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Executive Summary
This export plan is for the launch of BBQ Tonight in the UAE to see the enviromental
effect on business. After undertaking a thorough country screening, where we screened
three countries, namely United States of America, United Kingdom and United Arab
Emirates, we have decided to target UAE.. After this, we conducted a situation analysis
where we took the demographic, political, economic, legal and cultural factors of the
UAE into account. After thoroughly understanding our market, we came up with the
export plan. This plan addressed many factors. First, we spoke about setting up an
international division within the organization... The BBQ Tonight meal will also be
adapted to local tastes and will have a smaller amount of spices than the ones sold in
Pakistan. It will carry only a small price compared to other food items available. The
funds we will use to finance this venture will be generated internally, with the choice of
turning to Pakistani banks in the UAE after a year.
GLOBAL SCREENINGAND COUNTRY SELECTION
Is a process were appropriate success factors are taken into account to select list of
potential countries were the product can be exported.
Factors which were considered in order to screen out countries are as follows:
POPULATION:
Reason for choosing the factor stated above:
1. The higher the population level of a country means more chances for thecompany to serve people belonging from different classes may that be higher
class, middle class, lower class.
2. High population not all the time indicates greater market but it does indicate
more consumption among individuals thus more consumer spending.
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World's Population by Continents
After reviewing the table it was decided as to choose Asia and America out as it carries
the most population
COUNTRY SELECTION:
(2007) Population and Settlements, has revealed the following:
Countries Population
Afghanistan 28395716Bangladesh 156,050,8
83India 11801660
00Kyrgyzstan 5,482,000Maldives 369,031Nepal 28,563,377
United States of America 310,497,0
00United Kingdom 62,008,04
9United Arab Emirates 4,798,491
Asia 3,879,000,000Africa 1,000,010,000Europe 830,364,178
North America528,720,588
South America 385742554
Oceania (incl. Australia) 32,352,618
Antarctica no permanent population
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The next step is to eliminate countries with low population because lesser the number of
people in areas the lesser the consumption of the product which would lead to low sales
and hence small profits and secondly due to the fact that everyone will not be willing to
use our product thus leaving with a very small percentage of success for the firm in
exporting its product to areas that carry very low population.
Thus it leaves us with countries namely
Countries Population
Afghanistan 28395716Bangladesh 156,050,8
83India 11801660
00United States of
America
310,497,0
00United Kingdom 62,008,04
9United Arab Emirates 4,798,491
GDP PERCAPITA:
Reason for choosing the factor stated above:
GDP per capita is one way to determine of how well off the average person is in a
country
A higher GDP per capita would indicate more income which means more consumer
spending , more purchasing power thus resulting in better chance for the restaurant to
capture greater market share with more sales and earn maximum profits.
GDP per Capita for countries.
Countries GDP per Capita
Afghanistan $21,340Bangladesh $224,889India $3,526
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United States of
America
$14,256,275
United Kingdom $2,139,400United Arab Emirates $184,984
Countries carrying low GDP per capita are ignored and 3 countries are chosen namely
1. United States of America
2. United Kingdom
3. United Arab Emirates
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POLITICAL ANALYSIS
Degree of Democracy and freedom in countries as follows
POLITICAL ANALYSISECONOMIC ANALYSISSOCIAL ANALYSISENVIRONMENTAL ANALYSIS
United Kingdom
(UK)
United Arab Emirates
(UAE)
United States of America
(USA)
Country PR CL Status
United Kingdom 2 4 Free
United States of
America
4 5 Partly Free
United Arab Emirates 2 3 Free
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P.L=Political Rights, C.L=Civil liberty
On a scale from 1 (most free) to 7 (least free).
Tariff Rate
Country Weighted average Tariff Rate Year
United Kingdom 1.3 % 2008United States of
America
1.5 % 2008
United Arab Emirates 3.6% 2008
Income Tax and Corporate Tax Rates
Country Income tax rate Corporate tax rate
United Kingdom 35 25
United States of
America
33 33
United Arab Emirates 30 32.5
ECONOMIC ANALYSIS:
Unemployment Rate
Countries carrying low unemployment rate would be preferred thats so because low
unemployment will mean more people with jobs which would result in greater amount of
people earning for a living thus more consumer spending.
