Big Fish or Fast Fish?

Until the mid-1980s, a common saying in the business world was: “Big fish eat small fish.” With the arrival of the 1990s, however, this idea began to lose its relevance. Revolutionary technological advancements and the evolving “new needs” of a new generation gave rise to young billionaires in ripped jeans. Especially small companies built on internet and communication technologies have reached truly massive audiences. Giant holdings dating back more than 100 years, operating across dozens of industries and comprising hundreds of companies found themselves surpassed. Despite the efforts of tens of thousands of employees, their annual revenues, net profits, company and brand market values were overtaken by newly established companies with relatively small teams (such as search engines, social media platforms, etc.…) This is the era of those who adapt to change. This is the time for fast fish to rise, regardless of their size.

Companies that fail to perceive the conditions surrounding them also fail to recognize when those conditions change. However, there are some companies that remain alert, whose “antennas are always up,” who are aware of their environment, their advantages and disadvantages, who are constantly monitoring both risks and opportunities. One of the most successful companies in this regard is Efes Pilsen. The “Traditional Channel”, which has been steadily losing ground to organized and modern retail, constitutes the company’s primary source of revenue.

Addressing an issue first highlighted by Ferhan Şensoy in 1991, the company launched a project in June 2008 and established an OTC (Off-Trade Chain) division. Severely affected by the decline in the number of grocery stores, kiosks, liquor shops and dried nut stores collectively referred to as the “Closed Channel” the company began opening its own retail stores to maintain distribution and turnover in this channel. Yes…they began opening their own stores. Just two years after the project began, more than 200 locations were established in strategically important areas. The company encouraged its regional distributors and dealers to open retail stores, while handling general procurement, store design and decoration through its internal teams. They covered the first six months of rent and additionally provided these stores with some free of charge beer. The result? The company achieved presence in various city centers and districts such as Kayseri and Ağrı, where alcoholic beverage distribution and sales had traditionally been low due to socio-economic and religious factor and proved that there was in fact demand for its products in these areas. Later transforming the OTC initiative into a more standardized concept under the name “Ekomini”, Efes Pilsen not only met its increasing annual targets consistently but also gained hundreds of strategic strongholds against organized retailers, who can often be quite demanding and highly entitled during the purchasing process. This initiative by Efes Pilsen stands as an excellent example of “creating” alternative sales channels and adapting through commercial evolution.

Environmental conditions may sometimes change through government intervention. For instance, in the pharmaceutical industry where the state is the largest customer; the government, as part of its healthcare policies in order to lower costs, placed significant pressure on pharmaceutical companies to reduce their prices. Apparently, these major pharmaceutical companies had been operating with very high margins, as all of them continued offering the same products to the market despite discounts reaching up to 40%. But what about the 20,000 pharmacies across the country? What happened to them? As their turnover decreased up to 40%, were pharmacies able to diversify their portfolios with new product categories and position themselves as alternative sales channels for other companies?