Home » Middle East » Middle East- May 11, 2012

Middle East- May 11, 2012

Today’s meetings were a nice change for us.  After breakfast in the hotel, we had our first meeting with Matthew Bond, a representative from Nike and a BYU MBA, in the hotel.  Matthew talked about how Nike competes in Turkey vs. globally, and some of the challenges and benefits from being located in Turkey.  Nike has a matrix organization, which Matthew pointed out, means they can move quickly in many cases, but can also be a source of frustration because of the management complexity.

Turkey has a relatively young population when compared to other places, including the USA.  Forty one % of the population is under the age of 24, and 50% is under 30.  The youth are status-driven and have a strong desire to belong, which sounds like a good market to which Nike can cater well.  One drawback for the market here is that, while they are very interested in football (that’s soccer for Americans who have the word ‘football’ confused with another sport involving a lot of hands to carry an object shaped more like an egg than a ball), the people are not the kind who play a lot of sports themselves for various reasons.  Being here in Istanbul it’s easy to see why that may be the case; there is just no room for large sports fields, tracks, and whatever else involves a lot of movement like we have in most of the USA.  In the past I’ve thought a little about how the land can affect culture, such as how in the USA we largely use cars for everybody instead of public transit, perhaps due to the space we have to hold cars, build roads, and which provide large distances between everything, but I had not considered this aspect where certain activities (sports) would require a lot of space and the culture as a result would not move in that direction.

Other risks to Nike include the large things we associate with the Middle East (political, economic) and counterfeit and “parallel” trade.  To increase demand for products, Nike sponsors several football teams, such as the Turkish team Galatasuray, as well as athletes in other sports and, aside from the time around 2008 when everybody suffered, Nike seen growth since they started selling in Turkey a decade ago.

Turkcell is an international communications company that has a huge mobile phone business.  They are by far the largest mobile phone provider in Turkey and also have business in other countries.  They have different channels used to reach different customers, including a few flagship stores, TIM (large ships), TSM (small shops) and then channels that are not exclusively selling their products such as chain stores, telesales, kiosks, and online channels.  The presenter mentioned that they have a large five-story building which houses not only a flagship store but also a TIM store on a different floor.

Other levels provide services to be purchased (vs. products), a focus on the younger generation, and technical support; within one building Turkcell can cater to various types of customers easily.  The investment in the building sounds like it was very unconventional but the presenter said it has advantage for the company so hopefully it will be justified per the company’s metrics and will give them an advantage going forward.

One unique differentiator for Turkcell is the existence of their own Android-based phone.  Rather than strictly going with what Samsung or others create, they have their own T11 and T20 lines of phones that they can customize as appropriate for their customer base.

After our meetings with these two businesses, our scheduled day had completed until dinner in the evening.  Some adventurers took off to the Turkish baths to have a unique experience there and results sounded like they were amazing, though I cannot personally attest to any of that.  Others ventured off to the Grand Bazaar a day early to scout out the area and see what the local marketplace included.  Ever-present, since our visit with Unilever, was a theme around the procurement of Magnum ice cream bars.  I have a feeling the Utah and Salt Lake valleys are going to have a spike in purchases when we return home.

Present in this part of the world is an extensive public transportation system.  Metros and trains are typically a great way to get around anytime you are in Europe within a city, and often between metropolitan areas.  Getting from the hotel to the Grand Bazaar involved a change from the metro to a train and took about fifteen minutes and cost four lira (a bit more than two dollars) so this has proven to be a very inexpensive way to travel.  For those who come to Europe, or to any large city with a public transit system, I would encourage using it as much as possible.

For some excitement, there was a rally, march, protest kind of thing down the main road here on our way to dinner.  Walking through it was hard because of the number of people, but also interesting from a social perspective.  The reason for the protest was apparently the following (warning, I have not read through this entirely… possible strong language):http://globalvoicesonline.org/2012/05/11/turkey-outrage-at-sentencing-of-scarf-case-student/

 The protest, as far as we saw, was peaceful, but behind the protesters were riot police in the full gear including big clear shields and helmets.  Being in the crowd was exciting really, and I can see how these types of things can get out of control easily if they start being violent.  Whether or not the reason behind the protest was as reported, I do not know, but it was something new for most of us.

 


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