Value of Loyal Customers refers measuring the overall revenue and profit that the organization gets from the customers purchasing cycle to the people who use and consume the product or the service provided by you. The organization takes a deep interest in creating loyal customers on the basis of their service and quality. On the other hand, organization also strives to take the loyal customers of the competing organization to their side and make them a regular user of the product that they provide. Loyalty of the customer is very important to establish a fixed revenue of sales for an organization (Hallowell, 1990).
The loyalty of the customers is maintained by providing them with the promised quality at an economic price as compared to the other organizations that produce the same product or provide the same service. The organization develops strategies and organizes them accordingly to obtain the loyalty of the customers and ensure that they use the product and service provided by them on a regular basis irrespective of the products of any other organization without even considering them (Basu & Dick, 1994). The loyalty of customers is very much important since it provides the set of customers that are always going to consume the product or use the service provided by the organization. It can be applied to the organizations by providing recognition to the loyal customers and other related schemes, offers and benefits.
The organizations have been executing the flow of operations and development of schemes and offers in order to obtain the maximum customers and then, it will provide special and really useful concessions to the regular customers to turn them into loyal customers and the mode of promotion for the organization. Thus, the organizations calculate the importance of the Value of Loyal customer (VLC) and apply it to increase their profit and has following measures and advantages:
- Repeat purchase by Regular customers
- Customer Passing or recommending others
- increase in turnover
- Increase in Profit
- Increased satisfaction of the new customers and hence forming a chain of references among the customers.
2) Mass customization in an organization refers to the adoption of computer aided and automated production system for delivering the quantity of products on the customer’s request for custom batches of the product. The mass customization is observed where the organization is capable enough to deliver the required quantity of product at the customer’s request and to fulfil the requirements in terms of quality as well as quantity serves to be the major challenge in performing the task (Pine, 1999). The main focus of the organization in executing the mass customization of the operations is to meet the huge demand of the customer in terms of production and carry it at the optimum economic cost.
The design that is adopted for the sequence and flow of operations and movement of the materials is to be analysed with respect to the outcome so as to obtain the most optimum and customized mode of production in the organization that will help to ensure that profitability and turnover of the organization is maintained.
Mass customization is observed in an organization where production is carried out in two ways which involve: a) delayed differentiation and b) modular design.
Delayed differentiation Modular design
|It is observed in an organization where the product is made first as the family product and then modifications are made in it.
It involves developing the actual product in a lot or a bunch and then modifying it as per the requirements of the customers and providing them with the leverage to choice the design.
|It is observed in an organization where the production is divided into small modules and after production they are assembled.
It involves accurate and systematic division of the design of the product into manufacturing of the parts and then assembling them in the best possible technique.
|It is most suitable for the manufacturing of clothes
||It is most suitable for the manufacturing of automobiles and its parts.
3) Quality function deployment (QFD) can be termed as a technique which helps to derive the quantitative parameters of the production from the qualitative needs of the consumers. It also involves considering the elements that are created and the components that are going to be produced from the customer point of view with the understanding that states that the demands that are put forth by the customer needs to be handled while developing and designing the product s (Akao, 2004). It helps to understand the requirements of the customers and transform the needs in terms of the product design and features.
Quality function deployment (QFD) to a specific product design is shown below:
It involves four phases which are:
It involves considering the customer’s requirements and evaluating the design of the product on the basis of that.
It involves coordinating the design requirements to the parts requirements which are going to be necessary for the product.
It involves considering the flow of operations that will be observed while carrying the production of the product.
It refers to the execution of the selected process and carrying the process of production as per the standards that are to be maintained and create a product that will satisfy the customer’s needs and in turn lead to huge sales of the product.
The customer’s requirements is taken as the input and reference for preparing the design. The elements and demands are analysed and developed while designing the product. After developing this, the output is in the terms of customer’s satisfaction of the product. The phases are very important in developing a design of the product and develop a product that will generate the maximum profit and sales in the organization.
