestek their technology embody lots of value, making processes employs a growth strategy that is based on organic in health care more efficient for example. growth with new application domains. Threats and counter measures Innovation strategy Sestek thinks that due to rapid growth in the IT sector, Sestek has strong ties to the technological universities in finding skilled employees is becoming more difficult. Istanbul. MSc and PhD students are offered jobs and Sestek is housed on a university campus and pays great internships, in order to innovate the technology of wages in order to attract technological students. Sestek Sestek. Furthermore, Sestek is housed on a “technopark” has also reduced their need for government grants. where the government has decided to cut the taxes dramatically as to improve innovation budget. Turkey and Europe Interviewee Turkey is a fast-growing economy, but merely because it came from really far behind. Three devaluations placed Turkey far behind. Because of the lack of skilled Prof. Dr. Levent Arslan personnel, Sestek doubts if the current growth can be CEO maintained.THEE/20120501 6
    • Artronic Success story Strategy As a large manufacturer of UPS’s, Artronic was faced by Artronic is eager to grow, by finding partners in as many the growing competition from cheap Chinese companies. countries around the world as possible. These partners Instead of battling them, they decided to outsource a must comply with Artronic standards (like ultra fast large part of their own manufacturing to China. This shipment and excellent customer service). Artronic helped Artronic to focus on marketing and sales and demands control over the service levels by a partner. extensive customer support around the world. Partners are searched for in Africa and emerging markets. Threats and counter measures Innovation strategy Artronic faces threats by the social and political situation As most R&D is also outsourced to China, Artronic in the region, which makes it hard to export products. focuses on innovation in marketing of the products. Furthermore, Artronic has to deal with cheaper Artronic visits different countries each year, just to competitors and protective European suppliers. Artronic understand the local culture and to gain market keeps playing the game by the rules to claim the position intelligence which can be used in the marketing of righteous company and overcome these threats. innovations. Turkey and Europe Interviewee Turkey has a unique position as a hub between Europe and Arabic and Asian countries. This makes Turkey an ideal export country and the government is providing Aziz Mutlu free training and advisory for companies to become Deputy GM international players. The history of economic crises resulted in a more efficient Turkey today.THEE/20120501 7
    • Summarizing lessons Innovate, wait and re-invest 1 Innovations require patience. Some innovations take time to gain a position in the market. On the same hand, don’t overdo it: be aware that innovations might be disrupted over time. Use the equity from successful innovations by re-investing in new innovations. This requires knowledge of the market, knowledge of technology and courage from the executive team. Find the hidden value 2 Many processes and data embody some sort of value. Releasing this value for a customer creates the need for a product or service. This requires a different paradigm: instead of reasoning about the offering, one should investigate the situation at the customer and find hidden value that could be activated by a particular product or service. Embrace your enemy 3 At some point in time, a competitor will offer the same (or better) product at a better price or with a better service. Trying to reconquer the market might work, but this is a costly strategy. Embracing the business enemy might be more effective: learn from their products, copy their processes, invest in them. This requires an adaptive strategy, able to reposition organizations.THEE/20120501 8
    • Strategy consulting firm... ...for complex problems in fast-changing markets Strategy process •  Founded in 2006 Timing Phase Executive management Shareholder •  Independent Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Phase 7 Week 0 Define goals •  Fact-based Creation Survival Success Expansion Balance Disruption Destruction 1. Gather 1. Gather •  Focus on fast-changing markets insights Markets are being disrupted in a faster pace Size and complexity of the organization Week 2-3 Define strategic goals 2. Analyze then ever. The average company age in the Big 2. Define ambition S&P 500 dropped from 75 years (1937) to 15 2 Re-organize 1 Create scale and position years (2012). Organizations in transforming 1 2 4. Define 3. Choose markets are faced with complex problems on 3 Unbundling 3 4 5 Destruct impact strategic options their existence, market position, and growth Evaluate Week 4-6 options. 3. Draw up strategic options 5. Forecast Small 4 Intrapreneuring results Strategy consulting firm Thaesis helps executive management, shareholders and Young Finished 6. Report findings Age of the organization potential buyers from these type of Week 6-8 Evaluate results organizations in the realization of winning Pioneering company Departmental company Matured company Matured company concern structure with de- mega structure with strategic strategies with sustainable results. simple structure with centralized functional structure with centralized centralized staffs and alliances and both internal and functional orientation targeted at innovators segment. decision making targeted at early adopters segment. business units targeted at external networks targeted at The process of developing a new strategy that Thaesis majority segment. multiple market segments. employs, is based on a compact process, making use of existing knowledge from within the organization. A selection of our recent customersTHEE/20120501 9