Cisco in Morocco
IB 8090, Fall 2008
Page 1 of 46
Global business oppportunities
Cisco Systems, Inc. stated in their fiscal year 2008 (FY 2008) Annual Report, “From a
geographic perspective, we are focusing on expanding our presence in the Emerging Markets
theater, and we are making additional investments in emerging countries”(fk1). For a multi
national corporation (MNC), such as Cisco, seeking to maximize profits, reach economies of
scale and take advantage of global markets, Morocco should be evaluated to determine its
potential. All research data indicates Morocco as an emerging economy with many business
opportunities. One reason could be the geographic location: the country of Morocco is uniquely
situated as a potential gateway among European, African and Middle Eastern countries. The
following plan will develop one opportunity and show through analysis of the economic,
geographic, social and political environments how our planned organization structure, financial
sourcing decision, information systems structure and human resources availability will lead us to
manage financial and business risks while marketing, distributing and promoting a product at the
correct price to achieve the desired financial results.
With Cisco’s stated goal of “expanding into emerging markets” why choose Morocco?
Applying Adam Smith’s “Absolute Advantage” theory, Morocco does not seem to produce
products more efficiently than any other country. Although Morocco takes advantage of their
natural resources, such as phosphates and iron ore, Morocco is heavily leveraged in textiles and
agriculture (fk2). According to the Economist Intelligent Unit, Morocco’s “competitiveness in
basic manufactured goods, such as textiles, is hampered by low labour productivity and high
wages.” In addition, they do not “produce what they use” as proven in their trade deficit.
Therefore, Morocco has sought to increase trade through negotiated free trade agreements and
Page 2 of 46
One opportunity is to fulfill the Moroccan need for irrigation systems. The climate and
infrastructure cause an over reliance on weather patterns to produce crops. An urgent need for
advanced irrigation systems provides a firm an outstanding opportunity to improve the overall
economy of Morocco. However, this type of industry is outside the core competencies of Cisco
A great opportunity for Cisco lies in the Moroccan Governments commitment to increase
education, reduce their unemployment and improve their telecommunications infrastructure.
Cisco is developing their relationship with Morocco with the announcement that Cisco’s
international consulting group will help “define a set of strategic actions accelerate the
penetration of nation-wide broadband connectivity across the Kingdom.” (fk3) Another positive
investment by Morocco lies in the newly constructed trade zone areas of Tanger. Cisco could
leverage the Kingdom’s desire to develop the telecommunications industry in order to establish a
joint venture for the purpose of supporting the business to business (B2B) segment.
Cisco, that has$28.484 billion revenue, is established in the Networking and
Communication Devices industry. It faces a couple of principal competitors which are Alcatel
Lucent, Juniper Networks, Inc and Nortel Networks Corp.
Alcatel Lucent is not implanted in Morocco but Juniper Networks, Inc has a subsidiary on
Juniper Networks is the leader in high-performance networking. Juniper offers innovative
businesses a high-performance network infrastructure to help them create a responsive and
trusted environment for accelerating the deployment of services and applications over a single
Page 3 of 46
network. The top 65 service providers, 96 of the Fortune 100, and large government agencies and
institutions are among the many demanding businesses that rely on Juniper Networks to quickly
meet their high-performance business requirements. The company is headquartered in Sunnyvale,
California. Juniper Networks is publicly traded on NASDAQ under the symbol JNPR. It has
2007 revenues of $5.3 billion.
Nortel Networks Corp, formerly known as Northern Telecom Limited and sometimes
known simply as Nortel, is a multinational telecommunications equipment manufacturer
headquartered in Toronto, Ontario, Canada. Nortel also has a subsidiary in Casablanca. It has
2007 revenue of $10.95 billion, and more than 32,550 employees worldwide.
Nortel is a recognized leader in delivering communications capabilities that make the
promise of Business Made Simple a reality for their customers. Their next-generation
technologies, for both service provider and enterprise networks, support multimedia and
business-critical applications. Nortel's technologies are designed to help eliminate today's
barriers to efficiency, speed and performance by simplifying networks and connecting people to
the information they need, when they need it. Nortel does business in more than 150 countries
around the world, including Morocco.
Nortel operations are divided into the following segments:
Carrier Networks (CN): Mobility networking solutions, including CDMA, GSM, and
UMTS, and carrier networking solutions, both circuit and packet based.
Enterprise Solutions (ES): Enterprise networking solutions, including circuit and packet
based voice, data, security, multimedia messaging and conferencing, and call centres.
Metro Ethernet Networks (MEN): Optical and metropolitan area networking solutions,
for carrier and enterprise customers.
Page 4 of 46
Global Services (GS): Services in four areas: network implementation, network support,
network management, and network applications (including web services).
These international competitors also have competitive advantages that helped them gain
market shares. In fact, Juniper Networks is well positioned to achieve continued growth in high-
performance networking. The company has nearly 500 technology patents issued or pending and
is committed to continued innovation, investing more than $500 million in R&D in 2007. The
company's business strategies, products and more than 5,000 dedicated Juniper employees are
aimed at delivering value for customers and shareholders. The J-Partner Alliances offers five
alliance categories, each one focused on a particular aspect in delivering next-generation
networking and security solutions, providing organizations with integrated and interoperable
best-in-breed solutions. The five categories are: Infrastructure, Security, System Integrator, OSS
and Network Management, and Content and Applications. Juniper has a strong market position
in high end routing and security products market, which provides it a competitive advantage.
