Merhaba!

–Authored by Maren Berge

Every year the Wisconsin MBA Program organizes several International trips to give students the opportunity to bring a global perspective to their MBA education.  For many students, these trips are one of the highlights of their Wisconsin MBA experience. Destinations are selected that allow students to learn more about an emerging business economy.  With its unique East meets West culture, young demographics and overall financial success story despite the recent economic downturn, Turkey was a perfect choice for a 2011 Global Trip. Turkey was the ideal place for us to learn about how business is being done in a fairly modern, but not yet mature market.

With sign-up and applications completed in early October, our group spent much of first semester eagerly anticipating and preparing for our trip.  Fortunately, we were lucky enough to have some students and faculty from Turkey here at the Wisconsin School of Business who were willing to help prepare us for our trip. We got our first introduction to Turkish food at Madison restaurant Oliva with first year MBA student Canan Ozkan and PhD student Volkan Ozbek. Wisconsin School of Business Real Estate Professor, Dr. Abdullah Yavas led us in an introductory presentation about the economic and business climate in Turkey. Many of us also made plans to extend our time abroad over our winter break with trips to nearby Greece, Egypt and London. By the time the end of first semester arrived we were all ready to depart!

Our party of MBA travelers arrived in Istanbul on January 3^rd and 4^th and included 16 first and second year students and our trip advisor, Cindie Adams. We represented four of the Wisconsin MBA specializations including Corporate Finance & Investment Banking, Marketing Research, Strategic Human Resource Management and Supply Chain Management. Our 11-day itinerary combined both business and cultural experiences and included stops in Istanbul, Cappadocia, and Kusadasi.  We participated in six company visits in Istanbul including Best Buy, Coca-Cola, Hewlett-Packard, Ülker, Vakif Bank and the Istanbul Stock Exchange.  The company visits gave us the opportunity to experience Turkish Companies as well as US companies with Turkish operations allowing us to develop a more robust understanding of the Turkish business climate. We also had the opportunity to learn more about Turkish history and culture through visits to many of the famous Turkish cultural and historical sites including the Blue Mosque, Hagia Sophia, Egyptian Bazaar and the Grand Bazaar in Istanbul; the Fairy Chimneys, Uchisar Castle and Goreme Open Air Museum in Cappadocia; and the Roman city of Ephesus, Pammukale, and the House of the Virgin Mary near Kusadasi. The following blog posts will give you a little more color on each of these experiences.

From each of our blog posts, I think you will be able to tell what an incredible time we had in Turkey.  We learned so much about the business climate, history and culture of Turkey and on top of that we had a great time together.  Many of us made new friends both from within our group and with the amazing people that shared their warm Turkish hospitality with us along the way.  Much of the credit for all of our learning and fun goes to our fabulous trip advisor Cindie Adams, who planned an awesome trip for us (while also keeping up with her day job as the Center Director of the Nicholas Center for Corporate Finance and Investment Banking). We sincerely thank her for making our trip so amazing!

Enjoy reading more about our trip to Turkey and feel free to reach out to any of the participants who will be thrilled to tell you more about our experiences!

Teşekkür Ederim (Thank you)

–Authored by Cindie Adams

Special thanks to our Turkish Wisconsin School of Business Community!

We had a lot of support and fun in preparing for our trip to Turkey.  I was amazed by how excited our Wisconsin School of Business community of Turkish students, faculty and alumni were to ensure we had a wonderful experience in their home country.

Real Estate and Urban Land Economics Professor, Dr. Abdullah Yavas, spoke to us about the economic and business climate of Turkey.  Professor Yavas currently serves on the Monetary Policy Committee of the Central Bank of the Republic of Turkey.   He also threw in some trivia to challenge knowledge (or lack) of Turkish football and cuisine.

