Environmental Report
BUS370 CCM Group Assignment - By 1 March
Chicago 17th B
In text ( NO COMMA before the year, Full Stop before intext)
Reference for journals - input DOI
Group member:
1. Esther (Product, Price and Place)
2. Janice ( Intro, Social and Technological)
3. Lynette (Executive Summary, Promotion and Conclusion)
4. Tsu Hui (Economic, SWOT and Target Market)
5. Ka Yan (Environmental and Political)
1. Executive Summary 250 (Lynette)
2. Introduction 50 (Janice) // bg of company
// history of company
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.” (HOH 2021) , in order for him to come on board, and that was how Crave was born.
Reference
HOH, WONG. 2021. "The Story Behind The Famous Adam Road Nasi Lemak". The Straits Times. https://www.straitstimes.com/opinion/the-story-behind-the-famous-adam-road-nasi-lemak.
3. STEEP
https://www.hofstede-insights.com/country-comparison/singapore,the-united-arab-emirates/
3.1. Social 450 (Janice)
· Power distance index (score: 90, accept hierarchy order. Bring in the restaurant concept to UAE, Premium Crave.)
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) As for Singapore, power is centralized and managers rely on their bosses and on rules. Employees expect to be told what to do. Control is expected and attitude towards managers is formal. ("Country Comparison - 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.
In Dubai, we have decided to brand Crave according to the power distance index there. As they accept different a hierarchical order, 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 over-rides 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 you 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 implications 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. We will have to be very careful of not to offend them in any way.
References
"United Arab Emirates* - Hofstede Insights". 2021. Hofstede Insights. https://www.hofstede-insights.com/country/the-united-arab-emirates/.
"Country Comparison - Hofstede Insights". 2021. Hofstede Insights. https://www.hofstede-insights.com/country-comparison/singapore,the-united-arab-emirates/ .
Karibayeva, Buadat, and Salima S. Kunanbayeva. 2017. "Power Distance And Verbal Index In Kazakh Business Discourse". International Journal Of Applied Linguistics And English Literature 6 (2): 9. doi:10.7575/aiac.ijalel.v.6n.2p.9.
3.2. Technological 350 - QR code menu / Website/App etc (Janice)
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. ("How The UAE Has Been Leading In Digital Transformation | The Fintech Times" 2021) 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. ("How The UAE Has Been Leading In Digital Transformation | The Fintech Times" 2021)
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 field. 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 the surfing at 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. ("UAE Internet Statistics 2020 (Infographics)" 2021)
We have decided to come up with a Crave application for food delivery, payment and reservation where everyone can use. Anyone can order our Crave Nasi Lemak at the convenience of their homes and at the tips of their fingers, with just one click. Due to Dubai being a very technology advanced country, and based on statistics, most people uses smartphones and about 9.52 million people are internet users, we can reach out to a greater audience using our mobile application.
We have also decided to come up with artificial intelligence for better service for everyone and to keep up with the technology in Dubai. In our restaurants, we will have robot servers who will serve the customers, so as to not let the customer wait too long and to have a fresh experience in our restaurants. We also decided to use digital menus and they will be able to directly order from those menus, instead of waiting for a robot server to come and take their order. Everything will be smoother and faster this way, and customers will have a better experience in our restaurants.
However, the implications would be the applications or robot crashing, and this may be a hindrance for our business.
References
"How The UAE Has Been Leading In Digital Transformation | The Fintech Times". 2021. Thefintechtimes.Com. https://thefintechtimes.com/how-the-uae-has-been-leading-in-digital-transformation/ .
"UAE Internet Statistics 2020 (Infographics)". 2021. Official GMI Blog. https://www.globalmediainsight.com/blog/uae-internet-and-social-media-usage-statistics/#:~:text=A%20whopping%209.06%20million%20UAE%20citizens%20are%20active%20mobile%20internet%20users.&text=53.16%25%20of%20users%20connect%20to,and%20just%201.54%25%20use%20tablets.
3.3. Economical 450 (Tsu Hui)
· Gdp of the country, Currency used, exchange rate,inflation rate
· Price nasi lemak at premium rate
· Employment rate bring in job opportunity to the country
· Inflation rate -- https://www.statista.com/statistics/297779/uae-inflation-rate/
· https://www.aspirantsg.com/singapore-vs-dubai-comparison/
· Implications : Market crash, Bad economy
Crave Nasi Lemak has to consider some economic aspects before venturing this business into the new market. The GDP is the monetary value of all the finished goods and services made within a country during a given period. For instance, the GDP of the United Arab Emirates was 39179.88US dollars per capita.
