Market Entry Strategy Project on Qatar – Free Essay Examples

Market Entry Strategy Project on Qatar

Introduction

The country Qatar as it is known is located in the Asian continent among a cluster of Arab countries in the Middle East. “The country is surrounded by a large part of the Arabian Peninsula and occupies a smaller portion of the Arabian Peninsula. Saudi Arabia borders Qatar to the south and is another state of Bahrain which is actually an island nation is separated from Qatar by the expansive stretch of the Persian Gulf”. (Orr 2008). Qatar’s size can be said to be a little less expansive to the Connecticut State in the U.S but the only differentiating factor is that most of its land is plain with almost no vegetation and mostly covered with sand

Demographics

According to the recent research, the country’s population stands at 907,229 people as at April in the year 2001.This figure however is comprised of the citizens and the non citizens of the country.350, 000 of the stated figure were found out to be legal citizens of the country. The other part of the non-citizens mainly comprised of persons from the neighboring Arab countries and the Southern Asian region who were temporarily living in the country on employment contracts basis and proffered to bring their families along with them.

Political Structure

The political status of Qatar is that under an absolute monarchy. The head of state in Qatar is the Emir who also conducts government business. The political structure in Qatar adopts a hereditary status where the Al Tahni family has been in power since the country got its independence in 1971.The Emir governs the state under the help of various departmental helps who help in the implementation process of the government mandate to the people. The primary laws that govern the Qatar people are mainly concentrated on Islamic roots hence tends to give the Emir an influential role in the governing process in the country.

Transport

Road is perhaps the most used mode of transport in the country. Qatar is thought to have probably the one of the best road networks in the region a situation caused by the availability of petroleum which has greatly helped the countries’ economy. The road system is developed in such a way that it can accommodate the country’s growing population. The capital city Doha has an elaborate bus network that connects the capital to other towns within the state. The bus network is therefore the primary transport means within the capital. The Salwa International Highway plays a key figure in facilitating international ties between Qatar and Saudi Arabia since it run to the Saudi border.

Qatar has no rail network but the Qatar government signed a contract to foresee the construction of a railroad network in the foreseeable 20 years. The railroad will be in such a way that it will connect the internal of the states and also link the country with other neighboring regions. This operation is part of the larger plan by Gulf Cooperation Council to connect the Gulf countries a move aimed at easing the movement of goods and services between the involved countries. Qatar is also well advanced in terms of air transport the main airport being the Doha International Airport. The airport is currently undergoing reconstruction due to the large number of internal travelers and is going to be known as the new Doha international Airport.

Economics

Over the past years, Qatar has continuously experienced drastic growth in terms of economic progression a situation that has been brought about by the increasing oil prices. The country has continued to post budget surplus consecutively over the past eight years. The country’ economic policy is focused on the development process of the no associated gas reserves and in trying to create a strategic plan that will oversee an increase in investment opportunities in the non-energy sector. According to Malakh, the country’s Gross Domestic product is accounted for by oil and natural gas reserves by almost 50%.There two are also the main earners of government revenue accounting for over 70% of this and the main exports of the country (Malakh 1985).

Qatar has the second highest per capita income a factor made possible by oil and gas in the country. This shows how the two are the pillar behind economic development in Qatar. The natural gas in the country contributes account for much of the total production in the world. Oil and gases are not the only economic growth contributors but there are other economic activities that the Qatar people engaged in before the discovery of oil and natural gas reserves. One of such activities was fishing due to the expansive region bordering water bodies. This was the main economic contributor before the discovery of oil which led to almost a complete overhaul of fishing.

Most of the country’s income is export dependent. The adequate financial benefit derived from the exports has improved the living standards of the Qatari people which can be comparative to that of Western Europe. The country is leading in terms of the GDP in the Arab countries as shown by the research done by the International Monetary Fund. This country offers flexible monetary policies in terms of the rate of taxation. The country is in a transition process trying to stimulate growth in the private sector. The establishment of the Qatar Science and Technology Park is part of an overall plan by the government to initiate growth in the private sector.

Communication

Doha the capital of Qatar is the main communication center boasting of a modern communication system. The ultra modern communication methods such as troposphere scatter, microwave relay on radio, submarine cables and satellite are some of the methods used for the process. The country has also strict rules and regulations that regulate the transmission of information and websites that can be said to be morally inappropriate. The communication process is governed by a government agency known as the Supreme Council of Information and Communication Technology. Vodafone Qatar is the main mobile network that provides mobile operation services. The main television network is Al Jazeera which has its headquarters at Doha and originally started as a news specialist but has now diversified and offers a variety of TV channels.