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Countries Unemployment rate (%) Year
United Kingdom 69.0 2010 estUnited States of America 67.7 2010 estUnited Arab Emirates 20.60% 2010 est
Wealth Index
Is the Average of indicators of household wealth which is based on average of needs
(food, sanitation, water) and income (GDP) scores and national wealth that is size of
economy, inflation, unemployment, debt).
Country Wealth IndexUnited Kingdom 42
United States of America 21
United Arab Emirates 28
A higher value indicates a greater level of wealth.
Inflation Rate (consumer prices)
Annual percent change in consumer prices compared with the previous year's consumer
prices.
Countries Inflation Rate (consumer prices)
United Kingdom 2.1%United States of America -0.70%United Arab Emirates 1.50%
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Human Development Index:
Country HDI
United Kingdom 0.859
United States of America 0.951
United Arab Emirates 0.868
Trade Balance:
Country Export in billions Import In billions Trade Balance
United Kingdom $ 157.3 $ 116 $ 12.92
United States of America $ 76.23 $ 113.1 $ -36.87United Arab Emirates $ 174.7 $ 144.5 $ -1.928
SOCIAL ANALYSIS:
Population Density (per sq km)
BBQ Tonight restaurant is basically targeted to the urban population therefore for the
firm this factor is considered as important as it helps to select the ideal country where the
density of urban population is high thus resulting in lower transportation cost, more
potential customers available at every step.
Country Population Density
United Kingdom 244
United States of America 29United Arab Emirates 30
Higher figure illustrates higher population per square kilometer
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Literacy Rate:
In order to bring out awareness among the individuals marketer needs to be aware of its
market that is how much literate are they or not and how easily they can understand the
importance, benefits of the product being offered.
This fact leads us to select the following factor as the more the literacy rate the easier it
would be to promote a product and more easier to devise marketing campaigns
Country Literacy Rate
United Kingdom 99.0%United States of America 99.0%United Arab Emirates 90.0%
COMMUNICATIONAND TRANSPORTATION:
Communication and Transportation both are important factors when we are talking about
going global that is providing the good or service to a foreign market. The Better the
infrastructure and communication facility the more it is easy for any product to penetrate
into the market.
Countries Infrastructure Index Communication Index
United Kingdom 83.6 28United States of America 82.40 33
United Arab Emirates 79.90 31
A higher index value indicates better communication or infrastructure in the country.
ENVIRONMENTAL ANALYSIS:
Natural Hazards
United Kingdom
Droughts, floods; dust storms, earthquakes
United States of America
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Droughts; floods, thunderstorms; earthquakes
United Arab Emirates
Heavy Rain
United States of America (USA)
Market Size
The US made up of various ethnic groups. 35 million of the nation comprises Hispanics,
approx 12% of the population (Wikipedia, 2006) and 12 million of the population is
Asian, representing approx 4% of the population (US Census Bureau, 2004). California,
New York and New Jersey are the main areas to be targeted, as they have the largest
South Asian populations (Promar, 2000). Combining these two groups with similar tastes
makes for a total estimated market of approximately 50 million.
Consumer Tastes and Preferences
Asian groups prefer intense, flavorful, spicy and diversified food (Promar, 2000). All
Asian subgroups have rice as a staple food. Ordinary Americans prefer beans, lentils and
other quick food. Junk food is very big in the US and satisfies a huge market. A large
number of people are health conscious too so eating oily foods is not high on their
agenda. But, our target market prefers spices and rice and that works to our advantage.
Where is the Market Headed
The market is headed in different directions. On one hand, people are becoming health
conscious while on the other hand people are displaying a preference for junk food. Forty
percent of Americans said organic food will be a bigger part of their diet within one year
and 63 percent buy organic foods and beverages regularly (Cukan, 2005). Junk food is
also increasing as time pressures force Americans to forsake healthy, home-cooked meals
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(Mercola, 2002). Americans are getting nearly one-third of their calories from junk foods
(Adams, 2004). In conclusion we can say that due to brand loyalty and time pressures, the
market for junk food will be sustained.
Logistics
The US has easy transportation, well developed road, rail and air networks. Ingredients
are not a problem as they will be imported. New Jersey and California, major markets,
are near to large ports. So this does not present a very large problem. Delivery will form
major part of the sales, so a fleet of vehicles will have to be employed.
