INNOVATION, CHANGE AND ENTREPRENEURS “Is going international something that only large and established firms should pursue after they have achieved success in its domestic market or should entrepreneurs think about international markets ‘right of the bat? ‘ which sorts of products are more amenable to going international by small and new firms? ” BY : DIVITA AGARWAL Entrepreneurs should think about the international market as “right of the bat”. . VISION STATEMENT NATU DEVELOPERS PVT.
LTD is a premier builder & developer of real estate sector in Jaipur. The company has made significant gains and achieved its shorts team goals and objectives. Now looking towards the future NDPL has decided to target a large and more diversified market segments with newer and more of real estate development in the residential and commercial sectors. The company wishes to forget ahead, experiment with new ideas and challenge new frontiers. NDPL will endeavor to achive excellence in all their undertaking and intend to provide customer satisfaction by being efficient and competitive.
We are planning to expand our business in Dubai as real estate market is growing there presently. Entrepreneurs should think about the international market as “right of the bat”. But before going internationally one should consider these following factors: Factor 1: Get company-wide commitment. Every employee should be a vital member of your international team, from the executive suite to customer service through engineering, purchasing, production and shipping. You’re all in it for the long haul. Factor 2: Define your business plan for accessing global markets.
An international business plan is important in order to define your company’s present status and internal goals and commitment, but it’s also necessary if you plan to measure your results. Factor 3: Determine how much you can afford to invest in your international expansion efforts. Will it be based on ten percent of your domestic business profits or on a pay-as-you-can-afford process? Factor 4: Plan at least a two-year lead-time for world market penetration. It takes time and patience to build a great, enduring global enterprise, so be patient and plan for the long haul.
Factor 5: Build a website and implement your international plan sensibly. Many companies offer affordable packages for building a website, but you must decide in what language you’ll communicate. English is unarguably the most important language in the world, but only 28 percent of the European population can read it. That percentage is even lower in South America and Asia. Over time, it would be best to slowly build a site that communicates sensibly and effectively with the world. Factor 6: Pick a product or service to take overseas. You can’t be all things to all people.
Decide on something. Then stick with it. Factor 7: Conduct market research to identify your prime target markets. You want to find out where in the world your product will be in greatest demand. Market research is a powerful tool for exploring and identifying the fastest-growing, most penetrable market for your product. Factor 8: Search out the data you need to predict how your product will sell in a specific geographic location. Do you want to sell a few units to a customer in Australia or ten 40-foot containers on a monthly basis to retailers in France?
Doing your homework will enable you to find out how much you’ll be able to sell over a specific period of time. Factor 9: Prepare your product for export. You should expect to adapt your product to some degree for sale outside your domestic markets before you make your first sale. Packaging plays a vital role in enabling international connections. Make yours the best in its class, and you’ll be able to sell it anywhere in the world. Factor 10: Find cross-border customers. There is no business overseas for you unless you can locate customers first. Factor 11: Establish a direct or indirect method of export.
It all boils down to export strategy and how much control you wish to exercise over your ventures. On the other hand, readiness to seize an opportunity is more important than having your whole strategy nailed down beforehand. Factor 12: Hire a good lawyer, a savvy banker, a knowledgeable accountant and a seasoned transport specialist, each of whom specializes in international transactions. You may feel you can’t afford these professional services, but you really can’t afford to do without them. Factor 13: Prepare pricing and determine your landed costs.
Be ready to test out your price on your customer. See what reaction you get and then negotiate from there. Factor 14: Set up terms, conditions and other financing options. Agree on terms of payment in advance, and never, ever sell on open account to a brand new customer. No ifs, ands or buts. Just don’t. Factor 15: Brush up on your documentation and export licensing procedures. If you find it too time consuming, hire a freight forwarder who can fill you in on the spot. Ask a lot of questions. Use their expertise to your advantage. Factor 16: Implement an extraordinary after-sales service plan.
The relationship between your company and your overseas customer shouldn’t end when a sales is made. If anything, it should be just the start of a long relationship which requires more of your attention. The “care and feeding” of your customers will determine if they keep coming back for more. Factor 17: Make personal contact with your new targets, armed with culture-specific information and courtesies, professionalism and consistency. Your goal should be to enter a different culture, adapt to it and make it your own. Factor 18: Investigate international business travel tips.
