Strategies & Challenges
The Savola Group is a Saudi public listed company and is considered as among the largest diversified conglomerates in the Middle East, North Africa and Central Asian (MENACA) region. It manages a varied portfolio of business. Savola Group’s inception can be traced back to 1979 when it started with an initial capital of SR40 million in the edible oil industry in the Kingdom of Saudi Arabia.
Currently, the Savola Group has 62% market share of Edible Oils market and 68% of the Sugar market in the Kingdom added to 113 Retail outlets in the form of supermarkets and hypermarkets. In addition to the retail store in the Kingdom of Saudi Arabia, Savola also own the biggest grocery store in the Middle East. The grocery store is called the Azizia Panda supermarket, which has branches in all the countries in the Middle East region (Savola Group, 2011). This has been of great help for the group towards increasing its profit margins, as well as improving the quality of products and services offered to its clients throughout the Middle Eastern countries. The company’s businesses can be divided into four main sectors: the Savola Foods Sector comprising of Edible Oils, Foods and Sugar; the Savola Retail Sector comprising of Retail; the Real Estate Sector comprising of Kinan International and the Savola Plastics Sector. Savola also has a Franchising Unit that owns exclusive rights in the Kingdom for global well-known brands of retail wear from various countries.
According to the recent ratings of the most profound companies in Saudi Arabia, Savola group was rated 9th in the top 100 companies that are successful in delivering their services to their clients, and 2nd among the companies in the same industrial sector (Savola Group, 2011). This was behind SABIC, which is one of the group’s biggest competitors in the edible oil industry. According to reports on the company’s website, the group is planning to list the edible oils that they offer on the stock market, as well as conduct an IPO aimed at raising funds to be used for building a new packaging plant in Qatar, which will be a major milestone in reducing the importation costs of the products in the country. The IPO which is scheduled to take place in the beginning of 2013 is targeted to raise more than SR1 billion, most of which will be from the public in Saudi Arabia (Savola Group, 2011). In addition, information that has continuously been published in newspapers and magazines has shown that the group is in the process of partnering with different edible oil companies in the world in a bid to increasing its consumer market to other parts of the world. This will be a major milestone for the groups towards increasing its profit margins, as well as its market share not only in the Kingdom of Saudi Arabia, but in other countries. The Savola Group employs more than 17, 000 people - both within and outside of the country with Saudi Employees numbering 5, 200. The Group has approximately 160,000 shareholders most of whom are profound business people in the Kingdom of Saudi Arabia owning most of the businesses in the country. The high number of shareholders has helped the company maintain its corporate image where directors and managers of the group’s holdings are accountable to the shareholders. Also, in the case where there is fraud within the group, the shareholders are called for a meeting to deliberate of the way forward. The shareholders also help to improve the transparency of the company’s dealing, which may ultimately improve the confidence that the consumers will have towards the company thereby expanding in terms of the clientele (Savola Group, 2011).
The Group’s Strategy
The Group’s strategy is stated in their website as, “a clear vision of success through a balanced approach towards corporate culture, a set of enhancing support activities and good intentions.”
The Group’s Strengths lies in its vision, its marketing skills, ethics and values, synergestic investments and through God’s help and blessings. The Group provides consumers a fair price while guaranteeing returns to investors and stakeholders. It creates a satisfying work experience for all its employees (Savolans) through inspiration, and enthusiasm. Thus, by understanding that the most essential part of the group is the employees, the group has introduced incentives offered based on the quality of work they deliver to the client, which will not only be beneficial for the employee, but also for the group in general. Some of these incentives offered by the company include holiday trips for the employees and their families, gift vouchers, and paid leaves among others (Savola Group, 2011).
The Group excels in its endeavors through the creation of superior offers, its market research, in-depth analyses and 25 year of experience. The Group is committed to its corporate ethics while delivering value to stakeholders. The commitment entails the Balanced Way, the Ensured World Class transparency in its corporate governance. The Group exerts efforts to leverage their core competencies. It improves their offer advantage in basic food sector trough operations in suitable support industries and maintenance of active investment portfolio. It develops a portfolio of complementary brands and production abilities. The Group has a firm belief that their successes are attributable to God’s help and blessings that are always available to those who maintain good and sincere intentions.
