Lebanon calls in consulting firm McKinsey to revamp its economy

29 January 2018 Consultancy-me.com

Lebanon is hiring management consulting firm McKinsey & Company as the nation bids to restructure its economy. As is the case for the majority of Middle Eastern economies, Lebanon has, until recently, been dependent on one or two areas of strength. In the case of Lebanon, this took shape as a dependency on remittances and banking – something which has left the country in the midst of a debt crisis.

With at least three times as many Lebanese living abroad than in Lebanon, the country’s economy is for a large part sustained by remittances which have continued to flow in, particularly from (high-ranked) Lebanese nationals in Gulf and African countries. Banks have used this money to buy government debt, but this now stands at 150% of economic output according to the Lebanese Government, one of the world’s highest ratios alongside Japan and the beleaguered economy of Greece. Lebanon’s trade deficit meanwhile hit $11.8 billion in Q4 last year, with exports of $2.1 billion lagging behind a heavy reliance on imports at $13.9 billion.

With foreign reserves standing at a record level of $43 billion, the Lebanese currency has been able to survive numerous domestic political storms, including several which have been dealt with without a President or Prime Minister – Lebanon had not set a domestic budget for 12 years until parliament passed one last year. However, the influx of 1.5 million Syrian refugees since 2011 has seen the sustainability of this model strained. The Economy and Trade Minister contended that this could see Lebanon’s debt-to-GDP ratio climb even higher, to 170%, in the next few years. Analysts are suggesting Lebanon should aspire to emulate the economy of Singapore, another small country with many ethnic groups. 

Lebanon calls in consulting firm McKinsey to revamp its economy

Moreover, the country – known as the Paris of the Middle East – grapples with high unemployment (despite its population across the board being relatively highly educated), with youth unemployment over 35% in the last figures available.

In a bid to help Lebanon advance its economy, Economy and Trade Minister Raed Khoury has confirmed that US consulting giant McKinsey & Company has been drafted in to support the development of a strategic economic roadmap, with the aim of bringing the country back to its flourishing times last seen in the mid 2000s. Meanwhile, back in the 50s, Lebanon was in terms of GDP per capita one of the globe's top five nations, among the likes of the Americans and the Swiss.

A “tricky” prospect 

The six-month agreement with the Arab world’s most indebted nation will see McKinsey start work with various ministries and economic bodies to formulate a new economic vision. According to Khoury, a former Barclays Wealth banker and founder of Cedrus Invest Bank; “The first thing we want to do is to identify our economic identity and then go to more specific things.”

In order to deliver this, McKinsey will first need to analyse and quantify various areas, including services, financial flows and parallel economies, such as the one controlled by the Iranian-backed Hezbollah group; something which David Butter, an associate fellow at Chatham House, believes is easier said than done. The London-based expert at the Royal Institute for International Affairs said such strategic plans “might not do any harm, but in the case of Lebanon it’s a bit more tricky… [This is because] you have a lot of grey areas which might be difficult to put into the context of some sort of a strategic plan.”

McKinsey are also involved in the high-profile revamping of the Saudi Arabian economy. The Kingdom, which is likewise plagued by youth unemployment over the 30% threshold, had been making drastic efforts to restructure its previously oil-dependent economic model. McKinsey has since been tasked by the Saudi monarchy with assisting in the implementation of this restructuring, with the Deputy Crown Prince Mohammed bin Salman’s Vision 2030 aiming to boost the private sector and reduce unemployment.

Saudi pharmacy chain Nahdi transforms with aid of two consultancies

11 April 2019 Consultancy-me.com

Saudi Arabia’s leading pharmacy retail chain Nahdi has undergone a recent transformation with the help of two consulting firms; Resilience& for a business process re-engineering project and Redbox Digital for an omnichannel commerce implementation.

With a vast network of outlets in 140-plus cities and villages across Saudi Arabia, the Jeddah-headquartered Nahdi Medical Company oversees the biggest retail pharmacy chain in the Kingdom – serving millions of customers every year. Stating a goal to remain at the forefront of innovation, Nahdi has recently undergone two transformation projects with the aid of consultancies Resilience& and Redbox Digital.

The former project, which commenced last year, has seen the team from management firm Resilience& partner with Nahdi’s Business Process Re-engineering leadership team to institute a more efficient and agile manner for serving its customers. For the strategic transformation, Resilience& among other activities assessed processes against best-practices and benchmarking tools and applied a performance review mechanism to aid with any future fine-tuning.

Founded in the UK in 2015 and with further branches in Egypt, the UAE, Oman, Kuwait, Morocco and Greece, Resilience& describes itself as a network of consulting firms and independent experts – among them; UAE-based principal partner Ahmed Ragab, who has 15 years of cross-sector consulting experience across the Middle East – including a brief stint as a deputy director with Baker Tilly in Kuwait; and senior manager for digital transformations Tamer Montase, a former manager at Ernst & Young.Saudi pharmacy chain Nahdi transforms with aid of two consultanciesMeanwhile, Nahdi has also seen an UX overhaul with the implementation of a complete omnichannel commerce experience across its retail stores and digital channels delivered by global digital commerce and creative design consultancy Redbox Digital – a leading global elite Magento partner in the Middle East. According to the firm, Nahdi experienced its highest ever site traffic and best basket size and conversion rates in the week following the launch.

Built on Magento Commerce Cloud and Magento Order Management (while integrating Nahdi’s existing back-office Oracle systems), Nahdi’s head of omnichannel and former Accenture management consultant Pawel Dabrowski described the implementation as an amazing achievement given its size and complexity. “There were so many elements to consider from mobile application and single sign-on to loyalty programmes and single customer view,” Dabrowski said.

“Being able to bring all these together required knowledge, skill, understanding of the wider eco-system and more importantly team-work. There were challenges along the way, as with any large-scale implementation, but Redbox’s technical understanding, flexibility and ability to swiftly solve complex issues was behind the project’s huge success. They have a long history in the region and an excellent reputation for delivering high-performing omnichannel solutions.”

Founded in 2004, Redbox has a regional hub in Dubai (established in 2013 and serving clients in the UAE, Saudi Arabia, Kuwait and Qatar) with further operations in the UK, US, Italy Australasia, South Africa and Mauritius – the digital consultancy having since its inception built up an impressive roster of clients including Universal Music, Sephora, AXA, Nespresso, The Body Shop and Abul Latif Jameel, the parent of lean management specialists Four Principles.

Elsewhere in the regional healthcare sector, Four Principles itself recently celebrated a total supply chain and procurement processes lean transformation project for the Sulaiman Al-Habib Medical Group – naming the company its inaugural Kaizen Awards’ winner – while specialist consultancy GE Healthcare Partners has just picked up its own award, being highly commended at the prestigious MCA awards in London for a transformation project in conjunction with the Dubai Health Authority.