Figure 1: GDP of UAE
The 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 value of the currency is falling and consequently showing the general level of prices of goods and services, the statistics show that the inflation rate was at 1.93 in 2019 decrease compared to that of 2018. The GDP increased to 3.07 for the year 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. It is one way or another that would affect Crave Nasi Lemak's operation in the market as the determinant affecting the company economy cannot be altered by the operation ("Singapore vs Dubai comparison," 2020).
Figure 2: Inflation rate
In comparison, Dubai is a potential market business for the company. It has more population making it the best market as the city also attracts luxury lifestyle. The Crave Nasi Lemak aims to provide its product to these individuals makes it a perfect spot for the business. The United Arab Emirates uses the dirham as its currency while Singapore uses Singapore Dollar. Dubai's income tax is the lower main reason why many individuals live in Dubai, leaving room for some funds for leisure money ("United Arab Emirates - Inflation Rate, 2021).
Comparing 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 on worries when we compare the county's rate of unemployment. 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
On comparing between Singapore and United Arab Emirates unemployment rate, it's evident that Singapore has a higher unemployment rate compared to the United Arab Emirates, as shown:
Figure 5: Unemployment Rate
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.
Reference
"United Arab Emirates - Inflation Rate 2021 | Statista." Statista. Accessed February 25, 2021. doi: https://www.statista.com/statistics/297779/uae-inflation-rate/.
"Singapore Vs Dubai Comparison - The World’s Most Eyed-upon Cities." AspirantSG - Food, Travel, Lifestyle & Social Media. Last modified October 21, 2020. https://www.aspirantsg.com/singapore-vs-dubai-comparison/.
"Social Media and Advertising." Social Media and Strategic Communications (n.d.). doi:10.1057/9781137287052.0008.
3.4. Environmental 200 (Ka Yan)
· Global warming → water level rise → affect reclaim land
Due to increase in human activities and contributing to carbon emission to the atmosphere, it worsen the condition of global warming. UAE being one of the highest carbon footprint in the world, the country is experiencing increase in temperature and extreme weathers (Alam et al. 2017). Besides climate change, global warming also poses other environmental challenges to the country. Since global warming causes issues such melting of glaciers and rising sea level. It will cause flooding issues and affect reclaim land. The UAE government has also attempted to make the country to be “green” by planting more trees and transforming desert areas into forest or plantation areas. In response to environmental challenges in UAE, the UAE government began to implement policies that help to control and minimise carbon emission and invest in renewable energy (U.AE 2020).
References for Environmental:
Alam, Hasnain, Jabar Zaman Khan Khattak, Shaijal Babu Thru Ppoyil, Shyam S. Kurup, and Taoufik Saleh Ksiksi. 2017. "Landscaping With Native Plants In The UAE: A Review". Emirates Journal Of Food And Agriculture, 729. doi:10.9755/ejfa.2017.v29.i10.319.
Salam, A. 2015. "Climate Change: The Challenges For Public Health And Environmental Effects In UAE". Sustainable Development And Planning VII. doi:10.2495/sdp150391.
U.AE. 2020. "The UAE's Response To Climate Change - The Official Portal Of The UAE Government". U.Ae. https://u.ae/en/information-and-services/environment-and-energy/climate-change/theuaesresponsetoclimatechange.
3.5. Political 500 (Ka Yan) Compared with SG policies → Corporate tax? Friendly for FDI?
· Obtain Food and Trade License
· Packaging/Labelling law
The difference in the law between SG and UAE → Threat
Overcome the threat by engaging with the local agency
https://www.export.gov/apex/article2?id=United-Arab-Emirates-labeling-marking-requirements
https://www.linkedin.com/pulse/how-start-foodstuff-trading-business-dubai-uae-anu-sharma/
https://www.commitbiz.com/set-up-an-food-and-beverage-business-in-dubai-uae
https://www.dm.gov.ae/municipality-business/food-safety-department-2/food-safety-department/
https://dubaided.gov.ae/Default/en
https://www.lexology.com/library/detail.aspx?g=ef6fe1c9-2762-49ee-8d50-e0bc7ec4ea80
Singapore is one of the countries with the most inflows for foreign direct investment (FDI) in Asia (Nyen Wong and Cheong Tang 2011). It is friendly for FDI as it is well known for being politically stable and having strong macroeconomic policies that make it attractive to foreign direct investment (Eudelle and Shrestha 2017). UAE is also one of the most politically stable countries in the middle east region. The UAE government has put much effort into improving their cities' infrastructure, especially Dubai, and refining their foreign investment and tax policies, catering to FDI and attracting more foreign investments.
