Halmstad University

Strategic Innovation Management II

Coors Beer international – Dubai/United Arab Emirates market

- Case study

Group 4

Rosa (Naijing) Du,

Mohamed Mekki,

Samer Al-Mimar

Termination Date: 06.10.2015

Technical Project Management and Business Administration

Contents1. Introduction................................................................................................................................ 3

2.Market Overview........................................................................................................................ 4Major Distributors in the UAE:............................................................................................................................5Dubai:.............................................................................................................................................................................. 5Abu Dhabi:.................................................................................................................................................................... 5Advertising and Promotional Activities...........................................................................................................5Market Size................................................................................................................................................................... 6

3. Environmental Analysis........................................................................................................... 7PEST/ DN-Analysis.................................................................................................................................... 7

Political factors:..........................................................................................................................................................7Economical factor:.....................................................................................................................................................7Sociological factors:..................................................................................................................................................8Technological factors:..............................................................................................................................................8Demographic factors:...............................................................................................................................................8Natural factors:............................................................................................................................................................8

SWOT-Analysis........................................................................................................................................... 8Opportunities and threats for brewing industry.........................................................................................8Strengths and Weaknesses of Coors and Competitors..............................................................................9

4. Porter 5 Forces......................................................................................................................... 10Industry competitors:...........................................................................................................................................10Threat of substitution:..........................................................................................................................................10Bargaining of suppliers:.......................................................................................................................................11Bargaining of buyers:............................................................................................................................................11Potential entrance:.................................................................................................................................................11

5. Diamond model........................................................................................................................ 12Factor conditions:...................................................................................................................................................13Demand conditions:...............................................................................................................................................14Firm strategy, structure and rivalry:..............................................................................................................14Related and supporting industries:................................................................................................................15Chance and government:.....................................................................................................................................16

6. Segmentation, Positioning and targeting........................................................................17Segmentation:.......................................................................................................................................... 17

Geographic segmentation:..................................................................................................................................17Demographic segmentation:..............................................................................................................................18Psychographic segmentation:...........................................................................................................................18Behavioral segmentation:...................................................................................................................................19

Targeting.................................................................................................................................................... 19Target customers:...................................................................................................................................................19Target market:..........................................................................................................................................................19

Positioning................................................................................................................................................ 19Functional positioning:........................................................................................................................................ 19

Symbolic positioning:............................................................................................................................................20Experiential positioning:.....................................................................................................................................20

7. Marketing mix - 5P:................................................................................................................. 20

8. Market entrance (action plan)............................................................................................ 21The Gulf Cooperation Council (GCC)..............................................................................................................22Foreign Investment And Business Establishment....................................................................................22Limited Liability Company (LLC).....................................................................................................................22Joint Stock Company (JSC)..................................................................................................................................22Unincorporated Joint Venture...........................................................................................................................22Branch Office.............................................................................................................................................................23Taxation...................................................................................................................................................................... 23Contracting with Agents and Distributors...................................................................................................24Doing Business in Israel.......................................................................................................................................24

9. Conclusion:................................................................................................................................ 25

10. Recommended Strategy...................................................................................................... 26First strategy:............................................................................................................................................................26Second strategy:......................................................................................................................................................27Third strategy:..........................................................................................................................................................27The fourth strategy:...............................................................................................................................................27

1. Introduction

United Arab of Emirates contains seven states following both mixed legal system of Islamic

law and civil law: Abu Dhabi, Dubai, Sharjah, Ajman, Um-Alqawen, Fujirah, Ras Alkhaema

The population is almost 10 million people with about 11% of local Emirate and the rest are

foreigners. For the alcohol sells it’s not allowed to sell to anyone without having alcohol

license and the license can be provided only to non-Muslim people. The license can be gain

from the police department at the state where the resident live, the license provided only for

residents not for visitors. After getting your license you can buy your alcohol from certain

supplier similar to Systembolaget in Sweden, the drinking age is +21. Other source for

alcohol is Ajman free zone area where you can buy as much alcohol you want for very good

prices. We should mention that UAE is tax-free country where almost everything much

cheaper than Europe. Another source of getting alcohol is the duty free in UAE airports,

which is allowed to buy up to 4 liters of alcohol.

However, alcohol sold without license to anyone at restaurants, bars and clubs that are the

main sources of alcohol in UAE. The country depend mainly about business and tourism, that

why huge number of hotels and tourist areas can be founded in UAE.

From the above figure easily can be noted the high percentage of Muslims in UAE which

alcohol consumption is prohibited in Islam. However, that doesn’t mean all Muslims not

drinking alcohol, in fact a lot of Muslims used to drink and smoke. Drinking in public is

prohibited all over UAE, also drinking is totally prohibited in some states as they follow the

Islamic Sharia laws, and when person arrested with accusation of alcohol can get 80-200

lashes plus fine. The states following Sharia laws are Sharjah and Um Alqwen, which usually

punished the crime of alcohol accusation with lashes.

The main gate to UAE is the tourism growth as the country received more than 13 million

tourists in 2014 and expected that number to increase to around 40 million tourists by 2024.

