XLEVER – INTERNATIONALIZATION PROCESS International Management Project Bucur Simona Andreea Dita Adina Muresan Andreea Neacsu Denisa Riscu Andreea… [626561]

XLEVER – INTERNATIONALIZATION PROCESS
International Management Project

Bucur Simona Andreea
Dita Adina
Muresan Andreea
Neacsu Denisa
Riscu Andreea
Unal Emin

I. Gene ral presentation of the company

Xlever is a Romanian consumer goods company headquartered in Bucharest, Romania with a
history of over 50 years in the cosmetics industry. Due to the popularity of our high -quality natural
products and th e high satisfaction ratings of our customers, Xlever is looking to expand and
internationalize, making our products available for a broader audience. It’s first subsidiary will be opened
in Turkey. The company is developing long term strategic objectives w ith the aim of exploring more
foreign markets, but focusing for now on the first.
Its distribution business model includes importing cosmetics from the Romanian production plant
to the Turkish subsidiary’s warehouse, which forwards them to ph armacies and specialised cosmetics
shops such as Sephora, Gratis, Watsons and La Deesee.
It produces cosmetic products, namely creams made from 100% natural ingredients, which contains a new
anti-aging formula with SPF factor designed for all skin types made from best quality grape seeds.

II. Planning

Mission and objectives

As one of the leading Romanian beauty establishment we have consistently met the desires,
needs and expectations of our customers (including professional users such a s cosmetic salons,
wellness and spa centres) with high -quality cosmetic products and services for more than 50 years.
We build and maintain partner relationships with our consumers as well as all other stakeholders
based on trust and reciprocity. Being awa re of our environmental responsibility, we take particular
care to preserve the natural world by continuously striving to improve the environmental aspects of
our business operations and with rational use of energy, raw materials and other natural resource s,
while implementing a plastic reverse logistics programme.
Providing access to natural care products to a broader market, enhancing the well -being of our
customers and protecting the environment are the main objectives of our company.

Premises

General overview of the market

 General economic and political conditions
The US Department of Commerce has identified Turkey as one of the ten most promising emerging
economies , and a recent World Bank study also declared Turkey one of the ten countries most like ly
to enter the top tier of the world economy. Today's Turkey, modern and open to the world, follows a
liberal policy in economy just as in its political structure. The 2023 vision is a list of goals released by
the administration of Prime Minister (now Pr esident) Recep Tayyip Erdoğan, to coincide with the
centenary of the Republic of Turkey in 2023. It includes objectives related to the economy, energy, foreign

policy, health care, transport and tourism. One of the main objectives is to become one of the top ten
world economies by 2023.

 Cosmetics market overview
The total cosmetics market size in Turkey is estimated to be $3.1 billion as of 2016, mass cosmetics
making up $2.4 billion and premium cosmetics market sales reaching $700 million.
According to E uromonitor International between 2010 and 2014 the market had a compound annual
growth rate of 15.5%. In 2014 this rate started to gradually decrease to 12%, however until 2020 the
research company estimates that this growth is going to range from 10-20%, looking quite
promising.

 Competition
Currently, there are 3,350 cosmetics companies in the industry according to the Turkish Ministry of
Health, of which 1,500 being local brands.
Regarding Turkey’s cosmetics demand, it is highly satisfied by internationa l brands such as
Unilever, Nivea Beiersdorf, Procter&Gamble, Johnson&Johnson, Colgate Palmolive and Avon,
although the local companies offer really competitive prices . Cost advantages of the imported
products and the consumer inclination towards foreign br ands especially in beauty and make -up
products keep the increasing trend of imports, where the annual average growth rate was 9,5% in
the last 3 years. The international brands within the industry represent 75% of the market
shares, however most of them ch oose Turkey as a production base, rather than solely importing
means. The main entry strategy is reflected by joint ventures and licensing agreements.
An interesting feature is the emergence of Asian brands such as Hayashi and Missha.
Among the local comp etitors we can name Evyap (Duru soap), Otaci, Kopaș, Hobi and Kosan
(Flormar), Erkul (Golden Rose).

 Trends
As far as trends are concerned, Turkish people prefer more and more natural ingredients (such as
argan oil, almond and honey contents).
Online sales have been boosted by the recent terror attacks and coup attempt as Turkish consumers
are staying at home for safety reasons. Currently the worth of the online industry is valued to be USD
13 billion.
Another trend that is on the rise is represented by inn ovation in terms of multi -functionality
benefits. Products that contain more moisturising, firming, anti -stress, exfoliating, anti -aging
and whitening are gaining momentum.

Values

Our business operation is guided by the following values:
★ Beauty
★ Environ mental friendly
★ Honesty and trust
★ Quality at its best
★ Customer -oriented
★ Know -how and innovation
★ Social responsibility
★ Tradition

Core values :
 Quality – each employee is committed to produce effective and safe products, along with
providing reliable informat ion and service to both internal and external clients
 Innovation – it is promoted within the company a “can do” attitude witch translate itself in
creatively turning problems into solutions. This kind of attitude is required in all departments
within the co mpany at all levels
 Continuous improvement – Each employee promotes and supports continuous efforts that
lead to improvements in our processes, products, services and workplace being
environmentally friendly.

