Brand Watch: Qatar 2022 Bid Wins Big

Editor’s Note: With this piece, we are introducing a monthly column by Abdur-Rahman Syed of Imprint Advisors.  Each month, he will inshaAllah review a brand launch or rebranding initiative by a Muslim corporate, sovereign, or non-profit brand.

On 2 December 2010, Qatar shocked the world (including Qataris themselves) by winning the bid to host the FIFA World Cup in 2022. For a tiny Gulf state with a reputation for bold initiatives, this is the boldest one yet.

The winning bid has faced more than its fair share of controversy.  Popular incredulity at Qatar’s insignificance as a football playing nation has evolved into charges of corruption at FIFA and a variety of doubts about Qatar’s ability to meet traditional expectations of World Cup season: comfortable temperatures, high alcohol consumption and minimal dress codes.

What most of this criticism misses is that world sporting bids are about the future.  Since the 1990s, FIFA has bet on newer, younger markets (United States 1994, Korea/Japan 2002, South Africa 2010, Russia 2018 and Qatar 2022) more often than on established football powerhouses (France 1998, Germany 2006, Brazil 2014).  This is in fact part of a much wider shift in world politics, economics and culture: from the global North to the global South.  By acknowledging that Doha will be a significant economic and cultural actor in another eleven years time, FIFA is staking a claim for international football in that shift.

Brand positioning

For its part, the Qatar 2022 Bid Committee’s efforts have been nothing short of remarkable.  Consider it a master class in brand positioning: turn your weaknesses into strengths.  The absence of a football pedigree spells a new market.  The lack of an existing sports infrastructure means that the 2022 architects can start from a new slate, building the stadiums of the future: culturally relevant, modular and powered by green technologies.  The tiny size of the host nation means a “compact” World Cup, so that fans don’t have to choose between matches in different cities.

Indeed, a string of high-profile (and presumably highly-paid) stars from the football universe have helped to make the case that the Arab world is the next logical step for international football. Zinedine Zidane’s TV spot is particularly on point: reflecting on the challenges of making it as a French Algerian footballer, he concludes that “football belongs to everyone.”

Logo design

The Qatar 2022 Bid’s brand launch in May 2009 showcased the work of the international creative agency FutureBrand (which cites the Sydney Olympics, Dubai World Championship and Asian Cup Qatar 2011 among its work).  The bid logo applies classical Islamic geometric motifs (in the local colors of sand, sea and sky) to the world of football.  In FutureBrand’s own words:

“The design work signals Qatar’s readiness to welcome the world. The logo features thirty-two pentagons, which represent the qualifying nations spiraling toward a football at the center.”

Setting the Qatar 2022 logo in the visual context of other recent FIFA World Cup and World Cup bid logos highlights both its strengths and weaknesses.  It is arguably the strongest concept in the set: the representations of international football and local culture come together in a true synthesis. But the execution is weak: while the pattern of pentagons is pretty enough, the colors and typography lack the youthfulness and vitality necessary for a successful sports brand.  To the football enthusiast, Qatar just doesn’t look very exciting.

Logo design in context: FIFA World Cup logos for Korea Japan 2002, Germany 2006, South Africa 2010, Brasil 2014, Russia 2018 (bid) and Qatar 2022 (bid)

Identity applications

Where the FutureBrand logo falls short, Lambie-Nairn’s supporting applications deliver.  The UK-based creative agency was appointed Qatar 2022 Bid’s Official Supplier and Official Brand Agency in October this year, presumably taking over from FutureBrand. Lambie-Nairn softens and scatters FutureBrand’s pentagons across compelling shots of footballers in action. Lambie-Nairn’s videos, posters and other applications manage to extend FutureBrand’s work in a younger and edgier direction, with urban typography and richer color tones.  It also has something to offer to both international and local constituencies: inspirational words like shaghaf (“enthusiasm”, depicted below) and fakhr (“pride”, depicted elsewhere) are discreetly incorporated into the background of a subset of the visuals.

Identity applications

Scores

To provide a point of comparison with future brand reviews, let’s score Qatar 2022’s brand positioning, logo design and identity applications on a rising scale from 1.0 to 5.0:

Recommendations

Let me close with a few recommendations for making the most of this opportunity.

Update the logo. As the most visible element of a brand, a logo can be a badge of honor or a lightning rod for criticism. Although I wouldn’t be surprised to see the current logo replaced altogether, a bolder execution of the same concept would strengthen its appeal among young spectators.  In the age of social media, the potential dividends are significant: after all, who could be a more passionate advocate than a football fan?

Keep the focus on the region. In a competitive neighborhood like the GCC, Qatar is unlikely to share the glory of hosting the World Cup matches. Neighboring countries can nevertheless play a key supporting role.  A hotel stay in Dubai, for example, not only reduces infrastructure but enhances the appeal of a World Cup vacation. Moreover, building a sense of ownership among Arabs will not only draw the football fans most likely to feel at home in Qatar, but also deliver on one of the Qatar bid’s implicit promises: to grow the market for football among Arab youth.

Discover the essence of Qatar’s country brand. Not unlike other GCC countries, Qatar has been making big splashes in multiple directions. This is an opportunity to focus the country brand, aligning its various initiatives on the world stage and distilling Qatar’s particular appeal and character (beyond “small state, big spender”).  How the World Cup host decides to balance visitor expectations with local values will also be a moment of truth for Qatar, sharing its own particular formula for a cosmopolitan Muslim society.

Indeed, what Qatar is about to embark on is no less than an exercise in national self-definition.  Fortunately, the 2022 World Cup gives it a generous timeline and plenty of motivation to get it right.

