The document provides an overview of Efes Pilsen, including its history, market share, SWOT analysis, and strategies for growth. Efes is Europe’s sixth largest beer producer, with significant strengths such as high brand recognition and a well-developed distribution network, while facing challenges like low barley supply and advertising restrictions. Future strategies focus on market expansion, product differentiation, and targeting new customer demographics in the Turkish and international markets.

1. EFES PILSEN
Derya Nasirli, Mine Ülgüray, Appaz Bavbekov

2. Outline
• Introduction
• SWOT analysis
– Porter’s Five Forces
• Current strategy analysis
• Sustainability of competitive advantage
• Possible future strategies

3. EFES PILSEN
• Efes Beverage Group formed in 1969 with 2 beer production
factories
• Now Efes has 14 beer factories (5 Turkey 9 abroad) in 5 countries,
and 6 malt factories
• Efes has 35.7 million hectoliter beer and 254.000 ton malt
production capacities
• Efes beverage group is the sixth largest European brewer on
combined production basis
• There are 220 exclusive dealers countrywide, and 31 exclusive
distributers in 6 metropolitan areas

4. EFES PILSEN
EFES Beverage Group Market Share
Efes Others
20% 18% 17% 14%
21%
40%
80% 82% 83% 86%
79%
60%
1987 2004 2005 2006 2007 2008
EFES Market Shares Abroad
Efes Others
#4 #1 #2 #1 #4
28%
53%
72%
91% 87%
72%
47%
28%
9% 13%
RUSSIA MOLDAVIA KAZAKHSTAN GEORGIA SERBIA

5. Strengths
• Europe’s sixth largest beer producer
• Most recognized brand in Turkey, 100% awareness among
Turkish consumers
• Has international high quality and wide range of products
• Sector is transparent and consolidated. They don’t have to
deal with 4-5 companies.
• In terms of illegal production, it is very hard to imitate
beer, unlike raki and wine
• Market is closed for new entrants because beer production
is a technology/knowledge intensive business and
TV&Radio advertisement is fully restricted since 1984. It is a
disable use of an important brand building tool.

6. Weaknesses
• Hardly to find suitable barley for beer
production
• Beer consumption per capita is very low in
Turkey
• It is very hard to introduce new products to
the market because of the TV&Radio
advertisement restrictions.

7. Opportunities
• Having well developed distribution system it is
easy to introduce new products
• Turkey has a young population
• Market share increase opportunity in the
abroad operations, especially in Russia

8. Porter’s Five Forces
• Bargaining Power of Suppliers
– Agricultural market is very competitive, no
producer can influence prices
• Bargaining Power of Customers
– Mainly Efes educates its customers
• Ex. Creation of Birahaneler
• Competitive Rivalry within Industry
– Tuborg and Carlsberg are second movers after Efes

9. Porter’s Five Forces (cont’d)
• Threat of New Entrants
– Turkish Beer Market is highly consolidated, top 2
players control 99%
– 100% awareness of Efes Brand
• Threat of Substitute Products
– Turkish alcoholic market is not
saturated, producers “teach” their customers
– High excise duty

10. Other Forces
• Government policy
• Current Government pro-Islamic, opposed to the
alcoholic drinks consumption
• High Excise Duty
• Customs Union with EU, no import taxes imposed

11. Choosing a Strategy
• It’s common to see one of the two strategies:
– product differentiation
or
– cost leadership
Where does Efes Pilsen fit?

12. Choosing a Strategy
• It’s common to see one of the two strategies:
– product differentiation
or
– cost leadership
Where does Efes Pilsen fit?

13. Sources of Cost Advantage
• Economies of scale
– High sales (86% market share)
– Intranet Stock Control System
• Learning curve economies
– High level of experience

14. Sources of Product Differentiation
• Product attributes
– E.g. Timing of introduction
• First mover in 1969
• Firm-Customer relationships
– E.g. Consumer Marketing and Reputation
• Advertisement through sponsoring sport activities
• Firm Linkages
– E.g. Linkages with other firms
• Anadolu Grup

15. Value Creation
• Sustainability of Efes Pilsen’s competitive
advantage comes mainly from:
– The unique brand perception or popularity by the
customer
• Thus, Value Creation is high: B-C
– Customers are willing to pay more for Efes
(B:Benefit)
– Production cost of Efes Pilsen is low because of
economies of scale (C:Cost)

16. Economic rent
• Economic rent = (P-C)*Q
– P is high (price premium) because of high Benefits
received by the customer and low competition
– C is low (as explained in s.3)
– Q is high (86% market share)
Economic rent received by Efes Pilsen is high!

17. Analyzing Rents
2. Firm’s
mix of products, 3 Firm’s cost and benefit
and customers position as compared to rivals?
vs. rivals?
Lower C with
Same same/close B as rivals
as significant Cost advantage
rivals in the
Industry…
Higher B with
same/close C as rivals Benefit advantage
No
Unique … with products and
from most activities tightly
significant rivals optimized to
1. Attractive 5 in the industry… customer economics Niche advantage
Forces in
Industry?
…game theory used to
deter entry and
Yes…. Market power
maintain win-win game 17

18. Market Power
1. Attractive 5
Forces in
Industry?
…game theory used to
deter entry and Market
Yes…. maintain win-win game Power
18

19. Efes is..
• competing in Turkey on the basis of a
combination of:
– Benefit advantage
+
– Market Power

20. EFES Possible Strategies
Beer per Capita Consumption
Turkey 11
China 25
Kazakhistan 30
Moldova 33
Greece 38
Bulgaria 61
Russia 65
Serbia M. 68
Romania 71
W. Europe 74
Hungary 75
USA 77
Poland 83
UK 96
Germany 114
Czech Rep. 159
* Source: Canadean Global Beer Trends, 2006, Company Data
TURKEY INTERNATIONAL

21. Turkish Market
INCREASE THE MARKET SHARE BY ENLARGING THE TURKISH BEER MARKET
WHILE MAINTAINING THE PROFITABILITY
• Enlargement and diversification of the beer consumption area, like sports
games, jazz/blues organizations etc.
• Continue with the Birahane improvement project. Changing the concepts
of traditional Turkish Birahanes into modern and civilized environments
where people share their best times. Clean, fashionable, and entertaining.
By this, also woman will be targeted as a new customer type. Efes has to
increase the woman’s beer consumption amount within the total
consumption.
• Continue with effective portfolio management of brands, SKU’s and
Channels.

22. International Markets
• INCREASE THE MARKET SHARE IN THE TARGETED
MARKETS BY M&A
• Increasing the presence in the current
markets, such as
Russia, Kazakhstan, Moldavia, Georgia and Serbia
– Ex. By 2012 Efes plans to increase its market share in
Russia from 9% to 15%
• Analyze potential markets and continue the
international expansion
– Advantage of CCI Distribution channels

23. Thanks for your attention