NEAR EAST UNIVERSITY

....
"''"
1988
NEAR EAST UNIVERSITY
DEPARTMENT OF
BUSINESS ADMINISTRATION
MAN400
2001-2002 FALL SEMESTER
GRADUATION
PROJECT
SUBJECT:ERCANTAN LTD.
STD.NAME:HASAN EKŞİOÖLU
STD.N0:970942
SUBMITTED TO: HASAN SARICA
Ercantan ltd
I. Introduction
Aim of the following study is
company in TRNC,
best
to
study a
local
the Ercantan Ltd. This is one of the
known names in
TRNC and it
is
considered as
a
successful organization. The study will be carried out
in light of the lectures and learning in management and
marketing principles. On one hand we will look into the
activities and present situation of the company and at
the other hand we will use certain tools to measure its
position
in
the
market
and
then
there
will
be
a
preparing
a
conclusion and suggestions for improvement.
One
of
the
main
difficulties
in
business management report is that the companies have
almost no written material about their businesses. They
also
refrain
to
give
information particularly
their accounts. Ercantan was no
about
exception. They had
almost no written information about their businesses.
But the general manager and the partner Kansu Ercantan
was
very
helpful
in
giving
information
about
the
business. The following report is prepared in light of
the
information
given by Kansu Ercantan as
well
as
interviews with customers and consumers in general. Our
lecture notes and study books had provided the guide
for the study.
The report will begin about the background of the
organization. A
followed
by
the
brief
historical background
strategic
business
units
will be
of
the
company. Since the company is dealing in many different
business activities ranging from banking to textiles,
we will select the Renault cars marketing department
and focus on this unit. After
brand
we
will
focus
on
the
looking
into the Renault
marketing
mix
of
the
'
Ercantan
Renault branch. There will be analysis of the
car markets in TRNC which will contain the competition
aspects in the market. The report will continue with a
SWOT analysis. After all the evaluation the report will
end with a conclusion and recommendation.
OF THE ERCANTAN LTD.
II. BACKGROUND
Ercantan family was in business life even before
1960' s.
The father was dealing in textiles retailing.
Ercan t arı- family is
business
life
in
fi ve brothers. They started their
the
Arasta
street
where
textile retailers had outlets, The two
Tansu
and
Kansu
established
their
all
the
twin brothers
first
formal
LTD
company back in 1967. Their first activity was textile
retailing. As a part of their effort they also entered
into manufacturing business with many partners called
the Toros knitting and textile company. After a while
they withdrew from this activity and concentrated on
retail marketing.
The company was a very well known company right
from the beginning but the business climate in Cyprus
was not very bright. The economy was under the Greek
dominance
Turkish
and
they
Cypriots
breakthrough
in
gave
to
the
do
almost
no
chance
business.
business
life
1974
of
the
for
was
the
a
Turkish
Cypriots when Turkey intervened and saved the Turkish
Cypriots from the Greek dominance. The business life
started to
flourish and Ercantan Ltd.
Was making· the
best of the developments.
Ercantan used a very clever strategy and worked
hand in hand with one of the most successful Turkish
holdings in Turkey, the Sabancı Holding. They became
the Cyprus extension of Sabancı. With Sabancı's backing
the Ercantan became one of the best textile retailers
and wholesalers in TRNC.
When Ercantan realized that they have expanded as
much as they could in the textile business they changed
,1
tactics
their
Magusa
and
new
started
plaza
main
at
to
the
road just at
room to diversify.
and household
many
businesses.
place
when
they
TRNC.
Just
after
Reanaul t
study.
cars
Finally
junction
this
which
the
when they established
goods,
A
obtained
major
the
they
will
After
of
the
completing
Nicosia
the exit of Nicosia,
They entered
electronics
other
diversify.
Ercan tan
they had
into car tire business
air conditioning,
diversification
dealership
obtained
be
and
of
and
took
Toyota
in
the dealership
of
our main
focus
started
banking
with
this
business
the Erbank.
ı::::
III. Strategic
Business Units of Ercantan
Ercantan operation strategy is to operate business as
strategic business units.
Following are the different
business units of Ercantan;
3.1 CARS
Ercantan imports mainly Toyota and Reanault types
of cars. But they also deal with second hand cars since
they sell knew cars and take the second hand cars in
part exchange. Each brand has a different manager. The
managers
have
certain
limits
that
they
can
make
decisions. Each car is priced in such a way that the
managers can reduce up to three percent. There is also
trade ins.
Ercantan usually accepts old cars of
customers as part of
the payment. In this case,
the
the
managers have to decide on the price. If they pay high
price for the car then at the end they loose money.
