Global Business in Pakistan

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New International Business Perspectives on Pakistan
Omar J. Khan
I

Lyn S. Amine

Executive Summary What image comes to mind when one thinks of Pakistan? Prior to the attacks of September 11, 2001, and the subsequent invasion of Afghanistan, many businesspeople had little information about this ancient land. Recently, Pakistan has come to the world’s attention as a powerful ally in the U.S.-led war against terrorism. Situated at the crossroads of the Middle East, Southeast Asia, China, and member nations of the former Soviet Union, Pakistan has long been a leading player in regional political and economic activity. This article presents some new perspectives on Pakistan as a market worthy of a closer look. We survey Pakistan’s history and geography, as well as its sociocultural, political-legal, economic, and competitive environments with a view to identifying new opportunities for foreign investors and global marketers. Current business trends and marketing opportunities are discussed, concluding with an outlook for future growth and development. Valuable insights are offered to businesspeople interested in doing business in Pakistan, a little-studied but vitally important newly industrializing country (NIC) and big emerging market (BEM). © 2004 Wiley Periodicals, Inc.

INTRODUCTION

T

he purpose of our study of Pakistan is to assess business and marketing opportunities at the present time and in the future. We argue that Pakistan should be given a “second look” as a target for foreign direct investment (FDI) based on two important reasons: its internal market opportunities and its strategic significance as an export platform for doing business in other southwest Asian markets. The contribution of this article is a probing, honest, and detailed examination of a key big emerging market (BEM) from the point of view of strategic foreign direct investors and global marketing managers. Omar J. Khan is a PhD student at Saint Louis University, currently in his final year. He has three journal publications and numerous conference papers to his credit, as well as a First Place Award in academic research from the University. E-mail: khanoj@slu.edu. Lyn S. Amine, PhD, is a professor of marketing and international business at Saint Louis University. She is also Distinguished Fellow of the Academy of Marketing Science and president of the Women of the Academy of International Business. E-mail: aminels@slu.edu. Thunderbird International Business Review, Vol. 46(5) 493–519 • September–October 2004 © 2004 Wiley Periodicals, Inc. • Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/tie.20022

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Omar J. Khan

I

Lyn S. Amine

…the present government has implemented incentives for FDI that are generous by Western standards.

We start our analysis with a brief general background section, before familiarizing the reader with Pakistan’s ancient history at the crossroads of Europe and Asia. This historical knowledge is critical to a full understanding of the mind of the Pakistanis, with their deep-seated sense of identity as an ancient people with a rich and diverse cultural tradition. We emphasize the important advantages of Pakistan’s geographic location, which has played such an important role in the past and promises to be an essential source of competitive advantage in the future. In the next section, we use the well-established and widely cited template of five marketing environments (first developed by Cateora, 1993) to discuss the sociocultural, political-legal, economic, and competitive environments in modern-day Pakistan. This environmental analysis lays the foundation for a micro-level discussion of business culture and consumer behavior, after which we identify appropriate marketing strategies and profitable business opportunities. We close with a detailed discussion of the strategic implications of doing business in Pakistan and lay out some expectations for future market...
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