CASE 2 TERMINALMARKETS.

COM

From Wall Street stockbroker to vegetable importer to Internet entrepreneur, Sinan Talgat has
trusted his serendipitous career wherever it has led him.

It all started with a mango farm venture in South America. A friend persuaded Talgat to sell the
produce in New York. So he solicited interested buyers at Hunts Point Terminal Produce
Cooperative in the Bronx, which is the largest produce marketplace in the world. But El Niño hit
Ecuador hard, wiping out the mango crop and Talgat’s chances.

Still, the produce market intrigued Talgat. To him, Hunts Point was “like the floor of the New
York Stock Exchange.” He formed Fortune Fruit Ltd. and imported fresh basil and asparagus.
But the stockbroker in him kept wondering: Is there a more efficient way to do this? A way that
more closely resembles a securities exchange?

Six months ago, Talgat developed his strategy for Termina1markets.com, a fruit and vegetable
exchange for the global wholesale produce industry and a culmination of all his past experience.
He plans to have the site operating in three months.

A terminal marketplace that handles perishable items including produce, meat, and flowers, it
forms the hub in the supply chain that takes the product from the farm to the consumer. Every
city has one.

About $18 billion worth of produce currently travels through various terminal markets. No one
wholesaler controls more than 1 percent of the market. “The market is completely fragmented
and completely inefficient,” Talgat says.

New York-based Termina1markets.com will serve all the major players in the wholesale produce
industry. The site will provide wholesale produce buyers, proucers, and truckers with timely and
improved price information, reducing all their transaction costs. Wholesalers will sort of act as
market makers and selling will be based on supply and demand. .

Buyers will be able to determine all sellers currently carrying the product, request prices from
these sellers, compare prices on a single page, examine seller reputations, and complete
transactions.

Termina1markets.com has already signed up 60 percent of the wholesalers at Hunts Point, which
as a whole generates almost $2 billion in annual revenues. Talgat reports that wholesalers in the
terminal markets in Boston, Philadelphia, Baltimore, and St. Louis have asked to link up with
Terminalmarkets.com.

The site will also include an auction site for surplus produce, industry news reports, third-party
inspection services, an employment board, and a truck brokerage service. Terminalmarkets.com
will generate revenues through transaction fees.
CASE 2 TERMINALMARKETS.COM

Question:

What issues of international business are being addressed in this case? Do you think that Talgat’s
idea was a good one or not? Why?

Reference:

International Business- A Global Perspective by Marios I. Katsioloudes and Spyros Hadjidakis