The Group’s History & Expansion
The Group’s inception began in 1979 as a company that deals with edible oil employing 200 employees under the name of Saudi Vegetable Oils & Ghee Co. Savola’s early days were akin to any struggling company at that time. The market was faced with intense competition from the presence of multinationals. As a result, Savola struggled to survive and almost closed up. However, the company’s response to the challenges it faced contributed to its survival and its unique position.
The company’s survival is attributed to its founder, its board members, executives, managers and all of its employees at managerial and operational levels. The early response of the company to the challenges was marked by hard and intelligent competition and leveraging advantage where the company saw fit. In order to seek a competitive edge, the company focused on its market research at a time when business tools did not exist yet in Saudi Arabia.
The company’s efforts were expended to studying consumers, their likes and dislike and needs. From their research, the company was able to develop products that match market needs. Even Savola’s efforts to be upfront with consumers regarding their preferences contributed to its distinctive competitive advantage over the companies at that time.
In 1991, the establishment of plastics production was a natural consequence for edible oil businesses. Owning its own facilities and infrastructure would guarantee continuous high quality packaging supply. At that time, Savola marketed various packaging including corrugated cartons, glass and tin plate printing. It retained the plastic sector which was a promising sector for growth. Savola’s plastic sector has been one of the leading producers in the Kingdom that supplies various industrial businesses at home and abroad.
Savola initiated its sugar business in 1994, with the establishment of a refinery boasting 500, 000 tons of annual production. It has now expanded to over 1.2 million tons with exports and distribution throughout the GCC countries and the Middle Eastern region.
The group has expanded to the GCC countries and the Middle Eastern countries that are its neighbors. It has commissioned a 750, 000 ton sugar cane refinery in Egypt and a sugar beet refinery. The foods sector of the Group then expanded to Algeria from Egypt, to Iran, Morocco, Turkey, Sudan, Kazakhstan.
As for its retail operation, it began in 1998 with the acquisition of Panda Azizia United Group of stores, which specializes in food and groceries. Savola extended its value chain from production to retail point of purchase. Consequently, its retail operations grew to 152 stores at the end of 2009.
Savola’s move to acquire Panda earned it the possession of 10 shopping malls and a significant real estate component. Because retail and real estate are different business propositions, Savola separated the two operations to form a 100 percent owned real estate division. As a consequence, Kinan International Real Estate Company was established to own and operate the mall properties.
Part of the Panda acquisition in 1998, is the Herfy group of fast-food outlets where Savola now controls 70% and the founder and managing partner controls the remaining 30%.
In addition, Savola established Al-Batool International in 2003 to operate as retail franchises for international cosmetics and fashion brands. It represents another Savola initiative to create opportunities for the Saudi Youth to try their hand at entrepreneurship.
In retrospect, Savola’s acquisition and sale of companies and investments formed a major portion of the company’s activities and contributed to profits through dividend income and capital gains.
Currently however, Savola’s development is concentrated on core businesses where it owns a large and growing competitive advantage. Savola continues to won over 26% stake in Al-Marai, the Middle East’s leading dairy products fruit juice and bakery conglomerate which proved to be an excellent strategic investment for the company.
Savola’s 30 years of success and experience throughout diverse business sectors has made the Savola Group positioned for a novel phase of organic growth. Owing from this maturity, Savola adopted corporate governance standards in 2004 for legal compliance in addition for its ethical commitment in keeping its corporate culture.
Savola’s corporate culture comprises of honesty, conscientiousness, caring, justice and personal control. The figure below (Fig. 1) summarizes Savola’s global expansion.
Economic Situation in the host countries
In order to take a comprehensive look at the international markets that Savola has entered into, a detailed discussion of its presence in these markets will be discussed one by one according to sectors; food sector, retail, plastic, franchising and finally, non-managed investments and its challenges in these countries will be highlighted.
