Industry Analysis: Events Industry in United Arab Emirate - Assignment Example

Industry Analysis: Events Industry in United Arab Emirates (UАЕ) Name Institution Course Date Executive Summary Worldwide, there has been a remarkable growth of the event industry. Even market consists of exhibition and conferences services, performance arts venues, party planning, promoters and producers of performance art shows, festivals, trade shows, live music and sport event promotions, and event planning and management. The United Arab Emirates happens to be one of the countries whose event industry has been recording remarkable growth in the recent past. This report has analyzed the demography of the industry by assessing the size of the market, companies in the industry, number of visitors as well as the geographical to understand the structure of the industry. The analysis also delved on the life cycle of the industry which is still in its growth stage and characterized by high competition. The report also analyzed the corporate strategies, values and corporate strategies Global Event Management, Mosaic Live, Abu Dhabi National Exhibitions Company (ADNEC). Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Demography of the Industry 5 Industry Overview 5 Companies 7 Geographical Spread 8 Value Chain 9 Industry Life Cycle 10 Strategic Group 11 Competition 12 Case Studies 1: Global Event Management 13 Case Study 2: Mosaic Live 15 Case Study 3: Abu Dhabi National Exhibitions Company (ADNEC) 16 Conclusion 17 References 19 Introduction Worldwide, there has been a remarkable growth of the event industry. Even market consists of exhibition and conferences services, performance arts venues, party planning, promoters and producers of performance art shows, festivals, trade shows, live music and sport event promotions, and event planning and management (Nair 2015; Dubai City Guide 2016). Other tangible products that are also considered part of events market include marquee and tent hiring, as well as managing software (Dulsco 2013). The United Arab Emirates (UAE) is one of the countries whose events industry has experienced remarkable growth over the last few years. In 2010, the UAE events industry attracted more than 5 million visitors from different parts of the world (Basit 2016). Accordingly, this has made the industry a multi-million dollar industry providing a variety of event services that includes sports entertainment, business events, arts, music festivals and exhibitions. Because of these, the industry has attracted numerous event management companies both local and foreign that seek to take a slice of the market (Arabian Business 2015). This report will begin by analyzing the industry structure by assessing the demographic aspects of the industry, including number of companies, size, geographical spread, and production/visitor and turnover figures. The second part of the report analyzes three key competitors in the industry in terms of their corporate strategies, and their competencies. The report will conclude by highlighting the implications of the findings, the gaps identified and the opportunities that might need to be exploited. Demography of the Industry Industry Overview The event industry is one of the largest contributors to the UAE’s GDP and is ranked among the most promising industries. Event market consists of exhibition and conferences services, performance arts venues, party planning, promoters and producers of performance art shows, festivals, trade shows, live music and sport event promotions, and event planning and management. The UAE event industry has been expanding at a faster rate in the recent years due to the increased demand for different types of event services and products. In 2010, the industry attracted more than 5 million visitors that attended different events in the country (Basit 2016). This makes event industry a major contributor to the economy of the UAE. The Dubai event market, for instance, is estimated at approximately DHS165.15 million and is projected to grow at the rate of over 25% in the subsequent years, according to 2016 study report (Basit 2016). This growth is catalyzing the expansion of the event serve providers supporting the industry. Similar growth trend in event market is recorded even in Abu Dhabi region, where the event industry is a major contributor to its GDP. In 2014, Abu Dhabi event market received approximately 3.5 million visitors, which represented about 25% growth compared to the previous year (Zawya 2016). Abu Dhabi authority expects the growth to continue as it has set the goal of recording 8 million visitors by 2030, notes Oxford Business Group (2015). The UAE event market consists of a variety of event products and services whose contribution to the economy of the UAE varies accordingly. According to the Arabian Business (2015) reports, the leisure industry ranks the top most events in terms of attraction. Reports show that the majority of people that visit UAE come to enjoy leisure events. The report that only captured events applied for by visitors through Dubai electronic ticketing platform found that there were approximately 656 systems registered