Turkey’s elite companies

If there is one thing that is more difficult for a company than growth, it is undoubtedly ensuring that growth is permanent... Capital’s new study seeks to identify the “elite” companies that have achieved this difficult target.

The study, which is based on the Capital500 lists for the last 10 years, reveals both the performance of the major companies in Turkey over the last ten years and the secret champions who have continued on this path in this long marathon without interruption and despite crises. Here are Turkey’s “continuous growth champions” and the strategies that brought them success.

THE CAPITAL500 is an important research project that has shone a light on the Turkish business community for the last17 years. The data acquired over the years in this long-running survey contains important information about both the economy and the transformation of the private sector.

It is possible to say that, after 17 years, the Capital500 data provides a depth of insight that goes well beyond mere rankings according to turnover or size. The “Turkey’s Elite Companies” study that we have conducted for the first time this year is the product of this accumulated data,

HOW WAS THE STUDY CONDUCTED?
The study covered all the companies that were included in the Capital500 over the last 10 years, that is from 2004-2014. It identified those companies that were included in the list each year during this period and which “had not undergone a contraction” in terms of turnover when compared with the previous year.

That is to say, even those which had changes of “0 per cent” were counted as recording “growth” on the grounds that they “had not contracted”. Only those companies whose turnover had contracted when compared with the previous year were eliminated. In this way, the members of the Capital500 which had grown continuously every year from 2004 to 2014 were identified. The results are very striking...~

The figures show that the number of companies that were able to achieve this stable success was very small. Although the number of Capital500 companies that achieved growth compared with the previous year was around 350-400 each year, only 23 succeeded in doing so every year. It is these 23 companies which are the leading actors in the “Turkey’s Elite Companies Survey”.

CONTINUOUS GROWTH IS DIFFICULT
So, despite the hundreds of companies that were included in the Capital500 over the ten year period, why is the number which recorded continuous growth so small? Experts say that it is not surprising that the number is small. It is possible to say that tens of companies dropped out of the race when the global economy contracted by 5 per cent and the Turkish economy by 4.8 per cent.

The experts’ comments support this. Tolga Yaveroğlu, the leader of Deloitte Türkiye Consulting Services, notes that the 2008 crisis breaking point is important. Egon Zehnder Managing Partner Murat Yeşildere stresses that it is difficult to maintain a high performance for a long time in the world as a whole, not just in Turkey.

He provides the following information: “It needs to be said that this is not just a Turkish issue. In his “Good to be Great” study of around 1,400 companies over a 40 year period, Jim Collins revealed that just 11 companies had been able to achieve the same stability.”

STABLE SECTORS
The results of the “Elite Companies” survey reveal some striking results on a sectoral basis. At 43 per cent, a large proportion of companies which were able to achieve sustained growth came from the food and drink sector. They were followed by the textile-clothing sector with 9 per cent. Ali Özgenç of Algoritma Danışmanlık says: “Each of the two sectors focuses on people’s basic needs.

This is the main reason why those that grow steadily come mostly from these sectors.” He adds: “On the other hand, I don’t think that it is easier to record growth in these two sectors. Because they are very competitive sectors. It is here that factors such as innovation, having a vision and good management come into play.”

Egon Zehnder Managing Partner Murat Yeşildere had the following to say: “One should say that in Turkey the domestic market and strength of local consumption are used well. Companies which take the right position on the domestic market, particularly in sectors like food and drink, are less affected by crises and fluctuations.”~

WHAT IS THE SECRET OF THE ELITE COMPANIES?
So, what is the secret of succeeding in growing despite a crisis? Acıbadem Health Group is one of the 23 companies. The group’s president Mehmet Ali Aydınlar says that a focused strategy lies behind their success. “Ever since we were founded we said that we would only be active in the health sector and we would focus on this.

This is what we have done. For this reason, the driving forces behind our sustainable development have been the principles that we have developed in line with this target.” Another secret is innovation. Algoritma Managing Partner Ali Özgenç says: “Companies need to be innovative in order to grow and not to deviate from this path. The data in

American SEC Compustat Archive show that innovative companies record net growth even when the economy is contracting.” It is true that these 23 companies succeeded in growing even during years when the Turkish economy as a whole contracted.

Quality is another element in the formula for success. Mavi Jeans CEO Cüneyt Yavuz said the following: “Mavi’s most important secret has been to ensure quality in its products. As a result of its sustainable and realistic strategy, over the last ten years in particular, Mavi has grown more than its targets.

It has continually updated its IT, logistical infrastructure and supply chain and carefully protected its quality and brand value. When its productivity-based sales policies and correct marketing are added to all of these, it has become possible both to grow its targets and to achieve these growing targets.”