Environmental Report
BUS370 CCM Group Assignment
Chicago 17th B
In text (NO COMMA before the year, Full Stop after intext)
Reference for journals - input DOI 1. Executive Summary Crave is a Singaporean food and beverage brand which specialises in servicing authentic Nasi Lemak, a fragrant coconut rice dish with accompanying condiments such as fried chicken or spicy fish paste.
It was also discovered that the UAE is highly advanced in technology especially when it comes to mobile applications. Furthermore the economics of the country was considered to be strong but political as well as custom aspects are noted to be of great importance and critical for success.
Following which a Strength Weaknesses Opportunity and Threats analysis was conducted to better understand where Crave can find a niche within the UAE market and adapt to a new geological environment.
Lastly the 4Ps including Product, Price, Place and Promotion was discussed to recommend the best approach for success including specific product themes to follow, the right location for Crave, how to better tailor pricing to be attractive with locals and promotions to best capture attention.
2. Introduction 50
Crave started in the humble place of Adam Road Nasi Lemak, and it was already popular at that time. Crave was founded by Abdul Malik Hassan, who’s childhood dream was to be an aspiring pilot. However, to fulfill his father’s dream, he gave the thought up. His father told him that he wanted his whole family to run the business together, however, his little brother told him "I want you to expand so that the whole of Singapore knows about Selera Rasa.” (Wong 2015), in order for him to come on board, and that was how Crave was born.
3. STEEP
https://www.hofstede-insights.com/country-comparison/singapore,the-united-arab-emirates/
3.1. Social
Power distance measures a degree to which less powerful members of organizations can accept uneven distribution of power (Karibayeva and Kunanbayeva 2017).
The United Arab Emirates scores high on this dimension (score of 90) which means that people accept a hierarchical order in which everybody has a place and which needs no further justification ("United Arab Emirates* - Hofstede Insights" 2021). Singapore has a Power Distance Index score of 74 and in order to allow Crave to be branded as a higher class brand, bringing it to Dubai will enable that to happen as the Power Distance Index is higher there ("Country Comparison - Hofstede Insights" 2021). Both the countries communicated with different languages as well. In Dubai, their first language is Arabic, while in Singapore, their first language is english. Therefore, the packaging that was decided to use would contain Arabic words.
In Dubai, it was decided to brand Crave according to the power distance index there. As they accept different hierarchical orders, we decided to brand Crave as “Premium Crave”, where the packaging and style of the restaurant will be targeted at higher net worth individuals.
Collectivism
The United Arab Emirates, with a score of 25 is considered a collectivistic society. This is manifest in a close long-term commitment to the member ‘group’, be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount, and overrides most other societal rules and regulations. The society fosters strong relationships where everyone takes responsibility for fellow members of their group. In collectivist societies offence leads to shame and loss of face, employer/employee relationships are perceived in moral terms (like a family link), hiring and promotion decisions take account of the employee’s in-group, management is the management of groups ("United Arab Emirates* - Hofstede Insights" 2021).
Masculinity
A high score (Masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner/best in field – a value system that starts in school and continues throughout organisational life. A low score (Feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A Feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (Masculine) or liking what they do (Feminine). Arab Emirates scores 50 on this dimension and can be considered to be neither Masculine or Feminine ("United Arab Emirates* - Hofstede Insights" 2021).
Uncertainty avoidance index = 80, high (dubai)
Arab Emirates scores 80 on this dimension and thus has a high preference for avoiding uncertainty. Countries exhibiting high Uncertainty Avoidance maintain rigid codes of belief and behaviour and are intolerant of unorthodox behaviour and ideas. In these cultures there is an emotional need for rules (even if the rules never seem to work) time is money, people have an inner urge to be busy and work hard, precision and punctuality are the norm, innovation may be resisted, security is an important element in individual motivation ("United Arab Emirates* - Hofstede Insights" 2021).
As for long term orientation, there is currently no score available for the United Arab Emirates on this dimension.
However, the threat of opening Crave in Dubai is taking ramadan into consideration. There will be a lot of restrictions to follow and it is a very sensitive festival, you will have to be very careful not to offend them in any way. However, the opportunity would be making it more personalised for them during ramadan by coming up with festive dishes.
