Arçelik Grows in Advanced and Emerging Economies
(8 pages of text)
Arçelik, a member of the Turkish Koç Group, had grown from a leading manufacturer of household appliances (also known as ‘white goods’) in Europe’s largest emerging economy to a substantive international player. Yet the company faced new challenges in strengthening its positions in advanced economies, exploiting its competitive advantages across a wider range of emerging economies and in raising the profitability of its international operations. In Western Europe, its Beko brand was often perceived as a low-tier brand, and in most of the region, brand recognition was low. In Eastern Europe, Arçelik’s low-cost strategies matched local demand, but the potential for demand growth was limited. In the Middle East, brand recognition was strong, but political risks remained high. In other emerging economies, Arçelik’s product offering fit local demand patterns well, yet trade barriers inhibited import market penetration. Thus, the firm needed to design and prioritize strategic initiatives for future growth.
- Analyze how and why developing strategy internationally rather than nationally is more challenging, and how and why national contexts impact the strategies of foreign investors.
- Explain the differences in competitive challenges in emerging versus mature market economies, and the consequences for both internal and external investors.
- Appreciate the need to set priorities and make strategic decisions when allocating resources to avoid small market positions.
- Design an entry strategy for a chosen international market, taking into account a broad set of parameters such as acquisition versus organic growth, ownership, etc.
Turkey, Large, 2014
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