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Discussions about the elimination of apparel quotas have focused on countries that obviously benefit or are harmed by their demise. Little attention has been paid to countries for which the post-quota environment is uncertain – and vital. As quotas were lifted in January 2005, uncertainty loomed particularly large for Turkey, the world's fourth largest apparel exporting nation. This paper utilizes secondary data and a survey to chronicle Turkish apparel exporters’ strategic expectations, preparations, and responses to the post-quota environment. The case details the unexpected consequences of quota elimination for the industry, including how the new competitive environment catalyzed many manufacturers to locate production in foreign lands.

In a fundamental sense, creation of value is the purpose of a firm. Values – measured by profits, cash flows, stock prices, or some strategic objectives – are the ultimate reasons why a firm exists. The ongoing and ever-expanding discussion of globalization, whether based on trade flows or financial flows, draws attention to the value of multinational enterprise. Existing empirical work on the impact of multinational firms, however, is inconclusive. Some observers point to the valuation discount with international operations due to the costs of agency and control and the difficulty of coordinating complex organizations and cultures. Others emphasize the value of a multinational network and the operational efficiency of a multinational enterprise (MNE). Thus, issues related to value creation are important and lively areas of business and finance. In fact, value creation is now at the frontier between the functional areas of finance and strategy. In international finance, the topic also interacts with economics in the areas of strategic trade policy and exchange rate behavior, as well as business strategy, as it relates to the management of an MNE. The role of government policy is also part of the debate, because the importance of public policy and the behavior of policymakers are elevated when finance and business become international, as evidenced by consistent attention to political risk.