Leisure travel spending (inbound and domestic) generated 78.6% of direct Travel & Tourism

GDP in 2014 (SEK 182.1bn) compared with 21.4% for business travel spending (SEK

49.6bn). Domestic travel spending generated 25.9% of direct Travel & Tourism GDP in 2014

compared with 74.1% for visitor exports (ie foreign visitor spending or international tourism

receipts). The domestic tourist from inside UAE or from neighbour countries, which they

travel to UAE in order to spend a lot and sometimes to visit the nightclubs and bars which are

prohibited in surrounding countries. Other segment of tourists is the foreigners arrived to

UAE from outside the GCC area (Europeans and Americans), which mostly wealthy and visit

the country to have great time and mostly to party. The above information showed the great

opportunity for COORS to enter new market, as the product is known by international

tourists and easily could make it way to the end customer.

2.Market Overview

United Arab Emirates prohibits the production and consumption of alcoholic beverages for

Muslims. The law is strictly applied to all Muslims in the country regardless of nationality.

So because of the large numbers of residents of non-Muslims in the UAE the government

allowed them to purchase and consumes alcohol according to certain conditions; should have

a valid liquor license, at least 21 years of age and have a monthly income ($815 minimum).

All places serving alcoholic beverages (hotels, night clubs restaurants, bars, stores, etc.)

required having a valid liquor license issued by the local police authorities.

Market Segments and Distribution Channels Alcoholic beverages trade in UAE can be

divided into three broad segments:

1. On-Trade and Off-Trade channels.

2. Duty Free and Dubai Ports

3. Re-Export to other countries

On-trade (pubs, clubs, bars, restaurants etc)

Off -trade (corner shops retails etc)

Almost 75% of alcoholic beverages consumption in UAE are through on-trade and 25%

through off-trade channels. Dubai alone has more than 1200 on-trade outlets such as

restaurants, pubs and nightclubs.

The largest second segment is the duty free stores, the passenger's traffic In Dubai airport

reached 51 million in 2011 and more than 11 million stayed at UAE hotels.

Major Distributors in the UAE:

There is a limited numbers of companies engaged in the import and distribution of alcohol in

the UAE we will take the two largest cities Dubai and Abu Dhabi the UAE:

Dubai:

There are three distributors, the two majors are: African and Eastern (A+E) and Maritime &

Mercantile International (MMI).

MMI holding around 57% of the market shares whereas African & Eastern (40% owned by

SAB Miller), has 43% of the market share.

(A+E) operates around 24 retail stores in Dubai and Abu Dhabi and MMI operates 13 stores

located in Dubai and northern of Emirates. The third distributor in Dubai is Coastal

Communities Distribution (CCD) owned by the Dubai based Nakheel Company, it's the

exclusive distributer for the Palm Jumeirah and the project world which still under

construction.

Abu Dhabi:

In Abu Dhabi, the Abu Dhabi National Hotels (ADNH) is the major distributer, it’s a joint

venture company with the UK based Compass Group. Two other distributors are (A+E) as

mentioned before and Gray MacKenzie & Partners.

Advertising and Promotional Activities

General advertising, mass media, newspapers and even illuminated signs are prohibited in the

UAE also Commercial posters, brands names, window displays and pictures are not allowed

and lead to cancel the license.

Only allows advertising inside the shops selling alcohol (on-trade channel) and companies

can hold an events inside the stores and distribute catalogues, vouchers and different types of

media (off-trade channel).

Market Size

Fig from the WHO/ Global Alcohol emro

Because of UAE can't produce alcohol beverage and the Islamic law we can see how the

consumption is too low during 1972-1996, also the total population at that time was not

exceed 2 million.

Due to the lack of sufficient data for brewing industry in the UAE the below table is for 2010

only showing the total amount of importing and exporting alcohol beverages in the large

three emirates Dubai, Abu Dhabi and Sharjah. A total of 107M$ were imported and 7.4M$

were re-exported to the neighbors countries in the 2010.

The total value of the imported alcoholic beverages from the USA reached 3$ million

represent about 3% from all the imports , the beer is about 35% from the total imports and

most famous brand are Miller & Budweiser.

The below table illustrates the import and re-export size from and to different countries in

2010:

3. Environmental Analysis

PEST/ DN-Analysis

Political factors:

UAE in general and Dubai in special has a stable political and financial situation we can say

it's a tax-free country with excellent tax benefits except for alcoholic, since no alcohol

production in the UAE the government impose heavily taxed almost 50% for importation.

Furthermore there is an age restriction for the consumption of alcoholic and the regulation for

the license is highly restricted and subject to strict conditions.

The most important factor is the UAE consist of seven emirates each one has its own

governmental institutions which required license for every emirate.

Economical factor:

The UAE is the second largest economy in the Arab world and has a huge infrastructure

project and some projects are under construction. The main revenue is from tourist, real

estate, construction, financial services plus the oil and the natural gas.

UAE has no foreign exchange control that attracts investments and facilitates the import and

export. The country will achieve a significant growth due to the good economic policies and

do not forget Dubai EXPO 2020, which expected to attract 25 Million visitors from around

the world.

Sociological factors:

UAE has a large expatriate population (more than 80%) Dubai is the most populated emirate

with almost 36% of the UAE population with a large numbers of foreigners.

Despite UAE being a Muslim country but alcohol is available all over the country and most

diffused in Dubai with a certain conditions as mentioned before.

Technological factors:

One of the main factor influence the industry is the transportation and logistics services, the

size and the efficiency of Dubai ports and even other emirates can play a vital role in the

brewing industry where there is an active commercial movement between the UAE, united

states and Europe plus the good infrastructure of roads and marine ports will facilitate the

process of import, export and distribution.

