Market
research
Turkey:



Market
research
Turkey:



Assessing
market
attractiveness
for
Mueller


Y.
van
der
Ploeg
 


Market Research Turkey:

Assessing market attractiveness for Mueller

Assen, July 2010

Thesis
for
the
Master
program
of
International
Business
and
Management
(IB&M)

 Faculty
of
Economics
and
Business


Rijksuniversiteit
Groningen
 



Author



Y.
van
der
Ploeg
 S1830848
 


Supervisors



First
Supervisor:
Dr.
S.
Stakhovych

 Second
Supervisor:
Mr.
H.
A.
Ritsema


 Company
Supervisor:
S.
I.
Bijma

 



Executive
summary


(Not
available)


Acknowledgements


The
 past
 period
 has
 been
 a
 great
 experience
 to
 me.
 I
 had
 the
 opportunity
 to
 write
 my
 master
 thesis
 for
 a
 company,
 Mueller.
 Therefore,
 in
 writing
 the
 thesis,
 it
 was
 a
 great
 challenge
to
create
a
balance
between
the
academic
and
the
business
world.
Combining
the
 thesis
with
this
internship
has
broadened
my
knowledge
in
the
international
business.


I
 would
 like
 to
 thank
 my
 supervisors
 from
 the
 university
 of
 Groningen,
 Dr.
 Stanislav
 Stakhovych
and
Mr.
Henk
Ritsema
for
the
advices,
encouragements
and
helpful
visits.


I
 was
 very
 pleased
 that
 the
 management
 of
 Mueller
 allowed
 me
 to
 perform
 a
 market
 research
for
Turkey.
Moreover,
I
appreciate
that
they
allowed
me
to
work
at
their
office
in
 Assen
a
few
days
a
week
on
a
flexible
basis.
Therefore
I
would
like
to
thank
Mr.
Tjepkema
 and
Mr.
Bijma
for
giving
me
the
opportunity
and
helping
to
perform
a
research
at
Mueller
 and
to
have
a
critical
view
at
the
research.
My
special
thanks
go
to
the
sales
managers
Mr.


Mulder
 and
 Mr.
 Van
 Wijk
 and
 to
 the
 marketing
 manager
 P.
 Fopma
 for
 their
 help
 and
 participation
in
an
interview
and
trips
to
getting
to
know
the
company
better.
I
would
also
 like
to
thank
the
vice
president
of
IMIGroup,
N.
Gozen,
for
her
participation
in
an
interview,
 her
advice
and
help
for
examining
best
practices
for
entry
to
Turkey.
Furthermore,
I
would
 like
to
thank
all
the
colleagues
at
Mueller
for
their
inspiration
and
for
being
very
interested
 in
my
thesis
during
the
writing
process.


Table
of
Contents


Executive
summary...1


Acknowledgements...2


List
of
figures...5


Introduction ...8


1
 The
Company...8


1.1
 General
company
description ...8


1.2
 Customers ...9


1.3
 Company
structure
Mueller ...9


1.4
 Organizational
chart...9


1.5
 Internationalization
strategy ... 10


1.6
 International
activities... 10


2
 Research
Design... 11


2.1
 Problem
statement ... 11


2.2
 Main
research
question... 11


2.3
 Management
objective... 11


2.4
 Subquestions... 12


2.4.1
 Organization
Mueller ... 12


2.4.2
 The
Turkish
market... 13


2.4.3
 Entry
mode
strategies ... 13


2.5
 Demarcation
of
the
research ... 14


2.6
 Data
methods ... 14


2.6.1
 Desk
research... 14


2.6.2
 Field
research... 15


2.7
 Data
collection... 15


2.8
 Validity... 16


3
 Literature
review... 17


3.1
 Internationalization
approach... 17


3.2
 Internal
analysis ... 18


3.2.1
 Porter’s
value
chain... 19


3.2.2
 Resource‐Based
View
of
the
firm ... 19


3.3
 International
market
theory ... 20


3.4
 Entry
mode
strategies... 21


4
 Internal
analysis ... 22


4.1
 Porters’
Value
Chain ... 22


4.1.1
 Primary
activities ... 23


4.1.2
 Support
activities... 24


4.1.3
 Conclusion ... 24


4.2
 Resource
Based
view
of
the
firm ... 25


4.2.1
 Valuable ... 25


4.2.2
 Rare
resources... 26


4.2.3
 Imitable
resources ... 26


4.2.4
 Organization ... 26


4.2.5
 Conclusion ... 26


5
 The
Turkish
Market ... 27


5.1
 Development
of
Turkey... 27


5.2
 Turkey
and
the
European
Union ... 28


5.3
 EU
accession ... 28


5.4
 Turkish
dairy
sector... 29


5.5
 PESTEL
analysis ... 30


5.5.1
 Political
factors... 30


5.5.2
 Economic
factors ... 30


5.5.3
 Socio‐cultural
factors... 31


5.5.4
 Technological
factors... 31


5.5.5
 Environmental
factors... 32


5.5.6
 Legal
factors... 32


5.5.7
 Conclusion ... 32


5.6
 Ghemawat’s
Distance ... 33


5.6.1
 Conclusion ... 35


5.7
 Porter’s
five
forces ... 35


5.7.1
 Conclusion ... 37


5.8
 Strengths
and
challenges
Turkish
dairy
sector... 37


6
 Entry
strategies ... 39


6.1
 Types
of
entry
mode
strategies ... 39


6.2
 Entry
mode
strategies
to
Turkey... 39


6.3
 Best
practices... 40


6.4
 Conclusion... 42


7
 Conclusion
and
Recommendations ... 42


7.1
 Limitations
and
Recommendations
for
further
research... 42


References... 43


Appendix
A:
Agricultural
sector
Turkey... 49


Appendix
B:
CAGE­Distance
Framework
 ... 50


Appendix
C:
Main
Dairies
EU
and
Turkey... 51


Appendix
D:
Competition... 52


Appendix
E:
Export
Turkey
to
the
EU... 52
 


List
of
figures
 


Figure
1:
Organizational
chart
Mueller... 10
 


Figure
2:
Porter’s
Value
Chain... 22
 


Figure
3:
Porter’s
Five
Forces... 36


Introduction



Mueller
 is
 specialized
 in
 the
 design
 and
 manufacture
 of
 stainless
 steel
 tanks,
 processing
 systems
 and
 equipment
 for
 the
 food,
 dairy,
 beverage,
 chemical,
 biofuels,
 pharmaceutical,
 biotechnical,
 and
 pure
 water
 industries.
 The
 company
 is
 active
 in
 North
 America,
 South
 America,
 South
 Africa,
 Asia,
 Oceania,
 and
 Europe.
 The
 demand
 for
 cooling
 systems
 is
 not
 only
 related
 to
 the
 Dutch
 economy,
 but
 also
 much
 more
 abroad.
 Expanding
 abroad
 is
 therefore
 a
 great
 opportunity
 to
 grow
 and
 enlarge
 business
 further.
 Therefore,
 more
 countries
should
be
analyzed
to
enter
the
market.