3.2. Technological
https://www.themedialab.me/uae-digital-media-statistics-2019/
Dubai has been leading in digital transformation Gulf Cooperation Council (GCC) members like the United Arab Emirates (UAE) are undergoing economic diversification transformations. A huge component of that is digital transformation across many aspects of daily life (Santosdiaz 2020). In terms of digital competitiveness, the UAE is ranked first in the Arab region (12th globally). This is according to IMD’s World Digital Competitiveness Ranking 2019 report. The same report ranks the UAE ranked 2nd in the technology factor, 9th in the future readiness factor and 35th in the knowledge factor (Santosdiaz 2020).
A whopping 9.06 million UAE citizens are active mobile internet users. Therefore, any new and innovative apps looking to enter this market will have a large user base to target. The last few years have seen an increased focus on the digital service sector. This field is ripe with opportunities in both hardware as well as software fields. The increased innovation in the hardware field has led to the rise of super speedy internet connections giving a real boost to social media usage. Besides surfing on a desktop or tablets, people prefer to be active at social media platforms regardless of time and this reflects the trend of increasing usage of smartphones in UAE. This massive upswing in mobile internet usage can be attributed to the availability of advanced internet facilities like 4G at lower price plans. 53.16% of users connect to the internet using smartphones, 45.30% use computers and just 1.54% use tablets (GMI Blogger 2020).
However, the threat would be the applications or robot crashing, and the opportunity would be efficiency using social media and technology.
3.3. Economical
Figure 1: GDP of UAE
Statistics show that the UAE's GDP was high in 2019 and dropped in the financial year 2020, which recorded 31947.92, but this value increased to 32686.18 in the current financial year 2021, which is a positive change compared to the previous year.
Comparing the inflation rate, which is the rate at which the currency's value is falling and consequently showing the general level of goods and services, the statistics show that the inflation rate was at 1.93 in 2019 decrease 2018. The GDP increased to 3.07 for 2021, which is a positive increase compared to previous years. The reduction in the economic impact of the United Arab Emirates is majorly dependent on the country's oil prices. When the oil prices decrease, the country's GDP increases, and when the prices fall, the GDP falls. In one way or another would affect Crave Nasi Lemak's operation in the market as the determinant affecting the company economy cannot be altered by the procedure ("Singapore VS Dubai comparison" 2020).
Figure 2: Inflation rate
In comparison, Dubai offers the best market for the company due to its market base. The United Arab Emirates uses the dirham as their currency while Singapore uses the Singapore Dollar, and the income tax of Dubai is lower ("United Arab Emirates - Inflation Rate, 2021).
Compared to the exchange rate between the Singapore Dollar and the United Arab Emirates Dirham, it is evident that an SGD is stronger than the AED as 1SGD=2.78702 AED.
Figure 3: Exchange Rate
On the other hand, the employment rate is still worrying when comparing the county's unemployment rate. The unemployment rate of the United Arab Emirates increased to 2,64% in 2019 from 2.57% in the 2018 financial year.
Figure 4: Employment Rate in UAE
Implication
For this analysis, it's evident that Crave Nasi Lemak needs to employ some strategies. The restaurant would be profitable since there is a ready market. Dubai has more population, which is an opportunity. However, the high inflation rate would affect the operation calling for direct exportation of the products. High dollar value is also an opportunity for the business.
3.4. Environmental
Environmental
UAE is one of the countries in the middle east region that suffers from environmental issues such as sandstorms, due to its hot and dry climate. The heavy sandstorms will affect people’s daily life due to the low visibility of the country. The level of visibility of the country is largely influenced by the dust particles of the sand storms (Nazzal et al. 2019). With low visibility levels, it is dangerous for people to drive on the road.
Furthermore, it definitely affects the air quality of the country. With bad air quality, it poses threat to people’s health and may cause harmful impact for those who suffer from respiratory illness (Karagulian et al. 2019). Therefore, it is advisable for people to stay indoors. Since outdoor activities are minimised, it affects the country’s tourism and it discourages tourists from visiting UAE. With such climatic conditions, this may be a threat to Crave as it will affect food businesses since people may stay indoor instead of going out for their meal.
