In the globalized business atmospheres, players in individual industries consider the expansion of their scope of operations in a bid to heighten their competitiveness. Before a company enters a new market, it ought to carry out an analysis of the internal and external factors that would affect its functionality in the new environment (Kang & Montoya 2014). Organizations include the expansion aspect of business growth and development in their strategic plans for the sake of maximizing profits besides attaining other business goals and objectives. For example, multinational corporations such as Coca-Cola saw the essence of expanding globally as a strategic plan over a century ago.
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Established in 1977 in Riyadh, Saudi Arabia, Almarai is a leading global player in the food industry concentrating on dairy products (Sadi 2006). The Irish and Saudi Arabian partners including two brothers, Alastair McGuckian and Paddy McGuckian and Prince Sultan bin Mohammed bin Saud Al-Kabeer respectively, had a long-term vision of expanding the operations of the food industry operator to foreign markets (Woertz & Keulertz 2015).
For this reason, Almarai focused on expanding its operations beyond the Saudi Arabian territories as demand for dairy, bakery, and poultry products grew globally. As part of its strategic plan, Almarai upheld the essence of centralizing its plants in Saudi Arabia to cut its production costs domestically (Asad & Henderson 2007). The strategy inspired the growth of the business domestically and regionally as it secured at least 700,000 shareholders by 2005.
Almarai’s partnership with PepsiCo in 2009 leading to the establishment of the International Dairy and Juice (IDJ) Company exposed its expansion interests in the various global industries and markets (De Jong 2013). Recently, the player has shown its interest in expanding its operations in the European market as part of its internationalization strategy. Therefore, Almarai ought to consider several aspects of the European market including the business environment, operational similarities and differences, available opportunities, European Union (EU) institutional policies, and frameworks, main challenges, and the suitable business strategy (Sadi 2014).
In this light, this paper identifies the reasons for Almarai choosing the European region to establish its manufacturing plant before analyzing the policy and institutional challenges and advantages that would influence the operations of the company in the EU. Further, the paper would assess three suitable EU countries where Almarai could erect its facilities to operate competitively before selecting the most suitable country among the identified. Additionally, identifying the factors for consideration in the chosen country for the establishment of an effective production and distribution facility would be a consideration in this paper before recommending a strategy for the company’s prosperous operations in the EU market.
Reasons for Choosing the EU for Establishing Almarai’s Manufacturing Plant
The EU presents Almarai with a strategic location for establishing its manufacturing plant due to several factors. Selecting the region aims at boosting the competitiveness of the player in the food industry by expanding its operations beyond the Middle Eastern territories. In this regard, conquering the European market would allow the player to gain a competitive edge in other markets such as the Americas and Africa in the long-term. Therefore, identifying the underlying factors that prompt the company to consider establishing its production facilities in Europe is crucial for understanding its suitability for Almarai’s international growth and development intentions.
The strategic location of the European region presents suitable sites for Almarai to consider for the erection of its manufacturing plant. The EU is regarded as the world’s largest market workshop, and thus, developing a manufacturing plant in the region would allow a player in any given industry to blossom and flourish in the region and globally (De Jong 2013). The Eastern, Western, and Central parts of the region present a business environment with the potential of becoming the world’s largest economy in the future as the EU envisions its development to a single country.
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Europe presents itself at the heart of manufacturing and goods exchanges. Europe attracts at least half a billion customers and clients as well as providing a large logistics market that houses more than 6.5 million retail and wholesale businesses. Additionally, the EU hosts over 2.4 million manufacturing plants representing different and multiple sectors (Thow, Downs, & Jan 2014). Therefore, the remarkable figures imply that the region presents a promising atmosphere for establishing a manufacturing and distribution plant that would foster the growth of Almarai in the food and drink sector.
Furthermore, the high number of manufacturing plants in the EU demonstrates the stability of its logistics sector, a crucial factor for consideration when siting a manufacturing plant in any given location. Surprisingly, the EU boats as the most profitable and largest logistics market globally. The network of effective road freight, rail freight, marine freight, and airfreight in the EU contributes to impressive regional revenues, thus, streamlining the growth of the manufacturing sector. Remarkably, in 2010, the logistics sector in the EU managed to gather revenues in the tunes of €2,320 billion, thus, denoting the region’s potential of generating notable revenues that boost the growth of industrial players.
