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Executive Report on Strategies in Saudi Arabia
ICON Group International, June 2007, Pages: 384
How to Strategically Evaluate Saudi Arabia
Perhaps the most efficient way of evaluating Saudi Arabia is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
Framework for Prioritizing Countries
Demand/Market Potential Driven Firm
Relative Accessibility
Accessibility/Supply Averse Firm
Relative Accessibility
In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market - neither a market-driven nor a cost-driven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).
Latent Demand and Accessibility in Saudi Arabia
This report provides an extremely detailed overview of factors driving latent demand and accessibility in Saudi Arabia. Latent demand is largely driven by economic fundamentals. But, latent demand only represents half of the picture. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks.
Chapter 2 deals with macro-accessibility. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Saudi Arabia:
Openness to Trade in Saudi Arabia
Openness to Direct Investment in Saudi Arabia
Local Marketing and Entry Strategy Alternatives
Local Human Resources
Local Risks
Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are also covered in Chapter 2, which is presented from the perspective of an American firm, though it is equally applicable to most firms entering Saudi Arabia. This chapter has been authored by local offices of the U.S. Government. I have included a number of edits to clarify the provided information as it relates to the general strategic framework.
In Chapter 3, I summarize the economic potential for Saudi Arabia over the next five years for hundreds of industries, categories, and products. The goal of this chapter is to report my findings on the real economic potential, or latent demand, represented by Saudi Arabia when defined as an area of dominant influence. The data presented are the result of various spatial econometric and time-series forecasting models which, for each category presented, are applied to forecast and allocate latent demand across all countries of the world and major distribution centers or centers of dominant influence within each country. This is accomplished knowing that economic fundamentals (e.g. income) generally vary from one country to another within a given country over time. In this chapter, I report the allocation for each category for Saudi Arabia as an area of dominant influence in the Middle East and, potentially, the world.
As a whole, this report presents a strategic assessment of Saudi Arabia by considering an extremely broad set of factors affecting both latent demand and accessibility, as outlined in the following chapters.
MACRO-ACCESSIBILITY IN SAUDI ARABIA
Economic Fundamentals and Dynamics
The Government’s Role in the Economy
The Saudi budget planning process is opaque. Little is known about the method of planning and the actual breakdown of anticipated revenues and expenditures. Some items are off budget. Most important, the oil price forecast from which the SAG derives approximately 75 percent of its revenues is not officially released. The government appears to favor conservative estimates of oil revenue for planning purposes.
Saudi Arabia’s defense and national security budget line item in the Saudi Arabian Monetary Agency’s annual report includes spending by the Ministry of Defense and Aviation and the Ministry of the Interior and other agencies. A significant portion of budget for defense and security goes to fund police, internal security, customs and immigration. Defense and security expenditures remain the largest sectoral allocation of budget spending, even though procurement of goods and services has declined over the years as spending has shifted to social services.
Large state firms, generally monopolies, dominate the Saudi economy. These firms include the oil firm Saudi ARAMCO, Saudi Arabian Basic Industries Corporation (SABIC), Saudi Telecommunications Company (STC), the Saudi Electricity Company (SEC) and the Saline Water Conversion Corporation (SWCC). Prior to the 1970s oil boom, parts or all of many of these firms, including ARAMCO, were in private hands. In recent decades, the private sector has accounted for roughly 40 percent of Saudi GDP.
Lack of diversity in sources of GDP and budgetary revenues continues to impede Saudi economic development. Oil and oil derivatives make up around 90-95 percent of Saudi export earnings, 75 percent of budget revenues and approximately 35-40 percent of GDP.
Balance of Payments
Remittances from 5-6 million foreign workers are a perennial drain on Saudi Arabia’s current account.
Net outflows of capital due to limited in-country tourism amount to about $5-6 billion annually. The tourism council is trying to encourage Saudi residents to spend more vacation time in Saudi Arabia. These efforts, if successful, should help reduce the net outflow of capital connected with tourism.
