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Marketing Strategy for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia
Posted by Addison on Mar-29-2023
Introduction
The report primarily focuses on the marketing strategy of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to give a reader an overview of the growth dynamics of the company. Recently, several strategic issues and managerial problems have been identified in marketing strategy of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia that have drawn the attention of the entire management to devise new marketing strategies that can help the company to resolve the problems to continue its expansion and future growth to achieve a competitive edge in the marketplace. This report is written to provide Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia marketing strategy with the required strategic solutions using multiple frameworks and tools.
External Environmental Analysis
PESTLE Analysis is the most popular strategic tool that is used by many organizations when conducting an external environmental analysis. This framework typically focuses on political, economic, social, technological, legal, and environmental factors that can impact the macro environment of the business (Zalengera, E.Blanchard, & C.Eames, 2014).
Political factors
Political Stability
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates in a politically stable environment, which means that it provides the company with more friendly and stable business growth opportunities (Christodoulou & Cullinane, 2019). However, since Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates in multiple countries, there are high chances of various political tensions that can cause instability in market growth trends for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia. This can limit the company's growth opportunities.
Pressure Groups
Moreover, it is important for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to analyze and monitor the activities of pressure groups. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can create a close collaboration with these groups to achieve long-term goals.
Corruption and Changing Policies
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia must keep a close check on the changes in any government policies because they can directly impact the performance of the business. The operations of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia are its different countries can become unpredictable if there is a high level of corruption and weak enforcement of the law (Achinas, Horjus, & Achinas, 2019).
Trade and Taxes
The profitability of a company is directly influenced if there are high taxes in a country. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should look into the taxation policies in each country before further expanding its operations (Eierle, Hartlieb, & C. Hay, 2022). Similarly, if there are high trade restrictions, it can get difficult for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to import and export its products, impacting the relationships with trade partners.
Economic factors
GDP, Employment, and Exchange Rates
The long-term growth strategies of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia are majorly determined by the GDP growth of the economy. The purchasing power of consumers significantly increases with a high GDP. High unemployment in an economy shows that Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can benefit from surplus labor with low-cost wages. Furthermore, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should monitor interest rates as it can affect the borrowing ability. With that being said, if there is a high fluctuation in currency, the profitability of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can also be influenced (Sadeghi, 2020).
Labor Market
It is important for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to make appropriate predictions regarding the labor market conditions in a specific economy (Sadeghi, 2020). This can help the company to hire a more talented workforce that can improve the performance of the company.
Industry lifecycle stage
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should consider expanding its operations in growing economies to benefit from growth opportunities. It can be challenging for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to enter a mature industry at a growing stage (Villamarín & Pinzon, 2017).
Social factors
Demographics
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should study the changing patterns of demographics, such as socio-economic variables, the aging population, and trends in migration (Barbara & Cortis, 2017). This can help the company to identify the right segment to target with a high potential for growth opportunities.
Cultural norms
Every country and society has a distinctive culture with different norms and values. It is important for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to study and identify social class stratification.
E-commerce
There has been a significant shift in online shopping. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia needs to adopt necessary changes considering the growing use of social media networking sites and mobile phones to increase its revenue and overall profitability (Villamarín & Pinzon, 2017).
Technological factors
Technological innovations
On-going technological innovations should be considered carefully by Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia so that it can stay ahead of the competitive market. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should continue working on introducing major technological transformations to achieve a competitive advantage (Rastogi & TRIVEDI, 2016).
Social Media Marketing
The collaboration with consumers has been growing rapidly because of the development of communication technologies (Rastogi & TRIVEDI, 2016). Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can take it as a great opportunity where can use innovative strategies to expand its customer base.
Environmental factors
Waste Management
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should implement the latest technological tools to minimize environmental pollution. Waste management is now getting popular and has been considered a major business norm (Igliński, Iglińska, & Cichosz, 2016).