- Foods sector – Savola Foods Company
SFO owns and manages all the foods sector operations of Savola locally and overseas. It is the largest contributor to the Group’s net income and operates more than 10 countries in the Middle East, North Africa and Central Asian Region.
- Edible Oils & Fats - Afia International Company
Afia International Company operates oils and fats operations in KSA, Iran, Egypt, Turkey and Kazakhstan. The Afia plant produces and markets edible oil products in KSA, Gulf States, Yemen and Levant countries. Their key brands have continued to maintain their leadership position delivering strong profitability during the year in the Gulf countries.
In Iran, Afia International Company owns 80% of SavolaBehshahr Company, a holding company owning and operating three plants in Iran. Net profit for 2010 was lower than in the previous year to obstacles faced like price ware, higher distribution costs and increase in taxation. However, despite these obstacles, the company continues to maintain its leadership position by supplying the Iranian oil market with 40% of the market’s total needs.
In Egypt, Afia International Egypt which is 99.8% owned by Afia International Company leads the Egyptian edible oils retail market with 42% market share. It recorded one of the highest operational profit figures for the company in 2010. The barriers faced by the company came in the form of government’s aggressive subsidy scheme, causing the market to adopt a shrinking trend. During the year, innovation enabled the company’s brands to grow strongly in the Egyptian subsidy-challenged ghee market.
In Turkey, YudumGida is owned 100% by Afia International Company and it operates as an edible oil manufacturing plant. It supplies Turkish edible oils consumer market multiple categories of oil. In order to capture growth opportunities, YudumGida has entered the out of home business segment since March 2010 and launched Yudum Professional including the whole oils range. However profits for 2010 decreased to SR1.5 million from SR6 million in 2009 owing to the reduced sales volume stemming from deterioration of corn category and decline in premium pricing.
In Kazakhstan, Turkuaze Edible Oils (TEOI) is owned by Afia International Company 90% and it has made a niche for itself in the market as the second largest player with 19% market share. The company achieved 25% volume growth in 2010 concentrating on its leading brand Leto which represents over 50% of the company’s total sales volume. Owing to the decline in inflow of Russian products into Kazakhstan, the market conditions for the company has improved. Despite these positive results, barriers are still faced by the company in terms of price wars and dumping in Kazakhstan edible oils markets.
- Savola Foods Emerging Markets Company (Edible Oils):
SFEM is a subsidiary of Savola Foods Company and the company holds a 95.4% stake in it. It owns and operates oil operations in Morocco, Sudan and Algeria.
In Algeria, Afia International Algeria is owned 100% by the Savola Foods Emerging Markets Company. It has a market share of 34% as of 2010. In 2010, the company incurred losses amounting to SR37.5 million due to expansion in the distribution of products from 12 provinces to 28 provinces. In addition, this was compounded by the surge in international prices in crude oil during the second half of the year and the complexity of sale prices due to the tough competitive environment.
In Sudan, Savola Sudan is 100% owned by the SFEM with sales reaching SR366 million in 2010. Profitability for the company in 2010 soared by 292% delivering SR18.7 million in 2010 owing to the success of the company’s strategy of converting the Sudan market from using unbranded crude oil to refined branded oil. The company’s success is further supported by a strong established distribution network across the country through 32 agents. However, the company’s main barrier is securing competitive crude oil. Hence, the company is pursuing long term supply agreements with key local companies, supported by international farming experience. The company is also struggling to cope with the local competitive environment and hence, it has applied for better tax and tariff stipulations.
In Morocco, Savola Morocco is 100% owned by the Savola Foods Emerging Market Co. The company’s main barrier is the drop in olive oil sales following the increase in international crude oil prices.
- Sugar Operations
The United Sugar Company of Egypt is 56.75% owned by USC (United Sugar Company, Saudi Arabia). The Group has a direct 19% shareholding in the company. Although there was a marked increase in net revenues, the company has a loss of SR106 million owing to the challenges faced in the form of the reversal of provisions made against fluctuating raw material prices and the cost of buying options of the sharp fluctuation in international sugar prices.
