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Strategic Analysis of Oman Flour Mills

   

Added on  2021-05-27

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Running head: STRATEGIC ANALYSIS OF OMAN FLOUR MILLSStrategic Analysis of Oman Flour MillsStudent’s name: Name of the university: Author’s note:

1STRATEGIC ANALYSIS OF OMAN FLOUR MILLSTable of Contents1. Introduction..................................................................................................................................22. External Environment of Oman Flour Mills................................................................................32.1 Industry overview and analysis.............................................................................................32.2 PESTEL Analysis Model as per the company.......................................................................32.3 Porter’s Five Forces analysis.................................................................................................62.4 Ansoff Matrix........................................................................................................................83. Internal environment of Oman Flour Mills.................................................................................93.1 SWOT Analysis.....................................................................................................................93.2 VRIO Model........................................................................................................................123.2 Value Chain Analysis..........................................................................................................143.4 Company Key Strategies.....................................................................................................164. Recommendations......................................................................................................................17Reference List................................................................................................................................19Appendices....................................................................................................................................22

2STRATEGIC ANALYSIS OF OMAN FLOUR MILLS1. Introduction Overview of Oman Flour Mills Oman Flour Mills was established in 1977 and it was set up as Joint Stock Company.This organisation has grown up in stature along with credibility features. Oman Flour Mills hasbeen followed hard work and determination in order to produce quality products. Therefore,Oman Flour Mills has gained a large market share in Arabian Gulf countries and it has developedexports in African countries and in Commonwealth of Independent States (Omanflourmills2018). Oman Flour Mills has brands like Dahabi and Barakar Feeds. Dahabi is famous for topquality products ranging from bread baking products, special products and health products.Dahabi offers best for all delicious recipes to cook for the family. In addition, Barakat Productshas been segregated to Calf rarer, general ruminant. Sheep cubes, general camel feed, alphahorse feeds, and pigeon feeds. Barakat Feeds mainly provides food for the pet animals and birds. Mission statement of Oman Flour Mills is about providing a quality hygienic workenvironment and it wants to be employer of choice. Oman Flour Mills wants to enhancecustomer loyalty and it follows continuous community development (Omanflourmills.com2018). Vision statement of Oman Flour Mills is to reach every household in the MEA region bydelivering healthy quality products through competent workforce and efficient processes. Theorganisation wants to develop in contributing the local development both socially andenvironmentally. Values of Oman Flour Mills are associated with integrity in business, focusedin diversification of the business, commitment to tasks and relationships and development of in-house talent of the employees. Flour Mills Oman achieved a net profit after the tax of RO 12.74million and it was better than RO 10.91 in previous year 2016 (Omanflourmills.com 2018).

3STRATEGIC ANALYSIS OF OMAN FLOUR MILLS2. External Environment of Oman Flour Mills2.1 Industry overview and analysisFood manufacturing industry in Oman has been growing at a Compounded AnnualGrowth Rate (CAGR) of 4.6%. In the year 2016, the annual growth rate in food manufacturingindustry was 3.1 million tons and it would touch the figure of 3.9 million tons in 2021. Theconsumption of the Oman population has been increasing with attribute to 3.1% and real grossdomestic product is increasing with 2.4% during the period in 2016-2017 (Rajsekar 2017). Omanand the USA both have a bilateral trade agreement in order to export and import of the foodproducts. In bakery products and animal food products; Oman mainly sells the products to GCC(Gulf Cooperation Council) that includes the countries like Kuwait, Saudi Arabia, the UnitedArab Emirates, Bahrain and Qatar. Oman has currently population of 4.58 million and amongthem, 2.1 million are expatriates (Gulfbase.com 2018). Oman Flour Mills increased the sales by0.76% where Barakat Feed sales have been increased by 6%. 2.2 PESTEL Analysis Model as per the companyPolitical: Politics of Oman follows absolutely monarchy and Sultan of Oman is the headof the government. Sultan serves supreme commander of the armed forces, minister of defence,prime minister and foreign affairs as well as finance. Political condition is stable at present inOman and trends affect the situation of food industry. Food manufacturing companies are addinghealthier options to the product service. Current systems and policies push the people to be moreconscious when they purchase the products. Food safety rules are strict and Oman governmentgives a grace period of six months prior to enforcement of new laws and regulations. Omanpromulgated new Food Safety Law aiming to safeguard the public health and strengthening the

