Far Eastern UniversityInstitute of Accounts, Business and Finance DEPARTMENT OF MANAGEMENT

DEPARTMENT OF MANAGEMENT

Marikina Shoe Exchange

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A franchised Business planPresented to the Faculty of Institute of Accounts, Business and Finance ofFar Eastern UniversitySampaloc, Manila

__________________________________________________________________ In Partial Fulfillment of the Requirements for the Degree ofBachelor of Science in Business AdministrationMajor in Business Management

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1. Executive SummaryThe UAE is situated on the Arabian Peninsula between Oman and Saudi Arabia and bordering the Gulf of Oman and the Persian Gulf.The UAE government estimates the total area of the UAE to be 83,600 square kilometers; excluding the three islands in the Strait of Hormuz, the area is 77,700 square kilometers (slightly smaller than the state of Maine). Abu Dhabi has an area of 67,350 square kilometers.The UAEs land boundaries total 867 kilometers. The emirates border Oman to the north and east (410 kilometers) and Saudi Arabia to the west and south (457 kilometers).According to the official census conducted in 2005, estimates for the UAEs population for that year range from 4.1 million to 4.6 million; the population is estimated to increase to 4.9 million in 2006. The overall population increased by almost 75 percent from 1995 to 2005, with the percentage of non-nationals increasing at a much faster rate than the national population. The current annual growth rate is estimated at 6.9 percent. The majority of the population (2.5 million) is urban and lives in the two largest emiratesAbu Dhabi and Dubai. Dubai has the fastest growing population, with an average annual growth rate of 8.5 percent between the years 2000 and 2005.A study by Dubai International Academic City, in conjunction with Deloitte, showed that the UAE is considered the fourth most attractive education destination in the world for students looking to study abroad.The UAE now has a blossoming financial sector and strong growth prospects. David Marshall, Senior Executive Officer at Emirates NBD Asset Management, discusses this post-crisis surgeOfficial data shows that the United Arab Emirates economy has turned around after years of low growth, financing issues and restructuring post-2009. Now, the Emirates isseeing a strong rebound in profitability and growth as it continues to benefit from its perceived safe-haven status amid regional instability.The proposed business is to establish a medium/large branch and franchises in United Arab Emirates. This includes all products/imports/services of the said company.

2. IntroductionThis document is a research paper for business proposal that proposes Marikina Shoe Exchange Company extends a successful branch or create a franchise at United Arab Emirates.Dubai is a large city in United Arab Emirates that has a population of over 2 million and more than 1 million tourists that visit there.Establishing MSE at Dubai and expanding its franchise, the company will extend its legacy in other countries and not only to introduce but to promote Filipino quality products.

3.a Socio-Cultural

3.a.1 Geography

Area of Dubai:4,114 km sq.Dubai Population:2,262,000Country:United Arab EmiratesDubai Independence Day:2 DecDubai Time zone:UAE standard time (UTC+4)Dubai Government:Constitutional monarchyDubai GDP as of 2008:US$ 82.11 billionDubai Language:English, Urdu, Persian, Hindi, Bengali, Tamil,Tagalog, Chinese, Malayalam, and other languages are spoken in Dubai by its many foreign residents.

Dubai is located on the Persian Gulf, in the northeast of the United Arab Emirates. Dubai is the second largest emirate with an urban area of 3,885 sq. km and the city is roughly 35 sq. km. However it will expand to twice that size with the addition of the man-made islands; the Waterfront, the three Palms, the World, the Universe, Dubai Land, as well as the construction in the desert.

One of the most fascinating geographical aspects of Dubai is its Creek, which divides the city into two regions. Dubai Creek is made up of a natural 9.5 mile inlet in the Persian Gulf, around which the citys trade developed. North of the Creek is called Deira, and Bur Dubai refers to the south where it joins the tourist and residential developments of Jumeirah along the coast.Dubai also has the highest population, sharing its borders with Abu Dhabi in the south, Sharjah in the northeast and the Sultanate of Oman in the southeast.Due to the citys unique geographical location it enjoys a strategic position which allows it to connect to all local Gulf States, as well as to East Africa and South Asia.

3.a.2 Climate

The line of the Tropic of Cancer crosses through the UAE, causing the weather in Dubai to be warm and sunny. In the winter it has an average daytime temperature of 25C, nearer the coast 12-15C, in the desert or mountains 5C. With the nights being relatively cool. Near coastal areas humidity can average between 50% and 60%.In the summer, the weather in Dubai is very hot and humid, with temperatures reaching mid 40s. Even the sea temperature can reach 37C, with humidity averaging over 90%.Rainfall in Dubai is infrequent and does not last for a long period. It mostly rains during the winter period in the form of short gushes and an occasional thunderstorm. On average, rain falls only five days a year.

3.a.3Education

Dubai: International students looking to study and live in the UAE continue to pay among the highest premiums in the world.The cost of studying in the UAE is equivalent to about half (51 per cent) of the gross domestic product (GDP) per person, or nearly $28,000 (Dh102,760) per year, making it the fourth most expensive country for foreigners to study and live in, according to the latest research by HSBC.The average annual fees and cost of living for international students in the UAE, at $21,371 and $6,004, respectively, put the countrys overall education cost ahead those of Canada, Singapore, Japan and Germany.The living expenses in the country is one of the cheapest among most developed and emerging markets, after China, Taiwan and Germany, but the high university fees pushed it to the top of the table. Annual fees in the UAE is the third most expensive in the world, trumping other major markets including the United Kingdom. Australia tops the overall list, where a year of study costs $38,516, followed by the United States.

