Kordsa Global

After getting our feet wet on Day One of presentations and having spent the evening prior immersing ourselves in an exhibit of cultural handcrafts, we were excited to embark across to bridge to Izmit to visit Kordsa Global, the leading producer of synthetic and polyester nylons. The long and scenic bus ride took us along the beautiful coast of the Sea of Marmara, which on a beautiful warm and sunny day showcased the cultural landmarks and historic mosques that are richly filled with longstanding history. The city of Izmit was the site of Turkey’s largest Earthquake in 1999 and much work had been done to restore the landscape to the pristine and coastal city that it is today. The city itself was quite the contrast to the busy streets of Istanbul and the landscape was peppered with industrial buildings and manufacturing plants, which housed some of the most innovative and technologically advanced development centers in Turkey.

Kordsa Global is one of the largest producers of nylon and polyester yarns, and cord fabrics that are found in mechanical rubber markets for both industrial and commercial applications.  They are member company of Sabanci holdings.  Upon arrival, we were greeted by Tolga Pekel, who is the Global Market Development Director, and his team. The location of their global headquarters was nothing spectacular and was pretty well guarded by the looks of the security around the site.

One would think there was not much involved with the way of nylons and polyester yarn built for tires, but a more in depth presentation revealed that Kordsa was a center to new innovations in their core and R&D technologies. Because their R&D program is accredited by the Turkish government, they are able to receive government subsidies to help fund their research.  This has enabled them develop chemical nano technology and finite element modeling to create a new line of synthetic reinforcements helps Kordsa remain a global leader. 

Kordsa had also recently gone through an organizational change from a regional model with core group functions to a new global management model with shared services.  This new centralized model allows them to achieve operational efficiencies through synergistic collaboration.  Even with the downturn in 2009, engaging the new Operating Model has allowed Kordsa to quickly respond to changing market conditions.  Their continued success relies heavily on their ability to match supply with market demand. Operating in nine different countries has allowed them to fully utilize their resources and still maintain control of their inventory as demand fluctuates. 

Driving their success in organizational change was human resources talent selection an activities that ensure they groom the right leaders for the future. They focus their hiring with people who have the right blend of technical knowledge and background to fit into their culture. Sixteen percent of their employees have masters as well as PhDs to ensure there is no shortage of innovative knowledge. Tolga alone had advanced degrees from Duke, Northwestern, Georgetown and INSEAD.

After the presentation we moved to the cafeteria and got to experience real Turkish cafeteria food which wasn’t too appealing at first site, but turned out to be quite the delicacy.  The fare was comprised of lentil bean soup, a sort of spinach goulash and an extremely rich pastry.

The visit was concluded with a final group picture in front of the building and an escort the bus. The timing of our visit coincided with the Sabanci Board’s visit to the plant, so we were unable to tour the manufacturing and R&D facilities as planned.  However, we were fortunate enough to still listen to an excellent presentation.

 In the end, even though nylon manufacturing didn’t have the romance of the other tech companies we visited, it was probably one of the best presentations we were given on the study tour.  Our hosts were gracious, generous and knowledgeable and the subject matter aligned closely with what we learned in Global Strategy with Kevin Steensma.

Munich Guided City Tour

After already hearing some great stories by our tour guide Michael, the class was ready to see all the sites he had previously mentioned.  We started our tour at the headquarters of the Nazi regime, The Führerbau, and saw the balcony where Hitler used to address the crowd.  You can still see the marks in the building from where the swastika used to hang above the balcony.  Michael went on to explain that the building is now used as a music school because it was the most neutral thing that they could put in there rather than have the building sit empty.  In the past couple of years a memorial path was built inside and outside that shows the path to Dachau, the first concentration camp that was built.  This path was built to remember those that were sent to the camp.  Another interesting piece of furniture that is housed in this building is the table that Hitler sat at when he signed the Munich pact.  I really appreciated the tale that went with this table.  The table is sitting at the back of a hallway unused because they don’t know what to do with it.  They can’t get rid of it because that would look like they are trying to erase the past but it is not something you can put in a museum because that would be almost like glorifying something that was so horrible, so instead it just sits in this hallway like a piece of trash.