International Mindsets of Suppliers/Mentality
The US has an open economy where demand drives what is produced and sold. Suppliers
also have a very open and international mindset. They do not hesitate to make contact
with international businesses and are growth driven.
Strategic Alliances for Distribution
Initially, company stores will be used. Later on, the franchising model will be used. By
looking at the franchising models used by all the fast food chains and other restaurants,
we can see that it is highly successful and can be used to grow in the US.
Competition
The environment is tough. There are a large variety of fast food chains competing in the
US. The likes of Burger King, McDonalds, Wendys and Subway all operate in the US
market. Each chain has a unique selling proposition attached to it. Policies need to be
such that they set our product apart from the competition.
United Arab Emirates (UAE)
Market Size
Most of the population in the UAE comprises of expatriates. The size of the market
amounts to approximately 4 million people (Bureau of Near Eastern Affairs, 2006). The
total population is 4.3 million out of which 50% are South Asians. So we will also
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include the Arabs. Even the other expatriates enjoy these foods, so a portion of them also
makes up our market.
Consumer Tastes and Preferences
Since most of the market is made up of expatriates, there is a diversity of tastes and
preferences. The large South Asian contingent here prefers spicy foods and rice. These
foods are very popular with the local Emiratis, other Arabs and Iranians as they share
similar cuisines. Western fast food is also popular here; there are a plethora of malls filled
with fast food joints.
Where is the Market Headed
Increasing demand for international food products and rising disposable incomes are
combining to make the Middle East a hot market for foodstuff producers and distributors
(Strategiy, 2006). The real drivers of growth are the young generation and tourists who
flock to the Gulf to enjoy the warm weather, shopping and other recreation. According to
a report by BIS Shrapnel, an Australian firm specializing in economic forecasting, the
UAE foodservice market is worth a massive US$4.36 billion (Reed Business
Information, 2005).
Logistics
With the construction boom in the UAE, road transport is very easily available. Also, the
UAEs status as a free port has turned it into an international hub for trade. The UAE sea
ports and air ports are among the busiest in the world and the zero duty will make it very
easy to bring in whatever is required.
International mindset of suppliers/ mentality
There are few suppliers available here as the UAE is not very rich in natural resources.
But, its status as a hub of international trade makes importing very easy. Every variety of
foodstuffs can be imported here as there are no restrictions. Meat will be purchased
locally as it is hygienic and is available at good prices.
Strategic Alliances for Distribution
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The initial plan is to use company outlets in a small area. After proving successful,
franchises will be used to sell the product. The franchise market growth rate is 27 percent
annually in the Middle East region (All Business, 2004) and it will be one of the drivers
of growth. Wealthy Emiratis are willing to invest in franchises because of the huge
potential of the food market in the UAE.
Competition
Competition in this market is intense and the market is extremely price sensitive due to
the high level of competition. Only chains with established international reputations are
running well here. The major competition comprises of the local and international
restaurants, like Ibrahim restaurant, Ravi restaurant and Indian most famous Chef
Restaurant located in Dubai (All these types of restaurants like Sultan, Ravi, Ibrahim, and
Indian Chefs restaurant which provides the same variety of food to its consumers are the
major competitor).
United Kingdom (UK)
Market Size
Around 4.3% of the UK population is Asian. Moreover, subject to the popularity of Asian
foods in England, we have estimated 35% of the other British population might enjoy
BBQ restaurant meal. Therefore our target market is about 25% of the UK population,
which are about 13 million people (CIA World Factbook, 2006).
Consumer Taste and Preferences
Asian food market is experiencing vigorous growth in the UK. Dishes like Chicken Tikka
Masala (Fell Walker, 2005) are becoming increasingly popular in this part of the world.
People have adopted these dishes and love the spices.
Where is the Market Headed
The market is heading to a similar direction as the US market. Health consciousness is
increasing, but so is the desire for good quality meals and home deliveries. BBQ Tonight
has good prospects in this market.
Logistics
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The UK is similar to the US and will not present any logistical problems. There are well
developed road, rail and air networks. London is a major international air and sea port
and will help in efficient supply chain management
International mindsets of suppliers/mentality
The UKs economy is one of the most prosperous and fast growing economies in the
world. The main drivers of this affluent economy are the numerous profitable
multinational organizations working in the country. This is because of low barriers to
entry and support from the British government. Thus the conducive and international
environment for business activity will help us work effectively in the UK.