Their success is measured by the lowest price for the
old cars and highest price for the car that they are
selling.
.
. .
Service
garages
are
business units. There is
Renault,
and
for
the
also
different
strategic
a different garage for
Toyota
cars.
Each
manager that makes day to day decisions.
one
the
has
a
Share of Renault
Business
in Ercantan's
whole business
Cement
41%
Renault
14%
11%
3.2 ELECTRONICS DEPARTMENT
This department is
a
totally separate strategic
business unit. The main part of this business is sales
of the TV sets,
cookers, washing machines and ~elated
products. Floor manager is totally responsible for day
to day activity and has certain limits in which he can
play with the prices.
3.3 TEXTILES
This is the oldest part of the business. In this
department
heading
of
trimmings.
they
sell
textiles.
This
almost
They
business
every
also
has
a
item
sell
under
the
carpets
and
manager
and
sub
'7
managers.
Sub-managers
other
than
money
that they collect
of
the
prices.
keeping
textiles
the
can
He can make
do not have much
stock
records
responsibility
and
cashing
from the customers.
make
decisions
wholesale
prices,
the
The manager
regarding
and also
the
credit
terms.
3.4 Banking
Recently the Ercantan started their bank business.
With the support of the other family friends they set
up a
small bank called Er Bank. This is
small family banks in TRNC.
Bank
was
to
provide
low
one of the
The main purpose of the
cost
finance
to
Ercantan.
Instead of borrowing from the other commercial banks at
expensive rate the company was to use the savings of te
clients and finance their business. Like all the other
banks the Er Bank is also going under difficulties in
the
banking
business
due
to
general
recession
and
failure of some similar banks.
IV. Ercantan Renault Plaza
Although Ercantan also imports Toyota cars to TRNC
they are highly concentrated on the Renault brand since
this has become one of the most favored cars in TRNC.
The agency of Renault was obtained in 1999. this means
that the company is at the beginning of the business
Q
V. RENAULT
Oyak
more
CARS
Renault
than thirty
millionth
are
years.
and
Thirty
made
at
automobile
industry
years.
Renault
in
sales
best
business
the
43% in recent
They
Turkey.
exporting.
year
years
turned
are
before.
at the
is
In
in general,
things
There
4O
a boom
Renault
in Europe
produces
and manufactured,
automobile
industry
competition;
is
percent
efficiency;
finding
manufacturi~g
one
of
the
biggest
French
mark.
trade
of cars
with
the
However
their
by
the
way
of
in the first
10
in production.
planned,
designed
in Turkey. The
with
profits
for styling,
labor
and
safety,
and
relations
Renault
of France.
economy,
Turkish
markets
car
of
was
After
Renault
for
are
Turkey,
in
manufacturing
the
in the beginning
opened
manufacturers
with high technology.
production
Turkish
activities
1999
effi~i~~cy.
is produced
of
demands
with
world Renault
of Renault
are
concerned
and
car
in
parallel
and marketed
with consumer
the
car sales dropped
by
that
in
were the golden
in exports
cars
in
pioneers
local markets.
around
brands
1999
Until
about
car
sold every year
of this year and also an increase
As
for
their second
known
of the cars
increased
difficulties
models
the
grew very fast. Early nineties
economic
years
production
factories.
with
and
of
two percent
compared
months
car
They have produced
one
industry
The
company
in
car in 2000. They are the second biggest
manufacturers
Turkey.
is
of
the
It is a
the
first
old models
liberalization
of the
of the eighties,
the
competition.
Today,
latest
manufactured
and
export
are intensifying.
1 "
Car
locally
market
produced
Union,
it
their
ways
before.
cars
in
is
are
and
that
the
Turkish
competitors
the
Ford
largest variety
is
and
the
market
With
foreign
markets,
amongst
To faş.
the
Renault
Customs
find
easier
than
produced
Cars,
are
the
it is due to this
was
But as the economy
a
will
locally
sellers
competition
with
the
cars
much
in price and models
only
producers.
cars.
the
that they are one of the best
past
large
imported
likely
in
Main
Turkey
in Turkey.
between
of Turkey
In the
the
local
is opening
up,
the automobile
sector gas to compete with the world.
In
coming
the
car manufacturers
is
carried
out
in
models
of
years,
expected
number
of
the
to increase.
Most
of
the
designing
France.
