PESTLE Analysis
‘The Coffee Bean and Tea Leaf’ that would like to expand the coffee chain to Dubai need to study the external environment of the country. For this, political, economic, and social-cultural aspects are considered in the report to discuss. Political factors need to be understood since it includes policies, laws and another legal system of the country that would be required by the company to follow if investing business in the country. Economic is a significant aspect that considers the nature and path of the economy in which company would operate. The amount of social and cultural influences on the coffee industry will differ from country to country and since The Coffee Bean and Tea Leaf is a USA based company, needs to understand Dubai’s culture, religion to decide for its business to expand in Dubai (coffeebean, 2018).
Dubai is a portion of UAE federal constitution, which is politically stable and a low crime country. Few political aspects of UAE includes: the country’s trade relations are healthy with numerous countries across the world; the negative aspect of Dubai’s political system is that some conflicts regarding oil reserves and land with neighboring countries, happen occasionally; most importantly, management is quite flexible across the country due to the individual governmental organization.
While deciding investment decision for ‘The Coffee Bean and Tea Leaf’ in Dubai or conducting business, the legal and regulatory framework of Dubai must be considered, which is dynamic and robust over a moderately short period to provide international investors ease in the decision. Dubai’s legal representation is comfortable to come by. Regional and International law firms’ full spectrum operates in the country. Enforcement of laws is very strict in Dubai. On driving with alcohol, zero tolerance policy exists (dubai-information-site, 2018).
To analyses The Coffee Bean and Tea Leaf to start their chain in Dubai, the first aspect to study is Dubai’s political system. It affects the decision of venture, as the company has to follow a political system of the host country. To conduct business in Dubai, there are two zones to do business, free zone areas, and non-free zone areas. The laws and regulations are different for both the zones. Dubai International Financial Sector (DIFC), Dubai Media City, and the Jebel Ali Free Zone are some of the famous free zones in Dubai. 100 % attractive conditions are there for conducting business in Free Zones. The DIFC is perhaps the most progressive of the free zones.
International business willing to expand their business to Dubai can either incorporate or register a representative office of a foreign company or can enter into a relationship of Commercial agency and UAE national. If a company is not setting their business in the free zone, the business structures need participation from UAE national in various degrees. In UAE and Dubai, business licensing is particularly important. Certain sectors are more stringent licensing necessities than other sectors of Dubai economy (lw, 2018).
Past three decades, Dubai economy has dramatically changed. It became the key business center with the diversified and dynamic economy. Operational and logistical cost is low in Dubai, international outlook and well-developed infrastructure could be most attractive aspects for The Coffee Bean and Tea Leaf to invest in the country and expand their chain in Dubai. Dubai is said to be the regional hub city and Arabian Gulf leading multi-purpose business center because of a combination of market, costs, and environmental advantages that Dubai’s economy enjoy. In more recent years tourism industries had grown to an extent, this could be beneficial for The Coffee Bean and Tea Leaf if invest in this country (dubai-information-site, dubai-economy, 2018). Dubai’s open and free economic system is another attractiveness for the company to invest in this country. As per this system, control of government and activities of private sector regulation has been minimum. Personal income and corporate profits are not liable for direct taxes. Moreover, the service sector and highly maintained infrastructure is another aspect that is beneficial for the company to initiate its chain here (Dubai.ae, 2018).
Some of the economic factors of UAE, which needs to be studied for investment decision making of The Coffee Bean and Tea Leaf, are UAE’s GDP per capita income, which is exceptionally high; an Unemployment rate of UAE is very low; and in the region, Foreign Direct Investment is highest of Dubai (Arg, 2014).
UAE GDP
Source: tradingeconomics, 2018
UAE Foreign Direct Investment
Source: Ceidata, 2018
Dubai is on Persian Gulf’s southeast coast and shares border with Oman (dubai-information-site, where-is-dubai, 2018). Dubai’s population is estimated at 2,269,000. In UAE, among all the Emirates, Dubai has the highest population (kwintessential, 2018). A major religion that countries inhabitants follow is ‘Islam’. If the gender of the population is seen, approx. 557,000 are females and 1,712,000 are males. International passengers traveling to Dubai at the airport are approx. 70,475,635 people per year on an average. This shows that investing in the country and starting chain for ‘The Coffee Bean and Tea Leaf’ could be profitable. There is reliable and safe metro rail for public transportation that will make employees of The Coffee Bean and Tea Leaf able to travel comfortably.
Considering culture, the United Arab Emirates social culture is interesting and includes a combination of several cultures due to increasing in globalization within Emirates; due to well-paying jobs, UAE’s inhabitants enjoy a comfortable lifestyle. Most importantly, religion is given major importance in the area for example particular clothes that a native woman needs to wear. Thus, for The Coffee Bean and Tea Leaf, understanding of Islam and its five-pillar knowledge would be useful to gain before investing in the country (Emirates, 2018). When safety is considered in Dubai, security is good. However, the major risk in Dubai is Road safety. The rate of mortality is highest in Dubai because of a large number of road accidents. Pickpocketing and theft types of petty crimes rate are very high in the country. Thus, safety could be a reason to take while investment decision for The Coffee Bean and Tea Leaf.
Conclusion
For this report, we can conclude that in this report political aspects are mostly in favor of The Coffee Bean and Tea Leaf to invest in Dubai due to strong legal system, free zone areas to conduct business and low crime area. The economy of Dubai is also strong with the very low unemployment rate. Moreover, since the jobs are well paid, the purchasing power of people would be high, and investing in this country could be beneficial for The Coffee Beans and Tea Leaf. Socio-cultural aspect can be a major challenge for the company to understand because of strict following religion country, where it is suggested to The Coffee Beans and Tea Leaf to consider Islamic religion rules and pillars and security in Dubai.
References
Arg. (2014). Business Environment United Arab Emirates . Retrieved from Arg: https://www.agr.gc.ca/resources/prod/Internet-Internet/MISB-DGSIM/ATS-SEA/PDF/6469-eng.pdf
coffeebean. (2018). Our Story. Retrieved from coffeebean: https://www.coffeebean.com/our-story
Dubai.ae. (2018). Dubai Economy. Retrieved from dubai.ae: https://www.dubai.ae/an/aboutdubai/Pages/DubaiEconomy/aspx dubai-information-site. (2018). dubai-economy. Retrieved from dubai-information-site: https://www.dubai-information-site.com/dubai-economy.html
dubai-information-site. (2018). dubai-legal-system. Retrieved from dubai-information-site.: https://www.dubai-information-site.com/dubai-legal-system.html
dubai-information-site. (2018). where-is-dubai. Retrieved from dubai-information-site: https://www.dubai-information-site.com/where-is-dubai.html
Emirates. (2018). Dubai culture and tradition. Retrieved from Emirates: https://www.emirates.com/english/destinations_offers/discoverdubai/aboutdubai/traditionandculture.aspx
kwintessential. (2018). Guide To Dubai & The UAE – Etiquette, Customs, Culture & Business. Retrieved from kwintessential: https://www.kwintessential.co.uk/resources/guides/guide-to-dubai-the-uae-etiquette-customs-culture-business/
lw. (2018). DUBAI’S LEGAL SYSTEM. Retrieved from lw: https://www.lw.com/thoughtleadership/dubai-legal-and-regulatory-system
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