Adequacy of the Infrastructure System
Saudi Arabia is the largest free market economy in the Middle East and North Africa holding approximately 25 percent share of the total Arab GDP. The Kingdom’s geographic location provides easy access to export markets in Europe, Asia, and Africa. Saudi Arabia possesses a solid distribution network. The business centers of Riyadh, Jeddah, and Dammam/Al-Khobar/Dhahran have international airports served by a variety of international airlines with passenger and cargo capabilities.
Because of the large distances that separate Saudi Arabia’s main cities, air travel is preferred for travel within the Kingdom. Regularly scheduled services are currently limited to the sole national airline, Saudi Arabian Airlines (Saudia). However, in June 2003, the Saudi government approved a law to allow domestic airline competition. Saudia transports about 13 million passengers a year on international and domestic flights. There are a total of 205 airports (72 with paved runways) and four heliports.
Most within-country freight is hauled by truck over a relatively good highway system linking the major business centers. The latest figures released by the Ministry of Communications and Transportation indicated that the paved and unpaved Saudi road network extended for more than 155,000 kilometers, and about 2,500 kilometers being added every year.
The Kingdom owns the largest marine network in the Middle East consisting of eight ports, or six commercial ports and two industrial ports. They are Dammam Seaport, Jeddah Islamic Port, Jubail Commercial Port, Riyadh Dry Port, Jizan Port, Dhiba Port, Yanbu Industrial Port and King Fahd Industrial Port in Jubail. Jeddah and Dammam are the main international seaports for moving containerized and bulk cargo. A rail link carries passengers and freight between Dammam and Riyadh.
The Kingdom has witnessed rapid advancements in the field of telecommunications. There are 1,000 telephone circuits with direct access to 152 countries. Although mobile phone penetration is at less than 10 percent of the population, rapid expansion and upgrading of the network is under way. International telephone calls can be made to almost anywhere in the world. Internet services are freely available and the main cities have several Internet Service Providers (ISPs) and Internet cafés. High speed DSL Internet is also available.
The King Abdulaziz City for Science and Technology (KACST) manages the Internet backbone, while the Saudi Communications and Information Technology Commission (CITC) regulates the market. Over 40 Internet Service Providers (ISPs) received licenses at the launch of Internet in the Kingdom. Market forces have since cut this number almost in half. The Internet infrastructure can support over one million concurrent customers.
The CITC, which began as the Saudi Communications Commission in 2001, has offered transparency as the telecom regulator and called for public comment in the establishment of its regulations. In a first for the Kingdom, the CITC granted end-users of telecom services a bill of rights.
Regional Economic Integration
Saudi Arabia is also a member party in the following regional organizations and agreements:
African Development Bank
Arab Bank for Economic Development in Africa
Arab Fund for Economic and Social Development
Arab Gulf Program for United Nations Development Organization
Arab Monetary Fund
Gulf Cooperation Council
League of Arab States
Organization of Arab Petroleum Exporting Countries
Economic and Social Commission for Western Asia
Islamic Development Bank
Political Risks
Nature of Political Relationship with the United States
Saudi Arabia’s unique role in the Arab and Islamic worlds, its possession of the world’s largest reserves of oil, and its strategic location make its friendship important to the United States. Diplomatic relations were established in 1933; the U.S. Embassy opened in Jeddah in 1944 and moved to Riyadh in 1984. The post in Jeddah then became a U.S. Consulate General. A U.S. Consulate also opened in Dhahran in 1944.
The United States and Saudi Arabia share common concerns about regional security and stability, oil exports and imports, and sustainable development. Close consultations between the United States and Saudi Arabia routinely take place on international, economic, security and development issues. Both nations share important strategic interests in the Gulf, in bringing peace and stability to Iraq, and in achieving peace between Israel and the Palestinians.
The continued availability of reliable sources of oil, particularly from Saudi Arabia remains critical to the prosperity of the United States as well as Europe and the Far East. Saudi Arabia is often the leading source of imported oil for the United States, providing 15.5 percent of total U.S. crude imports. The United States is Saudi Arabia’s largest trading partner, and Saudi Arabia is the largest U.S. exports market in the Arab world.
