International Business
Abstract
The underlying study is an analysis of camel cookies which is a UAE based business willing to expand in Kingdom of Saudi Arabia. The company is already functioning in few Arab countries with a goal to satisfy customers and uplift the Arab culture in a modern way. Founded in 2013, the company has successfully met the demands of the domestic market. The first part of the paper plans to analyze the business concept of camel cookies and the second part entails a detailed political and legal analysis of Kingdom of Saudi Arabia as the company is about to open a branch in there. The factors that may have a significant impact on the business operations of camel cookies in Kingdom of Saudi Arabia includes; Intellectual property rights, government attitudes, patents, political ideology, the stability of government, type of economic system, type of legal system and particular rules, regulations that govern the business operations in Saudi Food and Beverage industry.
Business Concept
The mission statement of camel cookies is accomplished by incorporating modern and unique flavors to introduce a modern and contemporary twist to the product. As a result of using comparatively new flavors in cookies, the company has realized a range of Emirates influence cookies that are widely consumed by the customers.
Business Goals
expand the delivery in major cities of UAE and avail international expansion opportunities
Size
The Camel Cookies was founded in 2013, since then it has produced seven different varieties of cookies in a very short span of time. Moreover, it is delivering the product door to door to all Arabian Gulf. Although, the company is not very large so it is operating from two offices with a small number of skilled employees operating in Abu Dhabi UAE. It is located in Al Raha Mall and Al Khaleej Al Arabi Road in Abu Dhabi (Camel Cookies, 2016).
Type of Industry
It is a locally owned and fast growing cookies company that also offers franchise opportunities. It is operating in food and beverage industry of UAE which has promising future as the market has a positive outlook. There are substantial opportunities for the small business to expand overseas as well as Food and Beverage market of UAE has shown exponential growth over the span of the last couple of years (AMEinfo Staff, 2016). Despite a number of challenges, on the whole, the sector reflects growth potentials.
Overseas and Domestic Experience
It has a 3-4 years experience for baking the best cookies in Abu Dhabi with passion and ability to serve the customers in a cultural and traditional way. The founders of the camel cookies were three young Emirates who traveled all around the world and then experimented with the new type of cookies. The core idea was to start with traditional ingredients and then add unique and modern flavors to offer a twist in taste. Till now it has successfully domestic experience which can help it to expand overseas.
Political and Legal Analysis
Intellectual Property Rights
It is important for camel cookies to understand how it can register its trademark and patent. The general method is based on first-to-file or first-to-invent. It is important to consider that intellectual property is a private right in Kingdom of Saudi Arabia, and US government cannot impose any rights for the individuals willing to expand in Saudi business landscape. The copyright law of 2003 has been recently updated to ensure effective deterrence against the violators. The government is likely to impose heavy penalties in case of violation as the Kingdom is highly strict in managing its intellectual property rights. As part of the National Transformation plan, the Kingdom has announced the establishment of Saudi Intellectual Property Authority in 2016. The camel cookies have to stay in compliance with the rules and regulations regarding the intellectual property rights there wise strict actions against the firm can harm its global reputation as well as the domestic business (Export.gov, 2016).
Political Ideology
The political and governmental system of Kingdom of Saudi Arabia is highly dominated by the religion of Islam as its constitution is Almighty God’s book. All laws and authoritarian matters are dealt in accordance with the Islamic laws. As camel cookies is a food chain, there are a number of Islamic implications for its successful operation in Kingdom of Saudi Arabia. Each and every ingredient used in manufacturing the food items must be Hilal. Otherwise, it can face a religious and political setback from both customers and authorities governing the businesses.
Stability of Government
The government is an absolute monarchy where the king is the head of state as well as head of the government. The government is stable, and the rules and regulations are pre determined which has very less room for flexibility. The camel cookies have to stay in compliance with the distinct governmental system of the kingdom as ignorance of rules and regulations can cause serious damage to any company willing to expand in Kingdom of Saudi Arabia.
Type of Economic System
Latest reforms in Saudi economy have focused on the diversification of economy and enhancement of private sector and employment level in the region. A rapid economic growth rate over the span of the last couple of years has made it an attractive economy to international expands in this region. Although it still lags behind in regulatory efficiency and make openness, but the government is now taking initiatives to make it easier for international investors to start entrepreneurial projects which make it attractive for camel cookies (Heritage.org, 2016).
Type of Legal system
The legal system of host country has significant implications and importance for the international business expansions. The legal system can directly affect the attractiveness of company operating overseas. The legal system of Kingdom of Saudi Arabia is based on Sharia which is quite different from other global jurisdictions. The Sharia is an Islamic legal system which governs each and every aspect of the economy is Kingdom of Saudi Arabia. Is Camel Cookies aims to successfully cater Saudi customer, it has to stay aware of all laws and legal patterns to avoid violating Sharia (Ansary, 2015).
Legislation, Regulations Specific Rules To Conduct Business in Kingdom of Saudi Arabia
Foreign investment in Kingdom of Saudi Arabia is regulated by foreign investment law where all foreign investors are expected to have a license to operate under this law. This law is favorable to the foreign companies as it allows 100% ownership of limited liability companies.
Foreign investors are allowed to establish branches of foreign companies in Kingdom of Saudi Arabia by having 100% ownership by the parent firm. But at least two partners are required by the law to participate in a joint venture (IMA, 2015).
The companies are bound to have local partners that could be either supplier or distributors or retailers in order to keep the customer services localized and avoid the issues related to language and social norms.
References
AMEinfo Staff. (2016). Dubai’s food and beverage market outlook positive. Retrieved January 25, 2017, from http://ameinfo.com/money/markets/dubais-food-and-beverage-market-outlook-positive/
Ansary, A. F. (2015). UPDATE: A Brief Overview of the Saudi Arabian Legal System. Retrieved January 25, 2017, from http://www.nyulawglobal.org/globalex/Saudi_Arabia1.html
Camel Cookies. (2016). Camel Coookies. Retrieved January 25, 2017, from http://www.camelcookies.com/
Export.gov. (2016). Saudi Arabia - Protecting Intellectual Property. Retrieved January 25, 2017, from https://www.export.gov/article?id=Saudi-Arabia-Protecting-Intellectual-Property
Heritage.org. (2016). 2016 Index of Economic Freedom: Saudi Arabia. Retrieved January 25, 2017, from http://www.heritage.org/index/country/saudiarabia
IMA. (2015). Doing Business in Saudi Arabia. Retrieved January 25, 2017, from http://www.saudiarabia.doingbusinessguide.co.uk/the-guide/legal/
Ladies Day Out Dubai. (2014). Camel Cookies. Retrieved January 25, 2017, from http://ladiesdayoutdubai.com/exhibitors/camel-cookies
