Al Rawabi Dairies Company: Market Challenges

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Table of Contents

Introduction
SWOT Analysis
TOWS Analysis
Conclusion
References

Introduction

Al Rawabi Dairies was established in Al Khawaneej in Dubai, the United Arab Emirates, in 1989. Since its establishment, the firm has experienced impressive growth in the market because of its effective management and marketing strategies. This dairy farm started production with only 500 Friesian and Holstein cows in 1989. Currently, the firm has over 10,000 cows of different breeds, and the prospects of growth are still high (International Business Publications, 2013).

Locally, the firm sells its products in all parts of the country. It has also expanded its operations to other GCC countries such as Oman and Qatar. The firm sells its dairy products in 14 different flavors in the local and regional markets. Its products are packed in different sizes and in different containers to meet the needs of its customers in the best way possible. For the time that this firm has been in the market, it has been able to master the needs of the local clients.

It has come up with products that meet these local needs in a special way. It has also developed marketing strategies that reflect the local environmental forces. It is important to note that the market has a number of challenges that this firm has been struggling to manage. One such challenge is the stiff market competition in the local and regional markets. The high temperatures in the region make the dairy industry one of the most lucrative ones in the region. As such, it has attracted numerous firms that compete for the same market. In order to understand how this firm has been dealing with these market forces, it is necessary to conduct a SWOT and TOWS analysis.

SWOT Analysis

Strength

Al Rawabi Dairies has a number of factors which act as its strength in this highly competitive market. This firm has been in operation in the local market for over the last 25 years. It means that it has a vast experience in this market hence has a better knowledge of how to deal with the local market forces. The products that this firm offers are healthy and recommended by medical experts. This has increased their popularity in the market.

This company also has a team of highly dedicated employees who share the vision of the firm. Their commitment to the firm has helped in promoting creativity and innovation at Al Rawabi Diaries (Ferrell & Hartline, 2014). The marketing unit of this firm has created a unique customer relations unit that deals with all the concerns of this firm. This unit has maintained close communication with the customers to help the firm understand the changing market tastes, customer concerns, or any other relevant issues that affect their normal operations. The efficiency in the operations of the firm is also unique.

The management has installed state-of-the-art technologies to help in milking, chilling, homogenizing, and pasteurizing the milk in a way that ensures that the protein and all other nutrients are retained in the final product. The firm has also come up with innovative ways of packing its products in different amounts and in different containers suitable for the different target audiences. Its regular corporate social responsibility (CSR) activities have helped it to promote awareness of its brand in the market. Currently, it is one of the most popular brands in the market (Vuong, 2013).

Weaknesses

Al Rawabi Dairies is faced with a number of weaknesses that have slowed its growth in the market. One of the biggest weaknesses of this firm is high employee turnover rates. Reports indicate that this firm has a problem when it comes to retaining its employees. Some of the former employees of this firm have complained of being overworked at this firm. As Hanieh (2011) says, every time, a firm loses an experienced and skilled employee, its competitiveness in the market gets considerably compromised. The level of employee satisfaction at this firm is also relatively low compared to other top employers in this country. These are managerial issues that need to be addressed to help this firm continue on its path towards a successful future.

Opportunities

The market has massive opportunities that this firm can take advantage of as it tries to increase its market share. The city of Dubai is growing in population at a very high rate because of its strategic position as a global business hub and tourist attraction center. The city’s growth in population means that the potential market size is on the rise. In Qatar, one of its current regional markets, the plans for the 2022 FIFA World Cup is underway, and the city of Doha has seen an upsurge in its population (Doyle, 2008).

The increasing regional population offers this firm a perfect opportunity to expand its market share. The size of the middle class is also increasing, which means that the purchasing power of its clients is going up. The United Arab Emirates has invested heavily in transport infrastructure, especially in Dubai. The improved transport infrastructure means that the products of Al Rawabi Dairies can now reach the market in time. The high regional temperatures in GCC countries also promote regular intake of drinks such as dairy products.

Threats

It is important to appreciate that the market has a number of forces that can be considered threats to the firm’s survival. The greatest threat that this firm has to deal with is competition. The dairy industry is one of the most competitive industries in the United Arab Emirates. There are numerous other firms offering the same products to the same target market. Some of the top competitors include Al Ain Dairy Farm, Al Maria EST Gulf, Arla National Food Products LLC, and Friesland Middle East (Doole & Lowe, 2008). Issues about global or regional economic recession may also affect this firm negatively. The growing terrorism and political instability in the neighboring countries threaten the sustainability of the business environment.

TOWS Analysis

Having looked at the factors affecting this firm using SWOT analysis, it is necessary to use TOWS model to see how this firm can use its strengths to take advantage of the market opportunities and address weaknesses and market threats.

Table 1: TOWS Analysis.

TOWS Analysis

Opportunities (O)

The growing middle class in the regional market
Stable economies in UAE, Qatar, and Oman
Improved infrastructure in the UAE
Growing popularity of dairy products because of health concerns

Threats (T)

Stiff market competition
Serious threats of new entrants
Possible global or regional economic recession
Availability of substitute products

Strengths

Very strong brand in the local and regional markets
Stable financial base capable of supporting new developmental projects
Skilled and innovative workforce and managers
Many years of experience in the local market in the dairy industry

SO
Al Rawabi Diaries should use its brand and financial strengths to capitalise on growing markets in UAE, Qatar, and Oman markets. Its skilled labour workforce and experience in this market can help it in executing new strategy in this market.

ST
Al Rawabi Diaries should use its well-trained and skilled managers to develop effective strategies of managing increasing market competition locally and in the regional markets. It should take advantage of its brand strength to manage competition in the market.

Weaknesses

Serious issues about employees’ level of satisfaction at this firm.
A relatively high rate of employee turnover at this firm
The firm is not as dynamic as the market would require it to be due to its size

WO
As a way of minimising its weaknesses, Al Rawabi Diaries should take full advantage of opportunities such as increasing middle class and improved infrastructure to find ways of increasing its market share.

WT
Al Rawabi Dairies should consider finding ways of managing the problem of high rate of employees’ turnover to help it retain its skilled workforce that can deal with threats such as stiff market competition.

Conclusion

In this case study, it has been revealed that Al Rawabi Diaries is one of the top dairy companies in the United Arab Emirates. The firm has been in existence since 1989 and has experienced impressive growth. The firm faces a number of market challenges that may jeopardize its expansion programs outside the United Arab Emirates. The TOWS model proposes how this firm can use its strengths to take advantage of the market opportunities, overcome its own weaknesses, and manage market threats.

References

Doole, I., & Lowe, R. (2008). International marketing strategy: Analysis, development and implementation. London, England: Cengage Learning.

Doyle, P. (2008). Value-based marketing: Marketing strategies for corporate growth and shareholder value. Chichester, England: John Wiley & Sons.

Ferrell, O. C., & Hartline, M. D. (2014). Marketing strategy: Text and cases. Mason, OH: South-Western Cengage Learning.

Hanieh, A. (2011). Capitalism and class in the Gulf Arab states. New York, NY: Palgrave Macmillan.

International Business Publications, Inc. (2013). UAE largest importers directory – strategic information and contacts. Hoboken, NJ: Intl Business Pubns USA.

Vuong, D. C. (2013). Ultimate gastric sleeve success: A practical patient guide to help maximize your weight loss results. New York, NY: Cengage.

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