Emaar Construction Company in Each Aspect of Its Business Operations - Research Paper Example

1. Introduction Before going into the details of analyzing an innovative organization, let’s get a better understanding of what innovation actually is. We can say that innovation is the act of launching a new product or service into the market. If, in a market, a product is introduced which was not available before in the market, that product is said to be an innovative product with new ideas and thoughts behind the product. In any organization, innovation is a complete process of generating new ideas and plans regarding a product or a service and then taking appropriate steps for the implementation of those ideas and plans in the product development process in order to create a new product. Some features of the innovative organizations include decentralization, risk taking culture, learning environment, creativity, imagination, originality and modernization of ideas, diversity, open communication among the employees, and a clear vision. 2. Emaar Construction Company While talking about innovation and innovative organizations, let’s talk about a company which has really embedded innovation in its all processes and activities. The company which we are talking about is Emaar Construction Company. Emaar is a public joint stock company whose motive is to provide the people with high standard or premier life styles. Emaar has really proved its worth in the field of construction. It has become one of the leading construction companies in the world because of its professionalism and commitment towards fulfilling the customers’ needs and requirements. It is due to Emaar’s allegiance and dedication that it has not only been listed on the financial market of Dubai but also it has become a part of Dow Jones Titans index. Emaar is basically a Dubai based Construction Company and has been working effectively and successfully since 1997. Emaar has managed a rapid growth due to its professionalism in satisfying the housing needs of the people of United Arab Emirates. Emaar Construction Company competes in various areas related to construction industry. These areas include building beautiful homes, providing value added services to the customers, master planned communities, various construction projects, and providing the customers with full range of high life style requirements. Emaar has undergone a lot of challenges ever since it has emerged as a leading construction company, but it is due to endless efforts and dedication of its management staff and employees that Emaar has successfully faced all those challenges and emerged as the prime mover of United Arab Emirate’s construction industry. In the near future, the main challenges which Emaar Construction Company may face include dealing with the world’s economic crises, maintaining standard in the competitive markets, unlikely to receive government’s support, globalization challenges, and shortage of skillful labor. The core activities and competencies related to Emaar Construction Company include property development, land development, investment in construction projects, providing financial services, development of hospitals, and investment in healthcare sector. Emaar’s main competitive strategy is based on creativity of new ideas and Emaar believes innovation and modernization of ideas to be the basis of success in any competitive market. Emaar Construction Company has a firm belief that customers are the main assets for any company and it should be the prime responsibility of any construction company to satisfy the needs and demands of the customers in order to gain an edge over the competitors. The current rating of Emaar Construction Company is A3 according to Moody system of rating securities and it reflects the leading and dominant position of Emaar in the residential market of Dubai. The main factors of high ratings for Emaar include very strong and sound financial position of the company, effective risk management policies, and high quality services to the customers. Emaar also holds over 20% of the whole market share which is the largest among all other construction companies. The high market share and ratings of Emaar are also supported by its risk management policies which ensure the limited amount of speculative development. This task of limited speculative development was achieved through pre-selling of the projects, phasing out of development projects, and collection of progress payments right after each stage of development is completed. 3. Review of the Literature about Innovation Innovation is a process of generating new ideas regarding a product or a service and then taking appropriate steps for the implementation of those ideas in the product development process in order to create an innovative product. “Innovation is the lifeblood of any organization” (Reavis 2009). McCallum (2010) states “creativity is important, particularly in business to remain competitive, to provide opportunities for staff and to create a fulfilling environment which has no constraints on free thinking”. No business can be successful without brining in innovation in its processes and culture. Gardner (2010) asserts “innovation Culture is another of those thorny innovation issues which will likely engender significant argument in any organization”. In an article, Gillies (2009) states “innovative culture can often be the difference between a successful and a not-so-successful organization”. Stressing on the need for innovation, Hunt (2007) states “a company cannot exist and develop without innovation technologies in the modern competitive world”. Talking about innovation’s benefits, Berkun (2007, p.140) states “the innovation earns you money, is enjoyable to work on, or solves the problem that interests you”. Chesbrough (2003) found that no organization can achieve market domination without brining in new and advanced technologies in order to develop an innovative product. Dodgson (2000) found that use of advanced technology in the development of products and services is another important characteristic of an innovative organization. Innovation is necessary in not only business activities but also in management styles of any organization (Hipple, 2005). Christiansen (2000) found that only those companies succeed in this world of competition who struggle for bringing in innovation in each and every business activity of the company. 