Introduction
Background
Entering new markets, especially foreign markets, requires organisations to exercise much caution. While organisations can develop strategies to cope with entry changes that are related to their internal structures, dealing with macro environmental factors in a foreign nation is incredibly problematic. This situation underlines the importance of development of an appropriate entry strategy that ensures that an organisation makes use of the existing knowledge and experience of operating in foreign nations. Such strategies include opting for franchising and licensing before focusing on full ownership arrangements.
In fact, “all business operate within an environment, which directly or indirectly affects the way in which they function” (Holt and Quelch 69). This claim implies how successful colonisation of new markets in the Middle East calls all organisations seeking to establish businesses in this region of the world that is characterised by political instabilities to consider the impacts of various macro environments within the selected locations.
Whether an organisation specialises in offering services or selling products, the aim of colonising new markets is to increase profitability levels, and hence the competitive advantage of the organisation in question. Any factor that may make this goal unrealisable becomes a major hindrance while engaging in business in foreign nations’ new markets. Indeed, an organisation can only invest in a foreign nation after calculating the possible risks and determining the possibilities of developing risk mitigation strategies with success (Yardley 219). While the strategic location of the Middle East nations is attractive for international organisations seeking to expand their business portfolios to grow their profitability, considering risks, especially the ones posed by political instability in the region, cannot be ignored. Nevertheless, other attractive factors such as availability of cheap youthful labour in the region together with legislative changes can encourage and boost investment.
Considering the challenges and opportunities in the Middle Eastern markets, investors in the international arena possess the freedom to make choices on whether not to invest in the region. They can also opt to invest in the region by deciding on the nations, which present fewer risks to their operations and/or which present high probabilities of success upon entering the markets. These decisions require availability of frameworks, information, and insights that are critical in developing effective entry and growth strategies (Yardley 221). This plan is particularly important for markets that are characterised by political turbulence and changing social developments. This paper aims at providing such frameworks and insights to organisations that consider exploiting the Middle Eastern markets through a detailed analysis of Tim Rogman’s case study on entry strategies for Middle Eastern markets.
Situational Analysis
Venturing into new markets requires an analysis of the likely risks that prevail in specific markets of interest. Tim Rogman’s case study presents the dynamics of the Middle Eastern markets through a discussion of the various changes occurring in the Middle East bazaar in terms of the changes in trends. The main trends, alternatively referred as megatrends by Rogman, include political unsteadiness and upgrading of commercial regulations, large wealth of energy resources that are necessary to boost production, regional integration, the emerging influx of participation of women in development, and maturation of the labour force in the Middle East. The demographic characteristics of the region and shift towards value consumption, turning towards east, and the rising multinationals in the Middle East (Rogman Para.8-10) also constitute important trends for organisations seeking to establish business operations in the region to consider.
Another important situation for consideration while making decisions to enter the Middle East markets by foreign investors is location. In making such decisions, Rogman identifies lack of reliable region wise data on market value statistics (Para.13) as a major challenge, which compels organisations to rely on fragmented macro level data that is collected by companies for their own specific uses. Even after identification of attractive business locations, Rogman maintains that the consideration of other factors such as infrastructural developments, taxation, and differences between thresholds of political risks in different Middle East regions is important.
New markets often present challenges in terms of aligning organisations’ culture to the local tastes and preferences, attitudes, and beliefs. For this reason, Rogman identifies the various options for entry modes as important situations that foreign investors need to consider while arriving at a decision to invest in the Middle East markets. Possible entry modes that may work in the markets are franchising, exporting, and joint ventures such as mergers and acquisitions (Rogman Para.17). Nevertheless, each of these modes is suitable for different extents and depending on different situations. Upon identification of the most suitable method for entry, the last conditions that are worth putting into consideration while entering Middle Eastern markets include the knowledge of the challenges of establishing and implementing the modes (Rogman Para. 20-23).
Problem Identification and Objectives
From the discussion of the above situational analysis section, an investor seeking to introduce new products and services in the Middle East markets encounters a myriad of challenges whose proactive resolution is problematic due to lack of sufficient data. This situation may hinder the efforts to develop a reliable marketing plan. In market planning, countless issues are considered with reference to decisions on products that are offered in the market for sale, the place where they are to be sold, pricing, and even promotion techniques. This requires heavy input of facts on consumption patterns on a given market.
Rogman confirms the scarcity or non-inexistence of the data for developing markets such as those of the Middle East. How can organisations arrive at decisions on how to re-engineer their products to meet mass appeal for consumers in the Middle East?
