Expansion of Peter Alexander's Business Operations in UAE - Case Study Example

?International Business Table of Contents Table of Contents 2 Stage 3 0.Introduction 3 2.0.Project and Progress 4 Stage 2 5 3.0.Business Matching and Networking 5 Stage 3 5 4.0.Objective of Joint Venture 5 5.0.Scope of Business Interest and Detail of Business Prospect in UAE 6 6.0.Brief Summary on the Opportunities and Current Business Environment of UAE 7 7.0.Brief Summary of Doing Business in UAE 7 8.0.Lessons Learnt 8 9.0.Conclusion 8 References 9 Bibliography 12 Stage 1 1.0. Introduction In the shadow of globalisation and industrialisation, the prospects of international business have enhanced with a rapid pace. In this regards, the fashion industry has offered a major involvement towards the international economy both in terms of direct and oblique employment generation as well as foreign exchange earnings. It is referred as the industrial business transactions which take place collectively among two or more nations, areas or regions. These transactions are performed in order to augment the profit margin of an organisation along with its brand equity across the globe (Eebizguides, n.d.). Notably, in recent years the scope of international business in United Arab Emirates (UAE) augmented due to low trade barriers and huge amount of Foreign Direct Investments (FDIs). In addition, UAE also offers the opportunity of free trade zones with modern infrastructure and sovereignty from foreign exchange controls. The economy of UAE also offers an easy entrance to consumer markets connecting ‘13 free trade zones’ in the present scenario (Eebizguides, n.d.). The objective of the assignment is to analyse the importance of international business and the scope of foreign investment in UAE with the motive to assist an Australian renowned fashion company, Peter Alexander to expand its business operations in UAE. With this intention, the discussion of this paper will evaluate the suggestion of considering joint ventures as a mode of strategic alliance with the local companies of UAE for Peter Alexander’s penetration to the market. 2.0. Project Description and Progress Peter Alexander is a renowned Australian fashion designer, mainly known as the leader in the segment of stylish sleepwear, nightwear and gifts. It includes varied types of stylish and trendy clothes for men, women and kids. In the year 2004, the foremost stand-alone store for Peter Alexander’s products was established in the city of Melbourne, Australia with his name (Peteralexander, n.d.). The objective of this project is to propose the organisation, i.e. Peter Alexander to expand in the UAE highlighting the opportunities in the UAE fashion industry. In order to enhance the portfolio of the brand along with its distinctiveness from a global perspective, Peter Alexander can be suggested with noteworthy strategies with due consideration to joint venture initiatives to attempt towards expanding its business operations in the markets of UAE. Hence, it might also facilitate Peter Alexander to amplify the brand value and total turnover of the organisation. It might also enhance the reputation of Peter Alexander, which is extremely essential to sustain in the long run. With this concern, the progress of this particular project will be considering the virtues of joint ventures to assist in the expansion planning of the company. Stage 2 3.0. Business Matching and Networking Owing to the virtues of globalisation, the intensity of fashion events enhanced quite rapidly acting as the backbone of the emerging markets of Middle Eastern region providing a considerable contribution over the GDP of these economies. Moreover, the exclusivity of fashionable hubs also developed by a large extent due to presentation of varied shows by the leading fashion houses within the market of Dubai (Scribd, n.d.). Thus, it is advised to the management of Peter Alexander, to visit the markets of Abu Dhabi and Dubai in order to recognise its underlining opportunities and strengths by conducting a market research to evaluate the internal as well as external risks of these markets. In addition, diverse information can also be obtained from the owners of local fashion designing organisations operating in this region, as it might help Peter Alexander to reduce the business risks by augmenting the portfolio. Stage 3 4.0. Objective of Joint Venture Joint Venture (JV) is referred as a mode of creating business alliance which takes place among two or more parties. This type of partnership occurs for the purpose of accomplishing a specific business objective assuming a uniform business strategy (NEDA, 2008). In this type of exercise, all the parties