business environment encompasses all those factors that affect a company final project

8/6/2019 Business Environment Encompasses All Those Factors That Affect a Company FINAL PROJECT

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INTERNATIONA BUSINESS

ENVIRONMENT ANALYSIS.FROM: MS. JASMEET.S.BAGGA

CLASS: CORE C

ROLL NO. : 176

UNDER GUIDANCE OF:

PADMASHREE DR. D.Y.PATIL UNIVERSITYDEPARTMENT OF BUSINESS MANAGEMENT

DATE : 4/10/2010 SIGNATURE


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What is business environment ?

y Business environment encompasses all those factors that affect acompany's operations, and includes customers, competitors,

stakeholders, suppliers, industry trends, regulations, othergovernment activities, social and economic factors and technologicaldevelopments

y Th e global business environment can be defined as theenvironment in different sovereign countries, with factors exogenousto the home environment of the organization, influencing decisionmaking on resource use and capabilities. This includes the social,

political, economic, regulatory, tax, cultural, legal, and technologicalenvironments.

The political environment in a country influences the legislations andgovernment rules and regulations under which a foreign firm operates.The economic environment relates to all the factors that contribute toa country's attractiveness for foreign businesses.

Every country in the world follows its own system of law. A foreign

company operating in that particular country has to abide with itssystem of law as long as it is operating in that country. Thetechnological environment comprises factors related to the materialsand machines used in manufacturing goods and services. Receptivityof organizations to new technology and adoption of new technology byconsumers influence decisions made in an organization.

As firms have no control over the external environment, their successdepends upon how well they adapt to the external environment. A

firm's ability to design and adjust its internal variables to takeadvantage of opportunities offered by the external environment, andits ability to control threats posed by the same environment,determine its success .


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IN TRODUCT I O N TO IN D IAN RET AIL JW E LL ERY:

y I ndia is a leading player in the global gems and jewellery market.

y The gems and jewellery industry occupies an important position in theI ndian economy. I t is a leading foreign exchange earner, as well asone of the fastest growing industries in the country

y The two major segments of the sector in I ndia are gold jewellery anddiamonds.Gold jewellery forms around 80 per cent of the I ndian

jewellery market, with the balance comprising fabricated studded jewellerythat includesdiamond studded as well as gemstone studded jewellery.

y The I ndian gems and jewellery industry is competitive in the worldmarket due to its low cost of production and the availability of skilledlabor. I n addition, theindustry has set up a worldwide distributionnetwork, of more than 3,000offices for the promotion and marketing of I ndian diamonds.

IN D IAN JW E LL ERY OVERV I E W :

YESTERD AY TOD AY Unbranded brandedSilver and gold jwellery Gold and diamond jwelleryinvestment I nvestment + fashion

Traditional design Fashionable and innovativedesignMarriage and festival is peakseason

Wearibility and gifts

Jwellery sold on commodity basiswith labour charges

Jwellery being sold on a per piecebasis


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M AJ OR P LA YERS IN IN D IA :

Gitanjali Gems Lt

Classic Diamond ( I ndia) Ltd.

Shrenuj & Company Ltd.

Goldiam international Ltd.

Su-raj Diamonds & Jewellery Ltd.

Rajesh Exports Pvt. Ltd

Vaibhav gems ltd.


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Introduction of the company :

Founded as a si ngle comp any cutt ing and pol ishing d iamond s f or the jewellery tr ade at Sur a t,

Gu jara t, in 1966 , The Gitanjali Group became, m any t ime s over, a p ioneer among major d iamond and jewellery hou ses.

First m ajor d iamond and jewellery hou se to be laun ched and run by modern entrepreneur sra ther tha n dyn as t ic jeweller s. An aut hor ised DTC Sightholder and loya l customer and amodern mult ina t ion al busine ss run on innov a t ive insigh ts.

At the f ore f ront of the globa l bre akthroug h in d iamond jewellery de sign and produ ct ion broug ht ab out by Ind ia s ability to cut d iamond s con sidered unwor kab le f or jewellery t ill then .Has the d ist inct ion of produ cing the world s sm a llest heart sha ped d iamond (0.03 ca ra t), and develop ing some 25 pa tented facet pa ttern s.

Beside s cha ng ing the face of m anu facture, bro ke the mould of tr ad it ion al jewellery m arket ing: it aba ndoned jewellery tr ade convent ion by laun ching mult iple brand s f or mult iple m arket s a nd pr ice segment s.