About the Author:

Abdur-Rahman Syed

Abdur-Rahman Syed has helped develop and manage brands in both in-house and consulting roles since 2001.  He co-heads Imprint Advisors, a niche brand and communication strategy firm focusing on Muslim brands.

You can reach Abdur-Rahman at abd@imprintadvisors.com to suggest a brand for a future review or for advice about your own brand.  You can also follow Imprint Advisors on Twitter (@imprintadvisors).

BRAND

Football Industry Hub Sialkot Struggles Forward

A gold colored football statue stands proudly at the Pakistani city Sialkot’s main traffic circle. For a nation dazed over cricket and one that is reeling from social and political distress, this statue illustrates Sialkot’s distinctive strength as a global football manufacturing hub, providing premium hand-stitched footballs commissioned by the best brands of this sport.

Image source: Forward Sports and FIFA (http://footballs.fifa.com)

Even when Addidas introduced the China manufactured Jabulani football at the World Cup in South Africa, most of the 45 million footballs sold worldwide were sourced from this enterprising industrial city of Pakistan. According to Pakistan Sports Manufacturers and Exporters Association, Sialkot-based football ball manufacturers grabbed around 30% cent of the total orders globally for the 2010 FIFA World Cup.  This however was a set-back, as the Sialkot had bagged 70-80% of the orders during the 1998 and 2002 World tournaments, and the 2006 FIFA World Cup footballs were hand-stitched in Sialkot.

The Jabulani football in South Africa marked the arrival of machine-made footballs. Struggling to compete with technology (from China in particular) – the Sialkot-based football manufacturers are now working to upgrade their technology to regain their own world cup within the football manufacturing industry.

Sialkot and Football

 

Though football is well-appreciated by Pakistanis, the nation itself is not a football power, ranking 165th out of 202 countries in the world. But Sialkot’s reputation goes back a long way as a provider of the world’s best hand-stitched footballs.

 

Pakistan exports 30 million balls per annum, accounting for 20% of the city’s USD 1.25 billion exports. Nike, the official supplier to the English Premier League and Danish Select Sports A/S, supplier to the Danish National league, procure their footballs from Sialkot. Sialkot has also been a forerunner in supplying balls to Adidas, the official provider of match balls to the FIFA tournament.

However, lack of focus on Pakistan’s enterprise level industries has eroded the influx of export orders. In 2006, the industry took a significant blow as new players like China, India and Thailand entered the international market, offering better technology and cheaper solutions. Balls for the FIFA 2006 World Cup were machine-made in Thailand for the first time. Past year, “Jabulani,” the official 2010 FIFA World Cup football, came from China, primarily because they had the available infrastructure.

Adidas liaised with Sialkot-based Forward Sports to manufacture replica World Cup balls; 5.5 million of which were exported this year. Adidas also shared its proprietary technology with Forward Sports to produce thermal-bonded balls for the 2010 Champions League; one of the three football manufacturers in the world to hold this technology. “The feedback was very positive and we have been commissioned to produce balls for the next Champions League in 2011. We are now targeting London Olympics 2012,” said Chief Executive Masood Akhtar Khwaja, Forward Sports Private Limited.

Running 80 stitching centers, the company churns out 25,000 balls every day, of which 2,000 are machine-made (thermal bonding) and the rest hand-stitched. According to Khwaja, the company has the infrastructure and technology to compete with Chinese manufacturers, which was lacking in the last FIFA World Cup.

The promotional balls market, estimated to be around 40 million, is currently being dominated by China. Local manufacturers will need to invest in machine-stitch technology to regain their lost share. Forward Sports aspires to win back both the tournament and promotional market for 2014. “We have only one way to go and that’s forward,” says Khwaja.

Other local manufacturers share similar opinions. Sialkot-based TajMahal Sports Company foresees prosperity for the Pakistani football industry but is concerned with the ongoing challenges such as slow technological advancement, shortage of skilled labor and soaring prices of raw materials. Running 35 stitching centers in Sialkot, the company exported nearly 2.5 million balls in 2010, sliding down from 5 million balls in 2006. Recently, the company invested in machine-stitch technology and has started producing a small quantity of machine-stitched balls, 5% of its total output.

Taj Mahal Company’s Football at Sao Palo 1938

Managing Director Khalid Mehmood, of TajMahal relayed that if these challenges could be resolved, Pakistan could produce premium quality balls relatively cheaper.

What’s Lacking?

Pakistan’s decline in export figures was seen in 2009, when export earnings was recorded at USD 164 million, as compared to the earnings of USD 221 million per annum between 2005 and 2008. Most prominent reasons for this 26% drop were:

  • Increased costs of production and delays in delivery due to frequent and prolonged power shortages. This tarnished the reputation of local suppliers. TajMahal Sports cited a 5% increase in costs due to the use of electrical generators.
  • Machine-made and machine-stitched production being superior to hand-stitched footballs; a machine can produce 36 balls a day whereas a worker can hand stitch an average of five to seven balls per day.
  • Terrorist threats and sectarian violence deterring foreign delegate visits to the operational centers.
  • Lack of recognition for Sialkot manufacturing of high quality footballs; local manufacturers catering to global brands have not been given the recognition they truly deserve. “If we consider the 4P’s of Marketing; Product, Price, Place and Promotion, personally, I believe that [Sialkot’s] football industry focused on the first three but left out promotion. People recognize brands like AdidasNike and Reebok because these market giants advertise and keep reminding the masses about what they do. Unfortunately, Pakistan was not able to build a brand,” says Aleem Sheikh, Head of Research and Carat Operations, Orient Media. If Pakistan would have been able to build a brand of international stature, the scenario would be different today.
  • Due to low wages and fluctuating demands, many workers have shifted to different industries.
  • The stigma of child labor still plagues the industry even though Sialkot’s football-stitching industry is now manned by International Labour Organization- International Programme on the Elimination of Child Labour (ILO-IPEC) and the Independent Monitoring Association of Child Labor (IMAC), covering approximately 95% of exportable football production. It is said that child labor may be present in counterfeit products, but even that opinion is not authenticated.

