Koç Holding Essay ⋆ Business Essay Examples ⋆ EssayEmpire

The owner of Koç Holding, Vehbi Koç (1901–96), started his first company in 1926 and later established Koç Holding in 1963 by gathering all his companies together. Employing around 94,000 people and with the largest dealership network in Turkey, Koç Holding currently has operations in automotive and consumer durables (core groups of the holding), financial services, energy, food, retailing, tourism, and information technology industries. Koç Holding was ranked 190th in 2007, 358th in 2006, and 389th in 2005 in the Fortune Global 500 list. Therefore, the company has increased its worldwide performance in recent years.

The current business groups within Koç Holding are as follows. The energy group is very effective and includes many companies. The group holds 51 percent of the public shares of Tupras, the eighth largest oil refinery in Europe; a 50 percent stake in Opet, operating in retail sales, commercial and industrial fuels, lube oil, and shipping; full ownership of Aygaz, the largest liquefied petroleum gas distributor in Turkey; and many other companies including Mogaz, Opet-Aygaz Bulgaria, Entek, Akpa, Demir Export, and Koç Statoil Gaz. The consumer durables group has 15 production facilities in four countries, 16 brands (including the famous Arcelik and Beko), and 39 companies outside Turkey. The group is the market leader with 58 percent share in household appliances, 41 percent share in television sets, and many others in the heating and cooling market. Koç automotive group achieved 45 percent of both total motor vehicle production in Turkey and automotive export in 2006; Ford Otosan (partnership with Ford Motor of the United States), the leading company in the Turkish automotive industry, and Tofas (partnership with Fiat of Italy) are the two key companies of the group.

The finance group is also the leading one in Turkey; it includes Koç Financial Services Group, an equal partner with UniCredit of Italy, Yapi Kredi Bank, the fourth-largest bank of Turkey, Yapi Kredi Leasing, Factoring, Insurance, Koç Allianz Sigorta (insurance company), and Koçfinans. The food and retailing segment includes Migros-Tansas (retail chains), Koçtaş (an equal partnership with B&Q, the largest home improvement retailer in Europe), and Tat (the market leader in tomato paste, ketchup, and tomato products).

History

In the second half of the 1920s, construction activities began in Turkey after years of wars (World War I, 1914–18, and the Turkish Independence War, 1919–22); Vehbi Koç expanded his business toward building supplies and hardware (a strategic and visionary move). Koç decided to institutionalize the company as he believed that one-person companies could not develop much further. In 1938 he established Koç Trade Incorporated by organizing his businesses under one roof. He traveled abroad a lot and saw industrialized countries, which helped enlarge his vision and business abilities and made him understand the importance of partner-ship with foreign companies such as General Electric, Ford, Fiat, Allianz, Siemens, Yamaha, LG Electronics, and UniCredit Group. These partnerships provided knowhow transfers through licensing.

In the 1950s, the corporation undertook its local manufacturing investments to replace imported goods and then produced the first of many locally produced goods in Turkey: light bulbs, cars, tractors, trucks, refrigerators, washing machines, and more. In the 1960s the corporation expanded its product range; such high growth and diversification of the corporation necessitated a new organizational structure. Thus, Koç Holding was established in 1963 and now serves as the decision-making authority that identifies, controls, and coordinates the firm’s activities. The holding began exports during the 1970s and its success continues. Vehbi Koç gave his position in 1984 to his son Rahmi M. Koç, who retired in 2003 and was succeeded by his son Mustafa V. Koç, the current chairman.

Koç Holding is a good example of a successful worldwide company that was established, prospered, and thrived through pioneering strategic investments and partnerships enabled by the vision, leadership, and entrepreneurial abilities of its founder and his descendants. The 2006 acquisitions of Tupras, the biggest company in Turkey and the third-biggest oil refinery in the world, and Yapi Kredi Bank, the fourth-largest bank of Turkey, are two recent examples of these visionary strategic investments; the energy group may soon be another core business group of the holding in addition to the current core business groups of automotive and consumer durables.

Bibliography:

Dundar, Vehbi Koç (Dogan Yayincilik, 2006);
Koç Holding, www.koc.com.tr (cited March 2009);
Vehbi Koç (1901–96), www.vehbikoc.gen.tr (cited March 2009).

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