Global Strategies for Doing Business - Example

Introduction The legal classification of the UAE is one of a Federal Sovereign State and it is made up of seven Emirates which include; Umm Al Quwain, Abu Dhabi, Fujairah, Ajman, Dubai,and Ras Al Khaimah. The establishment of the current federation took place in 1971, and was organized with only six Emirates. Then on February 10, 1972, Ras Al Khaimah became a member of the federation. The capital of the federation is Abu Dhabi.The Emirates is governed by the Supreme Council, which consists of the rulers from the seven Emirates. The Supreme Council elects two leaders from its midst to serve as President and Vice President of the Supreme Authority, which is the highest law in the UAE. The federal composition also has a cabinet, which is called the council of minsters, and a federal national council, along with a federal supreme court which has jurisdiction over the independent judiciary. The Emirates legislature has a membership of representatives from each Emirate, and is called the legislative council, and they are granted executive authority to formulate and draft all laws. Each Emirate also has its own local government arrangement, wherein there are variances in size as well as scope. Along with the indigenous populations within each Emirates, there is a substantial number of foreigners, which include Arabs, Asians, Iranians and Europeans.Of course, the official language as mandated in the country’s constitution is, Arabic. However, there is a preponderance of English which is spoken when it comes to doing business. For the foreign company seeking to do business in the UAE, there are abundant opportunities. There are open invitations for the establishment of trading relationships using commercial organizations as conduits, as actual presence has distinct advantages. It is the desire of local businessmen to have a preference for conducting business with someone whom they are familiar with, for the purpose of establishing a personal relationship and trust. This is an essential commodity in the Middle East, and carries far more weight than it does in Europe and the USA. One can not understate the importance of physical presence for a company seeking to do business in the UAE. Another important element of the need for a physical presence is that the buying patterns of some countries may tend to be somewhat erratic, and this non-adherence to brand loyalty must be recognized early, and it is only through first class market intelligence on the ground, that detection can be recognized early and averted. It can be critical to a multinationals bottom line, if the have employed a reporting structure which does not relate to the region. It is not small mystery that the member Emirates have embarked upon a prudently devised strategy in investing their surpluses, more importantly, they are selecting synergies and positioning their holdings in a long term economic vision to attract technology and knowledge transfer for specific industries on all local levels, within the Emirates. In the event that the price of oil enters a downturn, they seek to have other reliable sources of income to offset the shortfall.This economic planning has fostered a liberalization, through the establishment of trade free zones, which serves as an incentive for foreign multinationals to enter this booming market, which is second only to China in overall GNP. Commercial Companies Law UAE While it is important to have a working knowledge of the culture, history, economics, politics and corporate planning which is applicable to all of the Emirates, it is also critically important to be abreast of the Commercial Companies Law. These regulations stipulate and outline exactly which activities are allowed for those seeking to establish a presence in the UAE business environment.The law takes on a comprehensive posture, as it relates to those companies which are conducting their primary business involvement in the UAE, and includes those foreign multinationals who seek to position themselves in branch offices within the UAE on a macro level, and the adherence of all local laws within the country where they plan to conduct business activities, which might have a slight variance from the federal laws. Consumer Research There will be a need for qualitative and quantitative research which will serve as the basis for establishing a broad data base, which will serve as viable and necessary instruments in formulating strategy and basing decisions. It must be established first and foremost whether the product or service which is offered by the multinational is either desired or needed by the consumer. It could be that the company may need to employ the four degrees of adaptation,(Rehman,2008), which involves the fashioning of their product or service to adher specifically to the consumers in the location.There may be certain elements which might require tailoring to suit the local needs or desires. Most multinationals if not all, are market oriented, and a marketing strategy geared toward the UAE must be based on the same premise. The company will strive to deliver new products and messages which address consumer needs, and these accommodations will be focused from their inevitable functionality and emotional satisfaction. Marketing and consumer research will empower the multinational to focus on the specific dynamics of the targeted consumer, such as their needs, motivations, and perceptions.Most multinationals are not prone to change their marketing strategy, however, they must be constantly aware of the needs of consumers from market to market. Multinational status affect on strategy The fact that a company which has a multinational posture seeks to enter the business members of the Emirates has placed on aligning themselves with those internal and external entities which can access and possess the latest technologies and innovations. Multinationals have the tendency to work with at least two essential types of innovations; Product innovation concerns itself with the design and bringing forth either a new or vastly improved product or service into the market place. The multinational through it vast communication network, coupled with its staff diversity, is empowered to saturate the market with the appropriate messages. These messages which are designed with an abundance of good practices, will exhibit the multinationals sincerity in adhering to country wide laws, standards, and consumer desires,while providing a quality product or service to the targeted consumer. The second type of innovation is that of process, which concerns itself with the multinational baring its comprehensive strategic plan, through the exposure of its logistics, personnel training, financing, inventory control, communicating, and marketing. It is a given that most of the focus of the multinational will be geared towards the innovation of product or service, particularly if the innovation represents a substantial change from the multinational norm in other markets. The return on any innovation which the multinational might employ to enter the EAU market, has a substantial pay off potential, as such, it also embodies a great deal of risk.