Seeing through the storm

The days of soaring growth in the Middle East PC market finally look to be over following the persistent stormy conditions that have plagued the sector all year. So how have the leading PC and components brands in the region been coping with the changing circumstances they face?

Tags: Dell CorporationIntel CorporationLenovo GroupRetailUnited Arab EmiratesWestern Digital Corporation
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Seeing through the storm Nass Nauthoa, Intel.
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By  Andrew Seymour Published  October 12, 2009 Channel Middle East Logo

How would you describe your Middle East Strategy and are you having to make any adjustments in response to the changing dynamics of the region?

Khaled Kamel: Lenovo recently redesigned its organisational structure to better align with customer needs, market dynamics and strategic direction with a focus on improving our cost-competitiveness and operational efficiency. The new structure creates two faster, more efficient go-to-market organisations — one focused on mature markets and the other on emerging markets, which is called ‘EMAT’ and stands for the Eastern Europe, Middle East, Africa and Turkey region. Our strategy focuses heavily on developing the channel model for the Middle East by strengthening our distribution network to ensure we’re better enabled to reach the markets. In a tough market, we need to ensure the growth sectors have a particular focus and as such we are placing particular emphasis on the SMB and consumer sectors which are forecast for considerable growth, even during tough economic conditions.

Khawaja Saifuddin: People, partners and products are the ‘three Ps’ for Western Digital. The company strongly believes that a systematic and well-executed channel strategy is vital to increasing both sales and brand awareness for a business. A key element of Western Digital’s business strategy involves having specialised partners in place to address customer storage needs in a more focused and localised way. Our main objectives are to continue to strengthen our reach by expanding our in-country partner network in MEA countries and to focus more on branded products — external portable drives — by educating consumers and SMB customers on the importance of data protection and the differing back-up requirements that they need to be aware of.

Nass Nauthoa: We have had a solid strategy that entails growing our collaboration with governments and non-private entities in the region through the Intel World Ahead Programme, which uses digital technologies to improve people’s lives and expand their opportunities. On the consumer and enterprise front we continue supporting our MNC and channel partners to grow their markets and cater to the different needs in the markets they operate in. We support the channel by helping partners to bring in the latest technologies and take first-mover advantage in the market. In addition, we continue fine-tuning our channel partner programmes to help our customers meet demand in the market. Examples of such programmes include our joint marketing Intel Inside Programme and the Intel Flex+ Programme.

John Coulston: In order to be accessible to customers, Dell has sought out collaborative partnerships with distributors, retailers and VARs. This channel partner strategy model adopted by Dell to sell its products is unlike the direct sales model adopted in more traditional and developed markets, where, for example, online sales purchases are much more popular. This has been our continued — and so far successful — strategy within the region. We continue to refine this approach, choosing the best partners and reducing complexity from the channel structure where possible, whilst expanding and strengthening it.

Has much changed in the way that you have been engaging with the Middle East channel in recent months?

Khwaja Saifuddin: Our interaction with the channel has not changed. We have always had a very close relationship with the channel, a relationship that we will continue to strengthen and develop. The channel is of upmost importance to WD and we will continue to partner with it directly, educate it on the market and provide it with the necessary tools to make business more profitable. 

Nass Nauthoa: We continually look at the ways we engage with our channel, and at the tools and programmes we have available to them. We make changes as needed in order to have an optimal model that makes it easy for our channel customers to meet local demand with our evolving product roadmap.

John Coulston: Dell constantly aims to improve and refine its engagement with the channel. We hold ongoing engagement meetings to ensure we’re adapting and progressing to keep ahead of the competition in our channel approach. We recently introduced the Partner Reward Programme, an initiative designed to recognise the valuable contribution resellers make to the growth of our business. As such, rather than changing the way we engage with the channel, we are looking to provide our partners with increased support and incentives. Resellers who register with us to participate in the programme are eligible for cash rewards, according to the rebate system we have developed, and the programme is intended to encourage partner loyalty.

Khaled Kamel: Yes, recently Lenovo announced a new programme called ‘Good Idea’ for channel-focused PC partners across the region. The programme provides Lenovo’s local business partners with attractive incentives that support their business objectives. In addition, Lenovo recently appointed a new regional transactional business director to further develop the regional channel and drive enhanced services to customers. Also, a new corporate relationship team for Kuwait, Saudi Arabia, Yemen and Libya has been formed to focus on large enterprise accounts and to support channel partners in servicing customers and providing ongoing support.

What factors should be considered when it comes to forming Middle East channel strategies?

Santosh Varghese: You have to create value addition and strategies that ensure the channel is able to create its own brand value, rather than just being a box mover or a vendor stockist. At the same time, it is important to be revenue-focused rather than volume-focused.

John Coulston: Understanding the different customer requirements is paramount when forming a channel strategy. Combine this with a good understanding of what makes partners successful — whether they are distributors, integrators or resellers — and you have the initial recipe for a good channel strategy. Some organisations take a top-down approach to their channel strategy, but in this increasingly competitive world listening to all customers will allow you to differentiate.

Nass Nauthoa: From a reseller perspective, one formula for success is to know the market you operate in and your own core competencies. This will help define the strategies needed to meet customer demand in a chosen segment. It is also important to retain focus, train the sales and technical teams and invest in building the brand as a point of differentiation. As a vendor it is important that we recognise these needs from our channel customers and, as much as is possible, provide them with the relevant tools and resources to help them win and grow the business.

Khaled Kamel: Being a 100% channel- oriented vendor, it is important to have a well-planned channel strategy to ensure a clear and flexible route to market, getting the right product at the right time to the right people. It is vitally important to make sure that the channel is well-educated on the products and delivery models so that they can understand and better sell our products into the appropriate businesses and home users. It is also important to ensure a breadth and depth of channel partners that are suited to the different industries and end-users.

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