3.5. Political
Political
The UAE is also one of the most politically stable countries in the middle east region. In order to maintain its political and economic power and influence in the region, the UAE government has put much effort into improving their cities' infrastructure, especially Dubai, and refining their foreign investment and tax policies that caters to FDI and attracting more foreign investments.
Besides understanding the new market's political situation, it is also essential to understand the law and regulations of the country before setting up businesses over there. While food businesses are required to obtain food licenses and other types of relevant certifications such as halal certifications, food safety and food hygiene certifications in Singapore (Singapore Food Agency 2021), it is similar for the UAE. Different types of food and trade licenses are required for food retail business operation. Since Crave is setting up a food business in the UAE, Crave needs to ensure the food safety standards are met, as per requirements by the UAE government (Government of Dubai 2021).
On the other hand, there are labelling laws for food businesses to follow in Singapore, such as pre-packed food need to label the ingredients and its nutritional claims, as to comply with the food safety standards (Singapore Food Agency 2021). In comparison, there are labelling laws in UAE that companies have to comply to as well. As per UAE’s labelling law, since Arabic is the first language in UAE, all labelling or signage has to be in Arabic only, or both Arabic and English (International Trade Administration 2020). Hence, Crave has to follow the labelling requirements as well as long as we have any packaged food for customers to take-away.
Although the UAE is easing the FDI policy to attract more investors, they have rather limited political freedom as compared to Singapore. Relevant certificates and licenses have to be obtained before setting up food retail business in Dubai. With all the licenses required for food and beverages business, Crave will face some challenges in entering the UAE market, specifically in Dubai. On the other hand, the brand name and menu for Crave is in English and it needs to be translated into Arabic (International Trade Administration 2020) as it is their national language and this is one of the labelling requirements.
Implication Due to the differences in law and regulations between Singapore and UAE, such as tax policies, food business licenses and requirements, this might be a threat for Crave. To overcome these challenges, Crave may engage and consult the local agencies regarding all the law and regulations, and to follow their advice and plans in setting up food business in Dubai.
4. SWOT
SWOT Analysis
|
Strengths |
Ethnic diversity • There is ethnic diversity as people are open to a different culture. Technology • The restaurant has also embraced digitalization as it's the first restaurant to embrace artificial intelligence. • The use of technology makes their services competitive. Services and brand • The organization is also a trusted brand as it has won several awards, making it known to the individual. • It also offers premium services to its customers and ensures that they attain customer satisfaction at all costs. Crave Nasi products • There is a plant-based meat menu that is preferred for vegetarians. |
|
Weaknesses |
Market • There is intense competition in the market as we have a lot of nasi lemak stalls in Dubai. Political aspects • There are also many red tapes in terms of politics as the political factors manage Dubai's business • Crave Nasi Lemak would have to adhere to all the different policies to survive in this market (COM et al., 2015). |
|
Opportunities |
Social aspects • Dubai is a known halal country which gives Crave a social advantage to operate in this business. Economic aspects • Dubai is just a city in the big country, and we may incorporate this information to venture to the entire UAE (COM et al., 2015). |
|
Threats |
Political and law • However, the restaurant would also face some threats in its market. • It would have to adhere to the political and the law of the European Arab Emirates. |
Target market
The restaurant aims to serve the Atas people and the high-income people as the restaurant goods are associated with class and leisure. It would be more profitable to the business. The age range is around 14-45 years, as this is the range of people who may want to be associated with its products (Quesenberry 2016).
5. 4 Ps
5.1 Product
When dealing in a foreign country, it is vital to know the market's subculture and 'Crave' must ensure the message and product are positioned to resonate with the host country consumer. The company's decision-making process will be based on the Hofstede cultural dimension, and they will tailor the product to communicate with the specific culture and market's demands.
The studying of Dubai’s social-cultural context i.e. collectivism, highly recognized that Dubai has rigid beliefs and regulation. Therefore, it is recommendable 'Crave' will translate its brand name to Arabic typography due to the country's desire to preserve the Bedouins' Arabic Islamic values.
Not to mention, the way consumers act and interact with the product indicates the power hierarchy cultures in Dubai. Since Crave Premium targets the upper-class society, the product viewed and used must be different from normalcy. Through this, Crave will emboss gold typeface on the logo to adapt its intended recipient as gold colour generally symbolizes wealth and power. The brand will also use premium ingredients to cater for its intended audience.