Oyak
Renault
Renault
In the first years
work
is
manufactured
the
of the production,
did not need to go into designing
more
recent
central
are
offices
now
Renault
models
years
they
of
intend
of Turkey
involved
produce
in
world
But at
in design,
France,
in
the
since
up-to-date
to the world.
they
models.
of some new
The development
of a
mode·l typical-ly is--initi-ated--.:t;;h:r:ee-- -t;o­
five years before production is
planners
and they
of new models.
aims to be sole producers
to distribute
··new --car·-or ··truck
are
the Renault
to
old
establish basic
to begin. Production
design goals such as
size,
weight, and potential market. Early in this process,
the
engine
and
transmission
are
selected,
and
the
exterior and interior dimensions defined. Stylists then
design the exterior shape and interior configuration.
Often numerous renderings are prepared before a final
decision is made to hand build a small number of clay
models of the proposed cars.
1 1
buy.
do
There are many
factors
Aspects
effect
with
which
the
appearance,
that is,
such
elements
must
be
wants
as
the
attention
and exporters
is
disposable
spent
to
luxury
modes
of
cars.
income,
cars.
declining
and
prosperity.
of
and
the
but varying
Cars
close
and
in
lines
needs
competitive
living
The
and
careful
producers
the
income
affect
be
seriously
food,
such
as
for
when
of
that
and
so-called
durable
or
the economy
is
in
of
food
affected
lack
shelter,
of
rapidly
the
and above
purchase
increase
research
Changing
or
pattern
the
cars,
over
such as
buying
Staple
to
behavior.
directly
may be deferred
may
marketing
availability
necessities
Similarly,
cars,
not
in
consumer
consumer
meaning
affects
long-lived
tend
study
and
for basic
clothing,
with
a line effectively,
conducted
salability
for
similar
and quality.
markets,
paid
to
of similar models.
achieve
attitudes
price,
correlated
be
are mainly
generally
in style or design,
target
must
to which car to
the decision,
Cars
size,
intimately
in
To
needs.
in deciding
periods
and
by
the
clothing,
business
cycle.
--
-Li-ke- ---al-1
the -p r-oduc ts-, -cars- has - to- be - distributed- -
in the right manner to
Distribution
of
the
achieve a satisfactory sales.
cars
different channels. One is
are
done
through
a
few
the appointed agents, who
represent the mother company.
It is not easy to become an agent of Renault since
it is one of the most popular car producer of Turkey.
Prospective
conditions
agents
and
basic
must
fulfill
requirements
the
in
following
order
to
be
considered eligible;
1 I)
new
There
must
be
agent
will
not
established
no
other
agent
effect
the
in
the
business
region,
of
the
and
other
agent.
the
have
must
agent
1. Pro spec ti ve
appropriate
premises,
2. They must be financially
3. They
should be
quality way.
able
sound and trustworthy.
to
sell
and
Once an agency is
building must be decorated as
Renault
.All
standard
of
the
Renault
shop-front,
service
the
obtained then the
to
the standards of
agents
fully
in
have
the
computerized,
same
and
fully furnished.
Main a qerı t s , have group of dealers and galleries
that they work with. These are smaller selling units.
Dealers and galleries have an important role in car
marketing. They are involved in buying and selling used
cars. Consumer find it useful to buy their cars from
these places, since they can trade in their used cars.
Renault
throughout
has
an
Turkey.
effective
The
distribution
Renault
car
sales
network
are
done
through agencies everywhere in Turkey. They are called
·Renault-aqenci e sr
·
·-· · -- ····· ---
,-- -
--- ·
··-·-- - ·- ·
There are two basic components which affect car
pricing, which are costs of manufacture and competition
in selling. It is unprofitable to sell a car below the
manufacturer's production costs and unfeasible to sell
it
at a price higher than that at
merchandise
is
being
offered.
which comparable
Other
variables
also
affect pricing. Company policy may require a minimum
profit
on
new
car
lines
or
a
specified return
on
investments, or discounts may be offered on purchases
in quantity.
1 '}
Special
marketing,
attention
so
as
to
must
be
be
in
paid
line
in
with
international
the
competitors
from the other countries.
Promotion
1994 Renault
is
a serious
promoted
can summarize
affair
in car industry.
In
and sponsored
many activities.
We
these as follows:
* University of Boğaziçi Auto-show
* University of Istanbul, privatization seminar
* European basketball matches
* Art exhibit of Abidin Dino
* Istanbul film festival
* Çeşme Music Festival
* International yacht race of Bodrwn
* Effect of customs Union with EU on car industry.
The primary objective of advertising is to presale
the cars, that is, to convince consumers to purchase an
item before
they actually see and
inspect it.
