Fawaz Alhokair Group Essay Example | Topics and Well Written Essays - 1250 words

Fawaz Alhokair Group - Essay Example Currently, it has 10,000 employees working in Saudi and abroad. Company has experienced significant increases in gross profit, a corresponding net profit increase, and in operating income for the fiscal period ending March 2013, as shown in Table 1 below Table 1. Income increases, Fiscal Year 2013* Comparative increases in income Item 2012 2013 % increase Net profit SR447.38M SR619.69M 38% Gross profit SR789.98M SR1,130.37M 43% Operating Income SR439.28M SR583.93 32.9% *12 months period Company considers these increases are due to their business strategies of new stores opening, introduction of new concepts and brands, international expansion and acquisition of the Nesk Trading Projects, LLC. Sales totaling SR1.899bn in 2009 increased by 2%; Revenue in KSA market increased by 34.6% in 2013, while international market revenue increased by 186% in 2013. For 2014, sales is expected to reach SR2,925bn. Management believes it is able to draw and keep competent workforce because of its cor porate culture, and these trained employees are experienced in adapting to swift fashion transformation of the retail market in the Kingdom. Out of its 10,000 employees, 33% are Saudis. The company represents famous international brand products and is acknowledged as a leader in fashion retail businesses in Saudi Arabia. ... any has continued to supply the market with new and fresh products in its stores conveniently located on major commercial centers and shopping centers. Furthermore, the grandiose product display excites the customers to the store and into the product. This marketing strategy has allowed the company to be on top of competition and to be abreast on fashion trends. The various brands it carries in its collection are aimed to target the middle bracket segment of the population thus creating a large base of operation. It has a competitive advantage of being able to offer lower cost pricing because of the economies of scale in bulk products purchase, lease rentals, combined attributes of manpower quality, committed management and a fully integrated logistics model. The low cost approach and the ability to source competitively priced products enabled Alkohair to gain an edge over its competitors. The low cost policy is one of the reasons for the success of the company. The fashion retail se gment of the company sets a competitive advantage seeing that it can choose prime locations and get better rental deals since the real estate segment of Alkohair is the largest shopping mall developers in KSA. Alkohair works with a demographic structure that allows them to offer higher quality and more fashionable products. However successful the company is, it is still confronted by problems related to the internal environment shown as: 1. Constant changes in fashion. These are the sensitive characteristics of the fashion industry. Fashion has a short life cycle since the designs that are popular in one season loses its attractiveness in the next season. This turns out to be a problem because company has to be aware of the fashion trends all the time. 2. Poor performance of brands. Not all