International Business Assignment Essay Example

accreditation from the Ministry of Higher Education in order to establish an international branch in the United Arab Emirates. The market assessment shows that there is significant potential for Trinity College in this market. The country analysis will provide information for the marketing and operational strategies, as well as the organizational structure. Based on the findings, it is recommended that Trinity College proceeds with establishing a campus in the United Arab Emirates. However, careful planning is essential as each aspect of this report needs to be thoroughly examined to create a solid roadmap and ensure success.

Introduction

This report aims to explore the possibility of Trinity College Dublin setting up an international branch in the United Arab Emirates.

The report will examine Trinity College's presence in Ireland for 400 years and assess its products. It will explore the challenges and opportunities of global expansion for Trinity, as well as strategies for entry, marketing, and operations. Additionally, it will evaluate how financial and political risks are managed and provide a recommendation on whether Trinity should proceed with its plans. The main focus is on Trinity College Dublin, which was established in 1592 and holds the distinction of being both Ireland's oldest university and one of Western Europe's oldest universities.According to the QS World University Rankings (Top Universities 2011), Trinity College is currently ranked 65th in the world. Its Chancellor, Mary Robinson, who previously served as the President of Ireland and the UN High Commissioner for Human Rights, further enhances its prestige. The University offers undergraduate and postgraduate programs, including doctorate programs. It also houses a renowned research center (Trinity College, 2011).

The faculties are divided into three main fields: Arts,

Humanities & Social Sciences; Engineering, Mathematics & Science; and Health Sciences. There are 24 schools within these faculties, including a reputable medical school.

In addition to that, there are 30 research centers, four research institutes,and eight major research programs such as Globalization. Notably,the University has produced Nobel Prize winners in physics (Ernst Walton)and literature(Samuel Beckett), along with celebrated authors like Jonathan Swift and Oliver Goldsmith(Top Universities 2011).

Trinity College, located in Dublin, the capital city of Ireland, aims to generate and transfer knowledge according to their 2009-2014 Strategic Plan. They believe that through combined teaching and research, they contribute to the creation of a knowledge society (Trinity College, 2011). This knowledge society's significance will be demonstrated later in this report. Ireland became an independent country in 1921 and joined the European Union in 1973 (CIA, 2011). The political system of Ireland is a parliamentary democracy, ensuring freedom of speech for all residents (CIA, 2011).

Ireland has a population of 67 million and a history of high immigration rates. These rates declined during the economic boom in the 1990s, also known as the Celtic Tiger. However, following the economic downturn, Ireland saw an increase in immigration once again. According to the CIA's report in 2011, Ireland was ranked 56th worldwide with a migration rate of 0.6 individuals per every 1000 people.

Despite Gaelic Irish being the indigenous language of Ireland, English is widely spoken and utilized throughout the nation. Education has played a crucial role in Ireland's enduring success. As per Harris (2005), the remarkable standard of education significantly contributed to Ireland's economic boom in the late 1980s. He praised Ireland's education system, describing it as excellent, with 48% of

the population attaining tertiary education by 2005.

The Irish Government abolished tuition fees for Irish nationals in undergraduate education during the mid-1990s, resulting in Ireland having the highest participation rates in tertiary education by 2009. However, the current economic climate has made it unsustainable to maintain this funding level. Consequently, student contributions for third-level education were reintroduced as part of a five-year national recovery plan announced in November 2010. Trinity College acknowledges the need to explore alternative funding sources as their exchequer funding has been declining each year due to the global economic downturn that has significantly affected Ireland. This downturn may also have financial implications for international students who might consider living costs abroad when choosing a university.

Trinity College currently has 16% of its student body from outside of Ireland, with 40% of this group coming from outside the European Union (Top Universities, 2011). Trinity College is considering establishing a branch in Dubai, United Arab Emirates to further its internationalization strategy and cater to these international students. This move aligns with the trend of European universities developing closer relationships with the Middle East as part of their internationalization efforts (Labi, 2009).

By expanding to Dubai, Trinity College expects to attract students from a wider range of countries beyond just the neighboring "feeder countries". Dubai offers immense opportunities for Trinity College in terms of internationalization due to its strategic location within a 12-hour flight from 80% of the world's population and only four hours away from one third of the world's population (Emirates, 2011). The next section will analyze the United Arab Emirates (UAE) as a potential host country.