4. Organizational Characteristics that Facilitate Innovation If we talk about organizational characteristics that facilitate innovation in the business operations and other activities of any organization, we can say that these characteristics really help the organizations in achieving success in the market. Organizational characteristics regarding innovation include creativity of new ideas, establishing a motivation-oriented business environment, creation of a corporate structure, innovative marketing strategies, constant desire to find our innovative ideas and a way to implement those ideas, and finding out resources which promote innovation in the products and services provided by a company. In today’s world of competition, no organization can achieve desired profit and success without brining in innovation in every business operation including management style of the organization. Finding out new ideas is one of the most valuable characteristics of an innovative organization. Innovation in not only necessary in each and every business operation but also it is beneficial in the marketing strategies of an organization in order to effectively compete with other organizations doing the same businesses. Some other characteristics that facilitate the organization innovation include supporting role of senior management for innovation, finding out new ideas regarding product development processes, and encouragement by senior management for the employees to take risks. 5. Does Emaar Possess Characteristics of Innovation? Emaar Construction Company has really proven its worth in the field of construction through providing the customers with high quality life styles. It is due to innovative characteristics of Emaar that it has proved to be one of the leading construction firms of the world. The three core factors of Emaar’s success include innovation, resilience and compliance. Emaar Construction Company possesses all characteristics of an innovative organization which include use of latest construction technologies, business segmentation, geographic expansion, risk taking, intense customer focus, cross-functional teams, development of innovative marketing strategies to sustain businesses, and providing the people with premier life style. Emaar has implemented innovation oriented strategies in all departments including customer relationship management department, marketing department, and in all strategic decision makings. Emaar encourages people to experiment and explore the world as much as possible. Emaar has developed such environment which promotes innovation in all aspects by all employees. Emaar has successfully maintained a balance between speed and quality which is also one of the key factors of Emaar’s success in the construction industry. It is the innovative thinking style of Emaar’s management employees which has enabled Emaar to develop various outclass buildings and projects which include the world’s tallest building Burj Khalifa, Downtown Dubai, Dubai Marina, Arabian Launches, Streets of Dreams, The Meadows, Hattan Homes, and Gold and Diamond Park. 5.1 Innovation Process in Emaar The innovation process of Emaar, which I examined while carrying out research regarding Emaar Construction Company and its success in the construction industry, is based on seven staged process. The steps included in the innovation process include generation of new idea of a product, analyzing market’s economic conditions for the implementation of ideas, beginning the development process, developing a business-effectiveness strategy for the product, brining in latest technology to create high standard buildings, developing innovation based marketing strategy to launch the product, and launching the idea in the shape of product into the market. In Emaar, every employee is encouraged to come up with new ideas in order to develop an outstanding product for the satisfaction of the customers. It is due to Emaar’s innovative strategies that Emaar has achieved a high rank in the construction industry and is successfully expanding its businesses almost all over the world. 5.2 Most Innovative Products of Emaar Emaar has succeeded in developing its name in the field of construction industry by bringing in innovation in every area of the company. Emaar encourages its employees and the management to take bold steps regarding creation of new ideas because Emaar believes in modernization of the lifestyles and the management of Emaar puts every effort in developing such innovative projects which should be able to attract the local and foreign customers. Some of the most innovative projects developed by Emaar Construction Company include Burj Dubai Downtown, Dubai Marina, Arabian Ranches, Emirates Living, and Emirates Hills. There are also various residential projects developed by Emaar in which the houses were so well developed and ground-breaking that they were bought like hot cakes by the local public and foreign investors. These projects include The Meadows, The Springs, The Greens, and Hattan Homes. Figure: 1 Burj Dubai Figure: 2 The Greens Figure: 3 The Springs 5.3 Why Emaar develops innovative projects? Emaar strives for innovation in every business operation in order to get competitive advantage in the construction industry. That is why Emaar develops every new project with a different idea and concept in order to increase its strength and domination