Comprehensive Market Analysis of Non-Alcoholic Wines Industry in UAE

This research assignment provides a detailed analysis of the non-alcoholic wines industry in the UAE, including SLEPTS analysis, major trade blocs, social and cultural factors, and ethical challenges. The report also highlights the rising demand for non-alcoholic beverages and the market's growth potential.

MAXWELL AMSTERDAM
GLOBAL MARKETING IN A DIGITAL ERA (HPMK440-1)
RESEARCH ASSIGNMENT (FA1)
A Comprehensive International Market Analysis of the Non-Alcoholic wines
industry in the UAE.

1.Introduction
The United Arab Emirates is a relatively new country, having been established as a
Federation on December 2, 1971. Prior to the creation of the UAE, the British
governed the seven Emirates that currently make up the Federation, and these
sheikhdoms were known as the Trucial States (DE MAN, 2020). Poverty and
socio-economic underdevelopment were present when the country was founded.
The UAE's subsistence economy, which was defined by agriculture, pearling
extraction, fishing, and trading activities, was still strongly impacted by its
subsistence economy in 1968, with a population of only 180,000 people.
Infrastructure was almost non-existent in the late 1960s, and the Trucial States – the
current United Arab Emirates – depended on foreign monetary help to begin its
illusive socio-economic growth. Despite this, the UAE was able to transform from a
subsistence economy to an innovation-driven economy in just 44 years (Alexandre,
Dias and Delgado, 2016).
Figure 1.1 Geographic Location of UAE (Jill Ann Crystal and Peterson, 2018).

According to official estimates, the UAE's GDP has grown approximately 36 times in
current values since it was founded in 1971 by seven Gulf emirates (gulfnews.com,
n.d.). This growth meant that the UAE is now ranked 18th globally when it comes to
exporting, (www.indexmundi.com, n.d.). The UAE also has an ease of doing
business rating of 16th globally which is the strongest rating in the region, of 80.9 out
of 100 (The National, 2019).
During this analysis, we will be looking at the market of Non Alcoholic beverages in
the UAE. Before even trying to infiltrate the market an important factor to consider is
the currency exchange, which is 4.1 Emirati Dirhams to 1 South African Rand.
2. International trade environment: SLEPTS analysis
SLEPT analysis is a methodology for evaluating the impact of the external
environment on an organization. It takes into account five macro-environmental
factors: social, legal, economic, political, and technological (Zigu, 2018).
● Social Factors: Health consciousness, education level, population growth
rate, gender distribution, socioeconomic classes, and other factors are all
considered (Zigu, 2018).
● Legal Factors: Antitrust laws, discrimination laws, intellectual property laws,
consumer protection laws, employment laws, regulatory mechanisms, and so
on are all included (Zigu, 2018).
● Economic Factors: Growth rates, inflation rates, interest rates, currency
rates, fiscal and monetary policies, credit availability, and so forth are all
included (Zigu, 2018).
● Political Factors: involves government policies and interventions in the
economy, such as the amount of corruption, government stability, trade

control, competition regulation, trade union engagement, consumer protection
legislation, and employment laws, among others (Zigu, 2018).
● Technological Factors: R&D activities, technology incentives, rate of
technological change, infrastructure level, access to technology, and other
technical characteristics are included (Zigu, 2018).
3. World trading environment
The Global Trading Environment consists of trade negotiations between nations to
form agreements by giving away some of their sovereign rights for a common mutual
beneficial goal. The concept of a global trading environment is based on the
principle of economic cooperation between nations.
3.1 Barriers to trade
Government measures that impede international trade are known as trade barriers.
Commerce obstacles may either make trade more difficult and costly (tariff barriers)
or totally prevent trade (Tejvan Pettinger, 2017). See below examples of barriers to
trade.
● Tariff Barriers - Certain imports are subject to these tariffs. Imported
items are becoming more expensive, making imports less competitive
(Tejvan Pettinger, 2017).
● Non-Tariff Barriers - These are rules and restrictions that make it more
difficult to trade. It can be difficult to trade, for example, if foreign firms
must follow complicated manufacturing rules.
● Quotas - A limit on the number of imports is imposed (Tejvan Pettinger,
2017).
● Voluntary Export Restraint (VER) - This is similar to quotas in that
countries agree to limit the number of imports they may make. This was
the method utilized by the United States to import Japanese
automobiles (Tejvan Pettinger, 2017).
● Subsidies - Government subsidies can give local companies a
competitive edge (Tejvan Pettinger, 2017).

