Business Marketing Audit of AL Sultan Sweets Company - Case Study Example

AL SULTAN SWEETS COMPANY Student’s name Code & Course Professor’s name University City Date Executive summary 2 Introduction 3 Macro Environment 4 Syrian Sweets Market 5 UAE Sweets Market 6 Marketing Strategies, Growth and Profitability 7 Corporate Social Responsibility 8 SWOT Analysis 9 Strengths 9 Weaknesses 10 Opportunities 10 Threats 11 Recommendation 11 Conclusion 12 References 14 Executive summary AL Sultan Sweets company has proven itself in performance in politically volatile regions of Syria, UAE and the larger MENA region. The company has four main units; the parent company in the ancient capital of Syria, Damascus and three other units in UAE. Management of the company is greatly defined by cleanliness, customer orientation and employee satisfaction. The Syrian government has benefited greatly in the sweets and confectionary business especially during the Ramadan period when there is heavy intake of sweets in the various Islamic households. This retrospect paper looks into the companies markets in Syria as well as in UAE. Key issues are well analyzed which revolve around macro environment, pest analysis, market shares, target groups, corporate social responsibility, business competitors and a SWOT analysis of the company. Correspondingly, recommendations regarding the future of the company are given. Introduction The company was founded in Syria’s capital, Damascus in 1998. It provides its consumers with delicious and high quality products. These products include AL sultan employs a combination of modern technology with the conventional Arabian artisanship in production. The company prides itself in cleanliness, equipment automation and loyalty of its employees. The company is founded in the MENA region, which is closely attached to UAE and the GCC region with respect to tourism, foreign aid, FDI and remittances. This region has an interesting economic landscape, having some of the richest economies globally as well as some of the poorest ones (Cashin et.al 2012). MENA also has a mix of countries with stable political and social environments as well as others that are extremely volatile on the same. There are also countries that are oil exporters while others are importers. Syria, where Al Sultan is located, is an oil importer. The economies in this region are becoming more consolidated. In 2014, the region’s oil producers and exporters realized moderate economic growth as they responded to the global economic recovery (Arezki & Nabli 2012). Public capital spending is on the rise while the private sector financial institutions are in considerable support of these economies. Macro Environment Political uncertainty has been a major issue in the region. The company operates in an oil-importing country, Syria. It is therefore vital to analyze the macro environment of oil-importers of the MENA region. In 2013, the economic growth of oil-importers was tepid and approximately 3% during 2014. The region is however facing massive unemployment rates and inflation which fiscal buffers are being immensely challenged (Ncube et.al 2014). The Syrian crisis for instance has had tragic impacts both domestically and regionally. Syria’s economy is founded on tourism, trade, oil, industry and agriculture. The government has been providing subsidies for the various sectors, with a particular interest in the agricultural sector. Since 1991, the country has liberalized itself form socialism to capitalism. The country has enjoyed a healthy economy in terms of foreign trade and low debt prior to the crisis. However, even before the crisis, rapid population growth, corruption, decreased oil production and fiscal deficits have had dire impacts on the economy (Maoz & Yaniz 2013). The crisis has left the country at a devastating economic position, with spillovers to other countries such as Jordan and Lebanon in the region. The result of the crisis are destroyed infrastructure, heavy sanctions from the Arab league, US and EU, disruption of supply and distribution networks as well as insecurity and military activity (Harmer 2013). While exports and imports have been held almost to a standstill, the purchasing power of consumers has been significantly lessened by the depreciation of the Syrian currency. The country is currently experiencing a 40% contraction in GDP since the genesis of the crisis. Moreover, above 50% of the Syrian labor force is currently unemployed. Jordan has been the most affected by the conflict in the region. The country has spent one percent of its public spending on humanitarian needs of the Syrian refugees in 2013 and 2014 consecutively (Aaronson et.al 2014). The corresponding demand for housing and employment in Jordan has also had negative effects on the economy. Housing costs have gone up while employment, notably in the informal sector has been strained. Syrian exporting routes have faced disruption while investors have been scared away by the crisis. Al sultan sweets company also has its branches in UAE, notably Dubai, Abu Dhabi and Alsharjah. The political stability of UAE is an advantage to the company since it attracts tourists and offers a good operational environment. More than 60% of the population in the country is employed. The country has been a member of global financial institutions such as World Bank, IMF and WTO for more than ten years (Rachid & El Fadel 2013). It has also embraced globalization, which attracts many investors such as AL Sultan. The people of UAE have adopted high living standards with high western orientations. There also exists a culture of recreation, sports, tourism and appreciation