In order to set up a restaurant in Singapore, companies need to apply for a food retail license from Singapore food agency. On the other hand, there are other types of relevant certifications such as hala certifications, food safety and food hygiene certifications also need to be obtained (Singapore Food Agency 2021). As compared to Singapore, food and trade licenses are required to start a food and beverages business in UAE as well.
In Singapore, some pre-packed food is required to follow the labelling requirement for food safety standards (Singapore Food Agency 2021).
As per UAE’s labelling law, since Arabic is the first language in UAE, all labeling or signage has to be in Arabic only, or in both Arabic and English (International Trade Administration 2020).
While UAE is not as friendly towards FDI, although they are easing the FDI policy to attract more investors, with the licenses requirement for F&B business, Crave will face some challenges in entering the UAE market, specifically in Dubai. Furthermore the brand name and menu for Crave is in English and it needs to be translated into Arabic (International Trade Administration 2020).
Due to the differences in law and regulations between Singapore and UAE, such as tax policies, food business licenses and requirements, Crave may engage and consult the local agencies to overcome the challenges by following their advice and plans in setting up food business in Dubai.
References for Political:
Eudelle, Philipp, and Ashin Shrestha. 2017. "Foreign Direct Investment And Economic Growth: The Cases Of Singapore And Oman". Global Policy 8 (3): 402-405. doi:10.1111/1758-5899.12482.
International Trade Administration. 2020. "United Arab Emirates - Labeling/Marking Requirements". International Trade Administration. https://www.trade.gov/knowledge-product/united-arab-emirates-labelingmarking-requirements .
Nyen Wong, Koi, and Tuck Cheong Tang. 2011. "Foreign Direct Investment And Employment In Manufacturing And Services Sectors". Journal Of Economic Studies 38 (3): 313-330. doi:10.1108/01443581111152427.
Singapore Food Agency. 2021. "Food Retail Licences". Singapore Food Agency. https://www.sfa.gov.sg/food-retail/licensing-permits/food-retail-licences .
Singapore Food Agency. 2021. "Labelling Guidelines For Food Importers & Manufacturers". Singapore Food Agency. https://www.sfa.gov.sg/food-information/labelling-packaging-information/labelling-guidelines-for-food-importers-manufacturers .
4. SWOT 4.1 SWOT 300 (Tsu Hui)
Strength --
1) Ethnic diversity, people there can experience what Singapore culture is like
2) Digitalisation (First Artificial Intelligence Nasi lemak restaurant, to improve service and keep up with the tech)
3) Power distance index: Trusted brand (Award winning, most preferred nasi lemak in singapore)
4) Premium service (like haidilao) 5) plant-based meat menu - appeal to vegetarian also
Weakness --
1) Intense competition, because there are a lot of nasi lemak stalls in dubai
2) Many red tapes in terms of the politics
Opportunity --
1) Dubai is a halal known country, so crave will have an advantage in it (social)
2) Dubai is just a city in a big country, we can use this to venture out to the whole UAE (economical) - Higher spending power
Threat --
1) Political and law
4.2 Target Market 50 (Tsu Hui)
· ATAS people
· High income people
SWOT Analysis
Strength
On analyzing the SWOT analysis, it's evident that the company has some strengths that help it in striving in the market. For instance, there is ethnic diversity as people are open to different cultures and can adapt to the changes, such as the Singapore culture. Crave Nasi Lemak also has embraced digitalization as it's the first restaurant to embrace artificial intelligence. It has helped it improve the service and keep up with the technology making its operation competitive. The organization at large is also a trusted brand. It has won several awards, making it known to the individual, and the fact that it's preferred even in Singapore gives it a competitive advantage. It also offers premium services to its customers and ensures that they attain customer satisfaction at all costs ("Social Media and Advertising.", n.d).
