Analysis of Kibsons International

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Introduction

Kibsons International is a Dubai company, which produces and delivers fruit, vegetables, and meat to UAE customers. The mission of the company is to bring fresh and healthy food to as many tables as possible (“How Kibsons Took on the Supermarkets,” 2020). As part of this intent, the company also wants to use an online app to make purchases and delivery fast and secure.

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Strength/Weakness Analysis

Management Capability

The company has been operating on the market since 1980, which makes thirty-five years of experience for its top management (“Kibsons International LLC,” n.d.). The current director of operation is Halima Jumani, who has been with Kibsons since 2007. She is the co-owner of the company with her husband, Jamal Hussain, who is the managing director of the firm. Familial ties and years of experience make the management’s commitment a strength of the firm.

Financial Resources

Kibsons’ activities on the market, which extend to the financial support of small and medium businesses, suggest that its net balance is positive (“Kibsons Steps in to Help Cash-Strapped SMEs,” 2020). Having more income than expenditures is the strength of the organization. Kibsons is a limited liability company, which means that it cannot sell its shares of stock to the public to raise finances. The only way for this company to raise funds is to sign financial agreements with private investors. The lack of the opportunity to attract investors via public offerings is a weakness.

Operations

Kibsons’ overhead costs include the production of meat, procurement of fruits and blueberries, and sales. Kibsons operates several production facilities, which supply their cold stores with fresh produce. Once the products arrive, they are registered online and available for customer purchase (“Q2 Issue of 2019 MEA Markets Magazine,” 2019). The digitalized inventory control system, which allows swift updates in the corporate database, is another strength of the firm.

Merchandising Capabilities

The major distribution tool is online marketing, which is performed through an app. Instagram, Twitter, and other social networks are used for the advertisement and promotion of merchandise. They also enable the company to quickly update the client base on the appearance of private brands, which are distributed by Kibsons. The use of a modern information system to communicate with customers is the strength of the company.

Store Management Capabilities

As all marketing and sales are performed online, there are no sales associates. Previously, the company used supermarkets to sell their produce. However, this venue of distribution was abandoned in favor of delivery services. As a result, now customers have to rely on products’ descriptions to decide which of them they will purchase. Therefore, the lack of sales associates is a weakness of the company.

Locations

Kibsons has four production facilities, one of which is simultaneously the corporate headquarters (“Kibsons International LLC,” n.d.). The cold stores and the meat processing factory are located in Al Aweer and Ajman, while no corporate affiliates exist in Abu Dhabi. The reclusiveness of production facilities from the majority of the UAE population is a weakness of the company because it creates the possibility of products being delivered not fresh.

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Customers

The client base of Kibsons comprises primarily UAE customers. Nevertheless, the company also delivers products to Arab countries in proximity to the UAE. The target audience is the people who appreciate living a healthy lifestyle. Social awareness of health issues is on the rise, with fruits being promoted as necessary components of healthy eating. As it is a modern trend, the chosen marketing campaign is the strength of the company.

Opportunity/Threat Analysis

Market Factors

The fruits and vegetable market is valued at nearly 4,000 million dollars (“United Arab Emirates Fruits and Vegetables Market,” 2020). It continues to grow as the consumption of fruits increases due to the propagation of healthy ingredients. At the same time, there is no seasonality, as the seasons of the year do not change eating habits in the UAE. Therefore, the expansion of vitamin-rich products sales is an opportunity for the company.

Competitive Factors

Kibsons is a leading retailer of fruits in the Emirates (“Q2 Issue of 2019 MEA Markets Magazine,” 2019). This means that barriers to entry are absent as the company already has a large portion of the market. Kibsons’ competition comprises fruit retailing companies, which also rely on online tools. As the demand grows, more businesses are incentivized to fruits. This constitutes both a threat and an opportunity to Kibsons. If the company does not acquire a new operating facility to increase production and delivery in Abu Dabi, it will face the threat of consumers choosing retailers in closer proximity. At the same time, opening a new facility on the opposite side of the UAE is an opportunity for the company.

