Al-Ayuni Investment & Contracting Company (AICC) Harvard Case Solution & Analysis

Creating Brand Equity

The power of the brand that lies in the mind of the customer is called the brand equity. Also, for AICC to build brand equity for the new office will be quite a difficult task. The reason is simple; brand equity is a feature or an attribute which builds with passage of time. A brand cannot build brand equity overnight.

However, a brand needs to work upon building brand equity by creating brand awareness, perceived quality, brand association and brand loyalty. With the four attributes intact, AICC’s new or service can actually develop brand equity. TEC office for AICC can create brand awareness by showing the technical, contractual, commercial analysis and corporate bidding process of the brand that is the TEC office. To create a perceived quality, AICC or TEC will not have to work a lot because of the strong brand name that has been built for the company. TEC can actually use the brand name which has strong brand equity in Saudi market. Brand association can be built with the help of the strong work force and the team will actually take up the brand to the clients or the general audience.

Therefore, it is an essential part of the company to consider hiring instate potential work force which can serve the needs and wants of a new brand in the right direction. Brand loyalty can be built around the attribute of the way the product is reached out to the general audience.

In the end, it can be said that the brand equity for TEC will be built through the brand name of the company that is AICC. As a matter of fact, AICC has a strong brand name in the Saudi market with substantial brand equity therefore; it is effective that TEC will also enjoy the similar brand equity.

Competitive Strategies to Become a Long-Term Market Leader

Bargaining Power of Buyer: High

The bargaining power of buyer in construction industry is high. The reason it is high is because of the price sensitive market. In the current era, people look for the company that offers construction services at lower prices, and the customer or the clients prefer buying from them. The players who can develop major projects are large in number and therefore, the clients can select on the basis of price negotiation in which power remains to the clients (Kotler, 2012).

Bargaining Power of Supplier: Low

The bargaining power of supplier is low for the industry. It is low because construction materials are easily available from various suppliers. The switching cost is also low for the industry players. Contractors, sub-contractors and manufacturers have to work together for the successful delivery of the project.

Threat of New Entrant: Low

Threat of new entrant in the industry is low. The reason it is low is because of the high capital investment required to become a part of the construction industry. Along with this, customers are loyal to companies and do not switch easily. The industry is highly risky and filled with quite a few uncertainties, also the access to skilled labor is a costly move.

Competitive Rivalry: High

The competitive rivalry is high for the industry. It is high because of the number of companies competing in Saudi Arabia for the market share. Along with this, the product differentiation is quite distinct as the industry requires high investor cost.

Threat of Substitutes: Moderate

The threat of substitute products in construction industry is moderate. It is moderate because the substitutes in the industry are quite large in numbers. These include the private housing, social housing and various other projects in the industry where clients can look on to.

Competitive Strategies

Along with this, in order to become a long term market leader, AICC with their new service offering Technical Department should consider focusing on the customers through differentiation strategy. By following the differentiation strategy, the Technical Department can focus on the broader target market. By following on the larger market and ensure that customers associate themselves with the new product offering; AICC can become a market leader in tendering, engineering and contracts. The new service offering will help customers with bidding process that will align the customers with the business development lifecycle. With the attribute or the feature of differentiation, TEC can actually become a competitive service provider in the industry. Along with this, AICC can achieve the first mover advantage of becoming the only company that will be helping customers in bidding contracts; provide engineering service and the after sales service to each client. With a multi featured department within AICC, the company can charge differentiated prices from the customers (Martins, 2000)...........................................

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