business plan - 2013 - yemen office - final

BUSINESS PLAN - 2013

Yemen Branch

June 2013

This business plan will analyze the Yemeni

market for the remaining period of the year

2013, it will also discuss the Yemen office

strategy, goals and will provide deep insight

about how the Yemen office shall act to

achieve its targeted objectives.

Arabtech Jardaneh

International

BUSINESS PLAN – Yemen Branch 2013

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Table of Contents

Executive Summary ……………………………………………………………………………………....……… 2

Strategic Analysis …………………………………………………………………………………………………. 3

· Competitor Analysis …………………………………………………………………………………….…….. 3

· Environmental Analysis …………………………………….……………………………………………….. 7

· Five Forces Analysis ………………………………………………………………………………………… 11

· Capabilities Analysis ………………………………………………………………………………..…….…. 11

· Competitive Life Cycle Analysis ………………………………………………………………………… 16

Market Segmentation …………………………………………………………………………………………. 18

· By Industry ………………………………………………………………………………………………..…….. 18

· By Fund Type ……………………………………………………………………………..……………………. 19

Financial Targets ………………………………………………………………………………………………….20

Business Strategy ……………………………………………………………………..…………………………. 21

Recommendations …………………………………………………………………………………..………….. 25

References ……………………………………………………………………………………………………….….. 26


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Executive Summary

Year 2011 had witnessed a noticeable reduction in the Yemen office activities due

to the political unrest that took place. In the second quarter of 2012 the Yemeni market has

begun to settle down and the business momentum started gradually to be restored. Since

then, the Yemen office is consciously observing and seeking opportunities and submitting

both expressions of interest requests and technical and financial proposals for projects

which are funded by Yemen government and various funding agencies.

This business plan will analyze the Yemeni market trends and will discuss the Yemen office

challenges, strategy and goals in line with AJI strategy. It will also provide deep insight

about how the Yemen office shall act to achieve its targeted objectives for the remaining

period of the year 2013.

According to the results reached, after applying business analysis tools, it is recommended

to continue operating in Yemen. However, the Yemen office is facing tangible threats, which

are caused by both internal and external challenges; these challenges shall be seriously

defined, evaluated and promptly embarked upon.

Subsequent to the comprehensive business analysis carried out, the recommended

measures to be applied are:

Internally:

1. Alignment of the office’s internal capabilities to be enhanced.

2. Applied policies and procedures to be re-examined.

3. Roles, responsibilities and office organizational structure to be re-evaluated.

4. Employees’ working conditions to be improved.

5. Information technology systems to be re-evaluated and enhanced.

6. Dependency on the head office shall be gradually reduced.

7. Technical support from the head office to be provided, whenever needed, in a faster

and better quality manner.

Externally:

1. Effective marketing strategy to be adopted.

2. Diversified services to be considered.

3. Long term partnership with local and international firms to be established.

4. Relationship with private and public sectors to be enhanced.

5. Opportunities with private sector, especially oil and gas companies, to be pursued.


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Strategic Analysis

Strategic analysis is a powerful tool when executed well. Effective analyses explore the

competitive situation, define key issues, recognize critical assumptions and tradeoffs, and

propose strategically sensible recommendations. In this business plan, the strategic

analysis is comprised of the following components:

1- Competitor Analysis

2- Environmental Analysis

3- Five Forces analysis

4- Capabilities Analysis

5- Competitive Life Cycle Analysis

1- Competitor Analysis:

Competitor analysis is a framework for evaluating current or potential competitors. A good strategic analysis requires an analysis of the firm’s competition in order to be able to assess and predict the sustainability of any competitive advantage and the response of rivals to various strategic actions. Competitor analysis can help make strategic decisions and gather competitive intelligence on the industry. Due to the lack of reliable information form trusted private and public agencies and/or government, the information provided in this section are not highly accurate. However, The following framework is adopted to analyze current and future competitors: Competitors Identification

There are three types of companies that could be considered as competitors to Yemen office, the table below depicts these companies and their rivalry position:

No Type Name Strengths Weaknesses Threat

1 Local Many small to medium size Yemeni companies

a- Low fees b- No mobilization

period needed c- Well versed with

market culture and requirements

d- Ability to partner with international companies

a- No comprehensive engineering solutions

b- Low quality work

c- Financially instable

Low


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e- Can furiously compete in small projects

f- Have advantage when it comes to some government funded projects

2 International Many medium to large size companies

a- Highly experienced

b- Good Image and well trusted in Yemeni market

c- Financially stable

a- High fees b- High entry cost c- Long

mobilization period needed

d- Not versed with market culture and requirements

e- Prefer not to operate in moderately unsafe countries

Medium

3 International and have local branch or partnering with local consultant

Such as, but not limited to: Dar Al Handasah (Shaer & Partners), Dar Al Omran, Sigma, , Engicon, Engineering Consultant Center, Umar Munshi Associates, Saudi Consulting Services,, Renardet Consulting Engineering, Spectrum Engineers And Consultants

a- Highly experienced

b- Good Image and well trusted in Yemeni market

c- Reasonable fees d- No entry cost e- No mobilization

period needed f- Well versed

with market culture and requirements

g- Financially stable

a- Some prefer to hold the works or not to operate in moderately unsafe countries

b- Not all have good reputation and image

c- Not all have comprehensive engineering solutions

d- Not all have long presence in the market

High

Intelligence Gathering

The following data is gathered to provide insight on the most important medium and high threat competitors. The information below is derived from the firm’s recent activities, historical data such as proposals submitted to clients and public relations events in addition to the information received from Yemen office staff:


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No. Firm’s Name Market Share

Strengths Weaknesses

1 Dar Al Handasah (Shaer & Partners)

3% a- Ranked as one of the top twenty engineering consultants in the world

a- High fees b- They participate in

direct negotiations rather than bidding

2 Dar Al Omran 7.5% a- Operating since almost 15 years in Yemen

b- Good local relations and image

a- Poor service during construction supervision phase

3 Sigma 5.25% a- Strong relations and partnerships with local consultants

a- Poor services in all stages

b- Poor engineering experience

4 United Consolidated

2.25% a- Key Yemeni partner a- Poor services in all stages


5 Engicon 8.5% a- Strong engineering experience

b- Excellent local relations with clients

No information available

6 Engineering Consultant Center

1.5% a- Diversified services b- Operating for over

than 15 years in Yemen

Operations are on hold

7 Engineering Consultant Company

6% a- Operating for over than 10 years in Yemen

b- Low fees

a- Poor engineering experience

b- No good local relations

8 Ahmad Abdul Wareth Consultant Engineering

4.5% a- Excellent local relations with clients

b- Low fees


b- Many works withdraw due to poor service

9 Umar Munshi Associates

3% a- Excellent local relations with clients


10 Saudi Consulting Services

1.5% a- Has better chance with Saudi Funded Projects


11 International Consultants And Technocrats PVT.

4.5% a- Good engineering experience




12 Saudi Consult 3% a- Has better chance with Saudi Funded Projects

b- Strong engineering

a- High fees b- They participate in

direct negotiations rather than bidding


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experience 13 Renardet

Consulting Engineering

3% a- Strong relations and partnerships with local consultants



14 Spectrum Engineers And Consultants

4.5% a- Good engineering experience




Sub-Total: 58% 15 Local Companies 30% a- Low fees

b- Have better chance with local Funded Projects



16 AJI – Yemen Office 12% a- Good engineering experience

b- Operating since almost 15 years in Yemen

c- Excellent local relations with clients

a- High Fees b- Full dependency on

head office

Total: 100%

It is important to highlight that the market share percentages are not based on highly reliable resources rather than primitive observations and assumptions. However, as shown in the table above, there are four companies control above 27.25% of total market share and above 5% of market share per each individual company. However, Engicon and Dar Al Omran seem to be the most fervent competitors to the Yemen office, according to the market share criteria. Rivals Analysis In this section we analyze the competitive positions of rivals i.e. what is the competitor strategy, competitive advantage and the rate of the competitor’s capability?