On the other hand, NT is offering telecom providers new ways to drive competitive
advantage through video services such as click-to-call that links IPTV with a mobile phone,
personal computer or home phone, as well as turning into your favourite show or movie on any
device. Plus, by moving towards a 100% variable cost structure for manufacturing, Nortel
Networks will achieve even greater operational and financial agility. + Partnership with
Flextronics: Flextronics has the necessary vertical supply chain expertise, resources, and global
presence to meet their time-to-market, quality, and product cost-reduction objectives and to take
NT supply chain to new levels of performance and competitive differentiation. NT has a first-
mover advantage in broadband wireless access. As NT CEO declared: “our suppliers are
absolutely critical to Nortel Networks success in delivering the high quality, cost-competitive,
Page 5 of 46
leading-edge products, systems, and services that enable our customers to compete effectively in
markets around the globe and build greater market share. Our competitive environment is
rigorous and the management of our global supply chain needs to mirror that reality.”
These competitive advantages rely on well chosen international strategies. Juniper for
example, sells directly and through resellers to network service providers, enterprises,
government agencies, and schools. To best connect billions of potential Internet users, Sindhu
wanted to start with new hardware from the ground up. Juniper had a strategy that was unusual
for network equipment makers: It outsourced all its manufacturing operations to better use assets,
lower production costs, and accelerate time to market-critical for the fast-changing Internet. And
the start-up harnessed the efficiency of the Internet to streamline operations. From the beginning,
Juniper collaborated on designs, linked with outsourcers, and managed inventory via the Web.
Juniper established a technology relationship in July 1996 with IBM, to produce all the
application-specific integrated circuits (ASICs) designed by Juniper for its Internet platforms.
Juniper also partnered with Solectron and Celestica, which manufactured products from the
prototype stage to production, and performed material procurement, final assembly, testing,
control, and shipment to customers.
Its Principal Subsidiaries are Juniper Networks K.K. (Japan); Juniper Networks B.V.
(Netherlands); Juniper Networks International Limited (Cayman Islands); Juniper Networks FSC
Inc. (Barbados); Juniper Networks U.K. Ltd. (United Kingdom); Juniper Networks GmbH
(Germany); Juniper Networks France Sarl (France); Juniper Networks Australia Ltd. (Australia);
Juniper Networks Hong Kong Ltd. (Hong Kong); Juniper Networks South Asia Ltd. (Hong
Kong); Juniper Networks China Ltd. (Hong Kong); Juniper Networks Canada Inc. (Canada);
Juniper Acquisition Corporation; Juniper Networks International, Inc.
Page 6 of 46
Nortel developed its own international strategy by expanding into the U.S. in 1971.
Today there are employees in over 100 locations in the U.S. with R&D, software engineering,
and sales centres in many states including California, Florida, Georgia, Illinois, Maryland,
Massachusetts, North Carolina, Texas, and Virginia. Nortel's full service R&D centres are
located in Ottawa (its R&D headquarters), Beijing, and Guangzhou. In Canada, Nortel also has
R&D sites in Montreal, Belleville, and Calgary. In the United States, Nortel's major R&D sites
are in Research Triangle Park (North Carolina), Richardson (Texas), Boston, and Santa Clara.
Nortel has significant presence in Europe, Middle East, Africa, the Caribbean, and Latin
America. Nortel delivers network infrastructure and communication services to customers across
Asia in Mainland China, Hong Kong, Taiwan, South Korea, Japan, Singapore, Thailand,
Malaysia, India, Pakistan, Australia, New Zealand, and Turkey (Nortel owns 53.17% of Nortel
Netaş, originally established as a joint venture with Turkish PTT in 1967). In addition, the
company has three joint ventures in the People's Republic of China, including Guangdong Nortel
Telecommunications Equipment (GDNT), who operates Nortel's full service R&D centres in
More generally, a competitive advantage is an advantage over competitors gained by
offering consumers greater value, either by means of lower prices or by providing greater
benefits and service that justifies higher prices. In this industry, a global business strategy can
create a competitive advantage thanks to economies of scale, lower costs, co-ordination of
activities, and faster product development. In fact, the Networking and communication devices
compete in almost every part of the world. This can be achieved by appreciating that success
demands a presence in almost every part of the world in order to compete effectively, making the
product the same for each market, centralising control, taking advantage of customer needs and
Page 7 of 46
wants across international borders, locating the value adding activities where the greatest
competitive advantage can be achieved and integrating and co-ordinating activities across
Geography and climate
Morocco is located in North East Africa and spread on 710,850 square kilometers. It has
over 3,500 kilometers of coast on the Atlantic Ocean (west) and the Mediterranean Sea (north)
and has boarders with only 2 countries: Algeria (east) and Mauritania (south). Note that the
Kingdom of Morocco claims and administers Western Sahara whose sovereignty remains
unresolved and this area is a large desert. (Without Western Sahara Morocco is only 446,300 sq
km, has 1,835 km of coast and only one 1,559 km boarder with Algeria).
Northern coast and interior are mountainous with large areas of bordering plateaus,
intermountain valleys, and rich coastal plains. The highest mount in the Atlas is Jebel Toubkal,
4,165m high. Northern mountains are geologically unstable and subject to earthquakes. Morocco
is part of the subtropical zone, which implies warm dry summers and fresh, wet and moderate
conditions in the winter. The dominating weather in Morocco is Mediterranean because there is
the Atlantic Ocean on the west. Inside the country, the weather is more continental with
significant differences of temperature. The Atlas area is very humid and it snows frequently.
