Country Profile
Qatar provides numerous opportunities for firms that are ready to establish trading further than the United States or Europe. It has among the highest growth prospects and GDP per capita (of approximately $110,000) across the whole world. Being the most attractive Middle East commercial destination experiencing rapid expansion in all sectors including transport, infrastructure, sports, industries, tourism, education and service sector, Qatar is the best country to export products of all kinds. Its high population of approximately 1.9 million provides a ready market for exports (International Business Publications, USA, 2000). A high number of residents include foreign expatriates’ workers from Palestine, Saudi Arabia, Europe, Jordan, Lebanon, Yemen, Egypt, Syria and South Asia. The high number of foreign expatriates increases the demand for merchandize imports from other parts of the world. Most sectors received a boost after the winning of 2022 FIFA world cup bid in 2010. It has a steady GDP of around 6% per annum with the liquefied natural gas (LNG) sector being the main economic driver. Massive investment in hydrocarbons has enabled Qatar to enjoy rapid economic growth over the past years. As the biggest trading partner, Australia recorded a 7% increase in merchandize trade hitting the $1.3 billion in 2014 (International Business Publications, USA, 2000). The major exports included motor vehicles, meat, live animals and which and totaled to approximately $550 million in 2014. Qatar’s huge oil reserves of approximately 15 billion barrels and liquefied natural gas of around 850 trillion cubic feet makes the country the largest LNG producer. Qatar has a favorable political climate that favors business with most of the projects receiving support from the Qatari government. The government encourages foreign investment through liberalization and tax holidays to the foreign companies investing in the country. The gas and oil sector comprises over sixty percent of Qatar’s GDP thus it can authoritatively be said that Qatar is an oil and Gas-reliant country. Qatar’s government has given economic diversification the highest priority opening up significant opportunities in sectors such as construction, hospitality, infrastructural development, event management and hospitality. In line with the goal of turning Doha to an educational centre, Qatar has attracted numerous educational institutions that seek to transform it to a knowledge-based country.
Aspects of the Business that have to Change to Accommodate Qatar’s Market Needs
Exporting to Qatar’s market where consumer tastes and incomes are different from those of US and Europe will require significant changes in some aspects including packaging, distribution, packaging and marketing of products. One of the most effective ways of reaching the target customers is arranging for a distributor in Qatar to sell the products. Since the local distributor bears the biggest responsibility of ensuring that the product sells, looking for a trustworthy distributor is inevitable (Goswami, Mattoo & Sáez, 2012). The company will set up a branch office in Qatar, preferably in Doha to establish local presence of the business. The local branch will be equipped with the right resources and provided with the right support to ensure success. Consumers focus on both the product and its supplementary features including warranties, service and packaging. Building recognition for a brand as well as protecting the brand name at international level is expensive but the company will strive to comply with Qatar laws on copyrights, trademarks and patents. It is necessary to seek advice from the local consultants and lawyers where appropriate. In addition, fundamental aspects of product to be exported require changing so that maintenance or instruction manuals are stated in the local units such as grams, kilos, Celsius grades or centimeters (Bourguignon, Lambert & Centre for Economic Policy Research, 1996). The color used on the product will be attractive to Qatar consumers. In order to heighten interest, the items will be labeled individually and local knowledge and taste will be taken into consideration. Ease of installation will also be considered so that all information including instructions for installation, training manuals is provided in the simplest language to the Qatar consumers. For easy understanding, English language that is widely used as the national language in Qatar will be used on installation and instruction manuals information provided to the product users.
Plan for Identifying the Emerging Markets to Venture Into
The proposed product to be exported to Qatar market will be electrical appliances. During the next four years, the company will spend $4 billion in creating innovative electrical products that are portable, power effective and cost effective to all income brackets. Since developing countries consumers’ are known for their greater interest in adopting breakthrough innovations, they will be happier with high tech electrical appliances that have high performance going at ultralow cost (Goswami, Mattoo & Sáez, 2012). The idea is to increase the market share for electrical appliances by tapping into all income brackets. The local distributor will be responsible for identifying the emerging markets and how to sell. Once the products become successful in the proposed emerging markets, the company will utilize the innovations in cannibalizing higher margin electrical appliances. The plan will target reaching consumers in major towns of Qatar as opposed to the current one where the local distributor supplies the electrical products to Doha and the neighborhoods. The company will appoint more local distributors to concentrate in the major cities of Qatar. This way, the company will reach the target customers from every corner of Qatar. The local distributors must have the capacity, knowledge of the market and the resources to accomplish the distribution targets. The company will empower the local distributors through offering huge trade discounts and friendly terms to boost the sales.
