Exporting Cheese in Qatar

Company

Shelter Farms (PVT) Ltd

Brand

Cheese Shelter

Submitted to:

Mr.Anyl Khan

Submitted by:

Fizza Siddique

MB-09-093

Muhammad Awais

MB-09-109

Institute Of Management Sciences Bahauddin Zakariya

University Multan

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 ACKNOWLEDGEMENT

We are thankful to Almighty Allah, Who is continuously guiding us

in all the matters of our life, He is aware what we are doing & He has never left
us helpless in any walk of life, thanks our great Allah for providing us the
opportunity to complete this detailed report on “Business in Qatar”

We are humbly grateful to our Venerable Teacher Sir Anyl Khan

who furnished us with the opportunity to complete this report, and thereby
consolidating our concepts, enriching our knowledge, establishing our skills
and strengthening our confidence. To help us discharge our responsibility, he
provided us with the worthwhile knowledge and continuous guidance. We
are also thankful to all the people who helped us in the completion of this report
in time.

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Executive Summary

This report is about is establishing business in Qatar. Qatar dairy industry is one of the growing
industries in Qatar. Qatar has always been a popular in exporting. A number of initiatives are currently
underway to upgrade for the foreign traders. Dairy industry has had a massive growth on Qatar over the
years. It has improved the local industry, provided many employment opportunities, has strengthened
their currency and has improved the standard of living for many Qatari people. Due to this reason Qatar
government is providing incentives to foreign companies that are investing in Qatar Dairy industry.

The detail analysis about external and internal environment is conducted. PESTEL Analysis and Porters
five forces model supported the decision of investment.

Qatar is constitutional monarchy. According to the constitution, the three major independent
authorities holding the balance of power are executive, legislative, and judicial. Population basis
Thailand is 39th largest country in the world. The nationality is termed as QATARI. Mostly people in Qatar
are Muslims but there is also some ratio of Hindus and others. Arabic language belongs to Arabic family
and spoken by major population in Qatar. But most of them can understand English language.

Qatar currency is Riyal. Initially Qatar was a Deserted country but now they are improving their
industries. Qatar export/imports are improving its GDP. The foreign investment policy of Qatar is
beneficial for foreign investors.BOI and Foreign Business Act Qatar is dealing with the government legal
policies about foreign investment in Qatar.

Socio-cultural analysis of Qatar is helping to know about the people about the Qatar. We, Marco Livings
being a part Asian region can easily understand their cultural values and attitudes. The basic cultural
dimensions like power distance, uncertainty avoidance and individualism is somehow same to Pakistani
culture. The non verbal communication values are somehow different like touching head is considered
to be very rude and to nod your head does not mean that they agree on that point.

Porters five forces model showed that as an overall industry is attractive. Entry barriers, competitive
rivalry, threat of substitute is high but the bargaining power of buyer and suppliers were moderate but
our firm specific advantages can help us in making our place in this industry.

We are going to start business in 7 different cities with 3 local Distributors. Our strong FSA’s and CSA’s
make us lie in third quadrant. Pricing strategy would be cost leadership and differentiation. The long
term strategy of Shelter Farms is to extent its chain in Gulf region and enters in Middle East market.

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Qatar
officially State of Qatar, independent emirate (1995 est. pop. 534,000), 4,400 sq mi
(11,400 sq km), on a largely barren peninsula in the Persian Gulf, bordering Saudi Arabia and
the United Arab Emirates (S). The capital is Doha. The economy of Qatar is dominated by oil and
natural gas, which accounts for 70% of export income. Oil and gas revenues have been used to
diversify the economy, including the development of chemicals, steel, cement, and fertilizer
industries and banking. A minority (20%) of the population are Qataris (Arabs of the Wahhabi
sect of Islam); the rest are largely other Arabs, Pakistanis, Indians, and Iranians. Arabic is the
official language, but English is also widely spoken. The country is a monarchy

History
Qatar was ruled by Bahrain from the 1700s until the mid-1800s, when Great Britain and the
Ottoman Empire began vying for control of the peninsula. It was a British protectorate from
1916 until 1971, when it became independent. In the 1980s and 90s Qatar had territorial
disputes with Bahrain and Saudi Arabia. These disputes were not completely settled until 2001.
During the Persian Gulf War (1991), international coalition forces were deployed on Qatari soil.
Palestinians were expelled from Qatar in retaliation for the pro-Iraqi stance of the Palestine
Liberation Organization (PLO), but since the war relations with the Palestinians have returned
to normal. After the Persian Gulf War, Iraq was still regarded as a threat to Qatar’s oil interests;
Qatar signed a defense pact with the United States but also restored relations with Iraq.
The present emir, Sheikh Hamad bin Khalifa al-Thani, came to power in 1995 after ousting his
father. In the late 1990s Sheikh Hamad eased press censorship and promoted ties with Iran and
Israel.
Since 2001 Qatar has allowed U.S. use of the Al Udeid air base, and the headquarters for the
U.S.
The emir has moved steadily to democratize the nation’s government and institute elections. In
2003 voters approved a constitution establishing a largely elected advisory council with the
power to pass laws, subject to the emir’s approval; women have the right to vote and hold
office.
The constitution was endorsed by the emir in 2004 and came into force in 2005.

