SEU Sources of A Firm Resources and Capabilities Global Strategy Discussion

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What two sources of a firm’s resources and capabilities have important implications for where the firm locates its production?

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Zamil Air Conditioners Company
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Zamil Air Conditioners Company
Introduction
Zamil Air Conditioners (ZAC) is a Saudi Arabian company that is currently leading in
supplying air conditioners in the entire Middle East. The company deals with the production and
supply of various air conditioners, including room air conditioners, to large units meant for
industrial and commercial applications (ZamilIndustrial, 2020). The company currently has
several products under its name and has risen to become among the leading companies with great
influence in Saudi Arabian government. This paper seeks to discuss the strategic plan employed
by this company through its part to becoming a top-notch international company
(ZamilIndustrial, 2020). To do this, the paper will discuss how the company extended its
competitive advantage from the local market internationally. Also, the paper will explain the
market entry strategy employed by the company in gaining an international market and how the
company mobilized local resources and factors to establish an international market.
Local Competitive Advantages in International Market
First, the company has established its local market sufficiently as it owns a larger market
share locally. In its initial plans to go global, the company ensured that the local market was
sufficiently addressed and had support from various key players (ZamilIndustrial, 2020). For
instance, the company enjoyed enough capital availability through its affiliation with Zamil
Investment Company (ZIIC), a well-established company with a variety of investments. ZAC’s
affiliation with ZIIC has given it a huge competitive advantage over its competitors as it earned
the company a reputable status (ZamilIndustrial, 2020). ZIIC is a highly respected company
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within Saudi Arabia and beyond as it has taken part in significant projects. Therefore, picking up
ZAC offered the latter a huge advantage.
The company has been in the international market for quite some time now. In its annual
report of 2005, when the company was globalizing, it used its diversity in the workforce to gain
an international market (Zamil Industrial Investment Co, 2005). The company’s workforce was
diverse because it employed not only the citizens but also from the international market; hence
the transitioning was easier. For instance, when the company first entered the Japanese market,
the Japanese employees working for the company played a vital role (Zamil Industrial
Investment Co, 2005). Therefore, the company enjoyed a competitive edge through its diversity
in the workforce.
Additionally, the company has invested heavily in its product line and works perfectly to
meet the different customer needs across countries. For instance, in the Middle East, cultural
differences and preferences require high diversification to satisfy different customer needs. In its
globalization strategy, ZAC understood the existing cultural difference and the need to produce
different designs to suit particular customers (Zamil Industrial Investment Co, 2005); therefore,
the company can increase its market share as different people can find different products.
The other point to consider that brings out the competitive advantage of ZAC company is
its intense marketing strategy. The company has set a strong marketing strategy that positions it
higher than its competitors. This intensive strategy has been enabled by the association with
ZIIC, which has easy access to capital (Zamil Industrial Investment Co, 2005). This marketing
strategy pushed the company beyond the local market as it earned recognition from the regional
market and eventually the global market.
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A close look at the above strategies applied by ZAC shows that these strategies apply
both in the local and the international market. For instance, the company’s affiliation to ZIIC was
an initial plan as the company was established. However, the two companies have continued to
partner in the international market. Also, the issue of having a diverse workforce has intensified
as the company continues to penetrate the international market. This strategy is also necessary as
it gives host countries a sense of belonging, thus boosting acceptability by the international
customers. The diversification of product types is also in place in the international market.
Considering the dynamic nature of the markets and consumers, the company needs to continue
diversifying its products to meet varying demands. Competition is becoming intense, and there is
a need for heightened marketing. Therefore, their intense marketing strategy is applicable in the
international market.
Mode of Foreign Market Entry
There are several ways a local market can gain entry into the international market. ZAC
entered the international market by partnering with an already established company ZIIC. This
strategy can also be termed as joint ventures whereby two or more enterprises can collaborate
and establish a market in an international market, and the joint ventures share ownership,
property rights, and control (TradeStart). The two companies work mutually to maintain the
international market share and venture into the untapped market.
Resources and Capabilities in The Local Market Used in the International Market
In its infant stage, ZAC company faced several challenges, especially in terms of capital
and competitors. However, the decision to partner with ZIIC company proved very fruitful as it
opened up many opportunities, including access to capital (Zamil Industrial Investment Co,
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2005). ZIIC is also a reputable company recognized regionally and enjoying a good working
relationship with the government and major stakeholders in the industry. Therefore, this served
as a great opportunity for ZAC company to grow and get the necessary networking
(ZamilIndustrial, 2020). Also, the investment company availed very important information to the
junior company that opened up huge investment opportunities for the company. In the political
context, the local government of Saudi Arabia has always been very supportive of the company.
It has created an enabling and conducive environment that thrives (ZamilIndustrial, 2020). In
addition, besides the loyal customer base, the government has also been their biggest customer
by purchasing their products for office installations.
Additionally, their company enjoys vast experience and expertise in product
development, evidenced by the several accolades they have won (ZamilIndustrial, 2020). Their
trusted quality and ability to meet customers’ needs and satisfaction has given them a competitive
advantage making the air conditioner industry seem monopolistic. The company is renowned for
making quality air conditioners and other products.
Conclusion
In conclusion, Zamil Air Conditioners is a perfect example when analyzing local markets
that have stepped up to the international stage. The company’s path is clear from scratch until
being incorporated by the huge company that has opened its paths. The company strategically
analyzed the target areas in the market and used these areas to gain a competitive advantage not
only in the local market but also globally. Also, due to its close ties with ZIIC, the company
stepped into the global market through the exposures of this investment company. Notably, the
company’s ability to enhance local resources and capabilities and use them to steer its growth
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into the global market. All these successes and progress made by ZAC company result from
competent and futuristic strategic plans put in place.
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References
TradeStart. Market Entry Strategies. Tradestart. Retrieved 8 March 2022, from
http://www.tradestart.ca/market-entry-strategies.
Zamil Industrial Investment Co. (2005). “A Winning Industrial Leader Creating Superior Values
for Business & Community .”Argaamplus.s3.amazonaws.com. Retrieved 8 March 2022,
from http://argaamplus.s3.amazonaws.com/231b882d-5e42-40e1-ba6bb9890f320514.pdf.
ZamilIndustrial. (2020). Zamil Industrial Investment Co. Announces Consolidated Interim
Financial Results for the Nine-Month Period Ending 30 September 2020.
Zamilindustrial.com. Retrieved 8 March 2022, from
https://www.zamilindustrial.com/uploads/newsLetterDoc/Impact_42_en.pdf.

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