Services Provided to Keep the Business’ International Customers Satisfied
Delivery is a major issue for most suppliers and getting it right is the surest way of winning the hearts of the customers. The company will honor delivery promises to the local distributors to ensure constant sale of the products. Honoring delivery promise all the time will encourage consumers to buy our electrical appliances again and again. The company will establish online presence through a website that maintains smooth communication with distributors. In addition, the company will make free deliveries for huge orders by the distributors. The company will notify distributors through email how much they need to spend so as to obtain free shipping. Purchases returns option will be provided to the local distributors through our clearly spelt out returns policy (International Business Publications, USA, 2000). Since customers dislike bad experiences with returns, the company will provide for free returns to the customers. Other services that will be made available to the local distributors include the advisory services, internet services, smooth communication, and mitigation against financial risks, currency risk and other external forces.
The Locus of Decision Making for the Service Center
The company will have internal locus of decision making to ensure that the management take full responsibility of its actions. With internal locus of decision making, the company’s management will assume responsibility of the consequences whether they are positive or negative (Lawal, 1974). As a result the company will not accept any external influences no matter what. With an internal locus of decision making, it will be easier to control the actions of Qatar local distributors. Each distributor will be responsible for his or her actions at all times. Further, the management will be in a position to make decisions faster and in a more diplomatic manner. External locus of decision making dilutes the decision making process since opinions of everyone have to be considered and this may take a lot of time. Decisions will be made at the head office and implemented in local branches as well at individual distributor’s level. However, this does not exclude distributors from taking part in decision making process as the company will frequently consult them on major issues affecting their areas of distributorship on a regular basis.
Forms of Foreign Investment
There are four identifiable forms of foreign investment into a developing country; foreign direct investment. Commercial loans, foreign portfolio investment and official flows. The difference between these forms emerges with on how engaged the giver of the loan is with the receiver as well as who the giver is (Oman, 1984). Foreign direct investment is a form of investment whereby a company invests in a company located in a foreign land. The investing company must own more than 10% of the shares in the foreign company. Most multinational companies that spread into many countries start as FDIs. Foreign portfolio investment occurs when a company invests in a foreign company through purchase of stocks and bonds. It is a temporary form of investment because the investing company or individual does not necessarily have shares in that company. Official flow is a form of foreign investment that takes place between nations as opposed to companies. In this case, developed economies invest money in lesser economies or developing countries (Oman, 1984). The recipient of official flow often receives high level technology, economic management and financial support. Commercial loans form of foreign investment on the other hand is in the form of bank loans. This type of investment may be between companies located in different countries or between different countries. FDI is the best option for long-term growth since it is a private form of investment. By buying shares to the subsidiary company, the parent or the investing company gains control over the subsidiary unlike FPI, commercial loans or commercial loans (Oman, 1984). In fact, most multinational companies that spread into many countries start as FDIs.
Current Brands Exporting to Qatar and the Selected Brand Name for Electrical Appliances
Some of the current brands exporting to Qatar include Bazaar, Blush, PSG, Rimmel, Bein, and Bourjois that supply retail outlet products among others (McCrum & Anwar, 2008). The selected brand name for the electrical appliances is Al-Nasr. The idea behind Al-Nasr brand name is the unique design, functionality and attractiveness to the conventional Qatari market. The brand name is likely to become popular in the foreseeable future due to the high performance of the range of products associated with the brand name. The selected distributor outlets will supply unheard array of electrical appliances and much more to the growing population.
References
Bourguignon, F., Lambert, S., Suwa-Eisenmann, A., & Centre for Economic Policy Research (Great Britain). (1996). Distribution of export price in a developing country. London: Centre for Economic Policy Research.
Goswami, A. G., Mattoo, A., & Sáez, S. (2012). Exporting services: A developing country perspective. Washington, D.C: World Bank.
International Business Publications, USA. (2000). Qatar: Country study guide. Washington, DC: International Business Publications, USA.
Lawal, O. A. (1974). The product life cycle model applied to export manufactures and investment in a developing country. Lund: Stiftelsen f. information om ekonomisk forskning.
McCrum, P., & Anwar, H. (2008). Qatar’s business environment. London: GMB Pub.
Oman, C. (1984). New forms of international investment in developing countries. Paris: Development Centre of the Organisation for Economic Co-operation and Development.