Appendix A: Case Firms

Abdi İbrahim

Abdi İbrahim was established in 1912 as a small pharmaceutical laboratory in Istanbul. It has been the leading company in the Turkish pharmaceuticals market in terms of turnover and unit sales since 2003. The production operations of the company date back to 1919. The company was renamed “Abdi İbrahim İlaç Sanayi ve Ticaret A.Ş.” in 1975. It has been run by the third generation of founder’s family since 1981. Abdi İbrahim is ranked among the world’s top 100 pharmaceutical companies (Abdi İbrahim Inc., 2016). It offers pharmaceutical services to the healthcare industry with its intensive and innovative research and development (R&D) practices and advanced production technologies. The firm has 3000 employees, including the largest sales and marketing force and the most experienced R&D specialists in the domestic sector (Abdi İbrahim Inc., 2016). The mission and vision statements of the company are as follows:

Mission To serve medicine and people through its pharmaceuticals and its pioneer- ing, innovative style.

Vision To be a respected, rapidly growing and number one player in the Turkish pharmaceutical market. (Abdi İbrahim Inc., 2016)

Abdi İbrahim’s goal of being a global player motivated the company to take a more active role in world markets. The company has large direct investments in Kazakhstan and Algeria, and its own organizations in Cyprus, Ukraine, Georgia, and Azerbaijan where it performs direct sales through its own subsidiaries. Moreover, it offers its products in European Union (EU) countries through its subsidiary established in Portugal (Abdi İbrahim Inc., 2016). The firm works with almost 30 international licensors in international markets and exports to more than 50 countries in four main regions. The company has a great reputation in the pharmaceutical industry on account of its 150-brand portfolio, close to 30 licensors, and an annual production capacity of 350 million boxes (Abdi İbrahim Inc., 2016).

Arçelik

Arçelik manufactures and markets home appliances and consumer electronics. The firm was established in 1955 by the Koç family, a leading business families in Turkey. The company initially grew in the domestic market by opening a series of manufacturing facilities in the country. Arçelik currently employs 27,000 people and has 18 production facilities located in seven countries: Turkey, Romania, Russia, China, South Africa, Thailand, and Pakistan. With 11 different brands, all of them competitive in their local markets, Arçelik exports to more than 130 countries and holds 50 % of the domestic white goods market in Turkey. The company is also the market leader in Romania and South Africa with its local brands. Arçelik holds a strong position in many European countries such as the United Kingdom (UK), Germany, France, Russia, Poland, and Italy in home appliances and consumer electronics. Arçelik is the leading Turkish firm in terms of patent applications. In 1991, the company established an independent center to accelerate its R&D efforts and is currently among the world’s leading 200 firms in Aydınlı 215 terms of intellectual property rights applications, according to the World Intellectual Property Organization (WIPO)—and it is the only Turkish firm included in the ranking. In international markets, Arçelik began to direct investments by acquiring German (Blomberg), British (Leisure, Flavel), and Austrian (Elektrabregenz, Triolia) home appliance and consumer electronics brands to strengthen its position in European markets. The company built a production plant in Russia in 2006. In 2007 Arçelik acquired the whole ownership of German consumer electronics brand Grundig. In the same year, a new production plant in China began to operate. The company grew internationally in 2011 by acquiring Defy Appliances, the leading white goods manufacturer of South Africa. In the same period, Arçelik opened subsidiaries in its target markets, including Ukraine, Egypt, and Taiwan. Arçelik invested in a new production plant in Thailand to serve the Southeast Asian markets in 2015, and acquired Dawlance from Pakistan to accelerate its global growth. The company engaged in many sponsorship agreements with internationally recognized sports teams and organizations such as the European Basketball Championship, World Basketball Championship, FA Cup, and FC Barcelona. In order to internationalize its R&D activities, Arçelik engages in partnerships and cooperative projects with the top universi- ties and R&D centers. For example, the company has an R&D center in Cambridge Science Park where the most important technology companies are also located. Arçelik has ten R&D centers located in Turkey, Taiwan, and the UK where the company employs more than 1000 specialists (Arçelik Inc., 2016a, 2016b).

Aydınlı

Aydınlı is a Turkish retailer and manufacturer in the ready-to-wear industry. The foundations of the Aydınlı Group can be dated to 1965 when the first store was opened in Istanbul. In the 1970s, the Group opened mul- tistory shops and started to wholesale ready-to-wear men’s and women’s products under their own brand, “Aydınlı.” In the following years, Aydınlı reached 200 retailers in total and started to manufacture its own products. 216 Appendix A: Case Firms

In 1990, the Group accelerated its growth by establishing larger production facilities equipped with the latest technologies. At that time, 80 % of the products manufactured in Aydınlı facilities were exported. In the 1990s, Aydınlı signed contracts with Pierre Cardin (in 1993), Cacharel (in 1995), and the U.S. Polo Association (in 1997) to become their con- tract manufacturer and licensee in Turkey. These licenses accelerated the growth of the Group. In 1997, Becon, a German ready-to-wear brand, was acquired. After 2000, the Group started to internationalize its retail operations through franchising in the surrounding region with the brands it had been representing. By 2014, the Group’s 410 retail stores, of which 150 are located abroad, employed more than 3500 workers, making it one of the largest retailers in Turkey’s periphery (Aydınlı Inc., 2016a). Aydınlı is currently the licensor of the U.S. Polo Association in 57 countries. It holds licenses for Cacharel in 37 countries and Pierre Cardin in 13 countries. The Group manages Cacharel in 17 countries and owns the brand rights for men’s ready-to-wear in Russia, Ukraine, Iran, Iraq, Syria, Kazakhstan, Azerbaijan, and Lebanon. Aydınlı represents Pierre Cardin in Kazakhstan, India, Iraq, Iran, Syria, Macedonia, and Azerbaijan with ready-to-wear products. It also holds the licensor rights of the brand for almost 60 product groups including home textiles, furniture, and carpets. By 2015, Aydınlı was ranked as 199th in the Fortune 500 Turkey list (Aydınlı Inc., 2016b). The mission and vision statements are as follows:

Mission Our mission is to become a worldwide example by putting forward a corporate culture that lives universally accepted values in all areas of life while allowing people to dress more beautifully with our success in fashion retailing. (Aydınlı Inc., 2016b) Vision In 2023, based in Turkey and in its close proximity that is connected with historical ties, our vision is to become one of the three most successful retailers with acquired or represented brands in fashion retailing. (Aydınlı Inc., 2016b)

Aydınlı currently exports its products to four different continents via its distributors, network of retailers, and its own foreign offices and stores. The Group has subsidiaries in Germany, Russia, Ukraine, Kazakhstan, and Boydak Furniture 217

Romania (Aydınlı Inc., 2016c). Direct investments in retailing began in 2008 with the Group’s offices, showrooms, and retail stores in Russia and Ukraine. The Group subsequently opened six stores in Russia and four stores in Ukraine where it previously had franchisees. Later, two companies in Romania and Kazakhstan were opened to run the retail operations in those countries. After these investments, the first stores in both countries were opened. Aydınlı now has 144 retail stores abroad in total. Of these stores, 59 are owned by the company. Among other countries, Russia has a significant share, with 53 stores, 37 of which belong to Aydınlı and the remaining to franchisees. As of 2015, Aydınlı’s revenue totaled $270 million. The Group’s long-term objective is to become among the top three retailers in the global ready-to-wear market (Aydınlı Inc., 2016b).

Boydak Furniture

The origins of Boydak Group can be dated back to 1957 when the Boydak family started to produce furniture in a small workshop in Kayseri, Turkey. It currently has operations in furniture, textile, chemistry, marketing, iron/steel, logistics, and energy industries. Boydak Holding has 34 companies and seven different brands, all of which are leading brands in their respective industries, including İstikbal, Bellona, Mondi, İstikbal Mutfak, Hes Kablo, Boyteks, and Form Sunger. The Holding exports to 140 countries and is among the important holdings in Turkey, with $2 billion in turnover in 2015 (Boydak Holding Inc., 2016a). Boydak originally began as a furniture manufacturer and later diversified its businesses into other industries. However, furniture has always remained of central importance for the Holding, accounting for almost 35 % percent of the Group’s revenue. In the furniture industry, Boydak Furniture exports to 80 countries and has made direct investments to establish five subsidiaries abroad. Therefore, our case study focused only on Boydak Group’s furniture operations. The Holding vision and mission statements are as follows:

Mission Attain continuous development throughout all fields of activity by means of sustainable growth, take leadership in the development of our industries, and become a value for our shareholders, associates, and community. 218 Appendix A: Case Firms

Vision Sustaining excellence in the domestic market and becoming a major actor in global markets through continuous investments and innovations in our strategic business units. (Boydak Holding Inc., 2016a)

Boydak’s furniture operations began in 1957. In 1992 Merkez Çelik, the manufacturer of sofas, sitting groups, and bases as well as semi- finished goods for the other Group companies, was established. It has more than 2400 employees and by 2015 had become the 177th largest industrial organization in Turkey. In 1995, Boytaş was established to manufacture panel furniture and kitchens for Group brands. Boytaş has 3600 employees and is the largest firm with its manufacturing capacity in its domestic market. By 2015 it had become the 120th largest industrial organization in the country. Another company in the Boydak Furniture Group is İstikbal Furniture, which was established in 1989 to produce spring mattresses, linens, and polyester fiber in its facilities under the brands İstikbal and Bellona. It was ranked 368th among Turkey’s industrial organizations in 2015, with 600 employees. Mondi, initially a local manufacturer in Kayseri, was acquired by Boydak in 2006. It manufactures sofa sets, sofas, dining room sets, bedroom sets, beds, box springs, home textiles, and teenager room sets. Boydak has five foreign affiliates located in Germany, the United States of America (USA), Russia, Ukraine, and Iraq operating in the furniture industry. Boydak Furniture is the largest furniture manufacturer in Europe. It has 300 stores abroad and offers its products to customers in 60 different countries (Boydak Holding Inc., 2016b).

Çalık

Ahmet Çalık, a member of the Çalık family that has been engaged in trade activities since the 1930s, established Çalık Holding when he associated all of his companies under one roof in 1997. He started his businesses in 1981 by founding Ortadoğu Textile in Malatya, Turkey. Later his businesses were transformed into one of the largest conglomerates in the country. The Holding operates in the textile, finance, telecommunications, Çalık 219 energy, construction, and mining sectors. It has activities in 17 countries and has become a regional power with its 28,000 employees. Its foreign operations have expanded into Central Asia, the Balkans, and the Middle East and North Africa (MENA) countries (Çalık Holding Inc., 2016). The story of Çalık’s internationalization is a unique and path-dependent case. The direct investments of the Holding in different industries are inter-related and have been realized in response to emerging opportunities within the Holding’s networks. The business domains in which the Holding operates were diversified during the internationalization process as new investment opportunities emerged. Therefore, this case study, unlike the others, does not focus on a sole business domain. Instead, it provides the entire case story of Çalık Holding with a focus on the textile, finance, and telecommunications industries in which the Holding has direct investments. The Holding’s project-based international operations in construction and energy are also mentioned in the case; however, they do not constitute the main concern in the text due to the scope of this study. Ahmet Çalık founded his first enterprise, Ortadoğu Textiles, in 1981. In 1987, GAP Güneydoğu Textiles, which is now one the largest denim manufacturers in the world, was established. The Group began its first cross-border operations in 1992 with a denim factory in Turkmenistan. In 1994, GAP Marketing was established to accelerate the Group’s international sales. Another company in the construction sector, GAP Construction, was organized and began business development in 1996. Ultimately, Ahmet Çalık established Çalık Holding in 1997 to associate all of his businesses in one organization. In the same year, two textiles factories in Turkmenistan began operations. The foundation of new companies followed. In 1998, Tuteks, the Group’s energy firm, was reorga- nized and renamed as Çalık Energy. The Holding entered finance and established Çalık Bank in 1999, which was renamed Aktif Bank in 2008. Investments in Turkmenistan continued in 2000 and 2001 with two new textile facilities, and new projects were initiated in unrelated business domains in the country such as construction and energy. In 2001, the partnership between Çalık and General Electric completed construction of two power plants in Turkmenistan. By 2013, operating as an EPC (engineering, procurement, and construction) contractor, Çalık had 220 Appendix A: Case Firms completed several power plant constructions, renewal projects, industrial complexes, and government buildings such as hospitals and ports in the country (Çalık Holding Inc., 2016). The Holding’s international operations are not limited to Turkmenistan. Another location where Çalık has operations in finance, telecommunications, and energy is Albania. The Holding’s direct investments in Albania began in 2006 when Çalık and Şekerbank jointly acquired 60 % of the ownership of Banka Kombetare Tregtare (BKT) by privatization. Three years later the Holding purchased the remaining 40 % of the shares. In 2007, CETEL, a consortium consisting of Çalık Holding (80 %) and Turk Telekom (20 %), acquired 76 % of ALBtelecom, Albania’s largest fixed-line telephone operator and Internet provider, by privatization. In 2008, Eagle Mobile began its operations as a GSM operator in Albania. Another country receiving Çalık’s direct investments is Egypt where, in 2009, a textile factory was set up to benefit from the low-cost labor in the country. Between 2010 and 2013 Çalık completed several power plants in Iraq, Libya, Georgia, and Uzbekistan. By 2015, its total sales had reached $2.5 billion (Çalık Holding Inc., 2016). The mission and vision statements of the Holding are as follows:

Mission To grow four-fold on four continents by our 44th anniversary in 2025, adding value to every life we touch in each of our areas of operation with reliable teams empowered by our innovative, entrepreneurial spirit. Vision To contribute to rising standards of living by using our talents and energy to develop solutions that add value to people's lives in every region in which we operate. (Çalık Holding Inc., 2016)

Hayat Kimya

Hayat Kimya is one of the Group companies of Hayat Holding, a family- owned Turkish conglomerate operating with 25 companies in various industries including fast moving consumer goods (FMCG), port operations, construction, wood, and energy. The Group history can be dated Hayat Kimya 221 back to 1937 when the Kiğılı family was involved in the wholesale fab- ric business. Later, in 1967, they entered the manufacturing industry to produce fabrics. Hayat Kimya was founded in 1987 as an attempt by the Kiğılı family to enter the FMCG industry. The firm manufactures tissues in different segments with the Papia, Familia, Focus, and Teno brands. In the home-care category, the company offers its products through the Bingo and Test brands. Hayat Kimya also offers the Molped brand in the sanitary pads category, the Molfix brand in the baby diapers category, and the Joly and Evony brands in the adult diapers category. It is one of the leading Turkish companies in the FMCG industry both in domestic and global markets (Hayat Kimya Inc., 2016). The Group mission and vision statements are as follows:

Mission To provide consumers and customers all over the world with the best quality Turkish brands in the sectors in which we are active. We intend to achieve this goal with our production power and our constantly growing and improving human resources, offering consumers and customers reli- ability based on sustainability on a global scale. Vision To be recognized, admired and preferred around the world in the sectors in which we are active, with all our companies and brands. (Hayat Kimya Inc., 2016)

Hayat Kimya has entered Turkey’s neighboring countries through exports and direct investments which have, eventually, turned the company into a global enterprise. It currently has approximately 8000 employees. Having subsidiaries in six different countries that are operating to European standards, Hayat Kimya reaches consumers through an export network spanning 101 countries. It has factories in Turkey, Russia, Algeria, Iran, Egypt, and Bosnia-Herzegovina. Hayat was ranked 51st in 2014 among Turkey’s largest exporters and 60th among the country’s largest companies thanks to its high performance in export markets, including 101 countries on five continents. The company is the largest sanitary paper producer of the Eurasian region and fifth largest baby dia- per manufacturer in the world (Hayat Kimya Inc., 2016). 222 Appendix A: Case Firms

Kastamonu Entegre

Kastamonu Entegre (KE) was established in 1969 to produce wood based panel products under Hayat Holding. KE manufactures products for the furniture, construction and decoration sectors such as raw and melamine faced MDF and particle board, doorskin, laminate flooring, worktop, and kraft paper for packaging which are sold in 93 countries. With its 5500 employees and four subsidiaries located abroad, KE is the 41st largest industrial organization in the country. The company is ranked first in Turkey, fourth in Europe, and seventh in the world in wood-based panel production (Kastamonu Entegre Inc., 2016; Kastamonu Entegre Inc. Executive Interview, 2015). The KE mission and vision statements are as follows:

Our mission is to add value to the comfortable living spaces with high quality, innovative, reliable and environmentally friendly products which meet all stakeholders’ expectations at the highest level in the wooden panel sector. Our vision is to be one of the top five manufacturers in the wood based panel sector worldwide and to make Kastamonu Entegre, a global brand. (Kastamonu Entegre Inc., 2016)

KE has 15 production facilities, six of which are located at Russia, Bulgaria, Romania, and Bosnia-Herzegovina. Of total sales, 35% is generated from overseas markets. The total sales of the company reached more than €1 billion in 2015 (Kastamonu Entegre Inc., 2016).

Turkish Airlines

Turkish Airlines was established in 1933 as a state-owned enterprise with only 24 employees. The number of aircraft in the fleet increased from five to 52 during the period 1933–1945. Turkish Airlines began international flights in 1947, becoming a member of the International Air Transport Association (IATA) in 1956. Early international operations were begun by the opening of sales offices in Athens and Rome. Turkish Airlines grew during the 1960s by adding new destinations such as Germany, Belgium, the Netherlands, Switzerland, Israel, and Iran to its flight points. Its growth continued during the 1970s with new destinations and aircraft. Vestel 223

