ALDAR Company is, a real estate company based in Emirates and operates in more than five countries. The company owns more than fifty million square meters of land in some of the strategic areas in Emirate. ALDAR’s strength is ventured in its strong brand name that is internationally recognized. There is wide recognition of its products in all parts of the world.
The strength of the company is undoubtedly engineered by its internal managerial mechanisms. To have a competitive edge in selling its developmental projects, it will be advisable for the company to take advantage of its ability to compete favorably with equal players in the market. A strategic marketing plan is the only way out. There is no one company that is perfect; there is always an area that offers a weak point.
One of the weak points that the company will have to go through is internal while others are from the external environment. Weaknesses refer to stumbling blocks that may deter the company from progressing towards a particular direction. With a strategic plan, it will be easy to decide the material flow, technology to use, process selection, inventory required, and the capital needed.
Operation management has the responsibility of setting the policies that define expected labor standards. Employees play the biggest role in production processes, their skills, knowledge, and abilities should be put into consideration. In the recent past demand drift have been strongly pulling the market. Few movements have emerged which are linked with most of the real estate’s companies with well-distinguished brand names and the wholesale operations.
There is, therefore, need for all companies in the sector to have strong access to the details of sales data. Having the necessary details will not only quicken the production planning but will also provide information about customers’ tastes and preference and will help in reducing the possibility of underproduction.
ALDAR’s mission is to mobilize the available resources to drive strategies in the core areas of expertise through innovation to ensure that customers are provided with high-quality products that are readily available at low costs.
Some of ALDAR developments are given below:
- Yas Island which occupies about 2,500 hectares of land
- Al Raha Beach occupying an area of 5.2 million square meters
- Luxuries apartments, restaurants, hotels, and office space in the city which occupies 5.0 hectares of land
- Al Gurm Resort found in Abu Dhabi mangrove forests (ALDAR website 2).
ALDAR aims at being the most realistic and dependable real estate company not only in Emirates but also in the rest of the world. It also aims at creating a steady and profitable investment platform for its shareholders and to provide development projects that are environment-friendly (ALDAR website 2).
The global financial crisis has compelled countries to relax their trade barriers. This is a good thing for the company since it can expand into other many countries. This will increase the market base.
In the past decade, the world’s economy has been at a low pace with many countries recording a negative rate. The world has recorded a positive rate since the great depression Era. Even if the rate today is not so good there is hope, and thus a risk taker can as well diversify his business (Yip 6).
Many people believe that ALDAR Company produces products that are of high quality and reliable. They are however willing to trade with current technologically improved products. There are no threats as far as the social environment is concerned if the correct technology is adopted.
Technology is not stagnant and more is expected in the future. The competitiveness of the company will be dependent on the efficiency of technology that it will implement. The world is experiencing rapid technological change; this is brought about by the use of computers in different sectors of business.
ALDAR has benefited from the changes; for example, the company has a website where a customer can log in and communicate directly to the company. These services are available for 24 hours in seven days (ALDAR website 4). In line with the same, the company has embraced computerized marketing and advertisement where it sells its products through the internet
The important thing is to comply with the particular country it invests in laws and regulations.
The world values its environment. There are policies that are targeted to compel companies to respect nature. On the positive note, since the country policymakers realize that no production can be made without the production of waste, it has embarked on the adoption of environmentally friendly technologies.
