Al-Ayuni Contracting and Investment Company Harvard Case Solution & Analysis

About the Company

The company Al-Ayuni started operation in the early 1960’s as a sub-contractor in Saudi Arabia and later on reaching the level of proper contractor after getting licensed for general construction in the year 1972. The company started operations for road constructions, and evolved immensely with the passage of time and made a good reputation for itself in the country. This image of the company led towards getting some major contracts and gave the company a boost that included contracts from two different ministries involving the ministry of communication and rural affairs in the year 1976.

The major contributors towards gaining a better and positive image and well-reputed name of the country is the basic values of the company that is very strong. Besides that the company also has a firm focus towards business ethics and has been highly successful as portrayed by their professional results. Initially the company operated in civil and road construction, but later on due to the commitment shown by professional and specialized staff, the company expanded and enter in various different sectors which were managed professionally by their staff.

Currently the company is graded as a first class contractor in Saudi Arabia and operates in around 11 different sectors that involves construction of railway, highway and building, equipment provider, information technology, education sector, marble and mining, precast concreting, real estate development, water works, vehicle services, gas and energy sector, and manpower services. The company is aiming to become a market leader after exploiting the opportunities available in the industry (AL AYUNI INVESTMENT AND CONTRACTING COMPANY, 2014).

Mission of the Company

The company aims to become a leading contributor towards the development of the nation and region by providing quality and best offerings in engineering and contracting services and in the meanwhile taking care of our stakeholders and bring prosperity for them.

Vision of the Company

The company wants to reach the top spot in its core business and to reach the list of the top ten in the emerging sectors.

Aims and Objectives

The company has witnessed a considerable growth in Saudi Arabia and has been ranked as the top contracting company in the country. Since the company has witnessed considerable growth, therefore, the company now wants to adapt a globalization strategy and expand beyond its boundaries. This paper will suggest the possible place for the company to expand and analyze the suggested region for expansion. The company has vast experience in the construction field and has seen some major growth in this industry. Therefore, this is attributed as its core competency.

The company is aiming to use its core competency as a major weapon for expansion that will provide the company an opportunity to explore different market and expand its horizons. Entering the global market is a good opportunity for the company, and the analysis portion will highlight the different opportunities and obstacles the company has to face and learn the ways to overcome these issues. A detailed analysis will be provided in the paper using different models and conducting research using different articles form reputed journals containing authentic data.

Environmental Analysis

The environmental analysis regarding the industry will be analyzed by using a PESTLE analysis model which will highlight the key aspects that Al-Ayuni should consider before going global.

Political

Market reforms are being implemented in many major developing countries, especially the BRIC nations, therefore, the company has an opportunity to invest in infrastructure which will enable the company to build a competitive environment. On the other hand, countries like the USA and other European nations are expected to keep the interest rates at the lowest, and banks are also not offering attractive interest rates.

Therefore, public investment in infrastructure is expected to increase and due to low-interest rates, loans can be taken to initiate new projects. Commodity price has seen a rapid increase due to the growing political issues in the Middle East, which has made the railroads and mining attractive sectors for investments. The political factors are quite encouraging in many countries, and Al-Ayuni can leverage the opportunities offered in order to give a push to its globalization strategy.

Economical

The economic factors are very important to consider as they are responsible for bringing in money moreover, the construction industry is highly dependent on investments. The economic crisis has raised many fears, and people are hesitant to invest in the infrastructure industry, which the growth has slowed down a bit. Secondly the growth of the construction industry in the next ten years is expected to grow 4% annually in countries like USA and UK while in emerging countries the growth is expected to vary from 10%-12%..................

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