Geographic and climatic factors imply that only 19% of the land is arable and there are 15,000
square kilometres of irrigated land (2005). The economic growth during the last decades has had
terrible impacts increasing exploitation of natural resources and damaging the environment.
According to Moroccan officials this degradation had a cost of about 8% of GDP, that is why
Page 8 of 46
regulations have been strengthened and information about water and air quality, waste, land
exploitation, fauna and flora made easily available.
In Morocco the services represent already almost 50% of the GDP: tourism and
construction are the most dynamic sectors. The main industries of the country are phosphate
mining and processing, food processing, textiles and leather goods. Agricultural products grown
encompass barley, wheat, citrus, wine, vegetables and olives. Moroccans also have an important
livestock of cattle. Main exports are clothing and textiles, electric components, inorganic
chemicals, crude minerals, fertilizers (including phosphates), petroleum products, citrus fruits,
vegetables and fish and those are primarily directed to Spain and France (over 40%). Imports
include crude petroleum, textile fabric, telecommunications equipment, wheat, gas and electricity
as well as plastics, coming from France, Spain, China, Italy, Saudi Arabia and around EU. The
account balance is a deficit below $2 billion, which is acceptable and must be balanced by the
drought which obliged Morocco to import wheat last year.
Morocco is considered to have a stable macroeconomic system since the early 1990’s but
its economic development grew inequalities and unemployment was over 20% in urban areas in
the late 1990’s.
King Mohamed VI launched a $2 billion social plan on May 18th, 2005, to address these
issues, called the National Initiative for Human Development. Reforms launched by the King to
improve economic and social development have been described as “impressive” by Condoleezza
Rice on September 7th 2008, and unemployment was below 10% in 2007. Estimations establish a
2.2% GDP growth in 2007 (quite low that year because of a severe drought) and a 2% inflation
Page 9 of 46
rate the same year, which proves the macroeconomic stability. GDP per capita is around $3,700
with 15% below the poverty threshold (compared to $45,800 and 12% in the USA).
The Moroccan dirham is pegged to a basket of foreign currencies (composite peg) and
thus has a low to medium volatility . There is no great risk to see the value of this currency
fall suddenly. However its value has changed over time, it increased from 9.527 dirham (MAD)
per dollar (USD) in 2000 to 11.584 MAD per USD in 2005 and has then decreased to almost 7
MAD per USD this year, before rising again. Latest exchange rates are available on this chart:
The Moroccan dirham is as volatile as the currencies it is pegged to but no more, and it is
a generally trusted currency, not risky. Moreover all major currencies (USD, EUR, GBP) are
accepted in Morocco. As a result of these stable factors Morocco is now really attractive for
investors who have gained confidence from efficient economic reforms. According to the UN,
FDI inward flows have increased from $500 million a year in the early 1990’s to $2.5 billion a
year since 2006.
Morocco has 4 main ports (Agadir, Casablanca, Mohammedia, Safi) ensuring 98% of the
Moroccan foreign trade, but also 14 main commercial airports, which allow easy transportation
of any kind of products. Railways are not developed in the country (only 1,907 kms) but more
Page 10 of 46
than 35,000 kms of paved roads link all major cities while another 22,000 kms of unpaved roads
allow trucks to reach deserted or mountainous areas. The improvement of roads is a priority
along with social and economic reforms, there were only 600 kms of highway before 2007 but
the government is now spending millions of dollars so that 150 kms of highway can be
constructed each year.
Since the early 1990’s the government pays a lot of attention to the telecommunications industry
since it is a major component of the economic and social development in a country where service
account for the half of GDP. However competition is very strictly regulated and Internet is still
very young in Morocco. There are more than 21 million mobile phones in service in June 2008
which means a penetration rate above 69%, compared to only 2.7 million fixed telephone lines
representing less than 9% penetration rate. There are 367,000 professional subscribers to fixed
lines in June 2008. Market shares are almost equal at 50% for both Maroc Telecom and Wana
The Internet market represent only 653,00 customers according to the ANRC survey in
June 2008 but the growth rate is above 10% per semester. ADSL customers are 488,000 but
growth was flat in the 2008 second semester. However, according to the CIA World Fact book
there are 7.3 million Internet users in Morocco, 3.5 million in Algeria and 1.7 in Tunisia, so the
Maghreb would be a larger market than Morocco alone for a company able to sell products or
services via Internet, and it’s a consistent entity (low tariffs). Further, there is no much more
possible e-commerce in Northern Africa. For instance, there are only an estimated 30,000
Internet users in Mauritania or 100,000 in Mali.
It seems that there is a real potential of growth in the telecommunications industry for
foreign companies because the Moroccan government wants to transition quickly to a services
Page 11 of 46
economy. Not only all individuals may be willing to access Internet but all companies need it.
Specifically, companies that move production or offices to Morocco to decrease their costs (low
salaries and low taxes compared to US and EU) must be in permanent contact with corporate
offices abroad. These foreign companies have to be connected and may benefit more from
telecommunications technologies than if they did not move offices. Finally, Moroccan
companies should use new Internet processes and many diverse tech products to gain a
competitive advantage on other firms that would settle in Morocco or Northern Africa without
such connection means.
According to The World Factbook as published by the Central Intelligence Agency (CIA),
the population of Morocco as of July 2008 was approximately 34 million. The population
growth rate was at 1.505% with a birth rate of 21.31 births per 1,000 population and a death rate
of 5.49 deaths per 1,000 population. Life expectancy at birth is 71.52 years. The literacy rate,
defined as age 15 and over who can read and write, is at 52.3% of the population; males at 65.7%
and females at 39.6% as of a 2004 census. The average school life expectancy is set at 10
years. One source states that the greatest challenge for Morocco and international investors is
providing effective education and job training. 