Management Doctoral student, Volkan Özbek attended a few of our planning sessions, providing great advice on places to visit, how to negotiate at the Grand Bazaar, foods to try, to name a few.  Volkan also arranged a Turkish dinner at the Oliva Restaurant on Madison’s west side, where we learned a few Turkish phrases, enjoyed a delicious meal and imbibed in the Turkish custom of “taking tea.”  Volkan also connected me to his sister, Gül Reiche, who was our expert on companies and banks in Istanbul, and arranged our visit to Vakifbank.

Our current Wisconsin MBA student, Canan Özkan, was invaluable as soon as I mentioned that we were going to Turkey.  Canan evaluated our itinerary, arranged several company visits, and was the best “cheerleader” of her country.  She’s probably the only person who loves Istanbul more than me.

Finally, I want to give a special thank you to our Wisconsin MBA alumni, Gülru Keten Gürken (Class of 2004) and Dilek Gürel (Class of 2006).  As students in the Nicholas Center, you convinced me that Turkey is the place to visit.  It was wonderful seeing both of you in Istanbul.  We were fortunate to visit Best Buy in Istanbul, where Gülru was instrumental in Best Buy’s expansion into Turkey and now serves as the Director of Finance.

My experience leading the MBA Global Trip to Turkey offers a great example of the wide reach of the Wisconsin School of Business Community.  From the moment that Turkey was selected as one of the winter break destinations, the wheels were in motion to create an outstanding learning experience for our MBA students.  Faculty, current students, and alumni were integral to the success of the trip.  A special thanks to all of you!

Together in Turkey…finally!

–Authored by Andrew Schumann

All travelers in the group finally united in Turkey today.  Thıs could defınıtely be described as a joyous event, as about half of the group was delayed ın the U.S. for an extra day.

The followıng ıs a short account of the trıals and trıbulatıons the delayed group (Cındıe, Heıdı, Rachel, Laura, Jıshnu, Andrew, Justın, and Todd) had the pleasure of experiencing:

The lucky travelers began our fun ın Chıcago.  Everything seemed to be goıng as planned.  A full-body scan and ıntrusıve pat-down later, we anxiously awaited the boardıng of our flıght to Amsterdam.  However, as the plane was experiencing a  mysterious oıl leak and somehow the only replacement part available needed to be flown ın from Amsterdam, our flıght was ‘delayed’ for 24 hours.  The aırlıne put us up ın a hotel just outsıde the aırport.  After several unsuccessful attempts to take the hotel shuttle, the group of us took taxıs to the hotel.  Thankfully, upon arrıval to the hotel we were treated to a much-needed complimentary cocktail.

Before headıng to bed, Heidi and Jishnu decided to check on our flıght reservations to make sure we would actually arrıve ın Istanbul on the 4th.  It was soon dıscovered we were bumped onto a dıfferent flıght and would not arrıve until the 5th.  Somehow Heidi managed to work her magıc and got the aırlıne representative to re-book all eıght of us to Istanbul vıa New York to arrıve early on the afternoon of the 4th.

Thıngs seemed to be lookıng up, as we made ıt to New York wıthout a hıtch.  Unfortunately addıtıonal delays were ın our future.  A lavatory ıssue wıth the plane slated for our flıght from New York to Istanbul rendered the plane un-flyable.  Instead, we needed to switch to a plane ın a dıfferent termınal of the aırport.  The food and luggage already loaded on the grounded plan also needed to be transferred.  After yet another frustrating shuttle bus experience, we arrıved at our new termınal and awaited boardıng.  Ultımately this flıght was delayed over two hours.

Once aırborne to Turkey, we exchanged a few hıgh-fıves and several sıghs of relıef.  Our trıp was fınally underway…

Best Buy

–Authored by Rachel Crooker

Our first company visit in Istanbul was to Best Buy.  We had a chance to see Wisconsin MBA 2004 alum, Gülru Keten Gürkan, who is the finance director of Best Buy Turkey.  Best Buy’s Eurasian expansion began in Turkey when they opened their first Eurasian store in Izmir in December 2009.  Turkey was chosen because it is a large country, population 70 million, the average age is 26 years old, and is the one of the fastest-growing economies in the world.  Izmir, Turkey’s third largest city, was chosen for the first store because of its young population that is interested in technology and communications, and because it had space for a large store and parking.  Best Buy now has two stores in Turkey, with the second in the capital, Ankara.

