| Disneyland in the UAE |
Summary
United Arab Emirates (UAE) is a country located in the Arabian Peninsula. It borders Saudi Arabia to the south, Oman to the east and shares its sea borders with Iran and Qatar. Its total population is around 9.8 million though majority of people located in this country are foreign internationals or expatriates. The country is governed by the leaders of seven federal states. Each federal state has an absolute monarchy. Together the head of the federal state form what is commonly referred to as Federal Supreme Council (“Overseas Business Risk – United Arab Emirates – GOV.UK”). Dubai is one of the main host spots attractions due to its well-built structures and rollercoaster and skyscraper buildings. The town hosts the world largest building having enormous shopping malls and stores. Most people are more familiar with Dubai than the country itself. Dubai has emerged as an international destination for most people across the world. It is an area that has relatively had peace and tranquility. It is also an area that has been in the limelight for amazing features. Numerous cultural activities take place in this town due to the numerous numbers of tourists that flock the area. Some of the important sites in UAE include the Bastkia, Sheikh Saeed Al-Maktoum House, Dubai Creek and Burj Khalifa just to mention a few (“Overseas Business Risk – United Arab Emirates – GOV.UK”).
Several macro segmentation factors were considered before choosing countries that qualify for foreign direct investment. The major four factors are political, social, cultural, and technological factors (Birnleitner 30). Political factors that are considered include taxation policies, stability of the country, trade regulations, and geographical regions free from terror attacks, employment law, competition law, and contract law (Birnleitner 30). Social factors include demographic trends, lifestyle of the people, level of education and leisure activities that are dominant in certain regions (Birnleitner 30). Economic factors include those related to interest rates, supply and demand curves, competition factors, and amount of money that is currently spent in the region (Birnleitner 30). It also includes unemployment levels and the level of inflation in a country (“Overseas Business Risk – United Arab Emirates – GOV.UK”). Technological factors that are considered included inventions, development of new systems and speed of technology transfer.
Environmental Analysis
The political structure in UAE is made up of seven federal or emirates states that are named Abu Dhabi, Ras al-Khaimah Ajman, Sharjah, and Fujairah, Dubai, and Umm al-Qaiwain. Although the country is located and classified among Arab countries, it has enjoyed a period of relative calm since early years (“Overseas Business Risk – United Arab Emirates – GOV.UK”). In fact, it is one of the countries in the Middle East that is considered to be the most peaceful. Rarely has it been heard that it’s a home of insurgents or its sponsoring terrorist. However, there are certain political risks that one should look at before investing in the country. Its main religion is Islam meaning that sharia law is still practiced in some areas in the country (“Overseas Business Risk – United Arab Emirates – GOV.UK”). However, their constitution provides for religious freedom. The country has equal rights to both men and women and the two major languages that are used are Arabic and English. The United Nations Development board ranked the country fourth in terms of having satisfactory practices. The country is also among the largest producers of different oil products and the number of foreign internationals in the country are more than the national citizens. This means that the country is open for all parties to invest.
UAE has the second largest economy in Asia and the third across the whole world. The country was also ranked 24th among the highest gross domestic products countries (“Overseas Business Risk – United Arab Emirates – GOV.UK”). The GDP per capita was $ 35392 (“Overseas Business Risk – United Arab Emirates – GOV.UK”). The countries economy only slumped 5% after the financial crisis that hit the whole globe. The rates of inflation in the country by the end of the year 2014 were 3.8 %. The three main economic areas that support the economy of the country are tourism, trade, and retail business. The country also produces 6.6% of the total oil that is distributed across the world. It is estimated that the oil reserves in these country would last for more than a hundred years (“Overseas Business Risk – United Arab Emirates – GOV.UK”). Oil prices for a single barrel range between $ 30 to $ 40 (“Overseas Business Risk – United Arab Emirates – GOV.UK”). The country has also invested heavily in the non- oil sectors to drive its economy to higher levels. Different foreign investors have also come on board to invest in the country. The United Kingdom London Gateway as well as the Abu Dhabi Investment Authority is perfect examples. The country infrastructure is well developed to meet the needs of its population. The transport, media, and logistics parts have all been heavily invested on (“Overseas Business Risk – United Arab Emirates – GOV.UK”). Their economic vision 2030 aims to ensure that it becomes a hub for all of the above-mentioned activities.
