Introduction
Rapid expansion of the product can cause many problems such as outgrowing the premises on the short-term, the staff suffering and morale drop if they are not able to cope with the load of work, expansion costs may also lead to a shortage in cash and management may be working under pressure. An Omani cosmetic company is marketing organic skin care product and is facing rapid expansion locally and based on product diversification. The company is in need to restructure its strategic planning in order to meet the new needs and requirements. The current paper is critically discussing theories that are relevant to that issue and is making recommendation the company can follow to develop its performance. The essay is suggesting methods for involving the company's employees in decision making and planning through identification of issues relevant to managing people and suggesting ways to manage the relevant issues effectively and ethically. (Etemad and Keen, 2012)
Discussion
Business organizations have different growth patterns as some of them are slow-growing firms and others are high-growing firms. Research has been giving interest to HGFs as they are changing the economic conditions of employment in modern business world. Some Studies investigated the issue from the side of job creation made by HGFs and others investigated innovation, productivity upgrades and industrial dynamics related to those firms. There is a gap in the literature about management in HGFs and the strategies they use and means they apply to facilitate that rapid growth and face challenge to expanding and to have more opportunities of having new entries so it is important to decide what type of organizational change the organization should implement. (Mason et al, 2009) It is suggested that the company can complete growth of its product in a new country that can be a new entry such as Dubai and to do this, analysis should be executed to recognize the different conditions the company is working at in that area, SWOT analysis can be done as follows:
SWOT Analysis
Strengths -The company has good reputation in Oman and the product is doing well there. -The company has good growth rate in Oman. -The company has experts and effective employees. -The product is organic which is a merit in skin care and cosmetics' field. -The company has effective management and can make more changes in it.
| Weaknesses -The company needs to analyze the new entry market to learn about competitors. -Cultural differences between Oman and The UAE. -Employment conditions in the UAE can differ from those in Oman. -The product is new and in the UAE there are many cosmetic products that can threat its existence.
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Opportunities -The company can apply Return On Investment (ROI) to manage culture change. -The company can apply compensation and benefits policies to reduce costs. -The number of people who are interested in organic products is increasing in the Gulf area such as The UAE. -The UAE is a country of a big population estimated to be 9.631 m. -the company can use effective communication tools depending on different new media channels. | Threats -Big companies in The UAE may fight the new product expansion and hinder it. -the company may not be able to manage its employees, planning and performance. -The company may suffer problems relevant to human resources management and employees' morale. -Recruitment process may include conflicts and problems that may hinder the expansion plans in the UAE. |
PESTLE Analysis
The company is in need to improve its growth rate in the UAE and use effective distribution plan and increase its sales revenues. A PESTLE analysis can be effective before entering the market of the UAE and it can discuss the external environmental factors in the UAE that can affect the product expansion and diversification in the UAE as follows:
Political | Political conditions in the UAE are stable as the country doesn't suffer any civil war, terrorism or any political problems which make it effective to market the product there. Politics in the UAE gives investors the opportunity to market their products there and expand the diversification of the products there. The country doesn't suffer any conflicts with its neighbors except some conflicts with countries on oil revenues. |
Economic | Economy of the UAE is flourishing and its GDP per capita is high. The company has unemployment rate which makes investing there is effective as employing native employees or others from different nationalities. Foreign direct investment in The UAE is high. |
Social | People living in the UAE prefers good life styles and organic products, they prefer to make shopping trying new products especially women who like innovative cosmetics products. The Emirates' society includes people from different cultures and countries that make a challenge when new products are marketed. |
Technological | Globalization and communication revolution has made the country give high care for technology that became apparent in almost all fields and on high levels. The high financial and economic levels of the country make The UAE able to develop its technological background in all fields. |
Legal | The legal factor in The UAE supports business investments as it allows investors from other countries to invest their money there and market their products with equal opportunities with local investors; the legal system in the UAE is developed and coping international laws. The legal system in the UAE is highly developed and advanced with wide use of laws in business that supports business investments. |
Environmental | The environment in Oman depends on natural elements such as dry climate and desert land that is almost hot and humid, this makes people always in need for creams and moisturizing products. |
PESTLE analysis can help the company prepare its abilities before entering the UAE and this can also guide the company management towards the implementation of the proper methods and frameworks that can be used with employees in order to motivate and retain them. (The Report, 2019)
The UAE Market Size
