Page 149 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

A Piece of the Action: Strategies for Entering the GCC Market 133

that the Gulf has to offer. Deeper engagement carries with it new
challenges and risks, but the rewards will often outweigh the risks,
and such enterprises can often yield large profits. Below we high-
light some of the key benefits and challenges of the more serious
forms of market entry in the GCC.

THE ENGAGEMENT SPECTRUM

Multinational firms, in their perpetual quest for growth, must
nonetheless be selective about which markets they engage and how
they approach these markets. Not all markets are equally promis-
ing, and not all are worth the effort required to seriously enter them.
Many of the world’s leading companies—especially those that are
consumer-facing—have mastered the techniques of market assess-
ment and of gradual commitment and exposure to growth markets.
Firms like Procter & Gamble and Coca-Cola, despite their nearly
universal market reach, simply cannot invest equal attention and
resources in all markets. Their “engagement,” as we will call it, with
various potential markets differs significantly based on the busi-
ness case for each market.
The Gulf has historically not been seen by most leading
nationals as possessing enough high-priority markets to make it
worth their while to explore deeply. As discussed in previous
chapters, the region has only recently become wealthy. Sustained
prosperity, together with demographic changes and regulatory
reforms—one such reform was the very creation of the GCC—
has made the Gulf much more attractive to potential entrants.
Another important factor is that the growth agenda of multination-
als has previously been focused on more developed markets
rather on those of places like the GCC countries. American
firms, for example, have typically looked first for growth
opportunities at home in US markets, next in Europe, and then in
the richer parts of Asia, such as Japan. European firms have typi-
cally had a more international perspective, but have naturally pre-
ferred large markets or countries in which colonial-era linkages
might facilitate access and credibility. Due to the relatively small
size of its markets and the substantial challenges associated with
entering them, the Gulf has been far down on the multinationals’
list of priorities.