Lines of action

Following our strategy to eme rge on the Turkish market, we took into account some lines of actions
as presented below:

 General offer
Our company’ desire is to penetrate the Turkish market with an anti -aging cream which will
be the best in terms of price -quality. Furthermore, besides the launch of this new product
made especially for the Turkish market we also take into account strategic initiatives for long –
term results in this market.

 Categories of clients
Because Xlever is a company addressing both combined retail (directly to an end user) and
wholesale (to the end user through a reseller) strategy our target customer must be broken into
two distinct groups, the end user and the reseller.

Our targeted end user is between the ages of 24 and 65. This consumer has an active lifestyle . They
are concerned about social and environmental issues. Mind and body wellness are important to them.
They belong to a health club; take yoga, pilates or tai chi lessons. The effects of aging and the
maintenance of a youthful appearance are a part of t heir life.
Our target customers (vs. end user) for wholesale distribution will be resellers who recognize the
needs of this consumer and who she identifies with. We have used the term resellers because they will
not be limited to retailers. We will reach t he consumer through four distinct reseller channels. Spas
and Health Clubs, Lifestyle Retailers, Cosmetic Specialty Retailers, and Boutique Department Stores.

We aim to work with two types of customers: pharmacies and specialised cosmetic stores. For e ach of
them we will have a dedicated sales plan and approach.

Value Added Factors

Having in mind the types of customers we are targeting, we developed a strategy based on our core
values and key factors that helped us having success in Romania.

Our ke y factors are:

 Differentiation (vs mass)
Xlever is planning to launch many other products. The successful execution of this strategy will
provide us with the ability to transcend into other categories in the future, as long as we define our
image and sta y true to the base precepts. We believe our ability to create new product opportunities
and growth will only be limited by our imagination and our ability to attract talented people who
understand the concept of branding.

 Innovation (save the environment mindset)
A cornerstone of our strategy is the creation of sustainable growth through a combination of new
product launches and replenish -able basics. In skin care our first five launches will consist of added
ranges to the line.
Moreover, we proposed a new life cycle of the product, being aware of its packaging. By doing so,
our mission is not just to launch the product on the market and to make it recognized, but also to take
care of it accord ing to environmental situation.
 Low prices strategy (best price -quality ratio)
Our skin care product pricing structure position Xlever as a quality brand. We will attempt to provide
the intermediary buyers with a margin opportunity above 50% for branded cream. Our price points

will compare with Unilever, P&G, Nivea, A von and local brands. We will be very well priced in
comparison with luxury anti -aging creams.

Our selling plan for the Turkish market will be mostly based on Pareto principle meaning
that we assumed that almost 80% of the total volume sales is given by 20% of the companies
(customers that we need to adress) which is why in our first 2 years we will prospect and address only
the big customers in the Turkish market from pharmacies and specialised cosmetic stores channels
and in the next 3 years we will continue with another strategies, for small and niche customers.
In our market assessment we analyzed the sales potential of the customers. We have ranked each
customers based on sales value, then applied Pareto principle which means that 135 cust omers (big
companies) sum 68% of the total value volume from the Turkish market, only in these two channels
that we are going to approach in the first 2 years. Afterwords, as stated above we will focus on the
next 3 years on the rest of 675 small customers with a different strategy.
From the total cosmetic market of 3.1$ billion these 2 channels that we are targeting represents 70%
of the total market (2,17$ billion).

*Detailed information on each of the factors are presented in the tables below .

SWOT analysis

Strengths Weaknesses

● Unique high quality products
● Great customer and partner trust and
reviews
● Long history and tradition
● Strong team of R&D and logistics
● Efficient production processes
● Dependence on retailers (pharmacies,
specialise d cosmetics retailers)
● Dependence on raw materials suppliers
● No international experience

Opportunities Threats

● Business diversification
● Product innovation for health
● Business enhancement for
environmental conservation
● Market development
● Strong Turk ish local and international
competitors
● Increasing popularity of retailers’
house brands
● Exchange rate volatility
● Huge costs for both entering and exiting
the market
● Competitive prices

SWOT Analysis
Internal factors

External factors Strengths Weaknesses

Opportunities Unique high -quality products
that will maximize the
opportunities for product
innovation and business
diversification A strong R&D department that
ensures the best quality raw
materials from the best s uppliers
– cost reducing and dependence
reducing strategy

Threats Minimizing the competition and
costs threats by making full use
of the unique products provided
by the company, its long
tradition, presence on the
market and efficiency; Outsourcing/Join t venture
strategy in order to minimize
the competition and huge costs
threats and to minimize the
dependence on the local raw
materials

*We focus on maximizing method

Strategic goal
Internationalisation by entering on Turkish market and achieve 35% of the market in 5 years through
product diversification by making full use of the our qualitative and unique products, efficient
production process, strategy that will maximize the opportunities that the Turkish market is offering.

