The Company has faced labor issues

Running head: MANAGEMENT
Globalization Strategies Assignment
Name of the Student:
Name of the University:
Author Note:

MANAGEMENT 1
Table of Contents
1. Company Profile and Services Offered:......................................................................................2
2. Detailed SWOT Analysis of the Company..................................................................................2
3. Critical Evaluation of Different International Strategies used by Emaar to Venture into
Different Countries and Setup Operations.......................................................................................6
4. Role of UAE Government and WTO in Supporting Selected Company to Expand Operations 7
5. Identification of Suitable New Countries for Expanding Its Business........................................7
6. PESTEL Analysis for Suitable Countries:...................................................................................8
7. Expansion Strategy to Set up Operations in Selected Country....................................................9
References:....................................................................................................................................11

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Introduction:
The report aims at providing an insight into the global strategies adopted by Emaar in
undertaking expansion. It is one of the most renowned real estate developer headquartered in
United Arab Emirates. Emaar is listed in Dubai Financial Market as public joint stock
organization having a total worth of US$9.7 billion. The firm operates on a global scale and
provides property development along with management service. The report commences with a
description of the company profile along with a mention of the services offered. The report also
puts across a detailed SWOT analysis along with a critical evaluation of the international
strategies that the Property Development Company uses for venturing into the various countries
and setting up operations. The report also provides an evaluation of the role of the UAE
Government and the WTO for expanding into the different countries. The report also provides
suggestions on expansion of the company into three selected countries along with a PESTEL
analysis.
1. Company Profile and Services Offered:
Emaar Properties is a public listed joint stock real estate Development Company
established in 1997(emaar.com, 2020) and had Mohammed Alabbar as its chairman. The firm is
listed in Dubai Financial Market. It is one of the biggest real estate development firm in Middle
East as well as the North Africa (MENA) region. Along with six segments and with 60
companies, Emaar’s collective presence can be felt in North Africa, Middle East, Pan Asia,
North America and Europe. The company has accomplished various world records that ranges
from creating the largest mall, tallest building to one of the largest fountain show across the
world. In the year 2007, the Dubai government owned 32 percent stake in the company in
exchange of land. In the year 1998, the shareholders of Emaar decided on increasing the capital

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through one to one right issue. The subscription had been successful with the shareholders
subscribing close to over AED 2.5 billion for buying shares worth 100 million. In lieu of rights
issue, the Dubai government allocated additional newer plots to Emaar and maintained its stake
at 32 percent. Due to the injections of the new capital and the land plots Emaar had been able to
initiate an integrated, new and planned master projects in Dubai.
As far as the services are concerned, the key services of Emaar has been property
development and property investment (emaar.com 2020). The company provided both B2B and
B2C service. As a part of the B2B service, the company contributed towards completion of the
two IPOs for operations in retail business and in Egypt. For its B2C service, the company had
been found to create one of the tallest building, biggest mall and fountain show across the world.
The company also had plans for undertaking a mega project within Dubai. In addition to this, the
company also provides property management services and undertakes substantial investments in
healthcare, education, retail, hospitality sector and other financial service.
2. Detailed SWOT Analysis of the Company
Emaar remains well positioned in taking advantage of the boom occurring in real estate
thereby catering to the American and the European expatriates. However, any crisis in global
financial market contributes to the decline in the property prices in Dubai.
Strength:
1. Backing from the Government: The government of UAE has a stake of 32 percent
in Emaar. In addition to this, the government of UAE has been able to show ability and
willingness in supporting business in face of the economic crisis (Yog, Cekin & Homsy, 2017).
The banks in UAE were provided close to $ 6800 million for tiding over the liquidity crunch.

