Client Situation
Our client is a group of companies that started its operations in 1979 and primarily engaged in FMCG wholesale and distribution. The group now has a portfolio of diversified investments, including development and management of real estate, restaurants, marketable securities, etc. The client wanted to enter the retail market in the UAE and wished to perform a market assessment to identify the opportunities, before formulating a comprehensive entry strategy.
Cedar’s Approach
To carry out its vision,client had mandated Cedar to perform an assessment of the UAE market potential and develop the entry and way-forward strategies. Cedar’s approach was as follows:
- Validation of objectives, approach and timelines; and determination of internal data sources
- Collection of all internal data regarding the strategy and operations of the client
- One-on-one interviews with the client’s senior executives to understand their current state assessment and vision
- Collection and validation of global market insights, UAE macroeconomic overview, UAE retail market data, and detailed competitive evaluation
- Primary interviews with external stakeholders in the industry value chain
- Integration and analysis of all gathered inputs
- Way forward strategy development
Outcome
The key outcomes of this program were as follows:
- Identification of an opportunity to realise revenues of AED 700-900 million over five years through participation in fast-growing healthy and organic markets
- Development of a market entry strategy across customer, product, process, channel, organization structure and technology infrastructure parameters
- Some of the key takeaways from the formulated market entry strategy were:
- Targeting of medium to high-income level Emiratis and western expatriates with an inclination towards a healthy lifestyle
- Implementation of segment-based data analytics to provide customers with personalised offerings
- The stores would be one-stop shops for all organic and healthy needs of the customers, and will also cater to customer needs for conventional goods (food & non-food) at competitive rates
- Merit comparison of developing a new organic brand and franchising leading to the strategic recommendation to implement the former strategy
- Identification of five ways to differentiate stores from other retail outlets by building a unique and robust brand perception
- 12 Retail outlet locations were shortlisted based on area dynamics, retail presence and population dynamics
- Identification of three major considerations for building a strong, healthy and organic supplier ecosystem, namely: traceability, quality assurance and regulatory awareness
- Identification of eight critical criteria such as lead time, reputation, payment terms, etc. to be considered while selecting suppliers