Strategic Management of Abu Dhabi Ship Building Company - Essay Example

Strategic Management of Abu Dhabi Ship Building (ADSB) Company Name: Student Number: Course Title: Lecturer: Date: Table of Contents INTRODUCTION 3 ENVIRONMENTAL SCANNING 3 1.External features 4 2.Internal features 5 II.Culture 6 III.Resources 6 STRATEGY FORMULATION 7 Mission 7 Objectives 7 Strategies 8 Policies 9 STRATEGY IMPLEMENTATION 10 Programs 10 Budgets 11 Procedures 11 EVALUATION AND CONTROL 12 Performance 12 CONCLUSION 13 References 14 INTRODUCTION Abu Dhabi Ship Building Company is the world class ship builder that specializes in the construction, repair and refit of Naval, Military and Commercial vessels at their Abu Dhabi located ship yard. New build and refit projects are carried out to recognized international standards of Steel, Aluminum Alloy and high tech Composites materials. ADSB is centrally positioned within the Arabian Gulf region and has rapidly consolidated its position as the leading ship builder and support contractor for all Gulf Cooperation Council (GCC) Naval, Military and Commercial operators. The ADSB's business foundation is based on the proven reputation and designs of their Strategic Partners. These companies are carefully selected for their expertise, specialist knowledge and world renowned pedigree in the design and build of naval military and commercial Ships. The four separate market segments of ADSB are Naval Ship Construction, Naval Ship Repairs, Refits and Upgrades, Commercial Ship Construction, and Commercial Ship Repairs. ADSB's facility which was completed recently at Mussafah industrial area in Abu Dhabi allows ADSB to construct highly sophisticated complex vessels in Steel, Marine Grade Aluminum Alloy, and advanced Composites. ADSB is now able to handle more than 200 water vessels every year for ship repairs and refits. ENVIRONMENTAL SCANNING This section comprises the external and internal features of the company. 1. External features These are the opportunities and threats of the company. It is divided into three: - natural environment, societal environment, and task environment. I. Natural Environment ADSB has the best shipyard in the GCC. ADSB is among the topmost shipbuilders in the United Arab Emirates. ADSB has more than 1200 employees. Production of vessels is best done at the coastline thus ADSB has this advantage and also has complete knowledge about the condition of the oceans in and around the G.C.C. II. Societal Environment All businesses should be able to adjust to change, since it’s the biggest challenge to all businesses. At ADSB change is taken as a challenge and this has been a reason for the success of ADSB. The process of ship building is long and it takes months to build a ship. Building a ship requires special equipment. Special yards are required for building ships. Steel is used mostly in building a ship. Many modern technology gadgets for helping navigation are used in ship building. Ship Building also requires the help of naval architecture. Welded steel is normally used for building ships. Ship building is complex and therefore takes time. III. Task Environment ADSB has been successful in distinguishing its image in the market. It is viewed as the best manufacture of Warships in the G.C.C. ADSB has always produced quality products according to the needs and requirements of the customers. ADSB has fulfilled the promises it made to its customers. This has created huge goodwill for ADSB in G.C.C. ADSB is producing and selling defense ships to various governments which include modern technology warships and other naval defense vessels and to the rich it provides the best in class luxurious boats, small ships, yachts' and other luxurious vessels. This has led to successful grouping of client management in the company. All projects undertaken by ADSB have provided more luxury and style to its clients and they have helped in enhancing the defense capabilities of countries in the Gulf. ADSB's projects are more accepted in gulf because of the quality of the final product the company provides. ADSB is known for fulfilling the smallest details of its clients (Mellahi, 2004). 2. Internal features These are the strengths and weaknesses of the ADSB Company. These features are divided into three sections: - structure, culture and resources. I. Structure The Managing Director and the Chief Executive Officer interacts directly with the clients because of the size of the product. This motivates the client because he gets to interact with the top most officials of the company and they pay direct attention to his needs and requirements. The company is more attentive to various governments in the gulf region, as they are potential clients for its defense vessels. ADSB has made all its decisions relating to its sales while keeping its customers’ needs in mind. Due to various environmental problems, ADSB should work in an environment friendly manner. Its vessels should follow the water pollution norms of U.A.E. and other members of G.C.C. This will in turn help increasing the company's overall sales and goodwill. Only the top management should devise the best possible annual plans for ADSB every year and they should be followed word to word every year. If there are any deviations, they should be corrected as soon as possible. II. Culture ADSB believes in adding something new to their products