Report on Herbal ProductsAnalysis of Supply and Demand Trends in the Target MarketIt is essential to analyze the key supply issues and demand trends of the three markets that include Saudi Arabia, Dubai and Qatar, where the formed joint venture wants to establish its target market. Notably, with regard to the supply and demand market issues and analysis, the joint venture has enabled the business to acquire a strategic, competitive advantage. This has been driven due to the fact that the joint venture business is now in a position to pool its resources together, thereby enhancing an effective analysis which consequently results to highly reliable outcome.
Such resources includes use of human resource, who have unique professionalism and expertise on market research from both companies under the joint venture agreement; use of higher financial resources, which enables the accomplishment of a more comprehensive research and analysis; and also enables the use of other capital resources that are essential in actualizing a highly reliable market analysis results. Supply AnalysisThe production of herbal products by the joint venture between Getz and Herbion companies mainly relies on the supply of specific, distinguished types of plants parts, which are considered to be the key raw material in the processing of various herbal products.
The UAE market in particular, the supply of raw materials for herbal products production is adversely affected by some regulatory issues with regard to importation of herbal materials, for instance, fruits, vegetables, roots, bark, seeds, among other parts and also the herbal products (Barkla, 2010). These regulations entail the compliance of certain standards, especially with regard to the chemical levels of those plant materials (Zaman, 2012).
Herbal materials imported from foreign countries to the Dubai market have to be ensured total compliance on the set chemical levels. Failure to compliance results to confiscation and destruction of such shipment. The three markets, Dubai, Saudi Arabia, and Qatar, remains significantly affected by the unfavorable weather conditions experienced in various producing countries. Also, plant diseases affecting the production of herbal materials has adversely impacted to the supply of the raw materials for the production of herbal products. For example, there has been considerably weak supply of herbal and plant materials from Jordan, Oman, Syria, and Lebanon, which are highly relied upon by the three countries (Barkla, 2010).
Consequently, this has resulted to a drastic price rise on these materials. Notably, the Saudi Arabia and Qatar countries do not have stringent regulations with regard to herbal materials chemical level compliance as opposed to the Dubai market. Moreover, Saudi Arabia enjoys substantially higher and more plentiful supply of herbal and plant materials from a range of countries including Spain, South Africa, Kenya, Jordan, Turkey, Syria, and Egypt.
Though Saudi Arabia still remains affected by inadequate supply of herbal products due to unfavorable weather conditions and certain plant diseases, the prices of herbal materials in this country is considerably fair as compared to Qatar and Dubai markets (Barkla, 2010). Therefore, the joint venture can establish a production plant in Saudi Arabia for it is the highly suitable strategic location with regard to the cost of raw materials and also it is geographically adjacent to Dubai and Qatar.