No. Name Strategy Overall Capability

Competitive Advantage

1 Dar Al Handasah (Shaer & Partners)

High Quality / High Fees High Internationally Recognized

2 Dar Al Omran High Quality / Low Fees Medium Relations With Clients

3 Sigma Low Quality / High Fees Low Partnership with Local Companies

4 United Consolidated Low Quality / Low Fees Low Partnership with Local Companies

5 Engicon High Quality / Low Fees Medium Relations With Clients


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6 Engineering Consultant Center

Low Quality / Low Fees Low Diversified Services (Technical Labs)

7 Engineering Consultant Company

Low Quality / Low Fees Medium Low Fees

8 Ahmad Abdul Wareth Consultant Engineering

Low Quality / Low Fees Low Relations With Clients And Low Fees

9 Umar Munshi Associates

High Quality / Low Fees Medium Relations With Some Clients

10 Saudi Consulting Services

High Quality / Low Fees Medium Low Fees

11 International Consultants And Technocrats PVT.

Low Quality / Low Fees Low Low Fees

12 Saudi Consult High Quality / High Fees High Internationally Recognized

13 Renardet Consulting Engineering

Low Quality / Low Fees Low Low Fees

14 Spectrum Engineers And Consultants

Low Quality / Low Fees Low Partnership with Local Companies And Low Fees

According to the market share criteria, there are four companies adopting High Quality / Low Fees strategy and those have good relations with clients. If we combined and cross-referenced the information provided in the Intelligence Gathering with the one provided in Rivals Analysis, we will conclude that Dar Al Omran and Engicon engineering consultancy firms are the top competitors to AJI – Yemen office.

2- Environmental Analysis:

The analysis provided in this section is derived from reliable sources such as UNCIF and

World Bank.

Overview:

After almost a year of crisis, in the wake of the Arab Spring, Yemen has embarked on a political transition based on an agreement brokered by the Gulf Cooperation Council (GCC).

The Government of National Reconciliation was formed and confirmed by the Parliament in December 2011. Presidential elections were held in February 2012 and President Abd Rabbuh Mansur Al-Hadi was sworn in soon afterward.


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During the transition period the government is expected to launch a National Dialogue, draft a new constitution, and reform the army and security establishments. The transition shall conclude in February 2014 with legislative and presidential elections to be held under the new constitution followed by the inauguration of a new president and the formation of a new parliament.

However, although the dialogue is launched but the there is great ambiguity about the outcomes. Our observations on the current progress indicate that the dialogue period is expected to be extended beyond the targeted date i.e. September 2013 as well as the transition period.

Security Front:

Security in Yemen remains calm but fragile. The lead up to the National Dialogue introduced a new level of unpredictability to the security environment as many delegations are unwilling to name delegates due to the possible security risks.

The past year of political transition has witnessed slow-paced progress in re-structuring of the army and the security and dismantling of ex-regime remnants in senior government positions.

Widespread arms possessions, lawless regions, armed tribal groups, sustained sabotage to energy supplies, an active Al Qaeda network, political assassinations, and kidnappings continue to pose threats to the political transition and the security of the Yemeni civilians. Tensions between Al-Hirak and Al-Islah are expected to continue in the south.

Economic Front:

Yemen’s economic situation has been very difficult in 2012. There have been continued attacks on oil pipelines and electricity transmission lines leading to interruptions of oil production and electricity delivery.

Nonetheless, there are signs of economic activity revival after a 10 percent decline in 2011. Inflation has come down to single digit. The exchange rate has appreciated then stabilized at pre-crisis levels and foreign exchange reserves (including the recently received US$1 billion deposits from Saudi Arabia) have increased to over US$5.0 billion.

These developments have allowed the authorities to reduce the policy interest rate from 20 percent to 18 percent. The fiscal deficit is expected at around 5.5 percent of GDP as a result of the Saudi oil grant and cuts in capital expenditures and transfers. Non-hydrocarbon revenues have also exceeded the budget estimates due to strengthened collection efforts.

All indicative targets under the government’s reform program that is supported by the International Monetary Fund’s (IMF) Rapid Credit Facility have been met. IMF is considering a medium term reform program.


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Diplomatic Front:

The U.N. Security Council envoys completed a visit to Yemen amid tight security on January 27, 2012, and issued a statement expressing the international community’s support to Yemen.

Most recently, on March 7, 2013, the Friends of Yemen meeting was held in London to reiterate the international community’s continued support to the country’s transition on the political and security fronts. They also underscored their commitment to deliver on the US$7.5 billion pledged for Yemen’s economic and social development through humanitarian assistance and visible high impact investment projects.

