Facing the competition from global giants is now a very common scene for the local companies in the emerging markets. As with this case, SADAFCO is struggling to rival with those globally well-known competitors.
As a local company, however, SADFCO has its own strength against its foreign competitors. SADFCO¡¯s brands are well recognized by local consumers. It will take a certain period of time and money for the foreign competitors to gain the same level of reorganization. In addition, the company¡¯s well established local distribution network system would also largely decrease the cost of distribution. Moreover, it has a better understanding of the culture of its market. This is a very important element in a market dominated by certain consuming pattern. As with this case, the understanding of Islamic culture and Muslim¡¯s shopping habit plays a crucial role in a company¡¯s marketing strategy. For example, foreign competitors used to use larger packing volume of ice cream for the consumers who get used to smaller volume of ice cream consumption.
However, SADFCO¡¯s weaknesses, compared with those global giants, are also obvious. First, its portfolio of ice cream brands is too diverse to allow continuous marketing supports for all brands. Some brands have really low market share (such as Movenpick). Secondly, due to the limited access to capital and technology of the latest development of the industry, SADFCO find it difficult to handle the uncertain market changes, such as customer¡¯s tastes and shopping habits. Thirdly, foreign competitors can create competitive advantage through its flexible marketing strategy. This strategy tries to integrate the foreign competitor¡¯s financial ability to enhance its competitive power. This involves centralizing their activiti ...