STRENGTHS, WEAKNESSES,

OPPORTUNITIES & THREATS

(SWOT ANALYSIS)
PRESENTATION
JUNE 1, 2004 7:00 PM.
Male Recreation Hall-Camp

STRATEGIC ASSESSMENT OVERVIEW OF THINGS TO CONSIDER

1.

SWOT ANALYSIS HOW TO PROCESS : It provides an

overview of QCC situation and is essential component of
crafting a strategy tightly matched to QCC situation. It also
needs to provoke thinking and answers to several questions
about what future resources strengths & capabilities QCC will
need to respond to emerging industry competitive threats & yet
produce successful bottom-line results.

Strength most logical & appealing building blocks for

strategy.
Weakness vulnerabilities that need correction & if corrected, it
becomes added strength.
Opportunity strategy should capture most attractive
opportunities.
Threat strategy should defend against threats to QCC wellbeing.

2.

EVALUATION OF PRESENT STRATEGY

Is it adequate for protecting & improving QCC market position?

Is QCC vulnerable to the competitive efforts of one or more
rivals?
Should the present strategy be adjusted to better respond to
the driving forces at work in the industry?
Is the present strategy closely matched the industrys future
key success factors (quality/product performance,
reputation/image, manufacturing capability, technological skills,
distribution capability, new product innovation capability,
financial resources, relative cost position, & customer service
capability)?
Does the present strategy adequately capitalize on QCCs
resource strengths & capabilities?
Which of QCCs opportunities merit top priority? Which should
be given low priority? Which are suited to QCCs strengths &
weaknesses?
How important is it for QCC need to correct its weaknesses?

 Are there things that QCC can do to lessen the impact of

external threats?
Does QCC have competitive advantage or must it work to offset
competitive disadvantage?
Where are the strong spots and weak spots in the present
strategy?
No clear strategic direction is itself a weakness & competitive
deficiency.

3.

OVERALL STRATEGY RECONSIDERATION

Crafting offensive moves to capitalize on the QCCs most promising

market opportunities.
Crafting defensive moves to protect QCCs competitive position and
long-term profitability. Competitive weakness on the part of
competitors presents opportunities for a strategic offensive.

4.

DEVELOP FUNCTIONAL STRATEGY BY EVERY DEPT.

QCC needs a functional departmental strategy and must support the
above QCCs overall business strategy and competitive approach.
Managers should create managerial road map (action plans) for
achieving the departments objectives and mission. Compatible,
collaborative, mutually reinforcing department strategies are
essential for the overall business strategy to have maximum impact.
Even if QCC lacks competitive superior competencies &
capabilities, its managers must still tailor a strategy that fits QCC
particular strengths & weaknesses.

5.

POTENTIAL THREAT TO QCCs WELL-BEING IMPENDING

MARKET OVERSUPPLY.

The potential market oversupply due to expansions and new market

entrants brought about by KSA joining the WTO will

push

prices and profit margins down.

Downward prices and profit margins are addressed by maintaining

cost competitiveness of QCC like:

1. Benchmarking the costs of key QCC business activities to learn
how other companies have actually achieved lower costs and better
results.
2. Economies of Scale increases volume and market share are
needed to be cost competitive.
3. Vertical Integration raises capital requirements but often creates
competitive and cost differences.
4. Product Innovation shortens product life cycle & increases risk
because of opportunities for rivals to bring out next-generation
products quicker & leapfrog current market leader.

