Introduction
For a company to be successful in its field of trade, it has to put in place effective performance measurement measures and a solid quality management strategy. These inputs will set it apart in the industry thus enabling it to deal with any competition that may be forthcoming. Constant auditing of the performance measures and quality management strategies is necessary since it ensures that high performance standards are upheld. The United Arab Emirates has some of the most successful real estate companies in the world due to the quality management measures put in place by both the government and the individual companies. One such company is Emaar Properties, which is based in the financial capital of Dubai. This essay looks at the company closely, its market contribution and competitors, and the performance measurement and quality management strategies it has in place.
Company Analysis
Emaar Properties is one of the largest property developers in the UAE and the world with its headquarters in Dubai. Its inception was in the year 1997 because of the construction boom experienced here around the same period (Dawawala, 2009, p.1). The high housing demand propelled the company to be one of the largest investment firms, a title which it has held over a number of years in the UAE. It was later listed in the Dubai Financial Market as a âPublic Joint Stock Company (PJSC)â, and as part of âDow Jones Arabia Titans Index: (Dawawala, 2009, p.3). The growth of Emaar Properties has been contributed in part by the high demand for residential units in the Emirate the rising prices of the units. The vibrant Dubai Economy has also facilitated the growth of this company, as it has a lenient government policy in the industry, which facilitates its expansion and running.
The mission of Emaar properties is âto transform into a one-stop, global solution provider for lifestyle including homes, work, play, leisure, retail, health, education, finance, industry, and many moreâ (Dawawala, 2009, p. 4). The vision is âto transform into one of the most valuable lifestyle developers in the world beyond real estate developmentâ (Dawawala, 2009, p.5). This vision has partially been achieved. A significant progress is the opening of branches in over 15 countries. The company operates by purchasing land for its developments, attaining the necessary government approvals, and developing the land to current standards in the real estate market, which it later sells at a profit (Dawawala, 2009, p.5). One of the advantages that the company enjoys is location. Over the years, Dubai has been considered as one of the fastest growing cities in the world with over half of the worldâs cranes being operational here at one time.
The demand for properties in Dubai has also been increasing over the years with investors willing to spend more on the same. The government policy in the industry is also favourable with the current administration investing more in real estates. There is also land available for expansion in the country. It is estimated, âEmaarâs total estimated share of land in Dubai itself is 235million Square metresâ (Dawawala, 2009, p.5). The Dubai Government owns about 32% of the Emaar real estate developers thus ensuring a constant supply of capital and necessary resources. The company has also benefited from the Brand power that it has established over the years with investors willing to invest with it due to the short time required for the ROI. This benefit is highlighted since âWithin 6 months of booking of any Emaar property, it has provided approximately up to 50% ROI to the investorâ (Dawawala, 2009, p.6). This achievement has boosted investorsâ confidence in the company besides establishing its firm market dominance. It is observed that most of the projects, which the company has undertaken are fully booked within the first day of prelaunch thus highlighting the high demand.
Another driving force for the growth of the company has been the demand for houses to be bought as an option to renting because the country has one of the highest rents in the world with an average of 25-40% increases each year. Property owners are therefore not willing to renew contracts for existing tenants. They (tenants) opt to buy new houses as the easier option. Other factors favouring the company include the high foreign inflow investments (Dawawala, 2009, p.7). The country is tax-free and âinvestorâs capital is not taxed…expats were given a 99 years of residency on every purchase of free holdâ (Dawawala, 2009, p.7). This strategy has therefore led to the high investment in the property market, which in turn has improved the returns to Emaar Properties.
Market Share
In the year 2005, the company earned $ 2,276 million in revenue. In fact, this figure rose in following year to about $3,813 Million (Dawawala, 2009, p.7). The year 2007 marked another growth in revenue with the mark of $4,782 million being achieved (Dawawala, 2009, p.8). This growth rate was calculated at 48% over the three years in terms of revenue (Dawawala, 2009, p.8). The company has also recorded increased profits over the years. In fact, using the years above, the company made $1,288 million in net profit for the year 2005 as per Emaarâs financials (Dawawala, 2009, p.9). This achievement increased in the year 2006 to $1,735 million with continued 71% increase in the following year to a profitability of $1,790 million for the year 2007 (Dawawala, 2009, p.10). The property giant was also ranked the fourth in âThe UAEâs top 50 companies in the survey that was done for the companies operating for the year 2012. The company âhas seen a rise in its share price this year, and is ranked fourth with a value of AED18.58bn, well ahead of the next property company, Aldar, ranked 16th with a value of AED4.53bnâ (Dawawala, 2009, p.10). This revelation proves that the company is well in course to maintain its market dominance over the next decade. In fact, there is much hope of seeing the company emerge the most successful not only within the UAE but also in the world at large.
Competitors
As noted above, one of the closest competitors for the company is Alder Investment Company (Dawawala, 2009, p.1). However, Alder Investment Company has not been able to cope with the market. In fact, it has a less strong brand name as compared to Emaar. The market share for Emaar Properties is intact. This strength increases each day. Other competitors in Dubai are smaller companies, which are not financially strong. However, the company faces strong competition in the international markets from other investment multinationals elsewhere. However, this case has not hindered the expansion of the company to most of the Arabic countries. Where this competition exists, the company still has significant market shares with marked growth in the economies.