Household budget

For many people, spending for education constitutes a huge portion of the household budget. School fees in most markets in the world are getting more expensive by the year and the falling value of some currencies against the dirham and US dollar is not helping.The Indian rupee, for one, has been sliding against the greenback and what this means to parents based in the South Asian country is that they will have to dig deeper into their pockets to be able to send their children to UAE schools.Education costs are generally prone to higher inflationary rates not just in the UAE but across the globe. For expatriates, education is generally the second-highest expense for families, the highest being expenses on house rent, noted Ashok Sardana, managing director, Continental Group.

The high demand for education in the country is the reason behind the expensive school fees. The UAE is regarded as one of the top destinations among residents from around the world.The UAEs stable political and economic environment, coupled with its favourable lifestyle for students, has made it the most attractive destination within this region for education, both for international students and for students from the neighbouring GCC and Middle Eastern markets, Rick Crossman, head of UAE retail banking and wealth management at HSBC Bank Middle East, said.

Emerging market economies

A study by Dubai International Academic City, in conjunction with Deloitte, showed that the UAE is considered the fourth most attractive education destination in the world for students looking to study abroad. It is also regarded as the most attractive destination among the emerging market economies, ahead of China, Singapore and Australia.With increased investment in educational institutions and a variety of international-standard universities for students to choose from, we expect the UAE to retain its position as a favourable education destination for the foreseeable future, Rick added.

3.a.4 Language

Language is the most important marker of identity for a country and theNational Language in Dubai isArabicwhich speaks a lot about the country and its people. Although according to the Constitution of the country theofficial language in Dubai is Arabic, yet English is widely spoken and differentregional languages are also often used.

Islambeing the official religion in Dubai with a vast majority belonging to theSunni clan. However, Dubai being a cosmopolitan place has several other religions like Hindus, Sikhs, and Christians living together harmoniously.Naturally, although theofficial language in Dubai is Arabic,other languages like English, Hindi, Urdu, Malayalam, Bengali and Tagalog are widely spoken.Languages in Dubaihave never been an issue and most of theschools in Dubaiteach English along with Arabic. The medium of instruction is usually English but crossing the barrier oflanguage in Dubaithere are a number of schools in Dubai that teach foreign languages including French and Russian to children.

3.a.5 Religion

Islam is the official state religion. The Government funds or subsidizes almost 95 percent of Sunni mosques and employs all Sunni imams; approximately 5 percent of Sunni mosques are entirely private, and several large mosques have large private endowments. The government distributes guidance on religious sermons to mosques and imams, whether Sunni or Shi'a, and monitors all sermons for political content. The Shi'a minority is free to worship and maintain its own mosques. All Shi'a mosques are considered private and receive no funds from the government. Within the UAE, Shi'a imams are government-appointed only in Dubai. Shi'a Muslims in Dubai may pursue Shi'a family law cases through a special Shi'a council rather than the Shari'a courts.

Regarding the other religions in Dubai, Dubai has large expatriate communities of Hindus, Christians, Buddhists, Sikhs and others. Non-Muslim groups can own their own houses of worship, wherein they can practice their religion freely, by requesting a land grant and permission to build a compound. Groups that do not have their own buildings must use the facilities of other religious organizations or worship in private homes. While the UAE doesn't offer any federal-level method of granting official status to religious groups, the individual emirates may exercise autonomy in officially recognizing a particular religious denomination. For instance, Dubai granted legal status to The Church of Jesus Christ of Latter-day Saints in 1993. Dubai is also the only emirate that has Hindu temples and a Sikh Gurdwara.

3.b The Countrys Environment Technological Aspect3.b.1 Contribution to the Society

Since its founding, the UAE has provided significant aid to developing countries and has been a major contributor of emergency relief to regions affected by conflict and natural disasters.

As UAE founder and former President HH Sheikh Zayed bin Sultan Al Nahyan said, Foreign aid and assistance is one of the basic pillars of our foreign policy. For we believe that there is no true benefit for us from the wealth that we have unless it does not also reach those in need, wherever they may be, and regardless of their nationality or beliefs.

In 2008 the UAE established the Office for the Coordination of Foreign Aid (OCFA) to track and document the countrys annual contribution to international aid. OCFAs first report, released in mid 2010, found that in 2009 the UAE contributed 8.9 billion dirhams ($2.43 billion) in foreign aid; 95 percent of which was in the form of grants to humanitarian, development and charity projects across 92 countries.

The UAEs primary aid and relief agency is the Red Crescent, one of the world's top ten Red Cross and Red Crescent societies in terms of the volume of aid provided. The Red Crescent actively collaborates with the United Nations Office for Project Services, (UNOPS), responsible for providing urgent technical, logistical and administrative support to other United Nations (UN) programs.

In 2009 the Red Crescent ranked as the countrys third most significant donor behind the Abu Dhabi Fund for Development and the Government. The Red Crescent gave a total of 451.5 million dirham ($123 million) to 55 countries, mainly to social infrastructure and services, and multi-sector projects.

The UAE Red Crescent organized the Emirates Heart Group, a voluntary collective of cardiologists working in the UAE, and from several countries, including the Emirates, France, Canada, Saudi Arabia, Egypt and South Africa. Started by five UAE cardiologists, and now boasting over 200 participants, the group's members volunteer their time to carry out surgery in countries where there is a lack of such skills. Their missions have included trips to Syria, Jordan, Egypt, Morocco, Sudan and Kenya.

Other organizations also sponsor aid and relief. One major initiative, launched by Vice President and Prime Minister HH Sheikh Mohammed bin Rashid Al Maktoum in September 2007, was Dubai Cares, which seeks to provide primary education for at least a million school children in the poorest countries of the Middle East, Africa and Asia.

