Western Union Business Solutions in Saudi Arabia
Monday 5th November 2012
Carly-Arzeen Zandipour 32067555
Western Union Business solutions seeks to infiltrate the Kingdom of Saudi Arabia (KSA) market of Small-Medium Enterprises (SME’s), engaged in International Trade and with a requirement for International money transfer solutions which are currently highly underdeveloped in the country. Western Union Business Solutions (WUBS) will spear head a campaign offering innovative Business solutions on cross border payments with a promise to ‘serve the underserved’, which is evidently plentiful in the almighty Saudi Market. Although one of the world’s fastest growing economies, the country still lacks the fundamental training, education and support of its rising Entrepreneurs who account for an excess of 90% of all businesses owners in Saudi and it is precisely this which has been the cause of some 30% SME dropout rates and an average small business age of 7 years which is evident of this flaw. However, it’s the country’s acknowledgement of its weak links and increased efforts to strengthen their weakest link that is best admired and poses great opportunity for WUBS. With the governments current investments in over 300 colleges for men and women, new government funding programs for SME’s and increased backing by advertising the countries opportunities externally and hosting event and trade exhibitions focusing on the SME sector and encouraging ‘locals thinking global’ by expanding their reach and opportunity. Although the main sector in Saudi is undoubtedly in the Oil industry, the country has recently witnessed accelerated growth rates in its private sector, proving to government the importance and opportunity for the sector and inducing additional support. A strength to strength, win-win approach as hosts a prime opportunity for WUBS’ entry as a long withstanding, customer caring, business solution provider and trade risk manager. Traits all coherent with and respected by the Saudi mentality. After a slump in 2009, which saw a drop in almost 40% of country imports and exports, the country has recovered fully. Saudi Arabia imports were worth 117.3 Billion SAR in the first quarter of 2012. Historically, from 1968 until 2012, Saudi Arabia Imports averaged 84646.15 Million SAR. Saudi mostly imports machinery and equipment, foodstuffs, chemicals, motor vehicles and textiles. Its main import partners are European Union countries (Germany, Italy, UK), United States, China, Japan and South Korea. (http://www.tradingeconomics.com/saudi-arabia/imports)
This offers an entry point for Western Union Business Solutions. To play the role of serving the underserved, educating the majority of SME’s in an understanding of options offered by WUBS, their international business transactional needs and offering foreign exchange risk management and peace of mind to the largest sector in this economy, ever growing and powerful with increasing recognition of its worth by local leaders an organizations.
Saudi small-to-medium enterprises (SME) make up 63% of employment, and 98% of all enterprises in Saudi, (http://www.zawya.com/story/Saudi_SME_opportunity-ZAWYA20120919051002/ September 19 2012) this converts to an average 770,000 individual companies with a total contribution of 25% to total economy GDP (Achoui, M. (2009) ‘Human resource development in Gulf countries: an analysis of the trends and challenges facing Saudi Arabia. ‘Human Resource Development International, 12(1) pp. 35-46)
The Saudi Industrial Development Fund, the Ministry of Finance and Saudi banks have established a new system that provides financing activities for SMEs. Although only 1100 businesses of the 770,000 registered SME’s have been awarded assistance thus far. Business service providers focusing on SMEs – for consulting, training, business...