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Overview of Kharafi National Kuwait

Discuss the strategic of kharafi national kuwait?

The paper focuses on conducting an evaluation of the macro and micro environmental situation of Kharafi National Kuwait through the use of PESTLE and Porter Five Forces. It also aims to conduct a SWOT Analysis of the company that would help in generating effective recommendations and also in identifying newer strategic options in a subsequent fashion.

Kharafi National Kuwait established during 1976 operates as a large scale infrastructure development organisation on a pan-Arabian scale. Different types of services like project development and contracting activities of infrastructural projects and also in providing services associated with facilities management. The company not only focuses on the development and construction of potential infrastructures but also helps in generation of needed finances for accomplishment of the same along with needed monitoring and evaluation activities. Further, Kharafi National also services its clients through the generation of different types of engineering services encompassing civil, electrical, and mechanical and telecommunication engineering. The company conducts its services based on a total strength of 28,950 employees spread along different international regions. Kharafi National being an ISO 9001:2008 organisation focuses on generating quality services and products to its clients at highly affordable rates ( Kharafi National , 2007).

The infrastructure development company focuses on becoming a market leader associated with the generation of value-added services to its diverse clients (Kharafi National , 2007).

The mission of Kharafi National Kuwait is generated in the following fashion.

  • The company through the integration of its human resources based along different levels and also based along different international regions aims in providing quality and trusted infrastructural services to its clients.
  • Kharafi National Kuwait aims in continually innovating and enhancing on its service and product quality to generate needed customer satisfaction.
  • The company also focuses on promoting the parameters of quality and safety and also in meeting the projects in due time.
  • Kharafi National Kuwait focuses on valuing the needs of its different clients and customers spread along different international markets(Kharafi National , 2007).

The objectives of Kharafi National Kuwait are effectively highlighted as follows.

  • The company aims in generating personalised services to its customers to help satisfy their emerging needs and interests.
  • The company also focuses on generating quality services and its products to customers at affordable rates and also in reaching the products and services generated within an effective period to its diverse customer base.
  • Kharafi National Kuwait focuses on generating profits through operating in a committed fashion in serving its customers’ needs.
  • The infrastructural development organisation also focuses on meeting the objectives of sustainability and also based on aptly addressing the safety and health related needs of its diverse stakeholders.

PESTEL Analysis

Political Situation

The construction and engineering industry of Kuwait is positively impacted by the political situation of the region. The focus of Kuwait government is to generate needed focus and potential investments to enhance the infrastructural potential of the region which in turn generates large scale opportunities promoting the growth of the construction sector in the region. Moreover, the existence of an integrated framework between the Gulf countries to considerably promote the growth for infrastructural developments further helps the Kuwait construction companies to earn new contracts. The Kuwait government is continuously involved in the development of new plans linked to the construction industry thriving in the region (Ulrichsen, 2015).  

Economic Situation

The value of the construction industry of Kuwait during 2013 amounts to $3.2 billion. The annual growth rate of the Kuwait construction industry in real value terms amounts to around 3.6 percent. The GDP of Kuwait estimated based on Purchasing Power Parity (PPP) rates amounts to $288.8 where the real growth rate for GDP amounts to 1.2 percent during 2015. The increased GDP of Kuwait reflects increased market and growth opportunities for the construction sector in the region. Estimates generated by the Kuwait Projects Market during 2013 further reflect an increase of 60 percent value of the construction contracts compared to the previous year. The above situation reflects a positive impact for Kharafi National Kuwait operating in the construction and engineering industry in the region (Sab, 2014).

Vision of Kharafi National Kuwait

Social Impacts

The increased demand of the Kuwaiti population regarding the development of potential infrastructures like roads, airports, railways and ports requires the government to generate effective investments for developing the infrastructural situation in the region. Further, the demand of the Kuwaiti nationals regarding the availability of affordable housing infrastructures is observed to be met by the Kuwaiti government through the development of Public Authority for Housing Welfare (PAHW). The growth of the construction sector in Kuwait is also observed to considerably help in the promotion of large scale employment opportunities of around 1.3 million jobs by around 2030. The construction sector in Kuwait is also observed to be increasingly demanded for helping in the generation of schools and hospitals that would help in the development of quality of life for the Kuwaiti nationals. The evaluation of the social situation in Kuwait reflects a positive impact for Kharafi National Kuwait Company (Celasun, 2013).

Technological Impacts

The companies operating in the Kuwait construction industry are observed to incorporate both internet and intranet mediums for effectively communicating with its external and internal stakeholders in an effective fashion. The development of effective communication between the different stakeholders is observed to considerably help in the accomplishment of construction projects within an effective period. Further, the continual investments generated by the Kuwait government are also observed to potentially help in the development of construction machineries and utilities needed for the conducting of construction activities in an effective fashion (Ray, 2015).

Legal Impacts

The construction industry in Kuwait is observed to suffer from growing impediments like the lack of effective safety and training standards. The legislations like the use of OSHA (Occupational Safety and Health Administration) standards requires the construction companies in Kuwait to not only incorporate effective training and insurance practices but also to potentially work in sustaining the health and safety standards of the employees operating in the different construction firms. Similarly, the construction companies are also required to generate effective compensation schemes for the workers involved in the construction activities. The above analysis reflects that the management of Kharafi National Kuwait are required to effectively generate potential regulations and procedures for generating quality care and safety of the construction workers (Oxford Business Group, 2013).

Environmental Impacts

The existence of strong environmental standards in the Kuwait region reflects the requirement of the construction companies to conserve energy and water resources associated with the conducting of the construction activities. Further, the construction and manufacturing companies are also required to effectively generate effective regulations and practices to potentially reduce the impact of the construction activities on the natural environment and people residing in the vicinity of the construction regions. Similarly, effective waste disposal activities are also required to be conducted and maintained by the construction companies to reduce the impacts on the natural environment. The development of green buildings and construction projects is also observed to be increasingly promoted through the generation of awards by the regional and national government of the region (Rico & Exell, 2014).