The Zayed Foundation responds to emergency needs and also contributes to infrastructure projects, like hospitals, healthcare institutions and schools. The scope of the foundation is perhaps the most active in global terms of all the UAE agencies. In 2009 the foundation gave grants totaling 47.9 million dirham ($13 million). The top recipient countries included Yemen, Burkina Faso, Kenya, Afghanistan, Morocco, Pakistan, Egypt and Ethiopia.

Besides emergency and other humanitarian relief, the UAE provides development aid. The oldest of the UAE's development agencies, the Abu Dhabi Fund for Development (ADFD) was established in 1971. Since its inception, ADFD has provided almost 13 billion dirham ($3.54 billion) to 207 projects across 53 countries. In 2009, the ADFD contributed or administered 4.95 billion dirhams ($1.35 billion) in grants and loans, making it the UAEs largest donor that year.

While much of the UAE's development assistance is provided on a government-to-government basis, the country is also a major contributor to international agencies. During the course of the last 30 years, for example, over 100 billion dirhams ($27 billion) has been made available through the International Monetary Fund and the World Bank, according to the UAE Ministry of Finance and Industry. In addition, the UAE supports various UN development funds, including UNICEF, UNDP and the Office of the UN High Commissioner for Refugees, as well as the UN Relief Works Agency for Palestinian Refugees.

The UAE Government and Emirati donor organizations also participate in a number of other multilateral aid-giving institutions, including the International Development Agency (IDA), and other bodies like the OPEC Fund for International Development, the Arab Gulf Fund for the UN (AGFUND), the Arab Bank for Economic Development in Africa (BADEA), the Abu Dhabi-based Arab Monetary Fund (AMF) and the Islamic Development Bank (IDB). In 2009, donations made to such multilateral organizations totaled 26.5 million dirham ($7.2 million).

A main initiative of the OCFA is to document all foreign aid contributions made since the formation of the UAE in 1971. While this study is not yet complete, during the announcement of the inaugural 2009 report, HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai stated a provisional figure of 163 billion dirham ($44 billion) as the amount given by the government and Emirati donor organizations since 1971.