(Vahs;Burmester 2005). Moreover, the multinational has the capability to retrofit their synergies to make them locally relevant. Most multinationals have the adaptability to have a global image, which they can adjust in and around the local demand.This can be achieved by the multinational due to their scientifically relevant data base, which has enabled them to exhibit a high level of flexibility, in accordance with their deep seated understanding of the country’s culture, which alerts them to the prevailing differences which may be prevalent.Moreover, the respect for these differences, whether they be economic, political,historical,cultural or social, provides them with a heads up, which enables them to appreciate and adjust to the variances. The breadth of a multinational’s scope enables them to be in a position to organize large global initiatives which encompasses a broad consumer base. The access of multinationals to tap corporate global deployment of plans and best practices enables them to comfortably and prudently position themselves and adjust their plans to accommodate their target market. (Valery 1999). The multinational is keenly aware that their corporate image, as well as their reputation as it relates to cooperation and partnering, will be called to bear. In this light, they are aware that the host country will be evaluating the request for entry on how well the corporate neighbor image will fit into the short and long term. Within the Emirates, there are a minimum of taxes, so the host countries are not seeking corporate partners to reinforce their tax base, moreover, they are seeking corporate partners whose strategies exhibit a contribution to their technology and information needs development over the long term.The ability of the multinational to exhibit the full range and scope of their flexibility, further enables them to develop strategies which will be acceptable to all countries within the emirates.It is essential for the multinational seeking to enter the UAE to be able to exhibit both its willingness and ability to sustain an innovative policy. It was revealed by Accenture (2002), consumers were queried on their feelings concerning innovative products, and more than two thirds of those surveyed, indicated they would be willing to spend more for a product which has been improved.This was particularly relevant to consumers during an economic downturn. Presentation of evidence on the existence of a pro-active research and development department will further enable entrance into the EAU market place. Reflect strong organization in marketing and branding It is important for the multinational strategy to reflect that it has placed an emphasis on its marketing resources to assure that this aspect will be formidable on at least two levels.It must be reflective of projecting a worldwide and regional brand development for marketing and furthering creativity. The second emphasis of the strategy must be reflective of building the brand on a local marketing level, with ample consideration for customer inputs, which will lead to customer management. Economies within the EAU are rapidly becoming global and the infusion and dissemination of information is becoming of the utmost importance, as intangibles have come to position themselves in places where tangibles once stood. When one views the list of intangibles, multinationals must be confident that the presence of their brands will stand out and represent their most valuable assests. However, it is important for the multinational to deal with the reality that the presentation of their brand, given its intangible existence, is only present in the form of a mere promise. It is a promise made to the consumer to fulfill a need, which may bring pleasure or even safety.It is pivotal to the multinational to show that there is a need in the consumer market for their product or service, which is essentially being unmet, this will further exemplify the power of the proposition for entrance. While the external vision of the market may appear to be a crowded place, the multinational must offer a strategy which will clearly articulate the needs which they will satisfy. It has been said that, it is not so much about what the multinational will be, but more about they won’t be. It would be to the advantage of the multinational if they were to enter the new market with prices that are markedly lower than those of their competitors, as this method has shown various levels of success in other emerging markets. Troy offers this assessment on the positive affects of lower prices,Wal-Mart maintains a promotional stand that its closest US competitors (K-Mart and Target), have yet to come close to emulate. “While Kmart trots out Martha Stewart Everyday, and Target promotes its ever-growing portfolio of exclusive, seemingly high-profile partnerships, Wal-Mart simply puts the product on the shelves and sells it for less”. Each brand which is introduced by the multinational must have its individual leader, which assures that each item will be fashioned to local needs.Further, it will affect rapid innovation, while affording uniformity in the market across regions. The strategy should reflect that the brand leaders will coordinate all efforts with diversified teams which provide various types and levels of expertise towards solidifying the brand. After all, the brand is only a promise, and the multinational strategy should reflect how the implementation of this intangible will be achieved. The strategy should show that the teams will be divided into, teams which will address government relations, point of market entry, responsibility for overall marketing strategy, corporate marketing which has the responsibility of overall on site avtivations, media strategy, external communications, public relations, public affairs, and brand responsibility for total market strategy. Market Segmentation Marketers are moving away from board mass marketing to a more targeted approach. Broderick and Pickton (2001) and Kolter and Armstrong (1997) identified a trend towards targeted marketing which allows sellers to better identify their marketing opportunities. Marketers can approach a market through market segmentation. “Market segmentation is the process of splitting customers into different groups, or segments, within which customers with similar characteristics have similar needs.” (Broderick and Pickton,2001) Marketing Mix In order to achieve company’s marketing objectives, a company may need to have a strategy that includes different elements which is the various parts of the marketing mix. It is important to get a balance between the marketing mix components in order to become successful. For example, if acceptance of a newly-priced service is poor, it could be that the answer is to change the service, or to deliver it in a way that is more convenient to the user, or to improve the quality of the promotion rather than to cut the price. In popular usage, marketing is the promotion of products, especially advertising and branding. However, in professional usage, the term has a wider meaning which recognizes the marketing is customer-centered. Products are often developed to meet the desires of groups of customers or even, in some cases, specific customers. McCarthy divided marketing into four general sets of activities. His typology has become so universally recognized that his four activity sets, the 4 P’s have passed into the language. Product, defining the characteristics of your product or service to meet the customers' needs. Pricing strategy.. Identifying the total cost to the user is a part of the price element. Promotion includes advertising, personal selling, sales promotions (e.g. special offers), and atmospherics (creating the right impression through the working environment). Public Relations is included within Promotion by many marketing people Place or distribution - Looking at location. Bibliography Accenture (2002) Accenture (Ed.): Mind the Gap! – Consumer Attitudes to Innovation, 2002. Broderick, A. and Pickton, D. (2001), Integrated Marketing Communications, 2nd Edition, Harlow: Financial Times Prentice Hall Kotler, P. and Armstrong, G. (1997) Marketing An Introduction. Fourth Edition. New Jersey. Prentince Hall International. Rehman,A., (2008) Dubai & Co:Global strategies for doing business in the Gulf States, McGraw Hill Professional Vahs; Burmester (2005) Vahs, Dietmar; Burmester, Ralf: Innovations management:Von der Produktidee zur erfolgreichen Vermarktung, 3. Auflage,Schäffer-Poeschel, Stuttgart, 2005. Read More