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North South University

BUS251: Business Communication

Group report Country:

Egypt (Cairo)

Section 06

Date of submission:

August 21, 2019

Submitted to:

Mohammad Asif Gazi (MAG)

Department of Management

North south university

Submitted by:

Shajid Hossain 1521663630

H. M. Towsif 1530700630

Fahim Ahmed 1520235630

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Acknowledgement:

We, the group members, want to thank our honorable instructor Mohammad Asif Gazi
(MAG)to give us such a great opportunity to understand multi-cultural communication and
gain experience on globalization through Business Communication.

We also want to thank him for the theoretical knowledge and guidelines that he has provided
us all through the semester.

August 26, 2019

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Letter Of Transmittal:

Date: 26 August, 2019

Mohammad Asif Gazi (MAG)

Department of Management

North South University

Subject: Submission of the report on positive recommendation of Pathaoto

Expand in Egypt.

Dear Sir,

It is a great pleasure for us to present you the report on positive recommendation of Pathao to
expand globally in Egypt (Cairo)as the report is required for the completion of the course
BUS251.

Hope you would accept our report on the globalization of Pathao and its way of Business
Communication.

Sincerely,

The Team Members

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Contents:

Executive Summary page 5

Introduction page 6
Methodology page 6
Analysis and research findings page 6 - 18
SWOT analysis Page 19
Conclusion page 19
References page 20
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Executive Summary:

Pathao is one of the leading Bike sharing companies of Bangladesh. The company wants to expand its
business in Egypt. Our team finds out the opportunity, obstacles, and feasibility of Pathao to start
operation in Egypt. Also, we find out and analysis the behavior pattern, cultural trends, and the way of
lifestyle of the people of Egypt that can be potential information for Pathao.

As a historical tourist attraction, the capital city of Egypt is the targeted city for pathao. The city is full
of traffic jam most of the time. So, the local people and the tourist will find it better to move through
the city with Pathao bikes. On the other hand geographically Egypt is a Middle Eastern country
where most of the people are Muslim. Our team finds out how Pathao can attract muslim customers
to ride on bikes.

Also we found some obstacles that might cause difficulties to business in Egypt. Pathao bikes cannot
attract Muslim ladies as passenger. Pathao will also face some competition in Egypt as there are two
other companies who are providing same facilities as Pathao. Besides, there are some legal issues
arise because of the taxi drivers union does not support ride hailing business in their territory.

In short, our team has done the in depth analysis so that Pathao can start business in Egypt with facing
any problem and gain the highest amount of profit from that region. Our team wants to see Pathao as a
successful venture in Egypt.
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Introduction:

Egypt is a country with a very long history. The official name of the country is Arab Republic
of Egypt. Historic events made Islam as the official religion of Egypt. The capital city of
Egypt is Cairo. Egypt is the most populous country in North Africa as well as Middle East.
High population causes high traffic jam in Cairo. Besides, Egypt is a tourist attraction. A lot
of people travel to Egypt each year. They need a better solution to travel around Egypt
without facing the traffic jam.

Traffic jam and tourist attraction made it convenient to start an app based ride sharing
business in the capital city Cairo. Few companies like Uber and Careem took some initiative
to start the business in Cairo. Pathaois a transportation network company from Bangladesh.
Its main operation is ride sharing service. It also provides services in E-commerce, parcel
courier and food delivery.Pathao has a opportunity to start operation in Cairo.

Methodology:

The research has been conducted mostly over internet information and analysis. The
instrument here is the analysis of internet articles, websites, news documents and reports of
other companies.

Findings and Analyses of Country:

Historical analysis of Egypt:

Historically enriched Egypt has a lot of tourist attraction. As the Cairo is the capital of Egypt,
most of the tourist comes to Cairo. The food of Cairo is also very popular among the tourists.
If Pathao starts ride sharing service in Cairo, there will be a high possibility that tourist will
prefer Pathao bikes to roam around in the traffic congested Cairo. Unlike Uber and Careem,
Pathao will be a profitable business as it offers less time to travel.
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Geographical analysis of Egypt:

The country is dissected by the amazing Nile River. It flows north to the Mediterranean

Seafrom it source in central Africa. The surrounding Nile Valley which has 5-10 miles wide
is the country's only fertile land. It is the home to 98% of the population.

