20SBMC - JET CAPSULE S.R.L.: Strategic Market Entry into UAE

This report provides a strategic market entry plan for JET CAPSULE S.R.L., an Italian luxury boat company, into the United Arab Emirates (UAE). It includes a detailed PESTEL analysis of the UAE, identifying political, economic, social, technological, legal, and environmental factors impacting business operations. The report recommends developing a new product, the 'JET CAPSULE LX,' an upgraded version of their luxury boat tailored for public water transport. Market entry strategies, including opening a local branch, appointing a local agent, or forming a joint venture, are evaluated, with a joint venture being recommended. The report also outlines a segmentation and targeting strategy focusing on wealthy individuals, local water transport authorities, and private organizations. Finally, it suggests using a differentiation focus strategy based on Porter's generic strategies, emphasizing product customization, innovation, and high-tech performance to gain a competitive advantage in the UAE market. The report concludes that the UAE's growing economy and openness to innovation make it a suitable market for Jet Capsule, with the proposed entry plan potentially yielding positive results.

Sarah Rocio Provenzani
Student ID: 21928342
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BA (Hons) Business Management (Top-Up)
Strategic Marketing-20SBMC
COURSEWORK N. 1
Due on : November 6, 2020
STUDENT: Sarah Rocio Provenzani
ID 21928342
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Sarah Rocio Provenzani
Student ID: 21928342
________________________________________________________________________
1. EXECUTIVE SUMMARY
In the following assignment, I will run a report based on how a company could best enter a new
country’s market.
First of all, I will perform a detailed economic analysis of the country in which I recommend starting
the new economic activities of the firm: the United Arab Emirates.
Then, in order to examine the factors acting on the company’s operativity, the opportunities and
threats, I will use PESTEL analysis.
Subsequently, I will recommend the company to develop a new innovative product that may
guarantee a successful entry into that specific market, dealing with all its characteristics and
explaining the reasons why the firm should offer it to the clients.
Afterwards, I will analyze the best strategies for the firm to enter the market and leading the industry,
such as segmentation and targeting of potential customers.
Finally, I will explain which of the three Porter’s strategies would be the most suitable to place the
brand on an excellent position within its industry and, as a consequence, get high profitability.
2. INTRODUCTION
As senior marketing consultant working for Ashanti Marketing Solutions (AMS) Limited, I have been
commissioned to write an individual report in order to assist ‘JET CAPSULE S.R.L.’, an Italian
luxury boats’ company, in developing a strategic plan with the aim of entering a new country’s
suitable market, in particular the United Arab Emirates.
In this report I will analyze the environmental factors who act in the firm’s functioning, as well as its
opportunities and threats. In addition, I will advise the managers to find the right way to enter a new
market place and I will illustrate the fundamental steps for the creation of new products that may
bring success to the enterprise’s activities among the country.
The company will also be aware of how to segment and target its potential customers, and how to
apply Porter’s generic strategies.
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Sarah Rocio Provenzani
Student ID: 21928342
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3. PESTEL ANALYSIS OF THE UNITED ARAB EMIRATES
The United Arab Emirates, Middle Eastern country located in the Arab Peninsula, has one of the top
25 Gross Domestic Products (GDP) per capita. Most of the country’s earnings come from the oil
exportation, industry and tourism.
3.A - POLITICAL FACTORS
There are 7 Emirates, each one with a different government, so that the management across the UAE
is quite flexible.
The country has good business and trade relationships with numerous countries, but sometimes it may
have conflicts about the oil reserves ownership with the nearby countries.
3.B - ECONOMIC FACTORS
The GDP is high, the unemployment has a low rate and the country’s Foreign Direct Investments
amounts is one of the highest in the world.
3.C - SOCIAL FACTORS
On average, residents have a comfortable lifestyle, because most of the jobs get the citizens good
salaries. A significant globalization increasement had made possible the coexistence of different
cultures and religions. Religion plays a fundamental role in the country; the law is based on the
Islamic sacred book and the natives dress typical national clothes.
3.D - TECHNOLOGICAL FACTORS
The tech-savvy young population allows the UAE firms to leverage technology and the relatively high
standard country’s wealth makes easier for the firms to buy the latest technological equipment.
3.E - LEGAL FACTORS
There are no legal factors affecting the country’s economy.
