Al Masaken Company has had its establishment in the August 1997. It was established as a selling and development company for real estates. Its operational framework is in the Middle East and integrating in the international arena through subsidiary network as a Multi National Company. Its launch was collaborated with ACICO which is an engineering company for building and real estate development. Its main activities and goals are selling, developing and owning real estates. Its present headquarters is in Kuwait with the current CEO been the Saud Aziz Al-Ayoub.
The initial launch of its activities held various challenges. This was basically from the opposition remarks from its possible customers on the authenticity of building system of using a load bearing wall of aerated concrete. Formerly, the people were used to the conventional skeleton construction system. Remarkably, the clients complained of the possible challenge which would accompany this new mode of construction.
(http://www.acico.com.kw/Subsidiaries/Real-Estate.aspx) The authenticity of this knowledge is undoubted due to its primary sourcing from the interview conducted from the deputy CEO of the company; Ahmed Faisal Al-Majed. Factors affecting the international business operations of the company.
A number of factors are explicitly defined in determining the scope of operation of the company in the international arena. Firstly, the company operates in a subjectively competitive market where service and product quality is never at compromise in defining the scope of adequacy in business performance.
However, the company’s activities are compounded by a number of strategies which are modelled as basic implements of helping it achieve its primary goals. Elsewhere, its business activities are compounds of product and service diversification which is a leeway of capturing a broad customer/client population. At one hand, it primary goals are in the sell, development and ownership of real estates in Kuwait and the neighbourhood international environment. (Rugman, Brewer, 2001, p.85)
As a basic and rational support for the achievement of its primary goals, the company’s strategies are aimed at providing the highest product output which can serve to provide a bid for the greatest level of competition at the highly competitive market. Above the ownership and the sales goals, the development of the real-estate is compounded by three basic methodologies as the main purposes of capturing the requirements of high quality output. At one point, it aims at building homes of affordable capacity to the families of the middle class within Kuwait.
This is perhaps a subjective rational factor of concern which helps to ensure that a large population of about 43% within the country is captured. Either, the aim of the company is using the best quality materials as well as workmanship in building the homes. Thirdly, is the use of high customer service and after sale service tools after client’s service. The management support for a discretionary high standard of operation is also a factor of concern where the management policies and strategies are used to provide high standards of activity. (Kline, 2005, p.54)
Firm’s international business strategies
The nature of operation for the company is under the effect of various factors of concern. Basically, the challenges of the perfectly competitive international market has led to a fundamental changes of the company in order to incorporate various fundamental concepts which helps it meet it competition target. Due to the conceptional challenges faced at the international business portfolio, internationalization is a virtue that helps to make decisions at a fast moment. Through internationalization, employees can be contacted directly across the board of even different states. Decisions of high concern of waging standards which promote coherency and high quality output can be disseminated to the employee fraternity. (Allen, Petzalis, 1996, p.1)
However, the international business is a coherent strategy and goal held at a high standard by the company. Through it’s superbly accreditation process, the company is at the zeal of even exploiting the broader region of the Middle East. Throughout its international operation strategy, the three pillars of its goals would still hold. According to the company interview with the deputy CEO, the exploitation of the international market is to capture the basic economies that exist in the international market. Either, this is at the expansionary goal and motive of the company to draw and embrace the economic advantages which would be allied to any foreign investment. (Green, 1994, p.1
Improving their performance
The concept of improving its business activities wages concepts of high rational implications. However, performance improvement is both at local disposition as well as in the international portfolio. From the local administrative capacity within Kuwait, performance improvement is a discretional factor which is a compound of the management control facility.
Through various schools of control management, the company is at stake to find its lee-way of even expanding its operational frontiers within Kuwait. Among the management control systems are the process controls, internal/managerial control, strategic controls, quality controls, supply chain controls and financial controls above others.
Through a system of controls, high quality of product and service output is ensured which gives the company an environment for a higher competitive output. System of controls at the local level ensures economic performance where the greatest benefits can be secured through the use of the least cost possible. (Foss, Perdesen, 2004, p.1) At the foreign investment capacity, performance improvement is achieved through a complimentary great market research. Through such research findings, the company is able to study the reflex capacity of market risks which are vulnerable to affecting its activity. Generally, adequate standards of exploiting the foreign market are achieved through an implicit strategy of studying the nature of the foreign countries.
Through such studies, the company is able to come up with the basic features of the operational risks within the foreign environment. Such risks are both political and market risks. Through a wide support of knowledge on political risks, the company is therefore able to analyze the risks associated with the state of governance in such foreign environments. (Athanassiou, Nigh, 2000, p.1) Market risks are associated with the demand and supply factor of the output.