Strategic planning
 company strategy: Strategy of business diversification: Penetration of Turkish natural
cosmetics market, aim ing at introducing a new product and achieving 35% percent of the
market.
 product strategy: Our anti -aging cream LIGHT16 is a moisturiser -based cosmeceutical
skin care product marketed with the promise of making the consumer look younger by
reducing, masking or preventing signs of skin aging . Unlike other collagen or wrinkle creams
on the market today that can take months to take effect, LIGHT16 has been shown to improve

your skin’s firmness and reduce wrinkle depth in as little as 16 days. As ingredients, is made
of natural red grape seed polyphenols (from local market). Its sensational antioxidant
properties help inhibit the aging process. Along with this ingredient we can find other marine
ingredients as: Padina Pavonica – a brown algae that is typically found i n the Mediterranean
Sea and the Atlantic. This algae is packed with added moisture to leave your skin feeling
refreshed while promoting firmness and elasticity and Chlorella – a green, single -celled algae
that is typically found in freshwater, Chlorella ac tually has an amino acid content similar to
collagen (imported from Guatemala). When combined with other anti -wrinkle ingredients,
this green algae helps to restore your body’s natural collagen stores for a more youthful glow.

According to Porter, Xlever follows a differentiation strategy , due to our product’s main features:
new formula anti -age cream with SPF factor designed for all skin types made from best quality grape
seeds and other natural ingredients.

Base of differentiation strategy in our compan y:
 Product : in order to have an edge over the competitors, our company offers an innovative
product that fulfills customers needs and requirements. This strategy cost us a lot in terms of
research and development, production and marketing ( 90% of ingredie nts are produced
locally, but 10% – ocean algaes are imported from certified producers from Guatemala).
Nevertheless, the return on investment is more than cost involved, because we had
overachieved our expectation in terms of sales, becoming now a market leader in offering
anti-aging creams.
 Pricing : to gain differentiation through pricing we choose to charge the lowest price for our
product. Thus, this strategy allowed us to rely on economies of scale to achieve efficiency.
Our forecasting, as presented a bove showed us a considerable growth in business
performance, giving us sufficient market power to demand price concessions and set
expectations on the market.
 Organization : we are aware that for differentiation, organization is a factor – wherein we earn
success through our brand name, location advantage, goodwill and customer loyalty.
To attain differentiation we incorporated some measures: p roviding utility to the customers by
offering them a product that match their need and preferences, product innovat ion, increasing product
performance, setting the price of the product based on the purchasing power of the customer, creating
a brand image, ensuring a better quality, services and customer satisfaction.
To successfully implement such strategy we took a ca reful analysis of customer’s needs and
requirements, to identify the feasibility of integrating differentiating features into a unique product,
that contains desired attributes.

According to Miles&Snow, the pursued strategy displays a prospect or strategy , as we intend
to perform on a new profitable external market with our innovative product. Prospector organizations
have broad product or service lines and often promote creativity over efficiency. Prospector
organizations face the operational p roblem of not being dependent on any one technology.
Consequently, prospector companies prioritize new product and service development and innovation
to meet new and changing customer needs and demands and to create new demands. The
administrative problem of these companies is how to coordinate diverse business activities and
promote innovation. Prospector organizations solve this problem by being decentralized, employing
generalists (not specialists), having few levels of management, and encouraging collab oration among
different departments and units.

This strategy was chosen over the others because Xlever is seeking to bring innovation, unique
and qualitative products to a market that offers development and diversification opportunities by
being open to this market of natural products. Xlever plans to maximize its opportunities with this
strategy, plans that otherwise wouldn’t have been achieved by using the other strategies because they
are not complying with the company’s future development pla ns.

Tactical Planning

Departm
ents
Tactical
Goal Respons
able Tactical Planning

Actions
Perio
d Resources
Materia
l Financial Human

Finance 1. Increase
capital
Chief
Financial
Officer 1. List the
company on
stock markets
2. Bank loans
3. Issue long
term bonds
Bonds
and
bank
loan
for 5
years

$39.995 –
$112.489/mo
nth

2 lawyers
to act as
legal
agents for
the
corporate

Sales 1.
Reach 25
% of
market
share Country
Sales
Manager Prospecting
BiG
Customers(iden
tifying and
approaching
them) -based on
sales manager
leads and input
First 2
years
Office
supplies 1. Sales
Team wages:
2% sales +
2.000 -3.000
TRY/sales rep

2. Budget for
customers
recruitment:
50.000$ for
sampling and
promo
discounts(acc
ording to mkt
strate gy)
2 Regional
Sells Team
Leaders
4 Business
Developer
s
2. Reach
10% of
market
share Prospecting
Small
Customers +
Continue

