ALKHOBAR, 12 July 2005 — Ask Saudi consumers what brand of computer they have at home and HP, IBM, Toshiba and Acer would be expected responses. One brand that probably wouldn’t get mentioned is Dell. That’s not to say that Dell doesn’t have any presence in the Kingdom, it’s just that in the past it would be more likely to find a Dell product in an office in Riyadh than in a home in that same city. But, according to Abdul Raheem Bawazeer, Saudi Country Manager, Dell Middle East, that situation is about to change. Dell has taken on a new direction and a new focus for the Saudi market.
“Dell has traditionally been strong in the enterprise sector but its presence in the small- and medium-sized corporate sector and the consumer market was lacking,” Bawazeer said. “Now, Dell has launched a very aggressive plan and created segmentation of the Kingdom’s markets. We are treating Saudi Arabia as three distinct markets and each of those markets has its own team and characteristics and partners. We are strengthening our existing channel, Al-Alamiah, and focusing them on what they are good at — very large corporate accounts and enterprise clients.”
Bawazeer continued, “For the consumers in Saudi Arabia, we have appointed two companies, Jarir and PC Net to serve the home users. Jarir will sell through their own outlets. PC Net will sell through their own branches and will also sub-distribute to other retailers. We have made agreements with Jarir and PC Net to look after consumers in regards to servicing Dell products. Immediately, they are honoring Dell warranties but hopefully soon it will be possible to also purchase extended warranties from them as well. This will give consumers the ability to increase the warranty from one year to three years on certain products and from three years to five years on other products. The existing service centers at Jarir and PC Net have been equipped with a good supply of spare parts plus the knowledge to deliver exceptional warranty support and service on Dell products in Saudi Arabia. The next step will be to certify them so they are acknowledged to be of an international standard in delivering Dell service.”
Dell is far along in launching its consumer strategy, so now the company is pushing ahead with its market plans for the small- and medium-sized businesses (SMBs).
“For the SMB market segment we have appointed Mindware as our distribution company,” explained Bawazeer. “They will address all SMB players in the Kingdom. There are strong players in this segment in the Western Region and different but also strong players in the Northern Region. We are working with Mindware to have our SMB products available in Saudi Arabia and to start building strong relationships with the resellers who are servicing the SMB market in the Kingdom, wherever they are located.”
Part of the channel building activities will be a new program between Dell and Mindware, to address dedicated SMB resellers. The plan is to create a special relationship with those SMB resellers who are willing to commit to work with Dell in Saudi Arabia and promote their business around Dell client business, such as the PCs and notebooks, the infrastructure business or enterprise business such as the servers, storage and networking and also the imaging and printing products, a technology segment that Dell entered in Saudi Arabia about a year or so ago. Those resellers focusing on Dell will be provided with all they need to give them an edge in the SMB market. This includes special pricing and incentives to support SMB clients. Dell’s Saudi strategy is not a plan developed in isolation. Many of Dell’s moves in the Saudi market are part of a larger, global drive by Dell to increase market share and consequently revenue.
“Dell is growing worldwide at a much higher rate than the other players. To maintain that growth, Dell has put a special focus on distribution markets,” stated Bawazeer. “These are markets such as Saudi Arabia. When you look at Saudi Arabia, the growth for the product segment that includes PCs, notebooks and servers — last quarter this market grew by 42 percent overall. That’s huge. There are only a few markets around the world that are showing such high growth level.”
So Dell has decided to invest in a direct presence to accelerate its growth in the Kingdom. Bawazeer is currently working to build Dell Saudi as a separate entity from Dell Middle East, registered in the Kingdom under the SAGIA regulations as a foreign investment.
“We are in the final stages of creating Dell Saudi. I estimate that we are several weeks away from concluding all the technicalities,” he advised. “Dell Saudi will be headquartered in Riyadh, but we already have a presence in the Eastern Province due to our strong relationship with Saudi Aramco and we have representation in Jeddah as well due to our relationship with large clients in the Western region. Of course our goal is to eventually be everywhere in the Kingdom.”
Whether such a goal is bold or crazy will depend on the outcome. Some vendors have already chosen not to bring their PCs to the Kingdom. Dell has decided that even though they are late in reaching out to consumers and SMBs, they have the products and performance to be a success in these challenging market segments.
“People like Dell products and we have established a good reputation among consumers,” commented Bawazeer. “Over the years we received numerous requests from people in Saudi Arabia telephoning or e-mailing Dell offices in other geographies, requesting the nearest location to purchase Dell products. Many managers and technicians in Saudi Arabia got used to Dell products in the workplace. So the Dell brand and product quality reputation was well established. We increased our market activity initially on a trial basis for about a year in this market and our growth has been phenomenal. Saudi consumers are very educated. They travel extensively. The local media competes to feature the latest products and technologies. Saudi consumers are also very brand conscious. They want to buy products that have a good reputation for quality, coupled with advanced technology. Dell has the products and reputation that the market wants and we are now moving aggressively to increase awareness that we are here to serve the Kingdom.”
It won’t be easy. Numerous vendors have been working for decades to establish their brands in Saudi Arabia. Those vendors aren’t sitting back and waiting for a new player in the market to erode their market share. A trip to Jarir shows that when it comes to PC choice, Saudi consumers are practically overwhelmed. So many products are available sporting so many different features and they are all sitting side by side on the same shelf. One interesting differentiator for Dell products is that this region is served by Dell’s European Manufacturing Facility (EMF) in Ireland. Some Saudi consumers have long preferred to purchase products manufactured in Europe.
Dell is also aware of the importance of playing the Saudi card in dealing with the local market. Bawazeer claimed that Saudization and localization are essential for Dell’s growth in the Saudi market.
“Dell is coming to the Kingdom with the strategy of building a strong local team,” he said. “Nobody in our local office will be an expat. By that I mean that all our team members will be either Saudis or people who have grown up here, worked here for years and know the market inside and out. We want only people with a strong commitment to this market to be on the Dell Saudi team. We are not only opening an office in the Kingdom to encourage business, we are here to serve and offer consultation on IT projects of all sizes.”
Members of the Dell Saudi team will not only have to work together, they will have to learn to think alike — at least while on the job.
“There is a good pool of young people in Saudi Arabia who have the necessary education, but Dell’s culture is different than that of other companies,” remarked Bawazeer. “What we are doing is that every team member who joins us, after being thoroughly vetted from a skills and education standpoint, goes through an induction course which concentrates on having everyone learn to think alike and work alike in the Dell environment. This is a global policy so that whether it is in the Dell headquarters in Texas or in the EMEA headquarters or Dell Saudi, everyone thinks the same in the workplace and pulls together for the customers and the customer experience.”
All these comments might sound a bit brash coming from Bawazeer if he were trying to pull off Dell’s Saudi strategy on his own, but that’s not the case.
“Regional Dell managers and team leaders plus other specialized managers in the company and consultants have already been to Saudi Arabia to experience the market first hand and collect feedback,” Bawazeer said. “They have spoken with enterprise customers and partners who are at the foundation of Dell’s business in Saudi Arabia. A strategy was put in place for the Saudi expansion of Dell even before I joined the company six months ago. Saudi Arabia now is among the focused countries in the world for Dell. High-level executives from Dell are taking a personal, careful interest in the Saudi market. Our aim is that success for Dell in the Saudi market will be accomplished by providing an excellent customer experience across all market segments with a long term, expanding market presence as the measure of our achievement in the Kingdom.”
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