Land Area 995,450 km2

Water Area 6,000 km2
Total Area 1,001,450km2 (#29)
Population 94,666,993 (#15)
Population Density 95.10/km2
Government Type Presidential Republic
GDP (PPP) $1,110.00 Billion
GDP Per Capita $12,100
Currency Pound (EGP)

Tourism in Egypt in 1995–2016

Total number of
Year Total revenue, 
tourists,

  million billion USD

1995 2.9 3
2000 5.2 4.7
2005 8.2 7.2
2010 14.7 12.5
2011 9.8 8.7
2012 11.5 9.9
2013 9.5 6
2014 9.9 7.2
2015 9.3 6.1
2016 5.4  
2017 8,2
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Geographically Cairo is very convenient to start operation of Pathaoin Egypt. Tourists visit
this place all over the world. Pathao can introduce tourist bus and scooter service along with
motorcycle ride sharing service. Tourist bus can cover most of the travel attraction of the city
to attract tourists as it will be low cost service.

Analysis of traffic condition of Egypt:

The average speeds on major roads are 15-40km/h. The expected normal speeds are between
60 to 80 kilometers per hour. Besides, speeds on some local roads in central Cairo are much
worse. The traffic jam is so acute that it is better to make trip on foot rather than on a
transport.

On the other hand the quality of public transport in Cairo is not good. Highly populated city
with low quality public transport is a main reason to increase motorcycle gradually. Between
the years 2008 to 2016 the number of bikes has been doubled in the city Cairo. Though the
oil price has not been decreased, people and tourist prefer bikes instead of public transports.
Buses and cars are not able to run through narrow streets of Cairo. Bikes can move anywhere;
even the roads are filled with traffic jam.

Number of Registered motorbikes in Cairo

2017 328066

2016 340305

2014 302024

2012 245892

2010 225207

2008 154520

0 50000 100000 150000 200000 250000 300000 350000 400000

Here we can see the number of registered motorbikes in Cairo. In 2008, it was 154520 and

increased dramatically to 328066 in 2017. It shows the preference of bike among the people.
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It also indicates the preference of bike among the people. Also, Pathao can get riders as

employee very easily.

Analysis of Population of Egypt:

Cairo Population

20,484,965
18,820,072
16,899,015
15,174,050

2005 2010 2015 2019

The Greater Cairo Metropolitan Area has more than 19 million inhabitants. It is host to more
than one-fifth of Egypt’s population. The city is also an important contributor to the Egyptian
economy in terms of GDP and jobs. The population is expected to be increased to 24 million
by 2027.

According to a recent study by the World Bank titled, "Cairo Traffic Congestion" at least
4,000 people are injured and 1,000 people die each year in traffic related accidents, of which
more than half are pedestrians.The same study claims that the capital's congestion problem
costs the country EGP50 billion (US$8 billion) a year, which is four per cent of Egypt’s
Gross Domestic Product (GDP). This is four times the amount lost by cities of the same size. 

On the other hand,Cairo has ranked the fourth worst city worldwide in terms of traffic
congestion right after Pune, India. According to Central Agency for Public Mobilization and
Statistics, the total amount of licensed vehicles in Egypt is approaching 11.1 million vehicles.
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This is an exponential rise, since in 2014 the amount of licensed vehicles was half as much as
it is now.

Analysis of People and their psychology:

Egypt is a male dominated society where father is the head of the family and mother is
primarily responsible for taking care of the household. Male offspring are regarded as a
blessing upon the family.

The psychology of people is based on religion. Men are the source of income of a family.
Pathao can get a lot of bike rider very easily. But, getting female as passenger would be
difficult.

Currency analysis of Egypt:

Egypt has a consistent GDP since 1999. The stability of the currency is helpful to start
operation of Pathao in Cairo. The people of Egypt do not want to share credit card
information to other companies.

Pathao can introduce cash after service system.On the other hand, tourist and visitors from
other countries may be able to pay in dollars. Payment mathod in dollars can be more helpful
for Pathao.

Analysis of Economy:

Egypt has a GDP of $1.2 trillion and 4.2% of growth. Per capita income is $12,671,
unemployment rate is 12.1%, inflation (CPI) is 23.5% and FDI inflow is $7.4%.

