PESTEL is an acronym for Political, Economic, Social, Technological, Environmental and Legal. It is actually analysis of macro environment situation. It provides knowledge regarding the factors that are not directly affecting the business but indirectly influencing decisions.
Introduction
Dubai is one of the most sophisticated and luxurious cities of the world, it is situated in UAE and has amazing sites to visit, all manmade. Like other Middle Eastern countries UAE isn’t gifted with anything but abundant oil and hence Dubai was made a tourist attraction all through government spending on its infrastructure. It is one of the safest cities in the world with literally 0% crime rate and that is why people feel so secure in visiting this city and roaming around on its streets even at the middle of the night. This was made sure through strict rules and regulations implementation. It also charges 0% personal income tax so although rents and property prices and inflation are all high there, ne could save the money due to no taxes. Local people now constitute only 15% of the total population rest are Indians, Pakistanis and Bangladeshis. Dubai itself is not rich in oil and its economy is all based on real estate and tourism. (22 Interesting Facts About Dubai That Are Larger Than Life)
Political Factors
There are no political parties in UAE but that doesn’t mean that it does not indulge into politics. It plays an important role in international politics. It is debated that oil producing countries because of getting oil rent, do not work to increase efficiency and hence productive efficiency is not there but that is not the case with UAE and Dubai. The political interests of rulers have not harmed the performance of the state. There is a dispute going on with Iran over three islands.
Economic Factors
Before the exploration of oil, Dubai’s economy was dependent on fishing and gold trading which was on decline, but with the export of oil the economy completely transformed itself and now is heavily dependent on tourism and commerce. Locals do not agree to perform laborious jobs and consider them beneath themselves that’s why Dubai is dependent on foreigners to join the workforce but the government has imposed strict restrictions on foreign labors and no one can stay in Dubai beyond the time period allowed by government. The city is a financial hub with trade free zones which lures investors and executives. Real estate projects like Burj Khalifa and Palm Islands are the centre of tourism and hence help the city earn profits. It is an open economy with no trade barriers and exchange controls. Foreign trade has been growing with an average of 11% for the last 27 years which shows that it has become a popular choice of businesses to open their head offices here, conduct annual conferences and meetings, and provide consulting services. (DUBAI ECONOMY)
Social Factors
Expatriates who arrive from third world countries solely for the purpose of earning well and send money back to their families find it very hard to survive there as living conditions thrust upon them are very tough with long working hours, uncomfortable living arrangements shared with so many others and tasteless food. They can’t even complain about these conditions as they will be asked to leave the state. For the nationals government has arranged for subsidized healthcare and education programs which will satisfy their needs and hence this is how peace is restored in the region despite of having so many people living there who belong to different ethnicities, cultures and races. Dubai is open and liberal in terms of other social factors like no strict policy on covering head or body for women and drinking alcohol is not prohibited as well unlike Saudi Arabia and other Gulf countries. (DeNICOLA, 2005)
Technological Factors
The profits earned through commerce and tourism are well spent on making technological breakthroughs for example Fly Dubai and Emirates are one of the largest airlines in the world having fleet of world’s latest technologically equipped aircrafts. Dubai International is claimed to be the busiest airport in the world. Use of technology has also aided Dubai in promoting tourism by creating apps that suggest the most attractive tourist places to visit, cuisines to try. Modern RFIDs are placed all over the city, driverless Dubai Metro can be seen which are ahead of times. However typical mentality of people with funds over there is to import from China rather than going through the pains of investing in R&D for years and coming up with the product themselves.
Environmental Factors
With rapid development, fiver star hotels and manmade island projects people tend to forget about environmental issues. Dubai’s biggest environmental sustainability issue is availability of clean drinking water, although water is present abundantly but it has to desalinated in order to be made drinkable, due to oil drilling and exploration activities of Dubai the salinity content in water has increased over the years. The carbon dioxide emitted from desalination plants pollutes the environment and also produces waste that is dumped into the sea. (ALDERMAN, 2010)
Law/Legal Factors
Dubai is considered to be one of the safest cities in the world with literally 0% crime rate, which means that the rules and regulations are strict and severe punishments are given to law breakers. Western clothing is allowed but one cannot go around exposing excessive skin in public nor public displays of affection and love are allowed, on beach the rules are slightly relaxed but topless bathing is strictly prohibited. The funny thing about law enforcing authorities here is they arrest the person and depot him/her…simple! Apart from this the custom laws are so strict that if someone is found carrying pills for flu or fever they can face four years sentence to jail, any sort of drug, inappropriate or anti Islamic material cannot be brought to the city. Although it is a tourism place but taking pictures need to be done very cautiously there, no local can be shot without asking for permission first and too many government buildings cannot be shot as well.
Bibliography
22 Interesting Facts About Dubai That Are Larger Than Life. (n.d.). Retrieved January 14, 2016, from Urban Cocktail: http://grabhouse.com/urbancocktail/interesting-facts-about-dubai-that-are-larger-than-life/
ALDERMAN, L. (2010, October 27). Dubai Faces Environmental Problems After Growth. The NewYork Times .
DeNICOLA, C. (2005). DUBAI’S POLITICAL AND ECONOMIC DEVELOPMENT:AN OASIS IN THE DESERT. Williamstown, Massachusetts: WILLIAMS COLLEGE.
DUBAI ECONOMY. (n.d.). Retrieved January 15, 2016, from dubai.ae: http://www.dubai.ae/en/aboutdubai/Pages/DubaiEconomy.aspx