Most
companies consider this function so important that they
have
allotted
advertising
extensive budgets
agencies
to
and
develop
engaged special
their
program
of
advertising. By repeatedly exposing the consumer to a
name- or -tra-dema-:ı:k; <to -t-he- -appear-ance or -pa.cka.qe
bzand
of
a
car,
advertisers
and
to
hope
special
features
incline
to
of
consumers
an
item,
toward
a
particular car. Advertising is most frequently done on
television,
radio,
and
billboards;
in
newspapers,
magazines, and catalogs; and through direct mail to the
consumers. In recent years, advertising agencies have
been joining forces to become giant agencies, making it
possible
for
them
to
offer
their
clients
a
comprehensive range of worldwide promotion services.
1 ı1
Salespeople
are
complex
customized
are now used primarily
and
require
application.
automobile
sale,
center
negotiating
on
For
where
the cars
careful
explanation
example,
in
the salesperson's
price
the
activities
and
or
typical
generally
arranging
terms
of
payment.
Purpose
coordinate
become
of
sales
advertising
increasingly
necessary
promotion
and
satisfactorily.
Displays
and cooperative
advertising
clerks
should
manufacturer's
for
a
supplement
selling;
in marketing.
and
this
has
Often it is
to work closely with the dealers who handle a
cars
provide
to
personal
important
manufacturer's
Store
is
if
be
cars.
the
must
trained
Often
such
as
specified
time
period.
discount
of a car,
contests,
or a lower price
are
supplied
in
a
the
On
special
to
and
move
set up,
may be worked out.
knowledge
of
manufacturer
installation
may involve
coupons,
be
programs
services
sales promotion
cars
the
must
and maintenance
consumer
inducements
a premium
the
level,
such as
with the purchase
on the purchase
of a second
car.
Sales of cars are not the end of the business.
of- the
sales
most , import-ant
of
cars
are
One
- aspects -directly -effecting the
the
guarantees
and
after
sales
services.
Renault cars are guaranteed for certain periods of
time
for
parts
and
repairs.
This
is
to
show
the
confidence in the products. This leads to confidence of
the consumer. Cost of guaranteeing is
total income from sales. So,
only
O. 5%
of
this can be considered a
reasonable cost for building up the confidence in the
name.
1 ı:::.
Selling
company
very
the
like
most
careful
servicing
car
does
of
in
the
services
There
are
aspect
very
different
well.
manufacturers
has
service
to
the
They promise
For
of
during
is
seriously.
totally
foot
is
the
new organization
of
the
where
this
the
main
take
that
in
the
brand.
cities.
services
have
achieve
in
they
of
between
they
to
after
business.
of
users
good
brands,
after-sales
reason,
are
business,
one
car
the
a
competition
a system
the
has
different
a
travel
taking
that
car
example,
designed
help
Renault
There
of
Consumers
part
of
work
which
in
policies
For
the
brand,
important
services.
as
a
Specially
are
after-sales
finish
commodities.
selecting
facilities.
sales
not
very
established
the
best
a
services
possible.
Main
There
agents
might
be
not
necessarily
all
the
service
are
set
with
of
a
service
be
an
garages
full
and
pa r t-s · a-re -very
decisive
one wants
points
to
also
have
garage
agent.
have
of
But
a service
Renault
which
whichever
the
similar
reasonability
of
garage.
the
appearance
may
case,
and
equipment.
Availability
-·- -spare
Renault
in
-impor-t ant;,
choosing
the
It- is
brand
the
infect
of
service
and
- Gne--of--the
the
car
that
buy.
1h
-- - _. -- . ~--- _
VI.
CAR MARKETS
IN CYPRUS
One of the most fierce competitions in these days
are in the car markets. By the early 1980s there were
only a handful of galleries and car importers. Today
there is
a gallery at every corner. The road to the
Famagusta
Street
is
from
the
full of
exit
of
Nicosia,
galleries. Apart
the
Sht.
Ruso
from this place
there are also many galleries spreading around. As well
as the Turkish cars there are many imported Japanese
cars in the market. As expected, the increased number
of dealers and galleries had effected the price of the
cars.
The
Turkish
enthusiasts.
In
have
Cypriots
such
an
extent
always
that
car
been
most
of
the
families can sacrifice on other aspects in order to buy
a car of their choice. There are incidents that some
people
fail
to
meet
their
obligations
towards
the
supplier because they stretch their limits too far. The
Turkish communities economic well being have started to
improve only after 1974.
Since then there is a steady
increased buying power.
growth in the economy and
Although th~;~ ~~~~· li~ited -~mount. o{- ca rs
-a-t­
avaıia:-f)fe
the
beginning
there
are
now
almost
every
brand
available in the country. The pioneers in this sectors
are Toros, Levent and ETİ.
The most popular cars that
are imported to Cyprus are mainly the Turkish cars. In
recent years however there are many Japanese cars and
the consumers are now buying big cars such as jeeps.
