END431E – Management and Organization Home Case Solutions
Mert Atik Özcan – 070200055
1) Question-1: Why has Arçelik succeeded in Turkey?
There are many reasons for Arçelik's success in the Turkish market. They monitored whether they
analyzed the market, their customers and the relationships between them very well. The company
has catered in different ways by offering a wide range of products at different Prices. Over time, it
has gained the trust of the public by maintaining high product standards, where temperature
conditions are less than guaranteed for local products. Arçelik products were cheaper than foreign
products. At the same time, Arçelik dealers also became profitable thanks to the fast stock turnover
rate. Additionally, a 50/50 system of abundance in ad spending has increased with time. The
reputation of Arçelik, a large holding company, turned into its own gain. In this environment, credit is
collected as interest rates are held by inflation. For such reasons, Arçelik was successful in the
Turkish market.
Question-2: Why has Bosch entered the Turkish market? Is Bosch's entry a threat?
Turkey might have offered Bosch an alluring chance to boost sales and market share because it is a
developing nation with a burgeoning consumer market. By entering emerging markets, Bosch is able
to diversify its geographic presence and lessen its reliance on particular areas as part of its entry
strategy. Bosch might have believed that Turkish consumers were wary of homegrown brands. Thus,
the business might have wanted to benefit from it. After import tariffs were lowered to zero in
January 1996, imports rose. Bosch took advantage of this as well and entered the Turkish market.
Bosch was positioned as Arçelik's only rival in the premium segment due to its high price and quality.
Arçelik's dominance in the premium segment of the white goods market was challenged by the
aggressive advertising directed towards Beko's and Arçelik's high-end products. This posed a threat.
Question-3: Why is Arçelik pursuing international markets? Does this make sense?
Arçelik is exploring foreign markets for a number of reasons, including the chance to learn and
compete. The company views the opportunity to compete against the world's top brands in
developed markets, especially in Western Europe. By participating in these markets, Arçelik hopes to
pick up tips from more seasoned rivals and strengthen its position to protect its share of the
domestic market from powerful international players like Siemens and Bosch. The requirement to
use excess capacity is another factor. The business can produce more than it needs to, particularly in
the refrigerator segment. The company is looking into exporting its products to other countries in an
effort to maximize production and attain economies of scale. Arçelik is aware of its geographic
advantage in supplying developing markets in Russia and Central Asia, where there is still a lack of
established foreign brand names. The company feels that the fact that its products are produced in
Turkey may work to its advantage in these markets. Given these factors, Arçelik would be wise to
pursue foreign markets.
Question-4: Which overseas markets should Arcelik focus on and with what products?
Arcelik has achieved really important market penetration in the UK with %8 market share. UK market
seems receptive to Beko brand, especially in the refrigerator section. There is an opportunity to grow
and diversify into other appliances, such as washing machines, ovens, and dishwashers. Arçelik has
already established a significant market presence in the UK. It plays a serious role in marketing the
refrigerator product. The focus should be on increasing these consumer sales by focusing on
dishwashers and ovens.
French market presents challenges due to recession and very strong commpetition. Arcelik has
achieved with Beko brand. The development of the Beko brand and competitive pricing, akin to that
of well-known brands like Candy, should remain top priorities. The current competition in
refrigerators in France should be continued. Washing machine product variety should be increased.
Dishwasher and oven products need to be promoted and marketed competitively against other
brands in the market.
The German market may be a potential for Arçelik due to the weak economy and price sensitivity.
Beko's sales are increasing and it has established relationships with major customers. This
relationship may bring the opportunity to expand into different product groups. Range and sales of
refrigerators and washing machines should be increased.
In emerging markets, it may have potential since there are fewer foreign brands. It may create
potential demand due to geographical advantages and the population density living there. As these
markets develop, more products must be introduced and sold to meet changing consumer needs.
Question-5: Can Arcelik aspire to build the Beko brand in international markets or should be an
OEM supplier?
In addition to OEM supply, Arçelik can continue to develop the Beko brand in the international
market. The success achieved with the Beko brand in certain regions indicates further growth
potential by leveraging brand awareness and consumer trust. With this growth, OEM partnerships
that are compatible with the company's growth targets can be continued strategically. This
partnership may include a balanced approach, strengthening the Beko brand in the market while
making OEM partnerships as agreements that complement the growth strategy of this brand.