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Economic, Financial and Social Growth Prospects of the UAE Essay


Introduction: UAE Economy

The United Arab Emirates have become the synonym for prosperity and economic stability. According to the latest information on the state’s progress, the premises for the growth of the international business in the UAE have been set rather successfully, with a range of areas, where international organisations may receive support. However, certain features of the UAE economic, social and legal principles may be seen as controversial to the success of international organisations. Though certain factors, such as bureaucracy, may jeopardise the very existence of foreign companies in the UAE setting, the use of the existing favourable factors may help advance in a range of the UAE industries.

PESTLE Analysis of the UAE

Factors Description
Political
  • Recent shift towards globalisation and the following openness to political contacts;
  • Extremely high bureaucracy rates;
  • Enhancement of interaction between the UAE government and its citizens (El Sokari, Van Home & Huang, 2013).
Economic
  • Super store chains as the driving force behind the evolution of the private business (GCC retail industry, 2015, p. 9);
  • Several key super store chains are dominating the UAE market at present;
  • The Borders Group, Inc. Has recently become one of the largest super store chains in the UAE;
  • Luxury as priority in the demands of the UAE customers.
Social
  • The significance of luxury elements of everyday life as the index of one’s social status;
  • Lack of opportunities for female entrepreneurs to succeed;
  • Recent shift towards promoting culture tolerance and the cognition of other cultures.
Technological
  • Technological progress and consistent development of information technology;
  • Application of IT in every domain of the UAE citizens’ life;
  • Promotion of the latest IT technologies as a tool for information management in most organisations.
Legal
  • The tax regulations are rather rigid in the state; however, the UAE legal system offers “doing business in free zones are highly attractive with 100 per cent” (Tarbuck & Lester, 2009, p. 9);
  • A range of bureaucratic processes, which slacken the process of registering the company and introducing it to the UAE market.
Environmental
  • Lack of natural fresh water;
  • Water desalination;
  • Deforestation and the following desertification (Environmental issues, 2015).

Implications for the UAE Organisations

Mid-Sized Car

The environmental concerns, which the UAE authorities have been facing for the past several years, may become a major impediment to the success of promoting a mid-size car, unless it is a hybrid one. Therefore, the introduction of pollution-free vehicles can be viewed as an option for a mid-size car company. Otherwise, the UAE environment may become rather hostile for an organisation of the kind.

The technological factors, in their turn, presuppose that a company producing mid-size cars is likely to face a stiff competition in the market. Indeed, high technological development rates mean that the UAE organisations working in the same area are more than competent in what they are doing.

The economic factors, on the other hand, are quite favourable, as most families in the area are rather wealthy and, thus, can allow buying a mid-size car. Likewise, the political stability of the UAE can be considered a major advantage for the organisation.

In addition, the fact that a car is considered one of the essential attributes of a citizen by most denizens of the UAE population makes car business one of the most profitable industries in the UAE. The inclination of the UAE citizens to buy luxury cars in order to emphasise their status, however, means that a mid-size car business may face certain issues unless a proper promotion campaign is carried out.

Super Store Chain

Seeing that the supermarket chains have been the driving force behind the evolution of the private sector in the UAE for several years running, setting a super store chain in one of the UAE cities may turn out a rather good idea.

However, the accomplishment of the specified goal can become rather complicated in the highly competitive environment, which the UAE super store market represents. The Borders Group, which has entered the UAE market recently and become dominant in it, is very likely to become a dangerous rival to the new entrants into the UAE super store chain industry.

Moreover, according to the existing data, the technological advances made over the past few years have created the premises for the evolution of the hyper market industry in the country (Mbaga, 2014). As a result, the creation of a super store chain will trigger the need to update the technological framework thereof on a regular basis and facilitate an impeccable process of information management. To be more specific, the incorporation of the AHP (Analytic hierarchy process) technology will become essential to the sustainability of the organisation within the UAE environment.