Additionally, Europe grants industrial players with a region characterized by a skilled environment committed towards the development of high technology besides its regard for the essence of research and development (R&D) in the economy. Continued R&D in the health sciences and technologies would favor the collaborative aspects of Almarai’s plant operations by integrating new advancements in the food production sector with its operations. Therefore, since the EU supports extensive R&D in various domains including the food sector, developing a plant in the region would allow the player to produce and distribute quality food products to the customers (Collins et al. 2015).
The cost aspect of locating a manufacturing plant is a crucial consideration for the success of a company that seeks to expand its actions in a new environment. Importantly, when intending to expand, a company ought to consider the plant costs such as leasing or buying land, taxes, wages, training, communications, office equipment, and IT infrastructure. Countries such as Britain have one of the lowest-cost manufacturing economies in Western Europe.
The UE, led by countries like the United Kingdom (UK), is regaining its consideration as the global manufacturing hub, and thus, emerging as one of the cheapest facility locations for the manufacture of different products. Over the past decade, Western European countries have recorded an average of 10% improvement in production costs due to improved productivity and stable wages (Thow, Downs, & Jan 2014).
Similarly, Eastern Europe has recorded low production costs over the past few years, thus, presenting itself as an ideal location to site a manufacturing plant. Importantly, the favorable labor costs in a considerable number of EU states favor the admittance of the food industry competitor in the European market. The mean hourly labor cost in the EU stood at € 25.03 in 2015 as the highest and lowest hourly labor costs reached €4.03 and €41.31 respectively (Baglee & Knowles 2013). Therefore, Almarai would consider the favorable costs stipulated by different countries in Europe for it to boost its productivity and competitiveness in the European market.
The level of infrastructure development in the EU favors the establishment of manufacturing plants that promote the growth of different sectors of the economy. Importantly, the transport and communications aspects of business operations play a crucial role in influencing the effectiveness of a given company (Kang & Montoya 2014). The ability of Almarai to share information flawlessly between its new plant in the EU and its company Riyadh headquarters in the absence of technical, language, or cultural barriers is essential.
In recent years, various countries in the EU have shown interest in developing Next Generation Networks (NGNs) that would boost communication in the region, thus, boosting industrial growth significantly, by 2020, when All-IP architecture would characterize the communication networks. Thus, Almarai’s plants in the EU would operate seamlessly due to the advanced infrastructure in the different EU countries resulting in ineffective processes that would boost its performance in the food industry especially, in the dairy products sub-sector.
Institutional and Policy Challenges and Advantages within the EU
The expansion of operations of a given company into a new market is usually subject to the institutional and policy frameworks that regulate the processes of industry players in the economy. The institutional structures in a given economy guide the way companies conduct their administrative and operational procedures, thereby affecting the corporate governance approach embraced by the company (Sleuwaegen & Onkelinx 2014).
Similarly, an organization that seeks to widen its scope of undertakings needs to comply with the policy provisions that regulate trading processes in the foreign economy. Some institutional frameworks and policy stipulations could favor an organization’s entry into a new market, and thus, bolster its growth in the new market. However, a company could find it difficult to operate in a new market due to the presence of unfavorable provisions that undermine its survival in such economies (Ahmed & Ali 2016). Therefore, analyzing the institutional advantages and challenges that would affect the performance of Almarai in the EU is appropriate in this context.
Institutional and Policy Challenges
The quality-labeling policy adopted by the EU could bar companies with foreign origin from gaining competitiveness in the region’s food market (Zander, Stolz, & Hamm 2013). In this respect, since Almarai traces its roots from Saudi Arabia, some consumers in Europe could opt for similar food products offered by domestic companies. Therefore, such favoritism could undermine the profitability of the new entrant in the market, and thus, undermine the sustainability of its operations in the EU. In this light, the unfair competition supported by the European government policies could undermine Almarai’s expansion prospects resulting in slow growth in the international food markets.
The volatility of dairy prices besides the ineffectiveness of associated instruments required for coping effects with the EU’s food sector considerably. The volatility of the input and prices for dairy production in Europe affects the production and processing of food products implying that players in the industry could incur losses due to uncertainties triggered by economic waves besides other policy frameworks. Therefore, the financial aspect of Almarai’s operations in the EU would be affected significantly by the price and input fluctuations that have characterized the European food industry in the recent past.