Climatic Conditions and Eco-friendly products
Climatic conditions can influence the efficiency of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia. The cost of a company's operations can be increased if there are extreme weather conditions. Similarly, there has been an increasing demand for eco-friendly products. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should work towards adopting more sustainable business practices to gain customer trust (Barkauskas, Barkauskienė, & Jasinskas, 2015).
Legal factors
Employee protection laws
It is important for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to follow the health and safety laws for its employees that are issued by the authorities to ensure the safety of its labor.
Consumer laws
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should protect its customer data to ensure their security and privacy concerns. Moreover, it should set the right price with the right product quality (Igliński, Iglińska, & Cichosz, 2016).
Porter's Five Forces
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can use Porter's Five Forces to analyze the competitive landscape of the industry. The strategic planners of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can use this framework to make effective decisions.
Threat of New Entrants
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates in an industry where it is difficult to achieve economies of scale, making it difficult for new entrants to enter the industry (Yunna & Yisheng, 2014). There is a strong product differentiation with high capital requirements. Moreover, it is difficult to establish a distribution network easily in this industry. Thus, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has a weak threat of new entrants.
Bargaining Power of Suppliers
There are more suppliers in the industry of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia. This shows that there is less control over prices. Organizations like Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can easily switch to other suppliers because of less differentiation in products. This makes the bargaining power of suppliers a weak force in Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia's industry (H. Th. Bruijl, 2018).
Bargaining Power of Buyers
The industry in which Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates has many suppliers as companies to buyers. This means that buyers have fewer options and do not have control over prices (H. Th. Bruijl, 2018). The high product differentiation shows that there are few alternative products for buyers, and there is a high switching cost. This makes the bargaining power of buyers a weak force in the industry.
Threat of Substitute Products and Services
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates in an industry that offers very few substitutes to its customers. The substitutes that are available are expensive because of their high quality (Zhao, Zuo, & Wu, 2016). However, companies like Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia sell their products at a lower prices. This clearly shows that buyers may feel reluctant when switching to other substitutes.
Rivalry Among Existing Firms
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates in a less competitive industry. The already established companies have a large market share, meaning that any move by the existing companies will be noticed. Moreover, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has to take several competitive actions to become a market leader, as the industry is likely to grow rapidly in the coming years (Aithal, 2020).
SWOT Analysis
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can make use of SWOT analysis to effectively analyze the company's internal strengths, weaknesses, external opportunities, and threats.
Strengths
Strong distribution network
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates in various countries and has multiple outlets that help the company to deliver its products quickly to its customers. This shows that Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has a strong distribution network (Benzaghta, Elwalda, & Mousa, 2021).
Financial position
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has established itself as a strong financial company over the past few years. It has generated enough profits that can be used to finance any future expenditure (Basset & Mohamed, 2018).
Automation
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has adopted the latest and innovative technology in its business operations, which has allowed the company to reduce its production costs (Benzaghta, Elwalda, & Mousa, 2021).
Social media presence
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has been successful in establishing itself as a strong brand on social media platforms that, includes Facebook, Twitter, and Instagram. This increases customer engagement (Basset & Mohamed, 2018).
Weaknesses
High rent costs
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has its manufacturing plants on rented properties. This increases the company's overall costs, and a significant portion of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia's profits go into paying the rent (Comino & Ferretti, 2016).
Research and Development
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has not been able to conduct effective and in-depth market research regarding new markets and products (Comino & Ferretti, 2016). Customer trends are always evolving, and it is important for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to take immediate action in conducting its research.
Centralized Power
There has been a centralized decision-making process in Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia. This means that employees have to consult their managers before taking any decision themselves. This slow down the decision-making process. and employees feel demotivated. Thus, impacting the operations of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia (Comino & Ferretti, 2016).
Opportunities
Presence of Internet
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has a great opportunity of expanding its business by using the internet. Since there has been a growing trend in online shopping Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can boost its sales by expanding its online stores (Yan, Xia, & X.H.Bao, 2015). Additionally, social media platforms can be updated constantly to engage customers with all the new products introduced by Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia.