Travel Agency

The recent changes towards global economy and the promotion of cooperation with foreign organisations have opened a wide range of opportunities for the UAE travel business to bloom. However, increasingly high bureaucracy rates within the state are likely to pose a legitimate threat to the evolution of the business. Moreover, the fact that the enthusiasm for learning about other cultures is rather low among the UAE citizens despite the recent attempts at promoting cultural awareness can be considered a rather negative sign for a travel agency. Thus, the emphasis in the promotion campaign must lie on the unique experience and the comfort that the travel agency has to offer.

Conclusion

An overview of the present-day UAE social, political and economic state has shown that the country is saturated with products to the point where its citizens require luxury ones in order to communicate their status to others through their possessions. Herein the key complexity for a new entrant to the UA market lies; it is essential to develop the strategy that will allow for coexist with the companies that are dominating the market currently and at the same time attract new customers, increasing the revenue stream.

The super store chain project seems to have the greatest amount of chances to survive in the competitive environment of the UAE market. Indeed, the popularity of the given type of entrepreneurship seems to be the highest among the target customers; therefore, it is quite reasonable to suggest that the specified type of entrepreneurship should flourish in the UAE economic environment. It is recommendable, though, that the company leader should consider an efficient promotion strategy aimed at propelling the company to the top and making it easily recognisable among a range of other organisations of the like. An integration of the e-commerce approach can be viewed as a viable opportunity for attracting the target audience to the numerous services and products offered by the organisation.

As far as the promotion of a mid-sized car to the denizens of the UAE population is concerned, the fact that most residents are preoccupied with the luxury features of a vehicle should be taken into account prior to integrating into the market. Therefore, unique features should be incorporated into the design of the car; otherwise, the company is most likely to be doomed to failure. Nevertheless, the fact that having a car is viewed as a necessity in the UAE may be the sign for a mid-sized car production company to put a stronger emphasis on the utility factor and integrate several original features into the car, such as a unique design, expensive material, latest technology, etc., so that the product could appeal to the key demographics.

Finally, as far as the travel agency is concerned, promoting luxury tours to the most popular or exotic spots of the world must be seen as an approach towards selling the services. One must admit that the current lack of enthusiasm concerning the exploration of foreign culture among the UAE residents is a huge obstacle to the evolution of the tourism industry in general and the company in question in particular. However, with the absence of a strong leader in the industry, taking the lead in the given domain will be a rather easy task to perform. Afterwards, a series of advertisements promoting the splendid experience offered by the company in the most luxurious hotels of the world can be created, thus, making the idea of using the firm’s services quite alluring to the target audience.

Reference List

El Sokari, H., Van Home, C. Z. & Huang, M. (2013). Entrepreneurship: An Emirati perspective. Dubai, UAE: The Institute for Social and Economic Research. Web.

Environmental issues. (2015). Chronicle. Web.

. (2015). ALPEN Capital. Web.

Mbaga, M. D. (2014). The prospects of sustainable desert agriculture to improve food security in Oman. Consilience: The Journal of Sustainable Development, 13(1), 114–129. Web.

Tarbuck, A. & Lester, C. (2009). Dubai’s legal system: Creating a legal and regulatory framework for a modern society. Dubai, UAE: Motivate Publishing. Web.

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IvyPanda. (2020, July 3). Economic, Financial and Social Growth Prospects of the UAE. Retrieved from https://ivypanda.com/essays/economic-financial-and-social-growth-prospects-of-the-uae/

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"Economic, Financial and Social Growth Prospects of the UAE." IvyPanda, 3 July 2020, ivypanda.com/essays/economic-financial-and-social-growth-prospects-of-the-uae/.

1. IvyPanda. "Economic, Financial and Social Growth Prospects of the UAE." July 3, 2020. https://ivypanda.com/essays/economic-financial-and-social-growth-prospects-of-the-uae/.


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IvyPanda. "Economic, Financial and Social Growth Prospects of the UAE." July 3, 2020. https://ivypanda.com/essays/economic-financial-and-social-growth-prospects-of-the-uae/.

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IvyPanda. 2020. "Economic, Financial and Social Growth Prospects of the UAE." July 3, 2020. https://ivypanda.com/essays/economic-financial-and-social-growth-prospects-of-the-uae/.

References

IvyPanda. (2020) 'Economic, Financial and Social Growth Prospects of the UAE'. 3 July.

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