Kanoo Holiday and Travel
BS701 - 002
Huda Hasan Hasan
Noor Sayed Sharaf Al Mosawi
Sara Ali Majed
Zahra Sayed Majeed Al Kamel
Clare Walsh
18th May 2014
20900481
201000255
201000442
20090867
Huda, Noor, Sara, Zahra
002
Spain
Contents
1.0
Introduction ...................................................................................................................................... 3
2.0
Country Evaluation and Selection ..................................................................................................... 4
3.0
Unique Selling Points of the chosen country .................................................................................... 6
4.0
Facilities and regulatory information................................................................................................ 9
5.0
Logistics related information .......................................................................................................... 12
6.0
Cost of doing Business .................................................................................................................... 14
7.0
Relevant country agreements ......................................................................................................... 16
7.1 Spain and Bahrain ............................................................................................................................. 16
7.2 Spain and the GCC............................................................................................................................. 17
7.3 Spain and Other Countries ................................................................................................................ 18
8.0
Evidence of industry cluster ............................................................................................................ 19
9.0
Recommended international strategy ............................................................................................ 20
10.0
Conclusion ....................................................................................................................................... 21
11.0
Bibliography .................................................................................................................................... 22
12.0
Appendix ......................................................................................................................................... 28
Page 2 of 31
Huda, Noor, Sara, Zahra
002
Spain
1.0 Introduction
Kanoo group was set up in 1890 as trading and shipping business. It has grown extensively to
become one of the most diversified businesses. Since 1973 Kanoo was involved in air travel by
providing refueling facilities. In 1947 they become the first IATA agency in the rejoin and grown
to be the largest traveling company in the Middle East. Their service line contains various
travels that are Kanoo Holiday's, corporate travel services, leisure travel services, marine travel
services, airline, exhibitions and conventions. The report will analyze and evaluate eight major
elements that Kanoo Travel and Holiday’s should consider when investing in Spain. These
elements are the country evaluation and selection, Spain unique selling points, facilities and
regulatory information, logistics, cost of business, relevant country agreements, evidence of
industry cluster and the recommended international strategy. The Holiday and Travel sector is
chosen because the members of the team are interested in tourism and would like to see the
companies in Bahrain are international expanding.
Page 3 of 31
Huda, Noor, Sara, Zahra
002
Spain
2.0 Country Evaluation and Selection
The above market penetration grid has been very useful for the evaluation and selection
process. It helps in identifying were the best opportunity lay. The analysis of the matrix shows
that Spain has the highest potential of business returns and equal risks with Ireland. The chosen
country that Kanoo should take in consideration is Spain.
The first three variables of the Matrix are the most important once as they determine whether
to continue the country analysis or not. The first one examines the ability of 100% foreign
ownership. This is fundamental variable as it gives 100% control to Kanoo which makes their
decision making easier. Also, Kanoo will have the ability to create new jobs abroad and
decrease the unemployment rate in Bahrain. The second variable is English language. This is
important as well because it the mother language for business operations for easier
communication. Kanoo will avoid communication barriers resulted from misunderstanding the
Page 4 of 31
Huda, Noor, Sara, Zahra
002
Spain
language used in the selected country. In Spain they use English language which makes it much
easy for Kanoo to invest without facing communication issues. The third variable is market
entry; this relates to whether easy to start a business or the country has set restrictions that
complicated the market entry. This variable is really important because if the market entry is so
hard Kanoo will struggle in getting their business approved or they will have low chance of
entering the market and compete.
Variables relates to returns are the second type which includes:Minimum Wages: it is one of the most important variables as the business do not operates
without human resources. Kanoo group should be aware that Spain scored the highest rate of
labor cost comparing with other countries. This will have direct impact on their pricing strategy
to cover the expenses.
Tax rate: Kanoo operates in Bahrain which is considered as Zero tax payments however the tax
rate in Spain is high which will influence on Kanoo profit and their services prices.
GDP: This is very important for Kanoo to take under considerations as it predicts the wealth of
the country economy in general and the participation of each sector. Spain scored the highest
GDP comparing with the three countries.
CPI: Consumer Price Index is another important variable related to the tourism because it will
help Kanoo Group to identify the purchasing power of the customers.
Logistics: Kanoo Company will have the advantage of Spain logistics that is considered as gate
for Europe and other countries. This will help in transferring people, goods, and resources
between different destinations much easier.
Page 5 of 31
Huda, Noor, Sara, Zahra
002
Spain
Trade Agreements: It is important for Kanoo to identify frameworks, investment problems, and
the capacity. The matrix has shown that all countries scored equally except Ireland. Agreements
make trade between countries easier, less cost, and less barriers.
Market share: is the number of competitors for certain sector. This helps Kanoo to identify the
percentage the competitor participation in the market. Also, this helps them to know how
profitable the investment to measure the potential returns.
Currency Exchange Rate: This is significant as Kanoo main office located in Bahrain and the
Dinar is bagged to the US Dollar. This reflects currency stability and security. Both Spain and
Ireland scored equally with fewer differences when exchanging with USD. Kanoo will have no
issues when dealing with financial operations; they can pay in USD, Euro, and others.
Political Risk: This is significant for Kanoo to be evaluated to measure the investment
continuity. This variable may interrupt the daily operations of the business that lead to losing
revenue. Spain scored the lowest political risk compared with other countries which provide
Kanoo with less concern about business fail and profit lose resulted from political unrest.
Inflation Rate: This variable could cause business failure result from the raise of prices that
impact on the sales and profit rate.
Business Legal Law: It relates to how easy the government regulation that include the
procedures of stating business, operating and closing the business.
3.0 Unique Selling Points of the chosen country
A percentage of 85% of the Iberian Peninsula which is shared with Portugal is occupied by Spain
in southwest Europe. The national name of the country is Kingdom of Spain (Reino de España).
Page 6 of 31
Huda, Noor, Sara, Zahra
002
Spain
The race in Spain is composite of Nordic and Mediterranean types and the religion is 94%
Roman Catholic and 6% others (Country Information , 2014).
According to Hofstede’s Cultural Dimensions, Spain scores in the long term dimension 86. This
shows that rules and traditions in Spain are not adaptable to changed circumstances.
Therefore, Spanish people like to have for everything rules, any change cause them stresses. As
a result, organizations will face difficulties when introducing new innovative plans because
people are more in favored with routines. This may have an impact on the foreign investors
because they will be prevented from introducing necessary changes in the organization without
hesitation. Also, they will face difficulties in developing people habits in the way that suit the
business nature. The members of Spain culture feel threatened by unknown circumstances.
Beliefs and institutions have been created to try avoiding these issues as it reflected in the UAI.
A survey has been conducted for Spanish people and it resulted that 75% of young people
wanted job for life without future concerning while 17% of American young people would like
this type of job (The Hofstede Centre - Spain, 2014). Spain support long term investment like
constant effort and slow results with keeping the option of investment open. Spanish believes
that foreign investments able to produce superior things as well as they can learn from other