share and manage the operations of the business in order to enhance the brand illustration and individuality in the market and thus attain a better competitive advantage (Estrellasp, n.d.). Moreover, all the parties involved in the JV also share the losses equally among them, if incurred. All the parties engaged in JV are more focused on attaining future goals rather than instant returns. It might further help in reducing the legal as well as the business associated threats (Yan & Luo, 2001). In addition, it might also help in reduction of the threat of new entrants resulting in enhancement of the total revenue and market value of Peter Alexander in the markets of UAE (United Nations Industrial Development Organisation, n.d.). 5.0. Scope of Business Interest and Detail of Business Prospect in UAE The industry of fashionable designer wears has already created an overwhelming existence within the economic life of the citizens of UAE which has been further leant to experience rapid improvements due to the frequent introductions of diverse free trade zones. Thus, the future prospects of Peter Alexander in the markets of Middle East is quite high due to its opening in diverse markets namely Africa, East Europe, CIS countries and West Asia. Moreover, UAE is also a member of World Trade Organisation (WTO) with the virtues of which it offers high chances of external trade. It also provides the facility of waterway and airway cargo shipment for efficient operations of trade activities among varied other countries. In addition, another significant reason is the availability of labours at a reasonable cost which can act as an essential factor for establishing the global manufacturing unit of Peter Alexander. Furthermore, UAE can also be regarded as a favourable market for Peter Alexander due to its multiculturalism economy along with increasing awareness for fashion wears (United Nations Industrial Development Organisation, n.d.). 6.0. Brief Summary on the Opportunities and Current Business Environment of UAE UAE is recognised as one of the dominant markets of fashion industries due to its high government support and repatriation of capital and returns, which enhanced the economic conditions of the country. Moreover, UAE also comprises of excellent foreign investment and trade relationships with diverse countries due to its membership with WTO. Due to extensive growth and development of information technology in the city of Dubai, the promotion of the varied products of Peter Alexander can be easily performed thereby increasing the awareness of the brand among the citizens. It might help Peter Alexander to enhance its profit margins along with brand eccentricity (NEDA, 2008). Along with this, high involvement of FDI can also be regarded as another considerable factor for the growth of Peteralexander in UAE markets. 7.0. Brief Summary of Doing Business in UAE UAE can be one of the most promising markets for Peter Alexander to expand its industry operations due to the involvement of government of UAE with the intention of amplifying the activities of trade. Moreover, the easy availability of licenses and permits also act as a significant aspect, attracting new players in the market of UAE (Docstoc, n.d.). Free trade zones and financial systems can also help new international organisations such as Peter Alexander to extend its business functions. Consequently, the culture of UAE is also quite supportive in accepting foreign brands, which can be regarded as another crucial advantageous factor for Peter Alexander (NEDA, 2008). 8.0. Lessons Learnt From this assignment, the concept of Joint Venture (JV) can be briefly analysed and evaluated. Moreover, the importance of JV is also assessed, after completing this assignment. Hence, with reference to the lessons learnt from this assignment, it can be stated that with the help of JV, any foreign organisation can introduce itself in a new market. JV also helps in sharing the financial loss, if experienced by the penetrating company in an efficient way, which can be a quite beneficial option for a new organisation. In addition, JV also offers the benefits of accumulation of diverse new ideas and information from various other partners regarding introduction of inventive products and the market trend which might help in the overall enhancement of the total revenue along with sustainability and competitiveness (Hogan, 2000). 