3. Sales Team
wages: 2.5%
sales + 3.000 –
4.000
1 Team
Leader

Account
management
for Big
Customers Next 3
years Office
supplies TRY/sales rep

4. Budget for
customers
recruitment:
50.000$for
acquisitions
plan on
different
layers 4 Business
Developer
s

Marketin
g Powerful
presence
on the
newly
entered
market,
building a
trustworth
y image. Operation
al
Manager Strong
adve rtising on
as many
marketing
channels as
possible. A
combination of
Internet,
electronic and
mass media
advertising
should be used
in order to
reach the
desired target
market
segments and
ensure
customer
visibility and
market
presence.
The
whole
period
of
activity
on the
market.
Image
and
various
project
plans
will be
update
d
annuall
y, with
constan
t
updates
on
social
media
campai
gns
during
the
year. Tradition
al media:
Tv
advertisin
g
commerc
ials.
Online
environm
ent such
as: social
media
platforms
(e.g.
Instagra
m,
Facebook
etc.), ads
on
YouTube
,
partnersh
ip with
local
celebritie
s &
influence
rs for
more
relevance
, develop
our
website
to fit
“Internati
onal
standards
”
(example
: English
version
of the
website),

127.655$/mo
nth

5
marketing
representat
ives:

Operationa
l Manager
Project
Manager
Team
members:
Social
Media
Coordinat
or
Content
Creator
Graphic
Designer

billboard
s.
Suggestiv
e,
colorful
packagin
g that
stands
out on
the
shelves
with
proper
informati
on
available
in
Turkish

Logistics 1.
Minimise
delivery
cost and
time
(1.Buchare
st
warehouse
– Istanbul
warehouse
import –
8h + 1 -2
days
custom
clearing
2. Istanbul
warehouse
– retailers
and
pharmacie
s) Logistics
Manager 1.Implementati
on of
Electronic Data
Interchange
(EDI) which
synchronises
inventory and
retailer orders

5 years
5
computer
s/
laptops, i
n-house
EDI
software

1000$
software
development,
100$
partners’
software
installation,
50$/month
software
maintenance,
salaries for
employees
3 Data
Administr
ators
1
Customer
Support
Specialist

2.Choosing
transportation
modes
and primary
routes 1 week Online
maps,
Bulgarian
and
Turkish
transit
and
export
laws,fuel
price
analysis 100$/project Route
Planner
Manager
Route
Planner
Assistant
3.
Implementation
of truck GPS
track ing system 5
years 3
computer
s,, GPS
platform
and 20
GPS
devices 1000$
software
development
100$/month
software
maintenance 3 Data
Administr
ators

2.
Increasing
efficiency
through
the
facilitation
of reverse
logistics 1.
Implementation
of disposabl e
plastic
packaging
return policy
5 years

1,000
Disposal
container
s, 5 out
of 20
trucks,
fuel
15$/disposabl
e
container, sal
aries, fuel
cost

10 Goods
Handlers,
5 Drivers,
Disposable
Plastic
Return
Manager

2.
Implementation
of sub -letting
truck services
5 years
15 out of
20 trucks fuel cost,
salaries, truck
maintenance
30 Good
Handlers,
15 drivers,
1 Account
Manager,
1 Project
Manager

3.
Implementation
of Electronic
Data
Interchange
(EDI) which
provides
insights into
natural
cosmetic s
buyer
behaviour 5 years 5
computer
s/
laptops,
in-house
EDI
software 1000$
software
development,
100$
partners’
software
installation,
50$/month
software
maintenance,
salaries for
employees
3 Data
Administr
ators
1
Customer
Support
Specialist

R&D 1.
Tailored –
made
products
for the
new
market R&D
Manager Developing
new products
that meet the
needs of the
local cultural
–
– Best
quality
organic
raw
materials
– Funds
–
Machiner
y,
devices
and
equipmen
ts

Unspecified
Team o f
researcher
s,
scientists
and
chemists

– Sterile
materials

2.
Innovation
/ Product
updates 1. Research and
analyze the
products other
businesses are
creating, as
well as the new
trends within
the industry
2. Regular
evaluations of
the products
offered by the
company to
ensure the best
quality

–
– Free
access of
the latest
technolog
y
–
Equipme
nts and
machiner
y
– Free
access
within
the
companie
s
databases

Unspecified

Team of
researcher
s,
scientists
and
chemists

HR 1.
Capability
for host
country
nationals HR
Director Create an
international
management
framework
5 years –

12600$
budget/year Lead
Team
IT Providing
timely
compleme
ntary
support for
existing
departmen
ts’
activities 1. Developing
and testing in –
house
supporting
software: EDI,
GPS
monitoring
platform,

2. Proving
timely technical
support and
software
mainte nance 2
months

5 years

5
computer
s, 5
laptops, 5
phones

6
computer
s, 6
phones,
office
supplies 1000$ EDI
software
1000$ GPS
platform

salaries
Chief
Informatio
n Officer
(CIO),
Chief
Technolog
y Officer
(CTO), 5
Software
Programm
ers, 6
Technical
Support
Specialists

