Strategic Audit of Alessa: Performance, Recommendations, and Analysis

This report presents a strategic audit of the Alessa group of companies. It begins with an executive summary and table of contents, followed by an introduction that highlights the significance of strategic audits for organizational success. The report provides a company background, detailing Alessa's history, business units, and product offerings, including appliances, electronics, and air conditioning systems. It assesses the company's current performance and strategic posture, including objectives, strategies, and policies. The analysis extends to the external environment, examining social, economic, technological, and political-legal factors. The internal environment is also evaluated, focusing on corporate structure, culture, and resources, including marketing and research and development. The report concludes with a recommended strategy, implementation plan, evaluation, and control mechanisms, offering insights into Alessa's operations and future prospects. The audit emphasizes the importance of adapting to market demands and technological advancements while maintaining a focus on customer satisfaction and ethical decision-making.

Running head: STRATEGIC AUDIT OF ALESSA
Strategic Audit of Alessa
Name of the Student
Name of the University
Author’s note

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Executive summary
The aim of the report is to analyse the strategic audit performance of Alessa. The strategic
audit gives a view about the current situation of the company and how the company is setting
their mission and based on which the company will be able to achieve its objectives.
.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Company background................................................................................................................3
Current situation.........................................................................................................................4
Strategic posture.........................................................................................................................4
Strategic managers.....................................................................................................................6
External environment.................................................................................................................6
Internal environment..................................................................................................................9
Recommended strategy............................................................................................................14
Implementation........................................................................................................................14
Evaluation and control.............................................................................................................15
Conclusion................................................................................................................................15
Reference..................................................................................................................................18

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Introduction
The strategic audit is a very effective method to check whether a organisation is
fulfilling its organisational goals in the most appropriate manner.in addition to that the
strategic audit also find out whether the organisation is making optimum utilisation of the
resources available to it.it is beneficial for every organisation to have a successful strategic
audit process. The strategic audit is a continuous process. based on the strategic audit report
the owners of the organisation takes decision and the team of the auditors checks the audit
process on periodical basis in order to revalue the performance of every unit of the
company .the management update the strategic plan once it achieve its goals.
Discussion
Company background
Hamad Abdullah Alessa incorporated the Alessa group of companies in 1935. Alessa
group is known by the name of Alessa Industries Company. Alessa is an integrated group in
the business. The wide variety of products that are produced by Alessa includes appliances,
electronics and manufacturing refrigerators, freezers, air conditioners and air-handling units.it
is also engaged in the contracting and installation of personnel and commercial air
conditioner and air handling units. The international department in Alessa supplies the
Middle East and Africa markets with a full range of air conditioners and other products such
as chest freezers refrigerators. Alessa has also separate brand distributorship and
manufacturing brand under licence, marketing, service divisions and research and
development.

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Current situation
Current performance
In the present days, Alessa has two strategic business units a trading company named
hamad A. Alessa & son’s co and a manufacturing complex known as Alessa for refrigeration
and air conditioning co. The corporate office of AIC includes support divisions of finance,
administration& HR, information technology, and performance management office .The
company for its well controlled administration and management system has been able to
make sustainable growth since its inception.
Strategic posture
From its inception date, Alessa’s main objective is to produce high quality products
that satisfy the demand of the customers. The management of the company believes that
giving importance to the needs of the users is the only way to accomplish the mission of the
organisation.
Objectives
The objectives of Alessa are to provide comfortable living to its clients in their own
buildings. The mission of the company as stated by their board of directors is providing
premier benefits to our stakeholders and community through products and services that
deliver value of comfortable living”. Therefore, from this statement of the directors it can be
clearly understandable that the main objective of the company is to provide high quality
residential products that will give high quality of comfort to the clients (Aguilera-Caracuel et
al).
Strategies

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The main strategy of Alessa is to achieve international and local benchmark efficiency
that will make them the top company in the international market. The strategy is to improve
the standard of their products and at the same time make it affordable by providing the
products at a competitive price. The main strategy that they adopt to give products at
competitive price is by maintaining premium positioning for the international brands, occupy
value positioning for local brands through advertisements and better product mix.
Policies
The company has adopted the policy to capture more market share by improving their
brand and products. They have increased the offerings on their products and have adopted
aggressive promotion campaigns to make their brand more popular among the potential
customers. a well known brand image will help Alessa to expand their market share and will
help them to reach to more customers. Product improvement is one of the most important
policy on which the company is giving high preference. The research and development unit
of the company is continuously working in the improvement of the quality of the products,
and to make the products equivalent to international level (Abed et al ).
The company has also adopted the policy of improving the after sales services so that
the customers does not feel disappointed after buying there products. The policy is to give
high quality services to the customers so that they do not feel that they have been exploited
by buying the products of Alessa.
Customer satisfaction is the most important policy that the company give highest
priority. The customers are the main sources from whom the company generate revenue and
it is very important for the company to retain the customers and for that reason the company
has taken the policy of receiving the feedbacks from the customers through their grievance
cells and the company will take necessary steps as it thinks appropriate.

