International Business Strategy Final Report
Dubai and Baltimore
Presented by:
Danny Braun, Solmaz Kaynama, Ausra Liaukeviciute, Smail Rahmouni,
David Sanchez and Amy Siebert
MGMT 781, Spring 2009
Table of Contents
I. Executive Summery......................................................................................................................3
II. Medical Industry in Baltimore ....................................................................................................4
III. Tourism Industry in Dubai .........................................................................................................6
IV. Dubai vs. Baltimore Cultural Analysis ......................................................................................8
V. Proposal for Global Business Ventures ....................................................................................12
A. Preakness in Baltimore ....................................................................................12
B. Medical Tourism in Dubai...............................................................................15
VI. Conclusion ...............................................................................................................................19
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I. Executive Summary
Baltimore possesses one of the most vital industries in the world, namely an excellent healthcare
infrastructure. This includes hospitals of high caliber, a choice selection of medical schools, medical
equipment & device companies. Patients in need of special treatment travel from around the world to
be able to take advantage of Baltimore’s medical centers. An exceptional institution is John Hopkins
Medical School and hospital which are one of the most renowned of them all. Hopkins University is
rated the second best medical university in the nation. John Hopkins hospital has highly skilled
doctors performing special medical treatments which other hospitals don’t even offer. When
analyzing the Porter diamond model we can conclude that Baltimore’s medical industry is a
worldwide leader and therefore is qualified to expand globally.
Dubai is one of the seven United Arab Emirates that has grown from a desert to one of the most
successful business centers and tourist destinations in the world. In recent years they have put much
emphasis on developing Dubai into a major tourist attraction. Tourism industry has accounted for
almost 20% of Dubai’s GDP. The tourism industry infrastructure includes seven star hotels, world
class malls, events and exhibitions, and tourist attractions such as historical sites, beaches, artificial
islands, theme parks, sand dunes, and much more. In addition, the city organizes one of the most
prestigious events in the world such as the Dubai shopping festival, the Dubai World Cup, and the
Dubai Tennis championships. All these diverse attractions make Dubai the ideal touristic location for
all types of tourists. Here too, on all four parts of the Porter Diamond model, Dubai’s development
industry is one which will be welcomed anywhere.
There are many cultural characteristics that differ from Dubai to that of Baltimore. For example; the
UAE is more collectivist while the USA is more individualist. While the differences do provide a
challenge, they are certainly possible to overcome. In addition, Dubai has previous experience
working with other western countries as well as some American companies, which can make
working together easier. Besides overcoming this cultural difference, we both can learn from each
other’s differences.
After analyzing both economies and their cultural differences, we would like to propose a joint
venture between Baltimore and Dubai in two specific industries. For the first industry we would
recommend a joint venture with Dubai for creating and maintaining Pimlico’s racing complex. This
would include the tracks, grandstand, slots, hotels and restaurants in order to boost Baltimore’s
tourism and provide Dubai with direct market access to the East Coast. Concerning Dubai’s side of
the venture we would recommend EMAAR as the development partner and EMRILL as the property
management partner. As for Baltimore’s side we would recommend Cordish Development Company
and Heritage Racing.
For the second industry we would like to suggest the expansion of John Hopkins Medical School and
Hospital to Dubai. Dubai’s government has scheduled to open the Dubai Healthcare City by
2010, which would become the largest international medical center in the Middle East. Having John
Hopkins as a participant in this Healthcare City would provide more fame to the already famous John
Hopkins legacy and will attract more confidence to this new Healthcare city in Dubai. These joint
ventures can generate profits for both cities.
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II. Medical Industry in Baltimore: the best potential for global expansion
The medical industry is extremely developed in the US. According to Tom Donohue of Chamber
Post and the American Sociological Association the US has one of the best if not the best
facilities and practitioners. With that said Baltimore is one of the best regions of health care in
the US. At the helm of this industry is Johns Hopkins which has the best medicals programs and
facilities in the US and the world. Furthermore, Baltimore has great pool of highly educated
workers and a plethora of renounced related or complementary industries.
However, there are some weaknesses with the medical industry in general. First, the increasing
cost of medical treatment. As doctor Craig Cordola CEO of Children’s Memorial Hermann
Hospital states in his interview “what is the point of developing life-saving treatments and
innovations if no one can afford it?”(Baranczyk & Palkon) Another, point that Dr. Cordola
explain is the lack of preventive medicine. Healthcare must begin with early education and
intervention and a focus on prevention. “The obesity epidemic is extending to our youth setting
them up for a lifetime of health issues. Substance abuse and tobacco use are also taking their toll,
contributing to rising health-related costs and lost productivity.”(Baranczyk & Palkon)
Moreover, the current global economic crisis has affected the healthcare industry to a certain
extent, with the greatest toll taken by those people that are uninsured.
Medical Industry Porter Diamond Model
Factor Conditions
The factor conditions surrounding this industry are great in Baltimore. To support medical
institutes, hospitals and research facilities, there are 53 Medical Equipment & Device Companies
in Baltimore ranging from dental suppliers such as DC Dental Supplies, LLC, to medical
uniform companies such as Hopkins Uniform Company Inc. Additionally, because of
Baltimore’s close proximity to Washington DC the health industry works closely with National
Institutes of Health (NIH), the FDA, the USDA Agriculture Research Center and the National
Institute of Standards and Technology (NIST). Moreover, the Baltimore medical industry has an
abundance of colleges and higher learning institutions, Hopkins University, the 2nd best medical
university in the nation, and University of Maryland (education), just to mention a few. This
attracts and develops a competent and well educated pool for the work force.
