Monday, January 23, 2006

Kyrgyzstan: A new Tourist Destination

Assignment Two for my english class - write a researched memo about expanding a company to a new country. See Below . . .



MEMORANDUM

To: Jack Welch, President, C&C Industries
From: William England, Student
Date: January 23, 2006
Subject: Expanding Adventure Travel to Kyrgyzstan


C&C Industries has enjoyed remarkable success in the eco and adventure travel business. To serve the fast growing Eastern European and Asian markets, C&C needs to expand. We have investigated several areas of the world, including South East Asia, South West Asia, Africa and Central Asia. Given the political, economic and cultural climates, we are making a recommendation to expand our operations to Kyrgyzstan in Central Asia.

Kyrgyzstan is a former Soviet republic with abundant natural beauty, a long history and proud nomadic traditions (CIA, 2006). A landlocked country, Kyrgyzstan enjoys many tall peaks, glaciers, and high altitude lakes (ibid.) After the 1991 collapse of the Soviet Union, Kyrgyzstan was left without support and minimal natural resources. Employing a liberal agenda and help from Western agencies, the government has embraced tourism to bring needed currency into the country. Kyrgyzstan has done more to encourage visitors and streamline government processes than any other Central Asian country (Yahoo! Travel, 2006). The people of Kyrgyzstan welcome tourists, often meeting visitors at the bus stations to welcome them into their houses (ibid). It is an open, friendly country, and ripe for expansion of the tourism industry. The country offers scenic mountains, the second largest mountain lake in the world, and many rare animal species (Postel, 2001). All of these would be strong draws for our primary clients in eco and adventure tours. Kyrgyzstan also offers Central Asia's premier territory for serious trekking and mountaineering, with peaks over 24,000 feet (Yahoo!, 2006).

The largest opportunities for tourism in Kyrgyzstan are in the growing market for something different than the typical package holiday. The newly wealthy in Eastern Europe, Russia and China are beginning to seek something other than the polished resort vacations offered in traditional tourist destinations. American and Western European travelers are seeking history and a different culture. Americans especially are interested in learning more about the Islamic culture. Kyrgyzstan is 75% Muslim, although they are considerably more open to Western visitors than other Muslim countries (Postel, 2001). By positioning our company in Kyrgyzstan, we can meet these emerging markets head on. Kyrgyzstan offers many tourism opportunities, but few large multinational tour companies. It can be considered an underserved market. In 1998, six of the 198 tour companies were foreign owned (Afshar, 1999).

The largest obstacle to building a tourism business in Kyrgyzstan is the lack of skilled guides with language skills (Afshar, 1999). By providing training to younger guides and translation services for more experienced guides, C&C can position itself to take advantage of the existing guide community, while creating a new generation of highly
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skilled guides, fluent in Chinese, German, English and Russian. Other challenges include the limited infrastructure – there are less than 500 kilometers of rail track in the country – and limited incoming air traffic. From the USA, it requires at least one transfer, and over 14 hours flight time to arrive. However, the primary customers of C&C eco-tourism in Kyrgyzstan will be people closer to the country – European and Asian travelers. There are daily direct flights from England, Germany, Russia and China (Yahoo!, 2006) Our primary market will find the additional challenge of getting to the country an appeal, rather than a drawback. "It is assuredly not for everyone, if you are an adventure type with a passion for the rugged outdoors, if you are pride of yourself on intrepid tolerance, if you are appreciate or seek out places untouched by 'development', Kyrgyzstan should be at the top of your list." (Vickery, 1998)

The employees who relocate to Kyrgyzstan will find it a grand challenge. Our company has been built upon the adventure spirit. While conditions are not ideal, with limited communications, poor infrastructure and questionable sanitation, they are improving and the government is committed to improving the infrastructure to draw foreign visitors and investment. Cost of living is low, and the capitol city of Bishkek provides all the amenities of modern life. The rural areas are less developed, and we do not recommend housing any of our staff outside of Bishkek at this time.

The Kyrgyzstan government has undergone significant changes recently, and is not entirely stable yet (CIA, 2006). This instability creates a great opportunity for growth by foreign investment. The country is rebuilding itself, and trying to find a new image to draw foreign investment. By providing premier tour services, our company can influence future government decisions and help to build a positive, friendly face for the new Kyrgyzstan. Our employees are skilled in negotiations with less stable governments, such as our success building the Argentine branch during their recent financial and governmental crises. We believe that the government turmoil offers an excellent opportunity to build a successful operation. Economically, the government has done an excellent job, reducing inflation to below 5%, with GDP in excess of 6%. Government debt is below 1% of GDP, indicating a fiscally stable environment to conduct business (CIA, 2006)


The final opportunity to succeed in Kyrgyzstan is simply that it has not been promoted – the country is unknown outside of the region (Afshar, 1999). Our advertising department can work with the Kyrgyzstan government and the in-country employees to develop a comprehensive marketing campaign. This new campaign will target the young, disaffected liberal tourist seeking an experience of a lifetime. Interest will be built through community discussions, targeted marketing, traveling exhibits, brand placement in popular cultural activities common to our target demographic. We have begun initial talks with television production companies about a new reality-based show documenting
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the travels and travails of touring the country. We feel that by promoting the features of the country and by positioning the Kyrg brand as an alternative to Western culture, we will appeal to our demographic and create a strong interest in our products.

Kyrgyzstan is a country on the cusp of a new era, with new government in place, unspoiled natural beauty, and a culture significantly different than Western norms. The policies and people are open and inviting to tourism. C&C is poised to take operations to new territories and expand our business. C&C has the people, the adventuresome spirit and the experience in building successful tour operations in times of opportunity and change. The foundations in the country, including people, destinations and economy are in place. C&C will be able to lay a solid business on those foundations and be poised to offer a premiere alternative destination for adventure and eco tourists.



References:

Afshar, Anisa. (1999, June). Incoming Tourism in Kyrgyzstan. Retrieved January 20, 206 from http://www.geocities.com/anisa_first/incoming_tourism.htm

CIA World Factbook – Kyrgyzstan. (2006). Retrieved January 19, 2006 from http://www.cia.gov/cia/publications/factbook/geos/kg.html

Kyrgyzstan Travel Guide : Yahoo! Travel (2006). Retrieved January 23, 2006 from http://sg.travel.yahoo.com/guide/asia/kyrgyzstan/index.html

Postel, Eric and Nevenchanny, Yuri. (2001, August).Kyrgyzstan -- A Jewel of Central Asia. Retrieved January 21, 2006 from http://www.pangaeapartners.com/kyrgyz1.htm.

Viickery, Tim. (1998). Kyrgyzstan: Unusual Jewel of the East. Central Asian Monitor. Vol. 6
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