For instance, in market planning, when attempting to place a new product, an organisation must evaluate the capacity of a new product to meet the need of the consumers. The claim here is that goods and services offered for sale must deliver utmost good to consumers. For instance, foreign investors seeking to offer financial products and services in the Middle East need to understand the reception of contemporary financial systems in comparison with Muslim financial systems for them to participate competitively in financial organisations that are established in the Middle East regions.
Even though Middle East regions present attractive markets for foreign multinational corporations, political risks that are presented by instabilities in countries such as Syria, Iraq, Iran, and the conflict between Israel and Palestine are major problems that may make an organisation susceptible to risks that may lead to financial failures. With these problems, it becomes important to provide a framework for entry modes to mitigate the impacts of the problems on business success. In this extent, analysis of the Tim Rogman’s case study is instrumental.
Challenges, Issues, and Limitations
Different research strategies have different strengths and limitations. Case studies present an effective research methodology where the focus in on answering questions such as why and how. While contemplating on the requirements of the group’s research, the major issues revolved around what was exactly required out of the analysis of the case study. However, the group resolved these issues by unanimously contending that the main objective upon analysis of the case study was to provide information on how organisation can penetrate the Middle Eastern market amid its political volatility challenges and the emerging social and economic trends.
The case study was found important in terms of successful achievement of the group’s task since case studies are important where “research aims ‘to provide descriptions of phenomena, develop theory, and test theory” (Darke, Shanks, and Broadbent 274). This concern corresponds to the purpose of the current case analysis report.
In the analysis of the case study, generalisation challenges were a major concern to the group members. Case studies suffer from generation flaws “in terms of concept development, theory generation, the drawing of specific implications, and rich insight development” (Walsham 9). Amid this challenge, the focus of the strategy is to explain and understand the case while providing a description of the Middle East markets entry challenges and opportunities. Common themes and attitudes among the group members emerged, thus reducing challenges in arriving at individualised generalisations. Another limitation of deployment of the case study in arriving at the deductions made in the research that is of great concern to the group members is rigor in research.
Case studies have been criticised for lack of research rigor (Yin 71). In fact, various challenges make case studies research lose rigor such as influence of researchers on the analysis and the processes for data collection (Darke et al. 279). However, in our research, the case study is already developed. In fact, no member of the group is permitted to engage in manipulation of the case study whatsoever to suit any individualised motives or affiliations. Thus, the only source of inaccurateness is in the inferences made using the information provided in the case study. This situation may emanate from the analysis process. Considering how case studies are important research methodologies for applied fields such as marketing, education, and administration among others, the use of the case study to offer recommendations on how organisations can penetrate the Middle East markets remains satisfactory.
Strategy or Framework
Drawing from the discussion of the challenges, issues, and limitations section, the use of case studies in the generation of information to apply to different market segments within a broad market block such as that of the Middle East is problematic. This observation is especially important since mega factors, which may influence business operations such as political instability, do not apply homogeneously within all Middle East regions.
However, Tim Rogman’s article forms an important case study depending on the research strategy and research design adopted in this research. “Perhaps because a case study focuses on a single unit, a single instance, the issue of generalisation looms larger here than with other types of qualitative research” (Stake 447). However, through analysis of a specific case study, much precise information can be availed on the given issue or specific situation. This assertion forms the main aim of conducting the analysis of the article by Tim Rogman’s on entry strategies for Middle Eastern markets.
Rigor, reliability, and validity in the use of case studies in research remain major challenges in research strategy. These problems are mitigated by drawing literature on entry strategies for volatile and risky markets in the analysis process of the case study. Specifically, issues of conformity to services and products offered with the prevailing attitude and practice within a given market are incorporated within the process of analysis. Since an analysis of the possible considerable factors on the development of products and services that are offered in the Middle Eastern markets to comply with the beliefs and tastes of the region’s consumers may not be feasible in a research that is constrained by time, only financial services and general products are considered.
The research strategy then synthesises trends, location, entry modes, establishment of entry modes, and the implementation of the entry mode for Middle East markets as provided by Tim Rogman in the context of the existing literature on new market colonisation.
Analysis
Forecasting and Measuring Demand for Organisations
Upon identification of the potential new markets, organisations seeking to establish their business in such markets focus on estimating both the current and future markets’ potential. This highlights the necessity for market demand forecasting and measuring in the Middle Eastern markets. It helps in the development of effective methods of targeting and management brands in the new markets. In fact, “Overly optimistic estimates of current or future demand can result in costly overcapacity or excess inventories” (Frank 308). On the other hand, underestimation translates into missing profitable opportunities through lost sales.