9.0. Conclusion Conclusively, it can be affirmed that UAE is one of the emerging and dominant markets in the global stature with regards to fashion industry. For this reason, it might be beneficial for Peter Alexander to enhance its business operations to a significant extent resulting in the overall augmentation of its brand status and profit margin. Moreover, it might also facilitate Peter Alexander to amplify its reputation and efficiency among a diverse range of customers in the markets of Middle East and UAE as well. As a result, it is quite likely to lead towards the reduction of business risks by enhancing its competitiveness among other new entrants in the targeted market. References Docstoc, No Date. Trade and Investment Opportunities. UAE. [Online] Available at: http://www.docstoc.com/docs/41148186/Trade-and-Investment-Opportunities-for-the-UAE-companies-in [Accessed May 09, 2012]. Eebizguides, No Date. Why Establishing A Company In UAE? Advantages. [Online] Available at: http://www.eebizguides.com/downloads/pdf/BG-AE.pdf [Accessed May 09, 2012]. Estrellasp, No Date. Joint Venture Agreement. Article. [Online] Available at: http://www.estrellasp.com/es/pdfs/Joint%20Venture%20Agreement.pdf [Accessed May 09, 2012]. Hogan, C., 2000. Joint Venture Agreement. Purpose. [Online] Available at: http://4xtra.com/datastore/resources/JointVenture.pdf [Accessed May 09, 2012]. NEDA, 2008. Guidelines and Procedures for Entering Into Joint Venture (JV) Agreements between Government and Private Entities. Legal Basis. [Online] Available at: http://www.neda.gov.ph/references/Guidelines/JV%20Guidelines.pdf [Accessed May 09, 2012]. Peteralexander, No Date. Stores. Peter’s Australian Stores. [Online] Available at: http://www.peteralexander.com.au/tem/PA_petersworld.tem?Level1Click=stores&Level2Click=stores_aus_act [Accessed May 09, 2012]. Peteralexander, No Date. New Collection. Men & Women. [Online] Available at: http://www.peteralexander.com.au/PA_IWCatLoadSections.process?CalledFrom=Main&Catalog_NAME=May+Catalogue&Level1click=New+Collection&Section_Id=2297 [Accessed May 09, 2012]. Scribd, No Date. Fashion Industry. Details. [Online] Available at: http://www.scribd.com/doc/39888513/Industry-Scenario [Accessed May 09, 2012]. Scribd, No Date. Global Fashion Industry. Emerging Markets of UAE. [Online] Available at: http://www.scribd.com/doc/47002350/Global-Fashion-Industry-Growth-in-Emerging-Markets [Accessed May 09, 2012]. Scribd, No Date. Marketing Projection. UAE. [Online] Available at: http://www.scribd.com/doc/11569951/A-Marketing-Project-on-FabIndia [Accessed May 09, 2012]. United Nations Industrial Development Organisation, No Date. Alliances and Joint Ventures. Patterns of Internationalization for Developing Country Enterprises. [Online] Available at: http://www.unido.org/fileadmin/user_media/Publications/Pub_free/Alliances_and_joint_ventures_part_1.pdf [Accessed May 09, 2012]. Yan, A. & Luo, Y., 2001. International Joint Ventures: Theory and Practice. M.E. Sharpe. Bibliography Beamish, P. W. & Lupton, N. C., No Date. Managing Joint Ventures. About The JV Literature Included In Our Review. [Online] Available at: http://journals.aomonline.org/amp/samplearticles/May%2009%20Managing%20Joint%20Ventures%20by%20Beamish.pdf [Accessed May 09, 2012]. Bennett, E. & et. al., 2000. Joint Venture Public Private Partnerships For Urban Environmental Services. Report On UNDP/PPPUE’s Project Development Facility (PDF). [Online] Available at: http://www.ucl.ac.uk/dpu- projects/drivers_urb_change/urb_infrastructure/pdf_public_private_services/UNDP_PPPUE_Joint%20Venture_2.pdf [Accessed May 09, 2012]. Christian-Albrechts-Universitat zu Kiel Letzte Aktualisierung, No Date. Joint Ventures. World Economy Joint Ventures 1. [Online] Available at: http://www.wiso.uni-kiel.de/vwlinstitute/Raff/Paper/Joint%20Ventures.pdf [Accessed May 09, 2012]. Forest Service. US., No Date. Monarch Joint Venture Accomplishments. Pollinators. [Online] Available at: http://www.fs.fed.us/wildflowers/pollinators/monarchbutterfly/conservation/mjtaccomplishments.shtml [Accessed May 09, 2012]. Houstan Business journal, 2008. Business Success Trips: Take Advantage Of Dynamic UAE Markets. Business Journal. [Online] Available at:http://www.bracewellgiuliani.com/assets/dir_docs/news_publication/1b9627be-fadc-494a-87ef-5f8222c4b588_pdfupload.pdf [Accessed May 09, 2012]. Luxembourgforbusiness, No Date. Market Entry Guide United Arab Emirates (UAE). Advantages. [Online] Available at: http://www.luxembourgforbusiness.lu/market-entry-guide-united-arab-emirates-uae [Accessed May 09, 2012]. Peteralexander, No Date. Peter’s World. The History behind a Man. [Online] Available at: http://www.peteralexander.com.au/tem/PA_petersworld.tem [Accessed May 09, 2012]. Terjesen, S., No Date. Joint Ventures: Synergies and Benefits. Q Finance. [Online] Available at:http://www.qfinance.com/contentFiles/QF01/g4fqn4jz/10/0/joint-ventures-synergies-and-benefits.pdf [Accessed May 09, 2012]. Read More