International businesses can improve a company’s performance by increasing profits and reducing costs. Both of the results generate greater profits for the company. There are several objectives of business setup in the UAE, each of which allows a company to improve its performance.
(I) Attract foreign demand:
Some companies are unable to increase their market share due to fierce competition within the industry. Alternatively, changing consumer tastes could reduce demand for the company’s products. Both of these conditions allow an entity to consider foreign markets where potential demand may exist.
You already have a business there and therefore have some name recognition, so you are focusing your efforts on future growth in those markets.
The general electric philosophy is that economic growth varies from country to country, so you need to position your business in a market with increasing demand. It is believed that as globalization progresses, only the most competitive companies will be able to serve their employees and shareholders effectively.
(Ii) Utilize technology:
Many companies are establishing new businesses in so-called developing countries, where the technology level is relatively low. Other companies have established new communication systems in developing countries.
(Iii) Use of economic resources:
Labour and land costs vary widely from country to country. Companies often try to establish production in places where land and labour are cheap. The cost is much higher in developed countries than in other countries. Many companies have subsidiaries in countries with low labour costs.
(Iv) International diversification:
If all the assets of a company are designed to generate sales of a particular product in the country, the profits of the company are usually volatile. This instability is due to the exposure of companies to changes within the industry or economy. The performance of a company depends on the demand for this product and the economic conditions in which it operates.
Many companies are diversifying their business setup in the UAE. Due to its geographical diversification, the company is less exposed to the economic situation. Of course, you are exposed to some of the foreign economic conditions in which you do business.