During our visit, we had the opportunity to hear from all of the different disciplines involved in bringing Best Buy to Turkey, including finance, human resources, marketing, supply chain and store design.  It was fascinating to hear how they carefully analyzed every aspect of the market in Turkey and then planned their entrance strategy around their findings.  They really wanted to tailor the stores to fit in with the local markets.  The main take-away from this visit was that it was a challenging process to enter into this new market, but from these challenges, they were able to adjust their strategy to make this international expansion a success.

A very special thank you to Gülru for setting up our meeting, and to everyone at Best Buy Turkey.  We had a wonderful time learning about Best Buy’s entrance into Turkey, and we truly appreciate everyone taking the time to meet with us!

Vakifbank

–Authored by Todd Johnson

One of the most interesting visits we made on the Turkey trip was to VakifBank. VakifBank is the 5th largest bank in Turkey and offers a wide range of services from commercial and consumer lending, to investment banking and investment management. What I found most interesting about the visit was learning about the differences between the Turkish and American banking systems. Furthermore, I think that banking is a really good way to understand business in a foreign country.

One of the most striking contrasts to the United States was that the use of debt is not very prevalent in Turkey, whether it be individuals, businesses, or even the government. The mortgage industry is just starting to develop and many homeowners still pay cash. Our host, Mustafa Turan, indicated that this is an area with lots of growth potential. While the mortgage market is still in its infancy, consumer lending is very robust. Many consumers finance the purchase of computers, TVs, and other high-priced consumer goods. Mr. Turan said that defaults are low in the consumer lending market since the Turkish people generally have the ability and willingness to pay off their debts.

Another point of contrast with the US banking industry is that Turkish banks have higher capital requirements. Turkish banking regulators have set capital adequacy ratios at 12%, significantly higher than the minimum of 8% established by international regulators. VakifBank even exceeds the 12% set by Turkish regulators with a capital adequacy ratio near 15%. Much of the risk aversion within the Turkish banking system is in response to a banking crisis which saw a significant amount of consolidation and failures in the industry.

A very special thank you to Mr. Turan and his associates Negris Ozer and Nihan Candan for taking the time to meet with us. It was a very educational visit and I know that my classmates and I learned a great deal about VakifBank and the Turkish banking system.

Istanbul Stock Exchange

–Authored by Mark Lusch

On our fourth day in Istanbul we paid a visit to the Istanbul Stock Exchange (ISE), the only stock exchange operating in Turkey. The ISE is relatively young compared with the major US based exchanges, established in 1985 and starting trade in 1986 with 45 companies. However, we also learned that the ISE is not the first instance of security exchange in Turkey with roots going back to 1866 when the Ottoman Empire established the Dersaadet Securities Exchange. Today the ISE is home to five markets with the largest being the National Market which lists 241 companies.

Our visit consisted of two portions, first we went through a presentation on the history and operations of the exchange including a question and answer session. Some interesting points from the presentation were the fact that roughly 66% of the publicly held portion of the market is held by foreign investors; this is partly due to the fact that traditionally security investment has not been a popular way for Turkish citizens to invest their money. Additionally, we discussed some of the efforts from the ISE to encourage more companies to list on the exchange including the creation of a emerging companies market which allows companies to list on a alternative market with lower listing standards. The idea is that companies would progress while on the emerging market to eventually list on the national market. The returns of these efforts were seen in 2010 when the ISE had 22 IPOs versus 1, 2, and 9 in 2009, 2008, and 2007 respectively.