(Not
available)
 


Looking
at
Europe,
many
countries
show
economic
developments
lately.
One
of
the
largest
 emerging
 markets
 considering
 Europe
 is
 Turkey.
 Since
 2002,
 the
 economy
 has
 steadily
 increased
and
this
trend
in
forecasted
to
hold
on
(Ismihan
and
Metin‐Ozcan,
2009).
However
 the
 economy
 in
 Turkey
 is
 forecasted
 to
 recover,
 the
 economy
 remains
 fragile
 to
 2010.


Turkey
 is
 also
 one
 of
 the
 most
 important
 dairy
 countries
 (Scheepstra,
 2010).
 At
 Mueller,
 there
is
already
an
assumption
that
Turkey
would
be
a
potential
market
for
doing
business.



As
 Turkey
 will
 be
 a
 new
 market
 outside
 Europe,
 Mueller
 has
 to
 know
 more
 about
 this
 country
and
its
cultural
aspects.



(Not
available)
 


Large
 players
 already
 try
 to
 enter
 the
 market
 and
 for
 a
 production
 company
 like
 Mueller,
 there
 might
 be
 opportunities
 to
 perform
 successful
 in
 the
 Turkish
 market.
 If
 these
 opportunities
exist
at
the
moment,
if
the
Turkish
market
is
really
a
potential
market
for
the
 company
and
how
this
market
can
be
best
entered
should
be
examined,
considering
entry
 mode
strategies
and
cultural
differences.


To
 examine
 whether
 Mueller
 could
 expand
 to
 the
 emerging
 market
 Turkey,
 the
 main
 research
question
for
this
study
is:
How
attractive
is
the
Turkish
market
for
the
production
 company
Mueller
and
what
would
be
the
best
way
to
enter
this
market?


In
the
field
of
international
marketing
and
the
resource
based
view
theory,
it
is
emphasized
 that
 before
 internationalizing
 its
 business
 operations,
 a
 company
 should
 first
 look
 at
 the
 internal
capabilities.
The
choice
of
internationalization
should
further
depend
on
the
internal


capabilities.
This
research
attempts
to
determine
the
attractiveness
of
Turkish
market
based
 on
Mueller’s
own
capabilities.



From
this,
analyzing
the
Turkish
market
and
its
dairy
sector
as
well
as
examining
the
best
 entry
mode
strategy
to
enter
this
market,
the
structure
of
this
thesis
is
as
follows.
The
thesis
 starts
with
a
description
of
the
organization
and
its
activities
in
chapter
one,
because
it
is
 wise
to
have
a
good
understanding
of
the
organization
first
in
order
to
read
the
rest
of
the
 paper.
In
chapter
two
the
methodology
used
in
this
research
is
outlined.
Important
issues
on
 the
problem
definition,
research
question
and
subquestions
will
be
discussed
in
this
chapter.


Chapter
 three
 discusses
 the
 most
 relevant
 literature
 for
 this
 research
 to
 provide
 a
 clear
 foundation
 for
 the
 evaluation
 of
 the
 results.
 Chapter
 four
 looks
 at
 Mueller’s
 internal
 capabilities
and
resources,
based
on
an
internal
analysis
using
the
theories
of
Porter’s
value
 chain
 and
 the
 resource
 based
 view
 of
 the
 firm.
 Thereafter
 the
 Turkish
 market
 will
 be
 examined
in
chapter
five.
In
this
part
some
attention
will
be
given
to
the
relation
between
 Turkey
and
the
EU,
the
developments
of
the
dairy
sector
in
particular
and
the
market.
To
 analyze
the
market
three
theories
are
used.
These
are
a
PESTEL
analysis,
Ghemawat’s
CAGE
 framework
and
Porter’s
five
forces.
In
chapter
six
the
best
choice
for
entry
mode
strategy
 will
 be
 analyzed
 as
 well
 as
 best
 practices
 on
 how
 to
 enter
 the
 Turkish
 market.
 The
 thesis
 ends
 with
 an
 answer
 to
 the
 research
 question
 and
 some
 recommendations
 for
 further
 research.


1 The
Company


In
this
first
chapter,
the
company
for
which
the
research
is
carried
out
will
be
introduced.


Therefore
first
an
overall
company
description
will
be
given.
Then,
the
company
structure
 will
be
explained.
It
is
important
to
highlight
this
aspect
of
the
company
at
this
point
in
time,
 because
 the
 company
 was
 recently
 taken
 over
 and
 this
 determines
 many
 of
 its
 actions
 today.
 Subsequently
 the
 activities
 of
 the
 company
 will
 be
 described.
 The
 chapter
 ends
 by
 indicting
the
general
internationalization
strategy
of
the
company.


1.1 General
company
description
 


In
general,
the
Paul
Mueller
Company
was
established
in
1940.
Its
headquarters
are
situated
 in
 Springfield,
 Missouri.
 The
 Paul
 Mueller
 Company
 is
 a
 global
 solutions
 provider
 and
 has
 been
active
in
the
international
market
for
over
45
years.
The
company
is
specialized
in
the
 design
 and
 manufacture
 of
 processing
 systems,
 stainless
 steel
 tanks
 and
 equipment
 for
 several
 industries,
 such
 as
 the
 food,
 dairy,
 beverage,
 chemical,
 biofuels,
 pharmaceutical,
 biotechnical
and
pure
water
industries.



The
Paul
Mueller
Company
bought
its
products
at
Meko
Holland
BV
for
many
years.
In
1970,
 Meko
 Holland
 BV
 was
 founded.
 The
 company
 provides
 milk
 cooling
 tanks,
 which
 are
 sold
 worldwide.
Business
takes
place
from
The
Netherlands.
The
production
plant
for
the
tanks,
 as
well
as
the
marketing
and
sales
office
are
both
positioned
in
The
Netherlands.
After
great
 development,
The
Mueller
Company
decided
together
with
Meko
Holland
BV
to
take
over
 this
company
in
2007.
From
that
point
in
time,
Mueller
BV
was
established.
Mueller
BV
is
a
 subsidiary
of
the
Paul
Mueller
Company
and
is
situated
in
the
Netherlands.
Mueller
BV
still
 designs
 and
 manufactures
 stainless
 steel
 tanks,
 processing
 systems
 and
 other
 equipment.


Currently,
the
products
are
being
used
in
over
100
countries
worldwide
in
a
wide
variety
of
 applications.