From there we went on to Munich University.  Michael told us about this student, Sophie Scholl, a member of the anti-Nazi non-violent student resistance group that used to distribute anti-war leaflets at the university.  In February of 1943, Sophie and her brother were found guilty of treason and were sentenced to death.  Only a few hours after being sentenced they were both beheaded.  As a memorial to these students, they have taken copies of the leaflets and engrained them into the pavement in front of the steps to the university.

After a couple more stops and many more stories, we ended at Marienplatz, the central square in Munich.  Many people walked around the Viktualienmarkt, or the outdoor market, to enjoy lunch.   We also stopped and enjoyed the Rathaus -Glockenspiel at noon.  It has 43 bells and 32 life size figures that move around in a 15 minute show.

The following was submitted by Angie Moe and Chris Rosenquest (TMMBA Class of 2011)

We visited Cisco on the Friday after arriving in Germany.  We were escorted into the Cisco offices, and given name tags.  Ulrike Tegtmeier, the vice president of European Markets gave us a talk about her company and their strategic take in the market.  Ulrike focuses on the consumer products side of the business. Cisco was founded in 1984, and had its first office outside the US in 1992.

They have a collection of brands, some the we recognized:

Flip Video

Linksys

Umi

Scientific Atlanta

A big focus of their attention right now is the Flip video recorder.  She expressed some of the difficulties launching in the EU market.  The EU has many small stores, compared to our large retail stores.  It makes it challenging to have a display box in the a shop that has limited real estate.  Interestingly, 70% of customers who buy video recorders didn’t come in with the intention to buy – the decision is made in the store.  She said that the Flip is a fashion item in the US, but hasn’t made that transition in the EU.

She spoke more indepth about Linksys routers.  She said the’ve consistently used a blue color to differentiate them from the competition. They also found that they had a high return rate on routers – so they put an emphasis on setup wizards.  The setup wizards dropped their retail return rate by 12%.

Interestingly, she said that Europeans aren’t as accent sensitive as the Americans are.  She also that Cisco also has competitors in each country in the EU.  There is an increased sense of national pride, which works against them with their global brand.

We wrapped up with Cisco, and then headed over to the Movenpick Restaurant.  We had a really tasty lunch of chicken breast with ham, green pepper sauce, string beans and potato gratin.  Half of the items were wrapped with bacon (yum).  We were all delighted to see a green vegetable that wasn’t pickled or marinated.  For dessert we had a choice of ice cream. There may have been a few of us that went for seconds, but I’m not naming names.

Visit to BMW World

Submitted by: Subin Mathew, Stephanie Leung (TMMBA Class of 2011)

Our last stop of the Study Tour in Munich was BMW World (translated to “BMW Welt” in German).  Despite a busy day thus far meeting with two other companies, Ashoka and Knorr-Bremse, it was clear that this was a stop that everyone was looking forward to – even Dan Turner!  Ok, maybe just a little bit of anticipation for Dan and a lot of anticipation from everyone else J

Upon stepping into BMW Welt, expectations were immediately surpassed.  The building is beautifully architected.  The cars in the showroom are in pristine condition and look fantastic.  And the robotic floor cleaning robots – so cool!  These robots look like futuristic white space blobs and can detect where people are nearby so they won’t bump into the.  These robots were a huge hit, especially for many of the kids we saw from other groups.

After overcoming our awe of the robots, it was time to start our formal tour of the BMW plant, located across the street from BMW Welt.  This particular BMW plant primarily produced the BMW 3 Series cars.  During the tour, several interesting facts about BMW were shared, including:

• BMW stands for “Bavarian Motor Works”
• BMW originally built aircraft engines, but after World War I, the company was not allowed to as part of post-war restrictions placed on Germany.  As a result, the company focused on building motorcycle engines, and then several years later, automobile engines.
• The BMW logo is comprised of the colors white and blue, which are also the colors of Bavaria.
• The BMW logo consists of a circle split into four quadrants.  The white quadrants represent propellers spinning in the sky, symbolizing BMW’s roots in building aircraft engines.
• The BMW plant is about 5 stories tall. However, unlike many other manufacturing plants of other companies, the BMW plant utilizes most of the available vertical space in its buildings to maximize its production space.  It was very common to see the next station of a car assembly process be above or below the prior process rather than in a straight line on the same level. 
• The BMW plant has a very high rate of automation via robots, in excess of 90% in numerous areas.  The BMW plant can also support producing different types of cars during the same batch.  We often saw a standard 3 Series car being built, followed by a 3 Series Touring Edition car, which was then followed by a standard 3 Series car model again. 
• The BMW plant produces cars at an astounding one car per minute. 

