Case Study Of Qatar Diar Commerce Essay

The real estate industry is a development process that involves establishment of real estate in prepared land by individual, government or developers. In this work Qatar was chosen as the country and Qatar Diar as the real estate company.

To support growing economy of Qatar with an eye to manage Qatar’s real estate development priorities Qatar Diar was established in the year 2005 by Qatar Investment Authority (QIA) which is the autonomous wealth fund of Qatar state. Northwest of Doha and on the coast of Arabian Gulf Qatar Diar’s headquarter is located. It started with $1bn capital. Its main concern was investment in real estate and community based projects. Since the start the company has worked on its portfolio which is worth $60bn estimated through its global investments.

Vision and Mission:

Qatar Diar’s vision is to be the finest real estate company in the world by valuing consumer imagination, cultural values and inspiring relations. Company’s vision statement is so far being honest with its vision. It has since its incorporation focused on luxurious ventures.

Despite the fact that Qatar hasn’t seen booming real estate bubble like its neighbour UAE Qatar Diar has provided with excellent opportunity to represent Qatar in the real estate market.

Mission of Qatar Diar is to improve quality of life of Qatar’s people and in places they will have project by creating distinguished grand development projects by valuing top industry standards.

Since the beginning the company has worked on the standard of its developments and it is evident from the projects they have done so far. More discussion on that will be in the next section.

Projects of Qatar Diar:

In a short span of time Qatar Diar has managed to create a global portfolio of real estate projects. At present the company has projects in Qatar and GCC, Asia, Europe, The Americas and Africa.

Company’s first project was Lusail City which was launched in December 2005 and soon it gained momentum. It wasn’t long when Qatar Diar’s innovative outlook started gaining praise for its work. This city is progressively self-contained which is the largest singleton real estate development undertaken in state of Qatar.

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Although the project hasn’t completed yet but Lusail have already created buzz about Qatar’s grand scale vision on next generation of developments. Qatar Diar already has become synonymous to quality. Lusail Real Estate Development Company started its journey in September 2008 to operate the expansion, construction and other development operations in legendary Lusail City Development.

In 2009 November under Qatar Diar’s flagship Qatar Railways Development Company was established which was of significant value for its portfolio. This company brought Qatar’s vision of creating a fully integrated national rail network and this regions first ever integrated railway system into reality.

In parallel with its developments in Qatar, Qatar Diar has always been committed to focusing on international market simultaneous to domestic market. Not only life of Qatar’s people was touched by Qatar Diar but also it has touched million people through its worldwide development ventures. As of now it is now one of the most famous, trustworthy, respected real estate company. It has become possible because of its continuous commitment to quality service, developing communities with state of the art innovative designs, worthy partnerships and trademark sustainability promise.

In January 2012 report released by Qatar Diar it has US $4 billion capital with currently undergoing 49 projects solely in Qatar related to development and planning. Also they have projects in 29 countries all around the world which combined can be valued at US $35 billion.

Strategic Business Management and Planning Tool:

Every business operates in micro and macro environment. To be successful in this competitive age every business have to have strategy for its operations whether its company management or marketing its products. For a company like Qatar Diar it has greater responsibility towards its wider stakeholders. For the purpose of this study focus will be given on two widely used strategic tools.

SWOT Analysis

PESTEL Analysis

SWOT Analysis of Qatar Diar:

SWOT which stands as an abbreviation of Strength, Weakness, Opportunities and Threats is a widely used tool to analysis an organisation’s current standing in the business environment.

It also looks into the future considering current competitions. This is a comprehensive planning tool where internally it focuses on strengths and weaknesses of an organisation at current state and looks into external impact factors in forms of opportunities and threats (Sadler, 2003).

http://www.lindsay-sherwin.co.uk/guide_managing_change/images/01_swot_1.gif

Figure : SWOT to Business Strategy (Sadler, 2003)

From both external and internal appraisal ‘Confrontational questions’ are generated.

For every single Opportunity – which strength element can assist the company to take advantage of the opportunity and which weakness can form a barrier to do so.

For every single Threat – which strength factor can lead to compete with the threat and which weakness can bound the company not to do so.

Following SWOT analysis examines Qatar Diar’s Strengths, Weaknesses, Opportunities and Threats considering its present scenarios.

Strengths:

Strengths of a business are all the positive elements that it do exceptionally well and generally are under its control. The strengths of a company gives it competitive edge over other business competitors. Often a company will emphasis on its strengths to reach to new dimensions. Below is a list of strengths for Qatar Diar.

