International Expansion: PESTLE Analysis of UAE & Recommendations

This report delivers a comprehensive PESTLE analysis of the United Arab Emirates (UAE) to evaluate its suitability as a destination for international business expansion. It examines the political landscape, highlighting the stability and governmental structures of the seven emirates, while also noting regional conflicts and security concerns. The economic analysis showcases the UAE's strong GDP, high per capita income, and significant foreign direct investment. Socio-cultural factors, including income levels, expatriate exchange, and cultural diversity, are assessed for their impact on business operations. The report also explores technological advancements, legal frameworks, and environmental considerations, such as the UAE's climate. Finally, the report identifies the oil sector and import/export activities as preferable business sectors for international firms looking to invest in the UAE. Desklib provides this and many other solved assignments to aid students in their studies.

Running head: MARKETING
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Introduction:
The effective business conduction in the modern business organizations are
observed to be affected by the competition of the industry. As an impact of the
globalization, the business industry is seen to have significant number of new
organizations which expressively eliminates any sort of scope of the market
monopoly (Ying, Chang and Lee 2014). With the increasing number of new
organizations entering the market, the level of competition in the modern business
world is seen to increase in a significant manner. Hence the modern organizations
are seen to restructure their strategies for the productive business conduction. With
a precise focus on the competition and the increasing number of new organizations,
the organizations are observed to search for the feasible options to reduce the
impact and the intensity of the competition (Saleem 2017). Under such situation, the
business expansion is considered to be a viable option for the organizations. With
the concept of the business expansion, the organizations are expected face the need
of identifying the location for the expansions and in such case, the evaluation of the
location or the destination becomes significantly important for the organizations.
The success of the organizations in the business expansions notably depends
on the appropriate identification of the locations for the expansions and in such case,
the effective and accurate evaluation of the various aspects of the destination market
becomes much needed for the organizations, The paper is also focused in the
evaluation of one such business destination in the form of the United Arab Emirates.
The paper assesses the political, socio- cultural, economic, technological,
environmental and legal impact on the chosen nation to identify the appropriateness
of the mentioned nation in being the preferred destination for the modern business

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organizations. Adding to that, the paper also recommends the profitable sectors of
the business industry of the chosen nation.
Political:
The United Arab Emirates is a combination of seven emirates in the form of
the Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah along with Umm Al
Quwain (Government.ae. 2019). Abu Dhabi is seen to serve as the capital. Each of
the seven emirates is seen to be ruled by different governing association and they
are observed to be led by different individuals as well.
The active presence of governmental organizations of the seven different
emirates is seen to be of great significance for the business organizations in
achieving flexible management in each parts of the country (Toledo 2013). However,
the chosen country is observed to be involved in significant amount of conflict with
the neighbouring countries regarding the ownership of the oil reserves and the land.
Adding to this, the stable financial condition of the nation is of great significance for
the outsider organizations with the intention of investing in the mentioned nation. The
effective management from the part of the governments of the different emirates is
capable of attracting larger amount of foreign investment. Hence it is pretty evident
that these financial institutions with bulk amount of investments can help the capital
markets that are developing within the UAE economy (Ulrichsen 2015). In spite of
the political stability of the concerned region, many of the researchers are seen to
comment on the vulnerability of the chosen region in context of the global security
and the increasing terrorism. However, it is seen that there is some amount of
discomfort amongst the people of the mentioned region with the outsider

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organizations specifically the organizations belonging to the American region due to
the Trump Administration Ban on the travellers of the Muslim country.
However, with the increasing business of the oil sectors along with the
construction, the ease in business conduction in the mentioned region is pretty
visible and that makes sure that the outsider business organization will face notably
limited obstacles in conducting their business in UAE.
Economic:
The economy of the mentioned country is seen to be significantly strong and
the notable amount of the business conduction that the chosen country is able to
conduct with the oil industry has remarkable impact on the economy on the
mentioned nation. As a result, the total GDP of the chosen nation is observed to be
732.861 billion US dollar in the year 2018 (Tradingeconomics.com. 2019). This
places the chosen country at the 32nd position in the list of the GDP and along with
that, the per capita GDP of the chosen country is 7th in the list of GDP (PPP) with a
value of 70262 US dollars in the year 2018 (Tradingeconomics.com. 2019). The
chosen country is at the 28th position in the list of the GDP (Nominal) with a total
GDP of 432.612 billion US dollars along with a per capita GDP of 41476 billion US
dollars which places the country at the 19th position in the list of the GDP (Nominal)
in the year 2018 (Tradingeconomics.com. 2019). Apart from that, the Human
Development Index or HDI of the chosen country is significantly high with a rating of
the 0.863 in the year 2018 and that places the chosen country at the 34th position in
the list of the HDI (Tradingeconomics.com. 2019). Adding to this, the chosen country
is seen to have a GDP annual growth rate of 0.80 percentage
(Tradingeconomics.com. 2019).