Another company in Egypt called Alexandria Sugar Company has an integrated project with the Savola Group in hopes of producing white sugar from beetroot a local crop in Alexandria. The Savola Group engaged in such a project to offset the fluctuations in the international market for raw sugar and to depend on local raw materials.
- Retail – Panda Stores
The Savola Group operates its retail business through its subsidiary ‘Azizia Panda United’ which currently operates 161 supermarkets and hypermarkets of which 124 markets are located in the Kingdom of Saudi Arabia, 1 in Dubai, and 36 markets in Lebanon.
- Plastics Sector
Savola Plastics based in Jeddah is owned by The Savola Group and it is a major regional producer of rigid and flexible plastic packaging. The company manages and operates six facilities; one in Jeddah, three in Riyadh and two in Alexandria. Savola Plastics exports to 15 countries around the world. It supplies pre-forms, containers, closures, and films for water and soft drinks, edible oil, health and personal care products, cleaning materials, lubricants, retail and other sectors.
Barriers& Challenges
It is evident from an overview of the Group’s expansion to International countries other than the GCC and Arab countries are generally raw materials (sugar and oil). These products’ basic characteristics are similar all over the world. Coupled with this is the fact that the Group’s aggressive expansion is based on acquisitions of companies. In other words, the companies already exist as legal entities; the Savola Group just acquires it and introduces its values and beliefs of running a business upon it. These values and beliefs are based on an Islamic perspective of the ethical way of running a business and therefore, it does not clash with the culture of any country as ethics is a universal subject. These beliefs and values are discussed in the local and international growth strategy of the company.
For the purpose of studying and analyzing the Savola Group’s barriers and challenges of global expansion the following factors have to be considered.
Language Barriers
Since, the running of the company is still left to the locals as it was before the acquisition; the issue of language barrier is minimized. The product name, slogan and concepts are already based on the country’s culture and norms. Furthermore, most of the expansion done by the Group, with the exception of Turkey and Kazakhstan is in Arab countries where the Group shares a common language and similar culture with. Also, by allowing companies to run under the management of the local communities, the group is ensuring that the local communities keep up the faith and confidence they have towards the specific companies; thereby increasing in terms of the profit margins. This has been a crucial factor for the group especially in countries based outside the Middle East (Gavin, 2007).
Marketing Barriers
Again, the companies are entities on their own before the Group acquires a stake in them. Therefore, marketing barriers are also not an issue since the previous companies’ employees are still local and therefore, aware of local customs and needs. The group will continue to use the marketing strategies adopted by the specific companies, as well as their subsidiaries in different countries (Gavin, 2007). It is important to note that consumers may have an issue with trying to develop trust and faith in a new company or new management. Hence, the group intends to limit the knowledge of the consumer towards the management and ownership of the company; thus helping to maintain the same clientele, as well as others.
Legal Barriers
Among the barriers that the Group have had to face while globally expanding are the legal ones. The foreign companies or the entities that the Group has a stake in changes its legal features they are now owned by a Saudi company. The group has had to introduce partnership with different legal companies so as to interpret the terms for selling and buying of the companies in the different countries. It is necessary for the group to understand the agreements that have to be signed before companies are handed over to them; thus must be advised by legal experts. Similarly, the group has had to send representatives to court cases where it has been sued over the buying of several companies. Some of the law suits state that the group has no authority to buy the companies, which has been challenged in the courts with the group emerging out victorious in most of the cases. In some of the cases, the group has had to forfeit the buying of companies due to the loosing of the court cases filed in the court of laws barring them from acquiring ownership of different companies. In addition, the group has over the past two years formed legal departments in its companies to cater for any legal barriers that may arise preventing them from offering services to their consumers (Gavin, 2007).
Political Barriers
As for the political barriers, the Savola Group has acquired stakes of companies in countries it has friendly relations with. Therefore, so far it has not faced any political barriers from its global expansion. It is important to note that the group is in the process of acquiring different companies internationally meaning that it may face these barriers depending on the stakes that the government plays in the industries. Examples of countries the group is likely to face political barrier are those having dictatorial leadership where politician are notorious for interfering with different industries as ways of enriching themselves. This being the case, the group has had to reinforce its political stands to make sure that they are able to deal with any kind of political interference in any given state.
