Yildiz Holding's Corporate Strategy: Managing Diversification for Growth

The case opens in May 2018 with Nurtaç Ziyal Afridi, chief strategy and growth officer of Yıldız Holding, a Turkish conglomerate, reflecting on the group’s diversification journey. In ten years, the group had achieved a remarkable growth through diversification: seven mergers, 33 acquisitions, and 23 divestments. By 2018, it had 164 companies and consolidated revenues of $12 billion. After two notable acquisitions (Godiva, a $850-million deal in 2007, and United Biscuits, a $3.2-billion deal in 2014), Yıldız Holding became one of the world’s largest confectionary companies. However, Yıldız Holding’s owner, Murat Ülker, wanted it to be the number one or two player globally. To achieve this goal, Afridi started a major restructuring program to focus on the group’s core assets. That was not an easy feat. The group companies addressed mass market to luxury customers, and their portfolio of products ranged from confectionary to dairy, beverages, baby food, and olive oil. They had wholesaling operations as well as retailing businesses across a wide reach of geographies. Afridi’s decisions in restructuring needed to balance all the various trade-offs. She had to decide how to define core, and accordingly decide which non-core assets to divest. Should she consider protecting only wholesaling businesses and divesting retailing? And what about managing their businesses in different geographies? Would it be a good idea if the group were to manage some geographies directly and leave the management of others to select partners?