Opportunities

Qatar provides elaborate and effective entrepreneurial opportunities. This is due to the fact that Qatar Financial Services are such in a way that there are no interest rates on loans. According to Osa, this gives equal opportunities and creates a balance between the high and low income earners (Osa 2000). This has gone on further to initiate and enhances creativity. The country provides employment opportunities to the citizens of the country and other neighboring countries. The creation of the Education City in Doha also created opportunities in terms of education and the many international colleges in Education City offer la competitive learning opportunities for citizens and non-citizens.

Due to the high oil prices, the country has nurtured continued growth and oil continues to be the primary source of government revenue. The country is likely to experience drastic growth due to the favorable environment that the country offers both to the local and foreign investors. The continued economic strength is supported by strong fiscal policies that not only regulate but also creates freedom in the economic sector. The level of corruption in Qatar is very low whether at individual or corporate level. The citizens in this country are not subjected to personal or corporate tax.

Despite having a strong economic background, Qatar also has some of its weak side that hampers the growth of the country. One of these is the low investments levels. This is brought about by presumably excessive government regulation on matters related to investment by both the citizens and foreign corporate bodies. The government is responsible of controlling and regulating employment of the citizens and also controls entry into the market by foreign companies. The economic setbacks are also accompanied by high inflation rates. The consumer Price Index inflation level was an estimated 15.2% a figure that is expected to rise due to the increase in the global demand of oil and oil products.

Imports in Qatar

One of the main imports of the country is machinery. The steady economic growth has led to an increase in demand of machinery. The housing sector is perhaps one of the most affected by shortages in building materials. The steady economic growth has brought about a steady economic growth hence increasing the demand of housing facilities. Most of the machinery is imported from the USA and Italy. One of the major companies that are involved in importation of the construction materials is Al Nisr Company. The company is involved in processing machinery and building materials and also offers services related to industrial supplies.

Another import of this country is food. Qatar is said to import more than 90% of its food from other countries. This makes food its main import in the country. Most of the food is imported from the European Union, Australia and also from the Saudi Arabia. This food transits to the country through the United Arab Emirates. However, the government prohibits importation of pork products as a matter of cultural reasons. The Qatar national Import and Export Company is involved in the process of import of food and food products. Food products that are exempted from tax are household goods. Alcohol on the other hand is not an entirely banned product in the country but only one company the Qatar Distribution Centre is licensed in the importation of alcohol.

Exports in Qatar

Oil is the main export of this country. The government revenue collected from the sale of oil and natural gas amounts to up to 60% (Nafi 1983).The main company that is involved in the exportation of the oil and petroleum products is Qatar petroleum that is involved in exporting oil and natural gas together with other services such as exploring, producing, refining, transporting and storing. Qatar is perhaps one of the smallest oil producing country in the OPEC region. Qatar however is a major supplier in the oil sector in the world. Qatar Petroleum was involved in a program to upgrade oil facilities in Qatar. This move was aimed at boosting the total output in the Oil industry in Qatar and also increases the efficiency of the oil production process

Another major export of Qatar is natural gas. The country has probably the largest non-associated field that exists naturally in the world. Natural gas production has seen and experienced a significant rise in its production. The North Field is the main source of natural gas reserves in Qatar. Qatar Petroleum is also involved in the production process of natural gas. The Qatar government was however concerned that the North Field project might have developed too fast not giving the necessary time for the neighboring fields to fully develop. The Qatar government introduced a mining policy to try and regulate the rate of development of the North Field.

Market challenges

Entry into the Qatar market experiences both a lot of advantages and restrictions. There is a government law that limits the investment level by foreign investors up to a certain percentage. The foreign investors are also required to have a partner from Qatar who has the majority share in the partnership. However, foreign investment is allowed in some sectors of the economy like health, education, tourism and agriculture. The government is mandated to license foreign investors wishing to invest in the financial sector of the economy. There are strict restrictions regarding foreign investment in the real estate and also the communication sector.

According to the laws of the country, some sectors like agriculture and tourism offer 100% ownership by foreign investment companies. The law however tends to restrict foreign investment in the financial sector which include the banking and the insurance sector. The approval of foreign investment in these sectors has to undergo a cabinet approval a process which reviews a close scrutiny of the foreign investment company interested in investing in the country and the existing companies in the sector. Firms can be allowed to operate independently after the registration process and the approval of their operations is verified.