Economic Barriers
Fluctuations in prices of raw materials and competition with local companies are challenges that the Group has to face in every country. However, this factor is faced by the Group in its home country as well. The threat of economic downturn and global recession affects the whole globe. The economic crunch currently being faced by countries in Europe has also affected the group considering that the importation and exportation prices to the European countries have gone up drastically (Gavin, 2007). Europe is a major destination for the products offered by the group especially the edible oils and sugar; thus the economic crunch has had a negative impact on the company’s economic status.
Access to raw materials and Human Resource
Human resource is already provided by the company that the Group acquires while for raw materials, the Group is expending efforts to partner with foreign companies in order to minimize the challenges it will face through price fluctuations. The rise in the exchange rate of the dollar has also affected the prices of raw materials considering that most of them are imported from outside countries, which has meant that the importation prices have had to go up affecting the group’s expenditure and in turn the profit margins.
Government Barriers
The Group has expanded to emerging markets where FDIs are encouraged into the countries for the benefit of the countries’ economies. However, as evident from the overview of the expansion and the problems that the Group is facing, its challenges mostly arise from high tariffs, taxes, and fluctuating government prices. In addition, the companies that the group has been able to acquire face several challenges from employee unions, which advocate for the rights of the employees while working for the companies. This has forced the group to make drastic changes that will stop further interference from government forces. The governments have also put a quality standard that all the products offered by the company must comply with; meaning that the company has to make sure that all the products offered to the consumers are of the best quality without any compromise (Gavin, 2007).
In sum, it can be stated that the Savola Group’s aggressive expansion to neighboring Arab countries, the GCC countries and to Turkey, Iran and Kazakhstan is characterized by its aggressive acquisition of already legal existing entities in the host countries. Therefore, barriers that usually arise in a normal expansion do not apply.
Local and International Growth Strategies
The Group’s strong and aggressive growth was fueled by expansion initiatives and the acquisition of key competitors in the grocery retail market. As stated the Group currently operates in several regions, including the GCC, Levant, North Africa and the CIS. It has a strong distribution channel to more than 30 countries and occupies a significant market share in various regions. As a result of its expansion, Savola has transformed its operational structure; shifting from a highly centralized operating structure to a decentralized structure.
It is evident that Savola’s growth strategies involve exporting its products to more than 30 countries, acquiring market share in companies and partnering with companies in the regions, and acquisition of key competitors. The Group is now planning to concentrate on expansion through its core competencies.
The Group’s growth strategies are based on its ethical values and beliefs which the Group’s higher echelons of management and employees hold dear.
Savola’s commitment to its values and goals is evident from its management to its employees. The Group is committed to full compliance with the best principles of Corporate Governance (CG) and the applicable rules of the country they are carrying out their business in.
Since 2004, the Group has developed a special code for CG that consists of the best rules and practices of corporate management. The Group’s growth strategy is based on principles of disclosure, transparency, interest conflict, confidential internal information, shareholders and stakeholders’ interests and the identification of the responsibilities of the BOD, the managing director and the executive management.
The Group believes that the only strategy to sustainable and profitable growth is to believe in the core beliefs of the company and to reflect these beliefs in the company’s culture.
Because the Group’s activities are interrelated in its home country and abroad, a core strategy of checks and balance to ensure profitable growth is established in their company’s culture.
The key principles underlying the Group’s Growth Strategies are:
- Don’t build on a weak core (hence, its emphasis on Corporate Governance and an ethical leadership and culture)
- Don’t stray too far from home
- Follow a repeatable formula for growth
- Move towards leadership economics and
- Leverage strategic assets
Moreover, the outcome of the Group’s growth strategy lies in focus and leverage. In other words, they focus on accelerating their core businesses’ growth and they leverage their assets and core competencies.