countries (The Hofstede Centre - Spain, 2014).
Spain is one of the highest income countries in the world (OECD) at $1.4 trillion in 2014 with a
reduction in the annual growth rate of -1.4%, and the per capita GDP is $30,557 (WorldBankSpain, 2014). However, Spain faces some economic problems resulted from the high
unemployment rate of 25.0%, which indicates that 11.55 million people do not have the
purchasing power. Spain has large market size which is 46.2 million people. This increase the
Page 7 of 31
Huda, Noor, Sara, Zahra
002
Spain
opportunity of profit as the number of potential customers is high comparing with other small
populations like Bahrain. The inflation rate in Spain is considered as low which is 2.4%, this help
in encouraging the investments as the price of the goods and services are generally fair. In
addition, Spain are treating foreign and domestic businesses equally and their free trade
market has increased to 87.8 (Index of Economic Freedom-Spain, 2014).
In order to develop the economy, Spain has work in reducing the number of imports and
increasing the exports with keep attracting tourists. As a result, Spain achieved trade surplus in
2013 for first time in three years. During the last four years Spain's tourist industry has
increased into the 2nd biggest in the world about 11% of domestic and foreign tourism of the
country's GDP. In August 2012 the monthly arrivals to Spain are registered 7.9 Million Visitor. In
2013, Spain becomes the world 3rd most visited country by 60.6 million tourists (World Tourism
Organiazation ).
Spain scored 67.2 in 2014 Economic freedom index and ranked 49 th freest economy (Index of
Economic Freedom-Spain, 2014). This means that there is high level of government interference
in the economy and business faces some forces when producing, trading, or consuming product
and service. Kanoo may face some differences when operating in Spain as Bahrain rank 13 th
freest economy which makes doing things much easier than in Spain. However,
Entrepreneurship is encouraged and the property right is secured by the Spanish Office of
Patents and Trade Marks (Spain Intellectual property, N/D).
Spain ranked the 54th in 2014 on the aggregate ranking on the ease of doing business (Ease of
Doing Business in Spain, 2014). The regulatory environment in Spain consumes time to be
Page 8 of 31
Huda, Noor, Sara, Zahra
002
Spain
approved. Starting a business in Spain requires 142 days, 10 procedures, and EUR 3,000
minimum capital required. This may cause foreign investors to spend time and effort to start
the business and they will take under considerations cost added from the required capital
(Starting a Business in Spain, 2014).
The minimum wage required to pay Spanish employees is 753 EUR (NMW, 2014). Therefore,
foreign businesses cannot pay below the minimum. The people are highly educated which can
add value to the business from their qualifications. Spain has policy for foreign workers which
should have visa to enter Spain valid for three months. During this time the employer should
register the worker in Social Security System and apply for Identity Number (NIE) to be in the
country legally (Hiring Forieng Workers in Spain, N/D).
Spain politic form is Parliamentary Monarchy, it is divided into 17 Autonomous Communities,
with each own Parliament and Government. Legally Spain is central country which foreign
investor will find many levels of administrations are similar to those on a federal country such
as United States (Spain Law, 2014). Based on AON’s Political Risk Map 2013, it illustrated that
Spain has low political risk (AON Political Risk Map, 2013). As a result, foreign investors will
ensure of less issues when starting their business. Also, because of no serious political risk
mentioned the probability of financial losses will decrease.
4.0 Facilities and regulatory information
Spain was ranked 52 out of 189 countries in the ease of doing business and 142 in starting up a
business. It is a benefit for Kanoo group, as there will not be many complications and the
process of setting up a business will be easy. Shutting down a business or terminating a
contract will take some time, as Spain was ranked 59 in enforcing contracts. This shows that the
Page 9 of 31
Huda, Noor, Sara, Zahra
002
Spain
efficiency of the judicial system in resolving a commercial dispute. As it will take 510 days to
resolve commercial dispute through courts and it cost of 18.5% of claim. It will go through 40
procedures starting from filing the claim, obtain judgment to enforce it. Spain was ranked 22 in
resolving insolvency, which means that Spain is not facing many financial issues like debts and
they can meet their financial obligations with its lenders (Group T. W., 2014).
In Spain, the regulations of hiring and firing employees are not complicated. When hiring any
employee there is a trail period, during this time either party can terminate the contract
without the needs of any justification (Felix Pedrosa, 2013).In addition, any employee who
complete one year of employment is entitled to 30 calendar days paid holiday every year.
Besides, there are 14 public holidays which are not included in the holiday entitlement.
Employees are entitled to a maximum of 18 months' sick leave in cases of illness or injury. After
this period is finished, employees have to be considered as permanently ill and claim a social
security pension. Pregnant employees are entitled to a maximum of 16 weeks' maternity leave.
The leave must be taken immediately after the birth. While for the father of the child, he can
take up to two working days' fully paid absence immediately after the birth (Employment and
employee benefits in Spain, 2013)1.
1
In Spain, the working time regulations state that
*Employees must not work (on an annual average) more than 40 hours a week.
*Employees must not work more than nine hours a day.
*Employees are allowed at least 12 hours' rest before starting the next day's work.
(Employment and employee benefits in Spain, 2013).
According to the Royal Decree 1717/2012 of 28 December (Official Gazette of 31 December) the minimum wage of
labors has increased by 0.6%. Now, the minim wage in Spain is EUR 21.51 per day, EUR 645.30 per month and EUR
5.05 per hour for household employees (Minimum wage 2013 , 2008).
On average, the monthly gross earnings in Spain are 1,630 EUR and the method of payment depends on the
agreement between the employer and the employee. The contract between the employer and the employee can
be written or oral for an indefinite or definite period (Group S. , 2014). Furthermore, employees who are less than
18 years of age are not permitted to work more than 8 hours a day (Spanish labour laws: Working time and leave,
2011).
Page 10 of 31
Huda, Noor, Sara, Zahra
002
Spain
Facilities
Spain has an incredible infrastructure that allows citizens and tourists to move easily between
the countries. Transportation in Spain cost less than other counties and has different modes like
Trains, planes, busses and cars are all readily available and easy to navigate (Radetsky, 2013).
Spain has 1824 hotels that are classified by a system of one to five stars served with high
quality. The maximum categories of hotels are the ones with five stars and Grand Luxe. Hotels
have different categories according to the size of the rooms, the facilities, the services they
offer, and the standard of comfort. There are also other types of accommodations, such as:
Parador hotels, these hotels offer more than 10,000 hotel places like old castles, palaces and
monasteries. It comes with all the comforts of the 21st century, besides they are classified by
the star system. The total number of parador hotels is 90.
Tourist apartments, these apartments can be rented by the week, fortnight or month. Other
options are chalets, villas and bungalows.
Apart-hotels, these accommodation units combine the benefits of tourist apartments with the
services and facilities of a hotel.
Guesthouses and hostels these accommodation units are more economical than hotels, and
they are classified as one to three stars hotels.
Rural tourism accommodation, owners of the property offer a home atmosphere and homemade cooking. Country house lodges can be rented as whole or individual rooms.
Tourist campsites, these are equipped with the basic services like hot water, electricity,
drinking water and surveillance. People can stay in caravans, tents or bungalows.
Hostels, The Spanish Youth Hostel Network (representing the International Youth Hostel
Federation) has more than 250 establishments in the main tourist areas2.
2
Spain has over 16,000 hotel establishments, over 14,000 rural tourism units, over 150,000 holiday apartments and
over 1,100 campsites (Accommodation to suit everybody, n.d). In Spain, there are services of Spain’s best EnglishPage 11 of 31
Huda, Noor, Sara, Zahra
002
Spain
5.0 Logistics related information
Spain has an access to 1.25 billion consumers in Europe, Latin America and North Africa,
because of its strategic position as an international business hub. The infrastructure and
communications network in Spain is highly developed, therefore it is considered as one of the
best connected countries by land, sea and air, both internally and externally (Spain, 2012)3.
Spain has comprehensive public transport that allows citizens and tourists to easily move from
Spain to other European counties. The citizens there are over 40 million and they can move
from one place to another by car, bus, train and many other public transports, such as:

Bus
In all cities in Spain, buses have different schedules each day, depending on the route and the
need of the service4.

Tube (Metro)
Spain has a good tube network especially in big cities like Madrid, as it has one of the best
metro systems in Europe.
speaking travel guides. They are friendly, experienced and passionate about the history and culture of their region.
Licensed guides can escort tourists for half day or full day walking or driving tours (Spain Tours, n.d). The most
common private tour is the city tour. City tours are better choice for tourist who has limited time for visiting the
city, because they will get to see the main sights while pointing out the easily overlooked but possibly more
significant landmark. They will make use of every time available and spend good times in the city. There are
popular private tours in Spain like the Gastronomy Tour, Valencia tours and Heritage Tours (Private Escorted Tours,
n.d).There are approximately 5,000 travel agency branches in Spain (Gil, 2003).
3
Spain is a member of the European community since 1986 and a member of the European Union since its creation
in 1992. It also has a wide transport network. It has 53 international ports and 33 international airports; it provides
easiness to optimally develop an industrial or commercial activity (Carbonell, 2012).
4
For example, buses that cover commercial districts would come every few minutes from Monday to Friday, but in
weekends the buses will come every hour or even less. There is also another type of buses that run from one city
to another and they are called “Long distance buses”. There is no central station for these buses, as they may
leave from different location. Citizens have to buy tickets for the destination that they want. In addition, there are
buses that are only for tourists and they are called “Tourist buses”. They are available in most of the cities and
more rural villages. Tourists can step in and out as much as they want during the trip, as the bus offers them
unlimited ride.
Page 12 of 31
Huda, Noor, Sara, Zahra

002
Spain
Trains
In Spain, the trains runs run by RENFE (REd Nacional de Ferrocarriles Españoles) and runs
through most of Spanish mainland and all the main cities are connected through it.

High speed railway - AVE (Alta Velocidad Española)
The train runs with high speed, as it is goes from Madrid which is connected to Seville, Malaga,
Valladolid (through Segovia) and Barcelona (which passes through Zaragoza, Tarragona and
Huesca). Malaga and Seville are both directly connected to Zaragoza and Barcelona.

Taxi
Taxis are available in all cities and villages in Spain at all times. Taxis wait for customers at a 'taxi
stand' where they queue and the customers should approach the first taxi in the row.

