The Strengths and Weaknesses of the Service Industry in the UAE - Case Study Example

SЕRVIСЕ INDUSTRY IN UАЕ (STRENGTH AND WEAKNESS) By (Name) Code+ course name Professor’s name University name City, State Date Table of Content Page 1.0 Introduction ……………………………………………………………………………3 2.0 Overview………………………………………………………………………………..4 3.0 About UAE economic ………………………………………………………………….6 4.0 Services industry in UAE Industry and Manufacturing………………………………..8 4.1.0 SWOT Analysis ……………………………………………………………………...9 4.1.1Strength ………………………………………………………………………………..9 4.1.2 Weakness ………………………………………………………………………….....10 4.1.3 The cause of strength …………………………………………………………………10 4.1.3 the cause of weaknesses……………………………………………………………....10 4.2 Advantage disadvantage of strength and weaknesses in the industry services ………..11 5.0 Impact of it on the UAE Economy……………………………………………………..11 6.0 Example of industry and how it get affected…………………………………………..11 7.0 Cancelation and recommendation ……………………………………………………...12 8.0 References List………………………………………………………………………….13 Introduction The United Arab Emirates is a renowned federation mainly consisting of seven monarchies. The seven monarchies that make up United Arab Emirates are Abu Dhabi, Ajman, Ras Al-Khaimah, Dubai, Umm al-Qaiwain, Sharjah and Fujairah. The administration responded to the underlying demands for the reform during the period of the Arab Spring by investing $1.6 billion program to advance the prevailing infrastructure within the poorer northern emirates (Peck & Peck, 2010: pp 131-147). This resulted to expansion of the number of the populace to participate in electoral process of the Federal National Council. Abu Dhabi contributes to relatively larger percentage of the total oil production within the United Arabs Emirates while Dubai is known as the center of funding, commerce, transporation and visiting the attractions. The free trade sectors within UAE allow one hundred percent foreign ownership with zero taxation thus broadening the horizons of the economy, but the United Arab Emirates is the main nationals that depend heavily on the underlying public-sector service coupled with the subsidized services. Hydrocarbons account for approximately eighty percent of the entire government revenues. The United Arab Emirates’ economic freedom is standing at a score of seventy one point one making it to be the twenty eighth freest within the year 2013 index. Moreover, the score is relatively higher than the previous year depicting substantial advancements within the business freedom, management of the underlying government expenditure. It is also free from bribery and possesses great monetary muscles. The United Arabs Emirates is ranked in the third place out of the existing fifteen states within the Middle East and North African region. Its entire score is higher than the world and regional averages. Developing economic freedom in the last five financial years, the United Arab Emirates has regained the rank of the most free economies that it held in the year 2003. The underlying economy performs competitively in numerous locations of economic freedom. The barriers to trade are normally low and the corresponding commercial operations are assisted by the set of laws that function in the open-market policies. With the existing transparent and favorable business climate coupled with the lofty degree of the political stability, the United Arabs Emirates has managed to develop a dynamic environment for the entrepreneurs. The level of corruption had decreased despite that rule of law being undermined and the prevailing ineffective judicial system, which is susceptible to the underlying political influence. Despite that little progress the entire investment regime still remains extremely restrictive. Overview Service sector is the key economic driver for the United Arabs Emirates. The country’s service industry overview is mainly based on the investment in the Middle East according to its wide underlying experience of the GCC structure market coupled with the broad projects database found across the states of the Middle East and North Africa region. Service industry offers a strategic insight that mainly encompasses political, economic, public, legislative, and environmental factors affecting the existing viable market (Gorgenländer, 2010: pp 497-510). Apart from analysis of the underlying market propellers coupled with chains that culminate in the prospect effect matrix of the occasion of the propeller and restraints on the construction market, the study mainly offer chief statistic of the UAE structure market namely industrial and infrastructure. The fundamental statistics generally entail market size and forecasts on the UAE structure. It will also look into the