Accounting and Financial Management - Aramex Company - Case Study Example

Market Research Project Company Name: Aramex Student Name: Date: Contents Introduction 3 Network and Location of main headquarter: 4 Executive Summary: 4 Creativity 5 Commitment: 5 Mission of Aramex 5 Vision of Aramex 5 Aramex and its Competitors: what makes Aramex better: 5 Aramex relationship with the customers: 6 International Delivery 7 Domestic Express 8 Shop And Ship 9 Number Of Employees And Their Positions  9 Workforce: 11 Salaries  12 Employee training: 13 Type Of The Company  13 Balance Sheet 14 Income Statement 15 Aramex stakeholders: 16 Sustainability at Aramex: 17 Recommendation 18 Conclusion: 18 Bibliography 19 Introduction Aramex Company is listed among the leading company that is serving around the world giving solution to transfer and deliver goods in different regions. Aramex got into line in 1982. It was found by Fadi Ghandour and the chief executive officer was Hussein Hachem. It was recognized among the companies that are working as courier. Their work with commitment made it acknowledged around the globe in no time. Aramex started in 1982 and in 1997, it became one of the Arabian companies that were trading on the NASDAQ. Later, it changed into a private company. From the start till now it has flourished a lot. No as such decline has been encountered in the company rather a continuous growth is seen. Aramex has not limited itself in one specific region in fact it has grown its market and costumers. It has adopted many new strategies that can have incorporated features customers demanded the most [Ara12]. Steps were taken by the company so that the company can be expanded in Asian and African regions. More and more opportunities were explored to strengthen the position of Aramex in world markets. According to its annual report more than 14000 are working as employees in different regions of the world. Special training programs have been resulted to be very fruitful for the employees. Training has helped in better attaining of goals and reaches the high growth level that they can. Aramex lies among the companies in Dubai financial market. This led to a rapid increase in the number of stakeholders. It was due to providing wide range of services with quality preference. Its services include: Integrated Logistics Solutions, International and Domestic Express Delivery, Freight Forwarding, Secure Records Catalog service Information Management Solutions, E-Services: E-Business Solutions Shop and Ship. Still the company is working day and night so that it can give the best and can do innovations of new products so its customer ship can be expanded. The revenues of Aramex in 2015 were 3837 million. This was about 5% more than that in previous year, 2014. Network and Location of main headquarter: Aramex head office and main origin is in Dubai United Arab Emirates. Other than this it has more than 300 Aramex offices in 68 different countries. It is one of the members of Global Distribution Alliance. In this way it keeps 40 express and transportation services from different regions of the world unified. The Aramex network has 33,000 vehicles and 66,000 employees. The workers are working with commitment to serve the clients of their region. Executive Summary: Aramex is providing cargo solution with a extensive network in different countries of the world. It is not only serving on domestic level but has expanded its circle on international level, facilitating international transport services to its clients. Aramex gives an attractive cheap cost that drags customers of its competitors. Leadership At Aramex well trained professionals in governance help the client to decide what service results more desirable for them. Giving each customer proper guidance to expand trust and customers. Creativity Aramex is working to present new products in line with new features. Steps are taken so that customer suggestion can be taken to the level and introduce things according to their choice. Commitment: Aramex operates with advanced strategies. It keeps safety factor on the main list. It has also taken sustainability factor into its company so that a long life can be maintained. Their commitment to shareholders is accountable. Mission of Aramex The main mission of Aramex is to be identified as one of the leading top five companies who aim is provide express carrier and deliver goods around the globe in a manageable effective mechanism. They consider their job to be show a more responsible attitude towards their customers. Vision of Aramex To be more familiarized among the clients is the foremost bullet in the vision of Aramex. They also have in their vision to show more adaptable behavior and be more versatile in the regions where they are providing services. A quality network is established by the company by an achievable price to maintain their position in the market [Jac08]. Aramex and its Competitors: what makes Aramex better: Talking of competitors of Aramex DHL is on the top of the list. Other includes [Jim10]: Forward air company Scan There are many reasons that helps Aramex maintain its position and fight its competitors. The foremost is the cost factor. The cost of DHL and others is far more than Aramex. People now a day prefer things done in a less costly way. And another point to be noted is that Aramex provides variety of services like air cargo, water cargo and other supplying goods other than just courier [Dun11]. The online services of Aramex are also far much better than other leading companies of logistics companies. . Other important points that make Aramex better than others are Its