luxury Qatar car distributor

A transnational organization's quest for a new market for its goods outside its home country is typically the most important step in boosting the world economy and increasing the sales of the commodity. Companies are looking for new business positions and they need to be more competitive and goal-oriented because of ever-growing competition in the industry and increasing demand for customers. Since each country has its own collection of legislation and investment rules, foreign firms choose to choose the right country to fund their development plans and cost-effective savings. Luxury Car Distributor is one of the fast growing car distributors company in the world. The company has learned that it can attract considerable advantages by expanding its distribution operations outside its home country making it to be a large multinational company. The market that management wants to choose for Luxury Car Distributor is Qatar and they want to evaluate whether the decision to enter the Southwest Asian market can be good or bad for the company. This paper provides PESTLE analysis for the Qatar market and also provides recommendation for Luxury Car Distributor whether to enter the market or not.

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Political Factors

Over the years Qatar has been known to be a conservative society, however in the recent past the country has embarked on a serious path towards political stability and economic modernization. Over a decade ago when the Emir, Sheikh Hamad bin Khalifa took power, he has since worked as a driving force behind the country’s openness on global markets. Emir is an advocator of a stronger relationship between Qatar and the United States of America grounded on the regional peace, strong investments and cultural exchanges. The relationship between US and Qatar has been strong in the recent past. Furthermore, Qatar became a member of Gulf Cooperation Council (GCC) and OPEC whose membership composed of the neighboring countries such Kuwait, Oman, UAE, and Saudi Arabia among others (Beraja, 2016). I would recommend that Luxury Car Distributor enters this market because of the peace and ample environment provided by the political situation in the country.

Economic Factors

The abolishment of trade tariffs and developments of trade integration of most of the Asian countries, including Qatar will provide Luxury Car Distributor with a big opportunity to build its distribution operations. Furthermore, there is rising number of development products such as building and construction activities which is focused to increase the demand for the medium and heavy commercial vehicles in the next few years. Qatar is expected to host FIFA World Cup-2022 hence there is need to cater or the sustainable infrastructure to accommodate tourist and sporting activities in the country (Crosthwaite 2000, p. 625). Luxury Car Distributor can take advantage of this opportunity to size the market in the country. Generally, there potential future growth in the market of commercial vehicles in Qatar,, hence there is a compelling need for Luxury Car Distributor management investors to use this opportunity to establish their branch in this viable market. Qatar has recorded a stunning economic growth and per capita GDP in the recent past, for instance in 2014, Qatar had a per capita GDP of approximately $93,000 and economic growth of 6.3% from 2013. Qatar is dedicated to provide a conducive investment atmosphere by utilizing its wealth to create more wealth (Weerakkody, et al. 2011, p. 180).

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Social-Cultural Factors

The decision of Luxury Car Distributor to set up its operation in Qatar is a good decision and it can pay off quite well. The company will be able to enjoy talented workforce, a proper-developed infrastructure and entry into one of the fast growing markets in the world are some of the exceptional benefits that Luxury Car Distributor will derive from this decision. Moreover, the Qatar encourage free movement of labor and knowledge of choices and the preferences from the Arabian customers will provide valuable insights into innovating new designs of cars especially those designs respects preferences and tastes of the customers.

Technological Factors

The state of technology in Qatar is viable for the Luxury Car Distributor. Qatar has emphasized on the significance to create a favorable environment that encourages innovation and transfer of technology and promote the access of technology for all the investors in the country. Qatar has ICT in its central agenda of achieving 2030 Sustainable Development Goals (Cetorelli 2001, p. 630). The country places emphasis of taking advantage of enormous technological services and investments in their mission towards attainment of its sustainable goals. Therefore if Luxury Car Distributor can join this market then it will enjoy the robust technological measures that the country has put in place. Because of the prominence that the country has placed on ICT, it has initiated several ICT centers within the country which enlighten the citizens and the investors. Generally, everything has gone digital in the contemporary society and Qatar is not left behind. Qatar has access to some of the outstanding IT culture which they have adopted from India, Europe and North America. If Luxury Car Distributor can take chance in the Qatar market they will enjoy robust technology in their operations hence they will be able to produce competitive products to their customers. Furthermore, Luxury Car Distributor can make of the technology in Qatar to educate their workforce which will be an added advantage on their side.

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Environmental Factors

Most of the market reviews which are presently underway are driven by the environmental factors which come as a long term strategy to encourage reduction in the emission of carbon dioxide into the environment. Recently, Qatar launched National Development Strategy 2011-2016 which includes a number of measures aimed at discouraging private vehicles which have been contributing to the rising of pollution level (Westing, 1986). Luxury Car Distributor can consider this and distribute more of the commercial vehicles as compared to private vehicles.

Legal Factors

There are law set aside in Qatar market which affect the way businesses do their operations and how customers should behave. It is significant for the Luxury Car Distributor to know some of these legal factors before it fully decide to venture into this market. Qatar law bars expatriates from crossing Qatar borders with the private cars before clearing the loans. Expatriates need to produce clearance from the banks and other financial institutions. Notably most of the business people who operate outside the country have been reluctant to buy cars because of such bureaucracy. Luxury Car Distributor can invest in this market but facilitate faster clearance of the expatriates after they have settled their loans. Additionally, there are employment laws in Qatar that companies have to follow when hiring new employees. Furthermore there is minimum wage law that the country has put forwards which dictates the payments that employers give to the employees. In Qatar multination companies setting up their branches in the country have to at least 45% of the total employments to the citizens of the country. Therefore, it is imperative that the management of Luxury Car Distributor do a market research in order to get familiar with the rules and regulations set by the country before they embark into setting up the branch in the country.

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Conclusion

Luxury Car Distributor can take the option to enter Qatar market because as a transnational company it needs to exercise full control over its operation. There is a cut throat competition in the car industry; however, following the PESTLE analysis of the Qatar market, the company can reap a lot if it enters the market.

References

Belwal, R., 2017. Public transportation in Oman: a strategic analysis. Advances in Transportation Studies, 42(3).
Beraja, P., 2016. Analysis of the Middle East fashion and luxury market: success of UAE through the prism of ecenomic development and consumer behavior transformation.
Cetorelli, N. and Gambera, M., 2001. Banking market structure, financial dependence and growth: International evidence from industry data. The Journal of Finance, 56(2), pp.617-648.
Crosthwaite, D., 2000. The global construction market: a cross-sectional analysis. Construction Management & Economics, 18(5), pp.619-627.
Fritsch, B.D. and Chlebovský, V., Marketing Strategy of Turkish Airliners.
Harrison, A., 2013. Business environment in a global context. Oxford University Press.
Weerakkody, V., El-Haddadeh, R. and Al-Shafi, S., 2011. Exploring the complexities of e-government implementation and diffusion in a developing country: Some lessons from the State of Qatar. Journal of Enterprise Information Management, 24(2), pp.172-196.
Westing, A.H. ed., 1986. Global resources and international conflict: environmental factors in strategic policy and action. Oxford University Press on Demand.