of the Arabian culture. The use of internet and IT software in UAE is twice that of Europe, amidst the promising young experts in the sector. Syrian Sweets Market The company’s mission statement is providing consumers with clean high products as well as competent customer service. Al sultan sweets contributed to the 60 million dollars revenue earned by the sweet industry in Syria before the crisis. The main products are creamy morsels, pistachio, dried apricots and dates. During the Eid festivals, it is estimated that an average Syrian consumes approximately 6 kilograms of sweets. This reflects about $160 per household during the festivals (Clark 2014). Located in Damascus, the company competes with others in displaying its products in magnificent stands to attract customers. Syria exports such products to markets such as Netherlands, Brazil and US. Damascus has become an embodiment of sweets globally (Goldstein et.al 2015). This is an advantage for AL Sultan since the geographical positioning, which is also a tourist destination acts as a marketing strategy for the company. With this global demand, the company, being a large producer has the opportunity to enlarge its markets globally. UAE Sweets Market Dubai hosts more than 20 sweet companies, including AL Sultan. These companies produce sweets, confectionaries, biscuits and chocolates for local and foreign consumption. Similarly, date sweets, cookies, wafers, toffees and lollipops are produced. Al Sultan has also been successful in offering snacks in Dubai. In UAE, major competitors of AL Sultan include Chocó a, Hunter foods and Fuala (Al Hosani & Ahmad 2013). Hunter Foods offers snacks in Jebel Ali Free Zone. The company has managed to capture international markets for snacks, posing a threat to AL Sultan, which also offers snacks in the region. Fuala has a logo ‘Made in UAE’ on its sweets. This gives it a competitive advantage over other sweet companies trying to market themselves with UAE. Chocó a, having been in operation for over 185 years, prides itself in production and sale of high quality chocolates in Dubai. By operating in UAE, the company is able to access international markets especially in the duty free zones of the GCC region (Parra 2012). Al Sultan has employed a state-of-art technology in processing and production of its sweets. Marketing Strategies, Growth and Profitability The company operates four main units in Damascus and UAE. Based on the recent demand for Syrian sweets and confectionaries, the company is seeking to expand its markets globally. The company has to overcome stiff competition from the unorganized sweets market especially in Damascus during the holiday seasons (Goldeinstein et.al 2015). To do this, the company has launched ways of attracting more customers by price sensitive packaging of sweets and confectionaries. Just before the crisis, AL Sultan had the largest market share in Damascus in terms of sweets. Its strong distribution network enabled it to maintain a competitive edge among other sellers in capital. The company operates under clearing and forwarding for distribution of its products. In Damascus, the company has 25 clearing and forwarding agents and 200 distributors. The UAE units comprises of 60 agents and 745 distributors. Though the company has internal showrooms for exhibitions, products are mainly offered on a retail approach to the final consumer. However, the company’s products are likely to be found in streets by vendors who have acquired them from the distributors. Moreover, AL Sultan’s products are found in supermarkets, provision and sweet stores. Despite stiff competitions from other sweet companies, in 2012, stockists ordered AL Sultan’s products continuously (Babili 2013). The company is currently conforming to the world of internet marketing. Orders can be made through the internet by use of their website http://www.alsultansweets.com/companyprofile.php. This contemporary step has led to increased sales, as the brand is popular especially to tourists who visit the ancient city Damascus. Concerning the target groups, AL Sultan’s products are highly consumed by people from all age groups and social classes. However, the company is marketing more to reach the teenagers who are heavy consumers of sweets (Clemens & Papanikolaou 2014). This is done by promotions and incentives such as discounts. The products are dynamically being modified with regard to tastes and preferences of the new generation and price-sensitivity. The company is also targeting event holders to offer the sweets they require in all occasions. Corporate Social Responsibility Syria’s refugees are currently undergoing turmoil as they flee war and drought. The refugees are flowing in large numbers into Europe, where they are being quarantined and sent back. Populations are being damaged entirely. The crisis has now become a global concern, which can only be mitigated by use of corporate social responsibility. AL Sultan, being a Syrian company has not responded in any way to the crisis. This happens when other companies all over the globe are offering their donations and assistance to these refugees. The company should therefore be among the few Syrian companies that are taking up to this call for help by the refugees. Engaging in social responsibility initiatives is not entirely a liability. It helps in raising the brand image and makes the company popular as the media publishes the companies that are socially responsible (Williams et.al 2012). AL Sultan however rewards its employees appropriately and remunerates them fairly, making them proud to be associated with the company. Its human resource department has