Strategic Marketing And International Marketing For Burj Analysis Essay Example

sect. The population is diverse, with only about a quarter being Emiratis. Russian, Iranian, and Filipino traditions also contribute to the overall atmosphere. While Arabic is the official language, English serves as the language of business. Urdu Farsi and Malay are also useful languages in Dubai.

Traditional attire plays a significant role in Dubai's culture due to high temperatures. Men typically wear long white robes while women often choose black abayas along with thin face veils.Dubai is well-known for the courtesy, kindness, friendliness, and hospitality of its people, both socially and in business matters. The city places great emphasis on respecting local customs, particularly religious practices due to its Islamic identity. Additionally, Dubai is renowned for hosting prestigious events such as the Dubbed Cup horse race and championship golf courses.

The hotel industry must recognize and embrace cultural differences in order to succeed in this dynamic market. This is exemplified by Dubai itself, where 80% of the population consists of foreigners who have invested in businesses or secured employment in the city. One prime example of cultural diversity can be found at Burj Al Arab hotel, which employs over 1100 staff members from 50 different nationalities. Each employee brings their own unique culture and values.

With diverse guest groups, product suppliers, and employees comes a variety of norms and practices that managers must navigate. It is crucial for them to treat everyone with equal respect while also understanding and appreciating different cultural customs.

Furthermore, the economic landscape of Dubai significantly impacts the development and risks faced by Burj Al Arab - Arabian Tower.Dubai is well-known for its open economy, high per capita income, and substantial annual trade surplus.

The city heavily depends on oil and gas production, which makes up about 33% of its GDP. While economic prosperity in Dubai fluctuates based on commodity prices, current production levels suggest that the reserves of oil and gas will last for over a century.

In order to support further growth and progress, the government has increased spending on job creation and infrastructure expansion. There is also an effort to involve the private sector more extensively in utility services. Dubai's appealing commercial and investment climate has made it a significant destination for international trade, positively impacting its economic and commercial activities.

The estimated real growth rate of Dubai's Gross Domestic Product (GDP) is high due to sectors such as trade, services, tourism, and manufacturing. The GDP purchasing power parity stands at approximately $51 billion with a per capita income of $21,100 (2001 EST.). In terms of sector composition within the GDP, agriculture comprises 3%, industry comprises 46%, while services comprise 51% (2001 EST.).

As for the labor force in Dubai, it consists of around 1.6 million people. The services sector employs 78% of this labor force while industry employs 15%, followed by agriculture employing 7% (2000 EST.) (source: Nonresistant.Com).The services sector plays a crucial role in Dubai's economy, with the continuous growth of GDP and the emphasis on stimulating non-oil industries like tourism and hospitality. This is evident in the success of iconic hotels such as Burj Al Arab. Factors that influence consumer purchasing power and spending habits also impact this economic environment. Therefore, Burj Al Arab's success relies on its customers' purchasing power and consumer classification (Kettle et al., 1996).

Dubai, where Burj Al Arab is located, is the

second largest emirate in the United Arab Emirates (AAU) and situated on the southeastern part of the Arabian Peninsula. According to www.Transporters.Gob.UK, it has a land area of 3,900 sq.M and an approximate population of 700,000. It should be noted that all citizens in Dubai are Muslims, with around 85 percent following Sunni Islam and approximately 15 percent practicing Shia Islam according to www.Pleasantest.Com. Only Sunni Muslims are eligible for naturalization.

Foreigners make up about 80 percent of Dubai's population, mainly from South and Southeast Asia. Additionally, professionals from countries in Europe, North America, and Middle East also reside there. The population density is about 24 inhabitants per sq km with an estimated annual growth rate of 3.5%. Economic activities within Dubai are regulated by both individual emirates and the Federal Government.However, authorities in Dubbed have consciously aimed to create a well-organized environment without excessive restrictions. Consequently, international companies have numerous options available to establish business relationships with Dubbed. Having an on-the-spot presence is advantageous for researching market prospects, making contacts, leasing with customers, and managing transactions and orders. This has led to a strong demand from two largest market groups - Business and Tourist travelers - for Burj Al Arab lodging industry. Burj Al Arab targets both types of travelers, as well as families and tourists, which have the potential to generate significant revenue. The high prices for limited services at Burj Al Arab attract top-tier segments with middle to higher incomes.