3b.2 Recent Research and DevelopmentNuclear Power in the United Arab EmiratesThe UAE is taking deliberate steps in close consultation with the International Atomic Energy Agency to embark upon a nuclear power program.It accepted a $20 billion bid from a South Korean consortium to build four commercial nuclear power reactors, total 5.6 GWe, by 2020 at Barakah.Construction of the first unit started in July 2012, and the second in May 2013.The United Arab Emirates (UAE) was founded in 1971, comprising seven states including Abu Dhabi and Dubai. Abu Dhabi city is the federal capital of UAE, and Abu Dhabi emirate accounts for 86% of the land area of UAE, and 95% of its oil. Dubai is the UAE's largest city.Background: Gulf CooperationSince commencing studies in collaboration with other members of the Gulf Cooperation Council (GCC), the UAE has proceeded with plans to set up on its own an ambitious nuclear power program with significant capacity being on line by 2020.In December 2006 the six member states of the Gulf Cooperation Council (GCC) Kuwait, Saudi Arabia, Bahrain, the UAE, Qatar and Oman announced that the Council was commissioning a study on the peaceful use of nuclear energy. France agreed to work with them on this, and Iran pledged assistance with nuclear technology.Together they produce 273 billion kWh per year, all from fossil fuels (2003) and 5-7% annual demand growth. They have total installed capacity of about 80 GWe, with a common grid. There is also a large demand for desalination, currently fuelled by oil and gas (directly or indirectly). A 2009 report projects GCC electricity demand increasing 10% annually to 2015, and desalination demand growing at 8%, implying the need for 60 GWe of new capacity by 2015.In February 2007 the six states agreed with the IAEA to cooperate on a feasibility study for a regional nuclear power and desalination program. Saudi Arabia was leading the investigation and thought that a program might emerge about 2009. Regional electricity grid integration is progressing, including a 3000 MWe connection from Iran by 2015.The six nations are all signatories of the NPT and the UAE ratified a safeguards agreement with IAEA in 2003. In mid-2008 it appointed an ambassador to IAEA.Nuclear power program in UAEIn 2009 the UAE produced 90.6 billion kWh gross, 98% of it from gas, for which it relies on some imports. It has about 19 GWe capacity. Electricity demand is growing by 9% per year and is expected to require 40 GWe of capacity by 2020. It is seeking to import some 1000 MWe from Iran. It relies entirely on electricity to provide its potable water, by desalination.In April 2008 the UAE independently published a comprehensive policy on nuclear energy. This projected escalating electricity demand from 15.5 GWe in 2008 to over 40 GWe in 2020, with natural gas supplies sufficient for only half of this. Imported coal was dismissed as an option due to environmental and energy security implications. Renewables would be able to supply only 6-7% of the needed power by 2020.Nuclear power "emerged as a proven, environmentally promising and commercially competitive option which could make a significant base-load contribution to the UAEs economy and future energy security." This led to creation of a regulatory framework and selection of a site between Abu Dhabi city and Ruwais, at Barakah. Another possible site mentioned then was Al Fujayrah on the Indian Ocean coast.Accordingly, and as recommended by the IAEA, the UAE established a Nuclear Energy Program Implementation Organization which set up the Emirates Nuclear Energy Corporation (ENEC) as an Abu Dhabi public entity, initially funded with $100 million, to evaluate and implement nuclear power plans within UAE (or specifically in Abu Dhabi emirate, which comprises 86% of the land area of UAE).The UAE announced that it would "offer joint-venture arrangements to foreign investors for the construction and operation of future nuclear power plants" similar to existing Independent Water and Power Producer structures which have 60% owned by the government and 40% by the JV partner(s). The UAE set up a model of managing its nuclear power program based on contractor services rather than more slowly establishing indigenous expertise.The UAE also resolved to forgo domestic enrichment and reprocessing, and "to conclude long-term arrangements . for the secure supply of nuclear fuel, as well as the safe and secure transportation and, if available, the disposal of spent fuel via fuel leasing or other emerging fuel supply arrangements." (See Fuel Cycle below.)The UAE invited expressions of interest from nine companies for construction of its first nuclear power plant. ENEC reduced this to a short list of three and sought bids by mid-2009. The three bidders on the short list comprised Areva, with Suez and Total, proposing its EPR, GE-Hitachi proposing its ABWR, and the Korean consortium proposing the APR-1400 PWR technology. The last group is led by Korea Electric Power Co. (KEPCO), and involves Samsung, Hyundai and Doosan, as well as Westinghouse, whose System 80+ design (certified in the USA) has been developed into the APR-1400. The UAE expressed an intention to standardize on one technology.ENEC appointed the global full-service program management, engineering, construction and operations firm CH2M Hill to manage the UAE's plans for bringing nuclear power to the country.In December 2009 ENEC announced that it had selected a bid from the KEPCO-led consortiuma for four APR-1400 reactors, to be built at one site. The value of the contract for the construction, commissioning and fuel loads for four units is about US$20.4 billion, with a high percentage of the contract being offered under a fixed-price arrangement. The consortium also expects to earn another $20 billion by jointly operating the reactors for 60 years. In March 2010 KEPCO awarded a $5.59 billion construction contract to Hyundai and Samsung for the first plants. The total cost of the plant including infrastructure and finance is expected to be about $32 billion.KEPCO claimed later that the reason for their selection in the face of strong competition from France, USA, and Japan was their demonstrable highest capacity factor, lowest construction cost and shortest construction time among the bidders.The plants will largely be financed by the state, without the need for loans, but with some Korean equity partners. By 2020 UAE hopes to have four of the 1400 MWe nuclear plants running and producing electricity at a quarter the cost of that from gas. It plans to export electricity to Gulf neighbours via the regional power grid. (The first APR-1400 units, Shin-Kori 3&4, are under construction in South Korea.)An operating company, Nawah Energy, is to be set up about 2017 to run the four Barakah units, with 82% ENEC equity and 18% KEPCO.From 2010 ENEC continued negotiations with the losing bidders, Arevab and GE-Hitachi, regarding cooperation in related nuclear areas.In November 2013 the Dubai Electricity & Water Authority said that it had a target of 12% of its electricity supply capacity to be nuclear by 2030, primarily from Abu Dhabis Barakah plant, but also possibly from a Dubai plant at some stage. This target is in Dubais Integrated Energy Strategy 2030, arising from its Supreme Council of Energy set up in 2009 as an independent legal entity to oversee all matters relating to Dubai's energy sector.Barakah power plantIn April 2010 ENEC lodged licence applications and an environmental assessment for its preferred site at Barakah (formerly 'Braka'), on the coast 53 km west of Ruwais and 300 km west of Abu Dhabi city a little closer to Qatar than to the capital. The applications were assessed by the Federal Authority of Nuclear Regulation (FANR). This assessment, with environmental management plan, was considered by Abu Dhabi's Environmental Agency and approval was given in July 2012.The site evaluation process for the four reactors considered ten potential sites and was based on guidance from FANR as well as the US Electric Power Research Institute, the US Nuclear Regulatory Commission, and the IAEA. The Gulf seawater at Barakah is about 35C, which will give less thermal efficiency than the Shin-Kori 3&4 reference units, where the sea is about 27C, so larger heat exchangers and condensers are required. In July 2010 