Doing business in Qatar mainly depends on what type of business one is setting up. It is possible to focus on foreigners but in most cases those in a position to make the business flourish are the people from that region and others from the gulf region. According to the 2018 survey by World Bank in doing business, Qatar was ranked number 83 out of 189 countries World Bank Group (Anon 2013). There are numerous opportunities in Qatar but investors need to be very cautious in order to succeed in such a country where the business is likely to thrive or perish into the desert. In this case the company is not a single entity and deals in manufacturing of soft drinks. The company’s name is “Crystal” and it operates through various local channels. The company manufactures and sells beverages and various syrups to different bottling operations. Additionally, it owns the brand and then markets the products. Since the company is in partnership the partners are responsible for manufacturing, packaging and distributing the soft drinks to the customers who in return vend them to the final consumer (Rani et al. 2012, p.4).
The bottling partners are supposed to work hand in hand with the customers who in most cases are the restaurants, supermarkets, street vendors among others. This way, they are able to carry out the strategies developed by the company. These customers are the ones that help the company make majority of its profits per day. The company has suppliers who are their business partners who provide them with packaging materials, machinery among others. There are supplier guiding principles which communicate effectively on the values and what is expected of them. These guidelines stress mostly on the policies and practices that should be maintained in a workplace. More so, the supplier’s policy must comply with the rules and regulations including those of discrimination, forced labor working hours, occupational health and safety among others. The company has communicated effectively their expectations therefore every new agreement with the supplier calls for compliance with the supplier guiding principle (Lawless et al. 2010). The company has also started carrying out trainings and auditing processes. Further, the company’s bottling partners have put in place similar principles so that they can reach the suppliers who are not covered by the company’s program.
The company aims at understanding the impact it has on their customers and the areas in which they can improve so as to add value not just to their beverages but as a company at large. The company’s customers include the local retailers, the international traders and small business which are independent. Crystal Company works with all its customers equally in order to have a mutual benefit. The company serves its customers through management teams, provision of services and heeding to their needs. The company’s customers help them in finding ways to cut costs and focus on boosting their sales as well as profits. More so, they focus on giving the best quality products to their consumers. Also, they focus on adding value to the customers’ demands and needs by finding solutions to their businesses.
Crystal Company’s Regional Expansion Plan
The company aims at expanding especially in regions such as Burma. From 1962-2011 Burma was ruled by the military which imposed the trade sanctions (Foxeus 2016, p.199). The company might consider this region since the trade sanctions were suspended thus enhancing democracy in the region. The biggest challenge in this region is how to do the marketing in a region which is not exposed to the company’s marketing campaigns. The company aims at exporting its products from those countries neighboring this region and later establish a bottling plant in the region. For the company to thrive in this region it has to comply with the legal requirements such as providing details on the rights of the workers and submitting annual reports to the state government (Thompson et al. 2010, p.303). The products that the company focuses on producing are beverages just like in all the other regions.
Additionally, the company aims at focusing on various issues in this region to ensure that it thrives. It focuses on the safety and compliance by making sure they train their staff on fleet safety and after that giving rewards to those staff members who practice the safety practices. The company considers focusing on the improvement of the working hours of its employees in this region. Prior to entering the region, the company aims at conducting a detailed due diligence. The products to be launched are soft drinks which will be launched during the humid season as they will be on a higher demand.
PESTEL Analysis
The global environment exposes companies to many pressures since the current market has become highly globalized. With the high globalization there are various factors that are bound to affect the business. The cultural, political and economic situations and the laws and regulations are some of the factors that significantly affect businesses either directly or indirectly (Rothaermel 2015). The changes in the global market can and usually affect the profits and the revenues of various companies. The Crystal Company is also subject to the political and economic fluctuations and these normally lead to losses. Laws vary from country to country as well as the cultural factors. Crystal Company is also subject to the impacts brought about by the cultural and social factors depending on the region. A Pestel analysis will help determine how these factors are likely to impact the business of these company in the global environment.
Political factors
The laws and regulations imposed by the government on food products in this region are the main political factor that is likely to be an issue to the company’s expansion in this region. The company is supposed to conform to the laws and regulations of this region as well as the business regulations and the tax laws (Cadle et al. 2010). For the company to be allowed to do business in this region it has to follow and adhere to the relevant laws imposed. Variation in these laws affect the profits and revenue generated by the company especially because it is in a new region. The changes in the tax rates are a major threat to the profiting making of the company. Additionally, the company requires a lot of water in manufacturing of soft drinks and it being a scarce resource might lead to various lawsuits. For instance, in India people protested against the company with the claim that it consumed a lot of water thus causing shortage to the local people. There are a lot of environmental laws put in place that are likely to challenge the operations of the company especially with the use of soda and this is likely to affect business in this region.