4) The production system is broadly divided into two categories (Yearnmin & Jinjoo, 1993):
- a) Intermittent production system:
It refers to a production system that follows a single line of production and the products are obtained at the end of the line following a specific sequence. Features of this production system is shown in below:
- The flow of production in the intermittent system is not continuous as the product is produced in a line and hence the machines become free after producing or executing an operation until it gets the other production line in its queue.
- Different variety of products can be produced due to the entire production of the product in flow and can be changed whenever a particular line is completed.
- It is used where the volume of the products that are produced is small.
- In this type of system, general machines are used and no specialized equipments in terms of the product development are not required.
- b) Continuous production system:
It refers to the production system that involves continuous production of a specific product without any kind of interruption.
The features of this type of production are as below:
- The flow of operations is continuous as there is no halt in the production process.
- The products that are developed are required to be following particular high standards for each and every component or part of the product.
- Products are developed on the individual requirement of the customer in terms of the specification of the component which are assembled for the product.
- Specialized machines and equipments for each and every component is utilized in the system
Akao, Y. (2004). Quality Function Deployment.
Basu, K., & Dick, A. S. (1994). Customer Loyalty: Toward an Integrated Conceptual Framework. Journal of the Academy of Marketing Science, 99-113.
Hallowell, R. (1990). The relationships of customer satisfaction, customer loyalty, and profitability: an empirical study. International Journal of Service Industry Management, .27 – 42.
Pine, J. B. (1999). Mass Customization: The New Frontier in Business Competition. Harvard Business Press.
Yearnmin, K., & Jinjoo, L. (1993). Manufacturing strategy and production systems: An integrated framework. Journal of Operations Management, 3–15.
Student’s Name: ID Number: Attendance Number: Section: Date of Submission:
GE Citizenship Case Study
General Electric (GE) is one of the largest company in US on the basis of the revenue that it generates. In 2011, t has been listed at the 6th position among the top 500 companies by Fortune 500. While, in 2012 it was the 4th largest company in the world according to Forbes Global 2000. It has a long history of about 119 years since its inception.
GE has achieved remarkable feats and milestones of success through inculcating different virtues and characteristics in their employees. It has been leading in the world in terms of technological innovation that it has made in different fields. The supportive and motivating atmosphere available at the GE Company makes it possible for the employees to explore their imagination and create innovative things that would take technology to a new paradigm. It can be seen from the slogan, “We Bring Good Things to Life” that was used by GE for over ages (Govindarajan & Gupta, 2001). It has been striving hard to imbibe innovation and creativity along with technical expertise and develop new products and services that would change the future of machines.
All the above things can be achieved through a systematic flow followed in the company regarding the training, development and learning of the employees. It has been discussed in the following sections.
It provides several training programs in the early career stages and they are:
Communications Leadership Development Program (CLDP): It helps to obtain the best and most innovative communication skills and public relations training.
Edison Engineering Development Program (EEDP): It develops technical skills and provides training regarding developing solutions to the engineering problems.
Graduate Engineering Training Program (GETP): It consists of developing and nurturing of talent that would be able to cope with number of challenges related engineering in manufacturing industries and other businesses which are related to GE.
Finance Management Program (FMP): It provides training related to the finance field that would help the students to sharpen their financial skills for carrying business with companies across the globe.
Information Technology Leadership Program (ITLP): It inculcates highly technical and proficient software development skills in the candidates.
Operations Management Leadership Program (OMLP): It guides the engineers regarding the different processes involved in the development of a product or a service. It ensures that the operations are understood and are performed in an innovative way that would save time, cost, energy and ensure that environment safety and security is held intact.
Commercial Leadership Program (CLP): It is a program which would help the candidates to learn global marketing concepts and strategies which are useful for ensuring growth and success of GE’s business.
GE also provides training related to the software leadership and development that would help any business to accelerate their growth and multiply its profit (Lakshman, 2005).
In the development stage, it provides a suitable and supportive environment that would inculcate various new ideas and concepts. The level of communication has been kept single and without any barriers and this provides a large number of opportunities to the employees to boost their inputs and develop state of its art technology. There is a large scope of personality as well as technical development of the employees due to the extensive programs provided by GE (Govindarajan & Gupta, 2001).