strength and weaknesses through a comprehensive analysis of the industry. Abu Dhabi is one of the pre-eminent among the emirates since it harbors numerous oil reserves. Peculiarly amongst the whole Gulf Cooperation Council states, the United Arab Emirates is normally considered as the federation of the prevailing seven largely independents that were merged together in the year 1971 immediately after independence. There is distinctive and significant variation in terms of the size, population, hydrocarbon resources and economic structure within the United Arabs Emirates (Peck & Peck, 2010: pp 131-147). Moreover, Abu Dhabi plays a dominant role in most of the prevailing United Arabs Emirate’s oil and gas reserves as well as in the corresponding eighty seven percent of the underlying land location and forty three percent of the nationals. Abu Dhabi’s prevailing hydrocarbon revenue per national is at US$232, 000, which is the highest within the GCC. As depicted by Abu Dhabi has a capita GDP of US$ 82, 000, which double the underlying UAE average. Dubai still possesses significant hydrocarbon reserves and revenue, relative to its underlying populace, which has decreased since the late 1990s. Despite the decrease, Dubai has invested heavily in the infrastructure advancement to miscellany its economy. It mainly drew on the long tradition of the global commerce to creation of an unrivaled regional hub for trade and manufacturing, which mainly focus on the Jebel Ali port and free zone coupled with wider services economy. This is result to the accomplishment of the same level of advancement to Abu Dhabi and the corresponding per capita GDP more than twice the existing high as the five northern emirates. Even though it was weakened by the underlying a debt and real estate crisis in year 2009, its economy is currently recovering. Sharjah is the third largest emirate where oil and gas reserves are located even though the production is down sharply from the corresponding peak. It is located next to Dubai and extremely populated than emirates. About UAE Economy The United Arab Emirates’ economic freedom is standing at a score of 71.1 thus making it to be the 28th freest within the year 2013 index (United Arab Emirates yearbook, 2012). Moreover, the score is relatively higher than the previous year depicting substantial advancements within the business freedom, management of the underlying government expenditure. It is also free from bribery and possesses great monetary muscles. The United Arabs Emirates is ranked in the third place out of the existing fifteen states within the Middle East and North African region. Its entire score is higher than the world and regional averages. Developing economic freedom in the last five financial years, the United Arab Emirates has regained the rank of the most free that it held in the year 2003. The underlying economy performs competitively in numerous locations of economic freedom. The barriers to trade are normally low and the corresponding commercial operations are assisted by the set of laws that function in the open-market policies. With the existing transparent and favorable business climate coupled with the lofty degree of the political stability, the United Arabs Emirates has managed to develop a dynamic environment for the entrepreneurs (United Arab Emirates yearbook, 2012). The level of corruption had decreased despite that rule of law being undermined the prevailing ineffective judicial system, which is susceptible to the underlying political influence. Despite that little progress, the entire investment regime still remains extremely restrictive. United Arab Emirates is the world eighth oil producer and has constantly maintained a free market economy with corresponding least precincts on the personal sector activitives, global trade and capital movements. Despite the effect of the international economic downturn, the United Arabs Emirates has developed to a remarkable resilient. The relatively elevated oil prices, escalated government expenditure and a noteworthy recovery within the tourism, transport and trade have positively contributed to the underlying upswing within the economy (Gorgenländer, 2010: pp 497-510). Moreover, the accomplishment reorganization of arrears owned by high profile companies, harmony among the emirates accompanied by accommodative monetary and fiscal policies, play a major task in ensuring steadiness to the market. Political turmoil within the Middle East and North Africa has not affected unfavorably on the United Arab Emirates’ economic upturn because it is one of the politically steady and safe states within the area and a comparative safe retreat for the tourism and venture. It was affected by four point eight percent