Performance Measurement and Quality Management Strategy
Total Quality Management is a system that enables a customer-focused organisation to improve and maintain high standards in its service delivery to the concerned clients. Emaar Properties has put in place measures to ensure that all the principles of total quality management are respected. This effort has contributed significantly to its large market share. The strategy of the company is to ensure that all the employees are involved in the effective quality management strategy. The company has a large number of employees in the many branches it has in the world, with the bulk of them working in the company headquarters in Dubai. These are trained to work in the most conducive of conditions, which the company has provided with an attractive payment package. This principle ensures that the employees are among the best retrained and qualified in the industry (Dawawala, 2009, p.15).
The management team is described to be highly qualified and experienced with the board of directors controlling the events and functions of the company. The mission and vision of the company are integrated in the working schedules of the company with each of the employees being expected to know and work towards personally achieving them. The company is also focused on continued improvement. It has tried to achieve this focus by maintaining the high value it withholds in its transactions (Dawawala, 2009, p.16). Some of the projects, which the company has embarked on, have contributed towards making it a market leader. The projects have ensured the brand name of the company is respected. As a result, most of these projects have attracted a high demand even on the drawing board (Dawawala, 2009, p.16). Decision-making in the company is guided, not by personal interests, but by the use of expert data and information provided by the management (Dawawala, 2009, p.16). This strategy has ensured that the decision-making process is appropriate. As such, the result has been new generation projects by the company.
The company has also invested in efficient communication strategies with an efficient framework in place for this strategy (Dawawala, 2009, p.17). As required for a successful company, the top management is regularly trained on TQM principles (Dawawala, 2009, p.17). The company also performs an assessment regularly on the functioning of its branches and investments with an annual report being presented to the staff for inputs on the areas to improve on as well as the strategies that need to be heighted on brought on board (Dawawala, 2009, p.18). A customer survey is also conducted. Over the past, the company has enjoyed high ranking in terms of client satisfaction (Dawawala, 2009, p.18).
The management also provides a blueprint of the core values and principles. This provision is communicated to all employees of the company. In accordance with the mission and vision of the company, customer satisfaction is a priority, which is embedded in the goals set by the company. The needs of the clients are therefore prioritised. As such, the products are therefore based on the customersâ needs (Dawawala, 2009, p.19). The company has a team of employees who are dedicated towards guaranteeing standard services, and these are in the quality assurance department. The suggestions and opinions of these individuals are incorporated in the companyâs strategy for each season. In part, this strategy has contributed to the improved service delivery.
The management of the company is involved in the training of the team involved in the improvement of service delivery. Besides, it later provides the required resources and planning for this outcome to occur. Adjustment is then made for the improvement plan by using the laid down strategies. The employees also get a frequent awareness session on the measures taken by the company. A feedback is also provided. This strategy has contributed to the success of the company thus allowing its diversification in other related markets and industries.
Some of the awards that the company has won include âEuromoney Best Developer in the Middle East and North Africa, Euromoney Top Laurels â Best developer in the UAE and Best developer in Saudi Arabia, Middle East Business Global Competitiveness Excellence Award, and the Mohammed Bin Rashid Al Maktoum Business Award (MRM Award)â (Dawawala, 2009, p.15). These awards were all won in the year 2009 alone. In fact, they were an addition to the large number of awards and high rankings that the company got in the previous years. Emaar Properties is also set to win a number of other awards specifically due to its excellent real estate developments in Dubai.
Recommendations
The company has set in place an effective performance measurement and quality management strategy. However, some improvements could be made to ensure that the company enjoys the continued success. Over the past, the company has developed housing units for the upper class. The people who cannot afford the units end up missing the opportunities. Therefore, it is recommended that company needs to embark on large scale housing schemes for the lower end of the market. This strategy will ensure improvement in consumer rankings once implemented.
The company should also invest in other markets with perceived competition in a bid to establish itself as a global brand that is dedicated to service. In the past surveys done, the company was ranked in the top 500 companies in the world. However, it shared this list with banks and other real estate companies. This enhances its image as a global company. Nevertheless, the branches elsewhere out of the UAE are not as competitive as it is. There is therefore a need for the company to come up with an effective strategy to achieve global dominance.
With the increasing number of real estate companies in Dubai, the stabilising of the real estate industry, and the global financial status, the company is likely to experience challenges in the real estate industry. Its profits are therefore likely to dip over the next years because the Dubai market and its markets elsewhere are saturated with developments in this area with less of the capital being available. The company therefore needs to diversify its operations by break from the past where it has only engaged in real estate investments. This plan will go a long way in maintaining profitability and a strong brand name for the company.
Conclusion
In conclusion, performance measurement and quality management strategies are important in the success of a company. Emaar Properties is one of the largest real estate investment companies in the world with its main branch in Dubai dominating the market. As discussed in the paper, the company has enjoyed a large market share in this industry over the years. This achievement has enhanced its brand name. Some of the measures in place for performance measurement and quality management have been discussed in the essay with specific recommendations being made.
Reference
Dawawala, A. (2009). Economical Analysis for Emaar Properties. MuĂËnchen: GRIN Verlag GmbH.