Sandan Development LLC
Introduction
Sandan Development LLC is one of the leading real estate development company in Oman. It is Oman’s first company to develop an integrated light industries park at a cost as low as RO100mn. It was established in January 26, 2016. Since the establishment of Sandan Development LLC, the Omani markets economy has been activated; the company has put a lot of emphasis on feasibility studies for projects and investment opportunities.
Sandan is based on projects innovation and creativity in order to create highly beneficial and important projects which can serve all the spheres of the community. It focuses in planning for the particular projects as it continuously study the market comprehensively basing on the real statistics and maintaining an up to date trends in the real estate industry
By the end of 2016, Sandan development LLC had already raised about $20 million, this according to the CEO’s speech at the closing of the financial year. This allowed the company to build their brand and improve the market share. Said al Rahdi, the CEO, has assured that the Sandan project is set to create up to 9,000 jobs to the Oman’s. This is a major step towards the advancement of Oman’s economy. The expected rate of return on investment is set to be from 40-60% while the members of the management team expects around 15-20%.
SWOT’s analysis
Strengths
· The company has been successful since the start of it, for the past one year it has recorded a profit of up to 40%
· The company has been able to cope up with the dynamic change in technology which is not the case with other companies in real estate.
· The company is the most preferred real estate industry, since it is the first company to build an integrated light industries park at the lowest cost ever recorded in Oman. As a result it has attracted the attention of most consumers
· It is a strong brand with the support of the government because of its good reputation.
· Adequate workforce and trained employees.
Weaknesses
· There is a rising cost of capital to stay ahead of the competitors. The company is new in the market and it has recently caught the eyes of the consumers due to its unique creation. For it to maintain the fire it will sufficient capital to stay at the top in the competitive market, (Khoshbakht and Dupre, 2017).
· The company requires large technological investments in order to keep competitors from competing in a lower price range markets.
· There are cases of limited levels of the individual abilities due to high expectations from the consumers.
· According to research the Sandan development LLC lacks sufficient leadership. There are gaps in the leadership of the company.
· Due to the volume of work and how engaging the real estate industry is, the employees mostly experience stress and difficulties in executing their duties.
Opportunities
· The company has a greater chance to implement the new technologies in an effective way since it is new and most of their systems are not out of date
· The companies competing with Sandan are now losing their strength due to sandan’s popularity in the market
· The company has a strategic real estate visibility which gives them a competitive advantage
· Sandan has all that it takes to enable them to use the modern ways of communication effectively
· Due to its popularity, it is now considered an international real estate industry.
Threats
· Real estate companies always operate on high levels of risk
· The likelihood of real estate positioning environment to change
· Threat of change in the real estate market
· Consumer preference is dynamic; therefore there is a threat of shift in potential buyers preference.
· With time rules and regulations come up and may disadvantage the real estate industry, hence the treat of eventual legal modification.
Action plan on threats and weaknesses
Monitor
Oman’s economy is changing at a higher speed, this means that Sandan has the duty to monitor the threats that the company is likely to face in the future. Apart from the above stated threats, the company should be always prepared since new threats always emerge; hence it should be ever ready to face them. Since Sandan has access to the most advanced technology it should always incorporate the technology to monitor the activities of the competitors. For example the use of price comparison sites will alert you when you should lower the price competition, ( Kotelnikov, 2014).
Weaknesses increases the probability of a risk event occurring, furthermore it makes it will make it difficult for the company to respond to external threats. To deal with threats the company should prioritize action plans such as training strategies or recruitment to overcome the problems which are presenting a greater risk.
PESTEL analysis
SME economic factors
Just like in other countries SMEs in Oman are still facing a number of challenges which are hindering their growth and development. The growth of a firm usually is affected by the environmental factors. Defines economic factors as the factors influencing changes in the cost and prices of products, interest rates, wage rates and inflation.it has the ability to affect how the business generates its profits. The economic factors influencing Small and Medium enterprises include the following:
Taxation
This is a major factor inhibiting SME growth in Oman; most of the small firms are unable to survive due to high taxation by the government. It reduces the profit incentive to the firms and raises the cost of doing business since most of the Oman’s SMEs lacks the capacity to administer tax returns. As a result most people don’t have the motivation to start a firm because they cannot afford to pay the high taxes and still maintain the business profitability.
