STRATEGIC AAST GRADUATE

MANAGEMENT PROJECT SCHOOL OF BUSINESS

“FRENSH DOOR NEW REFRIGERATOR”
Feb.2024
MARKETING MAJOR, GROUP 4M4

Team Members:

Mariam Abo El Naga 21120663

Merna Kamel 21225838

Mahmoud Gamal 21121256

Presented to:
Ahmed Abdelkhalek 21227532
Prof. Dr: Ashraf Labib
Mahmoud Shedid 20217427

Issue Date: 20240224

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 CONTENT

1. Introduction…………………………………………………………………………………………………..3

2. Company history……………………………………………………………………………………….……4

3. Situational Analysis…………………………………………………………………………………….……6

4. Objectives……………………………………………………………………………………………………25

5. Grand Strategy………………………………………………………………………………………………25

6. Tactics………………………………………………………………………………………………………..29

7. Actions………………………………………………………………………………………………………..33

8. Control ………………………………………………………………………………………………………..34

9. References

Since 1964, the name of ELARABY Group has

been associated with major international companies.
There are commercial relations with these companies
in the field of marketing, manufacturing electronic and
electrical devices as (Washing machines, Water
Heaters, Refrigerators, Air Conditioners, Fans,
Vacuum Cleaners, Lamps, Cookers, Microwave,
Deep freezer, TVs, SHA, Water Dispensers, Food
Processors & Mixers, Irons, Heaters).

The year 1974 is considered the starting point in

ELARABY Group historical relationship with the
Japanese TOSHIBA company. TOSHIBA has credited
and provided technical and technological support to
ELARABY to enter the battlefield of manufacturing for
the first time.

In 2002, ELARABY Group was associated with

another Japanese giant, SHARP Company. After that
year, ELARABY Group made many successful global
1. Company Overview
partnerships with major companies in the world such
as•(Japanese HITACHI
Executive - Italian LA GERMANIA - NEC
Summary:
Japanese - SEIKO and ALBA Japanese Company -
Italian HOOVER - Japanese giant SONY - Italian
CANDY).

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 Introduction

El-Araby Group for Trade and Industry or El-Araby Group is an Egyptian family joint stock company,
founded in 1964, and works in the field of manufacturing and marketing home and electronic
appliances at the level of Egypt or neighboring countries. Now it is one of the well-known institutions
in the field of trade and industry with a capital of about one and a half billion pounds.

Marketing Research team has been working on the market gap and resulted in the trend and lifestyle
issue for home appliances for using large sized products like Television 50” to 70”, French door
refrigerators and washing machines. Our strategy would focus on investigating the French door
refrigerators opportunity in the Egyptian market and analyze the market need to reach the target
audience which will help decide the grand strategy required to implement the new product.

• Mission statement:

Providing international quality and distinguished service for electrical and electronic products in the
local and international markets.

Establishing balanced relationships with our suppliers. Developing an active, productive and
satisfied working family in a distinguished work environment.

Maintaining the system of values on which the company was built. Play a developmental role for the
community.

Developing and maximizing the value of the company.

• Vision Statement:

Out of our pursuit to maintain the trust of clients and partners of success, we are always committed
to:

• Provide world class quality and excellent service for electronic appliances in domestic and
foreign markets.

• Establish balanced relationships with our suppliers.

• Form a family of active, productive, and satisfied workers in a distinct work environment.

• Maintain the set of values which was solidly established in the company.

• Play a developmental role for society.

• Develop and maximize the value of the company.

• Company history:

Since 1964, the Elaraby Group name has been associated with major international companies and
has commercial relations with these companies in the field of marketing and manufacturing
electronic and electrical devices. The year 1974 is considered the starting point in its historical
relationship with the Japanese company Toshiba, which is the company that is credited with

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 providing technical and technological support to El-Araby Company when it entered the arena of
manufacturing for the first time.

• Core Values:

• Agile

• Accountable

• Innovative

• Engaged

Since 1964, the Elaraby Group name has been associated with major international companies and
has commercial.

• Current Strategy

• Lean Manufacturing

Provide world class quality and excellent service for electronic appliances in domestic and
foreign markets.

• Stakeholder Relationships

Establish balanced relationships with our suppliers.

• Employee Loyalty

From a family of active, productive, and satisfied workers in a distinct work environment.

• CSR (corporate social responsibility)

Play a developmental role for society.

• Range of Products & Services

Product portfolio

- Width: ELARABY operates through 16 commercial, industrial, medical, and service companies,
in four different governorates

- Length: 35 industrial facilities, and 2 hospitals.

- Depth: 26 product categories and more than 4,000 variations.

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 • Organization Size

El-Araby organization is considered as large-scale company no. of employees exceeds 40k. revenue trend
analysis as following:

Year Revenues

2018 21.7

2019 22.9

2020 20.5

2021 21.2

2022 22.7

2023 30

• Customer base

El-Araby is considered as B2C, as the company is targeting the end users, the group often target B2G in some
special cases.

• Main Competitors

Product Name Manufactures Revenues Market Share

550-liter model El-Araby Group EGP 12 bn 38%
550-liter model Samsung EGP 9 bn 28%
550-liter model LG EGP 6 bn 19%
550-liter model kiriazi EGP 5 bn 16%

• Stakeholder Analysis “7 Market S Model”

Level of Level of
Stakeholder Impact P/I Category
Power Interest
Marketing Team are well educated and well experienced as
they built their mindset on Japanese technology, thanks to
long partnership with large Japanese brands as TOSHIBA
Internal Market High High Key Player
and SHARP.
Turnover ratio at El-Araby is very small 2%, as all
employees are emotionally attracted to the corporate.
Referral Market Campaign driven by actors Mohamed Hendey, Dora…etc. High High Key Player
Yahia Radwan and many others are representing the Keep
Influence Market High Low
influence market Satisfied
El-Araby has more than 316 suppliers all over the world,
their bargain power is too small, no cartel made from Keep
Supplier Market Low High
supplier market on El-Araby thanks to SC sourcing diversity Informed
strategy” Mapping”.
El-Araby BOD provide great attention to marketing team,
Shareholders High High Key Player
their decision always for long-term plans
El-Araby has good reputation in work force market and Keep
Employee Market Low High
always improve employee services. Informed

80% of the marketing budget would be spent on key players and 20% would be spent on keeping informed stakeholders.