Dubai's economic development has led to rapid social changes, including improvements in transport facilities, schools, hospitals, tourism developments, and other advanced society amenities.Despite its cosmopolitan features, Dubai maintains its ancient ways while attracting international

businesses looking to expand their markets.Dubai's market continues to grow steadily despite having a smaller population compared to other Middle East countries.Social factors such as reference groups,family influence,social rules,and status significantly impact customer buying behavior in Dubai.The local communities in Dubai are accepting of cultural differences and tourist behaviorDubai is renowned for its safety and comfort, making it a popular destination for tourists. It also provides an advantageous business environment for hotels. Various hotels in Dubai, such as Burj Al Arab Hotel, Lee Meridian Mina Essays Resort, Hyatt Regency Dubai, and Sheraton Jumeirah Beach Resort and Towers, showcase the positive impact of social and behavioral aspects. This not only attracts more visitors but also intensifies competition among hotels.

Companies like Burj Al Arab Hotel must adhere to specific social rules imposed by Islamic law. These regulations include restrictions on alcohol and pork sales as well as guidelines for prayer practices. Additionally, the government of Dubai plays a crucial role in influencing businesses through political and legal factors. They establish laws and regulations governing business operations that require obtaining licenses from the ministry of economy and commerce. This ensures a more favorable business environment while avoiding inappropriate competition or entry from other entities.

As a prominent hotel destination, Burj Al Arab Hotel faces inevitable competition. The existing policies and regulations encourage domestic hotel owners to enhance their establishments and gain dominance in the market. Effective implementation of these regulations would create a business environment that is easier for the government to control and for investors to manage.Despite potential challenges such as the exemption of personal income tax, the hospitality industry has faced difficulties including increased operating costs due

to employee turnover. To adapt, hotels have considered modifying their policies, employee treatment, and organizational culture. These challenges have been worsened by political and economic tensions and terrorist attacks. However, Dubbed has managed to remain unaffected amidst Middle East turmoil since 1971. Although a war with Iraq could negatively impact tourism development in Dubbed, the hospitality industry has experienced significant growth in availability and quality despite regional political tensions. Experts predict continued expansion based on developing trends. From 1993 to 2001, Dubbed's hotel industry saw an average annual growth rate of 6.1% with total revenues increasing by an average of 9.2% per year (wry.Hotelier- Malta.Com). By the end of 2001, Dubbed accounted for 69.5% of I-JAKE Do's total revenue from hotels and had 72.5% of the total hotel count. Among these hotels, 71% were classified as 5-star or higher while respectively below-2-star classifications made up percentages of 65%, 53%, and47%.According to Fred (1995), using the Grand Strategy Matrix can help determine appropriate strategies for success by analyzing a corporation's competitive position and market growth. The Burj AL Arab hotel in Dubai has achieved significant growth and competitiveness due to high occupancy rates and industry expansion. Porter's Competitive Strategy and Competitive Tactics will be used to further analyze its competitive advantage. The hotel is located in Quadrant 1 of the matrix, indicating a focus on current markets and product development as suitable strategies. Quadrant 2 represents rapid market growth with opportunities for market penetration, product development, and different integration strategies. In contrast, Quadrant 3 offers choices such as retrenchment, concentric diversification, and divestiture due to weak competitive positioning. Lastly, Quadrant 4 showcases strong competitive positioning with

possibilities for concentric diversification, conglomerate diversification, joint ventures,and liquidation. Dubai attracts visitors through top-class leisure activities,sports events,and shopping festivals. The shift from business to leisure reasons for visiting Dubai is primarily driven by the luxurious hotel services and facilities offered there.Dubai is renowned globally as a prestigious sporting venue hosting various events such as Horse Races, International Power Boat Racing, Pedigree Camel Races, Dubai World Cup, and Dubai Tennis Championships. Additionally, the well-known Dubai shopping festival is widely recognized as the largest festival featuring shopping experiences, world-class entertainment, daily raffles, and arts exhibitions.

