- Anasayfa
- Haberler
- Tüm Haberler
- The nine new criteria for doing business
The nine new criteria for doing business
To enter a new country, to make a move in a niche sector, to establish a partnership or realize an acquisition...
In all of these aspects of investments, companies are now taking more healthy steps. Many companies which in the past used to enter a business with their eyes closed are now turning more towards niche businesses. Those who want to grow without making any concessions in terms not only of capital but also in terms of time or image are studying in greater detail all of the aspects of an investment. They are identifying the criteria very clearly. For example, Akfen Holding is looking for a monopoly in any new sector is going to enter. Astaş has announced that it will only make investments in niche areas. HSBC is looking for a profitability rate of at least 15 to 20 per cent in a bank it wants to buy. All of these criteria show that “reliable” investors are following nine new trends.
1- THE PRIORITY IS A VIRGIN MARKET
The first thing that the Ar Companies Group, which has grown to giant size through foreign investments in foodstuffs, does in foreign markets is to acquire property. Ar Companies Group Chair Hasan Arslan says that this approach enables investors to feel sure of themselves. “As a result, they know that if there are economic or political problems we will not pick up our jacket and leave.” The criterion for Global Yatırım when it makes investments abroad is being the first foreign player in the region. The clothing brand Kiğılı favours growth in developing countries. Kiğılı CEO Hilal Suerdem says: “Becoming part of something which is newly developing provides us with the opportunity to put down roots and become more long-lasting.”
2- WHAT IS NECESSARY FOR A FACTORY
The calculations are made more meticulously when the investment includes opening a factory. For example, five years ago, İnci Holding would not make any factory investments which had no return. Ar Companies Group Chair Hasan Arslan says: “The location of our plant should be close to a railroad and provide us with shipping and logistical advantages.” Local regulations and any investment incentives play an important role in physical investments. Arslan says that the most important question facing an investor is to be sure that the incentives are sustainable and that they always monitor incentives.
3- SEEING AHEAD IS İMPORTANT
HASAN ARSLAN / AR COMPANIES GROUP BOARD CHAIR
FOREIGN POTENTIAL
Our first criterion when going into a new business is that the sector which we are going to enter must be open to development for the next 10 years. It is very important that we are able to see whether there is potential for growth both domestically and abroad and whether the regulatory authorities will or will not enable the sector to grow. Our other criteria include the size of the market, competition and profitability rates.
4- A SENSITIVE APPROACH TO ACQUISITIONS
Every company has different targets and looks for different characteristics when it is thinking of making an acquisition. For some companies, it is price which takes priority, while others give greater importance to profitability and image. Yıldız Holding CFO Cem Karakaş says that they are looking to acquire three to four companies which produce cakes and chocolates in Eastern Europe, the Middle East and Africa. Karakas notes that the smallest of the companies they are thinking of buying may have a turnover of $40-$50 million and the largest a turnover of $400-$450 million. Samir Assaf, chief executive of HSBC’s Global Banking and Markets business, says that the first criterion in many acquisition is a profitability rate of 15 to 20 per cent.~
5- PARTNERSHIP CONDITIONS
Many groups and companies add momentum to growth through strong partnerships. But it is not easy either to form or to sustain a partnership. The most important criterion is that the partners share a similar vision. Index Board Chair Erol Bilecik is looking for partners who speak the same language and with whom they can grow together. Akman Holding Chair Ali Akman says: “For us, the most important factor is having a majority shareholding and being able to make the final decision. It is important that our partner is strong locally and respected.”
6- AN İNVESTMENT SHOULD SECURE A COMPETITIVE M ADVANTAGE
ERDAL AKSOY / AKSOY HOLDING BOARD CHAIR
WHAT WILL BE OUR
One of the most important considerations when entering a new business is whether or not we have advantages that will create a competitive edge. When launching a new business, I look at what our role will be in that business. What kind of synergy it will create with our existing business is also important. After these criteria, I study the potential for growth. If, in addition to these criteria of ours, our financial structure is also sufficient, then the business is worth us investing.
7- THREE CRITICAL POINTS IN STORES
In the last few years, many brands in different areas have rapidly opened stores and started retailing. Today retailers are taking more reliable steps when opening stores. Makromarket General Manager Mehmet Songör says that, even if it is now very difficult, they try to find a location which is a virgin area. The primary criterion for Teknosa when it opens a new store is to be in a province where it does not already have a presence. Adidas General Manager Haluk Özmutlu says: “When we are going to open a store in a shopping mall, we look at how it will become a centre of attraction compared with the existing ones. Our basic criterion is return on investment. The ideal is an investment which provides a return within one year.”
8- HIGH EXPECTATIONS FROM NEW BUSINESS
When entrepreneurs make investments in a new area or sector, their own criteria and expectations come into play. For example, for new business Akfen Holding generally prefers sectors which are monopolies or where there is limited competition. The holding’s CEO Süha Güçsav says: “As a holding, our target is to make investments in infrastructure with high growth potential, either by using our own resources or by forming strong strategic partnerships.” Astaş Holding Board Chair Vedat Aşcı says: “The longer the time that a specific sector can continue to develope, the more we can make investments in it.”