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.
Strategic managers
Board of directors
The company ids formed by Hamad Abdullah Alessa in the year 1935.since then the
board of the directors under the chairmanship of Hamad Abdullah Alessa the company has
been able to gain success and become one of the largest company in the industry of
External environment
Social environment
Economic
The economic condition of the Middle East is quite stable and people used to lead a
sophisticated life style, which enables Alessa to sale its products at large volume. The
company by taking the advantage of the current economical situation has been able to
improve the business condition. The demand for the products is of high and that help the
company to increase its revenue. The profit margin of the company has also increased over
the recent years.
Technology
Technology is not a problem for the Middle East countries as they have enough funds
to import technology from foreign countries. The company also by going in to strategic
alliance with the other countries has been able to improve the features of the products. The
application of advanced technology has enabled the company to provide technologically
advanced products to its customers. The government of Saudi Arabia has given liberty to the
companies to import latest technology from foreign companies. The government does not

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impose any tariff barriers that help the company to improve the technology of its products
(Leonidou Leonidas et al).
Political legal
In the recent days, the electronics industry in Saudi Arabia is going through a growing
phase. The companies that are involved in the production of luxury electronic items have
been able to mark an impact in the economical development of the country. The government
of Saudi Arabia has given special emphasis on the development of the electronic companies
and for that reason, the company is getting benefits from the government of the country. The
political parties in Saudi Arabia is trying to uplift the electronics industry for this reason the
company is getting full advantages that are given by the government of Saudi Arabia.
Social/ physical environment
The modern society has a preference of using highly advanced electrical devices and
comfortable equipment’s in their apartments. This has increased the demand for the products
of the company. The company by producing high quality freezers refrigerators and air
cooling machines satisfy the demand of the customers (Trotman et al).
Increased construction of modern buildings and apartments has increased the demand
for luxury products and that leads to the growth of the company. The company is going to
satisfy the society by providing world class products to the customers and by providing high
quality after sales services (Johnstone, Curtis, and Michel Albert Brisebois).

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Task environment
The Middle East market is highly competitive the demand for environment friendly
and quality product is high.
The company must try to explore the international market apart from the local market.
The company should bring more innovations and technology for expansion and
sustainability of the market (Prajogo Daniel I).
High rivalry, there are many other companies who are also trying to capture the
market.
Power of the buyer, the power of the buyer is high due to the presence of other
competitors in the market. The buyers have all the right to negotiate with the company
regarding the price of their products and regarding the quality of the products (Shaukat
Amama Yan Qiu and Grzegorz Trojanowski).
Power of the suppliers, the suppliers takes an active role in supplying the raw
materials that is essential for the manufacturing of the products. The suppliers thus has the
high bargaining power because if the suppliers stop providing raw materials then in that
situation the company will not be able to carry on their production process (Härdle et al).
Threat of substitutes, the threat of substitutes is low as there is no other4 products that
can substitute the freezers or air conditioners. Therefore, in this industry the company’s does
not have to think much of the threat from the substitutes (Jeppesen).
The power of other stakeholders is moderate, Alessa has taken a leading position in
most of the business in various fields and there by limiting the stakeholder’s power in the
industry.

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Summary of external factors
From the external analysis, it has been able to find out the strength and weakness of
the organisation. It has been observed that the external factors will be of great importance to
the company and the industry at large. The government by promoting the electronic industry
give an opportunity to the Alessa to expand and increase its revenue. The increasing demand
of the real estate company has given the opportunity to the company to grow faster in the
future. It is expected that the company will make more progress in the future and will become
one of the largest company in the electronic industry (Collier, Danielle, and Tara Murphy).
Internal environment
Corporate structure
The company has different units with centralised controlling system by which the
chairman of the company directly monitors all the affairs of the company (Kohler Thomas).
The CEO of the company takes active role in the development of the company. The
CEO is taking all initiatives to expand the market and try to capture the international market.

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The dynamic vision of the top management of the company has made it possible for
the company to produce products of international quality and thereby they are trying to
capture the international market (Grayson David and Adrian Hodges).
Corporate culture
Alessa ahs created a corporate culture in which they give best training to their
engineers so that they can produce the best quality products.
Six sigma e business and globalisation are some of the corporate actions that the
company has taken as a initiative to update the skills of the employees.
The corporate culture has a strong environmental initiative where the CEO of the
company take various steps to bring more efficiency among the staffs of the company and to
improve the standard of living of the employees. The CEO always look after the matter that
the employees get all the benefits and give their best efforts so that the company can achieve
its desired objective (Epstein, Gil S., and Renana Lindner‐Pomerantz).
Corporate resources
Marketing
The marketing team of Alessa is highly efficient and that help the company to earn
more revenue over the year. The marketing team has been able to convince the customers to
buy the products and has created a remarkable image of the products among the customers.
The technologically advanced product has made the job of the marketing team more easy. In
addition to the local market the marketing team is also trying to do aggressive marketing
campaign in the international market also (Gitman, Lawrence Roger Juchau, and Jack
Flanagan).
Finance

