The new generation is faster

A total of 72 companies on the Capital500 list for 2013 have turnover of over $1 billion. Last year, this figure was 69.

20.04.2014 21:12:220
Paylaş Tweet Paylaş
The new generation is faster
The figures show that the number of billion dollar companies is increasing every year. But there is also another striking item of data.

The length of time that it takes to become a billion dollar company has decreased. It now takes an average of 26.5 years to reach this landmark. But everything changes when the age factor is included.

For companies which are 5070 years old it takes an average of 50 years to reach one billion dollars, while the time falls to 7.6 years for companies which are less than 15 years old. In other words, younger companies take shorter to reach the landmark.

Click images to see the table.
Experts say that what has brought these “young and fast” companies to the fore is their agility, circumstantial factors, globalization and successful management.

When we look at the billion dollar companies in Turkey, we see that 72 of those in the Capital500 list have passed this milestone. But the time taken to reach it varies.

For example, Şişecam, which was established in 1935 and is one of the oldest companies in Turkey, took 65 years from its foundation to achieve a turnover of $1 billion. For Diler Demir Çelik it took 58 years to reach this landmark, while for Türk Traktör its was 57 years and for Tekfen İnşaat it took 51 years.~

The most striking figures are related to the companies which have a turnover of over $1 billion but are less than 20 years old, what can be described as the “new generation”. There are 20 companies which meet these criteria.

These companies account for 30.3 per cent of the 66 companies which have provided data and have achieved a turnover of $1 billion. It is striking that half of these companies reached $1 billion in turnover within their first ten years.

For companies which were founded in the 2000s, reaching the $1 billion landmark did not take as long as it did for their predecessors. For example, Teknosa, which was founded in 2000, took 12 years, while TAV Airports succeeded in reaching the $1 billion mark within 8 years. Mey İçki and Otokoç took just 6 years...

There are a variety of reasons why the younger generation of companies is faster than their predecessors. The factors that have reduced the time it takes to reach this milestone include changing ways of doing business, growth formulae, an increase in acquisitions and partnership options, and the interest of investment funds.

“For companies, the increase in, and competition between, investment funds has increased the possibilities of them for finding the necessary resources for growth,” says Prof. Dr. Ramazan Aktaş, and continues: “In addition, they have developed sales possibilities through methods such as the internet, social media and franchising.

Another key to rapid growth is the intelligence use of debt.” MCT Danışmanlık Managing Partner Tanyer Sönmezer says: “In fact, the secret of these fast companies lies in them achieving economies of scale, reaching a certain size and undergoing consolidations.”

Speed is not just the result of external conditions, There are some qualities that young companies naturally possess which accelerate growth and thus shorten the time it takes to reach the $1 billion landmark.~

According to Robert H. Hacker, the author of the book “Billion Dollar Company”, the main reason why young companies are faster is their attitude towards risk. “We can say that smallsized or young companies have a different risk profile to those with large and mature structures,” says Hacker and he explains the reasons as follows.

“New companies have limited resources and know that they need to take more risks in order to grow,” he says. “This attitude towards risk makes them more aggressive when it comes to new markets and new opportunities. Mature companies tend to have a more unwieldy structure. Large companies don’t like taking risks, adopt a less aggressive attitude and a tendency to preserve the status quo.”

There are similarities between the secrets of success of the companies which have grown rapidly in recent years. LC Waikiki is an example of the young generation of companies. The company was established in 1997 and took 13 years to pass the $1 billion mark. The company’s strategic planning director ibrahim Arit explains as follows:

“Scale is important in retailing. You are able to create the possibility of developing your competitiveness in many areas on the scale on which you are able to succeed in securing in healthy growth. Our target is to be an easily accessible retailer. Our customers are able to reach us easily. As a result, we are growing at an increasing rate.”

BiM CFO Haluk Dortluoglu says that their success is based on the “right business model” and adds: “As a result of this model, we are able to keep our operational costs at the lowest level. This is reflected to our customers in high quality and low prices. As a result, customer satisfaction is continually rising. Maintaining effective cost management plays an important role in our growth.”

Türkiye ve dünya ekonomisine yön veren gelişmeleri yorulmadan takip edebilmek için her yeni güne haber bültenimiz “Sabah Kahvesi” ile başlamak ister misiniz?


Yorum Yaz