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2. Situation Analysis
This part from SOATAC model would provide an answer for the question” Where we are now?” This would be extracted
through internal and external analysis.

• External analysis:

Analyzing the External Environment “Micro-Environment” through PESTEL model

Relative
PESTEL Factor Notes Potential Impact Time Frame Type Implication
Importance
Taxation Policy
Egypt market there are two types of
taxation first one is Vat, it is 14%, and High Long Threat Increase High
another one is Income Taxes, 22% of net
profit

Government Policy
Medium Long Opportunity Increase High
Political It is stable and supports private sector.

Not Yet
Revolutions Undecided Long Threat Low
Determined

Interest Rate
In Egypt, interest rate decisions are taken
by the Central Bank of Egypt (CBE). The
Central Bank of Egypt official interest rate High Medium Threat Increasing High
is the overnight deposit rate.
Highest →21.40%
Economic Actual→16.25%
Inflation Rate
As this rate increase the purchasing
power reduced, in Egypt the inflation rate
High Medium Threat Increasing High
jumped 24.4 percent in December 2023,
compared to 21.5 percent in November of
the same year.

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 Unemployment Rate
Which is reach 7.2% in 2023 this would High Long Threat Decreasing Medium
reduce procurement power.
Recessions
The market is in a state of recessions
High Long Threat Increasing High
because of the increase in inflation &
unemployment rates

Income by social culture

The Avg annual income per family: EGP
69.1 k (CAPMAS - 2020) High Long Threat Decreasing High

Demographics.
One of the key factors which affect
demand forecasting. High Long Opportunity Increase High
As population is aging it will require less
technological intensive products.
Socio-culture Distribution of income according to culture
High Long Opportunity Increase High
of consumption & saving

Lifestyle & their attitude towards leisure High Long Opportunity Increase High

Speed of technology:
R&D Center newly established High Medium Opportunity Increase High
Inverter Technology
Business automation:
Improve the business efficiencies through High Medium Opportunity Increase High
Technological automation
Internet & growing online market.
The level of internet & mobile phone
penetration to build requisite business High Medium Opportunity Increase High
model based on local needs & realities.
Online market increases the revenues

Environmental Freon (R-410A) Low Long Term Opportunity Decrease High

Legal Consumer protection Low High Short term Threat Increase Medium

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Analyzing the External Environment “Micro-Environment” through Porter`s 5 Forces model

- Threat of New Entrants

The electronics industry needs a high financial investment to catch up with the innovations stable
corporations have in the industry. Companies like LG, Samsung, Beko, etc… have been innovating
new products to keep the customers interested in the quality of their items. As the competition in the
Egyptian market is high.

These innovations have left the new entrants at a disadvantage because they do not have the financial
investments to catch up with the innovations needed. It is easier for large corporations to keep
improving their products because they have a brand image and are stabilized. However, if these new
entrants have a great idea, they will most likely have a hard time starting up the company because
start-up costs and brand images will be very high. Entering this industry requires you to be diversified.
This barrier makes the threat of new entrants low.

- Threat of Substitutes

Most industries do not have the skills or power to make similar products, and if they do, they are within
the industry. However, since there are no substitutes in different industries, there has been a change
to substitutes within this industry. This is what stems from the rivalry within the industry, which will be
explained more in the corresponding section below. Because the majority of substitutes are within the
industry, the threat of substitutes is extremely low, if present at all.

- Bargaining Power of Suppliers

The industry has been trying to please customers through the quality of products instead of the
quantity since the economy in Egypt has been struggling. The country is facing recession and inflation
which force the suppliers to increase their prices because the devaluating of the Egyptian pound and
that will increase the burden on them as the situation is not clear and some of them cannot pricing
the raw materials. This means that the bargaining power of suppliers is Medium as no one will be able
to import raw materials during these circumstances. El-Araby has more than 316 suppliers all over
the world, no cartel made from supplier market on El-Araby thanks to SC sourcing diversity strategy”
Mapping”.

- Bargaining Power of Buyers

Buyers' bargaining power rounds out the external forces that pose the most serious threats to EA.
Refrigerator is always in a high demand as the number of populations is high and Married cases that
require to build a new house with new refrigerator. Consumers can be selective about where they
spend their money as they want to get value with the money they spend. Buyers hold a lot of sway
over the industry, and one bad or disappointing offering that causes a revolt from the community can
devastate a company.

- Rivalry Among Existing Competitors

Rivalry within the Electronic industry is high. Companies often must be ready to produce and distribute
unproven technologies in order to keep up with the competition in the industry. Companies in this
industry also sell similar products, so there is little brand differentiation, and the switching costs
between brands are low. For example, making a switch from a Beko refrigerator to a Tornado
refrigerator will not cost a consumer very much money other than the cost difference between selected
models. The industry is expected to keep increasing in market value for the next five years, so
competition within this industry will remain at a moderate to high level. The French Door product is in

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 a RED OCEAN Market since it already exists. However, this product will have an IOT system along
with the Freon Sustainable system as its USP.

As one of the leading companies in its industry, Al-Araby Electronics Inc. has numerous strengths
that help it to thrive in the marketplace. This swot is not only help it to protect the market share in
existing markets but also help in penetrating new markets. Al-Araby started as retailer then take a
step back to be a manufacturer and start to spread their store in the market with great variety.

Conclusion for the Porter five forces

The five forces of Porter summarize the competitiveness of the industry. In other words, it looks at the

microenvironment of the business. Where it found that.

