Accessing the potentiality of south africa market as an export destination of uae product exporters

Document Type:Essay

Subject Area:Business

Document 1

South Africa is determined as an export destination for UAE products. It is, therefore, significant to establish and justify its suitability in accommodating exports from the UAE. This research, therefore, will figure out the strengths and weaknesses of the South African market which will encourage the UAE to continue exporting its products to Africa. Moreover, South Africa has a history of supporting international business as most of the foreign countries target the African countries as their ready market because of the increased demand for manufactured products. Companies based in the UAE can, therefore, consider some of the factors of imports and exports in South African and get familiarized with the South African market. Moreover, the trade between South Africa and UAE is on a steady rise as the UAE increases its exportation to the country.

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Some of the products exported from the UAE include transportation equipment, crude oil, machinery, home appliances, textiles, consumer electronics, and computer accessories among others (Bardawil, 2010). For the South African exports to the UAE, their main products include vegetables, steel, allied products, plastic goods, base metal, defense material, minerals, and chemicals (Shayah, 2015). Two countries have maintained a strong political relationship where their leaders often meet to discuss some of the economic issues which they regularly face in their trade. Moreover, the relationship between the two countries has also been improved by tourism which the two countries embrace. A. South Africa, is a country that is economically stable and has been well established in terms of financial assets, unlike the other African Countries.

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Since independence in 1994, South Africa has been performing very well in international business as evident in the contracts and deals it gets into with other high economically profiled countries like the USA and UAE. The main concern in this research, therefore, is to discuss South Africa and establish whether it is an excellent export destination for the UAE exporters. The significance of the study This study is very significant in many ways. Q1: what are some of the factors that promote South African market to consider imports from UAE? Q2: What are some of the considerations or conductions which should be considered and taken into action when evaluating South Africa market for its suitability in accommodating exports from UAE? 1. Research aim The main aim of the research is to determine whether South Africa as a market is suitable and has high potentials of becoming a famous export destination for the UAE goods.

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Research objectives This research is based on various purposes which will be worked upon to succeed. The goals which also act as the research aims will guide us through the entire analysis as they are highly depended on to understand the research issue at hand. The research aims at the following: • To study the South African market concerning its suitability to accommodate EAE Exports • To examine the demand for UAE products in South Africa and its impacts. Some of the cultural difference discussed in the CAGE distance framework include differences in ethnicities, language differences, different religions, the difference in norms and values and lack of trust. The administrative distance includes lack of common currency, lack of colonial ties, and political hostility.

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Some of the geographical distance to be considered include physical distance, the difference in climate, the difference in time zones and lack of a land border. Finally, the economic distance is considered in factors such as economic differences, natural resources, human resources, and financial resources (Malhotra, Sivakumar, & Zhu, 2009) The UAE will, therefore, consider these factors before deciding on South Africa as their export destination. Exporting to South Africa- Market Overview South Africa, despite its high population of 55 million people, it enjoys a lot of microeconomic stability and a large convenient business environment. The country has also made economic agreements with various countries such as Swaziland, Botswana, Lesotho and Zambia who it does business with regionally. The country is also a member of the World Trade Organization(WTO).

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The authors of this article also present some of the critical considerations which companies should look into when exporting to South Africa. One of the significant factors is that South Africa has the best business management environment which surrounds factors such as marketing, legal, forensics, publicity and process outsourcing. South Africa is also suitable for accommodation of new market ideas which can be introduced and grown significantly in the country. There is a high Market competition from other exporters such as European countries and Asian nations which the UAE must consider to form market entry strategies. There is also volatile rand-dollar exchange which complicates trade operations in South Africa. It will therefore interfere with planning for the new market entrants. Additionally, there is significant imbalanceamong the historical communities of South Africa who were disadvantages.

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It therefore does not facilitate economic transformation in the country thereby lagging it behind in terms of socioeconomic development. One of the main benefits of the country is that it has an ample supply of natural resources which might also encourage foreign investments. South Africa also has a large production base that might encourage the exchange of products such as exporting their products to their exporters too. They have a wide range of export goods which are consumed internationally. South Africa, also has a well-developed legal and financial services that promote trade. International trade is perceived to be a very critical trade that requires a lot of legal and financial considerations to be successful (Söderbom, and Teal, 2003) Another significant reason as to why a country can consider exporting products to South Africa is that the country is well developed in terms of infrastructure.

