Critical Warnings From Gurus

Growth, competition, profitable customers, restructuring, creativity, innovative organization and others… Towards the New Year, the business world is looking for the answers of critical questions. Each businessman and manager has a different agenda. World’s leading gurus, including James Champy, Jack Trout, Michael Hammer and Ram Charan, highlighted the agenda topics while answering those questions.

ADVICES OF FAMOUS GURUS TO TURKISH MANAGERS

JAMES CHAMPY: The Turkish managers and companies should create more productive workplaces. Turkey has the people, skills and resources necessary to become another off-shoring region. You know how to produce. I think that the capital should be directed towards production.

AL RIES: There is nothing to prevent Turkey from creating a big brand such as the Australian Red Bull. Absolut, Ikea and Volvo are brands created in Sweden. Nokia came from Finland and Zara from Spain. Most of the American companies have focused on brand extension. This allows smaller companies from smaller countries to launch new brands that are able to dominate new categories. The mobile phone had been developed by Motorola, but since this company followed a strategy of brand extension, a small company of Finland, Nokia, has been able to dominate the market with a new brand.

DAVID FOOT: The future successes of countries such as Brazil, Turkey and Vietnam will depend on their ability to create jobs for young workers. Labor saving projects that are suitable for developed countries may lead to high unemployment rates among youth in demographically young countries. That may contribute to instability and endanger future growth prospects.

DON TAPSCOTT: I advise to Turkish managers and companies to strive to be the best. For competition, to be the best is not sufficient. Besides, the price should be in line with quality. The customers should be allowed to expand the company. Furthermore, they should certainly see globalization as an opportunity.

FERNANDO TRIAS de BES: I can advise to Turkish managers and companies to orientate towards areas where they are better in comparison with other countries. Globalization provides many opportunities to countries whose governments allow free competition in their own markets. However, that will lead to some changes. Companies protected by their governments forget their advantages and focus on their comparative advantages. When the market is opened to foreign investment together with guarantees for private property, the country attracts investments and that leads to growth.

JACK TROUT: The Turkish companies have to learn how to cope better with the competition in the global economy. That means understanding marketing strategy better. I think that the best way of doing this is to examine the U.S. market like a competitive laboratory and try to avoid making the same mistakes.

MICHAEL HAMMER: I will give the same advices that I give to all other managers. Today, all of us are living and competing in a single world market. All companies face the same competitive pressures and customer pressure.  Considering that the possibility of Turkey’s entry to the EU has been increasing, I can say that the Turkish companies have to reach the performance levels of the world’s best companies.

RAM CHARAN: The Turkish companies have to assess their new competitors and the markets to be focused very well. We will see that exports from China to Europe will increase further. The Turkish companies have to begin to think about issues such as creativity, productivity and controlling distribution. Under today’s competitive environment, similar to Mexico, Turkey may lose its markets to China. I think that those are the most important issues to be considered by the Turkish companies in 2005 and afterward.

DON SCHULTZ:  I think that from now on the Turkish companies have to understand that they are taking place in a global market. The rivals of Turkish companies will come from many different areas. One of the problems faced by Turkey is its image. Turkey should tell that it is the center of many different products and services and explain the differences and advantages of these, since that will be the key to enter the export market. Thus, the main issue is the product’s country of origin. I think that all industries of Turkey should consider this issue important. That is not an issue concerning just a single company.

THE BRANDS OF RETAILERS WILL PUT PRESSURE ON PRODUCERS

BRAND BUILDING BECOMES MORE IMPORTANT In 2005, it will be continued to focus on the issues of brands and brand building. Today, there are very few differences among products and services. Products in the market have reached such a quality level that it has become very difficult to find significant differences among them. Consequently, there is a shift towards brand building. Since, they are trying to use brands as elements of differentiation.

CHINA IS THE DRIVING FORCE There is a global interest in the growth of products originating from China and the expansion of China towards other regions of the world. China is not producing only low-cost products but also high-quality products. I think that will be an important driving force.

THE RETAILER’S EFFECT Besides, the influence and value of the retailer are gradually increasing. Traditionally, we are accustomed to brands created by producers. However, as we increasingly see, the retailers as well are creating brands. Thus, if we look at institutions such as Carrefour and Wal-Mart, we see that they have focused on creating their own brands.

CONCENTRIC ORGANIZATION I think that the most important thing that should be done by most institutions is to create a concentric organization. Today, many advertisement and marketing activities of an organization are not supported by its employees and distributors. I think that most of the problem is caused by the lack of cohesion within the organization.

THERE IS A TREND TOWARDS GLOBAL BRANDS

GLOBAL BRANDS ARE AT THE TOP There are four marketing trends that will mark the next year. The first is the trend towards global brands. Almost every category from beer to cola or computers is going to be controlled by global brands. 

Secondly, weaker brands are purchased by bigger companies or those brands are pushed out of the market. The strong becomes stronger and weak weaker.

The third trend is the appearance of new categories and new brands. For instance, the energy drink: Red Bull. This is a trend providing many opportunities to companies in smaller countries. And the fourth trend is the domination of public relations over the traditional marketing and marketing communication tool of advertisement.

GROW THROUGH NARROWING THE FOCUS The best strategy for almost every company is “narrowing the focus” in order to become the leader in a segment of a category. For instance, Dell did not tried to sell personal computers to everywhere. Instead of doing that, it narrowed the focus of the company and it marketed its products first via internet and then through direct selling. During this process, Dell became world’s number one personal computer seller.

BRAND EXTENSION IS A MISTAKE The main mistake made by companies and managers is brand extension, i.e. using an existing brand for new product and service categories. But the method of growth is to launch a new brand. Toyota had wanted to sell expensive cars, but it did not call them “Toyota Supreme”. It used a new brand: Lexus. Today, Lexus is the leader of the U.S. luxury car market. On the other hand, Volkswagen as well had wanted to sell expensive cars, but it called them Volkswagen. That was a very bad mistake. The Volkswagen Phateon turned to be a big disaster.

STRIVE TO BECOME LEADER Nothing is as useful as leadership. A company should strive to become the leader of its category. If it is not already the leader, the best strategy is to focus on the market segment where the company may become the leader.

N. ASLI TEKİNAY
atekinay@capital.com.tr