Launching Sultan’s Dine in UAE

ITB 301
Section- 05

Prepared for
Fariza Binte Mahbub
Lecturer
Department of Business Administration
East West University

Prepared by
Group -06
Name ID Contribution

Nusrat Humaira 2017-2-10-191  Political and

Economic
Environment.
 Entry Mode.
 Abstract.
 Referencing.
Jannatul Ferdous Oni 2018-1-13-031  Trade Barriers.
 Promotional
Strategies.
Tahanee Mim 2016-3-10-051  Doing Business
Report.
 Entry Mode.
Faize Zafar 2017-1-10-333  Incentives from host
country’s
Government.
 Product Adaptation.
Md.Tanjil 2018-1-10-148  Any other reasons.
 Promotional
Strategies.
 Target Market.
 Product Adaptation.
 Merging .
Abstract
This assignment is about the launching a local brand of our country into a foreign country. We
have selected the food brand “Sultan’s Dine “to launch in UAE. The entry mode will be
franchising mode. As we will sell our local brand to their local restaurant in a wholly owned
subsidy. We have shown so many reasons for choosing this brand and this country. The main
reasons were their political and economic environment is much favorable for our business of
franchising. UAE is in many higher rank categories in Doing business report. The trade barriers
and incentives we will get from UAE is also described, trade barriers are identified as less
comparatively. Some other reasons for the demand of food business is also mentioned. The
impact of cultural differences on the brand is explained with adaptation strategies and
promotional strategies. Target market is identified according to demand with proper research.
The risk of this idea is also discussed in this assignment. This assignment is made by proper
research from using various articles and website information. Though we lacked some time and
limited access so including every detail was not possible due to limitation.
Political environment (system & risk)
There are many kinds of political system. UAE follows authoritarian system. Totalitarianism or
authoritarianism is a form of government in which one person or political party has absolute
control over all spheres of human life and prohibits opposing political parties. The UAE has a
stable political situation. President KHALIFA bin Zayid Al-Nuhayyan (since November 2004)
and Prime Minister and Vice-President: MUHAMMAD BIN RASHID Al-Maktum (since
January 2006) is ruling UAE. The form of government can be referred to as a federal presidential
elected monarchy, as the president is elected from among the absolute monarchs who rule each
of the seven emirates.
Each emirate has its own local government, and municipal governments. The constitution
established the distribution of authority for each level of government. They are the liberal nation.
The constitution of UAE guarantees all UAE citizens equal rights and opportunities, safety and
security, and social justice. Over the years, the UAE has taken many steps to develop its political
system. The government tried to make it more receptive for the socio-economic progress in the
country and tried to ensure that UAE's population is capable to cope with the challenges of
global development.
We know that democracy is more beneficial for doing business in foreign. But the setup of the
political system in UAE is so much sorted that their totalitarianism is playing the role of a
positive factor in doing business. Being a totalitarian regime UAE has maintained rapid
economic growth with strong property rights and free-market economy.
Risk
Sometimes totalitarian shifts to dictatorship so that can make trouble for our business. Besides, in
UAE corruption is in moderate risk. Without these things many other risk such as criminal
activities are low in rate. As their political system is stable so other risk are controllable.

Economic Environment (system & risk)

System
UAE’s economic system is mixed economic system which is favorable for doing business.
Because here the private firms and government both owns the productive activities. This mixed
free-market open economy gives us the positive environment to set up our local brand.
GDP rate
A country’s economic development is determined by the numeric observation as well as that
country’s living standard of people. UAE’s GDP in 2020 has fallen because of COVID-19
pandemic situation. Its economy is rising since 2013. They launched some plans to make the
growth high. In general case. UAE is in a better position among other middle east countries.
Doing Business will be better in this country.
HDI score
The UAE govt. maintains regulations that are favorable to the formation and operation of private
businesses. According to the HDI (Human development index) score it has been gradually
increased year after year. In 2017 the last data shows that UAE’s HDI score is .863. We know
that if the HDI score is 0.8-above then it is high development in economy. So, according to the
HDI score the economic environment is positive in UAE. A good HDI score is good for our
business. Also it has lower debt, as a stable economy.
Others
Their GDP per Capital is moderate in amount. Inflation rate is lower, and unemployment rate is
also lower. This is beneficial for doing business in UAE. As the economic condition and the
government of UAE is positive and day by day they are trying to grow more, it is totally positive
for our business also. It will be easier for us to set up our food business there.
As we want to set up our local brand Sultan’s Dine in Dubai. Dubai has some positive elements
in doing business. Dubai has built its economy on trade, travel, tourism and real estate. Dubai
property prices have gently gone downwards over the last year. Dubai is more open for economic
growth. Dubai is the 2nd largest emirate.