Demand Conditions
According to the US Census Bureau there are three major components of US population that are
changing. These three components are life expectancy is growing, population is growing larger
and population is growing older. The life expectancy is projected as follows “the middle series to
increase from 76.0 years in 1993 to 82.6 years in 2050. In 2050, life expectancy in the low
assumption would be 75.3 years and in the high assumption would be 87.5 years.” (U.S Census)
Furthermore, according to the US Census the middle-series projections, the Nation's population
is projected to increase to 392 million by 2050 -- more than a 50 percent increase from the 1990
population size. During the 1990's, the population is projected to grow by 27 million, a 10.8
percent increase. Finally, the Baby Boomers are getting older which has increased the median of
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the US population. The US census describes the following “In 2011, the first members of the
Baby Boom will reach age 65, and the Baby Boom will have decreased to 25 percent of the total
population”.
All these factors contribute to the rise in medical treatment and the healthcare industry.
Additionally, in a more localized way the Baltimore health care industry reflects the US health
care industry but with more intensity. Currently, Maryland’s population growth has expanded
and along with having already a very sophisticated medical industry in Baltimore (Hopkins,
GBMC, Etc.), has forced automatically more competition and more incentive to outperform to be
able to facilitate the steady increasing and aging population.
Supporting and Related Industry
As mentioned before Baltimore has a vast array and world class supporting industries. Because
of Baltimore proximity to Washington DC the health care industry works closely with several
governments related institutions.
Furthermore, the hubs, schools and biotechnical make the health care industry in Baltimore an
exceptional one. Besides the obvious world class biotechnical firms and the leading medical
schools in the country, Baltimore health care industry posses other not well mentioned related
industries that are outstanding. A clear example is CBaySystems. This company is a “leading
provider of medical transcription and healthcare technologies to large hospitals, healthcare
networks and physician practices throughout the United States and has a growing presence as a
provider of patient financial services to hospitals and hospital-based physician practices in the
United States. The company utilizes secure Internet technologies combined with its global-based
delivery model to deliver its services and product offerings to healthcare
providers.”(CBaySystems) This proves that Baltimore’s health care related industry is vast and
diverse making it strong candidate for importing it’s know how at a global scale.
Firm Structure and Rivalry
The cluster of health care related industries and the abundance of higher learning institutions
have attracted many competitors in the area. Furthermore, having these related industries in the
same geographic area is also beneficial in that it leads to a rivalry between hospitals, researchers,
and universities to be the best and thus promotes innovation and change that may not otherwise
have occurred or would have taken considerably longer. Baltimore has a competitive advantage
because of the clusters of medical related businesses along with fierce competition between
hospitals for the best reputation, doctors, equipment and resources. Not only is Hopkins
respected around the world but St Joe’s Medical Center pioneered the emergency room and
“emergency medicine became a specialty.” (St. Joe’s)
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III. Tourism Industry in Dubai: best potential for global expansion
The current economic recession has reached the Dubai tourist industry. Because vacation is a
leisure item people tend to cut vacations the most. Even though Dubai is a tourist destination it is
usually geared towards high end tourism which is less likely to flatter during this economic
crisis. Furthermore, Dubai has also become a venue for conferences, regional and international
exhibitions and major sports events such as the Dubai World Cup, the Dubai Desert Classic Golf
Tournament, and polo and cricket competitions. Tourism industry has accounted for almost 20%
Dubai’s GDP. Due to the fact that Dubai’s oil resources are very limited, the tourism industry
has over taken oil exports. Additionally, the air travel has significantly increased the number of
visitors who come to Dubai. “Traditional Arab hospitality and a delightful winter climate
complemented by a highly sophisticated infrastructure and crime-free environment, have also
contributed in recent years to creating an ideal atmosphere for the development of tourism”
(Tourism).
Dubai is a major for hub more than 255 hotels (Dubai hotels) including all the major
international brands and regionally well-known brands. The key to this industry is Sheikh
Mohammed bin Rashid Al Maktoum which has been the greatest driver of this industry (as to not
depend on oil) directly and indirectly through the Department of Tourism and Commerce
Marketing. Other key drivers of the Dubai tourism industry are Dubai Hoteliers & Destination
Management Companies, airlines (Emirates Airlines), shopping venues, and annual shopping
festivals. Adding to the increasing number of hotels and resorts, shopping venues, attractions and
others, a major development for medical tourism is the Dubai Healthcare City (DHCC) project,
set for completion in 2010. DHCC will increases Dubai’s, as a best tourist destination, value.
Dubai’s tourism industry strength is the reputation of being the best there is. Dubai is known for
being one of the safest places to travel in the Middle East. It is also known for its grand hotels,
edifications and world class leisure venues. In addition, Dubai’s geographical location and
weather are great for tourism industry to flourish. However, Dubai has several issues that can be
seen as weaknesses. The first issue is the immigrants workers that have helped create Dubai,
these workers have been separated from the main population creating various levels in the social
system. Vast numbers of foreign workers are treated as modern indentured servants in industry
such as housekeepers, waiters and waitresses. Additionally, Dubai location in the Middle East
gives it an unfavorable position because of the political conflicts of the area which might break
into a war.
Tourism Industry Porter Diamond
Factor Conditions
Since the late eighteen hundreds Dubai’s Sheiks have been focused on making it the trading/hub
of the Middle East. Dubai’s government has been set on creating infrastructure and harboring
business/trade. Even though oil was found in Dubai during the 1970’s Dubai Sheiks made a point
to continue their path on making the Dubai the trading/business capital of the Middle East.