Opened up d istr ibut ion via super store s, dep a rtment store s and ot her ret ail outlet s a t MRP,supported by intern at ion a l cert ificat ion s of scient ifically te sted pur ity and aut hent icity, acro ss Ind ia and in the world s jewellery cap itals. Even m arket s branded jewellery d ire ctly by m ail order ca talogue .

Busine ss model now integr a te s a ll oper a t ion s, f rom roug h d iamond sour cing, cutt ing, pol ishing and d istr ibut ion, and jewellery m anu facture, to jewellery brand ing and ret ail, as well as globa l lif estyle brand s, in Ind ia and ab ro ad .

Broug ht d iamond s within re ach o f a wide con sumer bas e . The first to off er d iamond studded jewellery at aff ord ab le pr ices, of stand ard ised de sign s, quality and pr icing acro ss locat ion s progre ssively pre cision-produ cing repl icab le de sign s using the la te st CAD and CAM pro cessesand equ ipment .

Off er s jewellery in d iver se style s: tr ad it ion a l, intern at ion al classic , and cas ua l. For con sumer s of a ll age group s, tas te s a nd budget s. With a grow ing ha mper of brand s, some alre ady globa l, and

each targeted to spe cific con sumer and m arket segment s.

Having won over 50 a ward s f rom the Min istry of Commer ce, Ind ia f or out stand ing export s of d iamond and jewellery, is tod ay over $1000 m illion mult inat ion a l group, and a pu blicly listed ent ity .

Oper at ion s span the globe, a ll the way f rom USA, UK, Belg ium, Italy and the Middle East to Thailand, Sout h Eas t Asia China , and Japan .


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B usinesses of Gitanjali Group

Gitan jali Group wasestab lished in 1966 a nd is

one of the earlie st d iamond hou se s in Ind ia. Having re ce ived over 50 Na t ion a l and Coun cil award s f rom

Gitan jali plans to develop seven SEZsto be oper at ion alised in 7-8 ye ars and the comp any hasalre ady boug ht land in Panvel, out side Mum bai , and has a pprov alsf or five more SEZs.

Each brand offers stylized and contemporary designs, conceptualized andcreated by an in-house team of award winning designers. Our strength indesign has been recognized repeatedly with Gitanjali designers.

Gitanjali Lifestyle has tied-up with threefashion designers to introduce fashionapparels and private labels. The parentcompany is targeting a turnover of Rs

500 crore from Gitanjali Lifestyle in 2


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Evolution of the company :

Genesis

Gitan jali Group was e stab lished in 1966 as one of the earliest of Ind ia sded icated d iamond hou se s.

The first Group comp any beg an cutt ing and pol ishing d iamond s, a t Sur at, one of Gu jara t sgre a t d iamond gem & jewellery m anu factur ing centre s.

In under three de cade s, it became a DTC Sightholder, and one of Ind ia slarge st m anu facturer s, ret ailer s and exporter s of d iamond s and a globa l f rontrunner .

Integration

In 1990 , w it h the startup of Gitan jali Cre at ion s, a 100% Export Oriented Un it a t Bor ivli, Mum bai , the Group integr ated f orw ard f rom d iamond s to d iamond- studded jewellery .

The Gitan jali Group 's oper at ion s extended f rom roug h d iamond sour cing, cutt ing, pol ishing and d istr ibut ion, to jewellery manu facture, which involved de sign ing, mould m aking, wad ing, cas t ing, sprue gr ind ing, filing, pol ishing and sett ing .

The Group m ade its fina l dep arture f rom jewellery tr ade convent ion by laun ching mult iple brand s f or variou s m arket s and pr ice segment s.

Each b rand was po sit ioned accord ingly . Moreover, the brand s were d istr ibuted throug h avariety of cha nnel s, f rom whole sa ler s, superm arket s and super store s to upm arket branded jewellery store s.

Spreading Wings

Integr at ion en ab led the Gitan jali Group to bu ild strengt hs a nd hone expert ise in all aspe cts of produ ct development, m arket ing and mer cha nd ising, the per f ect laun ching pad f or org an ic and un interrupted growt h.

Beside s growt h throug h incre ased integr at ion and synergy of oper a t ion s, it grow s ab ro ad throug h subsid iaries and str ateg ic acq u isit ion s.