In addition to economic ties, a long-standing security relationship continues to be important in U.S.-Saudi relations. The U.S. Military Training Mission (USMTM) established at Dhahran in 1953 (now located in Riyadh) provides training, advice and assistance to the Saudi Ministry of Defense and Aviation in a variety of areas, including the management of the Kingdom’s Foreign Military Sales (FMS). A second U.S. military command, the Office of the Program Manager - Saudi Arabian National Guard (OPM-SANG) performs similar functions for the Kingdom’s National Guard. Operation Southern Watch, which enforced the southern “no-fly” zone against Iraq, was headquartered at the Kingdom’s Prince Sultan Air Base. This Operation ceased at the close of Operation Iraqi Freedom.
Saudi Arabia yearly spends an estimated one third of its budget on defense/national security and has the ninth largest defense budget in the world. United States defense firms have over the years sold Saudi Arabia military aircraft (F-15s, AWACS, C-130s, and UH-60 Blackhawks), air defense weaponry (Patriot and Hawk missiles), armored vehicles (M1A2 Abrams tanks, M-2 Bradley infantry fighting vehicles, M-113 armored personnel carriers), and other equipment. For many years, the U.S. Army Corps of Engineers had a long-term role in military and civilian construction activities in the Kingdom.
While the Saudi military purchased large numbers of many weapons systems throughout the 1990s, budgetary constraints have in recent years resulted in far fewer purchases of new weapons systems. The Saudi Government is interested in finding inexpensive solutions to upgrade existing systems.
In the wake of September 11 terrorist attacks in New York and Washington and the May 12 attacks in Riyadh, Saudi cooperation with the U.S. on counter-terrorism has become the most important issue in bilateral relations. Cooperation and information sharing on investigations and other counter-terrorist operations, including efforts against the financing for terrorism, has reached an unprecedented level.
Major Political Issues Affecting Business Climate
The United States and Saudi Arabia share many common concerns about regional security and stable development. Military cooperation during the 1991 Gulf War, and Operations Enduring Freedom and Iraqi Freedom was extensive. The Government of Saudi Arabia adhered to the U.N.-imposed sanctions regime against Iraq and supports efforts to alleviate the sufferings of the Iraqi people.
While also an advocate of a comprehensive peace in the Middle East, the Saudi Government has conditioned normalization of its relations with Israel on the resolution of final status issues between Israel and the Palestinians, such as Jerusalem, and on success in Syrian-Israeli and Lebanese-Israeli bilateral peace negotiations.
The Political System
The central institution of Saudi Arabian Government is the monarchy. The Basic Law adopted in 1992 declared that Saudi Arabia is a monarchy ruled by the sons and grandsons of King Abd Al-Aziz Al Saud, and that the Holy Qur’an is the constitution of the country, which is governed on the basis of Islamic law (Shari’a). There are no political parties or national elections. The King’s powers are limited because he must observe the Shari’a and other Saudi traditions. He also must retain a consensus of the Saudi royal family, religious scholars (ulama), and other important elements in Saudi society. The Basic Law stipulates that the King alone chooses his successor, the Crown Prince. However, his choice must meet with the approval of a royal family council comprised of leading members of the royal family.
The King governs the Kingdom through a Council of Ministers, which advises on the formulation of general policy and directs the activities of the growing bureaucracy. This council consists of a prime minister (the King), the first (the Crown Prince) and second (the Minister of Defense) deputy prime ministers, 23 ministers, five ministers of state, and a small number of advisers and heads of major autonomous organizations.
Legislation is approved by resolution of the Council of Ministers and must be compatible with Shari’a law. Access to high officials (usually at a majlis, or public audience) and the right to petition them directly is a well-established tradition.
Saudi Arabia is divided into 13 provinces governed by members of the royal family. The King appoints all governors, who report to the Minister of Interior.
In March 1992, the King established a national Consultative Council (Majlis al-Shura), with appointed members having powers to review and give advice on issues of public interest and legislation. In 2003 the government increased the powers of the Council, enabling it to initiate legislation. the Council debates and votes on legislation, and questions government officials on policy issues. .
The Legal System
Saudi Arabia’s legal system is based on Shari’a law, which is derived from the Qur’an and the traditional sayings (Hadith) of the Prophet Muhammad, and interpreted by the Ulama, a body of religious scholars.