The market size of organic cosmetic products and personal care in the UAE was estimated in 2018 with USD 82.5 million and it is expected to grow at a 7.6% CAGR over the forecast period. People began to reduce usage of harmful chemicals such as aluminum salts, phthalates and parabens and there are multinational corporations that are changing its products to cope with the need for organic products as a result to the increase usage of organic products in the UAE, this can work as a good opportunity for the company to market its product in the UAE and there is a rising awareness among people locally and internationally to turn to using the natural products made from organic materials, this makes a good opportunity for the company to have the UAE as its new entry. Yet the company has some challenges in expansion of its product in the UAE market such as the great companies marketing organic products of skin and personal care there including international products such as Nivea, Loryal, Olay and others that have great market share in the country. The market in the UAE has a wide variety of skin care products with high demand on them from people, technology is also very advanced as technological innovations such as oligopeptide, are used to increase products' efficiency and shelf life, with their positive impact on the market. The UAE market is chosen by the company as it is a big market full of sales channels and clients who are interested in natural organic products for personal usage from both sexes. The country includes great hypermarkets, chemists, and supermarkets that market internationally certified organic products for personal use and welcoming innovative new products. Consumers in the UAE are ready and welcoming to spend big amounts of their budgets in skin and cosmetic products. These products are presented for the public in many beauty stores, pharmaceuticals, salons and via online stores as this is maximizing their penetration in the market of The UAE. The environment of the country is characterized with bearing pollution and this makes people in need for using organic personal care products that can help them have good healthy skins and bodies. Another challenge the company will face in the UAE is its need for diversifying its product and produce new and innovative organic products that can with this product make healthy collections people can purchase in offers that can save money and at the same time provide them with more care for all parts of the body such as other oral care products, other skin care products, hair care and others. The UAE usage of different personal care products can be declared as in the following figure:
It is clear that skin care products are highly used for the biggest market share amongst different personal care products which makes diversification of the product to include more skin care products a good suggestion the company can use to expand more effectively in the UAE.
HOFSTED theory and management strategy
The new company will be located in the UAE; it needs new management strategies and different performance appraisal techniques. The culture of the UAE has differences from that of Oman, the company management can apply theories such as the HOFSTED theory that can recognize differences between cultures and can focus on cultural constraints through making rational comparisons between countries, their cultures and other differences that can affect marketing certain products. The theory suggests comparing two countries or more to realize the differences between the two cultures and how the business organization can use its management to make use and manage these differences for the welfare and success of the company to reach competitiveness. The current case presents two countries which are Oman and the UAE as a new entry for the local Omani company that encounters rapid expansion for its organic skin care product. Oman's market size is smaller than that of the UAE, the theory refers to cultural dimensions, Oman is a Gulf country and the UAE is a Gulf country too, they both belong to the GCC countries while the UAE is much more developed and is bigger in size as a market, Oman's (GDP) was worth 79.50 billion US dollars in 2019 while the UAE GDP was 414.2 in 2019, population of Oman is 4.829 million persons and the UAE population is 9.631 persons. This shows that the UAE is greater in people and area and GPD than Oman with more opportunities of expansion as cultural diversity in the UAE is higher than that of Oman, tourism is much more flourished in the UAE which makes people from different places in the world come to entertain different shopping festivals, hotels and other services for relaxation and business in the UAE. Cultural diversity in the UAE makes it have opening culture to the global markets and cultures. This makes the company able to staff people from different countries not only Omani in order to make use of the effective experts that may not be existed in Oman in addition to staffing loyal employees from Oman too, multinational diversity can add differentiation in the way the company markets its products as advertising the product through different media channels can depend on people from different nationalities working in the UAE to present the product as useful for people from all nationalities and cultural backgrounds such as religions and races that differ in the way they look and live. This diversification will make marketing the product easier than focusing on Omani people only. This will require the company to have effective performance appraisal framework that is able to motivate employees effectively. Management should also depend on innovative leaders who can present innovative and transformative ideas for diversifying the products and marketing them locally and globally. (ZABIHI, 2013)
Marketing mix 4ps
Product
The product is an organic skin care product that is highly needed in the UAE, Oman and the world. Women are much more interested in skin care products but there has been trend for males to be interested in skin care products so the product can either be classified for both sexes or there can be both types of the product to be marketed as for males skins and for female skins. This will raise the request and interest of consumers with the product and will make them able to find innovative usage for the product. Packaging can also be different to be presented as one soft package for females and another strong one with strong cent for males. The product can be presented for different media channels including social media such as You Tube, Facebook and Twitter in order to reach more people in addition to the traditional means for marketing. Famous figures can also be used to market the product through the reviews they make about it and influencers on social media too.
Price
Prices of familiar organic skin care products should be studied to set the actual price for the product. The market needs should also be put into consideration in order to measure how far offers can be made, promotions and prizes for new consumers. This can be studied before setting the price, taxes should also be considered in order to set a price that is convenient for the quality of the product and the market needs in a way that the company can make its profits and revenues without loss. Cost effectiveness strategy can be used before setting the price in order to reduce costs of production to present the product in a comparative price that can boost the market and other products in the price area.