The practical aspects of international business can make or break the success of your trip. In preparing to go boldly where you’ve never gone before, plan accordingly. Factor 19: Explore cross-border alliances and partnerships. In charting your global strategy, consider joining forces with another company of similar size and market presence that’s located in a foreign country where you’re already doing business, or would like to. Gauge your readiness-or willingness-to take on a 50/50 partnership and what it can and cannot do for you. Factor 20: Enjoy the journey.
Never forget that you are the most important and valuable business asset you have, and that the human touch is even more precious in our age of advanced technology. Take the best possible care of yourself, your employees, your suppliers and your customers, and your future will be bright, prosperous and happy. EXPANSION OF REAL ESTATE BUSINESS IN DUBAI Dubai is known as a tourist hub in the entire gulf region. Since 1990’s Dubai real estate sector shows appreciating growth. But during the previous 3 years this sector is not enjoying favorable conditions. Yet government and other parties are trying hard to set its track towards growth again.
Real estate businesses enjoy range of opportunities, relaxing terms and conditions and flexible policies in Dubai. That is why this business is alluring to the people around the globe. There is a proper procedure of opening a real estate business in Dubai. Let’s discuss its start up rules and regulations: Select the form of Business: First of all, select the form of real estate business. Mostly in Dubai seven types of structures of organization are there to choose from including partnership, sole proprietorship, corporate form, partnership in commendams’, joint venture and many more.
However, partnership, sole proprietorship and corporate form are most popular in Dubai. Selecting location of a business: Then, select the area in which you want to open your real estate office. You can also take the building on rent in Dubai for opening up a commercial office. If it is a sole proprietorship business, opening up office in free zone areas is quite beneficial. Many commercial areas in Dubai are designated free zone areas which give 100 percent ownership to its owners. While in the rest of the regions 51% ownership is in the hands of UAE government.
Other benefits like tax exemptions and import duties exemptions are also given to the businesses operating in free zone areas. Apply for the licenses: A professional as well as a commercial license is required to open up real estate business through RERA. Department of economic development helps you in identifying the exact licensing requirements as per your business needs. Also, you need training specifically required by the RERA. You are required to complete the course of “Real estate executive diploma course”. Register your real estate business: Register your company by department of economic development.
Registration process requires several documents to be filed with. As a result, an initial approval is given to you and afterwards final approval is given on meeting of further formalities. In the end, official commercial license is given to you that allow you to buy and sell Dubai properties officially. Open up a legal office: Then obtain establishment immigration cards from the Ministry of Labor to hire further employees in your company. After meeting all these requirements you can open up your legal business easily. FACTORS EFFECTING DUBAI REAL ESTATE BUSINESS ESTABLISHMENT IN DUBAI 1.
The determinants of demand and supply are those factors within a defined real estate market that cause demand and supply to shift and lead to price changes. The primary determinants of real estate demand are population, income, buyers’ tastes and preferences, price changes of other goods, the cost and availability of financing, and the expectations of buyers about the future. The primary determinants of real estate supply are the costs of production inputs, cost of financing, advances in technological know-how, and expectations regarding future demand. 2.
The demand for real estate can be boosted by encouraging people to come to Dubai, whether as investors, business travellers, employees, tourists, attending events and conferences and for health and education purposes. To do this, more liberalization and simplification of laws, rules and measures are necessary in the following areas: (i) immigration and residence laws and procedures (ii) labour laws and procedures (iii) business and commercial laws and procedures (iv) real estate and tenancy laws and procedures (v) administration of courts and dispensing of justice. . Dubai Strategic Plan (DSP), which was recently announced by Dubai government, has projected 11 per cent annual real GDP growth during the time frame of the strategy 2007-2015. If Dubai long term population growth rate of 7 per cent, which is based of its historical trend for the last 30 years, is coupled with the DSP projected growth rate of real GDP of 11 per cent, then this gives a real per capita income growth rate of 4 per cent during the years of the strategy.
Therefore, the past trend of per capita income growth is expected to be sustained into the coming years. This is good news for the real estate market. Most of this income growth accrues to the upper and middle income groups who are the primary targets of the real estate developers. Their rising purchasing power is expected to fuel the demand for real estate. 4.? The demand for real estate can be enhanced if the availability and cost of real estate financing are further enhanced.
Further opening up and liberalization of mortgage financing markets is expected to promote competition in this market and therefore bring more financial resources for lending and encourage more product innovations that cater for the different needs of the customers. The competition is expected to render the cost of financing and its conditions affordable and therefore entice more people to be involved in the real estate market as investors and buyers. ?5. The demand for real estate can be promoted by developing and cementing of the tastes and preferences of the people for Dubai.