9- THE GROWTH RATE IS LOOKED AT
EROL BİLECİK / INDEX GROUP BOARD CHAIR
THE COMPLETION AFFECT
When acquiring a companyö we usually look to see whether or not it provides us with something which we are missing. This forms our basic criterion. Another criterion which is just as important is that the founder of the company in question has a good image. The profitability of the business, the rate of growth and the period for a return on investments are also very important. According to our criteria, the maximum period for a return on investment should be four to fıve years. The growth rate should be a minimum of 10 per cent.
1- THE PRIORITY IS A VIRGIN MARKET
The first thing that the Ar Companies Group, which has grown to giant size through foreign investments in foodstuffs, does in foreign markets is to acquire property. Ar Companies Group Chair Hasan Arslan says that this approach enables investors to feel sure of themselves. “As a result, they know that if there are economic or political problems we will not pick up our jacket and leave.” The criterion for Global Yatırım when it makes investments abroad is being the first foreign player in the region. The clothing brand Kiğılı favours growth in developing countries. Kiğılı CEO Hilal Suerdem says: “Becoming part of something which is newly developing provides us with the opportunity to put down roots and become more long-lasting.”
2- WHAT IS NECESSARY FOR A FACTORY
The calculations are made more meticulously when the investment includes opening a factory. For example, five years ago, İnci Holding would not make any factory investments which had no return. Ar Companies Group Chair Hasan Arslan says: “The location of our plant should be close to a railroad and provide us with shipping and logistical advantages.” Local regulations and any investment incentives play an important role in physical investments. Arslan says that the most important question facing an investor is to be sure that the incentives are sustainable and that they always monitor incentives.
3- SEEING AHEAD IS İMPORTANT
HASAN ARSLAN / AR COMPANIES GROUP BOARD CHAIR
FOREIGN POTENTIAL
Our first criterion when going into a new business is that the sector which we are going to enter must be open to development for the next 10 years. It is very important that we are able to see whether there is potential for growth both domestically and abroad and whether the regulatory authorities will or will not enable the sector to grow. Our other criteria include the size of the market, competition and profitability rates.
4- A SENSITIVE APPROACH TO ACQUISITIONS
Every company has different targets and looks for different characteristics when it is thinking of making an acquisition. For some companies, it is price which takes priority, while others give greater importance to profitability and image. Yıldız Holding CFO Cem Karakaş says that they are looking to acquire three to four companies which produce cakes and chocolates in Eastern Europe, the Middle East and Africa. Karakas notes that the smallest of the companies they are thinking of buying may have a turnover of $40-$50 million and the largest a turnover of $400-$450 million. Samir Assaf, chief executive of HSBC’s Global Banking and Markets business, says that the first criterion in many acquisition is a profitability rate of 15 to 20 per cent.~
5- PARTNERSHIP CONDITIONS
Many groups and companies add momentum to growth through strong partnerships. But it is not easy either to form or to sustain a partnership. The most important criterion is that the partners share a similar vision. Index Board Chair Erol Bilecik is looking for partners who speak the same language and with whom they can grow together. Akman Holding Chair Ali Akman says: “For us, the most important factor is having a majority shareholding and being able to make the final decision. It is important that our partner is strong locally and respected.”
6- AN İNVESTMENT SHOULD SECURE A COMPETITIVE M ADVANTAGE
ERDAL AKSOY / AKSOY HOLDING BOARD CHAIR
WHAT WILL BE OUR
One of the most important considerations when entering a new business is whether or not we have advantages that will create a competitive edge. When launching a new business, I look at what our role will be in that business. What kind of synergy it will create with our existing business is also important. After these criteria, I study the potential for growth. If, in addition to these criteria of ours, our financial structure is also sufficient, then the business is worth us investing.
7- THREE CRITICAL POINTS IN STORES
In the last few years, many brands in different areas have rapidly opened stores and started retailing. Today retailers are taking more reliable steps when opening stores. Makromarket General Manager Mehmet Songör says that, even if it is now very difficult, they try to find a location which is a virgin area. The primary criterion for Teknosa when it opens a new store is to be in a province where it does not already have a presence. Adidas General Manager Haluk Özmutlu says: “When we are going to open a store in a shopping mall, we look at how it will become a centre of attraction compared with the existing ones. Our basic criterion is return on investment. The ideal is an investment which provides a return within one year.”
8- HIGH EXPECTATIONS FROM NEW BUSINESS
When entrepreneurs make investments in a new area or sector, their own criteria and expectations come into play. For example, for new business Akfen Holding generally prefers sectors which are monopolies or where there is limited competition. The holding’s CEO Süha Güçsav says: “As a holding, our target is to make investments in infrastructure with high growth potential, either by using our own resources or by forming strong strategic partnerships.” Astaş Holding Board Chair Vedat Aşcı says: “The longer the time that a specific sector can continue to develope, the more we can make investments in it.”
9- THE GROWTH RATE IS LOOKED AT
EROL BİLECİK / INDEX GROUP BOARD CHAIR
THE COMPLETION AFFECT
When acquiring a companyö we usually look to see whether or not it provides us with something which we are missing. This forms our basic criterion. Another criterion which is just as important is that the founder of the company in question has a good image. The profitability of the business, the rate of growth and the period for a return on investments are also very important. According to our criteria, the maximum period for a return on investment should be four to fıve years. The growth rate should be a minimum of 10 per cent.