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However, recently this drive for improving trade and infrastructure has been directed more
towards the construction(through government contracts) of tourism destinations like the Palm
Island seven star hotels, world class malls, events and exhibitions, and tourist attractions such as
historical sites, beaches, artificial islands, theme parks, sand dunes, and much more. Moreover,
the city organizes one of the most prestigious events in the world such as Dubai shopping
festival, Dubai World cup, and Dubai Tennis championships.
Furthermore, Dubai’s favorable business attitude has brought international companies that are
investing directly or indirectly in the tourism industry. Additionally, location makes and ideal
destination. Situated at a crossroad of Asia, Africa and Europe, Dubai represents a gateway to
these large and fast growing markets.
Lastly, even though it is believed that Dubai does not have a sufficiently good education system
to deliver the quantity and quality of workforce needed. Dubai has countered that reputation
because the government is heavily investing in educational projects such as Dubai’s knowledge
village. Furthermore, the higher salaries paid attract foreigner workers to complete Dubai’s work
force.
Demand conditions
The demand for tourism in Dubai has several avenues. First the geographical proximity to Saudi
Arabia with a population of more than 25 million of inhabitants creates vast pool of tourist that
come to visit Dubai.(Rehman p.120) Second the lax attitude towards their Muslim religion
attracts tourist from different parts of the world (mainly Europe and the US). Third, being an
economic hub of the Middle East Dubai attracts the expatriates from the multinational
corporations and their families to indulge in the world class attractions present in Dubai. Tourism
demands do not include only tourists and holidaymakers, it also include people who visit the city
for business and employment purposes.
Results from these surveys shows that Dubai demand is growing, with a 13% in increase in the
number of visitors from 2006 to 2007, and forecasts showing a 10% increase in the coming
years. As a consequence, Dubai’s goal of achieving the 15 million tourists by 2015 compared to
6.9 million in 2007 is highly possible.
Related and supporting industries
In order to support the rising demands and growth of the tourism industry, the government is
supporting the creation of a sound social and economic support for this industry, by investing in
many industries such as the transport industry, manufacturing industry and infrastructure.
Other supporting industry that greatly aids the tourism are the construction industry which has
created amazing edifications, such Palm Island, an indoor show mountain and the 7 star Hotel
shade as a sail and the tallest building in the world, and the financial industry which helped fund
these grand projects.
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Firm Strategy, Structure and Rivalry
To attract businesses and investors, Dubai’s economy is open and free, and government
regulations are minimal. For example, no taxes are charged on corporate or personal profit
except for oil and banking companies. Moreover, custom duties are only 4%, there are no trade
quotas or barriers, no foreign exchange controls, 100% repatriation of capital and profits is
permitted, and the exchange rate between the US dollar and the UAE dirham is stable. Such is
their devotion for Middle Eastern business hub that they created the “open-for business
environment”. (Rehman pg.110)
The “Open-for business environment” is dived into four; foreign ownership rights, active
government investment, fast-track government services and liberal lifestyles policies. The four
strategies previously mention is what forms and structures the companies in Dubai. At first the
active investment role of the Dubai government was limited to infrastructure. However, in recent
years the Dubai government has ventured into more than infrastructure, it has been investing in
telecommunications and healthcare. (Rehman pg. 106) Furthermore, government now has been
investing in private development. Furthermore, with its implementation of foreign ownership
rights (“freeze zone” which are areas were wholly owned foreign companies) it has been made
easier for foreign multinationals to establish business.
Such ideal factors have created a large rivalry and competition among Multinational
Corporations, to establish businesses in the region and control the market not only in the tourism
industry, but in all the other industries. However, a competition on an even greater scale is that
between the Emirates for tourist. In fact Abu Dhabi created Reem Island and Ras al-Khaimah
created Dana Island to attract tourist towards them.
IV. Dubai vs. Baltimore Cultural Analysis
A. Hofstede Dimensions
It is important to understand cultural differences among the countries when engaging in
international business. And first of all it is necessary for international managers to understand the
different norms of groups from different countries and cultures in order to communicate and
conduct business negotiations successfully. To establish productive and effective Baltimore and
Dubai business relationships, we have to understand and know Dubai specific culture as well.
Therefore, we will evaluate Dubai culture based on Hofstede’s cultural framework, which
includes for dimensions: Power Distance, Uncertainty Avoidance, Individualism, Masculinity
and Long-term, Short-term orientation. The Geert Hofstede analysis for the UAE (Dubai) is
almost identical to other Arab countries that include Egypt, Iraq, Kuwait, Lebanon, Libya, Saudi
Arabia, and the United Arab Emirates, where Muslim faith plays a significant role in the
people’s lives. (ivythesis)
Power Distance (PDI)
First Hofstede Framework Dimension is Power Distance, which focuses on the degree of
equality, or inequality, between people in the country's society. In UAE Large Power Distance is
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one of the predominant Hofstede framework characteristics. This indicates that it is expected and
accepted that leaders in UAE separate themselves from the group and issue complete and
specific directives. These societies are more likely to follow a caste system that does not allow
significant upward mobility of its citizen, while inequalities of power and wealth have been
allowed to grow within the society. (cyborlink)
Uncertainty Avoidance (UAI)
The other predominant Hofstede characteristic in Dubai is high uncertainty avoidance, which
indicates the country has a low tolerance for uncertainty and ambiguity. UAE society is highly
rule-oriented with laws, rules, regulations, and controls in order to reduce the amount of
uncertainty. As a result of this high Uncertainty Avoidance characteristic, the UAE society does
not readily accept change and is very risk adverse. When the two high power distance and
uncertainty avoidance dimensions are combined in UAE, it creates a situation where leaders have
virtually ultimate power and authority, and the rules, laws and regulations developed by those in
power reinforce their own leadership and control. It is not unusual for new leadership to arise
from armed insurrection – the ultimate power, rather than from diplomatic or democratic change.
