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					Government, Information Systems and Marketing in
Morocco

Government
   1. GOVERNMENT AND POLITICS - Describe the type of government and
      recent political developments that could influence the economic and
      business environment of the country. (For example, various events in
      recent years in the Middle East have contributed to the uncertainty
      when doing business with some countries.)

Morocco currently exists under a constitution which was Adopted in 1996 which
describes the political structure as "a democratic, social and constitutional
Monarchy". The constitution guarantees basic principles including equal rights for
men and women, rule by referendum, privacy, taxes, the ability to strike, equal
rights for education and employment and the right of private property and free
enterprise. Morocco's ruler is a king who passes his crowd through the family line,
and of a parliament with two houses. One house (the house of representatives) is
elected through universal suffrage, the second (House of Counsellors) consists of
members elected in each region by members of trade chambers and wage-earners.

Morocco is described as having a resource based economy with a low ROI and Value-
Added results. GDP for the country is based on the poorly managed agriculture
sector and is therefore highly sensitive to climate fluctuations. The main exports are
textiles, clothing and food. Morocco has suffered from a mis-managed economy
where a move to privatization was not properly transitioned creating economic
instability and the education system does not reflect the needs of businesses looking
to hire[1].

Morocco has petitioned for entrance into the EU, which was denied. The reasons for
rejection included the fact that Morocco is not in Europe, the general lack of
democracy; human rights abuses, including torture; detention of political prisoners;
the use of the death penalty; and occupation of the Western Sahara. Still, Morocco
continues to try and open up trade with Europe as much as possible including the
creation of the Mediterranean Partnership Initiative, which proposes to create a free
trade zone, with agricultural products excluded, in the Mediterranean area.
Morocco’s economic problems are many and include a huge foreign debt, a growing
young population, an unemployment rate estimated at 25 percent, and years of
recurring drought which impacts their heavy agricultural based economy.
Additionally, the gap between the rich and the poor is increasing and many
Moroccans are fleeing to Europe in search of economic opportunities.

The drug trade is estimated to be $2 billion annually. Both of these have eased the
effects of the SAPs somewhat, but they have also proven problematic as foreign
investors balk at the government’s inability to deal effectively with the black market
and drug trade and at their apparent complicity in both. [2]
   2. FORMAL TRADE BARRIERS - Identify formal trade barriers (tariffs and
      other taxes, foreign exchange controls, ownership restrictions) that
      might require a company to adapt its business strategy.

   AND


   3. PROMOTING GLOBAL BUSINESS - Analyze host government efforts to
   attract foreign investment. (Some nations offer tax incentives to attract
   foreign capital.)

Morocco aims to create up to 100,000 jobs over ten years by drawing new business
from companies seeking to hire off labor-intensive service activities. The government
is setting up a chain of specialized business zones across the kingdom to capture a
slice of the global market for offshore services, expected to be worth $38.74 billion
over the next ten years.
The zones offer lower overheads such as telecommunication costs, simplified
administration and employee training services to draw banks, insurers and IT
companies.


The Moroccan government has worked hard to establish trade relationships with as
many western and European countries as possible, lessening the formal trade
barriers we may experience. In many of those agreements provisions exist which
help the foundations upon which our chosen industry resides making it easier to
participate. Those resolutions include:

The EURO-MEDITERRANEAN AGREEMENT
States that there will be free movement of goods, including gradually establish a free
trade area over a transitional period lasting a maximum of 12 years, which was
signed into effect in January of 2000. This agreement also included in article 56 a
focus on telecommunications and information technology, where cooperation was
requested in the standardization, conformity testing and certification for information
technology and telecommunications; the dissemination of new information
technologies, particularly in relation to networks and the interconnection of networks
(ISDN . integrated services digital networks and EDI electronic data interchange);
and finally stimulating research on and development of new communication and
information technology facilities to develop the market in equipment, services and
applications related to information technology and to communications, services and
installations.
Article 34 includes provisions for freedom to conduct direct investment between the
EC and Morocco, stating that “the Community and Morocco shall ensure, from the
entry into force of this Agreement, that capital relating to direct investments in
Morocco in companies formed in accordance with current laws can move freely and
that the yield from such investments and any profit stemming therefrom can be
liquidated and repatriated. The Parties shall consult each other with a view to
facilitating, and fully liberalizing when the time is right [by 2005], the movement of
capital between the Community and Morocco.” [3]

