You are on page 1of 6

PRT503 Entrepreneurship for Professionals

Tutorial-3

1- Choose a country. Research, and be prepared to report on, that country’s (a) stage of
economic development, (b) political-legal environment, (c) cultural environment, and
(d) technological environment. If you were advising an entrepreneur who was
considering entering this country to sell his or her products, what would you say were
the major strategic issues? (Be specific to the country chosen.)

The country I have chosen is the United Arab Emirates. The Arab country is
the federation of seven emirates and its capital is Abu Dhabi which is one of
the two centers of commercial centre, other being Dubai. The UAE has
large reserves of oil and natural gas and has become a commercial hub in
this part of the world.

Stage of Economic Development: The UAE became the only Arab country to
be included in the Global Economics driven by innovation as per the recent
report released by World Economic Forum. The report also ranked the
country in top ten for macroeconomic development, infrastructure, good
market efficiency and labor market efficiency. The UAE has relatively high
human development index among the Asian continent. It is also ranked in
14th position globally for doing business based on its economy and
regulatory environment. All these reports suggest that UAE is in advanced
stage of its advanced stage of economic development and flourishing in
economy. It has become one of the favorite destinations for business
people to start their new business.

Political – Legal Environment: The UAE follows the absolute hereditary


Monarchy which is governed by the Federal Supreme Council made up by
the seven Emirs of the seven Emirates. The Supreme Council is responsible
for the matter of all national policy. The council of Ministers or the cabinet
is the executive authority for the federation. The UAE is politically stable as
in the present and has a better political and legal environment for starting
new ventures. The government always encourages foreign investors for
1
investments. There is a comprehensive legal framework in the UAE to
ensure the businesses are conducted in fair means and in an orderly way.
The constitution has laws that deals with commercial transactions,
intellectual properties, labor and other aspects related to business. Only
the UAE nationals are supposed to represent the clients in the court but
people from other countries can work as legal consultants.

Cultural Environment: Though Islam is the main religion of the UAE, it has a
diversified and a multicultural society. Most of the people prefer to wear
the traditional outfits but all the semi autonomous emirates have their own
rules about the attire. Dubai is the most liberal of the seven. It can be taken
as a cosmopolitan society. So it has a diverse and vibrant culture. The UAE
can be taken as the most liberal of all the Arab countries and offers high
religious tolerances. Migrant workers prefer the UAE as their favorite
working destination.

Technological Environment: Industries are mainly based on natural


resources like oil and gas, infrastructures, public transportation and
communication sectors. Environmental friendly technologies are
encouraged such as green technology.

If I were to advice an entrepreneur who is considering entering the UAE to


sell or promote his products I would advice to go for a local sales agent or a
distributor because the UAE law demands for that. It can be very sensitive
issue to find a right agent so care has to be taken for that.
The UAE being investor friendly country another option can be of
franchising by following the legal ways.
Direct marketing is equally getting popular due to the internet and mobile
technology. So direct access through the technology and promotion, sales
of the products can be done.

2- We typically focus on firms from well-developed economies entering markets of less


developed economies. Do firms from less developed economies have a chance of
success if they entered developed markets, such as Australia? What competitive
advantage could a firm from a less developed economy rely on in entering developed
markets? What would likely be the best entry mode?

2
It is a fact that generally the focus is on the firms from well developed
economies entering the market of developing economies and it has been
the general trend. In my opinion the firms from the less developed
economies do have the chance of success if they enter developed markets
such as Australia. The inspiration to enter well developed economies may
be due to various reasons and a firm which does not have a base or is not
flourishing in its home country cannot think about that. Firms doing well in
the less developed economies may think of expansion and enter the well
developed economies to gain more profits, local market not dynamic, and
their product offering some uniqueness to succeed in developed
economies. There must be a considerable amount of research done about
everything from the market and the consumers to the country’s attitude
towards the foreign firms. Moreover the major decisive factor would be the
consumer’s acceptability, after all the market depends on the consumer. So
if the firm has something new and promising to offer to the market of
developed countries then they have the chance to success.
The firms from the less developed economies can rely on the strategy of
producing its products back home and then go for the better
advertisements of its product in the developed economies to sell the
products. That way it can use the availability of the cheap labor and other
resources that is easily available. I t will not have to worry about the plant
set up and other issues. An example can be taken of the garment
companies in Bangladesh which has its market in Europe and America. They
have their factory set up in Bangladesh and mass production is done there.
This way the firms from a less developed economies do not have to worry
about the huge investment required for the factory set up and other costs.
They can just ensure that their products have a good market potential and
customer attraction. For the research they can use the web and other
market research methods and then go for the promotion of their brands.