ENEC received two licences from FANR: a site preparation licence for Barakah and a limited construction licence allowing manufacture of major components for four units. A construction environmental permit from the Environmental Agency-Abu Dhabi followed them and groundbreaking took place in March 2011. Construction licence applications were based on the safety analysis completed for Kepco's Shin-Kori 3&4 in South Korea which are the reference units for the Barakah plant. Differences relate principally to cooling, and 50Hz output instead of 60Hz.ENEC lodged a 9000-page construction licence application for units 1&2 in December 2010 to undertake full site works and start construction of unit 1 in mid-2012 and unit 2 a year later. The construction licence for units 1&2 was issued by FANR in mid-July 2012. The 18-month review involved more than 60 FANR staff and three international consulting firms, as well as IAEA, and took in changes resulting from the Fukushima accident. Construction of unit 1 started almost immediately with first concrete, and that for unit 2 started in May 2013. Commercial operation is envisaged in 2017 and 2018 respectively, followed by 2019 and 2020 for units 3&4. Unit 1 was 55% complete in September 2014. See ENEC statement and schedulec.ENEC submitted a 10,000-page construction licence application for units 3&4 to FANR in March 2013, based on that for units 1 and 2, and the licences were issued in mid-September 2014. Substantial work to prepare for first structural concrete had been authorised for units 3&4 in February 2014.An IAEA integrated nuclear infrastructure review (INIR) mission to the UAE reported in January 2011 that the UAE had followed its recommended comprehensive 'milestones' approach for such countries. Areas of good practice identified by the mission included "cooperation, without compromising their independence, between the regulatory bodies and utility, human resource development, a well-structured management system, and a strong safety culture." Also ENEC has joined the World Association of Nuclear Operators (WANO) to benefit from its peer review process at the outset, to ensure high standards of safety.The US Export-Import Bank approved $2 billion in financing for the Barakah plant in September 2012, for US-sourced components from Westinghouse and services from it and two other firms. Most of it was for coolant pumps and controls.Fuel CycleBy August 2012 ENEC had awarded six contracts related to the supply of natural uranium concentrates, conversion and enrichment services individually, and the purchase of some enriched uranium product. A spread of suppliers is involved for each stage of the front-end fuel cycle. The company estimates the contracts are worth some $3 billion and will enable the Barakah plant to generate up to 450 billion kilowatt-hours of electricity over a 15-year period from 2017.The contracts involve Canada-based Uranium One, UK-based Rio Tinto, France's Areva and Russia's Techsnabexport (Tenex) for supply of uranium concentrates. For conversion services, contracts utilise the USA's Converdyn, Tenex and Areva. Enrichment will be by Europe-based Urenco, Areva and Tenex. Areva said that its contract involved supply of enriched uranium worth some $500 million, and Tenex claimed to have secured half of the supply. ENEC "expects to return to the market at various times to take advantage of favorable market conditions and to strengthen its security of supply position."The enriched uranium will be supplied to Kepco Nuclear Fuels part of the prime contractor consortium led by Korea Electric Power Corporation (Kepco) which will manufacture the fuel assemblies.WastesThe UAE is committed to a dual track radioactive waste management strategy that involves developing a national storage and disposal programme in parallel with exploring regional cooperation options. Used fuel will be stored in reactor ponds for up to 20 years, or may be transferred to dry storage after six years. Reprocessing in France or elsewhere internationally is an option, depending on economics.Swedens SKB is studying the prospects of a geological waste repository in UAE, and the Arab Atomic Energy Agency (AAEA), with a widened group of participating Middle East and North Africa (MENA) countries, is discussing regional options along the lines of EU precedents.Organisation, RegulationIn August 2009 the UAE advised the IAEA that it was ready to join the IAEA Convention on Nuclear Safety, and the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management.In October 2009 the Federal Law Regarding the Peaceful Uses of Nuclear Energy was signed into effect, providing for development of a system for licensing and control of nuclear material, as well as establishing the independent Federal Authority of Nuclear Regulation (FANR) to oversee the whole UAE's nuclear energy sector, and appointing the regulator's board, headed by a senior US regulator. The law also makes it illegal to develop, construct or operate uranium enrichment or spent fuel processing facilities within the country's borders.ENEC was formally established as an investment vehicle in November 2009. As well as overseeing development of the nuclear program, it will act as a government investment arm by making strategic investments in the nuclear sector, domestically and internationally. This is likely to include taking a significant stake in the successful bidder, though that is not a condition or criterion in the bidding process.In mid-2010 ENEC set up a Nuclear Safety Review Board to provide a review of the safety and effectiveness of the construction, startup and operations of the ENEC program, and to contribute to the review of ENECs Construction Licenses Application for the proposed Barakah Nuclear Power Plants, submitted to FANR. The Board is made up of five members, from Korea, Japan and the USA, with significant experience in all areas of civil nuclear power.Separate from FANR, ENEC has also set up an International Advisory Board (IAB) of experts, headed by Dr Hans Blix.International agreementsIn October 2012 the UAE passed legislation in line with the revised Vienna Convention so that civil liability lies solely and exclusively with the plant operator. It sets a limit of 450 million SDRs, about $694 million, 50% higher than the Vienna Convention minimum, so that the operator needs to insure to this level. The state accepts responsibility as insurer of last resort. In July 2014 the UAE ratified the Convention on Supplementary Compensation of Nuclear Damage (CSC), though it is not yet in force.The USA signed a bilateral nuclear energy cooperation agreement1 with the UAE in January 2009 and South Korea signed one in June 2009. The UK has signed a Memorandum of Understanding on nuclear energy cooperation with UAE. France and Canada have nuclear cooperation agreements with UAE, the latter signed in September 2012, Russia in December 2012, and Argentina signed one in January 2013, then another in April 2014. Japan signed a nuclear cooperation and technical transfer agreement with UAE in May 2013, and another in February 2014. Australia and Canada signed bilateral safeguards agreements with UAE in August and September 2012, and the Australian one came into force in April 2014.Public OpinionA total of 82% of people surveyed by market research company TNS in December 2012 (N=750) were in favour of nuclear power, compared with 66% in 2011, and 89% also supported a plant being built in their emirates, up from 67% in 2011, before Barakah construction started. The 2012 poll also found that awareness of nuclear energy had increased, 89% of residents now felt that peaceful nuclear energy is "extremely important, very important or important" for the UAE, and 55% viewed it as a main source of power generation, second to oil. The high support was attributed to public engagement as plans developed. The survey saw a decline in concerns related to overall safety of nuclear power plants, which TNS attributed to efforts spearheaded by the national government, ENEC and other nuclear industry bodies in the UAE. However, some work remained to be done to reassure the public about nuclear waste disposal, the company said.Non proliferationThe UAE is a signatory of the NPT and it ratified a safeguards agreement with IAEA in 2003. In 2009 it signed the Additional Protocol.