The official language of Morocco is Arabic, of which many unique dialects exist; this is
the language spoken in the streets. Also spoken is French, the one taught in schools and the
predominant language of business, government, and diplomacy; Spanish, mostly in the north;
and English, increasingly with tourism. Islam is the dominant religion, specifically the Sunni sect.
Christianity and Judaism are also practiced. Although very religious, Morocco is considered the
Page 12 of 46
least Arabic among the Arab nations.
The population is mostly of Berber origin. Culturally, the nation is a mix of African,
Muslim and European influence, slowly adopting more western values. Women are mostly still
very traditional, with a few modern ones in urban areas. They are strictly regulated in what is
acceptable clothing, appearance, and behavior.
The Islam faith very strongly influences life in Morocco. This affects the way in which
business is transacted as well as the work schedule. Moroccans highly value close working
relationships; in fact, business is done on the basis of relationships, which is important to
remember when considering an entrance strategy. Also strongly influential on business is family.
Closely tied to the discussion of the role of women in the culture, the New Family Code passed
in early 2004 granted more rights to women by asserting that both man and woman have equal
responsibilities within a marriage. 
As previously mentioned, a challenge and somewhat of an informal trade barrier to
bringing business to Morocco is the lack of higher education and training. There are currently
efforts underway to bring the population more in line with global standards by improving career
and economic opportunities, providing technical skills and access to higher education in
engineering, computer science, and related fields, which will be detailed further in subsequent
sections of this essay.
The following are a few websites that are designed to provide insight to Morocco, its
culture, and business opportunities to other nations across the globe. There are also numerous
sites that target the tourism industry but do not provide as much useful, reliable information:
www.Moroccanamericantrade.com This website is helpful for American firms
interested in pursuing business opportunities in Morocco. As it states on its home page, “The
Page 13 of 46
Moroccan American Trade and Investment Center (MATIC) was established under the Royal
Patronage of His Majesty King Mohammad VI as a vehicle to promote the Moroccan-US FTA.
MATIC is an American based non-profit trade association that assists the country of Morocco in
its quest to encourage economic growth and stability through the promotion of its private sector.
Through its Brand Morocco program, MATIC has identified strategies for firms electing to take
advantage of the unique location that Morocco provides as a platform from which new business
initiatives can be launched into markets throughout the region.”
www.marweb.net/morocco/ This site is a directory service with numerous business
listings; it could be classified as an equivalent to the U.S. www.yellowpages.com, where
individuals can look up business listings by category in any given area or region. A unique
feature to this site is its selection of English, Arabic, French, Spanish, or German language.
www.albawaba.com and www.menareport.com These webpages are operated by The
Al Bawaba Group, Middle East Information, Media and Technology. On this site, Al Bawaba
boasts of being “one of the most dynamic companies in the Middle East today, and is making a
real difference in the Arab world. The company brings together unique and unmatched abilities
in information, media and technology, providing its widespread audience and its distinguished
clients with outstanding services.” The first site features news on politics, sports, entertainment,
satire, and so on, as well as the largest web directory in the region. The second site is the leading
business site in the region, “providing business leaders and decision makers with in-depth
coverage of the region’s key industries.”
Page 14 of 46
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.
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
Morocco’s economic problems are many and include a huge foreign debt, a growing
young population, an unemployment rate estimated at 25%, and years of recurring drought which
Page 15 of 46
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
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. 
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
Page 16 of 46
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.” 
The US Morocco Free Trade Agreement - July 15, 2004.
This 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
Purchase or lease and attach terminal or other equipment that interfaces with a public
Provide services to individual or multiple end-users over leased circuits;
Page 17 of 46
Connect owned 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
Finally the USTR Issues Annual Report Listing Barriers to Telecom Trade report for
2008 showed no issues with Morocco living up to the FTA 
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%. 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
Page 18 of 46
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 up to 10,000 MDh. For a foreign company,
if you show adequate justification and documentation you can also deduct expenses incurred
outside of Morocco.
Subsidiaries 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% withholding tax. Interest, royalties and
services/management fees paid to non-residents are subject to a 10% with holding tax, provided
there is no double taxation occurring.
Personal income tax is by anyone who has their habitual residence in Morocco on their
worldwide income on a progressive scale of 13 – 44%. Non habitual residence only pay income
tax on the income that is a direct result of work in Morocco. 
Telecommunications and Morocco
After the 1997 election, the socialist–led government affirmed its commitment to
economic liberalization 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
Page 19 of 46
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 modernization 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 liberalization 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 (FDI) 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 FDI in the late 1990s and early 2000s. With the privatization of IAM in
1998, the possibility of greater foreign involvement in the telecommunications sector has been
Page 20 of 46
greatly increased. FDI in the telecommunications sector amounted to 2.3 billion USD in 1999 or
15% 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). 
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. 
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.
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.
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.
Page 21 of 46
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." 
Global Company Structure
More and more businesses are becoming global, so an organization which was regularly
only addressing the US market is now looking at the globe as a market so they would like
expertise and implementation of IT expertise in marketable countries. Most businesses are
becoming competitive, so one of the ways of meeting competition and differentiating yourself
from the competition is if you have complete control over the information that comes out of your
business. And because of this competitive pressure most businesses are trying to increase
profitability by reducing cost and that’s what Cisco is doing.
