The development of new food industry in the United Arab Emirates, especially in Abu Dhabi has remained a challenge to most local and multinational companies which have ventured in the food industry. In consistent with this stiff competition and a high product mortality rate continue to characterize this market. As a result of this, this research paper will look at Abu Dhabi and issues which must be examined in details by managers when launching new products in this market which required these companies to analyze critically the UAE culture and industry structure to manage new product launches.
The United Arab Emirates is one of the growing economic in the Asia. In line with this, the market for different products in the UAE has continued to pose a competitive threat to other markets across the globe. As a result, both local and multinational companies that have an endeavour of venturing into the United Arabs Emirates’ market have to carry out extensive analysis of the market or rather industry structure and the United Arab Emirates’ culture especially in regard to the food industry. Notably, the UAE market has shown an extreme competitive dynamics and a high product mortality rate. As mentioned earlier, the food industry remains as one of the competitive industry in the United Arab Emirates and particularly in its capital, the Abu Dhabi City.
In reference to Grant, Golawala & McKechnie (2007), for the Middle Eastern region alone, the fast food franchise market growth is estimated at 27% annually, while 80% of the United Arab Emirate demand for total food services is in two emirates, Dubai and Abu Dhabi (p.530). The food market in the United Arab Emirates and specifically in Abu Dhabi City has been growing at an extremely high rate. According to Pujol & Forster (2007), businesses which majored in food industry such as hotel had a high entrance rate into the UAE market in the next four years. However, these businesses, some with new products, cannot escape the eminent challenges which are as a result of the cultural background of the UAE and stiff competition from the already existing food products. More, this growing market has continued to promote significant challenges to companies who want to launch new food products in this particular market.
Research Findings and Discussion
It was found out that the hotel industry was growing at a tremendous rate in Abu Dhabi. In reference to Pujol & Forster (2007), Abu Dhabi was experiencing a surge or rather a boom in hotel construction. In line with this, both local and multinational companies who had an aim of venturing into the United Arab Emirate market must consider the already existing products which were being sold by both local and multinational food companies in this market. This was a critical opportunity for these local companies and multinationals to formulate important strategies which would promote the new product entrant rather than creating an environment which will kill the new product. It is important to understand that dealing with competition with the existing products in the market remains as some of the vital issues which cannot be ignore by businesses and organizations.
Apart from understand that the hotel or rather food industry in Abu Dhabi was growing at a relatively faster rate, another issue which need to be understood by both local companies and multinationals concerned the status of Abu Dhabi in the United Arab Emirates. Note that Abu Dhabi was perceived as the nation’s industrial centre, which a relative high growth of industries (Oxford Business Group, 2008, p.162). Consequently, setting up a food industry in this city could prove to be an important milestone to have been taken by both local companies and multinationals. However, this meant that the food industries which were to be set up had to consider important regulatory issues such as those that had been set by Abu Dhabi Food Control Authority. Therefore, for a company to launch new food products in the industry, the management of such a country company had to take into considerations the fact that most of this nation’s food was imported. Yet this did not imply that a city such as Abu Dhabi should take a passive role regarding the safety of these products. This again posed the challenge on whether the new food product would be sustained over a long period of time or whether it would disappear within a short period of time since the raw materials (raw food) was not easily found; instead it was imported.
In addition, the food industry in Abu Dhabi is in need of professional business platform such as SIAL Middle East which is counted among the largest food events across the globe (Trade Arabia, 2010). In this respect, launching new products into the Abu Dhabi market would require a subsequent analysis of the existing market while at the same time utilizing food networks which are available to market the new product. This is further coupled by launching of different exhibitions which not only allow a local company or a multinational to market its products, but also to observe other products in the market which could serve as threats to its new product. Professionalism in the presentation of the new food products therefore would also serve as a critical or rather vital approach towards ensuring the success of this product. More so, the product would also be able to identify its threats, opportunities, weaknesses and strengths by gauging itself against other similar products in the market.
In connection to this, whereas other parts of the globe do showcase their products in trade fairs and other forms of exhibitions, the UAE trade fairs and exhibitions remain among the most renowned across the globe. Furthermore, specific cities have taken initiatives to organize their own exhibitions to promote their products. For instance, Abu Dhabi has its own shows whereas Dubai also has its own shows (Farah, 2010). Following this point, a critical understanding of these exhibitions and participation is highly encouraged as they have formed a foundation to access new markets of different products for both local and multinationals.
It has also been realized that these shows and exhibitions do not provide opportunities just to showcase traditional foods and other products to the residents of UAE and the globe in general. On the contrary, they are provided to show talent and innovation in the products which have been prepared. This is alleviated by the fact that most people in the UAE have shifted their appetite for food and consumption of other goods to more sophisticated technologically-produced goods and services. Therefore, whereas focusing on the Abu Dhabi culture could play a significant role in enhancing the introduction and marketing of new food products in this particular market, this could be alleviated further by exploring the benefits of technology in the preparation of these products. Therefore, as either a local or a multinational company, one has to focus on the fact that whereas the Arabian culture is promoted in cities such as Abu Dhabi, this is a city which is ready to test other type of food from other cultures as long as they innovative and are geared towards addressing some of the key issues which are being faced by this city such as food shortages.
The understanding of specific markets is an important factor which must always be considered by local and multinational companies when preparing to launch new products in these markets. In this connection, launching of new products in the Abu Dhabi market in the UAE has always been faced by challenges in the sense that this is a market which is characterized by stiff competition and a high product mortality rate. Therefore, as an player in the food industry, one has to understand the market dynamics of this city, taking into consideration the fact that this is an innovative city, with an open-minded cultural approach. Therefore, both local and international food products can thrive in this market as longs as the approach by the marketer is well research and utilized to present these products to the consumer.