Explain the differences between products and services
One of the main differences is that products are tangible whereas services are intangible. It can be interpreted to mean that you can touch products since they have physical dimension and can be sampled before buying. Services on the other hand, cannot be touched and this means that service delivery is seen after the fact. One can touch meat since it is of physical dimensions but you cannot touch banking services and the after fact is after withdrawal of money or deposit.
Another difference between products and services is that products can be quantified whereas services cannot be quantified. Products can be packed into units of quantifiable dimensions since they are tangible. Services cannot be quantified in any way. One can count fifteen bottles of soda but one cannot quantify barber services.
Another difference is that products are produced after a manufacturing process is completed whereas services are offered through utility facilities by the service provider. Goods are usually obtained after processing or manufacture whereas services are offered only where facilities are put up by the service provider.
Another difference is that you can own a product whereas one cannot own a service simply because of the fact that products are tangible whereas services are intangible. Ownership of products is transferrable to customers after purchasing. Services cannot be transferred since they are not tangible.
Another major difference of products and services is that products are non-ephemeral meaning that they last for a long time whereas services are ephemeral meaning they last for only a short time due to the nature of the products and services.
What are the barriers of exporting services?
One of the barriers to exporting services is rules governing the destination of the goods in transit. Some countries may have stringent rules that may hinder the goods from being imported into the country. The United States of America has banned unpasteurized milk whereas in Kenya sale of raw milk is common in many parts of the country.
Another barrier to exporting services is exporting tariffs. Some of the countries have very high exporting tariffs to curb importation of certain products especially old cars. Kenya imposes heavy taxes to discourage cars older than eight years so as to ensure that only new and maintained cars are imported.
Sanctions due to such factors as political injustices are another barrier to export services. Sanctions revoke export of goods to a specific country mainly because country has gone against international agreements. Zimbabwe, in Africa, experienced sanctions from the Western countries because of the dictatorship posed by President Mugabe.
In some countries, licensing requirements act as barriers to exporting services. Such goods as armaments require licenses for those involved in the trade. Governments through custom bodies issue limited licenses to ensure that they control these kinds.
Setting up uniquely high standards for exporters to meet is another way of barring exporters. The bodies set very specific safety, health and quality standards exporters find hard to comply with.
Some countries like South Africa enforce exchange controls, where local firms have to apply for provision of foreign currency to use in international trade. The firms are also required to submit any foreign currency obtained within a week. Having such controls means the government controls the number of importers and exporters thus effectively barring export services.
What is the role of services in the UAE economy? Explain
Some of the most vibrant services in the UAE economy include banking services. Prior to oil discovery in the federation, banking was limited to Dubai but after its exploitation, it has seen banking grow to have 20 national banks with 301 branches plus 26 foreign banks with 83 branches spread throughout the country. It requires deepening financial degree to save more than demand for credit. Banking services therefore, have led to an increased growth in the economy since savings are available for expansion of other sectors of the economy.
Transport in Dubai is one of the most advanced in the world. It boasts in one of the most advanced urban railway networks in the world with Dubai Metro having covered 47 miles in Dubai. It is said that Dubai is developing a transport system that will surround Dubai World Central containing what will be the world’s largest airport and will be the only of its kind to link road, port and air terminals in a single city. Transport ensures that various economic transactions can be carried and mobility of factors is facilitated.
Communication in UAE is one of the sectors that the government has very stringent rules governing communication. The use of Internet services has seen implementation of censorship of material that degrades the high moral, religious and spiritual value of the Muslim religion. The regulation of communication is done by the Telecommunications Regulation Authority. UAE boasts of a developed telephone with over 6.5 million mobile phone subscribers. Communication is vital in any economy since it supports many business transactions.
Insurance in UAE is developed and is regulated by provisions of the Federal law No. 6 of 2007 of the Establishment of the Insurance Authority (the Insurance Law). Insurance is developed in UAE and it has seen some new practices put in place. One such practice is the introduction of Resolution No. 4 of 2010. This resolution outlined distinct regulations governing Takaful Insurance. The regulations were different from those governing conventional insurers. Takaful Insurers were different from other insurers since they had different policies that were in accordance with the Sharia law of the Muslims.
Real estate is one of the sectors targeted by the 2015 Strategic Plan launched in 2007 by Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the United Arab Emirates. He noted that there was a great boom in this sector and that more housing was required due to the growing demand for residential and office space in the country.
Government services have been a core part of the developing economy in UAE. The Ministry of Economy in the UAE has stressed on the importance of reduced delays in transactions and has been on the forefront of digitizing its transactions to ensure that delays are reduced in its efforts to bring development in the country. The Ministry of Economy has been praised for having policies governing economic issues such as foreign investment, industrial property and such areas with an aim of protecting all the concerned parties.
Travel and tourism in Dubai has been on the rise and had seen 86% occupancy in its hotels in 2007. It has become a well-known destination due to the famous spectacular destination sites such as the world’s tallest hotel, Burj-al-Arab hotel and the reclaimed dykes that form the biggest man-made island in the world, the Jumeirah Palm. It meant that the country received a lot of foreign income from this industry thus it has become a very important part of the economy.