By the 1980s the company had already become an international enterprise operating in three continents: Europe, Asia, and Africa. During the 1980s Turkey became more outward-oriented and, in parallel with this, the growth of the company accelerated. Turkish Airlines flights’ range reached the Far East, and it made its first transatlantic flights in the second half of the 1980s, when its international flight points also increased to 42. In 1989, Turkish Airlines and Lufthansa engaged in a partnership and established SunExpress to offer scheduled and charter flights between Turkey’s popular holiday destinations and Europe. In the following years, Turkish Airlines improved its ground and flight services together with the interior and exterior design of its aircraft and upgraded its flight crew and ground personnel qualifications. During the 1990s Turkish Airlines continuously refined its fleet, added new domestic and international destinations, and undertook agreements with several foreign airlines. Its continuous improvements in operations and its fleet began to produce positive outcomes by the late 1990s and early 2000s. Turkish Airlines was invited, in 2006, to become a member of the Star Alliance, with full membership realized in 2008. New international destinations were added in addition to the agreements with foreign airlines. Turkish Technic, a large subsidiary mainly operating in the area of mainte- nance, repair, and technical support, was established in 2006. In 2011, the company was awarded the Skytrax “Best Airline in Europe” award, voted for by passengers (this success was repeated in the years 2012–2016) and became the airline with flights to the most countries in the world (Turkish Airlines Inc., 2017c). Turkish Airlines has several affiliates, including Turkish Technic (a wholly owned subsidiary), SunExpress (a 50–50 % joint venture with Lufthansa), and Turkish DO&CO (a 50–50 % joint venture established in 2007 with DO&CO Restaurant & Catering AG from Austria) (Turkish Airlines Inc., 2017b). By 2017 Turkish Airlines was reportedly flying to 296 destinations in 120 countries (Turkish Airlines Inc., 2017a).

Vestel

Vestel Group consists of 23 companies, of which 14 are located abroad; it has operations in software and technology development, marketing, and distribution fields in the consumer electronics, household appliances, 224 Appendix A: Case Firms multimedia communication, LED lighting, and defense industries, with more than $6 billion in turnover. Vestel was founded in 1984 and in 1994 joined the Zorlu Group, which has operations in electronics products, home appliances, energy, textiles, and real estate (Vestel Inc., 2016). Vestel is the 11th largest industrial organization in Turkey. The Group has more than 16,000 employees, 1250 sales points, 350 after-sales ser- vice centers, and works with a large network of suppliers, making it the export leader in the country in its industry for the past 18 years, with a large export market comprising 152 countries. Vestel City in Manisa, Turkey, is one of the largest industrial complexes in Europe on a single field, and is where the company gathers its operations. Vestel has another production facility in Alexandrov, Russia. In total, these facilities are able to produce more than 30 million electronic products per year. Vestel has five R&D facilities located in Turkey, the UK, Hong Kong, China, and Taiwan, focusing on developing new hardware and software solutions (Vestel Inc., 2016). Vestel’s mission and vision statements are as follows:

Mission As the technology giant of Turkey in the durable consumer goods sector, we carry out our activities with a mission of making the “highest quality” accessible to our customers and being a leader in the sector we operate in. Vision We aim at being the most powerful production and technology group of the world in our sector and achieving a sustainable and controlled development by focusing on producing high-quality consumer products. (Vestel Inc., 2016)

Vestel Group is among the largest original equipment manufacturers (OEMs) and original design manufacturers (ODMs) in the world. Its international markets include Europe, the Commonwealth of Independent States (CIS), and MENA countries. Vestel’s sales are per- formed on an OEM/ODM basis in Europe where the company strategy is to maintain an own-brand presence in Turkey, CIS, and MENA countries. Vestel operates in Europe with its purchased local brands and gained trademark rights in different segments (Vestel Inc., 2016). Yıldız Holding (Ülker) 225

Yıldız Holding (Ülker)

Yıldız Holding is one of the leading Turkish groups in size and has operations in various industries including food, wholesale and retailing, investment services, and manufacturing of papers and personal care products (Yıldız Holding Inc., 2017c). Products such as biscuits, chocolates, and candy, however, have always been at the center of the growth and global expansion of Yıldız Holding (Yıldız Holding Inc., 2017d). Yıldız Holding currently positions itself as a snack food (biscuits, chocolates, and candies) producer in global markets and has recently divested some of the Group’s companies in order to concentrate on its core business. Thus our case study focuses solely on the core business of the Holding by examining its development and growth periods at home and abroad in the food industry. The Group’s history goes back to the 1940s when the first Ülker biscuit factory was established in Istanbul, Turkey. Under the brand name of Ülker, in time, numerous biscuit and chocolate products have been offered to the domestic market. The first exports were made in 1974 to the Middle East, and the first foreign investment was realized in 1999 in Saudi Arabia. Yıldız Holding was established in 1989 in order to com- bine all the family companies under one group. In 2000, the founder of Yıldız Holding, Sabri Ülker, handed over its management to the second generation and Murat Ülker became the chairman of Yıldız Holding. Yıldız Holding engaged in several partnerships with international firms, including the Cerestar Group in 1993, Kellogg’s in 2005, Gumlink in 2009, Eckes-Granini Group and McCormick in 2010, and Japanese Nissin in 2013. The Holding pursued an accelerated internationalization through a series of aggressive international acquisitions, including Godiva in 2007, Nuroll in 2011, and DeMet’s and the British food giant United Biscuits both in 2014. Yıldız Holding currently exports to more than 100 countries and runs production in 77 factories located in 14 countries (Yıldız Holding Inc., 2017b). A new global company named Pladis was established in the UK in 2016 to unite the activities of United Biscuits, Godiva Chocolatier, Ülker, and DeMet’s Candy Company. Yıldız Holding has become a truly global enterprise by virtue of its recent 226 Appendix A: Case Firms international acquisitions and greenfield investments abroad. The company, with its affiliates, is now one of the leading biscuit (3rd largest) and chocolate (10th largest) producers in the world (Yıldız Holding Inc., 2017a).

