The Internationalization of the Turkish HVAC Industry in Germany: Drivers, Challenges, and Success Factors

Abstract

This paper examines the internationalization dynamics of the Turkish HVAC industry in Germany through a qualitative design based on 24 semi-structured interviews with senior executives. The analysis demonstrates that conformity with EU and German standards, product quality, and continuous innovation are decisive drivers of international expansion. At the same time, economic volatility and regulatory complexity constitute major constraints. Organizational capabilities—particularly internationally experienced managers, R&D capacity, and strategic partnerships—are shown to enhance firms’ competitiveness. Furthermore, diaspora networks provide relational capital that facilitates trust and market embeddedness. The study contributes to international business literature by identifying critical success factors for Turkish HVAC firms in a highly competitive European context.

1. Introduction

Internationalization is generally defined as the extension of a company’s functions (partially or all) beyond the borders of its home country [1]. In today’s dynamic business world, internationalization has become a strategic imperative for companies which target a sustainable competitive advantage. The collapse of the Soviet Union in the 1990s served as a milestone, accelerating globalization in business and establishing internationalization as a fundamental growth strategy for organizations [2,3,4]. Internationalization offers access to new markets, expanded customer bases, economies of scale, and increased competitiveness. However, companies face numerous challenges such as cultural differences, legal complexities, and supply chain difficulties, which can significantly shape their internationalization processes [5]. To sum up, to achieve success in the global markets, companies should be capable of developing strategies that are specific to their industries and adaptable to complexities in the business world. Like many industries, the HVAC industry has been influenced by internationalization, motivating companies within the HVAC industry to develop diverse strategies aimed at enhancing their competitiveness. The growing trends of urbanization, industrialization, population growth, food security, and the COVID-19 pandemic have driven an increased demand for indoor spaces with high efficient air conditioning systems [6]. More importantly, the emergence of global climate change and sustainability issues increased the demand for innovative and environmentally friendly solutions in the HVAC industry. In this context, HVAC companies have shown a growing interest in accelerating the speed of internationalization. This research aims to compare the internationalization of the Turkish HVAC industry in Germany by analyzing how different factors influence its sustainable competitive advantage. The study seeks to identify the specific strengths and challenges that shape the expansion of Turkish HVAC firms into the German market. Accordingly, the main research question is “How do the dynamics between Turkey and Germany shape the internationalization of the Turkish HVAC industry, and what insights can be drawn from its trajectory in the German market?”

2. Literature Review

2.1. Internationalization

Internationalization has emerged as a concept in business strategy, especially in the context of increasing global interdependence. Domínguez Romero, Durst, and Navarro Garcia [7] argue that in today’s dynamic environment, internationalization is not an option but a necessity for companies that want sustainable growth. Defined as a multidimensional concept where companies expand their operations beyond national borders to the international markets [8], internationalization reflects the scope, intensity, and depth of international activities [9]. In addition to market access, internationalization enables firms to increase competitiveness, distribute risk, and boost innovation capacity [10]. Internationalization is a strategic and structural process, covering different entry modes, the design of international operations, and their effective management [11]. In addition, factors such as technological advancements, the globalization of markets, reduced trade barriers, and increased collaboration opportunities have accelerated internationalization. Recent studies emphasize that internationalization has become even more complex due to digital transformation, sustainability pressures, and geopolitical uncertainties. Nambisan and Luo [12] emphasized the role of digital platforms in reducing entry barriers and enabling firms to internationalize faster and more flexibly. Similarly, Witt [13] and Verbeke, van Tulder and Piscitello [14] point out that de-globalization trends, regulatory divergence, and sustainability requirements reshape firms’ global strategies. In this regard, the “twin transition”—digitalization and green transformation—has emerged as a critical determinant of firms’ competitiveness and international expansion paths [15,16]. These dynamics suggest that the internationalization process is increasingly intertwined with environmental, technological, and institutional change, requiring firms to adapt continuously.

2.2. HVAC Industry

Air conditioning is defined as a process that aims to increase the comfort and health of people living or working in these areas by controlling the indoor conditions of closed areas such as temperature, humidity, air cleanliness, and air movement [17]. Air conditioning is generally described as HVAC, which is an abbreviation comprising the initials of the words heating, ventilation, air conditioning, and cooling in English [18], and these systems are used to ensure the indoor air quality and thermal comfort of buildings [19]. Carrier’s efforts to reduce humidity and stabilize it at a certain level in 1902 made him gain a great reputation in the HVAC industry as this important success has been recorded as the first step in consciously controlling environmental conditions [20]. HVAC devices generally consist of a motorized fan and elements that change temperature and humidity which work with electricity as well as other energy sources such as gas or steam. HVAC devices can be of various types, including window/wall mounted, self-contained, with or without a refrigeration unit, and with a reverse cycle cooling system.

