Strategic Management Analysis of Almarai

This report provides a strategic management analysis of Almarai, a Saudi Arabia company that offers food and beverages. It includes a SWOT analysis, analysis of the 4 P's (Product, Price, Place, Promotion), Porter's Five Forces Framework, and BCG Matrix. The report highlights Almarai's strengths, weaknesses, opportunities, and threats, as well as its market position and competition.

Almarai

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Introduction
Strategic management is the process of analysing the environment of the company in order to
develop the strategies (Dobbs, 2014). In this report, Almarai has been taken to analyse the
environment. Almarai is the Saudi Arabia Company, which offers the food and beverages to
the consumer (Almarai, 2019a). The analysis tool will be used to analyse the external
environment of the company.
SWOT Analysis
SWOT Analysis
Strength
 The company has strong distribution
network
 It also has the high quality of
products in the market
 It has high brand image in the market
as a market leader in Dairy Market in
GCC.
 Consumer loyalty is also strength due
to high quality of product provided by
the company.
Weaknesses
 The company has high operating cost
 The company is majorly depending
on the imports for the raw material.
 It is also depend on dairy and juices
segments except the others.
Opportunity
 The company has the opportunity to
diversify the product
 As the there are many visitors come
to visit the country, it has to provide
Threat
 Feedstock supply distribution will
increase the cost of the company
 The political interference is a biggest
threat for the company in order to

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the different products in order to
satisfy the demand of consumers.
 Online platform is an opportunity in
which it can achieve success. The
company has to enter the online
market in order to attract the large
number of consumers.
survive in the market.
4 P’s of Almarai
Product
Product is the main asset of every company. The company achieved the high growth in the
market due to its variety of products. The company deliver many products such as dairy,
juice, bakery and poultry products in order to satisfy the consumer (Almarai, 2019b).
Price
The company adopt the price strategy in order to attract the large number of customer.
Almarai products are less expensive as compared to its competitors such as the milk of
Almarai is less than the price of Nadec. The company have the different prices on the
different products such as soft drinks and dairy products (Kotler, and Armstrong, 2015).
Place
The company transport its raw material of dairy products from dairy farms to the central
processing plants and then these goods are transport to the sites which is designed to sale the
product. The main office of the company is mainly located in the Saudi Arabia and has 42000
shops within the different countries.

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Promotion
Promotion is the main strategy of the company in which it can easily attain the customer to
sale the large number of products to the consumers. Almarai promotes their products through
different sources to attract the large number of customer. Newspaper campaigns, Radio
campaigns, Discounts, TV advertisement, Banners and holdings are the sources in which the
company promotes the product in the market.
Porters Five Forces Framework
Porters Five Forces Framework
The threat of New Entrants
 It has lower level of threat of new
entrants.
 Lack of natural grazing is the biggest
challenge for the new entrants to enter
in the diary market.
 It requires the high capital to invest in
the irrigation system
 The industry has high risk to damage
the products in the short term due to
change in climate (Ansoff, Kipley,
Lewis, Helm-Stevens, and Ansoff,
2019).
Bargaining power of consumer
 The bargaining power of consumer is
low
 Positive factor for the company in
terms of profit
 There are limited companies operate
in juice and dairy segments as
compare to the population of the
country
 It is a vast company which attracts the
consumer by providing the quality of
product and services
Bargaining power of Suppliers Threat of Competitors

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 The suppliers have moderate level of
bargaining power as per the quality of
product they provide to the
companies.
 Quality of product increases the
bargaining power of suppliers.
 Price of dairy products is controlled
by the government authorities due to
which suppliers have less bargaining
power.
 The company cannot easily switch to
the other supplier to attain the high
quality of product (David, and David
2016)
 It is observed that the company have
moderate level of threat of
competitors.
 As the new entrants are less and the
bargaining power of consumer is low,
the company face the lower level of
threat of competitor.
 It is also has been seen that the
company has high brand image due to
which the existing companies in the
market compete the company with the
different strategies.
 Agthia, Arla, Fonterra and NADEC
are the top competitors of the
company which attain the customers
by providing the quality of services
(Owler, 2018).
 Juice and Soft drink segment of the
company have high threat of
competitors
Threat of Substitute
 The company has moderate level of threat of substitute products as per the different
segments.
 There are many substitute products which can easily replace the soft drinks and juice.

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 Dairy products have large threat of substitute products due to milk powder products.
 As there are many substitute product but the consumer prefers the high quality and
innovative products of the company. That is why. The company has low and moderate
level of threat of substitute products (KMEFIC Research Department, 2013).
BCG Matrix

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Star Long Life
All segments of the company have
high market share with the high
growth level
Cheese & butter Bakery
Question Mark
ALYOUM
Cash Cow
Fresh Diary have high
Market share Fresh Diary
with mature sector
Dog NURA
High Low
Relative Position (Market share %)
(Source: By author)
Conclusion
From the above analysis, it has been measured that the company has high scope to survive
long time in the market. The company has high brands image in the market due to which it
has high competition. SWOT Analysis, Porter’s Five Forces Framework, and BCG matrix are
the tools which can be used by the company to analyse the environment of it. As per above
discussion, it is evaluated that the company has high degree threat of competitors due to its
high brand image. High quality of products is the main strength of the company due to which
Busines
s growth
Rate
High
Low

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it can easily beat the competitors. BCG Matrix states that the company has high brand image
in the market.

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References
Almarai. (2019a) Profile. [online] Available from:
https://www.almarai.com/en/corporate/almarai/profile/ [Accessed 21/2/19].
Almarai. (2019b) Brands. [online] Available from: https://www.almarai.com/brands/
[Accessed 21/2/19].
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R. (2019) Implanting
strategic management. Springer.
David, F.R. and David, F.R. (2016) Strategic management: A competitive advantage
approach, concepts and cases. Pearson.
Dobbs, E. M. (2014) Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
KMEFIC Research Department. (2013) Equity Analysis Report –Initiation of Coverage.
[online] Available from: http://content.argaam.com.s3-eu-west-1.amazonaws.com/1ba674cc-
bafc-46f8-bb0b-3f42a45d0e78.pdf [Accessed 21/2/19].
Kotler, P. and Armstrong, G. (2015) Principles of Marketing-Global Edition. Pearson.
Owler. (2018) Almarai's Competitors, Revenue, Number of Employees, Funding and
Acquisitions. [online] Available from: https://www.owler.com/company/almarai [Accessed
21/2/19].