ARABTECH GROUP IN UAE

3. Country and Market Analysis

Arabtech group is a very huge engineering company which is a targeting to expand in UK. But in
UK it might face some specific challenges from the local business competitors (Boatright, 2000).

3.1. Following factors are to be considered.- which are now explained underneath:

3.1.1-Political stability

In UK, if the country finds political stability all over then it can be a great boon in finding huge
market to expand its business. The Arabtech Group can take and make use of the maximum
advantage of the countrys government and political authority in its favor in creating a market for
it in the land.

3.1.2-Free Market Schemes

In UK, some of the free market schemes can be necessary for developing its new business.
Arabtech can market and develop its business and attachments to the local controlling
department favoring its suitability catering the needs of it from the business development
viewpoint.

3.13-Inflation rate-
The current financial year inflation rate of the country in reports have been found sound and
lucrative to the money lending firms such as banks who have thus delivered loans at a very low
interest rate level to the group along with beneficial creditability policy to those up comiong and
expanding business companies who are venturing to expansion plan (Burke and To, 2001).

3.1.4- Debt to the private sector-

As UKs financial condition is much effective and promising in comparison with other nations;
its private companies have got an opportunity to invest in the businesses that are now being
developed by other foreign global companies (Chen, Griffith and Hu, 2006). The advantage of

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the point that the private sector companies are having low debts, the Arabtech group can find
good and huge investors in the new projects.

3.1.5- Corruption Levels-

UKs sound and strict government policies have barred the corruption at the very grass root
level. A hassle free corruption scenario of the countrys economic condition have been attracting
many international top notch business organizations all over from globe to can make the
maximum benefits from its flexible and well planned trade policies of the government (Helm,
2004).

3.2- Customers and Competitive forces-Two points

Customers and competitive forces have been discussed here in the following portion
underneath.

3.2.1- Service availability-

The target representative demographic profile of the construction business has been totally
controlled by the particular and efficient service availability. Countrys population demands
quality services and well trained and knowledgeable people. Thus such prospective business
clients can be attracted, convinced and used to make the business permeate till the core of
country in UK.

3.2.2-Efficiency of the market competitors -

UKs construction business is at the all time highest standards. Market Competitors in the
country have exemplified excellent service facilities for the rest of the industry to attempt.
Abtech group thus has to find and show some other exceptional and unseen and unheard services
to attract the customers for them to launch some unique marketing presentations to sustain and
get hold in and of the market (Inoue, 1989).

3.3-Industry and Business Related Factors

The construction business link market and related factors have been analyzed to gain attention in
UKs market.

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3.3.1-Availability of Human Resources
-In UK, the business can be set up as efficient manpower and quality can be available at the
professional level. As the requirement of the industry is well qualified and educated pupils of the
population, UK is the apt country in producing and providing such human resources at a justified
pay as per the industry standards and market rate.

3.3.2-Company expansion strategy and policy-

The UK government has been able to deliver few legislation and law as business upward scaling
for the international business clients (Kheng Soon, n.d.). The organization should follow the laws
and regulations that have been prescribed by the UK legislations.

3.3.3 Levels of Government Control

In UK the influence of the government in the business activities is very less as compared to the
other nations. Therefore the company can easily plan its business activities in the country to
establish itself in the new market.

4. Marketing mix & staffing Policy

4.1 Marketing Mix

The strategy that will be adopted by the company for marketing is explained using the 4Ps as
given in the marketing mix which are explained as follows:

4.1.1 Product and Services

The company is planning to enter into the construction business in UK in order to provide high
quality housing facility to the customers (Sthler and Upmann, 2008). Thus in order to get a
competitive edge from the rivals the company has to devise a new strategy so that the
organization can provide best quality as compared to the rivals. The main attraction of the
Arabtec Company is the quality of the services that are provided by them. The company will
built the houses as per the needs of the local communities and people in the region.

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4.1.2 Promotion
In order to promote themselves in the new market the company should take the services of the
media advertisement company (Mayrhofer, 2004). Attractive offers and discounts on every sale
can also help the company to promote itself in the new market.

4.1.3 Pricing strategy

Since the company provides the best quality services in the market the prices of the dwellings
can be kept high. But keeping in mind the stiff competition in the market the company has to
keep the prices as competitive as possible in order to attract more customers to the organization.

4.1.4 Place
The company has chosen United Kingdom in order to expand its business internationally . The
advantage of doing business in United Kingdom is that the economy of UK is in good shape and
the per capita income of the residents in UK is also high. Thus the company will choose either a
metropolitan city or any urban area in order to establish its business.