leisure event seekers in 2015, which accounts for 1.1 million tickets sold (Zawya 2016). Similar trend was recorded in other major UAE regions such as Abu Dhabi where leisure events were the most demanded. Besides leisure events, exhibition events also record huge growth and contribute to the economies of the UAE. For instance, reports from Dubai authorities indicate that exhibitions are a key engine to the Dubai economy. In 2013, exhibition contributed about 5% to the Dubai GDP (Bitar 2013). The authorities attribute the high demand for exhibitions to the fact that UAE has some of the world’s best exhibition facilities that attract people from all walks of life. Additionally, the festival services are also a key contributor to the UAE events industry. The Oxford Business Group (2015) indicates that festivals contribute significantly to the growth of the UAE economy. In 2010, Dubai’s promotional festivals alone helped the UAE attract more than 57 billion visitors with an estimated total spending of Dh102 million in just fifteen years (Basit 2016). According to the Gulf News Report (2010), the Dubai Shopping Festival attracted more than 40 million visitors from different parts of the world who spent Dh80 billion over 15 years while Dubai Summer Surprises (DSS) attracted more than 17 million people spending Dh22 billion over 12 years (Zawya 2016). Accordingly, this makes festivals a critical event service segment that contributes immensely to the growth of the UAE economy. Others include conferences services, performance arts venues, party planning, promoters and producers of performance art shows, trade shows, live music and sport event promotions, and event planning and management. Companies UAE is currently regarded as one of the world’s event hub due to the large number of events that are hosted in different parts of the country that attracts many people from different parts of the planet. Because of this, the UAE event industry has been attractive to both domestic and international event management firms that have entered the industry to take a share of the market that continues to grow. The players in this industry consist of small and large event management companies (Zawya 2016). However, considering the complex nature of the event industry that consist of different categories of event products and services, such as exhibition and conferences services, performance arts venues, party planning, promoters and producers of performance art shows, festivals, trade shows, live music and sport event promotions, exhibitions, festivals, leisure and event planning and management, there is no data for the precise number of event management companies in the UAE (Dulsco 2013). Nevertheless, estimates indicate that there are more than one thousand event management companies in the UAEs with the number growing every year due to the attractiveness of the industry triggered by the numerous opportunities and growth that the industry is projected to record in the coming years. The following are some of the leading event management companies in Dubai. They include Show Entertainment & Arts, Byblos Translation, Art UAE Art Gallery, No. 1 Events, SSL Productions, and Pains Fireworks LLC to name but a few. In Abu Dhabi, some of the leading events companies include Fonoon, Ocean Events, Extreme Parties Organizing LLC, Elegant Events, Light Tower Events, and Baynunah International Development Group among others (Nair 2015). These companies specialize in different categories of events. Other than Abu Dhabi and Dubai, there are several other companies that organize for events in other cities and towns, as well as rural areas across the country. As indicates above, it becomes clear that the UAE event industry is a highly fragmented market that consists of firms of different sizes small and large as well as different origins, including local and international firms. A fragmented industry is that industry that is characterized by a large number of small and medium-sized firms ( Hill & Jones 2012, p. 194). Besides, the industry is fragment because it offers different categories of event products and services that visitors can choose from, which include exhibition and conferences services, performance arts venues, party planning, promoters and producers of performance art shows, festivals, trade shows, live music and sport event promotions, and event planning and management, as well as products, such as marquee and tent hiring, as well as managing software (Nair 2015). Geographical Spread Geographical spread is a concept that deals with how the events are distributed in different regions. The UAE has many events that are organized in different parts of the country every year. However, considering that the market is highly fragmented as it provides diverse event products and services, there is no data detailing the geographical spread of the industry. However, as indicated in the map below, it is clear that most of the event companies are located in the major towns and cities. In particular, the map shows that there is a high concentration of event firms in the major cities, including Abu Dhabi and Dubai. The high concentration of the event