The HVAC industry in the world has been growing in recent years. and in 2022, HVAC devices were recorded as the 69th most traded product worldwide with a total trade volume of USD 63.4 billion. In the same year, 2022, exports of HVAC devices increased by 9.57%, from USD 57.9 billion to USD 63.4 billion which accounts for 0.27% of world trade. The HVAC devices rank 428th on the Product Complexity Index (PCI), and this industry is mainly dominated by 13 countries. China, Germany, Mexico, U.S.A, Japan, and Italy were the main exporters whereas the United States, China, Germany, France, and Mexico were the main importers of the HVAC industry in 2022. The world trade volume of the HVAC industry increased to USD 11.6 billion in 2022 with an increase of 20% compared to USD 9.7 billion in 2019. In the same period, exports increased to USD 6 billion by 22% whereas imports increased to USD 5.6 billion by 17% [21].

The Turkish HVAC industry is also an important industry in terms of its contribution to international trade GDP and employment. In 2022, the HVAC industry had a share of 1.9% of Turkish industrial trade, 3% of its exports, and 1.6% of its imports. The Turkish HVAC industry contributes 1.36% to GDP and 2.8% to employment in 2022. Similarly, the German HVAC industry makes an important contribution to the national economy, mainly characterized by its market size and global market share. In 2024, Germany accounted for approximately 6.7% of global HVAC system revenue and the domestic HVAC system market was valued at around USD 8.77 billion in 2023 [21].

2.3. Theoretical Approach

This research analyses the premise that the internationalization of the Turkish HVAC industry is mainly based on network relations in which companies are embedded that plays an important role in decision-making and outcomes [22]. Operating in the international markets requires companies to deal with volatility, and to overcome these volatile situations, companies have to gather and manage different capabilities and resources [23].

Foghani, Mahadi, and Omar [24] define the networks as

“Alliances belonging to groups of companies that function together to achieve an economic objective and cooperate based on joint development projects, while complementing on another and specializing to solve common challenges and reaching a collective efficient goal, while conquering markets that would have been too difficult to reach on their own.”.

(Foghani, Mahadi, and Omar, [24] p. 2)

In international business, access to network resources refers to the extent that the company can control assets that belong to its partners within international networks. These resources are critical for building a competitive advantage in a particular international market environment [25]. Subsequently, these resources are only available when the company is embedded in a strategically leading position within international networks. This embeddedness in international networks provides access to resources by enabling companies to take advantage of their relationships by forming alliances, agreements, transactions, and interactions with one or more partners through a value creation process [26]. Gulati, Nohria, and Zaheer [27] stated that a network functions as a strategic resource by itself which is distinctive and difficult to replicate as each company has its own portfolios according to its unique objectives, need, and trust-based relationships. Therefore, it is unlikely that two companies could have the same position within the network by developing the same combination of alliance relationships. Moreover, the combination of quantitative and qualitative resources held by the company’s partners gather a unique set of opportunities such as information flows, asset complementarity, and knowledge transfer [28].

Networks are seen as a source of market knowledge and information that is often acquired in the longer term when relationships with the host country are not established [29]. Therefore, networks are a bridging mechanism that enables rapid internationalization. The company’s position in the local network is effective in the internationalization process as this location determines its ability to mobilize its resources within the network. As all companies in the market are related to other players either local or international, all actions occur within the network, and their activities need to be coordinated to obtain a better return on these relationships. Ties arising from the firm’s network are difficult to imitate and these ties have consequences in three dimensions: (a) the availability of information to the parties involved in the relationship; (b) timing; and (c) directions [30]. Ties also affect the time it takes for some information to reach a particular company; referral companies provide information to other companies at the right time and place. Granovetter [31] defines the strength of ties as a combination of time, emotional intensity, closeness, and mutual services. Ties can be weak or strong. When they are weak, relationships are distant. When there is close interaction and ties are strong, the parties involved act autonomously and adapt to each other easily. The ties are dynamic, and the company may make ties stronger or weaker, depending on the relationship between them [32].

