Saudia Arabia Ksa

The Kingdom of Saudi Arabia (KSA) presents an intriguing situation in itself as a potential destination for companies in the market for foreign expansion. A major telecommunications company, such as World Communications Corporation (WCC), which specializes in telephone, cellular telephone, digital cable television, and digital internet service, must examine closely the demographics, economy, government and long term viability of Saudi Arabia before making a calculated decision in overseas investment. Major competitors of WCC, such as SAP and Cisco, have already realized a significant return on their investments in both Saudi infrastructure and human capital.

The economic climate of the Kingdom of Saudi Arabia has already provided substantial fruit for the competitors of WCC. The opportunity, as evidenced through competitors in the industry, appears to be poised for excellence in returns for WCC. However, upon closer inspection, over the Kingdom of Saudi Arabia looms a multi-layered albatross of fog; clouded heavily in uncertainty. A largely unskilled and uneducated workforce, lack of government regulation, congestion in the market of telecommunication, social instability, and ambiguity in long-term sustainability collectively reveal far too many uncertainties for WCC to consider the Kingdom of Saudi Arabia as a prospect for foreign expansion.

A population of 25 million people inhabits the kingdom of Saudi Arabia. Of those 25 million people, 35% are under the age of 35 while only 4% are over the age of 60. A strikingly daunting reality, in regards to the workforce, lies in the largely unqualified student population. Standardized test scores in Saudi Arabia, in both the GMAT and TOEFL, rank below the United States average and WCC minimum score requirement. Saudi scores in both Math and Science remain below international averages. In addition, a lack of proper training methods in Saudi Arabia increases the regional employment burden for WCC even further. The onus to train Saudi employees, potentially overseas, to the tune of exorbitant associated costs, falls squarely on WCC. An over reliance on foreign workers coupled with a candidate pool of substandard educational capability and poor motivation (only 1.8% of students chose to pursue graduate-level education) dim the prospect of a sustainable work force for the WCC in the Kingdom of Saudi Arabia.

The KSA boasts both a strong life expectancy and quality of life. Life expectancy (in years), on average, is at 71 for males and 75 for females. In terms of quality of life, 97% of the population has color television and 78% has cell phones; percentages comparable to the United States. At first glance, these statistics shine a favorable light upon the KSA as a prospect for the telecommunications market. However, inherent risk lies in the formidable presence of telecommunications giants, Cisco and SAP, who already have the advantage in market presence.