Porters 5 Analysis
Porter developed a structure for analyzing the nature and extent of competition within an industry. He argued that in every industry there are at least five competitive forces, which establish the nature of competition within that industry (Harvard Business School Press 22). It is necessary to conduct this analysis because ALDAR is in an industry that is highly competitive and there is a need to understand the forces behind this competition. These five forces are discussed below:
- Supply of foreign distribution links
- Inexpensive supply of sophisticated technology
- Low Switchover costs – Firms within this industry are vertically integrated. Dependence on foreign/domestic supply is minimal
- Risk of forwarding integration
- High Buyer Concentration- leads to price wars & high competition
- Short Contracts- Buyers can switch to alternatives rapidly
- Inexpensive switching costs- customers can switch-over effortlessly
- Backward Integration- threat removed since the industry is diversified
- Government restrictions on monopolistic firms
- Greater economies of scale-out performance
- Expensive– high set-up costs
- Diversification- acceptable quality survives, can be easily imitated
- Rising demand for substitute products
- Growing user related products
- Diversified international companies
- High exit barriers
Over the years, the real estate industry has been undergoing a substantial change. This has been as a result of the increase in competition globally and the change toward global supply sequence. The end users play a major role in terms of selection of suppliers and in decision making of products which is changing from being operational to being strategic.
The increased number of companies resulting from the emergence of new entrants in the market has led to increased competition (Yip 50). Consumers have become choosy due to the increase in the number of product options in the market. This has led to increased operation cost on the side of retailers trying to match up with the customer need. It is the work of the operation management to utilize the scarce resource and maximize returns.
Value chain analysis
The requisites of the vibrant business environment have made many companies’ value chains unsteady; this means that businesses have more and more been required to formulate decisions regarding the management of the value chain into a further peripheral system of management.
The vibrant commerce environment gives the impression of affecting both interior and exterior business procedures. Its latest transformation from in-house business procedures to peripheral business procedures has been extremely rapid because of the use of diverse IT-application.
These appliances at present sturdily affect the structure and substance of ALDAR’s entire value chain, which also places new hassles on business strategies, devices, and daily processes. Managers have to comprehend how to administer these new alterations, and they also have to appreciate numerous innovative behavioral aspects in the innovative nature of the value chain.
The concepts of the company, with the support of which the business makes and appends value, are usually depicted by supply and value chains. Nowadays, the industry environments have become more multifaceted, lively and vague, which puts new anxiety on companies’ capability of adding value and managing their value chains
- Vertical and horizontal integration chain– effective distribution channels that reduce costs & improves cash flows.
- Effective management– training, motivating & reviewing staff. Also outsourcing Marketing power & growth- strong brand creation through cross-promotion (Yip 63).
- Strong balance sheet- stable liquidity & average debtor/creditor days reduced.
- Tax advantage in different countries- lower corporate taxes.
- Lack of a succession plan– uncertain future successor
- Disappointing financial returns– asset, investment & equity returns
- Debt to Equity financing– future risks of high borrowing & cumulative interest
- Inconsistent growth & income revenue- cyclical results
- International business expansion
- Market development
- Increasing technological advancements
- Emerging markets
- Global competition
- Intense rivalry
- Political problems
- Price competition
ALDAR has expanded its markets in the social and cultural contexts, and this has contributed to its success. It has been using high technology which has been rising over the years leading to success in all its activities. An effective procedure is followed to establish new and attractive ideas for the success of the organization.
Some times it is not able to make the expected profit margins due to the competition. It has an opportunity of expanding into other countries. However, it is often faced with the threat of intense rivalry, price competition, and government regulations
Strategic objectives are statements that identity plans within an organization that need to be improved. This includes both long-term and short-term goals. For them to be achievable, they have to be SMART (Specific, Measurable, Attainable, Realistic, and Time-bound). The following are some of the strategic objectives for ALDAR Company.
The company aims to make and retain its customers through appropriate marketing, advertising and customer services. To do this, there is a call center that operates 24hours in a day and handles customers complains. The company aims to have a customer-intimate company relationship to derive a win-win situation.
It uses the 4Ps of marketing where it ensures that there are affordable goods to all its customers when they need them.
ALDAR is an international company which targets global markets. To remain competitive, the company aims at having high growth as its competitors and has its products distributed all over the world. In doing this, the company is in the process of establishing new markets in other parts of the world.