Joint Ventures

Companies in Qatar can also operate as joint ventures. The law governing this requires the foreign investor to own the minority share in the company and give the majority share to the Qatar citizen partner. Other forms of operation are representational offices. The government approved a plan through the Ministry of Economy and Commerce to allow foreign firms to operate with representational offices without necessarily having to have a local partner.

Franchising

Fast foods are perhaps the best notable example of franchising. According to Sugars, the business can not only engage in one activities but tries to offer a variety of other services that are closely related to the primary objective of the firm(Sugars 2005).One notable characteristic of the Qatari people is that they tend to prefer business which are owned not by local investors but foreign investors. Franchising is a major success in Qatar and the US has taken advantage of this having many fast food joints and casual restaurants that have their target market particularly with the younger generation.

Direct Marketing

Direct marketing can be applied though there are rules that prohibit direct marketing to the consumers in Qatar. The law provides for marketing by a local distributor or agent to carry out the marketing aspect of a firm. However, the food processing sector allows for direct marketing particularly the vegetables and food ingredients. The procurement process in the awarding of tenders to foreign firms has to undergo an approval process giving credit to the best firm. Foreign investment companies may choose to appoint a local representative to participate in bidding for government tenders (Rosenbloom 1993).

E-Commerce is one aspect of marketing that is still developing in Qatar. This is because the people and the government are in a process of fully adopting the use of computers and technology. Most of the financial companies and agencies have their company profile and the wide variety of goods and services they offer in their respective websites according to Botha (Botha 2004). The Qatar government is encouraging the use of technology a move aimed at promoting the technological culture and revolution in the country and also offers a level playing field for the stakeholders in the market.

The advertising process in the Qatar market is used via a number of methods are environmental friendly and acceptable by corporate bodies and consumers. The major forms of advertising in Qatar include; print and visual media, billboards and personal selling by the local producers or agent. The work of the local agent is mainly to come up with the most appropriate and effective advertising channel that is likely to create a wide range of market.

The local consumers in Qatar are very sensitive to prices in the market. The local consumers pay particular attention to trade and sales promotion s hence both local and foreign firms engage in promotions to try and attract a wide range of customers. The local distributor is supposed to offer after sales service for goods and services and is also responsible of handling customer care and support regarding goods and services. Companies are required to fully understand and implement Intellectual Property Rights (Andersen 2006).The enforcement of the property rights is registered under the local laws of the country.

Foreign firms are required to undertake a background check on the companies that they transact business within Qatar. This is to safeguard the due diligence of the involved companies. The Ministry of Economics however arbitrates financial disputes arising from the operations of different companies in the country. Foreign firms are made to understand that despite having different rules and regulations regarding the Intellectual Property Right, it is almost impossible to try and enforce the rules in their mother countries in a foreign country (Shippey 2002).

Reference List

Andersen, B. (2006), Intellectual Property Rights, Edward Elgar Publishing: New York.

Botha, J. (2004), E-Commerce, Junta & Conley Ltd: South Africa.

Malakh, R.E. (1985), Qatar, Energy & development, Routledge: New York.

Malakh, R.E. (2000), Qatar, Routledge: New York.

Nafi, Z.A. (1983), Economic and Social Development in Qatar, F. Printer: New York.

Orr, T.Qatar, (2008), Marshall Cavendish: New York.

Osa, I. (2000), Qatar: Business & Investment Opportunities Yearbook, Int’l Business Publications: New York.

Rosenbloom, B. (1993), Direct Selling Channels, Routledge: New York.

Shippey, K.C. (2002), a Short Cause in Intellectual Property Rights, World Trade Press: New York.

Sugars, B. J. (2005), Successful Franchising, Mc Graw-Hill Professional: New York.

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UniPapers. (2022, January 7). Market Entry Strategy Project on Qatar. Retrieved from https://unipapers.org/free-essay-examples/market-entry-strategy-project-on-qatar/

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UniPapers. "Market Entry Strategy Project on Qatar." January 7, 2022. https://unipapers.org/free-essay-examples/market-entry-strategy-project-on-qatar/.

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UniPapers. 2022. "Market Entry Strategy Project on Qatar." January 7, 2022. https://unipapers.org/free-essay-examples/market-entry-strategy-project-on-qatar/.

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UniPapers. (2022, January 7). Market Entry Strategy Project on Qatar. https://unipapers.org/free-essay-examples/market-entry-strategy-project-on-qatar/

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UniPapers. (2022) 'Market Entry Strategy Project on Qatar'. 7 January.