(ivythesis, cyborlink)
Individualism (IDV)
While Individualism and creativity is encouraged in the Saudi culture, this country ranks 26 of
the 53 nations on Hofstede’s scale of individualism, which places it on the collectivist side of the
spectrum. In UAE a close long-term commitment to the member 'group', that being a family,
extended family, or extended relationships is important and valued and groups’ opinion is more
often taken as one. Private opinions and individual achievement are not valued in this setting.
As mentioned, one of the strongest manifestations of the Saudi collectivism is the family. The
extended family is the single most important structural unit of the society, and virtually all
Saudis consider themselves as members of an extended family. Each family member shares a
collective ancestry, a collective respect for the elders and collective obligation and responsibility
for the welfare of other family members. This also translates in business environment in UAE,
where collective well-being is more important than individual. (cyborlink)
Masculinity (MAS)
The Masculinity Index (MAS), the third highest Hofstede Dimension in Dubai, is 52 which is
slightly higher than the average of 50.2 for all countries in the Hofstede MAS dimension. This
indicates that the while women have limited rights in the country, the reason must be due
religion rather than cultural paradigm. Feminine societies stress solidarity, emotional displays,
relationships among people and resolution of conflicts by compromise. Masculine cultures stress
achievement, competition and resolution of conflicts through violence. Arab culture incorporates
several of Hofstede’s feminine characteristics; however stronger emphasis in Arab culture is on
masculine role attributes.
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B. Dubai Comparison to Baltimore
The Arab world, particularly Dubai, scored twice as much as the United States in terms of Power
Distance. According to these scores generated from the Hofstede Model, Arabs accept separation
between the ruler and the people as a cultural heritage. On the other hand Americans, particularly
Baltimoreans, are the opposite. Americans do not accept differences between rulers and the
people, but accept equality between all societal levels and even within families.
In terms of Individualism, the United States scored twice as much as the Arab world. From these
results, it is clear that the Arab culture is a collectivist culture, and Arabs are loyal to the groups
they belong to, whether it is their family, a political group or the society as a whole. On the other
side, the American culture according to Hofstede results is the opposite. Americans are more
individually oriented, have loose bonds with others, and look out more for themselves.
In terms of masculinity, both regions scored close to one another. Both Baltimore and Dubai
experience a higher degree of gender differentiation roles. While in the United States this
situation might generate “a female population that becomes more assertive and competitive, with
women shifting toward the male role model and away from their female role”, it is not the case
for the Arab world. In the Arab world, most women accept their role in society, and accept the
difference between the two genders, including the idea that each gender has certain duties to
fulfill.
Finally, in terms of uncertainty avoidance, the Arabs are less tolerant for uncertainty than
Americans. Most Arab laws come from the Quran, God’s revelation to his Prophet Mohammed
(Peace be Upon Him), and from Mohammed’s teachings. Arabs follow only these rules, and in
case there is a need for a new law that is not in these religious books, a committee of the most
knowledgeable scholars is formed to study this matter. Laws are then devised to follow the
teachings of the Prophet and the Quran. On the other hand, Americans are more tolerant to new
ideas, thoughts, and beliefs; therefore, they do not need defined rules and laws.
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C. Problems from the differences
In Dubai, leaders are accustomed to making all the decisions and rules, while employees only
follow them. Since it is different in the American corporate culture, sending someone else other
than the CEO of a company or director to do business with Dubai’s Sheikhs may make these
leaders uncomfortable, as they are not used to dealing with lower rank employees thus losing
business opportunities. Also, when sending American employees to work in Dubai these
employees might not used to having to follow rules from the leader, thus creating conflicts
between American employees and Dubai leaders.
As mentioned before, Americans are more individualistic. When dealing with people from Dubai
they might act individually which will be interpreted by the Arabs in Dubai as a betrayal to their
group or as pursuing self-interest. Similarly, on the other side, when Dubai employees are sent to
the U.S they will try to join certain groups as they are used to the support from their groups and
peers in Dubai. Americans act more individualistically, and Dubai employees might feel a
rejection from the American society.
Another cultural problem that may arise between these two regions is that Americans are not
used to following rules and laws and like to constantly change rules and beliefs. Therefore, when
dealing with an Arab, an American employee trying to bring new ideas or rules might be rejected
by the society or considered as trying to impose the American culture on the culture of Dubai.
Arabs are less individualistic and will protect their groups and reject any change. On the other
side, when Dubai employees come to Baltimore, they will try to follow the rules, and will in turn
have a hard time adjusting to constant change in rules in this society.
Even though both regions have a high masculinity score, problems might arise if an American
female employee is sent to make business in Dubai. The Arabs in Dubai are not used to deal with
female employees, and therefore it will be hard to communicate with them increasing chance of
cultural conflicts and not reaching deals with Dubai.
D. Synergies from the differences
Dubai and Baltimore have almost totally opposite culture; and differences are more prevalent
than similarities. However, because of these differences, each region can learn from the other,
making it easy to make business with other regions with similar cultures. For example, after
making business with Dubai, it will be easy for Baltimore to do business with other Arab
countries such as Kuwait, after it has gained experience from its transactions with Dubai and vice
versa for Dubai.
Also, no culture is perfect, therefore each region can learn from the other one to improve their
corporate habits. For example, Baltimoreans might learn from the people of Dubai to become
less individualistic, improving their teamwork and increasing their attachment to their company.