Mission of Kharafi National Kuwait

The micro environmental analysis of the construction and engineering sector in Kuwait is conducted based on the use of Porter’s Five Forces Analysis. The same is rendered as follows.

Consumer Bargaining Power 

Consumers in the construction industry of Kuwait are observed to increasingly demand the availability of green housing and commercial building projects. The existence of internet enabled technology further helps the consumers to rightly evaluate and screen the existence of affordable housing and commercial properties. The above factors enhance the level of competition for the construction industry in the region (Sperling, 2014).

Supplier Power

The managers of the construction companies operating in Kuwait focus on the use of e-procurement practices for sustaining relationship and networks with the vendor and supplier firms. The use of e-procurement practices contributes in sustaining an effective business-to-business (B2B) relationship between the construction companies and its different vendor firms. The same helps the construction companies to dictate terms and governs the acts of the different supplier firms. The existence of e-procurement programs thus helps in reducing the bargaining potential of the suppliers in the Kuwaiti construction industry (Fitzgerald, 2016).

Power of Substitutes

The construction companies based in Kuwait faced increased threat from the existence of large number of small substitute firms operating in different regions. The small construction and manufacturing companies operating in the region act as potential substitutes in rendering low cost building and construction projects to the Kuwaiti consumers (Manassah, 2013).

Internal Rivalry

The construction sector in Kuwait is characterised by a number of small and large construction firms increasingly competing with each other. Further, the construction industry of Kuwait is also observed to be largely fragmented in nature owing to the existence of a larger number of sub-industries and companies. The above factor attracts the entry of large number of firms in the construction sector in the region leading to increase in the level of competition (Vrontis & Thrassou, 2013).

Entry Barriers

The construction sector of Kuwait reflects the existence of reduced entry barriers. The existence of an open trading climate, tax free situation for the newly entered companies and also the stability of the political situation in the United Arab Emirates are observed to be the potential factors that contribute in the expansion of the construction sector in the region (Oxford Business Group, 2013).

The SWOT Analysis of Kharafi National Kuwait is reflected as follows.

Strength

Kharafi National Kuwait operating as a ISO 9001:2008 organisation provides quality services to its customers spread along different markets. The company provides services to its customers based along different categories like infrastructural development, engineering, facility management in a committed fashion thereby generating enhanced customer satisfaction ( Kharafi National , 2007).

Objectives of Kharafi National Kuwait

Weakness

Kharafi National Kuwait faces a potential problem associated with higher bid values for its different contracts associated with infrastructural development activities. The company thus loses in the face of increased competition from low bidders both international and national companies in the related sector that potentially attracts the attention of the Kuwaiti government.

Opportunities

Kharafi National Kuwait gains potential opportunities based on increasing demand of the Kuwaiti residents for greener residential properties and also of the Kuwaiti government generating large scale investments associated with the development of large scale infrastructural and construction projects in the region (Oxford Business Group, 2013).

Threat

Kharafi National Kuwait gains increased threat from the entry of potential foreign competitors in the infrastructural development sector. The existence of a liberal trading climate encourages the growth of entry of foreign companies in the region (Manassah, 2013).

Kharafi National Kuwait has different strategic options to enhance the level of competitive advantage. The company can effectively diversify into other allied sectors like generation of financial services that would provide due assistance for the easy accomplishment of infrastructural activities in the region. Similarly, the company apart from infrastructural development activities can also focus on generating increased investments for the development of different types of automobiles in the region. The above activities would help Kharafi National Kuwait to expand its base to untapped markets both along Kuwait and other international regions.

Kharafi National Kuwait needs to potentially focus on innovating and diversifying its products and service base for attracting larger number of customers along different market bases. The company needs to acquire new staffs with needed expertise and also train its existing staffs to gain needed knowledge for meeting diversified needs of its customers.

References

Kharafi National . (2007). About Us. Retrieved March 15, 2016, from https://www.kharafinational.com/companyprofile/aboutus.html

Celasun, M. (2013). State-Owned Enterprises in the Middle East and North Africa: Privatization, Performance and Reform. New York : Routledge .

Fitzgerald, R. (2016). The Rise of the Global Company: Multinationals and the Making of the Modern World. United Kingdom : Cambridge University Press.

Kharafi National . (2007). Vision and Mission . Retrieved March 15, 2016, from https://www.kharafinational.com/companyprofile/vision.html

Manassah, J. T. (2013). Alternative Energy Sources: Kuwait Foundation for the Advancement of Sciences. Kuwait : Academic Press.

Oxford Business Group. (2013). The Report: Kuwait 2013. Kuwait: Oxford Business Group.

Ray, N. (2015). Strategic Infrastructure Development for Economic Growth and Social Change. London : IGI Global.

Rico, T., & Exell, K. (2014). Cultural Heritage in the Arabian Peninsula: Debates, Discourses and Practices. United Kingdom : Ashgate Publishing, Ltd.

Sab, M. R. (2014). Economic Impact of Selected Conflicts in the Middle East: What Can We Learn from the Past? Geneva : International Monetary Fund.

Sperling, J. (2014). Handbook of Governance and Security. United Kingdom: Edward Elgar Publishing.

Ulrichsen, K. C. (2015). The Gulf States in International Political Economy. United Kingdom : Palgrave Macmillan.

Vrontis, D., & Thrassou, A. (2013). Innovative Business Practices: Prevailing a Turbulent Era. United Kingdom : Cambridge Scholars Publishing.

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