What Can Be Done?

The business community within the football industry is optimistic and forthcoming, despite the prevailing circumstances. The industry looks forward to:

  • Investment in new technology. Leading brands prefer machine-stitched balls because of better quality, increased consistency and the absence of the stigma of child labor.
  • Streamlining the casual workforce hired by manufacturers. Workers need to be offered minimum wage, over-time, social security, old age and medical facilities. Gender discrimination needs to be eliminated with equal male and female compensation.
  • Government level incentives that would elevate the structure of local enterprise-level industries. Trade related packages should be introduced to stop the diversion of export orders and also bridge the trade/fiscal deficit. Slashing of import duties, revival of export debate, infrastructural improvements, financial assistance and other forms of support would go a long way.
  • Marketing steps and strategies need to be deployed on an industry and nation-wide basis to promote Pakistan as a premier football provider.

What Does the Future Behold?

The future of the football industry in Pakistan remains bright. Pakistan has the best craftsmanship, raw materials, tradition, skill, expertise, business linkages and entrepreneurship to flourish in the market.  The Small and Medium Enterprise Development Authority is in the process of establishing a Sports Industries Development Centre that would help the local manufacturers sought modern technology and infrastructure.

Pakistan has a fair chance to harness its current potential; there is sufficient demand for machine-made, machine-stitch and hand-stitched balls in the global football fraternity. If the local industry manages to leverage on its strengths and focus on pivotal areas, it will gain the success and status it truly deserves.

Key Learning Points:

  • Pakistan has a rich history as a manufacturer of quality hand-stitched balls. Pakistani footballs have been commissioned by the best brands worldwide but are now facing stiff competition from the likes of China that have adopted new technological approaches to manufacturing.
  • Premium quality hand-stitched and machine-made footballs are used in actual tournaments, clubs and other league matches whereas hand-stitched are needed for practice purposes too. Machine stitched balls are relatively cheaper than machine-made and are widely demanded for promotional purposes.
  • The demand for Pakistani-manufactured balls therefore still exists (whether hand-stitched or machine-stitched), and Pakistan is taking steps to increase its competitiveness in the industry alongside streamlining their own manufacturing practices.

Business Innovation Center (BIC) showcases Indonesia’s Top 100 Innovations

Business innovation has had a lot of buzz created in the last few years. The difficulty with innovation is that we all have an intuitive understanding of the topic and we aspire to be innovative, but struggle to make it real and tangible. This challenge is further complicated when we see “others,” – companies, communities and countries – innovate and yet we are not able to repeat those successes. This is especially true for emerging countries as they try to keep pace with innovation that is coming from the developed world.

To address the innovation challenge, Indonesia, the world’s fourth largest country by population, has come up with a bold and innovative (what else!) approach. In 2008 the Ministry of Research and Technology established a Business Innovation Center (BIC) with the vision to “become the leading Business-Innovation intermediary, in order to promote Indonesia’s economic and business competitiveness.”

Top 100 Innovations Report

A practical and inspiring output of this initiative has been to showcase Indonesia’s leading indigenous business innovations that already exist. An impressive list of Top 100 innovations was compiled covering relevant sectors of food, energy, health & medicine, ICT, defence, transportation and others.

Indeed, the report is a source of inspiration and shows how high impact business innovation is within the grasp of every entrepreneur from any developing country.

A selection of the innovations highlighted in the report are as follows:

Selection of Top 100 Innovations from Indonesia

Sector Innovations
Food
  • Chitosan – A natural preservative using byproducts from invertebrate sea creatures to substitute formalin in the salt dried fish industry.
  • All-natural coconut oil – A new way using yeast used to ferment tempeh that can separate the coconut milk without using  chemical heating or additives.
New Energy
  • 3-in-1 Agricultural dryer – A pyramid shaped dryer that uses 3 sources of energy: the electricity and thermal energy from solar, wind, and Biomass.
  • Sea pendulum energy generator – Power generator based on a pendulum swinging from the sea waves to generate up to 500 KW of electricity, utilizing Indonesia’s natural sea energy.
Transport
  • Shallow water catamaran – A catamaran (two-hull) boat that can carry heavier loads but does not generate excessive wake using an innovative asymmetrical hull design.
  • New indigenous composite material brake pads – These new brake pads can replace the current cast iron pads, are lighter, cheaper and last longer.
Info/ Comm. Tech (ICT)
  • Batik design using computerized fractal – Using fractal, a branch in math and geometry, to produce fresh, contemporary colorful shapes and design patterns.
  • Remote digital meter reader – Incorporating the radio technology, electric meter reading can be done remotely, in addition to cutting and reestablishing the line.
Defence
  • Hazardous cable cutter robot – A robot that can be used dangerous situations such as cutting cable to defuse a bomb or cutting high voltage electric cable.
Health & Medicine
  • Spirulina grown in latex waste – Spirulina also known as “magic food can be grown in latex effluent in a cost efficient and environment friendly manner.
  • Pure Water from Sea Water – A sea water distillation system, fully powered by solar energy that produces table salt as its by products.
Others
  • Earthquake resistant foundation – A spider web construction is able to withstand earthquakes, is cheaper and faster to make and can support a 4 story building.
  • Vacuum cleaner machine freezer – Machine consists of the freezing room, vacuum pump and cold trap system and is very effective for products with high water content.
Source: BIC Top 100 Innovation

These top 100 innovations were selected from a total of 623 proposals spanning multiple segments. The selection was conducted by a jury of 14 members comprising a cross-section of industry, academia and government that used 8 criteria for selecting the finalists. The criteria were deliberately chosen to emphasize the business aspects of innovations.