TRNC has a reasonably relaxed import regime. Apart
from limited restrictions in respect of the age of the
cars there are no limitations for import. The import
1 '7
duties
and
expenses
the
cars.
The
25%
customs
and these
tariffs
around
car
increase
55
in
imports
tariffs.
for the
port tax,
vary
respect
from
There
percent.
from
With
Turkey
to
the
the
around
other
total cost to nearly
hundred percent.
larger
so
recent
cars
on.
The
increased
is
that
years
such
these
tariffs
as
reasons
buying
is
cars
f
the
behind
this
do
expenses
The
are higher
at
such
as
the
tax increases
the
demand
not have
to
and Mitsibushi
development
any age
of cars in Cyprus
final
estimate
population
that
consider
4,
Pajeros
has
percent.
increasing
Jeeps,
figures
Organisation.
easily
means
are
of
and
are
Another
limit
the
fact
and the
are lower at 30 %.
Planning
the
70
ability of the consumers.
Total number
This
there
other
costs
tax and Security
origin
and Europe
Far East
pre-profit
In
the
are however
the cost
cars
to
At
present
there
the
country
one
car
at
as
over
is
about
fo~
This
the
however
State
we
100,000.
can
Since
200,000,
each
family.
that each family has an average
this means
ami.Ly:
available
the car number
of
in 1996 was 97713.
this
If
we
population
of
that there are at least two cars in each
is· a
hi·gh ·· fi.qur e
@ven- - with . the-- world.
standards.
There are many
different actors in
the market.
First of all there are recognised agents of main brand
names.
Toros,
These companies Apart
Levent,
Eti
and
the
from Ercantan,
Raşit
Group
such as
and
the
Anglomed, represent the main car manufacturers such as
the Tofaş, Renault, Volvo and Hyundai. There are also
many companies who act as
agents and dealers in the
market.
1 O
One
group
business
of
businesses
are the importers.
who
with
At the beginning
of the importers
were not many.
Ercantan,
ETİ and Levent.
Toros,
deal
The main ones were the
At the luxery
were also
from the beginning.
these all changed
later
stages.
Today
number
of
the
become
importers.
in demand
of
This happened
individuals
own
imported
small
in
galleries
who
big profits,
there
the
have
of the increase
investors
Today
right
hand at
increase
because
The
are making
cars.
great
side of
of the high profit
importers.
importers
their
a
Many
and also because
the
import
is
importers.
the original
that
there
car
the number
the cars the BMW and Mercedes
Although
the
are
margins
realised
started
even
to
private
who import there own cars. The Japanese
car
exporters
are now marketing
the second hand cars on the
Internet.
And
want
placing
anybody
who
a
car
can buy
one
by
an order over the Internet.
It is estimated
galleries
in
the market.
dealers
and
smaller
selling
important
- buying- and
that there are over 50 dealers
galleries
role
Main
that
uni ts.
they
Dealers
in car marketing.
-s-el·iing
agents,
work
and
have
with.
group
These
galleries
They
tı s edvca.r s. -Constlmer
and
of
are
have
an
are involved
in
-find it
u se.f u L
to buy their cars from these places, since they can
trade in their used cars.
All
the
major
brands
have
an
effective
distribution network throughout Cyprus.
Apart from Renault cars Tofaş had been one of the
most popular cars in TRNC specially since 1974. It was
first represented by a pioneer importing company ATAI
Brothers. Atai Brothers were the one of the very first
importing
companies
in
TRNC,
importing mainly
from
Turkey, white products, like refrigerators cookers etc.
1 ()
They
started
continued
to import
company,
weak
importing
due
to
Today
some
the biggest
Boyacı
the
internal
To faş
companies
since
is
1974.
1995.
By then the
problems,
the company
represented
in TRNC Levent,
They
became
very
in the proper
by
the
which
one
of
belongs
to
family.
Another
textile
La ter
as
in
and
they
Toros,
competitor,
establishments
such
cars
these cars until
and could not represent
manner.
in
Tofaş
have
garment
and
cars.
They
which
are produced
dealt
with
different
Toros
are
second
Each
brand
certain
has
limits
In
involved
marketing.
business
repair
the
also
the
in
Turkey.
Even
agents
Each
the
works,
Isuzu and
of
Opel
different
service
uni ts
automobile
They import Japanese
are
oldest
cars
brand
garages
is
for
are separate.
imports
hand
the
and
sales,
departments.
separately.
brands
and
of
originally
different
imports
food
one
manufacturing
sector they are leaders.
Suzi ki
were
established
automobile
electronics
They
TRNC.
is
many
and
types
the Volvo
a different
that
they
of
cars.
Japanese
cars
and Opel
are new
cars.
manager.
can make
The managers
decisions.
have
Each
car
·ts pr reed in ·such -a-·way-that- the man-agers- can reduce..up -­
to
three
percent.