Ziylan

Ziylan is a Turkish group that has been operating in the footwear industry both as a retailer and a manufacturer with its locally known shoe brands, including Polaris, Flogart, and Kinetix, and retail stores named FLO and Polaris. It was founded as a small workshop making shoes to order in the early 1960s in Gaziantep, a city in southeastern Turkey. In the 1970s, the company moved from Gaziantep to Istanbul, and in 1985 it started mass production of sports shoes. In 2001, the company entered the retail industry with the FLO brand and introduced the shoe store concept in Turkey. Initially registered and introduced as a slipper brand in 1994, Polaris was turned into a footwear and retail brand in 2003. The first shoe store under the Polaris name was opened in 2006. The number of stores with the FLO and Polaris brands rapidly increased to 295 by the year 2013. Ziylan offers 5000 different shoe models to consumers of all ages and 3000 different products, including those in the categories of bags, accessories, sports accessories, and clothing through its FLO stores, Turkey’s largest chain of shoe stores (Ziylan Inc., 2016a, 2016b). By 2016, Ziylan was selling more than 35 million pairs of shoes each year and providing employment to 6000 people. The firm has 403 domestic and 37 international stores (Ziylan Inc., 2016c). The Ziylan Group currently exports to 25 countries (Ziylan Inc., 2016a), the first export being made to Greece in 1988. In the same year, the firm signed contracts for footwear production with Germany and Finland. In 1989, a shoe factory was purchased in Germany (Ziylan Inc., 2016c) to acquire and transport the production units of the facility to Turkey in order to meet the high volume of orders received from Finland (Ziylan Inc. Executive Interview, 2015). The Group acquired manufacturer licenses of the German brand Docker’s by Gerli in 2003, Ziylan 227 of which it had been operating as a distributor for some time. In 2012, Ziylan acquired Lumberjack, a 65-year-old classic Italian brand, and now conducts the sales and marketing operations of the brand in six stores in Italy, one in Spain, and 20 franchises located in the most prestigious shopping and fashion locations across Europe. The company entered into a partnership with Gözde Girişim Sermayesi Yatırım Ortaklığı A.Ş., BİM, and Mater Footwear BV in November 2013, thus strengthening its financial position. In 2016 the Group expanded its retail operations abroad by acquiring the German HR Group, which owns the second largest footwear retailer in Europe, Reno. By 2016 Reno had 505 retail stores and revenue of $500 million. This acquisition enabled the Ziylan Group to reach 1000 stores in total, which generate 60 million shoe sales resulting in revenue of more than $900 million (Ziylan Inc., 2016e). Ziylan Group offers its products branded as Polaris, Lumberjack, Kinetix, Torex, and Pinkstep on world markets through its dealers and sales points. The company cooperates with thousands of selected stores, wholesale distribution networks, chain stores, and agencies in markets throughout Europe, the Middle East, North and South America, Africa, and the Far East. Ziylan brings its products to consumers at suitable prices and endeavors to increase the value of its brands by offering high comfort and fashion (Ziylan Inc., 2016a, 2016d). The mission and the vision statements of Ziylan Group are as follows:

Mission To satisfy customer demands and expectations at the highest level by constantly improving the quality of our products and services. To ensure customer loyalty by building emotional bonds between consumers and our company by means of powerful communication. To become the most preferred footwear chain by expanding our chain of stores in Turkey and abroad. To increase our competitive power and profitability. Vision To become a reliable and reputable company of Turkey that constantly develops its own processes and pioneers the industry in its field of expertise in order to boost the effectiveness and productivity of our company on the national/international market. (Ziylan Inc., 2016a) 228 Appendix A: Case Firms

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The research strategy used in this study is the case study method, which has its own research design (Yin, 2009). Therefore the research design of this study is embedded within the case study method, and the design components can be explained along with the method itself. For this rea- son, it is more appropriate to begin with the rationale behind the choice of case study research as our method of inquiry. This research is designed to develop answers to two main research questions: “why and how do Turkish MNEs internationalize their operations through foreign direct investment (FDI)?” These initial how and why questions justify the case study method (Edmondson & McManus, 2007; Eisenhardt, 1989; Eisenhardt & Graebner, 2007; Rowley, 2002; Yin, 2009). Second, we would like to understand whether there are any differences between developed country multinational enterprises (DC MNEs) and emerging country multinational enterprises (EC MNEs) in terms of internationalization. We aim to contribute to the recent debate in the international business literature about whether or not existing international business theories sufficiently explain the internationalization process of EC MNEs (Ramamurti, 2012). By doing so, it might be possible to

© The Author(s) 2018 231 Y. Ayden et al., Turkish Multinationals, Palgrave Studies of Internationalization in Emerging Markets, DOI 10.1007/978-3-319-57294-9 232 Appendix B: Research Methodology extend existing theories and perspectives (Jormanainen & Koveshnikov, 2012; Meyer & Thaijongrak, 2012). At this point, using pre-established constructs and propositions to understand EC MNEs’ behaviors might result in biases and limit the findings (Eisenhardt, 1989). As is frequently stated, extensive and in-depth description of social phenomena, again, justifies the case study method (Flyvbjerg, 2006; Ruddin, 2006; Yin, 2009). In addition to this fit between the research questions and the method of the study, the control of the investigator over the phenomenon being studied and the historicity of the phenomenon are two remaining condi- tions (Yin, 2009). Regarding the focus of this study, it is obvious that the behavior of multinational enterprises (MNEs) cannot be manipulated by the researcher and that the internationalization process of these EC MNEs is a contemporary phenomenon, not a historic one. Therefore, it seems appropriate and logical to use case study research as our method of inquiry. Furthermore, the international business literature is mostly dominated by quantitative methods, resulting in a methodological condition that restricts the explanatory power of the findings (Birkinshaw et al., 2011; Jormanainen & Koveshnikov, 2012). Many scholars assert the useful- ness of qualitative research methods in international business research (Birkinshaw et al., 2011; Patton, 2002; Sinkovics et al., 2009; Vissak, 2010), particularly to examine features and issues specific to EC MNEs (Jormanainen & Koveshnikov, 2012). This study was designed as a multiple-case study. Once the multiple- case design is chosen, another decision must be made concerning the number of cases that will be included in the study in order to conduct effective and meaningful research. Although there is no ideal number of cases in multiple-case study research, it is proposed that a number between four and ten cases works effectively. Any number of cases fewer than four may be insufficient and unconvincing to explain the complex- ity. Using more than ten cases, meanwhile, may generate a large volume of data that is difficult to cope with (Eisenhardt, 1989). In this study, we examined 11 cases of Turkish MNEs. We think it is an appropriate number for our study to collect an adequate volume of relevant data. This study is not built on a single theory or approach, and it does not include any propositions to test. Instead, we defined our research Case Selection 233

framework by applying the three fundamental views of strategic management (i.e., resource-based view, industry-based view, and institution-based view). We also compare our findings with the existing internationalization theories (i.e., international process model, eclectic paradigm, springboard perspective, and linkage, leverage, learning model) to discuss their explanatory power and to find some possible extensions, refinements, and refutations. Therefore, the existing literature on these perspectives provides us with a useful base to define the scope of our study and to develop the correct data collection instruments (e.g., interview questions).