Strategic alliances for distribution
Like the US, franchising is very popular in the United Kingdom. Therefore, initially the
company will sell its products through its own restaurants and distribution centers.
However as the profitability and brand loyalty of the company increases, the franchise
will be allocated to the local franchisees.
Competition
There are a number of restaurants operating in the country, which includes various
American chains and some English ones too. Each value chain has differentiated itself
from others players in the market by catering the needs of a niche market. Similarly, the
BBQ Tonight will cater to the untapped needs of Asian immigrants living in UK, as few
restaurants are serving the subcontinent food in a spicy style over the
The next step involves selection of the most ideal country that may serve as our target
market where the product shall be exported.
INDICATORS UK USA UAE
Population ** *** **
Population Density (sq km) *** ** **
Literacy Rate *** ** ***
Unemployment Rate *** * **
Wealth Index * ** ***
GDP per capita ** *** **
Inflation Rate (consumer prices) *** ** *
Corporate Tax * ** ***
Tariffs ** * ***
Market Size ** ** ***
Competition ** *** **
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Communication Index ** *** **
Infrastructure Index *** ** **
Corruption *** ** *
Trade Balance ** * ***
Natural Hazard Risks ** ** ***
Key
*** Stars indicate favorable
** Stars indicate partly favorable
* Star indicate not favorable
COUNTRY CHOICE:
Product would be exported to United Arab Emirates as it carries
Fine literacy rate, a healthy GDP per capita, low unemployment rate with the
most population density at every square kilometer supported by a healthy wealth
index and good communication and transportation facilities.
Standard competition in the field of food industry such as restaurants then as
compared to India and Bangladesh thus making an opportunity for the firm itself
to capture greater market share in less time.
Good bilateral relations with Pakistan thus there are no political obstacles in this
case which may not permit to export the product to UAE
OTHER VARIOUS REASONS ARE:
Strong growth in the restaurants sector.
Proximity to Pakistan.
No restrictions on free trade.
Large South Asian expatriate community.
Consumer preferences geared towards restaurants.
Zero rates of taxation.
Easy to forge strategic alliances due to support from the UAE government.
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Logistics will be handled extremely well
BBQ Tonight meals serves as an international food item can be tested in a
multicultural and cosmopolitan place like the UAE.
Will serve as an indicator of future performance in other international markets.
SITUATIONAL ANALYSIS
Demographics
The median age of the UAE is 27 years. Males outnumber females in the country,
especially among the expatriate population. There are 2.6 males for every female in the
UAE. The majority of the expatriate population is from South Asia (HSBC, 2004). Men
are older compared to women. The majority of the population lies in the age group of 20-
44. As mentioned earlier, our focus is on the South Asian population, which represents
about 50% of the population of the UAE.
What is equally important for us is the breakdown in terms of occupation. About a
million manual labourers are employed in the UAE (NRI Online); most of them belong to
India, Pakistan, and Bangladesh. The emirate of Dubai itself has 300,000 workers in the
construction sector alone (Muslimedia, 2006). Hence, workers working within medium
wages will be able to afford BBQ tonight meals.
Economic
The UAE is largely dependent on oil for its revenue. Recently, it has started to hype itselfas a tourism, transport, business and communications hub for the entire Middle East
region. Abu Dhabi and Dubai are the economic powerhouses of the UAE, with Abu
Dhabi contributing 61.1% of GDP and Dubai 24%. Abu Dhabi holds 94% of the UAE's
total oil and gas reserves, which account for almost 10% of the world's total and are
predicted to last about another 100 years (Oxford Business Group).
With a GDP per capita of $29,100, the spending power of UAE citizens is quite high. The
governments of the emirates of Abu Dhabi and Dubai are the most active and rich
governments out of the seven total emirates. They are turning towards tourism and
opening up their borders.
Dubai has been an innovator. It has created an internet city and a media city and has
positioned itself to move beyond oil dependence. It has become the number one choice
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for professionals to work. Many large MNCs have set up their regional bases there. The
Dubai Port and Dubai Airport are regional hubs of transport and trade.