Environmental Dynamics

As the control for environmentally safe production intensifies, Kibsons has to modify its technological process to meet the Hazard Analysis and Critical Control Point standards (“Kibsons International LLC,” n.d.). Businesses have to follow governmental guidelines on hazardous material production. The possibility of the government’s stricter regulation of environmental safety constitutes a threat to the company since it will have to spend more resources on fulfilling its corporate social responsibility.

BCG matrix

Kibsons used to be a wholesale company, which was present in supermarkets. However, as the bargaining power of hypermarkets rose, the company decided to shift to delivery services (“How Kibsons Took on the Supermarkets,” 2020). As all retailing is handled online, the COVID-19 pandemic did not have a significant effect on the structure of Kibsons’ operations (Thomas, 2019). The only change was the increase in the number of deliveries a day, which had been the intended plan years before the pandemic. Therefore, the BCG matrix will be the same for the time before and after COVID-19.

The BCG matrix has four elements: stars, cash cows, question marks, and pets. The stars are well-known products having a large market share and generating a high return on investment. In Gibson’s case, stars are fruits because it is common knowledge that they are essential in healthy eating, for which there is high demand. Cash cows are those products that have a high market share but low growth. Kibsons’ blueberries represent cash cows since they are frequently bought by customers with low income due to price (“How Kibsons Took on the Supermarkets,” 2020).

Question marks refer to products, which have little market representation and can grow in the future, while pets are those products that have no growth and should be dropped. Kibsons produced meat, yet only the processed meat market is expected to grow, making it a question mark for the company (“The Middle East and Africa Processed Meat Market,” 2020). At the same time, unprocessed meat is a pet because it seizes to be popular.

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Ansoff Matrix

Ansoff Matrix is a representation of the current strategies employed by a company. The first strategy is market penetration, which presupposes the expansion of presence in the market. The second one is product development which entails a company introducing new brands in the market it is already present. Market development focuses on appearing in new markets with products, which have a high share in a different one. Finally, diversification refers to approaching a new market with a previously unused product.

Kibsons successfully dominates in the UAE fruit market with its grown produce. According to Ansoff Matrix, this company implements two growth strategies – market penetration and product development. The other two do not apply because the company does not introduce any new products or brands, which they would promote in other regions. Meanwhile, market penetration can be observed in Kibsons’ initiative to build a new production facility, which implies the intention to increase production volumes. Moreover, Kibsons’ recent partnership with the UK company Sainsbury leads to new products being available for purchase on Kibsons’ app (Godinho, 2020). This development suggests that the company follows the product development strategy.

Suggestions in the Post-Pandemic Era

Kibsons showed that it is capable of surviving the lockdown measures and continuing its delivery services. The first suggestion is to use the World Health Organization’s encouragement to eat fruits as preventive measures against COVID-19 as an advertisement slogan (World Health Organization, 2020). The second one is to allow small businesses to sell fruits via its delivery service. It has helped both sides in the past (“Kibsons Steps in to Help Cash-Strapped SMEs,” 2020). Finally, Kibsons should address its geographic limitations and open subsidiaries in Abu Dhabi to minimize the risk of products ceasing to be fresh during delivery. All these measures will help the company sustain itself in case quarantine is reintroduced.

References

Godinho, V. (2020). Sainsbury’s enters UAE through exclusive partnership with Kibsons. Web.

How Kibsons took on the supermarkets in the UAE and won. (2020). Web.

Kibsons International LLC. (n.d.). Web.

Kibsons steps in to help cash-strapped SMEs. (2020). Web.

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Middle East and Africa processed meat market. (2020). Web.

Q2 issue of 2019 MEA Markets Magazine. (2019). Web.

Thomas, A. S. (2019). The year that was: Halima Jumani, director, Kibsons. Web.

United Arab Emirates fruits and vegetables market – Growth, trends, and forecast (2020 – 2025). (2020). Web.

World Health Organization. (2020). Coronavirus disease (COVID-19): Food safety and nutrition. Web.

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BusinessEssay. 2022. "Analysis of Kibsons International." November 28, 2022. https://business-essay.com/analysis-of-kibsons-international/.

1. BusinessEssay. "Analysis of Kibsons International." November 28, 2022. https://business-essay.com/analysis-of-kibsons-international/.


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