Strengths and Weaknesses of Service Industry in the United Arab Emirates - Assignment Example

?E-Commerce Strengths and weaknesses of service industry in United Arab Emirates Introduction A country’s economy comprises of various sectors working together uniformly to achieve a unitary economy. The significance of each sector varies from one country to another depending on its strengths or weaknesses. UAE is one of the counties with a very stable economy after the innovation petroleum. This discovery changed the face of different fields such as education for both males and females, medical, transport and service industries among others. However, the main concern for this case is the service industry in the UAE and mainly aims to highlight the strengths and weaknesses of the services sectors (Gorgenlnder, 2011). A service industry comprises of various companies which basically earn income by providing intangible services and products. They are involved in transport, food services, retail, distribution and other service-dominated enterprises. At times, they are called tertiary sectors or service sectors. Strengths Economic strengths The steady oil prices in the country has boosted transport sector to highest levels. Most of the economy revenue comes from the oil industries. For the past few years, according to the country’s statistics, the world market has remained stable favoring service mobility. Transport industry has benefited most from this global market. As a result of this, non-oil sectors have been stimulated thus escalating the disposal revenue of the less performing segments of the entire population. Generally, the country produces up to 22 million barrels of crude oil for export daily. This boosts the country’s economy (Gorgenlnder, 2011). The country also has steady and convertible currency which is pegged to the US dollar with minimal foreign exchange controls. This facilitates easy movement of services from one part to the other. If the global financial crises arise, it has survival tactics to make it productive in the market. Furthermore, UAE has been known for very competitive labour costs and real estates. The country has experienced and readily available work force that provide cheap and quality labor. Most of the work is done by these locals thus low cost of productions. The country’s permissive policies and healthy balance of payments allow free trade movements within and without the country. This allows free flow of services/goods thus boosting the economy (Group, 2008). Geographical strengths The country is strategically located at the Middle East, with very easy contact to not only to Eastern and Middle Eastern markets, but also to South Asia, Philippines, Malaysia, Indonesia and other markets in the Asian countries. This implies that there are ready markets for the manufactured goods and services. Furthermore, the country has well established ports that can access to main sea routes. Most of the trading countries use these ports for exit and entry in transacting businesses. This has made the country to be seen as a pacesetter and a regional leader for development. Commercial strengths According to Gorgenlnder (2011) and Group (2008), the country has open trade zones favorable for business start-ups. Most of the enterprising people can easily nature their talents and explore market opportunities easily. Interestingly, the country has no corporate and personal taxation. Any business start-up has no personal/corporate intimidation in form of taxes. More often than not, most businesses fail due to high taxation and unfavorable work environment. This favor has been extended to other countries; there is no taxation for information exchange. Infrastructural strengths UAE has sophisticated and ultramodern banking sectors that provide various services for its rich expatriate clientele. Most financial institutions are furnished with modern facilities which accommodate the needs of the clients. In fact, the banking sector has been privatized to enable quality delivery of services. Also, the country is equipped with IT infrastructure and high-end communication facilities that is networked to all crucial sectors. This serves as a unitary tool for effective service. Transport industry has not been left behind also. Roads are super-high ways with modern standards. Most of the industries have very good road networks and reliable waterworks. It has over one hundred airports that connect up to one hundred and fifty destinations. Service industry has greatly benefited from this. Cheap and abundant energy supply is widely used in most service industries with lowest rates ever (Gorgenlnder, 2011). Business environmental strengths Most of the industries get administrative support from the local authorities thus operating in a safe environment. Also, the country allows a full ownership of both the business and the capital. This provides a friendly business environment. Weaknesses Although the country has greatly developed, it has lots of ups and downs. Ironically, most of the strong service sectors are only reserved for the UAE nationals. This may be a big blow in case of any mismanagement or financial crisis. It may limit the flow of ideas from natives and non locals. These top performing sectors may also need help from non locals which might not get. Some service industries like forestry and hunting have been misused. For instance, a lot of poaching and deforestation has been on the rise. Most common people have not realized any benefit from them and they keep on destroying (Gorgenlnder, 2011). As a country of vast opportunities, all have not enjoyed. Growth and expansion of opportunities depends on the fate of others. For instance, if anybody needs to expand business, he/she requires a network of people. This is simply corruption. The ‘networked’ will benefit while the ordinary people face their fate (Group, 2008). The passenger roads have been neglected without any attention. Conversely to established infrastructure in service industries, the ordinary people have been forgotten. Most of their roads are unworthy and impassable. There are no universal rules and regulations that govern business set-ups. Each business operates at its own capacity and applies what it pleases it. This may encourage nepotism, harassment and imbalance development (Gorgenlnder, 2011). Lastly, agriculture and fishing has incidental services. These services have contradicted the services that are needed in the service industry. Conclusion UAE is one of the developed countries that has greatly benefited from the service industry. Although it has its weaknesses, it has enjoyed more than it has lost. References Gorgenlnder, V. (2011). A Strategic Analysis of the Construction Industry in the United Arab Emirates: Opportunities and Threats in the Construction Business. NY: Diplomica Verlag. Group, O. B. (2008). The Report. Ras Al Khaimah , 354-372. Read More