Host

Country Analysis

In preparation for investing in a new foreign

market, an international company will conduct a country risk assessment. This report focuses on analyzing the potential of the UAE as a host country for Trinity College, which has been operating in their home country for nearly 420 years. When multinational enterprises (MNEs) contemplate expanding internationally, they encounter risks that are distinct from those in their home country. To evaluate the disparities between the host and home countries, MNEs must examine four key areas - political, cultural, financial, and commercial.

The population of the UAE is approximately 8 million.

The U.S. State Department (2011) reports that approximately 9 million people in the UAE, constituting around 10% of the population, are Emirati citizens. The remaining population is comprised of expatriates from various nationalities. It is noteworthy that over 200 nationalities reside and work in the UAE (Thekkepat, 2011, p21). Ball and McCulloch (1999) argue that the primary political risks in the UAE stem from government attitudes towards non-national businesses rather than wars. These risks can also be influenced by the country's legal system. Hence, this section of the report will evaluate the overall macro-level political environment of the UAE and assess its stability. Moreover, it will examine how their legal system impacts business operations and their stance on foreign direct investment (FDI), reflecting this evaluation.

According to Davidson (2009), the UAE is a federation comprising sheikhdoms in the lower Persian Gulf, including oil-rich Abu Dhabi and international hub Dubai. The political system of the UAE consists of hereditary monarchies governed by a central federal government that is dominated by Abu Dhabi and Dubai. The presence of hereditary monarchies is significant because any change in ruler could result in a

major shift in the country's political landscape if the new ruler has a different vision for the future. Davidson argues that due to its blend of traditional and formal powers, the UAE can be characterized as a "hybrid, neo-patrimonial political system."

The UAE continues to attract foreign investment despite not moving towards a democracy as defined in the Western world. Dubai and Abu Dhabi have both been successful in this regard. The country's 2021 Vision Document (UAE Interact, 2010) outlines four objectives: developing a knowledge-based economy to encourage entrepreneurs from both the public and private sectors, establishing a high-quality education system, creating legal frameworks and regulations to support these initiatives, and protecting intellectual property rights. According to Wilkins (2010), the UAE government aims to make the country a regional hub for higher education. To promote the UAE as an ideal study destination, Counselling Point Education and Social Services hold an annual seminar on higher education (Menon 2011, p9).

Both Trinity College has a keen interest in both the goal of a knowledge-based economy and the provision of a first-class education. This interest demonstrates that Trinity College sees the UAE as an opportunity for internationalization.

Legal System ; Attitude to Foreign Direct Investment

The legal system in the UAE is a combination of civil and Islamic law. The country's legal frameworks are still evolving, as evidenced by frequent additions and amendments. However, the UAE, especially Dubai, is highly supportive of foreign direct investment (FDI). They have established free-zone investment parks, including one dedicated to education known as Dubai International Academic City. The UAE's decision to join the World Trade Organization in 1996 and later the International Labor Organization further highlights

their commitment to FDI. Joining the ILO was particularly significant because it overturned a federal law that previously prohibited collective bargaining (Davidson, 2009).

Despite the changes, there is still state-enforced control of information, although this has relaxed somewhat since the disbanding of the Ministry of Information in 2006. Control still exists through measures such as internet proxy servers that restrict access to certain sites (Davidson, 2009). Some free zones and universities operate outside of this system, but it remains a significant consideration for universities setting up overseas outposts, as it affects even basic tasks like ordering books. George Mason University, which established a campus in Ras Al Khaymah, experienced this firsthand when government censorship delayed book delivery by months (Lewin, 2008). Trinity College, originating from a country that actively promotes free speech, will need to carefully examine this aspect. Cultural and social factors are crucial considerations for any company planning to establish operations overseas, often overlooked during the country assessment process.

International business success relies on cross-cultural literacy as cultural differences greatly impact business practices. While globalization may give the impression of cultures merging, there are still deep-rooted cultural disparities (Hill 2005 p90). Hill (2005, p91) combines the definitions of Hofstede, Namenwirth, and Weber to define culture as "a system of values and norms shared among a group of people, which together form a way of life." The term "way of life" highlights the significant influence of culture on social and workplace behaviors. Trinity College is considering the possibility of a new campus in U.