Readers are encouraged to browse through the Top 100 Innovation report. As of press time, the report is partly in English and partly in Indonesian – later the website will support English as well.

This report is designed to be read by a broad population – this is not a detailed patent description or an academic write-up of the innovation. The report uses simple language, clear visuals and elaborates color-coding to make it an easy read for the average person. For each selection, the report articulates what is the innovation and why is it useful. This is important as it helps bring down the innovation from the ivory tower to the common masses.

Key goals of the Business Innovation Center (BIC)

Speaking to DinarStandard, Kristanto Santosa, Executive Director of the Center, highlighted that the key drivers fro establishing the Center were the opening up of the Indonesian economy and the imperative to make it globally competitive. In prior years, local companies had protection in terms of tariffs and other barriers, and relied extensively on partnering with foreign firms or licensing their technologies.

A broader goal of the center is to promote innovation so “in 10 years, innovation activities in Indonesia will be superior (benchmark) to other countries in ASEAN bloc.” This is a key point for other countries that embark on a similar initiative. The conscious tracking of innovation activities leads to better utilization of resources and allow the Center leadership to change track if results are below expectations.

Triple helix of business, academia and government to support innovation

A key challenge for facilitating innovation across a nation is to ensure that all constituents are involved in the activity. The BIC overcame this by bringing together Academia, Business and Government to form the integral core of the institution – something the centre calls “the triple helix.”

This combination ensures that many innovations do not remain in their traditional silos – such as developments that do not cross a university’s boundary due to a lack of business commercialization skills. Mr. Santosa emphasizes the importance of effective communication as the “language used by R&D is very different from the one used by business teams. The business focuses on development time, cost and returns, whereas R&D focuses on features and functionality.”

Another advantage of having a consortium of academia, business and government is that it helps in open innovation – innovation that requires multiple entities to partner together. This is especially important for major innovation breakthroughs that require significant expertise and capital that may not available to a single company or a university. Thus, other countries wishing to start a similar institution would do well to emulate the BIC model of ensuring that government, industry and academia are involved from the very beginning.

Thou shalt innovate! – does not work;Instead inspire innovationInnovation is not a top-down activity, that is cannot be mandated on an organization. Ideally, it should flow in all directions – from junior employees to senior executives, from human resources to R&D department. So given that innovation cannot be forced, however, it can surely be facilitated. This is especially important for emerging countries that do not have the benefit of say a Silicon Valley – to provide role models, mentors, venture capital, etc. In these cases a formal institution to help broaden the thinking, generate aspiration and provide support goes a long way in helping innovation.

An effort like the Top 100 Innovations report publication helps inspire the broader community about innovation. This happens in multiple ways. First, it helps de-mystify innovation. Innovation is no longer perceived as some magical activity that is being performed by the gifted people. Seeing common people come up with new ideas helps make it real! Second, it breaks the myth that innovation requires huge investments or some special talents. Third, this type of activity creates healthy competition amongst the participants for future innovation competitions. Fourth, awareness of innovators will help create role models, mentors and communities of interest to spur future innovators. Finally, the awareness of innovations helps connect the innovators with other interested parties that may help commercialize them.

As institutions try to promote innovation, they oftentimes fall into a trap of focusing on one or two areas while neglecting other promising areas. ICT (Internet and Communication Technologies), Bio-tech and Renewable Energy are the favorite focus areas for many innovation groups, VC firms and startups. The BIC did a good job of ensuring that it covered a broad spectrum of innovation areas, based on the National Research Mission of Indonesia. Thus multiple industries that are important at a national level were included such as food, transport, and others, thus identifying a wide variety of innovation topics.

Supporting hands-on day-to-day innovation

The BIC supports a lot of hands-on work to realize innovations. This assistance is crucial, as it translates the theory into practice. A lot of promising ideas across the globe go waste, as they were not matured to their logical conclusion. This is a bigger problem in emerging countries where innovators have difficulty getting answers and support for the very basic questions – like how to patent an idea? How to develop a business plan? How to market or commercialize a product? Etc.

The BIC provides a range of service from access to facilities to conduct research, to leading workshops on specialized topics like patenting, to conducting customized consulting for companies, universities and government bodies. Apart from tangible knowledge sharing, BIC also facilitates the soft side of innovation, like networking amongst innovators, connecting innovators with appropriate businesses or industry groups, etc.

…a key challenge BIC faces, is “the lack of a system to invest in risk-bearing investments,” says Mr. Santosa

Road ahead for BIC

The BIC is a young institution, with impressive results and ambitious goals. However, some of the key challenges it faces, is “the lack of a system to invest in risk-bearing investments,” says Mr. Santosa. From a government perspective, its easy to invest in bridges, roads and defense, but difficult to invest in risk-laden innovations. In addition, there is an absence of a venture capital community, angel investors and of trading markets like the NASDAQ. There is potential for a Shariah based investment approach that equitably shares the risks and benefits across the innovators and investors. Finally, the businesses are used to focusing on the operations and market development instead of R&D.