On the other side, Dubai employees can learn from Americans to become more accepting to
innovation and new ideas, as well as open doors for change to a better corporate world.
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Finally, other regions might learn from this experience between Baltimore and Dubai, which will
benefit both sides. For example, other States might learn from some mistakes Baltimore did
when dealing with Dubai, which will help the economy overall. This improvement in the
economy, even if it might be small, it will help Baltimore. For Dubai, it will be easier for them to
make business with regions with similar cultures to that of the American culture.
V. Proposals for Global Business Ventures
A. Dubai Tourism Industry in Baltimore: Baltimore Preakness
There are many opportunities for joint business ventures between Baltimore and Dubai’s tourism
industries. While Baltimore struggles to bring in tourists, Dubai thrives. However, Dubai does
not have a strong presence in the Baltimore/Washington metro area. Currently, the most
pressing concern for Baltimore tourism is the threat of losing the 2nd jewel in the Triple Crown of
thoroughbred horse racing- The Preakness. Therefore, we recommend a joint venture with
Dubai for creating a racing complex including track, grandstand, slots, hotels and restaurants in
order to boost Baltimore tourism and provide Dubai with direct market access to the East Coast.
This is a very feasible possibility for a business opportunity due to both geographic areas
investment in the horse industry. Sheikh Mohammed owns two of the largest thoroughbred
breeding farms in the world, currently based in Kentucky. Not to mention his love of racing is
highlighted by the fact that, “Sheik Mohammed has spent untold millions of dollars for horses at
the American auction, has made no secret of his desire to win the Kentucky Derby, but the Form
last week quoted his racing manager, Simon Crisford, as saying the colt might skip Churchill
Downs and try the Preakness first.” (Horse Racing) Dubai is already the sight of the Dubai
World Cup which boasts tow of the richest nights in racing starting with the Godolphin Mile, a
$1 million race. Few American bred horses travel to race in Dubai and even less come from
Dubai to race in the US, however this venture could also open the door to transporting more
horses across the Atlantic or sharing breeding techniques and bloodlines between Dubai and
Baltimore. Also, Dubai is strong in building development, creativity and investment in larger
projects which would be a big benefit to this business venture.
Baltimore needs the Preakness to be a strong fixture in order to save Maryland horse racing and
bring in the millions in revenues that come along with it. For example, “Last year, Pimlico
logged 112,668 attendees, a record number in Preakness history, and the race enjoyed wide
exposure by media, including all-day television broadcasts from the historic racetrack. It is said
that the Preakness revenues from one day at Pimlico enable the racetrack to keep operational for
the other 364 days a year.” (Preakness History) On top of that it is highly important to
generating revenues for Maryland. “The state recognizes its interests in the Preakness are both
economic and intrinsic. The second leg of the Triple Crown, entering its 134th year, has been run
without a break at the Baltimore track Pimlico since 1909 and regularly draws more than
100,000 fans. The Maryland Department of Business and Economic Development estimated the
economic impact of the Preakness and related events at about $24 million in 2007. The event
generated an estimated $1.4 million in state and local taxes that year.” (Scheinman) Therefore,
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Baltimore cannot afford to lose such an event especially in current the economic situation and
Dubai is just the partner it needs to create the biggest and the best track and entertainment tourist
destination since they have experience in building record breaking projects.
There are two companies from each geographic area that would make this business venture
work. ON the Dubai side Sheikh Mohammed would have to be involved due to his controlling
interests in almost every development company. Therefore we recommend EMAAR as the
development partner and EMRILL as the Property Management partner. EMAAR already is
involved in international projects mainly in the Middle East so has the experience of working
with different companies and different areas. They also are already working on a project called
the Arabian Ranches which includes a polo and equestrian center complex which will translate
well to working on a racing complex. Also, they are responsible for the entire Burj Downtown
and multiple other multibillion dollar projects. They had an American acquisition of John Laing
Homes, a large real estate company, which recently filed chapter 11 bankruptcy so EMAAR
needs a new US business opportunity. (EMAAR Properties) EMRILL is a leading property and
facilities management firm that creates integrated best solutions to increase long term cost saving
and reduce reliance on sub contractors as well as provide a single point of focus for joint
working. (EMRILL) They are very adept at working in partnerships internationally as well and
would be an excellent addition to the business venture.
On the Baltimore side there are also two strong members that would help this business venture
succeed. Baltimore Developer David S. Cordish revealed on April 2, 2009 that his company,
Cordish Development, will bid to buy Laurel Park, Pimilico Race Course and the Preakness
Stakes. Corish already had purchased a bid to have slots installed at Arundel Mills mall and with
a fresh infusion of capital from the Dubai partners would probably install slots in Maryland
tracks as well. This company already has the interest, the capital, and the management skills to
be a strong partner but has no international experience. The opportunity to work on a project
such as this with Dubai firms would be a big boost to publicity and business for the firm as well.
The other Baltimore member would be the solid horse industry supporter making sure that in the
drive to create tourism and revenues the heart of racing isn’t lost. Heritage Racing is also an
interested party in putting a bid for Preakness and it was formed to “purchase, acquire, buy, own,
hold, develop, lease, manage and otherwise operate Pimlico race course and maintain Preakness
as a premier racing event.” (Cho) These two Baltimore based firms would bring to the table
what the Dubai companies lack: local knowledge and local government support (Governor
O’Malley is on record as saying he would do most anything to keep Preakness in Maryland(Cho).