When examining the culture of a country like the UAE, it is crucial to consider important factors such as its diverse population of

over 200 nationalities and the strong influence of Islam on the majority of its residents (CIA, 2011). This religious influence greatly shapes the value systems and way of life in the country. The following points highlight the significant impact of religion on the functioning of the UAE.

The United Arab Emirates (UAE) designates Friday and Saturday as weekend days, regardless of one's home country. Friday holds significant religious significance for the Muslim community as it is considered a holy day. Public holidays in the UAE follow the Hijri calendar rather than the Gregorian calendar. Additionally, Ramadan takes place once a year for a month, during which employees have reduced working hours by law. These factors are crucial for Trinity College to consider if they plan to establish an outpost in the UAE because they affect operational days and hours, impacting alignment with operations in their home country.

Scholars like Hall and Hofstede have extensively studied both this region and the West. The management team at Trinity College should closely examine Hall's communication theory, which delves into how culture influences communication context levels. While many may assume that language barriers between English and Arabic, the native tongue in the region, would pose the biggest challenge, it is actually far less significant in high-context cultures and is perhaps the least important factor.

According to Rosch ; Segler (1987, pp 58), communicating becomes particularly problematic when the parties involved come from different cultural backgrounds, especially if those backgrounds are as drastically different as the Orient and Occident. Given that Trinity's setup team is likely to come from a low context background, it is crucial to navigate this communication challenge effectively. High

context communication is prevalent in high power distance countries, a concept studied by Hofstede. Power distance is also a significant aspect of this culture, and for the management team of Trinity College to be successful, they must be highly aware of this factor as it influences expected levels of Protocol.

Ireland's power distance ranking is low, below 40, while the Arab world has a high power distance ranking of 80. This can be compared to the world average of 56.5 (Hofstede, 2011). According to Hofstede (2009), power distance is defined as "the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally." This theory suggests that authority should be respected and subordinates should expect to be instructed rather than being involved in decision-making.

In order to ensure a successful internationalization into the UAE, Trinity College should thoroughly study the culture in advance. It is crucial for them to understand the differences between their home country and the host country, as this will greatly impact their success. Additionally, it is highly recommended that Trinity College conducts an extensive study on the financial currency of the UAE (the U.A.).

E is the dirham which was introduced in 1971 upon the formation of the country. Later in 1978, the decision was taken to peg the dirham to the dollar, since 1997 the rate has been set at $1 = 3.6725 dirham (ExchangeRate.com, 2011). As Trinity College is based in Ireland where the currency is the Euro they will face a foreign exchange risk if they choose to operate here.

The Euro has been gaining value compared to the US dollar

in recent years, and this trend is expected to continue. Therefore, it is currently a favorable time to invest in the U.A.E. While there were some signs of a move towards a single currency for GCC countries, the U.A.E. has recently expressed its unwillingness to participate in this.

The depreciation of the dollar against the euro is favorable for the initial investment. However, it may have a negative impact on the pricing of courses and the repatriation of funds from the UAE to the home country, which is the ultimate goal of setting up the operation.

Repatriation Laws

In 2007, Dubai established a Free Zone called Dubai International Academic City (DIAC) dedicated to higher education. DIAC, along with Dubai Knowledge Village, form part of the Education Cluster. This offers several advantages for institutions like Trinity that wish to establish in the U.A.E. These include 100% foreign ownership, full repatriation of profits and capital, exemption from customs duty, and a guaranteed 100% tax exemption for the first 50 years (DIAC, 2012).

If Trinity College wants to maintain independent control both financially and operationally, it is recommended that they consider hosting their campus at DIAC. Unlike Abu Dhabi, where universities like New York University had to find local partners to establish a campus (Lewin, 2008), DIAC offers the opportunity for Trinity College to have more autonomy. The UAE is ranked 33rd in the world for its business environment and ease of doing business by The World Bank (2011) in their "Doing Business 2011 Report". The establishment of free zones has further facilitated business operations. However, Trinity College should also be familiar with the regulations of the two main bodies governing tertiary

education in the UAE in addition to the rules and regulations specific to operating in the free zone.

