Turkish Beer

Appendix

A Case Study of Location, Distribution, and Capacity Expansion

Decisions at Anadolu Efes

Editor's Note: The case in this appendix cannot be distributed to students. This case is

currently under review by INFORMS Cases and Teaching Materials Initiative for distribution.

Contact Tom Grossman(tagrossman@usfca.edu) to find out the status of this case for in-class

use.

1. Introduction

Anadolu Efes has dominated the Turkish beer market in the last two decades as a result of careful

planning and successful strategies in distribution, pricing and marketing. Consequently, Efes has become

synonymous with beer in Turkey andhas reached an impressive 78% market share in 2000 (Exhibit 1).

The company has also extended its business line by buying the right to bottle Coca-Cola inTurkey in 1998,

and has been transforming into a multinational identity by building up international brewing operations

mostly in Eastern Europe, Russia and Central Asia. The two main challenges faced by the company in the

new millennium are to succeed in its business diversification efforts and to maintain its market position in

its core Turkish brewing business.

Emre Yaman, who was hired as the Chief Executive Officer of Efes nearly one year ago, has a couple of

major issues in mind as he shapes the business plan of the company for the years to come. In terms of

domestic operations, an immediate issue is that the anticipated increase in beer demand will surpass Efes'

total production capacity in a couple of years. A capacity expansion plan has to be prepared carefully to

address this problem. Such a plan will also prove useful to deter any foreign entries to the attractive

Turkish beer market. In fact, increasing competition is the other major issue in Emre Yaman's agenda. He

has already seen the first signs of pressure when Efes' main competitor Turk Tuborg was acquired by the

Danish Carlsberg Breweries in September 2001 and subsequently launched the “Carlsberg”...