The Porter's 5 Forces framework developed by Michael Porter analyzes the industry influenced by five forces: threat of new entrants, bargaining power of suppliers, rivalry among existing competitors, bargaining power of buyers, and threat of substitute products and services (see Figure 3). This model provides firms with a deep understanding of the industry context to achieve higher profit margins while remaining competitive.

Grant (1998) suggests examining factors such as low product demand, low switching cost, and exit barriers when considering the rivalry among existing firms. With its state-of-the-art infrastructure and excellent business environment Dubbed serves as a leading regional commercial hub. It is an ideal location for businesses due to its strategic attributes offering investors a comprehensive and unique value-added platform. The city has successfully attracted foreign investments resulting in construction of numerous hotels. Ongoing development is being carried out to meet high demand from foreign customers in support of Dubbed's economic growth.Among the various hotels, Burj Al Arab is distinguished by its strong brand reputation among both local and international travelers. However, it faces competition from other establishments like Lee Meridian Mina Seyahi

Hotel, Hyatt Regency Dubbed, Sheraton Jumeirah Beach Hotel, and others. To maintain its brand equity in the market, Burj Al Arab must provide superior service and facilities compared to its competitors (Johnson et al., 1999).

Several factors determine the power of entry for new entrants in the hotel industry according to Johnson et al. (1999). These factors include existing brand loyalty, high fixed costs, switching costs for consumers, and government restrictions. Additionally, potential new entrants pose a threat to Burj Al Arab's customer base. Failing to meet their expectations may result in customers switching to other hotels.

Burj Al Arab sets high customer expectations and failure to meet them can lead to disappointment. One advantage that distinguishes Burj Al Arab is its unique product that is difficult for other establishments to replicate. Its distinctive nature makes it a top choice for guests seeking luxury and thrills in Dubbed.

When compared to other new hotels, Burj Al Arab stands out with cost advantages such as lower hiring, recruiting, and operating costs. It also enjoys strong brand recognition among high-end travelers.

The bargaining power of buyers plays a significant role in the hotel industry (Johnson et al., 1999).Buyer power is influential in a monophonic market with multiple suppliers and one buyer. According to Fred (1995), three factors should be considered when assessing buyer power for Burj Al Arab: price sensitivity, product differentiation, and brand identity. The hotel may adjust its prices based on seasonal changes to attract customers who closely consider pricing. Although the hotel has minimal product differentiation with only suite rooms, this helps reduce competition. However, Burj Al Arab does not have the same level of brand recognition as

other hotels like Sheraton, Hyatt or the Lee Meridian chain. Nevertheless, the hotel aims to attract high-profile customers who are willing to pay a premium price for unique experiences and superior services. This strategy enables them to maintain consistently high occupancy rates throughout the year. Suppliers hold significant bargaining power as they provide essential resources for production in business transactions. The hotel may face pressure from suppliers under certain circumstances such as having few dominant suppliers, no available substitutes, costly product switching or when the product holds great importance for the hotel.To reduce the power of suppliers, Burj Al Arab can engage in negotiations with travel agencies or large supermarket chains to purchase products in bulk and also internally produce some goods. The fact that the hotel is owned by the sheik prime minister of AAA provides advantages for establishing better relationships with Dubai suppliers due to political factors and economic benefits. All companies within an industry face competition from substitute product industries, which puts pressure on their revenue and profits. The main factors contributing to the threat of substitution include fair price performance and buyer's propensity. Close substitutes effectively limit pricing ability and impact profitability. However, if a company offers products with fewer close substitutes, there is an opportunity to increase prices and generate higher profits (Knowles 1999; Hill et al 2001). Fortunately, the Burr AL Arab Hotel in Dubai does not face significant competitive threats from substitution because it exclusively offers suite rooms and has gained a reputation for exceptional service as the world's first 7-star hotel. As a result, the hotel can demand high room rates ranging from $900 to $7000 per

night, significantly boosting its profitability.