Additionally, the ineffectiveness of some legislative frameworks implemented in the EU such as the milk quotas could affect new entrants in the region’s food industry. The policy showed its ineffectiveness and limits in the milk crisis that created demand and supply imbalances in the food industry due to poor timing before intervening. Therefore, not unless the EU introduces intervention measures promptly during crises in the food sector, new players in the sector including Almarai would operate unsuccessfully.
Moreover, challenges such as the uneven implementation of a cost-covering policy, lack of market transparency, and ineffectiveness of some dairy supply chain processes in particular European countries affect the food industry negatively (Manzini & Accorsi 2013). The issues suggest that, as a stakeholder, Almarai ought to maintain vigilance on the aspects that would trigger its failure in the European market. In this light, amid the growth potential that the EU presents to Almarai, several challenges could undermine its development if not fully addressed.
Institutional and Policy Advantages
The EU has established several institutions that seek to develop and implement policies geared towards enhancing the growth of the region’s food and drink industry. The notable institutions that have spearheaded the development and execution of policies in the region include the European Parliament, Council of the European Union, European Commission, European Economic, and Social Committee, and the Committee of Regions (Nestle 2013).
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Additionally, agencies such as the European Food Security Authority, European Environment Agency, and the Consumers, Health, Agriculture, and Food Executive Agency (CHAFEA) have contributed largely towards creating an enabling environment for food industry companies to conduct their operations in the EU, successfully.
For the sake of bolstering the growth and development of the food industry in Europe, the EU created a common agricultural policy that serves multiple purposes and functions that also affect the food sector. The EU agricultural and food-related institutions contributed to the establishment of a policy that aims at assisting farmers to produce adequate food quantities to feed the European population and beyond.
Therefore, such a policy implies that Almarai would benefit from the abundance of inputs for its manufacturing plant in the region. For instance, sufficient dairy inputs supplied by the EU farmers to Almarai would ensure a streamlined flow of its production processes, and thus, meet the demand of its customers not only in the region but also globally.
Additionally, the EU established a policy that pursues the modernization of farming processes in various countries. For this reason, the EU has injected huge investments in the agriculture and food sector to improve the efficiency of agricultural production and processing endeavors. Albania provides a good example of countries that have seen the growth of its food sector thanks to the EU’s Modernisation of the Agricultural and Food Sector Policy. The policy integrated technological advancements in the agricultural and food areas, thereby encouraging the emergence of processing plants and the growth of the food industry (Ahmed & Ali 2016).
Furthermore, the EU has put in place quality-labeling schemes that guide the producers and consumers regarding the manufacturing components and purchasing considerations. The schemes encourage individuals in the EU to consider purchasing food products produced or processed in the region for the sake of promoting economic growth (Collins et al. 2015). Therefore, Almarai’s establishment of a plant in Europe would allow it to penetrate the market easily given that the customers inquire about a product’s country of origin prior to purchasing. Additionally, the quality-labeling policy requires processors and manufacturers in the food sector to employ traditional methods or ingredients of farming like in the case of organic farming.
Suitable Countries in the EU for Almarai’s Production and Distribution Facility
The EU is comprised of several countries that have a common interest in spearheading political, economic, and social growth and development. The EU integrates the economies of 28 member states that contribute to at least 26% of the global Gross Domestic Product (GDP). The EU enjoys a significant number of consumers exceeding 500 million with a high purchasing power, thereby making the region the largest single market globally. Furthermore, the single currency, that is, the Euro is used in at least 19 countries, thus, improving the efficiency of transactions by eliminating the currency exchange barrier (Ingram et al. 2013).
However, despite the efforts put by the EU to create an environment /that allows seamless economic processes, some structural and policy differences in the individual countries could influence the decisions made by investors who seek to establish their plants in the region. Therefore, analyzing at least countries in the EU that would be suitable for Almarai’s operations in the said region is essential.
Ireland is recognized as one of the leading countries that produce the best quality food and drink products in the international markets. Interestingly, the food output in the country can feed its population eight times. Therefore, the stable output of food products from the country imply that Almarai could enjoy a stable supply of agricultural inputs before processing and distributing to the regional and international market. For this reason, food and drink industry players such as Coca-Cola, Nestlé Nutrition, PepsiCo, and Abbott Nutrition have considered Ireland as a suitable location for their operations since it is strategic for accessing the European and global markets (Jess et al. 2014).