Table of numeric observation

Main indicators 2020
GDP (Constant Prices, Annual % Change) -8.0
GDP per Capital (USD) 67,427
Inflation Rate (%) 2.3
Unemployment Rate (% of the Labor Force) 3.5
Source: IMF – World Economic Outlook Database, Latest available data

Risk
For now, the risk in economic environment is only the present pandemic situation which lowered
the GDP rate badly. In this case we have to adapt the situation with proper plan. When a
country’s economic management falls badly then it creates a risk for foreign business but UAE is
continuously trying to grow more and tackle any bad situation.
Doing Business Report
Doing business report will provide the objective measures of regulations and their enforcement
in UAE economy and the country. It captures the important dimensions of the regulatory
environment as it applies to local firms. This report will provide the idea about regulations that
UAE has as we will launch our business idea there.
Doing Business Report: United Arab Emirates
Ease of Doing Business in UAE
The doing business rank of UAE is 16 and the doing business score is 80.9. The regions are
Middle East and North Africa. Their income is high and the business is covered in Dubai.
The Topics of Doing Business in UAE
Starting a Business
It basically will measure the number of procedures, time, and cost and paid in minimum capital
for a small to medium sized company. The rank of starting a business is17
Score: Procedures 91.2, Time 96.5, Cost 91.4, Paid in min. capital 100.0
Dealing with Construction Permits
It is about the procedures, time and cost to build a warehouse including licenses and permits,
submitting all required notifications, requesting and receiving all necessary inspections and
obtaining utility connections. The rank is 3 for UAE
Score: Procedures 76.0, Time 93.8, Cost 89.2, Building quality control index 100.0
Getting Electricity
It measures the procedures, time and cost required for permanent electricity that is needed for the
warehouse also the reliability of supply and transparency of tariffs index measures reliability of
supply, transparency of tariffs and the price of electricity. The rank is 18 for UAE.
Score: Procedures 100.0, Time 100.0, Cost 100.0, Reliability of supply and transparency of tariff
index 100.0
Registering Property
It examines the steps, time and cost involved in registering property and the quality of the land in
a country. The rank for UAE is 10.
Score: Procedures 91.7, Time 99.8, Cost 98.8, Quality of the land administration index 70.0
Getting Credit
It examines two sets of issues. First the strength of credit reporting systems and the second one is
the effectiveness of collateral and bankruptcy laws in facilitating lending. The ranking for UAE
is 4 and score for getting credit is 70.0
Protecting Minority Investors
It measures the strength of minority shareholder protections against misuse of corporate assets by
directors for their personal gain as well as shareholder rights, governance safeguards and
corporate transparency requirements that reduce the risk of abuse. The ranking is 13 and score
for protecting minority investors is 80.0
Paying Tax
It records the taxes and mandatory contribution that a company must pay pr withhold in a given
year and also the administrative burden of paying taxes and contributions and complying
procedures included Vat refund and tax audit. The ranking for UAE is 30.
Score: Payments 96.7, Time 89.6, Total tax and contribution rate 100.0
Trading across Border
It records the time and cost associated with logistical process of exporting and importing goods.
There are basically three components and they are documentary compliance, border compliance
and domestic transport. The ranking for UAE is 92
Score:
Time to export- Border compliance: 83.6
Cost to export- Border compliance: 56.4
Time to export- Documentary compliance: 97.9
Cost to export- Documentary compliance: 65.0
Time to import- Border compliance: 81.0
Cost to import- Border compliance: 53.9
Time to import- Documentary compliance: 95.4
Cost to import- documentary compliance: 59.5

Enforcing Contracts
It measures the time and cost for resolving a commercial dispute through a local first instance
court and the quality of judicial processes index, evaluating the series of good practices that a
country adopted which promote the quality and efficiency in the court system. For UAE the
ranking is 9.
Score: Time: 73.4, Cost: 76.5, Quality of judicial processes index: 77.8
Resolving Insolvency
It shows the study of the time, cost and an outcome of insolvency proceeding involving domestic
legal entities. These are used to calculate recovery rate through reorganization, liquidation of
debt enforcement proceeding. The rank for UAE is 80.
Score: Recovery rate: 29.8, Strength of insolvency framework index: 68.8

Trade Barriers

We all know that Govt. impose trade barriers to protect the local goods producers from foreign
producers. There is no special legislation for franchising in the UAE. General contract and
commercial law are applicable to franchise agreements in the UAE. In UAE, if the franchise
agreement is registered, it will be regulated by the Ministry of Economy.

As we want to set up our local brand like the Sultan’s Dine in Dubai, so we may face some
problems under the UAE law. The problems or difficulties we may face are given below:

Formalities-

As we are Bangladeshi local brand, it may be found difficult to translate the formalities into
Arabic. And the franchisors (Sultan’s Dine) have to deal with-

 Department of Foreign Affairs (or its equivalent body) of the country in which the
foreign principal is located.
 UAE Embassy in that country.