As
a
guideline
for
the
organization,
the
company
has
formulated
the
following
quality
policy:


‘Paul
 Mueller
 Company
 is
 committed
 to
 providing
 solutions
 for
 our
 customers
 by
 continuously
 improving
 our
 processes
 to
 produce
 valued
 products
 and
 services,
 when
 promised
and
as
promised.’
(www.muel.com)


1.2 Customers
 


The
customers
of
the
company
vary
considering
the
industry.
The
customers
that
buy
the
 product
 can
 vary
 mostly
 between
 cultivators
 or
 companies
 and
 multinationals
 that
 need
 cooling
 tanks
 to
 store
 milk.
 Also
 companies
 dealing
 with
 cruise
 ships
 are
 customers
 of
 Mueller.
For
this
research
the
focus
will
be
on
the
agricultural
sector,
as
this
is
one
of
the
 most
 important
 industries
 for
 the
 company,
 where
 they
 already
 have
 many
 years
 of
 experience
in.


1.3 Company
structure
Mueller
 


The
areas
the
company
is
already
active
in
are
North
America,
South
America,
South
Africa,
 Asia,
 Oceania,
 and
 Europe.
 The
 products
 are
 produced
 in
 The
 Netherlands
 and
 are
 then
 distributed
 among
 the
 countries.
 The
 marketing
 department
 of
 Mueller’s
 marketing
 and
 sales
division
develops
promotion
materials
for
all
export
countries
in
order
to
make
sure
 that
Mueller’s
corporation
style
is
distributed
in
an
equal
way
among
the
countries.
In
this
 thesis,
 the
 marketing
 and
 sales
 division
 of
 the
 company
 will
 extensively
 be
 analyzed.
 The
 subsidiary
 can
 be
 split
 up
 in
 four
 parts,
 as
 is
 visualized
 in
 figure
 1.
 Meko
 Holland
 BV
 is
 responsible
for
the
marketing
and
sales
activities.
This
company
division
is
therefore
most
 important
 for
 this
 research.
 Meko
 Services
 BV
 is
 an
 organization
 that
 provides
 services
 considering
the
products.
Meko
milk
tanks
BV
is
a
rental
division
and
Meko
Asia
is
a
trading
 company
(Mueller
Business
sales
plan,
2010).



1.4 Organizational
chart
 


In
 this
 part
 the
 overall
 chart
 of
 the
 Muller
 Company
 is
 visualized.
 As
 explained
 earlier,
 Mueller
 operates
 under
 the
 influence
 of
 the
 Paul
 Mueller
 Company.
 This
 influence
 is
 reflected
in
the
organizational
chart.



1.5 Internationalization
strategy

 


(Not
available)
 


1.6 International
activities
 


(Not
available)
 


PMC


Mueller
BV


Paltrok
Beheer
BV


Mueller
Sales
BV


Mueller


Lichtenvoorde
BV
 MCS
UK
 Meko



Holland
BV
 Meko



Services
BV
 Meko



Milktanks
BV
 Meko



Asia
Ltd


DEG
Germany


Figure
1:
Organizational
chart
Mueller


2 Research
Design
 


In
this
second
chapter,
the
management
problem
will
be
described.
The
research
question
 and
 objective
 will
 be
 explained
 as
 well
 as
 the
 subquestions.
 The
 data
 analysis
 will
 be
 explained
 and
 attention
 will
 be
 paid
 to
 the
 limitations
 that
 might
 emerge
 during
 the
 research.


2.1 Problem
statement


At
 the
 moment
 the
 focus
 of
 Mueller
 is
 now
 more
 on
 emerging
 markets
 as
 the
 company



captures
 already
 several
 regions
 and
 countries
 in
 the
 world.
 Despite
 the
 financial
 crisis,
 many
countries
have
shown
economic
developments
lately.
At
Mueller,
there
is
already
an
 assumption
that
Turkey
would
be
a
potential
market
for
doing
business.
At
the
moment
this
 market
 is
 still
 a
 blind
 spot
 for
 the
 management
 of
 the
 company
 and
 therefore,
 the
 management
of
the
company
would
like
to
gain
more
knowledge
about
the
opportunities
 for
the
company
in
Turkey.


2.2 Main
research
question
 


The
 main
 purpose
 of
 this
 research
 is
 whether
 Turkey
 would
 be
 a
 potential
 market
 for
 a
 production
 company,
 like
 Mueller,
 and
 how
 this
 market
 can
 be
 best
 entered
 considering
 entry
strategies
and
cultural
differences.
Moreover,
it
is
important
here
to
analyze
how
the
 company
and
its
management
should
adapt
to
enter
the
market
successfully.


The
 research
 question
 of
 this
 thesis
 will
 be
 the
 following.
 How
 attractive
 is
 the
 Turkish
 market
for
the
production
company
Mueller
and
what
would
be
the
best
way
to
enter
this
 market?


2.3 Management
objective
 


The
objective
of
this
research
is
to
provide
Mueller
with
sufficient
knowledge
about
whether
 there
 will
 be
 a
 market
 for
 the
 company
 and
 its
 products
 in
 Turkey
 and
 how
 this
 market
 should
be
best
entered.
To
gain
knowledge
on
this
issue,
it
should
be
analyzed
first
if
Turkey,
 as
a
market,
could
be
really
beneficial
for
the
company.
Furthermore,
it
should
be
analyzed
 how
this
market
should
be
entered
in
the
first
place.
Moreover,
recommendations
will
be
 given
on
how
the
company
should
adapt
to
perform
successfully
in
that
market.
This
should


be
 done
 in
 a
 way
 that
 the
 management
 of
 Mueller
 will
 be
 able
 to
 make
 a
 well‐founded
 decision
about
their
focus
in
this
country.


2.4 Subquestions

 


Because
 several
 aspects
 play
 a
 particular
 role
 in
 this
 research,
 the
 subquestions
 will
 be
 divided
over
three
chapters
in
order
to
come
to
a
structured
investigation.
The
chapters
are
 about
 the
 company
 Mueller,
 the
 country
 market
 assessment
 and
 a
 section
 about
 entry
 mode
strategies.



2.4.1 Organization
Mueller



The
 subquestions
 that
 will
 be
 answered
 in
 chapter
 four
 about
 the
 internal
 analysis
 of
 Mueller
are:


‐ What
are
the
strengths,
weaknesses,
opportunities
and
threats
of
Mueller,
looking
 at
the
organization?


To
 get
 to
 know
 the
 company
 and
 to
 get
 more
 information
 on
 the
 organization
 and
 its
 members
 it
 is
 necessary
 to
 find
 out
 where
 the
 organization
 has
 its
 strengths
 and
 weaknesses,
looking
at
for
example
the
general
internationalization
strategies.
In
that
way
a
 good
indication
of
the
organization
and
its
management
can
be
outlined.