Operational Planning

Departments
Responsible Type of
Operational
Plan
Operatio
nal Goal Operational Planning

Actions Period Resources
Material Financial Human
Finance Chief
Financial
Officer Policy Maximize
sharehold
er value Keep
Positive
Net
Working
Capital
Pay
Dividends
Regularly Entire
Finance
Departme
nt
Sales Country
Sales
manager (offi
ces) Implementati
on of the
sales plan
(yearly
revised based
on sales
performance)

Prospecti
ng big
companie
s Create sales
plan to
achieve
25% of
market
share: the 3
pillars of
this plan
are:
Differentiat
ion
(different
targeting
and promo
campaigns
based on
customer
strategies):
1. for top 5
customers
we will
negotiate
the launch
of our
cream and
anothe r
future
product

2 years 6 cars, 6
laptops, 6
phones,
mkt
materials
(booklets
and
samples),
paper –
related
items,
writing
accessorie
s, phone
monthly
subscriptio
ns 2
Regional
Sells
Team
Leaders
4
Business
Developer
s

exclusively
for each of
them,
2.
launching
of our
cream
together
with one
month of
free
sampling
and an
acquisition
plan on
sales layers.
Innovation:
1. Logistics
approach –
together
with
customers
we will
develop a
concept of
sharing
trans portati
on
costs(expor
ting
different
Turkish
products
with our
trucks), 2.
Recycling
strategy –
plan for end
users of
returning
packaging
& storage
in
customers
warehouses
(by giving
the the
incentive of
having 50%
return rates)
Low prices:
We will
attempt t o
provide the
intermediar
y buyers
with a

margin
opportunity
above 50%
for branded
cream. Our
price points
will
compare
with
Unilever,
P&G,
Nivea,
Avon and
local
brands. We
will be very
well priced
in
comparison
with luxury
anti-aging
creams.
Prospecti
ng
small&ni
che
companie
s Maintain
current
buyers and
Creating a
sales plan
to achieve
an
additional
10% of
market
share:
keeping the
same sales
scheme at a
smaller
level,
together
with new
sales
insights
after the
first 2 years
of
prospecting
big
companies 3 years 5 cars, 5
laptops, 5
phones,
mkt
materials
(booklets
and
samples),
paper –
related
items,
writing
accessorie
s, phone
monthly
subscriptio
ns Increasing
the sales
team with:
1 Team
Leader
4
Business
Developer
s
Marketing Operational
manager Implementati
on of
marketing
campaigns(b
ased on
marketing
researc h, 1.Aggress
ive
marketing
that will
ensure the
firm
entering 1.Create
and
broadcast
Tv
commercial
in Turkish
of the 1.The
campaign
will take
apx. three
month to
be
completed. TV
commerci
al, online
ads,
representat
ive
packaging 35.000$ The whole
marketing
departmen
t team

demographic
s, target
public etc.) the new
market
make their
products
visible.
Creating
market
awareness
will
ensure
that highs
sales
levels are
achieved.
2.Incentiv
ise partner
shops to
facilitate
monthly
storage product,
partner with
local
influencers
for social
media
relevance.

2.Provide
discounts
for more
than 50%
return rates
The actual
advertising
campaign
will take
action 2
months
before
actually
making
the
products
available
on the new
market
and a
minimum
of 9
months
after
entering for regular
product
and newly
introduced
product
Logistics
(Safety) Vehicle
Safety
Manager

Standing
plans –
Standard
operating
procedure

Reducing
the
incidence
of faulty
trucks

1.Regular
thorough
truck
revisions
2. Changing
outworn tire s
3. Changing
truck oils

monthly
quarterly
quarterly

3 truck
platforms,
hand tools,
3 air
compresso
r
3
headlight
equipment
s, tire
changers
salaries,
2.000$/month for
possible
malfunctions,
apparel
maintenance

3 Vehicle
Safety
Inspectors

Logistics
(Administrat
ion)
Logistics
Assistant
Manager Standing
plans –
Standard
operating
procedure
Document
complianc
e
1.Custom
clearing
documents
2.Truck
documents
preparation with each
import
transport
yearly Control
Certificate
by Turkish
Ministry
of Health
originals
of invoice,
ingredient
list,
Certificate
of Origin,
plant
health
certificate,
the bill of
lading,
Vignette Vignette cost,
salaries 3
Document
Preparatio
n Clerks