Inflation
Inflation is a major cause of rise in the general pricing of goods and services, (Pawliczek, & Rössler 2016). This rise in prices makes goods and services expensive to the common markets normally targeted by SME enterprises.
Access to finance
Access to financial services and credit in the sultans is one of the foremost challenges for the SMEs. This has negatively influenced the growth of firms in Oman as a developing country. Muscat bank has encouraged the SMEs in the country to enhance the mechanisms of encouraging a saving culture for them to use as collateral for financial credit access
Competition
SMEs are not always competitive when we consider their knowledge, innovation and the way they conduct their operations generally. Oman is competing with other countries as a result of globalization and the increase in trading activities. According to the view of Sandan development LLC, it is evident that competition presents a risk for survival for the individual enterprises
Culture factors
Cultural factors are sets of values and norms that a particular group believes in, it is what shapes the behavior of an individual. The SMEs need to take into consideration the culture of the consumers in order in order to exhaust their needs and demands
Education
It’s evident that the level of education of the consumers and the community as general affects the growth and development of the Small and Medium Enterprises. The sultans’ level of education is average not everyone is educated but a considerable number of the population have access to education. The more a community is educated the more likely to have more SME skills and hence higher rate of business assimilation, (Miladi, 2014).
Social responsibility
An enterprise has the responsibility to give the best good and services to the community since they are the consumers of their products. The consumers delight increasingly knowing that there is a positive social outcome form the money they spend in buying the particular product
Religion
The sultans Muslims and hence the SME do not have the difficulty is deciding what product or service is acceptable and appropriate to their customers
Technological innovations that the SME is using
Information technologies help reduce the costs of operation, accelerate the development process and enable effective advertisement of the products and services. Sandan has incorporated a number of technological innovations in order to ease the processes and efficient customer service.
ICT task force
As part of Sandan development LLC efforts to deal with challenges brought about by changes in technologies, they have established a task force and a group of personnel to control the ICT uptake and competitiveness.
Electronic invoicing
This is the transfer of billing and payment information vial electronic media or the internet. This is what most businesses and enterprise have incorporated in Oman and the rest of the world.
E-Business
ICT has changed the way business is carried out all over the world. The quality of SMEs has have improved in Oman over the past 3-4 years and they have invested more in hardware hence allowing the introduction of new business
Conclusion
Oman’s economic growth rate is accelerating; the country’s development has been boosted by the introduction of the company. The 9,000 job opportunities are a step ahead and the government should put a lot of effort in supporting this company. The adoption of new technologies and smart building solutions has driven the growth of facility management, (Sheng et al, 2017). This study suggests that the sector is moving towards a quantum leap and as a result it will transform all the industries and other related sectors to the positive. In addition to that, the research shows that Sandan will record the highest growth rate and later become the largest overall building company in Oman in the next 5 years.
References:
Sheng, J., Zhou, Y. and Li, S., 2014. Analysis of Real Estate Project Market Localization.
Khoshbakht, M., Gou, Z. and Dupre, K., 2017. Cost-Benefit Prediction of Green Buildings: SWOT Analysis of Research Methods and Recent Applications. Procedia Engineering, 180, pp.167-178.
Kotelnikov, V., 2014. Small and medium enterprises and ICT.
Bala, V., 2015. Small and medium enterprises: Threats to environment and sustainable development. IAHRW International Journal of Social Sciences Review, 3(1).
Miladi, A.I., 2014. Governance for SMEs: Influence of leader on organizational culture. International Strategic Management Review, 2(1), pp.21-30.
Pawliczek, A. and Rössler, M., 2016. Knowledge of Management Tools and Systems in SMEs: Knowledge Transfer in Management. Knowledge Management Initiatives and Strategies in Small and Medium Enterprises, p.180.
Heurman, M. and Paavola, J., 2015. Marketing Plan for a SME.
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