Commercial practice-

The rights of renewal are usually tied to the performance by the franchisee of its obligations
under the current term agreement. As the law says, the Sultan’s dine are generally advised not to
grant renewals automatically on expiry of the initial term. Under the law, the Sultan’s dine has to
pay the renewal fees to open an additional number of stores or restaurants under a new
development schedule in the renewal agreement.

Competition law-

The UAE Competition Law seeks to prohibit anti-competitive practices in or affecting the UAE
market and provides that agreements between establishments that seek to prejudice, limit or
prevent competition will be prohibited.
Restrictive agreements that include the following provisions are prohibited:
 Directly or indirectly specifying prices of commodities (which may include resale price
maintenance).
  Specifying conditions of buying, selling or service provision (which may include tied
selling).
 Phasing out of, or limiting, production or other investment.
 Manipulating goods/services supply in the market.

According to the law, our franchisors, the Sultan’s dine cannot buy, sell, make production and
sell products at their own will. It’s a barrier for the franchisor for the UAE’s anti-dumping policy
cting the UAE market and provides that agreements between establishments that seek to
prejudice, limit or prevent competition will be prohibited.

Online/e-commerce restrictions-

Under UAE law, the Sultan’s Dine will face the problem of having its own website presence,
from promoting its business on the internet (like advertising the brand and business), and from
engaging in e-commerce and selling products or services online. Because of the law, the
franchisee cannot open its own websites and cannot promote the products. Thus the franchisors
like the Sultan’s dine face the cost of advertising.

Employment issues-

There is significant regulation of employment relationships in the UAE. Due to local

employment laws, which require all employees to be sponsored for UAE work and residency
purposes by a company or legal entity established in the UAE, it is difficult for an employee of a
franchisee to be regarded as an employee of the franchisor, unless the Sultan’s Dine:

 Has a legal entity established in UAE.

 And that legal entity sponsors the employee for work and residency authorization.

Incentives that Sultan’s dine franchise might get from the UAE (host country)
Government:

Every country always wants to get new foreign direct investment. Sometimes they provide
incentives for them sometimes they create barriers also. If Sultan’s Dine want to do their
business in UAE they will get some incentives from the host government.
 No direct taxation of corporations (apart from oil, banking and insurance sectors) or of
individuals.
 No foreign exchange control or constraints related to repatriation of funds.
 Very rich hydrocarbons resources.
 Solid and profitable banking sector with a powerful sovereign fund and favorable
regulations for foreign investments.
 Long-term political stability.
 Good-quality business climate.
 Low-cost foreign labor force.
  Good transport and production infrastructure.
 Access to low-cost energy.
 competence, experience and reputation of the relevant foreign investor.
 Insurance services.

Some other reasons to choose Dubai of UAE for launching Sultan’s Dine are given below:

 Market is booming

Dubai is currently one of the biggest business hubs in the world. It is the fastest growing
economy. Restaurant business in Dubai is booming. Being the owner of a restaurant may
seem like a fascinating business to have and prosperous restaurateurs can get a measure
of fame and fortune.

 Infrastructure and Amenities:

The Dubai government try to ensure the foreign investors may not face any trouble in
running a restaurant business. The government has left no stone unturned to ensure it.
This has translated into world-class infrastructure and amenities in terms of business
parks, office spaces, warehousing , transportation, connectivity, and utilities. [CITATION
Why19 \l 1033 ]

 Ready Made Food Consuming People:

In Dubai, there are many people who do not prepare food in the home. They simply take
it from outside and consume it. This would increase the sale of Sultan’s Dine.

 Many South Asian’s living:

In Dubai city, a large number of population is from the South Asia. As, we know they
love to eat kacchi a lot particularly people from India, Pakistan, and Bangladesh. So,
there is a huge market for Sultan’s Dine. 44% of the Dubai’s population is make up by
those countries. India makes up 25% of Dubai’s population. Pakistan makes up 12% of
the Dubai’s population and Bangladesh makes up 7% of the Dubai’s population.

Adapting the product for local customers:

As we would launch Sultan’s Dine in Dubai we need to adopt our products for local customers.
But the extent would be very low as our target market is mainly the people of Bangladesh, India
and Pakistan who live in Dubai. Since Sultan’s Dine is a Bangladeshi company the products are
designed to keep the choices of Bangladeshi people in mind. And the choices of Indian and
Pakistani people are almost alike. Some of the adoption we would bring are given below:
Sheikh Kacchi:

We would introduce Sheikh Kacchi in our product line for the local customers of Dubai. It is
associated with the culture of Dubai.

