Maha Research Labs Case

Maha Research Labs Case Study

1. What opportunities does the Turkish market offer for Maha Research Labs?

Primarily, turkey provides an strategic advantage because of its unique geographic location as the country’s borders are in both Europe and Asia. Hence, it provides a unique bridge between the two continents and shared borders with eight other countries. Likewise, Turkey is one of the most populated country in the region offering a huge opportunity to Maha Research Labs in the sense that it allows them to target a broader market. Furthermore, in reference to the population, Turkey is awarded a high working force as their average age is of 29. Thus, is provides an opportunity for exporters willing to enter the market as they could take advantage of the high unemployment rate existent in the country, regarding of the benefits that can be granted by the state for opening operation facilities in Turkey. Nevertheless, even though the Turkish economy presented a high economic growth and stability in the first half of this decade, it has been struck with a terrible situation since 2017 where the GDP has decreased more than 6%. This currency deficit is consequence of the constant devaluation of the national currency the Turkish Lira and the continue rise of the inflation.

1. Is the Turkish market attractive for Maha Research Labs? Explain why or why not?

The Turkish market is sufficiently attractive nonetheless the risks are too high for Maha Research Labs. Their economy is defined as an emerging market by the International Monetary Fund. Nonetheless, on the last couple of years the economy has presence a plunge cause of the continuous devaluation of the currency. However, their geographic location permits a unique strategic advantage for commerce. On the other hand, the instability on the political scope and the high danger cause of the incessant terrorist attacks make the country a very risky investment regarding the opening of operating facilities. Likewise, the limited entry modes, effect of the high regulation on behalf the country, make it imperative the creation of a partnership with a local company in order to operate.  

1. What are the challenges for Maha Research Labs if they enter the Turkish market? How can they overcome them?

Even though their efforts to liven up the economic environment in order to be more similar to the European, Turkey is very presenting uncertainty in the economic scope. Besides, the government has a risen number of barriers for importers making it completely necessary for Maha Research to form a partnership with a national company in order to be able to conduct business. However, another solution to this problem could be for Maha can create a company in Turkey or make a brownfield foreign direct investment by buying an existent company.

1. What is the business environment faced by foreign investors in the Turkish market?

Turkey is in a strategic geographic location, as it not only is in both Europe and Asia, it is considered a commercial hub in the region as it provides access to business opportunities through Central Asia, the Caucasus, the Middle East, and even Africa. Notwithstanding, the terrible economic and social situation that threats to become a crisis, makes turkey become a very risky country for foreign investors. Furthermore, the problematic that the country needs to face with the terrorist group ISIS in the border with Syria only worsen the panorama for investors.

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