While planning to enter the Middle Eastern markets, the current demand and future demand forms two essential factors that organisations must put into consideration. The current demand is estimated through total market demand, actual sales, demand within specific areas, and the markets shares for organisations in a specific industry that a particular company seeks to establish itself. Total market demand of products and/or services involves the overall volume anticipated to be placed in the market successfully for a given group of consumers within a particular geographical region for a certain period of time and through the adoption of particular marketing mixes.
In the Middle Eastern Markets or any other market, various factors act as the determinants of the capacity of an organisation to market its products and services with success. For instance, the financial market demand in the Middle Eastern markets is influenced by economic conditions, political risks, and other environmental factors.
In any market, organisations encounter the problems of identifying territories that will account for the best sales through allocation of marketing financial budgets with optimal success. “They need to estimate the market potential of different cities, provinces, and countries” (Barnett 29). This factor is perhaps incredibly important for Middle Eastern markets upon considering that different regions have different levels of risks and impediments to business success. Sustainability highlights the importance of selecting business locations by considering the capacity of organisations to mitigate different risks. Market-built-up approach and market-factors index approach are important techniques in enhancing effective forecasting and measuring of the demand in the Middle Eastern markets by organisations seeking to exploit various business opportunities in the region.
In the new markets, organisations also endeavour to estimate and forecast their market shares together with actual sales. This factor calls for identification of competitors and/or estimation of organisations’ sales levels. “Industries’ trade associations often collect and publish total industry sales, although not individual company sales” (Frank 309). This provides platforms for evaluation of organisational performance compared to the overall industry. Unfortunately, as Rogman reveals, this data may not be available in developing markets such as Middle Eastern markets. Companies must then conduct their own studies to gather data that enables them to conduct estimations and forecasting of their market share and actual sales.
Advantages or Disadvantages of an Organisation that provides a Good against an Organisation that provides a Service when entering the Middle Eastern Market
Marketing strategies act as imperative mechanisms of entering any new markets. Customers not only buy a product or pay for a service but also pay for the brand image. Brand image is a “perception of customers when they see a brand reflected by brand associations in their mind” (Keller 27). These associations are multidimensional and dependent on the cultural context and beliefs of the target market. They contain a myriad of attitudes or dimensions, which are emotionally instigated in relation to customers’ perceptions on the brand quality and the degree to which the brand satisfies the needs of customers. Kotler, Adam, and Denise note the relevance of creating services or product brand images in any new market (136). They claim, “From customers’ overall picture of their experiences, brand image is important because it creates the customers’ cognitive, emotional, and behavioural responses as an outcome” (Kotler, Adam, and Denise 136). This suggests that successful marketing of both products and services in a new market requires the availability of consumer data.
Analysis of consumer behaviours data can help to provide information on psychographic and demographic patterns of consumptions of products and services in a new market. “Data on a reliable market can be hard to obtain in countries where the collection of statistics by government agencies is ongoing” (Rogman Para.13) while discussing the challenges that investors encounter when establishing the best location in the Middle Eastern markets. This implies that whether an organisation specialises in offering services or products in the Middle Eastern markets, availability of data to inform the best strategies of positioning a product or service presents disadvantages.
Macro environmental factors that influence the success of an organisation in a new market are not selective on whether an organisation specialises in offering services or products for sale. In fact, a number of factors, which operate internally or externally to an organisation, influence the decisions made by a new organisation that seeks to invest in the Middle Eastern markets. From the PEST EL organisational analysis approach, these factors include political, economic, social, technological, environmental, and legal factors (Kotler, Adam and Denise105). Legal and political environments affect the operations of the company via taxing policies. An organisation must pay taxes from its profits. In the Middle Eastern markets “most Gulf countries operate a ‘no tax’ policy, which makes them look attractive at first sight” (Rogman Para.15).
This rule does not advantage service or product-selling organisations, with segregation suggesting that advantages or disadvantages in establishing business operation equally affect organisations that specialise in offering services or products in the Middle Eastern markets.
The management of an organisation must comply with environmental regulations, tariffs, and employment laws that are established within various nations where the company intends to establish outlet stores. The main challenge for any company establishing new operations in the Middle Eastern markets is that these policies may be different in different nations. Thus, whether engaged in the service sector or in offering products for sale in the Middle Eastern markets, organisations’ control over these policies in an effort to have harmonised financial budgeting systems presents disadvantages.