Weakness
However, some weaknesses Crave Nasi Lemak would find in the market. For instance, there is intense competition in the market as we have many nasi lemak stalls in Dubai, which would pose a significant rival to the restaurant. There are also many red tapes in terms of the politics as the political factors manage Dubai business, and Crave Nasi Lemak would have to adhere to all the different policies for it to survive in this market ("SWOT Analysis.", n.d).
Opportunity
Some opportunities Crave Nasi Lemak would enjoy in the market. For instance, Dubai is a known halal country which gives Crave a social advantage to operate in this business. Also, since Dubai is just a city in the big country, we may incorporate this information to venture to the entire UAE to understand their market well if the restaurant wants to expand in the future ("SWOT Analysis," n.d).
Threats
However, the restaurant would also face some threats in its market. For instance, 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).
"SWOT Analysis." Encyclopedia of Finance (n.d.), 267-267. doi:10.1007/0-387-26336-5_2002.
Quesenberry, K. A. (2016). Social Media Strategy: Marketing and Advertising in the Consumer Revolution. Lanham, MD: Rowman & Littlefield." Asian Communication Research 15, no. 2 (2018), 174-176. doi:10.20879/acr.2018.15.2.174
5. 4 Ps
5.1 Product 300 (Esther) - Need at least one journal
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, 'Crave' will translate its brand name to Arabic typography due to the country's desire to preserve the Bedouins' Arabic Islamic values. Brand name, use ARABIC language (Link to social) - Standardisation, don't want to lose brand identity
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. Brand logo, remain the same but add some arabic words to customise to dubai’s market (Adaptation). Organic products will be used (Link to social) - Adaptation, higher quality food for high class target market
'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. Labelling (Political) - Labelling law: Labels must be in Arabic only or Arabic/English. Arabic stickers are accepted. - Adaptation, opening in Dubai
1) Packaging (Social) Adaptation: High-class or masculine - gold wording logo → power distance index high
5.2 Price 200 (Esther) - Need at least one journal
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. Competitive pricing ( Link to social - PDI is high and economic - GDP high )
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. Even pricing because higher net worth people won't mind - Even pricing refers to a price ending in a whole number or in tenths (e.g., $0.50, $6.10, $55.00). The idea is that a price ends in .99 soounds cheaper in the mind of the customer than those ending in .00.
5.3 Place 200 (Esther) - Need at least one journal
Use ADAPTATION to explain the following:
1) 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. - Exclusive distribution
5.4 Promotion 300 (Lynette) - Need at least one journal (Link to political and technological)
1) Use non traditional media
2) Political - No obscene scenes and alcohol // Need permit for social media influencers
3) Technological - Use social media and online advertising.
4) Using AI-powered to run the restaurant. Will be the first ‘smart’ nasi-lemak restaurant in Dubai. - new input Comment by Lynette Chai: Journal Article in AI (F&B Category)
6. Conclusion 50 (Lynette)
7. Reference
"United Arab Emirates* - Hofstede Insights". 2021. Hofstede Insights. https://www.hofstede-insights.com/country/the-united-arab-emirates/.
"Country Comparison - Hofstede Insights". 2021. Hofstede Insights. https://www.hofstede-insights.com/country-comparison/singapore,the-united-arab-emirates/ .
Karibayeva, Buadat, and Salima S. Kunanbayeva. 2017. "Power Distance And Verbal Index In Kazakh Business Discourse". International Journal Of Applied Linguistics And English Literature 6 (2): 9. doi:10.7575/aiac.ijalel.v.6n.2p.9.
"How The UAE Has Been Leading In Digital Transformation | The Fintech Times". 2021. Thefintechtimes.Com. https://thefintechtimes.com/how-the-uae-has-been-leading-in-digital-transformation/ .
"UAE Internet Statistics 2020 (Infographics)". 2021. Official GMI Blog. https://www.globalmediainsight.com/blog/uae-internet-and-social-media-usage-statistics/#:~:text=A%20whopping%209.06%20million%20UAE%20citizens%20are%20active%20mobile%20internet%20users.&text=53.16%25%20of%20users%20connect%20to,and%20just%201.54%25%20use%20tablets.
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