Ireland has an infrastructure that supports and encourages new investment in the country. Over the last few decades, in a bid to bolster export-focused enterprises, Ireland invested significantly in the infrastructure aspects of IT, communications networks, efficient logistics, and sea and air connectivity. Furthermore, Ireland has invested in R&D to boost innovation in food production, and thus, boost the competitiveness of food products produced and processed in the country (Grunert & Traill 2012). In this light, Almarai’s entry into Ireland would allow it to benefit from the efficient infrastructure that supports international trade.
Ireland has a fair taxation system that inspires business and investment. The competitiveness of the country’s corporate taxation regime has allowed it to offer companies with R&D tax-based incentives, low corporate taxes, and fostering operations, and intellectual property acquisition (Mytton, Clarke, & Rayner 2012). Therefore, the taxation structures imply the Almarai could operate smoothly in Ireland by cutting the operational costs. The company could also benefit from the cost-cutting aspect of operations given that the country offers a highly skilled and competitive workforce ready to offer their services in the food industry.
The United Kingdom (UK)
The UK claims to have one of the effective food industries in the EU. The food and drink sector in the UK contributes a turnover of at least £96 billion annually, making it the largest manufacturing division of the UK economy. The industry is comprised of 7,000 corporations, thereby creating jobs for 400,000 individuals. The sector’s competitiveness has been boosted by the government’s R&D incentives that have facilitated the introduction of at least 16,000 new products annually (Law, Harvey, & Reay 2013). Therefore, the entry of Almarai into the market would anticipate stiff competition from the already established companies in the sector.
The UK government supports the development of new products in the food and drink industry as demonstrated by the 8,500 products introduced to the stores annually. Furthermore, due to health concerns, the UK has implemented policies that seek to heighten health awareness besides improving the well-being of the general population. The government requires industry players to consider the essence of offering healthy products to clients by reducing the sugar levels and introducing micronutrient additives besides lowering salts and increasing fiber content in the food products (Nestle 2013). In this regard, the production processes undertaken by Almarai in such a country need to consider the health concerns for effective operations in the market.
The distribution aspect of manufacturing corporations in the UK is fostered by the country’s effective supply chain system. The supply chain in the country facilitates the distribution of at least 6.3 billion product cases annually (Law, Harvey, & Reay 2013). For this reason, manufacturers can deliver and receive returned goods within 24 hours thanks to a wide and effective distribution network. The profound supply chain network would allow entrants like Almarai to streamline its distribution processes, and thus, meet the needs of its customers promptly.
The height of innovation and technology in the UK’s food manufacturing sector employs IT, life sciences, and engineering to realize advanced consumer needs, foster productivity, and reduce detrimental impacts on the environment. Additionally, increased investment in R&D aims at enhancing the competitiveness of food and drink sector companies by emphasizing on branded products, value addition, and skill-intensive products (Grunert & Traill 2012). Thus, Almarai would benefit from a pool of innovation and technological advancements available in the UK, thereby enhancing the productivity of its production and distribution processes.
Germany is another country that demonstrates an interesting food and beverage industry environment. With at least 82 million food and beverage products customers, the country boasts one of the largest retail markets in the EU (Bieberstein et al. 2013). In 2013, the food retailing revenues reached an impressive €180.4 billion (Meier et al. 2014). The food and drink industry comprises of the fourth largest manufacturing sector in Germany. The market segmentation entails the baked goods, milk products, fruits and vegetables, meat and sausage products, confectionery and snacks, and a variety of beverages. In this light, the variety of food and drink inputs from the locally available agricultural products would provide a steady flow for Almarai’s processing facilities before delivering the finished products to the German customers and beyond.
For these reasons, the German economy has attracted players in the food and drink industry including Nestlé, Coca-Cola, Vion Food Group, and Mondelez International. The existence of such competitors hints at the level of competitiveness in the market dominated by multinational corporations (MNCs). Nestlé intends to invest €220 million for the erection of a factory-made up of 12 production lines, thus, denoting the opportunities that the country presents in the food and beverage sector (Bigliardi & Galati 2013). Therefore, Almeria’s entry into the German market would prompt some creativity and innovation in its marketing strategies to boost its product sales in the European market.
Moreover, the emphasis non-R&D in the food sector has allowed interested parties to carry out studies that seek to bolster the productivity of food and drink sector processes. The technological advancements engineered by the German government also seek to spearhead efficacy in the sector as part of the major contributors to the country’s GDP (Lelieveld, Holah, & Napper 2014). Additionally, the government also concentrates on the production and distribution of food and drink products that consider the aspects of wellness, safety, and convenience. In this light, Almarai needs to take into consideration the production and delivery of standard products within and beyond the German market.