‐ What
are
the
goals
of
Mueller?


What
does
the
organization
want
to
achieve
from
now
until
the
next
two,
five
or
then
years
 is
important
to
gain
information
on.
What
goals
do
they
have
to
expand
further
and
what
 are
the
exact
objectives
to
grow
more
internationally
at
the
moment.


‐ Why
do
they
want
to
enter
the
Turkish
market?


This
 subquestion
 is
 very
 important,
 as
 it
 should
 be
 clear
 what
 the
 main
 reasons
 are
 to
 expand
 to
 a
 new
 market.
 Also,
 why
 the
 management
 thinks
 it
 would
 be
 relevant
 for
 the
 company
in
this
case
to
expand
to
Turkey,
is
important
to
know.


‐ How
does
Mueller
normally
expand
internationally?


It
 might
 be
 wise
 to
 look
 at
 the
 international
 expansion
 strategies
 of
 the
 company
 first,
 before
 analyzing
 how
 to
 expand
 to
 the
 new
 market,
 Turkey.
 Finding
 the
 strengths
 of
 the
 company
 on
 this
 aspect
 could
 in
 the
 end
 be
 beneficial
 to
 find
 out
 which
 entry
 strategies
 would
be
best
for
Mueller
to
enter
the
Turkish
market.


2.4.2 The
Turkish
market


The
subquestions
that
will
be
answered
in
this
chapter
five
are:


‐ What
does
the
Turkish
market
look
like
for
Mueller?


Since
the
market
is
new
for
the
company
it
should
be
made
clear
how
the
market
looks
like
 for
a
production
company
like
Mueller.


‐ Is
the
Turkish
market
potential
for
the
company?


A
 market
 analysis
 should
 be
 done
 to
 find
 out
 whether
 Turkey
 is
 a
 potential
 market
 for
 Mueller.


‐ Which
competitors
are
there?


Competitors
 are
 an
 important
 aspect
 to
 look
 at.
 It
 should
 be
 analyzed
 if
 there
 are
 already
similar
companies
that
are
operating
in
Turkey
or
whether
there
are
threats
for
 the
organization
in
Turkey.


2.4.3 Entry
mode
strategies


Finally
the
following
subquestions
that
will
be
answered
in
chapter
six
are:


‐ Which
entry
strategies
are
there?


With
the
knowledge
of
the
previous
parts,
on
the
organization
Mueller
itself,
the
strengths,
 weaknesses,
 opportunities
 and
 threats
 and
 the
 market
 analyses,
 a
 suitable
 entry
 strategy
 can
 be
 defined
 for
 Mueller
 to
 enter
 the
 Turkish
 market
 successfully.
 Therefore
 some
 knowledge
of
several
entry
strategies
should
be
obtained
and
analyzed
first.


‐ Are
there
best
practices
of
other
companies
that
entered
the
Turkish
market?


To
 find
 out
 how
 other
 companies
 entered
 the
 Turkish
 market,
 some
 information
 can
 be
 gathered
from
these
companies
on
this
issue.
Also,
companies
from
Turkey
itself
could
be
 analyzed
to
find
out
what
their
opinion
on
entering
their
market
is.


‐ What
experiences
with
entry
strategies
does
the
organization
have?


It
 is
 worth
 noting
 what
 experiences
 the
 company
 itself
 already
 has
 when
 expanding
 internationally.
This
information
will
be
taken
into
account
when
giving
recommendations
 on
the
best
entry
mode
strategies
for
the
company.


‐ What
are
common
entry
strategies
for
Mueller
when
entering
the
Turkish
market?


In
the
end
the
question
should
be
answered
on
which
entry
strategy
would
be
most
suitable
 for
Mueller
to
enter
the
Turkish
market.


2.5 Demarcation
of
the
research
 


This
research
is
cross‐sectional
research,
because
data
is
collected
by
a
single
respondent
in
 a
single
period
of
time
due
to
limited
time
to
conduct
the
research.
In
longitudinal
research
 conclusions
 are
 based
 on
 information
 gathered
 from
 multiple
 periods
 of
 time
 (Malter,
 Ganesan
and
Moorman,
2008).
Because
the
Turkish
market
remains
fragile
through
to
2010,
 conclusions
about
the
opportunities
and
threats
could
be
altered
after
a
short
period
time
 (Lopez,
2009).


2.6 Data
methods
 


How
to
conduct
this
research
will
depend
on
the
methodology
used
as
this
is
an
important
 way
of
how
to
structure
actions
on
research
(Blumberg,
2008).
The
problem
field
in
which
 this
 research
 is
 conducted
 is
 the
 field
 of
 management
 research
 (Thomas,
 2004).
 As
 the
 research
will
be
done
for
a
company
and
its
management,
a
good
balance
should
be
made
 between
the
business
world
and
the
scientific
world
of
research.
To
do
this,
what
concepts,
 and
how
these
will
be
identified
should
be
described
and
why
certain
things
happen
will
be
 explained
(Whetten,
1989).
Therefore
there
are
three
aspects
that
are
important
to
analyze
 in
this
research
which
are
divided
into
three
chapters
about
the
company
Mueller,
a
country
 market
 assessment
 and
 a
 chapter
 about
 entry
 mode
 strategies.
 The
 way
 on
 how
 to
 investigate
this
research
is
mainly
by
desk
research
and
field
research.
This
is
done
by
data
 construction,
 by
 using
 documents
 and
 records
 in
 desk
 research
 and
 interviews
 for
 field
 research
(Thomas,
2004).


2.6.1 Desk
research


To
 investigate
 whether
 Turkey
 would
 be
 an
 opportunity
 for
 production
 companies
 like
 Mueller,
 first
 an
 internal
 analysis
 on
 the
 company
 Mueller
 will
 be
 done.
 What
 are
 the
 strengths
of
the
company
and
where
to
find
the
threats
when
expanding
abroad.
What
kind
 of
 company
 is
 Mueller
 and
 what
 goals
 are
 important
 to
 achieve
 when
 expanding
 internationally.
 The
 value
 chain
 of
 Porter
 will
 be
 used
 here
 as
 well
 as
 the
 resource‐based
 view
of
the
firm.
The
internal
context
according
to
Boddy
(2005)
will
be
taken
into
account.



