2/27/2012

by Prema Nakra, Ph.D.

Strategically located at the crossroads of Southwestern Asia and Southeastern Europe and bordering the Black and Mediterranean seas, Turkey is well-positioned to offer and take advantage of global business opportunities. In terms of land mass Turkey is the world's 37th largest country; about one-third the size of Mexico. A variety of multinational corporations are turning this youthful nation into an entrepreneurial hub, tapping cash-rich export markets in Russia and the Middle East while attracting billions of investment dollars in return.

 

In this series of articles I will discuss the new face of Turkey and its lure for multinationals in multiple industry sectors. Turkey's value proposition and marketing and operational challenges are also illustrated. Understanding these factors will assist decision makers in making appropriate strategy changes for successful market entry and appropriate positioning.

 

INTRODUCTION

 

Founded as a republic in 1923, Turkey was established as a modern secular state after a European model. For the first few decades after its formation, Turkey has endured decades of short-lived governments, hyperinflation and bailouts by the International Monetary Fund (IMF).

 

The new Turkey has a fascinating story to tell as it has come full circle as it prepares to claim its rightful place in global trade. Prime Minister of Turkey, Recap Tayyip Erdogan, has headed this moderately Islamic government since 2003 and has pushed largely pro-business policies by slashing corporate taxes and tightening intellectual property protections. The country under his leadership has weathered the global financial crisis much better than many other countries because of its well-regulated financial markets and banking system. Its average real gross domestic product (GDP) growth rate during 2002-2010 was estimated to be 4.8%. Today Turkey has the 15th largest GDP in the world and is one of the largest Western Eurasian countries.

 

From the 1980s to the 1990s, the Turkish economy transitioned from a controlled centralized system to a market-based model where the private sector has emerged as a key player. The customs union between Turkey and the European Union (EU) came into force on January 1, 1996. Under this agreement, the country has abolished the tariff and non-tariff barriers against all EU goods it covers. Turkey's bid to accede to the EU has also been a key motivator for reforms and development in its political, social and financial environment and its on-going determination to align its policies with the required standards for EU membership.

 

Over my next three articles I hope to convince you that Turkey is a country worth looking at for business expansion. I will discuss the industries currently doing business in Turkey, the country's value proposition, and the operational and marketing challenges for companies wishing to do business in the country.