Even before the crisis, Yemen was one of the poorest countries in the Arab region with a per-capita GDP of US$1,209. The country has one of the highest population growth rates in the world, placing pressure on educational and health services, drinking water, and employment opportunities. Yemen is not expected to meet any of the Millennium Development Goals (MDGs). (1)

In addition to the above, we will focus on the analysis of factors in the larger competitive context that are currently affecting or may in the future influence the nature of competition within the industry; this will help to identifies trends that influence things such as demand, growth, entry and exit of firms, innovation, and regulation.

This environmental analysis will focus on:

1. Demographic trends 2. Socio-cultural influences 3. Economic impacts 4. Political-legal pressures 5. Technological development 6. Global trade issues

Demographic Trends Socio-cultural Influences - High population growth - Relatively young society, almost 25

% under 19 years old - Over 45% of population are females - Iraqi and Syrians nationalities are

migrating to Yemen due to the unrest in their countries

- Total adult literacy rate almost 64%

- Substandard lifestyle - Low productivity due social habits

(Qat) - Low media influence - low ethnic and religious differences - The civil service is overstaffed,

underpaid, and highly vulnerable to corruption. Government officials at every level solicit bribes from foreign companies at every step of a project.


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Source: (2), (3) and (4)

Economic Impacts Political-legal Pressures - Very slow business cycle - Poor home economy, average

annual growth rate is almost 1% - Average annual rate of inflation is

almost 15 - 17% - Reasonable taxation - Market is highly volatile due to

conflicts - Population below international

poverty line of US$1.25 per day is almost 18%

- Public debt is 42.5% of GDP - Investment (gross fixed) 17.8% of

GDP (2012 est.) - Gross revenues: $7.63 billion

Gross expenditures: $12.01 billion (2012 est.)

- Poor legislation and ineffective regulatory bodies and processes

- High social pressures due to poverty - Public funding for grants and

initiatives is poor - influence of lobbying and advocacy

groups is high (local trips) - The regulatory efficiency needed to

develop a more dynamic private sector has not been established.

- Due to the level of ongoing political and economic volatility, it is difficult to gauge the lasting effectiveness of earlier regulatory reforms aimed at broad-based economic expansion and dynamic job creation.

- The weakness of the private sector results in chronically high underemployment.

Technological Developments Global Trade Issues - Private property rights are not

strongly respected. Foreigners may own property, but foreign firms must operate through Yemeni agents.

- Applying technology to the development of Yemen is very weak.

- Lack of telecommunication and Internet services in many areas in the country.

- Yemen does not have any current laws that regulate online trade.

- The infrastructure required is far from adequate.

- No reliable power supplies; electricity blackouts have become a routine.

- Most rural areas, accommodating 70% of the population, have virtually no network connectivity.

- The trade-weighted average tariff rate is 4.2 percent, and some additional non-tariff barriers further limit trade freedom. Officially, the government permits foreign investment in most sectors and grants equal treatment to domestic and foreign investors. In practice, the inefficient investment regime inhibits dynamic growth in new investment. The economy is largely cash based, and the small financial system remains dominated by the state.

- The judicial system is subject to political pressure. Thus, enforcement of contracts is weak.


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3- Five Forces Analysis:

Five forces analysis is an excellent method to help analyzing how competitive forces shape an industry in order to adapt or influence the nature of competition. Collectively, it determines the attractiveness of an industry, its profit potential, and the ease and attractiveness of mobility from one strategic position to another. Because of this, the analysis is useful to identify major threats and opportunities in an industry. While all firms operate in a broad socioeconomic environment that includes legal, social, environmental, and economic factors, firms also operate in a more immediate competitive environment. The structure of this competitive environment determines both the overall attractiveness of an industry and helps identify opportunities to favorably position a firm within an industry. Five forces analysis are shown in the following table:

Rivalry Among Current Competitors Threat of New Entrants - High rivalry with international firms

with local branch especially for projects funded by World Bank

- Medium rivalry with international firms without local branch

- Medium rivalry with local firms with partnership with international firms.

- Medium threat due to low cost of entry, low operating cost and no legislation barriers. However, the unstable political situation, lack of primary services such as electricity and lack of security make international consultant reluctant in entering the Yemeni market.

Substitutes And Complements Power of Suppliers - Contracting with international firms

that operate out of Yemen. - Contracting with local firms that

partnered with international firm.

- Not applicable

Power of Buyers - Medium power due to shortage of experienced engineering firms in Yemen that can

provide comprehensive and in-house engineering solutions.