Commitment to employees
The company respects its employees and has made policies aimed at getting employees loyalty. The rate of compensation is high, and the employees’ view is respected. The human resource department is given the mandate of ensuring that adequate employees are available at all times. It has the mandate of planning, deploying, employing, training, retaining, and dismissal of employees (ALDAR website 9)
Corporate diversification through growth further boosts the marketing strategy, creates a strong brand name and targets a wider set of customers through introducing the use of new mediums.
The building blocks of a successful global business company start with a sound strategy, which incorporates structural, leadership and cultural forces the business needs to take into consideration. For ALDAR, it is important that an aggressive strategy is adopted. This owes to the fact that the company lags much behind its competitors.
By adopting the aggressive strategy, the company will be seeking to catch up and probably outweigh its major competitors. The strategy will be used in the new acquisition of assets which are necessary for the company’s expansion to other foreign countries and other regions where it has the potential of creating more market opportunities.
Furthermore, the strategy is very appropriate in terms of attracting more clients. With a large number of operators in the industry and the potential entrance of new players, the aggressive strategy is most appropriate in grabbing customers and even establishing loyal clients.
A major generic strategy is the cost leadership strategy. Each producer in the industry aims at being the lowest producer at a given level of quality. Products are sold at an average price to attract a big market share and earn high profits.
Most customers tend to prefer low priced products if they guarantee them of quality. ALDAR will be able to maintain its profitability during price wars because it has already adopted the low-cost production. Another strategy that can be used by the company is the differentiation strategy.
This is the use of a set of incorporated actions that are intended to improve the production and delivery of goods and services, and customers are expected to recognize these goods and services as having different and unique importance.
Global marketing strategies call for developing strategies to develop and build brand image and loyalty among customers. This includes developing positioning strategies as compared to competitors worldwide. Branding and positioning strategies must fit the product and the company across multiple countries.
Because ALDAR’s primary customer base is global customers, advertising campaigns must be similar. Before choosing a business strategy, one has to evaluate different options and only chose the best. There are many different strategies that can be used in business, but all of them do not give equal results.
It is upon the management to make a choice in which is the best taking into account the business operations and the needs of the market. The company can choose to expand organically and increase its range of products or expand internationally through a strategic alliance.
Organic Expansion of the company’s business in the domestic market can ensure increased returns for ALDAR. By capitalizing on its existing potency and unique resources, the company can effortlessly gain a competitive advantage in Dubai and realize high returns on the capital invested. Through organic growth, the company can choose suitable locations for its coffee houses in the city centers and towns.
ALDAR can be able to succeed in its expansion strategy because it will able to capitalize on changes in the real estate market. Through this strategy, the company can be able to expand its operations in many parts of the country as opposed to the other companies which are unwilling to adopt technologies that are friendly to the environment.
Through this strategy, Alder can be able to realize a high turnover growth which offsets its low-profit margins and enables the sustainability of the cooperation’s price-based competitive advantage. In addition to the reinvestment of margins, ALDAR can achieve differentiation through its products as well as imperfect mobility of its brand name, which is inimitable.
ALDAR’s strategy of international expansion through a strategic alliance is an example of a business strategy that is strategically chosen. This is because it meets both the company’s expectations as well as the expectation of the external environment. This calls for different strategies of entry into the market.
In general, the goal is to seek a mixed strategic alliance. The best option would be a strategic alliance with the goal of acquisition of a subsidiary. The advantages of strategic alliances are significant not the least of which is the opportunity for even greater economies of scale. Mixed Strategic alliances are effective at managing uncertainty, risks and sharing cost
Implementation and control
The implementation plan for the generic strategies allows the business to compete favorably in the market by producing quality products at a low cost hence growing shareholder value. Achieving the implementation plan takes utilization of critical success factors, as well as knowledge of the plant capacity and production output maximums.
Identification of risks associated with the strategies and plans to combat the risks will allow the business to make the necessary provision to address the situations when they occur. The success of the strategies will be accomplished through continuous evaluation of the plan to make necessary changes to realign the strategies with the business’s vision.