Our firm's strategy is the actions that, as managers, we take to attain the goals of the firm,
which are its profitability and its profit growth. Cisco is pursuing an international strategy: it
transfers the products and services derived from the core competencies to Morocco (and other
Page 22 of 46
foreign markets), while undertaking some limited local customization.
We can detail this global strategy according to some key points objectives:
Product/service offering: Our product will be the call center infrastructure that companies
and Call Centre consulting firms will purchase to set up their call centers in Morocco. We
will also include in the package installing and teaching services to use the infrastructure.
Target market and customer benefits: our target market is Moroccan and other
Entrepreneurs looking to set up call centers in Morocco and sell their services, businesses
who run their own call centres, and specialized outsourcing consulting firms that
companies in our target market use to set up their call centres. These customers will
benefit from the expertise of Cisco. Plus, our firm offers good prices and assistance. It
has a strong brand image that guarantees good quality for customers.
Financial aim: as this industry is not well-developed yet in Morocco, and as the country is
quickly developing, we plan to gain a significant market share in a short time. Our
expansion at the beginning may be slow, but once we have gained recognition and we
have communicated effectively about our offer, we may gain customers. Thus, our return
on investment will increase. Cisco has a lot of cash, so it has no restrictions to invest a lot
at the beginning of our entering a new market. This allows a faster positive ROI.
Employees' satisfaction: One motto of Cisco it that you join Cisco not just for a job, we
promise employees here a career. We will offer them a better salary than the average one,
with some advantages for health care, education...
Social contributions: In developing the Moroccan network, Cisco works for the country
transformation. Plus, it will create Public Private Partnerships (PPPs) to make the country
Page 23 of 46
more competitive, to educate people, with a Cisco Academy for example.
As an entry mode, here Cisco will choose "wholly owned subsidiaries" as part of its
strategy of entering this new market. Cisco chooses that option because it believes that the
technology it is building and its management skills are core to the value it is going to retain as a
company. Cisco doesn’t want its knowledge to be shared with other companies that could learn
from it and become competitors.
On the other hand, Cisco would have looked to buy if it had moved into a new area that
would have complemented the things it is doing today - because Cisco would have believed the
acquisition would be critical to its business value. Finally, Cisco would have partnered with
Moroccan companies that would have added incremental value in areas that are not core to
Cisco's primary strategy.
Decisions regarding overall firm strategy, major financial expenditures, financial
objectives, and legal issues will be centralized at Cisco's headquarters in San Jose, CA. However,
operating decisions relative to marketing or human resources management will be decentralized
and managed in Morocco. In fact, while the products are developed at home, our managers in
Morocco will have significant latitude for formulating strategies to market the products in the
For Cisco to properly estimate its planned revenues for this project, the team must first
determine the start up costs and then decide on how to finance the project. This project is a B2B
service with entry into Morocco as a wholly owned subsidiary. The World Bank’s Doing
Page 24 of 46
Business in Morocco 2009 (XX) states that the cost for starting a business, as a percentage of
GNI per capita, is 10.2%. If the GNI (PPP) is approximately USD$4,000, then the estimated
cost of starting a business in Morocco should be about USD$400. However, we will develop our
own estimates to confirm if this is correct.
The first and most important estimation is the human resources calculations. Our plan
projects a starting team of 5 people comprising of 3 expatriates and 2 Moroccans. This will
support our geocentric strategy while taking advantage of local knowledge. Morocco’s laws
governing salaries and wages are generally relaxed except for the minimum wages. However,
we recognize that choosing a local employee will cause challenges as previously discussed:
hence, the use of expatriates and local talent.
The most complicated aspect of the start up costs lay in the infrastructure computations.
The following table provides a rough estimate of the human resource and start up costs.
Table of Estimated Costs
Salaries: Base Salary of people Total
3 Expatriates $100,000 3 $300,000
2 Moroccans $ 4,000 2 $ 8,000
Training $ 10,000 5 $ 50,000
Relocation $ 50,000 3 $150,000
Total Human Resources $508,000
Office Expenses & Start up
Rent $ 12,000 12 $144,000
Page 25 of 46
Equipment $ -
Telecommunications Connection $ 1,000 8.6 $ 8,600
Monthly Telecom $ 1,320 8.6 $ 11,352
Import Equipment $ 1,000 1 $ 1,000
Import Duties (max ad valorem) 10% $ -
Estimated Office Costs $164,952
Therefore, if we operate on a conservative overestimated USD$1 Million dollars of initial
costs, Cisco must choose a financing strategy.
To examine how Cisco can best utilize the different funding options, the team reviewed
Cisco’s latest Financial Reports and the economic data from Morocco. The Economist Intelligent
Unit report on Morocco provides a discount rate of 3.25% and a money market rate of 3.30% in
Morocco. Therefore, for Cisco to seek external financing in Morocco, the cost of capital from
other sources must be greater then 3.25%. With USD$26 Billion in cash and cash equivalents
(2008 Financial Report), Cisco may find it more cost effective to expense this project utilizing
their extensive cash and cash equivalents. These estimates do not account for many different
variables that must be properly vetted when this project is approved.