The large Turkish diaspora in Germany plays an important role in shaping and facilitating the internationalization of Turkish HVAC companies. With nearly three million people of Turkish origin living in Germany [33], these communities not only create cultural and social bridges but also serve as valuable nodes in business networks, easing international market entry for Turkish companies. Strong diaspora ties provide access to information flows, local distributors, and customer preferences, which are otherwise difficult to obtain for foreign companies. As network theory emphasizes, embeddedness in such social and ethnic networks creates unique resources and opportunities that are hard to replicate, thereby strengthening the position of Turkish firms in the German market [34]. In addition to facilitating the internationalization of Turkish HVAC companies in Germany, the presence of a strong Turkish diaspora has also influenced German companies’ investment in Turkey.

Germany has been one of the earliest foreign investors in Turkey, not only due to its geographical and economic ties but also because of the Turkish community living in Germany. These networks reduce cultural distance, foster mutual understanding, and encourage German companies to enter the Turkish market earlier and more intensively than companies from other countries. According to official data, Germany has been one of the largest sources of foreign direct investment (FDI) in Turkey, with over 7600 German companies currently operating in the country [35]. This strong investment relationship illustrates how diaspora-driven networks not only benefit Turkish companies abroad but also attract foreign capital into Turkey, reinforcing bilateral economic integration.

3. Methodology

Qualitative research enables an in-depth examination of cases in their own context. According to Yıldırım [36], qualitative research is “research in which qualitative data collection methods such as observation, interview, and document analysis are used, and a qualitative process is followed to reveal perceptions and events in their natural environment in a realistic and holistic manner”. In this research, case study design is used which is defined as a qualitative approach. The case study design is defined as “a qualitative approach in which the researcher collects detailed and in-depth information about real life, a current limited situation, or multiple classified situations in a specific time, through multiple sources of information, and reveals a situation description or situation themes [37,38].

In this research, criterion sampling, which is a sub-type of purposeful sampling methods, has been preferred. Purposeful sampling allows researchers to select the situations that are rich in information related to the topic of the subject. This sampling method is mainly used when the researcher is targeting deep research on the topic [39]. People, events, and situations related to research topics are the main sampling targets of the criterion sampling [40]. This research targets to identify the specific strengths and challenges that shape the expansion of Turkish HVAC firms into the German market, and semi-structured interviews were performed with 24 C-Level executives of the HVAC industry. In qualitative research, the selection of participants is typically based on the richness of the information they provide and relevance to the research objective rather than on statistical representativeness [41]. In the context of studying internationalization strategies, C-Level executives are considered key informants, as they possess strategic-level insights and decision-making authority regarding international market entry and expansion [42]. The interviews were conducted online and recorded with the consent of the participants. As stated by Creswell [37], the participants were informed about the purpose of the research in advance and about the interviews which lasted around 30–45 min. Below,

Table 1. Profile of participants.

Participant ID	Age	Participant ID	Age
P1	43	P13	64
P2	55	P14	53
P3	65	P15	65
P4	46	P16	59
P5	52	P17	54
P6	44	P18	57
P7	49	P19	58
P8	47	P20	57
P9	43	P21	58
P10	51	P22	59
P11	58	P23	45
P12	60	P24	43

outlines the demographic profile of the participants.

Actually, the most criticized point of qualitative research is its validity and reliability. Hence, in order to ensure the validity and reliability of the research, the following studies were carried out:

⬤

An extensive literature review was carried out all through the research period.

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The interviews were recorded through audio recording with the permission of the participants in order to prevent data loss.

⬤

The interview questions were revised by an expert academician and an experienced manager from the HVAC industry. This process was performed to ensure methodological rigor in the design of the research.

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A pre-interview with a manager was conducted to test the clarity of the interview questions. The outcomes of the pilot interview were reviewed with an expert academician, and the validity of the questions was confirmed.

⬤

To guarantee the reliability of the qualitative analysis, intercoder reliability was assessed. The check demonstrated an agreement rate of 86.84% with a Cohen’s Kappa of 0.87, exceeding the minimum threshold of 80% and confirming the internal consistency of the coding process. The below Figure 1 shows the Cohen’s Kappa coefficient of the research.

The audit trail illustrated in

Table 2. Audit trail of the research.

(1) Corpus and Team Setup

24 interviews, MAXQDA, two coders, six themes (Economic, Political, Technological, Market, Product, Organisation).