workers are more than other companies thus having approach to do things in more manageable way as human resource matters a lot. The revenue is far more than DHL. Talking of social media power and press, Aramex has more followers and is been more active in media as compared to its competitors. Aramex relationship with the customers: Customers are entertained with great hospitality and care at Aramex. The workers are given special training about how to deal with the customers and clients. The best behavior is maintained with commitment so the customer faces best experience. Detail information about the services is given to the clients so that he can choose the best desired. Special care is taken about the information of the customer. Thus providing full security and privacy. Special emergency system is maintained to safeguard the good in case of any emergency. New technology is used in the warehouses so that high security of good to be delivered is maintained. In case of any disaster or natural climate occurs goods condition is maintained. High customized efficient vehicles also ensure goods safety. In this way the customers remain satisfied. The packaging of the goods is done by packages that are not harmful to the environment[Ara151]. In fact the packages are such that can be easily recycled and easy to open. These innovative measures contribute a lot in expansion of network. The goods to be delivered are handled with great care. A well maintained warehouse with advanced facilities is used in order to take care of the goods that are to be delivered. Customer can easily approach order and track and obtain information about the order. A 24 hour service is available to entertain the customers’ queries. Customers can reach through different mechanism. A website is available where customer can give feedback. They can also reach to Aramex through contact number, social media and also through outlets. This way the company can work on weak areas and also on the suggestions of clients. International Delivery Aramex is one of the logistics providing international service of transport to its clients. It is providing facilities that help in overcoming time and ship thing with responsibility. There is a wide range of products and services for the international clients [Ara152]. This overcomes the problem of transfer wit safety. Every year new and advanced facilities are created for the overseas shipments. Due to fast and efficient logistic service the customers of Aramex has increased to a great extent. In 2015 there is seen a vast increase in clients and orders. The new ranges of services in 2015 were: Expansion in Aramex Bio service for the purpose of freight business. This was fruitful for the customers in the Middle East and African area. Aircraft-on-Group’ launch desk in the Middle East Asia. This was for the clients that wanted quick urgent air or water cargo to deliver goods or order. Launch of ‘Aramex-Envoy’. This service is preferable for those clients that require delivery with security and deliver at the minimum distance. Domestic Express Domestic delivery is something in which Aramex is best. Quick door to door delivery with cheap cost created great customer ship since 1982. Aramex is even facilitating the clients who require their order to be delivered the same day. There is an expansion in technology on domestic level. Along with this Aramex is also providing facility that can deliver on the place of address and the time at which the order is to be received. This facility attained great success and a huge number of customers got entertained from this service in the year 2015. This facility was named as My address. Aramex is one of those top companies who have a large land freight network. The network is spread all over Arabian countries and some part of Europe. The vehicle customized by Aramex has special GPS system that is helpful in delivering and tracking order. The land freight is the most extensively used service of Aramex. Plus it is less costly hence easily approachable service. Aramex gives the customer the facility to track their order. Along with this all the updates are also delivered through text messages and email to the client. This service is available through out the clock to keep a track about where the order has reached. Shop And Ship Aramex has brought innovation in its services and introduced online service. This service allows the customer to shop online and mail it to forward to another member. This unique service gained a lot of positive response. This service is familiarized in top 15 shopping countries on which the order can be forwarded. These countries include United States , England, China, Turkey, Arab nations, India, South Africa, Hong Kong, Germany, Italy, Spain, France, Singapore, Canada and Malaysia. The best part of this service is that it doesn’t charges any extra tax or any such amount. The cost is totally reasonable so this attracts more customers. Last year this service got more expansion that resulted to be more fruitful for the company’s growth. Number Of Employees And Their Positions  Aramex consider human as the most powerful tool in growth of company. Training programs are introduced so effort is put bringing professional trained workers. The number of workers working for Aramex is continuously increasing. There are more than 13900 people working in different regions of the world as an employee of Aramex. Around 4160 are listed as indirect employees with 84 different nationalities. Every year a huge number of new fresh employees are incorporated. The proper organized governance really helps in the growth of any company. At