Emaar Properties is a public joint stock company that is listed on the Dubai Financial Market (DFM). It was established in 1997, and its headquarters are in Dubai, United Arab Emirates (Emaar, n.d. (b)). The company provides property development and management services. It operates in 36 markets across the Middle East, Europe, Pan-Asia, North America, and North Asia (Emaar, n.d. (b)). In 2004, Emaar Properties established Emaar International LLC, which enabled it to venture into foreign markets.
The company was founded in 1997 by Mohammed Alabbar. Currently, it has diversified into various real estate markets including both residential and commercial property developments (Emaar, n.d. (b)). At the time of the company’s initial public offering, in 2000, its initial shareholders held 24.3% of the shares, while the government owned the rest. Some of its popular projects include the Burj Khalifa, The Dubai Mall, and Dubai Hill Estate. Emaar Properties has also initiated significant projects in Egypt, Pakistan, Syria, India, Lebanon, and Morocco.
Competitive Advantage of the Company
Emaar Properties can differentiate its self from competitors by becoming more innovative and responsive to its customers. In this regard, the company should establish energy efficient buildings using recyclable materials. Innovative and energy efficient buildings will enable its clients to reduce their lighting and heating costs. In particular, the use of large windows will ensure all parts of these structures have natural lighting, which will, in turn, reduce the need for using electric lamps (Pretson, 2009). Similarly, proper housing designs will make its houses have sufficient circulation of air, which will minimize the use of air conditioners. Finally, the use of recyclable materials will please some of the company’s environmentally conscious customers.
Besides being innovative, Emaar Properties should be more responsive to its customers. In this case, the business should establish a chat box on its website so that its clients can readily communicate with it in case of an issue. Additionally, the firm can create a customer care department that will specialize in taking care of all its clients’ needs. The use of an online customer care platform coupled with the employment of quick and responsive managers will enable the Emaar Properties to be more sensitive to its clients.
Strength, Weakness, Opportunities, Threats, Analysis
One of the major strengths of Emaar Properties is the support that it enjoys from the United Arab Emirates government. The state has significantly contributed to the existence of the company. At its inception as a publicly traded company, the government was its largest shareholder (Emaar, n.d. (a)). Furthermore, the country’s support has enabled it to win various state-sponsored construction projects.
The company’s board of directors is one of its primary strength, which has made it survive in the competitive building and construction industry. The Emaar Properties’ board is composed of individuals who are experienced and competent in both accounting and finance (Emaar, n.d. (b)). As a result, they check the operations of business’ management and ensure that the latter conduct their activities according to best practices in finance. Additionally, their knowledge of accounting and finance places them at an advantaged position of detecting any attempt of misappropriation of the company’s assets.
Finally, Emaar Properties has access to a lot of finances from both local and international investors. Since the company is listed on the Dubai Financial Market (DFM), it can access more capital whenever there is need by issuing new shares through a public offering. Furthermore, the business has a healthy financial status that can help it to maximize on any opportunities that may arise.
One of the significant weakness of the firm is its concentration in the Middle East market. Most of Emaar Properties’ investments are in the Middle East and North Africa market, which is risky. Since economies of nations in this region are influenced by the export of petroleum products, a decrease in prices of this commodities affects trade opportunities in areas where the business has most investments (Bio, 2016). Therefore, Emaar Properties should diversify its markets to reduce its risk exposure.
Although competent, the company’s board of directors lacks an international touch and gender inclusiveness. The entire board of directors is composed of men, which shows there is some possibility of discrimination of women from holding senior positions in the business (Emaar, n.d. (a)). Similarly, all of Emaar Properties board of directors are from the Middle East. Consequently, the company has no international representation, which can make it fail to understand the changes in the global real estate market.
With the rise of Middle East economies, there has been an increase in various construction based business opportunities that Emaar Properties can exploit. For example, most of these countries are diversifying their economies by introducing manufacturing and tourism businesses (Bio, 2016). Accordingly, there is an increase in the construction of warehouses, residential buildings, hotels, malls, and assembly plants. The need for these new buildings presents business opportunities for Emaar Properties.
Emaar Properties is faced with a lot of competition from multinational companies that have interest in the Middle East market. Some of these companies are more experienced than Emaar Properties in the real estate industry (Deloitte, 2017). These include companies such as Century 21, DAMAC properties, and Barwa.
On the overall, Emaar Properties has enjoyed a steady growth since its establishment in 1997. With its current access to a lot of capital due to its inclusion in the Dubai Financial Market (DFM) coupled with a rise in demand for houses in the Middle East, the company’s future business prospects are favorable. However, Emaar Properties should still diversify its market and business to reduce its risk exposure.
Bio, F. (2016, August 26). Mid-East states attempt to diversify economies amid low oil prices. Retrieved from https://www.forbes.com/sites/debtwire/2016/08/26/mid-east-states-attempt-to-diversify-economies-amid-low-oil-prices/#7cd8b2275e15.
Deloitte. (2017). Middle East real estate predictions. Retrieved from https://www2.deloitte.com/ye/en/pages/real-estate/articles/middle-east-real-estate-predictions-2017.html.
Emaar. (n.d. (a)). Leadership: Board of directors. Retrieved from https://www.emaar.com/en/who-we-are/leadership/board-of-directors.aspx.
Emaar. (n.d. (b)). What we do. Retrieved from https://www.emaar.com/en/what-we-do/.
Pretson, M. (2009). Practically green: Your guide to ecofriendly decision-making. Cincinnati, OH: Betterway Home.