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Ruchir Sharma describes South Africa as “a developed market wrapped inside an emerging market. ” South Africa emerges as Africa's largest economy however has different problems that constrain its growth and development. It is forecast to be the wealthiest country in Africa for two decades to come through its high economic growth rate. South Africa experienced significant economic growth between 2003 and 2007. However, the level of GDP between 2001-2010 has been reduced. Some significant factors are said to have been lagging the country behind economically. One of the most significant reasons why SA is lagging behind the existence of a two-speed economy where sectors such as tourism, some parts of mining, banking and finance, and farming are doing well whereas there is prolonged growth reported on the informal urban industries parts of farming and traditional manufacturing.

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There are also low capital investments in South Africa which have been falling as measured in the GDP. This is because most of the South African Companies consider foreign investments in other countries rather than investing domestically in the country to improve the financial state of their own country. They, therefore, resolve to base their industries abroad in high economy countries. In the past, there was a considerable generation which was deprived of education during the apartheid regime. It has therefore reduced the standards of literacy and training in the country. This has led to high rates of unemployment in the formal sector as most of the citizens do not have the academic or educational requirements to be employed in some high profile industries.

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These factors can, therefore, be considered by countries which want to make Soth Africa their export destinations. Progressively, South-Africa has very high potentials of economic growth which it can achieve through various strategies which can be facilitated by the government and the trade unions. Also, South Africa also has a well established and modern infrastructure. It is a well-eveloped country despite achieving its independence very late in the 1990s. South Africa, therefore, has stood to be a country with excellent infrastructure such as numerous urban markets, right road, and transport facilities, utility amenities and universities which has increased the demand for export goods. Another advantage that can be considered in this case is the well established financial and legal services in the country (Calderón, & Servén, 2010).

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The country has a stable financial and banking system that supports investments and does not allow any occurrence of regression in the country. This is caused by the low levels of education which started years ago before the country gained its independence. There are also some sectors of the country which lags behind in terms of infrastructural development such as water, energy, and transport. The country still lags in these sectors that might significantly affect trade with other countries. There are also high crimes rates which might be caused by unemployment and high poverty levels including the large gap between socioeconomic classes in the country. The high crime rates affect businesses such as retail business as levels of robberies with violence are on a high rise.

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S, India, and Germany. Most of the imports enter South Africa through the O. R Tambo Airport, Capetown and Durban Port. South Africa imports different consumer and industrial products from these countries which also strengthen their business relationships as they continue doing business together. There are also some essential imports regulations in South Africa which should be considered by the exporters. H5: When the country implements huge economic growth factors, it will expose it to more external and international trade partnerships which facilitate imports and exports. CHAPTER 3:RESEARCH METHODOLOGY 3. Research design The design used in this research is to help in determining the components surrounding and can address the research problem. The appropriate strategy was selected for this research which is believed to bring it to success.

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To achieve the research aims and objectives successfully, the multi-method research design was implemented satisfactorily which was accompanied by a collection of primary and secondary data (Maxwell, 2012). In collecting the primary data, a sample size of 30 people in business in South Africa form different cities and urban areas. The respondents significantly helped us in collecting new data which were later analyzed (Mai, 2016). Methodology This section in the dissertation represents various detailed discussions revolving around the methods of data collection and analysis. There are also other elements such s techniques used to collect the information discussed in this part. Research Paradigm In conducting the research, a research philosophy was considered and used to understand and do the research satisfactorily. The rationale of this sampling technique is that it reduces bias in research and gives the individuals equal chances of selection to contribute to the study and express their views on the research problem (Burns, Bush, & Sinha, 2014).

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Method of data collection Both primary and secondary data collection methods will be used in this research to collect useful information. Primary data collection was meant to get the correspondent's feedbacks to the questionnaires and interview questions which were analyzed. The first data collection was made possible through surveys and interviews which give reliable information on the research problem. The surveys were also designed to obtain information that aims at answering the research questions and collecting the research objectives (Gill, Stewart, Treasure, & Chadwick, 2008). Ethical considerations Many ethical considerations were involved while conducting this research. Ethical consideration is significant as it is based on the concerns of the participants of the research and the information collected. Some of the ethical considerations implemented in this research include the following: • The respondents were educated before the questionnaire survey where they were convived of the purpose of the research and the reasons why their responses were important for the research (Eide, & Kahn, 2008).

