Case Analysis of EMAAR

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Project 1:- Case Analysis of EMAAR

Emaar Properties
Executive Summary
EMAAR properties are a pioneer in the field of real estate has been studied in an in-depth
manner in the report. The report initiates with the introduction of EMAAR properties followed
by the manner it competes in the market. Thereafter, a discussion is done relating to the fixed
and variable cost of the company. The competitors of EMAAR are vividly discussed in the
report. An analysis is then done by conducting SWOT and PETEL analysis. Furthermore, a
discussion is done on the demand and supply that resulted from the happening of Arab spring.
Overall, it can be ascertained that the company performed in an effective owing to strong
fundamentals and effective grip on the entire market.
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Emaar Properties
Contents
1. Introduction.........................................................................................................................................4
 Competition.........................................................................................................................................5
2. Types of costs in EMAAR......................................................................................................................5
3. Competitors of Emaar..........................................................................................................................6
4. SWOT Analysis.....................................................................................................................................7
5. PESTEL Analysis....................................................................................................................................9
6. Demand curve...................................................................................................................................12
Promotion/marketing affects the demand curve for EMAAR....................................................................13
7. Supply Curve......................................................................................................................................14
Promotion/marketing affects the Supply curve for EMAAR.....................................................................15
Game theory..............................................................................................................................................17
Price elasticity of EMAAR...........................................................................................................................19
Conclusion.................................................................................................................................................21
References.................................................................................................................................................22
Figure 1 Shift In Demand...........................................................................................................................13
Figure 2 Shift in Supply..............................................................................................................................14
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Emaar Properties
1. Introduction
Emaar Properties is a joint stock company headquartered in the UAE. It is primarily engaged in
real-estate business and listed on the financial market of Dubai. Further, the company has a
valuation of approximately US$ 9.7 billion that is attained through its management and property
development services. The company has sixty active companies and around six segments of
business diversified throughout North Africa, Middle East, North America, and Europe.
Furthermore, Emaar Properties of Dubai is one of the biggest developers of real estates in the
entire UAE and its big-scale projects like Burj Khalifa has also attained the title of tallest
building in the entire world (EMAAR, 2019).
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Emaar Properties
 Competition
Over the last few years, Emaar has been redefining the mechanism of property development that
has allowed it to serve as a national champion company throughout UAE and Dubai. The
company has always relied on the vision of discovering new ideas and methods so that it can
outperform others, thereby set an example for others across the world. Furthermore, Emaar
believes that their shareholders have stood by them when they were providing development and
property management services throughout international markets. In addition, the company’s
shareholders have offered it various opportunities towards an incredible transformation of its city
into an international hub (EMAAR, 2019). Nevertheless, this has fetched Emaar an opportunity
to build Dubai as an extraordinary place throughout UAE, thereby attaining the title of one of the
most admired and valuable companies.
Currently, models of business development are being modified and cycles of innovation have
been diminishing. As a result, companies that fail to react to such alternations encounter
immense risks that can affect their overall long-term growth prospects. However, Emaar view
such changes as a valuable opportunity to establish a new trend in the international market.
Therefore, it endeavours in establishing innovative strategies and models that can allow it to
diversify its business and grant it the position of one of the leading businesses in the entire world
(Cohen, 2016). Overall, the company has been taking advantage of every possible opportunity
that can grant it the benefit of attaining enormous amount of profits that can further be utilized in
the establishment of smart cities.
2. Types of costs in EMAAR
The fixed cost that has been used in EMAAR is as follows:
Interest on loan –The interest pertains to various aspects such as payable of interest on the loan
used for the purpose of construction or the repairing of the property. EMAAR deal into real
estate and hence, have a huge loan running owing to the huge constructions. In this scenario, it
needs to pay interest that constitutes a fixed cost (Cronin, 2016). Further, acquisition of new
property requires large sums that is procured from the loan and hence it comes under the ambit
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Emaar Properties
of the fixed cost. Secondly, there are various taxes that needs to be paid and one prominent tax is
the municipal tax. It comes under the ambit of the fixed cost. Further, any amount that is spent
for the repairs, as well as renovation comes under the fixed cost heading because such repairs are
done so that the property have the capacity to fetch money over a long term period (EMAAR,
2019).
Variable cost are those that varies in tune to the activity variations. When it comes to real estate
business herein EMAAR, it can be commented that the business has a huge production volume
together with huge sales volume. The materials that are used in the process can be defined as
variable costs as it varies in tune to the building and construction process (Mankiw, 2010). As
per the number of construction the overall material will alter and hence it is a variable cost.
Direct materials – It is the raw materials that are used to develop a product and hence, is
considered as a variable one.
Piece rate labor – the amount that is paid to every worker for the completion of the work is the
variable cost.
Supply of production - for the construction and building there are various supplies required.
Supplies such as machinery oil are consumed as per the usage of the machinery hence such costs
varies with the volume of production.
3. Competitors of Emaar
Nakheel is recognized as one of the leading contributors to realisation of Dubai’s vision. It
intends to establish an effective class destination for segments like tourism, business, and living
on a whole. Further, it also focuses on offering and enhancing a significant portfolio of
innovative projects throughout Dubai across segments like hospitality, retail, residential, and
leisure. Further, its developments comprise of The World, Palm Jumeirah, Jumeirah Heights,
Discovery Gardens, Dragon City, Nad Al Sheba, International City, etc. Nonetheless,
collectively these accumulate more than fifteen thousand hectares of land and presently it offers
accommodation for more than 270,000 people. Besides, Nakheel also pursue more than twenty-
one thousand residential areas that are in the pipeline or under construction.
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