The electronics industry needs an ongoing financial investment in order to cope with the threats that are

brought from the competitors as the rate of innovations which is brought by the major players in the market

might threat the entire existence of an organization that is working in the field of such an industry. El-Araby

might be threatened by a new descriptive innovative product that would turn the market upside down, thus

such an investment is inventible in order to sustain in such a market and maintain its competitiveness and

even its entire existence. And there are no substitutes in different industries and that will give an advantage

as the threat of substitutes is extremely low. El-Araby has more than 316 suppliers all over the world which

is no cartel made from supplier market on El-Araby Consumers can be selective about where they spend

their money as they want to get value with the money they spend, and buyers hold a lot of sway over the

industry so competition within this industry will remain at a moderate to high level.

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 • Strategic Group Map

High Price

High Quality
Low Quality

Low Price

• Strategic Type

• It is an organizational framework to help companies look at their existing operations and define
their current strategy.
• We have four type’s prospectors, defenders, Analyzer & defender.
After applying strategic group map analysis, we found that direct competitors follow the same strategic type
which is Analyzer and reactor current strategy.

Strategic Type Definition Direct Competitors

Defending the current market
position, maintains stable growth,
Analyzer Samsung
looking for new opportunities and
innovation.
Protection oriented seeking
stability by maintaining current
Defender Fresh
market positions focus on
improving the efficiency

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 • Value Discipline Triade

Samsung - LG

Leadership
Product

Haier - Beko FRESH

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 • BCG matrix “Growth/Share Matrix”

These products are market leaders These products are being questioned
High

and produce a high ROI. They use - they can become Stars or become a
a lot of cash to become leaders. drain, turning into Dogs.

TVs Refrigerators
WMs
Market Growth Rate (Cash Usage)

These generate cash and have a These products are draining cash
high market share and don’t and have low market share. You
require constant investment. will divert away from these ones.

Half Auto WMs Air Purifiers

Stand Fans
Low

High Market Share (Cash Generation) Low

• Industry Matrix

TORNADO SAMSUNG LG FRESH

SN Key Success Factors Weight Weighted
Rating Rating Weighted Score Rating Weighted Score Rating Weighted Score
Score
1 Expertise 0.1 5 2 0.30 3 0.45 4 0.60 2 0.30

2 Process 0.15 2 0.30 4 0.60 3 0.45 1 0.15

3 Service 0.20 4 0.80 3 0.60 3 0.60 2 0.40

4 Cost - Leadership 0.10 3 0.30 2 0.20 1 0.10 4 0.40

5 After-sales 0.30 4 1.20 3 0.90 3 0.90 2 0.60

6 Quality 0.10 3 0.30 4 0.40 3 0.30 2 0.20

3.20 2.05
Total 1.00 3.15 2.95

After evaluating all the elements of the competitive matrix for our company Elaraby Group had the highest
degree compared to competitors. However, the real competitor is Samsung, and they should keep an eye on
him, while at the same time improve their cost-leadership.

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Thomson Framework to identify resources:
Tangible resources:
Physical Resources:

• Land: El-Araby have a huge variety of lands exists on all industrial complexes in Egypt, El-Araby
is a corporate that likes to own their assets, corporate valuation reaches 1 billion dollars.
• Equipment: as one of the leading manufacturers El-Araby invests in all kinds of equipment that
achieve local manufacturing product, manufacturing ratios reach around 90%.
• Factories: This is one of El-Araby strengths as their factories equipped with the latest technologies
and operating systems always moves to automation which provide economies of scale and better
competition to the other Brands.
Financial Resources:

• With a strategy of funding the investment from the owner’s equity and avoid borrowing from banks
loan, El-Araby achieved a strong financial resource with a good cashflow situation. Marketing budget
always vairy with the economic situation and supply and demand status.
Technical Resources:

• El-Araby established an R&D center just to meet the customers’ needs and wants also to save their
rights regarding the new product and technology patents.
Organization Resources:

• As for searching for better connection between operational department and sales, El-Araby always
depends on latest editions of ERP systems like SAP4 Hana.
Tangible resources:

• Marketing, sales, business development and CRM always

take care of El-Araby BOD, as they know its importance and
provide all the requirements to attain their successful
performance.
• Brand Image, El-Araby established its own brand TORNADO
with a solid image for trust builders came from Elaraby name,
they brand for trust builders nowadays and connect this
statement with Brand name.
• Relationship, with a strong relationship and huge sales
network includes around 356 certified retail and 65 B2C
branches located in 28 governorates around the country.
• Organization culture put the employee first even in bad
economic situation, they made money incentive backage
monthly, quarterly, and yearly.

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Strengths

S1. Reliable suppliers – It has a strong base of reliable suppliers of raw material thus enabling the
company to overcome any supply chain bottlenecks.

S2. Strong Brand Portfolio – Over the years Al Araby has invested in building a strong brand portfolio.
The SWOT analysis of Al Araby just underlines this fact. This brand portfolio can be extremely useful if
the organization wants to expand into new product categories.

S3. Strong dealer community – It has built a culture among distributor & dealers where the dealers not
only promote company’s products but also invest in training the sales team to explain to the customer
how he/she can extract the maximum benefits out of the products.

S4. Superb Performance in New Markets – Al Araby has built expertise at entering new markets and
making success of them. The expansion has helped the organization to build a new revenue stream and
diversify the economic cycle risk in the markets it operates in.

S5. Good Returns on Capital Expenditure – Al Araby is relatively successful at executing new projects
and generated good returns on capital expenditure by building new revenue streams.

S6. Strong Free Cash Flow Al Araby has strong free cash flows that provide resources in the hands of
the company to expand into new projects and develop in R&D.

S7. High level of customer satisfaction – the company with its dedicated customer relationship
management department has been able to achieve a high level of customer satisfaction among present
customers and good brand equity among potential customers.

Weakness

W1. Investment in Research and Development is below the fastest growing players in the industry. It has
come across as a mature firm looking forward to bringing out products based on tested features in the
market.