With a widen ing; customer bas e, the Group became one o f the la rge st exporter s of studded jewellery with m ajor m arket s in USA, Dubai , Saud i Arabia , Singapore, Ita ly and France .


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Sourcing :

As one of the worlds leaders in the diamond and diamond-studded jewellerybusiness, the Gitanjali Group principally sources its diamonds through DTC.

However, with the development of independent sources globally, some partof its resources are also devoted to them.

At Antwerp, Belgium, the worlds diamond capital, the Group runs acentralized operation to sort diamonds for various operations .

S trengt h s of t h e company :

First mover advantage

I n its manifold mission, the Gitanjali Group is overall ahead of rivals becauseit has been the first, or among the first, to make break new ground in manydirections an advantage of momentum it continues to build on.

I ntegrated, multilocation operations

The Group is active in all stages of the diamond jewellery business, fromcutting polishing rough stones, to design and manufacture of finished

jewellery. With manufacturing operations in I ndia, China and Thailand, anddistribution points across the country, and in the global orbit, on fourcontinents.

Sk ills and tec h nology

Gitanjalis core strength is the expertise of its artisans in cutting andpolishing diamonds, and its jewellery designers and marketing teams indeveloping market-friendly jewellery in tune with shifting user preferencesworldwide, to which it gives shape using high precision CAD CAM processesand equipment .


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Product range and innovation

Having brought diamonds and diamond-studded jewellery within reach of consumers previously unable to afford them, the Group offers a wide varietyof products in classic, ethnic and modern patterns, suitable for consumers atdiffering price brackets, in line with market demand in various markets, inI ndia and abroad.

At the same time, we continually press ahead with innovations in design anduse of various metals gold, silver, platinum and stainless steel: we notonly keep up with changing fashions we make fashions.

M ar k et access and brand support

The Group has quickly secured substantial market share. I t has launched agrowing hamper of targeted brands, with powerful communications andmerchandising support.

I n line with each brand profile, multilayered distribution right down to theretail level, has ensured product delivery to each targeted consumersegment, whether at upmarket malls, department stores or exclusive retail

jewellers .

LE AD ING B R AN DS O F THE CO M P AN Y : THE CO M P AN Y H AS M AN Y BR AN DS LIK E CO LLECT I O N G , AN DRE W S JW E LLERS , ETC. AN D THE O N E W H I CH ARE IN IN D IA ARE M E N T I O N ED B E LO W :


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EXPANSION D iversificationRamping up the retail chai Gitanjali lifestyles to focus on

manufacture and distribution of luxuryand lifestyle products.

Expanding stores inIndia Developing 200 acres gems jewellerySEZ in Hyderabad

Acquisitions including Samuels, Rogersand Tri-Sta

Plan to develop more SEZS focused ongems and jewellery across I ndia.

Plans to make further inorganic growthin the U.S. and FAR EAST.

To partner for developing real estateand infrastructure.

Expanding manufacturing capabilitiesto address increasing demand

Leverage its key strengths.

Further integration with the jewellerychain

Large opportunity for incrementalrevenue.

Higher margin in retail business. Diversify business model.

Higher value addition .


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G E N ER I C B US IN ESS LEVE L STR ATE G Y :

I nter-Firm R ivalry H ig h Two types of rivalry. (1) I nside I ndia & (2) Outside I ndia.

Large presence of unorganized sector. 0.2 Million Gold jewelers and over8,000 Diamond jewelers.

I nternational rivals Such as, China.

Threat from producing nation like S.A. & Russia.


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S. W .O.T ANAL YS I S O F THE CO M P AN Y :

S trengt h s : Large integrated diamond & jewellery player and having an international

presence.Pioneers of branded jewellery in I ndia.Strong marketing & distribution network. Strong retail presence in I ndia

and in U.S. 112 distributors and 1246 outlets in I ndia and 143 outlets in U.S.Strong brand equity and broad product range Such as, Gili,

Asmi,Nakshatra, Sangini, Ddamas, Vivaaha, Maya, Giantti, Desire,Samuels etc.

Visionary leadership (Acquiring Nakshatra, Samuels, Rogers etc.)

Expanding manufacturing capabilities in Mumbai and at specialeconomic zone in Surat to address increasing demand.