R&D Head of the
department Standing
plans –
Standard
operating
procedure – Product
developm
ent and
product
updating
– Regular
evaluation
s of the
products
offered by
the
company
to ensure
the best
quality
– Research
and
analyze
the
products
other
businesses
are
creating,
as well as
the new
trends
within the
industry
– Intensive
market and
consumer
research
– Track
changes
within the
market
– Identify
the best
suppliers
–
Conducting
studies,
tests;
–
Evaluation
of the costs,
specificatio
ns, need for
the product The
products
need to be
checked
regularly
(approx.
every 6
months);
Regarding
the
product
developme
nt, the
timing
depends
on the
decision of
the
manageme
nt board. – Lab
equipment
,
machinery
– Best
quality
raw
materials
– Free
access
within the
company
databases
and
resources

Unspecified The team
of
researcher
s within
the
departmen
t

Learning
and
Development
(HR) Training
Manager Standing
plans –
Standard
operating
procedures Capability
for host
country
nationals 1.Corporate
training
calendar
2.Coaching
session
with home
country
managers 5 years Training
materials Learning&Develo
pment Budget:
5600$ Esternal
trainers
for soft
skills
Managers
from
home
country
Recruiting
(HR)
Recruiting
Manager Standing
plans –
Standard
operating
procedures Achieve
full team
sufficienc
y 1.Campus
activation
for
recruiting
recent
graduates
2.
Company
presentatio
ns to
targeted
audiences
3. Job fairs
presence
4. Social
Media
awareness 2 years
until
renewal –
Campaign
visuals
–
Recruiting
booth Talent Supply
Budget: 7000$ HR
At first:
home and
host
country
employee
(Romania
n
emplo yee
represent
the
company
alongside
the early
candidates
in the
subsidiary
)
Once
settled:
host
country
employee
(Turkey)
IT
Chief
Technology
Officer Standing
plans –
Standard
operating
procedure In-house
software
maintenan
ce 1. Fixing
bugs
2.Adding
extra
features
3.Updates
testing
4.Installing
updates every 6
months
after
software
developme
nt 6
computers,
6 phones,
office
supplies salaries 2
Programm
ers
3
Technical
Support
Specialist
s
1
Customer
Support
Specialist

III. Organizing:
Organizational structure before internationalization:

Organizational structure after internationalization:
Chief Executive
Officer
Head of
Marketing Head of
Manufacturing HR Manager Sales Manager Head of
Logistics Head of R&D Head of IT

● Type: The type of the organizational chart we have used is organizational structure in the
early stage of internationalization – Extension of the Domestic structure.
● Why: This choice is motivated by the fact that Xlever is taking the first steps in becoming
international. In order to accommodate with the new changes, the company is expanding the
departments and the afferent functions abroad, in Turkey, without major changes. In this early
stage of expansion abroad, the company’s main activities and expertise are centered around
the mother -company, without the major involvement of the subsidiary. The subsidiary’s
activities are closely watched by the mother -company. After the internationalization, there is
the need to have an export manager which controls and supervises the export activities
between the two entities. The export manager will be handling the exports between the
subsidiary and the mo ther-company and will report directly to the general manager of the
subsidiary.

IV. Coordinating (human resources policy):

In this section we are going to specify the source of recruiting and its advantages, the
selection criterias for each candidat e, the training path that should be followed and the
motivating factors in the framework developed by Hertzberg.

General Manager

● Recruiting
The strategy chosen for recruiting is to use a home country national as GM. The ethnocentric
strategy is suitable for the “start -up phase” of the company in a foreign market.
The source of recruiting will be from the Top Management of the company, thus a person
that knows very well the company culture and operations. They will possess numerous
advantages:
-technical expertise
-the ability to supervise whether the subsidiary complies with the company policies and
objectives
● Selecting
For successfully coordinating the Romanian business in Turkey, the designated manager
should fulfil the following characteristics:
➔ techni cal ability and knowledge of the cosmetic industry
➔ adaptability and flexibility towards a different cultural environment: recognize
differences and act accordingly in order to increase the efficiency of the
organisation

➔ ability to solve problems in differe nt frameworks and from different
perspectives
➔ decisional skills (the Turkish hierarchical structure implies that decisions are
taken at the level of top management)
➔ diplomatic abilities to succeed in being the ambassador of the parent company
and to advoca te the company’s point of view in the foreign market without
ignoring the host’s country principles
➔ willingness to undergo a foreign assignment ( avoid the dual career personnel
issue)
➔ change management knowledge: in Turkey would be perceived as imprudent
to introduce rapid change, and yet it would be recognized as poor management
to resist change unnecessarily.

● Training
➔ Cultural aspects of Turkey and its society: the main characteristics of Turkish culture
are high collectivism, power distance, uncertai nty avoidance and conservatism. All
these aspects should be taken into consideration by the GM.
➔ Cross -cultural Training: the Area Simulation Model approach – attempts to create a
variety of situations that will offer a starting point for how the manager sho uld react
in a foreign environment
● Motivating
We are using Hertzberg’s classification:
1. Motivator factors : career progression is obviously an important factor for a
candidate for a General Manager positions as these are generally individuals that are
invest ing a lot in their career paths and this job allows them to prove their managerial
skills and responsibility.
2. Hygiene factors play a very important part when it comes to undertaking a foreign
assignment. The compensation system has to be very well put in p lace. The company
divides its employees into two categories in order to establish its long term
international strategy of expansion: local employees and international executives.
After reaching certain performance standards, local managers become part of t he
international corp and should be available for relocating at any time. When
undertaking a foreign assignment, the newly appointed GM will receive an Overseas
Premium.