W2. Organization structure is only compatible with the present business model thus limiting expansion in
adjacent product segments.

W3. The marketing of the products left a lot to be desired. Even though the product is a success in terms
of sales, its positioning and unique selling proposition is not clearly defined, which can lead to attacks in
this segment from the competitors.

W4. Demand forecasting is below expecting especially, due to the current circumstances there is not
enough stock with a high demand in the market so they need to open a crisis management department
in the company as the world is not stable and facing lots of crises that might lead to war.

W5. Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios
suggest that the company can use the cash more efficiently than it is doing at present.

Opportunities

O1. Opening of new market– the adoption of new technology standard is an opportunity to enter a new
emerging market.

O2. Decreasing the cost of shipping, they deliver free of charge to boost its profitability and pass on the
benefits to the customers to gain market share.

O3. New trends in consumer behavior can open new markets and are a great opportunity for the
organization to build new revenue streams and diversify into new product categories too.

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 O4. The new technology provides an opportunity to practices differentiated pricing strategy in the new
market. It will enable the firm to maintain its loyal customers with great service and lure new customers
through other value-oriented propositions.

Threats

T1. Economic downtick and decrease in customer spending.

T2. Slowing down the economy is the main connection between inflation and a recession.

T3. Inflation is a sustained increase in prices of goods and services.

T4. New technologies developed by the competitor or market disruptor could be a serious threat to the
industry in the medium to long term future.

T5. Issuing a new certificate in the Egyptian banks with highest interest rate up to 25% per year that will
more recession.

External Factors / EFAS

Opportunities

Weighted
External Factors Weight Rating Comments
score

Electronics market in Egypt is expected to increase over the

next years. The expected compound annual growth rate for the
Market Growth 0.2 4 1.2 next four years (CAGR 2024-2028) will be 9.1%, resulting in a
projected market volume of US$776.7 million by 2028.
The Consumer Electronics market in Egypt is projected to
grow by 5.60% (2024-2028) resulting in a market volume of
Customer Demand 0.1 3 0.3 US$8511.0m in 2028.

Egypt Makes Electronics (EME) initiative aims at transforming

Innovation
Economic Growth
Foreign aid and investment
Strategic Location and role
Egypt into a regional and global hub for advanced electronic
0.2 3 0.6 design and manufacturing in Arab, African, and European
markets, before the end of 2030.
The initiative aims to position the electronics industry as a key
driver of economic growth in Egypt. It is schemed as a main
0.1 1 0.1 contributor to doubling exports, reducing imports of
electronics, and providing jobs for researchers, engineers, and
skilled technicians.
Egypt has been suffered of the lack of the USD and has been
floated its currency and announced a deal with the
0.1 1 0.1 International Monetary Fund to increase its bailout loan from
$3 billion to $8 billion, moving to shore up an economy hit by
a staggering shortage of foreign currency and soaring inflation.
The strategic location and role of Egypt in the region is
moderate. Al Araby has many branches and services centers
around the government including and plays a key role in
0.3 4 1.2 regional stability and security to contribute to the development
of the Egyptian economy

Total 1.00 3.5

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Threats

Weighted
External Factors Weight Rating Comments
score

Rivalry within the Electronic industry is high. Companies

Competition 0.3 3 0.9 often must be ready to produce and distribute unproven
technologies to keep up with the competition in the industry

Most industries do not have the skills or power to make similar

products, and if they do, they are within the industry.
Substitution 0.1 3 0.3 However, since there are no substitutes in different industries,
there has been a change to substitutes within this industry

Egypt's inflation rate climbs to record 36% in February 2024

Inflation 0.3 3 0.9 by CAPMAS

The country is facing recession and inflation which force the

suppliers to increase their prices because the devaluating of the
Suppliers 0.05 1 0.05 Egyptian pound and that will increase the burden on them as
the situation is not clear and some of them cannot pricing the
raw materials.
The electronics industry is heavily regulated in order to protect
Regulation 0.05 1 0.05 consumers and minimize the environmental impact of
electronic products.
Egypt is required to pay $29.23 billion in external debt service
Public Debt and Interest in 2024, $19.43 billion in 2025, and $22.94 billion in 2026,
0.2 3 0.6 according to data released by the Central Bank of Egypt
rate (CBE). The country's total debt reached $164.73 billion by the
end of June

Total 1.00 2.8

IFAS
Strength
Strength factor Weight Rating Weighted Score
Reliable suppliers – It has a strong base of reliable suppliers of raw 0.10 3 0.3
material thus enabling the company to overcome any supply chain
bottlenecks.
Strong Brand Portfolio – Over the years Al Araby has invested in building 0.10 4 0.4
a strong brand portfolio. The SWOT analysis of Al Araby just underlines
this fact. This brand portfolio can be extremely useful if the organization
wants to expand into new product categories
Strong dealer community – It has built a culture among distributor & 0.10 4 0.4
dealers where the dealers not only promote company’s products but also
invest in training the sales team to explain to the customer how he/she can
extract the maximum benefits out of the products.
Superb Performance in New Markets – Al Araby has built expertise at 0.15 4 0.6
entering new markets and making success of them. The expansion has
helped the organization to build a new revenue stream and diversify the
economic cycle risk in the markets it operates in.
Strong Free Cash Flow Al Araby has strong free cash flows that provide 0.15 4 0.6
resources in the hands of the company to expand into new projects and
develop in R&D.
High level of customer satisfaction – the company with its dedicated 0.15 4 0.6
customer relationship management department has been able to achieve a

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 high level of customer satisfaction among present customers and good
brand equity among potential customers
Weakness factor 0.05 4 0.2
Investment in Research and Development is below the fastest growing
players in the industry. It has come across as a mature firm looking
forward to bringing out products based on tested features in the market.
Organization structure is only compatible with the present business model 0.05 3 0.15
thus limiting expansion in adjacent product segments.
The marketing of the products left a lot to be desired. Even though the 0.05 2 0.1
product is a success in terms of sales, its positioning and unique selling
proposition is not clearly defined, which can lead to attacks in this
segment from the competitors.
Demand forecasting is below expecting especially, due to the current 0.05 3 0.15
circumstances there is not enough stock with a high demand in the market
so they need to open a crisis management department in the company as
the world is not stable and facing lots of crises that might lead to war.

