development of xyz company's activities in gcc region

DEVELOPMENT OF XYZ COMPANY ACTIVITIES IN

GULF REGIONGULF REGION(GCC & KSA)

Prepared For:Prepared For:

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Prepared By: Samer MOBAYEDFeb 20121/19

ContentsContents

Background Information 1 2 Purpose of the Presentation

3 Overview of GCC Market 4 GCC Construction Sector Overview

5 Construction Opportunities in KSA 6 XYZ Competitive Advantage5 Construction Opportunities in KSA 6 XYZ Competitive Advantage

7 Market Entry Strategies Overview 8 Choose appropriate Market Entry Strategy

What can I offer to XYZ ?10

y g pp p y gy

9 Create detailed Market Entry Plan

S. MOBAYED, Feb 20122/19

My Background Information1 My Background Information

Profile

Competencies

Education

Employment

Skills


Purpose of the Presentation2 Purpose of the Presentation

Provide a guideline with necessary information d ti t XYZ i d t d t t thand tips to XYZ company in order to demonstrate the

significant potential of developing its activities in the GCC market with a special focus on Saudi Arabiamarketmarket

Provide information about the distinct market entry strategies that could be adopted for penetrating this region

Give an idea about what I would be able to offer for XYZ company in developing and expanding its activities in the designated regionits activities in the designated region


Overview of GCC Market3 Overview of GCC Market

The six‐member Gulf Cooperation Council (GCC) S di A bi U it d A b E i t (UAE)(GCC)—Saudi Arabia, United Arab Emirates (UAE), Kuwait, Qatar, Bahrain and Oman—represents one of the wealthiest country groupings in the world

The GCC is a major source of foreign investment capital: by 2020, GCC countries areinvestment capital: by 2020, GCC countries are expected to have over US$3.5 trillion in foreign direct investment holdings

Furthermore, the region is being positioned as a leading trading hub serving the Middle East, Africa d S th t A iand Southeast Asia

S. MOBAYED, Feb 2012S. MOBAYED, Feb 20125/19

Country 2010 Rank

USA 4

Switzerland 21

Canada 8Overview of GCC Market3

GCC

Ease of doing business in the GCC ranks better than India China and Russia

Canada 8

KSA* 13

UAE 33

Kuwait 61

Overview of GCC Market

GCC Country

S&P Moody’s

Bahrain A A2

Kuwait AA- Aa2

ranks better than India, China and Russia (IFC & World Bank ranking)

Kuwait 61

Qatar 39

Bahrain 20

Oman 65

The 6 GCC countries are all rated “i t t d ” b M d ’

Kuwait AA Aa2

Oman A A2

Qatar AA- Aa2Saudi

Arabia AA- A1

Oman 65

China 89

Russia 120

I di 133“investment grades” by Moody’s.Arabia

UAE N/A Aa2India 133

The high oil price has allowed governments to set more ambitious budgets and ensure an expansion of their capital investments programs


GCC Construction Sector Overview4 GCC Construction Sector Overview

Infrastructure Projects currently underway in Infrastructure Projects currently underway in the GCC region aggregate to $ 2.8 trillion

P j i h i d fi i l b ki d Projects with committed financial backing and sustained economic impact will continue

Saudi construction boom will drive listed Developers and Construction companies

In ‘08, Qatar announced plans to spend close to ~$150bn over a 5‐year period. An additional ~$50bn is expected to be spent on infrastructure related to World Cup 2022


Construction Opportunities in KSA55 Construction Opportunities in KSA

Saudi Arabia represents the largest Saudi Arabia represents the largest construction market in the Middle East and one of the fastest growing markets in the world

Saudi Arabia has budgeted more than US$385 billion on roads, airports and energy projects for the , p gy p jfive‐year period from 2010 to 2015

In recent years, record high oil prices and large oil revenues have made it possible for the construction industry to employ extra liquidity for its y p y q ydevelopment