Introduction to business

Business name: Shelter Farms Pvt ltd.

Brand Name: Cheese Shelter

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Location: Multan, Pakistan

Business type: Dairy Products

The business which we are going to start in Qatar is “Shelter Farms”

We are having a well established business in our home country Pakistan. We are having our distributors
in Qatar. We are carrying out our all operations in Pakistan and providing the Final items on the demand
of the distributors.

We are purely manufacturing on the orders of the distributors, which quality they demand, which
specifications which they want in their order.

Distributors:

 Al Muftah
 Carrefour Qatar
 Family Food Centre

These are our main distributors which are having their offices in Doha. They are getting the orders from
their country and sending the demand to us, here we are having production plants where we produce
the cheese according to the demand of the distributors. After the completion of the production we
manage the shipment of the order. These orders are shipped to the distributors in Doha.

After receiving these shipments by the distributors it is their responsibility to deliver these lots to the
local manufacture or the party who makes the order.

Vision Statement

To be recognized the market leader in the dairy industry complying with the focus on quality
and standards.

Mission Statement

We are committed the high value of the dairy industry to become the globally recognized
cheese manufacturer with focusing on the Quality & Freshness to provide the Best taste and
Value to the Customers.

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External Environment
PESTEL Analysis
Political system
The modern State of Qatar gained its independence from the UK on September
3, 1971. The country’s constitution was ratified by public referendum on April 29, 2003; it was
endorsed by the Emir on June 8, 2004; and it became effective on June 9, 2005.

Qatar is an emirate, and its Head of State (since 1995) is the Emir Sheikh Hamad bin Khalifa al-
Thani. He also holds the positions of Minister of Defense and Commander-in-Chief of the
Armed Forces. The emirate is hereditary, so there are no elections for this position. The heir
apparent is Sheikh Tamim Bin Hamad Al-Thani.

The head of government is the Prime Minister Hamad bin Jasim bin Jabir al-Thani, and the
Deputy Prime Minister is Abdallah bin Hamad al-Atiyah. These positions are appointed by the
Emir.
The Emir has a cabinet/council of ministers, which he appoints.

The Advisory Council has 45 members, 30 of whom are elected by direct, general secret ballot,
and 15 of whom are appointed by the Emir. The term of service of the appointed members
expires when these members resign their seats or are relieved from their posts.

The legal system is based on Islamic and civil law codes, and a discretionary system of law
controlled by the Emir. Islamic law dominates family and personal issues.
There are three types of courts:

 Preliminary Courts (which decide on doctrinal issues (hudood), punishments criminal,

civil and commercial, personal affairs, inheritance, administrative disputes and other
cases);
 Appeals Courts; and
 Cassation Courts.

A Judiciary Supreme Council was established in 1999, and there are also administrative
Presidencies over the Courts of Justice and the Sharia courts. All judges are appointed by the
Emir for a renewable 3-year term, on the recommendation of the Supreme Judiciary Council.

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Additionally, in April 2007, Qatar held nationwide elections for a 29-member Central Municipal
Council (CMC), which has limited consultative powers aimed at improving the provision of
municipal services. (The first CMC election had been held in March 1999). Terms are for four
years.
Male and female Qataris aged 18 and older are able to vote, and run as candidates for election.
There are no political parties in Qatar.

Economic system
Petroleoum is the cornerstone of Qatar's economy and accounts for more than
70% of total government revenue, more than 60% of gross domestic product, and roughly 85%
of export earnings. Proved oil reserves of 15 billion barrels (588,000,000 m³) should ensure
continued output at current levels for 23 years. Oil has given Qatar a per capita GDP that ranks
among the highest in the world. Qatar's proved reserves of natural gas exceed 7000 km³, more
than 5% of the world total, third largest in the world. Production and export of natural gas are
becoming increasingly important. Long-term goals feature the development of off-shore
petroleum and the diversification of the economy.

Qatar is now the richest country in the Muslim world. Current GDP per capita registered a
world record-breaking peak growth of 1,156% in the Seventies. This became quickly
unsustainable and Qatar's current GDP per capita contracted 53% in the Eighties. But rising
global oil demand helped current GDP per capita to expand 94% in the Nineties. Diversification
is still a long-term issue for this over-exposed economy.

This is a chart of trend of gross domestic product of Qatar at market prices estimated by the
International Monetary Fund with figures in millions of Qatari Rials.

Inflation Index Per Capita Income

Year Gross Domestic Product US Dollar Exchange
(2000=100) (as % of USA)
1980 28,631 3.65 Qatari Rials 53 266.18
1985 22,829 3.63 Qatari Rials 64 104.82
1990 26,792 3.64 Qatari Rials 77 67.85
1995 29,622 3.63 Qatari Rials 85 55.75
2000 64,646 3.63 Qatari Rials 100 86.03
2005 137,783 3.64 Qatari Rials 115 127.05

For purchasing power parity comparisons, the US Dollar is exchanged at 5.82 Qatari Rials only.
Mean wages were $59.99 per manhour in 2009

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Qatar’s economic freedom score is 70.5, making its economy the 27th freest in the 2011 Index.
Its score is 1.5 points better than last year, reflecting notable improvements in five of the 10
economic freedoms. Qatar is ranked 2nd out of 17 countries in the Middle East/North Africa
region, and its overall score is above the world and regional averages.

