education market in united arab emirates

education market in united arab emirates Market Profile and Analysis

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Market: education market in united arab emirates
Classification: No Specific Industry
Stage: Growth (expansion)
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Market Size and Market Potential
The Education market volume must be high so that it will be a market easier for the Paris Sorbonne university to enter. Further, high market potential means that the market will be highly likely to allow
sustainable growth of the university in the medium to long term.
Based on the above mentioned criteria, the Group has eliminated many countries and districts easily, including North America, South America, Europe and Africa. The remaining countries are mainly in Asia. Even in Asia, countries fulfilling the above mentioned criteria are limited. Group selected U.A.E as their target country. Because this region has large education market volume and their growth rates are high.


education market in united arab emirates Market Strengths Update

According to Ball and McCulloch (1999) country risks are increasingly political in nature, while these include wars more common is the impact of government and its attitude to non-national business, risks can also be the legal system of the country and how this impacts business operations. Reflecting this analysis this section of the report will examine the UAE’s the macro political environment and its stability as well as their legal system and their attitude to foreign direct investment (FDI).
Political development in UAE was comparatively stable compared with Kuwait, Saudi Arabia, Qatar,etc..

Macro Political Environment (Christopher-M-Davidson, 2009)

Davidson (2009) describes the UAE as a “federation of sheikhdoms in the lower Persian Gulf comprising of oil rich Abu Dhabi, and the international Centre report of Dubai”. He goes on to describe how the political system in the UAE comprises of hereditary monarchies which are assembled under a central federal government control of which is dominated by the emirates of Abu Dhabi and Dubai. This system is important as the environment could change dramatically with a change (Scribd - FN107-1342[1], n.d.) in ruler if that ruler has a different vision for the future of the country. Davidson believes that given the mix of traditional and formal powers the UAE is an excellent example of a “hybrid, neo-patrimonial political system”.
The UAE shows little sign of moving towards a democracy as defined in the Western world. However despite this both Dubai and Abu Dhabi have continued to attract foreign investment and the country’s 2021 Vision Document (UAE Interact, 2010 - Political System, 2010) lists among its four key objectives both the building of a knowledge based economy, which will encourage entrepreneurs from public and private sectors, and the provision of a first rate educations system. The plan also clearly states that legal frameworks and

regulations will be designed to support these initiatives and that intellectual property rights will be protected. the UAE government has an objective of making this a regional hub for higher education to support this each year Counseling Point Education and Social Services host a seminar regarding higher education and part of this is the promotion of the UAE as a study destination .
Both the goal of a knowledge based economy and the provision of first class education would be of great interest to Paris Sorbonne university, it illustrates that the UAE provides an opportunity should
they proceed with internationalization.


Financial Currency

The currency of the U.A.E is the dirham which was introduced in 1971 upon the formation of the country. Later in 1978 the decision was taken to peg the dirham to the dollar, since 1997 the rate has been set at $1 = 3.672962 ( (ExchangeRate.com, 2013). As Sorbonne university is based in France where the currency is the Euro they will face a foreign exchange risk if they choose to operate here. In recent years the Euro has appreciated against the US dollar a trend which seems set to continue so from that point of view now would be a good time to invest in the U.A.E. as although there were some indications of a move towards a single currency for the GCC countries the U.A.E has recently indicated that they are unwilling to partake in this. While the depreciation of the dollar against the euro is a positive factor when it comes to the initial investment the downside of this may be felt when it comes to setting of prices for courses and subsequent repatriation of funds from the UAE to the home country which would be the ultimate goal of setting up the operation.

Commercial

Commercial language used in UAE was English and its legal system followed similar to France
with which the Paris Sorbonne university is familiar. The World Bank (2011) Ranked the UAE as 33rd in the world in their “Doing Business 2011 Report” when evaluating the business environment and the ease of doing business.