The potential payoffs to this business venture are huge. First, Baltimore would keep the
Preakness which has already stated provides large revenues and boosts tourism to the area. A
state of the art track complex that provides top of the line amenities would also be a big draw
year round and would increase racing by bringing in top trainers and horses, bigger purses and
sponsors and potential be the site to really promote international racing. Also, it would bring in
huge numbers of jobs both during the construction phase and during operation. The main reason
Preakness is in trouble is that the owner of Pimlico (Laurel, Santa Anita, and multiple other US
tracks)is the Canadian owned Magna Entertainment. Magna has been terribly run and badly
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managed its assets to the point of bankruptcy so when Maryland passed the slots referendum
Magna couldn’t even afford to bid. Part of the joint venture would include slots which would
boost revenue for the Sate, keep people coming to Maryland tracks, create an interest in
Maryland as a destination that Delaware, New Jersey, Pennsylvania, and West Virginia already
have as far as racing and gambling are concerned. There are many benefits to Baltimore in this
venture however Dubai also stands to gain a great deal. They have a limited presence on the
East Coast as far as marketing to US travelers is concerned. This venture would create a giant
amount of media coverage and interest in Dubai and provide a great opportunity for Dubai to
showcase its many wonderful attractions. This would in turn bring more US tourist s to travel
there and therefore generate revenues for their many projects. EMMAR and EMRIL L both
already have international projects ongoing throughout most of the Middle East and parts of
India, however a successful business venture in the US would open a lot of doors to enter into
projects in countries throughout Europe and the rest of North America as well. On top of these
benefits there is also the opportunity to access the knowledge Baltimore processes on horses and
racing. In general a Dubai bred horse will not be as successful racing in the US as a US bred
horse. This is true about US horses racing in England or Ireland so is not isolated to Dubai. A
joint venture would allow for knowledge sharing on breeding and training techniques as well as
open possibilities to grow this track complex to include a vet and breeding center. This has the
potential to incorporate the human capital available in Baltimore (UMD College Park has a
leading vet program) and the already mentioned strong medical community, which would
provide access to state of the art equipment and research. The potential opportunities are
staggering and if the initial business of the track and entertainment complex is successful there
would definitely be areas to continue to expand the collaboration between the two cities. Not to
mention the possibilities of creating a Middle East Triple Crown with the “Preakness” equivalent
being held in Dubai and a similar track system being built in the massive sports complex already
in development in Dubai World.
The best model for the new business would be a joint venture due to the specific purpose and
relatively limited scope of the project. There would be the four main partners that would each
have equal financial investments and each provide members of management. This would allow
all parties to feel equally important and have equal decision making capabilities. Also, there
would be a set time frame for dissolution of the joint venture unless all parties agreed on
continuing the venture in other business opportunities like those mentioned above. A joint
venture would allow the partners to pool their resources and coordinate their efforts in order to
achieve favorable results. Mostly this joint venture would strengthen the existing business at
Pimilco but would be started as a complete Greenfield basis since most likely the whole project
will start from scratch including development and it would also allow all partners to diversity
into a new business. For Dubai it would be an opening in to the US and for Baltimore it would
be expanding racing to a tourist entertainment complex. The biggest decisions would be
deciding on managers that could have a solid working relations hip and help the venture succeed
and to overcome any cultural barriers.
The main risks to this venture would be political and cultural. As we explained before, the
cultures of Baltimore and Dubai are very different and could certainly create obstacles in any
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business venture. Also, the current stereotypes, however wrongly employed, of Middle
Easterners being terrorists could create security issues and cause uncomfortable tensions.
Mainly however would be the challenges in politics and management. Sheikh Mohammed is
used to being able to make final decisions on projects and his word is law in Dubai. However, in
the US there are convoluted and time consuming pathways for decisions making. Also, there is
always economic risk in any large investment and this is amplified by the global economic
situation. However, labor and materials could be purchased at lower prices due to lower demand
in the area and in five years when the project would hopefully be complete the recession should
be long over and a booming economy would provide large returns. All obstacles can be
overcome by good management and creating an understanding of each other’s cultures, which
while difficult is still possible and worthwhile.
In order to have the greatest chance of success with this business venture it is most important to
manage the relationships between all the partners. This includes respecting and understanding
each other’s culture and each company’s values in order to build a strong and coherent working
relationship. This could be accomplished by putting all managers through a course that improves
their ability to work with each other and communicating the core values of each partner company
throughout the new organization. Also, there must a continuous and open flow of knowledge
from the partners through the managers and dispersed out to the workers and vice versa so that
any potential problems could hopefully be solved before they become real problems. It is
important for all sides to be receptive to the knowledge and skills of each other and be able to
leverage that learning. Finally, making sure that the parties have agreed upon the direction the
project will take and the steps to accomplish it while maintaining flexibility to challenges and
changes makes it possible for the joint venture to succeed.
B. Baltimore’s Medical industry in Dubai: Medical Tourism
Another great business potential between Baltimore and Dubai is in medical tourism. Taking into
account that Baltimore has famous medical schools and hospitals; and Dubai is recently
promoting its Medical tourism industry, this seems like great opportunity for both parties.
Dubai’s government has scheduled to open the Dubai Healthcare City by 2010, which would act
as the largest international medical center connecting Europe and Southeast Asia and Baltimore
should not miss an opportunity to have a stake in this project as well.