at steady prices in the year 2009, which resulted to decline within the manufacturing and real estate, actual GDP development that has shown the marked advancements in the previous years. In the year 2011, the united Arabs Emirates accomplished a respectable GDP development that was standing at 1.3% (Peck & Peck, 2010: pp 131-147). Due to its maintenance of the strong competitive edge and depicted itself as the region’s premier commercial hub and second biggest economy, the corresponding real GDP development fronted to four point two percent in the year 2012. This emanated the 6.6% development within the oil GDP and corresponding three point one percent in terms of non-oil GDP. The underlying economic environment in the year 2013 is promising due to the renewed confidence and favorable signs in numerous sectors that mainly include real estate. The average house price within Dubai increased by ninety percent in the year 2012 while the IMF anticipates GDP to develop to US$394 billion in the financial year ended 2013. The development rate of UAE is approximated to be three point six percent approximation in the year 2013 and three point seven percent in the year 2014 (Boermeester, & Durante, 2010: p 504-579). The United Arabs Emirates Central Bank anticipates that the region inflation rate was 1.5% in the year 2012 after dropping from corresponding average of eleven point seven percent amidst the year 2007 and 2008. This was mainly due to the underlying pressure from the real estate sector. Moreover,IMF approximates0.7% in the year 2012 as compared to the 0.9% in the year 2011,which is to increase to 2% in the year 2013,2.4% and 2.5% correspondingly in the year 2014 and 2015. Services industry in UAE Industry and Manufacturing United Arabs Emirates banks dominate the GCC and Middle Eastern banking sector whose ranking is based on the tier-one shareholders equity as define by the Bank of International Settlement. UAE Central Bank maintain ten percent capital/assets ratio. The banks with the UAE is non separable from the underlying non-banking commercial activities thus permitting participation within the stock brokerage, real estate brokerage, securities market and other corresponding non-banking activities (Sandikci, & Rice, 2011; p 423-67). The main services industry within UAE industry that have been accomplished across the underlying subvention of Glass LLC, Masharie LLC and the Dubai Investments Industries LLC,which assumes the responsibility of increased importance by the Dubai Chamber of Commerce and corresponding Industry. UAE manufacturing segment is amongst the famous highest contributing sectors of UAE’s non-oil GDP in the previous decades, with steady role from 2001 to 2012 thus depicting developing pattern that resemble the UAE GDP development path (United Nations Conference on Trade and Development, 2007). The manufacturing sectors have experienced a robust development thus remaining as the main focus locations for the DI, which functions across a broad array of the manufacturing and corresponding processing industries encompassing glass, building materials, pharmaceutical, and food. Glass LLC has attracted massive demand from the underlying from emerging markets that mainly touch sales. Dubai Investments Industries LLC is mainly responsible for prevailing industrial advancement within the local and regional markets. Service industries within United Arab Emirates are concern with supply of material. Crane industrial services are a multiparty venture of the Koncranes and the global leading material management solutions. The Kanoo Group is the renowned leading trading house within Middle East possessing different range of eminence products thus making Crane Industrial Services LLC. This makes it the most consistent and effective supplier of the EOT cranes and other corresponding enlivening equipments within the underlying progressive market. SWOT Analysis Strength The United Arabs Emirates the second biggest spending country within the GCC after Saudi Arabia thus presenting as one of the most advanced telecom infrastructure and services of Middle East. Moreover, the underlying global ICT players such as Microsoft, HP, Dell, Google and Oracle are present within the TECOM ICT Cluster. In logistics and Manufacturing, Dubai is world-class logistics hub and the centre for trans-continental trade contributing 80% of the UAE’s non oil trade (United Arab Emirates yearbook,, 2012). Moreover, UAE is ranked one in the FDI destination within the Middle East thus 81% of the companies that venture within Dubai normally plan to maintain and raise by the end of 2013. Weakness Manufacturing industries within UAE typically have solely trading operations that is normally tipped the