4.2 Staffing Policy

The best staffing policy for the company is to hire employees from the local regions. Since in
UK there is no dearth of trained and qualified labors thus it will be an advantage for the company
(Kheng Soon, n.d.). Also the market awareness among the workers is very high which will help
them to establish better interaction with the prospective customers of the company. Another
advantage of hiring the people from the local region is that it will be beneficial for the economic
progress of the region which will in turn help the company to get establish itself in the economy
easily.

5. Market Entry Strategy

5.1 Evaluation of Entry Mode

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In order to establish itself in a new market there are many market entry modes that can be
followed by the company. The main Six market entry modes are illustrated as follows:

5.1.1 Global Strategic Alliances:

Global Strategic alliance is a manner in which the company can form short term alliance with the
competitors in the market in order to understand the conditions of the market and get a strategic
advantage on the other competitors.

Advantage: In order to achieve the objectives only a single contract is built.

Disadvantage: The main disadvantage of this type of contract is that the competitors can get the
access to the new technologies in the market at a very low cost.

5.1.2 Licensing
In this process a company can operate in a foreign nation without bearing any cost on the
development and risk (Helm, 2004). In this process the new company gets a license from Origin
Company so that the new company can carry out its business activities in the new market.

Advantage: Reduced risk and start up cost for the new company.

Disadvantage: The level of access in the new market is limited as per the terms and conditions of
the contract.

5.1.3 Franchising
In this type of system a new company gets the franchisee rights to operate under the name and
brand of another company that is already established in the market. In return the franchisee
company pays a certain lump sum amount to the established company also gives a percentage
from the profit that is earned by the franchisee (Fabling and Sanderson, 2013).

Advantages: this process helps to establish and expand in the new markets in low cost and risk.
The company can also get access to the foreign business activities of the established company.

Disadvantage: The main disadvantage in this system is that the new company has to give some
share of profits to the established company due to which it costs more than the licensing system.

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5.1.4 Foreign Direct Investment
In this system a company invests in another nation by acquiring assets in that nation. In this
system the company can get the ownership rights of up to 10% along with the right to vote
(Chen, Griffith and Hu, 2006). The various ways of foreign direct investing that can be followed
by the organization can be Greenfield entry, Brownfield entry and the joint venture.

Advantage: The Company is able to get more control on the foreign operations.

Disadvantage: This system poses high financial risk.

5.1.5 Joint Ventures

In this system a company enters a new market with the help of a partner. The risk and the cost is
distributed among the partners of the contract.

Advantage: The foreign company gets the help of the local company in order to establish in the
new economy. It also helps to reduce the financial risk.

Disadvantage: Both the companies do not have the entire control over the business.

5.1.6 Wholly Owned Subsidies

In this process one company expands its business activities in the new country without taking
help of any other company. The company starts its operations in the new market on its own
(Burke and To, 2001).

Advantages: It eliminates the risk on the control over the business activities of the company.

Disadvantages: All; the cost and the associated risk of working in a new market are beard by the
company.

5.2 Recommendation
For entering the new market it is recommended that the company can either follow the franchisee
model or the wholly owned subsidy system depending upon the market condition and the risk to
finances associated with it (Boatright, 2000). The franchisee system will reduce the financial risk

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for the company. At the initial stage the can adopt the franchisee system and if they want to get
fast success in the new market then they can adopt the wholly owned subsidies system.

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References:

Boatright, J. (2000). Globalization and the Ethics of Business. Business Ethics Quarterly, 10(1),
p.1.
Burke, A. and To, T. (2001). Can reduced entry barriers worsen market performance? A model of
employee entry. International Journal of Industrial Organization, 19(5), pp.695-704.
Chen, H., Griffith, D. and Hu, M. (2006). The influence of liability of foreignness on market
entry strategies. International Marketing Review, 23(6), pp.636-649.
Fabling, R. and Sanderson, L. (2013). Exporting and firm performance: Market entry, investment
and expansion. Journal of International Economics, 89(2), pp.422-431.
Helm, R. (2004). Market commitment, export market entry strategy and success: conceptual
framework and empirical examination. International Journal of Globalisation and Small
Business, 1(1), p.58.
Inoue, Y. (1989). Globalization of Business Finance. Japanese Economy, 17(4), pp.41-92.
Kheng Soon, K. (n.d.). Globalization of E-Commerce in Business. SSRN Electronic Journal.
Mayrhofer, U. (2004). International Market Entry: Does the Home Country Affect Entry-Mode
Decisions?. Journal of International Marketing, 12(4), pp.71-96.
Sthler, F. and Upmann, T. (2008). Market Entry Regulation and International Competition*.
Review of International Economics, 16(4), pp.611-626.

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