CASE STUDY

Aishwarya.K
 DOING BUSINESS IN SAUDI
ARABIA
• Saudi is not an easy place for the Western
countries to do business.
• Oil rich kingdom gives many opportunity for
enterprising business
• Western aerospace company (Boeing / Lockheed)
have sold significant number of aircraft to Saudi
over the years.
• Saudi market is one of the largest in the Middle
East with the population of 22 million
• Since 2000, Government has signaled an open to
foreign investment in certain sectors of the
economy.
• Saudi is a conservative country where they
follow the religious values and traditions.
• The culture was shaped by Islam and Bedouin
tradition.
• The law is Islamic law. The stores & restaurants
close at 5 daily prayer times and many
restaurants including western ones have separate
dining areas for men and women.
• Women is Saudi are not allowed to drive car,
sail a boat, fly a plane, appear outdoors with
hair, wrists or ankles exposed. And these
should be followed by other countries while
doing business here.
• Saudi adherence to Islamic values has given
rise to anti American sentiment which is
increasing since the American led invasion of
another Muslim nation, Iraq.
• Cultural solidarity has expressed itself in
consumer boycotts of American products.
• This led to the terrorist attacks against western
expatriates in Saudi Arabia.
• Bedouin traditions have been just as strong as Islam
values in shaping Saudi.
• The cultural importance attached to the status, Saudi
executives will not react well if a foreign company
sends a junior executive to transact business.
• Loyalty of families and friends is a powerful force
and job security and advancement may be based on
the family and friendship ties, rather than or in
addition to demonstrated technical or managerial
competence.
• Saudi executives also consults with family and friends
before taking business decisions.
• The Bedouin aversion to menial work has produced a
chronic labor problem in the kingdom and foreign
company will quickly discover that it is difficult to find
Saudi nationals who will undertake manual labor.
• Around 6 million foreigners lives in Saudi and they
undertake many of the menial occupation that Saudi
disdain.
• Oil revenues have made this social stratification possible,
the Saudi government sees it as a potential long term
problem – almost 90% of all private sector jobs in Saudi
are filled by foreign nationals who launched a program of
“Saudiazation.”
• Saudi society started to change in important ways.
• Rights for women are being expanded.
• In 1964 Saudi girls are not allowed to go to
school, today 55 % of university students in the
kingdom are women. In 2004 women were granted
the right to hold business licences.
• Women held some $25 billion in deposits in Saudi
banks and had few opportunity to use them.
• This made women to play greater role in Business.
 INDIAN CHAAT IN AMERICA
• Management Focus:
• Manhattan has lately been seized by a craze for
Indian snacks, with new places like Spice market,
Bombay talkie, Von singh’s, Devi, Lassi & Babu
all claiming the Indian Street food.
• Many of them adapt well in New York style
eating on the run, especially flat breads like
parathas and chapathis and wraps like dosas,
kathi rolls, bombay frankies. (A roti wrapped
around tandoori chicken)
• Gandar Nasri, 74 yrs a retired New York City
Taxi driver, who moved from Delhi in 1955
says that “Nothing will ever taste like the taste
of papri chaat”
• Chaats are jumbles of flavor and texture:
Sweet, sour, salty, spicy, crunchy, soft, nutty,
fried & flaky tidbits, doused with cool yogurt,
fresh cilantro and tangy tamarind, and
sprinkled with chaat masala, a spice mixture
that is itself wildly eventful.
• All Indians in America are home sick for the
same thing, says Mitra Choudhuri, a s/w engineer
from Gujarat, who lives in Fort Collins, Colo.
• But this has finally changed in the New York
region.
• All over India, Chaatwallas, snack vendors,ply
their trade from street carts or small store fronts.
• Like New York Hot dog vendors they are
ubiquitous in parks, at train stations, in busy
shopping streets.
• Chowpathy Beach in Mumbai is famous all over
India for its quality and variet of its chaats.
