Zad Holdings Company - Case Study Example

Company Zad Holdings Company ID: of the Section: Table of Contents Executive Summary 3 Part 1 3 1.1 Brief history of ZAD Holdings Company 3 1.2 Target market 3 1.3 Product strategy 4 1.4 Pricing strategy 4 1.5 Promotion strategy 4 1.6. Distribution strategy 4 1.7 Conclusion 4 Part 2 5 2.1 Target market in the foreign country 5 2.2 Marketing environment 5 2.3 Competitive environment 6 2.4 Market size and potential 6 2.5 Conclusion 6 Part 3 6 3.1 Positioning in the new market 6 3.2 Product strategy 7 3.3 Pricing strategy 7 3.4 Promotion strategy 7 3.5 Distribution strategy 7 3.6 Conclusion 8 References 9 Executive Summary The assignments lay emphasis on international expansion of a shareholding company, Zad Holdings Company, which is situated in Qatar. The new target market for international expansion is the UK, where the company can increase the range of products and also modify the existing one so as to attract the customers. The key points that are related to the expansion of the company are briefed henceforth. 1) The overall macro environment of the UK is favorable for Zad Holdings Company. However, it is observed that the political and economic condition of the country may affect the business. 2) In the UK, Zad will encounter extensive competition from large conglomerates and indirect competitors such as small and large retail chain an investment companies. Hence, in order to overcome the challenge in the foreign market, the company can diversify its product range and modify the existing ones so as to cater the needs of the customers in the UK. 3) Premium pricing strategy is chosen for the company in the UK as the quality of the products is high. Moreover, Zad has to undertake extensive promotional strategy so as to spread awareness regarding the company and its products among the customers of the UK. 4) The products will be distributed to the stores and direct customers with the help of distributors. Part 1 1.1 Brief history of ZAD Holdings Company Zad Holdings Company (SAQ), a shareholding company listed in Qatar Stock Exchange is chosen for the project. The company includes a number of subsidiaries that aims at providing diversified services in Qatar. It has always searched for new opportunities in international grounds in order to expand its business and increase the customer base. Zad is well recognized in Qatar for its diversified business portfolio (Zad Holding Company S.A.Q., 2015a). 1.2 Target market The target market of Zad Holding Company is Qatar; however, over the last few years the company has been trying to increase the breadth of the portfolio by investing wisely beyond the boundary of the country (Zad Holding Company S.A.Q., 2015a). 1.3 Product strategy The range of products and services products that are offered by Zad are flour and related products, bakery items, processed beef, chicken, meat and vegetables along with burgers, nuggets, kebabs, kofta, meat balls, minced free flow, minced rolls etc (Zad Holding Company S.A.Q., 2015c). The services include the export and trading of products of high quality and reliability, construction of roads and infrastructure projects, provides logistics solutions and lastly real estate services. It manusfatcires and delivers the food products such as fresh chakki atta, wheat derivatives, flour such as hares, semolina, jaresh and other decorative pastas to the customers (Zad Holding Company S.A.Q., 2015c). The main benefit of business products and service is that it meets the basic necessities of the consumers. 1.4 Pricing strategy The price of products is set according to the market rate so that the customers in Qatar can easily afford them. However, the price of services is based on its type and convenience to the customers. The pricing objective of the company is to cater the needs of the population in Qatar and attract highest number of customers so as to increase its revenue and profit. 1.5 Promotion strategy Zad does not do extensive promotion of their products and services. Moreover, they do not concentrate on marketing the products and services. The main communication channel is the company website, which provides information regarding the subsidiaries and the products and services offered. Zad capitalize the operational experience, financial strength and management expertise for investing in the companies, which share its values and ideology. 1.6. Distribution strategy The products are transported from the manufacturing unit to the stores at a regular basis so that the items are not out-of-stock. 