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This will also provide an aid to Emaar in staying capitalized in financing operations and
expanding the markets.
2. Successful Business Model: Emaar possess the expertise in the creation of the master
planned communities to the international markets (Reed, 2017). The company focused on the
creation of a lifestyle living rather than putting across a property. The innovative offering in the
form of communities with the integration of parks, schools, retail centers, landscaped grounds,
golf course and marina lifestyle had been a winning combination. It also offered the clients with
huge plots of land as the investment option. The business model also delivered properties with
higher quality.
3. Diversification and Foreign Expansion: Emaar Properties entered different via its
subsidiaries for sustaining the future growth and creating the alternative streams of revenue.
Most subsidiaries hold partnership either with the private players or the local governments for
better understanding the market. The international land bank included close to 500 square meters
of land across Saudi Arabia, India, Morocco, Syria, Pakistan, Egypt, Algeria, Libya, Jordan,
Canada, Tunisia, Indonesia and USA (Al Bakri, 2014). The strength of the company also lay in
its diversification strategy.
4. Effective Regional Partnerships: Emaar also holds established partnerships and a
stronger reputation with not only the local governments but also the key local players in each
country in which it forayed the development of real estate (Al-Saadi & Abdou, 2016). The key
area of the focus had been the North Africa, Middle East and the Indian subcontinent where it
entered into partnerships with the leading market players.
Weakness:

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1. Too Much Exposure to Dubai: To reduce too much dependency on Dubai, Emaar
tried to foray into the international market (Tiwari & White 2014). However, the domestic
revenue in terms of percentage as well value increased which account for over 86.96 percent.
Therefore, despite the entry into the foreign market Emaar was not able to reduce the exposure to
Dubai market. This downgraded the credit rating of Emaar due to a weaker real estate market in
Dubai and the uncertainty over duration and the depth of downturn.
2. Funding and Operations Strategy: Emaar’s funding strategy focused on limiting
funding by parent company for financing the acquisitions of land and the initial
infrastructure(Bazoobandi 2013). Hence, the funding of the parent company reduced to about 8
percent of cost. Additional funds have been raised at project level via pre sales and the project
related debt financing. The downgrade could have imposed difficulty in raising cash. Besides,
this also resulted in paying a higher rate of interest on a new debt. This could have made things
difficult for the firm in managing the current projects which resulted in operational imbalance.
The company also faced a decline in operational margins, operational cost, return on the equity
and the return on the capital employed.
3. Quality Issues and Labor Problems: The Company has faced labor issues. Its
flagship project ‘The Burj Dubai’ has been built predominantly by the migrant labor (Gonzalez
et al. 2018). The company has been accused of paying lower wages and implement harsher
treatment on laborers that forced the laborers to resort to the industrial action, disrupt work and
damage property. This tarnished the company’s image thereby causing delay in completion of
the projects.
Opportunities:

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1. Consolidation of Position in the Domestic Market: The Company comprised of
sufficient scope for enhancing the presence in Dubai. The company had close to 16.8 million
square meters of available land for undertaking a planned construction activities. The company
has plans of opening hotels, malls and international schools (Soueid, Spraggon & Bodolica,
2017). The company also looks forward to the establishment of University of Arts for meeting
the rising demand for an international standard arts education in the Indian subcontinent and
MENA region.
2. Revenue Diversification and International Expansion: The mission of Emaar has
been in becoming a one stop solution as lifestyle. To keep up with the strategy the company
made various investments in areas like malls, education, hospital, resorts, hotels and mortgage
financing. For achieving this, the firm not only undertook acquisitions but partnered with the
existing companies for entering the newer markets. This not only expanded its operations but
also led to an expansion of product and services thereby insulating the firm from sectoral crisis.
The company also has further plans for expanding into the Education and Healthcare in MENA
and the regions of Indian subcontinent.
Threats:
1. Impact of Economic Protectionism: Presence of domestic lobbies in United States
has been successful in derailing investment citing concerns related to perceived or real national
security. For instance, one of the examples had been the case related to involvement of Dubai
Ports World in US. These restrictions might deny or delay the ability of Emaar in successfully
executing the growth plans (Bateman & Majdalawieh, 2009).