Case Selection

In case study research, generating a sample from the population being studied is not relevant. The cases are not representative of the population as are data in survey research (Eisenhardt & Graebner, 2007; Yin, 2009). Thus, conventional sampling methods are not appropriate for case study research. Instead, theoretical sampling is applicable, which means the cases should be chosen for theoretical reasons such as to replicate previous cases, to reveal an unusual phenomenon, or to eliminate alter- native explanations (Eisenhardt, 1989; Eisenhardt & Graebner, 2007). In the case study method, the investigator should choose the cases that are most likely to illuminate the research questions of the study (Yin, 2009). Information-rich cases that allow the investigator to access the data needed, whether by interviewing people or by reviewing documents or records, are preferable. Patton (1990) defines 15 strategies of purpose- ful sampling that can be used to select cases. Among these 15 strategies, our case selection logic converges on the criterion sampling in terms of selected firms’ internationalization vision and maximum variation sampling in terms of industry diversity and firms’ internationalization stage. After carefully screening Turkish firms that have undertaken outward foreign direct investment (OFDI), we developed a list of 25 Turkish MNEs with intentions to become global players that offer information-rich cases by considering their accessibility. An invitation letter with an interview guide was posted to the top-level executive of each target firm asking them to participate in our study. Following the initial contacts with the 234 Appendix B: Research Methodology targeted MNEs, we concluded our case selection phase as we attained 11 MNEs willing to participate in our study.

Methods of Data Collection

A case study protocol was developed to guide the researchers in the data collection and analysis phases of this study. The protocol includes an overview of the study, field steps to be followed, and the case study questions to be asked. During the data collection phase, the researcher kept the case study questions and subquestions in his mind in order to focus on the topic being investigated (Yin, 2009). Case study research exploits various data sources such as documents, interviews, archival data, survey data, and observations (Chetty & Campbell-Hunt, 2004; Eren-Erdogmus et al., 2010; Perry, 1998; Richardson, 2014; Rowley, 2002). Among these sources, we used interviews and documentation in our study. The interviews were conducted between September 2014 and September 2015. The procedures detailed in the case study protocol were strictly followed by the investigators prior to visiting the companies. The positions of our key informants ranged from general manager to strategic planning director. The duration of interviews varied from 90 to 180 minutes. All interviews were conducted at the firms’ headquarters offices and were made in the cities of Istanbul, Kayseri, and Manisa. Data collected through interviews were transcribed and combined later with the data collected through documentation to develop a case study database for each firm. In order to triangulate the data, documentation was used as a second data source. Documentation is a common method preferred in case study research (Chetty & Campbell-Hunt, 2004; Richardson, 2014) and its most important use is to corroborate and augment evidence from other sources (Yin, 2009). In our study, four sources were used for documentation: (1) documents directly obtained from the firm; (2) documents retrieved from the official company website (e.g., annuals and periodi- cals); (3) press (e.g., news, executive interviews); and, (4) publications (e.g., cases, articles, books). Methods of Data Analysis 235

Prior to visiting the companies, the last three of the sources were sys- tematically searched by the investigators and classified in the firm’s case study database. This provided a significant amount of background information about the firm and usually generated some further questions to be asked during the interview. After the interviews, key informants were asked to provide possible additional documents if they were available. All these documents were also carefully classified and stored in the case databases for the final analysis.

Methods of Data Analysis

Since additional investigators may increase the creative potential of the study and bring new perspectives, the use of additional investigators enhances confidence in the findings and improves the quality of the research (Eisenhardt, 1989; Sutton & Callahan, 1987). During the data analysis phase of this study, findings were discussed among the research team members who had expertise and sufficient knowledge concerning the scope of the study. By doing so, we also triangulated the investigators in our research, which increased the confidence in and quality of the research (Patton, 2002). In order to develop individual case study reports, first, we began the analysis by examining each case independently. The overall idea was to find answers to the case study questions by examining the supporting evidence. This within-case data analysis made the investigator familiar with each case and allowed the researchers to determine the unique patterns of each case (Eisenhardt, 1989). In this phase, no case comparisons were yet completed; instead, each case was examined individually. At the end of this first phase, individual case reports were developed. Second, we searched for cross-case patterns by comparing each case with the others. In this phase, the investigator should avoid premature and false conclusions by looking at the data from divergent perspectives (Eisenhardt, 1989). To do this we developed some dimensions (e.g., motives for foreign direct investment, location choices, and entry mode choices) and categories (e.g., asset-exploiting firms and asset-seeking 236 Appendix B: Research Methodology firms) in order to reveal the differences and similarities between cases (Eisenhardt, 1989).

References

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A asset exploration, 200 Abdi İbrahim, 68, 70, 77, 80, 84–7, asset-based ownership advantages 93–5, 98, 101, 106, 111, 113, (Oa), 40 145, 146, 173, 190, 192, 213, asset seeking, 4, 42–6, 48, 53, 55, 214 83, 90, 97, 99, 121, 129, 164, absorptive internationalization, 201 170, 177, 191, 192, 194, 196, accelerated internationalization, 38, 200, 201, 235 43, 85, 170, 201, 225 Aydınlı, 68, 70, 77, 80, 82, 83, 88, adaptation, 69, 93, 132–8, 179 92, 93, 95–7, 104, 105, 109, advantages, 73, 102 110, 115, 139–41, 144, 190, Ahmet Çalık, 147 215–17 Albania, 79, 93, 104, 112, 148, 149, 220 ALBtelecom, 112, 149, 173, 220 B Algeria, 78, 79, 87, 94, 98, 101, 111, Balkans, 100, 134, 219 162, 173, 214, 215, 221 Banka KombetareTregtare (BKT), ambidexterity, 128 112, 148, 173, 220 Arçelik, 68, 70, 75, 84, 85, 94–7, Beko, 108, 151, 152, 177, 178, 181 107, 108, 110, 114, 138, Bosnia-Herzegovina, 100, 105, 161, 149–53, 157, 173, 174, 177, 221, 222 178, 181, 190, 192, 203 Boydak, 68, 71, 74, 75, 84, 86, asset exploitation, 200, 201 93–5, 103, 104, 107, 109,