From the above assertions, Middle Eastern markets may not have different advantages or disadvantages in marketing products or services. However, the nature of marketing strategies for services or products may portray contradictory advantages or disadvantages. Marketing a service is different from marketing a product because in addition to the usual traits of products, services “lack ownership, are intangible, inseparable, and have heterogeneity” (Rust, Zeithaml and Lemon 113). Consequently, to realise results in attempting to establish good customer relationships, appropriate service marketing mix must be deployed. The service marketing mix includes physical evidence, people, and process.
Physical presence prescribes the characteristics of the place of the service being offered. The deployment of these aspects in building and managing customer relations is realised through ensuring that an organisation is distinguished clearly from probable and existing competitors. Unlike marketing products where an organisation may decide to offer the products through partnering with an organisation that has built good customer relationship and loyalties, offering service will require an organisation to create unique service brand through its established infrastructure, people, and processes.
In the fresh markets, people can evaluate and/or compare the utility of a product with other products that are offered by other organisations with ease. The utility attributes for a product such as taste, quality, and quantity may be easier to quantify. On the other hand, while marketing serves the goal of re-engineering services to comply with the existing cultural and religious beliefs and teachings, it may be interpreted with suspicion. This disadvantage may afflict organisations that seek to offer financial services in the Middle Eastern markets. For instance, business activities and conducts of parties in businesses are legitimate only within the confines of the teachings of the Holy Quran as the basis of Shariah law (El-Galfy 949).
In contrast with the conventional systems, Shariah takes control over any business undertakings conducted by Muslims to ensure free and fair market. For instance, Islamic financial systems are guided by various rules that are derived from Shariah law such as avoidance of riba and Qard (El-Galfy 949).
Qard encompasses a financial package used in Islamic banking in lending systems, which are interest-free with no extra increment. The repayment includes the loan plus bank expenses done at once or in part in the future. In the conduct of the permissible types of sale, the involved parties cooperate to avoid unacceptable practices such as riba and gharar (Abdul 57). Consumers may be suspicious on the purpose of altering financial services offered by foreign investors in the financial sector, thus creating more difficulties in marketing of the services compared to products in Middle Eastern markets. However, it is important to note that Islamic principles with regard to trade equally apply even in business relationships involving exchange of products for value. In these sense, product-selling organisations also suffer from similar challenges that are experienced by service sector organisation such as those seeking to exploit financial service sector in the Middle Eastern markets.
Marketing Environment for in Middle Eastern Markets
Marketing environment for an organisation has a collection of external and internal factors, which influence the capacity of an organisation to establish successful relationships with its target clients. These factors operate at either macro or micro levels. Micro- environmental factors refer to all “forces that closely influence the company while directly affecting the organisation’s relationships” (Yardley 226). Major micro-environmental factors include company suppliers, intermediaries deployed in marketing, the employees for an organisation, the company itself, and the public within the market environment in which the organisation operates.
These factors are internal to organisations. Hence, organisations have the capacity to control them in any market. This suggests that even if they are important in the analysis of the marketing environment for organisations seeking to invest in the Middle Eastern Markets, they may not cause excessive panic on the success of an organisation in the market compared to the factors that are external to it. Factors that influence the marketing environment for an organisation externally are collectively termed as macro-environmental factors or PESTLE factors.
As stated before, there are various macro-environmental factors affecting marketing function for an organisation in a new market or an already established market. These factors are “political, economic, social, technological, legal, environmental, and demographic factors” (Kotler, Adam and Denise105). Demographic factors imply the characteristics of the market population including density, occupation, race, location, and age. Studying these factors helps to determine the consumption characteristics in a given market. Demography also includes aspects such as geographic shifts, changes in workforce characteristics, and diversities occupying a specific area.
Demographically, Middle Eastern markets are characterised by immense changes in the workforce environment. Despite various challenges in alteration of the perception of non-incorporation of women in the workforce through the culture for confining women to domestic chores, the Middle Eastern regions have experienced a boom of increased enrolment of women in institutions of higher learning together with their absorption in the workforce. This suggests that an organisation seeking to invest in Middle Eastern markets should consider the rising potential and buying power among women in the development of its marketing strategies that should be divided along gender demographic factors. The population in the Middle Eastern market block is anticipated to “grow by over 80 percent over the next four decades” (Rogman Para.9).