been involved in training and development of employees for many years. Customer satisfaction and production of high quality products has also been an endeavor of the company, where it majors on cleanliness and personalized service delivery. With the rapidly growing economy of UAE, companies are deviating from profit maximization to social responsibility. Companies, including AL Sultan Sweets are investing in social responsibility initiatives. They are expected, by the UAE government to have community interests in all their operations. Social responsibility in the country is deeply embedded in customer satisfaction, employee satisfaction and environmental protection (Goby & Nickerson 2012). Al Sultan being active in Dubai, Abu Dhabi and alsharjah has not been left behind. The company is involved initiatives aimed at reinforcing relationships with consumers, networks, suppliers and other logistic actors. By doing so, the company has been able to attain customer loyalty which enhances their retention. Since establishment, the company has greatly invested in customer-oriented business model. SWOT Analysis Strengths In Syria, even amidst the crisis, Al sultan faces the advantage of a strong demand for Syrian sweets and confectionaries globally. Prior to the crisis, the sweets market was growing at a rate of 5% annually, where market bloom was expected by 2017 (Rachid & El Fadel 2013). The company has a good brand image in Syria, has excellent relations with other retailers while developing skills and positive work experiences for its employees. The company was recognized by ISO and is an award winning business. In the UAE, the company is exposed to a strong economy with stable financial institutions that offer any necessary assistance. AL Sultan is a member of Abu Dhabi and Dubai Associa6tions which offer support for medium and small enterprises. This is a way of being socially responsible which boosts the brand image in UAE. Weaknesses The large scope of Syria with a single unit in Damascus is rather difficult. Though the company has maintained a positive brand image among its customers, it has proven challenging to reach all the markets in Syria. The company is also faced with the challenge of campaigns against foods with high calories especially confectionaries (DeNicola et.al 2015). This is in relation to health risks such as obesity and blood sugar. The company therefore needs to expand in the country before undertaking global expansion strategies. In UAE, the company has been faced with low fiscal buffers, deceasing profit margins as a result of high competition and high operational costs. Opportunities The Syrian society has a culture of utilizing sweets. Based on the dominance by Muslims who consume many sweets especially during the Eid season, the company has the opportunity to improve its profitability. Almost all the ceremonies in this culture have sweets with various decorations portraying different messages (Baglar 2013). Maintaining a positive brand image will ensure that people holding various events and ceremonies will order all their sweets, snacks and confectionaries from the company. In the UAE, the government is diversifying its industries from the usual petroleum and tourism. This will ensure that as other sectors such as education grow, demand for sweets in the region will increase. Such an increase in demand will be an opportunity for AL Sultan to expand its markets in the region. Threats The current situation in Syria is a business threat. Many people are escaping the nation to Europe, Canada, Lebanon, Iraq and Jordan. This means that the demand factors of the population are on a downward trend. Demand for all products has gone down while purchasing powers of those who are still in the country have been hit hard. The destruction of infrastructure, insecurity and military action in the country poses a threat to business operations (Hydemann 2013). It is impossible or rather challenging to conduct business in a war-torn country. Considering the UAE, there is also the threat of political instability. Though UAE by itself has a stable political domain, other countries in the MENA region that are highly volatile could pose threats to the country. This can be reflected by the Syrian crisis, which has had negative implications on neighboring countries especially Jordan, Lebanon and Iraq. Recommendation The company has been successful in its operations since its establishment. However, threats such as the current crisis in Syria can lead to business failure. The company therefore needs to come up with buffers that will ensure the company is in operation during such occurrences. For instance, in the current situation where Syria is war-torn, the company should concentrate more on the units in UAE. Any marginal profits earned from UAE can be used to stabilize the Syrian unit once peace has been restored. Correspondingly, the company needs to come up with strategies to outdo the current unorganized sweets business in Damascus. This will help in returning customers to the mainstream of organized business such as the company’s operations. Conclusion AL Sultan has been successful in trying to become the ‘king’ of the sweet industry in Syria and UAE. The company has been excellent in customer and employee satisfaction, a strategy necessary for success of any business. The company has thrived even in the most volatile economies such as Syria and UAE. The experience gained by the company in these areas is an additional advantage for global expansion. This is because the company is likely to perform well in countries where peace prevails. 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