136, 137, 149, 162, 173, 203, customer responsiveness, 89, 142 217, 218 customization, 73, 142 brand management, 151, 163, 184 Customs Union, 12, 18, 22, 70, 73, Brazil, 188 102, 142, 143, 193 Brazil, Russia, India, and China (BRIC), 2, 171 brown goods, 109, 142 D Bulgaria, 79, 100, 105, 118, 119, Dawlance, 108, 151, 174, 178, 181, 161, 222 215 Defy, 96, 108, 151, 174, 178, 181, 215 C design capabilities, 53, 68, 70, 78, Cacharel, 77, 83, 216 82, 84, 97, 115, 139, 141, Çalık, 68, 71, 79, 81, 82, 84, 93–5, 149, 163 98, 104, 110, 112, 117, 145, differentiation, 44, 49, 54, 57, 73, 147–9, 173, 191, 193, 218–20 85, 97, 127, 142, 164, 205 Çalık, Ahmet, 81, 82, 218, 219 diffusive internationalization, 201 Cardin, Pierre, 77, 83, 216 distance, 36, 55–7, 93, 101, 194 Central Bank of the Republic of distribution channels, 1, 146, 150, Turkey (CBRT), 23, 25, 29 155, 162, 172, 180 challenging to incumbents, 149–63, drop and diffuse, 132–8, 162, 163, 197, 198, 202, 203 195–7, 203 China, 6, 23, 147, 151, 156, 171, 178–80, 182, 187, 188, 193, 206, 214, 215, 224 E Commonwealth of Independent Eczacıbaşı, 135 States (CIS), 12, 26, 70–2, 98, efficiency-seeking, 4, 52, 164, 193, 100, 176, 194, 224 203 competences, 48, 54, 75, 78, 101, Egypt, 79, 87, 93, 98, 104–6, 118, 112, 137, 145, 169, 172–7, 134, 162, 193, 215, 220, 221 184, 195–7, 204, 207 entry mode, 3, 6, 33, 35, 44, 45, competitive strategies, 49, 127 56–8, 67, 108–23, 194, 195, consumer electronics, 54, 75, 78, 86, 207, 235 107, 109, 110, 143, 150, 177, European Foundation for Quality 214, 215, 223 Management (EFQM), 75 cost advantages, 42–4, 49, 54, 69, European markets, 83, 89, 102, 103, 72, 73, 76, 91, 102, 142, 143, 105, 107, 139, 142–4, 150, 193, 203, 205 180, 181, 193, 194, 205, 215 Index 241

European Union (EU), 12, 16, 18, H 22, 26, 27, 82, 86, 91–3, 100, Hayat Kimya, 68, 69, 71, 84, 85, 87, 102, 142, 143, 187, 214 93–5, 98, 105, 106, 109, 110, Europe, Middle East and North 112, 118, 132–5, 162, 192, Africa, and Commonwealth of 220, 221 Independent States highly competitive markets, 83, 84, (EMENACIS), 98, 99, 103, 88, 129, 130, 132–9, 191, 107, 158, 194 197 home appliances, 75, 85, 107, 109, 143, 150, 178, 214, 215, 224 F home-country, 44, 47, 49, 50, 78, Far East, 91, 99, 102, 140, 156, 159, 90, 92, 93, 128 179, 193, 205, 223, 227 host-country, 40, 50, 51, 55–7, 69, fast moving consumer goods 82, 93–6, 136, 162, 163 (FMCG), 87, 88, 132, 220 firm-specific advantages (FSAs), 39, 112, 129 I Foxconn, 142 import substitution, 14 India, 6, 138, 147, 162, 188, 206, 216 G industry-based view (Ind.BV), 3, 46, Germany, 23, 75, 84, 96, 97, 102, 49, 233 103, 105, 107, 115, 122, 136, institutional ownership advantages 150, 158, 181, 214, 216, 218, (Oi), 40 222, 226 institution-based view (Inst.BV), 3, global brands, 74, 75, 95, 96, 140, 50–2, 189, 233 141, 152, 160, 178, 222 insufficiency of firm resources, 82 Godiva, 76, 78, 79, 109, 155–7, internalization, 36, 39, 41 175, 176, 178, 179, 181, 182, internalization advantages, 6, 39, 40, 225 42, 44, 47, 170, 190, 191, good laboratory practices, 78 193, 201 good manufacturing practices internationalization process model (GMP), 78, 101, 173 (IPM), 4, 35–9, 200 government support, 50, 90, 95, internationalization strategies, 3, 6, 104, 205 34, 38, 83, 92, 112, 128, 146, gradual internationalization, 37, 38, 149, 169, 206, 207, 233 96, 136, 201 International Monetary Fund (IMF), Grundig, 151, 177, 178, 181 19 242 Index

Istanbul, 76, 159, 213, 215, 225, licensing, 41, 77, 79, 83, 89, 103, 226, 234 203 İstikbal, 75, 95, 162, 217, 218 linkage, leverage and learning (LLL), Italy, 23, 79, 82, 89, 107, 109, 122, 4, 33, 43–5, 48, 56, 97, 201, 139, 177, 213–15, 225–7, 234 233 location advantages, 40, 54, 99, 193 low-cost strategy, 127 J Lumberjack, 77, 79, 82, 89, 97, January 24, 1980 Decisions, 14, 15 107, 109, 139, 140, 176, 180, Japan, 1, 34, 156, 180, 182, 187 227

