Question

In: Operations Management

You are a consultant to a small size Company engaged in Medical Products. The company is...

You are a consultant to a small size Company engaged in Medical Products. The company is interested to expand its business to the Middle East - Dubai. Prepare a business report focusing on the business potential. Also, give advice on the entry mode and external risks if the decision is made to do business in the Middle East.

Solutions

Expert Solution

In 2009, there were 14,677 medical professionals in Dubai alone; in 2019, the number rose to 43,500 medical professionals in the emirate. But despite having a significant professional network, we must investigate the customs and traditions present in the country we want to reach with our portfolio. The United Arab Emirates is a federation made up of 7 emirates.

The oil-rich United Arab Emirates is home to millions of expatriate workers of all levels and nationalities, lured by tax-free wages and sunny days throughout the year. These factors will give us an idea of ​​the type of services we can offer in that country. Dubai and Abu Dhabi are the main financial squares in the entire region.

Addressing the presence of VAT, which is 5%, however, the labor market is expected to remain incredibly competitive. On the other hand, it also includes the 100% opening of certain sectors of the economy to foreign ownership, a more flexible visa regime and cuts to company registration fees and other administrative costs.

To sell in the Emirates, it is not enough to have a quality product, it must also be accompanied by a sales and marketing strategy adapted to this market. We must not forget that, to sell abroad, having a quality product is no longer enough. All claim the quality of their products, the French, Italians, Germans, Portuguese, Americans, etc. And although quality of course plays an important role, it is not the only factor that will determine whether a customer opts for our product or that of our competitor.

Many of these mistakes are probably more a matter of lack of international vision than of lack of resources. Today a good company and product image without having to make a large investment.

1. Boost your presence on the Internet

2. Create quality bilingual corporate material

3. Take care of the design and image of your products

2.- For several years, the tension between the United States and the Middle East has been increasing, either due to the constant incidents related to the American military occupation in Arab countries, as well as the precedents of war between both sides. The relationship between the two countries has deteriorated since Donald Trump became president of the United States.

Direct exporting may be the most appropriate strategy in one market while in another you may need to set up a joint venture and in another you may well license your manufacturing. There will be a number of factors that will influence your choice of strategy, including, but not limited to, tariff rates, the degree of adaptation of your product required, marketing and transportation costs. While these factors may well increase your costs it is expected the increase in sales will offset these costs. The following strategies are the main entry options open to you.

Other factors include:

  • Direct Exporting
  • Licensing
  • Franchising
  • Partnering
  • Joint Ventures
  • Buying a Company
  • Piggybacking
  • Turnkey Projects
  • Greenfield Investments

Risks & Opportunities:

But one can not disregard the benefits of doing business in MENA. Organizations following and adhering to strict risk management standards will bring about very successful business development. The new estimates published by the International Monetary Fund ( IMF) via its World Economic Outlook Report placed the Middle East's export value at $1.13 trillion at the end of 2012, a amount that constitutes 6.2 per cent of overall global exports, and a cumulative GDP of $3.96 trillion for all Middle Eastern nations. However, amid these difficulties, total economic growth stayed stable at 2.4% in these oil-exporting countries. The IMF expects a significant increase in oil prices from under $50 a barrel in 2015 to $74 a barrel by 2020, providing further assistance to the global economy. While wars and political unrest have devastated the economies of some MENA countries, many others are emerging markets which bring big openings for a large range of foreign businesses. According to Nielson 's study on Internet Use and Global Population Figures, internet use in the Middle East has risen by more than 2.500 trillion over the past decade, Saudi Arabia is already the world's largest user of You-Tube content, and cell phone penetration in the Middle East is 19 percent higher than the world average.


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