There
is
also
trade
ins.
Toros
usually accepts old cars of the customers as part of
the payment. In this case, the managers have decide on
the price. If they pay high price for the car then at
the end they loose money. Their success is measured by
the lowest price for the old cars and highest price for
the car that they are selling.
Like most of the commodities, selling the car does
not finish the work of the company. Specially in car
business, after sales services are very important part
()()
of
the
business.
different
There
brands,
competition
in
in this aspect
take the service
They promise
The increase
is
to
due
income
to
different
after-sales
the main manufacturers
brand.
are
services.
as well.
old
many
different
reasons.
is
First
are increasing.
prefer
second
economy
reason
due
car
to
at
and
there
days
there
that
both
man
three
the
are
and
cars
the
all
hand cars.
10 billion
region
increased
of a
weal th
The women
since
this
in
of
there
si
TL the
few billon
two
per
is
cars
wife
a
for
at
work.
house
and need
are more
a need
the
Today
for the boom in the second-hand
home.
transportation
become
cities.
People who never
to buy second
can be bought
again
that
Those who do not have
the new cars start from around
TL. Another
of
and the boom in the second hand car market
resources
cars
a
a system where they
travel between
had cars ·are now able to buy one.
while
is
one of
the foot of the car users
help during
of
There
For example,
has designed
level of people
enough
policies
active
lack
a working
least
This
where
of
in
for
public
the
are
a
in the
women.
number
there
cars
In
houses
may
even
grown
up
children.
· - · · Arrott1er ·rea·son · for the
boom i·n the second hand e-ar-
market is due to the new arrangements for the Turkey
Nationalities to buy cars in Cyprus. After a new law in
Turkey, Cyprus has become a market of second hand cars
of the Europe and the Far East. The new law gave right
to every Turkish to take a foreign car with them, into
Turkey, when they return from an outside country for
more than two years. This meant that,
the students, the office rs
as well as all
of the military
services
would also benefit from this law. Immediately after the
announcement of this law, many new businessmen entered
() 1
into
car
sector.
As
a
result
the
market
has
become
saturated.
There
are mixed
car markets
become
arguments
in Cyprus.
many
condition.
cars
For
that
some
come
brands
casually
from
problem.
The
the
importers
legal
system
in
also
the
will
There are
in
a
poor
getting
very
The cars that are bought
may
Cyprus
of
become
a
real
not very
clear
importers.
Some
is
the
do not import any spare parts.
in Cyprus
is that the number of second
hand cars are on a continues
about
Cyprus
is
distributor
responsibilities
One reality
effected
to
it
to find spare parts.
any
of
Some argue that the Cyprus
difficult
have
the future
a scrub yard of the second hand cars.
indeed
about
about
the
sharply
2-3
markets
and
dropped.
increase.
the
While
second
in
the
This has already
hand
car
prices
past
there
were
thousand pounds difference between the new
cars and a 2-3
years old cars, today the difference is
about the half the price. For example a new Opel is in
the region of 14 thousand pounds while the second hand
is only 7-8 thousand. The trend suggest that this is
going to be even worse. Increase in the second hand
cars· will
further·· decreas-e
the
-p r i-ce s . - At . the
end
people will find it very difficult to get rid of the
old cars. This will be a problem and it will make it
difficult to buy a new car.
Cyprus is at the moment
like a saving box. Everything comes in but nothing gets
out. Unless we start finding markets outside Cyprus the
car
markets
recommendation
will
to
face
the
car
serious
importers
problems.
is
thinking about exporting the old cars to
to
My
start
some other
countries.
ı')(l
VII. COMPETITION
AND PRICES
Car prices in TRNC is a very good example for the
impact of competition on the prices. Just before the
new entries into the gallery business, the car business
was almost a monopoly between the state and a few big
businessmen.
The
Isuzu
troopers
for
example
were
imported by Toros and sold at little under Stg 30,000.
immediately after the
boom
in
the dealer agents the
prices fell to less than 25,000. today similar cars are
sold at
under 20,000
stg ponds. Similar trends were
taking place at all trade marks. For example the first
Nissans that were imported sold over Stg 8,000.
today
these cars are sold between 6-7,000.
List of the cars imported and their value declared
at the Customs AT YEAR 2000
Type
Amount TLxlOOO
$
Buses
100.385.043
670.885
Jeep
691.748.793
4.199.245
Ambulance
21.976.600.000
123.008
Vans and Tracks
480.665.936
3.115.983
Saloon cars
2.978.388.442
12.545.863
.
Lorry
Source:
,.
- ...
Police
...