Qatar scores well in many of the 10 economic freedoms. Moving away from its dependence on
the hydrocarbon sector, Qatar has promoted a sound entrepreneurial framework and a flexible
regulatory process for business ventures. The country’s open trade regime and growing status
as a regional financial hub have also contributed to private-sector growth outside of the oil and
gas industries.

While Qatar has made significant progress in laying the institutional groundwork for sustained
and diversified economic growth, the volatility of prices continues to undermine
macroeconomic stability and entrepreneurial activity. Restrictions on foreign investment and
considerable state involvement in the economy are serious drags on economic dynamism.

Social System
The State of Qatar works to provide the best social services for its citizens in
pursuit of its policy to realize and establish the principles of social stability and individual well-
being.
In accordance with the private societies' law, private establishments extend charitable and
social services in collaboration with the concerned government departments, using donations
from individuals and the private sector.

Small populations and high gross domestic products allow the Qatar to fund the welfare of their
people without needing to impose many financial obligations upon them. (This also means that
the governments avoid the high costs of administering such schemes.) Nationals are
automatically provided with extensive state help, including medical care, sickness and
maternity cover, child care, pensions, unemployment benefit and in some instances housing
and disability benefits.

Foreign workers have access to medical facilities, but to little else. In fact, Qatar is beginning to
pressurise companies to provide medical insurance for their employees to ease expatriate
pressure on state healthcare programmes, and private medical insurance is recommended for
most foreigners.

Social Activities and Camps Section at the Department of Youths at the General Authority for
Youth is charged with organizing work and public service camps, managing the participation of
youths in conferences, courses, camps and festivals held locally or abroad and supervising the
scout team. To promote their youth they established centre for environment friend.

Technical System

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 There are various Qatar Industries in Qatar. Industries are a major source of
income to any country. It is required for the overall development of the country’s economy.
The government of Qatar has also stressed upon the industry sector to expand Qatar’s financial
system. The foreign firms have been permitted to endow with proficiency in development,
administration, construction, in lieu for marginal shares in the companies.

There are many Qatar Industries which are coming up for the development. Qatar Petroleum
has come up extensively to build up the financial structure of the country. Qatar’s water
desalination and power generation plants are located in Ras Abu Fintas and Ras Abu Abbud.

Qatar’s industrialization

is controlled by The Industrial Development Technical Centre (IDTC), which was established in
the year of 1973 but the ITDC does not manage the petroleum extraction. Umm Said is the
foundation of heavy industries in Qatar about the petroleum extraction.

The government helps and encourages Qatar industry and business by openhanded loans with
low interest, electricity, water supply, at subsidized rate. The land leases given by the
government comes at very low cost and the tariffs and the taxes are also very shielding in
nature all proposed to help out the country’s advance in the industrialized sector.

Environmental system

The State of Qatar is a peninsula located between 24o 27- and 26o 10- N latitude and
50o 45- and 51o 40- E longitude. It is about 180 km long and 85 km wide, covering an area of
11,437 km2. Qatar is surrounded on three sides by the waters of the Arabian Gulf and
connected to the south by land to Saudi Arabia. The landscape is generally flat to wavy with
some prominent hills. The land elevation ranges between 6m to 103m above sea level. Rocky
hills and sand dunes are mostly found in the southern parts of the country. Saline swampy mud
flats are common along the coastal areas.

According to its geographical location and climate, Qatar is classified as a hot subtropical
desert; very hot and muggy between June and August and pleasant between November and
February. The average annual rainfall is 81 mm, average maximum temperature is 31oC and
average minimum temperature 22oC. The morning humidity averages 71% and the afternoon
relative humidity 43%. Qatar is affected by wind blown dust and occasionally sandstorms. The
country has no rivers or lakes, and besides the rainfall received, the primary source of fresh
water is the ground water. Surface water is very limited; only after a good winter rainfall, water
may be seen in depressions, Wadis and runnels for a short time.

As Qatar is subjected to an arid climate, it mainly possesses an arid soil, with coarse texture,
shallow depth and low retention low of soluble substances. Four soil associations were
recognized in addition to the soil of the cultivated areas. These have been tailored in

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accordance to geographic and topographic settings, and comprise Rowda (depression) soils,
Sabkha deposits (saline soil), Lithosol (rocky soil) and sandy soil. The location of Qatar, being a
part of the large land mass of the Arabian Peninsula, play an essential role in the make up of its
flora and vegetation. Ephemerals, annuals, dwarf woody perennials, few tree species and
perennial grasses are the most common features of plant life forms in the inland leveled parts
of the country. Generally the inland vegetation is sparse, with vast areas either barren or with
few sporadic species. However, well established plant communities grow in depressions and
water catchment areas. Halophytes are common along the coastal areas.