4- Capabilities Analysis:

In this section we will discuss and provide information of the Yemen office and AJI vision,

mission, values, the value / supply chain, core set of capabilities and SWOT analysis.

Vision

Our inspiration is our desire to be distinguished as leaders in engineering and architecture,

our commitment is to achieve growth and sustainable returns and to positively contribute

to the community.


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Mission

To deliver outstanding engineering and architecture consultancy services, to be bound by

our commitment to our clients and to be entrusted by our stakeholder.

Values

ENTRUSTED: We are responsible, accountable and are committed to the end result.

BOUND: Our relationships are respectful, caring and based on mutual trust.

INSTRUMENTAL: We are efficient and performance oriented.

INSPIRED: We are one step ahead and look towards the future.

COMMITTED: We are bound by our responsibility to the progress of the Saudi Engineering

Sector.

The Value / Supply Chain

Operational wise, the following value chain is applicable in all work stages i.e. pre and post

contract.

Pre-contract

During EOI and proposals submission, design and tender stages:

Post contract

During supervision stage:

1. Supervision works sub-contracted:

2. Supervision works in house:

Client Yemen

Office Head Office Client

Yemen

Office

Client Yemen

Office

Sub -

Consultant

Yemen

Office

Client Yemen

Office Contractor


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From the above value chains we can notice that the longest process is during the EOI and

proposals submission, design and tender stages followed by the supervision works if it is

sub-contracted.

It is known that long value / supply chains have negative impact on the work efficiency in

terms of the delivery time, cost and quality of the final product.

In terms of supply chain for EOI, RFP and proposals submissions, the following process is

taking place:

It is important to note that both research and production works are done at the head office.

The most important disadvantages are: a) the delays occurring in submittals and, b) the

substandard final product due to misinterpretation of client’s requests.

Core Set Of Capabilities

1. Processes: processes are an important foundation of core capabilities because they

represent codified knowledge, “recipes,” or standard routines for how work will be

done and results will be accomplished.

2. People: human capital is perhaps the most obvious source of knowledge-based

advantage.

3. Technology Systems: in addition to core processes and talent, knowledge-based

resources are also codified in supporting systems and technologies. This may include

information systems, databases, proprietary technologies, and the like. These systems

have three primary impacts: a) operational, b) relational, and c) transformational.

4. Work Environment: it describes, a) the employees working conditions in terms of

working space, facilities, hygiene, lighting, etc. and, b) the office cultural that are spread

and enforced among the employees in terms of honesty, commitment, innovation and

motivation.

Degree of Alignment: to determine if the people, processes, and systems are aligned

with each other i.e. internal alignment and aligned with the customer value proposition

external alignment:

Client

Request

Research &

Development

Production

Review

Submission

Business

Developme

nt


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a. Internal Alignment: are the improvements have been made in some elements of the

office capability or in all? Are the capabilities in harmony i.e. at the same level of

importance and advancement? Are the capabilities compatible with each other?

b. External Alignment: what is driving a customer’s willingness to appoint Yemen

office? What benefits do they derive relative to the costs that they incur i.e. value

versus benefits/costs?

5. Sustainability: means the sustainability of distinctive core capabilities. However, it is

important to note that the competitive advantage that accrues to certain capabilities

may be undermined by two general forces a) imitation and, b) durability:

a. Imitation: Core capabilities provide a competitive advantage only to the extent that

others cannot imitate them. A number of factors may limit the imitability of core

capabilities; scarcity is one. Capabilities derived from socially complex, integrative

sets of activities may be difficult to imitate. Also, ambiguity about the underlying

process or source behind a capability may hinder imitation by others.

b. Durability: Even a difficult-to-imitate capability may fail to continue to provide value

if the underlying basis for that capability degrades over time. Human capital, to the

extent that it is embodied in an individual or individuals, will eventually degrade.

Most assets such as property and equipment degrade over time.

