If I were to advise Ravi and Keith with regards to their strategy for entering the Turkish market, I would advise them to work with local partners, as this has been found to be the easiest and quickest way to access the Turkish market (U.S. & Foreign Commercial Service and U.S. Department of State, 2012). The local partner can help Ravi and Keith with the local regulations and with the language, as well as with finding contacts. In particular, the local partners can consist of a bottling and a manufacturing company. The bottling company will manufacture Zip-6’s products through a strategy called assembling (Lambin, 2007) where Zip-6 can just send the mixed ingredients to the bottling company, which the bottling company then adds water to and bottle. With this strategy, Zip-6 can save on transportation costs as they only have to export the raw materials and they also won’t have to share their product’s recipe or formula with the bottling company, which minimizes the risk of competition. In addition, Ravi and Keith would need to partner with a marketing firm to market their products locally.
The partners that Ravi and Keith choose do not have to be Interbil as Interbil wants a joint licensing agreement, which Ravi and Keith are not amenable to. A formal partnership would also be better than a joint venture as a joint venture allows the local partner to have a management voice and an equity position in Zip-6. Since Ravi and Keith are uncomfortable with a joint licensing agreement, they will most likely be uncomfortable with a joint venture as well, as both of these strategies would entail them handing over some of the company control to their partner. On the other hand, by getting formal partners, Ravi and Keith will still have control over the company but will also be able to benefit from the contributions of their local partners. Although a partnership would require more involvement from Ravi and Keith, compared to entering a joint venture where much of the work can be done by the local partner, the former strategy would allow Ravi and Keith to later open subsidiaries, expand their market share, and make more local investments without having to get their partner’s approval.
References
Lambin, J.-J. (2007). Market-driven management: Supplementary web resource material.
Palgrave-MacMillan.
U.S. & Foreign Commercial Service and U.S. Department of State. (2012). Doing business in
Turkey: 2012 country commercial guide for U.S. companies. Retrieved from
http://www.buyusainfo.net/docs/x_3855906.pdf