Bicycles
This method of transport is a new trend in the cities of Spain. Bicycles are picked up from
certain areas and then lock it back in another drop point when the customers are done with it
(Carballo, Public transport in Spain, 2009).
5Spain
is strategically located in a privileged way for the shipping, as Valencia port in Spain is
the 31 out of Top 50 World Container Ports. It got 4.47 Million TEUs in 2012 (Council, 2014).
This emphasized that ocean transportation isconsidered as the most used mode of
international goods transportation (International goods transportation, 2013).
Goods can be transported through railways, for example RENFE is the national state train
system that runs most of the services in Spain (Getting around, n.d). This company controls
most local, regional and national routes. Goods are transported with high speed and cheap
prices comparing to European countries.
5
International goods transportation is a vital element in the foreign trade and supply chain. In Spain, about 85% of
imports and 50% of exports are managed through international sea transportation and about 80% of world trade
has developed because of Ocean transportation.
Page 13 of 31
Huda, Noor, Sara, Zahra
002
Spain
Another way of goods transportation is air freight. Iberia is the main carrier of Spain that has
the busiest schedule for flying around the major cities in Spain (Getting around, n.d)6.
6.0 Cost of doing Business
The cost of running and expanding Kanoo’s Holiday and Travel operation to Spain must be
taken into consideration.

In order for Kanoo to register and operate official in Spain as a new firm in the country
there are some procedure to be followed and some fees to be paid regarding the
bureaucratic and legal hurdles faced by entrepreneurs incorporate. According to
DoingBusiness.org the total amount to be paid for the government is approximately
Euro 1,065.017. The amount includes the following:
o For Kanoo Holiday and Travel obtaining a certification of uniqueness (Euro
13.52)
o Getting the public deed of incorporation before a public notary (Approx. Euro
500)
o Filing the public deed with the Mercantile Registry, the fees is around Euro 155 –
300 depending on the share capital of Kanoo, shareholders, and administrative
body of the company
o Legalizing company books (Euro 46.49)
o Submitting the documents for starting the operation (Euro 350)
6
Iberia is competing with independent companies like Spanair, Air Europa and Vueling. All these companies have
an extensive network of internal flights that covers all Spain (Getting Around Spain, n.d), (Getting around, n.d). In
2011, TAP awarded TIBA as the fastest growing freight forwarder in air freight cargo and they have certified as a
leading international air transport of goods (TIBA, n.d).
7
558.4912 BHD
Page 14 of 31
Huda, Noor, Sara, Zahra
002
Spain
(Starting Business in Spain, 2013).

According to the data stated in Invest in Spain the minimum capital that Kanoo should
invest in is Euro 3,0008 (Setting Up Business, N/D).

The total tax rate that is payable by the second year of Kanoo’s operation is measured
to be 58.6%. The percentage includes the Profit Tax (21.2%) to be paid as a percentage
of the commercial profits. Additional to that, a 36.8% should be paid by the business as
a percentage of the commercial profits in regard of Labor Tax and Contributions; labor,
property, property transfer, dividend, financial transactions taxes. The remaining 0.6%
which includes any other taxes that are not named under Profit Tax and Labor Tax and
Contributions (Paying Taxes in Spain, 2014).

The three most visited cities in Spain are Madrid and Barcelona (Top 10 Cities to Visit in
Spain, 2014). According to that the location of Kanoo Holiday and Travel will be located
in one of the following cities, and from real estate offices in Spain these are the range of
prices:
o
Madrid – Renting is in the range of Euro 650 – 9509 per month depend of the features
and the size of the location (Madrid Commercial, N/D).
o
Barcelona – Renting is in the range of Euro 3,000 – 5,50010 per month depend of the
features and the size of the location (Barcelona Commercial, 2014).

Kanoo Holiday and Travel will need electricity to operate the new expansion in Spain, it
will cost Euro 0.1892611 per Kilowatt Hour (Homewood, 2013).
8
1573.2 BHD
340.86 – 498.18 BHD
10
1573.2 – 2884.2 BHD
9
Page 15 of 31
Huda, Noor, Sara, Zahra

002
Spain
The company should take in consideration that the minimum wages that should be paid
to employees is Euro 752.9012 (Spain Minimum Wages, 2013).