Of the terrestrial invertebrates, few species (only five) of terrestrial annelids were reported,
and even fewer species of terrestrial molluscs are known. However, arthropods including
spiders, scorpions, centipedes, ticks, isopods and mainly insects constitute the bulk of
terrestrial invertebrate diversity in Qatar. The class Insecta dominates in relative density and
diversity. The ecological role played generally by terrestrial invertebrates and particularly by
arthropods as far as energy transfer and recycling of organic material, is major in the
functioning and overall balance of the delicate desert eco-systems of Qatar. Records of
arthropods in Qatar are limited. Few groups have been identified and published in form of lists:
(Abdu and Shanmar, 1985; Abu Shama, 1997, 1999; Vine and Casey, 1992; Pittaway 1980).
Studies of terrestrial vertebrates have received little attention and the records available are
marred by many gaps. Reptiles of Qatar were investigated by Mohammed (1988), who
recorded 27 species of turtles, lizards and snakes. More recently, El-Sherif and Al-Thani (2000)
published a list of Qatar reptiles describing 29 species which comprised varieties of Chelonids,
Lacertids and Ophids. However, Amphibia of Qatar have not been previously studied, only one
record exists; the green toad Bufo Orientalis (viridis) which was recorded around the waste
water ponds south of Doha city (Kardousha, et al., 2001).

The Supreme Council for the Environment and Natural Sanctuaries

The Council undertakes all environmental protection responsibilities. It augments and protects
endangered wildlife and its natural habitat; formulates the general policies aiming to protect
the environment and effecting sustainable development; monitors the current environment
and wildlife-related protective procedures and practices; prepares the necessary drafts of
legislation, regulations and decisions on the protection of the environment and operates a
national environmental data base - alongside with other environment protection-related
functions.

The council is formed of a deputy president and a number of experienced and environment
enthusiast members and a secretary-general.

The employees of the council have the capacity to act as law enforcement officers in cases of
contravention against the provisions of the council's law and its executing regulations and
decisions.

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The Supreme Council for the Environment and Natural Sanctuaries organizes nation-wide
functions to control the desertification problem as Qatar lies in an arid region, where rainfall
doesn't exceed 200 mm per year. The council is also seeking to preserve all land, marine and
atmospheric environments. It launched a campaign to destroy the farms that did not abide by
environmental and health rules and set up many compounds in which sound health and
environmental prerequisites are available.

The Council prohibits trading or dealing in any endangered wildlife, either dead or alive. Such
practices are only allowed by a license from the Council. Hunting of wild birds and animals is
also strictly prohibited within the boundaries of natural sanctuaries, islands, cities and villages.

To preserve the resources of wildlife the council enforces the wildlife hunting law. This law
organizes wildlife hunting and designates the times and places where hunting is ultimately
prohibited, as well as the techniques of hunting and the penalties for violations.

The law allows wildlife hunting during the season from 15th September to the beginning of May
each year, after which hunting is prohibited.

Hunters are under the obligation not to damage gardens, farms and plant cover; not to
interfere or tamper with the life of wild birds, marine turtles, baby animals, wild eggs and nests
either by taking possession thereof, damaging, moving or selling them. Such practices are only
permitted for scientific research purposes. Even then, a special pre-arranged approval must be
secured from the council.

As a committed member of Basel Convention since the 9th of August 1995, Qatar doesn't allow
hazardous waste to enter the country as per the provisions of the convention, which stipulate
that no waste materials should be buried in any Qatari territory without the approval of the
Supreme Council for the Environment and Natural Sanctuaries. Efforts are underway to arrange
storing the hazardous industrial waste materials in specialized treatment centers as of 2003.

Legal system
A unique legal system prevails in Qatar in the Arab Gulf states. Two characteristics
define Qatar's particularity. First, as a traditional Muslim society, people have settled their
disputes according to the sharia court (Islamic court), which applies sharia law (Muslim law).
Second, the independence of Qatar in 1971 marked the termination of British protection and
with it British jurisdiction over non- Muslim residents. Consequently, the Amir established the
Adlia court (civil court) to meet the needs and problems which resulted from the termination of
British jurisdiction

Legal History:

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From its early history, the region now known as Qatar has come under Persian, Portuguese,
Ottoman and British influence. Qatar was considered a part of Bahrain by the British until the
1860s, although the ruling al-Khalifah family of Bahrain only exercised limited control over
Qatar. In 1868, a treaty of co-operation was signed between Britain and the al-Thani tribe
settled around Doha; the treaty outlawed warfare at sea and directed that any conflicts be
referred to the British Resident in the Gulf. Wahhabism became influential in the region due to
an alliance forged between the al-Thani tribe and Wahhabis and their allies in the late 18 th
century; the al-Thani tribe became the ruling family of the region by the 1893 after Shaykh
Jasim al-Thani, appointed Governor by the Ottomans in 1879, asserted his own rule.

The Ottoman Turkish garrison was expelled from Doha and relations with Britain were
further strengthened by the 1916 Treaty of Protection making Qatar a British protectorate. The
Treaty of Protection continued in force until 1971 when Qatar declared its independence. Since
that time, a Penal Code, Civil and Criminal Procedure Codes, and Laws on Judicial Organisation
have been adopted. Personal law remains uncodified, administered by the shariah courts.

Schools of Fiqh:

The Hanbali school is the predominant madhhab in Qatar.