The second portion of our visit was a trip to the trading floor, which was surprisingly quiet compared to how trading floors are typically portrayed in the media. It was a great experience to actually get to see the trading floor of an exchange in a foreign country. The ISE’s floor has become less utilized over the years as technology has allowed traders to work remotely from the exchange; however, there are still a number of traders who choose to come into the exchange daily or periodically to conduct business. In addition, the ISE doesn’t have any plans to get rid of the floor despite its lower utilization because it is still representative of the spirit of the exchange.

Overall, the opportunity to visit an exchange in a foreign country is something that many of us would not have been able to do without this global trip. We want to give a special thanks to the Istanbul Stock Exchange especially Erlap Polat and E. Ceylan Yilmaz for together a great presentation and trading floor visit as well as fellow MBA student Canan Özkan for arranging our visit.

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HP

–Authored by Carlos Olivares

HP’s Turkey office serves as a hub for business units that support Eastern Europe, west Asia and northern Africa. Turkey’s central location, educated work force and affordable cost of living make it an attractive location for global companies like HP. Many of HP’s Turkish employees have been with the company for several years and have worked in different business units in and outside of Turkey.

HP’s sales in Turkey mainly come from hardware such as PC’s, servers and printers. HP hopes to diversify its sales in Turkey with consulting, outsourcing, and technology service as Turkey’s free market economy matures. As is the case worldwide, HP Turkey faces competitors on many fronts because of its diverse product offerings.

HP and Foxconn have partnered to build factory in Turkey to support $1.5B in sales. In the first half of 2011, Foxconn Technology Co. Ltd. will start assembling desktop and laptop computers for Hewlett-Packard Co. The $60M factory is located in Corlu in northwestern Turkey and will have the capacity to produce 2.4M units and employ 1,500 workers. Foxconn Turkey chief executive Tuna Kardes said 90 percent of the output will be exported to regional countries.

HP Turkey team members are excited about the future because they hope to contribute to HP’s future success in more ways than one. HP Turkey is building its talent base with a college internship program. HP Turkey hopes to capitalize on its technology savvy young population which 25% is under the age of 15. HP Turkey would like to partner with Turkish universities to develop new products.

HP Turkey seems like a great place to work!

Ulker

–Authored by Heidi Freund

I consider myself to be a well-composed person; with the exception of, say, a finance exam, I can keep it together incredibly well. However, during our company visit at Ülker, I found myself moved to tears. As a matter of fact, I believe I uttered the phrase, “I’m so happy, I think I could cry.”

What on earth made me have such a strong reaction? Before I go into details, I feel compelled to give a little background on the company itself. Ülker started as a biscuit (also known as cookies) company in 1944 with only 3 workers and has since grown into thousands of employees and multiple divisions with well over 280 products. Ülker first expanded their product line in 1979, when they added chocolate production, and have since added chewing gum, ready-to-eat soup, supplements, soft drinks, baby food, UHT milk, ice cream, and Turkish coffee. They’ve also begun collaborating with Kellogg’s for cereal production. Additionally, Ülker has acquired Godiva, partnered with Gumlink, and will soon be partnering with LHS, a German tea company. Quite the gentle giant!

What makes Ülker such a lovely company is their core philosophy: making happy moments. This core philosophy has been critical to the culture of the company, as well. Every single lovely person we came in contact with that was associated with Ülker just wanted to see us smile. And smile we did.

Imagine this: You’re in a foreign country, well aware of the fact that you’re currently at a ‘cookie factory’- or so you think. You are ushered into a building (out of a cold, damp rain, no less), up a couple of flights of stairs, into a room…that’s filled with tables of cookies, chocolate, and bottles of water.  You hope that, just maybe, you may be receiving an afternoon snack, but don’t want to make assumptions. After gathering in a meeting room off the side of the ‘snack room,’ you’re urged to once again enter the ‘snack room’ and eat…a lot. This is a lovely conundrum if you’re like me, a person with an intense sweet tooth that can take down the most disgusting amounts of sweets in one sitting.

