Developing Business in the Middle EastDeveloping Business in the Middle East

2011

About Sharp Minds

Many companies would like to start or develop business in the Middle East but face a number of financial, cultural, legal, logistical and social barriers.

Sharp Minds is a Business Development Consulting firm based in Beirut/Lebanon with the relevant experience and proven know-how needed to assist these companies in starting and developing their business in the region in a fast, efficient and economical way.

About the Region

Gulf Cooperation Council (GCC) = Saudi Arabia, Kuwait, Oman, Bahrain

Regional Facts (GDP Growth)

Source: MENA GDP: World Bank for 2008 and 2009 and Global Economic Prospects 2010 for 2010 and 2011World GDP: Central Intelligence Agency website

Economic Future

Two major factors are currently affecting the economic growth in the Middle East (aside from political turmoil):

1.High population growth rate– Average population growth rate of 3% per

year– The population in a given state will double

about every 20-30 years– This is the 2nd highest growth rate of any

region in the world, exceeded only by sub-Saharan Africa region. In Iraq, Libya, and Saudi Arabia, it exceeds 3.5%, and in the UAE and Yemen, it goes well above 4%

2.Fluctuations in the price of oil– In an effort to reduce their reliance on oil

revenues, many countries in the region are making major efforts to develop alternative economic activities. Nevertheless, the price of oil has always been a major factor influencing the economies of oil producing countries, growing steadily to their benefit

Tap into the Middle East Economy

Most economists do predict continued economic growth for the Middle East, though not evenly spread across the region. Moderate economic growth rates of around 3-5% are expected though the actual rate will be heavily dependent on such things as the fluctuating price of oil, the rate of foreign investment, the efficiency of the large number of state-owned industries, and the population growth.

Reasons why to do business in the Middle east:1. Oil price to continue surging Economy to continue growing2. Population to continue growing rapidly Market size continuously growing3. Economically stable (more stable than world economy)4. Large ticket sales opportunities

Why use the Services of a Local Business Development Consultant?

1. Faster and cheaper market penetration (understanding the market and its pitfalls is a long and costly process)

2. Avoid the social barriers3. Tap immediately into existing contacts and relationships4. Remain close to your customers and your local competitors

Why would Sharp Minds be your ideal Partner?

7. Comprehensive business development solution8. Based in Lebanon to benefit from:

– Qualified human resources– Multi-lingual staff: Arabic, English, French– Much closer to customers (low cost travel)

9. Staff is capable of understanding both Arab and Western way of thinking

10.Unique risk sharing approach working to your benefit

1. 20+ years experience in starting and developing businesses in the Middle East

2. 20+ years of consecutive success3. Existing business contacts and relationships4. Proven methodical and structured approach to market

penetration5. Proper market positioning of your products/services in

order to lead on added value rather than on price6. Complete control of pricing to your customers (no

intermediaries)

Sharp Minds vs. Your Own Regional Office

• 3 times cheaper• 3 times more efficient• 3 times faster results3X

Market Positioning

Sharp Minds will assist you in positioning your products / services on the market to compete on added value rather than on price.

Sharp Minds Business Model

Sharp Minds

Supplier of Product/Service Customer

Products and Services are invoiced directly to the customer

CommunicationCommunication

Sharp Minds interacts with both the supplier and the customer to optimize both their businesses. The Supplier bills and ships to the customers directly, placing him in full control of pricing and business relationship.

Sharp Minds Comprehensive Business Development Solution1.Regional Setup

– Immediate regional office in Beirut– Dedicated Business Development Consultant supervised by another

Senior Consultant– Tax free Logistic hub for consumables, spare parts and after-sales

service

2.Business Advisory – Experience and know-how to customize your products/service to match

the market expectations– Proper positioning of your products to lead on added value rather than

price– On-going competition analysis and pricing adjustment– Advice and practices to avoid receivable risks– Advice and practices to control legal exposure– Advice on Letter of credits and other financial operations– Mediation of conflicts

3.Marketing & Sales force– Market segmentation and prioritization of marketing approach– Focused and methodical customer solicitation– Simultaneous multi-country marketing (country diversification)– Regional marketing events advisory and participation – Follow-up on cashing receivables

4.Business Intelligence– Accurate and unbiased commercial feedback– Continuous advice on product development, competition and

opportunities

5.After-Sales support– Regional support center for after-sales services and parts

Sharp Minds Business Development Process

Phases of commercialization

Product adaptation Phase & Competition analysis

Product adaptation Phase & Competition analysis

Initial Sales PhaseInitial Sales Phase

Product or Service Certification/Registration

Product or Service Certification/Registration

Sales Development and market share preservation

Sales Development and market share preservation

Understanding your business

Understanding your business

Targeted Countries

Iraq The northern side of Iraq is stable. Economy is booming. This is the right time to start business.

Saudi Arabia Market is stable after the injection of US$ 150,000,000 in the economy. This is the best time to enter the market.

Lebanon Market is small but growing at about 7% per year.

Syria ON HOLD (*)

Jordan ON HOLD (*)

Egypt ON HOLD (*)

Kuwait Large and Stable Market.

United Arab Emirates Economy is picking up again after the 2008/2009 crisis. Real estate is still in trouble.

Bahrain ON HOLD (*)

Qatar Economy is booming. Government is investing heavily in the economy to try to diversify from gas income. Public sector is heavily investing to prepare for the FIFIA 2022 world cup.

Oman Economy is stable and growing.

Yemen ON HOLD (*)

(*) We are currently not marketing any product in Syria, Egypt, Jordan, Bahrain and Yemen as these countries are currently politically unstable. We will resume business when the situation becomes stable.

Sharp Minds Business Partnership Model

1. A collaboration agreement signed on 5 years with a 90 days trial period for both parties

2. Lump sum amount for the first 3 months3. Monthly lump sum service fee after the first 3 months4. Monthly fixed fee includes:

• Dedicated junior consultant• Supervision by a Senior Consultant• Use of the address of Sharp Minds as regional office• All communication costs (phone, fax, e-mail, internet)• Conference room use (subject to booking and availability on FCFS basis)

5. Monthly Fixed Fee does not include:• Travel tickets or hotels• Cost of meals and entertaining customers• Express courier or logistic warehousing fees

6. Sharp Minds charges also a variable success fee on sales (payable upon reception of funds at customer’s bank)

7. All other business and travel expenses paid separately upon submittal of supporting documents

8. Junior consultants travel economy while senior ones travel on business class

9. Exit from contract for the client is possible at anytime against an exit fee (after the first 90 days), in addition to the applicable sales commissions

10. Exit of contract for Sharp Minds is possible at no penalty to Sharp Minds provided a 2 months notice is given.

5 Golden Rules to Remember in the Middle East

Rule #1: In the Middle East, time has no value. Nothing happens quickly. Patience is an absolute necessity to get anything done.

Rule #2: It’s not about your product features or price. It's about who you know, and how you sell.

Rule #3: It takes quite some time before you get the order, but when you get it, it’s a big one with substantial margin.

Rule #4: If you deliver a good product and stand behind it, you receive repetitive and much larger orders than your actually expect.

Rule #5: It takes two to tango like anything else…