Emaar - The Center Of Tomorrow, Today Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Emaar - The Center Of Tomorrow, Today Case Study Solution

PESTLE for the suggested country:

The PESTLE analysis for France and Italy is provided in Appendix 3 and 4 of the case report whereas the PESTLE analysis for Spain is demonstrated below:

Political

The political environment of Spain is considered to be unstable as several cases of corruption have been identified in the last five years and the country has had a deficit since the last ten years which indicates the government spends more than it earns. The significant government spending rate has led the country to higher sovereign debt. In addition, Spain is a parliamentary autonomous country and the political crisis in the country has affected the global age of Spain. Moreover, the country has been a member of world trade organization (WTO) and European Union since 1986.

Economical

The country is ranked as the 13^th largest economy in the world with a gross domestic product amounting to 1426.19 billion US dollars, in the year 2018. The key industries that contributed significant amount to the country’s Gross Domestic Product were: Tourism, manufacturing, agriculture and electricity.

In addition, the unemployment rate and inflation in the country is expected to decrease further in the coming years, the demand of residential properties might increase due to high disposable income of citizens. Moreover, Spain received nearly 82.8 million foreign tourists in the year 2018.Thus, indicating higher demand of hotels and malls in the country.

Social

In the year 2019, Spain had a total population of 46.7 million and the main industries of the country includes manufacturing, agriculture, electricity, exports and imports which suggest that the executives of the companies operating in the mentioned industries will prefer living in luxurious houses thus, indicating demand for Emaar residential properties. Around 20,000 people visit Spain for the la tomatina festival annually.

Furthermore, Spain has a relaxing external climate and affordable cost of living. In addition, nine out of ten citizens of the country prefers to spend their vacation in the hotels with the beach view and sun exposure in the local country instead of spending vacations abroad. Therefore, it will be recommended to the business to establish a hotel in Spain in order to seize the opportunity of significant number of tourists in Spain and achieve global expansion.

Technological

The country has a large number of companies operating for technological development and innovation, thus indicating that technical assistance will be provided in the execution of the construction projects and ensuring that an advanced technological infrastructure is available in the country. The contribution of companies operating in IT development and innovation in relation to international securities, mobile communications and air and road traffic control are well known around the world.

Furthermore, the country has an internet penetration rate of 86.11 percent, which indicates the wide use of social media network in the country. This will ensure that cost effective marketing techniques are employed by the organization to reach a maximum number of customers in the region.

Legal

The country imposes no restrictions on foreign investment in the region or purchase of land for residential and commercial purposes. However, stringent laws and regulations exist in relation to direct and indirect discrimination at work places and employee’s rights protection and privacy. In addition, the country is highly bureaucratic and the legal laws allows foreign investment of up to 100 percent of equity.

Environment

Spain is the most preferred holiday destinations in the world. The most visited cities of the country which includes Barcelona, Madrid, Malaga, Seville, Valencia which has spectacular beaches, prehistoric sites, mountains and classic food has made the country a great holiday destination.

However, various concerns in relation to environmental damage has been experienced by the country which includes deforestation, air pollution, water pollution, dissertation and noise pollution.(pestle analysis, 2020)

Expansion Strategies

Using Ansoff Matrix framework, it will be advised to the business to expand its business to Spain by employing market development strategy i.e. by acquiring high end and most visited hotels in Spain which includes ME Madrid Reina Victoria and Ayre Hotel Rosellon, Barcelona as these hotels enjoys significant market share, have strong brand image and offers hospitality services at premium rates. Acquiring these hotels will provide competitive advantage to the company and ensure significant profits are earned and will enable the organization to achieve quick growth. (touropia, 2020)

Constructing new hotels in the region is not recommended due to various attached risks, which includes difficulty in finding the ideal location and building customer awareness. In addition, it is advised to the business to acquire renowned shopping malls and residential properties due to high number of hotels in the region and lack of market and customer understanding of Spain, undeveloped land on ideal location might be difficult to find and capturing significant share in the country might be difficult. Moreover, acquiring the companies will ensure proper control over strategic matters is maintained and significant market share is achieved as competition will be reduced by acquiring luxurious properties.

Conclusion:

Based on the critical evaluation of the globalization strategy employed by Emaar, the organization is suggested to enter European countries which includes France, Germany and Spain. The expansion strategy involves acquiring renowned hotels, shopping malls and residential properties due to various attached risks, which includes difficulty in finding the ideal location, building customer awareness and lack of market and customer understanding of Spain..................................

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