Entering the Turkish Market: International Business Strategy
This paper examines the strategic considerations involved in expanding a domestic manufacturing company into the Turkish market. It evaluates four international market entry modes — exporting, licensing, joint ventures, and direct investment — and argues that exporting is the most appropriate initial approach given the company's lack of international experience and desire to minimize upfront capital risk. The paper also addresses supporting measures such as hiring local legal counsel and advertising professionals, establishing on-the-ground operational oversight, and conducting thorough due diligence. Cultural compatibility, market size, tariffs, and business environment fit are discussed as additional factors shaping the entry decision.
- Why Expand to Turkey?: Rationale for pursuing overseas market expansion
- International Market Entry Modes: Overview of four foreign entry mode options
- The Case for Exporting: Justification for choosing exporting as entry strategy
- Managing Risk and Local Expertise: Risk controls through local legal and operational support
- Additional Factors in Market Selection: Culture, tariffs, and due diligence in market choice
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What makes this paper effective
- The paper systematically evaluates all four major entry modes before justifying its recommendation, demonstrating structured analytical thinking rather than jumping to a conclusion.
- It balances advantages against drawbacks honestly — acknowledging the limitations of exporting while still defending it as the best fit for the company's situation.
- Practical risk-mitigation steps (local legal team, advertising agency, on-the-ground oversight) ground the strategic argument in operational reality.
Key academic technique demonstrated
The paper uses a comparative framework to evaluate multiple strategic alternatives against a consistent set of criteria — risk level, capital requirements, local knowledge, and control — before selecting the optimal option. This approach mirrors standard business strategy analysis and is well-suited to international management coursework.
Structure breakdown
The paper opens with a rationale for overseas expansion, then surveys entry mode options, narrows to exporting as the recommended choice, discusses its trade-offs, outlines operational risk controls, and concludes with broader market selection factors including culture, tariffs, and due diligence. The argument flows logically from motivation to recommendation to implementation.
Why Expand to Turkey?
There are several reasons why a company would want to market overseas. Selling internationally is a proven way to expand market potential. In a country like Turkey, entering the market means reaching approximately 80 million additional potential customers. This can help fill existing production capacity, generate new revenue streams, and provide geographic diversification (Gordin, 2011). If the company is already producing goods in Turkey, selling there would also create an opportunity to establish an operating hedge on the Turkish lira.
International Market Entry Modes
There are a number of different methods for expanding abroad: exporting, licensing, joint ventures, and direct investment. Exporting involves using existing domestic production capacity and shipping products overseas. Licensing means hiring a local Turkish firm to produce for the Turkish market, with the originating company providing specifications and licensing the brand. A joint venture involves entering an equity partnership with a local company, where each partner contributes distinct resources or capabilities to the new entity. Direct investment entails establishing a wholly owned subsidiary to handle the Turkish market, which would typically include both manufacturing and sales operations in-country (QuickMBA, 2010).
The Case for Exporting
Pink Manufacturing already has domestic manufacturing capacity and therefore does not need to create additional capacity abroad. Furthermore, there are real risks involved in building a new company presence in an untested market. Having never conducted business overseas, international expansion represents a significant experiment. Given a lack of international expertise, making a massive investment in a country where the company has no prior earnings would be unwise. Thus, the most sensible option is to enter the Turkish market via exporting.
There are certainly drawbacks to this approach. Exporting means working with an importer who handles much of the in-country work, leaving many critical business elements outside direct control. A limited understanding of the Turkish legal system also puts the company at a disadvantage in any commercial disputes. However, there are meaningful advantages to working with a local importer. The importer possesses far greater knowledge of marketing and distribution within Turkey and may therefore make better operational decisions than a foreign entrant could. Moreover, the importer absorbs a share of the commercial risk. Exporting is the lowest-risk entry option and carries the lowest upfront capital requirements, making it an effective way to test product viability in the Turkish market before committing to a larger strategic move.
Managing Risk and Local Expertise
Beyond the choice of entry mode, there are other important steps to minimize risk. It will be necessary to retain a Turkish legal team and a local advertising agency. Engaging these professionals allows locals to manage the aspects of the business that require on-the-ground expertise, thereby reducing exposure to legal and cultural missteps. Written contracts are standard practice in Turkey and should be used consistently throughout all business relationships.
The business will also require some form of operational control. To achieve this, the company should establish a small representative office and place a dedicated employee in Turkey to ensure that importers and distributors are fulfilling their contractual obligations. Simply choosing to export does not mean that management responsibilities end at the loading dock — ongoing oversight is essential to protecting the company's interests and brand in a new market.
References
Gordin, A. (2011). Expanding internationally: Is it right for you? Wharton Magazine. Retrieved November 14, 2015, from http://whartonmagazine.com/blogs/expanding-internationally-is-it-right-for-you/
QuickMBA. (2010). Foreign market entry modes. QuickMBA. Retrieved November 14, 2015, from http://www.quickmba.com/strategy/global/marketentry/
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