Consulting Services in Saudi Arabia

Topics: Management consulting, Saudi Arabia, Jeddah Pages: 5 (1667 words) Published: June 17, 2013
An American management consulting company is planning to extend its business broad and target a new international market. The consulting services help companies to develop their business plan, marketing plan, financial plan, logistic plan, information technology, and training. Today, this kind of services has become very common and widely spread across all business activities around the world. Also, it has become integrated Part of the huge numbers of companies. In 2007, the total revenue of its market amounted $201 billion. The management consulting market is almost shared between USA and Western European consulting companies. Many companies provide different consulting services and on the other hands many of them specialize in a certain filed such as information technology and accounting and auditing services. The management consulting market is very fragmented and low barriers to enter or go out (Encyclopedia of Global Industries 2012). The objectives of extend the business broad are; first, benefiting from the international growth demand on the consulting services. Second, finding new market with lower competition especially the US market is becoming stiff competition because of the growth of demand that attract new comers to compete. Third, enhance company acknowledge by working in verities countries and cultures that reinforces ability to attract new clients. Forth, meet the international growth demand for consulting services (Encyclopedia of Global Industries 2012). The target market is Saudi Arabia, it is one of the emerging economies (Alder Audit Bureau 2010). There are several motives to target this market. First, the strength of economy, it is the largest economy in the Middle East and North Africa, and the 19th largest economy around the world. It enjoys high GDP growth that exceeded the world growth, it amounted 5.8% in 2012. Also, the other economic indicators; economic stability, government expenditure and the the average person annual income ($25,000) show that the Saudi’s economy is an attractive market for foreign investors (Saudi Arabian General Investment Authority 2013). Second, potential opportunities either in government and private sectors, Saudi government has lunched several programs economic and regulatory reforms as a respond on Saudis’ claims and anticipation the Arab Spring extension. Also, the private sector is seeking to be ready for competition with foreign companies because Saudi Arabia has become a member of WTO. As well as the government strives to increase the non-oil exports to minimize the dependence on the oil income, so it provides large support for non-oil sector ("Saudi Arabia Promotes Non-Oil Trade" may 16, 2013). Third, many of family companies are planning to convert to public companies to tap into government aids and stock market opportunities. Also, the educated next generations of companies owners look forward to run business in modern concepts. Forth, the foreign consulting companies are very favored than the domestic companies because the high level management in both government and private sector think that the foreign companies are more skilled and better than domestic companies. Thus, the competition with domestic is an easy game. Those factors together create an attractive market for foreign consulting companies. However, this attractiveness of Saudi market involves significant challenges. First, the lack of fairness in competition, Saudi Arabia is ranked the 66 in the transparency index of the Transparency Organization that implies there are serious corrupted practices in both the government and private sector activates (Transparency Organization 2012). The obtain problems here is that there are certain companies assigned because of their relationship with high level management in those organization not because of their qualification that make getting an opportunity hard for new comers or which do not have relationship. Thus, the new comer has to build a strong...
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