After consuming what seemed like four pounds of chocolate and cookies each, we were shown a couple of inspiring videos about Ülker, what they stand for, and why they do what they do. Our wonderful new friends then handed us some stylin’ frocks, complete with hairnets for a once-in-a-lifetime experience: a tour of their facility. And we weren’t at the cookie facility, as I had originally thought: we were at the chocolate factory! Yes, it had seemed I had traveled to Turkey and then died and gone to heaven. Of course, the tour wouldn’t be complete without yet another table of chocolate bars of all shapes and sizes, fresh from the line, not even wrapped! After another pit stop at this lovely table (which is where my tearful quote comes in), we were shown the processing lines. Everything from melted chocolate to nougat to caramel was being pumped through various machines to make so many wonderful flavors of chocolate bars. Our ‘tour guides,’ most of whom were actually what I will call ‘sugar engineers,’ took the time to explain each step in the process, each part of the machines, and even to grab fresh chocolate bars right from the lines!

Following our extensive factory tour, we were once again ushered into the ‘snack room,’ which of course, following Turkish hospitality, had been freshly replenished. Not only were we encouraged to enjoy more of these treats, but we were handed boxes of delicious Ülker candies to take with us. Sadly, it was time to leave; we all climbed onto our bus with the most intense sugar rushes we’d ever had.

This amazing, tear-filled experience would not have been possible without the hospitality of Kakan Özkök and Sedat Erpek, and all of the other wonderful Ülker employees we met that day. As a group, we thank you for such a fantastic, unique experience! Additionally, we thank Canan Özkan for arranging the visit for us.

(In case you were wondering, my favorite Ülker treats are the Hazelnut Biskrem and the Ülker Golden Hazelnut Cream bar. I have yet to find either of these in the United States…so if you find them, please inform me immediately!)

Coca-Cola

–Authored by Laura Hausfeld

Our final company visit took place on our last full day together in Turkey.  After arriving back in Istanbul that morning, we headed directly from the airport to Coca-Cola.  We were greeted by Rengin Ornay and Melitsa Mizrahi (the coordinator of our visit). We settled in to a room that had bright red comfy seats and a spread of Coca-Cola brand beverages.

The Coca-Cola associates first presented us with some background about both the company and its operations in Turkey. A short video summarized Coca-Cola’s history: Coke was first served in 1886 as a fountain beverage and saw rapid growth following its 1899 bottling agreement. Interestingly, the exclusive right to bottle Coke was sold for $1 by owner Asa Griggs Candler, who believed bottled soda would not be successful. Today, Coca-Cola is one of the planet’s most recognizable brands which distributes its products in more than 200 countries through over 300 bottling partners.

Coca-Cola has had much success in Turkey, thanks in large part to its ability to tailor marketing to the regional culture while still maintaining the heart of the Coca-Cola brand. For example, we were shown a commercial which promotes Coca-Cola as a beverage to drink during Ramadan. Coca-Cola is also helping to bring about positive change in Turkey through its role in the “Life Plus” Youth Program. This program provides financial support and mentoring to people age 18 to 30 to help them complete projects designed to address environmental issues in the country.

Following the presentation we enjoyed an informal reception, referred to as a “coke-tail hour,” of snacks and a variety of Coke products.  At the end of our visit, each of us received a gift: a classic Coca-Cola glass bottle filled with tiny ‘evil eye’ beads.  A tag was enclosed which read: “Tradition has it that the ‘evil eye’symbol (Nazar Boncugu) was used by sailors to protect their successes against misfortune and bad faith when embracing a new adventure. We hope this gift will bring you luck and success in your endeavors.” The evil eye symbol is truly omnipresent throughout Turkey, and so this particular gift serves as a great reminder of both our visit to Coca-Cola as well as the whole trip.

Welcome to Istanbul!

–Authored by Scott Meyer

Students were coming in from all over to meet in Istanbul and begin our trip of Turkey.  We had people flying (or taking the train) from Athens, Egypt, London, and a couple places in the United States.  The majority of the group was flying in from Chicago, and that group arrived a day later than planned due to severe weather conditions in the States.