Mr. Santosa is optimistic about the road ahead for BIC. The next report has a foreward written by the President of Indonesia, as a sign that the institution is gaining traction. The center is evolving rapidly and wants to be an open platform for innovation – they are open to collaboration with other parties and countries. In conclusion – they use the analogy of entropy to encourage innovation – that is a positive movement on innovation by one molecule increases the innovation energy for the entire system!

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Key Learnings:

  • When setting up an institution to promote innovation, make sure that it has cross-functional representation as well as broad industry coverage. In the case of BIC – the combination of academia, business and government helps ensure an integrated approach towards innovation and ensures that promising projects do not languish within the R&D silo.
  • Facilitate an environment, or culture for innovation. The Top 100 innovation report, showcases recent successes, increases confidence in the ability to innovate, instills a sense of pride for the accomplishments and creates a healthy competitive atmosphere for further innovation
  • Provide hands-on help, where needed. Apart from providing conceptual training and motivation, the institution has to have a roll-up-your-sleeves attitude to help innovation. This includes activities like consulting support, patent workshops, business case development, networking forum, etc.
About the Author: Meraj Mohammad is a management consultant focusing in the area of strategy and innovation. He serves as an Independent Consultant of DS Consulting – growth strategy services). Meraj has over 10 years of experience, most recently, working with PRTM Management Consulting, where he led a variety of engagements on innovation management.Meraj has B.Tech from IIT, Kanpur, India; a MS from Virginia Tech and is pursing an Executive MBA at Columbia University. He may be contacted for comments at Merajm@Gmail.com.
Author: Mr. Meraj Mohammad

 

Pakistan’s Defense Private Sector Emerges with Indigenous UAV Technology

Back in 1970, the American Army Gen. William Westmoreland is reported to have said: “On the battlefield of the future, enemy forces will be located, tracked and targeted almost instantaneously through the use of data links, computer-assisted intelligence and automated fire control. … I am confident the American people expect this country to take full advantage of its technology-to welcome and applaud the developments that will replace wherever possible the man with the machine.” It seems that this vision from the 1970s is being realized today. One manifestation of it is the development and deployment of unmanned aerial vehicles by many nations, including Pakistan.

Image source: www.idaerospace.com

The growing reliance on armed drones (aka Predators) by Americans in Afghanistan and Pakistan’s FATA region to target militants has been making headlines with increasing casualties.

This technology of Unmanned Aerial Vehicles (UAV) or drones designed and manufactured in Pakistan has also been making news since the IDEAS (International Defense Exhibition and Seminar) 2008 event, a 5-day biennial arms show held November last year in Karachi, Pakistan. Among the largest foreign pavilions at the exhibition, Turkey had 28 companies and United States had 22. Other major exhibitors came from China, France, Germany, Italy, Russia, South Korea, South Africa, the Ukraine and the United Kingdom. Among other products, Pakistani companies showed off JF-17 fighter plane built by Pakistan Aeronautical Complex in partnership with China’s Chengdu Aircraft, Al-Khalid main battle tank, and a variety of Unmanned Aerial Vehicles (UAVs) designed, developed and built in Pakistan.

While offering employment to thousands, and strengthening Pakistan’s defense, the growing indigenous sophistication of many of the private sector companies is also becoming an attractive investment opportunity.

Integrated Dynamics

One such Company is Integrated Dynamics, a privately held Pakistani company that drew attention at the IDEAS 2008 expo. It is a developer and manufacturer of unmanned aerial vehicles which is exported to Australia, Spain, South Korea and Libya and the United States. The UAV Company is an example of a new generation of private defense companies in Pakistan that have grown with the emerging needs of Pakistani military and export opportunities to both military and civilian sectors abroad.

Integrated Dynamics is a full-service UAV (Unmanned Aerial Vehicles) systems provider based in Karachi, Pakistan. The company has been in business since 1997 and designs and integrates UAV systems primarily for the Government of Pakistan, the Pakistan armed forces and export.

The company says they are committed to the use of the UAV system as a scientific and defensive tool that can be used to save lives and monitor potentially hostile environments for human personnel. The company also makes drones such as the turbojet-powered Tornado decoy, which can fly up to 200 kilometers, and emit false radar signals to “confuse enemy air defenses into thinking they are attacking aircraft,” according to Defense News of Pakistan.

In addition to supplying drones to the Pakistani military, the company exports its products to Australia, Spain, South Korea and Libya and the United States. The US Homeland Security Department uses ID’s Border Eagle surveillance drone for border patrol duties. Integrated Dynamics’ products cost only a fraction of the cost of comparable products made in the United States and Europe. According to the Karachi-based company, ID UAV prices start from about USD 20,000 while in comparison UAV products made in the West start from about USD 200,000. The ID models have operational ranges of 20 to 1,600 kilometers.

Integrated Dynamics had begun to develop the Firefly mini-rocket UAV in late 2004 in response to the Pakistani army’s operational requirements for a high-speed, short-range observation system that could be used in the high-altitude environments of northern Pakistan. A basic system of such sort costs around USD 3,000 and comprises four rockets, a launcher, a carry case, datalink and a PDA-based ground control station.