companies in Abu Dhabi and Dubai as indicated in the map is attributed to the fact that most events, such as exhibitions, festivals, trade shows and music concerts among other events are held in these cities. Therefore, the majority of event management firms have set up businesses in Abu Dhabi and Dubai because of the huge market available in these cities. Geographical Spread of Event Companies in the UAE Source: https://www.google.com/maps/search/map+showing+all+event+management+companies+in+uae/@24.6403719,53.2391769,7z Value Chain Value chain is a strategic concept developed by Michael Porter describing a set of activities that a firm engages in to create value for customers. Events industry delivers value by engaging in various activities divided into primary activities and supporting activities. The activities include primary activities, such as marketing and sales to pursued clients, and secondary activities that include procuring equipments, human resource, infrastructure and technological development activities. The diagram below shows the activities that event companies perform to ensure the delivery of value to clients. Value Chain Activities Industry Life Cycle Every product goes through different life cycle stages and the same applies to an industry. Understanding the life cycle of an industry is important for strategic planning as it enables firms intending to enter the industry understand the growth prospects before they can enter the industry (Baum & McGahan 2004, p. 24). An industry goes through four different life cycle stages that include introduction, growth, and maturity and decline stage (Cole 2003, p. 39). The life cycle stages experience diverse growth rates for the products in the industry. Analysis of the UAE events industry indicates that the industry is in its growth stage. The industry is experiencing faster growth, which is expected to continue in the in the next coming years (Zawya 2016). The growth stage of the industry is also indicated by the fact that the players in the industry stiff focus on differentiating their products and service offerings from the rivals in the market. Because of this, the existing industry players are investing heavily on promotion and standardization of their products and services. Studies also indicate that firms in the UAE events market are experiencing growth due to the growing number of visitors attending different events in the country. Additionally, the event industry is in the growth stage as Oxford Business Group (2015) indicates that the players in the industry are focusing mainly on expanding their geographical reach to increase their market share. Despite the growth of this industry, the main challenge facing the players is the high competition. The growth has made the industry attractive to local and international firms that have entered the industry in large number to take a share of the market (Dulsco 2013). This implies that the existing even management firms must adopt strategies that are good enough to enable them attract and build customer loyalty. Besides, the industry is about to enter maturity stage and this is likely to affect the sales and profitability of the existing players in the industry. Strategic Group Strategic group denotes a group of companies that adopts a similar strategy in an industry. In the UAE’s event industry, there are different strategic groups. First, there are a group of companies that adopts differentiation strategy. Differentiation is a strategy involving a firm seeking to become unique in the market in terms of product and service offerings. Some of the companies that adopts differentiation strategy include Mosaic Live, Global Event Management, and Abu Dhabi National Exhibitions Company (ADNEC). The other strategic group seen in the industry has to do with quality service delivery. In this industry, it emerges that the majority of the firms focuses on the delivery of quality products and services to the clients. This is because clients in the market appear to focus more on quality of the products and services delivered to them. Some of the firms that adopts this strategy include Mosaic Live, Global Event Management, and Abu Dhabi National Exhibitions Company (ADNEC), Show Entertainment & Arts and Byblos Translation. The other strategic group is affordability. The majority of the companies in the industry claim that they are among the most affordable in the market. This indicates that they charge relatively lower prices for their products and services in order to lure clients that happen to be price conscious. The list of firms that adopts this strategy includes Fonoon, Ocean Events, Extreme Parties Organizing LLC, Elegant Events, and Light Tower Events. Differentiation Mosaic Live Global Event Management ADNEC Affordability Quality Fonoon, Ocean Events, Mosaic Live Extreme Parties Organizing LLC Global Event Management, Elegant Events ADNEC Light Tower Events Show Entertainment & Arts Byblos Translation Competition According to Michael Porter, any business that hopes to succeed must understand the competitive landscape in which it operates and develop effective strategies to enable it achieve a competitive