1.7 Conclusion The main strength of Zad Holdings Company with regard to internalization project is its wide range of products and services, which will be useful for the consumers in a new target market. With regard to weakness, it does not undertake any promotional activity to communicate the products and services to the company. Moreover, the main challenge for Zad in a new target market is barrier to entry. Hence, the company should undertake strong promotional activities to make the consumers aware regarding its products and services in the new market. In order to overcome the challenge in the new market, Zad can acquire firms. Part 2 2.1 Target market in the foreign country Among all member countries of European Union, the UK is chosen as the main target market for Zad for the internationalization project. The reason behind choosing this market is that there is low barrier to entry for new firms, favorable economies of scale, cost advantage and low government regulations. This is the criteria for choosing a target market for internalization process. 2.2 Marketing environment Political The most influential and prosperous nation in the world, the UK is observed to have played important role in the international scenario. The country experience low level of risk in three categories of risk such as political, economic and financial system. There is less military influence in the political system of the country. Hence, the country does not have extensive political pressure, which can influence the new entrants in the UK market. Economic The current account deficit in the UK have been worrying for the past five years as it is observed to have increased drastically during 2014 when the economists have expected that it will narrow to about £14 billion at the end of 2014. The deficit for the years 2014 was £71.1 billion, which equals to 4.4% of total Gross Domestic Product (GDP) value of the UK (BBC, 2015; Elliot, 2014). Social The population in the UK is class conscious; however, there is presence of small to middle class individuals. The budget deficit has affected the life of the individual in the country and there is big challenge in the level of public services. It is difficult for government to undertake public welfare projects in order to improve the social condition of the country because of the budget deficit (Smithers, 2014). However, this problem can be solved if the businesses are able to contribute positively towards the development of the economy. Technological Technological advancement has helped the companies in the UK to earn more profit than expected. However, rapid change in the technological usage is quite a challenge for the industry as it increase cost for the same (Bell, 2012). However, it can be stated that technological advancement will help the conglomerate company, ZAD Holdings Company to earn profit in the UK. Ecological The quality of environment varies community-wise in the UK; this refers to the environmental inequalities. The inequalities are observed in a number of aspects of environment such as flood risk, access to the green space and air pollution (NCB, 2012). Legal In the past few years, there have been severe changes in the UK laws which have affected the business of the organizations to a great extent by increasing their cost and demand for products and services (Oxford University Press, 2011). 2.3 Competitive environment The main competitors of Zad Holdings Company in the UK are Swire group and Virgin Group. These two companies have established their business in the UK since the 90’s. They have received positive responses from the consumers over the years and have become well recognized brand globally. Hence, Zad has to experience extensive competition from these conglomerates. Moreover, the indirect competitors of Zad Company are the retailing, food processing, manufacturing, contractor and investment companies. 2.4 Market size and potential The size of the target market is dependent on the demand of the products and services that are offered by Zad Holdings Company. The demographic feature of the UK includes population (63,742,977 as in 2014), growth rate of population (0.54%) and median age of male and female (39.2 and 41.6 years respectively) (CIA Worldfactbook, 2014). 2.5 Conclusion Zad Holdings Company has a good opportunity to enter the UK market as there is demand for the type of products they manufacture. The only challenge for the company in the new market is competition. There are renowned and strong competitors in both conglomerate and retailing industry. In order to overcome the challenging situation in the new market, Zad can further differentiate its products and develop new range so as to attract customers. Part 3 3.1 Positioning in the new market Zad Holding Company is of the opinion that in the next few years the auxiliary industries will encounter transformation, which is not expected over the past few decades. The old paradigms will be redundant as result new norms are needed. In order to keep in pace with the transforming world, Zad has devised strategies for offering those products and services to the customers, which are relevant to their preferences and tastes. It also provides high quality products and services to the customers for improving customer relationship. The products and services of Zad Holdings Company will be positioned in the new market i.e. the UK after conducting a thorough research on the taste and preference of the population. The product positioning strategy employed by Zad Holdings Company in the UK will be different from that of Qatar. The products will be positioned according to the taste and preference of the population. The products that are manufactured and delivered by the conglomerate are available with the retailing shops as well as in the large and small retail chains. Hence, it is important for the company to differentiate their products from that of the direct and indirect competitors. It can be done with the help of modifying the products according to the liking of the customers. After segmenting and targeting the new market, the products will be positioned based on the demand of the same in the regions. 