(2) Pre-analysis Setup

Verbatim transcription, IDs (P01–P24), metadata, reflexive memos.

(3) Codebook Generation

Deductive skeleton from literature, refined abductively with examples and include/exclude rules.

(4) Pilot Coding and Reliability

3 transcripts coded independently ≥80% intercoder consensus achieved.

(5) Full Coding Workflow

21 transcripts coded, alternating leads, weekly spot checks, consistency scans.

(6) Theme Development

Summaries per theme, code relations analysis, search for disconfirming evidence.

(7) Decision Log and Refinement

All changes logged (e.g., digitalisation split into operational vs market-facing).

(8) Example Code Refinement

Documentation in local language moved from Organisation to Market →

Adaptation

(9) Reliability Records

Consensus ≥80%, random 10% adjudicated, stability check with re-coding.

(10) Reproducibility Checklist

Final codebook, decision log, memos, anonymized quotes archived.

demonstrates a step-by-step process designed to enhance transparency, reliability, and reproducibility in qualitative research. Following Lincoln and Guba’s [43] framework of trustworthiness, each stage of the coding procedure—including corpus preparation, codebook development, pilot coding and reliability checks, theme development, and the maintenance of a decision log—was systematically conducted [44], while the archiving of the codebook, decision log, and memos provides a clear chain of evidence that ensures confirmability.

The research are economic factors, political factors, technological factors, factors of market, factors of product, and factors of organization.

3.1. Economic Factors

Generally, the participants believe that economic factors play an important role in the success of internationalization of the Turkish HVAC industry. In the “economic factors” subject, the declarations of participants are categorized under four groups as “tax & investment incentives”, “foreign exchange rates”, and “macroeconomic indicators” and “availability of financial resources”. The sub-codes of economic factors are shown below Figure 2.

The “availability of financial resources” sub-code is found important by all the participants in the economic factors code. All of the participants believe that if they have access to affordable financial resources, they are engaged in a successful internationalization process. Participant P12 explains this as follows:

“… Access to finance is important, in order to make the investments with affordable financial resources. However, there are challenges here as well, there have always been issues…”

Similarly, the “macroeconomic indicators” sub-code is found important for the success of internationalization by all participants. It should be noted that the participants believe that macroeconomic indicators will not have an effect on the decision of entry but rather on the timing of the decision. Participant P1 states this as follows:

“... Macroeconomic indicators only influence the timing of your investment. Trade continues regardless; it persists when indicators are down and when they are up. So, while these indicators do affect your investment decisions, they do so in terms of when to invest, not whether to invest…”

Germany’s positive macroeconomic indicators are key factors in its selection as a target market for Turkish HVAC companies and Participant P21 mentioned this as follows:

“Germany’s low inflation rate and stable interest rate policy ensure price stability in long-term contracts”.

Related to the “tax incentives” sub-code, the majority of the participants found it important whereas just two of the participants stated that it does not have any effect for internationalization. As an example, participant P20 mentioned the below:

“... Tax incentives play a crucial role. For example, the European Union encourages renewable energy use by offering a 50% tax reduction to customers who replace their old boiler or heating system with a renewable energy-based solution, like a heat pump. Such incentives significantly lower costs for individuals transitioning to renewable energy and help promote sustainable energy solutions…”

The effect of the foreign exchange rate on the success of internationalization is also accepted by the majority of the participants and they mainly added that the foreign exchange rate is more effective in developing countries like Turkey in the success of the internationalization and that the parity of USD/EUR during the last years has made the EU market more attractive as the Turkish HVAC industry’s raw materials are supplied in USD.

P22 commented on this topic as follows:

“... The parity of USD/EUR makes the export to Germany more favorable as we supply in USD from China”.

3.2. Political Factors

According to participants, political factors are important in the success of the internationalization of the HVAC industry. The sub-codes of this code are “local standards”, “sustainability requirements”, “political stability”, and “trade agreements. Figure 3 below shows the sub-codes of code political factors.

The participants believe that political stability even affects the decision of entry into an international market. Participant P15 mentioned this as follows:

“... Political stability is one of the factors that already impacts the decision-making process of entry. If political stability means that the plans you make today can be entirely altered tomorrow due to factors beyond your control, then you likely wouldn’t want to enter that market…”

“Trade agreements and regulations” is a sub-code that participants accept as an important factor for internationalization success. The customs union with the EU is mentioned as the participants are taking advantage of it in the HVAC exports. The representatives of the HVAC industry are satisfied with the Ministry of Trade’s work in agreements and regulations.