Economic development
Abu Dhabi holds 9% of oil reserves and 5% of gas reserves
•The stock of direct foreign investment at home was estimated $62.69 billion
•Abu Dhabi Investment Authority (ADIA) is the world wealthiest
•sovereign fund.
The economic development of U.AE was the best and fastest in the Middle East. U.A.E intended to become the business Centre, logistic Centre, tourist center and financial Centre of the Middle East .


education market in united arab emirates Market Weaknesses Update

Language

The language barriers might cause considerable problems to the future business development including,
but not limited to the following, mis-translation, mis-interpretation and mis-communication. Hence the group decided that a commonly recognized language should be considered and based on the language best known, the best choice will be English. Other languages will require extensive translation and invite both legal and communication problems. As the French language is not a commonly used language in the international business environment. Sorbonne management team should look carefully at Hall’s communication theory which looks whether communication is high or low context. Many could assume that the biggest challenge will be the language barrier between French, English and Arabic the native tongue in the region however the actual spoken or written language is far less significant in high context cultures it is perhaps the least important. state “communication is particularly difficult when the communicating sides belong to different cultural environments.

Culture& Social

Culture is a very important consideration for any company considering setting up overseas and it is very often the factor that is overlooked when carrying out the country assessment. Business success internationally requires cross cultural literacy differences in culture heavily impact how business is practiced.

As Paris Sorbonne university explores the option of a new campus in the U.A.E. it is important that they examine the culture of the country carefully. As noted that the UAE has over 200 nationalities living here which means it is already a cultural melting pot the religion of 96% of the population is Muslim (CIA, 2011) and this heavily influences the value systems and how people live.

The following points illustrate how religion impacts how the country works. No matter the home country the weekend days in the UAE are classed as Friday and Saturday, Friday is a holy day and a very important day for the Muslim community. Public holidays throughout the year are largely based on the Hijri and not the Gregorian calendar; also Ramadan takes place once a year for a month when employees are entitled by law to reduced working hours. These factors are very important for Sorbonne as it considers an outpost here they impact days and hours of operation which in turn impacts the semester days and how they link to the operations in the home country.

This report can only touch on the main points of culture it is highly recommended that should Sorbonne university decide to proceed with internationalization into the UAE, they should carry out an extensive study of culture as given the difference between home and host this will be critical to their success.


Legal System & Attitude to Foreign Direct Investment

The legal system is a mix of civil and Islamic law (economy, history at a glance - World - CBC News, n.d.) and one only has to read the newspapers daily to realize the legal frameworks of this country are still evolving as there are frequent additions and amendments.
On the other hand the UAE is very supportive of FDI.

In an effort to attract foreign companies, The UAE has no income tax and no federal-level corporate tax. Different corporate tax rates exist for certain activities in some emirates. There is no general sales tax, and the overall tax burden is quite low at 7.1 percent of total domestic income. Government spending is equivalent to 22.3 percent of total domestic output. Large oil revenues have kept the government budget in surplus and public debt below 20 percent of GDP. (United Arab Emirates Economy: Population, GDP, Inflation, n.d.)

Advancing economic freedom for the fifth consecutive year, the United Arab Emirates has regained the rank of “mostly free” that it last held in 2003. The economy performs competitively in many areas of economic freedom. Barriers to trade are quite low, and commercial operations are aided by regulations that support open-market policies. With a transparent and favorable business climate and a high degree of political stability, the UAE has created a dynamic environment for entrepreneurs.

Despite these changes there is still a state enforced control of information although this has relaxed somewhat since the disbanding of the Ministry of Information in 2006 control still exists for example internet proxy servers restrict access to certain sites (Davidson, 2009). Some free zones and Universities are operating outside the system nonetheless it remains an important consideration for Universities setting up outposts overseas as it impacts even the most fundamental university tasks such as ordering books.

For Paris Sorbonne university who has its origins in a country which proactively promotes free speech this will be something they will have to examine carefully.

Accessibility
The ease with which to enter the country including visa application and development accessibility is very important. It would be a waste of time to consider developments in remote locations where Paris Sorbonne university professionals are not willing to travel and it is difficult to get a visa.

Communication Systems
In today’s global business environment, communications through mobile phone, fax, telephone, web-site and IT system are becoming very important. Hence the availability of information technology and communication systems in the target location will be important as a prime element in selecting the
target market.

Transportation

The traveling distance must not be far. Furthermore, travelling to the location must not be overly difficult. Again, for first time overseas development of Paris Sorbonne university operations, travelling
long distances and transiting several times is highly undesirable. Transport organization is crucial
• Surface Transport Master Plan will be developed in Abu Dhabi 2030.

Security

Security has become a major concern, particularly after the 9/11 terrorism incident in USA. The company has placed the importance of security or safety for its employees working in its targeted country as a top priority. The group considered that the target nations of the company must be low risk countries.


education market in united arab emirates Market Trends Update


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