Technological Innovations
Technology is constantly evolving, and Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can benefit from it by implementing the technology in its various departments. Manufacturing process can be completed automated, which can eventually help Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to reduce its costs (Taghavifard, Mahdiraji, & Alibakhshi, 2018).
Globalization
The continuous increase in globalization has allowed Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to expand its business operations across borders. It has the opportunity of entering new markets (Yan, Xia, & X.H.Bao, 2015).
Threats
New Entrants
Recently, many companies are entering the industry in which Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates. This means that there are chances of increased competition. This poses a threat to Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia as it has to put more effort into gaining market share (Taghavifard, Mahdiraji, & Alibakhshi, 2018).
Fluctuations in exchange rates
The exchange rates are highly subjected to fluctuations that negatively impact the sales of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia needs to study the changing fluctuations to keep up with its profitability (Vlados & Chatzinikolaou, 2019).
Consumer trends
The consumer trends are constantly changing, that causes changes in their demands. This puts pressure on companies like Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia, who have to continuously meet their consumer demands. Moreover, there is a significant threat from substitute products because consumers tend to switch to these companies (Vlados & Chatzinikolaou, 2019).
Marketing Mix
Product
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates in a wider range of products. Each of the products has its further product lines that are sold under the Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia. This means that customers can benefit from a large variety of products. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia sells highly differentiated products with higher quality that, gives it a competitive edge (Khan, 2014).
Price
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia follows a competitive pricing strategy. The company also takes into account all its costs before setting its prices (Londhe, 2014). Currently, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia is using a product bundle pricing strategy where customers get bundled products at lower prices.
Place
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has adopted various distribution channels to reach its customers. The company sells its products through its website directly (Thabit & Raewf, 2018). Apart from this, it also distributes its products to wholesalers, who then further sell it to small retailers. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has its own retail stores where it sells its products directly to consumers.
Promotion
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia uses traditional and modern promotional techniques. TV ads are used to reach a larger audience. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia also advertises on social media sites such as Facebook, Instagram, and Twitter. Events are sponsored by the company. Moreover, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia participates in several exhibitions (Londhe, 2014).
VRIO Analysis
Valuable
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia engages in corporate social responsibility activities. This has allowed the company to establish a strong brand image. Since, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has a well-established distribution network, the products are reached to consumers in a timely manner. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has been able to introduce innovation in its various departments, which has lowered its costs (Ariyani & Daryanto, 2018).
Rare
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia operates in multiple countries. This means that its global presence is a rare factor. It works towards an organizational culture that encourages teamwork, and creativity among employees (Ariyani & Daryanto, 2018). Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia is also able to adapt to different societies, and cultures due to its exposure to various locations.
Inimitable
The products produced by Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia are of a high quality. Customers make repetitive purchases, and thus it is an inimitable source. (Miethlich & G. Oldenburg, 2019). Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia has a significant placement of its stores that gives an easy access to its customers. Additionally, the company has been using a competitive pricing strategy because it has been able to achieve economies of scale, thus lower production costs.
Organization
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia, over the years, has successfully gained a financial strength. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can make use of these finances to invest in major acquisitions that give it more growth opportunities. The advancements in technology have allowed Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to manage its operations more effectively. Distribution channels are another resource for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia. The supply chain is very efficient, resulting in more revenue (Miethlich & G. Oldenburg, 2019).
Value Chain Analysis
Primary Activities
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia is involved in primary activities such as the production of goods and then selling them to the target audience.
Inbound Logistics
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should ensure to have a strong relationship with its suppliers to avoid any inconvenience in receiving, storing, and distributing the product. This will help Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to have a more effective transformation of a product (Ariwibowo & Saputro, 2021).
Operations
Operations involves manufacturing as well as services. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should conduct an in-depth analysis of its operational activities to remain ahead of its competitors (M.El-Sayed, W.Dickson, & O.El-Naggar, 2015). This will increase the productivity of the company, and more profits can be generated.
Outbound Logistics
It is important for Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to analyze, and optimize its outbound logistics so that it is able to achieve the long-term corporate goals. Managing outbound activities properly reduces the chance of late deliveries (M.El-Sayed, W.Dickson, & O.El-Naggar, 2015).
