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Business Expansion to the United States vs. Turkey Report

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Market Profile

Cultural Profile

For business expansion, it is essential to compare the cultural profile of the original country and where the new branch is planned. While in the USA, the primary language is international English, the main population of Turkey speaks Turkish. At the same time, the main religion is Islam, which has distinctive solid features from Christianity that are common in America.

This leads to the fact that the behavior of residents is more restrained, and communication between men and women does not go from business to friendship. In terms of cultural dimensions, Hofstede Insights (Country Comparison, n.d.) data shows that Turkey scores significantly lower on the Individualism (IDV) dimension, with a score of 37 compared to the USA’s score of 91, indicating that collectivism prevails among the Turks where everyone belongs to a particular group and strives for peaceful conflict resolution. Additionally, Turkey scores lower on the Masculinity (MAS) dimension with a score of 45 compared to the USA’s score of 62, indicating that traditional gender roles and a focus on achievement and success are less emphasized in Turkish culture.

Additionally, social stratification in Turkey is higher, which shows the difference between the rich and poor in the country (Country Comparison, n.d.). Finally, the US and Turkey have UAI, LTO, and IVR, which must be considered when studying culture. In this way, the Turks often use rituals to cope with unrest, combine pragmatism and old traditions in everyday life and are reserved in situations regarding the socialization of society. All of the above factors should be examined by management if they want to expand the business and bring it to Turkey. The data in the table was entered using the Country Comparison resource.

Category

United States

Turkey

Commonly Spoken LanguagesEnglish, Spanish, ChineseTurkish, Arabic, Kurmanji
Commonly Practiced ReligionsCatholicism, ProtestantismMuslim
Power Distance Index (PDI)4066
Individualism Versus Collectivism (IDV)9137
Masculinity Versus Femininity (MAS)6245
Uncertainty Avoidance Index (UAI)4685
Long-Term Orientation Versus Short-Term Normative Orientation (LTO)2646
Indulgence Versus Restraint (IVR)6849

Political and Economic Profile

Political and economic factors show how relevant business expansion is. Both the USA and Turkey have democratic political systems, which give businesses the right to influence the development of the pricing policy of the market. In addition, the heads of state of both countries are focused on strengthening the economy and trade relations with countries around the world. However, Turkey has a mixed economy, while the USA has a capitalist economy, which allows the authorities to control the established norms (BEE, n.d.). Ideologically, the USA is primarily capitalist, while Turkey is a mix of capitalist and socialist ideologies.

Regarding current leaders, the USA is led by President Joe Biden, while President Recep Tayyip Erdoğan leads Turkey. Economic measures such as Gross domestic product (GDP) and purchasing power parity (PPP) are used to classify the economy of both countries. Turkey’s GDP is significantly less than that of the US, which leads to the conclusion that sales should be constantly monitored. PPP shows that the exchange rate ratio in Turkey is highly conducive to doing business. However, GDP per capita shows almost twice the difference between Turkey and the United States. This indicates that the material well-being of people is an order of magnitude lower, and many residents need help to purchase expensive products (Esen, B., & Gumuscu, 2018). Government intervention in trade is present in both countries, but the US allows the economy to develop more freely. At the same time, the Turkish authorities control the market to avoid increased competition. Thus, considering these factors, the organization can conduct successful trade in the territory (CNBC International, 2019). The data in the table was obtained from the study conducted by Esen and Gumuscu (2018) and was entered using their resource.

Category

United States

Turkey

Political SystemDemocracyDemocracy
Current LeadersJoseph R. BidenRecep Tayyip Erdoğan
Economic ClassificationMixed economyMixed economy
Economic Blocs Impacting TradeEuropean Union, WTO, GATT, Mexico, China, CanadaWTO, GATT, Free Trade Agreements
Gross Domestic Product$25.035 trillion819.04 billion US dollar
Purchasing Power Parity1 LCU per international dollars2.8 LCU per international dollars
Gross Domestic Product Per Capita$63,413$38,759

Legal and Regulatory Profile

Legal issues are vital to the operation of a company in another country. To enter the domestic market in Turkey, documentation is required that confirms the status and quality of goods like in US. In this case, the first requirement is to open a bank account, where the established capital will be deposited (Dunung, 2019). Restrictions in Turkey include forfeits on customs payments, import duties and the requirement for permission from the authorities to import certain groups of goods. At the same time, some categories have customs duties, which must be paid without fail. From a product and service regulation point of view, all suppliers are required to present a control certificate and identity control. However, the US does not impose active restrictions on grains and seeds.

In addition, when importing agricultural products, quarantine measures and required seed tests may be observed. Legal processes for transactions in Turkey require certification of goods on the territory of the state and negotiation and consolidation of legally formalized contracts (GDPR, n.d.). The country is not distinguished by the introduction of special restrictions; as a rule, this applies only to agricultural crops in order to avoid infection and poisoning. Documentation must include payment of taxes and a bank statement to prove the conduct of a legal business.

References

Business Enabling Environment (BEE). (n.d.). The World Bank. Web.

CNBC International. (2019). [Video]. YouTube. Web.

. (n.d.). GDPR.EU. Web.

. (n.d.). Hofstede Insights. Web.

Dunung, S. P. (2019). Global Business Management. Boston, MA: FlatWorld.

Esen, B., & Gumuscu, S. (2018). . Journal of Balkan and Near Eastern Studies, 20(4), 349-372. Web.

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