Koc Holding: Arcelik White Goods
Prepared by: Alex Sagastume
Which Countries are involved in this case? Describe the diplomatic relations between those countries? Are there any trade agreements, policies, sanctions, political circumstances, or diplomatic issues which would impact management’s decision to enter the market? There are several countries involved in this case; specifically Turkey, Germany, France, and the UK are all countries in which products under the Arcelik, or Beko brand are being sold. Turkey, being a secular country established in 1923, has the advantage of being very neutral and so there is no trade tension between any of the countries it does business with. Therefore, it can be said the relations with the companies it does business with are unaffected by political or religious issues. A major recession in 1994 caused a decrease in exports and an increase in imports, however due to trade agreements with the European community for white goods established in 1988, tariffs would be reduced from 40-50% to 0 between 1992 and 1996. This certainly promoted trade and is worth noting its success. Tariffs on imports were also being cut to zero, which would also mean that domestic prices would get more and more competitive as a result. The countries, which I as Vice President of global strategy seek to establish a presence in, are Korea/Japan. Without trade tariff agreements, like those established with the EC, it will be much harder to be as competitive with prices remaining an OEM supplier. Which geographical markets are being considered in this case? Provincial, country, regional, and or global? Arcelik has established a presence in markets across the European community. With tariffs on exports down it was only logical for them to move across into western Europe, specifically: Germany, France, and the UK. Our goal now is to move east, in the Asian community and establish a presence in...
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