Some of us even got a sneak peak at one of BMW’s latest innovations – a concept car called “Gina”, whose exterior is not made of hard metal or plastic, but instead a special skin that looks like neoprene, that allows the body of the car to change shapes!  The car is not embraces a flexible design, but embodies BMW’s desire to “think flexibly” and apply engineering in creative ways.  Here’s a picture of Gina below.  You can see how the “skin” actually folds when the doors are opened. 

No tour of Germany would have been complete without visiting BMW – one of Germany’s most respected and recognizable brands.  We all left the BMW tour feeling satisfied – learning about an important company in Germany’s history as well as about cutting edge production and innovative ways of thinking – and that Dan Turner lived up to his promise to not key up any of the cars in the showroom .

We kicked off our Study Tour in Istanbul with a visit to Sabanci Holdings, the parent company of Sabanci Group, a massive Turkey-based conglomerate.  We met with Mr. Vecih Yilmaz, who works in the Budgeting, Consolidation, and Investor Relations Department.  Mr. Yilmaz was great, and was a stand-out presenter because of the patience, attentiveness, and detail he provided in both the presentation and Q&A sessions. 

Right off the bat, we were learned a couple interesting facts about Sabanci from Mr. Yilmaz:

1)      Sabanci Holdings is really BIG, directly accounting for 4% of the Istanbul Stock Exchange’s (ISE) market cap, and 13% of the ISE’s market cap when factoring in the 74 companies that Sabanci is involved in at the holding level. 

 2)      Sabanci has major operations in seemingly unrelated areas – including financial services, energy, retail, cement, automotive, tire and tire reinforcement materials. 

Sabanci prides itself on quality, long-term investments, and local expertise in the Turkey market.  As a result, Sabanci is a preferred partner for many foreign firms looking to enter the rapidly growing Turkey market, often via joint ventures (JVs).  Sabanci already has JVs with significant multi-national companies such as Bridgestone, Citigroup, Carrefour, Hilton, and Philip Morris.  One of the requirements by Sabanci in its selection of JV partners is a shared commitment by the JV partner to doing business in and investing in Turkey, long-term.  We found Sabanci to not exclusively be concerned about their own company’s prosperity, but about the overall welfare of their country of Turkey long-term.  This was a refreshing viewpoint that was pleasantly shared by other Turkish companies that we visited on our trip. 

Since we just learned about joint ventures last quarter in the TMMBA program’s Global Strategy class, a couple JV-related questions were asked of Mr Yilmaz, including how ownership of the JV was typically divided between Sabanci and the JV partner.  Mr. Yilmaz stated that most JVs are split 50-50.  We learned in our Global Strategy class that a 50-50 split is difficult to work with due to potential ownership disputes, however Sabanci stated that it has worked well for them in the past.  In their situation, the JV partner typically provides the operational skills needed by the JV, and Sabanci provides the strategic skills needed for the JV to start and later expand in Turkey. 

One of the final things we learned about Sabanci we began learning in our discussions with Mr. Yilmaz but really learned after our discussion with Mr. Yilmaz – mostly on the bus driving around Istanbul.  That is, how good a job of branding Sabanci does with its JVs.  Their method of branding JVs is creative, and I’m sure was noticed by Dan Turner (who was on our trip) from a Marketing perspective.  Sabanci uses the short-form “SA” to represent Sabanci, and tends to incorporate its short-form into the name and/or logo of several of its joint-ventures, further reinforcing both i) Sabanci’s brand and ii) the JV’s brand.  See JV examples below: 

Now that’s real branding for you!

Microsoft Turkey: Blog Post
Pete Austin & Flora Wu (TMMBA Class of 2011)

The afternoon of our second day of company visits took us to Microsoft Turkey. Microsoft Turkey also serves as the center of Microsoft’s larger Middle East and Africa regional division composed of 79 countries.