3.c - The Countrys Environment Economic Aspect

3c.1 Agricultural SectorAgriculture accounts for only 3 percent of the UAE's GDP due to the federation's severe climatic conditions, although it accounts for 20 percent of all water consumed, much from rapidly-depleting natural water supplies or desalinization projects. The UAE's agricultural sector annually produces about 600,000 tons of produce. The federation's chief crops are cereals. The UAE produces enough poultry and salad to meet its needs for most of the year. Some crops, such as tomatoes, are grown in quantities greater than what the UAE consumes in a whole year. The agriculture sector also produces water-melons, eggs, cucumbers, gherkins, aubergines (egg-plants), green chilies, peppers, and dates.For much of the 19th and 20th centuries, fishing and pearl diving were mainstays of UAE commerce. Today the government works to conserve fish stocks and protect the economic livelihood of the remaining fishing communities. The annual fish catch96,000 tons slightly exceeds domestic consumption.Because a high proportion of UAE nationals are employed in fishing and agriculture, these 2 sectors receive a disproportionate amount of federal and local funding. For political reasons, the UAE government will continue to encourage agricultural self-sufficiency but it is aware that this goal is unattainable in either the short-or long-term.

3c.2 Industrial Sector

The UAEs industrial sector contribution to the GDP is expected to increase by three per cent this year over 2012 driven by petrochemicals, aluminium and steel products, the countrys minister of economy said on Monday.The current industrial contribution to the GDP is 16 per cent and this is expected to increase by 1 to 3 per cent in 2013 depending on global demand for the UAEs products, Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, told reporters on the sidelines of petrochemicals trade show Arabplast 2013.

The UAE will focus on the downstream industry this year, including petrochemicals, aluminium and steel, he said

3c.2 Industrial Sector

The services sector trade, restaurants, and entertainment; hospitality, including hotels; transport, transit, and storage; communications; finance and insurance; construction and real estate; business services; community, social, and personal services employed 58 percent of the labour force in the late 1990s, reflecting its dominance of the UAE economy.

3c.4 GDP AND GNP ReportCountryGDP PerCapitaGDP PerCapita

United Arab Emirates57,82745,615

International ReservesUS$ 37.269 billion (Source: IMF; Data updated: 2012)Gross Domestic Product - GDPUS$ 386.39 billion (2010 estimate)GDP (Purchasing Power Parity)268.122 billion of International dollars (2010 estimate)

Real GDP growth20012002200320042005200620072008

1.7%2.6%11.9%9.7%8.2%8.7%6.1%5.3%

2009201020112012*

-3.3%0.9%4.9%2.3%

GDP per capita - current pricesUS$ 69,799 (2009 estimate)GDP per capita - PPP$48,435 International Dollars (2009 estimate)GDP (PPP) - share of world total19801990200020102015**

0.23%0.19%0.2%0.32%0.32%

GDP - composition by sectoragriculture:0.7%industry:59.4%services:39.8% (2011 estimate)

Inflation2009201020112012*

1.6%(2008)0.9%0.9%1.5%

3c.5 Entrepreneurial /Investment StatusThe UAE now has a blossoming financial sector and strong growth prospects. David Marshall, Senior Executive Officer at Emirates NBD Asset Management, discusses this post-crisis surgeOfficial data shows that the United Arab Emirates economy has turned around after years of low growth, financing issues and restructuring post-2009. Now, the Emirates isseeing a strong rebound in profitability and growth as it continues to benefit from its perceived safe-haven status amid regional instability.The economic recovery has been solid, supported by the tourism and hospitality sectors, and a rebounding real estate sector in particular. Whats more, infrastructure and growing wealth has fostered a growing financial industry in key hubs such as Dubai and Abu Dhabi. Public projects in Abu Dhabi and buoyant growth in Dubais service sectors have continued to underpin growth, which reached 5.2 percent in 2013. Now, the macroeconomic outlook from the IMF, expects a 4.8 percent growth in 2014 and approximately 4.5 percent in coming years, supported by a number of government-led mega projects and the successful bid for the World Expo 2020.Crucially, the UAE growth is increasingly supported by non-oil activity, which remains a robust source of income as the local economies wait for oil production to stabilise. In particular, construction and retail trade will continue to drive economic activity, supported by high levels of public infrastructure spending and strong private sector credit. In addition, oil production is expected to rise owing to strengthening global demand, challenges in restoring oil production in non-UAE countries such as Libya, and a decline in global oil inventories. Recent analysis from the IMF also revealed projections for the production of 2.8 million barrels of oil per day in the UAE during 2014 (see Fig. 1). This positive outlook for the current economic state in the UAE has bolstered financial services in the region, which have picked up significantly following the drop in markets post-crisis and after the Arab Spring, which drove down bond prices.100%GROWTH IN ENDB ASSETS IN THE LAST TWO YEARSNow, major players such asEmirates NBD Asset Management (ENDB)are looking positively on the investment landscape in the region.Weve seen a re-rating thats attracted investors interest; a lot of international investors are now interested in the region. For me the game changer was of course the upgrade from Frontier to MSCI status of the UAE and Qatar this year. This really forced international investors from just being interested, to making significant allocations, says David Marshall, Senior Executive Officer at ENDB.On the fixed income side, weve seen a real improvement in spreads. Borrowers were somewhat shut out of traditional lending sources namely banks in the Middle East. So since then theyve tapped the capital markets. We have seen really interesting issuers looking to raise money atattractive yields, and again theres been a re-rating there. So weve seen, since the crisis, CDS levels coming from around the 940/950 levels down to 150 today.Financial services boostThe UAE officially transitioned from being considered a frontier market to emerging on a key MSCI market index in June 2014, which marked a new era of both greater opportunity and closer scrutiny for the financial markets. Since the announcement in 2013, stocks across the UAE have 89 percent over the last year as of June, while capital markets in Dubai are starting to draw more attention from foreign investors.Being listed on the emerging markets index, UAE companies are joining firms from Brazil, China and more than 20 other markets across the globe. In particular, several Dubai-listed financial firms have benefited from this and seen their stocks soar as a result. In this respect, investments in financial services are a growing trend in the UAE as the economy continues to recover. Like most parts of the world, banks were under strain after 2008-2009 and balance sheets were largely impaired, with loan-to-deposit ratios in some cases of up to 130 percent and thereby inhibiting loan growth. When some of these loans defaulted, local firms endured provisioning and impairments, but having moved past this part of the economic cycles, players like ENBD are seeing very strong underlying profits and a renewed faith in the Arab region.Foreign interestsGeographically I think there are some interesting trends. Countries like Egypt, which obviously has been under political and social strain, now looks attractive from an economic point of view, with elections having just taken place. We think thats going to put confidence back into the region, and we expect foreign direct investment to improve, which will spur capital expenditure and investment, says Marshall.Last year, we started making investments there defensively: utilities, and telecom companies. Now we are moving to play the cyclical story, so construction, real estate, and more investment banking themes. The big game changer will be Saudi Arabia though. Thats the untapped market, the one that all investors want to get into. Its still expensive; you can only do it through derivatives or indirect access. The recent announcement that the market will open up to foreigners will have a huge impact once this happens, with likely strong foreign investor participation and possible inclusion to various indices. In this respect, the IMF projected that foreign direct investment will reach almost AED44bn (approximately $12bn) in 2014.

