The University of Economics in Katowice/Poland

FOREIGN DIRECT INVESTMENTS

in Turkey FDI

The University of Economicsin Katowice/Poland

Part ThreeTHE STRATEGIC ANALYSIS

SWOTIntensive Programme Seminar of teachers and students

1st-13th May 2006 HONIM / Brussels

The University of Economicsin Katowice/Poland

Authors: Anna Brzęska Anna Gandor

Edyta Tyc Artur Barski

Sławomir Czech

Session led by: PhD Joanna Czech-Rogosz

What should Turkey do or change

in the field of FDI to take

advantage of joining of the

European Union?

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THE RESEARCH THE RESEARCH METHODOLOGYMETHODOLOGY

SWOTSWOT

THETHE PURPOSEPURPOSE

THE STRATEGIC ANALYSISTHE STRATEGIC ANALYSIS

INTERIORINTERIOR SURROUNDINGSSURROUNDINGS

Strengths Weaknesses Opportunities Threats

SWOT SWOT AnalysisAnalysis (1)

O1 O2 O3 O4 O5 O6 O... On T1 T2 T3 T4 T5 T6 T... TnS1S2S3S4S5S6S...SnW1W2W3W4W5W6W...Wn

If the strenghts assisst in

exploiting the opportunities

If the strenghts help facing the

threats

If the weaknesses do not allow to

exploit the opportunities

If the weaknesses intensify the

threats

0 1 2 3Very weak connection

Very strong connection

SWOT Analysis SWOT Analysis (2)(2)

O1 O2 O3 O4 O5 O6 O... T1 T2 T3 T4 T5 T6 T...

S1 1 0 0 0 1 3 0 5 0 0 1 3 0 2 0 6

S2 0 2 3 1 0 2 0 8 0 2 0 0 3 1 0 6

S3 3 1 3 0 0 1 2 10 1 0 0 0 2 0 3 6

S4 2 1 3 2 0 0 0 8 0 0 0 1 2 0 0 3

S5 1 1 1 2 0 0 0 5 3 2 2 0 0 0 0 7

S6 0 3 1 1 0 0 0 5 0 0 0 1 1 0 0 2

S... 0 0 2 3 1 1 0 7 1 2 0 3 1 1 1 9

7 8 13 9 2 7 2 48 5 6 3 8 9 4 4 39

W1 0 0 0 1 1 0 0 2 0 2 3 0 0 0 0 5

W2 1 2 3 0 0 0 0 6 0 0 0 1 0 0 0 1

W3 1 1 0 0 0 2 3 1 0 2 0 0 2 1 1 6

W4 1 0 0 0 0 1 0 2 0 0 0 1 2 0 1 4

W5 0 0 0 0 1 2 0 3 0 1 0 0 0 0 0 1

W6 0 0 1 2 0 0 0 3 0 0 0 0 0 0 1 1

W... 0 0 0 0 0 2 0 2 1 0 0 0 0 0 0 1

3 3 4 3 2 7 3 25 1 5 3 2 4 1 3 19

an examplean example

SWOT Analysis SWOT Analysis (3)(3)

O1 O2 O3 O4 O5 O6 O... On T1 T2 T3 T4 T5 T6 T... TnS1S2S3S4S5S6S...SnW1W2W3W4W5W6W...Wn

Aggressive strategy

Competitive strategy

Defensive strategy

Back out strategy

Strategy implementationStrategy implementation

What to do to What to do to gain the goals gain the goals and improve and improve

the situation?the situation?

TURKEYTURKEY

FDI – SWOT ANALYSISFDI – SWOT ANALYSIS

THE GOALSTHE GOALS

1.1. Is Turkey an attractive Is Turkey an attractive

country for the FDIcountry for the FDI

2. Does Turkey take advantage 2. Does Turkey take advantage

of the FDIof the FDI

????

StrenghtStrenghtss

(27)(27)

WeaknesseWeaknessess

(27)(27)

OpportunitiOpportunitieses(17)(17)

ThreatsThreats(20)(20)

The swot analysis The swot analysis resultsresults

O1 O2 O3 O4 O5 O6 O... On T1 T2 T3 T4 T5 T6 T... TnS1S2S3S4S5S6S...SnW1W2W3W4W5W6W...Wn

454 335

270 195

DOMINATION OF THEDOMINATION OF THE

AGGRESSIVEAGGRESSIVE STRATEGYSTRATEGY

Turkey should take Turkey should take immediate actions based on immediate actions based on main strenghtsmain strenghts......

1. High tourist attractiveness of the Turkey

2. Low employers’ total payroll costs

3. Special Zones for investors

4. High potential in the fields of maritime and railroad transportation

5. Continuation of the structural reforms process

6. Wide range of the financial institutions

7. Low costs of living

8. Low tax share in the GDP

The The strengstrengththss should be should be reinforcereinforced in order to take the d in order to take the advantage of the advantage of the main opportunitiesmain opportunities......

1. Companies relocation tendecy in the EU

2. Possibility of using the EU funds by Turkey

3. Advanced telecommunication technology development

4. Stability of the EU market

5. Investors’ demand for high quality labor

6. Strong relations of cooperation between Turkey and Asian countries

7. Structural changes in the economy

8. Increasing interest in Turkey as a tourist destination

O1 O2 O3 O4 O5 O6 O... On T1 T2 T3 T4 T5 T6 T... TnS1S2S3S4S5S6S...SnW1W2W3W4W5W6W...Wn

454 335

270 195

A HIGH POSITION OF THEA HIGH POSITION OF THE

COMPETITIVE STRATEGYCOMPETITIVE STRATEGY

Turkey should be aware of Turkey should be aware of the the main threatsmain threats which which hinderhinder exploitexploiting the ing the strenghts...strenghts...

1. Tough competition among the EU countries for attracting investments

2. Not joining the European Union

3. Negative stereotypes and opinions about Turkish people in the EU

4. Possible dominant position of an investor in the host country

CAUTION!CAUTION!DANGEROUS WEAKNESSESDANGEROUS WEAKNESSES

O1 O2 O3 O4 O5 O6 O... On T1 T2 T3 T4 T5 T6 T... TnS1S2S3S4S5S6S...SnW1W2W3W4W5W6W...Wn

454 335

270 195

1. Cultural and religious differences between Turkey and other UE countries

2. Breaking human rights in Turkey

3. Poor foreign investments promotion

The The suggestionssuggestions

1. Prepare a professional investment background for European investors that shall highlight the Turkish advantages

2. Provide FDI encouraging legislation

3. Set up a Foreign Investment Promotion Agency in order to encourage potential foreign investors

4. Promote free market and privatization

Economic Economic promotionpromotion

EducatiEducationon

1. Maintain the high-quality level of high education

2. Put an impact on IT and advanced technology teaching

3. Promote the knowledge about Turkey in the European Union by students („Turkey’s week”)

4. Strengthen the exchange of students

5. Introduce a new subject in Turkish

schools concerning European culture

1. Stimulate the domestic companies’ activity

2. Maintain low employers’ total payroll costs

3. Invest in technological and

social infrastructure

4. Promote Turkey as a

tourist destination country

Domestic Domestic economyeconomy

1. Maintain political and economic stability

2. Reduce bureaucracy, fight against corruption

3. Promote high-quality legislation4. Simplify the tax system5. Reduce social security

PoliticsPolitics

Turkish strategy motto

HEALTH, NOT WEALTH

Thank you for your attention!!

Have a nice day!