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Bin-Shihon Group Company’s Analysis Research Paper

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Updated: Jun 25th, 2020

Company Background and Fundamental Values

The Bin-Shihon Group is located in Saudi Arabia and was founded by Bin Shihon in the year 1950. The company has its headquarters in the city of Riyadh and has established successful businesses in the sectors such as transport, real estate, household, tire and battery, machinery and trucks, and joint ventures. The company has diverse interests in different sectors of the economy and operates within the codes of integrity, business excellence, accountability, and entrepreneurship. The fundamental values of the company are customers, people, stakeholders, and business partners (Bin-Shihon Group par. 2).

Major Divisions of the Company

The major divisions of the group operate under different company names such as BBG Group FZE, Bin-Shihon for Household, Bin-Shihon Real Estate Holding Company, Aliur Laud Transport Company, Al-Mohtaraf, and Al-Hloul Heavy Equipment Company among others (Bin-Shihon Group par. 3). The share of each division is summarized in the table below.

Division Percentage Share (%)
Tire and Battery 37.95
Household 6.50
Real Estate 24.11
Transport 15.60
Trucks and Machinery 20.71

From the above table, it is apparent that the tire and battery sector has the highest share of 37.95 followed by the real estate sector. The household sector has the least share of 6.50 of the total value of the Bin-Shihon Group (Bin-Shihon Group par. 5). The share per division is summarized in the pie-chart below.

Division Share

Specific Focus: The Tire Industry

Players and Competition in the Tire Industry

The main players in the Saudi tire industry are Bridgestone, Michelin, Bin-Shihon (Bin-Shihon Commercial Company and BBG Group FZE), and Goodyear. The Goodyear Company has market share of 32% followed by Bridgestone at 27.9%. The Bin Shihon Group occupies the third position at 25.3% with Michelin controlling 16.4%. This is summarized in the graph below.

Company Saudi Tire Industry Market Share (%)
Goodyear 32
Bridgestone 27.9
Bin Shihon 25.3
Michelin 16.4
Saudi Tire Industry

The Goodyear and Bridgestone have successfully used the business to business (B2B) contact management strategy to penetrate the market and maintain dominance due to expanded distribution networks and series of marketing campaign. However, the Bin-Shihon Group, through its subsidiary companies such as Bin-Shihon Commercial and BBG Group FZE, has used the strategic business to customer contact system and multiple branding strategies to survive competition and expand its market.

Bin-Shihon Tire Division

The tire division of the Bin-Shihon Group is operated under the Bin-Shihon Commercial Company and BBG Group FZE. These companies deal in exclusive brands such as Hankook, United Tires, XL, Barox, Safari, West Lake, Triangle, Zoom, and Forceum (Bin-Shihon Group par. 6).

Marketing Analysis

Innovation and Multiple Branding

As part of the tire division’s market entry strategy, the Bin-Shihon Group utilized its innovative and expertise capabilities in product development by offering multiple brands of the tire products to appeal to different customers with different needs. For instance, the group opted to deal in exclusive brands such as United Tires, XL, Barox, Safari, West Lake, Triangle, Zoom, and Forceum (Bin-Shihon Group par. 3). Besides, the group is known to be the only venture dealing in many brands of tires in Saudi Arabia. As a result, the group was able to create an environment of own competition since customers were offered a variety tire products with different price tags. Therefore, the company was able to easily penetrate the Saudi Arabian market through the multi branding strategy.

First Mover Strategy

The Bin-Shihon Group also used the first mover strategy to enter and penetrate the tire market in Saudi Arabia through securing exclusive rights of dealership in the Hankook tire brand. Being the first and only company in the Saudi Arabian market dealing in the Hankook tire, it was easy to penetrate the market without competition or challenges since this brand of tire in renowned globally for its quality and affordable price tag. The brand positioning strategy ensured that the business increased its presence in the Saudi market as a respectable distributor of exclusive Hankook tire brand (Bin-Shihon Group par. 6).

Proactive Marketing Mix

In order to penetrate the highly segmented market in Saudi Arabia, the Bin-Shihon Commercial and BBG Group FZE companies negotiated for discounts, competitive pricing, and flexible distribution network to ensure that the targeted customers were able to get value for their money. Through this strategy, the Bin-Shihon Commercial and BBG Group FZE companies were able to implement the high-quality low-prices strategy to outperform any form of competition in the Saudi market (Bin-Shihon Group par. 3). The Bin-Shihon Group developed a complex distribution network within the Saudi market to ensure that customers across Saudi Arabia are able to get the tire products in the most convenient way possible. Since the target market is dynamic, the Bin-Shihon Commercial and BBG Group FZE companies used the business to business and business to customer contact management strategies in order to reach the customers across all regions of Saudi Arabia.

Product Promotion and Branding

Lastly, the Bin-Shihon Group used series of promotion strategies to enter and penetrate the Saudi tire market. Through the Bin-Shihon Commercial and BBG Group FZE companies, the promotion strategies involved personal selling, advertising, and sales promotion to ensure that the targeted clients were brought on board as stakeholders in the tire venture. The promotion messages were further customized to incorporate the aspect of Saudi language in product marketing and branding. Besides, the Bin-Shihon Commercial and BBG Group FZE companies used personnel of Saudi origin in order to win the trust of the conservative customers in Saudi Arabia. Lastly, the business model within the tire division was integrated to ensure that the dominant Islamic culture was part of the product branding strategy.

Customer Loyalty Management

The Bin-Shihon Commercial and BBG Group FZE companies have strategic and effective customer relationship management approaches to guarantee customer loyalty. For instance, the two ventures within the Bin-Shihon Group have series of annual promotion activities such as discounts for purchases of different tire brands. Through the laggard activism strategy, the Bin-Shihon Group has been able to guarantee customer loyalty in the short term by offering premium customer experience, low charges, and compact customer care support.

In the long term, the Bin-Shihon Group has established a contact management system that integrates the standard operating procedures that promote consistency in customer service. These strategies are aimed at ensuring continuous expansion and customer satisfaction. The vision supports the Business to Customer (B2C) strategy for sustainable business.

As a market leader and the third largest tire dealership group in Saudi Arabia, the Bin-Shihon Commercial and BBG Group FZE companies initiated several support services to customers and communities surrounding its branches. As indicated in the group’s website, the Bin-Shihon Commercial and BBG Group FZE companies initiated 25 different support services to the community. These initiatives have enabled the group to expand rapidly due to improved customer loyalty.

Moreover, the group has managed to penetrate the traditional markets as the suppliers perform the function of marketing the group to potential customers. The CRM strategies of the group are effective because group’s model of running the customer assurance strategies allow for the customer preference tracking process and live feedbacks. For instance, adoption of the hybrid system of management by the group was meant to ensure direct contact with customers within the shortest time possible. The hybrid system is very successful in contact management and positive attitude reassurance.

Works Cited

Bin-Shihon Group. Our business: Divisions. 2015. Web.

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