Tassimo’s Entry Into the Coffee Pod Market in Turkey
Business and Management
Submitted By morenon06
Like many Eurasian states, Turkey struggles to find a balance between new capitalistic markets consuming its larger cities and the agricultural sector of its economy that still accounts for 25.5 percent of employment. Its influence in the global market has been slim; however, technology and automobile markets are growing significantly and have helped raise real GDP by over five percent per year. Turkey’s main priority is to maintain the stability of growth in GDP and reduction in inflation (“Turkey”).
Since the 1980s, Turkey has struggled to reform its economic policy through the ups and downs of military coupes and competing government parties. Turgut Ozal, finance minister at the time, is responsible for Turkey’s economic reforms. Ozal focused on the reliance of market forces; he devalued the Turkish lira, reduced exchange rates, increased incentives for exports, increased the price of goods produced by public sector companies, and abolished price controls (Rivlin, 212). The policy was successful, driving down inflation and increasing GDP. By the mid-eighties, however, inflation rates skyrocketed due to outside spending that increased national debt, an increase in unemployment rates, and unstable trade agreements (213). Throughout the next decade, the rollercoaster of inflation and increased debt continued to plague Turkey’s economy. A 1989 reform allowed capital movements in and out of the country and high interest rates encouraged investment into the country, keeping the economy stable. By 1994, with a change in government and international disapproval of political policies, Turkey’s credit ratings dropped and the international funds, which had been supporting its growth, pulled out, causing an economic crisis (215).
GDP (purchasing power parity): $1.026 Trillion (2011 est.)
GDP - real growth rate: 4.6% (2011 est.)