DHCC is yet another new city within the city of Dubai which is targeted at the health and
wellness industries. When completed, the DHCC will offer a number of medical teaching
institutions, private hospitals and clinics, pharmaceutical offices and research centers, as well as
spas and rehabilitation centers. “DHCC is a highly regulated institution with a long-term vision
for providing for high-quality healthcare, medical education and research in the region. The four
entities involved in delivering DHCC’s vision are:
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Dubai Healthcare City Free zone (DHCC FZ)
Center for Healthcare Planning and Quality (CPQ)
Harvard Medical School Dubai Center (HMSDC)
Dubai Harvard Foundation for Medical Research (DHFMR)
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The leadership of DHCC is committed to the principle of accessibility for all, professional and
academic development, and international recognition for quality of care as well as patient
privacy, rights, and satisfaction.” (Who We Are-DHCC)
“Dubai Healthcare City, the world's first healthcare free zone, boasts two complementary
communities, namely, the Medical Community and the Wellness Community. The Medical
Community, occupying an area of 4.1 million square feet, focuses on clinical services for disease
treatment and prevention, while the Wellness Community, 19 million square feet, completes
DHCC’s healthcare continuum by housing hospitals, outpatient clinics, luxury spa resorts, and
the entire spectrum of wellness services.” (Who We Are-DHCC)
“Dubai Healthcare City has partnered with the Dubai Bone & Joint Center (DBAJ) and Boston
University (BU) in an ongoing initiative to provide the region with diverse healthcare practices.
The future projects include the Mohammed Bin Rashid Al Maktoum Academic Medical Center,
which is the core of a fully integrated regional healthcare network at DHCC. It is comprised of
the University Hospital, Harvard Medical School Dubai Center, Dubai Harvard Foundation for
Medical Research, The Al Maktoum Harvard Medical Library, & Boston University.” (Future
Projects-DHCC)
As we can see, Dubai has a clear interest to attract the best in the world medical institutions to
make its DHCC project successful. Keeping in mind Dubai’s great geographical location, well
developed tourism and building development industries, big population, Middle East lack of
quality medical services providers, Baltimore’s medical industry presence in Dubai really makes
sense. Baltimore, on the other hand, even though it is known for its strong and quality medical
industry needs to built on its strength and expands overseas, and DHCC is a great opportunity to
do that. In addition, increasing medical cost makes it necessary to look for the new ways to
cooperate in order to increase productivity and lower costs. Baltimore’s medical industry
expansion in Dubai would benefit from Free-Zone business set up regulations, such as 100% taxfree, no corporate tax, no income tax, no customs duty, no restrictions on capital, trade barriers
or quotas.
Other benefits in establishing business in the DHCC are:
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Low operating costs
State-of-the-art facilities
Flexible real estate designed to suit the industry (laboratories, etc.)
One-stop shop for government services (permits, etc.)
Business support services (hospitality, events, etc.)
Fast-track company registration
Simple company laws and legal framework
Hotel and conference centers
Telemedicine facilities
Residential community
Recreational facilities
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
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Patient referral network
Others
In particular, we would recommend Baltimore’s John Hopkins Medical School and Hospital
through a partnership with Mohammed Bin Rashid Al Maktoum Academic Medical Center to
become part of this DHCC community, which would be beneficial to both parties.
JH can benefit from its present at DHCC in the following areas:
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Access to Middle East, Europe as well as Asia market.
Strengthen its worldwide recognition.
Opportunities for learning from its partners (not only Mohammed Bin Rashid Al
Maktoum Academic Medical Center, but all involved in DHCC).
Keeping up with competition. Since Harvard Medical School and Boston University have
already joined the DHCC, considering JH as one the top rank medical school and
hospitals in the world must keep its network up to date and be present wherever
necessary in order to keep its ranking position in long-term.
Benefits form DHCC free zone status, which ensures its partners of unique value making.
Create great opportunities for JH medical students as well as researches at JH to establish
a business in DHCC.
Better selection and attraction of young talents in the area whom could become its assets
in the future
In exchange, the payoff to Mohammed Bin Rashid Al Maktoum Academic Medical Center as
well as DHCC would include:
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Mohammed Bin Rashid Al Maktoum Academic Medical Center could increase its value
to DHCC, as JH could play a significant role in the development of DHCC.
Since JH is recognized in many areas, it could provide its expertise and support medical
education and research in the ones which are still not represented.
JH could increase DHCC capabilities and service offerings in the areas of medical
education, health care delivery, and research.
JH presence and name would add value and credibility to DHCC
Joint Venture would be the most suitable business model for John Hopkins presence in DHCC,
since, first of all, all DHCC project is created as partnership, and equal coordination is necessary
to achieve DHCC vision. Mohammed Bin Rashid Al Maktoum Academic Medical Center (or
DHCC) could provide JH with necessary start up facilities, whereas JH could invest its
intellectual assets. JV would minimize the risks for JH associated with finances as well as
cultural differences.
There can be some risks that might arise when creating Joint Venture between JH and
Mohammed Bin Rashid Al Maktoum Academic Medical Center. First of all, Dubai and
Baltimore cultures are very different, which can make communication difficult. Another risk for
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the JH would be the access to the valuable organization’s information, in case venture does not
work out. In addition, since the DHCC is initiated by Sheikh Mohammed and Mohammed Bin
Rashid Al Maktoum Academic Medical Center is sponsored by him, there is a political risk that
all too that Sheikh Mohammed will intervene and make it difficult to work, coordinate and
achieve the desired results.