Demographic factors:

Alcohol in the UAE is forbidden till the age of 21, due to restrictions of drinking alcohol

most of the consumers are foreigners, which may affect at the growth of the brewing industry

in the country.

Natural factors:

Competition is almost non-existent in the UAE due to the restrictions of the license for

brewing of importation and distribution; we can say UAE market is very small comparing

with other markets in brewing industry but its profitable.

SWOT-Analysis

Opportunities and threats for brewing industry

Opportunities

● Coors can emerge with other companies in the UAE which will reduce the risk.

● They can produce zero alcohol for the Muslims consumers.

● Beer with different flavors.

● Change of regulations in the future may increase the beer consumption.

● Change of regulations may also allow for beer production in the UAE.

● Exportation to the neighbor's country.

Threats

● High Taxes for alcoholic.

● Government regulation in age restriction.

● Economic crises as happened before in the UAE.

● License regulations.

● High prices from importation comparing with the local zero alcoholic drinks.

Strengths and Weaknesses of Coors and Competitors

Coors Strengths:

● Vertical integration structure.

● Good quality beer

● Sustain long-term relationship with their suppliers.

● Good production activities (cold filtering process, large packaging facilities.

● Good in procurement (VIPER PROG).

● Promotions and advertising through national football league.

● Unique value systems in HRM towards employees

Coors Weaknesses:

● Family based management style.

● Rely on few popular brand names.

● Concept of beer is only for middle or lower class members of society in the US.

Strengths Competitors:

● (MMI) & (A+E) have license that is hard for the new entrances.

● (MMI) & (A+E) have retails shops all over the country with joint venture with other

emirates.

● Good importation and distribution activities.

Weaknesses Competitors:

● License cancellation by the government.

4. Porter 5 Forces

By using Porter five forces to analyse the current Dubai beer industry, we figure out Coors as

new entrance of Dubai beer industry is under the other forces from Current rivals, Buyers and

Substitutes. Coors don’t have the bargaining from suppliers since they have brewery at USA.

Industry competitors:

There are three current competitors in Dubai beer industry. Competitors MMI and A+E are

currently dominating in the market, the third company still under construction CDI. Most of

them have already designed their non-alcohol beer that focus on muslim.

Threat of substitution:

There are substitutions of Coors beer is the beverage, soda, wine and other alcohols. Because

of the laws, most of Muslims prefer beverage than alcohol. In the same time, in restaurant

and hotel, customers are more likely to choose beverage or wine than beer. Especially in

luxury hotels and formal occasions, alcohols like wine, whisky and vodka are have better

sales than beers.

Beverages like Coca-Cola and Sprite are the main threat of substitution, especially the cold

beverage. Compared to Coors non-alcohol beers, people prefer other beverages that have

better flavor and better taste in cold. Publics have the habits for drinking cold soda in hot

summer, because the high annual average temperature in Dubai is and most days are sunny

throughout the year. There are also several beaches and deserts in Dubai, which makes cold

soda even more popular than other country.

Bargaining of suppliers:

Coors don’t have the bargaining from suppliers, because Coors have their own brewery in

USA and there are Islamic laws and civil laws that forbid any alcohol brewery in Arabian

country, which means Coors have to transport their product instead of establishing a new

brewery in Dubai. Dubai has two major commercial ports, Port Rashid and Port Jebel Ali.

Port Jebel Ali is the world's largest man-made harbor, the biggest port in the Middle East, and

the 7th-busiest port in the world. Since Dubai is not far away from America and Dubai has

these two large ports, the most profitable and convenient way of Coors to transport their

products from America to Dubai is by ship. But it is necessary to transport beers by vacuum

container for the long-time shipping and high temperature in Dubai.

Bargaining of buyers:

The buyers have limited power and few brands to decide between them, as the buyer can get

only what the bar or night club offering to the customers or what the selling points offering of

their shelves. Usually people don’t have the alcohol license as many people don’t prefer to

visit the police station to get one or they are not allowed to get one as mentioned earlier. For

that reason the buyer get any cold beer offered by the bar, and in party nothing interesting

more than strong stuff make you drank and funny.

However, zero alcohol beer can straggle little more than regular beer, for the reason of

varieties of brand names well known by customers. Such product normally offered in normal

supermarkets beside two to three brand names. The innovation in finding new flavor zero

alcohol beer can guaranty the sales in such market, of course with fine beer taste like

COORS.

Potential entrance:

COORS can enter the promising market of UAE after setting solid foundation by getting the

licenses to import and re-sale, and find the proper distributer agent to deliver the product to

the end customer. The market could be risky to enter if we look at the country as Muslim

country and put the xenophobia in front of our plan, but we must understand the need is such

market and the target customer.

Also we should contact the two major licensed companies in UAE, MMI &A+E both

currently operating in the market. The third company still under construction CDI, could be

the next potential for COORS as distributer for the product. By working with the major

distributors in the country COORS can guaranty the entrance and increase the sales.

However, it could limit the number of sales as the distributors are limited, which mean they

already have the market share with existing suppliers. However, the famous brand name for

COORS can do the sales, as the product well known globally for the fine taste and good

quality, especially as the main target customers is the tourist which are familiar with the

brand name of COORS.

5. Diamond model

In this part we will talk about diamond module applied into UAE market in general and

Dubai in special. To clarify the importance of diamond analysis role in Dubai we quote Saeed

Al Muntafiq, CEO of Tatweer said ¨We have made Porter`s theory a reality¨ this shows the

great importance of diamond in the head of UAE leaders.