Justice is administered by a system of religious courts, whose judges are appointed by the King on the recommendation of the Supreme Judicial Council, composed of 12 senior jurists. Law protects the independence of the judiciary. The King acts as the highest court of appeal and has the power to pardon.
Shari’a courts exercise jurisdiction over common criminal cases and civil suits regarding marriage, divorce, child custody, and inheritance. Cases involving relatively small penalties are tried in summary courts; more serious crimes are adjudicated in general courts. Other civil proceedings, including those involving claims against the government and enforcement of foreign judgments, are held before specialized administrative tribunals, such as the Commission for the Settlement of Labor Disputes and the Board of Grievances.
In order to ensure appropriate legal principles and punishments, the Justice Ministry, the Court of Cassation, or the Supreme Judicial Council reviews judicial appeals. In capital cases, the King acts as the highest court of appeal and has the power to pardon.
Laws are enforced by local police and officers of the Ministry of Interior. In addition, the religious police, members of the Committee for the Promotion of Virtue and the Prevention of Vice, enforce adherence to a strict version of Islamic norms by monitoring public behavior.
Marketing Strategies
The Saudi Government’s reform agenda continues in an effort to diversify the economy away from its almost complete dependence on the petroleum sector, to attract foreign investors, and to create new jobs for Saudi citizens. The Saudi Government is pressing ahead to encourage the private sector to take the lead in the country’s economic development. The Government, for its part, has passed numerous laws and regulations to facilitate and entice investments.
Distribution and Sales Channels
There are three major marketing regions in Saudi Arabia:
Western Region, with the commercial center of Jeddah
Central Region, where the capital city Riyadh is located
Eastern Province, where the oil and gas industry is most heavily concentrated
Each has a distinct business community and cultural flavor, and there are only a few truly “national” companies dominant in more than one region.
U.S. exporters may find it advantageous to appoint different agents or distributors for each region having significant market potential. Multiple agencies and distributorships may also be appointed to handle diverse product lines or services. Multiple agencies and distributors can present logistical and management difficulties, so often U.S. firms, particularly in the franchise sector, choose to appoint a master franchiser or distributor for the Gulf region. However, finding a master regional distributor can be just as problematic as dealing with half a dozen or more for some very small countries and markets as the Gulf States often compete in commercial sectors.
While there is no requirement that distributorships be granted on an exclusive basis, it is clearly the policy of the Saudi Ministry of Trade and Industry that all arrangements be exclusive with respect to either product line or geographic region.
Many Saudi companies handle numerous product lines (sometimes even competing product lines), making it difficult to promote all products effectively. Saudi agents typically expect the foreign supplier to assume some of the market development costs, such as hiring of dedicated sales staff (especially for high-tech or engineered products), setting up workshops and repair facilities, and funding local advertising. Foreign suppliers often detail a sales person to the Saudi distributor to provide marketing, training, and technical support. Absent such an arrangement, U.S. firms should expect to make frequent, periodic visits each year to support their Saudi distributor.
Steps to Establishing an Office
The procedures to follow in establishing an office in Saudi Arabia differ according to the type of business undertaken. The most common and direct method of establishing an office is simply to appoint an agent/distributor, who can set up the office under their own commercial registry and obtain residency visas for any necessary expatriate personnel. The agent/distributor agreement should be registered with the Ministry of Trade & Ministry as previously described.
A second method might be to establish a technical and scientific service office, which also requires a license from the Ministry of Trade and Industry. This approach preserves the independence and identity of the foreign company’s local office as a separate entity from the Saudi agent/distributor. Foreign companies represented in Saudi Arabia may apply for permission to open a technical and scientific service office. Technical and scientific service offices are not allowed to engage directly or indirectly in commercial activities, but they may provide technical and advisory support to their Saudi agent/distributor as well as conduct market surveys and product research.