Aramex from the chairman to the board of directors, every person is working at their best to achieve the goals of the company by applying different strategies. The main members of governance are mentioned below[Ara15] among which 67% of them are independent and the rest are non-independent. Member Position Independence Mr. Abdullah M. Mazrui Chairman Independent Mr. Fadi Ghandour Founder Non-Independent Mr. Hussein Hachem Chief Executive Officer and Director Non-Independent Mr. Helal Al-Marri Director Independent Mr. Ahmed Al-Badi Director Independent Mr. Arif Naqvi Director Independent Mr. Charles El Hage Director Independent Mr. Ayed Aljeaid Director Non-Independent Mr. Mana Al-Mulla Director Independent The number of employees are rapidly increased for the past some years for Aramex. While is most of the areas of different companies the employees rate has decreased[Ara09]. The growth can be easily judged through charts and graphs. The chart below depicts the number of employees that has increased during the year 2009. 2007 2008 2009 Number of employees 3214 7607 8101 Percentage of increase in employees 8% 20% 6% Workforce: At Aramex the workforce has both genders. Both male and female are actively working but the male member is more than female. In the graph above about 85% is the male workforce and 15% is the female workforce. Talking about the workforce in regions different numbers of people are working for Aramex in different regions of the world. There are about 27% people working in Africa for Aramex. 5% in Europe, 9% in Asia and 59% is working in GCC and Levant. These people have different nationalities and belong from different age group. Some are experts while other are locals. Salaries  The salaries of the employees vary in their position and their area. The salary of some workers are describes below[Gla12] A system analyst salary lies between $60k-$68k, A programmer analyst lies between $63k-$74k A marketing manager lies between $74k-$80k A customer service $57k-$61k Beyond the salaries Aramex has also kept an eye on the extra side benefits and also worked for the safety and security of its worker. Work is done for an improve quality of vehicles. A standard is maintained for the GPS system that can help tracking if any issue occurs. The improved GPS system helps in maintaining the record as well. Employee training: Aramex has built a separate system so that it can train its employees so that they can lead more effectively in their careers and position in Aramex. With the help of Corporate University workers are given training that helps in meeting the challenges in the work place. Training helps in emerging the commitment among the workers. To know the pros and cons there is a annual evaluation about the year performance [Ara121]. Through this evaluation the capabilities and strengths of workers is judged and the weak points are let up and are polished. In this way the next training programs are created that over comes the weak points of the previous one. In 2015 variety of new mechanism and strategies were set by Corporate University that familiarized learning and development systems. Now with the passage of time and success in training programs training and learning sessions have attained more focus. The breakdown of training program is: 70% of development comes from employment: learning and applying 20% of training through coaching and mentoring 10% is derived from formal structured training Type Of The Company  Aramex is now a public company. Although it has switched several times from public to private and then private to public. Initially it started in 1982 providing express services. It got into a global brand due to extensive facilities it provided. In the year 1997 it became part of NASDAQ stock exchange. So it could sell and purchase shares through this new medium. After having success due to NASDAQ stock exchange it again became private company. Then again in the year 2005 it become public company giving multiple services and presenting new innovation in its products. Currently it has many offices and branches in different countries providing services at reasonable approachable prices. Balance Sheet The balance sheet of a company can clearly demonstrate all the assets and liability of a company for a particular span of financial period. Following is the balance sheet of Aramex for the fiscal year 2015. It is showing a clear picture of all the assets and liabilities along with equity for the year 2015 [All15] 31 12 2015 31 12 2014 Cash 707158 619991 Inventories NA NA Account receivable 163187 686677 Other current assets 1601577 191766 Current liabilities 821721 1498434 Total assets 3445356 792241 Working capital 779856 3207249 Capital 1464100 706193 General reserves NA 1464100 Other reserves NA NA Long term debts 228585 NA Total liabilities 1245561 97286 Owners equity 2161531 1017673 Income Statement Income statement is helpful in watching the situation of any company in a quick glance. It shows all the profit and losses that had occur during the fiscal year. Assets liabilities along with equity of Aramex for the year 2015 are depicted in the table below[Ara15]. Like every passing year Aramex is facing gains and growth in its company. The growth graph is continuously going up. This is mainly because of the new features Aramex is serving its customers every year. Items 2015 2014 ASSETS Non-current assets Property, plant 703151 530616 Goodwill 1038079 1076098 Other intangible goods 49367 44387 Investment in joit ventures 46857 47548 Deferred tax assets 3943 3365 Other non-current assets 2382 6801 Total 1843779 1708815 Current assets Account receivable 