Implementation of Organic expansion
ALDAR could target a much larger industry base in Dubai. To provide some central control, but allow specialization as required to penetrate industries, ALDAR will assign product managers. The product managers are the troubleshooters to resolve production, supply chain, quality, and efficiency. They have the authority to work across all operating companies to achieve goals.
ALDAR will have global customers. To meet the special needs of global customers, the company will have to hire and assign global account managers based on industry. Global companies often have multiple needs. The global account manager will serve as the single point of contact for the client. Industries to target would be consumer sales companies for coffee and food products.
Appendix 1 shows the report structures. The blue line reporting of product managers to the vice president of marketing means they’re to coordinate with marketing personnel for brand and company image but remain primarily operations focused. The green line between global account managers and product managers is to show both are expected to communicate with each other regarding customer needs and expectations.
Global Implementation Plan
The chart in appendix 2 is the Gantt Chart and Work Breakdown Structure describing specific activities required for full implementation of ALDAR’s international expansion. Each task takes into consideration factors such as objectives, resource allocation, deadlines, milestones, and the department responsible for its execution
Strategic management involves devising and applying strategies that permit the organization to reach its objectives. Thus it is imperative that an organization measures its success in the formulation and accomplishment of its strategy and this is called strategy evaluation.
The factors that are likely to have an impact on reaching these goals are the size of the organization, management styles, complexity of the environment, nature of the production processes, nature of the problem and the purpose and planning system. Strategy evaluation is important to ensure these factors do not hinder the achievement of strategic goals and evaluation should be followed by continuous improvement.
Strategic evaluation is important since no strategy can be expected to produce 100 % of the desired results due to changes in the environment and the fact that for ALDAR there are different implementation environments. Evaluation is a continuous process, which is included in each stage of strategic management.
Some of the performance measures ALDAR can use in evaluating the success of its strategy include Return on its international investments, percent variation from budget of each of the implemented strategic decisions, amount of variation in capital spending, amount of changes in the strategic plans, cost of poor quality, variance of actual variance from the budgeted revenue, percentage of target dates of completing implementation of a strategic phase that have been missed, and the amount of security violations per month.
Proper environmental evaluation ensures that the named strategy can be well implemented with changes only in the implementation phase. A strategy is a roadmap; hence if properly formulated should have very few adjustments.
ALDAR website. “Welcome to ALDAR.” Aldar, Web.
Harvard Business School Press. Essentials of Strategy Harvard Business Literacy for HR Professionals’ Series. Harvard: Harvard Business Press, 2006.
Yip S. George. Total Global Strategy II (2nd ed.). New Jersey: Prentice Hall, 2003.
ALDAR Company: Global Organizational Chart
ALDAR: Gantt chart for global expansion to
|1||Create ALDAR’s global strategic plan||Internal/external||Executive||Global expansion||1/6/2011||31/6/2011||20|
|2||ALDAR structure re-organization||Internal||Board of directors||Facilitate global management||1/6/2011||7/7/2011||25|
|3||Create strategy implementation plan||Internal||Management||Plan execution||1/7/2011||15/7/2011||10|
|4||Allocate implementation resources||Internal||Executive||Plan execution||14/6/2011||22/7/2011||7|
|5||Create strategic alliances||Internal||Team||Market entry||30/7/2011||24/10/211||60|
|7||Install plant and machinery||Global||Team||manufacturing||1/12/2011||10/01/2012||28|
|8||Begin test production||Global resource||Local subsidiaries||Quality control||1/02/2012||29/02/2012||22|
|9||Implement marketing plan||Global resource||Global management||Gain market share||5/01/2012||30/11/2012||253|
|10||Begin live production||Global resource||Local subsidiaries||Gain market share||1/03/2012||31/03/2012||20|
|11||Strategy evaluation||Global corporate||Global management||Process improvement||4/03/2012||30/12/2012||126|