and that is their way of facing the modern market. According to ADSB, adding something new to their product every now and then is beneficial. It attracts new customers and guarantees repeat sales to existing customers of the company. It also helps in getting bigger sales than before. Innovation is the only key to success at ADSB. ADSB is striving to become a valuable resource to its customers. ADSB believes in helping its customers in all possible ways, other than selling its ships to them. ADSB focuses on the end product and its end result more than on the product itself because the customer's care about how the product performs and not in the product itself. III. Resources ADSB has enough capital and technology available at its disposal that it can produce all types of vessels in its ship yards in Abu Dhabi by itself. ADSB has successfully generated its customers. STRATEGY FORMULATION ADSB needs to refer to its past sales and market conditions and it should also check the performance of other ship building companies in order to formulate a perfect market strategy. ADSB should not violate any of the environmental norms of the country it is working in. It is important to be environment friendly as it saves a lot of trouble for the society thus attracting customers to ones products. Mission ADSB struggles to be the largest builder of water vessels in the G.C.C. For it to achieve this target, it must give the best possible products to its customers and provide its customers with the latest technology available. ADSB has to run it shows on limited orders only. This phenomenon has increased the competition faced by the company hugely. To add on this, things have worsened recently because of the global meltdown and the Dubai, economic crisis. The sales of ADSB have gone down because of the meltdowns. Objectives ADSB is targeting two segments of customers which include the various governments of Gulf countries and the rich of the Gulf countries. All countries should have proper defense mechanisms so as to protect them from hostile countries. The various governments of gulf region are the best target because they have high purchasing power due to the oil reserves they hold. Due to the number of the ships that are built by ADSB, it must only aim at customers which are capable of bearing the cost of the product. The nature of the modern world company’s market is fragile, thus the defense area is increasing by the day. Strategies The company should be able to correctly promote its product if it wants to succeed in the market. There are so many producers of the same product in the market nowadays and all wish to be the best. Promotion refers to the process of bringing your product to the customers in the correct manner so that they are attracted to buy your product more than of any other producers. There are different types of promotion available nowadays like advertising and promotion through telecommunication etc. in which a firm should be able to bring its product in front of the potential customers. A good promotion technique has a lasting effect on the customer hence the company should focus its energies on matching its resources with customers’ needs. A company's success should be dependent on its ability to satisfy its customers' needs. Research is an important part of marketing concept. Research assists companies to find out the needs of their customers. Special attention should be given on the quality of product. The company should innovate better ways to reach the customers. The managers at ADSB should be able to choose wisely the new changes they need to bring into the company's products. Such decisions affect the market reputation of the company to a great extent. Market policy of the company should aim at keeping the price of the vessels as low as possible during this era of economical meltdowns but at the same time they should successfully accommodate the change in technology in its products. Such policies help in lowering the competition from other companies. Although it may reduce the revenues of the company for some years to come, but it will prove to have a positive effect in the future as this policy will enable the company to create a stronghold in the defense water vessels market in the G.C.C. It will also make the current customers of the company to remain faithful to it because of the low prices. In addition, it will increase the overall sale of the company which will fetch more revenue into Abu Dhabi which will ultimately help it out of the economic crisis. If the government learns that production of defense vehicles is fetching it revenue indirectly then it may itself start investing more in the company. This will benefit ADSB (Davidson, 2008). Policies Marketing concept is a modern philosophy which states that all firms should analyze and scrutinize the needs of their customers and then they should act on such needs. This philosophy makes a firm to act on the requirements of its customers rather than on competition with other firms. Customer satisfaction should come first. Moreover, participation of the employees is required in the firm. Employees should aim at full customer satisfaction to achieve more profit. Since ADSB specializes in producing its own unique ships, it becomes hard for them to market the product. The product which is produced is new and unique in itself when compared to