Emerging Sophistication from a Cottage Industry

JF-17 Jointly developed by Paksiatn and China

Pakistan’s arms manufacturing sector has long been considered to be a cottage industry. The dusty little town of Darra Adam Khel,only a half-hour drive from Peshawar, reminds visitors of America’s Wild West. The craftsmen of this town are manufacturers and suppliers of small arms to the tribal residents of the nation’s Federally Administered Tribal Areas who carry weapons as part of their ancient culture. The skilled craftsmen of FATA make revolvers, automatic pistols, shotguns and AK-47 rifles. Until five years ago, the list also had items such as anti-personnel mines, sub-machine guns, small cannons and even rocket launchers. The Pakistani government has forced the tribesmen to stop making heavy assault weapons to try and prevent the Taliban and Al Qaeda from having access to such weapons.

Pakistan’s arms industry has come a long way from making small arms as a cottage industry in the last few decades. The US and Western arms embargoes imposed on Pakistan at critical moments in history have proved to be a blessing in disguise. In particular, the problems Pakistan faced in the aftermath of the Pressler Amendment in 1992 became an opportunity for the country to rely on indigenous development and production of defense equipment.

Pakistan’s Military Industrial Complex

Flamingo – Satuma Pakistan

The country now boasts a powerful industrial, technological and research-based developing and manufacturing sector for its armed forces and exports a wide variety of small and large weapons ranging from modern fighter jets, battle tanks, armored vehicles, frigates and submarines to unmanned aerial vehicles and high tech firearms and personal grenade launchers for urban combat. Some of these items were on display at IDEAS 2008.

Pakistan has become an increasingly important player in the world arms industry, a global industry and business which manufactures and sells weapons and military technology and equipment. Arms production companies, also referred to as Defense Contractors, produce arms mainly for the armed forces of nation states. Products include guns, ammunition, missiles, military aircraft, military vehicles, ships, electronic Systems, and more. The arms industry also conducts significant research and development. Pakistan’s major defense manufacturing companies are owned and operated by Pakistan’s military.

Mukhbar- Satuma Pakistan

According to Business Monitor, Pakistan’s defense industry contains over 20 major public sector units (PSUs) and over 100 private-sector firms. The majority of major weapons systems production and assembly is undertaken by the state-owned PSUs, while the private-sector supplies parts, components, bladed weapons and field equipment.

Major PSUs include the Pakistan Ordnance Factory (POF), Heavy Industries Taxila (HIT), Pakistan Aeronautical Complex, Karachi Shipyard and Engineering Works (KSEW) and the Pakistan Machine Tool Factory. Multinational presence in Pakistan is limited, although joint production or engineering support in the development of certain armaments has recently occurred with companies such as DCN International and the Chengdu Aircraft Industry Group.

IDEAS 2000, Pakistan’s first major arms show, was organized after former President Musharraf assumed leadership of the country in the wake of the 1999 bloodless coup that toppled the Nawaz Sharif government. At the show, the former president emphasized the need for the growth of Pakistan’s defense industry and private sector involvement in R&D, manufacturing and marketing of arms. Held every two years since the year 2000, the show has become a runaway success. It has helped Pakistan and other friendly nations to show off their wares, find customers, share knowledge, build bilateral partnerships, encourage scientific innovation and learning among young people and made visitors and Pakistani citizens more aware of the role the defense industry plays in national defense and economy.

World Arms Market

It is estimated that yearly, over USD 1 trillion are spent on military expenditures worldwide (2% of World GDP). Part of this goes to the procurement of military hardware and services from the military industry. The combined arms sales of the top 100 largest arms producing companies amounted to an estimated USD 315 billion in 2006. In 2004 over USD 30 billion were spent in the international arms trade (excluding domestic arms sales). Many industrialized countries have a domestic arms industry to supply their own military forces. Some countries also have a substantial legal or illegal domestic trade in weapons for use by its citizens. The illegal trade in small arms is prevalent in many countries and regions affected by political instability.

Pakistan’s Arms Business

In a July 2008 interview with Pakistan’s Dawn newspaper, Major General Mohammad Farooq, Director General of the Defense Export Promotion Organization, claimed that Pakistan’s defense exports have tripled to around USD 300 million because of the quality of its ammunition, anti-tank guided missiles, rocket launchers and shoulder-fired surface-to-air missiles. He said exports to South Asian, Middle Eastern and African countries had increased significantly. It has been reported that Sri Lanka has purchased cluster bombs, deep penetration bombs and rockets and UAVs from Pakistan.

General Farooq said optical instruments like night vision devices, laser range-finders and designators, laser threat sensors, artillery armor mortars and munitions, mine detectors, anti-tank rifles, missile boats, different types of tear gases, fuses of unarmed vehicles, security equipment and sporting and hunting guns were also being manufactured in Pakistan. “The fuses are being purchased by countries like Italy, France and Spain,” he said.

In recent times however, Pakistan has come under criticism by human rights groups for being a leading manufacturer and exporter of land-mines, cluster bombs and depleted uranium munitions.

Pakistan’s UAV Industry

The three main branches of the Pakistani military are evaluating UAVs made in Pakistan and the rest of the world for purchase and deployment.

Uqaab – Air Weapons Complex

Pakistan has been eager to boost its capabilities for high-tech aerial warfare and restructure and reorient its military to respond to the new and emerging challenges of combating insurgents. A number of public and private sector companies have been engaged in research, development and manufacturing of unmanned aerial vehicles as a part of this initiative. The public sector companies include Pakistan Aeronautical Complex, Air Weapons Complex and National Development Complex.