The design of Microsoft’s office building in Istanbul reflects Microsoft’s building designs in Redmond. A modern, angled exterior gives way to a bright, open, colorful interior. As is the case at many Microsoft offices, few employees wear suits or are otherwise “dressed up”. Our group’s business professional attire definitely stuck out in the environment and within moments of meeting our speaker and host Jeffrey Avina, he demanded that everyone remove their ties.

Mr. Avina is the Lead Manager of Microsoft Middle East and Africa’s CSR (corporate social responsibility) program. Accordingly, his presentation to the group focused almost exclusively on Microsoft’s Corporate Citizenship efforts in the region, and covered very little of Microsoft’s business strategy in the region.

Mr. Avina possesses an extensive background in public policy including a Directorship position with the United Nations, public sector legal representation, and a laundry list of public administration degrees from both Harvard and Stanford. One thing clearly apparent from Mr. Avina was that he knew his field inside and out, and that he was deeply passionate about public policy work.

Microsoft’s Corporate Citizenship efforts are an effort to “help create social and economic opportunities wherever we work, live, and do business [and to] make a meaningful contribution to the prosperity of communities and the sustainability of the planet”. These corporate citizenship efforts are not a part of Microsoft’s core business and are run under the larger Unlimited Potential corporate social initiative. According to Mr. Avina, these efforts help to ensure that as commercial businesses continue to advance economically students, non-profits, and NGOs are not left behind in their access to technology.

Mr. Avina manages Microsoft Middle East and Africa’s corporate donations and sponsorships to NGOs of all sizes and causes including political and religious NGOs, health organizations, educational institutions, and governance agencies.

Although Mr. Avina acknowledged that corporate citizenship efforts receive very little PR or recognition, companies with strong CSR records attract better talent over time. CSR programs and efforts also help to improve perceptions of Microsoft throughout the world and broaden the scope of their commercial products into sectors that may otherwise not have access to them.

One such project that Mr. Avina has helped donate Microsoft services to is the Eye On Earth website for monitoring air and water quality levels in partnership with the European Environment Agency.

Mr. Avina was without a doubt one of the most unique individuals that we met with throughout our study tour. He has a boisterous, larger-than-life kind of personality that makes it difficult to tell when he was being genuine and when he’s exaggerating. As he spoke, his stories bounced from the inspiring to the completely outlandish; his personality seesawed from sincere and empathetic to egomaniacal.

Most importantly though, Mr. Avina clearly conveyed Microsoft’s focus on corporate citizenship and social responsibility. It was a unique opportunity to see how one of the world’s largest companies is trying to give back to communities and non-profits – and the kind of person it takes to lead these herculean efforts. For more information on Microsoft’s Global Corporate Citizenship efforts, visit their website here.

The following blog was submitted by Terry Etapa and Dhawal Ogale both from the TMMBA Clas of 2011.

Pozitron (http://www.pozitron.com/index.php)

Internet banking anyone? Well, not in Istanbul. Internet banking was passed over in favor of mobile banking.

In Istanbul laptops and internet service is expensive. The general population does not use internet banking. What’s funny, according to SekerBank, the general population wants their banker to know them and their family. So, why do Turks want mobile banking? This might be because of a young mobile phone using population with median age of 28.7 years. There are about 6 banks that offer mobile banking and have 200K to 300K active users every month.

I’ll now talk about Pozitron, the mobile banking app company. We met with their Director of Business Development, Mr. Firat Isbecer.

Here is what they say about themselves:

Pozitron is a software developer focused on creating, integrating and securing business solutions through cutting-edge mobile technology.

Since 2000, the company’s products reach millions of customers and include mobile applications for Turkey’s largest banks, airlines, and media companies.

Pozitron has earned international recognition from institutions such as Harvard Business School and Endeavor Global Inc. and partners with industry leaders ranging from Sun Microsystems to BlackBerry. They were invited to the Harvard Business School’s Global Business Competition in 2008, which they won. In 2010, Pozitron was one of the five Turkish firms invited to the US Presidential Entrepreneurs Summit in Washington DC.

