Introduction
The present report delves into the expansion of Hind Al Oud Company into Bahrain, which is the only GCC countries in which the company does not operate. In particular, the report examines the suitability of Bahrain for Hind Al Oud Company’s expansion. The factors that make Bahrain a suitable marker for the company expansion are political stability, free market system, low inflation, positive economic growth and strong financial services regulation, positive industry growth, low level of centralized control required, lack of trade barriers, low transportation costs, unique business core competencies, low rate of expansion needed, high level of competition, high level of efficiency and value of the present competitors, and high availability of products to meet consumer needs. Hind Al Oud should provide Bahrain consumers with high-quality products so as to succeed there. It should also utilize different distribution channels as well as both digital and traditional marketing channels so as to reach as many consumers as possible. Regarding the pricing strategy, the company should use the penetration pricing strategy to help it increase its market share in Bahrain. Additionally, the company should use strategic alliances and foreign direct investment modes of entry when expanding into Bahrain. Lastly, the company should utilize global standardization and transnational strategies to succeed in competing in different international markets.
Hind Al Oud Company Background
Hind Al Oud Company was established in 2001 by Mohammad Hilal. The company is headquartered in Dubai, United Arabs Emirates. Hind Al Oud’s parent company is Mohamed Hilal Group. The mission of the company is to put their passion into everything that they do. The company endeavors to inspire their employees, customers, and the entire world through creating their products and brands with inspiration, passion, and love. The aim of the company is to make the Emirati name globally known as successful. Their values include developing people, quality, thinking outside the box, global vision, integrity, and innovation. Hind Al Oud provides the customers with a collection of high-quality perfumes and oils. The company supplies its products in Qatar, Kuwait, Oman, Kingdom of Saudi Arabia, and the United Arab Emirates markets.
Country and Market Analysis
Bahrain has made crucial steps to harmonize as well as incorporate its economy with the economies of the other Gulf Cooperation Council Countries. Consequently, this provides better opportunities for the companies such as Hind Al Oud to expand their operations there. The following table describes the external, customer/competitor based factors, as well as industry and business related factors in the Kingdom of Bahrain that will have an impact on the operations Hind Al Oud Company.
Marketing Mix
Product Features
Place/distribution strategies
Hind Al Oud ought to utilize a range of distribution channels for its products to reach as many customers as possible. In particular, the company should use both direct and indirect distribution channels. In other words, the company should sell its products directly to the customers through its retail outlets. Besides, it should sell the products to the wholesalers and retailers who will, in turn, sell them to the final consumers. These channels will help the company reach as many customers as possible.
Pricing strategy
Hind Al Oud Company should utilize penetration pricing strategy during its initial year of operation in Bahrain. The penetration pricing strategy is optimal. Specifically, the company should sell its perfumes and oils at low prices at first and then increase them gradually. In other words, the company should charge low prices for its products during its initial years of operation in Bahrain and increase these prices slowly by slowly after increasing its market share. The penetration pricing strategy will help Hind Al Oud Company increase its market share quickly since a higher number of consumers will buy its products. Besides, this pricing strategy will help the company beat the competition.
Promotion Strategy
Hind Al Oud Company should utilize a mix of sales promotion, personal selling, and advertising to promote its products in the Bahrain’s fragrance and cosmetic market. It should engage in different promotional activities such as contests and sweepstakes to attract as many potential customers as possible. It should also use personal selling strategy to create healthy relationships with the customers and generate high sales. Additionally, Hind Al Oud should utilize digital marketing channels as well as traditional marketing media to create awareness of its existence in Bahrain’s fragrance and cosmetics industry. In essence, this promotional strategy will help the company market itself in its new Bahrain market.
Staffing Policy
In Bahrain market, Hind Al Oud should apply the geocentric staffing policy. The individuals that a multinational company using this staffing approach appoints to different job positions can include the nationals of a country except the company’s home country, nationals of the country of the subsidiary, and third country nationals. Consequently, Hind Al Oud Company should assign job positions to any individual best suited to them irrespective of their country of origin or culture. In essence, this staffing policy will help the company increase its cultural knowledge of Bahrain market.
Market Entry Modes
Hind Al Oud Company should use strategic alliances and foreign direct investment modes of entry when expanding into Bahrain.
Strategic alliances
One of the best entry modes for Hind Al Oud Company to use when expanding into Bahrain market is forming strategic alliances with the local firms in Bahrain. Strategic alliances are the agreements between partners to attain common interest objectives. In particular, the Hind Al Oud Company should form partnerships with some Bahrain firms and work together with them so as to attain mutual benefits. In essence, strategic alliances will help Hind Al Oud access its target markets in Bahrain without difficulty. Besides, this mode of entry will help the company attain synergy as well as competitive advantage. The company will also share the financial risks with its strategic partners.
Foreign Direct Investment
The foreign direct investment will be the other best mode of entry for the company to use. Foreign direct investment is a global company’s ownership of production units in the target nation. Specifically, the company should transfer its resources including the workforces, technology, and capital into Bahrain. It should establish new enterprises in the Bahrain market. As a matter of fact, this mode of entry will help the company access additional resources in Bahrain market. Additionally, it will help the company reduce its cost of production considerably. The company will also benefit from Bahrain’s favorable taxation system.
Strategies for International Business Operation
Hind Al Oud Company should utilize global standardization and transnational strategies to compete globally.
Global Standardization Strategy
As a matter of fact, this strategy will help the Hind Al Oud beat the competition in the international markets. In particular, the company should reap the cost decreases from the economies of scale in different countries including Bahrain to increase its profitability. In other words, the company should focus on reducing costs in different countries. Ideally, this strategy will give the company a competitive edge and, as a consequence, help it remain on the top of the competition.
Transnational Strategy
The transnational strategy will also help Hind Al Oud Company compete in the international markets. Specifically, the company should endeavor to attain low costs through the economies of scales, product differentiation, and local economies. As a matter of fact, this strategy will help the company attain global efficiency as well as local responsiveness. As a result, this will give the company a competitive advantage.
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