The Group’s core competencies and strategic assets include:
- Rich & Inspiring Corporate Culture
- Branding Power
- Scale of Buying
- Customer Knowledge
- Operations Excellence
- Logistics Infrastructure
- Geographical footprint
- Human Resources and
- Trading Academies
SWOT of International Operations
Porter’s Five Forces Model Theory
Porter’s five model theory is a model used to determine the competitiveness of a market in terms of the product that is being introduced by the specific company. In this case, this report will focus on the products delivered to the consumers by Savola Group in the Kingdom of Saudi Arabia market. Therefore, the use of Porter’s five model theory will be used to analyze how the products are affected the by competitive rivalry among the major competitors, threat of new entrants in the market, the consumers of the products, as well as, the suppliers of the products to the markets.
Competitive Rivalry
Savola group had been on the forefront in advertising their products using print and television in a bid to show their clients that their products are of the best quality thereby helping to capture a bigger share in the Kingdom of Saudi Arabia market. The products that Savola group delivers to their clients include edible oils and sugar, which has helped maintain a competitive advantage over their rivals because none of their major rivals have been able to deliver the same kind of products to the market (Aura, 2008). This has, therefore, reduced the competitive rivalry that the company faces in the Middle Eastern market thereby increasing the company’s market share, which has in turn translated to an increase in the profit margins for the group.
Threat of New Entrants
Savola group also faced threats from new entrants in the industry that will offer the same products as those offered by the group. This being the case, the group must maintain a steady rise in the quality of products offered so as to reduce any chances that the consumers may prefer the products offered by the new entrants over those offered by the group. In addition, in order to neutralize the threat that may be faced, the group must maintain the employees that they have at the moment mainly because of the experience that they may have, which will be beneficial to the group when delivering quality products and services to their clients (Aura, 2008). Hence, to maintain the employees, the group will standardize the salary to match those offered by the new entrants or even better, to reduce the chances of employees moving from the group to the new companies, which may be very detrimental to the company’s corporate structure.
Over the year, Savola group has had enough capital to capture and maintain the needs of the Middle Eastern market; thereby the group must also consider that the new entrant may do the same when wanting to capture the market. Therefore, to understand this, the group will have to work using business intelligence so as to understand the reactions that the consumers have towards their products. This will help the group’s management to get a clear picture of what the consumers may need, which will mean that the group will have to offer these needs in minimizing the chances of the consumers moving to the new entrants’ products once released into the market (Henderson, 2007).
Threat of Substitute Offering
When it comes to the threat of substitute products that the consumers may opt for, the group may face a major threat in the edible oil industry. This is considering that the consumers may choose solid fat, which may also be used for the same purpose. This being the case, the group must conduct thorough marketing that will inform the consumers on the benefits of the edible oils they offer; thus convincing them towards their products. It is vital for the consumer to be conscious about the benefits of going for a certain product, which is the most essential factor in determining the attitude of the consumer towards the product offered (Aura, 2008). The company must also offer incentives to the consumers, such as; gift hampers and discount that will help to propel the consumers towards the products offered by the group. This results in neutralizing the threat of the consumer opting for substitute products.
Purchasing Power
The consumers in the Middle East have continuously put Savola group under pressure to deliver the best quality of products; hence the group must keep up with this pressure so as to reduce the power that the consumers may have on the group. It is important to note that the group has in most recent year reduced the costs of most of its products offered to the consumers in a bid to change the perception that the consumers may have towards the group. This will in turn translate to more and more consumers opting for the group’s products resulting to increased profit margins among the numerous benefits (Henderson, 2007). The group has also increased the quality of services through opening up branches in most of the cities around Saudi Arabia that will cater for the queries that customers may have with regard to the products offered. This has helped the group’s management understand the consumer trends and habits, which is most essential when delivering products to consumers. The group has also developed a space where the buyer has the right to negotiate for the prices of the products offered. This will help in promoting the sales, as well as increasing the satisfaction levels the consumer may have towards the group’s products and services offered especially in Saudi Arabia where the company has the biggest market share amongst its major rivals.