Through a coherent study of the market situation within the foreign environment, the company mode of entrance is seldom monitored so that the most adequate method of investment and entrance can be sought. This can be through the choice of various investment methods such as by-outs, mergers, start ups and franchises. However, the choice of business entrance within the foreign market is monitored so that the mode adequate investment facility can be used.
Currently, foreign investment support by the company is in Saudi Arabia. In this kingdom, there has vulnerably a broad market for its services where many developers of real-estates have entered into its contemporaries from the world. The high foreign investment both by private companies and multinational corporations has been provided in by the overwhelming concern of a highly adaptable business environment.
The political situation within the country is adaptable with a good regulatory framework by the government. High standards of international law and various economic integrations provide an adequate atmosphere for facilitating high capital inflows. ( Lloyd, Vautier, 1999, p.45) Elsewhere, the Saudi Arabia kingdom has a favourable business environment which is compounded by various business opportunities. The environment in the kingdom is relatively good which provides standards of its investment objectives. The future foreign investment by the company will be even to exploit the entire environment of the Middle East.
Viability in the choice of market entry strategy
Perhaps the greatest attribute allied to the company is the market entry strategy. This is right and a foremost investment activity which will ever provide an expanded horizon in the achievement of the company’s goals. The rationality in the adequacy of the market of entry is adequate enough to even take the company to greater operational heights. The market for real-estate is great and developed to even offer good business prospects. Either, it entered the real-estate business through business start-up.
This was however after a comprehensive business scanning into the possible risks and opportunities at the market. Elsewhere, 25% of capital ownership was allied to the ACICO Company which had long traded in the building and construction business.
Through business start-up the inadequacies of other entry methods such as by-outs and mergers were avoided. However, the good and admissible business performance can now be credited to the advantages behind business start-ups. Business development can be credited to the operational advantages that were arrived at from a good management support from the originality of the business start-up. (Johnson, Turner, 2003, p. 64) Perhaps, methods of entrance such as mergers and buy-out would not provide an authentic performance initiative like the case with this start-up.
Through the support of a good system of market entry, there has been a high sales and employee recruitment. Sales increase has even gone up to 25% on annual bases. Also, there has been an increase in the employees’ recruitment to 60. Through this positive challenge, the future of the company is foreseen in been a bright one to expand highly and increase its sales volume and employee numbers.
As an importance factor of consideration, entrance in a foreign market is allied to various basic factors of concern. Some contributory remarks and factors provide the strategic rationale for the company entrance into the Saudi Arabia kingdom. However, among the many economic advantages, the favourable business environment which is secure has attracted the company’s interest to involve in foreign investment in the kingdom. The basic property development industry is described as been favourable with investment benefits accruing highly.
The adequate investment climate has attracted high foreign investment turn-over. The kingdom embraces an overwhelming investment situation which is highly implicative in providing a support for profitable investment. Generally, the state governance is subject to adequate governance fundamentals which promise investment security and profitable investment output. (Farmer, Richman, 1966, p.38) Either, the requirements of the international law on foreign capital inflow is held at high esteem with neutrality in capital entrance been uncompromised by the government. There is the emphasis of equal treatment for both local companies and foreign corporations.
Lack of discrimination on foreign companies remains a big incentive to the foreign investors for the security of the capital inflow against any discrimination which may be an operational loss. The general cost of investment in Saudi Arabia is therefore cheaply recommendable via the positive influence of the basic factors that are held to provide the most adequate standards of investment.
Mode of entry.
As held high in the economies of foreign investment, the mode of entry in any foreign investment plays an important role in determining the level of operational efficiency. However, the company has not compromised in using an adequate approach which has seen it through in escaping the challenges ascribed to entrance inefficiencies. It has however used an approach of direct hands.
The legacies of this approach are where the processes and controls are directly laid in the hands of the firm without agency theory and other methods of establishment. Through this approach, the company is involved in the purchase, development and selling of the houses on its own to the clients. Various efficiencies are achieved through direct approach system of entrance. The stronghold of the AL AMADIANH projects and properties perhaps had its development through this system. The property has even seen high market activity which subjectively helps in rationalizing for the importance of this approach.
Since the adoption of this approach in March of 2007, the objective of developing in its sales has been seen. From the government’s authority for the middle class group to have loans for house purchase, the company did not overlook the importance of using this approach in attracting the widespread house ownership concern by the middle class persons. It was an advantage to be taken over the rational interest by the government in providing loans for house purchase. (George, 1999, p.44)
The basic and specific role of entering the country was to provide development of real-estate houses to its people. Elsewhere, entrance into the country was a compound of the existing level of human capital and expatriate which would offer good service output. Within the kingdom, the prospects of the entrance were developed by the efforts of personnel manager on Kuwait.