To
analyze
whether
Turkey
would
be
a
potential
market
for
the
company,
a
country
analyses
 will
be
done.
To
analyze
this,
macro
and
micro
economic
aspects
will
be
taken
into
account
 (PESTEL).
 Therefore
 mainly
 the
 country’s
 characteristics
 will
 be
 analyzed
 and
 described
 as
 criteria
 to
 criticize
 the
 country.
 Criteria
 that
 will
 be
 used
 to
 analyze
 whether
 the
 Turkish


market
would
be
potential
for
Mueller
are
for
example:
the
political
system
and
legal
system
 of
 the
 countries,
 economic
 development,
 international
 relations
 and
 cultural
 differences.


Several
 theories
 will
 be
 used
 to
 analyze
 the
 characteristics
 of
 the
 countries
 as
 well
 as
 documents
or
reports
on
the
economic
development
of
the
countries.
Also
more
literature
 will
 be
 used
 here
 to
 evaluate
 global
 opportunities
 such
 as
 Ghemawat
 (2001)
 to
 diagnose
 strategic
capabilities.
When
looking
at
the
situation
in
Turkey,
Porter’s
five
forces
model
for
 industry
 analyses
 (threat
 of
 new
 entrants,
 bargaining
 power
 of
 suppliers,
 threat
 of
 substitutes,
 bargaining
 power
 of
 buyers
 and
 intensity
 of
 rivalry)
 will
 be
 used.
 Moreover,
 some
attention
will
be
paid
to
what
changes
will
emerge
when
Turkey
would
or
would
not
 join
the
EU,
when
looking
at
entry
strategies.


After
 these
 analyses,
 a
 study
 will
 be
 done
 on
 which
 entry
 strategy
 to
 chose
 to
 enter
 the
 Turkish
market
and
perform
successfully.
This
will
be
done
by
looking
at
theory
and
what
 has
been
written
about
this
issue
so
far.
Also
information
will
tried
to
be
gained
from
the
 Dutch
and
Turkish
Embassies
to
gain
more
knowledge
on
the
cultural
differences,
especially
 looking
at
entering
the
Turkish
market.


2.6.2 Field
research


Furthermore
 information
 will
 be
 obtained
 from
 desk
 research
 as
 well
 as
 by
 interviewing
 managers
at
companies
that
entered
the
Turkish
market.
With
this
method,
qualitative
data
 will
be
obtained.
The
interviews
will
be
semi‐structured,
as
it
is
important
to
compare
the
 results.
The
goal
of
face‐to‐face
interviewing
is
to
obtain
useful
information
on
how
other
 companies
 entered
 the
 market
 in
 the
 past
 (Blumberg,
 2008).
 The
 results
 of
 the
 survey
 or
 interviews
will
be
compared
to
what
is
written
by
the
literature
on
entry
modes.
Moreover,
 several
case
studies
could
be
done
to
gain
knowledge
about
how
other
companies
entered
 the
 Turkish
 market.
 This
 will
 be
 done
 by
 investigating
 how
 other
 production
 companies
 entered
the
market
and
who
are
already
operating
in
the
market.
What
entry
strategies
did
 similar
production
companies
use
to
enter
the
Turkish
market?
To
do
this
investigation,
first
 similar
 companies
 have
 to
 be
 chosen
 that
 are
 active
 in
 the
 market
 in
 Turkey.


Recommendations
will
be
based
on
the
results
derived
from
the
research
to
come
to
reliable
 conclusions.


2.7 Data
collection

 


The
 data
 that
 is
 used
 for
 this
 research
 consists
 of
 primary
 and
 secondary
 data.
 To
 obtain
 relevant
information
considering
the
desk
research
in
the
first
part,
company
information
is
 needed
 such
 as
 reports,
 or
 other
 useful
 documents.
 In
 the
 case
 of
 primary
 data,
 several


interviews
 with
 managers
 in
 different
 functions
 are
 done
 to
 get
 more
 knowledge
 of
 the
 organization
from
several
perspectives.
All
interviews
are
semi
structured.
The
data
that
is
 used
for
the
market
assessment
part
of
the
research
will
be
secondary,
quantitative
data.


The
data
is
selected
based
on
the
criteria,
that
it
should
be
reliable
and
as
recent
as
possible
 with
respect
to
the
emerging
market
Turkey,
as
this
information
can
possibly
change
over
 time.
Several
articles,
journals
and
books
will
be
used
as
well
as
websites
and
other
reports,
 to
 be
 able
 to
 base
 the
 results
 and
 conclusions.
 Because
 the
 Turkish
 dairy
 sector
 is
 very
 specific,
several
reports
are
collected
from
other
universities
who
did
research
in
that
area.


Furthermore,
 case
 studies
 from
 companies
 that
 expanded
 to
 Turkey
 are
 done
 and
 an
 interview
with
a
Turkish
company
to
get
knowledge
on
best
practices
to
enter
the
market
 from
another
perspective.


2.8 Validity
 


The
 concept
 validity
 is
 a
 desirable
 and
 essential
 property
 of
 research
 and
 functions
 as
 a
 boundary
 maker
 by
 dividing
 approved
 research
 from
 disapproved
 (Thomas,
 2006).
 There
 exist
two
key
dimensions
of
validity,
which
are
internal
and
external
validity.
Internal
validity
 refers
to
the
ability
of
a
researcher
to
argue
that
observed
correlations
are
casual.
It
is
about
 the
internal
coherence
obtained
in
the
study.
External
validity
can
be
defined
as
generalizing
 the
relationships
that
are
found
in
a
study
to
other
times
and
settings
(Roe
and
Just,
2009).


Because
this
research
continues
to
dominate
the
discussion
and
critique
of
empirical
work
 based
 on
 naturally
 occurring
 market
 and
 field
 data,
 the
 internal
 validity
 is
 sufficient.
 By
 examining
 theories
 as
 well
 as
 scientific
 articles
 in
 relation
 to
 the
 three
 sections,
 the
 company,
the
market
and
entry
mode
strategies
as
well
as
making
use
of
the
information
 gathered
from
semi‐structured
interviews,
an
extended
and
valid
analysis
can
be
provided.


In
that
way
a
comprehensive
and
coherent
market
analysis
can
be
provided
to
the
company,
 which
shows
a
balance
between
the
business
world
as
well
as
the
scientific
world.


3 Literature
review
 


In
order
to
provide
a
clear
foundation
for
the
evaluation
of
the
results
of
this
research,
the
 most
relevant
literature,
for
this
research,
that
is
used
in
the
international
marketing
field
to
 assess
 a
 new
 market
 will
 be
 discussed.
 This
 literature
 review
 can
 therefore
 be
 seen
 as
 a
 framework
 in
 which
 the
 following
 chapters
 should
 be
 interpreted.
 Several
 aspects
 will
 be
 discussed
that
are
related
to
the
area
regarding
issues
in
the
international
marketing
field.