Selling Power
The group can use the market inputs that it gets as a source of competitive advantage over its major rivals so as to capture a bigger market share. Some of the market inputs that the group may use include; the suppliers of raw materials, the labor that the group has, and the expertise that the group has over its rivals. Thus, using these inputs, the group may create and use product differentiation to help the consumers understand the products from the group, and those from its major rivals. This results in reducing the chances of consumers going for products for other companies (Henderson, 2007). The group, on the other hand, may strengthen its distribution channel that it uses to deliver the products to the consumer making sure they gain access to the best quality of products and services at all times. For the group to gain the selling power, it must source for the suppliers that offer raw materials and other inputs at reasonable prices; thereby reducing the cost that the group will incur while buying raw materials to be used in the production process, which will in turn translate to an increase in the profit margins of the group’s investment.
Recommendations
The Savola Group is currently considered as among the largest diversified conglomerates in the Middle East, North Africa and Central Asian (MENACA) region. It is evident from the information collected for this paper, that the Group’s core competency is its core values that is the basis for its growth in both local and international expansion. More importantly, its values are embedded in the company’s culture in its entire activities and decisions. No other company can boast of such dedication to ethical norms and beliefs in business that is not only stating it in its vision but following it in every decision making. The Group has minimal barriers to its international expansion owing to the fact that the countries it has expanded in (open its operations) is within the GCC, and Arab Community. The rest of its international activities are stakes in companies whose market shares it has acquired. Also, a notable strategic asset of the Group is its constant seeking of R&D to delivery of products. The Group meets the expectations of all its stakeholders including government, customers, society, employees and shareholders. Its success so far has also been attributed to the synergy of its investment for success and its exemplary corporate governance.
However, the Group’s still has a multitude opportunity for growth. These include expansions into new markets with considerations of its culture and norms, electronic commerce, and expansion of its core competencies. The group may also employ the use of technological advancements in delivering and marketing their products to the consumers. An example of an advancement that the company may use is the internet through posting of advertisements in different websites so as to make consumers aware of offerings. This will prove to be a vital marketing tool that may help improve the clientele base of the group. In addition, the group may also use online stores in selling their products where consumers from different countries may make orders and buy the products over the internet, which are to be shipped to them depending on the country. This will increase the satisfaction that the consumers will have towards the products considering that they may order them from any part of the world. The technological advancements may also be used in the different companies that the group has acquired through the buying of modern equipment that will improve the quality of services offered to the consumers. This will also help maintain the security of the company’s important documents through a network that will be secure for use by the management and other employees of the companies. This is essential in making sure the consumer is fully satisfied with the services and products of the group.
Conclusion
In conclusion, Savola group is one of the largest companies in the Kingdom of Saudi Arabia, as well as the Middle East offering different products and services to its consumers. Among its dealings, Savola deals with the production and distribution of edible oils, which is the group’s highest income generator in the Middle Eastern market. On the other hand, Savola also deals with the importation of sugar from different parts of the world to the Middle East market, which is in addition to the retail stores that the group owns within the Middle East, North Africa, and Central Asian (MENACA) region. Therefore, based on the analysis that has been carried out in this research, the company faces several barriers, which include language, political, and government among others, that prevent the group from being able to deliver its products to consumers.
The group has also put in place different strategies aimed at improving the group’s corporate image, which is the most important factor when determining the success rate of the group. The group has a vision of improving its corporate ethics while at the same time delivering value to the group’s stakeholders. According to the group’s website, the group has over 160,000 shareholders and over 17,000 employees in the different countries. It is also clear from this analysis that the group may face different threats from different entities, which may include new entrants into the market and substitute products. However, according to research, the group has put in place measures that will make sure that the threats are neutralized, in turn translating to profit margins for the group. The group’s main vision is to enhance the success of the group through the embracing of the corporate culture, through good intentions and support activities. As mentioned earlier in this research, the group has a special code for CG that consists of the best rules and practices of corporate management, which helps in enhancing a steady growth of the groups towards its goals, vision, mission and targets.
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