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Weaknesses
• Public owned company.
• Low sales growth in comparisons with its industry.
• Immigrant employment.
First Question
Threats
- Global finance crisis. (2009)
- Strong competition.
Strengths
Opportunities
SWOT Analysis
- Huge gas reserve.
- Global availability of supply.
• One of the largest top ten petrochemical industries.
• Geographical presence.
• Public owned company.
• Talented workforce (3300 employees).
• Diversity of divisions (SBU).
• Delegation of authority.
• Resources utilization.
• Strong strategy.
• Creditable performance.
Cont. Strengths
• Innovation.
• Strong liquidity.
• Strong customer relationships.
• Strong leadership.
• Single exporter of granular urea.
• Corporate virtual technological network.
• Strong social responsibility.
• Diversified workforce.
• Communication network within the company.
Case Study Analysis
SABIC
Second Question
Value Chain Analysis
Manufacturing
[First Activity]
Primary & Pivotal
Description:
SABIC has six strategic business units , four of them contribute to chemical manufacturing:
- Chemicals: the largest in production and was above the industry average with %18.5.
- Polymers: SABIC is a major producer of the two most important polymers in the world.
- Performance chemicals: this unit is leading the diversification of SABIC product portfolio, and is expected to produce more than 40 new performance products.
- Metals: it oversees the running and runs several companies like the Saudi steel company (HADEED) , Aluminum Bahrain (ALBA) and have joint venture with gulf aluminium company in Bahrain ( GARMCO).
- Fertilizers: SABIC has built up its fertilizers capability and now is one of the industry’s global leaders.
- Innovative plastics: is a multibillion dollar SBU which leads plastic industry through close collaboration with its customers in automotive, aviation and medical industries.
Sixth Activity
Sales
Finance
[Second Activity]
Primary & Pivotal
Primary & Pivotal
SABIC’s net profit was higher than global petrochemical industry profitability. Its operating margin reduced in 2009 as a result of the economic slowdown, but was still above the sector average.
Description:
SABIC is the only Arab company in the top 500 list of the world’s largest corporations in terms of revenue. It ranked 293 globally in the year 2009. The chemical segments of the company accounted for %83.9 of the total revenue during 2009, the sales of the 4 chemical manufacturing segments reached %10.75 of the overall sales growth.
Innovation
Seventh Activity
Primary & Pivotal
One major SBU is the “ innovative plastics” . This is a multibillion unit with more than 9000 employees and operations in 35 countries. It leads the plastic industry through collaboration with customers, investments in polymer technology and many areas of modern life. The innovation is apparent in “1 SABIC” initiative.
Description:
This is the key role in driving rapid growth, boosting market share and enhancing corporate positioning. It was coupled with technology in a single unified global organization fully aligned with all the SBUs’ R&D plans , and equipped to fulfill SABIC’s customer needs.
Eighth Activity
HR
Supporting & Pivotal
Description
SABIC employs 33000 employees in 40 countries, and invests their talents worldwide integrated global organization that will work together to fulfill SABI’s vision in becoming preferred world leader in chemicals in 2020. This initiative was called “1 SABIC” .SABIC’s global workforce proved to work efficiently under pressure in spite of the world’s economic downturn.
Ninth Activity
IT
Supporting & Pivotal
Description
All SBUs within SABIC have a technology department and these technology departments are linked up via virtual network to formulate a technology center.
Third Question
IFE Matrix
Tenth Activity
Communication
Supporting & Pivotal
Description:
All SBUs are connected via network to ensure coordination both horizontally and vertically. The use of technology widely supported the communication between 33000 employees and their leadership to fulfill the vision of world’s preferred leader in chemicals.
This indicates that the company is in better position in terms of efficient cost management and a strong pricing strategy. In 2009 SABIC’s net income was SR 9 billion, sales revenue was SR103 billion and total assets were SR297 billion.
[Fourth Activity]
Quality control
Supporting & Outsource
[Third Activity]
Marketing
Strategic planning
Fifth Activity
Description:
All SABIC plants are designed, built and managed to ensure they meet best industry standards on safety, health and security in all its operations.
Primary & Outsource