4STRATEGIC ANALYSIS OF OMAN FLOUR MILLSconsumer safety and public health. The government set the rules as part of the framework toraise awareness in food safety towards international standards. Economic: Oman is Middle East country and GDP per capita has expanded in past 50years. Current GDP rank of Oman is 64th and in regard of PPP; it touches 74th. GDP growth ofOman is 2.9% and the current inflation rate is 1% and agriculture sector provides 1.2% in theOman GDP (Gulfbase.com 2018). Oman currently has a labour force of 968,000. Main industriesin Oman are crude oil refining and production. The GDP growth of Oman is decreasing as it isjust 2.9% in 2017 and in 2015; it was almost 5.3%. Protracted low oil price is the reason behindthe lower GDP growth in Oman. Oman is famous for the local agricultural production as allother foods are nearly all imported. Oman has raised food-sufficiency by 32% and Oman hasbeen modernising the agricultural food sector (Gulfbase.com 2018). The annual volume ofimports of major food-based grains exceeded 84 million tons and it has been estimated to be overUS$ 30 billion in value. FDI inflow into the country was negative in 2015 and it saw a bitimprovement in 2016 (USD 140 million).Social: Oman is easy to place to do the business than other Middle East countries asOman was ranked 66th out of 190 countries by the World Bank's Ease of doing the businessranking for 2017. In Oman, labour forces are primarily native people and there are many expatswho have been in Oman for a long time. The consumers of Oman change their taste frequently asthe country is eventually rich and they have a good amount of disposable income. Half of theOmani population are from Ibadi sect of Islam and many of the population belong to SunniIslam. In Oman, there are many small communities and the population growth is estimated at 4%per year. GDP per capita income of Oman is $43,800 (Oukil et al. 2016). The incomedistribution is not same in Oman as demographic influences are higher. In case of food

5STRATEGIC ANALYSIS OF OMAN FLOUR MILLSpreferences, Omani people like rice and in morning; it consists of bread. In Oman, dried or freshdates are important to diet and it is part of the ritual and hospitality. Omani people serve theirguest's various types of confectionary dishes like helwa. Many of the Omani people live in ruralareas and many of the countryside are self-sufficient with farmers and they have money in theirhands.Technological: Oman based food manufacturing industry is looking forward toimproving the technology. Sultanate of Oman and Lithuania are both developing countries andthese countries make a tie to share the technology of food industry (Massoud et al. 2015). In foodmanufacturing industry, Omani companies are using IT specialists for technologicalimprovement of database and communication. In technologies of food manufacturing machines,the companies are following the recent trend of automation. The companies of Oman are tryingto spend more on automation as it can help to improve quality, productivity and reduce the costby automating the human tasks. Omani based companies in food manufacturing, the use oftechnical operations and high-tech maintenance are in great demand. As stated by Khalfan andAlshwaf (2014), automation in the food industry can enable the organisation to be moreproactive in information and monitoring.Environmental: In Oman, food manufacturing or bakery industry emits the gases and ittakes serious note on improving the community sustainability and improvement. The weather inOman is hot and humid and sudden climate change can impact on the business venture. Extremeweather condition and sudden natural disasters can provide toll on the business in the affectedarea. In the supply chain, the vehicles can emit harmful gases. UN Environment Programme hasgiven Oman with credit for the environmental conservation, maintenance of ecological balanceand pollution control.

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