Before starting with the diamond analysis we should mentioned the mean industry around the

country. The country play major role in oil & gas industry and the oil was the main base for

the country creation and development. Abu Dhabi alone contains 10% of the world’s oil

reserves. In each state a free zone area was established to bring more investment of

international companies into the market, of course with a lot of governmental facilities and

reasonable prices. Both Ras Al Khaymah and Fujairah depends more on agriculture as they

have better water resources than other states. However, both of Ras Al Khaymah and Fujairah

depend also on tourism depending on fascinating nature. While the state of Dubai is known as

commercial center connecting the east and west, it also has been named the business capital

of the Middle East and has become a large tourism attraction.

The main source of income to UAE is the oil and gas industry, which contributes to the

Government revenues. The biggest producer is Abu Dhabi, the capital of the country and the

biggest state as well. The discovery of oil transfer the country from being a desert to one of

the most booming country in the region

The United Arab Emirates is a constitutional federation of seven emirates; Abu Dhabi, Dubai,

Sharjah, Ajman, Umm al-Qaiwain, Ras al-Khaimah and Fujairah. The federation was

formally established on 2 December 1971.

The main successful industries in UAE:

- Oil & Gas

- Real Estate

- Tourism & Service

- Logistics

- Bank & Finance

Factor conditions:

The most advantage in this path is the government support the financial cluster with low

interest rate and no tax policy. The government concentrate more on expanding airports,

ports, roads and entertainment. These activities attract foreign capital to the country and

develop the economy. This attraction for foreigner’s capital has a positive effect on the job

market creating more jobs, which was negatively affect the local human resources and

prevent it from being develop. Also the risk of economic bubble caused by low interest rate

and tax which keep the inefficient firms for long time.

1- Oil & Gas: The source of raw material mainly from Abu Dhabi and Dubai where crude oil

and natural gas can be get. While the cost of extraction and exploration and processing oil is

cheap compared to other countries, also the transportation domestically and internationally is

easy through the ports. Finally the oil & gas technology is available in UAE and well

developed.

2- Real estate: UAE location in Middle East and quite stable area provide great support to

this industry. The big amount of professional workers, global investment, location, stability,

government support and policies, construction equipment’s, tax free, huge amount of areas

still virgin and no contraction started, plus the great infrastructure around the country. All the

above give great potentials for the industry growth and development, also the government

opened the gate to more investment not only in residential contraction. The government open

more ports and power project to support the infrastructure for the future development, the

new ideas in build over the water. They manage to create very nice islands over the sea which

attracts most wealthy buyers, which can be translated to more than financial benefits as big

names invested in such projects.

3- Tourism: is one of the most important factor UAE, depend on the excellent infrastructure

and the non-local labors. The main infrastructure is the airport where only in Dubai airport

more than 130 airlines operate, travelling to more than 220 destinations. Dubai airport ranked

as one of the most crowded airports around the world, also Abu Dhabi upgrading their airport

to fulfill the high demand, and to comply with the city improvements. Furthermore, the high

quality roads, ports and the luxurious locations attract more tourists to the country.

4- Logistic:

From firm strategy point of view 6 factors must be highlighted: open markets in logistics and

transportation sector, business supportive economic policy, favorable complementary

policies, massive infrastructure investments, attractive regulatory and business environment,

and growth oriented governmental companies. These factors became very important to

develop the industry.

Demand conditions:

The wealthy GCC area requires financial support and provides variety of investment

possibilities. The wealthy area because of oil revenues have to develop their investments,

especially stable country like UAE. The population demand is high quality expectation and

fast delivery requirement, which results in a high demand standard. However, the oil

revenues are sometimes unprofitable invested.

1- Oil & Gas: Globally the demand is very high for petrol as the energy mainly still depends

on petrol. While the regional trend not let demand than the global demand and it grow quite

well after 2003 due to the regional economy grows quite well in recent years. The strategic

location of UAE helps to develop and grow in oil and gas trade, as they sell crude oil and

different types of fuel inside and outside the region.

2- Real estate: The growth of population in UAE give great demand factor to this industry.

Also the governmental facilities to the construction companies by the flexible labor laws

support the industry. Nevertheless, the international investment in real estate market gives

great support to the industry.

3- Tourism: the demand increased annually by almost 6% and will reach to 40 million

tourists in 2024. The high demand will be always attractive factor to the industry and insure

the growth during the next years.

4- Logistic: the booming in local and regional market around UAE was the main demand

factor for this industry. UAE has the best airports, ports, roads, free zones, infrastructures and

industrial cities. Also the population growths and the increased for import because the

economic growth.

These points make economic strength and create demand for the logistic service.

Firm strategy, structure and rivalry:

The financial structure of UAE is attractive to Arabian customers. The Arabian and

international investor enhance the investment strategies. Also the poor developments in the

region provide UAE a monopoly role in the area. Fast moving and project realization is great

advantage of UAE, also the opening of the west culture because of the liberal culture very

attractive to foreigners to invest in UAE. In addition, international financial institutions

attracted by the free zone investment, increased rivalry and opened the market for external

investments.

1- Oil & Gas: UAE has realized great effect on technology development in oil & gas sector,

and keep the industry up to date with world development in that sector by implementing new

technologies from big companies around the world. UAE also understand the need to secure

the economy for the after oil time, by finding new sources for income.