Sheikh Biryani:

We would introduce Sheikh Biryani in our product line for the local customers of Dubai. For
keeping the Dubai culture in mind we would introduce Sheikh Biryani. It’s the cultural
adaptation of products for the local customers.

Different kinds of Kebab:

The people of Dubai like kebab a lots. From the early stage kebab is associated with their food
culture. So, we would introduce different kinds of Kebab with our kacchi. Like, Shish Tauk-
traditional kebab of chicken marinated in a special spice mix and cooked in a tandoor oven.

Promotional strategies
There are lots of restaurants in Dubai. As we want to set up our local brand the Sultan’s Dine in
Dubai. We have to compete with them. So, we need some strong promotional strategies for long-
term success and to bring more customers and profit for our business. Some of promotional
strategies are given below that we would follow:
Discounts
As we have a lot of local competition due to chain restaurants in Dubai. And our restaurants
may face difficulties to compete against with others. We can offer a welcome drink to our
customers. We can offer kids-eat-free programs on specific days. We can also provide a
discount on the customers' receipts so they will return to our restaurant.
Membership
We would provide membership card to our customers in terms of intensity of purchasing of
our products. Like, we would segregate into 3 dimensions. Those are Gold customer, Silver
customer and Iron Customer. Segment wise we would provide special offers.
Food Bloggers
We would endorse food bloggers for promoting the restaurant. As people love to consume food
by taking the review from others. We would endorse famous food bloggers of Dubai and
provide offers to their followers in purchasing our products.

Distribute Fliers
We have to make a leaflet with important information about our restaurant, including the
address, phone number, type of cuisine and specials and distribute these leaflets by having an
employee personally hand them out. We should try to give these leaflets to businesses and
organizations that meet with your type of business.

Affiliation with residential hotels- As, there are many tourists around the year in Dubai. We
would go for affiliation with many residential hotels to suggest our restaurant when the tourists
ask for good place to eat.

Events-We would get many potential customers by hosting an event at our restaurant. Like,
hosting a holiday party or a comedy show or a live music show that will depend on customer’s
demand. We would also arrange different kinds of events like Birthday party, Anniversary
party and so on.

Content marketing strategy- We would follow content marketing strategies to promote our
restaurant through Ads.

Promotional Channels/ Communication Channels:

 Facebook.
 Instagram.
 YouTube.
 Website.
 Food Magazines.

Target Groups of Sultan’s Dine

We as a franchisor would suggest the franchisee company xxxxxx to set the target market/
groups by following the above mentioned structures:

Socio Economic Structure

In terms of socio economic structure the franchise can set their target market by Lower Middle
Class, Middle Class and Upper Class.
Tech Presence
The franchise company can set target by Moderate to High tech presence.
Geography
In terms of geography the mainland of Dubai would be targeted as target market.
People
In terms of people the 3 living nations would be targeted as target market mainly. Those are:
Indian (make up 25% of Dubai’s population), Pakistani (make up 12% of Dubai’s population)
and Bangladeshi (make up 7% of Dubai’s population) and those people from 3 countries like to
take Kacchi as food a lot.
Benefits sought
People who like to consume ready-made food. In Dubai, there are many people who do not like
to make food in the house. Because they are busy at work.

Entry mode for Doing Business in Foreign Country

We have chosen the franchising mode for doing business in UAE. As franchising is one the most
attractive entry mode to do business. It has less cost and can easily capture the global market. We
will sell intangible property of our local brand “SULTAN’s DINE “to a local restaurant of Dubai
as wholly owned. That can be any Bangla restaurant or Indian restaurant. We will have our strict
rules and control over the menu, cooking methods, staffing policies, design and location. We will
also provide management training and financial assistance. Franchising is actually doing
business through the service so we will ensure the service is good.
The advantage of Franchising in UAE
The franchise market in UAE is very advantageous for any franchisor who wants to set their
business in UAE. They can test their product or services on a broad range of clients. So for us it
is the most profitable path to grow. It is profitable because franchising presents corporate with a
way of achieving successful growth without the need for either substantial capital investment or
sizeable managerial infrastructure. So setting up the brand in UAE will give the advantages of
productive activity through franchise and it is beneficial as it will create brand recognition,
support and directions from franchisor.
But the actual main advantage is the freedom of self-employment. So this will state that the
knowledge that the owner has invested in a proven system with the training and encouragement
of the franchisees. Owning a franchise also provides a monopoly market which states to conduct
the business in a particular area.
The risk
As franchising has a little risk with quality control so here we have to be more cautious and
endurance of the franchisee. In doing business in UAE as franchising has little disadvantages
also such as, the liability issue. In the concern of taking the liability the franchisor will be
responsible for any fraudulent act of franchisee. So, here is a risk of harming the brand
reputation. And under UAE law if the firm face any indirect loss or damage they can’t claim for
the damages.