Therefore
an
indication
will
be
given
first
on
the
essence
of
internationalization
in
today’s
 global
world.
The
need
and
benefit
of
an
internal
analysis
will
be
discussed
as
well
as
the
 reasons
for
performing
an
internal
analysis.
The
variables
and
characteristics
that
should
be
 taken
into
account
when
assessing
a
market
will
be
outlined
to
assess
a
country’s
market
 attractiveness.
Last
an
indication
of
the
most
relevant
entry
mode
strategies
that
would
be
 needed
when
expanding
to
new
markets
will
be
discussed.



3.1 Internationalization
approach
 


In
 the
 face
 of
 globalization,
 as
 well
 as
 an
 increasingly
 interconnected
 world,
 many
 firms
 attempt
 to
 expand
 their
 business
 abroad.
 The
 main
 reasons
 for
 this
 are
 because
 international
expansion
provides
new
and
potentially
more
profitable
markets.
Moreover,
it
 can
 be
 helpful
 to
 sustain
 competitiveness
 and
 it
 might
 facilitate
 access
 to
 manufacturing
 innovations,
 new
 product
 ideas
 and
 the
 latest
 technology
 (Hollensen,
 2008).
 There
 are
 several
 theories
 that
 explain
 for
 a
 part,
 or
 parts,
 the
 firms’
 internationalization
 activities.


Some
theories
however
seem
to
be
more
relevant
for
Mueller
than
other
theories
based
on
 the
 information
 obtained
 at
 Mueller.
 Knight
 and
 Cavusgil
 (2000)
 state
 that
 internationalization
of
the
firm
is
to
expand
into
foreign
markets
and
exhibit
international
 business
powers
and
superior
performance,
from
or
near
their
founding. Approaches
used
in
 explaining
internationalization
of
firms
are
often
classified
into
three
groups,
which
are
the
 process
of
stages‐models
of
internationalization,
the
network
approach,
the
foreign
direct
 investment
 approach
 and
 internalization/transaction
 cost
 theories.
 Analyses
 on
 internationalization
 of
 firms
 have
 used
 different
 explaining
 factors
 such
 as
 a
 demographic
 approach,
 or
 a
 resource
 based
 view,
 when
 looking
 closer
 at
 the
 firm’s
 resources.
 This
 is
 necessary
to
understand
the
company’s
strengths
and
objectives.
(Tuppura
et
al.).



Internationalization
can
be
very
successful
when
the
company
prepares
in
advance.
Planning
 is
 very
 important
 to
 the
 success
 of
 international
 new
 ventures.
 To
 achieve
 objectives
 on


expanding
abroad,
planning
is
essential
as
this
raises
new
workflow
and
logistical
challenges
 (Boddy,
2005).
The
form
of
the
firm’s
response
to
global
market
opportunities
depends
on
 the
assumptions
and
beliefs
that
managers
have
about
the
nature
of
doing
business
around
 the
world.
The
view
of
the
business
activities
of
the
firm
can
be
described
by
means
of
four
 orientations.
These
lead
to
the
EPRG
framework,
existing
of
the
Ethnocentric,
Polycentric,
 Regiocentric
 and
 Geocentric
 orientation
 (EPRG)
 (Perlmutter,
 2001).
 The
 ethnocentric
 orientation
views
the
home
country
as
superior
and
its
needs
are
most
relevant.
Therefore
 controls
 are
 highly
 centralized
 in
 the
 organization
 and
 technology,
 which
 leads
 to
 implementation
 that
 will
 be
 the
 same
 as
 in
 the
 home
 country.
 A
 Polycentric,
 or
 multidomestic
approach,
views
each
country
as
unique
and
therefore
targets
each
country
 in
 a
 different
 way
 and
 control
 is
 decentralized.
 Conditions
 on
 production,
 marketing
 and
 sales
should
be
adapted.
The
regiocentric
approach
divides
the
world
in
regions
because
the
 firm
should
try
to
integrate
and
coordinate
its
marketing
program
in
regions.
The
geocentric
 approach
 views
 the
 world
 as
 getting
 smaller
 and
 therefore
 the
 firm
 should
 offer
 global
 product
concepts
(Perlmutter,
2001).
Mueller
has
its
total
production
and
technology
based
 in
The
Netherlands.
Therefore
Mueller
rather
leans
to
the
ethnocentric
approach.
However,
 management
views
all
countries
as
unique
and
therefore
the
multidomestic
orientation
is
 also
valuable
at
Mueller.

3.2 Internal
analysis

 


Many
different
authors
stress
the
importance
of
looking
at
the
internal
capabilities
of
the
 company
in
order
to
increase
performance
success.
Strategic
success
depends
on
two
parts.


On
 the
 one
 hand
 there
 is
 the
 external
 environment,
 which
 can
 be
 uncertain,
 globalizing,
 complex
 and
 competitive.
 Looking
 at
 the
 external
 environment
 where
 the
 company
 operates
 in,
 success
 depends
 on
 the
 opportunities
 and
 threats
 the
 external
 environment
 has.
 (Johnson
 and
 Scholes,
 2002)
 However,
 strategic
 management
 is
 said
 to
 make
 a
 significant
 difference
 in
 the
 external
 environment,
 but
 this
 is
 more
 difficult
 (Miller,
 2003).


Besides
 the
 understanding
 of
 this
 environment,
 it
 also
 requires
 the
 more
 subtle
 management
 of
 unique
 competences
 of
 the
 firms.
 Therefore,
 on
 the
 other
 hand,
 success
 depends
 to
 a
 great
 extent
 on
 the
 company
 itself
 and
 so
 the
 internal
 capabilities
 of
 the
 company.
 Finding
 a
 match,
 between
 the
 internal
 strengths
 of
 the
 company
 and
 the
 opportunities
and
threats
that
the
external
environment
offers,
will
increase
the
company’s
 success
(Johnson
and
Scholes,
2002).


Looking
 at
 the
 long‐term
 perspective,
 managers
 are
 mostly
 concerned
 with
 the
 way
 their
 companies
are
doing.
To
be
able
to
answer
this
question,
several
tools
are
available,
such
as
 the
 Value
 Chain
 of
 Porter
 (Porter,
 1985)
 and
 the
 resource
 based
 view
 of
 the
 firm
 (Wernerfelt,
 1984).
 Most
 processes
 that
 aim
 to
 formulate
 a
 strategy
 start
 with
 an
 assessment
of
the
company
itself,
both
from
the
internal
and
from
the
external
perspective.


