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ARABTEC CONSTRUCTION L.L.C

Company overview, PESTLE Analysis, SWOT Analysis, Entry Mode
by

Eiman Al Dhaheri

on 27 May 2014

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Transcript of ARABTEC CONSTRUCTION L.L.C

ARABTEC
!
CONTENTS
__________
PESTLE ANALYSIS
CONSTRUCTION
By:
Afra Al Romaithi
Eiman Al Hammadi
Mona Thabet

About Arabtech
PESTLE Analysis
Entry Mode
SWOT Analysis
Strategic Plan
Conclusion
L.L.C
Leading Construction Company (UAE)
Established in 1975
Largest construction company in the Arabic Gulf
Hasan Abdulla Ismaik - Managing Director & CEO
Multinational team of 40,000 plus employees
UAE market is main focus but operate across borders
Awarded MRM Business Award & Arabian Business Award - Company of the year

CLIENT FOCUS
COMPANY VALUES
CREATE GROWTH
Excellent Quality, Long Term Investment & Open to Learn and Change
Satisfy clients needs & expectations
Provide exceptional service on time & within the budget
Encourage the growth and creativity of the employees
Offer development and learning opportunities for all staff
Act to set the standards to achieve long-term sustainability
Learn to adapt to the changing market to ensure the long-term success
ASSOCIATED COMPANIES
PRODUCT PORTFOLIO
Commercial
High Rise Developments
Hotel & Interiors
Museums
Residential
Stadiums
Mixed developments, oil & gas, industrail and marine projects
MARKET SIZE & PROJECTS
fast-growing sectors in the world
contracts awarded =
$59 billion
92%
approximately =
$128.5 billion
2013
2014
COMPETITORS
12th
foreign companies
2nd
local companies
strong presence and potential to take on foreign rivals
" Global construction industry is expected to grow over the next decade, countries such as the US, China, India, Brazil and Poland are expected to undergo the largest growth. "
OLITICAL
P
Stable democratic political system

Provides equal treatment between domestic and foreign capital by law
All registered employees required to hold a work card (Carteira de Trabalho)
The World Bank’s 2012 annual global report ranked Brazil 126/183 countries at "Doing Business” due to:
High corruption rate in Brazil that took about 2.5% of the average annual cost of the country in 2013.

Apply the Monetary policy that focuses on the inflation.
FDI is not subject to any taxation
E
CONOMIC
Worlds 7th largest economy in Latin America
$2.4 trillion
2.3% growth
GROSS DOMESTIC PRODUCT (GDP):
UNEMPLOYMENT:
5.5%
Rank:
114th
declining due to temporary jobs for World Cup & Olympics
INFLATION:
5.4%
facing monetary tightening, excess demand & scarcity causing inflation to rise
slow growth from 2012 (0.8%)
FOREIGN DIRECT INVESTMENT (FDI):
$65.3 bn
Favorite destination for FDI - large population, relative economic stability & rising incomes
EXPORT:
IMPORT:
$19723.93 Mn
$19218.06 Mn
worlds largest exporters of soybeans, orange juice, raw cane & refined sugar.

raw materials, intermediate goods, capital goods, consumption durables, oil and motor vehicles

PARTNERS:
China, US and Argentina, Netherlands, Japan, Germany and India.
S
OCIAL
POPULATION:
RELIGION
:
LANGUAGE:
5th-largest country in the world by population
Population = 199.3 million (2013)
Roman Catholic 73.6%, Protestant 15.4%,
11% Other (Spiritualist, Bantu/Voodoo, and unspecified)
Portuguese (official), Spanish, German, Italian, Japanese, English and minor Amerindian languages.
CULTURE & HOFSTED ANALYSIS
Uncertainty Avoidance 76%
Power Distance
69%
DEMOGRAPHICS
T
ECHNOLOGY
• Technological Development
Brazil’s science and technology output with an average of more than 2% of the world output across ten fields of science

• Research & Development (R&D)
- Ranks it tenth globally, slightly ahead of Canada.
- Spending in R&D Increased by 8.1%

• Information Technology (IT)

- The largest in Latin America and expected to continue its solid growth
- Brazil IT market spending from 2013 to 2014 is expected to increase by 8.4%.

!
L
EGAL
- Limited liability company (LLC).
- Joint stock company

Commonly used corporate forms:
Prohibits all forms of discrimination
Every company must create and operate an Internal Accident Prevention Commission (CIPA):
- To define requirements for the Workers Health and Medical Program (PCMSO) and the Environmental Risks Prevention Program (PPRA).
Antitrust law state transactions will have to be filed for approval whenever one of the corporate groups has recorded a gross revenue in Brazil of at least  BRL 750 million in the previous financial year
E
NVIRONMENT
Deforestation
Air pollution
Urban pollution
Degradation of quality water resources
Action plans and laws to protect the environment:
Kyoto Protocol to the UN Framework on Climate Change
Sustainable amazon Program
Stopping deforestation
Reducing emission
Developing the Amazon Basin
ENTRY MODE
Joint Venture:
a contractual business undertaking between two or more parties. (a single business transaction).
Familiarity with JV:
KSA, QATAR, PAKISTAN, RUSSIA
allow companies to share their strengths, minimize risks, which in return increases their competitive advantages
JV
Brazil:
Difficult to start a new business
High corruption risk
Construction industry is booming (World Cup & Olympics)
Suggested Companies:Andrade Guiterrz S.A & Kieppe Patrimonial Ltda
STRATEGIC PLAN FOR 3 YRS
Resources:
Additional capital resources from Arabtic Holding PJSC and UAE.
Upgrading the used technology
Encourage innovation in the work place and projects.
Increasing the expertise of employees by providing new training method
Focus on leading and competing construction market locally and globally:
Develop major projects worldwide while focusing on emerging countries.
Improve and expand Arabtec’s partnerships.
Research and Developing area (R&D) to gain a competitive advantage.

SWOT ANALYSIS
CONCLUSION
Leading company in the UAE

Have opportunities to expand globally. (Brazil)

Associated with many prestigious projects in the UAE
Have several joint ventures worldwide.
ARABTEC
SWOT ANALYSIS
High number of procedures

Construction permits required an average of 17 procedure and 469 days to get authorized.
From 2012 to 2013:
The Brazilian IT market:
Full transcript