Constitutional Status of Islamic Law:

The Amended provisional basic regulation was passed on 19 April 1972, replacing the
Provisional Constitution adopted in 1970. Article 1 declares Islam state religion and provides
that "the Islamic Sharia Law shall be a fundamental source of its legislation". Article 9
guarantees equal public rights and requires equal public duties without distinction for race, sex
or religion.

Court System:

Qatar maintains a dual system of civil and sharia courts. The first civil courts were established
in 1962. The sharia courts jurisdiction has increasingly been limited to family law matters
(marriage, divorce, wills, succession), though they retain some criminal jurisdiction. Sharia
courts are staffed by qadis who administer uncodified (mainly Hanbali-Wahhabi) personal
status law and are organised into two levels: Sharia Courts of First Instance and the Sharia
Court of Appeal.

Import duties and custom duties in Qatar

The import of goods into Qatar is regulated by the Qatar Customs Law No. 5 of 1988. In general,
a person who wishes to import goods into Qatar for sale must be registered in an importers
register and be approved by the Qatar Chamber of Commerce. Individual importers must be of
Qatari nationality. Companies must be wholly owned by Qatari nationals except in these
instances where the following rates of customs duty apply:

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Item Tariff
General goods and commodities 4%
Reinforced Iron Bars, Steel and 20%
Cement (similar to local manufacture
or equivalent)
Ammonia (similar to local 30%
manufacture or equivalent)
Cigarettes and Tobacco Products 50%
Essentials and Personal Items (such Exempt
as foodstuffs, machinery and raw
materials for industrial projects)

Imports into Qatar require an import license, which may be issued only to Qatari citizens.
Agents and agency agreements are subject to the Law Concerning the Regulation of Activities of
Local Commercial Agencies and Their Foreign Principals 4/1986, as discussed in the above
section on Commercial Agencies.

In accordance with Islamic tradition, the importation of pork and pork products is prohibited.
Also prohibited are firearms, ammunition, immodest prints and pictures, narcotics and artificial
pearls. Alcohol and alcohol products are discouraged by the imposition of heavy customs
duties.

Goods from other Gulf Cooperation Council countries are given preferential tariff rates.
According to a reciprocity agreement among the GCC states, products of GCC origin are
exempted from customs duties. Except for steel, along with tobacco and cigarettes, all general
merchandise is subject to 4 percent customs duties. The current rate of customs duty for steel
is 20 percent, 10 percent for hi-fi equipment and 50 percent for tobacco and cigarettes.

Wage rates

Qatar's Minimum Wage is the lowest amount a worker can be legally paid for his work. Most
countries have a nation-wide minimum wage that all workers must be paid.
While Qatar's labor law provides the emir with authority to set a minimum wage, no minimum
wage rate has ever been set. Qatar's minimum wage was last changed in N/A .

Hofstede model

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Individualism vs Collectivism

In Qatar culture, it is commonplace for extended families to live under one roof and there is
expectation placed upon individuals to help out financially and emotionally to even extended
family members. Financial assistance for medical treatments, weddings and other family
activities are expected from other members in extended family.

Moreover, there is low acceptance of individual responsibility. For example, some young people
can still be seen depending on their parents for financial assistance even after getting married

In addition, there is a strong pressure upon people to follow what is regarded as the norms of
the society. This can be seen by people’s reluctance to accept small changes which some
society members brought to the prayer, in spite the fact that many Islamic scholars have
spoken that those changes are inline with the traditions of prophet Mohamed (PBUH) or the
difficulty which people find in accepting the way conducts himself as the emir, Sheikh Hamad
bin Khalifa al-Thani of the Qatar and his policies such as privatization, although the latter
applies more to our willingness to avoid uncertainty.

Based on these observations, I am inclined to believe Qatar is fairly a collective culture with
strong pressures upon individuals to follow what is regarded as the collective norms of the
society.

Power Distance

In the 1760s, members of the Al-Khalifa of the Utub tribe migrated to Qatar from Kuwait and
central Arabia and established a pearling and commercial base in Zubarah in the north. From
there the Al-Khalifa expanded their territory by occupying Bahrain, which they have ruled ever
since. The Al-Thai, the current ruling family, established themselves after years of contention
with the Al-Khalifa, who still held claims to the Qatar peninsula through most of the nineteenth
century. In 1867, Britain recognized Mohammad bin Thani as the representative of the Qatari
people. A few years later, Qasim Al-Thani (Mohammad's son) accepted the title of governor
from the Ottoman Turks, who were trying to establish authority in the region. Qasim Al-Thani's
defeat of the Turks in 1893 usually is recognized as a confirmation of Qatar's autonomy. In
1916, Abdullah bin Qasim Al-Thani (Qasim's son) entered an agreement with Britain that
effectively established the Al-Thani as the ruling family. That agreement provided for British
protection and special rights for British subjects and ensured that Britain would have a say in

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Qatar's foreign relations. The increase in state income from oil concessions strengthened the
Al-Thani's position.