Strengths
 and
 weaknesses
 of
 the
 company
 are
 most
 important
 looking
 at
 an
 internal
 analysis
 (Quezada
 et
 al.
 2002).
 An
 internal
 analysis
 is
 seen
 as
 at
 least
 as
 important
 as
 an
 external
 analysis
 and
 is
 capable
 of
 providing
 a
 more
 stable
 basis
 to
 future
 strategy
 (Macmillan
 and
 Tampoe,
 2001).
 To
 obtain
 an
 internal
 analysis,
 several
 theories
 can
 be
 effective
 to
 use.
 The
 value
 chain
 will
 be
 analyzed
 to
 describe
 the
 activities
 within
 the
 organization,
which
will
also
refer
to
the
firm’s
strength
and
weaknesses.
Moreover,
for
this
 research
the
resource‐based
view
of
the
firm
is
seen
as
essential
to
understand
the
firms’


main
resources
considering
the
strengths
and
weaknesses.



3.2.1 Porter’s
value
chain


The
value
chain
describes
the
activities
around
and
within
an
organization.
The
underlying
 principle
of
the
value
chain
of
Porter
is
that
all
strategic
business
activities
of
the
business
 unit
 can
 be
 classified
 into
 several
 categories,
 which
 are
 then
 divided
 into
 primary
 and
 support
 activities
 to
 make
 a
 clear
 distinction
 between
 the
 activities
 within
 the
 company
 (Hollensen,
2008).
According
to
Porter
(1985)
the
value
chain
defines
two
types
of
different
 interrelationships
that
may
create
synergy.
These
are
the
ability
of
the
company
to
transfer
 expertise
 or
 skills
 between
 similar
 value
 chains
 and
 the
 ability
 of
 sharing
 activities.


Moreover,
 value
 and
 competitive
 advantage
 can
 be
 enhanced
 through
 a
 low‐cost,
 high
 differentiation
or
a
hybrid
strategy.
Supply
chain
activities
are
therefore
important
sources
 of
value
adders
of
strategy
(Patterson,
1995).


3.2.2 Resource‐Based
View
of
the
firm


Next
 to
 internationalization
 capabilities,
 available
 resources
 also
 determine
 the
 strengths
 and
 weaknesses
 of
 the
 company.
 In
 this
 case
 resources
 play
 an
 important
 role
 when
 internationalizing.
In
the
field
of
strategic
management,
researchers
have
long
understood
 that
 competitive
 advantage
 depends
 on
 the
 match
 between
 external
 environmental
 circumstances
that
can
change
over
time
and
internal
organizational
capabilities,
which
are
 distinctive.
 The
 resource‐based
 view
 of
 the
 firm
 represents
 the
 relationships
 among
 firm
 resources,
capabilities
and
competitive
advantage
(Barney,
1991).
Over
the
last
years,
more
 emphasize
 has
 been
 on
 the
 significance
 of
 resources,
 capabilities
 and
 competences
 as
 a
 basis
for
making
strategy.
This
resource‐based
view
of
strategy
is
important
because
of
two


reasons.
First
of
all,
the
external
world
is
unpredictable
and
therefore
there
are
limitations
 to
the
value
of
studying
its
present
in
detail.
Secondly,
the
business
might
have
success
due
 to
 certain
 qualities
 from
 within
 the
 firm,
 and
 these
 can
 only
 be
 understood
 by
 looking
 inwards
(Macmillan
and
Tampoe,
2001).


3.3 International
market
theory
 


A
good
market
assessment
starts
by
looking
at
the
overall
strategy
as
well
as
the
business
 environment
the
company
operates
in.
It
builds
on
the
strengths
and
weaknesses
to
work
 out
what
the
exact
strategy
will
be.
Such
a
plan
sets
out
clear
objectives
and
how
these
will
 be
achieved
(Payne,
2005).

As
well
as
the
internal
environment,
forces
in
the
wider
world
 also
shape
management
policies
(Boddy,
2005).
It
is
important
to
generate
a
good
analysis
 of
the
general
environment
when
examining
whether
a
certain
market
would
be
potential
 for
 a
 foreign
 investor
 to
 invest
 in.
 Lasserre
 (2007)
 makes
 clear
 that
 a
 country
 will
 be
 attractive
for
a
company
when
investing
in
that
country,
the
return
will
be
at
least
equal
or
 higher
than
the
company’s
cost
of
capital.
At
this
point
of
research,
macroeconomic
factors
 have
to
be
taken
into
consideration
to
be
able
to
examine
whether
a
certain
market
would
 be
 attractive
 in
 a
 specific
 industry.
 Country
 risk
 analysis
 is
 in
 this
 case
 a
 very
 important
 aspect.
 The
 purpose
 of
 a
 country
 risk
 analysis
 is
 to
 assess
 the
 probability
 that
 adverse
 circumstances
 could
 affect
 business
 performance
 negatively.
 Country
 risks
 can
 be
 categorized
into
four
groups,
which
are
political
risks,
economic
risks,
competitive
risks
and
 operational
 risks
 (Lasserre,
 2007).
 Thomas
 (2002)
 states
 that
 the
 environment
 of
 international
 management
 concerns
 three
 specific
 environments.
 These
 consist
 of
 the
 economic,
legal,
political
and
cultural
environment.
Understanding
the
economic
strategies
 of
 a
 country
 is
 important
 when
 making
 managerial
 strategic
 decisions
 on
 a
 global
 basis.


From
the
variety
of
laws
and
regulations
that
exist
throughout
the
world,
some
complexity
 of
international
management
arises.
Political
systems
are
processes
and
structures
by
which
 a
nation
integrates
the
parts
of
society
into
a
unit
that
is
functioning.
There
exist
a
number
 of
 varieties
 of
 political
 systems.
 However,
 there
 are
 two
 extremes,
 which
 are
 the
 pure
 democracy
on
the
one
hand
and
totalitarianism
on
the
other
hand.
Moreover,
it
is
necessary
 to
get
an
insight
in
the
cultural
environment,
as
norms
values
and
customs
differ
across
the
 world
 (Thomas,
 2002)
 To
 examine
 the
 external
 environment
 that
 is
 relevant
 to
 an
 organization,
 a
 PESTEL
 analysis
 is
 essential.
 This
 is
 a
 technique
 to
 identify
 and
 list
 the
 political,
 economical,
 social,
 technical,
 environmental
 en
 legal
 factors.
 These
 factors
 are
 important
 because
 they
 all
 contribute
 to
 the
 external
 environment
 and
 whether
 this
 environment
is
potential
for
a
company
(Boddy,
2005).