P21 contributed to this sub-code as follows:

“... Trade agreements and regulations are important. In this regard, the HVAC sector’s relationship with the Turkish Ministry of Trade is going quite well. We are trying to push these forward, but it’s not always easy…”

The last sub-code is “local laws, standards, and compliance requirements” which the majority of the participants mentioned. The participants give examples from standards from different countries. They also added that the Turkish Standards Institute (TSE) should be more active and internationally recognized. Participant P1 added to this sub-code as follows:

“Standards and the Turkish Standards Institute (TSE) need to become more internationally recognized. Local laws, standards, and compliance requirements are important, and there are areas for improvement here as well…”

3.3. Technological Factors

Technology has become indispensable in the HVAC industry, as in all other sectors. The sub-codes of the technological factors are grouped under three sub-codes as “digitalization”, “R&D innovation”, and “technological infrastructure”. Figure 4 below shows the sub-codes of technological characteristics.

The participants emphasize that the HVAC industry requires high technology compared to other manufacturing industries. The first and most important sub-code of the technological factors is the “R&D investments and innovation”. Germany prioritizes R&D investments in the HVAC industry, reinforcing its competitive position. In Turkey, however, R&D spending is often perceived as an unproductive expenditure, which limits technological advancement. This fundamental difference allows German companies to maintain a significant competitive edge over their Turkish counterparts. As a contribution to this sub-code, participant P22 states the following:

“... Turkish companies often perceive R&D investments as unnecessary costs, which makes them fall behind Germany in the competitiveness”.

“Technological infrastructure” is a sub-code that participants accept as a vital code for the HVAC industry. They stated that technological infrastructure helps HVAC companies to reduce their costs and prices. Participant P20 mentioned this sub-code as follows:

“... The more advanced the technological infrastructure, the more innovative the company becomes, reduces its costs and becomes a pioneer…”

The last sub-code of technological factors is “digitalization”; the participants mention that digital marketing and operational tools should be analyzed separately. At that point it is very clear that the German market is much more advanced in digital transformation, especially in ERP systems compared to the Turkish HVAC industry. Although there are efforts to catch up with the German HVAC industry, the Turkish HVAC industry has a long way to go. Participants P4 and P18 made the following contribution to this code:

“... Turkish HVAC is a sector that requires high technology. In this sector, digitalization, internet, remote access. In the future, artificial intelligence will come…”

“... All the processes of the German HVAC industry are followed by ERP systems which means they are totally digital…”

3.4. Factors of Market

The Turkish HVAC industry mainly targets the developed markets as a target market, and the internationalization of the industry is concentrated in the EU. The code of factors of the market has six sub-codes which are “knowledge about foreign markets”, “size of the market”, “operational knowledge”, “geographical proximity”, “intensity of competition” and “culture”. The sub-codes of factors of the market can be seen below in Figure 5.

For the “compliance with customer needs” sub-code, the participants mainly mention that it is necessary to focus on customer preferences and needs in the targeted international markets to be successful.

The participants mentioned that the customer preferences and needs in the developed markets are directed by multinational companies in the HVAC industry. The customer preferences in the developed markets and German HVAC industry are significantly shaped by sustainability concerns. Increasing environmental awareness encourages consumers to purchase environment-friendly products, and this leads HVAC companies to focus on environmentally friendly packaging.

The statement of participant P5 is as follows:

“... Specifications in the Turkish HVAC industry are weaker compared to Germany. Therefore, we are improving our products in line with market demands, particularly as there is increasing demand for sustainable packaging”.

The participants mention the distribution network, logistics infrastructure, and supply chain in the sub-code “operational information”. Although they are all aware of the importance of the operational information, the companies which work on a project- or contact-base stated that they are not affected by not having adequate operational information.

The Turkish HVAC companies prefer working on a project-base or through wholesalers instead of having a distributor in the German market. The Turkish diaspora in Germany and LinkedIn Sales Navigator are very supportive for being successful in the projects. Participant P16 stated as follows:

“... As a strategy we preferred to enter to the market by wholesalers or projects instead of distributors”.

The majority of the Turkish HVAC manufacturers have difficulties in gathering “information about the foreign markets” and they demand more support from the Turkish Export Association, (TIM).

Participant P19 contributes to this sub-code as presented below:

“... Of course, it is very important to get information about the foreign markets, however it is very difficult for us to access this information. In fact, the Turkish Exporters’ Association (TIM) should be more active and gather detailed information rather than just graphics”.

