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Strategic assessment of residential and real Estate industry in Saudi Arabia

STRATEGIC ASSESSMENT OF RESIDENTIAL AND REAL ESTATE INDUSTRY IN SAUDI ARABIA

USING PESTEL AND SWOT MODELS

Mohiuddin Asad
B.Com, MBA(UK), ACCA, CMA, CIA, CFE, FFA, CCSA

Mohiuddin Asad

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Electronic copy available at: http://ssrn.com/abstract=1987530

Strategic assessment of residential and real Estate industry in Saudi Arabia

Introduction
In the following article, the author has carried out a strategic assessment of residential and real estate construction industry in Saudi Arabia. Beginning with explaining the concept of strategy in different schools of thought, he has used PESTEL and SWOT models to perform his assessment. The author has first scanned the external macro environment of the residential and real estate construction industry in Saudi Arabia using the relevant PESTEL factors and then highlighted the strengths and weaknesses of major firms in the said industry with the help of SWOT model.

Mohiuddin Asad

2

Electronic copy available at: http://ssrn.com/abstract=1987530

Strategic assessment of residential and real Estate industry in Saudi Arabia

SRATEGY IN DIFFERENT SCHOOLS
Whittington (2001) categorized strategy in four basic generic approaches namely, Classical, Evolutionary, Processual and Systemic. According to classical approach, strategy is a logical process of calculation and analysis, intended to maximise long term benefits. For classicists, profitability is the ultimate objective of business, and rational planning is the means to achieve it. As per Alfred Sloan: “the strategic aim of a business is to earn a return on capital, and if in any particular case the return in the long run is not satisfactory , the deficiency should be corrected or the activity abandoned” (Sloan, 1963) For evolutionists, strategy in the classical sense of rational deliberate future planning is often irrelevant. In evolutionary approach, competition is not

References: Whittington, R. (2001), what is Strategy - and Does it Matter? 2nd edition, Thomson Learning, London Sloan, A. P. (1963), My Years with General Motors, London: Sedgwick and Jackson. Cuizon, G. (2009), Theories of Action in Business Strategy: Classical, Evolutionary, Processual and Systemic Approaches Mintzberg, H. (1990), “Strategy formation: schools of thought”, Harper Business, N.Y Mintzberg, H., Ahlstrand, B. and Lampel, J. (1998), Strategy Safari: A Guided Tour through the Wilds of Strategic Management, Prentice-Hall, N.Y. IFC, (2009), “Doing Business 2010: Reforming through Difficult Times” International Finance Corporation, World Bank, September 2009 Report Saudi Arabian Foreign Investment Act, (2000), article (6), Saudi Arabian General Investment Authority Research and Statistics Department (2009), “Economic Developments 4th Quarter 2008”, Saudi Arabian Monetary Agency Annual Budget (2009), Ministry of Finance, Saudi Arabia Saudi Economic Perspectives, (2009), National Commercial Bank, Saudi Arabia “Mid-Year Economic Review and Forecast”, (2009), Saudi American Bank (SAMBA), Saudi Arabia “Saudi Arabian Real Estate Market”, Global Investment House, Kuwait, Jan, 2009 “Oil fuels Saudi real estate market boom”, Global Property Guide, Aug, 2008 “Saudi Cement Sector”, BMG Advisors, June 2008 Mohiuddin Asad 13 Strategic assessment of residential and real Estate industry in Saudi Arabia “Saudi Steel Makers receive export Licenses” Gulf News, July 6, 2009 “Contractors focus on Saudi Arabia”, Meed, 20-26 March, 2009 Mohiuddin Asad 14