As seen, the UK presents a suitable site for establishing Almarai’s production and distribution plants as part of its expansion strategy implemented in the European market. The significant number of new and existing customers renders the location strategic for Almarai’s growth. Additionally, the proximity of the UK to product innovation and development would significantly facilitate the production of quality food products. Furthermore, the UK economic environment allows investors to find new suppliers and partners thanks to its efficient supply chains and availability of investors (Manzini & Accorsi 2013). Lastly, the UK is suitable for the establishment of Almarai’s production and distribution facilities since it houses several Enterprise Zones that offer investors reduced taxes, financial benefits, and simple planning provisions.
Factors Almarai Should Consider in Setting up its Production and Distribution Facility in the UK
When setting up a business facility in a foreign environment, a company ought to consider several factors that influence its operations, thus, affecting its sustainability. The key factors for consideration in a new market include the capital investment strategy, location, local knowledge and expertise, infrastructure, policies and regulations, the supply chain network, competition, market demand, and technology among other factors. Therefore, Almarai ought to put into consideration these factors for the sake of enhancing its seamless expansion in the EU market by erecting its production and distribution facility in the country.
The selection of an optimum location to site a company’s production and distribution facility is crucial since it influences the success of the business (Mytton, Clarke, & Rayner 2012). Therefore, Almarai needs to consider a location that is ideal for erecting its plant by factoring issues such as taxation, proximity to the market, availability of labor, and government preferences. The location is also important for facilitating the ease of acquiring farm inputs to feed the production plants before delivering the finished food products to the customers, thereby streamlining its supply chain and logistics aspects in the EU. The Enterprise Zones established by the UK government would be favorable for Almarai’s operations due to the reduced taxation among other incentives and benefits it provides.
Laws, Rules, and Regulations
The erection of a production and distribution facility in the UK setting would require Almarai to uphold compliance with the national and regional laws, rules, and regulations that guide the activities of the food industry. Failure to comply with the stipulations would welcome considerable penalties to the company, thereby undermining its smooth entry into the EU. In the UK, the government underlines that the food and drink sector should engage in the production and distribution of safe, affordable, and healthy products to consumers besides adhering to all the regulations that govern the sector (Lelieveld, Holah, & Napper 2014). In this case, Almarai’s compliance with the UK stipulations is crucial for legitimizing its operations in the European market.
Market and Demand Forces
Carrying out an exploration of the market dynamics and demand for the products or services offered by a company is a crucial consideration for its expansion strategy. Some products and services could only satisfy the local market while others seek to fulfill the demand of the international market. Interestingly, UK consumers are characterized by busy lifestyles that prompt the emergence of a convenient food market to fulfill the dynamic needs of its customers. For this reason, the value of the food industry is expected to reach the £46.2 billion mark by 2018 (Jess et al. 2014). In this regard, the expansion of Almarai’s operations in the European market would allow it to benefit from the anticipated growth of the food sector. Therefore, the available market should be considered as essential for the successful operations of the company in the new environment.
Technology and Innovation
An organization that seeks to expand its operations in a new market ought to consider the integration of innovation and technology in its operations to allow it to perform efficiently, and thus, boost its competitiveness. The technology would entail plant machinery and office equipment. In the UK food and drink industry, the quality of products is emphasized especially, regarding hygiene and safety aspects. Furthermore, an emerging trend of product innovations and advances are changing the way the UK population drink and eat. The UK is the first EU member state to familiarise ready coffee, instant meals, and frozen food (Bigliardi & Galati 2013). Therefore, Almarai should know that it is entering a market that upholds the essence of innovation and technology in fostering the quality of food and drink products.
Labour Force Availability
Companies that intend to expand their undertakings in new territories by establishing new facilities need to understand the available labor force comprehensively. Currently, the UK recorded an impressive employment rate of 73.7%, thus, denoting the stability of its labor market (Baglee & Knowles 2013). The availability of a skilled and experienced workforce in the UK’s food and drinks sector makes it easy for new entrants to acquire and develop talented professionals that would eventually boost their productivity. In this respect, given that labor is a key aspect of production, Almarai ought to take advantage of the stable employment policies that also ensure that new entrants in the economy employ the skills of the local population in facilitating the productivity of their production and distribution endeavors.