Net Worth is 3,460.37 million Rs. So we can say that it is financially verystrong company.

Sight holder status with DTC through a promoter group company.Highly skilled, qualified and motivated employee.

Wea k nesses

There may be conflicts of interest between them and certain of theirPromoter group companies.As the major raw material requirements need to be imported,

companiesnormally stock huge quantities of inventory resulting highinventorycarrying costs.

Technology is less improved compared to China and Thailands company.


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O pportunities

New markets in Europe & Latin America.

Growing demand in South Asian & Far East countries.I ndustry moving from a phase of consolidation.Expansion possibilities in lifestyle and luxury products in I ndia like

watches, leather goods, Platinum jewellery because increasing disposableincome of people.

Th reatsI nternational Competition:-China, Sri Lanka and Thailand's entry in

small diamond jewellery.I ncrease in the price of Gold & Diamonds.

Other local competitors. According to the data 97% jewellery sales are byfamily jewelers.

Threat from producing nation like S.A. & Russia

LA U N CH ING O F A N E W B R AN D C ALL ED

N OOR IN U. A .E. : As above we have seen the swot analysis and market position of the

company , so this gives us a brief idea that how com[pany has performed innew countries ,hw it has made its position in new market and established areputation which no other can beat.

Now the company has plan to launch its new brand in UAE as it is apotential market for retail brand. I ts a tourist hub,moreover the retail marketshare of the country is growing year by year and same is with The gitanjaligroup, it has a big retail line and its entry in a new and a very potentialmarket like Dubai will increase its revenue ,its recognition in world marketand will be able to satisfy a wide range of customers.


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W HY DU BAI I S A P OTE N T IAL M AR KET ?A study covered 22 retail sectors across the UAE, this study is the

most comprehensive of its kind. An impressive 2284 mystery shopping visits

took place covering 115 brands and 558 outlets between end April and thestart of May 2009 - the purpose - to evaluate the UAE's retail sectors servicequality and sales performance.

Whilst visiting the 558 retail outlets scattered across 37 retail shoppinglocations including shopping plaza's, shopping centers, walks and 10 majorshopping malls, each mystery shopper was paying close attention to 5 keycriteria. The outlets premises, greeting and appearance received from thesales staff, the overall sales and service approach demonstrated by the salesstaff, the farewell received and finally the overall experience.

The UAE has invested heavily in retail infrastructure. A recent CBRE surveyrevealed 46% of the world's top 280 retailers have a presence in Dubai, nextonly to London, Paris and New York City. This is a fantastic achievement forDubai's retail sector, but purchasing a franchise or brand outlet and fitting itout with top class interiors does not guarantee footfall or encourage loyal,repeat customers. Recruiting the right staff and providing them with qualityproduct, service and sales training is an absolute must.

Lack of selling ability across all 22 sectors was identified as a clear trendwith the exception of the automotive, restaurant and jewellery sectors whichall performed well at both up-selling and cross- selling as well as productknowledge. Our explanation for this is simple - cars are no longer sellingthemselves and customers need to be convinced to spend their money onexpensive purchases such as automobiles. Dealerships must be investingmore money and effort into the training of their staff which is refreshing anda step in the right direction.

Of the 115 brands involved in the study, Pure Gold Jewellers were identifiedas the best overall performing brand. This ties in well, given jewellery scoredtop points and was recognised as the top performing sector. Jewellery,watches, caf's, restaurants and electronics seem to be more advanced intraining their staff and as a result are delivering acceptable customer servicestandards. All 5 of these sectors scored over 80% when evaluated againstthe 5 key service and sales criteria, however there is still room forimprovement as many inconsistencies were revealed between brands withineach sector and even outlets of the same brand. Our findings identifiedinconsistency as one of the key shortfalls that needs to be given muchthought by retailers across all 22 sectors involved. There is a need forbrands to identify where they are delivering best practice and at whichoutlets so as they can mirror these attributes consistently amongst all of


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their stores. L'Occitane at Dubai Mall performed exceptionally well andmanaged to rank as overall best outlet amongst the 558 visited thought outthe study. I f all L'Occitane stores across the UAE had of performed as well astheir leading store at Dubai Mall, the L'Occitane brand may have placedhigher than 7th over all.

