Doing business in saudi arabia
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Doing Business In Saudi Arabia. Outline. Country’s Overview Challenges faced by Foreign Direct Investments Hofstede’s cultural dimensions Opportunities Strength of KSA Market Entry Strategies. Country Overview. Full name : Kingdom of Saudi Arabia Population : 28 million (UN, 2011)

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Doing Business In Saudi Arabia

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Doing business in saudi arabia

Doing Business In Saudi Arabia


Outline

Outline

  • Country’s Overview

  • Challenges faced by Foreign Direct Investments

  • Hofstede’s cultural dimensions

  • Opportunities

  • Strength of KSA

  • Market Entry Strategies


Country overview

Country Overview

  • Full name: Kingdom of Saudi Arabia

  • Population: 28 million (UN, 2011)

  • Capital: Riyadh

  • Area: 2.24 million sq km (864,869 sq miles)

  • Major language: Arabic

  • Major religion: Islam

  • Monetary unit: 1 Riyal = 0.26 US Dollar

  • Main exports: Oil, Natural gas, cereals

  • GNI per capita: US $17,820


The kingdom is divided into four major regions

The Kingdom is divided into four major regions


The kingdom is divided into four major regions1

The Kingdom is divided into four major regions

  • The Western Region ( Hejaz )  which lies along the Red Sea coast

  • The Central Region ( Najd ) the heart of the Kingdom

  • The Eastern Region ( Al Hasa ) the richest of all the regions in petroleum

  • The Southwest Region ( Asir )  in the southern Red Sea-Yemen border area


Challenges faced by fdi

Challenges Faced by FDI

sociocultural differences:

  • Body language or eye contact

  • Culture heavily influenced by Islam

  • Language

  • Boundaries between genders


Hofstede s cultural dimensions

Hofstede’s cultural dimensions

http://geert-hofstede.com/saudi-arabia.html


Individualism collectivism

Individualism / collectivism

individualistic = look out for yourself and immediate family (United States)

Collectivist = strong family ties and identity in groups (Saudi Arabia)

  • Saudis must establish strong relationship with outsiders before engaging in business with them.

    Common problem:

  • Take a long time to get to know someone or don't rush the beginning process


Uncertainty avoidance

Uncertainty Avoidance

  • US does not avoid uncertainty

  • Saudi Arabia avoids uncertainty

  • Saudi Arabians:

  • Keep rules and rigid codes of conduct in place

  • Have desire to stay to the rules

  • Work diligently

    Common problem:

  • Americans suggesting new ideas / methods


Power distance

Power Distance

  • Middle eastern societies are extremely bureaucratic

  • Decisions are not made as quickly as in western cultures

  • Nonverbal communication

  • Handshake: right hand and wait for host to draw and withdraw hand

  • Men: avoid touching / looking at women

  • Women: Dress conservatively


Masculinity femininity

Masculinity / Femininity

  • Both countries are masculine

  • Working is a key part of a person’s life

  • High performance in work is crucial

  • Motivation to want to be the best in their work

    Common problem:

  • Lack of training on how to not overpower others in a disrespectful manner


Opportunities in saudi arabia

Opportunities In Saudi Arabia

  • Stable political system.

  • Islam plays a large role in its citizens’ lives.

  • Cultivating solid business relationships before entering into business dealings is key to your success.

  • Safe and secure family environment.

  • Well-established infrastructure.


Strength of saudi arabia

Strength of Saudi Arabia

  • Strong banking system. (Stable currency)

  • No minimum capital requirement.

  • No restriction on repatriation of capital.

  • The ability for foreign investors to sponsor foreign employees.


Market entry strategies

Market Entry Strategies

In-house training:

  • Enables staff to have a prior knowledge of the Middle East and have a better success when entering the new environment

  • Prepares employees to face international business blunders

  • Encourages employees to continue to study various websites, pamphlets, and books that relate to the foreign country.


Video

Video


Work cited

Work Cited

  • “GeertHofstede Cultural Dimensions”.Clearly Cultural, 21 April 2009. Web. 29 January 2013. <http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/individualism/>.

  • “Training for Overseas Effectiveness.” Central Intelligence Agency. CIA Historical Review Program, 22 Sept. 1993. Web. 24 Feb. 2013. <https://www.cia.gov/library/center-for-the-study-of-intelligence/kent-csi/vol4no4/html/v04i4a07p_0001.htm>.


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