K M KastamonuEntegre, 68, 69, 72, 74, market entry, 3, 6, 112, 129–62, 84, 87, 91, 92, 94, 95, 98, 164, 195–9, 204 100, 101, 109, 110, 112, 119, marketing capabilities, 69, 70, 85, 149, 160–2, 164, 173, 190, 139, 146, 162 192, 203, 222 market-seeking, 26, 52–5, 83, 95–7, Kazakhstan, 78, 96, 100, 101, 104, 99, 105, 113–22, 139, 184, 105, 110, 111, 113, 115, 173, 191 214, 216 masking the EC MNE, 139–45, Koç Holding, 75, 107, 150, 152, 163, 196 173 Middle East, 12, 107, 156, 157, 159, Kozlu, Cem, 76, 90, 158, 159, 175 182, 219, 225, 227 Middle East and North Africa (MENA), 71, 83, 94, 98, 100, L 111, 120, 133, 134, 144, 146, latecomer disadvantages, 44, 51, 53, 176, 194, 204, 219, 224 75, 82, 109, 139, 142, 163, Multilatinas, 128 169, 191, 194, 200, 201, 205 Latin America, 6, 127, 170, 190 lead time, 142 N leapfrogged internationalization, 202 NATO, 12 less competitive markets, 145 networks, 1, 47, 68, 71, 77, 79, 81, liability of foreignness, 47 82, 88, 96, 97, 104, 109, 110, liability of outsidership, 82 117, 122, 141, 146, 171, 176, liberalization, 16, 17, 51, 52, 69–72, 182, 183, 191, 197, 201, 219, 90, 94, 159 227 Index 243 niche markets, 116, 118, 146, 195, product know-how, 68–71, 73, 78, 203 85, 111, 122, 139, 174, 193, North Africa, 12, 100, 107, 134 196 product know-how and operational capabilities, 69, 76–8 O product management, 96, 171, OLI framework, 4, 33, 35, 39–42, 177–81 45–7, 54, 55, 57, 97, 99, 200 operational capabilities, 68, 72, 77, 85, 111, 112, 172, 173, 191, R 193, 203 regional brands, 177, 178 original design manufacturer regional markets, 70, 72, 107, 108, (ODM), 73, 78–80, 85, 102, 133, 142, 178 120, 128, 142, 180, 191, 196, Reno, 82, 89, 107, 109, 181, 227 224 reorganization, 154–6, 182 original equipment manufacturer resource-based view (RBV), 3, (OEM), 73, 78–80, 85, 102, 39–41, 45–7, 233 128, 142, 180, 191, 196, 224 resource-seeking, 50, 52, 54, 98, Ottoman Empire, 12 117, 119 outsourcing, 77, 79, 122 Romania, 79, 96, 100, 104, 105, over-the-counter (OTC), 113, 146 111, 114, 115, 119, 161, 162, ownership advantages, 53, 79, 97, 173, 214, 217, 222 163, 184, 190, 194, 199–201 Russia, 22, 23, 71, 79, 83, 93–6, ownership modes, 56, 111, 113 100, 102–5, 110, 114, 115, Özal, Turgut, 18, 72, 81, 90, 158 119, 141, 146, 148, 154, 156, 171, 173, 188, 189, 214–16, 218, 221, 222, 224 P Philips, 81 playing the DC MNE, 145–9, 163, S 197 Sharp, 83 post-acquisitions, 3, 6, 110, 145, Silk Road, 151 155, 163, 164, 169–84, 189, sourcing, 2, 36, 47, 73, 76, 82, 102, 199, 206, 207 122, 142, 153, 198, 234 pricing, 70, 77, 86, 93, 113, 146 South Africa, 2, 84, 96, 108, 153, Procter & Gamble (P&G), 87, 132, 174, 178, 181, 188, 189, 214, 135 215 production capabilities, 69, 71–3, Soviet Union, 16, 81, 93, 159, 192 76, 101, 145, 162, 196 specialization, 113 244 Index sponsorships, 152, 157, 160, 215 United Kingdom (UK), 23, 83, 97, springboard, 4, 33, 43, 44, 48, 51, 102, 143, 150, 156, 182, 214, 84, 97, 128, 188, 201, 233 215, 224, 225 Star Alliance, 76, 159, 223 United Nations Conference on Trade strategic alliances, 139, 158 and Development strategy tripod, 46, 189, 192 (UNCTAD), 20, 23, 34 sub-Sahara, 108, 181 United States of America (USA), 1, supply chain, 174, 199, 203 34, 103, 137, 138, 147, 150, synergy, 156, 169, 171, 175, 182 187

T V takeaway internationalization, 202 VehbiKoç, Mustafa, 75, 174 Thailand, 95, 108, 111, 114, 150, Vestel, 68, 73, 78, 80, 82, 83, 86, 151, 214, 215 88–91, 94, 95, 97, 98, 102, time-to market, 142 103, 109, 110, 120, 139, Toshiba, 83 142–6, 180, 191, 203, 223, trade barriers, 44, 94, 98, 106, 169 224 transaction costs, 36, 39, 41, 55, 57, Vestel City, 102, 224 171 transaction-type advantages (Ot), 40 Turkish Airlines, 68, 72, 76, 86, 90, W 94, 95, 99, 119, 149, 158, white goods, 78, 89, 102, 109, 150, 159, 190, 222, 223 214, 215 Turkmenistan, 81, 93, 95, 98, 104, World Intellectual Property 110, 147, 219, 220 Organization (WIPO), 215

U Y Ukraine, 79, 83, 96, 100, 103–5, Yıldız Holding, 25, 68, 73, 76, 78, 115, 118, 137, 173, 214–16, 95, 99, 108, 109, 112, 121, 218 149, 153–7, 174–6, 178, Ülker, 76, 99, 149, 154–6, 182, 225, 180–3, 190, 192, 225, 226 226 Ülker, Ali, 78, 99, 112, 154, 156, 175 Z Ülker, Murat, 153, 154, 179, 225 Ziylan, 68, 73, 76, 77, 79, 82, 88, Ülker, Sabri, 153, 154, 225 89, 92, 94, 97, 107, 109, 122, Unilever, 87, 132, 135, 138 139, 140, 144, 176, 181, 183, United Biscuits, 109, 155, 156, 174, 190–192, 203, 226, 227 182, 225