By becoming a partner with Mohammed Bin Rashid Al Maktoum Academic Medical Center,
John Hopkins will indirectly become a partner of all institutions involved in forming the Dubai
Health Care City; therefore it will have to adjust to fit an overall DHCC vision and goals, first of
all. In addition, since medical industry is very knowledge intensive, all partners involved will
have to share its knowledge and learn from each other to achieve greatest results. The
coordination can be difficult among all partners involved as well, since Mohammed Bin Rashid
Al Maktoum Academic Medical Center is comprised of the University Hospital, Harvard
Medical School Dubai Center, Dubai Harvard Foundation for Medical Research, The Al
Maktoum Harvard Medical Library, & Boston University, as well as is a part of partnership at
DHCC. To solve all the potential problem when expanding to Dubai through JV, we believe JH
should try to be flexible to adjust to already integrated network of DHCC as well as its vision. It
also has assign a right leader to JV, who knows Dubai culture, is flexible and is a team player.
Since the business model in Dubai will be different than the one in US, the JH should provide
enough authority to management in Dubai. In regards to successful cross-cultural management
of the JV, we think it should not be a big problem. Although the official language in Dubai is
Arabic, education system is such that people are also trained in English speaking. Thus, there
should be mo language barriers. Also, since Harvard Medical School and Boston University are
already present in Dubai and is part of DHCC, JH should learn from them how to do business in
Dubai, as well as Dubai should already understand the differences in dealing with American
organization in order to be successful. Finally, both parties should be very open to knowledge
each party brings and try to learn as much as possible from each other.
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VI. Conclusions
Baltimore as a player on the global scene
There are many fields where Baltimore can present itself as a player in the global scene. This
was made clear by the projects delivered by our class on Baltimore’s industries’ strengths and
weaknesses. The few out of the many which were mentioned were: Black and Decker’s power
tools, McCormick’s spices, Northrop Grumman’s defense, BP’s solar energy, Under Armour
clothing company, tourism industry and obviously the medical industry. Putting aside those
industries and focusing only on our research we can conclude that Baltimore is a strong potential
player on the global scene. The medical industry encompasses many fields accompanied by other
related industries as well. This will include medical equipment companies and medical
transcription providers. The Pimlico racing track is a major tourism attraction for many here in
Baltimore and many will drive the distance from out of state as well.
Benefits of joint venture for Baltimore and Dubai
Working with Dubai, which is small in size but large in its endeavors, may be very beneficial to
Baltimore and its citizens. Dubai is known worldwide with their breathtaking skyscrapers and
their advanced projects. Cutting edge techniques and technology are being deployed to create
manmade islands, rotating buildings and other impressive projects never seen before. They even
have experience building projects similar to the Pimlico’s tracks as they have already worked on
a project called the Arabian Ranches which includes a polo ground & riding club. Rebuilding
the Preakness race course and its surroundings here in Baltimore, with the help and inspiration of
these advanced architects and developing companies, will not only lure horse racing lovers but
many tourists as well.
Even though the architects and financial support will come from Dubai, the actual laborers will
be locals from the greater Baltimore area. This means that working with Dubai will generate
local jobs for this enormous construction itself. This will come at a time when job loss in the
construction industry is very severe and will give new life to those who are searching for a job in
this sector. This also means that the cost of construction will be substantially lower than if it
would be in a good economy since there is a lack of work providers. As mentioned before, if
possible, there would be a local veterinary present at the Preakness. This will also provide jobs
and incorporate the human capital available in Baltimore. (College Park has a leading vet
program)
Once the projects are completed and operating in full swing, Baltimore’s tourism sector will
experience a new era where people will come to take advantage not only of Pimlico’s Preakness
but also of the slot machines and the other surrounding attractions.
In addition, this will generate closer working relations with Dubai’s economy which can lead to
future business joint ventures as well.
Dubai will also extract benefits from this joint venture. Each country has different laws and tax
codes, making it hard for a foreign company to expand to a different country. However by
entering a joint venture, Dubai’s development companies can gain insights and prepare for
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further expansions within the USA. By redeveloping the Preakness, they will heighten awareness
about Dubai’s capabilities for excellent constructions, which will lead to higher demand and also
more investors worldwide. Introducing this joint venture for the Preakness can be a launching
pad for further investments here in the States.
John Hopkins’ expansion to Dubai will benefit Baltimore as a whole. In many countries around
the world, including Arab countries, there are “American schools”. These schools might be
located abroad, yet the staff members and professors teaching there are mostly American.
Hopkins can open their medical school in Dubai where the staff and management will be
American. This will provide jobs for our local citizens willing to teach abroad. Their expansion
to Dubai will give Hopkins the opportunity to learn from the local medical schools as well,
sharing this information with the Hopkins base here at home. Even though John Hopkins
Hospital is famous around the world, adding a branch in Dubai makes them even more
recognized globally. In addition, as mentioned before, once John Hopkins establishes its
institute and hospital in Dubai it will definitely create better and more relations with Dubai’s
economy which can lead to more business opportunities in the future.
Dubai is a country trying to lure tourists, investors, and the press to receive world recognition for
their advanced industries. This includes tourism, development, business district, fashion,
shopping, sport competitions and last but not least; the medical field. With no doubt, we are able
to state that if Dubai can get Hopkins as a partner to their “Dubai Healthcare City” this will
enhance their global image. Many might be reluctant to be treated at a new medical facility, prior
to receiving feedback by previous satisfied patients. However having Johns Hopkins as a partner
at the “Dubai Healthcare City” will attract many to come solely for treatment to Dubai which
will subsequently also generate tourism income.
Baltimore’s potential for global business
In summation, Baltimore has a promising potential for global business by expanding abroad their
medical expertise and sharing their world renowned Pimlico Racing Track. Both are prominent
attractions to Baltimore in America. By sharing these attributes abroad, essentially their medical
knowledge, it will lead to healthy foreign relations with Baltimore and America. With a better
understanding of each other’s cultures and needs, it will lead to new untold business
opportunities.
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