Forecasting of EMAAR Company - Case Study Example

Strategy, Sustainability, Demand Management and forecasting of EMAAR Company Introduction EMAAR Company was established in 1997. Since then strategies have been used to give direction in which EMMAR Company is headed to. The company has divided its strategy into various forms namely corporate, business unit and operational. EMAAR Company has also devised ways in which it can sustain itself through its maintenance, supportive and endurance. In the realization of Strategy, Sustainability, Demand Management and forecasting, the company does examine its micro-environment. It is composed of EMAAR’S resources and comprises of factors that it can effectively use in adapting to the changing external environment. Unlike external environment, the internal environmental factors are much within the control of the management of EMAAR Company (Crum and Palmatier, pg 23). The factors include: The emaars resources that are mainly tangible e.g. production or operation factors: like plants, equipments and machinery; marketing factors like sales force, channels of distribution; personnel/ labor relations e.g. employees and relations with the trade unions and financial factors e.g. funds available and their sources e.g. loans. Intangible such as location factors e.g. suitability of the present location, reputation, research and development. Emaars internal environment assessment hence helps pinpoint the company’s strengths and weaknesses with which it faces and counteracts challenges in the global markets. The strengths in the firm’s internal environment enable it to exploit environmental opportunities or to overcome the problems thereon, hence its capacity to successfully enter the market despite competition (Martz, Pg 49). Such assessment is based on two specific areas namely Physical resources and the personnel competencies (Crum and Palmatier, pg 63). Physical resources and personnel competencies, the physical resources are the assets of EMAARS Company that it uses to carry out its strategic plans. Many of these are reflected in the balance sheet by cash, inventory, machinery and equipment accounts. The location and the disposition of these resources are also important. For example, it is based in Dubai and also has branches and partners internationally enabling it to compete worldwide. Another important consideration is the degree of integration that exists within the operating units of EMAAR Company (Madura pg, 67). The company uses “Vertical Integration” that is the ownership of all the assets needed to produce the goods and services to customers. The company purchases the controlling interest of their suppliers so as to ensure that the materials are available when needed. They also use the “Vertical Integration” which is the ownership of the core technologies and the manufacturing capabilities needed to produce outputs coupled with dependence on outsources to produce all the inputs needed. Personnel Competencies, The Company examines these because they reflect their strengths and weaknesses, that is an outstanding Research and Developments departments leads to the high development of high state quality outstanding of the products (Madura pg,97). VALUE CHAIN ANALYSIS A complementary approach to the internal environment assessment used by Emaar is the examination of the firm’s value chain. It is the way in which the primary support activities are combined to produce valuable goods and services and increase the profit margin. The primary activities in EMAARS value chain include: Inbound logistics; Concerned with the receiving, storing, material handling and warehouse activities. Operations, in which inputs are converted into products form by the performance activities like machining, assembling, testing and packaging. Marketing and Sales, the Company uses this to inform and encourage customers to buy products and services they produce. In addition, the Emaar Company determines its competitive scope which is the breadth of its target markets within the industry. It also help EMAAR as a company to create synergies within the organization’s activities i.e. by combining the human resources talent of their sales people with the expertise design and styling personnel. The company does pursue the following strategies to successfully counteract competition (Shura, pg 208). Cost Leadership Strategy: Here, EMMAR tends to produce identical products through international economies getting cheaper than their competitors through economies of scale. Differentiation Strategy: Here, EMAAR seeks to develop a unique single image for its products, exposing them as superior in order to achieve competitive advantage e.g. like focusing on oil and gas production as a single segment to provide customized products. In the development of the global programs, EMAAR management determines: Product Offering: As a Company, EMMAR’S decision is to produce customized products. In many cases, it tends to produce goods with similar bases while tailoring some other features for different markets to reduce costs (Niles, et al pg, 55). Marketing Approach: The Company will implement marketing approach named globalization. It’s the approach that sorts out elements that are strategic in nature. (E.g. Position of the company) uniformly across the globe and localizes other necessary tactical elements (e.g. Distribution) to better penetrate the local market (Shura, pg 223). Competitive moves: With a regional or global presence, the company will not need to respond to a competitive move only in the market where it is being attacked. Instead, it may compete by draining its competitor’s resources in the other