The level of rivalry in a particular industry welcomes consideration among the different players in a bid to gain a competitive edge in the market. Similarly, a corporation that seeks to broaden its operations in foreign markets including the largest market globally, in the EU, should consider the level of competition critically (Lang & Heasman 2015). Therefore, Almarai needs to evaluate the institutional and policy provisions that regulate competition in the food and drink sector (Lang & Heasman 2015). Importantly the quality and origin labeling provisions that require companies to indicate the origin of a product implies that Almarai would also benefit since it would produce and distribute the food products competitively.
For a successful entry into the European market, Almarai ought to consider the integration of a functional plan that would enhance its accomplishment in the highly competitive food and drinks industry. Importantly, before entering a new market, a company should engage in feasibility studies that facilitate the analysis of factors that influence the operations of the competitor. In this case, Almarai needs to engage in a practical action plan that would facilitate a smooth entry into the EU food and drink industry.
Thus, Almarai could contemplate the integration of a market entry strategy the focuses on several key steps. The steps include the definition of the market, performance of market analysis, assessment of the internal capabilities, entry into the market or seeking another target market, and developing a market entry plan and options. In doing so, the company would apply a systematic action plan that would minimize its chances of failure in the European market.
Definition of the New Target Market
The initial step that a company should consider in its expansion efforts entails the definition of the market by factoring the geographic location and demographic aspects of the new target market (Sleuwaegen & Onkelinx 2014). In this regard, Almarai would define its new market niche by maintaining the same target group in a new geographic area. Thus, since Almarai intends to sell to a similar target group compared to the one in the Middle East, it should have a detailed profile of the EU consumers. As such, defining the target market based on consumer profiling would allow the player to prioritize fulfilling the needs of the customers in a way that also observes UK’s institutional and policy frameworks that govern the food and drinks sector.
Performance of a Market Analysis
After defining the target market, a company intending to expand its operations in a new market should endeavor in a market analysis to understand the dynamics and needs of the new market (Grant 2016). The market analysis allows the company to determine the customers’ interest in its products or services. Market research ensures that a company like Almarai understands the trends that influence customer behavior. Furthermore, the analysis would foster an understanding of the weaknesses and strengths of its rivals, thereby influencing decision-making processes.
An Assessment of Internal Capabilities
Assessing the internal environment besides the external forces is crucial for gauging the capacity of the company to perform successfully in a new market (Sleuwaegen & Onkelinx 2014). In this regard, Almarai could evaluate the extent to which its competencies could apply as an advantage to bolster its competitiveness. As such, the company could assess its financial health, sales channels, relationships, and available infrastructure. In doing so, the company would enhance its strengths besides addressing its weaknesses.
The decision to Enter the Identified Market or Not
After conducting the external and internal analyses, a company that has put expansion efforts will understand whether the new market has growth potential for its products or services (Grant 2016). Thus, if Almarai’s entry into the European market is a financially sound decision, it should not hesitate to implement it. In case its entry into the EU would trigger financial losses, then it should pursue an alternative market.
Entry to the Market
After deciding to enter a particular market, an enterprise needs to establish an effective strategic plan (Kang & Montoya 2014). In this respect, Almarai’s decision to enter the EU market by setting its production and distribution facility in the UK could concentrate on the promotion of its food products for it to realize desirable sales in the European region. Then, the food industry competitor could utilize the advanced infrastructure to foster the effectiveness of its logistics and supply chain management by acquiring inputs promptly before delivering the finished products to the customers. Moreover, entering a new market requires the player to create a considerable market share besides the sustenance of current operations through customer satisfaction.
The entrance of Almarai to the EU market requires the consideration of several factors that would influence its expansion efforts. The erection of its manufacturing plant in the EU depends on aspects such as its strategic location, the growth of the food production sector in the region, infrastructure development, and the market’s potential. Additionally, the EU’s institutional and policy aspects have a considerable impact on the operations of Almarai in the region since some provisions could not favor its entry.
Besides Ireland and Germany, the UK presents Almarai with a suitable environment to facilitate its expansion efforts due to advantages such as favorable taxation, availability of Enterprise Zones, heightened innovation, technology, and investment in R&D among other benefits. Therefore, before establishing its facility in the UK, Almarai ought to consider issues such as the location, technology, laws and regulations, labor force availability, competition, and infrastructure. However, Almarai’s entrance to the EU requires the consideration of a step-by-step action plan that concentrates on defining the market, assessing the environment, evaluating its internal capabilities, deciding whether to enter or not and entering the market through a strategic plan to boost its sustainability.
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