The difficulties facing a UK company such as Carpetright PLC opening in the Middle East
Carpetright would firstly check to see if there is a market for them in the Middle East and select a suitable location. The location would be determined by market size, local government investment support, supply of labor, etc.
The current economic situation in places such as Dubai would favour Carpetright's investment as it is one of the many Emirates that are trying to attract investment in other businesses other than oil which they have been dependant on for decades. Secondly, there are is a growing number of real-estate projects returning after the recent slump that would increase demand on ...view middle of the document...
The comparative GDP levels are 2.5 trillion US dollars in the UK with growth at 0.8% whilst Dubai is much smaller at 86 billion US dollar. However, Dubai's growth is expected to reach 4.9% in 2013 making investment in the country attractive.
Inflation in Dubai is 1.4% which has been rising steadily since the beginning of 2013. In the UK it stands at 2.1% which represents a steady drop since early 2013.
Central bank interest rates in the UK are at 0.5% as they try to keep inflation down. In the UAE the current rate is 1.0%
Carpetright would have to cope with a completely different way of doing business in many respects. I have listed some of the major hurdles that foreign companies have to cope with.
Islam permeates all levels of society – from business values to personal life and community.
The working week is Sunday to Thursday as Friday is the Muslim holy day. Saturday is the Sabbath, so many amenities will be closed. Little business is done during the month of Ramadan, which varies each year according to the Islamic calendar.
Every country in the Middle East has different customs and beliefs about what is acceptable in a business environment: don’t assume that what is acceptable in Dubai will be OK in another emirate, for example.
It is expected...