GE has opened the doors of learning for each and every one out there. In 1956, they created the Crotonville Institute for global leadership. It has been providing a perfect symphony in developing innovative ideas, concepts and solutions for various problems that have been faced by different industries across the globe due to the unavailability of appropriate technology. It is one of the first institute in the world to provide learning based leadership programs to graduates. It has set the benchmark for high standards of leadership and innovation and has been a pioneer in this field. It has the legendary John F. Welch Leadership Center which provides specialized leadership training to the candidates. It can be observed from its current slogan, “Imagination at Work” that it focuses on learning and innovation and imagination serves to be the foundation of innovation. It helps in developing new technologies that has helped in creation of useful machines that have revolutionized the engineering sector (Barreto, Anderson, Anglin, & Tomovic, 2010). Thus, GE provides lifelong learning to its employees throughout their career
There are many other initiatives where GE has set high standards for the world like the challenge of green manufacturing. It involves developing products through different processes with minimum effect on the environment. It has developed specific strategies for managing product’s life cycle. It has also initiated CSR programs where they have helped in generating financial and other help for the needy communities across different countries. It provides different volunteering programs to the employees which has helped in spiritual and social development of the employees and has led to the development of the society.
Barreto, L. V., Anderson, H. C., Anglin, A., & Tomovic, C. L. (2010). Product lifecycle management in support of green manufacturing: addressing the challenges of global climate change. . International Journal of Manufacturing Technology and Management, 19(3-4), , 294-305.
Govindarajan, V., & Gupta, A. K. (2001). Strategic innovation: a conceptual road map. . Business Horizons, 44(4),, 3-12.
Lakshman, C. (2005). Top executive knowledge leadership: managing knowledge to lead change at General Electric. . Journal of Change Management, 5(4), , 429-446.
Describe the basic concept behind strategic alliances. In what ways can strategic alliances facilitate a firm’s quest for quality?
Strategies have become one of the most important factors in making any major event happen in the organization. Every organization needs to strategize their moves very carefully and choose them as the situation requires. In such a case, strategic alliance is one of the major moves that any company makes in its lifetime. The event marks as a definite milestone for any organization. When talking about alliances, it is important to understand that not every partnership or alliance has a strategic motive attached behind it, although most of the organizations today do so with that agenda (Wohlstetter, Smith, & Malloy, 2005).
Strategic alliance refers to the concept of forming a bond between two or more companies by agreeing on a set of rules, procedures and obligations that has to be followed by them and carry their individual business. The companies involved develop strategies through evaluation of the products and services that they offer and on the basis of that they develop a general agenda. This agenda helps to increase the productivity in the respective companies and creates a scope of expansion in the customer market by using the name of the other allied companies. The formation of strategic alliance is important from the point of view of creating a position in the market which has seen tremendous amount of variation in the needs and demands of the consumers. This helps the companies to enter a new market and serve as a competitor to the leading company by providing the users with a better product or service that provides the integration of both the company’s customer service and technology. This helps to create a niche in the local as well as international market for the companies (Culpan, 2009).
There are various reasons and factors that support the company’s urge to deliver a quality product or service through strategic alliances. The two major reasons why companies usually go for strategic alliances are to make sure that the core competencies of the organization are getting a boost by the alliance or when the goals and objectives of the companies are so aligned that they could profit a lot more if they allied with one another. While these factors are the major reasons for strategic alliances between two companies, the part about being strategic and formulating strategies takes place once the alliance takes place and the refreezing regarding the change takes place (Wohlstetter, Smith, & Malloy, 2005). Some organizations have well-formed strategies in order to address this transformation and a lot of agenda post that. There is a great amount of flexibility obtained through the strategic alliances in terms of high quality. It provides a growth in the strengths that the companies involved in the alliance have and a decline in the loopholes and other weakness elements. There are various sections where a huge amount of cost is saved without compromising the quality factor. This sections involve the research and procedure related to the development of product or service and this in turn improves the quality of the product.