A G R AP H I C AL RE P RESE N T AT I O N AT THE RET AIL SECTOR O F U AE :

Sales

ret ail

serv ice indu stry

shipp ing

agr iculture


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B US IN ESS ETT IQ UETTES IN U AE : y When holding business meetings in the United Arab Emirates, some

foreign businesspeople suggest holding the meeting in the lobby of an

international hotel rather than in an office. The advantage of this isthat there will be fewer people wandering in and out of the meeting.Also, your counterparts willingness to come to you demonstrates atrue interest. You will also have access to refreshments that may bemore to your taste.

Appearance

Visitors are expected to abide by local standards of modesty however, do not adopt native clothing.Traditional clothes on foreigners may be offensive.

Despite the heat, most of the body must always remain covered.

A jacket and tie are usually required for men at business meetings. Men should wear long pants and a shirt,preferably long-sleeved, buttoned up to the collar. Men should also avoid wearing visible jewelry, particularlyaround the neck.

Women should always wear modest clothing in public. High necklines sleeves at least to the elbows areexpected. Hemlines, if not ankle-length should at least be well below the knee. A look of baggy concealmentshould be the goal, pants or pant suits are not recommended. It is a good idea to keep a scarf handy, especiallyif entering a Mosque.


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B ehavior

Avoid admiring an item to an excess, your host may feel obligated to give it to you. When offered a gift, it isimpolite to refuse.

Often shoes are removed before entering a building. Follow the lead of your host.

Alcohol and pork are not consumed by those that observe the Muslim religion.

There are several styles of greetings in use, it is best to wait for your counterpart to initiate the greeting. Menshake hands with other men. Some men will shake hands women, however it is advisable for a businesswomanto wait for a man to offer his hand. A more traditional greeting between men involves grasping each others righthand, placing the left hand on the others right shoulder and exchanging kisses on each cheek.

The left hand is considered unclean and reserved for hygiene. Gesture and eat with the right hand. Do not

point at another person.

Men walking hand in hand is a sign a friendship.

In the Muslim world, Friday is the day of rest.

Do not cross your legs when sitting, showing the bottom of your shoe or foot is offensive.

The "thumbs up" gesture can also be considered offensive by some.

Gifts are not necessary, but appreciated. If you do give a gift, it will be open in private.

Gifts to avoid giving include:

- alcohol- perfumes containing alcohol- pork- pigskin products- personal items such as underwear - knives- toy dogs or gifts that picture dogs- images of nude or partially clad women (even in paintings or sculptures with artistic merit)


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C ommunications

Do not discuss the subject of women, not even to inquire about the health of a wife or daughter. The topic of Israel should also be avoided. Sports is an appropriate topic.

Names are often confusing. Its best to get the names (in English) of those you will meet, speak to, or correspond with. Learn both their full names and how they are to be addressed in person before you meet.

Communication is slow, do not feel obligated to speak during periods of silence. "Yes" usually means"possibly".

Meetings are commonly interrupted by phone calls and visits from friends and family.

The person at a meeting who asks the most questions is likely to be the least important. The decision maker is likely a silent observer.

y A customary greeting is salaam alaykum. Shaking hands and saying kaif halak follows.

W H AT I S P EST ?PEST Analysis is a simple, useful and widely-used tool that helps youunderstand the "big picture" of yourPolitical,Economic,Socio-Cultural andTechnological environment. As such, it is used by business leaders worldwideto build their vision of the future.I t is important for these reasons:

First, by making effective use of PEST Analysis, you ensure that whatyou aredoing is aligned positively with the powerful forces of change that areaffecting ourworld. By taking advantage of change, you are much more likelyto be successfulthan if your activities oppose it;

Second, good use of PEST Analysis helps you avoid takingaction that is doomedto failure from the outset, for reasons beyondyour control; and

Third, PEST is useful when you start operating in a new countryor region. Use of PEST helps you break free of unconsciousassumptions, and helps you quickly adapt to the realities of the newenvironment.

H ow to use t h e tool :

PEST is a simple mnemonic standing for Political, Economic, Socio-Cultural

and Technological.