sector towards freight forwarding. Moreover, the operating costs coupled with developing demand for electricity are main challenges for big manufacturing facilities. Review of the prevailing telecommunication regulation within the UAE to boost the broadband uptake and to open up the utilization of the VolP services. Saturated level of the mobile penetration over two hundred percent within UAE result to focus to mainly innovative service concepts by the operators thus generating new revenue streams (Gorgenländer, 2010: pp 497-510). The cause of strength The strength of UAE mainly relies on the massive expenditure that has resulted of telecom infrastructure and services of Middle East. Moreover, it has a suitable world-class logistics hub and the centre for trans-continental trade that contribute to approximately 80% of the UAE’s non oil trade. The cause of weaknesses The main weaknesses originate from the manufacturing trading operations that tipped the sector towards freight forwarding. The operating costs and increasing demand for electricity pose great challenge to the manufacturing facilities. The saturated level within UAE result to innovative service concepts that generating new revenue streams. Advantage and disadvantage of strength and weaknesses in the industry services Massive expenditure as one of the strength has enabled the developments of telecom infrastructure and services of Middle East. This is appropriate for uplifting UAE industrial services to the world-class logistics hub and the centre for trans-continental trade. However, manufacturing trading operations in the service industry results to tipping off of the operating towards freight forwarding, which subsequently results to escalation in demand and cost Impact of it on the UAE Economy The UAE’s remarkable economic performance has been principally propelled by the energy sector and the corresponding robust service industry, which include logistics, tourism and financial. This has resulted to the underpinned process by world class infrastructure advancement thus enabling creation of the country’s competitive advantages within the sectors. Example of industry and how it gets affected Crane industrial services are a multiparty venture of the Koncranes and the global leading material management solutions. The Kanoo Group is the renowned leading trading house within Middle East possessing different range of eminence products thus making Crane Industrial Services LLC. This makes it the most consistent and effective supplier of the EOT cranes and other corresponding enlivening equipments within the underlying progressive market. Service industries within United Arab Emirates are concern with supply of material. Cancelation and recommendation Venture within the manufacturing and energy-intensive sectors that mainly encompass petrochemicals and metal ought to be executed as they are the main propellers of the non-oil sector. They are assisted by the exports that are more competitive by weakness of the United State dollar. The services sector majorly tourism on execution of the appropriate will gain strength. The inflation within the United Arabs Emirates is predominant within the oil-Gulf economies thus attributing a surge in the domestic demand, which subsequently generates increase in international prices in oil prices. This affects the service industry thus the UAE government ought to constitute extensive systems that mainly pertain to the subsidies. This will enable restriction of price escalation on the underlying range of the fundamental goods and services Reference list: (2008). Report: Dubai 2008. [S.l.], Oxford Business Group. (2012). United Arab Emirates yearbook. London, Trident Press. Boermeester, S., & Durante, L. (2000). Best of Dubai: United Arab Emirates ; Vol (1) : pp 504-579. Commonwealth Heads of Government Meeting. (2007). Commonwealth Heads of Government Meeting 2007. London, Henley Media Group Ltd, in association with the Commonwealth Secretariat. Gorgenländer, V. (2010). A strategic analysis of the construction industry in the United Arab Emirates opportunities and threats in the construction business. Hamburg, Diplomica-Verl, pp.497-510. Peck, M. C., & Peck, M. C. (2010). The A to Z of the Gulf Arab States. Lanham, Md, Scarecrow Press: pp 131-147. Remenyi, D. (2005). European Conference on IS Management, Leadership and Governance: University of Reading, UK, 7-8 July 2005; [Proceedings]. Reading, Academic Conferences Limited; pp 57-105. Sandikci, O., & Rice, G. (2011). Handbook of Islamic marketing. Cheltenham, Edward Elgar: pp 423-67. United Nations Conference on Trade and Development. (2007). Transnational corporations, extractive industries and development. New York, United Nations. Read More