There are questions to be needed answer Essay Example | Topics and Well Written Essays - 1500 words

There are questions to be needed answer - Essay Example Even though the current per capita consumption of biscuits in Turkey at 4-5 kg per year is lesser than the consumption in other European countries at 7-15 kg, the market suggests a considerable potential for sustainable growth (JP Morgan, 2008). Biscuits, wafers and crackers are still considered a luxury item in Turkey, with most of the population residing in rural areas still preferring local bakery items over mass produced baked goods. However, this is mainly due to the fact that these low-income regions are more price sensitive to such commodities, however rapid growth is expected in this regard as the coming years see a reduction in economic imbalances in the country (Global securities, 2007). The company experienced a sales volume growth of 9% in the year 2008 and 2009 consecutively, and reported a total gross sales growth of 13.6% and 14% respectively in the year 2008 and 2008. The 5 year Gross margin average for the company is 21.90%, which is lesser than the gross margin averages of most international and national competitors, but the organization has a policy which does not concentrate on increasing prices and margins in tough economic circumstances and instead concentrates on trying to increase in volume growth, a feat it has been very successful at. Ulker Biskuvi’s growth in the Turkish market is directly linked with the country’s GDP and per capita income growth. Although Turkey had been experiencing a rapid GDP rise since 2001, the year 2007 and specially 2008 were difficult as the GDP growth was merely 4.5% and 3.8% respectively, a decided low when compared to the GDP growth of 8.4% in the year 2005. Due to this, these years presented a slower growth for the company. The company’s ROE also dropped down to 2.21 in 2008, which was very low as compared to the ROE recorded in 2007 which was 18.52. However it picked up again as the national