As the economy is booming, if Pathao start operation in Egypt, it can get huge amount of
profit from that region. Also the can expand in Israel or some other Middle Eastern countries
soon, as most of their pattern for business is same.
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Demographic analysis of Egypt:

Demographically Cairo can be divided with income level of the people. In Cairo, high level,
midlevel and low level income people exist in Cairo. Besides, the tourists from other
countries can be considered as high level income.

Motor bikes can be considered as high level product and the user of it can be tourists. Scooter
can be considered as mid-level market product. Tourist bus is considered as product with
affordable and economic price.

Customs and Behavior analysis:

Handshakes are the basic mode of communication between same sex people and handshakes
are prolonged with smile and eye contact. When two different sex people interact, female
should extend their hand first otherwise male should bow down.

People of Cairo are very friendly to the tourists. Usually they shake hand and maintain eye
contact. That’s why tourists can adapt with Egyptians easily. Local riders of Pathao can help
tourists to travel through the city with a very friendly manner. Tourists will also feel safe with
riders.

Climate: The climate of Egypt is mostly hot and remains dry all the year. The surroundings
area is desert so the climate remains the same. With such climate, traffic jam is intolerable to
the people. If Pathao bikes and scooters can be introduced, they can reach to their destination
easily.
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Overview of the Business of Pathao in Egypt:

Possible level of Competition in the international market:

Though Uber and Careem faced some problem to establish business in Egypt, Uber and
Careem has able to relaunch successfully and started operation in Cairo recently.

Uber has already added 40000 drivers for their operation. Also, Uber is adding 2000 drivers
each week. Cairo is the largest market for Uber in the Middle East. On the other hand,
Careem struggles with Uber as Uber charges 10% less than Careem.

Pathao Bikes can beat both Uber and Careem as bikes can go through traffic jam and costs
less also. If pathao can at least 40% less than Uber cab then it can grab the market. If we
analyze it, we can see that a cab can take 4 to five person at a same time. But bike can take
only one passenger. So if Pathao charge less 40% than Uber, still it can generate 200% more
Uber based on passanger count.

Advertising Strategy:

If we follow some other companies marketing strategy, Uber offers the New Year eve
celebration. They also offers celebrities as driver as surprise ride. Pathao can follow this
strategy too.

Pathao can offer free rides to Mosques all through the year for elderly people. On the other
hand Pathao can offer free rides for everyone on Eid ul Fitr and Eid ul Azha. Also Pathao can
offer Iftar pack free if a trip taken in Ramadan.
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This kind of religious advertising will help Pathao to gain trust, reliability of the people of
Egypt as the country is heavily influenced by religion

Organizational strategy:

In Egypt, the organizational structure has to be according to the local environment. If all the
decision are made based on the international condition, certain facts would not match. So, the
decision making power has to be decentralized. The manager in that area will take proper
decision, based on the situation.

For example the tagline of Pathao in Egypt can different from the tagline in Bangladesh.
Pathao can write the logo in Arabic instead of English. This will increase the brand image of
pathao as well as the trust of it in that region.

Budget required:

The estimated budget of Uber in Egypt was around 100 million USD till 2023. Their initial
investment was $20 million. Pathao should invest initially atleast 22 million USD to compete
the ride hailing giant. On the other hand, pathao should arrange around 120 million USD for
the next 5 years.

As there are few registration related problems, Pathao should invest more on legal terms. As
well as they need to focus more on marketing and advertising. Around 150 million USD
would be enough to if Pathao wants to the market leader.

Natural resources:

Egypt is rich in petroleum, natural gas and fish. Egypt also has lots of arable land (2.95% of
total land in 2015) and River Nile. Though the price of natural petroleum has not been
decreased in 2013, but the availability makes the country helps to maintain constant GDP
which is a positive factor for business.
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If the number of transports increases because of Pathao operation, there will be no shortage of
fuel in Egypt.

Available labor:

According to World Bank, Egypt has available labor force of 31149152 in 2017. The number of

existing labor in Egypt has increased dramatically since 2006 to 2018. Among the years, the number

increased around 100%.

if pathao start operation in Egypt, there will be a lot of workforce over there as the demand
for job in that territory is high. Also, pathao can get get labor at a cheap price.