Because the location of UAE between the main petroleum producers, they understand the

need to change their strategy and look further longer than the others. That provides stable &

dynamic foundation for economic growth.

2- Real estate: The context for structure, strategy and rivalry of the construction cluster are

the level of competition among construction companies, the level of trustworthiness and

fairness, the entry barriers in the forms of policies that prevent new entries, and the ratio

between direct and indirect costs. The real estate industry follows the international strategies

in their planning and structures, which give the strength to the industry when everything in

well calculated and planned in proper way. Also the fast growing around the country make

the competition very high between the companies, a race of building most unique and highest

builds between the companies never ends. That keeps the door open to new things every day.

3- Tourism: The foreign investment opened widely in UAE, secular policies with regard to

issues such as alcohol. The local government help and support the economic growth in the

country, the government owned giant companies participating heavily in the market.

4- Logistic: the UAE government created valuable infrastructure in logistic, in all three ways

(Air, water, road) including the communication and energy. The infrastructure support the

development of logistic in UAE, while the geographical location play high role in supporting

the industry.

Related and supporting industries:

As mentioned above, many industries can be found in UAE such as trade, tourism, and real

estate. Therefore, it seems reasonable to establish a financial cluster to serve these industries

with sufficient capital. UAE land consist desert mostly, for that reason it’s not suitable to

create heavy industry. Opening more industrial diversification would strengthen the financial

cluster’s position for UAE.

1- Oil & Gas: the infrastructure in UAE from roads to ports and great logistic industry

support the oil & gas industry. While the support industries are energy industry and oil

products.

2- Real estate: oil price increment, development into service sectors such as ports, tourism,

logistics, financial services, health, manufacturing, media all of that led to economically

development in the country. Nevertheless, the country stability, acceptance of western

culture, tax free, international investment, big salaries all of these points provide the proper

structure to the industry to grow.

3- Tourism: the main factors influence the industry is logistic, real estate, retail and finance.

In logistic the roads, ports and airports provide the most important factors. Also real estate

industry develops the tourism industry, by building hotels and tourism entertainment areas.

4- Logistic: The main factors in this regard: highly developed finance, insurance,

construction, and tourism clusters, and rise in local capital markets. These industries and

organizations provide necessary services, markets and information for improvement and

strengthening of competitiveness of the logistic cluster.

Chance and government:

By the end we should mention the other two factors (chance and government): In UAE

market the electronic government make the business easy to establish and develop with

shorten the way and make things more clear. In the same time, the government transparency

is not very high which make it risky to invest in the market is the investor have no clear

picture about the governmental economic situation and other related issues. Other

problematic issue is to get the license to import and distributes the product in Muslim

country; good connection with powerful people can do the trick and make heavy entrance

into the market.

While the chance is high to gain profit from such market, man can consider the market still

new and the chances are really high. Despite the fact its Muslim country located next to Saudi

Arabia, still the chances high for the fact of high tourism movement into the country, and the

tourist from surrounding countries visited UAE to attend the fantastic activities in United

Arab of Emirates and good amount of them visit the night clubs and bars as such places are

prohibited in their home countries.

After all we discuss only four successful industries as we saw it’s the main industries in the

nation.

6. Segmentation, Positioning and targeting

Segmentation:

Geographic segmentation:

The United Arab Emirates (UAE) is a federation of seven emirates that located on the

southeast coast of the Persian Gulf. Dubai is one of these emirates. Compared to USA, the

territory of UAE is much small but there are Islamic laws and civil laws that only allow some

of these emirates to sell alcohol.

The constituent emirates of UAE are Abu Dhabi (which serves as the capital), Ajman, Dubai,

Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain. Sharjah and Umm al-Quwain are

the cities forbid alcohol.

In our report, we mainly focus on Dubai emirate, which shares main population of the whole

UAE. Dubai lies directly within the Arabian Desert.The sand of Dubai consists mostly of

crushed shell and coral and is fine, clean and white. That makes the beaches fancy scenic

spots to attract tourists and locals. Weather in Dubai is also essential part to consider about.

Dubai has a hot desert climate. Summers in Dubai are extremely hot, windy, and humid, with

an average high around 41 °C (106 °F) and overnight lows around 30 °C (86 °F), winters are

warm with an average high of 24 °C (75 °F) and overnight lows of 14 °C (57 °F). Most days

are sunny throughout the year.

We divide the Dubai into three parts: rural, suburban and urban. Urban located near the

seaside, which has the most population of Dubai and has most of hotels, restaurants and

clubs. From the seaside to the mainland, the amount of district population decreases and there

are less hotels, restaurants and clubs in the suburban and urban.

Demographic segmentation:

Demographic segmentation is most important in Dubai market because of the globalization of

Dubai and high rate of expatriate population. We can also divide the customer by

demographic factors such as: age, gender and race. Because the Islamic laws and civil laws,

most of the Muslims are not allowed to consume alcohol and there are not our main customer

of our main produce such as Coors light and Coors Banquet. Because the population in Dubai

is almost 10 million people with about 11% of local Emirate and the rest are foreigners.

Many of foreigners either have been in the country for generations or were born in the UAE.

Approximately 85% of the expatriate population (and 71% of the emirate's total population)

was Asian, chiefly Indian (51%) and Pakistani (16%); other significant Asian groups include

Bangladeshis (9%) and Filipinos (3%).