This growing interest by Pakistani military and also foreign companies and governments has helped spawn several private Pakistani UAV companies specializing in air-frames, launch and propulsion, flight control, tele-command and control systems, signal intelligence, training simulators, etc. In addition to Integrated Dynamics mentioned earlier, other private companies involved in UAV development and manufacturing include, East-West Infinity, Satuma and Global Industrial Defense Solutions.

Between the public and private sector UAVs developed in Pakistan, there is a long list of products. In addition to Integrated Dynamics described above, here are three more UAV companies in Pakistan:

East-West Infinity

One of the companies at the forefront of UAV development is East West Infinity (EWI). EWI’s latest products are the Heliquad micro tactical UAV and the Whisper Watch signals intelligence (SIGINT) package. The Heliquad was first displayed in prototype form at the IDEAS 2006 defense exhibition. Equipped with a tiny camera, it can relay pictures back to troops or Special Forces in an urban environment or in the field, giving them a tactical reconnaissance capability. Being exceptionally small and powered by four electric motors, Heliquad is highly stealthy and represents the cutting edge of EWI’s electronics miniaturization. SIGINT has become more important with ongoing anti-terrorism operations on the western front and in the tribal areas. Designed for militaries unable to afford high-end, dedicated SIGINT platforms, the company says its Whisper Watch platform is most effective when aerostat-mounted, as the platform is stationary and airborne for longer.

Satuma

Satuma (Surveillance and Target Unmanned Aircraft), founded in 1989, is a small UAV specialist company based near Islamabad, Pakistan. Satuma products include Flamingo, Jasoos and Mukhbar UAVs. Its biggest customer is the Pakistani military.

Global Industrial Defense Solutions

GIDS, the largest of the private defense sector companies, has a UAV division, which produces a whole range of operational and training UAVs, the main customer of which is the Pakistani military. The UAVs developed by GIDS have been extensively flight tested by the military. GIDS ground control stations have an interactive and user friendly interface, where flight parameters and auto-pilot mission planning, and execution is done in addition to reception of high-end crisp quality video transmitted over an encrypted digital link.

Headed by a retired PAF Air Vice Marshall, GIDS has emerged from a combination of 7 Pakistani private defense companies that include AERO (Advanced Engineering Research Organization), IDS (Integrated Defense Systems), MSL (Maritime Systems Pvt Limited), ACES (Advanced Computing and Engineering Solutions), IICS (Institute of Industrial Control Systems), ATCOP (AI-Technique Corporation) and SETS (Scientific Engineering and Technology Solutions). Other than UAVs, its major products include anti-personnel, anti-armor, incendiary, anti-runway, electronic impact and time-based fuses, electronic warfare equipment, navigation systems, optical fiber and optical fiber cables. Anti-tank Wire Guided Missile System known as “Baktar Shiken” made by IICS, is a component of GIDS.

Conclusion

Pakistan’s growing defense industry is becoming high tech to keep up with the challenges of a changing world that requires advanced weapons and new strategies to maintain peace and stability in a hostile neighborhood. Simultaneously, Pakistan’s defense industry is contributing to a scientific, technological, industrial and economic development of the nation by training and employing thousands of citizens. The investments made in defense production are a good bargain for the companies, their investors and the taxpayers of Pakistan to help ensure the nation’s economic, political and national security against both internal and external threats.

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Riaz Haq (www.riazhaq.com) is the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. He is an alumnus of NED University, Pakistan and served as Chairman of the NEDians Convention 2007 held in Silicon Valley, CA. He has more than 25 years experience in the hi-tech industry and has been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls.

He is a pioneer of the PC and mobile communications businesses and has held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. He was recognized as “Person of the Year” by PC Magazine for his contribution to 80386 program. He has an MS degree in Electrical engineering from the New Jersey Institute of Technology, Newark, New Jersey.

Book Review: Blue Ocean Strategy

Management Gurus W. Chan Kim and Renee Mauborgne have presented a critical strategic management approach for today’s global competitive environment in their international bestseller, Blue Ocean Strategy: How to Create Uncontested Marketspace and Make the Competition Irrelevant. The book, which debuted in 2005, is a must read for any corporation today. Resting upon four “formulation principles” and two “execution principles,” Blue Ocean Strategy teaches the reader to create uncontested market space and break away from bloody competition by strategically moving into the area the authors call the “Blue Ocean.”

An example of its application to put the book/ strategy in context is the Nintendo’s newest game console Wii which unlocked a ‘blue ocean’ of new market space of whole new mass buyers – Adults including senior citizens that never before played video games. This enabled it to bypass the bitter competitive rivalry with the Sony Playstation and Microsoft Xbox. As many of the world’s leading growth companies showcase their success in exploring Blue Oceans (eg. Apple, Google etc), such examples are far and few in between in Muslim world economies. However, an example to note would be, Bangladesh based Grameen Bank which has created a blue ocean in finance industry by focusing on once non-customers of banking and finance – the poor. Another one would be Malaysia based AirAsia who has successfully implemented a business model to capture an untapped budget travel market in the travel industry.

Challenging the focus on Market Share wars

Management strategies, corporate strategies and marketing strategies: any strategy crafted by a corporation traditionally focuses on profit-maximization. Increasing the wealth of a firm is strongly related to capturing revenue through market share. The golden rule of business denotes that the higher the market share, the larger the revenue stream – consequently, the greater the wealth of the firm (provided there is constancy of market prices). Blue Ocean Strategy challenges this notion by forcing firms to create new a market space and in many cases, work parallel to the competition.

Obviously, this overhaul of ideas would entice strong resistance to change by corporations who have become accustomed to their practices (as they comfortably match their competitors’ ideals) and continue to contest for market share. Such a strategy would only serve to increase costs, cause conflict amongst staff and diverge from the corporation’s vision.