Capability Poor Good Excellent Outstanding Processes

People Skills

Technology Systems

Work Environment

Alignment: Internal Alignment

External Alignment

Sustainability

Imit

ati

on

Core Capability Easy Moderate Hard

International Consultant With Existing Local Branch

Reputation and Image (operating since 15 years) Comprehensive And Quality Engineering Services

Reasonable Fees

Good Relation With Clients And Government Officials


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Sustainability

Du

rab

ilit

y

Core Capability Easy Moderate Hard

International Consultant with Local Branch

Reputation and Image (operating since 15 years)

Comprehensive And Quality Engineering Services

Reasonable Fees

Good Relation With Clients And Government Officials

SWOT Analysis

SWOT analysis is the most renowned tool for audit and analysis of the overall strategic

position of the business and its both micro and macro environment. Its key purpose is to

identify the strategies that will create a firm specific business model that will best align an

organization’s resources and capabilities to the requirements of the environment in which

the firm operates.

Mic

ro –

En

vir

on

men

t (i

nte

rnal

)

Strength Weaknesses

Long previous experience and good record in Yemen Good reputation/Image Comprehensive and in-house engineering services Integrated solutions from inception, master plan, design, construction supervision till handing over Ability to partner with local and international consultants, if needed Previous relations with key persons from client’s side

High dependency on the head office Poor information technology systems Employees’ working environment to be enhanced AJ vision and mission to be enforced in the office culture Poor Internal alignment of resources and capabilities Financially instable High fees Lack of marketing strategy Lack of strategic planning Many old and unclosed contracts insufficient history with private sector


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Mac

ro –

En

vir

on

men

t (e

xter

nal

) Opportunities Threats

Heavy funding of regional and international funding agencies, which allows AJ to take advantage of the projects suggested for re-build and development High need for infrastructure works (roads, water, power, sewerage, etc.) High need of rehabilitation of existing healthcare facilities and constructing new hospitals and healthcare centers Private sector is eager to invest in Yemen once it is politically stable

No political stability Lack of security Lack of clear regulations and governance Poor planning capabilities in the country Emergence of new competitors Fierce price competition High risk of on hold and pending payments High corruption

5- Competitive Life Cycle Analysis:

Demarking each of the three phases i.e. disruption, annealing, and shakeout associated with

a single S-curve are transitory inflection points. The emergent phase begins with a

disruption—the introduction of a new product concept.

After a disruption occurs, the new S-curve begins and we enter the emergent phase. The

emergent phase ends as customer adoption accelerates and the product concept solidifies

around a core set of features.

Annealing typically gives way to the growth phase. Business focus typically shifts from

development to scaling. This is not to say that products and technologies do not continue to

evolve and advance, but greater emphasis is placed on replication and expanding to meet

growing demand.

As the growth phase winds down, when marginal growth rates begin declining, a

competitive shakeout often ensues. Marginally competitive firms exit the market and a

handful of dominant players emerge. Shakeouts can vary in intensity.

The following S-curve diagram shows that the engineering consultancy services are in its

growth phase. The table below describes the three competitive life cycle phases, its

expected start and end dates and its severity.

Positioning Of Engineering Consultancy Services:

We believe that Yemeni engineering market is familiar with process and procedures to be followed in order to achieve best results. However, the market is still lacking professional engineering firms. Therefore, we believe that the industry is in the middle of the growth phase.


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Competitive Life Cycle Phases:

If the political situation becomes stable, as expected, by the end of 2013 and beginning of 2014; then our projections for the competitive life cycle is as follows:

S- curve Phase Timing Severity

Introduction / Emergence Disruption Completed Incremental

Growth Annealing From 2014 Till 2023 Incremental

Maturity Shakeout From 2024 Till 2029 Incremental then

Radical


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Market Segmentation

According to AJI business strategy, the Yemeni market is segmented either by industry

or by fund type.

1- By Industry

Industry Type Market Share Targeted Projects To Be Secured From Market Share

Expected Projects To Be Secured From Market Share

Buildings & Master Planning 5% 0% 2%

Power 15% 3% 3%

Water, Waste Water & Environment 45% 11% 11%

Roads & Transportation 35% 6% 6%

Total 100% 20% 22%


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2- By Fund Type

Fund Type Market Share Targeted Projects To Be Secured From Market Share

Expected Projects To Be Secured From Market Share

Local Government 20% 2% 3%

World Bank 25% 8% 7%

International Monetary Fund 2% 0% 1%

Islamic Bank for Development 15% 2% 2%

Arab Fund for Social and Economic Development 20% 6% 5%

Saudi Fund 10% 1% 2%

Abu Dhabi Fund for Development 5% 1% 1%

Islamic Kuwait Fund 3% 0% 1%

Total 100% 20% 22%


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Financial Targets

Due to the instability and ambiguity in the Yemeni market; long term financial planning and

strategy cannot be predicted. The market is subject to sever changes due to the political

changes that might occur in the coming future.