similar products of other companies. This means that it is even harder to persuade the customers to buy this product. One needs to make the customers believe that this unique product is better than the other already existing products in the market. In order to conquer the market, the company should follow some basic managerial and marketing rules. If these rules are followed properly, they can help the company in even the worst of patches that the company may face in its whole lifetime. STRATEGY IMPLEMENTATION Programs The purchasing power of people has increased so much that they can demand anything from the company because they have the right kind of money to pay for such products. ADSB has to maximize its production capabilities no matter how costly it is. ADSB should be in a position to provide all sorts of products that the customers may ask of it. It should harness the latest technology in defense warships that has the latest missile launch systems and fitted with the most advanced sonar. If ADSB wishes to sell them to any of the governments they should have one of the most powerful radars fitted on them. The luxurious boats produced should have the best of the interiors with all on board facilities for the owners. The boat should have a barbecue to a Jacuzzi if ADSB is to sell it to one of its rich clients. Marketing is all about customer satisfaction and managing to earn profit out of it. This involves a lot of hard work and it is not an easy job. The product that produced should be of the best possible quality and should match the specifications of the customers. The product is the main key to success of any company followed by the price of the product. The price of the product determines whether it will sell in the market or not. Budgets The purchasing power of individuals has highly increased in today’s modern world. Luxurious water vessels are a sense of style and status for the rich. ADSB is successfully attracting this area of market in the U.A.E too. The governments have allocated some funds to be invested in the defense sector this time around. Even the rich have reduced their expenditure on luxury items due to the meltdown. The sales of luxury ships and other luxury water vessels have also gone down tremendously. Governments have become very selective in purchasing defense vessels. ADSB has to provide the best in line ships at the lowest cost possible to survive this meltdown. The price of the product should be such that it should cover all the costs incurred in the process of production and also fetch a sizeable profit to the manufacturers. The price should be the best in the market in comparison to the competitors of the company. The price of the product should be capable of giving an edge to the company in the market. Procedures The company relies heavily on feedback from current customers for market orientation. This has to change. The company should carry out surveys and collect sample data in order to be more customers oriented. ADSB needs to use internet to interact with its potential customers. It needs to advertise more about itself and promote its product on the internet. If ADSB can successfully manage to advertise itself on the internet, it will benefit the company. Grabbing a hold on the internet advertisement will mean high increase in the sale of the company. ADSB needs to make its website more popular by advertising about it on other websites. If the website of ADSB will be easy to access for the common people, the number of clients would increase. In addition, special discounts to new customers should be given by ADSB so that it leads them re-order again with ADSB only. ADSB requires special employees which can identify the potential customers and go and try to extract business deals from them. ADSB's good work is acting as a marketing agent for it as it is attracting potential customers to give business to ADSB. ADSB should invent a brand out of itself. This will boost up its sales and increase the goodwill of the company hugely. It will also help in decentralizing the expenditure of the company. A strategic relationship with various governments will also help boost the sales of ADSB (Kozami, 2002). EVALUATION AND CONTROL Performance According to the interview of the employees of ADSB it is clear that the company has given full emphasis on customer satisfaction. The ADSB Company is following all the modern management and marketing trends. The company offer after sale service and gives the desired product to its customers on time. All the employees work towards a common cause that is customer satisfaction. The company itself is based on coastline area therefore the cost of production is less. ADSB Company has the local advantage over other sellers. In addition, ADSB is producing most of the parts that are required in ship building by itself thus avoiding import costs and delays and also fewer taxes have to be paid. ADSB has a huge advantage over many gulf based ship producers due to its non-reliance on support in building of the vessels from foreign countries like the U.S. CONCLUSION ADSB has to put in more effort into collecting data about the market. ADSB should also do proper analysis of its recent failures in order to prevent them in the future. ADSB should implement its annual plans completely. Deviating from a set plan will result to short term profits. References Read More