Having associations with other robust and prevalent businesses around the globe is a major advantageous point for Qatar Diar as it helps bring in new clients and make business more operative. Qatari Diar since beginning have formed strong alliances in form of joint ventures with construction and management firms. In 2008 it signed agreements with Germany’s Hochtief; in 2009 signed agreement with Germany’s Deutsche Bahn to form the Qatar Railways Development Committee (QRDC). Under this committee, the Qatar Railways Company manages the expansion of Qatar’s $35bn rail system. In 2010 it joined with France’s Vinci Construction.

Being a market leader, as Qatar Diar is, is key to their success as it increases status, revenue and market share. Under Qatar Diar there are several key real estate development is ongoing which gives Qatar Diar additional advantage.

Innovation is a vital component of Qatar Diar’s overall accomplishment, as this retains them way above the other real estate companies.

Riding high in the niche market in Real Estate industry has helped boost Qatar Diar and raised reputation and turnover. It has so far focused on high end luxurious projects.

Not only they have ambitious projects in Qatar but also in several other countries with high profile construction work in prime locations. The US $1bn expansion of London’s past Chelsea Barracks is one such instance.

The establishments developed by Qatar Diar are sustainable modern, meaning this high valued clients will return to Qatar Diar for future projects.

Qatar Diar’s marketing strategy has proven efficiency. Which helped the company to raise profiles and profits and standing out as a major strength not only in gulf region but in the world.

Qatar Diar’s innovation keeps it a leader in Real Estate as it is frequently implementing new proprietary technology and design.

Experienced employees are key to the success of Qatar Diar helping to drive them forward with skill and knowledge. For example in March 2012 Qatar Diar appointed thirteen international law organisations to Qatari Diar’s six legal boards.

High quality machinery used in sites, experienced staff, offices and equipment guarantee the job is done to the utmost standard, and is a strength of Qatar Diar.

Qatar Diar has a widespread client base, which is a key strength regarding profit. Qatar Diar is spread in all over the globe in prime locations.

Being financially strong helps Qatar Diar deal with any problems, ride any dip in profits and out perform their rivals. Qatar Diar has state backing which helps them to stay strong in volatile market.

Qatar Diar has emerged as a strong brand which is an essential strength. Qatar Diar’s international operations establishes its authority over the business.

2012 World Cup will be held in Qatar. Before then the company will have some of their high profile projects finished which will enable them to capitalize the event.

Weaknesses:

Weaknesses of a corporation are things that should be improved for a better result; which are under their control. Weaknesses puts a business behind its competitors and create barrier to achieve its target. This section will present core weaknesses of Qatar Diar

Global economic crisis will have an adverse impact on the sales of high end products. As more and more people are trying to hold their money in safe investments. Qatar is yet not as promising as UAE which is first preference among many client.

Legal issues that buyers may face for the developments is still an issue for Qatar Diar as this creates barrier for potential customers.

Opportunities:

Opportunities are external deviations, drifts or desires that could improve the business or organisation’s strategic positioning, or which could be of a benefit to them. This section will summarize opportunities that Qatar Diar currently have.

Qatar Diar gets direct backing from Qatar Government which allows them to have additional support when they go overseas or even inside the country with grants and favourable policies.

Sudden change or adaptation of technology could give Qatar Diar an opportunity to strengthen future success. Use of social media network to promote its products to target markets may open new windows for them.

Qatar Diar is in respectable monetary position, which is an opportunity for them to explore in terms of investment in new developments.

Qatar Diar has the opportunity to enter niche market with their ever favourable government support to maintain leading position and therefore lift financial performance.

Grasping the opportunity to magnify the customer base is something Qatar Diar can aim for, either geographically or through new products. Qatar Diar has planned to take its innovative developments to other countries in coming time.

Qatar Diar can also explore takeover and merger opportunities could be explored for Qatar Diar and which later can be used to acquire new customers, new resources and enter new markets.

Threats:

Threats are reasons which may confine, harm or put areas of the business or organisation at jeopardy. They are factors which are external of the company’s control. Being conscious of the threats and being able to prepare for them makes this section valuable when considering contingency plans and strategies. This section will outline main threats Qatar Diar is currently facing.

Consumer lifestyle changes could lead to less of a demand for Qatar Diar products/services.

A slow economy or financial slowdown could have a major impact on Qatar Diar business and profits.

Rising costs could be a major downfall for Qatar Diar as it would eat into profit.