The US Morocco Free Trade Agreement - July 15, 2004.
The States that free trade will exist between the US and Morocco. Article 13 states
the “Each Party shall ensure that service suppliers of the other Party have access to
and use of any public telecommunications service, including leased circuits, offered
in its territory or across its borders, on reasonable and non-discriminatory terms and
conditions.” The agreement specifically allows for:

       purchase or lease and attach terminal or other equipment that interfaces with
       a public telecommunications network;
       provide services to individual or multiple end-users over leased circuits;
       connect owned2 or leased circuits with public telecommunications networks
       and services in the territory, or across the borders, of that Party or with
       circuits leased or owned by another service supplier;
       perform switching, signaling, processing, and conversion functions; and use
       operating protocols of their choice in the supply of any service, other than as
       necessary to ensure the availability of telecommunications transport networks
       and services to the public generally.
       Number portability
       Dialing Parity
       Resale options
       Competitive safeguards
       Licensing

Finally the USTR Issues Annual Report Listing Barriers to Telecom Trade report for
2008 showed no issues with Morocco living up to the FTA [6]
Taxation of foreign firms incorporated in Morocco are treated the same as native
businesses, taxed at 35 percent. Net profits earned by foreign subsidiaries are not
taxed until profits are repatriated and distributed to shareholders.

“Taxable income is based on receipts and accruals from products delivered, services
rendered and work carried out and accepted by customers. Interest, royalties,
income and service fees are subject to corporate income tax at the rate of 36
percent. Dividends received by corporate shareholders from taxable entities
incorporated in Morocco are not taxable. This exemption does not apply, however, to
foreign investment income, which is taxed after deducting foreign withholding taxes.”
There are some tax benefits, through the use of exemptions that we can choose to
employ, for example if we set up our business in the Western Sahara we will be
exempt from corporate taxation. Most business expenses are tax deductible upto
10,000 MDh. For a foreign company, if you show adequate justification and
documentation you can also deduct expenses incurred outside of Morocco.
Subsidaries of foreign companies set up in Morocco are treated as local companies,
independent of their foreign parent-company for legal and taxation purposes.
Dividends paid to non-native shareholders are subject to a 15 percent withholding
tax. Interest, royalties and services/management fees paid to non-residents are
subject to a 10 percent with holding tax, provided there is no double taxation
occurring.
Personal income tax is by anyone who has their habitiual residence in Morocco on
their worldwide income on a progressive scale of 13 – 44 percent. Non habitual
residence only pay income tax on the income that is a direct result of work in
Morocco. [8]


Telecommunications and Morocco
After the 1997 election, the socialist–led government affirmed its commitment to
economic liberalisation and to the integration into the information–based global
economy (Hajji, 2002). The Moroccan government has been under tremendous
pressure to adapt to the rapid pace of development of new ICTs, global market
forces, and the growing demand for telecommunications services. In its engagement
to arm itself with institutional and legal framework, the Moroccan government
launched a program of telecommunications legal policy reforms. On 7 August 1997
the Moroccan Parliament adopted the Post Office and Telecommunications Act
(International Telecommunication Union (ITU), 2002). The promulgation of Law 24–
96 on post and telecommunications provided Morocco with a modern legal
framework. One of the significant results of the new Telecommunications law was the
creation of the "Al–Wakala Al–Wataniya Li–taknin Al–Itissalat," National
Telecommunications Regulatory Agency (NTRA) in March 1998 (ITU, 2002). The chief
aim of this autonomous agency is to promote rapid modernisation of the
telecommunications systems and services in Morocco through regulation and the
maintenance of transparency in tender procedures (ITU, 2002). As a result, the
NTRA’s first priority has been to introduce competition into the marketplace. The
agency has pursued a competitive telecommunications market policy by focusing on
revising legislative authorities.

The movement towards market liberalisation and deregulation in the
telecommunications sector has meant growth in investment development. In a bid to
transform the country into a new telecommunications powerhouse, the Morocco
government has invested heavily in ICTs, providing funding for the development of
the telecommunications infrastructure. To date, the government had made a massive
investment, nearly 1.2 billion USD, to upgrade and expand telecommunications
digital networks (El–Mandjra, 2002). This is about 11.90 USD per capita. For the
period 1995–2000, Morocco’s telecommunications investment reached three percent
of the GDP (El–Mandjra, 2002).

Increasing privatization and liberalized policies have strongly encouraged numerous
multinational firms to conduct business with Morocco. Because Law 24–97 allowed
private foreign direct investment with international giants in the field of
telecommunications, Microsoft, Nokia and Siemens set up local offices and marketing
facilities in Morocco.