A third method is to establish a branch office. The establishment of branch offices is open to wholly foreign-owned entities. Under the new Foreign Investment Act, the requirements and procedures for establishing a foreign branch office have been eased. The move has sparked a number of foreign companies to set up branch offices in Saudi Arabia. Companies that are contracted to do work for the Saudi Government must obtain a temporary commercial registration. Under certain circumstances, a foreign company may apply for a permanent registration if it wishes to engage in permanent business in Saudi Arabia.
A fourth method is to establish a representative (or liaison) office. This is normally granted only for companies that have multiple contracts with the Government and require a local office to oversee contract implementation. Representative offices are not allowed to engage in direct or indirect commercial activity in the Kingdom. Establishment requires a license from the Ministry of Trade and Industry.
A fifth method is for a foreign company to establish a joint venture with a Saudi firm. Usually, the Saudi business community refers to limited liability partnerships as joint ventures. These partnerships must be also registered with the Ministry of Trade and Industry and the partners’ liabilities are limited to the extent of their investment in the partnership.
Finally, foreign companies can get a license from the Saudi Arabian General Investment Authority (SAGIA) to set up an industrial or a non-industrial project in Saudi Arabia. SAGIA licenses projects under the Foreign Investment Act, which allows for 100 percent foreign ownership. In addition, foreign investors can open a sales/administration/marketing office to complement their industrial or non-industrial project. SAGIA has a broad mandate on all matters relating to foreign investments in industry, services, agriculture, and contracting.
Costs associated with setting up a business in Saudi Arabia have remained relatively unchanged from previous years. It is important to note that the law forbids females in Saudi Arabia, regardless of nationality, to drive motor vehicles. Money should be included in an office budget to provide sufficient cars and drivers for transportation of female family members and staff.
Creating a Joint Venture
Under the Foreign Investment Act, a foreign investor may either chose to set up his own project or in association with a local investor. If the latter option is chosen, foreign investors may structure their enterprise as a limited liability company, which is the most commonly used approach. By law, limited liability companies must not have less than two nor more than fifty shareholders and must be capitalized with at least SR. 1,000,000 ($267,000). Joint venture companies are a variety of the limited liability company that can be held either privately or publicly. Joint ventures are unincorporated associations in which each party to the venture holds title to his mutually agreed contribution. They resemble general partnerships. The Ministry of Trade and Industry approves formation of all joint ventures.
If the foreign investor chooses to set up a business on his own, the amount invested should not be less than $533,000 for agricultural projects, $1 million for industrial projects, and $533,000 for other projects. The Investors Service Center (ISC) at SAGIA oversees all matters related to a foreign investor licensing and registration process. The ISC is intended as a one-stop shop that will assist foreign investors and minimize lengthy procedures. Another very significant change that accompanied the new Foreign Investment Act is the reduction in the corporate tax rate for foreign companies with profits in excess of $26,000 a year. It lowers the maximum rate from 45 to 30 percent and allows companies to carry forward corporate losses for an unspecified number of years.
Licensing will be also an appropriate method of doing business in Saudi Arabia under some circumstances, but the tax implications should be considered. Royalties, license fees, and certain management fees are deemed to be 100 percent profit, and the full amount will be taxed at the normal corporate tax rate for non-Saudi companies.
Depending on the nature of the foreign investment, the Saudi Arabian Standards Organization (SASO) may be involved. SASO is the Saudi authority for establishing product standards for imports and locally manufactured goods, and will examine products or processes to be used to ensure they meet existing or planned Saudi standards.
The Saudi Industrial Development Fund (SIDF) may be engaged to provide up to 50 percent financing for approved industrial projects, and payback period could be up to 15 years. Market intelligence also is available through the SIDF for prospective investors.
Other Saudi Arabian Government entities that may be involved in the process include: Ministry of Foreign Affairs (visas), the Ministry of Interior (residence permits and industrial safety and security approvals), the Royal Commission for Jubail and Yanbu (if the project is placed at the Saudi industrial cities of Jubail or Yanbu), the General Organization for Social Insurance (social insurance and disability payments for Saudi employees), and the General Organization for Technical Education and Vocational Training (training programs for Saudis).