advantage. The UAE event industry is a highly competitive industry with large, medium and small-sized even management companies (Zawya 2016). An earlier indicated, as much as there is not precise number of firms in the industry due to fragmented nature of the industry, estimates show that there are more than one thousand firms competing for the market share in different event categories. Nevertheless, there are certain players that are dominant in the industry and control a significant market share as described hereunder. Case Studies 1: Global Event Management Global Event Management (GEM) is one of UAE’s leading event management companies. The Dubai-based company was founded more than 3 decades ago and has grown to become a global brand with brunches in London, Doha, and Abu Dhabi (Global Event Management 2016). Global Event Management Company provides a variety of integrated event management solutions to its clients that include making corporate events, conferences, exhibitions, concerts, seminars, festivals and special entertainment events. Global Event Management understands that it operates in a highly competitive industry. As such, to stay ahead of the park, the event management firm communicates a number of values. First, the company communicates the value of quality and excellence. The Global Event Management website indicates that it strives to ensure that its clients are satisfied all the time by delivering quality and excellent events (Global Event Management 2016). Besides, the company indicates in its website that its success in the crowded industry is linked to the fact that it maintains high client satisfaction level. GEM also communicates the value of reliability. Reliability is an important factor that clients look for when choosing an event management firm to hire. Because of this, GEM tells its audience that it is not just an excellent even management firm, but also a highly reliable company in the event management industry. Regarding corporate strategy, GEM adopts different strategies to attract and retain clients to its brand. The strategies that GEM has adopted can be analyzed using Michael Porter’s generic strategies. According to Porter’s Generic Strategies, there are three main strategies that a company can pursue to ensure competitive advantage and success in an industry, which includes differentiation, cost leadership and focus (Eldring 2009, p. 12). Analysis of GEM strategies indicates that the event management firm adopts mainly differentiation strategy (Global Event Management 2016). The company strives to differentiate itself from rivals in terms of service features and prices. For instance, the company indicates in its website that it charges affordable prices compared to its competitors in the industry. Besides, the company also focuses on the provision of quality products and services to its clients as its key strategy to winning the market share. In order for a firm to compete effectively in a firm, it must be able to recognize and utilize its core competencies. Core competency is a management theory coined by C.K. Prahalad and Gary Hamel. A core competency is the resources and skills that a company utilizes to deliver value to customers in a market (Cole 2003, p. 27). Regarding competencies, GEM has a number of key competencies that enables it deliver value for its customers. First, the company has a wealth of creative event management team that ensures that clients are provided with quality products and services all the time. Second, the company adopts some of the latest technologies in event planning and this is a key competency that gives it an edge over rivals in the industry (Global Event Management 2016). Case Study 2: Mosaic Live Mosaic Live is one of the leading event management companies in the UAE. The Dubai-based company provides a variety of event management services to clients, which include making exhibitions, festival management and seminars and concert management among others. The company communicates the value of unique experience. In its website, Mosaic Live indicates that the company focuses on the production of interactive, authentic and immersive experiences to its clients (Mosaic Live 2016). To achieve a competitive advantage, Mosaic Live has adopted a number of strategies. First, the company has focused on the delivery of quality products and services to customers. The company also indicates that it charges some of the most affordable prices in the market. Mosaic Live charge premium prices as its prices are among the highest in the market (Mosaic Live 2016). The company adopts this pricing strategy to create the perception that it provides quality products and services. Like GEM, Mosaic Live differentiates itself from rivals in the market by providing unique products and services that are difficult to match. Analysis of the company indicates that it has a number of core competencies that has enabled it stay among the top in the industry. First, Mosaic has highly talented and experienced event management team. This enables it deliver quality services to clients. Second, the company has is highly customer focused, which is a core competence as it