3.F - ENVIRONMENTAL FACTORS
The climate is highly hot; productivity could be low, the air conditioners are necessary and farming is
difficult. The country has many costs and sea cities, which favors trade.
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Sarah Rocio Provenzani
Student ID: 21928342
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4. COMPANY’S OPPORTUNITIES AND THREATS
Jet Capsule produces very innovative and modern luxury boats. The firm’s incredible futuristic design
of each model was never seen before in the nautical industry’s world, obtaining a global acclaim since
the launch of the vessel at Monaco Boat Show in 2018.
With my fully understanding and consent, the Italian company chose to enter the UAE market
because it may offer numerous opportunities and apport benefits to the firm, since:
4.A - The residents are relatively wealthy: there are many rich families with high income which
may want to buy such incredible and luxurious products.
4.B- The Municipalities have the capacity to invest money with the goal of transforming the cities
into profitable tourism destinations; this type of boats is so different from the others in terms
of design and technological capabilities that it is a tourist attraction itself, plus it is perfect to
be implemented in the tourism locations as public transport, like a sort of water limousine for
the wealthier visitors.
4.C - The country has lots of coastal areas, which results perfect for selling marine vessels.
As every company entering a new market, there are threats to face. The main one is the competition:
there are many firms producing boats who want to lead the market in the Middle East.
That is why Jet Capsule is required to create super innovative, comfortable, great looking and high-
tech products with a quite right price that customers will love and purchase.
Our aim is to obtain competitive advantage over the competitors.
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Sarah Rocio Provenzani
Student ID: 21928342
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5. RECOMMENDATION FOR A NEW SPECIFIC PRODUCT
My advice is to create a new upgraded version of boat called ‘JET CAPSULE LX”.
Starting from the currently manufactured basic Jet Capsule which hosts up to 12 passengers, a new
model 2.0 (LX VERSION) can be easily obtained by the same platform, simply prolonging the vessel
hull of 1.25 meters without particular costs or complications.
This additional length allows to host 6 additional seats (18 instead of 12).
In this way the vessel becomes a perfect public water transport vehicle, with a very short payback
period thanks to the more favorable ratio between cost and number of passengers.
Such kind of innovative and functional water transport vehicle can become the first choice for the
local Public Water Tansport Authorities, in order to connect the main inter-city and intra-city venues.
Last but not least, a convenient and enjoyable water transport becomes interesting for resident
commuters and also for tourists.
I also suggest the company to implement a more sustainable propulsion technology, in particular
adopting a hybrid diesel-electric engine able to cruise in full electric mode at least during the
approaches to the dock. This solution reduces the pro-capita carbon footprint, accomplishing to the
newest environmental regulations.
6. MARKET ENTRY ADVICE
There would be 3 main ways to enter a new market:
6.1 - The firm should open a new local company branch, totally controlled by itself. In fact,
the UAE Government allows foreign companies to open branches or representative offices
upon 100% ownership. This solution ensures a company’s direct control in the market entry
but it requires important investments (trade license, office, personnel, local marketing etc..).
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Sarah Rocio Provenzani
Student ID: 21928342
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6.2 - An alternative entry strategy is to appoint a local agent. In this case the budget could be
drastically reduced, but the main company cannot perform direct control on the daily
actions and sales strategies, which usually are carried by the agent itself.
6.3 - A third entry strategy may be represented by a joint -venture agreement. In this case the
company will join a new local company together with a local well-established partner,
better if already leader in the local nautical market. This could be the best market-entry
strategy, because in this case the new joint venture company can rely on the local
partners’ offices and also on its local reputation and customers’ list.
7. SEGMENTATION AND TARGETING
To reach success, it is always good norm that a firm uses an efficient customer segmentation and
targeting strategy; in this way it will be possible selecting the right customers.
Market segmentation and targeting is the process that a company uses to identify its potential
customers.
Besides, the firm will have to choose the right customers to pursue and create value for their targeted
clients.
This process is called STP process, and it consists of 3 steps: Segmentation, Targeting and
Positioning:
Segmentation means categorizing the customers into groups according to demographic, geographic,
behavioral and psychographic traits; the firm should find common characteristics in the potential
consumers, such as interests, lifestyle, age or gender. The segment in which the firm concentrates on
for the sale of a specific product/service is the target market; types of targeting strategies are:
- Mass marketing ( undifferentiated marketing
- Segmented ( differentiated ),
- Concentrated (Niche marketing)
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Sarah Rocio Provenzani
Student ID: 21928342
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- Micromarketing.