The telecommunications sector has witnessed the greatest opportunity to
competition and the greatest amount of Foreign Direct Investment (FDI) in the late
1990s and early 2000s. With the privatisation of IAM in 1998, the possibility of
greater foreign involvement in the telecommunications sector has been greatly
increased. FDI in the telecommunications sector amounted to 2.3 billion USD in 1999
or 15 percent of the total foreign investments (NTRA, 2002). For year 2000, the
foreign investment in the telecommunications sector rose to 2.7 billion USD. It
reached its apogee when Vivendi Universal, a French conglomerate, bought 35
percent of the equity (IAM, 2002). [12]


4. INTELLECTUAL PROPERTY - Discuss the country's regulations to protect
intellectual property, such as brand names, copyrights, patents, software,
music, videos. (Some countries do not enforce these laws resulting in the
pirating of products and lost profits for companies.)
Morocco has been sighted as having a fairly comprehensive legal system which does
allow for the enforcement of intellectual property protection. We are required to
register in both Casablanca and Tangier in order to be protected. [7]
Morocco has signed several trade agreements which outline provisions for protecting
intellectual property including, but not limited to: the Bern Copyright, Paris Industrial
Property and Universal Copyright conventions, membership in GATT and the FTA.
According to the treasury, the FTA, which updated the Bilateral Investment Treaty of
1991 (BIT) gives a legal framework for all those willing to invest in Morocco.
However, the there continues to be issues with the enforcement of intellectual
property laws which could affect our investment strategy. [5]
Patents are valid for 20 years, based on form only (therefore not novelty or merit).
The international classifications of goods is followed in Morocco, and trademarks can
be registered in form and last for 20 years. Copyrights, which apply to the literary or
artistic expression of an idea, are also protected and are granted upon inception of
the work. This right is perpetual, inalienable and remains with the author until death
and is then passed on to their heirs.

5. Conduct a survey of local businesspeople who are involved with or aware
of political and economic trends around the world. Obtain information
related to their assessments of which regions are the best prospects for
international business expansion.

n/a

6. Research possible restrictions or taxes imposed for online activities in
other countries. Describe how these government actions could affect global
business operations.

The broad realm of Morocco’s telecommunications policy has thus acquired a salience
it never had in the past. Indeed, ICTs as well as the Internet have become a part of
public political discourse in the late 1990s (Yahyawi, 1996).

The rapid advent of the Internet led to a discussion of the legal aspects involved in
its use. There have been concerns that the Internet could negatively impact
Moroccan society, culture and tradition. This potential pitfall is related to social
values. One fear is that pornography and subversive information is freely distributed
over the Internet.

A few papers have been published in the print media focusing on legal issues, calling
for Internet regulation, especially to protect children from obscenity, pornography
and violence. The main subject under discussion has been censorship. In the
Parliament no bills have yet been passed, thus there are no legal regulations
governing the use of the Internet in Morocco, giving Moroccans the credence of being
a free country. In terms of Internet censorship, Larbi Messari, once a Moroccan
Minister of Communication and Culture, asserts that the logic of the digital age "has
banned the banning" [12]




7. Recommend actions that might be necessary for an existing company or a
new enterprise with regard to factors in the political and legal environment.
Provide evidence to support your proposal.
n/a
Creating a Global Management Information System

1. GLOBAL INFORMATION NEEDS - Identify the types of reports and other data that
would provide managers with the information necessary for organizational decision
making. (Common categories of management information include financial
documents, inventory data, sales and marketing reports and human resource
records.)

2. GLOBAL INFORMATION SOURCES - List the main (a) external and (b) internal
sources of data for your global business enterprise. (External sources include
government agencies, financial institutions, trade associations, suppliers, and
customers. Internal sources include research information, accounting data, employee
records, sales figures, and inventory reports.)

3. TECHNOLOGY FOR MANAGING INFORMATION - Describe computer systems and
other technology that would facilitate the processing, reporting, and use of
information for international business operations. (For example, a global computer
network may be used to record and report inventory and sales from various branch
offices.)

4. Develop a suggested format for a Web site (with information and interactive
features) that would communicate to customers, suppliers, investors, and
prospective employees some of the benefits and opportunities of your global
business enterprise.