in the market. The main reason for bringing in innovation in all business operations includes achievement of business growth and sustainability. Some other factors which drive Emaar towards innovation include increased profit margins, customer attraction, creation of differential and market space between the company and its competitors, customer satisfaction, providing the people with high standard life style, opening of new markets for the business through customer demand, faster turnaround times, improved designs of buildings, and building streamlined relationships with customers. The innovation type used by Emaar in development of new projects through new ideas is process innovation because it mainly focuses on the improved profit margins and removal of non value-adding steps from the workflow. It is Emaar’s continuous desire for innovation that Emaar has led its way towards achievement of market domination and expansion of its business operations in various other countries of the world. 5.4 SWOT Analysis for Emaar Construction Company Strengths Innovative housing schemes. Provides customers with high standard life style. Always achieve project’s completion deadline. Provides one year housing maintenance. Increased market share through providing the customers with modernized and comfortable housing facilities. Management is committed, innovative and confident. Weaknesses Shortage of skillful labor. Sometimes budget becomes short for the ongoing projects (very rare). A short training course needed for the marketing staff. Sub-contractors do not maintain standards sometimes which need a constant supervision in order to maintain the standards. Opportunities Emaar can come up with more innovative ideas. People demand modernism, so more innovative projects can be started. Emaar can have a constant edge over competitors by improving its marketing strategies. Emaar can support core business economies. Threats World’s economic crises Maintaining standard in the competitive markets Unlikely to receive government’s support, globalization challenges Existing core business distribution risk. Retention of talented staff. Susceptible to reactive attack by major competitors in the construction industry. 5.5 Project’s Life Cycle If we talk about the project’s life cycle at Emaar Construction Company, we can say that Emaar has implemented a proper mechanism for the development of any project. The stages included in the project’s life cycle are same as the stages of product development process in a company. These stages include introduction, growth, maturity and decline. In the introduction stage, Emaar creates project’s awareness among the public in order to develop a market for the upcoming project. Then in the next stage, brand preference is built and steps are taken to increase the market share. After growth, when the company sees that the growth in sales is reducing, it takes steps to defend the market share and increase the profits. Emaar has never faced a real decline situation but if a decline is foreseen, steps are taken to bring in new ideas in order to enable the project to attract the customers. Figure: 4 Product’s Life Cycle 5.6 Effects of Innovation on Emaar Innovation in all aspects of the business operations of Emaar has enabled it to develop a name in the field of construction. It is due to endless efforts of the management and all employees of Emaar that it has become one of the leading construction companies of the world. The goal of achieving success in construction industry is achieved through exploring creative and innovative ideas regarding the projects. The market share has tremendously increased and the businesses of Emaar have expanded to several countries due to creation and implementation of innovative ideas in the projects developed by Emaar. 6. Contribution to the Future of the Company 6.1 Conclusion Summing it up, it can be said that innovation is the key to success in this competitive world. No organization can achieve market domination without brining in new and advanced technologies in order to develop an innovative product. Emaar Construction Company has developed its name in the construction industry through brining in innovation in each and every aspect of its business operations. It is due to Emaar’s innovative strategies that Emaar has proved to be the leader in the field of construction. 6.2 My Contribution in Emaar’s Future As an employee at Emaar Construction Company, it will be my prime responsibility to make all efforts in order to increase the market share of Emaar through effectively carrying out all of my roles and responsibilities regarding the job. As Emaar encourages innovative ideas by all employees, I will try to create new ideas regarding projects and introduce those ideas and innovative techniques to the upper management in order to get them analyzed and implemented if they are found perfect after the analysis. References Berkun, S., 2007. The Myths of Innovation. Sebastopol: O’Reilly Media, Inc. Cherbourg, H., 2003. Open Innovation: The New Imperative for Creating and Profiting from Technology. Massachusetts: Harvard Business Press. Christiansen, J., 2000. Competitive Innovation Management: Techniques to Improve Innovation Performance. London: Macmillan Press Ltd. Dodgson, M., 2000. The Management of Technological Innovation: An International and Strategic Approach. New York: Oxford University Press. Gardner, J 2010, Innovation Culture - Does Such a Thing Exist?, viewed 23 April 2010, . Gillies, A 2009, Innovative Culture in Business, viewed 23 April, . Hippel, E., 2005. Democrizing Innovation. London: The MIT Press. Hunt, O 2007, Innovation and Porter’s Five Forces Theory, viewed 23 April 2010, . McCallum, L 2010, Innovation - 6 Steps to Innovation and Creativity, viewed 23 April 2010, . Reavis, D 2009, Innovation Definition - The Four Requirements For Innovation, viewed 23 April 2010, . Read More