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Apart from that, the low employment rate of the chosen country is seen to be
significant in specifying the improved working culture of UAE. This proves the strong
basis of the chosen country for achieving the foreign investments and that is pretty
evident with the fact that the particular country has achieved one of the highest
amount of foreign direct investment in the region. Hence it is pretty evident that the
chosen country has a significantly well-developed market for the profitable business
conduction.
Socio-cultural Factors:
The organizations in the mentioned country are seen to offer a certain amount
of money to the employees of them as the compensation which is considered to be
higher than the required compensation and that is pretty effective for the
organizations in terms of motivating their employees for the better production and the
improvement in the quality of their operations. On the other hand, this plays a crucial
role in making sure that the people of the chosen country is able to live a comfortable
life and be happy with their lifestyles courtesy their well-paying jobs. The average
monthly household income of the people of the chosen nation is observed to be AED
18248.60 whereas the average household expenditure of the people of the nation is
observed to be AED 11.241.20 per month (Data.worldbank.org. 2019).
In addition to this, the impact of the globalization is pretty evident with the
improving business environment of the chosen country which is seen to experience
notable amount of expatriate exchange. However, the emirates are considered to be
Muslim based regions, the representation of the people belonging to the other
countries and religion is seen to be significant in the region. The exchange of the
cultures, social belief and values amongst the people of the chosen country is seen

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to be noteworthy in increasing the amount of representation of the ethnic groups in
UAE. The country is seen to experience the representation of the 21.8% Indian, 12%
Emirati, 10.2% Pakistani, 9.5% Bangladeshi, 6.1% Filipino, 4.76% Iranian, 4.23%
Egyptian along with 2.2% Chinese and that elaborates the improvement of the social
bonding in the mentioned country (Newworldencyclopedia.org. 2019). Along with
that, the above mentioned statistics are pretty evident in describing the reduction of
the cultural differences amongst the people of the country. Hence it is evident that
the chosen country has a significantly efficient socio cultural environment for the
improved business conduction.
Technological:
The incorporation of the technology in the lifestyle of the people of the country
is pretty evident with the usage of the wide range of gadgets and the technological
equipment that the people of the chosen country are using. Majority of the business
organizations of the mentioned country are seen to deploy improved technology and
the innovative ideas in the marketing and the promotional campaigns for their
business conductions. Along with that, the significant improvement of the E-trading in
the mentioned nation is a major building block for the improved business conduction.
The conduction of the UAE eCommerce Summit which is able to assemble
government substances, eBusiness, eCommerce, eMarketers, eRetailers along with
the small scale enterprises is considered to be noteworthy step from the part of the
government in acknowledging the presence of the improved technology and the
innovation (Wamda.com. 2019).

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The application of the technology is pretty evident in the infrastructural
development that the mentioned country is able to conduct. Along with that, the
youth generation of the chosen country is seen to be notably tech-savvy which is
significant in influencing the organizations to apply improved technology in the
products and the services that they are designing for their customers. Adding to this,
the organizations are able to increase the pricing of the products depending on the
incorporation of the improved technology without dissatisfying the customers
(Vivarelli 2014). With the significant amount of wealth, the country has the capability
to purchase improved equipment with the presence of the technological development
for the better business conduction and for the better achievement of the preferences
of the customers along with the market trends.
Legal:
With the development of the different governments for the seven emirates, the
chosen nation is seen limited impact of the legislation which can affect the ethical
business conduction. The business conduction of the organizations in the region is
seen to be affected by the federal law and the immigration law (Brunges and Foley ‐
Brinza 2014). In addition to this, the labour and employment legislations regarding
the wage characteristics, over time characteristics along with the provisions for
providing equal opportunity to each of the employees have significant effect on the
business conduction of the organizations. Adding to this, the activities of the
government are significant in making sure that the organizations operating in the
chosen country make sure that they eradicate the existence of the gender