The Ministry of Higher Education, specifically the Commission for Academic Accreditation (CAA), is responsible for ensuring educational excellence through licensing institutions and accrediting programs. The CAA strives to maintain standards that are on par with international benchmarks. The Knowledge and Human Development Authority, on the other hand, is the regulatory body for all academic institutions in Dubai. This authority is in charge of licensing all educational institutions, regardless of their location within or outside the free zones (DIAC, 2011).

Trinity College must determine an entry strategy if it decides to proceed. The choice of strategy is heavily influenced by the desired level of control and risk attitude. It is essential to carefully evaluate the strategic significance of the UAE market, especially considering that this would be Trinity College's first venture overseas, making success imperative. This report has already examined the possibility of the educational free zone DIAC. Therefore, if Trinity College decides to pursue a strategy that entails maintaining high control by establishing its own independent campus, which would function as a wholly owned subsidiary, this would be the optimal approach. However, it is important to note that high control comes with a greater risk due to the substantial resource commitment involved.

If Trinity College decides to proceed with this entry strategy, they will need to carefully analyze the host country, as discussed earlier in this report. Of particular importance will be the social and cultural factors since the UAE and its nearby feeder markets are significantly different from Trinity College's home country, Ireland. Alternatively, Trinity College could consider partnering

with an existing educational institution in the UAE. This would still allow them a moderate to high level of control while reducing the resources required. For example, the University of Waterloo has partnered with the Higher Colleges of Technology (HCT) in Dubai. Through this partnership, they provide courses from the HCT campus, maintaining consistency with the courses taught in Canada. The faculty delivering these courses are also employees of the University of Waterloo. The agreement includes the use of HCT's infrastructure, laboratories, and technology (University of Waterloo, 2011). Trinity College could also explore a partnership like this; however, they would need to carefully select their partners.

Cavusgil, Ghauri and Agarwal (2002, p126) emphasize that success in emerging markets requires more than just capital and technology; it also requires the ability to build and maintain strong relationships with foreign partners. They argue that Western businesses tend to prioritize technology over relationships, but in an emerging market like the UAE, where relationships are highly valued, this approach would not work. Trinity College should consider its long-established reputation for excellence when selecting a partner, as it is crucial to avoid diluting their brand. Trinity College offers a wide range of courses and research centers, so their entry strategy will heavily depend on the courses they choose to offer in this region and the necessary resource investment. However, considering their brand, it is recommended that they opt for foreign direct investment (FDI) instead of a partnership as their entry strategy. Market assessment is the first step that any multinational enterprise (MNE) must undertake when entering a new market.

Factors to consider for Trinity College, a high-quality tertiary educational institute, in the

UAE include the market need, market size, purchasing power of the residents and feeder markets, and potential market growth. The UAE holds positive opportunities for Trinity College's growth. According to the UAE National Bureau of Statistics (2010), the current national population demographics show that 38% are below 15 years old and 46.8% are between 15 and 40 years old. This presents a significant opportunity for Trinity College as it has an international brand and can cater to expatriate families who may not want to return to their home country for university education. Daniel Kirk (2009, pp 2-3) states that education is now seen as a commodity in the wake of globalization, and he emphasizes the importance of education for a nation's social and economic success. With the scarcity of natural resources, more nations are realizing that economic success depends on a knowledge economy that fosters educated individuals, ideas, and systems, all of which can be traded in a globalized economic system.

The importance of education as a commodity and its role in creating a knowledge economy is significant. This has led to a preference for Western Education models, resulting in an increase in the number of University with Overseas Branch Campuses. The UAE, being close to Asia and the Middle East, has been particularly affected by this trend (Kirk 2009, p5). Trinity College needs to consider this trend from two perspectives. On one hand, they may choose to follow the lead of other recognized institutions to avoid being left behind. On the other hand, as Wilkins (2010) highlights, they may struggle to differentiate themselves in a crowded market. Lewin (2008) describes the rapid expansion of foreign

institutions in the Middle East, especially in the UAE, as an "educational gold rush". Wilkins (2010) predicts that the best Universities will thrive while weaker ones will decline in the next 5-10 years. With their good reputation and worldwide ranking, Trinity College has a chance to grow and prosper by carefully considering their product, pricing, and promotion strategies.

