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 which 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. Also drinking is prohibited in some states as they follow the Islamic Sharea laws, and we person arrested with accusation of alcohol can get 80-200 lashes. The states following Sharea 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 can make it way to the end customer.

Market plan article follow that Check the trends in the market for your country Do the cage model in distance still matters Do the Diamond model for the country To see it the companies are strong because they are in their home nation Then how COORS should enter that country Then you have product strategy, price, promotion, distribution Do a 5F where COORS is the new entrant

Preparing to Expand to the UAE

http://www.startupoverseas.co.uk/expanding-a-business-in-uae/preparing-to-expand.html

Market entry: United Arab Emirates (Dubai and Abu Dhabi

http://www.lexology.com/library/detail.aspx?g=7fe1f1d9-f3fd-4446-af99-c56ab1790cdb

4- Diamond model (analyse the demand and supplier, rivals and resources) (To see it the companies are strong because they are in their home nation)

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 known as commercial center connecting the east and west. It has also 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, hug 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 labours. 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 fulfil 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, favourable 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 population growing in UAE give great demand factor to this industry. Also the governmental facilities to the construction companies by the flexible labour 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, 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 realize 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, that give the strength to the industry when everything in well calculated and planed in proper way. Also the fast growing around the country make the competition very high between the companies, a race of building must 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 wildly 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.

By the end we should mention the other two factors (chance and government): In UAE market the electronic government make the business easy to stablish 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 is 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.

Entrance plan

Documentation is hard to lision, sell, distribution . there is only 2 companies and the third one still under process …. COORS can make joint venture with other supplier

They can make the way to other countries

They can make zero beer

They can contact one prince

Target is tourist areas

Target the whole sell points

Make zero beer factory in UAE / other beer to be bring from USA

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. It is managed by at least one manager, or a board that can constitute up to five managers. 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. It is managed by a chairman, who must be a UAE national, and a board of directors, 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 half way 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 bellow 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 will 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 resend it to the end customer by the distributers. For that a cold store need to be build 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 flavour beer with affordable prices. Such product (Zero Alcohol Beer) can by 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 will 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, specially 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, agreements with distributers and expand the distribution to international market in surrounding countries. The UAE market can give a good advantage to COORS as the company want 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.

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 shelfs. 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 flavour 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 contraction CDI, could be the next potential for COORS as distributer for the product. By working with the major distributers in the country COORS can guaranty the entrance and increase the sales. However, it could limit the number of sales as the distributers 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.

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 contraction 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 distributers, 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.