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Introduction
UAEs property sector has been recording tremendous growth over the years. The growth is attributable to high demand for residential and commercial housing units. The demand is based on the growing population who need buildings for shelter and execution of commercial activities. Clearly, the demand ratio for residential and commercial housing units remains proportional in most towns in UAE. This shows that demand for both commercial and residential property is increasing at an alarming rate. According to most empirical studies, UAE has never recorded immense growth in construction sector as evident in this century.
The growth and high demand for housing units have made competition to become stiff in the sector since every industry player wants to capture the market share and earn more returns. The stiff competition is greatly affecting pioneering corporations such as Emaar Properties. This requires companies that operate in the sector to develop viable strategies to counter competition and ensure that they remain in operation. This paper gives a comprehensive study of the UAE property sector where Emaar is the company adopted as a comparative institution under study. The paper focuses on its key competitors where Deyaar, Adyner and Nakheel PSSC have been selected to aid the study. It also covers background information on the Emaar Company and how competition is treated as a performance strategy.
Emaar Company
Emaar Properties is a renowned construction company that is based in the UAE. The company operates in the building and construction industry where it focuses its potential on building commercial and residential houses. Since its inception in the year 1997, the company has grown from an in-house service provider to a leading construction corporation. Its performance has also been positive over the years. This is apparent in its annual reports that show growth in profitability every year. Its profitability index currently stands at $ 493 million. Similarly, the companys strong asset base gives a clear picture of how well it has grown. The exemplary performance that it has always recorded is attributable to its effective operating strategies and development of quality housing units. Its units are attractive since they are spacious, built with quality fittings and furnishings. These potentials give it a leverage advantage in the industry as compared to its competitors.
High-quality housing units that the corporation builds have enabled it to be the most competitive company in the industry. The company now boasts of having over 14,000 housing units in UAE as compared to its competitors. Its growth has sparked immense hostility between the industry players. The hostility has made housing providers to be great rivals as they compete to capture the market. Every company wants to gain competitiveness and to benefit from the competitive advantage. They are also keen in enhancing their growth and expansion that is necessary for sustainability. Although the Emaar Company is well established in the market, competition from its rivals may affect its growth, because all the companies including potential new entrants are competing for the same customers. This will require the companies to build on their strengths to enable them provide quality-housing units that suit the needs of customers.
Discussion of the Companys Competitors (Deyaar, Adyner, Nakheel PSSC) and Competitors Performance
Evidently, Emaar Properties has strong competitors in the construction industry that include Deyaar, Adyner, and Nakheel PSSC. In particular, Deyaar remains the companys main competitor in the industry. The company that is known as a leading local and regional real estate developer, has developed viable modalities to ensure that it gains competitive advantage. The real estate developing company is working on a mission of countering growth strategies of Emaar. The modalities are to enable it to close in on the companys performance. Major performance strategies that the Deyaar Company is employing include constructing quality houses and hiring of qualified constructors. Others include acquisition of necessary equipment and developing attractive housing designs that match real estate standards. In particular, the company seeks to ensure that quality is not compromised. It operates with an aim of providing safety structural set ups whose durability is not under question.
For example, it is using quality-building materials to facilitate its local and international real estate construction activities. The materials that include strong building stones, sand, metal bars, cement among others contributes to their exclusivity. Variably, the company is determined to revolutionize operations in the construction sector by adopting conventional construction techniques. This is evident since it constructs housing units with quality fittings that match real estate standards. The houses are well partitioned, painted, and furnished. The houses also have serene areas and lounges for resting, spacious balcony, and groomed rooms from living to bedrooms. It seeks to advance fitting systems to outdoor Emaar that has not adopted some of the conventional techniques. The strategy is to enable it to attract more customers and build market share. The business also seeks to use the strategy to counter the influence of other industry players.
The corporation also constructs houses that are meant to serve both low and high-income earners. This strategy is to enable it to cover a wider range of customers and in turn gain competitiveness. Variably, the company has quality construction equipment such as tractors that facilitate its operations. Variably, Nakheel PSSC remains a serious competitor to Emaar and other companies. The company has over 7000 housing units that it has constructed in a spurn of 9 years. It has a strong capital base and personnel capacity that enables it to grow faster. Its current performance level stands at $326m that shows how well it is coming up. Over the years, the company has been a serious challenger to Emaar enterprise. It has been constructing quality residential and commercial houses just as Emaar Company. Both locals and the rich in the society target the houses under its management for use. This wide target customer range makes it more competitive and a threat to other players in the industry.
Evidently, the stiff competition that is present in the sector has enhanced performance in the construction industry. Firstly, the competition has been favourable to customers or tenants who hire houses in the region for both commercial and residential purposes. The competition has resulted in the availability of many houses in the region that has in turn led to the reduction of cost of acquisition. Therefore, tenants are finding it easy to cope with the rent levies especially when the players are many as compared to singular players. Secondly, the stiff competition has resulted in construction of quality housing units that are safe for use by the tenants. The houses are built using quality materials and adherence to set procedures that foster their sustainability. Thirdly, competition is making the industry to become vibrant in terms of performance.
Emaars Performance Level in the Next 20 Years Using Strategic Thinking
As noted, Emaar Properties has made a milestone in the construction industry that its competitors may not match easily. The company has cut itself a niche based on its quality strategies that will still guarantee its exemplary performance even in the years to come. Strategically, the company has positioned itself to counter any form of competition from its rivals. Firstly, it rolled out superior marketing campaign to create awareness of its products and to attract more buyers. It has also launched effective promotional activities that are carried out through personal selling, media advertisements and use of flyers. Similarly, the company has made contingency measures to enable it to operate under noble principles.
It seeks to continue executing its operations through adoption of best construction practices. That is its buildings are to be constructed using quality materials, they are to be furnished with modern fittings and they are to be well-ventilated. To maintain its market capitalization, the company seeks to continue constructing unique and masterpiece buildings that hold luxurious and safety features such as bulletproof, noise, and waterproof walls. The buildings are also to be built using designs that promote land conservation and eliminate misuse. Indeed, the strengths of the company that have made it remain competitive over the years will make it thrive in the years to come. Its projected financial performance also reports a 30% growth in profitability in the years to come from the current figure that stands at $943 million. These aspects show that the company is bound to continue recording good performance despite the existence of the strong rivals in the industry.
Bibliography
Dubsky, Alexandra. Emaar Takes on the Global Challenge. Middle East no. 367 (2006): 34-35.
El-Bannany, Magdi. Global Financial Crisis and the Intellectual Capital Performance of UAE Banks. Journal of HRCA: Human Resource Costing & Accounting 16, no. 1 (2012): 20-36.
Jeffreys, Andrew. The report Sharjah 2008. London: Oxford Business Group, 2008, 96.
Leahy, Joe. Reits Plan for Emaar Growth. Financial Times no. 396 (2012): 2-69
Mark, Kent. Adyner growth prospects in UAE property sector . Business Wire no. 2 (2011): 23-69.
Silfuna, Triza. Growth in the property industry . Middle East Business News, Gulf Financial and Industry no. 2 (2012): 2-258.
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