A Case Study of Meraas Holding in Dubai

Introduction

Meraas Holding was established in 2007, having its headquarters in Dubai. It has a wide range of portfolios in different sectors of the economy. For instance, the investment portfolio has been spread across various sectors such as real estate, the hospitality industry, food and beverage, retail, leisure, entertainment, and healthcare. Additionally, Meraas Holding is under the leadership of its chairman Sheikh Ahmed Bin Saeed Al Maktoum, the Dubai City ruler.

Analysis of Meraas Holding Mission Statement

Meraas Holdings mission and vision are based on making Dubai and the United Arab Emirates the best place to work, enjoy leisure activities, and live (Meraas | A Dubai Based Holding Company, 2020). The companys primary focus and objective are building spaces for a diverse population to stimulate and accommodate a creative urban culture where the future generation of ideas, businesses, and communities will have a foundation to thrive.

In commitment to its mission, the company has mega projects under its real estate development portfolios, such as the Dubai Harbour and Ain Dubai, located on the Blue Water Islands, whose completion has not been announced (Meraas | A Dubai Based Holding Company, 2020). Other complete projects include luxurious hotels and homes that are spread across the country. All these facilities and developments are open places that allow the communities to socialize, explore the city, learn from different cultures, play, create, and innovate great ideas.

SWOT Analysis of Meraas Holding

Meraas Holdings success is positively associated with its ability to use its business strengths to overcome the weaknesses and threats it faces and its capability to explore and maximize economic opportunities (Bodolica et al., 2018). Moreover, the companys strength to diversify and spread its operations in the different sectors of the economy provides a more competitive advantage, increases sales and revenues, and maximizes profits.

Strengths of Meraas Holding

One of the significant strengths of Meraas Holding is its solid brand. The brand supports its ability to introduce new products in its business line (Brexendorf & Keller, 2017). In addition, the company prides itself on having a pool of talented, highly skilled, and motivated workforce, thus enabling it to deliver high-quality products to the market. The location is also a significant strength of Meraas Holding. It has established the most renowned luxury hotels in Dubai City, such as The Nikki Beach and the Blue Waters Island Residences (Meraas | A Dubai Based Holding Company, 2020). Dubai City is among the top listed preferable tourist destinations, favoring the leisure and entertainment enterprises and the hospitality section. Lastly, customer loyalty to the company is one of its greatest strengths to stay afloat in the market.

Meraas Holding has been able to diversify into various sectors due to the companys availability of financial resources. Thus, it is advantageous to rely on other sectors for its sustainability (Lin et al., 2019). The research and development techniques available help the company in identifying products that the market requires. Besides, the organizations leadership and management are another strength whereby the chairman has a rich background in managing the economy and businesses.

Companys Weaknesses

The company needs more investment in its technology due to its expansion to different geographical areas and the various sectors of the economy. Furthermore, a large and diversified workforce is costly for the company, as this increases labor costs and reduces the profit margins. Even though diversification offers a cushion to the overall financial performance, it is exposed to more financial risks associated with investments in unrelated sectors.

Companys Opportunities

Meraas Holding has not invested adequately in the healthcare and education sectors. Thus, it should consider developing properties that will facilitate health and education institutions. Furthermore, it can merge with other top-performing companies in the same industry to cut operational costs and increase margins. For the expansion and growth opportunities, the company has not explored different geographical locations outside the UAE that needs to be exploited.

Companys Threats

There is increased stiff competition in the UAE for companies in the hospitality, leisure, and real estate development sectors. The innovations due to technological advancements need to be adapted to expand its competitive advantage. Meraas Holding needs to embrace digital marketing strategies for market dominance. In addition, as a result of inflation and economic cycles, the labor costs keep on rising, thus reducing the profit margins.

Application of the BCG Matrix to Meraas Holding

The management needs to identify the low-selling products and decide whether to keep, sell, or invest more. To support the firms leadership in strategic planning, the BCG Matrix helps the company identify its growth strategies and options (Afriyie et al., 2018). The companys primary revenue source includes real estate products, leisure and entertainment products, and retail and hospitality enterprises.

There was a constant increase in demand for all the services offered by Meraas Holding. Therefore, before the Covid-19 pandemic, the market share was stable in the hospitality, food and beverage, retail, leisure, and entertainment enterprises it has established. The company was able to maximize its profits and maintain a healthy cash flow. However, the hospitality industry has been affected significantly by the Covid-19 pandemic. With fewer travels experienced worldwide and a reduction in tourists, the sector has recorded losses. Therefore, the company may consider enhancing the amenities to adhere to the WHOs guidelines on Covid-19 spread and invest more in marketing and promoting the facilities as the pandemic slows down to continue operating and generating revenues from the affected sectors.

Application of the Ansoff Matrix

The company has successfully implemented its growth strategies and significantly reduced the associated financial risks. The four strategies that Meraas Holding can use to plan for its growth include the market penetration strategies to increase its share as the firm uses its products in the existing market. One of the best methods to implement this is by merging or acquiring a current competitor and increasing promotional efforts.

Another strategy in the matrix is product development. Meraas Holding has aggressively invested in research and development, which is why it can meet the markets current needs by providing innovative solutions. For the company to expand into new geographical areas, the firm should adopt a market development strategy by using existing products to enter new market segments. Meraas Holding has put in use the diversification strategy since it has developed new products for the same targeted market. According to Loredana (2017), a diversification strategy helps the company expand its operations in different sectors from those of its current business. Furthermore, the risk is mitigated significantly in related economic sectors.

Recommendations

Meraas Holding enjoys a diversified portfolio, but it has been experiencing losses due to the Covid-19 restriction. Therefore, with the adverse effects on the economy, the company needs to invest more in less affected sectors. Thus, the risks will be mitigated and sustainable growth realized by the company. The companys decision to merge with a competing firm is viable as it will enhance its growth and expansion strategy.