'Crave' also has to adapt to Dubai packaging and labelling law. The country has mandated all food and beverages companies to translate labelling and signage to their national language or English (International Trade Administration 2020). Only then the brand can operate in Dubai.
5.2 Price
Product pricing is one of the sticky problems for a business to overcome. By considering key factors like market research, competitive analysis, and revenue cost, a company can rightly price the product and create a business foundation (The Economic Times 2016).
As 'Crave' devotes itself to illuminate luxurious gastronomy together with innovative technology. The brand will adapt to a competitive-based strategy to price and distribute its product effectively. Doing so offers a better and upsells price point with exclusive and valuable features that remain competitive to the current market.
Dubai is a country with a high GDP and high power distance index. The consumer is willing to pay a steep price to differentiate itself from the lower-to-middle income and power hierarchy. For 'Crave' to be seen more like an upscale restaurant with top-notch services, they will position the cost goods with even pricing. Odd pricing is usually perceived as a bargain, and this concept is not what the brand has liked to portray to its high net worth audience.
5.3 Place
Direct channel
Distribution strategy helps a business disseminate the product to the consumer via various logistic support. By crafting the right distribution strategy, increases the business revenue and retains customer loyalty (Will Kenton 2020).
Dubai is one of the most advanced digital economies globally. To tap on its advancement, 'Crave' will be the first-mover that uses premium ingredients together with AI-powered function. The brand will also adapt and explore an exclusive distribution as this functionality allows the consumer to experience elaborate dining courses without compromising the quality and services.
5.4 Promotion
To highlight Crave’s entry to the Dubai market as a premium dining destination, a strong integrated marketing campaign is important to obtain the awe of the general public. As Dubai can be considered a young nation coupled with rapid increase in social media usage (Radcliffe and Lam 2018). We will tap on their existing 9.73 million active internet users ("UAE Internet Statistics 2020 (Infographics)" 2021) through non-traditional media such as viral marketing on social media platforms.
Firstly, a teaser campaign will be launched using targeted social media influencers as brand ambassadors in an attempt to turn viral. It is of high importance that selected influencers are politically correct which is tailored to the local consumers' way of life and religion. Consumption of Alcohol, drugs and offensive messages will be prohibited in UAE campaigns (Randeree 2019). The teaser campaign will include stunts such as giving away paperweights shaped like rice grains or chicken wings wrapped in 24k carat gold. Another campaign will include the hunt for “golden tickets” to attend a star studded launch of the first Crave store in UAE.
A star studded launch with top influencers will be organised along with the introduction of Crave’s UAE signature dish, the rice platter topped with gold foil on fried chicken. To further identify Crave as a premium dining destination, exclusive extravagant toppings will be introduced like Japanese Snow Crab legs, Whole Lobster Tails and Sea Urchin wrapped in gold foil.
Furthermore, the japanese concept of a chef preparing sushi by the bar will be replicated by AI robots to provide a sense of handcrafted origins. AI robots will assemble these extravagant rice dishes and may even perform tricks such as attempting to feed customers through facial recognition with spoons full of rice, in a bid to attract the attention of diners and hopefully trend on social media feeds.
Lastly a media campaign highlighting the AI aspect of Crave’s application will be launched. Advertisements showing our Robot servers in action will be displayed both online and in traditional media while our application will have chances for increased customer participation in the food preparation, such as virtual cooking challenges while waiting or even printing out unique personalized packaging with the user’s name, creating buzz and social media opportunities. One successful example is the ‘Share a Coke’ campaign where consumers share their personal experience on social media with a specific hashtag by giving consumers the free rein to create their own content and stories (Vincent and Kolade 2019).
These will be something different from casual dining restaurants and will set Crave apart as a premium dining destination for a night to remember.
6. Conclusion 50 (Lynette)
In conclusion, Crave can expand in the UAE through foreign direct investment (FDI) due the ability in adapting their product of Nasi Lemak as a premium F&B offering with average cost to dinner of above US$30, much like gourmet popcorn around the world.
With FDI, Crave has full control over their product and distribution allowing for this stark transformation. This aggressive position is further aided by using AI to transform Crave’s dining experience thus differentiating itself and using non traditional media to attract the desired target audience of one with high disposable income.
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