The cost of using transportation in Spain:
o
Local Transport (One way) – Euro 1.5013
o
Taxi 1 Kilometer – Euro 3.0014
o
Taxi 1 hour – Euro 20.0015
o
Gasoline (1 Liter) – Euro 1.4416
o
(Cost of Living in Spain, N/D)
7.0 Relevant country agreements
Spain has been a member of the World Trade Organization since 1 st of January 1995, as well as
being member of the European Union (Spain and the WTO, 2014). Having free trade
agreements between the home country and the new country is important, because it will ease
the process.
7.1 Spain and Bahrain
Recently Industry and Commerce Ministry of Bahrain and Energy and Tourism Minister of Spain
had a meeting about discussing how to increase the volume of bilateral trade (Bahrain-Spain to
enhance trade, investment ties, 2014). If the agreement is signed, it will give Kanoo Holiday and
Travel the opportunity to expand easily in Spain, besides, it will not only help the travel and
tourism to expand it will be helping vital sectors such as trade and investment areas.
11
0.0992 BHD
394.8208 BHD
13
0.7866 BHD
14
1.5732 BHD
15
10.488 BHD
16
0.7551 BHD
12
Page 16 of 31
Huda, Noor, Sara, Zahra
002
Spain
In addition, the agreement and memorandum of understanding signed between Kingdom of
Bahrain and the Kingdom of Spain; Promotion and Reciprocal Protection of Investment, this was
signed in the 22nd of May 2008. The main purpose of the agreement is the economic benefits
of both countries. Moreover, it intends to create favorable conditions in investing in both of the
contracting countries (Agreement between Bahrain and Spain, 2014). Having this agreement
signed between both countries will benefit Kanoo, for instance, Kanoo will enjoy the full
protection and security in accordance with international law. Additionally, the agreement will
help the company if Spain suffers any crisis resulting from war or revolution; Kanoo should be
accorded by the Contracting Party as paying the losses. Furthermore, there will be free transfer
of all payment relating to the investment of Kanoo, where the agreement will guarantee in
delivering the payment without any delay.
Bahrain Culture Minister met the Spanish Industry, Energy, and Tourism Minister on the May
the 1st 2014 discussing to activate the tourism field in both countries. As well the meeting
included activating the memorandum of understanding enhancing and supporting tourism in
the two countries (Culture Minister meets Spanish Industry, Energy and Tourism Minister ,
2014).
7.2 Spain and the GCC
The main general objectives of the EU-GCC17 Cooperation Agreement are to strengthen the
relationship between the countries and increasing the investment such as services which will
17
European Union – Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal,
Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom
GCC – United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar, Kuwait
Page 17 of 31
Huda, Noor, Sara, Zahra
002
Spain
help Kanoo Travel and Holiday. Besides, helping GCC counties to diverse its economy far from
oil (EU-GCC Cooperation Agreement, N/D). If Kanoo Holiday and Travel expanded its operation
in Spain there will be support from both the Spanish Government as well as the other EU
countries. Furthermore, it will help the company to access different markets and as well can
expand the operation in other countries from the EU. In addition, since there is agreement
between GCC and EU countries it will be easier for Kanoo to be known and will have the
support of those counties as well.
7.3 Spain and Other Countries
The agreement on the European Economic Area18 which was signed on 2nd of May 1992 which
first aim is to bring up and strengthen the relationship of trade and economic between the
European Community. Moreover, to contribute in the market economy and world-wide trade
liberalization (European Economic Area, N/D). This agreement will provide the free movement
of services, which will benefit Kanoo if decided to expand in Spain where they will get to access
the tourism market of other Contracting Parties and can use this kind of contract to promote
for the services they will be offering. Besides the service that will be provided, Kanoo might
want to benefit from other educated employees from other countries under the contract which
will be the free movement of person. For instance, the tour person that will be guiding the
tourists outside of Spain might not be from the country itself. Other advantages of this
agreement are; free movement of goods and movement of capital, where Kanoo will be take
18
Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Portugal, United
Kingdom, Austria, Finland, Iceland, Liechtenstein, Norway, Sweden
Page 18 of 31
Huda, Noor, Sara, Zahra
002
Spain
this in consideration if they want to expand a second sector of their operation (European
Economic Area, N/D).
8.0 Evidence of industry cluster
There are a list of travelling agencies which are specialist in organizing family, couples, and individual’s
holiday packages. For example, Faris for Tourism and Services offers a comprehensive tourism
services for Arab tourists; pick tourists from the airport and transport within Spain, multi-choice
of hotels and tour guides and translators, as well as providing general information needed by
tourists and advices (Faris Travel Agency , n.d).
Also there is agency with more than 40 years of experience in tours services it is side tours
agency. They provide many services and they have activities appropriate families, business men
in business trips and individuals also they provide packages for couples in honeymoon. Those
services meet all level of incomes and it’s based on customer’s budget. Services include:
accommodation, transfers, excursions, rental cars, conferences for businesses, student groups
and cultural programmers and trips (Side Tours, n.d).
There are a wide range of hotels in Spain, since it the country is one of the top tourism places in
Europe. In Barcelona, Mercer Hotel it has swimming pool and they provide free internet,
Majestic Hotel & Spa they have swimming pool and shuttle services also the location is perfect.
As well there are many hotels in Madrid for example; The Westin Palace Hotel is famous
because of its suitable location as well in providing free breakfast and shuttle services, The
Artrip Hotel, the location is good because it is in busy part of the city.
Page 19 of 31
Huda, Noor, Sara, Zahra
002
Spain
In fact, the availability of transportation in Spain, it is easy to move around, they have buses,
metro, trains, trams, ferries and taxis they all are public. All cities in Spain have network of
buses. For the metro only the big cities that have the network of metro and Madrid have the
best metro systems in Europe. In addition, the tram network is connecting between the main
cities in Spain and the tickets can be reservation by their website. The taxies in Spain are
around all cities and villages also they are in taxi stand in malls (Carballo, Public transport in
Spain, 2009).
9.0 Recommended international strategy
The recommended strategy for Kanoo Group is international strategy. This strategy will guide
Kanoo on the way of holding the business in Spain and compete internationally.
This type of strategy will allow Kanoo to create the innovations at Bahrain and exploit them to
Spain. Kanoo will transfer the business process system, knowledge, and services that includes
travel services, Marine, and Leisure, that will be served in Spain. As the process and the
management of this sector are successful in Bahrain as the main office of Kanoo Group, it
should be transferred to be served in Spain. This strategy requires Kanoo Company to adapt
their capabilities to Spain local situations and make the required customizations. For Example,
Kanoo can add different tourism activities that suite the Spanish culture. The international
