Dubai Aluminum Opening a Branch in Saudi Arabia

Dubai Aluminum Opening a Branch in Saudi Arabia Opening a project in Saudi Arabia is not a difficult thing as far as the terms and conditions for foreign investors in the market is concerned. After joining the World Trade Organization, Saudi Arabia’s business regime became open to accommodate the foreign investors. The government also legitimized the merging of investors to form business cartels that would enable them acquire up to 51% of the market shares (Leroux 23)Advertising We will write a custom report sample on Dubai Aluminum: Opening a Branch in Saudi Arabia specifically for you for only $16.05 $11/page Learn More Before Dubai could think of opening its branch in this market, a lot of research had to be carried out on the various macro and micro economies prevailing in the market. Some of the external factors that would have a significant impact on their business included: political interferences-despite the series of wars in the Middle East, Saudi Arabia has in the recent past enjoyed poli tical stability and hence could provide adequate security to its investors. There are other political considerations that investors should keep in mind like the tax rates levied on goods and services, trade barriers, quotas, ownership rights and expropriations. These factors if favourable, may encourage more investors and vice versa. Another factor is economic stability in the country- which is slowly stabilizing from the increase in international prices of oil hence good for the investors. Technological factors- the country has embraced technology in all its sectors and this has greatly boosted their market economy hence attracting investors. The micro environment on the other hand, emanates from within the organization and its up to the managers to deal with them to ensure success of the company. These internal forces relay majorly on the organizational structure and its way of handling critical issues. Some of the differences in the market economy between Dubal and Saudi Arabia i nclude: Dubal is a world class business organization that has been recognized by the United Arab Emirates as one of the most successful companies with a reliable market (Usawa 11). It is known for its political and economic stability as it has recorded very low levels of crime while Saudi Arabia’s economy is unstable due to the many external factors that include: wars, oil disputes and political interferences. The country has huge debts that are yet to be paid off hence dragging behind its economy. Dubal has got proficient workers and makes use of sophisticated technology to produce quality goods and services as opposed to Arabia where they mostly deploy cheap manual labour and the technology they use does no produce quality services. Dubal has a very wide trade network that has attracted many investors as compared to Arabia whose trade network is limited to a few investors.Advertising Looking for report on business economics? Let's see if we can help you! Get your f irst paper with 15% OFF Learn More Despite the differences, both economies are open to foreign investors and are geared towards upgrading their systems, infrastructures and communication channels so as to maximize their output and increase their productivity. Some of the major challenges that Dubal may have to face when opening up a branch in Arabia include: trade restrictions that may limit its level of investment in the country, a slow growth rate in the economy, inadequate skilled labour , economic and politic instability and also cultural differences. On the other hand, they can easily outshine other firms due to their proficiency and high technology and hence be in total control of the market. Leroux, Marcel. Factors Influencing the Market Economy. New York: Springer, 2005. Print. Usawa, Shinto. Economic Growth and Stabilization. Cambridge: Cambridge UP, 2003. Print.