Financial planning is not done properly and efficiently. The current asset 0.05 3 0.15
ratio and liquid asset ratios suggest that the company can use the cash
more efficiently than it is doing at present.
Total 1.00 3.65

SFAS
Factors Weight Rating Weighted score

Strength
Reliable suppliers – It has a strong base of reliable suppliers of raw 0.10 3 0.3
material thus enabling the company to overcome any supply chain
bottlenecks.
Strong Brand Portfolio – Over the years Al Araby has invested in 0.10 4 0.4
building a strong brand portfolio. The SWOT analysis of Al Araby just
underlines this fact. This brand portfolio can be extremely useful if the
organization wants to expand into new product categories
Strong dealer community – It has built a culture among distributor & 0.10 4 0.4
dealers where the dealers not only promote company’s products but also
invest in training the sales team to explain to the customer how he/she
can extract the maximum benefits out of the products.
Superb Performance in New Markets – Al Araby has built expertise at 0.15 4 0.6
entering new markets and making success of them. The expansion has
helped the organization to build a new revenue stream and diversify the
economic cycle risk in the markets it operates in.
Strong Free Cash Flow Al Araby has strong free cash flows that provide 0.15 4 0.6
resources in the hands of the company to expand into new projects and
develop in R&D.
High level of customer satisfaction – the company with its dedicated 0.15 4 0.6
customer relationship management department has been able to achieve
a high level of customer satisfaction among present customers and good
brand equity among potential customers

Weakness
Investment in Research and Development is below the fastest growing 0.05 4 0.2
players in the industry. It has come across as a mature firm looking
forward to bringing out products based on tested features in the market.
Organization structure is only compatible with the present business 0.05 3 0.15
model thus limiting expansion in adjacent product segments.
The marketing of the products left a lot to be desired. Even though the 0.05 2 0.1
product is a success in terms of sales, its positioning and unique selling
proposition is not clearly defined, which can lead to attacks in this
segment from the competitors.

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 Demand forecasting is below expecting especially, due to the current 0.05 3 0.15
circumstances there is not enough stock with a high demand in the
market so they need to open a crisis management department in the
company as the world is not stable and facing lots of crises that might
lead to war.

Financial planning is not done properly and efficiently. The current asset 0.05 3 0.15
ratio and liquid asset ratios suggest that the company can use the cash
more efficiently than it is doing at present.

Opportunities
Market Growth 0.2 4 1.2
Customer Demand 0.1 3 0.3
Innovation 0.2 3 0.6
Economic Growth 0.1 1 0.1
Foreign aid and investment 0.1 1 0.1
Strategic Location and role 0.3 4 1.2

Threats
Competition 0.3 3 0.9
Substitution 0.1 3 0.3
Inflation 0.3 3 0.9
Suppliers 0.05 1 0.05
Regulation 0.05 1 0.05
Public Debt and Interest rate 0.2 3 0.6

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VRIO Analysis

The VRIO framework is a strategic planning tool designed to help organizations uncover and protect the resources
and capabilities that give them a long-term competitive advantage.

VRIO Analysis Model

Resources Valuable Rare Imitable Organized Comment
Diverse Product √ × √ √ Competitive parity

Product quality √ √ × √ Competitive parity

Innovation √ × × √ Competitive parity

Skilled employees √ √ × × Competitive parity

Global presence √ × × √ Competitive parity

Sales & Marketing √ √ × √ Competitive parity

After Sales Service √ √ √ √ Sustainable competitive edge

HR √ × × √ Competitive parity

Finance management √ × √ √ Competitive parity

Availability √ × × √ Competitive parity

Geographical Coverage √ √ √ √ Sustainable competitive edge

Distribution Cost √ √ √ √ Sustainable competitive edge

Relation with distributer √ √ × √ Competitive parity

Corporate brand √ × √ √ Competitive parity

19 | P a g e
 • SWOT analysis:
Strengths
S1. Reliable suppliers – It has a strong base of
reliable suppliers of raw material thus enabling
the company to overcome any supply chain
bottlenecks.
S2. Strong Brand Portfolio – Over the years Al
Araby has invested in building a strong brand
portfolio. The SWOT analysis of Al Araby just
underlines this fact. This brand portfolio can be
extremely useful if the organization wants to
expand into new product categories.
S3. Strong dealer community – It has built a
culture among distributor & dealers where the
dealers not only promote company’s products but
also invest in training the sales team to explain to
the customer how he/she can extract the
maximum benefits out of the products.
S4. Superb Performance in New Markets – Al
Araby has built expertise at entering new markets
and making success of them. The expansion has
helped the organization to build a new revenue
stream and diversify the economic cycle risk in
the markets it operates in.
S5. Good Returns on Capital Expenditure – Al
Araby is relatively successful at executing new
projects and generated good returns on capital
expenditure by building new revenue streams.
S6. Strong Free Cash Flow Al-Araby has strong
free cash flows that provide resources in the hand
of the company to expand into new projects and
develop in R&D.
S7. High level of customer satisfaction – the
company with its dedicated customer relationship
management department has able to achieve a
high level of customer satisfaction among present
customers and good brand equity among the
potential customers.
Opportunities
O1. Opening of new market– the adoption of new
technology standard is an opportunity to enter a
new emerging market.
O2. Decreasing the cost of shipping, they deliver
free of charge to boost its profitability and pass on
the benefits to the customers to gain market
share.
O3. New trends in consumer behavior can open
new markets and are a great opportunity for the
organization to build new revenue streams and
diversify into new product categories too.
O4. The new technology provides an opportunity
to practices differentiated pricing strategy in the
new market. It will enable the firm to maintain its
loyal customers with great service and lure new
20 | P a g e
Weakness
W1. Investment in Research and Development is
below the fastest growing players in the industry. It
has come across as a mature firm looking forward to
bringing out products based on tested features in the
market.
W2. Organization structure is only compatible with
the present business model thus limiting expansion
in adjacent product segments.
W3. The marketing of the products left a lot to be
desired. Even though the product is a success in
terms of sales, its positioning and unique selling
proposition is not clearly defined, which can lead to
attacks in this segment from the competitors.
W4. Demand forecasting is below expecting
especially, due to the current circumstances there is
not enough stock with a high demand in the market
so they need to open a crisis management
department in the company as the world is not stable
and facing lots of crises that might lead to war.
W5. Financial planning is not done properly and
efficiently. The current asset ratio and liquid asset
ratios suggest that the company can use the cash
more efficiently than it is doing at present.
Threats
T1. Economic downtick and decrease in customer
spending.
T2. Slowing down the economy is the main
connection between inflation and a recession.
T3. Inflation is a sustained increase in prices of
goods and services.
T4. New technologies developed by the competitor
or market disruptor could be a serious threat to the
industry in the medium to long term future.
 customers through other value-oriented
propositions.

