Almarai is a Saudi Arabian dairy company that specializes in the manufacturing and distribution of food and beverages. The company was founded in 1977 by its founder by the name Prince Sultan Bin Mohammed Bin Saudi Al Kabeer. Almarai has become a successful company over the years and has dominated the market in the six GCC countries(FARID, 2014). This paper will analyze both the internal and external factors of the company and how it fairs among its competitors. The analysis will begin from the SWOT analysis of the company, the 4 P’s, Porter's five forces model and lastly the evaluation of the product portfolio using the BCG matrix.
Conducting a SWOT analysis is essential in determining the position of a Company in the market. The SWOT analysis entails surveying and identifying the internal and external factors that impact the operations of the enterprise either directly or indirectly. Strengths and weakness are classified as internal factors of the company in the cosmetic industry while opportunities and threats are the external factors that the company is subjected to in its operations.One of the strengths of the Almaraicompany is that it is the market leader in the dairy markets in all the GCC countries(Lee et al., 2015).
However one of its weaknesses is that of over depending on the dairy and juices segment of the company. This it does instead of trying to strengthen the other segments which are part of the company too. One of the opportunities that the Almarai Company can exploit is the diversification of its products to reach a larger market as possible and also to go beyond the gulf market and venture into other countries globally. Lastly, one threat that the company faces is the political instability that is witnessed with most countries in the Gulf region. If the instability persists penetrating in the Gulf markets would become hard. Another threat is that of the increased cost feedstock supply which would lead the company to increase its expenditure.
Marketing mix strategy using the 4 P’s
Marketing mix strategy of the Almarai Company involves the 4 Ps which stand for the product, place, price and the promotional strategies that the company uses. Concerning the product, the company over time since it was founded has entered into several products which they manufacture and distribute. These products include juices, home snacks, yoghurts and desserts, culinary products, dairy liquids and lastly kids products. On the issue of the pricing mix in the AlmeriaCompany, the company always looks at the customers market more as well as focusing on making its profits(SADI, 2016). Most of their products are cheap and affordable for their customers.
Moreover, the promotional mix of the company is mostly done through media and technology. The company is leading in dairy manufacturing and distributor in the Gulf region; it uses advertisements on major national televisions to promote their products. Almaria company also use social media to push further their products to the market and reach as many people as possible. Lastly, on the placing mix, the company has made a name and place in all the GCC countries and is the leading manufacturer and distributor of dairy products in all of them.
Porter’s five forces model
Almarai uses Porter's five forces model to analyze its competitiveness in the market. The first force is that of the threat of new entrants. It is usually weak for other companies to enter the dairy industry due to the existence of other factors such as the enormous costs of capital to start a new business, substantial financial implications of starting new companies and the massive cost of new brand development. The second force that o the bargaining power of suppliers where the competition is always high among them and the lowest bidder gets the contract(Dobbs, 2014). Another force is the bargaining power of customers where they have less say at the prices due to the limited alternatives. On the force of threats of substitutes, Almarai Company has managed to merge or acquire most of the smaller companies in the same industry hence making the number of substitutes limited. Lastly, to beat the intense rivalry among the existing competitors in the dairy products industry, the company has developed a sustainable differentiation strategy, collaborating with some competitors to increase the market size. However, it is also important to note that the number of competitors is few hence no much rivalry.
BCG Matrix of Almarai Company
Dairy Products and Juices
These are considered the star since they bring the company a lot of money through sales. The demand for dairy and juices products in the market is so high and is not showing signs of slowing. Although there have been some issues with the sale of the products in the gulf market, Almarai company has been able to penetrate the market well thanks to their dominance technology prowess
These products are one of the products by Almarai company which is considered to have the potential for growth. Nevertheless, it is not meeting this potential. If the company can invest only further on research and development and product innovation, Kids Products will have a high market share shortly.
Home Snacks and Yoghurts
These two falls in this category since they generate huge profits and their market share is high. This therefore means,Almaraicompany does not invest further on these two products. Instead, they manage them properly to ensure a continuous stream of revenue.
For a very long time, this product has been top-rated. However, due to some recent shifts in the market, Kids Products have reduced in popularity. As a result, Almaria company has refrained from further investment in the product.
It is advisable for any company to gauge its competitive prowess in the market to determine their dominance as well as the loopholes to be filled. With the analysis of Alamaria Company using the different approaches, it is worth noting that the company is much dominant in the market and is going to remain there for a long time. One of the reasons for this is because it has invested in different types of products in the dairy industry and has also been able to penetrate to most countries in the Gulf region.
Lee, V. H., Ooi, K. B., Chong, A. Y. L., & Lin, B. (2015). A structural analysis of greening the supplier, environmental performance and competitive advantage. Production Planning & Control, 26(2), 116-130.
SADI, M. A. (2016). Case study: marketing perspective of Almarai dairy food company. International Journal of Management Cases, 9(1), 42-50.
FARID, S. M. (2014). Determination of trace elements in cow's milk in Saudi Arabia. Engineering Sciences, 15(2).
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