The influx of young people into the labour market is also incredibly high. Hence, organisations seeking to invest in the region must consider developing products and services that potentially attract the high consumption among the youths. High population means high consumption rates of products and services within a given market segment. This translates to high sales levels, which create the necessity of incorporating strategies for enhancing large placement for products and services in the marketing plan for any organisation that looks forward to invest in the Middle Eastern markets.
Political factors are important in the analysis of marketing environment for organisations that wish to invest in a new market as they help to reveal the degree of political risk in the financial performance of an organisation. The Middle Eastern markets have political volatilities that are fuelled by conflicts such as the Israel-Palestine conflict, Syrian conflict, and the instabilities in Iraq and Iran among other regions (Rogman Para.3). It important to note that different nation’s plays active and passive roles in resolution of these conflicts. Where the public or even a given target market segment opposes the roles played by a given nation in the political conflicts within their nation, multinational organisations that are established within negatively received nations face higher challenges. Such challenges may include boycotts for purchasing products and services that are offered in the Middle Eastern marketplace by such multinationals.
The operational economic environmental factors denote issues such as competition and influx of new brands by the existing competitors. In the Middle Eastern markets, foreign multi-nationals operating in various industries are encountering intense competition from local organisations, which are also expanding at international platforms.
Such industries include airlines with organisations such as Emirates and Qatar airways that are rapidly expanding together with the logistics industry, with Aramex and DP World taking central platforms in the global logistical markets. Other industries where foreign multinationals are experiencing intense competition from local organisations are “tourism (Jumeirah), telecommunications (Etisalat, Orascom), petrochemicals (SABIC), as well as in finance and construction” (Rogman Para.10). Local organisations have a competitive advantage. They do not encounter legacy problems. This ensures quick adoption of the best practices that are embraced by population in the Middle Eastern markets.
Lack of significant legacy challenges ensures that local multinational organisations in the Middle Eastern markets have the advantage of “low cost labour, low taxes, and a favourable location for transport, tourism, and energy-intensive industries” (Rogman Para.10). All these advantages are important in ensuring that organisations are economically competitive. Availability of energy resources, regional integration, and turning towards east are important factors that may enhance economic competitiveness of foreign multinational organisations seeking to invest in the region.
Apart from political and environmental macro-environment factors, legal, technological, and social factors also affect the marketing environment in the Middle Eastern markets. Shift towards value-based consumption is perhaps one of the most important social factors that may affect the success of an organisation in the Middle Eastern markets. Middle Eastern customers are progressively buying based on their principles and philosophies, thus bringing fast expansion in Islamic markets (Rogman Para.8). This implies that social beliefs form important factors that determine consumption patterns in the region.
While foreign investors may have well-developed technologies to enhance their penetration in the Middle Eastern markets, legal factors may influence their degree of success. For instance, most Middle Eastern regions run under the rule of ‘no tax’ policy. At glance, this looks like a major advantage while operating in the Middle Eastern market. However, “Investors need to do a careful analysis of the total cost of running a business, including rent, various license fees, import duties, and telecommunications” (Rogman Para.14). This advice is perhaps important by considering that the cost of telecommunication in some Gulf region nations supersedes the rental cost for business premises.
Role of Corporate Culture in Competitive Advantage
An organisation has to adopt values and beliefs that are shared by all people and its business associates. This strategy helps the harmonisation of goals, objectives, and mission of an organisation in its different operating units. The constituents of an organisational philosophy define the organisational culture. This suggests that organisational corporate culture binds all components and sub-components of an organisation to form one harmonious system that has common goals and objectives amid constituting different components, which are capable of building and maintaining an organisation’s competitive advantage.
Corporate culture can create a competitive advantage or difficult challenges for organisations entering the Middle Eastern markets. Challenges may arise in situations where organisations do not alter their organisational culture to meet the needs, beliefs, tastes, and preferences of the Middle Eastern Market population. For instance, in the Middle Eastern markets, the application Shariah law to regulate business relationship determines the permissible and non-permissible form of trade. Generally, future and forward markets are not permissible. Islamic exchange systems have different rules that are applicable to these two markets. The rules prevent unnecessary gains or acts of taking money away from other people (Abdul 121).
Where the corporate culture supports hedging in financial markets, such an organisation will definitely suffer from a low competitive advantage. Important hedging instruments involve “interest rate swap and profit rate swap” (Zahan and Kenett 60). Although the instruments are available under both the conventional and Islamic system, their permissibility is based on different legal principles. In the Islamic system, the principle entails the application of Shariah. While it is widely used in conventional financial systems, interest rate swap in the Islamic system leads to the violation of Gharar, riba, and the Maisir Shariah laws that guide the operation of the Islamic banking system.