Mobile application development is complicated by several types of devices, a multitude of operating systems and numerous development platforms. Designing and developing a mobile application that works across mobile devices entails a testing phase that needs to be repeated for each type of device.

Pozitron’s Mobile Development Platform (MDP) abstracts the complexities of the underlying device from application development and hence streamlines development on mobile platforms. MDP ensures device compatibility and allows the developer to focus on application development alone.

Here is what we have to say:

Pozitron is a “Cantina” company. Since there are no garages in Istanbul to start your company, companies are started in the cantinas.

Pozitron was started in 2000, but restarted in 2005 in its present form. That extra five years gave Pozitron more respect when dealing with customers in Istanbul. Startups lack credibility.

The turning point for Pozitron was the development of a mobile banking app for the largest bank in Turkey. From this app, they gained enough experience and respect to attract customers from other banks, airlines, and media companies. Many of Pozitron’s server applications are hosted by Amazon’s cloud platform.

Pozitron’s product profile includes Mobile Banking (http://www.pozitron.com/productview.php?id=8), Mobile Betting (http://www.pozitron.com/productview.php?id=13), Mobile Ticketing, Mobile eCommerce (http://www.pozitron.com/productview.php?id=15), Multi-factor Authentication System (http://www.pozitron.com/productview.php?id=16), Mobile Sales Force (http://www.pozitron.com/productview.php?id=19), SMS Gateway, Location Based Services and more.

The entrepreneurial situation in Turkey is only starting to take shape. If you try to start a business, the first thing your parents and friends will tell you is to take up a job. Interestingly starting a company takes 1 month and winding it down takes 18 months. So entrepreneurs need to understand the climatic risks of opening a startup in Turkey.

 Pozitron earned a few million dollars in revenues last year.

The following blog was submitted by Bob Carlstrom and Brian Shaflik both from the Class of 2011.

We had the privilege to have Ibrahim Gokcen, the Market Development Manager, come and speak to us about GE Turkey.  Mr. Gokcen has a background in computer science and holds his PhD from Tulane University in Louisiana. He started to work for GE in New York as a computer scientist then transferred to Turkey to become the Market Development Manager.

 Mr. Gokcen began his presentation talking about GE as a whole and what markets it currently plays in. This primarily includes finance, energy, aircraft engines, healthcare but also include other markets. Mr. Gokcen touched on how eco-magination and healthy-mangination (two GE coined terms), are the two primary pillars of GE’s strategy. These terms imply how GE is getting creative with their technologies within the green tech and bio tech industries. He also mentioned how GE is focused on smartgrid technologies to assist in economic development.

Key interesting facts about GE Turkey:

-          GE Turkey does about 1.6B in revenue and has about 500 employees

-          The Turkey location primarily does engine parts, healthcare (which it exports to 80 countries), transportation, and energy.

-          Turkey is key for GE because it strategically located close to Europe and Asia

-          Turkey is a critical growth market for GE because of its young population and rapidly growing economy.

-           The Turkey location is used as an economy base to serve the entire region

-          Threats to GE Turkey include sovereign debt crisis and China because of their reduced cost of labor.

-          Government relations are especially important when doing business within Turkey

Overall Mr. Gokcen did a fantastic job presenting GE as a company and explaining the uniqueness’s with the GE Turkey branch and doing business in Turkey.

On the bus outside Knorr-Bremse in Munich

“You can’t learn about the world on the internet”

Nothing encapsulates the objective of the Technology Management MBA Program International Study Tour more than this simple statement made by Sekerbank’s VP of Investor Relations & Subsidiaries Department.

Through the TMMBA International Study Tour experience, students experience first-hand that the world is a big place to do business yet small in that it is really all about people and relationships.

The 2011 TMMBA Study Tour included company visits and cultural excursions to Istanbul, Turkey and Munich, Germany.   30 students were exposed to large multinational companies and local and regional companies with all of them putting their TMMBA knowledge to the test with discussions around marketing, entrepreneurship and global strategy.