Existing industries:

Key industries of Egypt are agriculture, automotive manufacturing, construction industry,

steel manufacturing, cotton cultivation, textile production, tourism industry, petrochemical
industry and consumer electronics manufacturing sector.
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Transportation Company based on internet network system is new in Egypt. For pathao it will
be a green to do business.

Problems that may Pathao face in Egypt:

Workers' rights:

Uber has faced a string of court cases over its workers' rights. As a Muslim country Egyptians
believe that it is better if the salary of the worker is paid sooner. So pathao should pay the
salary of the riders as soon as possible.

No credit card info:

As in other markets in Africa and Asia, the company may have been forced to accept cash
payments in Egypt to accommodate the majority without access to a credit or debit card. Just
35% of Egyptians have access to a credit card, according to MasterCard, and more than 90%
of all financial transactions are in cash.

Technological problem:

Another problem is that many Egyptian drivers are unfamiliar with the technology. Egyptian
drivers are not educated enough to know how to read online maps. One Cairo resident
complained that an Uber driver who was asked to take her to the airport had no idea where it
was or how to get there.

So, Pathao need to spend a lot of time educating the riders on how to use the app, how to use
the technology, A lot of people have not used a Smartphone before.

Technical problems:

Many users of Uber, the US based ride-hailing application, said they experienced technical
problems in using the service. The company has not yet revealed the reasons behind this
issue. Both Uber website and app gets down very often. Technical experts say it is because of
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poor internet connection as the ride hailing service needs high speed internet connection. So
Pathao should ask to the Egyptian government to increase the facility of high speed internet
connection before starting operation in Egypt.

Legal structures:

Egyptian legal system is a civil law system which is a combination of Shariah law and
Napoleonic law. Supreme law of Egypt is written in constitution.

Forty two Egyptian taxi drivers filed a lawsuit a year ago against U.S.-based Uber and its
Dubai-based competitor Careem, arguing they were illegally using private cars as taxis. They
also claimed that the two firms were registered as a call center and an internet company,
respectively.

The court suspended the two companies’ licenses, banned their apps and suspended the use of
private cars by the two ride-hailing services. After a long negotiation, Uber and Careem were
able to start their business.

Pathao should be careful on registration and the licensing of the company as both careem and
uber have lots of their investment on legal battle.

Cultural differences:

Egypt is a country full of diversified population. In Cairo and in many other cities, population
is composed of majority of the people from time of Pharaohs and also modern time
Egyptians. Government is doing their best to create a bridge between all the diversified
communities.

As pathao will operate as a decentralized business operation in Egypt, pathao should take
care of the cultural differences and act based on that.

Reason that Pathao should expand in Egypt:

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Egypt is the gate way to expand business in the Middle Eastern region. Geographically
convenient, historically enriched and economically rich Egypt should be the best option for
pathao to expand as they can be the ride hailing leader within the next 5 year.

Culture communication information:

Verbal and nonverbal communication, including body language:

Arabic is the official language of Egypt. 50 million people speak Arabic and another 36
million people are use to speak mixture of the words like English France German and Italy.

Nonverbal communication is very important in Egypt culture. Egyptians welcomes one

another with a handshake. If they know the person very well sometimes they will give a kiss
on the chick. They are used to stand very close when they speak. They are also accepted
direct eye contact.

If pathao expand over Egypt, the riders should be taught to shake hand with the passengers.
Also it is a sign of friendliness to the tourists. Also the riders should talk to the passengers
standing near to them maintaining eye contact.

Tone of communication:

Normally in Egypt, people’s tone of communication is very high. When they talk for
communication purpose always they speak very loudly. Pathao riders should be instructed to
communicate with their passengers with a high tone of speech. It shows that Egyptians like to
be precise on business communication.

Time awareness differences:

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Egyptians usually do not maintain time properly. If they say they are coming within an hour
means they are two hours behind. It could be a catastrophe for pathao. If passengers and
riders cannot match their arrival time to the pickup location then it will cause a huge problem.

Pathao should instruct their Egyptian riders to be precise about their arrival time to the pickup
location.