Related to the “geographical proximity” sub-code, as the HVAC industry’s products is bulky, large-sized merchandise, geographical proximity is important in the cost calculation. Participant P18 comments on this as follows:

“... Geographical proximity is important in terms of logistics and it is an advantage, especially for the HVAC industry as the products are bulky”.

“Competition intensity” is another sub-code which is mentioned as synonymous with demand. The participants mentioned that they favor markets where the competition intensity is low but difficult to find. Although the German market is the top export destination for the Turkish HVAC industry, it has a very intense competition.

Participant P2 declared the following:

“... We entered the Spanish market because the competition was not intense. There was a demand for flexible air ducts and no manufacturer…”

The last sub-code in this code is the “size and growth potential of the market”. Participant P3 talked about this sub-code as follows:

“... The companies are not interested in entering small markets anymore. If the market size is less than 1 million for them, they prefer to have a distributor in that market…”

3.5. Factors of Product

The factors of product code are analyzed under four sub-codes which are “product quality and meeting standards”, “product diversity & innovation”, “after-sales services”, and “product placement and adaption”. Figure 6 shows the sub-codes of the code factors of product.

For the sub-code “product diversity & innovation”, the participants are mainly conflicted between diversity and innovation. Although all participants agree on the importance of innovation, there is no common view on diversity. As an internationalization strategy, the participants generally entered the German market with narrow product lines and concentrated on the lines where they are strong. This is stated by participant P3 as follows:

“... It is impossible to be successful in internationalization without innovation, but it is also possible to be successful without diversity if a company’s products are very good…”

The nature of the HVAC industry makes “after-sales services” more important for the HVAC industry. The participants emphasize this in their statements; as an example, P10 explains this as follows:

“... Although after-sales service is important for every industry, if you have products that need periodic maintenance, such as air conditioners, combi boilers, Heat-Pump or VRF systems, this becomes a necessity”.

For the “quality of the product”, participants mentioned that excessively high-quality products weaken their competitive skills; therefore, the importance of achieving optimal quality was emphasized. This is stated by P21 as follows:

“... In the past, ventilators were made from very thick sheets of metal. Then, Nikotra started using the thinnest metal sheets possible to find the optimal thickness. This approach enabled them to sell to the entire world.”

3.6. Factors of Organization

The code “factors of organization” has the sub-codes “strategic partnerships”, “internationally experienced managers”, “size of the company”, “availability of the skilled workforce”, “entry strategies”, and “logistic network”. The sub-codes of the code “factors of organization” are listed below in Figure 7.

All the participants agree that a qualified workforce experienced in international business is a critical factor for success. In addition, not having anyone who speaks a foreign language, especially English, poses a huge obstacle. Having documentation in the native language of the targeted market plays a crucial role in the success of the internationalization for the German market and other markets. The contribution of participant P21 for this sub-code is as follows:

“The staff we have is fluent in German and this is very important for our success”

The “managers with international experience” who have network relations with the target markets is a crucial factor in successful internationalization. Participant P7 stated that

“... We were encouraged about this business through Mr. X, who works at our company, due to his connections abroad. If we did not know him, we would have faced great difficulties”.

There is a consensus on the last sub-code which is “strategic partnerships”.

The participants strictly stated that without “strategic partnerships”, successful internationalization is not possible. The contribution of participant P20 is as follows:

“... Strategic partnerships and collaborations are, of course, crucial. No matter how high the quality of your products is, it’s very difficult to promote them abroad and reach consumers if you don’t have local supporters, dealers, or distributors…”.

4. Discussion

The co-occurrence analysis demonstrates the interdependencies among the codes of the research which shape the internationalization of Turkish HVAC companies especially in their biggest export market, Germany, with a share of 10.5% in 2022 [45]. Market-related factors, such as size and competition intensity, co-occur with after-sales services and operational knowledge. The adaptation capability to meet consumer demands based on local needs is an important factor in the internationalization process of the HVAC industry. Local language content, rapid spare parts supply, local service training, and product modifications aligned with the local market are the main adaptations to meet the local demands of the German market. The research of Handoyo Yudianto and Fitriyah [46] states that adaptation to the local needs and company’s skills to develop various products for diverse markets is an important factor for guaranteeing international success. In the same direction, Porter and Heppelmann [47] declared that companies can increase the satisfaction of their customers by ‘regionalizing’ their products to meet local needs while offering innovative solutions. Similarly, Barłożewski and Trąpczyński [48] found in their research that capability to adapt to the local dynamics is a vital factor to be successful in internationalization.

