SME Sector in the United Arab Emirates essay sample

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Management for the Entrepreneur

Introduction

The small and medium enterprise (SME) sector continues to expand in the United Arab Emirates (UAE) as the country’s economy grows and market conditions improve to accommodate new business ventures. With the UAE preparing to host the World Expo 2020, the national government pledged to improve public-private partnerships in the country to inspire continued growth and innovation particularly in the economy. UAE’s Expo 2020 plans has also spurred growth in the SME sector (SME Advisor, 2014).

For this reason, now would be a perfect time for entrepreneurs to invest in small businesses. Since the SME sector is on the rise, entrepreneurs need to take advantage of the favorable business climate to invest on ventures. The following report is a proposal for a small business venture – a locally-owned convenience store that offers low cost on common goods found at convenience stores, adopts an automated shopping system, and will be located near residential areas that are located far from central business district. The report will describe the proposed small business, rationalize its contributions to society at large, and determine the contributions of small business opportunities to UAE’s economy and the growth of the business sector in the country in general.

Description of Proposed Small Businesses

The proposed small business is a convenience store, which would compete against established large-scale store chains in the UAE. Considering the store’s competition, the objective is to gain market share through product differentiation. The convenience store aims to become a low cost leader in this sector. Labor is one of the main reasons that contribute to high product and service cost. The proposed business aims to cut down on cost by adopting an automated shopping system, allowing customers to shop on their own and pay for products without the assistance of service personnel. The convenience store will be located near residential areas that are located far from the central business district and would sell usual items found in convenience stores such as packaged food, toiletries, household items, and magazines among others but will also include some uncommon items such as fresh produce and frozen food for customers who prefer to cook their own meals at home but are far from grocery stores.

Modernizing the convenience store’s business model through automated shopping would be beneficial to the business because this system meets current business standards in the UAE as implemented by the government. Many convenience stores closed in 2013 after failing to meet current market modernization standards implemented by local governments in various cities across the country (Briggs, 2013). Establishing a convenience store in the UAE is proposed because it matches an existing demand in the market. In 2012, the Association for Convenience and Fuel Retailing (NACS, 2012) reported that one of the major consumer trends in the UAE is toward convenience stores. In the past, wholesalers, or ‘big format’ or large-scale businesses dominated the market in the country. In recent years, however, the retail market has grown gradually. Consequently, UAE’s …

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