5. Prepare a visual synopsis of a proposed global management system that
identifies: (a) input sources, (b) processing activities, and (c) output reports that
would serve the decision-making needs of managers within the organization.
Product and Target Market Planning
1. PRODUCT CONCEPT - Identify the physical attributes, customer benefits,
and competitive advantages of the product (or service) to be offered by the
organization. Analyze geographic, economic, cultural, and legal factors that
would influence offering a standardized or an adapted product for this
market. (A product concept should list as many characteristics as possible
to better communicate attributes and benefits within the organization as
well as to potential customers.)

Our product will be to providing call center technologies and other
telecommunications needs to companies looking to offshore their call centers in
Morocco. With a plentiful supply of French and Spanish-speaking graduates, Morocco
intends to replicate the success of India, which has become an outsourcing hub for
the English-speaking world. Calls centers for French and Spanish speaking countries
increased substantially during the last few years and we hope to be able to convince
our customers to set up their call centers in Morocco to save costs and reap the
benefits of a geographically proximate country which speaks the language of their
customers. [9].

Product attributes:

      Sound quality: How good does offshore call sound, would an average
       customer know they were calling a foreign country.
      Up time: How often do the phone lines go down, either due to product issues
       or infrastructure issues.
      Service: When an issue with the phone system arises, or questions need to
       be answered, how quickly are those items resolved.
      Reliability: How reliable are the connections.
      Information availability: Does the system provide the right information to the
       customer to help them make decisions.

Customer Benefits:

      Inexpensive Labor
          o 20 to 40 percent cheaper than in France [10]
      French/Spanish/English speaking representatives ready to work
      Customers can take advantage of our Cisco University training young
       Moroccans on technology and industry

Competitive Advantages of the Product:

      Working directly with the Moroccan Government, this product allows for the
       best possible telecommunications equipment for the region
      Customers can take advantage of our Cisco University training young
       Moroccans on technology and industry
      Cisco answers to all the hardware and software infrastructure needs of
       customers in one place
      Allows our customers to receive cost savings, while meeting the needs of their
       customers
Geographic, economic, cultural, and legal factors that would influence
offering a standardized or an adapted product for this market.

    There are lots of opportunities for us to leverage the close ties between France
and Spain and Morocco by selling our call center technologies in Morocco to facilitate
the needs of the Spanish and French consumer. Geographically France and Spain,
two of our five target markets are very close which helps in terms of accents,
training and customer satisfaction.




    From a cultural perspective, Morocco is an Arab country which lived under the
protectorate of France and Spain from 1912 - 1956, shares a language and school
system with the French which is unofficially the second language and the language
most used for business transactions. Historically Morocco has hosted hosted many
people coming from East (Phoenicians, Carthaginians, Jews and Arabs), South (Sub-
Saharan Africans) and North (Romans, Vandals, Andalusians (including Moors and
Jews)). All those civilizations have had an impact on the social structure of Morocco.
It conceived various forms of beliefs, from paganism, Judaism, and Christianity to
Islam.

Each region possesses its own specificities, thus contributing to the national culture
and to the legacy of civilization. Morocco has set among its top priorities the
protection of its diverse legacy and the preservation of its cultural heritage.

Culturally speaking, Morocco has always been successful in combining its Berber,
Jewish and Arabic cultural heritage with external influences such as the French and
the Spanish and, during the last decades, the Anglo-American lifestyles [11].

The level of diversity in the region will help our model of outsourcing centers to be
successful. We feel that the ties between Morocco and our target market countries
will help overcome some of the local market issues with outsourcing.

In terms of product adaptation, we feel that because our clients will initially be hiring
French, Spanish and English speaking individuals to fulfill the role of the laborers, our
product will be able to be sold using the Latin Alphabet, instead of both the Latin and
the Arabic Alphabets.
2. PRODUCT LIFE CYCLE - Discuss economic, cultural, political, or
technological factors that might affect the speed of movement of the
product (or service) through the stages of the product life cycle
(introduction, growth, maturity, decline). (For example, the presence of
several distinctive identity for the company (or specific product). Analyze
cultural and legal factors that could influence packaging of the product.

Stage 1 – Introduction
Two factors that will be most likely to affect our product offering during introduction
will be cultural and technological. From a cultural perspective our clients, specifically
the French, our largest target market are extremely against outsourcing. President
Sarkozy has repeatedly tried to pass legislation to make it very expensive to
outsource French jobs to another country. Second, while the Moroccan government
has been making strides towards a making an modern telecommunications system,
we are expecting to struggle in areas where the system is not up to date.

Stage 2 – Growth
As the product begins to grow, we believe technology and scalability of the
infrastructure may continue to be an issue.