Product quality and adaptation are strongly associated with compliance with EU and German standards as well as sustainability requirements, underscoring that technological legitimacy is a prerequisite for entry. The compliance with the standards of the target market constitutes the most critical determinant of success in the international markets especially for developed markets like Germany. Most of the Turkish HVAC industries are facing difficulties in meeting the technical standards of the EU market, and especially the German market which has the highest standards, and where accreditation has the top priority. The minority of those companies who can meet the technical standards upgrade their product qualities, such as decreasing thermal conductivity. Similarly, Wen, Liu, and Zhou [49] declared that companies that want to be successful in internationalization should meet the minimum required quality standards and adjust their technologies according to customer requirements. This is stated similarly by the studies of Chandra, Paul, & Chavan [50], and Wen, Liu & Zhou [49]. Product innovation is accepted as a vital factor that enables companies’ internationalization effectively and quickly in the studies of Breuillot, Bocquet & Favre-Bonté [51], and Jiang et al. [52]. Furthermore the study of Arredondo-Hidalgo, Caldera-González, & Álvarez-Valadez [53] states that product quality, product localization and adaptation to customer preferences and needs, and strategic partnerships are important factors in the internationalization of companies.

Organizational resources, particularly internationally experienced managers and a skilled workforce, are strongly tied to the development of strategic partnerships and institutional networks, which facilitate trust and reduce cultural distance. Having “experienced managers” in the company is also an important factor that affects the success of the internationalization. The research stated that experienced managers can quickly evaluate different scenarios regarding market prioritization, risk analysis, and partner selection during internationalization. Similar results are found by the research of Buckley and Casson [54] as they drew attention to the fact that a skilled workforce who is experienced in international markets directly affects the success of internationalization. Barłożewski and Trąpczyński [48] added that experienced companies are more advantageous in the international markets due to their know-how.

The size and the growth potential of the market are found to be important factors for success in internationalization. The top five export markets of the Turkish HVAC industry are Germany, UK, Italy, Russia, and France, which is a clear sign that the size and potential market is vital. In the study of Barłożewski and Trąpczyński [48], the current size and growth potential of the target market is taken into account by the companies during their internationalization decisions. A similar result is declared by the study of Zaytseva et al. [55].

Finally, digitalization emerges as a cross-cutting factor, linking sustainability requirements and local standards with firms’ ability to meet regulatory and operational demands, echoing recent work on the twin transition of digital and green transformation in international business [56,57,58]. Product diversity and innovation are closely linked to R&D capacity and technological infrastructure, supporting the argument that continuous investment in digitalization and innovation is essential for sustaining competitiveness [59,60]. “Digitalization” and “sustainability” are found to be important critical success factors for internationalization in the study and they strengthen one another. The ERP systems and digital portals enabling us to track the status of the shipments, and digitization helps to track the carbon footprints of the shipments, which is one of the main targets of sustainability. In addition, digitalization enables companies to improve their operations and respond to market dynamics quicker. Similarly, Feliciano-Cestero et al. [61], and Kyove et al. [62] stated in their research that digital technologies enable the faster development of new products and services, the easier penetration of international markets by companies, and the automation of the production process. Figure 8 below shows the co-occurrence analysis of the codes of the research.

Table 3. Comparison of Turkish and German HVAC industries’ internationalization.

Dimension	Turkish HVAC Firms	German HVAC Firms
Policy Response	Benefit from EU Customs Union, but struggle with meeting stringent EU/German standards; rely on tax incentives (e.g., renewable energy support) and exchange rate advantages. Limited state support in standard-setting (TSE less recognized).	Strong policy alignment with EU/German regulations; stable macroeconomic environment; government-backed incentives for R&D, renewable energy, and sustainability adoption.
Technological Advantage	R&D often seen as a cost, leading to underinvestment; technological infrastructure improving but digitalization still fragmented; innovation pursued selectively in niche products.	Strong, continuous investment in R&D and innovation; advanced digitalization (ERP systems standard across firms); technological infrastructure supports global leadership.
Network Type	Heavy reliance on diaspora networks in Germany; project-based entry and wholesalers preferred over distributors; need stronger institutional/export association support. Strategic partnerships considered vital but inconsistently developed.	Embedded in global industry clusters and associations; strong professional and industrial networks; partnerships leveraged systematically to build long-term competitive advantage.