• Some chaats are light and crunchy like an
ethereally flavored snack mix, and others are
practically lunch, like samosa chaat: piping hot
samosas split open and covered with spicy chick
peas, minced onion and cilantro, yogurt and
tamarind which is handed over in banana leaf.
• Chaats are like every flavor of chips and every
kind of pizza you have here, said Dave Sharma, an
owner of Amma, a mid town restaurant, who is
from Mumbai.
• Some legendry chaatwallahs, like Vital
Bhewala in Mumbai have occupied the same
space or patch of sidewalk for generations.
• Mumbai and Mr.Bhewala in particular, are
famous for Bhelpuri, a puffed rice chaat with
bits of mint and potato.
• The flavor of chaat is in the chaatwallahs
hand, Mr.Sharma said. And its true, literally
and figuratively , he also adds that going for a
chaat is a social act with the same casual
sociability as going for a beer.
• Piyush Sukhadia, an owner of chaat and sweet stores, said,
In India a guy might have a Mercedes and live in a house
on a hill, but he still puts on his slippers and goes to eat
chaat.
• The word chaat means “to lick” in hindi says Mr.Sukhadia,
whose family business was established in 1890, when is
great great grand father received the title of official
sweetmaker to the nabob of Cambay in southern Gujarat.
• Sandip Patel, the owner of Chowpatty Foods, one of the
first chaat houses in the United States, has just imported a
chaat cart from India in the red & white colour scheme of
the showpatty chaatwallahas.
• Chowpatty is the biggest chaat and sweet specialist in the
Oak tree road neighbourhood of Iselin which lures 1000’s
of Indian Americans from as far away as Philadelphia &
Boston.
• Oak tree road serves a knowledgeable clientele and
has the best quality sweets and chaats in the region,
you can see ingredients for chaats divided in rows
of stainless-steel bins, but a traditional
chaatwallaha sits surrounded by his mounds of dry
ingredients & bowls of yogurts etc.
• A fine tribute to pani puri appears in 1991 memoir
about Mumbai by Ganghadar Gopal.
• After several 1000 words describing the process of
eating and experiencing pani puri, he concludes
with this tribute to the afterglow that, as I can
attest.
• Follows a pani puri binge: In that state of
beatitude the Maharastrians stop being surly,
the marwaris look at the millions of starts
without being reminded of their own millions,
the Gujaratis speculate on the moon instead of
the scrips they should have sold, the North
Indians dream of things other than Hindi as the
official language of the United Nations, and
even the Parsi ladies stop nagging their
husbands.
THE RISE OF ISLAMIC BANKING IN
PAKISTAN.

COUNTRY FOCUS:

• The Koran clearly condemns interest, which is

called riba in Arabic, as exploitative and unjust.
• For many yrs banking operation in Islamic
countries conviently ignored this condemnation
• Starting of Islamic bank in Egypt 30 yrs ago,
the bank started opening in Muslim countries,
By 2005, 176 Islamic financial institutions
managed over $240 billion in assets, making
an average return on capital of more than 16%.
• Even conventional banks started entering the
market, Citibank and HSBC started offering
Islamic financial services.
• Iran and Sudan enforce Islamic banking
conventions
• In an increasing no. of countries customers can
choose between conventional and Islamic banks.
• Conventional banks make a profit on the spread
between the interest rate they have to pay to
depositors and the higher interest rate they charge
borrowers.
• Islamic banks experimented 2 banking methods –
Mudarabah & Murabaha.
• Mudarabah is a profit sharing scheme.
• When a Islamic bank lends money to a business,
rather than charging that business interest on the
loan, it takes share in the profits that are derived
from the investment.
• Similarly when a business deposits money in
an Islamic bank in the savings account, the
deposit is treated as equity investment in
whatever activity the bank uses the capital for.
• Thus the depositor receives a share in the
profit from the banks investment according to
the agreed on- ratio.
• The second Islamic banking method –
Murabaha contract, It is most widely used
among worlds Islamic banks, because it is easy
to implement.
• In Murabhaha when a firm wishes to purchase
something using a loan the firm tells the bank
after negotiated the price with the equipment
manufacturer.