What is a benchmark firm? Why is it good practice for a benchmark firm
to open its doors and allow others to view its operations and tour its
A benchmark firm refers to the company that is one of the best in its field or the one that adopts the best policies and other companies compare and evaluate their system and practices with reference to it. A benchmark firm ensures that the systems and procedures that it is executing leads them to be the best among their competitors in the market. Companies evaluate themselves through using a bench mark firm so as to directly obtain its improvement in terms of profits gained and improvements made. It also helps them to forecast the future strategy that would help in continuous improvement of the firm’s operations and practices (Elmuti & Kathawala, 1997).
It is a good practice for the firms to open its doors for the other companies to enter its firm and view and analyze the various operations since it provides the firms with good relationship with other firms, better understanding of their own practices. It also keeps an eye that the operation within the firm is maintained as per the required high standards that it has been keeping since a long time. The firms continuously improves its practices so as to ensure that it continues to be the best in the market and the firms can benchmark it as an ideal firm for the practices and operations executed (Bendell, Boulter, & Kelly, 1993).
What are the pros and cons of becoming a benchmark firm? If you were the
manager of a highly successful company, would you want other companies
bench-marking against your firm? Why or why not?
A bench mark firm in the market makes sure that the best practices and operations are carried in the firm. Being a bench mark firm, there are many elements that the firms need to take of while enjoying the position of the best among the competitors. The advantages of becoming a bench mark firm are that they tend to keep a constant check on the steps of operations and performances that are obtained. It also serves to be one of the motivational factor in maintaining the quality that helps in developing the best position in the market (Bendell, Boulter, & Kelly, 1993).
However, there are few disadvantages of being a bench mark firm. This involves an excessive feeling of satisfaction among the employees and this does not let them to work and strive for continuous improvement. At the same time, the competitors may outperform the bench marked firm by knowing and evaluating all of its strategies and developing a better strategy or check for performing in their firms. The bench marked firm would be totally unaware of this and would continue the practices that it has been following since a long time without modifying or up grading it (Elmuti & Kathawala, 1997).
If I would be the manager of a highly successful company, I would let the other companies to bench mark our firm with a scope of continuous improvement and development in the practices and operations in my company. I would let them do so since it will keep the practices and procedures of the firm under constant check. However, I would also make sure that the employees continue to give their best without getting overly satisfied with their efforts.
Discuss the advantages of concurrent engineering.
Concurrent engineering refers to the process of obtaining products through a design where the various stages of production run parallel to each other. This is also termed as “Parallel or Simultaneous Engineering”. It involves integrating all the functions and operations that are executed in the company. It also helps to achieve the best utilization of time. Resources and cost and helps in optimizing it for the good of the company. It serves to be one of the leading approach in the production industry providing results that are required by the company (Dowlatshahi, 1994).
The process of continuous improvement that involves following steps and making efforts while striving to improve the quality offered by the company. It is observed that continuous improvement is achieved by carrying Concurrent engineering while creating the product (Wright, 2000). Concurrent Engineering helps to attain a continuous urge that is required in the observation of continuous improvement process. It helps to obtain the following advantages that would incorporate in continuous improvement (Dowlatshahi, 1994):
• Increase in productivity:
The adoption of Concurrent engineering in the designing process helps to increase the productivity across the operations and other levels of management. This increase in productivity is a continuous process that is observed in this process.
• Benefit over competitors:
The company that uses Concurrent engineering has an extra hand over the competitors by providing the required quality within the time frame and that too, at an economic cost. The process and practices involved here tend to provide the company a niche over its competitors in the market.
• Optimization of time, cost and material:
While observing and adopting Concurrent engineering, there is a strategic planning of using the sources and management in parallel operations and flow of efforts is kept continuous. This helps in saving the time and cost involved in the development of the product. The resources that are available are also utilized productively to ensure continuous improvement.