Due to its special characteristics, the JET CAPSULE LX, I suggest segmenting wealthy potential
customers who live in locations next to the sea; segmenting the country’s habitants and organizations
who may be interested in purchasing the product, is an important step for the firm’s positioning in the
new market.
JET CAPSULE LX targeted customers could be:
- Wealthy individuals and families passionate about boating for their private usage. It is
possible to customize the boat taking into account their taste and preferences about design,
color, technology capabilities, type of engine (hybrid, electric etc..).
- Local Water Transport Authorities who may be interested in using the boat as a new
transportation vehicle, a kind of water metro or water limousine to connect the key city’s
locations.
- Private Organizations such as hotels and malls who want to transport their guests to other
hotels, beaches or the most accredited tourist places, as Dubai Mall, Dubai Marina. Jumeirah
Palm, Festival city etc.
8. PORTER’S STRATEGIES
A firm’s positioning within an industry establishes if its profitability is above or below the industry
average. The competitive advantage types a company can hold are: Low cost and Differentiation.
To achieve an above average profitability there are 3 Porter’s strategies:
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Sarah Rocio Provenzani
Student ID: 21928342
________________________________________________________________________
- COST LEADERSHIP
A firm aims to be the most low-cost producer in its industry by exploiting all sources of cost
advantage.
- DIFFERENTIATION
A company wants to be unique in its industry and positioning itself as the one with the best
reputation in the market. It seeks to offer excellent customer value and quality by meeting their
clients’ needs. The products’ pricing is premium because of its unique attributes.
- DIFFERENTIATION FOCUS
The firm selects a segment and tailors its strategy to serve it to the exclusion of others.
- COST FOCUS
In cost focus the company seeks a cost advantage in the target segment, instead in differentiation
focus seeks differentiation in the target segment. Cost focus exploits differences in customers’ cost
behavior in segments, differentiation focus exploits their specific needs.
For JET CAPSULE LX, the best strategy may be the DIFFERENTIATION FOCUS:
- The firm should target specific geographic segments around the country and tailor strategies
to offer its product to those authorities, hotels, malls and families passionate in nautical
vehicles who may be interested in purchasing the boat.
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Sarah Rocio Provenzani
Student ID: 21928342
________________________________________________________________________
- The wealthy targeted customers may have high standard preferences and taste, so the firm has
to be completely able to offer them a comfortable, luxurious, innovative and high-tech
performance boat for which they will be willing to pay a premium price.
- The boat can be also deeply customized, all of this ensures the firm’s differentiation in its
industry, as well as its reputation, and this will hopefully lead it to gain competitive advantage
in the new market.
9. CONCLUSION
The UAE market is a fast-growing economy, open to foreign cultures, innovation and sustainability.
The motto of Dubai Ruler is “Open Doors, Open Minds”.
I firmly believe the proposed “entry plan” may sort out very positive results for Jet Capsule company,
due to the extended presence of water across the pivotal points of the city, which can be reached via
alternative urban mobility network to be developed using “waterways”. With the additional benefit
not only to support the residents’ commute needs, but also to represent a fantastic tourism attraction
for the massive amount of tourists visiting Dubai in annual basis.
10. APPENDIX (pictures)
Picture 1:
JET CAPSULE - current stock model
(7.95 meter length – 12 seats)
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Sarah Rocio Provenzani
Student ID: 21928342
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Picture 2:
JET CAPSULE LX - suggested new model for the UAE Public Transport Authority
(9.20 meter length – 18 seats)
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Sarah Rocio Provenzani
Student ID: 21928342
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11. REFERENCES
Books:
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Sarah Rocio Provenzani
Student ID: 21928342
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Hollensen, S.(2010), Global Marketing – A Decision-Oriented Approach. 5thed. Harlow, UK, FT
Prentice Hall.
Kotabe, M. and Helsen, K. (2011), Global Marketing Management. 5thed. New York, NY, John Wiley
& Sons.
Journals:
Harvard Business Review
International Marketing Review
Journal of Global Marketing
Journal of International Marketing
The Economist
Wall Street Journal Europe (www.wsj.com)
Designboom
Forbes Italy
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