Focuse On Al Haramain As One Of The Arabic Perfume's Company (Essay Sample)

Arabic Perfumes
Name
Institutional Affiliation
Date
Arabic Perfumes
The perfume market in GCC has a value of Dh11 billion every year, accounting for nearly 20% of the global market with consumption per capita of perfumes and cosmetics that is amongst the leading worldwide. The industry of perfume deals basically with firms that produce nonalcoholic perfumes, alcoholic perfumes and oils that are essentially targeted toward the domestic and Arab market segment within the UAE (Current awareness in flavor and fragrance, 2009). Currently it is in its phase of maturity with just four great existing market players, with regards to the previous shake outs because of instability for the period of the Gulf War (Bains & Middle East Economic Digest Ltd, 2011). The players not only control the market of Arabian Perfume but have a competitive edge as well because of their distinctive dynamics and strategies. This analysis focuses on Al Haramain as one of the Arabic Perfume’s company.
The headquarters of Al Haramain are situated in Dubai, and there are 25 retail outlest within Middle East. While new brands were established and the organization expanded, Al Haramain began selling in Europe, the Far East, as well as the USA. Recently, Al Haramain also started an Oudh plantation in Bangladesh (Al Haramain Perfumes Website, 2014). Basically, Al Haramain caters to the Arabian audience, hence the mainstream of sales come from its Oudh products. This firm provides a broad product line and has a geographical scope that is regionally focused.
Globalization is Al Haramain’s great opportunity (Maidment, 2007). Besides, the UAE’s economy is growing steadily and this offers a perfect opportunity for the firm to raise its profits and in so doing, increase its market share (Maidment, 2007). In view of the fact that the internet has turned out to be a global medium of communication (Haan, 2004) Al Haramain must take advantage through inventing online advertising and online selling. Rasasi, which is also among the four leading perfumes firms in UAE, adopted IBM Lotus Domino System that facilitated it to bring fresh products to the market within a shorter phase of time, decreasing its costs of communication and raising efficiency of employee via enhanced collaboration (Maidment, 2007). Al Haramain needs to make use of such technological improvement to advance itself and stay at the level of competition.
Additionally, Al Haramain must not ignore their most significant segments, particularly younger users who make up 60 percent of the growing population in UAE (Al Haramain Perfumes Website, 2014). This generation has cultural concerns sharing. They mind the environment and favorably respond to organizations like The Body Shop that have demonstrated records of socially and environmentally responsible actions (Al Haramain Perfumes Website, 2014). They are concerned with fitness and healthy lifestyle. This is why Al Haramain should plan strategies that target this expanding market from a tender age and foster them as devoted customers for a generation (Al Haramain Perfumes Website, 2014).
The UAE is developing dedicated areas to supply to the fragrance as well as related sectors. It is approximated that presently Dubai has thirty manufacturing divisions in the cosmetics, fashion and fragrance sectors and equal number are running in other emirates. Dubai’s geographical location and its accessibility and proximity to the upcoming markets is an important advantage. Regardless of its humble population, the UAE provides a sophisticated, varied market for other countries. Position of Dubai as a regional business hub promotes outstanding trade exhibitions as well as conferences, which presents ways for firms to reach consumers from all over Africa, Middle East, East and South Asia (Walsh, 2008).
Although the perfume industry in the UAE is basically at its maturity, Al Haramain is still in its growth stage. The focus of Al Haramain is majorly on oil based oriental fragrances that are merely truly valued by Arab users whose culture for many years has used non-alcoholic perfumes that are Oudh-based (Al Haramain Perfumes Website, 2014). However, in the UAE, other ethnic group is gradually becoming interested in purchasing oriental perfumes that are oil-based. One reason may be that Muslims have a preference of using perfumes that are non-alcoholic-based. Perfumes that are oil-based are regarded as more hygienic compared to perfumes that are alcohol-based since they bring about fewer allergies (Current awareness in flavour and fragrance, 2009). This position segment has been targeted by Al Haramain, which is developing to incorporate non-Arabs also.