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2. Impact of the Economic Downturn on Global Scale: The expatriates from Western
Europe and United States focuses on Dubai and have also acted as the key driving force in
determining its growth. They comprised of 80 percent. However the loss of job and freezing of
credit market might not provide enough capital for investing in the property market of Dubai and
this might lead to an adverse impact on the sales of the company (Shayah, 2015).
3. Critical Evaluation of Different International Strategies used by Emaar to Venture into
Different Countries and Setup Operations
In the year 2007, Emaar already started entering the neighboring markets and started to
figure out the option of venturing into different emerging markets. To make an entry into new
market, the firm depended on its Dubai model that comprised of a five step approach that
included the identification of the growth market, establishment of a stronger localized
partnership, acquiring of significant land at the competitive price, building of entire communities
and the development of higher end property projects.
Nevertheless, Emaar entered Egypt through forming joint venture with the local partner.
The applied strategy had been successful in Egypt since it allowed the company in gaining
competitive advantage through accessing the market, technology, capital and people used by
partners. In Egypt, the company made a declaration for developing $4 billion lifestyle
community at Cairo (Wilson, 2013). In other words, Egypt was identified as one of the crucial
market for growth that allowed Emaar to introduce four crucial projects within the country which
are Uptown Cairo, Mivida, Marassi and Cairo gate. The projects has been names of places that
defined the prominent destinations of Egypt. In Egypt, Emaar had an investment portfolio of
close to US$7.97 billion.

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The company made an entry in India by forming a joint venture with Motor and General
Finance (MGF) developments limited where Emaar had a share of 40 percent. However, the
strategy did not work for India. Emaar’s plans of raising close to $1.7 billion by offering 10
percent stake in Emaar India never materialized. The company also got entangled with claims of
corruption for untimely delivery of an athletic village worth $240 million in Delhi to be used for
the Commonwealth Games held in 2010. This caused Emaar to loose close to $206 million
between 2012 and 2014.
The company also entered Turkey by forming a joint venture with the biggest gold
exporters of Turkey. Emaar’s strategy had been successful in Turkey as it allowed the company
to make an announcement for the development of project worth $1 billion outside Istanbul.
The company entered into the market of USA through acquiring the John Laing Homes,
developer of real estate. This investment influenced the design research of the company as
subsequent building designs of Emaar had been inspired by the American lifestyles and
communities. Emaar international strategies for USA did not fail since after filing for bankruptcy
the company continued its operation in the USA and launched luxury projects in California
.

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4. Role of UAE Government and WTO in Supporting Selected Company to Expand
Operations
The market cap of Emaar for the year 2015 had been US$15 billion with annual revenue
standing at US$3billion and international land bank of close to 2.432 billion sq. ft. The most
precious asset for Emaar had been land which had been offered by the UAE government for
expanding its operations in exchange of an equity stake of about 32 percent in the company
(Yog, Cekin & Homsy, 2017)
The World Trade Organization (WTO), is an intergovernmental primarily concerned with
regulating the international trade between the nations (Matsushita et al. 2014). The WTO derives
its value from functioning based on consensus that provided individual countries like UAE with
an unmatched influence in the other organizations with an ability of acting freely and
autonomously and also freely make an entry into coalitions, take shared positions, sponsor and
submit proposals depending on the shared economic interest which is beyond the political
considerations.
As UAE companies like Emaar grows and remarkably becomes multinational
corporations, the UAE will require rising level of instruments like WTO for its trade defense,
influence and globally defend the new status along with providing required support.
5. Identification of Suitable New Countries for Expanding Its Business
Emaar can undertake business expansion in Panama, Columbia and Indonesia. The
company should choose Panama since it is considered as one of the best countries for real estate
investment. The country has been found to provide a real estate yield of 5.75 percent. Columbia
can also be a choice since it remains characterized by a desire for change and innovation and has

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been considered a good choice for investment of foreign properties. It provides an overall rental
yield of 6.51 percent. Indonesia also seems to be a healthier economy for Emaar’s investment
since the country had varied natural resources and can be considered one of the prominent
countries for real estate development thereby providing a rental for 8.61 percent.
6. PESTEL Analysis for Suitable Countries:
Factors Panama Columbia Indonesia
1. Political It is a politically
stable country with
a democratic
government
The country is democratic
republic with corruption as its
primary concern.
It is a democracy with stable
political structure.
2. Economic The economy has
higher rate of GDP
growth with history
of low level of
inflation.
The country has a diversified
stable economy with prospects
of long term growth.
The country has mixed
economic structure and
centralized government
planning and regulation
with a higher growth in
GDP and an inflation of
about 3.198 percent.