Head of the Sales department:

● Recruiting
The strategy chosen for recruiting the head of the sales department is to have a host country
manager for the following reasons:

➔ the familiarity of the local culture of Turkey and the knowledge of Turkish
patterns of management (hierarchical structure of the organization,
paternalistic attitude of managers to their employees)
➔ lower cost of hiring
➔ the positive public relation element for the Turkish market
➔ higher probability of management continuity when compared to potential
managers from other countries that might leave the position earlier
The sou rce of recruitment and selection is the present workforce in the Turkish cosmetic
industry. Headhunting will target someone with a supervisory position ready to assume
greater responsibility.

● Selecting
The Sales leader should fulfil the following chara cteristics:

➔ ability to manage patronage relationships with their subordinates as dictated
by the Turkish business environment and the in -group -oriented society
➔ personal philosophy of understanding different cultural values and adapts
accordingly, finding a balance between Xlever as parent company and the new
subsidiary
➔ adaptability and flexibility to the communicating and negotiating style (high
pressure sales tactics)
➔ good relations with the local community
● Training
As the host country candidate has the a dvantage of being familiar with the local government,
business people and cultural business environment. In order to have the candidate ready for
coordinating the activity of the subsidiary, trainings should be undertaken:
➔ cross -cultural management in orde r to understand how the Romanian business
structure can be translated to the Turkish business environment
➔ people manager training as the prospect is going to be recruited for a pool of
candidates that know the industry and now should focus on how to delega te
and organize the entire sales force
➔ technical knowledge of production and strategic standpoints in the cosmet ics
market.

● Motivating
Hertzberg ’s two -factor motivation theory helps us understand which factors would motivate
a Turkish manager working in a foreign subsidiary:

1. Motivator factors – enjoying your work, feeling recognised and career progression: As the
prime prospects for this position will be individuals already part of the workforce, the foreign
subsidiary should offer attractive benefits comparable or better with other firm in order to
argument the change of workplace. Although the absence of these factors do not generally
create dissatisfaction, in the situation portrayed in this case scenario, they are highly relevant

in order to increas e satisfaction and attractiveness of the position.In Turkish culture, there is a
strong commitment between leaders and employees, activity operating in the paradigm that
the workplace should create a home away from home, so the company culture should put
emphasis on this cultural dimension.
2. Hygiene factors – These factors can lead to dissatisfaction and a lack of motivation if they
are absent. Examples include salary, company policies, benefits, relationships with managers
and co -workers.

Operational worker in Marketing

● Recruiting
While for managers, the strategy is to employ experienced candidates into the coordination of
the subsidiary, for operational workers, the targeted pool of candidates will be recent
graduates and people at the early start of their career in order to shape a “build from within”
company culture started by the parent company. Besides creating a positive image for the
company and a good employer branding, this tactic can increase the efficiency of the
subsidiary. Young people ar e eager to learn and generally adapt faster to a different
environment of a multinational operation.
● Selecting
The candidate should have:
➔ eagerness to learn
➔ strong communication and collaboration skills
➔ marketing and branding background
● Training
Employees who are equipped with a specific set of rules detailing their job duties and how they relate
directly to the overall business goal of the company are often more efficient and accurate while
performing their daily tasks. Consequently, a technical training i s necessary in order to understand
what the candidate has to do. Moreover, a Turkish language course may be taken into consideration
for candidates outside the host country, as properly written information on packaging and advertising
materials is crucial for a successful marketing campaign.
● Motivating
To be consistent in our analysis,we are going to use Hertzberg’s classification again:
Although Hygiene factors (salary, company policies, benefits, relationships with managers and co –
workers) will be enough at the beginning to attract a good operational worker, Motivator factors
might reach a more important status in the long term as the targeted prospects are going to be young
people that will be anchored to a multinational company with international aspirat ion as a company
culture. Xlever plans to expand more and so will its workforce ambitions, this being a common
characteristic of “millennials” regardless of their local culture.