T5. Issuing a new certificate in the Egyptian banks

with highest interest rate up to 25% per year that will
more recession.

Competitive analysis:
El-Araby current & potential competitors “Local & Multinational”

SN Competitor name Competition degree

1 Samsung High Leader
2 LG High Nicher
3 Electrolux High Leader
4 Fresh High Follower
Many other players as Beko and Haier are going to enter the market and already agreed with the government
about all regulations and terms to establish their own plants. This would make the competition more difficult
for El-Araby in the Egyptian market.

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Financial Analysis:

• Return of investment ROI

Year Revenues in billions EGP

2018 21.7

2019 22.9

2020 20.5

2021 21.2

2022 22.7

2023 30

• Liquidity Ratios

Current Ratio Quick Ratio 1.6

1.4
1.4

EL Araby2020 1.4 0.6 1.2

1.0 1.0
1.0
EL Araby2021 1.0 1 0.8
0.6
0.6
0.4
0.2
0.0
EL Araby2020 EL Araby2021

Current Ratio Quick Ratio

Current Ratio: The decrease from 1.4 in
2020 to 1.0 in 2021 indicates a potential decline in the company's ability to meet short-term
obligations.

Quick Ratio: While improvement is seen from 0.6 in 2020 to 1.0 in 2021, it remains at a level
suggesting minimal buffer for unexpected short-term liabilities.

22 | P a g e
 • Solvency Ratio

Debt to Total Assets Ratio

31% 31%
EL Araby2020 30% 31%
31%
31%
EL Araby2021 31% 31%
31%
30%
31%
30%
EL Araby's Debt to Total Assets Ratio has
30%
remained relatively stable, increasing slightly 30%
30%
from 30% in 2020 to 31% in 2021. While this EL Araby2020 EL Araby2021
level suggests a moderate use of debt to
finance assets,

• Inventory Turnover

42.0
Inventory Turnover (Times)
41.5
41.5
EL Araby2020 41.5
41.0
EL Araby2021 40
40.5
40.0
40.0
Turnover Ratio shows a slight decrease from
41.5 in 2020 to 40 in 2021. While a minor 39.5
change, it suggests a potential increase in the
39.0
time it takes to sell inventory. This could tie into EL Araby2020 EL Araby2021
the liquidity concerns raised earlier.

• Conclusion

EL Araby's financial picture presents a cause for concern. While they have enough current assets to cover
short-term debts, declining liquidity ratios and a slowing inventory turnover compared to other competitors
indicate potential cash flow challenges. Their moderate debt level might not be a major risk on its own, but
combined with these trends, it warrants closer attention.

23 | P a g e
TOWS
Strengths-Opportunities Strategy " Maxi-Max"
S1-O1: Opening new markets and expansion strategy
could be supported by strong relation and partnerships
with suppliers, this will facilitate the opening process
and locate the feeding supplier everywhere El-Araby
open.
Strengths-Threats Strategy "Maxi-Min"
S4-T1: Fast opening on new markets would
mitigate the Economic downtick.
S7-T3: Providing products with affordable prices
will mitigates the effect of inflation rate.

S1-O3: Partnership with supplier and forecast sharing
would establish the trust that would provide better
pricing strategy from suppliers with El-Araby, this
would empower El-Araby for more and more
competition with local and multinational corporates
S4-O1: For serving diversity strategy and according to
economic situation the good supplier network would
speed up the business opening in different markets.
S6-T4: Investing in R&D would remain the
competition with multinational in its normal limits
and keep the corporate market share growth.
S1-T5: Reducing the components cost and
operation through economies of scale and best
quotation from trusted suppliers would remain
the product price on the customers purchasing
power and reduce the recession impact.

S6-O3: Strong free cash empower El-Araby to develop

in R&D to match the customer behavior change, this
would serve existing products and new one to
compete better in the market

S7-O3: Strong relationship with customer and solid

ground of trust built upon the bast years would provide
a good market share even the consumer behavior
changed with fast way.

Weakness- Opportunities Strategy " Min-Max" Weakness- Threats Strategy "Min-Min"

W1-O4: Accelerating the investment on R&D would
cover the gap of technology which happen due to
multinational corporates Market penetration
W2-O1: Performing internal structure and operational
revamping plan would help on better and fast
expansion strategies.
W4-O1: Fast moving on new markets and export
expansion would cover the lack of demand happen
because of recession and reduction of purchasing
power of customers
W1-T4: Reducing the time of complete
investment of R&D would reduce the threats of
new technologies entered the market by
competitors
W2-T1: reducing the revamping plan time
related to be ready for exporting and would
reduce the impact of Economic downtick
W3-T5: Right pricing would encourage the
customers to purchase corporate products
unless it still in their purchasing power.

