Monetary Considerations
When considering expanding into the Turkish market, monetary considerations such as currency, exchange rates, and exchange-rate management play a significant role in the decision-making process. The current exchange rate between the U.S. Dollar and the Turkish Lira (TRY) is an essential factor to consider. As of 2023, one U.S. Dollar is equivalent to 8.34 Turkish Lira (“Xe currency converter,” n.d.). As displayed by the Xe currency converter (n.d.), the exchange rate has the potential to fluctuate and affect the cost of doing business in Turkey. Organizations looking to expand into this market must consider the exchange rate when setting prices for their products and services. For example, if the exchange rate changes significantly, the cost of importing goods or raw materials could increase, making it more challenging for organizations to remain competitive in the market.
Moreover, exchange-rate management is an important consideration for businesses operating in a foreign market. Organizations can use various strategies, such as hedging or currency swaps, to mitigate the risk of exchange-rate fluctuations. These strategies can help minimize currency changes’ impact on the organization’s finances. As Dunung (2019) mentioned, organizations need to comprehensively understand the local currency and its movements to manage their financial risks effectively. Alhodiry et al. (2021) emphasize the importance of exchange-rate management, especially in the Turkish real estate market, as fluctuations in oil prices and U.S. interest rates can significantly impact the market. With proper planning and the implementation of risk-management strategies, organizations can effectively navigate the complexities of the local currency and minimize the impact of exchange-rate fluctuations on their finances.
Management and Logistics Considerations
Expanding into the Turkish market requires organizations to consider human-resource management and logistics practices. According to Turkish labor laws, working hours, minimum wage, and employee benefits are regulated, which can affect an organization’s policies and procedures. Dunung (2019) in Global Business Management highlights the importance of adopting a culturally sensitive management style to manage and motivate employees in the Turkish market effectively. This can include understanding and accommodating cultural differences, promoting diversity and inclusiveness, and fostering a positive working environment. Dunung (2019) mentions that one of the ways organizations can promote diversity and inclusiveness is by embracing the new market’s local cultural values and norms and ensuring that employees feel welcomed and valued. Therefore, companies expanding into the Turkish market must pay close attention to the country’s labor laws and cultural norms to create a harmonious and productive workplace environment. A successful entry into the market requires a combination of a culturally sensitive management style and effective logistics practices, which can lead to long-term success and growth.
Additionally, effective logistics practices are crucial for the success of an organization in the Turkish market. This includes providing adequate training and support for employees to adapt to their new environment and perform their duties effectively. For instance, organizations can consider offering language training, orientation programs, and access to resources and support systems to help employees acclimate to the new market. Furthermore, organizations can take advantage of the support systems offered by government agencies and trade organizations to help them navigate the legal and regulatory requirements in the Turkish market. Hayes et al. (2020) stress the importance of understanding the Turkish market’s local supply chain and transportation infrastructure. Organizations must consider the availability and reliability of transportation and distribution channels and the cost and time involved in getting products to market. By clearly understanding the logistics landscape in the Turkish market, organizations can make informed decisions about the most effective and efficient ways to get their products and services to customers.
Mode of Entry Considerations
Organizations looking to expand into the Turkish market have several traditional modes of entry, including exporting, licensing, franchising, joint ventures, and wholly-owned subsidiaries. Dunung (2019) states that exporting can be a low-cost and low-risk option for organizations entering this market, as it allows them to test the waters in the market without having to make a significant investment. As Dunung (2019) noted, licensing and franchising are attractive options for organizations looking to expand into the Turkish market. These modes of entry provide organizations with a proven business model and a well-established brand, helping them quickly establish a presence in the market. Joint ventures and wholly-owned subsidiaries, as noted by Dunung (2019), are more capital-intensive options that require a significant investment. Despite the potential risks, these modes of entry offer organizations greater control over their operations in the Turkish market. Ultimately, deciding which mode of entry will depend on the organization’s goals, resources, and risk tolerance. Careful research and consideration of all the factors will ensure that organizations make an informed decision when entering the Turkish market.
These modes of entry can offer organizations greater control over their operations in the Turkish market, but they come with higher risks. It is essential to consider the market conditions and the organization’s goals when deciding on the best mode of entry into the Turkish market. For example, organizations looking to expand and establish a strong brand presence rapidly may consider licensing or franchising, while organizations looking to have greater control over their operations may choose to establish a joint venture or wholly-owned subsidiary. In addition to these traditional modes of entry, organizations should consider alternative modes such as e-commerce and digital marketplaces. These have become increasingly popular in recent years, especially in light of the COVID-19 pandemic and its impact on the global economy (Hayes et al., 2020). It is crucial for organizations to thoroughly evaluate their options, weigh the risks and benefits of each mode of entry, and make informed decisions that align with their goals and resources.
References
Alhodiry, A., Rjoub, H., & Samour, A. (2021). Impact of oil prices, the U.S interest rates on Turkey’s real estate market. New evidence from combined co-integration and bootstrap ARDL tests. PLOS ONE, 16(1), e0242672. Web.
Dunung, S. P. (2019). Global business management. FlatWorld.
Hayes, D. J., Schulz, L. L., Hart, C. E., & Jacobs, K. L. (2020). A descriptive analysis of the COVID‐19 impacts on U.S. pork, turkey, and egg markets. Agribusiness, 37(1), 122–141. Web.
Xe currency converter – live exchange rates today. (n.d.). Xe. Web.