731232 686677 Other current assets 163187 191766 Bank balances and cash 707158 619991 1601577 1498434 Total Assets 3445356 3207249 Equity and liabilities Share capital 14641000 1464100 Statutory reserve 195663 170632 Foreign currency translation reserve 255821 151421 Reserve arising from acquisition of interest 28119 28268 Cash flow hedge reserve 2056 Retained earning 785708 708001 Equity attributed to equity holders 2161531 2165100 Non controlling interests 38264 24476 Total equity 2199795 2189576 Non current liabilities Interest bearing loans 228585 97286 Employees end service benefits 129544 117717 Employees benefit liability 63825 8336 Deferred tax liabilities 1886 2093 423840 225432 Current liabilities Accounts payable 176044 178587 Bank overdrafts 33941 12922 Interest bearing loans and borrowing 87950 53939 Other current liabilities 523786 546793 821721 792241 Total liabilities 1245561 1017673 Total equity and liabilities 3445356 3207249 Aramex stakeholders: Due to expansion of Aramex the number of stakeholders got increased to a great number. The number is getting bigger not only domestically but also around the globe. The trust in Aramex strategies have made stakeholder more involved. Meeting and benefits keep the holders in touch with the company. A direct and indirect relation is thus build between the company and the stakeholders. In 2015 many seminars and programs were held that made the stakeholders active. This was seen in Dubai KSA and south Asian countries. These workshops and seminars give rise to discussions through which high profits can be attained. At Aramex the meeting are held at Yearly bases Weekly monthly time Every quarter Depending upon the need and requirement the meeting is called upon and matters are discussed. In the quarterly meeting senior management is sometimes also invited to discuss the matters. The purposes of these calls are to maintain job security, reframe training programs and also to evaluate the performance. Feedback is also entertained is these meetings. At Aramex the stakeholders include [Our12]: Employees Customers Global Distribution Alliance Business partners Shareholders Community and society Environment Sustainability at Aramex: Aramex consider sustainability to be an important part of business. It helps in maintaining the position of company in market for a lasting time. The main criteria set for sustainability is to support different organization and society as well as the culture. Strategies are set so the aims regarding sustainability can be easily attained in an effective manner. The three main sections on which Aramex focus are: Youth education Entrepreneurship Environmental commitments Aramex creates different programs and services through which corporates can be stabilized and sustained. Strategies are created that also bring stakeholders into the sustaining activities. Programs are organized that evoke sustainability activities and volunteering work for the help of society. At Aramex it is believed that investment in female can lead to great positive outcome in society. No matter what sector it is women are there to produce best out of every matter. Many opportunities are given by Aramex to woman so that the company can flourish. Involving them in training programs improve the learning and development. In 2015 the company trained more than 100 women with variety of skills. Recommendation Although the Aramex Company is going towards growth with every passing year still there are some areas where more improvement can be brought. Effectives mechanism should be created so that time complains that sometimes occur can be overcome. Adjustments in the rules and regulation should be brought. Along with this seasonal benefits should be given to the customers so that customers should prefer it more. Areas in which the competitors of Aramex win should be adopted in an effective way. More and more expansion in the network can also be fruitful for the company as can lead to become universal company that can serve as courier. Conclusion: The whole document has summarized the company inner and outer. Aramex is one of the leading company that is solving transport and courier problem and let people send gifts and parcels around different countries. It has expanded in different nations of the world and is still working for its growth. It has maintained the satisfaction of customers since 1982. Aramex major focus also lies in sustainability. Different efforts are done by the company for the maximum assurance of sustainability in the society. Innovation is occurring in every sector of services. So at Aramex there is seen a rapid development in innovating their products. The feedback of customers leads to such innovation. Latest technology is utilized and through different meetings and discussions ideas are generated. These ideas give root to new services and product. This all leads to expansion of network of any company. Similarly the feedback obtained through different means is utilized in special department of Aramex and the quality of services is enhanced to the next level. Management is properly organized so that the quality of services is maintained and is up to the mark of the customer. Bibliography Ara12: , (Aramex, Annual report , 2012), Jac08: , (Jackal, 2008), Jim10: , (Fowler, 2010), Dun11: , (Dun, 2011), Ara151: , (Aramex, Annual Book, 2015), Ara152: , (Aramex 2015, 2015), Ara15: , (Aramex, Annual Report 2015, 2015), Ara09: , (Aramex, Sustainablity report, 2009), Gla12: , (Glassdoor, 2012), Ara121: , (Aramex, annual report, 2012), All15: , (All year balance sheet, 2015), Our12: , (Our Stakeholders, 2012), Read More