Political
UAE consists of seven emirates, each having its own ruler. The federal government has
given autonomy to the states in dealing with affairs like control of minerals, rights and
budget allocation. The President of the UAE is Sheikh Khalifa bin Zayed Al Nahayan,
the ruler of Abu Dhabi. He is assisted by the Prime Minister Shaykh Maktoum ibn Rashid
l-Maktoum, the ruler of Dubai (Kjeilen, 2004).
UAE is a monarchy, but, several steps are being taken to democratize the country. Sheikh
Khalifa bin Zayed , has announced that half of the members of Federal National Council
will be elected by a democratic process, where as the other half will be appointed by theruler himself (UAE Government Online). The ruler has also taken a number of steps in
modernizing and educating the masses and providing assistance to international
companies working in the country. Thus, the political situation is perceived to be stable
and conducive for the corporate sector.
Cultural
UAE civilization is deeply rooted in Islamic traditions. However, life styles, preferences
and attitudes of the people have changed over time due to the influx of foreigners. There
are a multitude of shopping malls, restaurants and apartments. The culture is evolving
into a modernist culture, especially with the construction boom and the rapid rise of the
MNCs in the entire Middle East region.
Legal
The UAE is a booming economy partially due to the rising oil prices and partly due to the
liberal economy with minimum legal hassles. The import duties are low in general and
nonexistent for the products like food, medicine and agriculture. Restrictions on revenue
transfer and capital repatriation is also nonexistent. Authorities have also nullified both,
the corporate and personal taxes, and have made a considerable effort in reducing
requirements and paperwork involved for establishing new businesses. Excellent
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economic integration. However, since we are engaging to start a small scale company
export and import strategy will be most appropriate for us.
Quality Control
The term quality control has been around for a long time, and it is a major function of
production and operations management. It allows the company to improve its product
quality on regular basis and it also discusses the ways of improving the quality of work.
In our case BBQ tonight is monitoring its employees for how the services are given to
customers, how the meal has been prepared also suggestions card will be on the table for
the remarks and feedback about the meal and how can it be improved.
Internal Firm Organization
The current functions will stay the same, with only one addition. An International
Division (ID) will be set up. The ID will have its offices in Karachi, where the Head
Office is located and the UAE Office will report directly to the ID.
The UAE Office will comprise of our Pakistani employees and also local Emiratis. The
induction of local Emiratis will inject local know how into our operations. They will
bring in local expertise and will have the networking to liaise with authorities and local
suppliers and vendors.
Performance Measure
As the management is already strong there will going to be little improvement to monitor
the quality of meal at every stage to insure that the quality of the meal does not vary.
Food quality and food safety is our major concern; customers coming in our restaurant
will be assure that food given them is fresh and healthy. However, this table will give an
insight of our food safety.
Constructs Example of Issues
Safety Standards of hygiene in food manufacture
Safety of food additives
Availability of information on food safety
Health and Nutrition Reliability of nutrition claim
Nutrition quality of processed food products
Cost Price relative to peoples income
Relation between price and food quality
Taste Modern methods of food processing and the taste of
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food (Taste of food today compared to the past)
Emphasis of appearance of food over taste in food
marketing
Choice of food Availability of traditional foods
Personnel Strategies:Experience and expertise of existing PersonnelPersonnel working in Abu Dhabi and
Dubai restaurant will be imported from Karachi, because these personnel are experience
and have good expertise in making and serving the food.
Labor
In view of the fact of increasing the production will need more expert labors in order to
meet up the requirements of the foreign market.
Training needs of existing personnel
Training plays a vital role in all type of business. BBQ tonight will be training all of its
employees frequently to keep the quality standards of food and services on its best. The
reason the training is important is because they will learn the new ways of preparing
dishes, way of serving dishes, more appealing appearance of food, and also how to
communicate with its customers.
Hiring needs in the short term and long term
Hiring will be required according to the conditions; if restaurant is in need of more
employees or we have start working on larger scale only then new employees will be
hired and will be given training.
Market Decision:
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Transportation and Distribution
Initially, the areas where we will function are Dubai and Abu Dhabi. Being the two most
populous emirates and also housing the largest South Asian populations, these emirates
present the ideal opportunity for our business to launch itself.