Therefore, in this report we will craft our plan and financial targets for the remaining of the

year 2013 i.e. from June till December 2013.

The following table depicts the targeted revenue of the projects to be secured during the

year 2013:

Industry Type Targeted New Backlog

Design Services

Construction Supervision

Others

Buildings & Master Planning $ 0.25 M $ 0.25 M 0 0

Power 0 0 0 0

Water, Waste Water & Environment $ 1.5 M $ 0.8 M $ 0.7 M 0

Roads & Transportation $ 0.75 M $ 0.45 M $ 0.3 M 0

Total $ 2.5 M $ 1.5 M $ 1 M 0


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Business Strategy

In this section we will discuss how the Yemen office shall act in order to achieve its goals and targets for the coming six months. Medium and long term business strategy will be crafted by the end of the year 2013; due to the lack of clear information about the country’s political and financial situations. It is unwise to build a long term strategy within the uncertainty and vagueness on the market conditions that are currently going through.

Based on the information provided in this report, we believe that there is potential for many opportunities to be seized, but simultaneously there are many internal weakness and external threats that should be considered. The proposed strategy is based on preparing the Yemen office to be ready to effectively compete and win projects in the coming phase by adopting the following steps:

Internally:

1. Alignment of the office’s internal capabilities to be enhanced.

2. Applied policies and procedures to be re-examined.

3. Roles, responsibilities and office organizational structure to be re-evaluated.

4. Employees’ working conditions to be improved.

5. Information technology systems to be re-evaluated and enhanced.

6. Dependency on the head office shall be gradually reduced.

7. Technical support from the head office to be provided, whenever needed, in a faster

and better quality manner.

Externally:

1. Effective marketing strategy to be adopted.

2. Diversified services to be considered.

3. Long term partnership with local and international firms to be established.

4. Relationship with private and public sectors to be enhanced.

5. Opportunities with private sector, especially oil and gas companies, to be pursued.

Marketing Approach:

Till the end of year 2013, Yemen office will proceed with the following actions in order to

secure new opportunities and to build good relation with current and prospect clients:

1. Daily scanning for calls of EOIs and Bids in the local newspapers.

2. Regular visits to current clients.

3. Collecting information through relations with Yemeni locals.


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4. Build relations with new clients through visits, gifts and invitations for attending

events.

5. Approach new clients as shown in the table under Prospect Clients section.

6. Building brand awareness by distributing greeting cards, company’s flyers,

company’s brochures, calendars, time planners, note books, etc. to key personnel in

both public and private sectors and organize events and business dinners in

addition to publishing AJI news in the local newspapers.

7. Look for qualified firms in Yemen operating in design, supervision and feasibility

studies fields for potential alliances.

In order to achieve the above actions, immediate marketing budget of ($ 8,100) to be

allocated for the remaining of year 2013 as follows:

No. Activity Occurrence /

Number Activity Owner

Cost (USD)

Total (USD)

1 Greeting Cards Ramadan, 2 Eids and New Year = 400

Amman Office NA NA

2 Company Flyers 200 Amman Office NA NA

3 Company Brochures 50 Amman Office NA NA

4 Calendars (2014) 50 Amman Office NA NA

5 Time Planners (2014) 50 Amman Office NA NA

6 Note Books (2013 + 2014)

50 + 50 Amman Office NA NA

7 Business Dinners 2 x 6 = 12 Country Manager / Business Development Manager

150 1,800

8 Ramadan Iftar 1 x 75 = 75 Business Development Manager

30 2,250

9 Gifts 2 x 6 = 12 Country Manager / Business Development Manager

200 2,400

10 Events (new office opening)

1 x 25 = 25 Business Development Manager

50 750

11 Newspaper Publications (new office opening, signing new contracts)

3 Business Development Manager

300 900

Grand Total: 8,100


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Prospect Clients:

The following are prospect clients that will be approached to seek business opportunities:

No. Name Activity Location Representative Contact No.

1 General Investment Authority

Government Sana'a - Hadda St.

Dr. Saleh Mohsen Ali

434312

2 Hayel Saeed Ana'am Group

Trading, Contracting and Industry

Taiz Governorate

Mr. Nabil Hayel Saeed

711116666

3 Yemeni Libyan Holding Company

Contracting and Real Estate

Sana'a - Algeria St.