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3. Social The customs,
culture and the
language of the
country is
Caribbean Spanish.
The population
comprise of 65
percent Mestizo, 9.2
percent black, 6.8
percent mulattoes, 6
percent native
Americans and 13
percent white.
The society is hugely stratified
with the social classes being
linked to the wealth or racial
distinctions and limitation in
vertical mobility.
The social structure of the
country comprised of the
tradition of a charitable
giving due to the Muslim
culture. Recently, the
country also experienced
rising interest in sustainable
finance from the financial
institutions and the
investors.
4. Technological The country has
tried to keep up and
remain recognized
for innovation and
technology.
The country has been a supporter
of technological innovation.
The country also
experienced a rapid
development in technology
that also had positive impact
on its economic growth.
5. Environmental The key
environmental
concern has been
desertification,
deforestation, water
pollution and
insufficient sewage
facilities.
The key environmental issues
are deforestation, soil erosion
and preservation of the wildlife.
The concentration of air
pollution in the country rose
by 171 percent and has
adversely effected the health
of the Indonesians.
6. Legal Habeas Corpus, a
legal procedure
featured on Anglo
American features
has a constitutional
The country focuses on
discrimination laws, intellectual
property laws and the health and
safety laws.
Law of the country depends
on civil law system which
has been intermixed with
Roman Dutch law and the
customary law.

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guarantee to be
operative in the
country.
7. Expansion Strategy to Set up Operations in Selected Country
The expansion strategy of Emaar can be described with Ansoff Matrix (Yin, 2016).
Figure 1: Diagrammatic Representation of Ansoff Matrix
Source: (Hussain et al., 2013)
Market Penetration: This is a growth strategy that is adopted whenever a company
with an existing product or service need to expand within known market
Market Development: A firm adopts this strategy whenever the existing products or
service aim at new market.

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Product Development: This strategy is adopted when the firm has better market
share in existing market and is in the need for introducing a new product or service for
expansion.
Diversification: A firm adopts this particular strategy whenever it aims at introducing
new product or service into new markets.
Emaar took steps in diversifying the business lines and developing newer competency in
leisure and hospitality, education, malls, financial and healthcare service. Emaar tried to enter the
education sector in Singapore through acquisition of the Raffles Campus. It also entered the
resorts and the hotel sector through Georgio Armani brand. The company also went into an
agreement with the Turner International for completion of the construction in sales center in
Saudi Arabia, Egypt, Morocco, Pakistan and India.
Conclusion:
On a concluding note, given the magnificent aspects of Emaar in terms of its projects and
successful international strategies despite the global financial crisis it has been to stand out as a
real estate firm. With successful projects in Dubai and other countries the firm should take
initiative in exploring newer countries.

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References:
Al Bakri, A. (2014). Portfolio Diversification Strategy and the Impacts on the Middle East Real
Estate Investment Decision. International Journal of Economics and Finance, 6(2), 62.
Al-Saadi, R., & Abdou, A. (2016). Factors critical for the success of public‒private partnerships
in UAE infrastructure projects: experts' perception. International Journal of Construction
Management, 16(3), 234-248.
Bateman, R., & Majdalawieh, M. (2009). Megaprojects and risk management: Emaar
Properties. International Journal of Teaching and Case Studies, 2(1), 56-75.
Bazoobandi, S. (2013). The political economy of the Gulf sovereign wealth funds: a case study of
Iran, Kuwait, Saudi Arabia and the United Arab Emirates. Routledge.
emaar.com, (2020). Retrieved from https://www.emaar.com/en/our-communities/the-valley
emaar.com, (2020). Retrieved from https://www.emaar.com/en/who-we-are/
Gonzalez, G., Karoly, L. A., Constant, L., Goldman, C. A., & Salem, H. (2018). Facing human
capital challenges of the 21st century: Education and labor market initiatives in
Lebanon, Oman, Qatar, and the United Arab Emirates (Vol. 786). Rand Corporation.
Hussain, S., Khattak, J., Rizwan, A., & Latif, M. A. (2013). ANSOFF matrix, environment, and
growth-an interactive triangle. Management and Administrative Sciences Review, 2(2),
196-206.
Matsushita, M., Schoenbaum, T. J., Mavroidis, P. C., & Hahn, M. (2015). The World Trade
Organization: law, practice, and policy. Oxford University Press.

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eastbusinessweek-business-news-stock-market-and-financial-advice
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of Evergrande Group. In MATEC Web of Conferences (Vol. 44, p. 01006). EDP Sciences.
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Today. Harvard Business School