• The bank then buys the equipment and the
borrower buys it back from the bank at some
later date.
• The development of Islamic banking dates to
1992 when pakistans federal shariat court, the
highest islamic court law, pronounced interest
to be un-islamic and illegal.
• In 1999, pakistan supreme court affirmed that Islamic banking
methods should be used in the country, and set a date of july 1,
2001, for their introduction, but in a concession to practical
considerations, the higher court agreed that western banking
methods could still be used alongside Islamic banking
methods.
• 3 fears the decision to establish a dual banking system in
Pakistan.
• One fear was that if there was a mandated shift to Islamic
banking methods, it might trigger large scale withdrawals by
depositors worried that they could suffer in the absence of
fixed interest rates.
• 2nd is the country needed to have a tight regulatory regime to
ensure that unscrupulous borrowers using a mudarabah
contract did not declare themselves bankrupt, even when their
businesses were making a profit.
• 3rd was that the uncertainty created by the transition
would scare off foreign investors, leaving Pakistan
starved of capital.
• After a slow start , by early 2005 Islamic banks were
starting to gain tranction in Pakistan.
• 2 Islamic banks operating 25 branches In Pakistan
and the 3rd was scheduled to start operating in 2005.
• 9 conventional banks including standard charted, AG
Zurich has opened from 23 branches offering Islamic
banking services and other conventional banks like
Citibank, ABN Amro for negotiating for licensees
with the pakistani banking authorities to start offering
Islamic banking services in the country.
• By 2010, 20 % of all assets in the pakistani banking
system will be held by Islamic banks.
• Their growth seems assured. As one customer
stated”I never went for conventional banking
as it is based on interest, which is prohibited in
Islam and amounts to waging war against
Allah. Now I have my bank account in an
Islamic bank and it satisfies my faith.”
 McDonald’s & Hindu Culture
• McDonal’s corporation has written a book on global
expansion.On an average 4.2 new Mcdonalds restaurants
are opened.
• By 2004, the company has 30,000 restaurants in more than
120 countries that served close to 50 million customers
each day.
• The latest addition of Mcdonalds list of countries hosting
the famous golden arches is India.
• Indias Hindu culture has revered the cow. Hindu scriptures
state that the cow is a gift of gods to the human race.
• Mcdonalds is the worlds largest user of beef, since
its founding in 1955, countless animals have died to
produce Big Macs.
• There arose a issue of opening the restaurant in
India as Mcdonalds use beef and pork, so
Mcdonalds responded to this cultural food dilemma
by creating an Indian version of its Big Mac – “The
Maharaja Mac” which is made from mutton. Other
additions are McAloo Tikki Burger which is made
from chicken.
• According to the head of McDonalds Indian
operations, “we had to reinvent ourselves for the
Indian palate.”
• In 2001, McDonalds was blindsided by a
class- action lawsuit brought against in the U.S
by 3 Indian Businessmen living in Seattle.
They sued Mcdonalds for fraudulently
concealing the existence of beef in Mcdonals
french fries! But it says that they use only
100% vegetarian oil to make french fries, but
the company soon admitted that it used a
“minuscule”amount of beef extract in the oil.
• Mcdonalds settled the suit for $10 million and
issued an apology to Hindus.
• The company pledged to do a better job
labeling the ingredients of its food and to find
a substitute for the beef extract used in its oil.
• In the 21st century, the revelation that
Mcdonalds used beef extract in its oil was
enough to bring Hindu nationalists onto the
streets in Delhi, where they vandalized one
Mcdonalds restaurant, causing $45,000 in
damage, shouted slogans outside of another
and called on Indias prime minister to close
Mcdonalds stores in the country.
• The negative publicity seemed to have little
impact on Mcdonalds long term plans in India,
however the company continued to open
restaurants and by 2005 had 65 restaurants in
the country with plans to open another 30 or
so.
• When asked why they frequented Mcdonalds
restaurants, Indian customers noted that their
children enjoyed the American experience, the
food was of a consistent quality and the toilets
were always clean.