Economic Cities Industrial Cities Major Economic Sectors

•Kind Abdullah Economic City

• Jizan Economic City

P i Abd l A i bi

• Jubail Industrial City I

• Jubail Industrial City II

R Al Kh i I d i l Ci

• Power

•Water and Wastewater

Oil G d P h i l• Prince Abdul Aziz bin Mousaed City

•Knowledge Economic City

•Ras Al‐Khair Industrial City

• Yanbu Industrial City

• Sudair Industrial City

•Oil, Gas and Petrochemicals

•Railroads and Roads

•Airports and Ports• Tabuk Economic City

•Ras Al‐Khair Economic City

• Sudair Industrial City •Airports and Ports

• Tourism


Construction Opportunities in KSA55

Riyadh• Sudair City Development ‐ $ 40b•Princess Noura Bint AbdulRahman University of Woman $ 11 5b

Construction Opportunities in KSA

•Princess Noura Bint AbdulRahman University of Woman ‐ $ 11.5b•Riyadh Airport Tunnel Project ‐ $ 800M

Jeddah• Jeddah Mile High Tower ‐ $ 13.6b

$• Jeddah Hills Community‐ $ 11.2b• Jeddah Gate Development – $ 1.6b

Dammam•Al Khobar Lakes Project – $ 1.2bj•Al Marina Project – $ 1b•Dammam‐Jubail railway ‐ $ 1b


XYZ Competitive Advantage6 XYZ Competitive Advantage

1. Highly trained people2 Sophisticated equipments

6

XYZ Resources

2. Sophisticated equipments3. International experience4. Business partners

Resources

Distinctive Competencies

Differentiation Advantage XYZ Value

XYZ C bili iCapabilities

1. Technology & Innovation2. Up‐dated methodology3. Multidiscipline applications4 Low budget Vs High Quality4. Low budget Vs High Quality


Market Entry Strategies Overview7 Market Entry Strategies Overview

Market entry strategy will provide a strategic Road to Success

7

roadmap to help organize the thought process.

There are six market entry strategies that y gcould be considered for Saudi Arabia/GCC region:

Local Agent (Representative) Joint Venture Partnership

Foreign Direct Investment Joint VentureStrategic AllianceInvestment

(Branch/Regional Office)

Joint Venture Project


Choosing appropriate Market Entry Strategy8 Choosing appropriate Market Entry Strategy Most small companies use the direct exporting strategy by engaging a local agent or representative, however, there are a number of options that could be more convenient to be considered Tips for minimizing risks and choosing the right strategy:

ld ll l l l h1‐ Building excellent local relationships

2‐ Getting excellent legal assistance

3‐ Adopting “Consortium” approach (players from different parts of the market)

4‐ Being careful in selecting local agents or partners

5‐ Entering the market gradually to establish a foothold, a “toe in the water” approach

6‐ Using a “less risk” and “less profit” strategy at the entry stageg p gy y g


Create detailed Market Entry Plan9 Create detailed Market Entry Plan Developing a market entry plan will assist to understand the costs and benefits of each possible

9

approach to the market, and will provide signals when to exit the market in the event that things don't go according to plan

A market entry plan will address:• Which sectors represent the best short‐ and long term opportunities by location and industry?long‐term opportunities, by location and industry?• Competitive positioning recommendations• Penetration strategies, and potential candidates

Opportunities

candidates• Strategic partner options and candidates• Level of support required to build partnerships by direct market presence

Positioning

Supportpartnerships by direct market presence• Costs and benefits of market entry options Costs


What can I offer to XYZ?10 What can I offer to XYZ?

1. Take the lead to develop XYZ activities in GCC and Middle East

2. Develop/Implement XYZ business and sales strategies

3. Identify new opportunities for the designated markets3. Identify new opportunities for the designated markets

4. Engage/Select the best strategic partner/agent

5 Build excellent local business relationships5. Build excellent local business relationships

6. Lead the bidding process and close contractual/commercial negotiations

7. Support/facilitate the executions of awarded projects

8. Oversee the Foreign Direct Investment process and set up regional or branch office (if decided)

9. Represent XYZ in the Gulf region (MENA Region?)


THANK YOUTHANK YOU

Research MarketSAMER MOBAYED

ThinkActBusiness Development & Marketing

Email: [email protected]: samer.mobayed

Plan Ahead

Skype: samer.mobayed


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