strategy allow Kanoo to make few changes in Spain, however, the modification are controlled
by
Bahrain
which
is
the
home
office.
Through the international strategy most of the decisions are maintained in Bahrain. Many of
the activities that practiced by Kanoo Company such as research and development is
Page 20 of 31
Huda, Noor, Sara, Zahra
002
Spain
centralized in Bahrain. Conversely, in Spain different marketing strategies than Bahrain will be
used. In other words, Kanoo should create advertisements in Spain and customized it in a way
that meets the Spanish tastes and needs.
10.0 Conclusion
To conclude, the eight elements that Kanoo need to take under considerations before
expanding their business to Spain has been analyzed, the market penetration to evaluate and
select the country, important unique selling points, regulations and facilities, the cost of doing
business, agreements between Bahrain and the country in additional to the regional and
international agreements, industry cluster, and finally recommended strategy for Kanoo.
Page 21 of 31
Huda, Noor, Sara, Zahra
002
Spain
11.0 Bibliography
Accommodation to suit everybody. (n.d). Retrieved from Spain:
http://www.spain.info/en/reportajes/alojamientos_para_todos_los_gustos.html
Agreement between Bahrain and Spain. (2014). Retrieved from Ministry of Finance - Bahrain:
https://www.mof.gov.bh/showdatafile.asp?rid=1564&ftype=file1
AON Political Risk Map. (2013). Retrieved from Moodle:
http://moodle.polytechnic.bh/moodle/mod/resource/view.php?id=27435
AON Political Risk Map. (2014). Retrieved from AON Political Risk Map:
http://www.aon.com/2014politicalriskmap/
Bahrain-Spain to enhance trade, investment ties. (2014, May 2). Retrieved from Twenty Four Seven
News: http://www.twentyfoursevennews.com/headline/bahrain-spain-to-enhance-trade-investmentties/
Barcelona Commercial. (2014). Retrieved from Think Spain: http://www.thinkspain.com/spanishproperties-spain/4/10/9/5/13
Canada-Ireland Trade Balance. (2012). Retrieved from Ireland - Canada Chamber of Commerce:
http://www.icccmtl.com/about/canada-ireland-trade/
Carballo, D. (2009, December 15). Public transport in Spain. Retrieved from Expatica:
http://www.expatica.com/es/essentials_moving_to/essentials/Public-transport-in-Spain_15222.html
Carballo, D. (2009, December 15). Public transport in Spain. Retrieved from Expatica:
http://www.expatica.com/es/essentials_moving_to/essentials/Public-transport-in-Spain_15222.html
Carbonell, J. (2012, July 23). Spain, strategic location for international trade. Retrieved from TASconsultoria: http://www.tas-consultoria.com/blog-en/spain-strategic-location/
Consumer Price Index - CPI. (2014). Retrieved from Central Administration of Statistic:
http://www.cas.gov.lb/index.php/economic-statistics-en/cpi-en#cpiresults
Cost of Living in Spain. (N/D). Retrieved from Numbeo: http://www.numbeo.com/cost-ofliving/country_result.jsp?country=Spain
Council, W. S. (2014). Top 50 World Container Ports. Retrieved from World Shipping Council:
http://www.worldshipping.org/about-the-industry/global-trade/top-50-world-container-ports
Country Information . (2014). Retrieved from Info Please:
http://www.infoplease.com/country/spain.html?pageno=8#ixzz31RTmsZLX
Page 22 of 31
Huda, Noor, Sara, Zahra
002
Spain
Culture Minister meets Spanish Industry, Energy and Tourism Minister . (2014, May 01). Retrieved from
Bahrain News Agency: http://www.bna.bh/portal/en/news/616143
Doing Business in Lebanon. (N/D). Retrieved from Doing Business in Lebanon:
http://www.doingbusinessinlebanon.com/en/default.asp?menuID=9&sub=14
Ease of Doing Business in Ireland. (2014). Retrieved from Doing Business:
http://www.doingbusiness.org/data/exploreeconomies/ireland#paying-taxes
Ease of Doing Business in Spain. (2014). Retrieved from Doing Business:
http://www.doingbusiness.org/data/exploreeconomies/spain/
Economic Agreements - Ireland. (2014). Retrieved from Bahrain Ministry of Finance:
https://www.mof.gov.bh/topiclist.asp?ctype=agree&id=748
Economic Agreements - Turkey. (2014). Retrieved from Bahrain Ministry of Finance:
https://www.mof.gov.bh/topiclist.asp?ctype=agree&id=278
Electricity in Spain. (2014). Retrieved from Doing Business:
http://www.doingbusiness.org/data/exploreeconomies/spain/#getting-electricity
Employment and employee benefits in Spain. (2013, November 01). Retrieved from Practical Law:
http://uk.practicallaw.com/8-503-1479?source=relatedcontent#a209427
Establishing a Business in Turkey. (2012). Retrieved from Invest in Turkey: http://www.invest.gov.tr/enUS/investmentguide/investorsguide/Pages/EstablishingABusinessInTR.aspx
EU-GCC Cooperation Agreement. (N/D). Retrieved from Trade EU:
http://trade.ec.europa.eu/doclib/docs/2008/september/tradoc_140300.pdf
European Economic Area. (N/D). Retrieved from World Trade Law:
http://www.worldtradelaw.net/fta/agreements/eeafta.pdf
Faris Travel Agency . (n.d). Retrieved from Faris Spain: http://www.farispain.com/
Felix Pedrosa, S. G. (2013). Doing Business in Spain.
Getting Around Ireland. (N/D). Retrieved from Lonely Planet:
http://www.lonelyplanet.com/ireland/transport/getting-around
Getting around. (n.d). Retrieved from Lonely Planet:
http://www.lonelyplanet.com/spain/transport/getting-around
Getting Around Spain. (n.d). Retrieved from Spain Guides: http://spainguides.com/gettingaround.html
Gil, S. M. (2003). Analysis of the travel agencies from the leisure travellers´perception. Retrieved from
Academia.edu:
Page 23 of 31
Huda, Noor, Sara, Zahra
002
Spain
http://www.academia.edu/574551/Analysis_of_the_travel_agencies_from_the_leisure_travellers_perc
eption_The_Spanish_case
gomez, f. (2013, October 23). Travel agency and tour operator sector in Spain . Retrieved from
Academia.edu: http://www.academia.edu/4945417/Travel_Sector_Spain
Group, S. (2014, May). Operating a business. Retrieved from Santander Trade:
https://en.santandertrade.com/establish-overseas/spain/operating-a-business
Group, T. W. (2014). Economy Rankings. Retrieved from Doing Business:
http://www.doingbusiness.org/rankings
Heritage - Ireland. (2014). Retrieved from Heritage:
http://www.heritage.org/index/country/ireland#open-markets last
Hiring Forieng Workers in Spain. (N/D). Retrieved from Extranjeros:
http://extranjeros.empleo.gob.es/es/InformacionInteres/FolletosInformativos/archivos/triptico_trabaja
dores_extranjeros_eng.pdf
Homewood, P. (2013, October 18). Comparison Of EU Electricity Prices. Retrieved from
Notalotofpeopleknowthat: http://notalotofpeopleknowthat.wordpress.com/2013/10/18/comparisonof-eu-electricity-prices/
Index of Economic Freedom-Spain. (2014). Retrieved from 2014 Index of Economic Freedom:
http://www.heritage.org/index/country/spain
Inflation Turkey - consumer price index (CPI). (2013). Retrieved from Trading Economics:
http://www.global-rates.com/economic-indicators/inflation/consumer-prices/cpi/turkey.aspx
International goods transportation. (2013). Retrieved from Cargax:
http://www.cargax.com/en/international-goods-transportation/
Ireland Consumer Price Index. (2014). Retrieved from Trading Economics:
http://www.tradingeconomics.com/ireland/consumer-price-index-cpi
Ireland Labour Costs. (2013). Retrieved from Trading Economics:
http://www.tradingeconomics.com/ireland/labour-costs
Ireland/China trade agreements signed. (2012, February 20). Retrieved from IDA Ireland:
http://www.idaireland.com/news-media/featured-news/irelandchina-trade-agreem/
Ireland: Foreign Investment Regulation Review. (2013, September 25). Retrieved from Mondaq:
http://www.mondaq.com/x/264742/M+A+Private%20equity/Legal+Guide+To+Investing+In+Ireland
Labor Costs. (N/D). Retrieved from Invest in Lebanon:
http://investinlebanon.gov.lb/en/doing_business/cost_of_doing_business/labor_costs
Page 24 of 31
Huda, Noor, Sara, Zahra
002
Spain