There is also other factors like gender and age, the population of the emirate was 1,771,000

as of 2009, which included 1,370,000 males and 401,000 females. Ladies prefer to Coors

Light than Coors Banquet because of the lower alcohol content. The median age in the

emirate was about 27 years. Adult are admitted to drink alcohol, however the young people

consume more than elder people especially the young people who just reached the legal

drinking age, they consume a large amount of beers than older.

Psychographic segmentation:

Lifestyles and habits of drinking beers have a huge influence of beer sales and consumption.

Since there are so many expatriate populations from all over the world, there are different

lifestyles and drinking habits. For example, Frankfurt of Germany as a Friendship city with

Dubai since 2005, that means there are a large amount of Germans moving to Dubai to run

business or traveling, they are prefer Lager than others. However Muslims don’t have any

drinking habits, but they have their preference of beverage, Coors can design non-alcohol

product focus on Muslims. Another psychographic factor is self-concept that imply customer

how they see themselves, which can be built by the function of advertising and packaging of

the beer. Even if there is forbidden for alcohol advertises on TV or billboard, the government

still allows advertisement in the clubs, restaurants and alcohol shops.

Behavioral segmentation:

Behavioral segmentation is the most powerful tool. Although according to Islamic Sharia

laws that Muslims cannot drink alcohol, there are also some special products and promotions

for special occasion, not all the Muslims refuse alcohol, some of them also consume alcohol.

But products for special occasion are still necessary, such as non-alcohol beer for Muslims

and Coors light for women. In addition, behavioral segmentation loyalty status is very

important tools to keep the old customers. In the beer industry, flavor of beer and experienced

of consumer are the loyalty status.

Targeting

After segmentation the Dubai market and customers, we figure out what are Coors target

customers and target market.

Target customers:

Adult, especially young people not only expatriate population but also the Muslims and

women who reached the legal drinking age and are allowed to consume alcohol.

Target market:

Target markets are urban and suburban districts, which have a large amount of population.

Coors should to satisfy the specific customers who have specific needs or different lifestyles

that mean they should have main product for main customers, in the same time also have

special products for special customers.

Positioning

After segmentation Dubai market and targeting our main customer and main market, Coors

should have positioning for their targeting. There are three ways of positioning we use for

fulfill consumer’s needs.

Functional positioning:

Because of the hot summer and the warm winter in Dubai, so the cold beer will be the main

product of Coors. Specific products for example non-alcohol beers also are very important for

Arabic countries, that allows Muslim become one of our consumers and the non-alcohol beer

also can be spread to potential markets that other countries have Islamic laws of forbidden

alcohol. It is also essential for them to have different kinds of tastes and types of beer for

foreigners who come for traveling and working.

Symbolic positioning:

Symbolic positioning must be the two main products of Coors; Coors light “silver bullet” and

Coors Banquet “golden”. The package and advertisement of the product provide self- image

and it can also symbolize the people who have different ego identification. For example, the

Coors light is the famous beer for women and the Coors banquet can be positioned to the men

who have three times population than women. For advertising, although it’s forbidden on TV

and billboard, Coors also can have posters for advertising in the clubs, restaurants, hotels and

alcohol shops.

Experiential positioning:

Different types of beers have different tastes, which offer the consumers different experience

that can fulfill the needs of consumers who from all over the world. There are different kinds

of beers like Lager, Bock Beer, Ale, Dry, Porter and Stout, which have different color, smell

and tastes.

They also should design special non-alcohol beer or beverage for Muslim customers, which

have totally different preference and eating habits.

7. Marketing mix - 5P:

After analyzing environment and beer industry in Dubai, then segmenting, positioning and

targeting market, it is crucial for Coors to make important decisions that lead to the execution

of a marketing plan.

Product: Coors light, Coors banquet and non-alcohol beers.

Price: Due to Dubai is a duty-free country, the price of products can be determined by Coors

and retails. Duty-free makes the profit of product higher than other countries.

Places: Hotel, club, shop (both on-trade and off-trade).

Dubai is not a big district and most of rural areas are desert. Hotels, clubs and shops are

mainly located in urban and suburban areas.

Promotion: Advertising beers that contain alcohol in nightclub, restaurant and hotel and

advertising non-alcohol beers on TV and billboard. Distributing beers with vacuum

containers by boat or road, finding local agency or distributors to help Coors distribute

products, which are more convenient and profitable than establish a brand new distribution

system in a foreign country despite Coors have their own distribution system in USA.

People: Network in a foreign country such as Dubai is the most important, which be able to

influence the sales, distribution and even the whole operation of company.

People from government and other companies might help Coors enter Dubai beer market by

providing license or joint venture. Since acquiring a permission of sale alcohol is extremely

hard and long process, joint venture or collaboration is the best way to enter Dubai market

and sell products immediately. Famous people or celebrities such as prince might help raise

public awareness of their product, for example, by asking celebrity to advertise non-alcohol

beers might stimulate customers to purchase and consume non-alcohol product.

8. Market entrance (action plan)

When a visitor landed at Dubai airport he see different world, almost everything look from

future as the Emiratis make sure to use the most updated technology and design in

everything. The visitor feel very comfortable as things moves very fast and smooth, also you

can get the feeling of living in the future but that feeling will vanishes as soon as you hit the

bureaucracy. Especially in our case, we are trying to sell prohibited material and in process of

getting the government approval to sell these prohibited materials. It’s also very important to

find the right & easier place to start your business. The next lines explain the UAE market

and types of companies with general information all over the country, it will provide clear

picture to the market and make it easier to understand.