below compares the internationalization paths of Turkish and German HVAC companies across three key dimensions: policy response, technological advantage, and network type. The findings indicate that Turkish companies benefit from the EU Customs Union but struggle to comply with stringent German and EU standards, while German companies demonstrate strong policy alignment and benefit from state-backed R&D incentives. Technological differences are also strong; Turkish companies often underinvest in R&D and face fragmented digitalization, whereas German companies sustain competitiveness through continuous innovation and advanced digital infrastructures. Finally, network structures diverge, with Turkish companies heavily relying on diaspora ties and project-based entry modes, while German companies leverage institutionalized clusters and formal networks that provide systematic long-term advantages. This comparative analysis highlights how structural asymmetries in policy, technology, and networks shape the internationalization dynamics of both industries

5. Conclusions

The interviews conducted with 24 industry representatives, for whom Germany is one of the target markets, clearly highlights that cultural adaptation is the most important factor for internationalization. Understanding cultures and adapting to the cultures of target markets are the key determinants of success in targeted markets. All other factors follow only after cultural adaptation. Since Turkish and German cultures are considerably different from one another, different aspects of German consumers such as their lack of flexibility, attention to detail, and strong emphasis on standards are not similar to Turkish HVAC companies. It seems unlikely that Turkish HVAC companies can be successful without taking these cultural characteristics of the German market into account. Meeting the standards of the target is a vital factor for the internationalization of the Turkish HVAC industry. For the German market, accreditation is very important for entering the market and unfortunately most of the Turkish HVAC companies cannot pass this barrier as they cannot meet the standards of the German market. However, the semi-structured interviews clearly underline that “meeting the standards of the target market” does not alone guarantee sustained access to international markets. Networks are found essential by participants as the networks enable access to local partners, distributors, and knowledge. The general agreement of the participants is that networks are necessary to translate quality into trust and visibility. Firms with strong product portfolios but weak relational networks reported difficulties in converting technical advantages into sales. The twin transformation whose effects are increasingly evident today has begun to significantly reshape industries. Unless the Turkish HVAC industry adapts to this transformation, it will not be possible for companies to succeed in their internationalization process. The experts believe that digital technologies have made dramatic changes both in the production and marketing of the HVAC industry. R&D and innovation gained more importance as a result of Industry 4.0 and digital transformation. Furthermore, these technologies have sped up the process of internationalization, eliminating the importance of geographical proximity, which is strongly emphasized in the traditional international theories like the Uppsala internationalization model. The proliferation of the internet and the convergence of digital technologies have enabled firms to learn about, communicate, and conduct business in distant markets. As sustainability and green transformation are gaining importance in the world, the findings of the research are in the same direction. The experts mentioned that increasing stakeholder sensitivities towards environmental issues leads businesses to adopt sustainable practices in the HVAC industry. The Turkish HVAC industry should undertake the necessary initiatives to align with the sustainability goals established by developed countries such as Germany. In this regard, it is essential for the industry to consider the newly developed energy regulations, which have emerged under the influence of the Sustainable Development Goals. This study features the critical role of network relations in internationalization, aligning with the principles of Network theory. The research clearly stated the importance of having strong and sustainable relations with all stakeholders in order to be successful in internationalization. As Network theory mainly suggests, companies should leverage their relations and partnerships in addition to the product and operational factors in the targeted markets.

6. Managerial Implications

The findings of this study provide several important implications for managers in the Turkish HVAC industry seeking to strengthen their internationalization strategies. First, managers should prioritize product quality and compliance with international standards, particularly those of the European Union and Germany, as these are critical requirements for entry to advanced markets. In addition to product development, building a reliable sales and after-sales service infrastructure is crucial to establishing customer trust and loyalty. Furthermore, the research emphasizes the necessity of developing strong networks and strategic partnerships with local distributors, industry associations, and diaspora communities, which can significantly reduce barriers to market entry. Managers are also advised to invest in digitalization and sustainability—such as through ERP systems, digital marketing tools, and carbon footprint tracking—which not only enhance operational efficiency but also ensure alignment with global environmental regulations. Finally, developing human capital through training, innovation, and foreign language skills, as well as employing experienced managers, will enable companies to adapt more effectively to dynamic market conditions. By addressing these topics, Turkish HVAC companies can sustain their competitiveness and growth in global markets.