The strategy of Al Haramain is to differentiate its manufactured products and to make a product that is considered industry-wide as being exceptional (Feenstra & Taylor, 2011). The new product variety’s introduction is purely to effectively compete with its competitors. Therefore one can state that by itself, Al Haramain is not innovative, although its innovation is due to reacting against competition. Product differentiation strategy by Al Haramain can earn returns that are above-average through creation of a justifiable position for dealing with the competitive forces. Normally a firm’s cost advantage serves as a defense against its competitors since reducing costs lead to higher returns. Al Haramain lacks this advantage because of its high labor costs, R&D, and high advertising. Since its primary start-up expenses are high, the end product turns out to be relatively high also. Swiss Arabian and Rasasi have a cost advantage above Al Haramain since they concentrate on mass-market inventions. Additionally, Ajmal has inexpensive labor as well as raw material expenses.
The success of Al Haramain lies in its experience, resources, skills and comprehensive knowledge of the business (Tripp & Tripp, 2002). The Al Haramain’s Managing Director (MD) has been involved in inventing majoring of the company’s perfumes and is an established expert of olfactory senses. The MD has succeeded in selecting the correct talent, and has nurtured a specialists’ team who understand the art and complexity of oriental fragrances. The team has facilitated in the establishment of the well-acknowledged brand name used by Al Haramain today. Al Haramain’s oils and perfumes target both women and men. There are two classifications of the fragrance: Floral and Oriental. Different from the popular belief, the firm has discovered that oriental perfumes are simply as popular in the United States and Europe as they are within the Middle East (Tripp & Tripp, 2002).
Al Haramain maintains to have excellent skilled work force that can generate the particles of Oudh from raw materials (Al Haramain Perfumes Website, 2014). The workers who take care of Oudh have more than 35 years of grand experiences and expertise. The team of Al Haramain tries innovative ways and generates latest concepts for extracting processes of Oudh. In addition, Al Haramain utilizes its financial influence to hire competitors’ workers. This provides Al Haramain with inside information about the way competitors operates, what innovative projects are underway, and the way particular matters are handled (Al Haramain Perfumes Website, 2014). Al Haramain states that its designs of product are so successful because of the extensive research of market done by the firm. The sales squad connects the firm to its sellers and they are considered Al Haramain’s front face. The leading management’s open door rule facilitates the sales squad and other workers to give feedback concerning its products (Al Haramain Perfumes Website, 2014).
Al Haramain’s sales squad has met sales teams from their competitors, and they state that the employees from the competitors merely recognize their direct managers, and their top-level management is not known (Al Haramain Perfumes Website, 2014). Al Haramain’s monthly meetings and open door policy facilitate the leading management to relate with every level of workers. The management of Al Haramain states that it has great financial advantage and that it is monetarily sound (Al Haramain Perfumes Website, 2014). Complete payments are done once raw materials are received, and 3-month credit facilities are given to retailers. Additionally, workers’ salaries are timely paid and review is done on a quarterly center.
The major threat for Al Haramain is large competitors such as Rasasi, Swiss Arabian, and Ajmal. Natural disasters may possibly prove to be the company’s threat as it would influence its operations in reference to the Oudh plantation based in Bangladesh (Feenstra & Taylor, 2011). This could be a great hit because perfumes that are Oudh-based are the company’s major product line. Another threat is perfumes’ imitation since the UAE is experiencing challenges from products that are counterfeit. An expert fragrance chemist with Mass Spectrometry and Gas Chromatography equipment is able to analyze a fragrance and strongly duplicate it (Feenstra & Taylor, 2011). Duplicates of costly, special fragrances are currently available at the cost’s fraction. Low-income groups and young teenagers normally fall victim to the products provided in the grey market (Feenstra & Taylor, 2011). Even though the state is alert, violations of copyright do occur and a couple of trendy brands are under habitual attack. These suppliers of imitation fragrance have the capacity to weaken the prices of Al Haramain and vend its perfumes at lower costs.
The 2003 Dubai External Trade Statistics indicated that exports perfume product from the UAE comprised of around 83.5 million AED globally (Brijs, 2013). Saudi Arabia (16.5 million AED), Kuwait (10.7 million AED) and Netherlands (24.6...