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The finance team of the company is also very efficiently managing the funds and
taking effective decisions regarding the optimum utilisation of the funds.
Most of the retained earning of the company is used in the strategic acquisitions and
that help the company to implement technological improvements in the products.
The company has been able to maintain steady growth and the figures of the revenue
have increased over the years. The profit margin of the company has also increased over the
years, which indicates the strong financial condition of the company (Damodaran).
The major financial ratios such as return on assets return on equity and the net
margins were improved significantly in the last few years, which indicate that the finance
team of the company has worked efficiently to handle all the financial matters of the Alessa
(Soros George).
Research and development
Alessa has developed a strong team of research and development to improve the
quality of their products and to meet the customer requirements.
The company has invested huge funds in the research and development programmes
for which the company has been able to bring innovations in the products and improve the
technical aspect of the various items produced by them (Noe Raymond et al).
The company has a strong monitoring system to look after the progress of the research
and development team and take actions as required by the company.
The efficient research team of Alessa has made it possible for the company to produce
technologically improved products and help the company to achieve its desired goal.
The company also installed highly advanced technologies that help the research and
development team to make more innovations (Fernie John and Leigh Sparks).

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Operations and logistics
The company is heavily dependent on the third parties to deliver their products to the
customers. This is a area where the company needs to improve. In many situations it has been
observed that the third parties has not been able to deliver on time or they have damaged the
products. Therefore, the company needs have a logistic department so that it can ensure that
the products can be delivered on time and without damaging the products (Christopher).
Human resource management
The company has well organised carrier development programs that help to develop
core competencies essential to its employees.
The company is very efficiently managing the employees so that they never feel over
stressed and loose concentration and fail to give their best. The work life balance has been
arranged in such a way that the employees never feel exhausted and always able to provide
the best to the company (Berman, et al).
The employee strength of 1600 and the company try to look after all their problems
through an effective human resource management system.
Information technology
Information technology is the part of the organisation that links all the departments
with each other. The information technology system effectively controls all the activities of
the company.
Alessa also have a strong information technology system, which helps the company to
monitor all the affairs of the company and helps the company to reach the top position in the
market.

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The amount allocated for the improvement of the information technology department has
been increased and
Summary of internal factors
From the table it has been found that the company has more strengths than the
weakness in summary the strengths are:
 Highly advanced products, that satisfy the demand of the customers.
 The services provided to the customers are of high quality.
 The company has been able to create a healthy relation with the customers.
 The company has used the resources of the company very effectively.

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Core competencies of Alessa are stated below
 The information technology system of the company is very advanced and can easily
adapt with the innovation and product development process.
 Research and development team of the company is of high standard and very efficient
to bring any improvements in the products that help the company to bring continuous
up gradation in the products and eliminate the market competition.
 The different unit in the organisation and highly efficient human resource team
motivates the employees and retain them for long term.
Recommended strategy
The main strategy that is recommended to the company is to use its research and
development team efficiently and try to explore the international market, which will bring
immense revenue generation opportunity to the company.
The company should go in a strategic alliance with any foreign company in order to capture
the international market. This strategy will give the company to use the technology of the
foreign company and the fund of the partner company and that will give an extra benefit to
the company to compete more efficiently in the international market.
Implementation
It is the role of the company’s executives to fulfil the desired goals of the company.
The main vision of the company is to provide the best products to the customers and become
the number one company in the industry. The corporate executives should work in such a
manner that the various business units in the organisation realise their potentiality. The
implementation process is an inclusive process where every employee of the organisation
starting from the top level officer to the lower level staff has specific role to play. The

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contribution of every staff enables the company to achieve its objective and make the
company as the leading organisation in the industry.
Evaluation and control
Alessa is known to use various control measure such as ERP system in its various
business segment. The company has been able to carry out an effective control system in its
business and that help the company to operate its functions efficiently and achieve its desired
objectives. An effective control system helps the company to set different profit goals for the
different departments of the organisation. It is also prudent to state that the Alessa has
arranged different rewarding system based on the performance rendered by the employee.it is
the culture of the organisation to reward the good performance and motivate the employees
so that they carry on their performance consistently (Grant Robert).
Conclusion
In conclusion, it can be said that from the strategic audit report it can be observed that
Alessa is one of the biggest players in the electronic devices. The company has performed
very efficiently in the last financial year and able to increase its customer base. The high
quality of products that they produce has enabled them to earn more customer faith and create
a strong brand image among the users of the products. The technologically updated products
have made the products of Alesssa, unique and create more demand among the customers.
Further, the company also provide world class after sales service for which the customers feel
more satisfied and that raised the volume of their revenue. From the internal and external
environment of the company has earned more opportunities and the management has been
able to manage the threats that come in then path of their business operations. So from the
analysis of the strategic audit report it can be stated that Alessa industries will be bale to

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achieve their desired objectives in the future and will become successful to capture the
international market also.

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