• Effective utilization of the efforts:
Concurrent engineering ensures that the efforts of the employees are used continuously without creating any sequence that requires dependence on the other levels of management that would create an obstruction in the time. This will help the employees to channelize their efforts for the development of the product and make sure that their efforts are utilized effectively in the process.
Thus, it can be said that Concurrent engineering helps in the continuous improvement process that has to be observed by the company in achieving its target and fulfilling its objectives in an effective way.
Bendell, A., Boulter, L., & Kelly, J. (1993). Benchmarking for competitive advantage. London:: Financial Times.
Culpan, R. (2009). A fresh look at strategic alliances: research issues and future directions. International Journal of Strategic Business Alliances, p.4.
Dowlatshahi, S. (1994). A comparison of approaches to concurrent engineering. . Int J Adv Manuf Technol,, 106-113.
Elmuti, D., & Kathawala, Y. (1997). An overview of benchmarking process: a tool for continuous improvement and competitive advantage. . Benchmarking for Quality Management & Technology,, 229-243.
Wohlstetter, P., Smith, J., & Malloy, C. (2005). Strategic Alliances in Action: Toward a Theory of Evolution. Policy Studies Journal, 419-442.
Wright, A. (2000). Scenario planning: A continuous improvement approach to strategy. . Total Quality Management,, 433-438.
Human Resource Planning: Financial Impact on L.A.M.P Model.
Human Resource Planning: Financial Impact on L.A.M.P Model.
In the process of making Human resource plans and strategies, LAMP framework serves to be one of the critical model. LAMP framework in Human Resource refers to the Right Logic (L), Right Analysis (A), Right Measure (M) and the right process (P) (Cascio & Boudreau, 2010). Planning the Human Resource also involves developing the correct HR to employee ratio, developing a precise HR matrix and developing and executing the measurement of performance on standard parameters (Talentship and Human Resource Measurement and Analysis: From ROI to Strategic Organizational Change , 2004). Apple has laid the best example for the world in terms of developing the LAMP model. They analyse the market, develop strategies and design technologies that would be useful to the people. Recently, they provided the customers with an ultimate browsing experience with the launch of the IOS8. Thus, it is observed that the planning, development and execution of the HR has financial effects on the four terms observed in L.A.M.P model.
Cascio, W. F., & Boudreau, J. W. (2010). Making HR Measurement Strategic. In Investing in People: Financial Impact of Human Resource Initiatives, . Pearson.
Talentship and Human Resource Measurement and Analysis: From ROI to Strategic Organizational Change . (2004). CAlifornia: CEO publications.
Date of Submission:
Identifying and discussing two major competitors:
Saudi Steel Pipes (SSP) Company serves to be a leading manufacturer of steel in the medium range enterprises. There are other medium range enterprises that consists of manufacturers of steel that tend to provide a considerable amount of competition to the Saudi Steel Pipes. Two of such competitors include Middle East Factory LLC and Emirates Steel. Both of these companies have been providing excellent services and products pertaining to their specialization and customization.
Emirates Steel tend to provide high quality of steel products with minimum effects on the environment. It has been established in 1998 and has been known for the different initiatives that it undertakes regarding the green measures for protecting the environment. It is one of the leading manufacturer in the world that has captured Carbon Dioxide at a commercial level. It specializes in producing bars, wire rods that is being utilized by different industries in the infrastructure as well as the commercial field across UAE (EMIRATES STEEL.COM, 2016).
Middle East Factory LLC is a company that has been developed in an Industrial zone of Al Quoz in Dubai. It has been mainly providing products that are required in the construction industry. The products that are developed by the Middle East factory LLC does not only contain steel, but it also contains brass, copper and aluminium production in large quantities. It also provides products for the companies that are involved in developing surface treatment plants in UAE (MIDDLE EAST FACTORY.COM, 2015).
These are the two main competitors that have a significant share in the market and have the potential to provide a tough competition to the Saudi Steel Pipes Company in the steel manufacturing industry of UAE.