3.2 Product strategy Formulation of product strategy is very important for Zad Holdings Company is very important as it is targeting a new market, which has totally different demography and taste and preferences. The products will be delivered in the new market under the same brand name; however, there will be modifications in the attributes and features of the product. The modifications are needed so as to cater the exact needs of the population in the UK. Apart from modifying the existing products, the company will also develop new range of products, which will help in adding value to the company. The new range of products will also assist the company to stay competitive in the UK market. The products will be different from that of its competitors, which will help the company to attract customers and increase its revenue. 3.3 Pricing strategy Pricing strategy employed by Zad Holdings Company in the UK is different from the strategy used in Qatar. The company will deliver the products to the customers in the UK at premium price. The reason behind applying premium pricing strategy in the UK is the high quality products. 3.4 Promotion strategy The promotional activities undertaken by Zad Holdings Company in the UK are different from that of Qatar. Though the company did not promote the products and services in Qatar but extensive promotion is needed in the UK as it is entering a new market and the customers are unaware of the products and services. The products and services will be promoted with the help of advertisement in the television, newspaper and social media sites. The key advertising message for Zad Holdings Company is “Quality products at premium price”. 3.5 Distribution strategy The products will be distributed from the manufacturing unit to the customers with the help of distributors and retailers. The customers will either get the products in the stores or directly from the distributors. 3.6 Conclusion For years, Zad Holdings Company has concentrated on investment experience and business development. The company aims at providing leadership and vision to the subsidiaries; at the same time set strategies for their operation as well as manage the subsidiaries (Zad Holding Company S.A.Q., 2015b). Zad Holdings Company is an established brand in the Qatar; however, it has to devise promotional strategies in order to spread awareness regarding the availability of products and services to customers in the UK. These promotional strategies will not only help the company to attract more customers but also increase sales in the new market. In future, the company has the opportunity to expand its business in different parts of the UK through research and development activities. References BBC. (2015). UK Current Account Deficit Near Record High At £22.4bn. Retrieved from http://www.bbc.com/news/business-26783713 Bell, L. (2012). UK Advances in This Years Global Information Technology Report. Retrieved from http://www.theinquirer.net/inquirer/news/2166308/uk-advances-global-information-technology-report CIA Worldfactbook. (2014). United Kingdom Demographics Profile 2014. Retrieved from http://www.indexmundi.com/united_kingdom/demographics_profile.html Elliot, L. (2014). UK’s Current Account Deficit Is Worrying – And Osborne Has No Strategy To Fix It. Retrieved from http://www.theguardian.com/business/economics-blog/2014/dec/23/uk-current-account-deficit-osborne-no-plan NCB. (2012). Environmental inequalities and their impact on the health outcomes of children and young people. Retrieved from http://www.ncb.org.uk/media/821507/ncb_environmental_inequalities_briefing.pdf Oxford University Press. (2011). PESTLE Analysis of The Macro-Environment. Retrieved from http://www.kantakji.com/media/1610/ty3.pdf Smithers, R. (2014). UK Living Conditions Becoming More Cramped, Research Finds. Retrieved from http://www.theguardian.com/money/2014/mar/14/uk-living-conditions-cramped-research Zad Holding Company S.A.Q. (2015a). Who are we. Retrieved from http://www.zad.com.qa/about-us/ Zad Holding Company S.A.Q. (2015b). Message from the CEO. Retrieved from http://www.zad.com.qa/about-us/ceo_massage.php Zad Holding Company S.A.Q. (2015c). Our Subsidiaries. Retrieved from http://www.zad.com.qa/about-us/our_subsidiaries.php Read More