When Britain announced its intention to withdraw from the region, Qatar considered joining a
federation with Bahrain and the seven Trucial States. However, agreement could not be
reached on the terms of federation, and Qatar adopted a constitution declaring independence
in 1971. The constitution states that the ruler will always be chosen from the Al-Thani family
and will be assisted by a council of ministers and a consultative council. The consultative council
was never elected; instead, there is an advisory council appointed by the ruler. Despite periodic
protests against the concentration of power and occasional disputes within the ruling family,
the Al-Thani's size, wealth, and policies have maintained a stable regime.

In light of these changes, Qatar is currently moving away from a high power distance to a low
power distance culture, although, it may take a few more years for it to fully become a low
power distance culture. And in the future where we will stand in this dimension will largely
depend on the way Islam and democracy is shaped in the Qatar. A more Islamic fundamentalist
approach could result in a higher power distance whilst strong democratic values would lower
the power distance barrier.

Masculinity vs. Femininity

In Qatari culture, individuals who have achieved high academic qualifications or have managed
to amass huge wealth are considered to be high achievers irrespective of the quality of their
life. For instance, majority of families who come to the Capital Male’ to educate their children
stays back in Male’ after their children have completed their education when they have the
possibility of going back to their islands where they can enjoy a better quality life with more
spacious living and peace.

Numerous other examples can be seen in our culture which suggests that we are a very
masculine culture which values material success over quality of life.

Uncertainty Avoidance

Qatar culture has low tolerance level for change. As a result it makes it takes time for new
changes to become accepted within the society. it is because the monarchy exist in the Qatar
,although Qatar moving toward somehow to the democracy bt still the emir, Sheikh Hamad bin
Khalifa al-Thani have all the powers.

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Qatar, like many Arab countries, is highly influenced by its religion which is Islam. One of the
predominant characteristics of this country is its high uncertainty avoidance.

Uncertainty avoidance deals with a society’s tolerance for ambiguity, it indicates to what
extend a society is comfortable with unstructured situations. The Geert Hofstede analysis
shows that Qatar has a high uncertainty avoidance

index equal to 68, which indicates a low tolerance for uncertainty. In order to reduce this high
uncertainty avoidance strict rules and laws are adopted in a way to control everything and to
avoid the unexpected. The religion plays an important role in fixing these rules .The population
believes that there is only one truth and is not very tolerant to change and to different
opinions.

From a business perspective, the high level uncertainty avoidance in the Qatar implies that:

people don’t like to take risk even when they are calculated. They are very fatalistic and they
don’t like to make decisions when some elements are unknown. new idea and concepts are
more difficult to introduce. So, if a company wanted to come up with a new product they
shouldn’t expect the market to embrace immediately. They should allow time to the market so
that it will develop and understanding of the new product. due to a need to negate uncertainty,
proposals and presentation are examined in details, so as an advice: back it up with facts and
statistics.

SWOT Analysis

Strengths
The strengths identified in terms of development performance include:

 Natural resources: pristine environment and rich marine resources.

 G.D.P of the Qatar is 128.3 billion US Dollars.
 Fast growing economy: 19% GDP growth during the last year, 13% in 2006
 based on the strong recovery in the tourism industry.
 Relatively high GNP per capita ($67,000) .
 Stable political environment with the ongoing reform agenda.
 Government pushes on local governance and decentralization.

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  Reasonably good primary and secondary education and English language skills.
 Similarly some strengths related to our industry and country are:
 Highly potential in food industry almost 18% in the dairy products
 due to cultural diversity, designers come up with new and unique designs which are
appreciated worldwide.
 No income tax
 Low taxation rates all over the world.
 Food import is exempt from duties and taxes

Weaknesses
Development weaknesses include:

 High capital intensive market.

 Highly automation needed
 Income inequalities and poor access to basic social service for many scattered coral
 atolls.
 Lack of adequate human resources in the country hampering sustained economic
 growth and development.
 Institutional deficit: weak institutions managing the development process and large
 expansion of civil service and subsidized social services.
 Low absorptive capacity for external assistance and currently too many externally
funded projects.
 No massive media
 Governance deficit: primarily on account of absence of independent institutions and
 Statutory bodies and lack of transparency in the decision making process.
 Large inequalities and inequities between the capital Malé and outer atolls.
 Very high youth unemployment rate due to illetracy and heavy reliance on expatriate
labor.

Opportunities
Development opportunities include:

 Increased foreign investment in core sectors and promotion of private investment by

locals (especially at atolls).
 Diversification of industry through developing local industries.
 Strengthening of institutional capacity in public sector.

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  Strengthening of governance and economic management.
 Development of a merit-based civil service structure and efficient human resource
 Management of the country overall good.
 Secure market
 Exemption of duties on food item.
 Potential in dairy market.
 Reliance over the external imports.
 Liking habits of the cheese among the Qataris.
 High per capita income.

Threats

 Competition from other developing countries, especially India.

 Continuous Quality Improvement is need of the hour as there are different demand
patterns.
 Elimination of Quota system will lead to fluctuations in Export Demand.
 Differentiation in Environmental Laws.
 To balance the demand and supply.
 To make balance between price and quality.
 Low entry barriers for international companies.
 Quality products are produced by competitors.
 Free trade zone, low barriers of new competitors.
 New and high technological changes.