The country grants for freedom of religion but most of its laws are still aligned to the sharia law. This might be the only hindrance to any business. However, the country has placed a lot of emphasis on encouraging investors. Technologically, the country is well developed and considered within the ranks of the most developed countries across the world. Most business operations related to technology are quickly opening up major companies in Dubai. Since most companies have been able to establish their activities in this country, there are higher chances that there will be a lot of competition from the other established companies in the region. The country has been on the forefront to encourage foreign direct investment and therefore most of the channels are open (“Overseas Business Risk – United Arab Emirates – GOV.UK”). There will be first mover advantage since Disney is already a branded label that has not been established in the Middle East. Additionally, entry of Disneyland will create competition to industries providing similar services.
Product Mix
Standardization of the whole Disney Dubai would have to take some important factors into consideration. Standardization is better than adapting to the local environment that is influenced by other factors in the market. Some of the factors include cross-cultural diversity as well as tariff and non-tariff barriers. It will also include factors related to internet economy, political and economic integration. The 4p will be utilized to address this problem. The price of the service offered will depend on the above factors. The price may occasionally be reduced provided that tariff barriers are less or are eliminated. Promotional activities will be the first strategy among the 4Ps to be utilized in this country. The notion relating to existence of Disney land will become vital. The company will be located in Dubai, which seems to be one of the great locations because most of the tourist’s attraction sites are within this area. In doing so, the service or product in the market will not only be used by the national but also the tourist who visit the area after occasionally. Therefore, it will be important to standardize Disney Dubai.
There are a number of ways in which Disneyland Dubai can fall into the product mix. The first method involves the creation of a lifetime pack that will be the envy of all the children in the country. Most children would seek an opportunity to go to Disneyland once in their lifetime. Disney land Dubai may contain all features including packs and magical areas that provide a once in a life time opportunity. It may also have a store which sells accessories and products related to Disney land Dubai. The company may also diversify to and engage the community through Disney grand day, school visits and Souvenir shops.
Market Entry Strategy
Direct Exporting is defined as the direct selling of products or services into a market using own resources. This form of marketing is best for Disney land Dubai. In this case, it will involve direct selling of the services and products related to Disney land into the United Arab Emirates. The same services and products that are offered by other forms of Disney land would be present in the UAE. Direct exporting as a method of exporting services of a foreign country is associated with numerous benefits. First all potential profits that will be generated will come directly to Disney land. This is because there is no intermediary in the whole process (“Chapter 7: Market Entry Strategies”). Secondly, there is a greater control in managing all forms of transactions in the country. Thirdly, the company will be able to exactly know and identify their true customers and will therefore implement all necessary strategies that are aimed at building a huge customer base (“Chapter 7: Market Entry Strategies”). The customer’s confidence also increases once they establish that they are dealing with the real company owners. Issues relating to trademarks of the company as well as other patents and copyright products formulated by the company will be saved and all parties will become fully engaged in the export process. Direct exporting is considered one of the most aggressive forms of exporting products to different markets.
Conclusion
Disneyland Dubai would be one of the greatest ideas ever to hit the market. Dubai as a country is politically and economically stable and therefore the country infrastructure serves to protect the interest of the company that is yet to be formed. The social and cultural practices of the people in this region are aligned to provide a good climate where products can be sold in the retail markets. The company is already an established brand and may therefore not face any serious competition. The country has already shown positive indicators in investing in foreign direct investments. Most of their practices are at par with what most companies need in order to develop in certain regions across the world. Additionally, a lot of companies have invested in the country making it a good area of expansive business opportunities. The company would be more likely to put up a structure in Dubai since it is the most preferred destination when compared to the other areas around that area. The services and products that will be offered in the first time after the company inception shall be standardized to meet the needs of the consumer. Trade regulations will determine the level of standardization. Other important aspects that will be considered will government regulations and type of tariffs in the market. Lastly, the method of entry into the country would be direct exporting since it has more benefits than any other method.
Works Cited
“Chapter 7: Market Entry Strategies”. Fao.org. N.p., 2016. Web. 11 May 2016.
“Overseas Business Risk – United Arab Emirates – GOV.UK”. Gov.uk. N.p., 2016. Web. 11 May 2016.
Birnleitner, Helmut. “Attractiveness of Countries for Foreign Direct Investments from the Macro-Economic Perspective.” Proceedings of FIKUSZ’14 (2014): 29-40.