122. 724 .4-QS.
Headquarters
.
-·'
. 8.2 7 • 5.4 4. . -
general
Statistical
Department
The imports of vehicles amounted to 7.8% of the total
imports in 2000.
The prices of second hand cars are considerably
low in the far east countries. Second hand cars such as
Honda, Toyota, Nissan and so on are at the region of
$3-5,000
according to the condition. A practical way to
explain the cost price at the source is that the Stg
price
of the cars
the source.
transport
varies
The price
costs
according
the
is
tariff.
value
in
the
of
price
by adding the
Customs
the
region
at
tariff
vehicles.
of
The
$1,200-1,500
to the size.
The
customs
nationality
of
the vehicles.
EU
customs
to
cost
less the$
level is determined
and
according
transport
TC,
in TRNC is more
tariffs
the
importer
Residents
and EFTA
nationality
also
the
according
well
as
as
to
the
the origin
of
of TRNC with the nationality
of
are all have
of
vary
TRNC
the
are
same
treated
treatment.
in
a
no
cars
The
different
manner.
The
first
imported
The
aspect
to
know
is
that
can be
into TRNC older than 6 years.
customs
tariff
2 5%.
In
addition
2.5%
security
citizen
for the non
to
tax
these
and
the tariff
residence
importer
2.2% port
is
55%
with
will
charges.
security
visitors
are
have
to
pay
For
a
TRNC
taxes
of 2.5%
and port charges of 2.2%.
Those who import
top pay
a
tax
in
cost of the car.
for commercial
advance
equaling
If the importer
purposes
to
the
6. 6%
is importing
own use they do not hav~ to pay any advanced
There
is
also
a
payment
fund.
TRNC citizens
long
as
years.
the
6th year.
to
pay
they
the non-TRNC
importers
the
price
do not pay anything
car
for this fund.
for
import
citizens
is
have
will have
of the
for their
taxes.
stabilization
to this fund as
younger
to pay
than
three
an extra
For the cars older than three years, the
have to pay 10%
for the 4th year,
15%
for the
For a six year old car the TRNC citizens
35%
non-citizens
for
15%
the price
stabilization
have to pay 50%.
fund while
have
the
Another
tax for
imported
vehicles
of the total CIF Value is charged
The Customs
the saloon
tariff.for
cars.
for
20% and for the non-citizens
The
pioneers
pounds
in
on each car.
than
the TRNC citizens
are
it is 13%
was very profitable
these
10%
as a VAT.
the Jeep are different
The tariff
The car market
is the VAT.
markets
made
As explained
to begin
more
earlier
than
with.
2-3, 000
the jeeps that
are sold for 20,000 stg today used to be sold at nearly
30, 000
stg.
was
excess
profit
in this
the
marketing
books
to
new
an
most
of
sector
to
was
tends
invest
always
exactly
today
There
what
the number
are many
invite
search
other
sector.
the
at
of people
today
the
there
suggested
profits
at
with
sectors.
the car sector
in
one
money
This
and hence
who are in car business
is
due to the large number
the car prices have come down. The importers
are happy
is hardly
that
People
pro fi table
as high as the grocery markets.
of dealers
As
high
entries.
for
happened
examples
enough
consumers
car dealers
to make
for
around
their
$500 at
each car.
This
investments.
I believe
that
are benefiting
in the business.
from
excessive
number
of
VIII.
SWOT ANALYSIS
OF ERCANTAN
Strengths
• Sound
Financial
background:
The
organization
is
considered to be one of the biggest in TRNC. They
used to be partners of a bank but drew out after some
problems with the other main share holders. They may
start their own banking business.
• Ercantan
has
organizations
competitive advantage over
due
to
good
image,
that
the other
they
are
considered to be one of the most popular business in
the
island.
They
keep
close
contacts
with
the
consumers and serve for their satisfaction. They are
market oriented people and try to help in case of
problems. One is almost certain to get what they want
at Ercantan center.
• They also have many different products: The firm is
involved in many different business. Cars and textile
are not similar in any way. The nice thing about this
is that, when the business is low in one sector there
is always the other sector which will make it up.
• Another advantage is that they have good management
skills:
Sons
of
Ercantan
along
with
the
General
Manager have very good managerial skills. They are
appropriately
educated
and
experience. Father Ercantan is
also
gained
good
also recognized for
his good talents.
WEAKNESSES
• Low awareness of Human resource management: Although
very good in business part Ercantan has not been able
to develop a good human resource management. Too many
employees
made.
leave
their
Staff
turnover
true in the
services
difficult
to
train
work
and
new
is very high.
departments.
and
it
is
a
This
is
an
recruitment
is
This is
specially
Technical
staff are
big
loss
when
they
leave the job.