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Porter's Five Forces
A MODEL FOR INDUSTRY ANALYSIS
SUPPLIER POWER
Supplier concentration
Importance of volume to supplier
Differentiation of inputs
Impact of inputs on cost or
  differentiation  
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forward integration
Cost relative to total purchases in
industry

THREAT OF THREAT OF
NEW ENTRANTS SUBSTITUTES
Barriers to Entry -Switching costs
Absolute cost advantages -Buyer inclination to
Proprietary learning curve  substitute
-Price-performance
Access to inputs  trade-off of
Government policy substitutes
Economies of scale
Capital requirements
Brand identity

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 Switching costs
Access to distribution
Expected retaliation
Proprietary products

BUYER POWER DEGREE OF RIVALRY

Bargaining leverage
Buyer volume -Exit barriers
Buyer information -Industry
Brand identity concentration
Price sensitivity -Fixed costs/Value
Threat of backward integration added
  Product differentiation -Industry growth
Buyer concentration vs. industry -Intermittent
Substitutes available overcapacity
Buyers' incentives -Product differences
-Switching costs
-Brand identity
-Diversity of rivals
-Corporate stakes

Porter’s Model

Porter’s model Five Forces of Competition is commonly used in order to specify and analyze
different factors that could affect the company’s profitability and competitiveness. Therefore,
first, the attractiveness of an industry, and, second, a company’s position within the industry
are analyzed. As Porter (1991) explains, “that is what strategy is all about – making choices
about how you position your company in its competitive environment; no matter how
attractive the game is, you will not do well if you do not hold a good position in it”

Cheese Shelter in the Michael Porter’s Five Forces Analysis. It uses concepts developed in
Industrial Organization (IO) economics to derive five forces that determine the competitive
intensity and therefore attractiveness of a market. Porter referred to these forces as the

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microenvironment, to contrast it with the more general term macro environment. They consist
of those forces close to a company that affect its ability to serve its customers and make a
profit. A change in any of the forces normally requires a company to re-assess the marketplace.

According to the first class, the power point showed that the Dairy industry is the most
profitable industry. Based on the Porter's five forces model, there are convincing explanation
why the Dairy industry has big profitability. For the threat of new entrants perspective, it is
high. The Dairy industry has a big barrier to prevent newcomers to enter this industry such as
R&D costs, patents limitation, new technology, an access to distribution channels, huge
marketing and sales costs and manufacturing of marble. The bargaining power of suppliers is
low. The bargaining power of customers is low in the market while the bargaining power of
customer in some resource based countries is high. For the threat of substitute products, it is
still very high due to the low variations of the products .

Rivalry

In the traditional economic model, competition among rival firms drives profits to zero. But
competition is not perfect and firms are not unsophisticated passive price takers. Rather, firms
strive for a competitive advantage over their rivals.

The rivalry among firms in Dairy industry is low, the industry is considered to be disciplined.
This discipline may result from the industry's history of competition, the role of a leading firm.

The intensity of rivalry is influenced by the following industry characteristics: The intensity of
rivalry commonly is referred to as being cutthroat, intense, moderate, or weak, based on the
firms' aggressiveness in attempting to gain an advantage.

 Number of firms: the number of firms in the market is high which increases rivalry
because more firms must compete for the same customers and resources.

 Market growth causes firms to fight for market share. Qatar market is growing rapidly
so the firms are able to improve revenues simply because of the expanding market.

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  High fixed costs the industry is based on a high fixed cost which result in an economy of
scale effect that increases rivalry. When total costs are mostly fixed costs, the firm must
produce near capacity to attain the lowest unit costs. Since Cheese Shelter must sell this
large quantity of product, high levels of production lead to a fight for market share and
results in increased rivalry.

 High storage costs: there is high need to store at a high level because the export is base
on the demand and due to the advantage of forward integration.

 Low levels of product differentiation: is associated with higher levels of rivalry. Product
categories, on the other hand, tend to constrain rivalry.

 High exit barriers: high exit barriers place a high cost on abandoning the product. The
firm must compete. High exit barriers cause a firm to remain in an industry, even when
it is not profitable. New technology and manufacturing a product is highly specialized,
these assets cannot easily be sold to other buyers in another industry, so there occurs a
high exit barriers for the form.

Threat of Substitutes
In Porter's model, substitute products refer to products in other industries. To the economist, a
threat of substitutes exists when a product's demand is affected by the price change of a
substitute product. A product's price elasticity is affected by substitute products - as there are
more substitutes available in the market, the demand is more elastic since customers have
more alternatives like.

While the threat of substitutes typically impacts an industry through price competition, which
we have in term of easy access or less transportation cost in the Qatar market. There can be
other concerns in assessing the threat of substitutes.

Buyer Power

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The power of buyers is the impact that customers have on a producing industry. In general,
when buyer power is strong, higher is the competition in the industry. Here we mention some
of the factors which indicate the power of the buyer in the Dairy industry in Qatar market.

 There are a large number of buyers in the market in term of increase in the saturation
which reduces the power of the buyer.

 Cheese Shelter has a forward integration.

 Products are high quality which the buyers cannot easily switch.

 Per capita income is high so that surely Qataris are powerful buyers

 Habitual of using Cheese in their breakfast.