3
The best entry mode would be to go for an exporting strategy as its saves
lot of investments. But choosing to export only would not be sufficient for
the gain at the market. Though it is a low risk strategy and safer than other
mode like direct market entry, a lot of research will needed to be done to
know the market of well developed economies. Since there will not be
direct operation the initial phase may be harsh as very less knowledge of
market. The other strategy may be to use licensing or franchising mode but
that do not give a sufficient control. So in my opinion it would be better to
start with the exporting mode.

3- Using the Internet, obtain copies of three patents that are at least three years old. What
are the elements that are common across these patents? What are the differences?
Which do you believe will be the greatest success? Can you find any evidence of
products that are now on the market that incorporate any of these patented
technologies?
The three patents obtained from the internet are as follows:
a) Method for improving reading speed and comprehensive skills: It is a
system which utilizes a series of computer controlled
4- Provide three examples of companies that use trade secrets to keep competitors from
imitating its products. What activities do they undertake to maintain this secrecy? How
effective do you think they are?
Trade secrets are used by the companies to keep their competitors and
other business people from copying their products. Below are the three
examples of the companies that use trade secrets to guard their products
from being copied

1) WD-40: WD-40 is a lubricant, a penetrating oil and water displacing


spray used for preventing corrosion. It is used commercially and in
domestic household to prevent squeaks, prevents formation of
moistures, cleans and protects hinges and other surfaces, loosens rusted
parts. It also removes dirt and residue. But due to low viscous properties
it is not commonly used as a general lubricant. The formula was
developed in 1953 by Norm Larsen, founder of Rocket Chemical
Company.

4
The trade secret which is the formula of the chemical composition is
protected by the company in a bank vault and has been taken out twice
only as per the record. Once it was taken out while changing the bank
and the other time was when the CEO was celebrating the 50th birthday.
The CEO wore the armor and rode the horse to protect the formula.
They mix the formula in three different locations before sending to their
aerosol partners. They have not gone for the patent so to keep the
ingredients secret.
I think they are effective in guarding their trade secrets till now even
though their compositions may have been varied by other companies to
produce similar products.

2) Coca cola: Coca cola is a carbonated soft drink most consumed


throughout the world. People commonly love to refer it as a coke and
has been winning the hearts of people since long. As per the history it
was originally intended as a patent medicine in its invention period by
its inventor John Pemberton and was later bought by a business man
Asa Griggs Candler. His marketing skills made coca cola famous soft
drink of the 20th century.
The concentrate or the formula is produced by the company which it
then sells to the licensed coca cola bottlers throughout the world. The
formula for the concentrate is a secretly guarded trade secret. The exact
formula for the coca cola’s natural flavoring only its trade secrets not
the other ingredients. The original copy of the formula was in the main
vault of a bank called SunTrust Bank in Atlanta for 86 years. It was
moved to a new vault in 2011 from the vault of SunTrust. There has
been a popular story of two executives having the half formulas. The
truth as stated is that the two executives know the entire formula and
the formulation process; also other executives know the formulation
process but not the formula. They have not patented their formula to
protect the trade secret.

5
Coca cola are highly effective in guarding their trade secret but one
employee and two other people were charged of trying to sell the secret
to Pepsi in 2006.

3) Krispy Kreme Doughnut: Krispy kreme Doughnut has its history back
in 1933 when Ishmael Armstrong bought a shop from a French man and
the recipe of the doughnut. Armstrong along with his nephew Vernon
Rudolph grew the business into success and a made it a popular brand.

The secret formula to make the doughnut is kept into the company
headquarter safely and very less employees has the access to it. The
ingredients are listed but the trade secret is not only the ingredients but
the ability to purchase the finished products. In 1950 the company
introduced a process that allows the fresh doughnut to get in to the
hand of customers in nice and warm state. This process also is the trade
secret of the company much important than the recipe itself and they
are able to keep the trade secret till now. The company is also
effectively preserving its trade secret to remain aloof in the business.