A few who didn’t get delayed arrived at the Marmara Hotel around the same time.  The Marmara Hotel is a luxurious hotel that is located on Taksim Square.  It was a little hectic without our fearless leader Cindie and the hotel didn’t really know what to do with us.  We didn’t know if we were supposed to continue with the planned agenda or not, and where is Carlos?!  Through emails, we were made aware that we were going to partial carry on with the itinerary.  We contacted our tour guides Sedat and Yalcin, and they took the incomplete group to dinner at a restaurant on the 3^rd floor of a building that overlooked the Spice Bazaar and a small market.  It was at that restaurant that we sampled the best baklava we would have the entire trip.  The group then went to a restaurant with a fantastic view of the Bosphorus Bridge that connects the European side of Istanbul to the Asian side of Istanbul to cap off our night.

The next day the late arrivals got in around noon.  After a quick fresher up, we made our way to lunch.  Lunch was at a neat restaurant that overlooked the Sea of Marmara.   After lunch, we had a Boshporus River Cruise planned.  The cruise would take us up the European side of Istanbul and then make its way to the Asian side to head back to the port.  It was an amazing boat ride, but the weather was not cooperative.  It was about 40 degrees and rainy.  We started off adventurous and stayed on the deck in order to get pictures of all the highlights on the riverfront.  Eventually the weather got the best of us and we made it into the heated cabin.  Going directly under the Boshporus Bridge was quite the sight.  We were also able to get a great look at all the castles, hotels, and other buildings that were built right on the river.

After the cruise, we made our way over to the Spice Bazaar.  This bazaar is famous for its different spices, fruits, vegetables, carpets, and pottery, amongst other things.  A few of the students were anxious to test out their haggling skills since every price was negotiable at the bazaar.  At each store front that you walked by you would be approached and asked to buy something.  After an hour and a half of making our way through the bazaar, we went back to the hotel.

On Wednesday we had our first company visits.  First we traveled to Turkey’s Best Buy headquarters to learn more about Best Buy in Turkey and to see an alumnus of the Wisconsin MBA program who is the Finance Director there.  After hearing about Best Buy’s exciting challenges of entering Turkey’s market, we went to a large mall for lunch.  The mall had a food court similar to what you would find at a mall in the United States, only their food options were much nicer.  After eating lunch and walking around the mall, we headed to VakifBank for a presentation.  Following VakifBank, we went back to our hotel rooms and changed for dinner.  Dinner that night was at a restaurant on Istiklal Avenue near our hotel.  Istiklal Avenue is a very busy pedestrian street that has cafes, pubs, music stores, cinemas, and restaurants along it.   The avenue is also filled with street vendors, and it is said to be visited by nearly 3 million people a day on a weekend.  Along Istiklal Avenue there are alleys that also host an array of stores, including more bars and hookah (or “water pipe” as they call it in Turkey) lounges.  Istiklal Avenue was filled during all hours of each day and there was always something to see there.

The next day was a very busy day for us.  We had three company visits.  First we went to the Istanbul Stock Exchange, then to Hewlett-Packard, and finally to Ulker, a Turkish food manufacturing company (foods like cookies and chocolates).  When we visited HP in Istanbul, we got to travel over the Boshporus Bridge and into the Asian side of Istanbul.  The bridge is just less than 1 mile in length and it travels directly over the Bosphorus Strait, where we took a boat ride on early in the week.

Once on the Asian side, we stopped for a nice lunch very close to the water before making our way to HP.  Finding HP was an adventure.  The driver seemed to stop at each gas station we passed to ask to for directions. Eventually we found HP’s Headquarters. Following HP we drove back to the European side of Istanbul and to Ulker.  It was a good thing that Ulker was our last company visit that day because they fed us far too much chocolate (at least in my opinion.  Some may say it was the correct amount).

When we finally returned to our hotel that night we were on our own for dinner.  Groups formed and people went their separate way.  It was a relatively low key night since we had an early wake-up call the next day for our flight to Cappadocia.