ensures that customers are provided with consistently quality products and services (Mosaic Live 2016). Additionally, Mosaic Live is highly innovative as it keeps coming up with innovative products that ensure that it keeps up with the market trends, thus high client satisfaction. Case Study 3: Abu Dhabi National Exhibitions Company (ADNEC) Abu Dhabi National Exhibitions Company (ADNEC) is Abu Dhabi-based event Management firm. Founded in 2005, ADNEC has grown in to become one of the leading event planning and management firms in Abu Dhabi and the UAE at large. The firm’s portfolio currently consists of Abu Dhabi National Exhibition Center ExCel London, Al Ain Convention Center, and Capital Gate (Abu Dhabi Government 2016). The goal of ADNEC is to become the leading venue providers to international exhibitions, live events by ensuring the maintenance of consistently high quality venue facilities, and management. The ADNEC communicates the value of high standards. The company believes that, to attract and retain clients, it must deliver high standard venue facilities and management. In fact, the company’s management reveals that, since the company was started about a decade ago, it has maintained the provision of high standard products and services to its clients (Abu Dhabi Government 2016). Besides, ADNEC communicates the value of trust and integrity. These are values that the company promotes as part of its corporate culture. To succeed in this highly competitive industry, ADNEC has had to adopt effective strategies. Michael Porter argues that to succeed in any competitive industry, a company must adopt strategies that are capable of giving them an edge over rivals in the industry. In line with Porter’s words of advice, ADNEC has ensured that it stays a competitive by adopting a number of strategies. First, the company focuses on the delivery of quality event facilities and management and this has ensured that the company attracts a large pool of customers (Abu Dhabi Government 2016). Secondly, the company charges affordable prices as part of its strategy to attracting price conscious customers. Because of high competition, ADNEC understands that to succeed in the industry, it must adopt an effective pricing strategy. Additionally, ADNEC adopts a differentiation strategy by delivering unique event facilities at reasonable prices. ADNEC has a number of core competencies that enables it deliver unique value to customers. First, the company has highly skilled and experienced event management team. In any industry, a company cannot compete effectively it lacks the right caliber of employees to deliver value to customers (Abu Dhabi Government 2016). ADNEC having been in the event industry for a decade has been able to build a strong caliber of talents that acts as its key resource. ADNEC is also one of the most innovative event management companies in Abu Dhabi and in the UAE at large. Its commitment to innovation is a core competence that has helped the company remains competitive in the event industry. Conclusion The analysis of the UAE events industry has brought into light a number of implications that any firm that intends to enter the industry must take into account. First, the industry is still in its growth stage through approaching maturity stage. This is an opportunity that new firms can consider exploiting. However, the analysis has also indicated that the leisure event category is the most visited in the UAE, which demonstrates that there is a big opportunity in this category compared to all the other event categories. Besides, the economic growth that the UAE records provides a huge business opportunity in the events market as the growth signifies a growing disposable income that people can spend in attending different events. Despite the opportunities available in the industry, the analysis also indicates that the industry has a number of risks. First, the industry is characterized by high competition that affects the profitability of the players in the industry and this makes the industry risky for new firms to enter the industry. Additionally, the events industry is characterized by high cost of providing event products and management and this affects the bottom line of the companies. References Abu Dhabi Government. (2016). Abu Dhabi National Exhibitions Company (ADNEC). Available: https://www.abudhabi.ae/portal/public/en/departments/department_detail?docName=ADEGP_DF_95258_EN&_adf.ctrl-state=kejjftini_4&_afrLoop=11586841367642243#! Last accessed 5 November 2016. Arabian Business. (2015). 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(2015). The events industry is attracting an increasing number of visitors. Available: https://www.oxfordbusinessgroup.com/analysis/events-industry-attracting-increasing-number-visitors. Last accessed 5 November 2016. Zawya. (2016). Dubai's event management industry was estimated at DHS165.15 million and continues with an annual growth of over 25%. Available: https://www.zawya.com/story/Dubais_event_management_industry_was_estimated_at_DHS16515_million_and_continues_with_an_annual_growth_of_over_25-ZAWYA20160208100234/. Last accessed 5 November 2016. Read More