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discrimination along with the sexual harassment for providing a better environment to
the employees to work in (Brunges and Foley‐Brinza 2014).
Environmental:
The country is observed to have a significantly high temperature with dry
climate (Alshebani and Wedawatta 2014). This provides a significant barrier to the
employees of the organizations operating in the region in case of increasing the work
pressure. The efficiency of the employees and the productivity of the organizations
are observed to be low with the mentioned type of the climate. However, the sales of
the coolers or the air conditioners are observed to be significantly high as a result of
such dry weather. On the other hand, the country is seen to be associated with some
of the coastal areas which enables the chosen nation to have a comparatively easier
business conduction through the sea and improves the transportation of the raw
materials and the products.
Preferable business sector:
The economy of the chosen country is seen to have the base on the oil sector
(Ahmed 2015). The country is able to conduct significant business in the mentioned
sector and adding to that, the dependence of the economy on the oil sector is pretty
evident with the statistics that more than 85% of the total economy is based on the
oil export (Data.worldbank.org. 2019). The export and the import is observed to be
one of the best preferred business sectors for the chosen nation as well where India,
China, United States, Germany and Japan are considered to be the leading partners

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of the country (Shayah 2015). Adding to this, the country is seen to have India,
Japan, Iran, South Korea along with Thailand as the leading export partners of the
chosen country. The products such as the plastic, man-made yarn, Gems and
Jewellery are seen to be the most exported products (Shayah 2015).
Hence it is pretty evident that the business environment of the chosen country
is notably preferable for the export sector along with the oil. The incoming
international firms are expected to achieve significant business conduction with the
oil industry and the export sectors.
Conclusion:
On a concluding note, it is pretty evident that the chosen country has limited
amount of legislative concerns for the organizations operating in it. Apart from that,
the significant business opportunity that the oil and the export industry offers to the
international firms will be of great significance for them in starting or expanding their
business in the mentioned nation. Adding to this, the environmental concerns are
expected to influence the operations of the employees which the organizations are in
need to take care. With the improved GDP and economy, the mentioned country has
all the potential to become a significant and profitable business destination for the
organizations.

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References:
Ahmed, A.Z.E., 2015. The role of diversification strategies in the economic
development for oil-depended countries the case of UAE. The Business &
Management Review, 6(2), p.207.
Alshebani, M.N. and Wedawatta, G., 2014. Making the construction industry resilient
to extreme weather: lessons from construction in hot weather conditions. Procedia
Economics and Finance, 18, pp.635-642.
Brunges, M. and Foley‐Brinza, C., 2014. Projects for increasing job satisfaction and
creating a healthy work environment. AORN journal, 100(6), pp.670-681.
Data.worldbank.org. 2019. United Arab Emirates | Data. [online] Available at:
https://data.worldbank.org/country/united-arab-emirates?view=chart
Government.ae 2019. Official Portal of UAE Govrnment. [online] Available at:
https://www.government.ae/en#/
Hdr.undp.org. 2019. | Human Development Reports. [online] Available at:
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Newworldencyclopedia.org. 2019. United Arab Emirates - New World Encyclopedia.
[online] Available at:
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Saleem, M.A., 2017. The impact of socio-economic factors on small business
success. Geografia-Malaysian Journal of society and space, 8(1).
Shayah, M.H., 2015. Economic diversification by boosting non-oil exports (case of
UAE). Journal of Economics, Business and Management (JOEBM), 735.

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Toledo, H., 2013. The political economy of emiratization in the UAE. Journal of
Economic Studies, 40(1), pp.39-53.
Tradingeconomics.com. 2019. United Arab Emirates GDP | 2019 | Data | Chart |
Calendar | Forecast | News. [online] Available at:
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Vivarelli, M., 2014. Innovation, employment and skills in advanced and developing
countries: A survey of economic literature. Journal of Economic Issues, 48(1),
pp.123-154.
Wamda.com. 2019. UAE eCommerce Summit - Wamda. [online] Available at:
https://www.wamda.com/2013/08/uae-ecommerce-summit
Ying, Y.H., Chang, K. and Lee, C.H., 2014. The impact of globalization on economic
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