PESTEL analysis of Qatar Diar

In the macro environment there are many factor that affects decision making process of organisation. Changes can come in form of law change, trade barrier, impose of tax, demographic change along with government policy changes. These all are changes in the macro environment (Bennett, 2002). We can use PESTEL model to assess and analyse most of these factors. This arrangement differentiates between:

Political factors. These factors denotes various government policy for example the degree of involvement in the economy. Which products and services the government wants to promote? Which areas will receive subsidy? Political factors can have tremendous impact on numerous important areas of business. It will determine how healthy the nation is and in terms of infrastructure how good it is i.e. road and rail network throughout the nation.

Economic factors. Economic factors includes but not limits to purchase interest rates, taxation charges, slow or high economic growth, inflation and exchange rates. To understand how it might affect a business with high impact let’s see the example:

– higher interest rates might discourage investment since it costs extra to borrow

– a strong currency may make exporting more problematic because it may increase the price in terms of foreign currency

– inflation may aggravate higher wage demands from employees and increase costs 

– higher national income growth may boost demand for a firm’s products

Social factors. Changes in social tendencies can influence on the demand for a firm’s products and the accessibility and readiness of persons to work. In Qatar Diar most of the workers are from different countries. If they cannot offer a competitive salary with other benefits there might be issue with finding right people. Also in 10 years’ time there will be Fifa 2022 World Cup in Qatar this might mean there will be additional interest for people to get involved and invest in properties.

Technological factors: new technologies generate new products and new procedures. Social networking, online shopping, online booking and computer aided design are all developments to the way we do business as a consequence of improved technology. Technology can lessen costs, improve quality and lead to innovation. These expansions can help customers as well as the groups providing the products. Qatar Diar has access to latest technologies in their work bases which helps them to minimize cost and maximize opportunities.

Environmental factors: environmental factors comprise the climate and environmental changes. Tourism industry can get hugely affected by temperature change or issues like changed climate. Due to global warming slowly there is significant environmental awareness which indicates that it is not a problem of a region. Qatar Diar also has implications of environmental factors. Sustainable growth will mean that there will be less scope for doing non-environmental friendly tasks. The recent trend of being more environmental friendly is something Qatar Diar can work on to build up campaign or similar movements which will be beneficiary for the business.

Legal factors: These factors are significant for a business in terms of the geographical area where they are based on. For example discriminations on the basis of age, sex, religion can have huge adverse impact on a business’s operation. Following laws of different country is also important as most of the time they does vary geographically. Also lawsuits can cost a company fortune. So having sound legal advisors are a must. Qatar Diar has an experienced panel of legal advisors to assist them with development planning.

Different categories of law that has direct relation with Qatar Diar includes:

consumer laws; these are intended to guard customers against biased practices such as ambiguous descriptions of the product

competition laws; these are designed at protecting trivial firms against oppression by larger firms and safeguarding customers are not exploited by firms with monopoly influence

employment laws; these cover parts such as dismissal, sacking, working hours and minimum wages. They aim to defend employees against the misuse of power by bosses

health and safety legislation; these laws are aimed at guaranteeing the workplace is as safe as is sensibly practical. This legislation covers important issues such as training, accident reporting and other provision for safety equipment.

Classic PESTEL features to ponder comprise:

Factor

Could include:

Political

e.g. Qatar government involvement in real state policies, investment agenda

Economic

e.g. inflation, credit crisis, national debt, exchange rates.

Social

e.g. view towards certain products, demographic characteristics, income

Technological

e.g. technological advancement, new ICT product, social networking, new product development by using new technology, rate of technological obsolescence

Environmental

e.g. global warming, climate change, natural disasters and other environmental issues

Legal

e.g. laws that company is abide by. competition law, health and safety, employment law

However, it is significant not to just list PESTEL factors as this does not in itself tell very much. What business strategic management team need to do is to work out which of the many listed factors may change. For example as a government holding company Qatar Diar will more or less have favourable policies from the government. Problem will arise when it goes to a different geographic location. Qatar Diar has a global portfolio that makes it challenging to take into consideration all the wider aspects of all its development activities.

In order to assess a big company like Qatar Diar it will be a good idea to distinguish between factors in terms of local, national and global (Drummond,2001).

For example, we can evaluate Qatar Diar’s PESTEL factors as:

Local factors such as designing a government project and its approval.

National factors such as government law regarding recruiting people for the construction.

Global factors such as entering into new market zones and its impact on business.

Conclusion:

This paper has looked into Qatar Diar’s business management from a strategic point of view. It is not long since the business was established. Getting world recognition in such a short time is really uncommon in today’s world. Qatar Diar has proved how innovative approach in real estate industry can shape its future. Strategically, Qatar Diar has been lucky to have state support throughout its operation. Thanks to its joint ventures it has seen its growth over 29 countries. In coming years Qatar Diar will reach to its peak and probably 2022 will be a milestone year for Qatar Diar.