Although cooperate culture’s support to conventional financial systems may make foreign investors in the Middle Eastern financial markets encounter critical challenges, re-engineering the culture to comply with Islamic financial systems may help induce and/or grow an organisation’s competitive advantage. In fact, corporate culture acts as the determinant of the capacity of a foreign nation seeking to invest in the Middle Eastern markets to differentiate and promote its brand.
With the onset of two-way forms of communication such as social media, an organisation that plans to build its competitive advantage around its corporate culture needs to get the correct culture in a given market right from the beginning. When one client identifies a single aspect in the organisation’s corporate culture that fails to comply with the beliefs and values of a certain group of the target market, social media provides a platform for viral spreading of a complaint. This suggests that building reputable brands in the Middle Eastern markets depends on the ability to establish cohesive corporate culture that is consistent with the values, perceptions, and beliefs of the target markets’ population in the region.
Can IMC assist?
Similar to any other market in the global market place arena, the Middle Eastern markets have an influx of products and services from which customers choose. Choosing a product depends on various factors, especially psychographic factors. Where an organisation establishing business in the Middle Eastern markets has a reputation of its services or products not complying with values, beliefs, and preferences of the Middle Eastern populations, chances are that this trait may influence buying decisions even though it may have altered its corporate culture to meet these requirements. To mitigate this challenge, integrated marketing campaign (IMC) is of great importance.
Through IMC, “marketers can clearly and effectively communicate their brand’s story and messaging across several communication channels to create brand awareness” (Boundless Para. 5). Consequently, building a cooperate culture for effective integrated communication that clears all doubts and suspicion in all market segments encompasses a major step towards maintaining competitive advantage of an organisation that is establishing new businesses in the Middle Eastern markets.
Conclusion and Recommendation
Establishing a new business in a new market presents several challenges to foreign investors. As revealed in the paper, many of the challenges are akin to the existing macro-environmental variables as opposed to micro-environmental variables. These variables make the Middle Eastern markets vary across nations in terms of threshold of risks accruing from challenges such as political instabilities and differences in demographic characteristics of their target market segments. Consequently, any organisation with a strategic objective of expanding into the Middle Eastern markets needs to consider various macro-environmental factors in arriving at location decisions.
While selecting the location of the business in the Middle Eastern markets, consideration of several issues is recommended for foreign investors. Assessment and analysis of various economic, institutional, and more importantly, political environments are necessary. Organisations seeking to invest in the Middle Eastern markets should only engage in calculated risks. To achieve this endeavour, it is recommended that they conduct reviews for various ratings of different risk factors together with how they influence the business of an organisation. However, to make informed decisions, companies need to collect data for use specifically in conducting their own assessments of risks that can influence negatively certain types of projects that they intend to initiate. In the case of Erbil in Iraq, such analysis may reveal that such challenges may provide opportunities for success even though operating in highly politically unstable environment is inappropriate.
For multinational businesses that plan to establish their business presence in the Middle Eastern markets, they cannot fail to consider issues such as life quality and the established institutional infrastructures to augment their decisions. All organisations largely rely on employees and managers to execute businesses on the behalf of the owners (shareholders). To encourage them to make decisions on relocating to new workplaces in new markets such as the Middle Eastern markets, quality of life stands as an important factor for consideration.
Factors such as the presence of international schools near localities (or in the vicinities of a location of an organisation’s office) and/or safety in regions with high political engagement of the public are crucial in this end. Another important aspect entails the availability of a talent pool to conduct sophisticated chores for organisations within the new market. Where this factor is important in influencing the location of an organisation in the Middle Eastern markets such as organisations in the IT sector, the Middle Eastern markets are attractive. This recommendation is made upon the realisation of the fact that there exists a large talent pool of young people joining labour markets in the region to provide cheap and highly technologically informed labour.
A few checks are important to ensure a positive reception of an organisation seeking to invest in the Middle Eastern markets. One of the issues is the corporate culture. Teachings of the Shariah law guide trade and business relationships. Organisations must then alter their business culture such as charging interests (riba) just like in the case of conventional financial systems. Future and forward markets are also not allowed. Hence, foreign investors are only recommended to deploy spot markets in their exchange of goods and services within the Middle Eastern markets. They must also be prepared to face intense competition from Middle Eastern multinational corporations such as Qatar airways and Fly Emirates in the case of the airline industry. A possible way of entering these markets is through strategic partnerships and mergers with these organisations since they also have legacy advantages in relation to foreign multinational businesses.
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