Week 6 - Case Study Analysis - Competitive Advantage - Due date 25th March 2023

Answer the questions given at the end of the case Study -

Please write 3 posts

1st Post Reply to above questions- within 2 days Total 500 words

2nd Post Response to other students between 3rd & 4th day 100 words

3rd Post Summary after reading all posts between 5th & 6th day. 100 words

CASE EXAMPLE 5.1 COMPETITIVE ADVANTAGE IN WHITE GOODS SUPPLY

Headquartered in Turkey, Arelik is a manufacturer of white goods such as fridges, freezers, ovens, and dishwashers. In 2018 it generated global sales of $7.4 billion with a 12.2% pre-tax profit. Over 68% of this revenue came from sales outside Turkey.

Several factors relating to Areliks position in the external environment contributed to its competitive advantage and continuing success. On 31 December 1995, Turkey became part of the EU customs union, allowing Turkish firms to reach nearly 300 million consumers on far more favourable terms of trade. Arelik responded rapidly to this change in the macro-environmental landscape, and is now established as a leading supplier of budget appliances in Western Europe. This brand has benefited from a move by Western European consumers towards lower-priced domestic goods following the global financial crisis. A visible symbol of its expanded status can be seen as its Beko brand appears as the shirt sleeve sponsor of the world-famous Barcelona football club.

Arelik has also exploited a global shift in supply chain possibilities, as information technology and trade liberalization has created many opportunities for creating international production operations. To minimize production costs whilst maximizing closeness to consumers, Arelik now operates 21 factories in eight countries, employing 30,000 staff. Given Turkeys geographic position at the East of Europe and the West of Asia, Arelik is in a favourable location to manage the flow of goods between a wide range of production facilities and consumer markets.

Arelik is pursuing long-term expansion in Asias growing markets. Despite variation in local government, consumer tastes, and competitive landscapes according to country, the white goods industry is consistently in a hyper-competitive state. In response, Arelik is taking a carefully considered range of strategic actions to target different markets in different ways, according to the needs of each country. It has long operated factories in China and has recently opened a new fridge factory in Thailand. It purchased a domestic white goods manufacturer in Pakistan in 2016, and it is partnering with Tata in India in a $100 million joint venture to sell under a local brand, Voltas, and import goods made in Turkey. In March 2019, Arelik purchased a majority stake in Singer Bangladesh, the countrys largest retailer of consumer durables with 385 stores and 720 wholesale dealers. Singer Bangladesh is a strategic fit for us, and this deal is a unique opportunity to invest in Bangladesh, a market which holds great untapped potential, said Hakan Bulgurlu, Areliks CEO. These actions are designed to maintain favourable relationships with local governments and suppliers, whilst positioning the firm as a reliable value-for-money brand which profitably meets the needs of consumers in each market it serves.

Arelik is also preparing to profit from shifts in macro-trends in technology and consumer behaviour. It is investing heavily in technological innovation which might exploit development in sensor technology and the internet of things, reportedly developing internet-connected fridges which can detect when food is going off and automatically order replacements.

Questions for discussion

1. Explain how the physical location of Areliks headquarters has been of benefit to its recent success.

2. Discuss what seem to be crucial macro-environmental trends that will benefit Arelik on a continuing basis.

3. If you were the CEO of Arelik, what sort of external environmental data would be helpful to you as you develop or review your strategy?