Today, more than 90% of the urban population of Dubai and more than 75% of the urban

population of Abu Dhabi are foreign nationals, the majority of which are from South Asia.

English is widely used for business and is the lingua franca of the cities, but there is

nevertheless a deep awareness within Emirati society of the country’s heritage in the face of

rapid modernization.

This Market Entry addresses some critical considerations, issues and questions confronting

companies as they establish, operate and grow a business in the Middle East from a base in

the UAE.

The Gulf Cooperation Council (GCC)

The UAE is a founding member of the Gulf Cooperation Council, a political and economic

union of the Arab monarchies of the Arabian Peninsula, namely Bahrain, Kuwait, Oman,

Qatar, Saudi Arabia and the UAE.

Foreign Investment And Business Establishment

The UAE does not have a foreign investment law, and the foreign ownership restrictions are

contained in the Commercial Companies Law (“Companies Law”), which requires that UAE

nationals or their wholly owned companies hold a minimum of 51% of the shares of all

companies established in the UAE. In the past, foreign investors avoided the foreign

ownership restrictions on UAE companies by entering into “side agreements” with UAE

shareholders by which the UAE shareholder granted the rights in their shares to the foreign

investor. In 2004, the UAE published the Commercial Concealment Law to prohibit and

criminalize these types of nominee shareholder arrangements, and the law is in force as of

2010.

The Companies Law provides for the establishment of the following business entities for

foreign investors: joint stock companies (JSC), limited liability companies (LLC),

unincorporated joint ventures, and branch offices of foreign companies. The Companies Law

does not apply to companies that are established in the free zones, which are explained

below.

Limited Liability Company (LLC)

An LLC must have a minimum of two and a maximum of fifty shareholders. At least one

manager, or a board that can constitute up to five managers manages it. Shares are not freely

transferable, and all transfers must be registered with the Department of Economic

Development. There are currently no specific minimum capital requirements.

Joint Stock Company (JSC)

A JSC must have a minimum of three shareholders. A chairman, who must be a UAE

national, and a board of directors manage it, and the majority of the directors must be UAE

nationals.

Unincorporated Joint Venture

The Companies Law also recognizes contractual unincorporated joint ventures to be

established between multiple parties. Such joint ventures are common in the construction

sector.

Branch Office

A foreign company can also register a branch office in the UAE. A branch does not require

UAE national ownership of share capital but requires a UAE citizen to act as the national

agent (often referred to as a “sponsor”) of the branch and to conduct certain regular activities

on behalf of the branch towards the UAE public authorities.

Free Zones

In 1979, Dubai completed the construction of Jebel Ali Port, the largest port in the Middle

East and the largest man-made port in the world. Dubai established the Jebel Ali Free Zone

(JAFZ) as a customs duty-free trading zone in 1980 that allowed trade in Jebel Ali Port by

which re-exported goods were free of local customs duties. In 1992, the free zone authority

permitted business establishments to be registered free of the foreign investment restrictions

of UAE Law.

Dubai has established more than thirty free zones. Other notable free zones include Dubai

Healthcare City (DHCC) and Dubai Silicon Oasis.

In 2005, Dubai established the Dubai International Financial Centre (DIFC) as a financial

free zone.

In Abu Dhabi the key free zones are twofour54, a media free zone, Masdar City for clean

energy businesses, and Khalifa Industrial Zone Abu Dhabi (KIZAD) as a unique industrial

cluster integrated with the new Khalifa Port, which opened in December 2012. In May 2013,

Abu Dhabi announced plans to establish Global Marketplace Abu Dhabi (GMAD) as a

financial free zone in Abu Dhabi.

Other Emirates have established free zones around seaports, airports, and other industrial and

technology sectors.

Taxation

Each Emirate of the UAE has promulgated its own laws regarding taxation of income.

However, currently, no corporate taxes are collected except from companies licensed in the

banking industry and carrying out oil exploration and production in the Emirates.

There is currently no individual income tax in the UAE.

Based on the information mentioned above, the best thing is to start company branch on free

zone area located in Dubai. It will easier to receive goods and resend them to customers, and

the location in halfway to everywhere also will shortcut the distances. Also our branch office

will make contact with distributer to deliver or products, forward integration will reduce the

cost and guaranty the high sell of our products. For that we shall mention the below

information.

Contracting with Agents and Distributors

It is common to sell products and services through agents or distributors. This is the case not

just for foreign companies but also for companies established in the free zones that are not

permitted to carry out commercial activity.

Distributors and agents that are registered as commercial agents of a foreign principal are

granted substantial rights, such as automatic rights of exclusivity, automatic renewal of fixed-

term agreements and protection from termination.

As such, all distributor agreements, dealer agreements, agency agreements, franchise

agreements and similar agreements must be drafted with extreme caution. Companies selling

their products and services in the Middle East need to know local law protections held by

local distributors, the agent registration system and registration mechanics, and plan ahead

about what to do if the relationship is not successful.

For the above a solid contract with distributer wills shortcut the process of sales put the sales

and delivery part on other company will reduce the cost and the managerial interferes.

Doing Business in Israel

The Arab League issued a boycott of Israel soon after its establishment in 1945, which calls

for a three-prong approach:

• Primary boycott: products and services that originate in Israel

• Secondary boycott: businesses that do business with Israel

• Tertiary boycott: businesses that do business with boycott violators

But following the Oslo I Accords in 1994, the GCC announced it would only enforce the

primary boycott. Today, it is common for multinationals do business in both Israel and the

Arab world, and Arab League coordination on the boycott has effectively ended.