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To use this tool, follow this three stage process

The following factors may help as a starting point for brainstorming (but makesure you include other factors that may be appropriate to your situation):Political:

Government type and stabilityFreedom of press, rule of law and levels of bureaucracy and corruption

Regulation and de-regulation trendsSocial and employment legislation

Tax policy, and trade and tariff controlsEnvironmental and consumer-protection legislationLikely changes in the political environment

E conomic : Stage of business cycle

Current and project economic growth, inflation and interest ratesUnemployment and labor supplyLabor costsLevels of disposable income and income distribution

I mpact of globalizationLikely impact of technological or other change on the economyLikely changes in the economic environment

S ocio- C ultural : Population growth rate and age profilePopulation health, education and social mobility, and attitudes to thesePopulation employment patterns, job market freedom and attitudes to workPress attitudes, public opinion, social attitudes and social taboosLifestyle choices and attitudes to theseSocio-Cultural changes

T ec h nological E nvironment : I mpact of emerging technologies

I mpact of I nternet, reduction in communications costs and increased

remote workingResearch and Development activity I mpact of technology transfer

P O LI T I C AL E N V I RO N M E N T : Politics of t h e U nited Arab E mirates takes place in a framework of


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Article 122, which stated that the Emirates shall have jurisdiction in all mattersnot assigned to the exclusive jurisdiction of the federation, in accordance

Federal Supreme Council

The Federal Supreme Council consists of the individual rulers of the sevenemirates. The President and Vice-President are elected by the Supreme Councilevery five years. Although unofficial, the Presidency is de facto hereditary to theAl Nahyan clan of Abu Dhabi and the Premiership is hereditary to the Al-Maktoom clanof Dubai. Article 150 of the UAE constitution defines the powers of the Councils authority in formulation of general policy; legislation on all mattersof state; ratification of federal laws and decrees, including those relating tobudget and fiscal matters; ratification of international treaties and agreements;

and appointment of the prime minister and Supreme Court judges.[3]

Decisionsare made by majority vote unless relating to substantive issues which require atwo-thirds majority vote (five out of seven rulers), which must include AbuDhabi and Dubai. [4] The Supreme Council also elects the Council of Ministers,while an appointed 40-member Federal National Council, drawn from all theemirates, reviews proposed laws.

Local politics

The relative political and financial influence of each emirate is reflected in the

allocation of positions in the federal government. The ruler of Abu Dhabi, whoseemirate is the UAE's major oil producer, is president of the UAE. The rulerof Dubai, which is the UAE's commercial center and a significant oil producer, isvice president and prime minister.

Since achieving independence in 1971, the UAE has worked to strengthen itsfederal institutions. Nonetheless, each emirate still retains substantial autonomy,and progress toward greater federal integration has slowed in recent years. Abasic concept in the UAE Government's development as a federal system is that a

significant percentage of each emirate's revenues should be devoted to the UAEcentral budget.

Although complexity of local government differs depending on size anddevelopment of each emirate, most such as AbuDhabi, Dubai, Sharjah and Ajman have their own Executive Councils chaired byrespective rulers and possessing various departments reflective of federal


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ministries. Various autonomous agencies also exist such as an EnvironmentAgency, Tourism Authority, Authority for Culture and Heritage, and HealthAuthority. Some emirates such as Abu Dhabi may also be divided into twomunicipalities (the Western and Eastern Regions) and its main cities of AbuDhabi and Al Ain are also administered by own municipalities with a municipalcouncil. Abu Dhabi, as well as Sharjah also have their own National ConsultativeCouncils with similar local duties and role as the Federal National Council.

I t has long been regional tradition for rulers to hold open discussions with theirpeople, be they common, merchants or the elite. Often, this forum is held by theemirate rulers as well as senior family members. This open majlis, or consultation,is held periodically; however, a ruler may also appoint an emir, or wali, to whomconcerns may be directed by the general population when necessary. Thisindividual is often considered a leading tribal figure whose trust is placed by histribe as well as the ruler.

Parliament

The Federal National Council ( al-Majlis al-Watani al-Ittihadi ) is the UAEsparliamentary body and consists of 40 members, representing the Emirates, half appointed by the rulers of the constituent states and the other half elected toserve two-year terms, with only advisory tasks. Members are required to becitizens of the emirate they represent, a minimum twenty-one years of age, andliterate. [8] The council carries out the countrys main consultative duties and hasboth a legislative and supervisory role provided by the Constitution. I t has theauthority to examine and amend any proposed federal legislation but it cannotveto any proposed bills. I t can also question any ministers on ministryperformance.

The United Arab Emirates does not have political parties. Members are drawnfrom each emirate based on population and presided over by a speaker who iselected from among the Councils members. I t is the main consultative body inthe UAE and has both a legislative and supervisory role accorded by theConstitution.