Mr. Moh'd Juma'a Marwan

448290

4 Yemeni Kuwaiti Holding Company

Real Estate Sana'a - Hadda St.

Mr. Asi Saher Shani

264111

5 Shebam Holding Company


Sana'a - Hadda St.

Eng. Saad Abdullah Sabrah

432 100

6 Al-Roaishan Group


Sana'a - Hadda St.

Shaik Yehia Roaishan

413708

7 Shaher Abdel Al-Haq Group


Mukalla Governorate

Mr. Ahmed Shaher Abdel Haq

05/542887

8 Abdullah Boqshan Group


Mukalla Governorate

Mr. Abdullah Boqshan

05/441252

9 Safer Petroleum Company

Petrol and Gas Sana'a - Hadda St.

Eng. Mohamed Al-Kohali

416080

10 Yemeni Liquid Natural Gas

Petrol and Gas Sana'a - Hadda St.

Eng. Sami Talj 438000


Page 24 of 27

Potential Joint Ventures:

Competing with rivals require adopting different strategies, one of these strategies is to provide comprehensive in-house services or diversified services that your rivals cannot copy or provide easily. Joint ventures with local and/or international companies are very feasible way to achieve this goal and have many advantages:

1- Reduce suppliers’ bargaining power 2- Save time and efforts in finding qualified services’ providers 3- Reduce cost of the outsourced services 4- Ensure high quality services 5- Increase the company’s capabilities and competitive advantage

Accordingly, it is recommended to establish joint ventures with qualified and reputed companies in the following fields:

1- Landscape Design 2- Health Care And Hospitals Design 3- Sport Facilities Design 4- Interior Design 5- Hotels Operators 6- Hospitals Operators 7- Sport Facilities Design 8- Feasibility Study 9- Specialized Quantity Surveying 10- Specialized Construction Project Management 11- Specialized Facility Management

It is highly recommended if the joint ventures are with companies operating in Yemen; as it will add more value to the clients for the provided services. Such companies are familiar with market conditions and clients’ needs. Being operating locally becomes crucial when it comes to providing feasibility study services.


Page 25 of 27

Recommendations

The engineering consultancy Yemeni market is viable and provides many attractive opportunities, especially for international companies with previous good record in Yemen. However, this is extremely depended on the stability of both political and financial situations, our observations on the current progress indicate that the dialogue period is expected to be extended beyond the targeted date i.e. September 2013 as well as the transition period.

Based on AJI’s goals, performance, and capabilities, it is wise to claim that there is an organizational opportunity for AJI to continue operating in Yemen for the coming years, due to the heavy expected funding from worldwide governments and international funding agencies.

Yemen is in sever need to develop and execute projects related to roads, bridges, power,

water, sewerage, hospitals and healthcare centers, educational institutions, cultural and

recreation centers and other type of buildings.

Nevertheless, it is expected that competition between engineering consultancy firms will

be furious once the country safely emerges to the next phase by crafting a new democratic

constitution and electing a new government. Therefore, The Yemen office shall be ready to

compete in the next phase by adopting the set of actions described in the Business Strategy

section.


Page 26 of 27

References

This business plan is crafted based on the information received from the Yemen

office, previous work history, previous business plan, submitted EOI’s and proposals,

market study and the following resources:

(1) http://www.worldbank.org/en/country/yemen/overview

(2) http://www.unicef.org/infobycountry/yemen_statistics.html

(3) http://www.indexmundi.com/yemen/economy_profile.html

(4) http://www.yementimes.com/en/1636/report/1774/Increasing-technology-use-

to-fight-poverty.htm

http://www.worldbank.org/en/country/yemen/overview

http://www.unicef.org/infobycountry/yemen_statistics.html

http://www.indexmundi.com/yemen/economy_profile.html

http://www.yementimes.com/en/1636/report/1774/Increasing-technology-use-to-fight-poverty.htm

http://www.yementimes.com/en/1636/report/1774/Increasing-technology-use-to-fight-poverty.htm

business plan - 2013 - yemen office - final

Documents

yemen office strategy

business plan yemen

yemen office challenges

yemen office activities

business strategy

business analysis tools

yemen government

capabilities analysis