• low
service
partly
are
quality:
due to high turnover
particular
department.
customers
about
of technical
problems
There
are
the
important
in
the
complaints
quality
and
also
problem
staff. There
car
services
amongst
the
the
price
of
services.
• Lack of professionalism:
They need
to
Too much
get professional
good management
family involvement.
managers
to build
up a
team.
OPPORTUNITIES
The economy of TRNC is suffering from recession.
Recently
the
TRNC
and
Turkish
officials
made
an
agreement for a financial support for the TRNC. Turkey
will send around two hundred million dollars to boost
the economy. This will mean an increase in the trade.
There are also signs that the municipal organizations.
may get finance to buy new generation of trucks and
cars.
THREATS
Ercantan, over the years have got very large and
the cost of business has increased. Due to high prices
of
specially the
spare parts,
there are new people
importing the similar parts. People are providing the
same parts and even services at very much lower prices.
07
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en
IX. RECOMMENDATION
Ercantan
is
a
company.
successful
But
the
management is clearly concerned about the high turnover
of
employees.
The
only
outstanding
problem
of
the
company seems to be in the field of human resources.
Improvements
are
needed
in
all
aspects
of
human
resource activities. The improvements should start from
the recruitment. Personnel function starts with finding
and
hiring
indivictuals
for
sales
slots
in
the
organization-persons who are both interested in sales
jobs and qualified to
here
is
that
no
qualifications,
situations.
fill them.
employee,
is
the
important point
whatever
universally
Thus,
An
his
or
her
acceptable
in
all
manager
must
decide
what
characteristics a given position requires. Clearly, the
task is to get the right person for the right job.
I would revise the recruitment policy of the firm
I would try to gather information about the educational
background,
solving
intelligence,
ability,
achievement
self
speaking
orientation,
confidence,
ability,
problem
appearance,
friendliness,
empathy,
and
involvement in social or community organizations.
Certainly no personality test or other test proves
that
an
individual
will
or
will
not
be
a
good
sa~esperson.
I would also consider recruiting responsibility to
continue
even
Responsibility
recruiting.
conditions
after
employing
of
manager
They
that
a
should
does
also
successful
somebody to
not
provide
people
the
finish
the
would
job.
after
necessary
carry
on
working and not leave the job. To this point, I would
f') (\
arrange
a
test and search
people,
leave the work but continue
to correct
The
true
those
reason
on
that
who
need
for
to
may
be
Fringe
benefit
procedure.
people
not
we
selected
find
is
only
discussed
tend
to
well
people
motivated.
for
to
hence
benefits
employees.
scheme
as
are
leave
is
the
or
are
not
for
new
for leaving
a very
company.
can
it
be
the
good
People
done
sense
by
of
etc.
sometime
Ercantan
a
example
increasing
job security
jobs,
searching
Motivation
incentives,
partly
earlier,
change
and
themselves
motivation
some
belongingness,
the
turnover
some
of
introducing
for
high
But there are many other reasons
Lack
reason
for
As
may
positions.
job.
to work and help management
recruitment.
are
successful
a
not easily
things.
dependent
is
who will
does
formal
But the are actually
great
way
not
encouragement
have
of
practicing
a
fringe
compensation
it.
X. CONCLUSION
Ercantan is a diversified organisation with many
different
business
lines.
It
is
a
typical
family
business but a large one. The general manager is not a
member of the family but he plays a very important role
in
the organisation. Despite
always
a
room
for
their success there is
improvement. To
achieve a
better
result Ercantan needs to give more importance to the
Human
resource
aspects.
This
is
not
a
secondary
responsibility that can be taken care of by a manager
of another field. This is, on the contrary, one of the
most important aspects in the organization. The whole
business, no matter how much automated depends on the
human values. Fringe benefits are an essential part of
employee compensation. It is however very important the
way it is designed. It has to be done in such a way so
that at the end of the day both the employee and the
employer are equally satisfied. I suggest that Ercantan
should
formalize
workers'
their
fringe benefit
compensation
legislation,
compensation are established
for
scheme. Under
scales
of
accidental injuries
arising out of and in the course of employment, without
regard to the party responsible for the accident. The
scope of coverage varies in the different jurisdictions
wi~h respect to benefits payable in case of death, of
total
disability,
specific
injuries
and of
or
partial
continuing
disability due
during
to
specified
periods.
') 1
REFERENCES
Annual yearbook of Renault 1999
Interview with Kansu Ercantan Partner and CEO January 2002 Nicosia
Interview with The Management of Eti (Importers of Renault)
Morden Tony Business Strategy and Planning McGraw HilJ 1993
C