Strategy Formulation framework
Strategy Formulation can be termed as a process in which all the decisions and the course of activities are developed by an organization for achieving its goals and predefined objectives. The framework of strategy formulation consists of three stages:
I. The Input Stage:
It consists of:
a) External factor Evaluation (EFE) Matrix
b) Competitive Profile Matrix
c) Internal factor Evaluation (IFE) Matrix
II. The Matching stage:
a) Internal – External (IE) Matrix
b) Strategic Position and Action Evaluation (SPACE) Matrix
c) Boston Consulting Group (BCG) matrix
d) Grand Strategy matrix
III. The decision stage
a) Quantitative Strategic planning Matrix (QSPM)
I. The INPUT STAGE
Competitive Profile Matrix (CPM)
A Competitive Profile Matrix helps in identifying the significant competitors that are existing in the market and helps in obtaining their strengths as well as weaknesses. It also helps in making a comparison between these companies and provides the strategic positions of these companies. In the table, the rating of 1 indicates that the specific factor related to it is a major weakness. Its magnitude increases gradually and a rating of 4 indicates that the factor related to it is a major strength of the company.
Critical success Factors Weight Saudi Steel Company
Score Middle East Factory Emirates steel
Critical success Factors Weight Rating Score Rating Score Rating Score
Product price competitiveness 0.10 4 0.55 3 0.35 2 0.24
Market share 0.15 3 0.40 2 0.28 4 0.59
Customer Loyalty 0.20 2 0.25 2 0.24 1 0.14
Product Quality 0.15 4 0.55 4 0.58 3 0.45
Management 0.15 3 0.40 1 0.12 3 0.39
Business development 0.15 2 0.26 3 0.35 2 0.21
Constant thrive for innovation 0.10 4 0.60 2 0.27 4 0.45
Total 1.00 2.96 2.19 2.47
It can be observed that the score is highest for the SSP which is 2.96 and it is very much similar to the Emirates Steel that stands at 2.47, whereas Middle East Factory LLC is also near at 2.19
Porter’s five forces model
The five forces that have been provided by Michael Porter helps in obtaining a strategy framework that has to be developed while ensuring sustainability and success of a product in the market. It consists of the following five forces:
Rivalry among the existing competitors
It refers to the rivalries in the form of competition that exists among the competitors that are competing in the market. There is a huge competition that is existing among the companies Middle East factory LLC, Emirates steel company and the SSP regarding the manufacturing of steel in the global market. The competition is regarding the market share that they aspire to create for themselves in the steel manufacturing industry. These three companies constitute a large portion of the overall development of steel by the middle range steel manufacturing industries (SAUDI STEEL PIPES COMPANY, 2014).
Bargaining power of suppliers
Bargaining powers of the suppliers refers to the power that the suppliers who provide the companies with the raw materials to develop the finished product have over the companies. Bargaining power of the suppliers is very limited as there are a large number of suppliers available to these companies and the resources that they require are developed by many suppliers across the globe. So, there is a constant competition among the suppliers too. It serves to decrease the power that each supplier has over the company in the market.
Bargaining power of buyers
Bargaining power of buyers refers to the development of power among the customers in terms of controlling the sales of the product in the market. It has to be considered while developing strategies that re related to the management of the resources in the organization. The bargaining power of buyers is extremely high. It is due to the increasing demands of the customers and a tremendous boost in the availability of quality steel products at feasible prices. Buyers have to be constantly upgraded with the new innovations and designs that are developed in the steel industry by these companies. Buyers, in the form of customers, are very crucial in determining the success of any business through several platforms and it has to be accomplished by the companies to develop a niche for themselves in the market. SSP has to adapt suitable innovative strategies for the same.
Threat of new entrants
There is a constant threat of new entrants that have the potential and capabilities to occupy a large share in the market through providing interesting offers to the customers at very effective costs. However, the threat of new entrants is harmful on long term basis as it would take time for the new entrants to develop a market share that would be comparable with the existing leaders in the middle range manufacturers that consist of SSP, Emirates steel and Middle East factory LLC (SAUDI STEEL PIPES COMPANY, 2014).