Concepts of personal space:

Men and women in Egypt relate differently to each other than in the west, and perhaps
differently to what you may be used to at home. Personal space between members of the
same sex may be closer than anyone expected, but men and women tend to stay further apart.

However, as a tourist, and perhaps as a westerner, one may find the rules are bent a little for
them. Men walking hand-in-hand or arm-in-arm, or male friends exchanging a hug and cheek
kiss as well as a handshake upon meeting.

This is a mark of affectionate respect. The handshake in Egypt is quite different from the
west where a firm and at times prolonged shake is prized. While men and women do shake
hands, if you are male it is probably best to wait until a woman extends her hand to you
before shaking, even if she has shaken hands with other women in the group.

Decision making, problem solving, and negotiation:

In Egypt, decision is taken and announced by the male as it is a male dominated society.
About the problem solving they do solve the problem in group and in here they maintain the
hierarchy. They always respect the top level for any kind of decision making or any kind of
problem solving matters. They do also believe in negotiation.

Political affiliation with Bangladesh:

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Politically both Egypt and Bangladesh are democratic country. Both are Muslim majority
country. Some businesses are existed between these two countries. Fertilizer, iron, steel, and
mining products are bought by Bangladesh and textile products are bought by Egypt.

As both are democratic country, they are very stable in nature and positive for doing
business. So there are a lot of similarities between them.

SWOT analysis:

Strength:

 Pathao Bikes can move through traffic jam very quickly

 Pathao can offer lower price than competitors

Weakness:

 The riders are unfamiliar with technology of app

 Riders are not educated enough to read the map
 Unable to get female passenger

Opportunity:

 Ability to expand internationally

 Increase of bikes

Threat:

 Legal Issues against Taxi drivers

 Any kind of regulation from government

Conclusion:
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In conclusion Pathao should start operation or take preparation to set up business in Egypt.
The business of ride sharing is booming in this Middle Eastern country. Though some facts
cannot be denied that there will be some technical problems but the business environment is
very positive in Cairo.

If Pathao can arrange proper finance, and invest more on marketing and legal terms. Pathao
will be the ride sharing giant of Egypt within a year.

References

 Egypt: No of Registered Vehicles: Cairo: Motorcycles: Economic Indicators: CEIC.

(n.d.). Retrieved from https://www.ceicdata.com/en/egypt/number-of-registered-
vehicles-annual/no-of-registered-vehicles-cairo-motorcycles

 Egypt court orders suspension of Uber, Careem services in victory... (2018, March
20). Retrieved from https://www.reuters.com/article/us-egypt-uber/egypt-court-
orders-suspension-of-uber-careem-licences-judicial-sources-idUSKBN1GW1O2

 Climate Egypt. (n.d.). Retrieved from https://www.climatestotravel.com/climate/egypt

 Cairo's chronic traffic jams: The price of bad public planning. (n.d.). Retrieved from
http://english.ahram.org.eg/NewsWorldCup/2018/56444.aspx

 Cairo Traffic Congestion study- Executive Note. (n.d.). Retrieved from

https://www.worldbank.org/en/country/egypt/publication/cairo-traffic-congestion-
study-executive-note

 Cairo Population 2019. (n.d.). Retrieved from

http://worldpopulationreview.com/world-cities/cairo-population/

 As Cairo Ranks Among Cities with World's Worst Traffic, a Solution May Be on the
Horizon. (n.d.). Retrieved from https://thecairoscene.co/Geek/As-Cairo-Ranks-
Among-World-s-Worst-Traffic-Congestion-a-Solution-May-Be-on-the-Horizon

 Africa/. (2017, April 07). Retrieved from

https://www.worldatlas.com/webimage/countrys/africa/egypt/egland.htm
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 Lane, E. (2017, April 27). What's behind Uber's success in Egypt? Retrieved from
https://www.bbc.com/news/business-39416041#targetText=The ride-sharing giant
may,that it is now booming.&targetText=Egypt is currently one of Uber's fastest
growing markets in the world

 Lamloum, A. (2019, January 28). Uber users face technical problems in Cairo.
Retrieved from https://dailynewsegypt.com/2019/01/28/uber-users-face-technical-
problems-in-cairo/