In the introduction to Blue Ocean Strategy, readers will find that this is hardly the case, and though there would be hurdles to overcome when executing the “Blue Ocean Strategy” (as hurdles would be inherent in any strategy), appropriate sub-strategies would have to be implemented for the successful creation of demands for new products or services.

Most importantly, the book highlights that the “Blue Ocean Strategy” is not a new concept. The growth of unique industries and the ever-changing lifestyles that are enjoyed by various communities around the world is proof that many corporations have successfully adopted and implemented “Blue Ocean Strategies” in the past and that the potential of creating uncontested market space in the future is most certain, provided corporations follow the intricate formulation and execution principles. The book talks about the business world 30 years prior to its publication and forecasts the growth of the “Blue Ocean Strategy” as an integral part of corporate reform for the next 3 decades.

Four Actions Framework

Source: www.blueoceanstrategy.com

How to Create Uncontested Market Space and Make the Competition Irrelevant

The book is intricately designed to walk through the process of its six principles and teaches the reader how each principle is able to reduce risks inherent in any new strategy. Blue Ocean Strategy is not only a book to read but a strategy to adopt and implement for corporations that are determined to succeed in the long-run.

The six principles that fall under the formulation and execution building blocks are designed to reduce various risks in adopting a new approach to business. Even for the most risk-averse business owner, a well-formulated “Blue Ocean Strategy” cannot be ignored.

To fortify this understanding, the authors wove in various case studies and true success stories to reinforce several points. First, they these cases create a familiarity within the reader who, as a consumer, is able to relate to certain cases such as of Cirque du Soleil®, Starbucks® and Curves®, and observe how consumers are affected by the “Blue Ocean Strategy.” Second, the reader is able to visualize the strategy as it is crafted in “opposition” of competition, by using its suggested managerial tools such as “The Strategy Canvas” and “The Four Actions Framework.” Lastly, the Book substantiates proof that Blue Ocean Strategy has existed since the 30s and that it is an ongoing process for the firm rather than a one-time strategy that will outlast competition.

The Waves of Blue Ocean Strategy

Kim and Mauborgne present Blue Ocean Strategy as part of strategic management, being a long-term focus rather than an intermediate route at a problematic juncture. The strategy is comprehensive and takes a macro approach towards how the strategy should be formulated, implemented and nurtured to its success. At the same time however, the authors present cases endorsing that corporations who ride the Blue Ocean wave will succeed in a shorter time-frame compared to those who continue to battle with competition in the shark-infested red waters. They do not discount the macro approach to Blue Ocean and assert that a misinterpretation of the formula or a miscalculation during its implementation will inevitably lead to failure.

The strategy concentrates on value innovation, which reduces costs for corporations. Instead of focusing on outdoing competition, the book advises corporations to use managerial tools such as “The Strategy Canvas” to identify voids in customer values. The book presents multiple cases validating how companies easily overlook opportunities to cater for valuable services concerning their existing and potential clients. This usually happens because decision makers in a company are absorbed with battling head-on with competitors rather than shifting their focus on clientele-oriented values. To be better acquainted with existing and potential clients and their values, the authors strongly advocate that top management descend to the grass-roots of their industries to blend in with their consumers and understand their trends. Furthermore, many corporations tend to outsource their marketing research to specialist marketing intelligence. This, according to Blue Ocean Strategy, is a detrimental approach to understanding the market and creating uncontested market space.

The Strategy Canva

Source: www.blueoceanstrategy.co

Besides challenging the norm of competing with rivals, Blue Ocean Strategy also challenges several other perceptions of new business strategies. Increase in product value and services do not necessarily require technological advancements. A successful “Blue Ocean Strategy” is seen to rely on existing resources and in many cases, allow companies to cut down on further resources.

Finally, Blue Ocean Strategy emphasizes the importance of interpersonal office skills in executing a successful new strategy. Employees are often sidelined during decision making and are generally not treated with the appropriate respect and humanity deserving of employers.. The authors caution the reader that employees and office politics are not only strong determinants of the strategy’s success but can also lead to failure even before the strategy takes off.

Although written in simplified English, the book retains a text-book feel because of its technical terminology. The authors provide numerous examples and case studies to ensure the understanding of readers who are not necessarily familiar with managerial terms. Additionally, their multiple illustrations and steps under each principle allow readers to observe and learn the different phases of crafting a strategy.

A Must have Tool for the Next Generation of Business Leaders

Blue Ocean Strategy has already benefited numerous companies and has received stellar reviews. Its authors have already been listed amongst the top 10 most influential thinkers of 2007 (The Thinkers 50 biennial poll of business thinkers.) The Strategy has emerged as one of the most important business strategy in the new globally competitive markets. An evidence of that is the acknowledgement of this business strategy by senior executives in China as a ‘Top 10 China Management Practices’ (source: Chief Executive China, the largest-circulation management magazine in mainland China’s ‘Fourth Annual Top 10 China Management Practices.’)

Business leaders in the Muslim world economies seeking global/ regional competitiveness cannot afford to ignore the ‘Blue Ocean Strategy.’ There are some encouraging signs certainly. Deputy Prime Minister of Malaysia Datuk Seri Najib Tun Razak is known to be a big supporter of the Blue Ocean Strategy. In an interview in Malaysia Star newspaper it was noted that he liked the book so much that he ordered 30 copies for members of his staff. We hope this and other such support will lead to many Blue Ocean Strategy successes from the Muslim World.