W5-O1: Performing internal structure and operational

revamping plan would help on better and fast
expansion strategies.

24 | P a g e
Objective

1. R&D team should complete the new refrigerator product development phases within 6 month and
meet the marketing requirements.

2. The marketing team will increase volume sales of Refrigerator of the local market for product from
8% to 18% over the next 12 months.

Grand Strategies

Strategic Alternative 1

Expansion Strategy “Product Development”:

Product development strategy should be initiated to fill the gap found in the corporate product portfolio,
customer requirements have been changed and the products must meet their needs.

Marketing and R&D team should integrate to accelerate the product development process and reduce time
to market procedures until attaining the strategy.

Strategic Alternative 2

Expansion Strategy “Market Penetration”:

Corporate should focus their tactics to achieve MKT penetration strategy, working on ATL, TTL and BTL
activities to reach our target audience and escalate their interest to action.

Despite the competition would remain red ocean, MKT mix should take a place to deliver the communication
message and confirm that customers would have the right awareness about the new product.

Corporate would assign a separate activity to every stage in AIDA model with an affordable budget,
responsibilities, and time bounded.

25 | P a g e
QSPM
QSPM (Quantitative Strategic planning Matrix)
Product Development Market Penetration
Key Factors Weight
Attractiveness Total Attractiveness Attractiveness Total Attractiveness
Strengths
S1. Reliable suppliers 0.06 5 0.3 5 0.3
S2. Strong Brand
Portfolio 0.05 4 0.2 4 0.2
S3. Strong dealer
community 0.035 3 0.105 4 0.14
S4. Superb
Performance in New
Markets 0.04 4 0.16 5 0.2
S5. Good Returns on
Capital Expenditure 0.035 4 0.14 4 0.14
S6. Strong Free Cash
Flow Al-Araby 0.06 5 0.3 5 0.3
S7. High level of
customer satisfaction 0.1 5 0.5 5 0.5
Weaknesses
W1. Investment in
Research and
Development 0.05 5 0.25 3 0.15
W2. Organization
structure is only
compatible with the
present business
model 0.03 3 0.09 4 0.12
W3. positioning and
unique selling
proposition is not
clearly defined 0.055 5 0.275 5 0.275
W4. Demand
forecasting is below
expecting 0.01 2 0.02 3 0.03
W5. Financial
planning is not done
properly and
efficiently. 0.035 4 0.14 4 0.14
Opportunities
O1. Opening of new
market 0.05 3 0.15 5 0.25
O2. Decreasing the
cost of shipping 0.04 5 0.2 4 0.16
O3. New trends in
consumer behavior
can open new
markets 0.05 5 0.25 3 0.15
O4. The new
technology provides
an opportunity to
practices
differentiated pricing
strategy in the new
market. 0.065 5 0.325 3 0.195

26 | P a g e
 Threats
T1. Economic
downtick and
decrease in customer
spending. 0.05 5 0.25 3 0.15
T2. Slowing down the
economy 0.04 4 0.16 3 0.12
T3. Inflation is a
sustained increase in
prices of goods and
services. 0.045 4 0.18 3 0.135
T4. New technologies
developed by the
competitor or market
disruptor could be a
serious threat to the
industry in the
medium to long term
future. 0.065 5 0.325 5 0.325
T5. Issuing a new
certificate in the
Egyptian banks with
highest interest rate
up to 25% per year
that will more
recession. 0.035 3 0.105 3 0.105
GRAND TOTAL 1.00 4.43 4.09

27 | P a g e
SPACE Matrix:

Rate Competitive advantage Rate Industry strength

-3 Research and innovation 3 Threat of New Entrants
-5 Customer Service & Support 3 Bargaining power of
suppliers
-3 Supply Chain 3 Market Growth Potential
-2 Brand Equity 2 Availability of substitutes
-3 Manufacturing Efficiency
-4 Global Sales and
distribution
Average=(-20/6)=-3.3 Average = (11/4) = 2.75

Total x score = -3.3+2.75 = -0.55

Rate Environmental stability Rate Industry strength

-2 Availability of Skilled Labor 2 Cash Flow Volatility
-1 Trade Regulations 5 Debt Ratio
-3 Infrastructure 3 Dividend Payout Ratio
-4 Foreign Policy
-3 Inflation
-2 Increasing people’s
awareness of technology
-2 Economic Stability
-3 The issuance of the central
bank’ decision
Average=(-20/8)=-2.5 Average = (10/3) = 3.3

Total Y score = -2.5+3.3 = -0.8

28 | P a g e
Tactics:

The Following Tactics are a series or set of strategic methods or actions aimed at promoting a business’

goods or services. The aim is to maximize sales and maintain a competitive good or service. Using the

strengths of the company and product and solving / handling the current weaknesses to eliminate the

threats of competitors and using every opportunity available to increase the sales and spread the product

in the market

Product:

Product Tactics

Current Product • To Have a base product available in retail stores, with clear

specs and training for retailers regarding the specs, quality, price

• To deliver the best quality and technology to the customer to

showcase the strength points of the product

New Product Development • Invest in R&D personnel to follow up with the latest trends of the

industry and develop the product to coup with the trends, as well

as define the current problems surfaced after the customer’s

usage of the product and solve them to prevent such issues

• Launching new offerings or improving existing ones is to keep the

product active in competition

• Follow Up with the rapid changes in consumer demands and

emerging technologies means there’s always a need to adapt.

This lays the groundwork for the development of the new product.