Another other aspect to consider is the tax regime. Morocco is considered to have a
multiple types of high taxes. On example is the corporate tax rate. The World Bank reports that
the corporate tax rate has been reduced from 35% - 30% in 2008. “Net profits earned by foreign
subsidiaries and establishments of Moroccan companies are not taxable until profits are actually
repatriated and distributed to shareholders” (Info Prod Research). In addition, there is a
minimum corporate tax rate called the “cotisation minimale or CM). It is 0.5% of income and
becomes effective if the corporation is taking advantage of the many tax credits that would
otherwise reduce the corporate tax rate. Other tax rates to be aware of is the Value Added Tax
Page 26 of 46
(VAT) that ranges from 7% - 19% depending upon if the product or service is exempt; a 15% tax
on dividends and capital gains; a 10% withholding tax on royalties, services and interest paid to
“non-residents”; and a 15% withholding tax for dividends paid to “non-resident shareholders”
(Info Prod research). All of these taxes have the effect of increasing the costs of conducting
business in Morocco.
However, from the other economic indicators such as GDP growth and the relative
stability of the exchange rate (see table below), the potential for this concept to be profitable is
enormous. One reason for the profit potential is the low operating costs.
Table: Economist Intelligent Unit Forecast for Morocco
Key indicators 2007 2008 2009 2010 2011 2012
Real GDP growth (%) 2.2 5.3 5.5 5.2 5.0 5.2
Consumer price inflation (av; %) 2.0 5.0 4.7 4.5 4.0 3.8
Budget balance (% of GDP) -1.4 -2.9 -2.4 -2.6 -2.7 -3.0
Current-account balance (% of GDP) -2.5 -3.9 0.3 2.2 2.4 2.6
Exchange rate Dh:US$ (av) 8.19 7.35 7.47 8.19 8.55 8.70
Exchange rate Dh:€ (av) 11.21 11.32 11.35 11.88 11.71 11.48
This business plan is based on Cisco selling the call center services to companies in
France, Spain and other European countries. Therefore, Cisco’s only operating costs are
associated with the 5 person sales team. The costs associated with call centers are paid for by the
Moroccan firms who invoice the European firms that are seeking the service. Cisco’s exchange
rate risk exposure is intertwined with subsidiaries office operations, salaries, revenues and
Page 27 of 46
expenses. As the Cisco office is generally fixed costs, any revenues above the break even point
is profit. Therefore, if revenues are USD$1 Million, then the subsidiary will be making a profit.
Global Management Information System ??
Our staffing needs consist of the sales people to receive and reach out to potential
customers, the technical people to set up the call centers, and the government liaisons to establish
and build relationships in the country required to set up the business line. We envision applying
a geocentric approach to building our office; as Cisco is a global company, we intend to draw
from the various units established across the globe to assist in the initial start-up, but from there
it is the intent to recruit and hire the best candidates for positions, regardless of nationality.
However, we will focus particularly on individuals with multilingual capabilities in order to
accommodate the multiple languages spoken nationally, which is paramount to our business
To our distinct advantage, Cisco established the Networking Academy worldwide, a
program that is run in high schools, colleges, universities, technical and military schools,
community-based organizations and government organizations. It combines the theory and
practice of designing, developing and implementing the networks that underpin businesses and
other organizations in addition to its advanced technology curricula in areas like security,
wireless, IP telephony, equipping candidates with the latest technology skills. Over the past
decade, the Networking Academy program has over 11,000 academies and has taught over two
million students in 166 countries globally.
Page 28 of 46
There is already a presence of the Networking Academy in Morocco which has serviced
students over 7,500 Moroccan students. The first Networking Academy in Morocco started in
Ain Bordja in February 2001, prior to the establishment of any Cisco office in the nation.
Currently there are 39 Networking Academies throughout the Kingdom with many more new
Academies across Morocco to be announced in the very near future. The primary intent of the
program in Morocco is to help reduce the IT skills gap in the Moroccan workforce and the
setting up of new Networking Academies in all public universities throughout the Kingdom,
focusing on the various ways advanced collaborative technologies, backed with Cisco's global
experience, can support efforts in driving Morocco's human capital and skills development
initiatives to the next level, helping national competitiveness and paving the way for new e-
learning initiatives. Notably, 31% of the enrolled students in Morocco Networking Academy
are female. 
Ideally the performance appraisal system put into place would be consistent with that
which Cisco implements in every other site it operates world-wide. No bias would be given to
native versus expatriate personnel. The intent would be to recognize outstanding performance in
sales and customer service through a system of bonuses as well as promotion and increased
responsibility. This would be measured by standardized guidelines, whereby salespeople would
be made aware of the organizational goals and objectives and work towards attainment of those
goals for the overall success of the business unit as well as the nation’s economy by stimulating
the growth of such a beneficial and lucrative industry. All indications in our research lead us to
believe that Morocco does permit such programs, as reference materials point to less restrictive,
more modernized labor codes. As GDP continues to grow, it is clear that Moroccans are being
more industrious and successful, and taking home larger paychecks.
Page 29 of 46
Due to the intent to employ a geocentric strategy, it is critical that much thought and
preparation be put into the compensation plan for management and employees in order to attract
and retain the best talent. Much of our intent, in addition to running a profitable business, is to
foster growth, success, and stability to the Moroccan economy, so ideally the compensation of
each employee will in line with national standards, yet perhaps slightly above the average. As
previously alluded with regards to performance appraisal, merit increases will recognize those
individuals who obtain great success in sales as well as technological developments.
After asking someone who works with businesses abroad main concerns appear to be the
value of the currency and its stability against the dollar (which is tied to inflation), the terrorist
risk since we are analyzing opportunities in a Muslim country and finally the possible outcomes
that could follow the death of the King or a putsch.