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• Confidentiality of the respondent’s personal information such as their names which were represented with secret identities. • The research also implemented random identification of the respondents to reduce bias in the research. Crude oil is the main import which constitute 65%, transport equipment, 7%, machinery- 8%, consumer electronics 10%, computer accessories, 6%, textiles 9%. UAE, therefore, produces a lot of oil which has a high demand in South Africa. Responding to the second questionnaire survey question (refer appendix) most of the respondents 6 in number strongly agreed to the fact that the UAE products are of high quality. 9 of them agreed, 5 were neutral, 6 disagreed and 4 strongly disagreed. Responding to the third question, 7 respondents strongly agreed, 9 agreed, 5 were neutral, 5 disagreed and 4 of them strongly disagreed. The discussions from the 5 busniess alspo yielded various results.

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They were able to relate some of the challenges that they faced from importing goods from UAE and also some of the solutions that they preferred to aid in overcoming such channelgs. The respondents presented some of the challenges such as • Difference in currency • Lack fo common and proper payment methods • High taxation on imported goods • Language barriers • Lack of proper communication Some of the solutions proposed by the business men based on their interests include include reducing the taxes of imported goods from UAE by the government, implementing favorable consumer laws that promote the consumption of international goods from the UAE, and establishment of trade relations between South Africa and UAE. It therefore implies that the relationship between the two countries will be strengthened and they will do business smoothly with each other.

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Analysis and discussion Considering the above finding s from the primary research relating to top regression and correlating value, it is evident that South Africa is a potential destination for the UAE product exporters. Many consumers, therefore, like them and change their consumer behavior towards them because of their competitive advantages. Most of the entrepreneurs in South Africa also prefer importing their merchandise from UAE into the country where they resell it and distribute it in the market thus making high profits. The primary analysis also proves that South Africa indeed is a potential export destination for the UAE exporters and they can consider moving their goods into the country to meet the demands of the consumers. Additionally, the need is also perceived to be high through the fact that the entrepreneurs make a lot of sales on the UAE imported goods in the market.

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The top demand factors, therefore, motivate most fo the UAE exporters to increase their production and export volumes in South Africa to meet its high market demand. The UAE exporters can, therefore, consider such factors to increase their exports to South Africa and meet the high demand for the products. This initiative will, therefore, benefit both the countries which will experience high economic growths. Many potential economic growth factors in South Africa makes it reliable to accommodate exports from the UAE. However, some factors such as government restrictions, trade barriers, currency fluctuations, poverty, and high unemployment rates can be considered to limit the exports to the country as some might not work due to changes in consumer behavior. It is also evident from the analysis that most of the participants or catalysts of international trade are the entrepreneurs who major on industrial and consumer products.

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There are still numerous considerations that are needed to be put in place to adequately justify the potentiality of South Africa to be a potential export destination for the UAE goods. The governemtn of UAE is also recomende to create and trade agreements and unions with south Africa to maintain good economic relations and avoid tarrifs on their products. This will alow it to be more competitive that other exporters such as Asia and European Union. The UAE banks should also extend their financial services by creating banks in Sout Africa which will be significant for overcoming currency fluctuations. Ministry of the economy should use some country branding strategies to promote UAE products in SA.  Marketing research (Vol. Harlow: Pearson. Calderón, C.

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, & Servén, L. Infrastructure and economic development in Sub-Saharan Africa. Export. gov.  South Africa - Market Challenges | export. gov. [online] Available at: https://www. Routledge. Harrell, M. C. , & Bradley, M. A. Positivist paradigm.  Encyclopaedia of Counselling, 2, 343. Levy, P. S. , & Lemeshow, S. Maxwell, J. A.  Qualitative research design: An interactive approach (Vol. Sage publications. Menyah, K. Frankfurt, M. : Dt. Fachverl. Qu, S. Q. South Africa - Market Challenges | export. gov. Retrieved from https://www. export. gov/article?id=South-Africa-market-challenges Söderbom, M. , Hoverman, S. , & Baldwin, C. The value and limitations of participatory action research methodology.  Journal of hydrology, 474, 11-21.  Cassim, Zaheer (19 January 2018). Strongly Agree b. Agree c. Neutral d. Disagree e. Strongly Disagree 3. Disagree e. Strongly Disagree 5. Do you make a lot of sales from selling the UAE imports in the local markets? a.

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