The reality today is that emerging markets like Turkey will be responsible for the long-term, sustained global growth of many multinationals. The 90 countries managed from here, which include a mix of emerging and developing markets, are critical to the company’s future global growth plans. Managing the variety of markets is not as difficult as it might seem. We have six business units based in South Africa, Kenya, Turkey, Russia, India, and Middle East/North Africa. We have functional teams in Istanbul with finance, legal, public affairs and communications, marketing, human resources, and strategy capabilities. The functional team works as part of the global team to come up with strategic plans for each market. We share that with the business units, and we expect them to enrich and add value to them by adapting these plans to their own needs. We operate under a principle of empowered business units, supported by functional teams, striving to work with world-class collaboration, being part of a global team.
In today’s world, whatever we do in any country has global implications. We need to think globally before moving on with new investments in any corner of the globe. I think the most compelling trend is the rise of the emerging markets. It’s creating a new consumer group. Business, local governments, and market structures are changing. The developed markets have their own challenges right now in terms of reconstructing and regaining competitiveness. We must be in a place where we can understand both East and West. Besides this, Turkey has its own dynamics. Turkey’s location is also significant. There are three economic blocs surrounding the country, each helping the economy and companies to drive growth. The first bloc is Europe, which is still the largest integrated economy. Secondly, there is the region from Russia to the Gulf, which is resource rich and trying to diversify. The third is from Morocco to Pakistan, a region that needs infrastructure and stability.
Philips has a strong bond in Turkey. It has been active in Turkey for over 80 years with brand heritage built on a reputation for quality and innovation. This is an inherently Turkish company, and our customers and staff alike see this as a Turkish company that just happens to be part of a Dutch multinational. A strong multinational, Philips is leveraging global innovation to be locally relevant, building on the long-lasting relationship we have built and are still further expanding. The Turkish market is of great importance to us. The economic conditions here are promising, and the country is trending as one of the world’s major growth economies. With this growth, new challenges are emerging. Our strengths in the fields of health care, lighting, and consumer lifestyle innovations enable us to contribute to current challenges like urbanization and the trade deficit in terms of energy efficiency, as well as create an affordable and accessible healthcare system, increasing the well being of the people.
Recordati decided to invest in Turkey a few years ago because of the country’s growing pharmaceutical market. Over the last few years, prices have fallen slightly, but, in the long term, it is still a very interesting market. The acquisitions of Yeni İlaç in 2008 and Dr. F. Frik İlaç in 2011 firmly fit into our diversification strategy to invest outside the EU. Turkey is now our third largest market—equal to Germany and larger than France or Italy—and we have between 400 and 500 sales representatives in the new Turkish organization. Turkey is a well-developed market, and our employees have a good level of skills and technical knowledge. It is important to have a presence in markets like Turkey and Russia in order to benefit from the higher rate of growth compared to Western European markets. We are increasing our production output in Turkey every year and investing in improving production capacity in our pharmaceutical plant. We believe in our strategy and our business plan commercially, and we expect to grow in the Turkish market.
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