A coordinated approach was provided for the engineering process in the designing, land development as well as drawing out artistic work for the buildings. Elsewhere, high marketing results were provided by the company’s marketing department. Within Saudi Arabia, the business model was however the same with the array of both dependent and independent variable. Equality model ensured that the objectives of the company in the foreign environment remained the same. Through such a model, the company could apply the same strategies in driving a support for achieving its missions in the foreign environment.
The mode of entrance was never abrupt. Though the market of entrance in Saudi Arabia was richly profitable, no abrupt foreign capital investment was made. However, a structured study support was made to ensure that the environment was adequately studied. Through the extensive research activity so carried out, various variables of effect in the business establishment in the kingdom were captured. A thorough investigation was done on the authenticity of involvement in the factor of active capital investment in purchases of houses. (Behrman, Boddewyn, Kapoor, 1975, p. 28)
From the research activity done about the country, part of the basic information was got from Chamber of Commerce to the kingdom. Various statistical parameters and questions of concern were adequately answered. Due to the knowledge held by this chamber, perhaps the information sought about the business legislative process within the kingdom provided the most lucrative bid of investment activity. This was however on and above the data collected from the field about the market variable for the business of concern held by the company.
Despite the strong support of statistical information about the legitimacy of the environment of entrance, various encounters of surprises were met across the board as the company moved across the borders to exploit the Saudi-Arabia market. However, rationality in decision was provided by the horizontal approach in the management decision process where first and rational decisions were arrived at through an explicitly faster manner.
Faster decision making was a basic solution for possible short comings and surprises which would develop due to the general nature of the foreign market. However, in all the attempts and decisions of entering this market, no mistake was made. This is ratified by the extra-ordinary business situation which has compounded the company’s activity since its entrance to the Saudi Arabia kingdom.
Behind the intention of engaging in foreign investment, the main goal was to expand the frontiers of the company’s activity. It was aimed at embracing the various economies that were in the foreign environment. However, the initial investment activity was however compounded by a high capital expenditure. Though great in terms of financial parameters, the current performance of the business does not depict any chances of operating in losses. However, investment costs will be covered at a break-even level. Indeed, the current status of operations is fruitful and perhaps able to provide a great autonomy of financial break through and profitable activity.
As a generalized business phenomenon, success or failures are basic factors which were held deeply in the initial stages of formulating the business concept. However, the performance attribute remains recommendable without any operation losses or failures so got. However, the bid to success is at a potential capacity with annual sales continuously growing up with a margin of 25% annually. However, from the interview, only relational support could be provided rather than the actual values.
As an important concept, it was important for studying the relation between Saudi-Arabia kingdom and Kuwait. However, the expertise capacity was not much different from what was in Kuwait. Perhaps therefore, the high quality of activity embraced in Kuwait could adequately be carried forward in Saudi Arabia. However, the geographical dispensation in the kingdom was bigger than the existing situation in Kuwait. Hence therefore, an importance was attached into the possible meticulous which would provide a wider support of activity in Saudi Arabia than it is in Kuwait. (Kline, 2005, p.95)
As a general strategy in ensuring success in any foreign market entrance, importance should be attached to collecting data and carrying out the most adequate investigation which would provide the most adequate knowledge on the situation within the foreign environment. Such knowledge is statistically used in providing the most appropriate information for reducing the level of risk which would consequently lead to operational losses.
Either, success in a foreign environment is a compound of the structural autonomy which decisions are to be made across the management system for the organization. Seldom however, this company did not overlook the role played by these factors which help to provide the most adequate information above the condition at the foreign environment. From the effect of adequate study support, the investment perfection in both Kuwait and Saudi Arabia are optimally successively.
To ensure a stronger business support within the kingdom, the same product as offered in Kuwait would exist till 2009. This is before choosing diversity into methods of further investment. Either, change in the product is provided as a future concept after a greater study of the customer’s likes is analyzed.
Summarily therefore, the great involvement and success in the Saudi-Arabia market by the company can be credited to the support studying the basics of international business. Due to the foreign nature of investors entering the foreign environment, there is every importance of understanding the concepts that exists in the international environment.
The rules and laws that governs foreign environment may substantially limit the success of an organization if accurate information about the choice of the environment is not fully studied. However, Al Masaken Company has extended the frontiers of its boundaries in studying the market situation within Saudi Arabia.
Through this study support, the company has therefore been able to explore the market without great effect of losses from the extra-ordinary variables that may occur from the activity within the country. Either, the legal and other policies have been drawn forward to even help the company get the most adequate information for use in doing its business. It’s perhaps through the support of an active strategy approach with which the company is able to overcome the various investment obstacles which may be in its pathways due to the foreign-hood of the operation environment.
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