● Embargo - Imports from a specific country are completely prohibited.
Consider the United States embargo against Cuba (Tejvan Pettinger,
2017).
3.2 Major trade blocs
Trade blocs are organizations of countries that work together to secure
advantageous trade agreements among their members. It is a collection of countries
that share the same geographical boundary. Preferential trade zones, free trade
zones, customs unions, and common markets are the four types of trading blocs
(Exportgenius.in, 2018).
4. Social and cultural factors
4.1The extent to which to minimize cultural impact in negotiations
Cultures vary somewhat across the seven different Emirates. UAE's culture expects
its members to have a strong sense of loyalty to their group, for instance, the family,
tribe, organization, or country. Businesspeople in this country prefer to do business
with those they know and like. In the Emirates, respect depends primarily on status,
rank, and age. Maintaining cordial relations is crucial (Katz, 2013).
The UAE's official language is Arabic, although the local dialect is significantly
affected by Farsi, Iran's language. Emirates Arabs frequently employ convoluted
jargon that might be difficult for Europeans to comprehend. Body language is
typically more limited in Gulf Arab countries than in non-Gulf Arab countries.
Meetings should be scheduled at least three to four weeks in advance. Greet the
most senior member of the group first, then personally greet everyone else in the
room. Introductions and pleasantries are followed by several compliments and
handshakes with the right hand .(Katz, 2013)
The majority of Emiratis favor a work style that is very polychronic. They are
accustomed to pursuing numerous tasks and goals at the same time. When
negotiating, they frequently use an all-encompassing approach or bounce from one
issue to the next rather than addressing them in chronological sequence. It is usual
for them to reopen previously agreed-upon conversations. UAE businesspeople are
excellent negotiators who should never be underestimated (Katz, 2013).

Allow yourself plenty of leeway for compromises at various phases of a discussion.
Even if it is true, Emiratis are typically too arrogant to accept that they have only little
authority. They may also apply pressure by making final proposals or nibbles.
The UAE is a male-dominated country, and women should not expect to be treated
equally with males. In all professional and social circumstances, Western
businesswomen should exhibit restraint and prudence. Excessive boldness and
aggression can lead to significant problems and should be avoided. Business
lunches and dinners are ideal for explanations and other business talks. In the UAE,
alcohol is legal and freely available, at least in hotels and restaurants. When
conducting business in any of the Gulf Arab states, impeccable presentation is
critical (Katz, 2013).
4.2Ethical challenges in trading
Businesses that trade internationally are obligated to respect all federal, state, and
environmental laws, as well as civil rights laws. Cultural factors can potentially make
or break a corporation doing business internationally. Every culture, nation, and
culture has its own history, customs, traditions, and ethical code. It is critical for a
multinational corporation to act in accordance with these values in order to gain
client support and business (The University of Texas at Tyler, 2016).
6. Conclusion
Because of the rising popularity of less alcoholic or zero alcohol beverages, the
worldwide non-alcoholic wine and beer sector is seeing strong demand. The market
is being pushed by the population's progressive shift away from alcoholic beverages
and toward more experimental preferences. Rapid technological progress and rapid
acceptance of this technology in Europe would help the market grow at a rapid
CAGR. Because of rising disposable income and economic growth, Asia Pacific is
anticipated to grow at a rapid pace throughout the forecast period. The research
provides an in-depth examination of several customer journeys relevant to the
market and its subdivisions.

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