Trinity College should be mindful that in the UAE, there are three federal Universities established for the education of Emirati staff, all of which provide free education to nationals. Trinity College must consider how this would affect their enrolment numbers. Additionally, Trinity College needs to carefully assess how any strategy will affect their marketing efforts. The next section will briefly discuss the four "P's" of marketing. Regarding the modification of their product/service, Trinity College will need to take into account the cultural factors discussed in the host country analysis and adjust their offerings accordingly to comply with local laws and culture. Despite the increasing openness in the UAE, censorship is still present and this will impact the course content.

According to Rugman and Collinson (2009, pp328-330), education products often require extensive modification to meet cultural sensitivities and local laws. When establishing branch campuses overseas, most universities offer a narrower range of courses that cater to the market demands and align with the university's resources (Wilkins 2010). For Trinity College, it is necessary to assess its existing range of courses and determine which ones can be internationalized and fulfill the needs of this specific market. Although it may pose challenges, it is crucial for the university to obtain full accreditation from both the Ministry of Higher Education in the UAE

and an international standards body to ensure that students' qualifications are recognized both locally and internationally.

Price

Pricing is a crucial factor for any company, including Trinity College. As they plan to expand internationally, they must find a balance between the fees charged to local students and the pricing structure of their competitors in the UAE. Their goal is to attract top-level students while maintaining exclusivity, just as they do at home. The pricing strategy will be influenced by the weak euro against the dollar, which impacts the purchasing power of residents in both the UAE and feeder markets.

Costs play a significant role in determining pricing. For instance, the university's expected expenses for attracting qualified faculty from abroad, who meet the standards of the courses taught domestically, will heavily influence pricing. Some expenses can be managed. For example, setting up in DIAC will provide Trinity with a non-traditional campus and several support services, such as food services. Internal management of such services can be costly, and there may also be a high initial investment required for fit out.

Promotion

Promotion, which refers to the process of stimulating demand for a company's goods and services (Rugman & Collinson 2009, p333), is crucial for Trinity College's success in this new market. While some modifications may be necessary, the core product of knowledge sharing will remain unchanged. However, the promotional message will need to be adjusted to be more inclusive.

Based on their website, it is evident that the message of Trinity College is heavily focused on Western culture. However, it is important to note that many of their students come from different parts of the world, although

this is not reflected on the website or in their promotional material. In order to target this region effectively, it would be necessary to create a more inclusive message that appeals to a diverse range of international audiences. The University of Wollongong in Dubai serves as a good example, as they have tailored their message to suit the needs of multiple nationalities. Additionally, since relationship building is highly valued in this region, Trinity College should consider conducting road shows to generate awareness about their programs through personal interactions.

The UAE organizes two major education road shows annually - GETEX (Gulf Education & Training Exhibition) in Dubai and Najah Education and Training Exhibition and Career Fair Abu Dhabi in Abu Dhabi. Trinity College needs a strong presence at both of these fairs before and after opening. The distribution network for Trinity College, unlike a tangible product like a car manufacturer, may not be as important. However, the location and design of the physical evidence are crucial in services marketing. The customers of Trinity College, including students and the external community, will judge based on what they see. It is essential that their expectations are met to reflect the brand's prestige and associated pricing. The three strategic goals of any multinational enterprise (MNE) revolve around efficiency, flexibility, and learning.

To be successful, Trinity College must examine the emphasis and driving factors of the organizational structure of the UAE Campus. The decision-making control will also impact the structure of the subsidiary campus. Ideally, the organization should adopt a geocentric structure, allowing for a global perspective to develop a strategic plan. This will lead to a transnational network structure that is

balanced in its responsiveness to the local market while still benefiting from economies of scale. Trinity College needs to adapt its product to meet the needs of the UAE market, considering the unique culture of this region and its impact on product, promotion, and operations. However, maintaining a strong link with the home country campus in Ireland is crucial, as it provides an opportunity for faculty sharing and combined course delivery through technology like video conferencing. The UAE Campus requires strong and experienced leadership who will report back to the board of directors.