Source: International Monetary Fund. Notes: Post-2013 figures are IMF estimatesA key part of this growth will be driven by an expansion in non-oil sectors namely manufacturing, construction, tourism, trade, transport, and logistics. Conversely, the Middle East has traditionally been an exporter of capital of the world, however, now the financial industry is seeing a growing interest in MENA investments from international clients. This follows a period of bearish investments, after the market peaked three years ago along with the depression on regional stock prices. Since then, flows dropped as investors considered the risk. But now, 2014 has been a bullish MENA year.To be frank they werent ready; we were too early. I think there was too much investment risk for them, there was too much business risk and I think possibly at the individual level, too much personal risk. So they werent ready to allocate then, but I think they are very much ready to allocate now. We are also seeing sovereign wealth fund interest in coming to the region,explains Marshall.I think on a macro-level there are also reasons why investors are interested in the region. If you look at recent trends, emerging markets have really been in the doldrums for the last couple of years, driven by currency weakness, weak fiscal and current accounts on the side of the governments, and really slow growth. We dont have any of those problems in the Middle East. We have largely dollar-pegged assets. We have strong growth driven by a high oil price. And that is really going to make a nice diversification play for those emerging market managers.Islamic investmentsAnother key driver for ENBDs marked growth, is the increasing popularity of sharia-compliant investing, which has become a prominent part of global portfolios. For ENBD, one of the UAEs largest asset managers, Islamic banking has always been a major focus for the business, with about 30 percent of assets run on a sharia-compliant basis. This amounts to more than $700m of the firms total $2.6bn in assets, invested in Islamic products.Were seeing people starting to tap into sharia-compliant investing. Even the UK government is looking into issuing a sukuk, in order to tap into that investor base. For me, its all about investor demand. Were in the Middle East if you want to attract assets from say Saudi, UAE, Oman even further afield like Malaysia or Brunei we have sharia-compliant products and services that are a key part of that. What were seeing is a lot of interest in sukuk a very attractive asset class, which can sit on the balance sheets and clip out income, thus helping to optimise balance sheets. In addition there is strong demand for sharia-compliant real estate solutions as well as money market products, says Marshall.On that basis, ENBD has grown its assets by approximately 100 percent in the last two years. A key driver in this has been the diversification of its product range, which Marshall insists is a trend that will continue along with a reduction in the dependence on cyclical issues.I want to achieve a diversified product set, so we can offer products from real estate to fixed-income to liquid equities. Also, I want to broaden our investor base. The wholesale market is very strong and I see a lot of growth in institutional investors, he explains.Finally, the firm is working hard at gaining an international flavour, which can diversify its business portfolio even further. Having recently launched a platform in Luxembourg for its fund range, ENBD Asset Management is looking to expand aggressively and is betting on strong growth in Europe and Asia that can sustain further asset increases in the years to come.http://www.worldfinance.com/banking/uaes-status-upgrade-behind-investment-surge-says-endb

3c.6 Employment StatusSOURCES:International Labour Organisation, Key Indicators of the Labour Market database.; International Monetary Fund, Government Finance Statistics Yearbook and data files.World Bank World Development Indicators.;World Bank national accounts data;Wikipedia: List of minimum wages by country (Countries)("Country Reports on Human Rights Practices for 2013" . State.gov . Retrieved 2014-03-04 .);CIA World Factbooks18 December 2003 to 28 March 2011; AllCIA World Factbooks18 December 2003 to 18 December 2008; International Labour Organization, Key Indicators of the Labour Market database.; International Labour Organization, Key Indicators of the Labour Market database. Population figures fromWorld Bank: (1) United Nations Population Division. World Population Prospects, (2) United Nations Statistical Division. Population and Vital Statistics Report (various years), (3) Census reports and other statistical publications from national statistical offices, (4) Eurostat: Demographic Statistics, (5) Secretariat of the Pacific Community: Statistics and Demography Programme, and (6) U.S. Census Bureau: International Database.;Wikipedia: List of minimum wages by country (Countries)

http://www.nationmaster.com/country-info/profiles/United-Arab-Emirates/Labor3c.7 Business LawsSETTING UP BUSINESSUnder UAE law, foreign entities interested in establishing a formal presence in the UAE have five options: create a permanent establishment, of which there are seven different types; establish a branch office; create an entity in a UAE free zone; create a civil company (only in Sharjah and Dubai); or enter into a commercial agency agreement.The UAE Commercial Companies Law (CCL) requires that each company established in the UAE has one or more UAE national partners who hold at least 51 per cent of the company's capital. Companies that undertake certain activities (oil industry, production of electricity and gas, treatment and distribution of water) are exempt from the 51 per cent requirement. Companies established in free zones are also exempt from the 51 per cent requirement, if the relevant free zone has special provisions regulating the company. Foreign banks are exempt from having to appoint a sponsor.