The UAE is made up of 7 Emirate states Abu Dhabi, Ajman, Al Fujayrah, AshShariqah, Dubai,Umm al Qaywayn, and Ra's al Khaymah. Their President, SheikhKhalifa bin Zayed al-Nahyan, maintains a pro-western stance in regards to foreign


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policy therefore contributing to a stable economic arena both politically andeconomically. The United Arab Emirates owes its healthy GDP to mostly to theexport of oil and gas products. Although oil has done well for the nation they haverealized that oil is a natural resource and will eventually run out. The hedging thisoutcome, UAE has started to diversify the economy towards non-oil basedventures such as tourism and commerce.

G eograp h y

Geography will lend a hand in regards to the UAE's economic environment whichis trying to transition itself from an oil based economy to one that focuses ontourism and commerce. With its vast coastline and numerous ports, the UAE

already has an infrastructure that is prime for both importing and exporting goodsto support its new industries.

Borders the Persian Gulf and the Gulf of Oman. 1,318km of Coastline. Ports and Terminals include: Mina' Zayid (Abu Dhabi), Al Fujayrah, Mina' Jabal

'Ali (Dubai), Mina' Rashid (Dubai), Mina' Saqr (Ra's al Khaymah), KhawrFakkan (Sharjah).

Economy


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The UAE has a high per capita GDP of $164.4 billion (2007 est. Their GDP is attributed to the production of oil and gas. This has led to a high

standard of living that is comparable to most Western European nations. 40% of their GDP is prmarily due to Oil. The government has in increased spending in regards to its infrastructure in

order to accommodate a greater involvement in the private sector. I n 2004 a Trade and I nvestment Framework was signed with the United States

that will eventually lead to a free Trade Agreement with the two nations. Thiswill eventually help out foreign investors by allowing them 100% ownership of their businesses and 0% tax rate.

E conomic G rowt h

Growth in 2008 is 8.5% compared to 7.5% in 2007. Growth will benefit from the expansion of the service sector, particularly in

tourism. Capital Spending on Real Estate and infrastructure schemes will remain high.

Expected growth for 2009 will be 7.5%, due to a decreased in governmentspending however buffered by a strong performance in the private sector.

I nflation

Expected to be 15.2% in 2008 eventually decreasing to 13% in 2009 I nflation is due to the country's currency (Dirham) being pegged to the


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weakening US Dollar. High global prices in regards to food and construction materials have

contributed to the inflationary prices in 2008.

External Sector

Given the rise of international oil prices. UAE is forecasted to increase itsexports by 17.4% in 2008 to $212 Billion in USD. This will be a 23% increaseof what they did in 2007.

I n 2009 Exports will decrease by 2.7% as the price of oil diminishes; howevernon-oil exports will continue to remain strong.

I mport Spending will continue to rise annually by 17.5% due to an increase in

food and other commodities; however, a trade surplus will continue to exist inthe amount of $69 billion USD in 2008 and $49 billion USD in 2009. [2]

Social and Cultural

The UAE is an innovative social investor, seeking ways to expand opportunities forUAE citizens and help address regional and global challenges. Among top UAEpriorities are education reform, improving healthcare, expanding the role of women, and the environment. The UAE has found support in the United States topursue these domestic goals.

E ducation

I n 1975, the rate of adult literacy was 54 percent among men and 31 percentamong women. Today, literacy rates for both genders are nearly 90 percent.

The UAEs values of tolerance and openness are best reflected in the progress of Emirati women in education. Forty years ago, virtually no girls went to school. ButHis Highness Sheikh Zayed Bin Sultan Al Nahyan, founder of the UAE, personallyencouraged and even insisted on education for girls.

New initiatives are being launched at all educational levels and US partners haveplayed key roles.

y US Education Secretary Margaret Spellings visited the UAE in May 2008. Thetwo countries signed a Memorandum of Cooperation, committing both sidesto collaborate on mutually beneficial projects in educational reform anddevelopment.