Even so, multinationals should be aware that it remains a criminal offense to import Israeli

products in the UAE and most other member states of the Arab League, and the “primary

boycott” is still actively enforced in most countries, with many countries maintaining a

“blacklist” of boycott violators.

Starting with documentation as COORS trying to sell prohibited product in UAE and trying

to get the license to sell the product. After finding the proper distributer and make joint

ventures agreement with the distributer, other process should be considered, storing the goods

and resends it to the end customer by the distributors. Hence a cold store need to be built or

rented, it should be near the port. The goods will be imported through the sea cargo with cold

containers.

For the strategic location in Middle East, the product can be send to other countries and carry

out the international sales. Also because of the religious nature of the Middle East and

restriction against alcohol, it will be wise to target new segment by make zero alcohol beer.

In fact zero alcohol beer will be big success, especially flavor beer with affordable prices.

Such product (Zero Alcohol Beer) can be manufactured in Arabic world, setting a factory in

middle east will be great advantage to sell the product in UAE and other surrounding

countries.

A good connection wills powerful people in the country will guaranty the success; even the

documentation process will be easier and faster.

The main local target will be the tourist areas, as these points are authorized to sell the

products will high prices and without computation. The variety is limited to few brand names,

and prices depend on the selling point, they can charge as much as they want. Also the tourist

demand is very high as explained earlier, especially tourists from North America and Europe

will be the main customers for COORS products. Beside the tourist segment and Muslim

segment, other segments must by target with different type of beer. Also the whole sell points

must be the one of the main target, more products can be sold to individual customers.

The target plan must be gradually develop, starting from documentations, authorizations,

network, facilities and agreements with distributors and expand the distribution to

international market in surrounding countries. The UAE market can give a good advantage to

Coors as the company wants to sell more and facing problems with local market in US,

establish such market will open new gate for the firm. COORS will enter establish market,

difficulties will be existed while the market easy to get share of it.

9. Conclusion:

The UAE is one of the stable countries in the Arab region and the Middle East with a good

investments facilities which make UAE and especially Dubai are desirable for all

multinational and international companies, the modest population numbers, tourism, oil and

gas resources and the government policies helped in this growth and development.

After analyzing the environment and alcohol industry of Dubai, we find out although territory

of Dubai is not as large as America, Dubai is still extreme profitable niche market for Coors

due to the high rate population. There is no local alcohol in Dubai, Muslims are forbidden to

consume alcohol due to both mixed legal system of Islamic law and civil law, but only 11%

of them are local UAE nationals with the comprising a large amount of Dubai's total

population are expatriates who are allowed to consume alcohol and there are thousands of

tourists and businessmen come Dubai for traveling and working, which means the Dubai

market are more globalization than localization. The main restriction of Coors entrance Dubai

market is permission and license, however this problem might be solved by joint venture,

collaboration and entrepreneur network.

The market could be risky to enter if we look at the country as Muslim country and put the

xenophobia in front of our plan, but we must understand the need is such market and the

target customer. Also COORS should contact the two major licensed companies in UAE,

MMI &A+E both currently operating in the market. The third company still under

construction CDI, could be the next potential for COORS as distributer for the product

On other side, the market entrance could be done easily without advertising, as the product

well known to the tourists who represent high part of COORS customers. Working along

with existing distributors, to sell and distribute the product. COORS branch can operate from

free zone area located in Dubai; the location will be perfect in middle way to other states.

Sales can be carried on to other nearby countries, or move to Qatar, as the football world cup

will take place over there in few years.

After segmentation, positioning and targeting, we figure out our main customers (young

people) and target market (urban and suburban districts). Meanwhile, Coors also have to

design their non-alcohol beers that have Muslims-oriented flavor focus on Muslims and other

countries.

So in the future if the government changed the policies and allowed manufacturing of beers

and alcohol then Coors will be the strike force for all the Arabian and the Middle East

countries.

10. Recommended Strategy

First strategy:

Coors should start with entering the market with any kind of joint venture or partnership with

MMI or A+E companies which already have license, distribution channels and customers.in

the future Coors can make an alliance with CCD (still under construction) which have the

exclusive distribution areas in the most two biggest projects in the world.

Second strategy:

Coors can expand horizontally in the all emirates with good prices policies and import special

zero alcohol or even manufacture inside the UAE for Muslims people.

Third strategy:

Coors should concentrate in re-exporting since MMI and A+E have exportation lines to some

countries in the Middle East and Asia as in the table above.

The fourth strategy:

If Coors failed in the UAE, we have two options (qatar and sultanate of Oman) both has the

same financial and economical stability especially when qatar will host the world cup 2022

but the problem with qatar is have only one company distributor (Qatar distribution

company) and only two retails alcoholic shop so we think the sultanate of Oman will be the

next place for Coors for the following reasons:

● Oman has the same regulation and laws like UAE.

● Has the same stable financial and economic situation.

● Oman have 5 major retailers around the sultanate:

- African & Eastern (A&E) (SAME COMPANY IN DUBAI).

- Oman United Agencies (OUA)

- Desert Trading Company (DTC)

- Marketing & Services Company (MASE)

- Gulf Supply Services (GSS)

● Most of Oman alcohol importation is from the UAE as in the table.