Languages . (N/D). Retrieved from The Lebanon : http://www.thelebanon.com/directory/Country_Studies/Languages/
Languages Across Europe - Turkey. (N/D). Retrieved from BBC:
http://www.bbc.co.uk/languages/european_languages/countries/turkey.shtml
Languages Across Europe. (2014, May 17). Retrieved from BBC:
http://www.bbc.co.uk/languages/european_languages/languages/english.shtml
Lebanon Law. (N/A). Retrieved from Doing Business: http://www.doingbusiness.org/law-library/lebanon
Lebanon. (N/D). Retrieved from Australian Government Department of Foreign Affairs and Trade:
http://www.google.com.bh/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CCsQFjAB&url=http%
3A%2F%2Fwww.austarab.com.au%2F_literature_140483%2F2013_DFAT_Country_Fact_Sheet__Lebanon&ei=DVNpU935KIKx0QWP0ICQDg&usg=AFQjCNHq1526WDlRoXyte6wSIdzPbqEWng
Legal Business in Turkey. (N/D). Retrieved from Ecovis: https://www.ecovis.com/index.php?id=legalbusiness-turkey
List of Lebanon Travel Agencies. (N/D). Retrieved from MOFcom:
http://lb2.mofcom.gov.cn/article/supplydemandofchina/cooperation/201006/20100606960776.shtml
Logwin in Lebanon. (N/D). Retrieved from Logwim: http://www.logwinlogistics.com/locations/lebanon.html
Madrid Commercial. (N/D). Retrieved from Think Spain: http://www.thinkspain.com/spain-realestate/4/15/5/24
Minimum wage 2013 . (2008). Retrieved from European Labour Law Network:
http://www.labourlawnetwork.eu/national_labour_law_latest_country_reports/implications_of_ecj_rul
ings/_implications_of_ecj_rulings/prm/191/v__detail/id__2731/category__2/index.html
Paying Taxes. (2012). Retrieved from Doing Business:
http://www.doingbusiness.org/data/exploretopics/paying-taxes
Paying Taxes in Spain. (2014). Retrieved from Doing Business:
http://www.doingbusiness.org/data/exploreeconomies/spain/#paying-taxes
Private Escorted Tours. (n.d). Retrieved from Traveling in Spain:
http://www.travelinginspain.com/visits/bus_group_tours2.htm
Radetsky, S. (2013, July 21). 10 Reasons to Visit Spain. Retrieved from Best 10 Travel:
http://www.best10travel.com/10-reasons-to-visit-spain/
Sea Ports of Turkey. (2014). Retrieved from Sea Rates: http://www.searates.com/maritime/turkey.htm
Page 25 of 31
Huda, Noor, Sara, Zahra
002
Spain
Setting Up Business. (N/D). Retrieved from Invest In Spain: http://www.investinspain.org/invest/en/invest-in-spain/setting-up-a-business/branch/index.html
Side Tours. (n.d). Retrieved from Aviso legal: http://www.sidetours.com/index.php?section=1
Spain. (2012). Retrieved from Interxion: http://www.interxion.com/locations/spain/
Spain and the WTO. (2014). Retrieved from World Trade Organization:
http://www.wto.org/english/thewto_e/countries_e/spain_e.htm
Spain Intellectual property. (N/D). Retrieved from European Union:
http://europa.eu/youreurope/business/start-grow/intellectual-propertyrights/index_en.htm#spain_en_protecting-intellectual-property
Spain Law. (2014). Retrieved from Spain Law: http://www.spainlaw.net/spanish-law-guide/politicalsystem.html
Spain Minimum Wages. (2013, June). Retrieved from Trading Economics:
http://www.tradingeconomics.com/spain/minimum-wages
Spain Tours. (n.d). Retrieved from Ole Spain Tours: http://www.olespaintours.com/
Spanish labour laws: Working time and leave. (2011, June 15). Retrieved from Expatica:
http://www.expatica.com/es/employment/employment_information/Spanish--labour-laws-Workingtime-and-leave_16110.html
Starting a Business in Spain. (2014). Retrieved from Doing Business:
http://www.doingbusiness.org/data/exploreeconomies/spain/starting-a-business
Starting Business in Spain. (2013, June). Retrieved from Doing Business:
http://www.doingbusiness.org/data/exploreeconomies/spain/starting-a-business
Tax Structure by Type of Business. (n.d.). Retrieved from Invest in Lebanon:
http://investinlebanon.gov.lb/en/doing_business/tax_system/tax_structure_by_type_of_business
The Currency Conventer. (n.d.). Retrieved from Coinmill: http://coinmill.com/IEP_USD.html
The Hofstede Centre - Spain. (2014). Retrieved from THE HOFSTEDE CENTRE: http://geerthofstede.com/spain.html
The Money Conventer. (n.d.). Retrieved from The Money Conventer:
http://themoneyconverter.com/USD/LBP.aspx
The World Bank - Ireland. (2014). Retrieved from The World Bank:
http://data.worldbank.org/country/ireland
Page 26 of 31
Huda, Noor, Sara, Zahra
002
Spain
The World Bank - Turkey. (2014). Retrieved from The World Bank:
http://data.worldbank.org/country/turkey
TIBA. (n.d). Freight Forwarders Spain and Custom Brokers. Retrieved from TIBA:
http://www.tibagroup.com/es/freight-forwarders-spain
Top 10 Cities to Visit in Spain. (2014). Retrieved from U City Guides:
http://www.ucityguides.com/cities/top-10-cities-in-spain.html
Top Risks. (2014). Retrieved from Eurasia Group: http://www.eurasiagroup.net/pages/top-risks-2014#10
Trade and Investment Agreements. (N/D). Retrieved from Invest in Lebanon:
http://investinlebanon.gov.lb/en/doing_business/legal_framework/trade___investment_agreements
TRY - Turkish Lira. (n.d.). Retrieved from XE: http://www.xe.com/currency/try-turkish-lira
Turkey Inflation Rate. (2014, April). Retrieved from Trading Economics:
http://www.tradingeconomics.com/turkey/inflation-cpi
Turkey Minimum Wages. (2013). Retrieved from Trading Economics:
http://www.tradingeconomics.com/turkey/minimum-wages
World Tourism Organiazation . (n.d.). Retrieved from World Tourism Organiazation :
http://www2.unwto.org/search/node/spain
WorldBank- Spain. (2014). Retrieved from The World Bank: http://data.worldbank.org/country/spain
Page 27 of 31
Huda, Noor, Sara, Zahra
002
12.0 Appendix
Why Spain, Lebanon, Turkey, Ireland?
Spain
Lebanon
100% Ownership
Language
Ease of Market
Entry
Tax Rate
Minimum Wages
GDP
CPI %
Logistics
Trade Agreement
Market Share
Currency Exchange
Political Risks
Inflate Rate
Business Legal Law
Acceptable
(Doing Business in Lebanon, N/D)
Acceptable
(Languages , N/D)
Acceptable
25%
(Tax Structure by Type of Business)
560 USD = 245.44 BHD
(Labor Costs, N/D)
$10793 Billion
(Lebanon, N/D)
1.90%
(Consumer Price Index - CPI, 2014)
Good
(Logwin in Lebanon, N/D) (Consumer Price Index - CPI,
2014)
Many
(Trade and Investment Agreements, N/D)
Over 23 Competitors
(List of Lebanon Travel Agencies, N/D)
1 Lebanese Pound = 0.00066 USD
(The Money Conventer)
High (8 Political Risks)
(AON Political Risk Map, 2014)
6.6%
(Lebanon, N/D)
Good
(Lebanon Law, N/A) (AON Political Risk Map, 2014)
Turkey
100% Ownership
Language
Page 28 of 31
Acceptable
Unacceptable
Spain
Huda, Noor, Sara, Zahra
Ease of Market
Entry
Tax Rate
Minimum Wages
GDP
CPI %
Logistics
Trade Agreement
Market Share
Currency Exchange
Political Risks
Inflate Rate
Business Legal Law
002
Spain
(Languages Across Europe - Turkey, N/D)
Acceptable
(Establishing a Business in Turkey, 2012)
40.2%
(Paying Taxes, 2012)
Euro 415.50 = 217.882 BHD
(Turkey Minimum Wages, 2013)
$789.3 Billion
(The World Bank - Turkey, 2014)
9.383%
(Inflation Turkey - consumer price index (CPI), 2013)
Good
(Sea Ports of Turkey, 2014)
3 Trade agreements with Bahrain
(Economic Agreements - Turkey, 2014)
More than 10 competitors
1 Turkish Lira = 0.48 USD
(TRY - Turkish Lira)
Unstable
(Top Risks, 2014)
9.38%
(Turkey Inflation Rate, 2014)
No government rules on investors
(Legal Business in Turkey, N/D)
Ireland
Tourism in Ireland is considered as one of the biggest sectors contributing to the increment of
the economy, over than 6.3 million people visited the country in 2011. According to the search
done the government of the country gives 100 percent ownership to investments which as will
aim to give them open and free market (Ireland: Foreign Investment Regulation Review, 2013).
Irish Gaelic is the mother language of the country however English is official common language
spoken in the European Union and of the United Nations (Languages Across Europe, 2014).
Other important indicators include:
Page 29 of 31
Huda, Noor, Sara, Zahra
Ease of Market
Entry
002
Acceptable