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y The New England Center for Children, a Massachusetts school servingchildren with autism, will establish a comprehensive special educationprogram as well as train and qualify a number of UAE nationals to provideservices in Arabic.

y

New York University-Abu Dhabi will be the first comprehensive liberal artsand sciences campus with a robust research component to be operatedabroad by a major US university.

y MI T is helping develop the Masdar I nstitute of Science and Technology in AbuDhabi. The I nstitute, which focuses on clean energy technologies, will be theregions first institution dedicated to research-driven graduate programs.

y The Wharton School of the University of Pennsylvania has partnered withDubai World to create the Dubai Leaders Program.

y Rochester I nstitute of Technology has established a new Dubai campus.

H ealt h

Health care delivery in parts of the UAE is undergoing a significant transformation,and the UAE is working with leading US institutions to develop its health caresystem.

y Boston University and Dubai Healthcare City are opening a dental school inthe Emirate.

y Johns Hopkins Medicine will manage the Tawam Hospital in Abu Dhabi. JohnsHopkins faculty are also involved in the development of a public healthdoctoral program for the UAE and providing advice on preventive health careprograms.

y The Cleveland Clinic is creating and operating a new world-class hospital inthe UAE. Cleveland Clinic also announced it will take over management of Sheikh Khalifa Medical City in Abu Dhabi.

y Susan G. Komen for the Cure, in collaboration with the University of Texas M.D. Anderson Cancer Center and the US State Departments Middle EastPartnership I nitiative, is developing programs with UAE womens groups,government officials, physicians and medical organizations to raiseawareness of breast cancer, and facilitate more effective outcomes in

prevention and treatment.y The UAE and the University of North Carolinas School of Public Health have

signed a two-year contract to investigate possible environmental health risksthat come with being an industrialized country.

Women

The UAE Constitution guarantees equal rights for both men and women. Women


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have been very successful in getting advanced degrees and graduates in the UAEcan be found working in government, engineering, science, health care, media,computer technology, law, commerce, and the oil industry.

y Four UAE cabinet ministers are womenincluding Sheikha Lubna Al Qasimi,Foreign Trade Minister, who was on Forbes magazines 2007 list of the 100most powerful women in the world.

y Women form two-thirds of government sector workers. I n October 2008, thefirst female judge was appointed. Women make up 20 percent of thediplomatic corps.

y Nine women hold seats within the Federal National Council, accounting for 20percent of the membership. The FNC is a consultative parliamentary body.

y I n 2003, for the first time, the Abu Dhabi police trained 32 women to workwith the special security forces. The UAE has four women fighter pilots, the

first to serve in UAE military forces.y Women finance one-third of the transactions in the financial and banking

sector.

The UAE has worked with US partners to further the success of its professionalwomen. Vital Voices, a Washington-based nongovernmental organization, and theUS State Department has organized the MENA Businesswomens Network. Thegoal is to build a network of businesswomen, expand the number of women inbusiness, increase the value of their businesses, advance the role of women insociety, and promote a regional culture of women's entrepreneurship. Among the

networks seven founding members is the Dubai Business Womens Council.C ultural

Art and culture play a central role in enhancing international relations anddeveloping understanding between the UAE and the United States.

y New York-based Guggenheim Museum will establish a world-class museum inthe UAE devoted to modern and contemporary art, to be known as theGuggenheim Abu Dhabi.

y National Geographic Entertainment and I magenation Abu Dhabi havecommitted $100 million for the production of 15 movies and documentariesfor theatrical release over the next five years.

y Abu Dhabi signed a deal with the New York Film Academy to establish a filmacademy in the UAE capital.

y The UAE has Sister City relationships between Detroit and Dubai and Houstonand Abu Dhabi.


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TECH N O LO GI C AL E N V I RO N M E N T : AS UAE is developing year by year so is its technology, as the country is ruled by

a mixture of new enthusiastic people plus experienced old people so it has

knowledge and experience both. Which can be seen in their new constructedbuildings, transportation, etc.

Many foreign based energy conserving companies are comoin to dubai andlaunching their products as it has become a potential market for every sector. AsUAE being a developing country even it needs lot of fdi in order to meet its needs.

CO N C LUS I O N : Considering all the factors as mentioned above.it goes in the favour of gitanjali

group and after takin care of all the factors they can launch their brand noor andprosper like they hav in the past.

As gitanjali group is also composed of a mix of new an old experienced peopleand so is UAE.


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B I B ILOGRAPHY:

1. Google.com2. Scribd.com3. Wikipedia.com

4.

Dubais official site5. Various news papers.

business environment encompasses all those factors that affect a company final project

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