Threat of substitutes
There is a constant threat of substituting the current designs and features offered by the leading Steel manufacturing companies by a more effective and feasible product that has the same strength but is available at low cost. It has to be kept under constant check so as to ensure that the companies are staying upgraded with the new innovations made in the industry.
External factor Evaluation (EFE) Matrix:
The below table shows the External Factors Evaluation though a EFE Matrix and can also be termed as the IFE matrix that has been established from the Annual report of the Saudi Steel Pipes. In the table, the weight column shows the importance of the parameter out of 1. The ratings has been provided by the customers out of 5 and the weighted score is obtained from the annual report. In the table, the rating of 1 indicates that the specific factor related to it is a major weakness. Its magnitude increases gradually and a rating of 4 indicates that the factor related to it is a major strength of the company.
EFE Matrix for Saudi Steel Pipes Company
Key External Factors Weight Rating Weighted Score
1. SSP has been producing 240,000 metric tons of steel pipes annually 0.05 4 .35
2. Possesses one of the largest plant that produces hot induction bending pipes 0.05 2 .12
3. Employee motivation 0.03 2 .18
4. It produces pipes of the diameters ranging from 2 to 48 inches 0.02 4 .31
5. Providing service to important sectors that involve the oil and gas industry, water related projects and other types of construction carried in this region. 0.05 3 .25
6. Focusing on developing state of the art technologies that are adapted in it to provide a highly efficient 0.05 2 .14
7. Develops sustainable technology that would help in providing high quality steel pipes.
0.04 4 .34
8. Adopting an electric control and tracking for all the stages that are carried in the production process 0.05 4 .35
9. Accredited by the government for various projects that are to be carried in the above mentioned fields 0.05 3 .28
10. Reducing the waste generated in the form of the water used, consumption of electricity, usage of water and proper disposal of the wastages 0.05 1 .08
11. Awarded with a certificate of industrial safety that is called as “OHSAH 18000” 0.07 2 .14
1. There would be serious consequences if the pipes fail 0.05 2 .16
2. High impactful accidents can be caused if the pipes undergo any kind of distortion in its size 0.04 2 .18
3. Negative performance among the employees 0.03 4 .35
4. Constant thrive for innovation and getting accustomed with the new market trends 0.02 3 .22
5. Cost effective services 0.05 1 .06
6. Handling the risk assessment 0.08 4 .32
7. Fatigue factors 0.06 4 .38
8. Extending the limits 0.05 3 .24
9. Managing operations effectively 0.03 1 .06
10. Environment considerations 0.05 3 .27
Total 1 4.78
Internal factor Evaluation (IFE) Matrix
Internal Factors Analysis Summary
Internal Factors Weight Rating Weighted Score Comments
1. Standards of safety .05 4 .70 High level of satisfaction
2. Market share .10 3 .60 Good engagement
3. Employee motivation .05 2 .25 Highly motivated employees
4. Quality .10 4 .75 High attainment of quality
5. Business development .05 3 .45 Effective business model development
6. Employee satisfaction .10 4 .65 High values of employee satisfaction
7. Employee engagement .10 4 .60 High values of employee engagement
1. Employee turnovers .05 2 .25 Highly sensitive
2. Improper strategic development .15 2 .20 Improper balancing of customers
3. Negative performance among the employees .15 4 .65 Threat of negative culture developing in the organization
4. Constant thrive for innovation .10 3 .50 Lack of innovation
II. THE MATCHING STAGE
It refers to the strengths, weaknesses, opportunities and threats that the Saudi Steel Pipes Company poses in the market. The strengths and weaknesses has been shown in the internal factor evaluation matrix whereas the opportunities and threats has been shown in the External Factor evaluation matrix.
It refers to the strategic position and action evaluation matrix. For the SSP, it has been developed as follows:
BCG matrix and Grand strategy matrix:
It is referred to as the Boston Consulting Group Matrix. It shows the two dimensions of market growth and market share as shown in the below figure:
It is the evaluation of the IFE and EFE matrix that has been developed in the above section.