As we have seen before Morocco has a stable economy compared to most developing
nations, all major macroeconomic indicators have been pretty stable for the past 15 years and
they are improving. The Kingdom is really open to the world, member of WTO and bilateral
agreements with the European Union and the United States and major reforms have permitted a
tremendous growth of foreign direct investments inflows in the past years. Besides, the National
Initiative for Human Development launched by King Mohamed VI in 2005 has set ambitious
goals for the infrastructures improvement, in particular telecommunications, and it seems that
those are realistic goals because a lot is achieved every year. As for the currency, the dirham has
proved to be to be quite volatile versus the US dollar; however we must remember that it is
Page 30 of 46
pegged to a basket of currencies, thus there is not much risk of transaction and translation costs
for a global company used to work on several markets. There is actually more conversation risk
with the euro than with the dirham for a US based company.
One risk that we could think about is that the government will give up with the National
Initiative or other reforms because it would be too expensive for its budget in times of global
crisis like we face today. However it could only be a slight delay because it is certain that
improvements in infrastructure (and of course telecommunications) will help foster the economic
development of the country. Moreover the King has set these goals not only for the growth of
GDP but also to decrease inequalities among citizens across the country; we guess that the
government must fulfill its planned duties.
The fact that Islam is the official religion in Morocco has to be in our minds. There is no
particular risk for an American company or its US expatriates since the government is severely
hostile to Islamism organizations and most people practice a moderate Islam. However that
means that they respect the Ramadan and the 5 daily prayers, national holidays that are different
from the US and women may wear scarves. Moreover families are usually larger since a man can
marry 4 wives and thus many children.
The current King Mohamed VI is part of the Alaouit dynasty that has governed Morocco
since 1664. During the early 20th century Morocco became part of the French colonies but the
dynasty was still present and Mohamed V fought for the independence of his country that
occurred in 1956. Then he lead the democratization of the Kingdom and had a Constitution
adopted in 1961. Then Hassan II and Mohamed VI were sponsors of individual liberties and
widened the rights of people who now elect their local representatives and a significant part of
Page 31 of 46
the Parliament members. The King has a strong authority on the government and the Moroccan
people but is recognized to be modern and careful. There is no reason to think that he could be
the victim of a military putsch and there are no parties in the opposition that could lead very
different policies since the King nominates most representatives and all ministers.
The King Mohamed VI promotes an open economy and has developed strong
relationships with France, Spain, the US but also Arabic and African countries. There are free
trade agreements with the EU and the US and an attractive judicial framework. We can list the
following reforms as great improvements for national and foreign investors: the Casablanca
Stock Market in 1993, the Commercial law in 1995, the right of industrial, literary, and artistic
property in 1997, the establishment of commercial tribunals and the reform of labour regulations
in 2004. There are incentives for foreign companies to operate in the country and thus no risk to
consider about hidden tariffs. Fiscal costs related to the acquisition of land, equipment and
materials for a new investment have decreased, as well as incomes and benefits tax rates and
there is a special tax system for companies favouring regional development. The only risk that
we can evocate is the fact that it is mandatory to get an institutional support from the
Interdepartmental committee. This means that our investment must be discussed with local
authorities before it can actually be set up.
As far as corruption is concerned there is space for progress! Morocco was ranked 72nd
among 179 countries ranked by Transparency International in 2007 (up from 79th in 2006) and
this NGO has opened an office in Casablanca at the beginning of the year with the support of the
Netherlands embassy. They plan to work with government officials and private companies to
tackle corruption and assist victims. There is a risk to consider and this is why it is crucial for
Page 32 of 46
Cisco to build strong relationships with the Moroccan government and be able to stay above
Risk management (or business risk & recommendations)
As we discussed before Cisco has a lot of cash and thus does not fear short term financial
risks and our evaluation of potential profits on this growing telecommunications market does not
conduce us to recommend any specific kind of partnership or insurance (except insurance of
assets and people). The actual insurance that we need is sponsorship from the government and
the certainty that it will continue to support the telecommunications industry and Cisco activities.
To ensure this key relationship we really rely on our team auditing the sector for the benefit of
the Moroccan government. We strongly expect that this audit of the current situation will lead to
strategic decisions taken with ambitious goals, and we also expect that the government will then
support our operations towards call-centers that would benefit the Moroccan economy as a whole.
Furthermore we should think about diversifying our product line as soon as possible.
Entering the Moroccan market by selling call-center infrastructure and relating services is a
smart idea but we are already thinking about other product lines that could target educational
systems (public and private high schools, colleges and graduate schools) or more generally
Moroccan administrations. However we prefer enter with only one product line in order to get to
know the market practically and be in Morocco when monitoring future trends in our sector.
We said we would adopt a geocentric approach when employing our teams in the
Kingdom and we really want to hire as many Moroccans as possible. We are aware of the
weaknesses within the educational system and it may be hard to find people with the technical
skills we need but we definitely want an international team and are ready to train most
Page 33 of 46
employees. At first we will send US and European managers and hire the best Moroccan (or
African) students from Cisco Networking Academy.
Many websites discuss the political risk and urge US corporations to insure against it.
You can get insurance with private insurers such as AIG or Lloyds but also with a US Agency
called Overseas Private Investment Corporation (OPIC). They do a really great job but the
insurance can cost as much as 1.75$ per 100$ covered. In our case we do not think that it is
worthy to be insured against expropriation, inconvertibility or political violence. We need to be
covered against usual risks (disaster, fire, strike, non-payment of a client) but we trust the
Moroccan government to guarantee our economic operations.
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.
Sound quality: How good does offshore call sound, would an average customer know
they were calling a foreign country.
