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Nakheel is a Dubai company that creates outstanding architectural built works and develop the city’s infrastructure. Some of the major completed projects are Palm Jumeirah, The World, Deira Islands, Jumeirah Islands, The Gardens, Discovery Gardens, Al Furjan, Dragon City, Jebel Ali Gardens and Nad Al Sheba. All these constructions give a home for more than 270,000 residents and cover the area of approximately 17 million square feet (“Corporate,” 2017).
Also, the company designed and built 14 hotels at different locations like Palm Jumeriah, Diera Islands and Dragon City. Nakheel operates within the Dubai World holding that supervises such projects with the authorization of Dubai’s government. The history of such rapid development started in 2006 when the first of 387 buildings was constructed. The company aims to set the highest standard of life and inspire people around the world to move forward. The main goal of this paper is to discuss the business model of Nakheel in order to identify competitive advantages and make a SWOT analysis of the organization.
Conditions that help an organization to create products or provide a service at a low cost or that assist in satisfaction of customers in other ways called competitive advantages. They enhance the performance, making it more effective than competitors’. Such conditions are characterized by accomplishments that are difficult to duplicate (Wagner III, & Hollenbeck, 2014). Competitive advantages include different aspects like quality, efficiency and innovations.
Efficiency is a prominent factor contributing to creating competitive advantages. Efficiency is the connection between initial investments and a final product. Efficiently designed production reduces prices. It depends on four factors. These are time, effort, energy and space. Saving each of them improves the effectiveness of a working process. High efficiency assists in establishing ambitious investment programs aimed to meet growing customers’ demands and improve working conditions for employees.
Quality is another competitive advantage. Companies that neglect quality issues ruin their businesses. On the other hand, companies that invest in increasing the quality of their products or services develop and get wealthier. It is a slow and graduate process that requires building quality awareness among personnel, establishing training programs and conducting various tests (“The Importance of Quality,” 2017). Quality interrelates with stability. Customers should be sure that they always get high-quality products. Usually, people are ready to pay more if they are convinced that it is worth it.
Another significant factor that creates competitive advantages is innovation. Innovation implies seeking for new opportunities, analyzing different perceptions from different angles, taking risks and flexibility. Innovation requires the application of different leadership techniques like motivating employees spiritually, creating a comfortable work environment and cultivating creativeness. In addition, it should provide training programs aiming to develop problem-solving skills. Adaptation to fast-changing circumstances is also a crucial characteristic for any innovative enterprise.
The SWOT Analysis
A SWOT analysis stands for strengths, weaknesses, opportunities and threats. This type of analysis assesses mentioned above factors in order to establish the strategy of the development of an organization. The main Nakheel strengths are skilled workforce and high growth rate (“Nakheel United,” 2017). Nakheel’s specialists have done an enormous work, completing highly challenging projects. These accomplishments are based on the great experience of a big well-managed team.
Also, the company demonstrates the rapid pace of development. The full scope of the work has been done for a relatively short period. Nakheel has become one of the major real estate organizations in the world for less than 20 years. The main weakness of Nakheel is a future cost structure (“Nakheel United,” 2017). A cost structure is expenses that are necessary to produce a product or provide a service.
The company’s large investments that are approximately EUR 1.7 billion significantly increase the future cost structure (“Nakheel maps,” 2017). However, that gives the company various opportunities. Some of them are growing economy, new products and services, global markets and a constant increase of an income level (“Nakheel United,” 2017). These opportunities are implemented in ongoing and future projects. Nakheel has already awarded several construction contracts that are estimated at EUR 4 billion, including EUR 2- billion contracts for developing new projects (“Nakheel maps,” 2017).
These projects make Nakheel attractive to investors from developing European countries. Along with various opportunities, the company is faced with several threats. These are cash flow, external business risks, increase in labor costs and technological problems (“Nakheel United,” 2017). Cases of negative cash flow have occurred several times as it depends on oil prices. Hence, the cash flow situation is at constant risk of reaching a precarious point again. Also, the company is exposed to many external business factors like government policies and the global economy. Nakheel’s complicated and innovative projects accompany with various technological problems what subsequently requires to raise wages.
In conclusion, Nakheel is one of the prominent global real estate companies. Its projects serve as examples of fast-developing technologies and excellent management techniques. The SWOT analysis demonstrates the high level of professionalism, the scale of the company’s accomplishments and directions for future improvements. However, all that was ensured by Dubai’s government policies. They were aimed to increase the diversity of economy by the expansion of real estate and infrastructure sectors (El Massah, 2015).
Therefore, several companies got the financial and political support. However, Nakheel was able to develop more successfully and continues setting the pace for the industry in general.
Corporate. (2017). Web.
El Massah, S. S. (2015). Islamic economy option: SWOT case study analysis. Web.
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Nakheel maps out Dubai investment opportunities worth AED 4 billion at world’s premier real estate summit. (2017). Web.
Nakheel United Real Estate SWOT Analysis – Strengths, Weaknesses, Opportunities, Threats of Nakheel United Real Estate. (2017). Web.
Wagner III, J. A., & Hollenbeck, J. R. (2014). Organizational behavior: Securing competitive advantage. New York, NY: Routledge.