The company ARABTEC is one of the leading construction companies in the Middle East and North Africa. The company was founded in 1975, and it focused on constructing various modern buildings (“About Us” n.p.). The company has expanded significantly since then. In 2013, the company started a new wave of change aimed at expansion and diversification. The company is undergoing certain changes which prove to be effective as the company’s revenue is growing steadily, and its shares’ value is increasing (“Arabtec Holding Co” n.p.). The steps undertaken are creating joint ventures, exploring new sectors and markets, assigning high-profile top management.
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First of all, entering new markets is a conventional strategy in the modern business world. It is a successful strategy due to several factors. Competitiveness of the market is increasing, and companies have to secure their operations by providing new products or services. ARABTEC has successfully utilised this approach diversifying its operations. More so, the markets chosen by ARABTEC are emerging in the area, and it is possible to occupy a significant place in this niche. This can prevent other smaller companies from entering this sector in the middle and long run. Finally, these sectors are highly promising as they help societies ensure their energetic safety. Admittedly, it is crucial to take into account these factors during the change process.
Furthermore, the structural policy of the company can be regarded as one of the change variables. The company has started a number of joint ventures with companies operating in new markets (for examples, oil and gas production, airport construction). ARABTEC did not have the necessary experience in this sphere, and it could face numerous issues and make losses. Development of joint ventures with more experienced companies can ensure the proper functioning of the company and the successful implementation of the change.
Importantly, this strategy does not lead to significant changes within the company and departments, which is beneficial since lots of people often oppose such changes. Joint ventures can be constituted by people who are ready for the change and understand their roles in it. It is also noteworthy that the company reduce the number of its potential competitors in each sector, making them its partners.
Finally, proper human resources management strategy is another important change variable. The company has chosen to recruit high-profile top managers who can ensure proper implementation of the change (Kane n.p.). There are numerous factors affecting this variable. For instance, the company will employ international professionals as well as top domestic managers (Kane n.p.). This can lead to certain cultural issues as top international managers can fail to understand the peculiarities of the region. Employees can be reluctant to work effectively with these professionals, and this can also have certain negative effects. Nonetheless, these issues can be overcome or even avoided if the HR strategies are thoughtful.
To sum up, it is possible to note that the change strategy chosen by ARABTEC is successful as the company is characterised by unprecedented growth. The company has entered new, highly promising sectors, which ensures its continuing growth. At that, the company minimised risks by starting joint ventures with companies operating in these sectors. Finally, ARABTEC has also facilitated its growth by recruiting high-profile top managers who have the necessary experience to ensure the company’s proper expansion and development.
About Us. 2014. Web.
Arabtec Holding Co. 2014. Web.
Kane, Frank. Arabtec Holding to Build on New Growth Strategy. 2013. Web.