Among those companies that continue to make big money in Turkey, such as IKEA, Ford Motor Company, and Microsoft, there is a number of companies that withdrew from the market. Nonetheless, there’s a big deal to learn from them as well.
- British American Tobacco
British American Tobacco (BAT) is one of the world’s largest tobacco companies, but their attempts to enter the market in Turkey were unsuccessful. The company had a presence in the country for many years but could not gain traction due to high tax rates, a ban on advertising, and limited distribution channels. The company eventually withdrew from Turkey in 2016.
- Coca-Cola
Coca-Cola is a multinational beverage and soft drink corporation that has been doing business in Turkey since 1969. The company’s market entry strategy was focused on targeting the younger generation – by focusing on a more diverse advertising approach, introducing new flavors, and offering promotional campaigns such as ‘Share a Coke’. This strategy was successful in targeting the younger audience, resulting in increased sales of the product. Despite this success, the firm was unable to ensure sustained growth and profitability due to rising taxes and stiff competition from local brands like PepsiCo. As a result, Coca-Cola exited the Turkish market in 2015.
- Marks & Spencer
Marks & Spencer entered the Turkish market with high expectations that their globally renowned products would be a hit among customers. However, the retailer faced several challenges including limited access to local materials, which made manufacturing expensive for them; and concerns about product safety compliance standards which resulted in some of their stores being closed down briefly by local authorities in 2013. This eventually led to the company exiting the Turkish market in 2017.
- Huawei
Chinese technology giant Huawei attempted to make its mark on the Turkish mobile phone industry by launching several mid-range smartphones over several years between 2014 and 2016; however, it faced stiff competition from global giants like Samsung and Apple who had larger product ranges and deeper pockets for marketing campaigns. This coupled with limited retail outlets hindered Huawei’s progress so much so that by 2018 it had decided to withdraw its operations from Turkey altogether.
- Nokia
Nokia was one of the first foreign companies to enter Turkey, establishing a subsidiary in Istanbul in 1992. The company invested heavily in the Turkish market and had some success with its mobile phones, but eventually withdrew from the market in 2014 due to increased competition from Samsung and Apple. Nokia’s failure can be attributed to poor marketing strategy, lack of customer feedback, and an inability to adapt to changing customer needs.
- Walmart
Walmart entered Turkey through a joint venture with BİM markets in 2011 with plans for large-scale expansion across the country but was unable to compete against local rivals who were better at understanding Turkish tastes and pricing strategies resulting in their withdrawal from the market by 2019.
- Starbucks
Starbucks entered Turkish markets in 2005 and has opened more than 70 stores across major cities since then. Its market entry strategy could be seen to revolve around leveraging its global brand recognition, creating local partnerships, and sourcing quality local ingredients for its products. Additionally, Starbucks also offered an online delivery option through its website which helped it reach customers who may not have had easy access to physical stores. However, the company was unable to keep up with its growth, and its customer service standards suffered as a result. Additionally, many Turkish customers preferred local restaurants like Cappadocia Café instead of Starbucks’ offerings which led to the closure of all their stores by 2020.
- McDonald’s
McDonald’s began operating in Turkey in 1988 and has since established itself as one of the most popular fast-food restaurants within the country. Its market entry strategy focused heavily on localization – it introduced many culturally relevant menu items such as falafel sandwiches and Turkish McFlurries; it also ran various promotional campaigns targeting young people with discounts, prize draws and free samples of new products from time to time; this helped increase its customer base significantly over time. However, rising labor costs caused McDonald’s profits to decline resulting in an eventual pullout from Turkey in 2018.
In each of the cases described, the external and internal reasons and factors that cause companies to leave the market are clearly presented. What are the inflated plans of companies regarding the Turkish market? At a minimum, they learned about the marketplace and gained experience that helped them become more agile. As a maximum, they continue to work indirectly with Turkey, working off new strategies or waiting for a new extraordinary opportunity.
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