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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 its not allowed to sell to anyone
without having alcohol license and the license can be provided only to nonMuslim 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 doesnt 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-toexpand.html
Market entry: United Arab Emirates (Dubai and Abu Dhabi
http://www.lexology.com/library/detail.aspx?g=7fe1f1d9-f3fd-4446-af99c56ab1790cdb

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 worlds 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 foreigners 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 equipments, 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 its not suitable to create heavy industry. Opening more
industrial diversification would strengthen the financial clusters 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 its 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. Its 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 countrys 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 reexported 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
dont have the alcohol license as many people dont 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.