Swot Analysis of Al Aim Farms Saudi Arabia

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SWOT ANALYSIS OF AL AIM FARMS SAUDI ARABIA
This SWOT analysis shows the internal strengths and weaknesses of Al Ain Farm in comparison to
external market opportunities and threats in the Saudi Arabian economy. Since the KSA economy is
growing rapidly, therefore it presents a robust expansion opportunity for multinational and global
companies to capitalize on the vibrant economic growth of the country.
Strengths
- Well-established brand – Al Ain Farm is considered the leading dairy and other related
products provider in UAE. The company is renowned for its high-quality products and brand
reputation. Therefore, it can capitalize on its goodwill and brand image to attract customers in
the Saudi Arabian dairy and allied products market. This will also offer a competitive
advantage to the company.
- Diverse product portfolio – Al Ain Farms offers an extensive product range such as dairy,
poultry, juices, and other fresh produce. The company can utilize its diverse product portfolio
to meet a broader customer segment’s needs in Saudi Arabia. For instance, the Saudi Arabian
dairy industry seeks international expansion to support its economic growth as it struggles to
fulfil local demand with domestic production. Hence, Al Ain Farm can capitalize on this
opportunity.
- Technical advancements and innovations – the company is renowned for its investment in
capital infrastructure as well as farming processes to produce quality and innovative products.
Al Ain can use this expertise and innovative farming practices in the growing Saudi Economy
to meet the quality-sensitive needs of Saudi Arabian customers.
- Strong supply chain network – Al Ain Farm has a very strong supply chain network spread
across the UAE. This enables the company to source and deliver materials and goods across
Saudi Arabia and expand into the market.
Weaknesses
- Reliance on imported feed – the company highly rely on imported feeds for the production
of dairy, poultry and products. The fluctuations in the currency prices as well as inflation
levels in Saudi Arabia can affect the company’s entry into the market.
- High operational cost – despite strong financial health, Al Ain Farm may face difficulties in
entering the Saudi market due to high entry costs (capital, brand image, physical) established
by local farms such as Alamarai Farms Saudi.
- Limited domestic understanding – Al Ain has limited regulatory, industry, and customer
behaviour knowledge which makes it difficult for Al Ain Farm to retain its brand image and
position in the Saudi economy.
Opportunities
- Industry Growth – the dairy product industry in Saudi Arabia is expected to reach around
$5.5 billion in 2024. It is also anticipated to grow by a CAGR of 3.6% till 2029 (Stallkamp,
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2024). This presents a good opportunity for Ail Ain farms to capitalize on the growing
industry of Saudi Arabia.
- Government assistance – under the Saudi Arabia Vision 2030, the kingdom supports
investment in dairy and food products to meet local demand without importing costly
products. Therefore, Al Ain Farms can benefit from local partnerships, and government
incentives, and navigate regulatory barriers comfortably.
- Growing e-commerce – Saudi Arabia offers a great opportunity for both physical and online
shopping with e-commerce growing significantly. As per a World Bank report, 100%
population of Saudi Arabia has access to the internet and uses it (Mordor Intelligence, 2024).
It allows Al Ain Farm to distribute its products easily as well as generate more revenues by
reaching a large customer base from online and break-and-mortar strategy.
Threats
- High local competition – the Saudi Arabian local economy is fueled by intensive
competition from major suppliers such as Almarai, SADAFCO, and NADEC along with a
loyal customer base. Countering these competitors may require extensive financial, capital,
and marketing investment.
- Regulatory barriers – Saudi Arabia is renowned for its strict food quality and safety through
multiple regulatory legislations such as the Saudi Food and Drug Authority. There are
multiple regulatory barriers such as food labelling, Allergen control, food handler
requirements, transportation etc. Therefore, Al Ain Farm will need to comply with multiple
regulations to sustain its position in the market.
- Economic fluctuations – the Saudi Arabian economy is highly dependent on oil production
which means global oil prices have a significant influence on the economic conditions of
Saudi Arabia. Global oil prices fluctuate significantly due to exchange rate differences, local
conflicts, differences between OPEC, and supply chain disruptions across the Gulf Sea.
Hence, demand for premium AL Ain products may fall with a decrease in the purchasing
power of residents.
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References
Mordor Intelligence. (2024). Saudi Arabia E-Commerce Market Size & Share Analysis - Growth
Trends & Forecasts (2024 - 2029) Source: https://www.mordorintelligence.com/industry-
reports/saudi-arabia-ecommerce-market. Retrieved from
https://www.mordorintelligence.com/industry-reports/saudi-arabia-ecommerce-
market#:~:text=The%20Saudi%20Arabia%20Ecommerce%20Market,e%2Dstores%20in
%20Saudi%20Arabia.
Stallkamp. (2024). Thinking Bigger: Dairy Farms in Saudi Arabia. Retrieved from
https://www.stallkamp.de/en/company/news/389-thinking-bigger-dairy-farms-in-saudi-
arabia#:~:text=The%20focus%20was%20on%20the,over%20the%20skyline%20of
%20Riyadh.

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SWOT ANALYSIS OF AL AIM FARMS SAUDI ARABIA

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