Economic factors
The economic factors too are likely to impact the expansion of business in this new region because of the reduced profits especially when the business is new in a certain place. When there is an economic crisis customer tend to purchase only those things that are basic to them. Crystal being a soft drink company especially in a new region is definitely not a basic necessity to the people in the region. Being a soft drink company, it requires tons of water for production which is scarce and the rise in the costs of raw materials. All these factors combined have a huge impact on the expansion of the business.
Social factors
These poses a huge risk to the business expansion as most people have switched to consuming healthy drinks and this could lead to company not doing well. The changes in people’s tastes and preferences could also impact negatively. If people opt to drink the healthy drinks then the profitmaking of the company will be affected. On the other hand, media has influenced people to stop drinking the soft drinks as they are claimed to have high levels of calories. Also, the availability of other brands in this region could affect the well doing of the company.
Legal factors
All over the world businesses must comply with the various rules and regulations especially if in a new region. The company therefore has to comply with the rules and regulations of Burma to avoid being penalized. There are various environmental, quality and labor requirements that require compliance.
The Pestel analysis shows that various factors are important in the expansion of a business in a new region (Ling 2017).
SWOT analysis
After conducting a pestle analysis about the company comes the swot analysis of Crystal Company, which outlines the strengths, weaknesses, opportunities, and threats.
Strengths
The company has good recognition as it has built its brand name thus, they have an unwavering customer loyalty in the region. The company’s products are also hard to match up to by their competitors within Qatar, which has created a strong brand, hence, market share growth.
Weaknesses
Though the company has built its name it still faces competition from their competitors. More so, Crystal has not come up with healthy drinks for their consumers which makes them opt for other brands.
Opportunities
The company can come up with other products such as the healthy drinks. It is possible for them to venture into other products that their competitors have no idea about. The company could also consider expanding in other regions which have humid temperatures.
The company can also consider venturing into other products such as foods apart from giving too much concentration on the soft drinks.
Threats
Water is a limited resource in most parts of the world and is used in all of the company’s products. In case water became too scarce the company would land in trouble. Thus, creating new products is crucial for the company so that if such a problem ever arises the company would not be shut down. Additionally, people have switched to healthy drinks and smoothies thus threatening the future of the soft drink company.
Costs that might be incurred in the expansion process
When starting a business or expanding it to another region there are various costs that are likely to incur. These costs include but not limited to:
Costs of advertising. Since the business is expanding in a new region advertising has to be done so as to market your products to the people in the region (Albert 2018).
Salaries and wages; these are for the people who are going to train the new staff and for the new employees
Legal fees; when starting a business in a new region there has to be application of various permits for the company to be allowed to operate in the region.
Travel and other expense; while starting a business in another region there are various surveys and market researches that are done which require a lot of money for them to be successful.
Rent and utilities; with the company being a manufacturing one there are various utilities that are required such as water which as much as it is a natural resource it is not free. Other utilities include electricity among others.
References
Albert B. The Tax Adviser. (2018). Deducting startup and expansion costs. [online] Available at: https://www.thetaxadviser.com/issues/2017/sep/deducting-startup-expansion-costs.html [Accessed 2 Nov. 2018].
Cadle, J., Paul, D. and Turner, P., 2010. Business analysis techniques: 72 essential tools for success. BCS, The Chartered Institute.
Foxeus, N., 2016. Mimicking the State in Burma/Myanmar. Bijdragen tot de taal-, land-en volkenkunde/Journal of the Humanities and Social Sciences of Southeast Asia, 172(2-3), pp.197-224.
Lawless, H.T. and Heymann, H., 2010. Sensory evaluation of food: principles and practices. Springer Science " Business Media.
Ling, X., 2017. Customer Relationship Management: Case study Coca-Cola Company.
Rani, B., Maheshwari, R., Garg, A. and Prasad, M., 2012. Bottled water–A global market overview. Bull. Environ. Pharmacol. Life Sci, 1(6), pp.01-04.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Thompson, J.D. and MacMillan, I.C., 2010. Business models: Creating new markets and societal wealth. Long Range Planning, 43(2-3), pp.291-307.
World Bank Group, 2013. Doing business 2014: Understanding regulations for small and medium-size enterprises (Vol. 11). World Bank Publications.