Trade Freedom 87.8
Investment Freedom 90.0
Financial Freedom 70.0
Business Freedom 83.4
(Heritage - Ireland, 2014)
Tax Rate
25.7% Total Tax rate
(Ease of Doing Business in Ireland, 2014)
Minimum Wages
Euro 1461.90 = 766.6204 BHD
(Ireland Labour Costs, 2013)
$210.8 Billion in 2012
(The World Bank - Ireland, 2014)
0.196%
(Ireland Consumer Price Index, 2014)
Wide range of logistics in the country, as well as having
excellent transportations in getting around (Getting
Around Ireland, N/D). Moreover, Ireland is one of the
leading gateways to the European Markets (Ireland:
GDP
CPI %
Logistics
Foreign Investment Regulation Review, 2013).
Trade Agreement
Market Share
Currency Exchange
Political Risks
Inflate Rate
Business Legal Law

Ireland and China (Ireland/China trade
agreements signed, 2012)
 Ireland and Canada (Canada-Ireland Trade
Balance, 2012)
 Ireland and Bahrain (Economic Agreements Ireland, 2014).
More than 10 competitors
1 IEP = 0.88 USD
(The Currency Conventer)
Stable
1.9 %
(Heritage - Ireland, 2014)
Free Market
(Ireland: Foreign Investment Regulation Review,
2013)
Currency Converter
Page 30 of 31
Spain
Huda, Noor, Sara, Zahra
002
In the cost of doing business part all currency of Euro was converted to the Bahraini Dinars
using Bahrain Financing Company: https://www.bfc.com.bh/en/currency-converter.html
Page 31 of 31
Spain