Most important factors and discussion of the scores:
The quantity of steel produced by SSP is a major characteristic of the Company in the middle range manufacturers. It provided different range of diameters across its manufacturing system. It tends to be the major advantage of SSP. Owing to the high standards of industrial safety established in it, SSP was awarded with a certificate of industrial safety that is called as “OHSAH 18000” (SSPIPE.COM, 2016). These are the important factors that develop opportunities for the company in the international market. On the other hand, there are few factors that develop threats and they are the high intensity of danger that is involved in the operations that are performed in the plant. The strength of the material is also a major threat as the products manufactured in the SSP are used in different critical applications that involves operating at high temperatures, pressures and other such conditions that has high values.
III. THE DECISION STAGE
Quantitative strategic planning matrix (QSPM):
Key Factors Weight Increasing the production (Strategy 1) Decreasing the wastes (Strategy 2)
Key External factors
Political .20 Political factors have to be considered Support of the political factors would be obtained
Economic .25 Economic costs to be considered Cost of wastes has to be considered
Social .20 Increasing number of opportunities in the society Beneficial to the society
Technological .35 Development of technology Sustainable use of technology
Key Internal factors
Management Optimum utilization of the available sources Obtaining effective utilization of resources
Production Increasing tremendously Increases as the waste reduces
Processes Number of processes increase Waste generated during each process reduces
R & D High investment, but provides immediate results High investment and shows steady results.
The PEST Analysis is an evaluation model or tool that helps in identifying and evaluating the political, Economic, Social and Technological factors that are existing in an organization in a specific market. The following factors are involved in developing an evaluation of the external environment that is pertaining to the Saudi Steel Pipes Company (SAUDI STEEL PIPES COMPANY, 2014).
Saudi Steel Pipes Company is affected by the unstable political conditions in the Middle-East countries of Iran, Syria and Iraq. It has been affected by the political conditions prevailing across the world such as wars, terrorist attacks and natural disasters. Due to this, there has been a considerable hindrance in the development of infrastructure and expanding the construction across the UAE.
It is one of the most significant factor in the contribution of SSP success in the global steel manufacturing industry. There is a tremendous amount of investment made by the UAE government to improve its infrastructure and boost the economy of the country. This has resulted in a large number of projects to be developed related to the infrastructure, energy development and water management. As a result, there is an increase in the demand of the products that are developed by the SSP. Some economic factors that affect firm strategy:
• Growth rate
• Interest rate
• Steel rate
• Price stability (inflation and deflation)
• Currency exchange rate
Social factors refers to the changing dimensions in the society like the population, percentage of educated class, increase in standard of living of the people, increasing demands of the people to get good quality of service. These factors have contributed to the increase in the development of the products that are developed by SSP. They have been pioneering in contributing to the social factors by carrying various tasks and activities for the development of the society.
The advancements in technology has boosted the steel manufacturing industry as the ease of producing high quality of steel and that too in large quantities has increased the pressure on the companies that are producing it. Also, there is a boost in the requirements of the different industries and quality demands of the industries that require the use of steel pipes in it (Elbanna, 2010).
Elbanna, S. (2010). Strategic planning in the United Arab Emirates. . International Journal of Commerce and Management, 20(1), , 26-40.
EMIRATES STEEL.COM. (2016). About the Company. Retrieved from http://www.emiratessteel.com: http://www.emiratessteel.com/index.php/en/
MIDDLE EAST FACTORY.COM. (2015). Welcome to Middle East Factory LLC. Retrieved from http://middleeastfactory.com: http://middleeastfactory.com/welcome-to-middle-east-factory-llc
SAUDI STEEL PIPES COMPANY. (2014). SAUDI STEEL PIPES COMPANY. Saudi Arabia: Saudi Steel Pipes Company.
SSPIPE.COM. (2016). Saudi Steel Pipe Company. Retrieved from http://www.sspipe.com: http://www.sspipe.com/en/pages.aspx?pageid=195