V. Controlling
Financial Performance
Direct and verification c ontrol method through :
● Auditin g – Financial Analysis (Ratio Analysis, Breakeven Analysis, Speculation)
● Financial Budgets – Departments having a yearly budget established at the beginning of each
financial year by the Top Management

1st year 2nd year 3rd year 4th year 5th year
Predi cted total
targeted
market 2.888.270.000
USD 2.931.594.050
USD 2.975.567.960
USD 3.020.201.480
USD 3.065.504.502
USD
Turnover 202.178.900
USD 439.739.107
USD 545.520.792
USD 654.376.987
USD 766.376.125
USD
Profit 12.247.375
USD 26.638.042
USD 73.435.491
USD 88.089.208
USD 103.166.016
USD

Quality Performance:

Control method:

Key Performance Indicators , or KPIs , are a tool businesses use to measure just how effectively
they are achieving their goals. KPIs can be used within a company or department to track its goals
and determine how best to fine tune its core practices to achieve the best results.(example: cost
reduction KPI, increased customer satisfaction KPI, selling KPI)

Quality controlling

For cosmetic and beauty products, safety is a paramoun t concern. Thus, our product being applied
directly on skin, including such sensitive areas as eyes and lips, they must never cause an adverse
reaction, even during prolonged exposure. To ensure a beauty product’s quality and safety, one must
make sure tha t each of its many ingredients is safe and the production process observed to the letter.
Quality control is an ongoing process. We can say that is a comparison with a set standard whether a
cosmetic product adheres to a certain criteria. In our company, our quality standards consists of:
1. Formula: giving precise statement of different ingredients which comprise the product;
2. Operating standards: which consists in details of manufacturing procedures, storage, filling
and packaging(logistics and r&d related)
3. Raw material specification: details of characteristics and limits of ingredients and deviations
permissible
4. Packaging standards: Comprising all the components which go around the product shape,
size, color and other aesthetics
5. Finished product standard: Pr oper performance, safety
6. Testing methods: Test procedures of the product – in our case testing the anti -aging cream
through different methods (sampling, consumer’s opinion)

Through quality controlling we aim to establish standards of quality which are acc eptable to
consumers, to locate and identify process faults and defects of products, to endure that
defective items are not used, to improve quality and productivity by process control and
expprimentation and developing quality consciousness both within an d without the
organization.
Responsibility of Quality Control:
● To prepare plant control programme for the management
● To advice production department regarding uniformity of materials, quality aspect
and specifications
● To advice and assist in inspection an d selection of sampling plan
● To assist sales in making use of quality and guarantee
● To analyze customer’s complaints report and make people quality minded
● How it is conducted
We will use a direct and prevention control method for personnel quality contro lling. As presented
in the tables, one of our sales promotion strategy is using samples for our new product just launched
in the turkish market. Our strategy consists of giving them free of charge for volumes that exceed 10
containers ( mostly for big comp anies that buys big quantities) and for those with lower buying
volume with discounts and combinations of 1+1 products.
After we sent these samples in the market, we focused on customers reactions and opinion, collected
both from our partners and social p latforms. However, our customer satisfaction reached an incredible
rate of 94%, allowing us to change our position in the market, becoming an important player in
Turkey.
An example of our overall management KPIs are presented in the following diagram:

Good KPIs:
● Provide objective evidence of progress towards achieving a desired result
● Measure what is intended to be measured to help inform better decision making

● Offer a comparison that gauges the degree of performance change over time
● Can track efficiency, effectiveness, quality, timeliness, governance, compliance, behaviors,
economics, project performance, personnel performance or resource utilization

Human Resources Performance:

The human resources performance method is highly important in our case scen ario as we have an
expatriate general manager evaluating local managers. In HRM practices, Turkey scored high on job
enrichment and empowering supervision, but low on performance -reward contingency. This is the
reason why we are opting for a direct verfica tion control method for personnel. Turkish societal and
organizational culture is a blend of „Western'' and „Eastern'' values. Consequently, performance
evaluation is one of the most challenging HR functions in Turkish organizations.

● Standards
The sett ing of the standards of control will take place at the beginning of the fiscal year, taking into
consideration the business objective of each department. The employee and the manager will come
together to complete a set of targets to be met. This set will be called “5 rocks” and will contain 5 big
goals to be achieved.

*OGSM=Objectives, Goals, Strategies, Measures
*BU=Business Unit

● How it is conducted
We will use a direct and verification control method for personnel performance. The manager and
the emp loyee will have the regular 1:1s sessions to observe the common day challenges and
achievements. Being a subsidiary in a high power distance culture, the organization will conduct
performance evaluations as a one -way process whereby subordinates are evalua ted by their superiors.
An official performance evaluation will take place after 6 months (mid -year review) and at the end of
the year (final year review). The reviews will consist of presentations to the leader of the department,
assisted by the employee ’s manager.

● Rewards & Monitoring
The method used is a current control method as it consists of periodic check -ups. The most frequently
administered rewards will include bonuses and salary increases. Due to the cultural dimensions of
Turkey, we believe that we should not focus on intrinsic rewards that single out high performers, such
as selecting the „employee of the month'' because it is believed that this will hurt other employees'
feelings and disturb group harmony.

VI. Conclusion

To conclude, our subsidiary in Turkey is promoting natural skin care products, having a
tremendous care of both internal and external factors that can affect our journey as company and
customers s atisfaction and loyalty. Nonetheless, what is guiding us are our core values, which help us
maintain a clear path in this internationalisation process and our “strive to achieve 100%” attitude.