Legal and Economic Considerations


Economic Environment
Based on your research in Week 1, you have explored how a country’s global economic development is essential in promoting and distributing a product. This week, expand on details about your country’s economic development and any possible concerns that may affect doing business in this country.
Primary Task Response: Within the Discussion Board area, write 400 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
Discuss the following with your colleagues:
How does the country’s economic environment affect potential business in your selected country, and why?
How does the economic growth of the country affect demand for your product, and why?
How will you distribute this particular product, and why?
How does technological development in this country contribute to opportunities to promote this product to your potential customers?

Sample paper

Legal and Economic Considerations

The economic environment in the United Arab Emirates (UAE) region has significant impacts on business. Various economic factors directly affect businesses. These include interest rates, general demand, government spending, inflation, taxation levels, economic fluctuations, and among other economic factors. During periods of recession, the demand is low. This means that businesses struggle to sell their products or services to consumers who are unable to pay due to low household incomes. On the other hand, the boom period is when businesses are doing better. Another key economic factor is inflation. This occurs when the supply of money is greater than the actual production of goods and services. This pushes prices upwards. This is accompanied by an increase in the cost of raw materials. These factors may affect the sale of petroleum.

The economic growth of the country is a key determinant of the demand for petroleum products. When there is high economic growth, most businesses are performing better. High economic growth means there are increased trade activities by businesses and individuals. For instance, there are more businesses purchasing raw materials and/or moving goods to the final consumer. The increased trade activities increase the demand for petroleum, which is key in the transport and energy sectors. This will directly affect the demand for petroleum products within the region. As such, economic growth promotes increased sales of the petroleum.

Distribution of petroleum products may involve the adoption of complex distribution systems that includes trucks, railways, pipelines, and ships. Distribution in the UAE region will involve trucks and pipelines. The trucks will help in carrying the oil to refineries, where the products will be transported via pipelines to various parts of the country. Transportation using pipelines is the cheapest and most convenient for liquefied petroleum. Use of trucks is time consuming and contributes to wearing down of roads, increased traffic congestion, and accidents. However, trucks may provide key links to areas not covered by the pipelines.

Technological development is critical in promoting products to customers. Technological development provides an opportunity for the company to promote its products to potential consumers at a much lower price. Currently, the company will be able to use social media to influence potential consumers into buying the products. Social media has become a powerful tool in reaching out to millions of consumers within a short time. Advertising through social media is relatively cheaper comparing with advertising using the traditional media. The company will be able to communicate the product benefits and provide information about pricing to potential consumers through the social media.


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