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From Abu Dhabi Investment Authority (ADIA) becoming the largest single shareholder of Citigroup, to a one day $40 billion buying spree of 140 new generation planes by Emirates Airlines, Qatar Airways, and Etihad, an endless flow showcasing the worlds ‘biggest’ and ‘largest’ project and investment news is emerging from the oil rich countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. With an estimated liquidity in excess of a staggering US$2.3 trillion (KPMG) and a seemingly equal appetite for domestic, regional and global investments - the noise around this trade bloc (referred to as the Gulf Cooperation Council - GCC) is finally getting global attention.
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Executives from western multinationals who never took the region seriously are now having their annual industry conferences, executive retreats or sending their emissaries to the region just to figure out questions such as why on earth are most of the world’s cranes in the GCC.
Meanwhile, surrounding OIC member countries and others with a history of engagement in the GCC are scrambling to figure out the best strategies to benefit from this second coming of the GCC 'oil rush'. |
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Dubai & Co. is a recently launched book (Dec 2007, McGrawHill, 330 pages) by global corporate strategist Aamir Rehman which for the first time looks at the unique nuances of the GCC market opportunity and provides specific strategies to approach with. If you ever needed a set of corporate strategy binoculars and a toolbox to navigate the regions opportunities-this book is it.
Aamir A. Rehman masterfully brings together his background as a strategy consultant to global multinationals as well as his experience with the culture and business environment of the GCC. He holds an MBA from the Harvard Business School and has worked as strategy consultant with the Boston Consulting Group and the Monitor Group. Until recently he was the global head of strategy for HSBC Amanah and also has a degree in Middle Eastern Studies and Arabic from the Harvard University.
This unique background gives the author the ability to talk about each country from a cultural point of view that only an insider would know while speaking the executive language of the best strategic frameworks to approach this market with.
The book is structured into two parts. The first part looks in detail at the business opportunity that the GCC markets provide as a whole as well as individually.
It starts by providing clarity on how best to approach the broader 'Middle East' region highlighting the confusion around its definition. The book suggests using a "three-cluster model" that is more indigenous to the region and recognizes distinct economic profiles-- the Levant (Bilad al-Sham), North Africa (al-Maghreb and Egypt) and the Gulf states (GCC, al-Khaleej).
Within the GCC, some key misconceptions are addressed-which are mostly for those with very little familiarity with the region. For example, the author addressess the ideas that GCC markets are not only about the rich and have needs that go far beyond high-end product and services. He cites that the GCC's GDP per capita was around $20,000 which is less than half that of the US ($43,500) and is infact roughly the same as Portugal, one of the poorest Western European countries. It certainly acknowledges the GCC's share of millionaires but points to the mid-market opportunities by citing the success of retailers such as IKEA and Carrefour in the region. Other key misconceptions broken, highlighted the importance of women and 'expatriates' in the GCC economy and the diversity of industries that go beyond oil.
The author makes a very strong case for the viability and attractiveness of the GCC market and its sustained prosperity and growth by discussing a variety of economic indicators (eg. growth rate of 6.5%) which are all highly attractive. Coupled with these economic indicators, the author highlights very attractive demographic shifts as well as regulatory reforms that result in a variety of business opportunities. The book also details the GCC's strategic international trade linkages--being the trendsetter for the broader Middle East, having strong linkages with Asia including India and China, and being the capital of the Muslim world. These opportunities are however weighted against key risks to doing business in the GCC countries, including economic, political, and social factors.
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A particularly interesting section of this first part is the history and background of each of the GCC countries as it relates to their economic profiles. This provides readers with new insights on the unique nuances that exist in them. For example, the author refers to Oman as the 'real' economy, with greater diversification, a local middle class, preserved historical sites, and a range of terrain while calling the UAE a 'trailblazer' which has established itself as the region's commercial hub. |
Mr. Aamir A. Rehman |
The second part of the book showcases how various global and regional businesses such as McDonald’s, GE, IKEA, Kraft, Honda, Nestle, Zara, Proctor & Gamble, and others have entered, marketed and managed these markets, and then provides actionable strategic models that best capture the various approaches.
The author goes in particular depth with examples of various market entry strategies which are particularly insightful as this is one of the biggest questions for those who have concluded that it is not a question of 'if' but 'how' in regards to the GCC market. From simple distribution agreements, to JV's and partnerships, to direct market entries - the author highlights, with examples, the pros and cons of each approach. Similarly the author addresses marketing and management strategies and the role of various global talent management and marketing agencies which already exist in the region.
Finally, and importantly, the book also devotes a whole chapter on how to approach the GCC as a source for capital. Given high liquidity and excess capital in the region looking to be invested regionally and globally, the book lays out the various capital outlets and an analysis of major transactions.
Overall, the book is an easy read with practical how-to insights at the same time keeping the reader interested with fascinating case studies of those global players who have experience in the market.
What's lacking in the book is that it seems solely directed towards western multi-nationals. For example, there are very little examples/ case studies relating to regional players experience in engaging with the GCC, for example of companies from Malaysia, Pakistan or India. For regional executives some of the introductory chapters may also seem very basic. However there are some very insightful nuggets which even readers from the GCC will find interesting. Also, given this is an overview to the GCC market opportunity, there aren't industry specific strategies laid out around core sectors.
Nevertheless, this is a ground breaking book which has for the first time addressed the GCC market strategically and we are sure many will follow. To end with the books last few sentences - "The wisest firms may embrace the region or choose to proceed with caution —but they certainly will not ignore it. No corporate strategy is truly global without attention to Dubai & Co."
--- You can read more about Dubai & Co. on the authors blog: Aamir A. Rehman. Note: Mr. Aamir A. Rehman is on the Advisory Panel of
Dinar Standard™.
| Key Learnings: |
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Dubai & Co. (launched book Dec 2007, McGrawHill, 330 pages) by global corporate strategist Aamir Rehman for the first time looks at the unique nuances of the GCC market opportunity and provides specific how-to strategies to approach it with. If you ever needed a set of corporate strategy binoculars and a toolbox to navigate the regions opportunities-this book is it. |
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The book first looks at the business opportunity that the GCC markets provide as a whole as well as individually. The second part provides strategy recommendations and showcases how various businesses such as McDonald’s, GE, IKEA, Kraft, Honda, Nestle, Zara, Proctor & Gamble, and others have entered, marketed and managed these markets. |
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This is a ground breaking book which for the first time addresses the GCC market strategically with fascinating case studies. Examples used are mostly western multi-nationals and very little is discussed relating to regional players experience in engaging with the GCC (Malaysia, Pakistan or India). |
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