Marketing and Sales
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should use various marketing and sales techniques to differentiate its products from its competitors. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can adopt marketing and sales activities such as promotional activities, advertising, and building strong relationships with suppliers and customers (Ariwibowo & Saputro, 2021).
Services
In terms of services, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia must ensure that it provides its customers with the pre-sale and post-sale services (Jaligot, C.Wilson, & R.Cheeseman, 2016). The post-sale service typically falls into the promotional activities of a company. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can thus develop its customer loyalty.
Secondary Activities
Firm infrastructure
A strong infrastructure of a firm can enable Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to optimize the entire value chain of the company. Moreover, by controlling the infrastructure activities, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can be in a better position to get a strong foothold in the competitive marketplace (Darmawan & Wiguna, 2014).
Human Resource Management
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should place its major focus on analyzing the different aspects of HR, such as recruitment, selection, training, and performance evaluation of employees (Darmawan & Wiguna, 2014). Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can reduce its costs by identifying and analyzing the costs associated with hiring and training.
Procurement
Procurement is an important element in the Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia's value chain. It is important for the company to assess its overall procurement activities so that the inbound, outbound, and operational activities can be optimized (Kumar & P. V., 2016).
Ansoff's Matrix
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can implement Ansoff's Matrix to make decisions regarding its business growth. This framework includes four different strategic choices that can be selected by Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia.
Market Penetration
Production capacity
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can increase its overall production capacity. This will allow the company to reach more wider audience in an existing market. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can also benefit from the reduced costs by expanding its production capacity. Thus, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can attract more customers using competitive pricing (Madsen, 2017).
Marketing Investment
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can penetrate the market by investing more in marketing and sales activities. This will help the company to engage with its customer more effectively, leading to more potential customers (Dawes, 2020).
Distribution Channels
Innovative and unique distribution channels can be explored by Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia. This will enable the company to reach new segments and groups of customers (Dawes, 2020). In addition to this, Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can penetrate the market by improving its supply chain, giving more accessibility to customers.
Joint Ventures/Acquisitions
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can enter into joint ventures or can take over other leading companies of the market. This will give Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia more market share.
Market Development
Research & Development
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should keep on investing in its R&D department, so it is able to identify the changing trends of the market. This will help Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to target the right market at the right time (Mukangai & Murigi, 2021).
Expanding Regionally
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can enter in a new market by expanding its operations regionally. This includes considering different cities of the country. Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia must consider any cultural differences when entering a new market (Mukangai & Murigi, 2021).
New Segments
New segments of the current market can be explored (Mukangai & Murigi, 2021). Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can add new features and product uses to its existing products that satisfies the needs of a different customer segment.
Product Development
Modifications
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can modify the existing product by improving its features to enhance the product offerings.
Launching additional products
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia should invest in its R&D department so it can come up with new and innovative products that attracts and fulfill the needs of the target audience. This will boost the sales of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia and will increase profitability (Khajezadeh, Niasar, & Asli, 2019).
Diversification
Vertical Integration
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can consider vertical integration. This will allow Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to develop and launch new products that are similar to its existing product category (Khajezadeh, Niasar, & Asli, 2019).
Horizontal Integration
Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can diversify its business operation using horizontal integration. This means that the new products and services of Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia will not be related to its current products (Dhir & Dhir, 2015).
A new business diversification
Entering into a completely new business can be considered by Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia. The organization can work towards starting a new business that can give a company more growth prospects in the future (Dhir & Dhir, 2015). Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can conglomerate with the help of mergers and acquisitions.
Conclusion
To conclude, it could be said that Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can resolve its current managerial and strategic problems by focusing on its existing products. The company can adopt more attractive marketing strategies that can help Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia to boost its revenue and profitability. It is recommended to focus on maintaining strong supplier relationships. Moreover, it is also advised to focus on more innovative products so Almarai Company Milk and Modernization in the Kingdom of Saudi Arabia can remain competitive in the market.
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