1. Arçelik has succeeded in Turkey due to factors like increasing household income and demand for appliances, as well as Arçelik's investments in quality, manufacturing, branding, and distribution. 2. Bosch entering the Turkish market does not pose a short-term threat due to Arçelik's strong brand, but could be a long-term threat as demand grows. 3. Arçelik is pursuing international markets to hedge risks, seek growth, and learn from competitors expected to enter Turkey.

1. Group 2
Koç Holding-
Arçelik White Goods
Chang ,Guan,
Erina, Oshu,
Sunhee, Miharu
International Business

2. Outline
1. Arçelik Success factors Analysis
2. Competitors—Bosch Entry Analysis
3. Arçelik International Strategy
4. Overseas Markets Analysis and Advices
5. Building International Brand “Beko” or OEM Analysis

3. 1. Arçelik Success factors Analysis
Q1. Why has Arçelik succeeded in Turkey
External Factors -PEST Analysis
• Political
• Consumer demand stimulation and
public investment increase in 1991
• Promotion of the domestic and
foreign policy to nurture private
sectors to gain global
competitiveness.
• Social :
• Fast pace of household formation and
urbanization increased demand,
• Household income increased
• Annual population growth rate is high,
and age distribution.
• Economics:
• Turkey’s gross national
product(GNP) increased from 1990 to
1996 except 1994.
• Convertible Turkish lira(Currency)
established.
• Technology:
• Technology licensed from GE and
Bosch-Siemens in 1970s and 80s.
• Continual investment in R&D.

4. 1. Arçelik Success factors Analysis
Q1. Why has Arçelik succeeded in Turkey
Internal Factors -Resource Based View Analysis
• Tangible Assets:
• Heavy investment in upgrading its manufacturing quality and productivity to world
class standards(Pursuing Economic of Scale)
• By introducing Just-in time and flexible manufacturing systems to reduce raw
material and labor costs(Pursuing Cost Leadership )
• High quality human resources in Arcelik
• Intangible Assets:
• Heavily investment of advertising and promotion(included Trade-in offers to
accelerate consumer repurchase cycle) to built their high-quality and reliable brand
image.
• Arçelik built a selected intensive and completed retail distribution network to
penetrate the Turkey market without destroying their high-quality brand image.
• Quality and availability after-sales service was provided professionally by exclusive
authorized dealers.

5. 2.Competitor —Bosch Entry Analysis
Q2. Why is Bosch entering the Turkish market? is Bosch’s
entry a threat?
❖ Growing population and number of households
increases(Attractive growing market size)
❖ Removal of import tariffs in the near future (1992~1996)
Short-Term Long-Term
Not a threat Threat!
Strong Arçelik brand image ;
Biggest Market share acquired
Due to consumer's growing
demand for high-quality products

6. 3. Arçelik International Strategy
Q3.Why is Arçelik pursuing international market? Does this
make sense?
Internal Incentive External Incentive
• Hedge the risk in Turkey
market.(Don’t put all eggs in
one basket)
• Seek opportunities for growth
through market
diversification.(e.g. UK
underserved niche market for
table top refrigerator)
• Learning better prepare
themselves to defend domestic
market share against the
competitors.
• Foreign Competitors are expected
to enter into Turkey market due to
removal tariff, Arçelik was forced to
access new markets.

7. 4.Overseas Markets Analysis and Advices
Q4.Which overseas markets should Arçelik focus on and with
what products?
Focus : Short-term
Focus: Long-term

8. 4.Overseas Markets Analysis and Advices
Q4.Which overseas markets should Arçelik focus on and with
what products?
Short-Term Focus Long-Term Focus
Developed market : Western
Europe
High-growth market : Eastern
Europe, Middle East, North Africa
• Absolute amount of sales of
Arçelik are still significant
• Gaining Competitiveness for
corresponding to urgent tariff
removal in the near future by
absorbing know-how,
technology , experiences
• Obstacle of technology licensing
agreement of dishwashers in
Europe at the present(p.8)
• High market penetration rate
acquired
• Similar religion(Islam culture)

9. 4.Overseas Markets Analysis and Advices
Markets and products Segmentation strategy
Markets Products Reason
Developed
Countries
Beko(Niche
products),OEM
Maintaing(low-growth and
excessive competition),
Absorbing technology and know-how
from Europe, U.S
customers.
Emerging
Countries
Beko brands(all
products)
Capturing high-growth and quick
penetration rate, built strong
brand image will be easier
Domestic
Market
Arçelik
Maintaining strong and trusted
brand image in Turkey

10. 5.Building Brand “Beko” or OEM
Q5.Can Arçelik aspire to build the Beko brand in international
markets or should the company be an OEM supplier?
Advise:
Two-handed growth strategy should be applied.
Reason:
❖ Obstacle of technology licensing agreement of dishwashers
in Europe(p.8)→ Arçelik has started OEM and its hard to quit
easily in the short-term.
❖ Absorb technology and know-how from OEM customer.
❖ Hedge economic fluctuation impact on Arçelik own brand
profit loss risk.
❖ Gain Economies of Scale, scope by chasing both.