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Situation analysis Koc Holding Koc is an industrial conglomerate in Turkey Its largest subsidiary Arc elik is the main manufacturer and market leader of so-called white goods major kitchen appliances in Turkey Koc will likely experience an increase in foreign competition as Turkish tariffs on white goods protecting the local market will be phased out in 1996 In its turn Koc is interested in expanding abroad as the Turkish market for white goods is getting saturated Problem identification As any company Koc is interested in growing its sales Given its existing international experience and the potential increase in foreign competition in its home market Koc has three options for growth 1 Attack the Western European markets 2 Expand in the emerging markets and 3 Keep growing domestically defending itself against foreign competition As I believe that going international is instrumental to Koc s growth I will focus on the first two options The question then is Should Koc expand in the Western European or the emerging markets Recommendation My recommendation for Koc is option 2 In Exhibit I I have listed the main reasons for Koc s competitive advantage in Turkey and to what extent these advantages are transferable to the Western European markets or the emerging markets Except for the low price advantage the situation as pictured in Exhibit I looks unfavorable for Koc in Western Europe In my opinion the main reason and most weighing factor in Exhibit I for not further expanding in Western Europe relates to the extremely strong presence of appliances manufacturers in Germany and Italy Companies like Siemens Bosch AEG and Candy have long established their brands in the Western European appliances market and any newcomer will be confronted with local customers unwilling to buy a refrigerator or dishwasher of a brand unknown to them even if the price is substantially lower This is partially due to the character of this industry When it comes to daily used
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