People
The marketing process should also depend on a strong performance management system that can manage individual and organizational performance through motivating employees and managers and appraise their performance. The company can focus on modern performance appraisal methods that can motivate employees and diversify techniques of broad interpretations that can seek employees' talents and encourage them to be more creative and innovative; this can help in the product diversification and marketing. Employees can also be empowered to maintain leadership positions that can manage team working better and provide better results. Traditional methods that focus on individuals' conduct and dependability should be replaced by modern methods that focus on the results of the work rather than employees' conduct. Modern methods include MBO management by objectives that focus on specific goals or objectives that should be achieved by employees who can be motivated to achieve them. Behaviorally anchored rating scales can also be used as a modern method for performance appraisal of employees from different cultural background as it gathers the benefits of critical incidents, narrative and quantified ratings through setting a quantified scale bearing certain behavioral examples of good or weak performance. BARS proponents suggest that it provides better appraisals than other performance appraisal techniques.
Place
Place where the product will be marketed is the UAE and this makes it necessary to study the best area the company can be located in, the Emirates is a country that has many attractive areas where people and tourists look for cosmetics and skin care products. This requires the company to study the different malls, chemists and cosmetic centers that it will communicate with in order to deal with them and market the product with their help. Oman is the place where the product comes from and there should be more expansion in Oman too in order to reach more consumers such as reaching rural areas. The place where the company is located should be vivid and attractive to attract cosmetics companies to market the product; this will make it effective to reach more people and consumers. Online sites such as Souq.com can also be used for marketing the product as innovative areas to market it. (Ehmke et al, 2020)
Diversification of the product
The product can be diversified through studying multiculturalism in order to recognize the individual needs of consumers and then to present new products that can suit the different requirements of consumers. The company can depend on concepts of multicultural beauty in order to address the wide variety of people in the UAE, this should include different ethnic minorities that may exist in the UAE. Another Technique for diversification of the product is focusing on gender fluidity that can address all consumers equally, for example, the product can be presented for both sexes and to show its effectiveness on them both. Another technique is the new aging concept that focuses on the healthy life style that depends on organic materials in all fields and then to present the product from the point of view that supports its organic nature that can suit people from all different ages.
Conclusion
In conclusion, the company can market its product in the UAE as a new entry after making SWOT analysis and PESTLE analysis that can show the weaknesses, strengths, opportunities and threats the company may face in addition to the external factors the company may face too. The company can use theories for marketing and performance appraisal and it should study the new marketing strategies through focusing on marketing mix and diversification of the product. (Casas and Mendoca, 2013)
Recommendations
The company is recommended to make more researches and comparisons between its product and others in the market of the UAE in order to be able to set prices and new promotional campaign for the product. It is also recommended to make the needed analysis to recognize its conditions and the different factors affecting it.
References
- Casas, A. Mendoca, p. (2013). 'Diversification as a Sustainable Growth Strategy in the Packaging Market: case study of a Brazilian company, Impacta S/A Indústria e Comércio.' https://www.researchgate.net/
publication/317258282_ Diversification_as_a_ Sustainable_Growth_Strategy_ in_the_Packaging_Market_case_ study_of_a_Brazilian_company_ Impacta_SA_Industria_e_ Comercio - Ehmke, C. Fulton, J. Jusk, J. (2020). 'Marketing’s Four P’s: First Steps for New Entrepreneurs.' https://www.extension.purdue.
edu/extmedia/ec/ec-730.pdf - Etemad, H. Keen, C. (2012). 'Rapid growth and rapid internationalization: The case of smaller enterprises from Canada.' https://www.researchgate.net/
publication/235319475_Rapid_ growth_and_rapid_ internationalization_The_case_ of_smaller_enterprises_from_ Canada - Mason, C. Bonner, K. Danes, M. Hart, M. (2009). 'Measuring Business Growth: High-Growth Firms and Their Contribution to Employment in the UK.' https://www.researchgate.net/
publication/277257755_ Measuring_Business_Growth_ High-Growth_Firms_and_Their_ Contribution_to_Employment_in_ the_UK - The Report. (2019). 'Abu Dhabi 2019' https://oxfordbusinessgroup.
com/uae-abu-dhabi-2019 - Zabihi, G. (2013). 'Culture and management style: A study of differences of Chinese and Swedish management style from Swedish perception.' https://www.diva-portal.org/
smash/get/diva2:638298/ FULLTEXT01.pdf
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