This can be done through Dubai government aggressive promotional campaigns in other countries through its Department of Tourism and Commercial Marketing and investment promotion agencies. Successful promotional campaigns are expected to develop people’s tastes and preferences for Dubai and consequently people will scramble for Dubai. 6.? The credibility of the government economic polices is extremely important because people base their expectations about the future on those policies. Generally speaking, Dubai government economic policies and measures are credible and the public have faith in them.
One stark exception to this credibility is the inflation issue. In the past, people were not confident about the official inflation figures published by the government because they did not reflect realities on the grounds as they saw and experienced them daily. Buyers of real estate need to correctly anticipate their financing cost based on inflation figures provided by the government. To create positive expectations that promote demand for real estate, the government needs to boost its economic policy credibility in fronts such inflation, employment and economic growth. .? The research has shown that market dynamics will take time to adjust supply and demand. Therefore, it is expected that it will take some time before Dubai real estate market cools down. It is expected that the market will not cool down before at least 5 years from now, assuming that the government has done nothing to promote the demand and supply of real estate. Any government policy measures that boost the demand and supply of real estate are expected to keep the market momentum on and push it further in time. .? The research has shown that the real estate price has increased by cumulative annual growth rate (CAGR) of 10 per cent in the medium term. In the long term, the price has increased by CAGR of 4 per cent. If the government is looking for an objective criterion for setting a rent cap, then the 10 per cent makes a lot of sense for the medium term. The long term real estate price increase of 4 per cent is very consistent with some EU countries rent cap such as the Netherlands.
This means that when Dubai real estate market becomes mature and reaches its steady state, then the annual price increase will just be covering the inflation rate plus a small margin as real return on real estate. 9.? The research has shown that if the government would like to keep the heat in Dubai real estate market then demand boosting policy measures are needed. Any policy measures that positively influence population, income, cost and availability of financing, buyers’ tastes and preferences, and the expectations of buyers about the future will contribute to the increase in real estate demand. 0.? The research has shown that if the government would like to take the heat out of Dubai real estate market and stabilize it then supply boosting policy measures are needed. Any policy measures that positively influence the real estate costs of production inputs, cost of financing, advances in technological know-how, and expectations regarding future demand will contribute to the increase of real estate supply. 11.? The model research has shown that the speed of adjustment in the real estate market (i. e. he time that the market will take to converge to equilibrium) depends on the competitiveness of the market. Therefore, if the government would like the supply and demand for real estate in Dubai to catch up relatively fast, then policy measures that promote competition in real estate market are needed. These policy measures are more opening up and liberalization of real estate market, information disclosure, flexible land and real estate regulations, and more liberalization of labour and capital markets, among others
Since 2010, the real estate market in Dubai has been showing small spurts of growth across many areas in Dubai. The year 2011 though remained another challenging year for the sector but during the last two quarters, the rate of decline in property prices was slowed down to a significant extent. This clearly marked that there would be something to cheer about Dubai real estate in the near future. Despite the economic recession, the speed with which the property prices are recovering shows that the market is surely on the positive path.
Though stabilization and recovery is mostly seen in limited prime residential and commercial areas across Dubai yet more uniform and steady recovery is expected in the following year. Owing to the regional unrest in many counties of the world and the US and European real estate sectors performing not so well, investors still are interested to invest in Dubai real estate. The residential sector of Dubai is outperforming its commercial sector, since the prices of residential properties in many areas across Dubai have gained advantage from current capital shifts in the region.
The prices of the communities like Dubai Marina, Arabian Ranches, Arab Spring, and Jumeirah Lake Towers have been inching up since the beginning of 2011. Though the commercial real estate is currently performing not so well but according to Cluttons, buyers are gradually showing interest in this sector as well. The offices available for rent in Dubai offer cost savings to the businessmen, since the prices are now declining slowly as compared to earlier times. In comparison to the London or New York real estate, the prices of the properties are much more affordable in Dubai.
Those who know this are bringing their businesses to Dubai. More astute investors are there in Dubai real estate market who look at the properties with different angles. Buyers now note down location, price, sense of community, quality, architecture, internal decor, facilities, and many other things before purchasing a house in Dubai. Sellers in order to create the demand of their properties are now staging their properties to suit the needs of the buyers. These all activities are the positive attributes of Dubai real estate, which are making the market more mature as compared to the earlier times.