Transportation for our specialized spices will be easily arranged and we will use our own
truck to transport them to our kitchen. We will purchase one truck to use for our transport
purposes. As demand for our product rises, we will consider purchasing another vehicle if
it remains feasible. Distribution of BBQ Tonight meals will take place through
motorcycle. Where the need arises for a large order, we may even use our transport vans.
Bikes are quicker and can navigate easily through the ever increasing traffic of the
burgeoning cities of Abu Dhabi and Dubai.
Controls
Controlling is the process of monitoring organization activities so that actual performance
conforms to expected organizational standards and goals. BBQ Tonight Monitor its
employees, resources using for input, defects found etc. Control is actually closely linked
with planning, organizing and leading which helps in adjusting our business performance.
Also it lets us to overcome our obstacles, problems and opportunities. Our company
focuses to achieve its goals and objectives in minimum time so that we can expand our
business and get more opportunities to rise in the industry.
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Determine
Areas to
Control
Establish
Standards
Compare
Performan
ce
Measure
Performan
ce
Standard
Met or
Exceeded
Standards
not met
Take
Correct
Action as
Recognize
Performan
ce
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There are also opportunities that controlling highlight in which things are going better
than expected for example better performance from our employees, suppliers and better
output etc.
BBQ Tonight monitor on all the areas and determine where controlling is required. There
are many areas to control in our business and it is expensive and impossible to control all
the aspects of our company. Measuring performance, establishing standards, taking
corrective action when necessary is a hard work thus we give closer look on those
controls which are very important in our company such as finding out performance of
employees and suppliers are they motivated, are they satisfied working with us keeping
them motivated and providing them incentives will allow us to keep our employees
performance maintains. In a similar way we have to control all of our marketing actions
like advertising, sales promotions etc. so that we could be the best in the food industry.
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Adjust Standards and
Measures as Necessary
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Financial Decisions:
Financing and credit arrangements
Initially, we will generate funds internally. Money will flow from our head office to the
ID to finance their activities. Since BBQ Tonight has never ventured outside of their
home operations in Karachi, excess funds have accumulated over time. These funds are
enough to initiate and sustain operations for the first year, after that, we will rely on
external financing. For this, we can liaise with a number of Pakistani banks operating in
the UAE, namely MCB, Habib Bank AG Zurich and Habib Bank Limited.
Islamic Banking
Modern banking system was introduced into the Muslim countries at a time when they
were politically and economically at a low, in the late 19th century. The main banks inthe home countries of the imperial powers established local branches in the capitals of the
subject countries and they catered mainly to the import export requirements of the foreign
businesses.
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The banks were generally confined to the capital cities and the local population remained
largely untouched by the banking system. The local trading community avoided the
foreign banks both for nationalistic as well as religious reasons. However, as time went
on it became difficult to engage in trade and other activities without making use of
commercial banks.
With the passage of time, however, and other socio-economic forces demanding more
involvement in national economic and financial activities, avoiding the interaction with
the banks became impossible. Local banks were established on the same lines as the
interest-based foreign banks for want of another system and they began to expand within
the country bringing the banking system to more local people.
Interest-free banking as an idea
Interest-free banking seems to be of very recent origin. They have recognised the need
for commercial banks and the evil of interest in that enterprise, and have proposed a
banking system based on the concept ofMudarabha - profit and loss sharing.
Current practices
Generally speaking, all interest-free banks agree on the basic principles. However,
individual banks differ in their application. These differences are due to several reasons
including the laws of the country, objectives of the different banks, individual banks
circumstances and experiences, the need to interact with other interest-based banks, etc.
Financing
There are four main areas where the Islamic banks find it difficult to finance under the
PLS scheme:
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a) Participating in long-term low-yield projects,
b) Financing the small businessman,
c) Granting non-participating loans to running businesses, and
d) Financing government borrowing. Let us examine them in turn.
CONCLUSION
BBQ Tonight has an open opportunity to serve out to the Abu Dhabi and Dubai Market
due to:
Strong growth in the restaurant sector
No restrictions on free trade
Consumer preferences geared towards restaurants.
Huge number of people who can actively become there targeted customers.
In order to export the product to the targeted market Company may need to
Manage its internal operations accordingly so as to carry on its export operations.
Adjust its marketing mix accordingly and concentrate mainly on its sales and
promotional activities as marketing a product in urban areas is not an easy job where
there is so much competition in the food industry.
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