29 | P a g e
Promotion:

Channel Tactics

Direct Marketing Channel • Prepare Coupons & Fliers in retail stores that sell the Refrigerator

to be handed out for customers

Advertising • Launch Social Media campaign aimed to current, potential and

seasonal customers to increase awareness of the product and

have solid media presence

• Launch TV Ads with in the start of the summer or in the seasonal

periods (Ex. Mother’s Day) showing people using the product in

real life and how it improved home life

• Launch search network campaign (Google) targeting search terms

that match and related to our product

Place:

Place Tactics

Offline • Use Bill Boards signs on the roads (Ex. October Bridge) to

increase customers awareness of the products

Online • Use social media to pinpoint the location of the retail stores where

the product is available

• Create website, Facebook page, etc. to stabilize our media

presence and showcase the product through them

30 | P a g e
People:

Place Tactics

Personal Selling • Hire a skilled B2B sales personnel to connect with such customers

especially through emails to increase sales in that area

• The intensive distribution of the product should be planned with

careful measures for wide market coverage. The supply chains

and distribution channels are referred in the placement of the

products. Through proper distribution method the accessibility of

the products are increased.

Customer Service • Hire and expert customer services team to handle customers

whether they need more details on the product or they need to

solve an issue with the product after the purchase

Training • All Retailers, Front office employees need to be trained to maintain

high quality customer service

Process:
• Maintain a wide selling network as it makes deals to let their products available on a wide
range and for all customers.
• The team also make sure that the process of making the product works on a good way and
conditions.
• Make sure that delivering the product is in good and high quality.
• Make deals with some applications (e.g.: amazon, Jumia, ….etc. ) to sell their products with
them to serve the customers at their door step.

31 | P a g e
The AIDA Model:

• Awareness: Prospective consumers learn the purpose and release date of the Refrigerator through
a social media advertisement

• Interest: Advertisements discuss the Refrigerator’s compatibility with required lifestyle and home
requirements. Viewers also learn about the product's extended warranty and affordable price point.

• Desire: The company hires social media influencers to publish videos that demonstrate how the
product works. showing people using the product in real life and how it improved home life

• Action: Viewers receive a request to click the link in the video description box to visit the website
and purchase the Product or pinpoint location of retail stores with available Refrigerators for
purchase and trial.

32 | P a g e
Action:

Tactics activity responsibility Budget 2024

*

R A C I J F M A M J J A S O N D

Packing (making sure designer Marketing Marketing Managing 2%

that its design is manager director director
matching the brand
identity) (flighting)

Bundle pricing (specially Brand CFO Marketing Managing 0.5%

in modern trade sector & manager director director
key retailers account
“Carrefour) (continuous)

Distribution channel logistic Supply Marketing Managing 1.5%

(To be planned with manager chain director director
careful measures for manager
wide market coverage

Advertisements (Sales Social Marketing Marketing Managing 3%

promotion, sponsors, media manager director director
influencers on social manger
media) (pulsing)

Sales promotion (special Social Marketing Marketing Managing 0.5%

offers, coupons, media manager director director
summer) (continuous) manager

Training programs and Hr. Department Marketing Managing 0.5%

regular meetings manager manager director director
(specially for facing
customer employees)
(continues)

Periodic research and R&D Quality Marketing Managing 1%

development(flighting) manager director director director

Quality and service Quality Quality Marketing Managing 0.5%

assurance manager director director director
(pulsing)

PR(CSR): Post videos Social Marketing Marketing Managing 0.5%

on YouTube, Facebook media manager director director
& Instagram to increase manager
the awareness of
sustainability & how
SHARP products are
sustainable (flighting)

*The budget is out of 10% of the total sales revenue.

33 | P a g e
 Time Frame Objective Target KPI Time Frame
Strategic
Target KPI
Objective-1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3Year 4 Year 5
Increase market share by
Increase market 15%Actual MS /
Finance
share Target MS 2% 3% 4%
3% 3%
Increase customer
Increase customer satisfaction
satisfaction index by 20%Actual /
index (CSI) Target 6% 4% 4% 3%
Customer 3%
Sustain Complain
Product Good after sales handling 98%Actual /
Development services Target 98% 98% 98%
R&D team should
Actual 98% 98%
complete the new
market Reduce number of NCR
refrigerator Increase
share / (non-conformance
product market share 1% 2% 2% 2% 1%
Target Increase quality report) by 15%Actual /
development by 8%
market Target 4% 4% 3% 3%
phases within 6
share 1%
month and meet Internal
Enhance efficiency
the marketing Process / Enhance
requirements. 10%Actual / Target 2%
Operation efficiency
2% 2% 2% 2%
Increase accident-free
Applying safety working hours
standards by 30%Actual / Target
7% 7% 6% 6% 4%
20 workshop Actual /
workshops
Target 3 3 5 2 2
Learning and
Improve performance by
Growth Provide
30%Actual / Target 10%
needed training
5% 5% 5% 5%

34 | P a g e
 Time Frame Objective Target KPI Time Frame
Strategic
Target KPI
Objective-2 Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3Year 4 Year 5
Increase market share by
Increase market 15%Actual MS /
Finance
share Target MS 2% 3% 4%
3% 3%
Increase customer
Increase customer satisfaction
satisfaction index by 20%Actual /
index (CSI) Target 6% 4% 4% 3%
Customer 3%
Sustain Complain
Market Good after sales handling 98%Actual /
Penetration services Target 98% 98% 98%
The marketing Actual 98% 98%
team will increase market Reduce number of NCR
Increase
volume sales of share / (non-conformance
market share 2% 3% 5% 5% 3%
Refrigerator of the Target Increase quality report) by 15%Actual /
by 18%
local market for market Target 4% 4% 3% 3%
product from 8% share 1%
Internal
to 18% over the Enhance efficiency
Process / Enhance
next 12 months. 10%Actual / Target 2%
Operation efficiency
2% 2% 2% 2%
Increase accident-free
Applying safety working hours
standards by 30%Actual / Target
7% 7% 6% 6% 4%
20 workshop Actual /
workshops
Target 3 3 5 2 2
Learning and
Improve performance by
Growth Provide
30%Actual / Target 10%
needed training
5% 5% 5% 5%

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References:
https://www.elarabygroup.com/ar/?gad_source=1
https://constguide.com/en/company/company/El-Araby-Group
https://www.crunchbase.com/organization/el-araby-group

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