Source: http://www.uaeinteract.com/business/settingup.asp 3c.8 Business PracticesThe Coffee Ceremony

You will always be offered refreshments in an Arab home or office. Frequently, this will be Western style tea or coffee. However, you may also be offered a sweet, milkless tea or a light Arabic coffee flavoured with cardamom.

If Arabic coffee is on offer, you will be handed a coffee cup which should be held in your right hand, and when the coffee is poured from an elegant coffeepot, you should accept at least one cupful. It may be considered discourteous to refuse. Your cup will refilled at frequent intervals. If you do not want any more coffee, shake the cup slightly to show that you have had enough. Three cups are considered to be sufficient.Holding Meetings When holding business meetings in the United Arab Emirates, some foreign businesspeople suggest holding the meeting in the lobby of an international hotel rather than in an office. The advantage of this is that there will be fewer people wandering in and out of the meeting. Also, your counterparts willingness to come to you demonstrates a true interest. You will also have access to refreshments that may be more to your taste.

Group OrientationIdentity defined by group, family

CooperationHarmony within group very important

Relationship FocusedPersonal interaction takes precedence over strict schedules; quality of life is important

HierarchyPatterns of rank and status observed

Need for CertaintyRules for appropriate behavior are known and should not be broken

ParticularismRequires reference to context. Relationships are given priority

Fluid TimeTime is intangible with little structure

FatalismEveryone believes in God and realizes that things depend on God

Cultural Note:It is likely that expatriates will have very limited opportunities to interact with Emiratis, who make up approximately 20% of the population. The UAE relies on expatriates from many countries to provide labor and services.

4.a - Proposed BusinessThe proposed business is to establish a medium/large branch and franchises in United Arab Emirates. This includes all products/imports/services of the said company.

4.b - Product and Service OfferingsMSE offers a wide range of good quality and fashionable products that suits different lifestyles. These products range from apparel and shoes to bags and accessories.The company launches new products and styles atleast every after two months to suit the likes of their customers. These are featured in their catalogues made available and accessible in MSE stores or dealers.They also cater the needs of kids through their fashionable and colorful products that are sure to fit the fun and lively attitude of the young people.The company also have its Character Shop that features products (apparels, shoes, bags, accessories) fashioned and inspired by children-loved characters like Bratz, Marvel Comics, and Looney Tunesproducts that will surely put a smile to every child.And also offers a line of cleaningproductsthat suits the need of everyhomeamong these are the following:1. Fragrant- floral freshfabric softener2. Fresh- floral freshlaundry detergent3. Greenapple- dishwashing liquid4. Neat-toiletbowl cleaner

Free Repair.Want a quick fix for an item or a product? Just bring in your Purchase Order and well make sure its as good as new.

4.c - Competitive Advantage of the CompanyMarikina Shoe Exchange (MSE) is a dominant industry leader due to its personnel, experience and financial strengths. Industry leaders are difficult to compete against, which decreases business and investor risks.The company offers a wide range of products and services which other small time shoe company doesnt have. Even large companies may have a hard time competing with MSE because of its prices.

The MSE also provides job opportunities for Filipinos, if we open a branch or franchise at another country, we (most likely) will encourage Filipinos at UAE to work at MSE and promote our product.

4.d - Opportunities for International TradeThe MSEs opportunity for international trade is possible due to its price competitiveness and quality.

4.e - Potential ThreatsSurely, the potential threats of MSE will be the huge shoe companies at UAE and those highly refined hand-made shoes made in that country. Theres no doubt that MSE can handle that competitiveness but theres a risk that there will be lots of new released products of other companies if MSE is established at UAE.

4.f - Strategic Adjustment/ImprovementsSince United Arab Emirates is a different country from Philippines when it comes to climate, there may be an issue towards the stability and quality of the products of MSE. They need to assure that the products to be exported in UAE will withstand the heat during the day and coldness during night.Hand-made fashionable products will most likely sell, so the company needs to focus on 100% leather handmade shoes.Native and Unique products will dominate the shoe/apparel market in UAE.

5 ConclusionIn creating this franchised business in the United Arab Emirates it is plausible for the business to be profitable for the value proposition is quality handmade school/office shoes and sandals made in the Philippines and sold in the United Arab Emirates at an affordable price and boast the quality of hand made shoes that came from Marikina city Philippines 6 BibliographyDatabase.;Wikipedia: List of minimum wages by country (Countries)http://www.nationmaster.com/country-info/profiles/United-Arab-Emirates/LaborSOURCES:International Labour Organisation, Key Indicators of the Labour Market database.; International Monetary Fund, Government Finance Statistics Yearbook and data files.World Bank World Development Indicators.;World Bank national accounts data;Wikipedia: List of minimum wages by country (Countries)("Country Reports on Human Rights Practices for 2013" . State.gov . Retrieved 2014-03-04 .);CIA World Factbooks18 December 2003 to 28 March 2011; AllCIA World Factbooks18

Business Management Page 2 of 282nd Semester SY 2013 2014