markets to affect its overall performance. In assessing how different rivals in the same industry can compete, the following three options will be considered: Price competition, Non- Price Competition and Cooperation/ Acquisition. Price Competition, EMAAR is a well established company and hence it faces stiff competition from other players in the market. As a result of stiff competition, the outbreaks of price competition tend to signal periods of discontinuity and imbalance as characterized by the excess capacity and or the emergence of new and aggressive entrants who are for example, attempting to develop worldwide competitors (Niles, et al pg, 86). Cooperation/ Collaboration, Instead of competing, EMAAR adopts a strategy in which it seek cooperation or collaboration with other competitors in different aspects of their business. For this to happen, a number of conditions must be met including mutual need. Indeed, in one sense, the acquisition of one company by another presents the final form of collaboration to the extent to which the company giving up its independence no longer believes it can survive on its own (Shura, pg 133). Methodology used, the methodology of the research used included the following: The research design, the study area, population, sample and sampling design, data type and data collection method, data analysis and presentation (Newman, et al pg 23). Objectives of the Study Overall Objective: The overall objective of this study was to establish the relationship between strategy and sustainability of the company Specific Objectives: Specifically, the study sought to: 1. Establish the use of various strategic plans since its establishment. 2. To determine the effect of the company’s growth internationally. 3. To find out the challenges faced by the management in the implementation of its strategies. Research Design In this study, survey research and descriptive research were adopted. Survey research ensured that the data collected was more appropriate and provided answers to the research questions based on the strategy, sustainability, demand management and forecast. Descriptive research described the customer’s behavior, attitudes and answered the qualitative research questions. (Niles, et al pg, 166) Study Area The study was conducted in Dubai and its environs, which is located in the Asian continent. The study dealt with the management of EMMAR and consumers of the company. The area was chosen because of its geographical position; it is located in a region with has a vas business opportunities, busiest in the Middle East and a dense town. These reasons made the data collected from this study area to be one of the most reliable in the country. Study Population and Sampling In this research study, the target population included 200 respondents, of which 12 stockholders and 188 are customers getting goods and services from this company (Newman, et al pg 44). Data Collection The study used both qualitative and quantitative data, questionnaires, interviews and observations to collect both primary data and secondary data. Sample and Sampling Design The research adopted simple random sampling in choosing and selecting the respondents. A sample of 100 customers was selected. Applying this technique led to a 95% level of accuracy and confidence and a 5% error margin. This threshold is within the acceptance of the business and the social researches. Questionnaires and interviews were targeted towards the customers in the study area (Martz, Page 249). Data Collection Instrument and Validation, the questionnaires were first examined to ensure relevance and that they were understandable and logical. The Kuder Richardson’s formula was used in the estimation of the internal consistency and ensured the questionnaires had a high reliability coefficient. Data Analysis, Presentation and conclusion, the questionnaire data gathered through interviews were analyzed using content analysis by identifying the relevant information so as to capture knowledge and perception concerning strategy, sustainability, demand management and forecast. The responses in the questionnaire were examined for completeness and consistency. Statistical tests were carried out to determine the relationships between the variables using SPSS and other relevant computer programmers (Newman, et al pg 66). The analyzed data was summarized using statistical charts, graphs, frequency tables and percentages. It was also summarized in inferences and the necessary recommendations were made. Tests for independence such as the Chi-Squire Test and the Pearson’s’ Correlations were used. The graph shows the financial status of EMMAR Company indicating that it is improving yearly as a result of the strategies applied. Work citations . Crum, Colleen, and George E. Palmatier. Demand management best practices process, principles, and collaboration. Boca Raton, Fla.: J. Ross Pub., 2003. Print. Madura, Jeff. International financial management. 7th ed. Mason, Ohio: Thomson/South- Western, 2003. Print. Martz, Louis Lohr. Milton; a collection of critical essays, Englewood Cliffs, N.J.: Prentice-Hall, 1966. Print. Newman, Isadore, Isadore Newman, Carolyn R. Benz, and Carolyn R. Benz. Qualitative-quantitative research methodology exploring the interactive continuum. Carbondale, Ill.: Southern Illinois University Press, 1998. Print. Niles, Blair, Edward Shenton, and Constance Lindsay Skinner. The James. New York: Farrar & Rinehart, 1939. Print. Shura, Mary Francis. Gabrielle. New York: Scholastic, 1987. Print. Strategy: create and implement the best strategy for your business.. Boston, Mass.: Harvard Business School Press, 2005. Print. Read More