2011 TMMBA Study Tour at a glance:

• On 3/12 the program kicks off with an Istanbul city tour and boat cruise on the Bosphorus.
• Students meet with Sabanci Holdings, Pozitron and GE and finish the day creating a painting using a technique called marbling.
• Day two in Istanbul takes students to Kordsa Global and Microsoft and for many ends with a traditional  Turkish Bath experience.
• The final day in Istanbul includes a visit with Sekerbank and the Spice Market and the Grand Bazaar to practice their negotiating skills.
• Students celebrate their arrival in Munich by enjoying food and drinks at the famous Hofbrauhaus.
• Students start their Munich visits off with a visit to Red Hat and Cisco
• The weekend in Munich includes a guided tour of the city and the Nymphenburg Palace.  Many students also take tours to Dachau or Salzburg.
• The final day of the Study Tour includes visits with Ashoka and Knorr-Bremse and BMW World.
• The Study Tour concludes with a festive and celebratory dinner!

The following is a summary of the Sekerbank visit during the 2011 International Study Study to Istanbul and Munich.   Students were asked to submit their thoughts and impressions on the various company and cultural visits.  The following was submitted by Jeff Steiner and Todd Colter, Class of 2011.
__________________________________________________

Our visit to Sekerbank was outstanding!  We were greeted by Mr. Cenk Eynehan, VP of Investor Relations & Subsidiaries Department who started right into a presentation that described that Sekerbank is the leading bank in Turkey (Top 500 in the world, due to backing in from other banks closing / mergers) for SME financing, not owned by the state.  Mr. Eynehan explained that over 50% of their loans go to micro, small and medium enterprises and that they see significant opportunity in the region to offer loans and provide banking to people that have never worked with a bank before. 

Mr. Eynehan told a funny story about living in the United States with his wife and dog.  In short, his wife was denied credit, but his dog was given a credit card with a little over $1000 limit.  He tied this back to working with customers in Turkey, as they want to know personally, those that they loan to.  It is a very different form of relationship building than we are used to in the United States, as their bankers actually visit the person, work with them to develop balance sheets and cash flow statements, to make sure that all understand exactly what is taking place and see where the money is going.  The US seems to be more impersonal; otherwise, dogs would not be receiving credit cards.

Currently, the inflation rate is roughly 7-9% annually, which we heard from numerous companies in Turkey, is a great inflationary percentage for their growing economy.  Back in 2000, Turkey was seeing an inflation rate of 60%, which Mr. Eynehan joked that if you took a cab from the airport across town, your ride would cost you much more when you arrived than expected when you got into the cab. 

Mr. Enis Bulca, the Small Business & Agriculture Banking Marketing Department Manager, took over the presentation about halfway through and began speaking about their actual loan procedures and the numbers involved.  The interest rates range from 14% for small business loans, 16-17% for micro loans, 18% for craftsman up to 22% for agriculture loans, but to me the most interesting number was the 9.5% interest rate offered on savings accounts to customers of the bank.  The smallest loan that the bank offers is the equivalent of $500 USD, and they are trying to use Experian (among others) to provide a reliable measure for credit ranking, but typically, these are people with little to no credit history. 

Of Sekerbank’s strategy, the part that was most intriguing was the goal to open branch locations in portions of the country that are currently not served by any banks.  The biggest challenge is working with people who have never worked with a banking establishment at all.  The main way they are trying to overcome the resistance and skepticism is by hiring local people to run the branches in an attempt to convince people in the area that working with a bank is a good idea and that Sekerbank is a trustworthy organization.

A final point in conversation revolved around the feelings of joining the European Union; on this subject, Mr. Eynehan expressed mixed feelings.  On the pro EU side, he felt that it would be good for a country with a 95% Muslim population to join a predominantly Christian and Catholic demographic.  It would also level the playing field for getting money into and out of the Turkey.  One major reason for being against joining the EU at this time revolves around the growth of the region.  Mr. Eynehan expects a growth rate of roughly 6-7% per year over the next decade, which would be stifled by sharing a common currency with the rest of Europe, which is not growing nearly as quickly.  Being a part of the EU would also allow banks and other corporations within Europe to eat into their share of SME loans because it would make it easier to move into the country.

Overall, the visit to Sekerbank was one of our favorites on the trip, and we were treated very well by the host company.  We would highly recommend that, if the program were to return to Istanbul, another visit should be planned to Sekerbank. 

One last thing for those of you interested, yes, you can open a savings account online.