Agents and Distributors and Hiring Local Counsel
U.S. exporters are not required to appoint a local Saudi agent or distributor to sell to Saudi companies, but commercial regulations restrict importing for resale and direct commercial marketing within the Kingdom to Saudi nationals and wholly Saudi-owned companies. Nationals from the Gulf Cooperation Council (GCC) countries, which include Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, and the UAE, are also allowed to engage in trading and retail activities, including real estate. Agent/distributor relations are governed by the Commercial Agency Regulations of the Kingdom of Saudi Arabia that is administered by the Ministry of Trade and Industry. These regulations are currently being revised.
In July 2001, the Council of Ministers cancelled a decree compelling foreign companies with government contracts to appoint a Saudi service agent. The old decree also specified a maximum commission of five percent. Some government contracts, however, will require a minimum requirement to subcontract to Saudi companies. In addition, government contracts will include a clause to develop training programs for Saudis. The Manpower Development Fund was established by the Saudi Government to facilitate employment and training for Saudis.
Under the 1969 Labor and Workman Regulations, 75 percent of a firm’s work force and 51 percent of its payroll must be Saudi, unless an exemption has been obtained from the Ministry of Labor and Social Affairs. In practice, the percentage of Saudis is far less. The number of Saudis in the private sector labor force may be under 10 percent. More Saudis work in the public sector. In 1996, the Saudi Government implemented a regulation requiring each company employing over 20 workers to include a minimum of five percent Saudi nationals. This number increases by five percent per annum, and has now reached 30 percent of a firm’s workforce.
Companies not complying with the Saudi minimum personnel rule will not be given visas for expatriate workers. Few firms have been able to meet these requirements. Foreign firms are under constant pressure to employ more Saudis. The list of jobs/positions that may no longer be held by non-Saudis is expanding.
Terminating an agent/distributor agreement can be difficult even though Saudi policy has changed to permit registration of a new agreement over the objections of the existing distributor. Time is better spent in making the proper initial selection than in attempting to end an unsatisfactory relationship at a later date. The U.S. Commercial Service, through the U.S. Export Assistance Centers and overseas posts, offers a variety of services to assist U.S. firms in selecting a reputable and qualified representative.
Saudi law is based on the Islamic Shari’a and differs considerably from U.S. practice. U.S. firms contemplating a joint venture, licensing, or a distribution agreement are advised to consult with a local attorney. The Saudi Labor law controls labor relations and, in 2001, the SAG approved the formation of Labor Committees in companies that employ 100 or more staff. The American Embassy and Consulates can provide a list of attorneys.
Performing Due Diligence and Checking Bona Fides
In 200I, the Commercial Service in Saudi Arabia reinstated the International Company Profile (ICP) reports in association with Dun & Bradstreet. The report will provide detailed information on a specific Saudi company based on a D&B report and U.S. Embassy Commercial Section comments about the company.
Franchising
Franchising is a popular and growing approach for local firms to establish additional consumer-oriented businesses in Saudi Arabia. Although the franchise market is small relative to that in the United States, it is rapidly expanding in several business sectors.
Franchising opportunities exist in the following business categories:
Apparel
Laundry and dry cleaning services
Automotive parts and servicing
Restaurants
Mail and package services
Printing
Convenience stores
Success in franchising in the Saudi market is often attributed to finding the appropriate franchiser and location. The Commercial Agency Law applies to any franchise agreement, and the Ministry of Trade and Industry is the government entity that licenses and approves such agreements. Under the new Foreign Investment Regulations, a foreign franchise owner may apply for a license to establish a company with a 49 percent foreign ownership for the distribution of its franchised product(s) that are locally produced.
Franchising remains a growing sector in Saudi Arabia. This is based on Saudis’ desire to own their own business and a widely held appreciation for Western methods of conducting business. Competition is particularly fierce between U.S. franchisers and local and third country competitors in the following sectors: car rental agencies, laundry and dry cleaning services, fast food, and auto maintenance. Some local fast food outlets are already making inroads, being more successful and more accommodating to Saudi tastes. Several Saudi-developed franchises have grown into successful regional businesses.
Direct Marketing
Direct marketing is not widely used in Saudi Arabia. Personal relations between vendors and customers play a more important role than in the West. Furthermore, many forms of direct marketing practiced in the United States are unacce
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