Page 34 of 46
Up time: How often do the phone lines go down, either due to product issues or
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.
o 20 to 40 percent cheaper than in France 
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
Allows our customers to receive cost savings, while meeting the needs of their customers
Page 35 of 46
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
Page 36 of 46
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 .
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.
Product Life Cycle
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
Stage 2 – Growth
As the product begins to grow, we believe technology and scalability of the infrastructure
may continue to be an issue.
Page 37 of 46
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
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.
Our target market consists of France, Spain, Canada, Africa, the US and the Middle East.
Socialist country with negative feelings about outsourcing of French jobs
Nationalistic with negative feelings about outsourcing from a customer service
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
Page 38 of 46
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.
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
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. 
Page 39 of 46
General Product Banner & Branding to be presented on the website:
Globalization can be good for
you and your customers
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?
Page 40 of 46
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.
Page 41 of 46
Let Cisco use their networking
expertise to globalize your business
Quality Cisco Product
+ Talented People
+ French and Spanish Speaking
+ More Staff & Service
+ Less Money
DISTRIBUTION & PROMOTION
The product is more services than goods-oriented; therefore, a traditional distribution
strategy does not apply. However, it is crucial to thoroughly analyze the elements of successful
distribution channel and be acutely familiar with the business practices within the host nation.
Particularly applicable to this product will be familiarity with the existence and robustness of the
communication lines in country. The primary distribution mode will be business-to-business
(B2B) sales, to negotiate contracts with various business entities worldwide to establish a call
center located in Morocco to do business across the globe. This will be facilitated through use of
Page 42 of 46
specialized consulting firms, which entities within our target market utilize to establish their call
centers and other various outsourced business functions.
When entering Morocco, Cisco will implement a promotional strategy with several
Informing on the entry of Cisco in Morocco
Increasing the sales by creating product awareness
Create a new product acceptance. In fact, this kind of products and services offering is
not developed in Morocco. Cisco has to inform potential customers on the benefits they
could get from Cisco.
Create a brand equity in this new market thanks to Cisco CSR, Cisco Academy, and the
initiative of Cisco helping women getting jobs in IT in Africa and Middle East
Position its products and services: Who is Cisco, what does it have to offer, in particular
in comparison with its few and weak competitors,
And create a corporate image for Cisco in Morocco.
These promotional decisions will be influenced by the Moroccan culture. In fact, Cisco
will have to be careful in its ad campaign and take into account some elements such as the
religion or the place of women in the Moroccan society. According to some opinion polls,
Moroccan people often feel that women are disrespectfully used in some marketing campaigns.
Plus, they feel that advertisers underestimate their level of education, which is also disrespectful.
It is also important to take into account the duality of the Moroccan culture in taking promotional
decisions: some ads are in Arabic, some others on French. It may be a better idea to use both
languages in the promotional campaign to reach more customers and to show we are interested in
Page 43 of 46
both groups. People from upper social categories mostly read newspapers in French.
Concerning the Moroccan media environment, Morocco ranks 106th out of the 167
countries assessed for press freedom, in the 2007 ranking of Doctors without Borders (Médecins
sans Frontières) and Moroccans have access to approximately 2,000 domestic and foreign
publications. The government owns many key media outlets, including Moroccan radio and
television. The development of the Internet has brought a new dimension to news reporting in
Morocco. Many of the major dailies and weeklies can now be accessed on their own Web sites.
Although journalists continue to practice self-censorship, opposition dailies have begun
to explore social and political issues that have traditionally been considered out of bounds. There
is a substantial and close military relationship with the US, and the media continue to exercise
great caution when discussing government corruption, human rights and Morocco’s policy
toward Western Sahara. The Internet access is quite free, but sometimes some websites are
censored without any explanation.
This leaves a lot of different channel to use for communicating with potential customers
for Cisco. There are a lot of business publications, including foreign newspapers, in Arabic,
French or English. They could be the first step to reach quickly and effectively business
entrepreneurs in Morocco at a low cost.
The promotional strategy of Cisco's entry in Morocco requires more of a "pull"
promotion. In fact, it is the customer that "pulls" the product or service through the delivery
channel, contrary to the "push" promotion when the consumer does not request the product to be
developed. Here Cisco responds to a demand from the customers. It can implement this pull
promotion thanks to coupons for example, offering training or reductions. Premiums can also be
offered, they can be additional merchandise given to the firm for making a purchase.
Page 44 of 46
Cisco's promotional strategy in Morocco will also rely on both above the line and below
the line promotion. In fact, it will reach easily customers thanks to media (TV, radio, newspapers,
internet, mobile phones) as they are quite free in Morocco. Cisco will hire a Moroccan
advertising agency to create the promotional ads. Thus, it is easier to avoid cultural
misunderstandings that could jeopardize the entry of Cisco in Morocco. As it has been said
before, Cisco will pay special attention to legal and cultural factors when creating the ads. Plus,
Cisco has to emphasize its social actions such as the Cisco Academy and its initiative to help
women getting a job in IT. Media are a good means to broadcast this kind of information.
Cisco will also use all other means of promotion such as sponsorships, product placement,
merchandising, direct mail, public relations... For example, it could hand out Cisco pens or other
promotional objects to engineering and business students in Moroccan schools or to business
entrepreneur during trade shows. It may also use the data base of its partners such as IBM, in
Morocco, to send personal emails to potential customers. Cisco can be used as a sponsorship for
events with a good image such as sports or cultural events.
organizational financial results
Page 45 of 46
Page 46 of 46