Transformation

FOCUSING MOTTO
Koç Holding, whose size makes it one of the leading groups not just in Turkey but in the entire world, has recently been undergoing a strategic transformation. The group, which had previously adopted a policy of sectoral diversification, is now applying a strategy of focusing. Last year in particular, the group took important steps towards improving its risk profile. The basic principle of the portfolio strategy is optimum diversification. Koç Holding CEO Turgay Durak attributes this distinct shift in their strategies to conjectural change. "We restructured the support functions in the Holding and increased the effectiveness of processes," he said. "The performance management system we have applied is an important element in realising our strategies. Another positive result has been an improvement in our risk profile. The share of our foreign exchange indexed revenue has risen to 61 percent. The proportion of our business units which are highly sensitive to interest rates and economic growth has declined to 30 percent."

PROFITABILITY RANKS FIRST
Particularly recently after the change in CEO, there have been distinct changes in strategy at Sabancı Holding. The experts with whom we spoke say that a strategic change had become unavoidable, particularly in the Akbank Group which had carried the burden of other companies in the holding. People are saying that the company's new strategy will include an end to its participation in industry. It is thought that the unprofitability of foodstuffs is a major factor behind this shift. There are also rumours that Teknosa, which has become one of the most important companies in the group, will soon go public or take a foreign partner. The most important characteristic of the new era at Sabancı, which started last year, is profitability. The company is focusing on profitability rather than growth. It is expected to adopt the Akbank model here. The new CEO Zafer Kurtul is no stranger to this strategy. The fact that the CEO has a background in banking is expected to result in financing quality becoming more important in the future.

ON THE WAY TO BECOMING GLOBAL
2010 was really a year of transformation for Yıldız Holding. The group caught the eye through being one of the most active in terms of the foreign partnerships it announced in every category in which it is active and in its organizational changes. Zeki Ziya Sözen, the head of the Yıldız Holding Investments and Business Development Group, says that they restructured the marketing and financing companies in the holding in order to enable them to meet the changing needs of the group, and he adds: "Yıldız Holding is aiming to be a global Turkish company and we can say that it restructured its organization with this goal in mind. We established the Continental Confectionary Company, a 50-50 joint venture with Gumlink of Denmark in chewing gum and confectionary. In tea, our product development efforts gathered momentum after the partnership we formed with LSH of Germany. Last we year we signed two more agreements, with McCormick in spices and with Eckes Granini in fruit juices.~

THE FAMILY HAS WITHDRAWN FROM MANAGEMENT
The withdrawal in mid-2010 of the famıly from the management of Doğan Holding in favour of professionals was an important development. Doğan Holding Strategic Group President Yahya Uzdiyen says that, as part of a restructuring of the management, Doğan Holding and Doğan Yayın Holding were simplified and the two holdings both began to be managed by the same professional team. "Again within the same framework, the family members transferred the management activities to professionals and only serve in companies at the level of the board of directors, where, together with high-ranking executives, they focus on issues such as the group's strategic development and future design," he says. The group began to see the positive results of this process during 2010. In its nine month financial results, its operating profit increased by 36 percent compared with the same period the previous year. Uzdiyen says: "In the previous period, our group took some steps towards becoming a regional power and realised major investments abroad. We are thinking of creating other opportunities using the right business models in developed and developing markets."

IT IS IMPORTANT TO GENERATE CASH
There are also those who are restructuring their different strategies through systematic internalization. Borusan is one of these groups. The group's new strategic plan for the period 2011-2015 was approved by the board of directors in the final days of 2010. They have currently moved to the implementation phase for these decisions. Borusan Holding CEO Agah Uğur says that they focused on different issues on their strategic agenda. "In the past, we were more focused on growth but now we shall concentrate more on profitability and cash generation," he says. Uğur says that they also plan to acquire significant financial revenues through their new strategies. He adds: "We are targeting growth of 20 percent in 2011 and turnover in excess of $4 billion. This year we are foresee spending half of our planned $400 million in investment on energy."