Supplier Power

A producing industry requires raw materials - labor, components, and other supplies. This
requirement leads to buyer-supplier relationships between the industry and the firms that
provide it the raw materials used to create products. Suppliers have no or a little bargaining
power, because there is abundance of raw material (Milk) in the country.

 Many suppliers of Milk easily available in Pakistan.

 Concentrated purchases of the Milk.
 Major purchases from our own dairy farms.
 High repute of the Shelter Farms

Threat of New Entrants and Entry Barriers

It is not only incumbent rivals that pose a threat to firms in an industry; the possibility that new
firms may enter the industry also affects competition. In theory, any firm should be able to
enter and exit a market, and if free entry and exit exists, then profits always should be nominal.
In reality, however, industries possess characteristics that protect the high profit levels of firms
in the market and inhibit additional rivals from entering the market. These are barriers to entry.

Barriers to entry are unique industry characteristics that define the industry. Barriers reduce
the rate of entry of new firms, thus maintaining a level of profits for those already in the
industry. From a strategic perspective, barriers can be created or exploited to enhance a firm's

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competitive advantage. Barriers to entry arise from several sources: here we mention the entry
barriers in the marble industry for UAE market.

 Government creates barriers. Although the principal role of the government in a

market is to preserve competition through anti-trust actions, government also restricts
competition through the granting of monopolies and through regulation. But there are
not such common practices in the Qatar Dairy market. Government instead of creating
barriers providing opportunities for the new entrants.

 High capital investment: In the Dairy industry there occurs a need for high investment
because new technology is needed for the preserving and packaging of the product and
high quality inspection is a must to be in the industry. So these all machinery and
specialized work need a high investment which is considered an entry barrier.

 Industry standards: there is required a high and industry standard quality product in the
Dairy industry in the Qatar market. So that the firms along Shelter Farms are very much
concerned for the industry standards and a high quality. These standards lead to the
entry barrier in the industry.

 Organizational (Internal) Economies of Scale. The most cost efficient level of

production is termed Minimum Efficient Scale (MES). This is the point at which unit
costs for production are at minimum. There is existence of such an economy of scale in
term of low labor cost and abundance of raw material which creates a barrier to entry.

Some other entry and exit barriers could be

 Specialized assets

 High exit costs

 Difficulty in brand switching

Position in FSA’s and CSA’s Matrix

According to FSAs and CSAs Matrix, Shelter Farms lies in third quadrant. We have strong
country specific advantages as well as firm specific advantages. Qatar is rich in attractions for
Dairy industry.

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The FSA/CSA Matrix

Country specific advantages

 Geographical Locations in Qatar

Major cities have huge population with wide range of Shopping and Super Markets .So that
they can easily buy our Product. so our product easily accessible through the Major
supermarkets like

 Al Muftah
 Carrefour Qatar
 Family Food Centre

These are the largest supermarkets chain in the Qatar Major Cities like

 Doha
 Al Rayyan
 Al Wakrah
 Al Khur
 Ras Laffan
 Dukhan
 Madina AL Shamal

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Firm Specific Advantages

Discounted Prices
There are discounted packages offered by our company to our Customers. These specific
packages are not offered by any other competitor in Qatar. Our Product is preferred by our
customers because we understand their tastes and customs which are economical for them.

Employees
We have best trained and skill full employees in our Farms. Employees are highly trained in
their respective fields. Employees whether lower staff or managers are well aware of their
responsibilities. They are competent, skillful and compatible.

Technology
We have the best automated technology to preserve the Milk and extracting cream, through
the automated process we are able to get Cheese from this cream. a highly automated machine
used to package these cheese in a standardized packing.

Pricing strategy
We are following “Cost Leadership” and “Differentiation” Pricing strategy

 Cost leadership strategy

is to compete with the other rivals . According to this strategy we are offering buying deals to
our customers like (Carrefour, Al Muftah) in a bulk purchasing.throug this we provide the extra
4% discount on our product Cheese Shelter.

 Differentiation strategy

is to compete with our rivals brand

 Al-Morouj

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  Al Ghaddar
 Dandy
 Chopin

Through increasing the

 Quality
 Taste
 Packaging
 Halaal food

STRATEGY of Export
Internationalization
Shelter Farms after its successful business in the local market is now practicing its very first step
to the international market Export. The company with its unique products in Cheese has variety
of opportunities in the Qatar market. The Qatar government with its good relationship with
Pakistan and Growth in the Dairy industry is way to the company’s entrance into the market.

We are entering of the major cities of the Qatar .The company using MAERSK shipping which
uses the route of gulf of Qatar that touches the Karachi Ocean which creates a competitive
advantage for the company due to the ease access in term of the transportation.

Target market
Our target market of the Qatar cities is

Cities

 Doha
 Al Rayyan
 Al Wakrah
 Al Khur
 Ras Laffan
 Dukhan
 Madina AL Shamal

Distributors

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  Al Muftah
 Carrefour Qatar
 Family Food Centre

Target audience
We are targeting those audiences who are moderate income level and have a strong
taste of cheese. Through this we provide the quality of the product so that the
consumer enjoy the everlasting taste of the real cheese.

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