Stage 3 - Maturity
As the model we plan to implement gains ground, we expect our competitors to
begin copying our model and finding ways to cut costs offering the same product.
We will need to strive to remain cost competitive as well as keeping aligned with our
core competencies and competitive advantages.

Stage 4 - Decline
Part of what India is experiencing today is as the education levels rise, and people
being making more money, the call center model becomes a less cost effective and
the staffing choices become more limited. We will need to be prepared to introduce
the model in other countries and shift away from the simple call center model to a
business model that wealthy Moroccans investing in Moroccan businesses may need
to buy to sell their products.

4. TARGET MARKET - Describe the characteristics of potential customers in
terms geographic location, demographics, media habits, consumer behavior
patterns, lifestyle activities, and psychographics.

Our target market consists of France, Spain, Canada, Africa, the US and the Middle
East.

France
    Socialist country with negative feelings about outsourcing of French jobs
    Nationalistic with negative feelings about outsourcing from a customer service
      perspective
    Currently Experiencing a .3% contraction of the GDP in the first quarter of
      2008
    28,500 companies filed for bankruptcy in H1 2008, up 15% from last year
    Geographically close to Morocco in similar time zones
    Speaks French, the second language of Morocco
   Based on the general world wide expectation of rising prices and slower earnings,
   we plan to emphasize the importance of saving money in a lean economy and
   showing our customers how much they can save, despite the negative feelings
   about outsourcing.

Spain
    Roman Catholic with high interests in the family unit
    9th Largest Economy in the world
    Geographically close to Morocco (share a water coast) and in the same time
      zone
    Demographically, Spain is a nation of small businesses. Recognizing this,
      the Spanish government actively supports this sector of the economy.
    Focus on Tourism (number one industry) Call Centers and Medical
      Equipment call centers
    The Hofstede Analysis illustrates that uncertainty avoidance is ranked the
      highest for Spain, while the other three dimensions are ranked moderately.
    Although many Spanish businesspeople speak English, it is a good idea for
      foreigners to have all of your materials printed in Spanish, including business
      cards which should have both English and Spanish. [13]


5. Prepare a product concept board. This visual presentation should include
information on the product attributes, customer benefits, competitive
advantages, branding, packaging, and target market.

General Product Banner & Branding to be presented on the website:




          Globalization can be good for
          you and your customers


          CISCO presents
          Call Center Creator ™
          Keeping you and your
          customers connected no matter
          where you are




By using Cisco’s Call Center Creator™ you can save your company and customer’s
time and money without sacrificing what makes your company unique. Keep your call
center close to home and the customer at almost half the price…

                                   who would not want to do business with you?
Diagram of Call Center Operation explains what is in the product without confusing
the customer with lists of technical information.


Easily set up a call center in Casablanca Morocco to take advantage of French and
Spanish speaking, low cost workers who have been trained by world class Cisco. Cisco
has partnered with the Moroccan government to give you the best technology and people
available to satisfy your customer needs and your bottom line.
Let Cisco use their networking
expertise to globalize your business

   Quality Cisco Product
 + Talented People
 + French and Spanish Speaking
 + More Staff & Service
 + Less Money
   Happy Customers




  [1] http://www.idrc.ca/en/ev-41633-201-1-DO_TOPIC.html
  [2] http://web.africa.ufl.edu/asq/v7/v7i1a3.htm
  [3] http://europa.eu/eur-
  lex/pri/en/oj/dat/2000/l_070/l_07020000318en00020190.pdf
  [4]http://www.ustr.gov/assets/Trade_Agreements/Bilateral/Morocco_FTA/FInal_Text
  /asset_upload_file803_3833.pdf
  [5]http://www.ustr.gov/assets/Document_Library/Reports_Publications/2004/2004_
  National_Trade_Estimate/2004_NTE_Report/asset_upload_file890_4782.pdf
  [6] http://malaysia.usembassy.gov/wf/wf0408_ustr.html
  [7] http://www.infoprod.co.il/country/morocc2d.htm
  [8] http://www.infoprod.co.il/country/morocc2e.htm
  [9]
  http://dcusa.themoroccanembassy.com/moroccan_embassy_economic_profile.aspx#
  a7
  [10] http://yaleglobal.yale.edu/display.article?id=6333
  [11] http://en.wikipedia.org/wiki/Morocco
  [12] http://www.firstmonday.org/Issues/issue9_1/ibahrine/
  [13] http://www.cyborlink.com/besite/spain.htm

				
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