Therefore,
in
this
research
a
PESTEL


analysis
is
necessary
to
be
done
to
examine
whether
the
Turkish
market
will
be
a
potential
 market
for
a
production
company
like
Mueller.
Moreover,
the
impact
of
distance
also
plays
a
 crucial
 role
 when
 investing
 in
 a
 foreign
 country.
 Distance
 in
 the
 sense
 of
 cultural,
 administrative
or
political
and
economical
dimensions
can
explain
whether
a
certain
market
 will
 be
 more
 or
 less
 attractive
 (Ghemawat,
 2001).
 Therefore,
 this
 aspect
 of
 country
 risk
 analysis
will
also
be
important
to
take
into
account.
The
five
forces
model
of
Porter
(1979)
 has
been
used
as
a
strategy
management
tool
for
many
years
and
helped
many
businesses
 to
understand
where
they
are
in
a
difficult
marketplace
and
helped
to
plot
strategy
to
gain
 greater
profitability
(Oliva,
2002).
Porter
(1979)
states
that
the
nature
of
competition
in
an
 industry
hinge
on
five
forces,
the
threat
of
new
entrants,
the
bargaining
power
of
customers
 and
 suppliers,
 the
 threat
 of
 substitute
 products
 or
 services
 and
 established
 rivals.
 To
 examine
 how
 these
 eventual
 competitors
 in
 the
 Turkish
 dairy
 sector
 work
 and
 how
 they
 could
affect
the
company,
Porter’s
five
forces
will
be
used.
Together
with
the
results
of
the
 internal
analysis,
these
are
all
important
aspects
to
take
into
account
when
analyzing
which
 entry
strategy
would
be
best
to
enter
the
Turkish
market.


3.4 Entry
mode
strategies
 


How
 to
 exactly
 enter
 a
 new
 market
 has
 to
 be
 determined
 by
 looking
 at
 the
 several
 entry
 mode
strategies
that
might
be
available
to
the
firm
to
invest
in
an
international
country.
The
 timing
of
entry,
the
magnitude
of
investment
and
the
area
of
competitive
emphasis
at
entry
 affect
the
long‐term
performance
in
the
marketplace
(Green,
Barclay
and
Ryans,
1995).
For
 each
different
market
entry
mode,
there
are
different
degrees
of
control,
risk
and
flexibility
 associated
(Kalliny
and
Lemaster,
2005).
Looking
at
the
assortment
of
entry
mode
strategies,
 three
 broad
 groupings
 emerge.
 The
 use
 of
 hierarchical
 modes,
 or
 investment
 modes,
 give
 the
 firm
 ownership
 and
 high
 control.
 However,
 committing
 heavy
 resources
 to
 foreign
 markets
 also
 lead
 to
 a
 higher
 potential
 risk.
 Simultaneously,
 heavy
 resource
 commitment
 creates
exit
barriers,
which
reduces
the
ability
to
change
the
entry
mode
strategy
quickly.


Intermediate
 modes,
 or
 contractual
 modes,
 give
 the
 firm
 shared
 control
 and
 risk,
 as
 ownership
here
is
split
up.
Export
modes
concern
the
last
category,
which
give
the
firm
low
 control,
low
risk
but
high
flexibility.
There
exist
several
factors
that
influence
the
choice
of
 entry
 mode.
 Four
 factors
 are
 believed
 to
 influence
 this
 decision.
 These
 factors
 include,
 internal
and
external
factors,
as
well
as
desired
mode
characteristics
and
transaction‐specific
 behavior
 (Hollensen,
 2008).
 
 It
 is
 important
 to
 examine
 these
 factors
 to
 make
 a
 reliable
 decision
on
the
entry
mode
choice
when
expanding
to
a
particular
country
such
as
Turkey.



4 Internal
analysis
 


To
be
able
to
decide
whether
the
Turkish
market
will
be
a
potential
market
Mueller
should
 focus
on
at
this
point
in
time,
a
comparison
should
be
made
between
the
capabilities
and
 resources
 a
 company
 needs
 to
 operate
 successful
 in
 a
 new
 market.
 Therefore
 an
 internal
 analysis
is
necessary
to
take
into
account
the
capabilities
of
the
company.
To
examine
the
 internal
capabilities
and
resources
of
the
company
Mueller,
two
theories
will
be
used.
In
this
 case
the
value
chain
within
the
organization
and
the
resource‐based
view
of
the
firm
will
be
 discussed.


4.1 Porters’
Value
Chain
 


If
an
organization
wants
to
achieve
competitive
advantage
by
delivering
value
to
customers,
 an
understanding
of
the
activities
which
create
value
and
which
activities
do
not,
is
essential
 (Patterson,
 1995).
 Porter
 (1985)
 classifies
 all
 strategic
 business
 units
 into
 nine
 categories,
 which
can
be
split
in
two
parts,
primary
activities
and
support
activities.
Primary
activities
 include:
inbound
logistics,
operations,
outbound
logistics,
marketing
and
sales
and
service.


Support
 activities
 are
 human
 resource
 management,
 firm
 infrastructure,
 technology
 development
 and
 procurement
 (Hollensen,
 2008).
 The
 activities
 of
 the
 value
 chain
 are
 visualized
 in
 figure
 2.
 In
 order
 to
 have
 a
 clear
 idea
 of
 the
 internal
 capabilities
 of
 the
 organization,
all
these
characteristics
should
be
analyzed.


Figure
2:
Porter’s
Value
Chain,
1985


Information
for
the
internal
analysis
on
Mueller
is
obtained
through
internal
interviews
with
 several
 export
 and
 marketing
 managers
 and
 meetings
 with
 managers
 at
 Mueller
 Services
 and
Mueller
Lichtenvoorde.


4.1.1 Primary
activities


The
 product
 of
 the
 company
 is
 a
 full
 range
 of
 tanks/vessels
 and
 process
 solutions.
 The
 company
offers
its
customers
in
the
dairy
sector
integrated
systems,
field
construction,
plant
 maintenance,
repair
and
complete
turnkey
project
execution.



Inbound
logistics


Activities
 in
 this
 area
 are
 dealing
 with
 receiving,
 storing
 and
 distributing
 inputs
 to
 the
 product
 or
 service.
 These
 include
 several
 aspects
 such
 as
 materials,
 transport
 and
 stock
 control
(Porter,
1985).



(Not
available)
 


Operations


Operations
transform
the
inputs
that
are
distributed
during
the
previous
activity,
into
the
 final
product
or
service.
Activities
are
machining,
assembling
and
testing
(Porter,
1985).



(Not
available)
 


Outbound
logistics


After
the
product
is
generated
and
when
value
is
added
the
product
will
be
collected,
stored
 and
distributed
to
the
customer.



(Not
available)
 


Marketing
and
Sales


Activities
include
administration,
advertising
and
selling
to
make
the
customer
aware
of
the
 products
and
service
(Porter,
1985).



(Not
available)
 


Services


These
activities
have
to
do
with
enhancing
value
of
a
product
of
service
such
as
installation,
 training
and
repair
(Patterson,
1995).



(Not
available)