A QCC SWOT ANALYSIS

AND
THE POTENTIAL MARKET
OVERSUPPLY

Cement Plants in the Kingdom 2004

Tabuk
Cement
1050
Eastern
Cement 2100
Dba-Jedh 860

QCC 1500
Buraidah-Hail 290

Bur-Riyd 340

Saudi
Cement 4150

Yanbu-Madin 238
Buraid-Madn 490

Yanbu
Cement 3360

Madn-Rabig 260

Riyd-Damam 395

Yamama
Cement 2700

Arabian
Cement 2400

Southern
Cement 3204

Total = 20464

Cement Plants in the Kingdom 2007

Tabuk
Cement
2400

Hail- Jawf 360

Eastern
Cement 3150
Dba-Jedh 860

QCC 2850
Buraidah-Hail 240

Bur-Riyd 340

Saudi
Cement 5500

Yanbu-Madin 180
Buraid-Madn 490

Yanbu
Cement 3360

Riyd-Damam 395

Madn-Rabig 260

White
Cement 1350

Arabian
Cement 4400

Southern
Cement 4554

Yamama
Cement 5700

Total = 36264

The Planed Railroad (next 5 years)

Tabuk
Cement
2400
Eastern
Cement 3150
QCC 2850

Saudi
Cement 5500

Yanbu
Cement 3360
White
Cement 1350

Arabian
Cement 4400

Southern
Cement 4554

Yamama
Cement 5700

Total = 36264

New Companies
Co. name

Location

Damam Cem Co

Damam

Capacity
K tons
2400

Al-wosta Cem

Dharma

1050

June 2007

Riyadh Cem

Riyadh

4000

Dec 2007

Jeddah Cem

Jeddah

1050

Dec 2007

Bader Cem

Bader

3000

Dec 2007

1200

June 2007

Ahmad Khiat Cem Rabegh

Total Capacity

12700

Expected
Date
June 2007

Imported Cement & Clinker

OPPORTUNITIES
Demand growth
Expansion timing in advance
of others.
The new roads.

THREATS
Market oversupply from 2007-2018
Market opening with joining the WTO (direct
investment & Imports)
Consolidation of RM suppliers (stronger buyers)
Growth of precast use & Manufacturers
Growth of use of additives additions to cements
(blended cement) either by cement
Manufacturers or RM/Brick/ or precast
Manufacturers.
The mew roads

Customers Needs
Identification

The more choices you provide, the

.more customers you obtain
Others

Customers

QCC

:We can make changes here

Quality Specifications and
product variation
Availability
Facilities
Packaging
Sales Promotion

Quality & Product variety

QCC products should cope with the
changing requirements regarding quality
factors (strength, setting time etc)
If exporting is an option , our products
should obtain all necessary quality
.certifications
Specific products for the different market
segments (Blocks, above ground
structures, finishingetc)

Sales Promotion
More variety of incentives
Event sponsorship
Participation in more exhibition
Customized gifts
Organizing tours to the company for other
.companies and varieties of the society
Improvement projects for the customers
.establishments
Providing regular journals containing the latest
. info about cement industry

Facilities
Financial facilities : Making the commercial
document available to the customer on line.
Providing a hotline to the customer to
answer and to take any complaints or
suggestions.
Providing better facilities to the drivers
(resting , officesetc)
Free consultancy and lab services for QCC
customers.

Availability
Any customer needs
a product which is
easy to obtain
available
To achieve this we
need to develop an
advanced distribution
system physical &
virtual

Partnership with the strongest distributors in

.the Kingdom
.On line sales channels, E-commerce
On time delivery
Opening up on new markets. Sales
.offices/agents in all areas
Having loading plants in some of the areas.
Either by QCC or a QCC customer. Example:
.Hail, Dawadmi
Making contracts with the RM and blocks
.manufacturers

Packaging
Changing the bags so that they
.contain more product info and usage
Adding more option regarding size :
.25kg , 35 kg , Jumbo bags

QCC STRENGTHS & WEAKNESSES

Comparative Performance Cement Companies

(QCC cost net of purchased clinker)

QCC

Yamama

Saudi

Eastern

Southern

Yanbu .

Arabian

Tabuk

Industry
Average

Clinker Capacity
Utilization Rate
(2002)

116%

103%

108%

105%

112%

92%

97%

101%

104%

Net profit
SR/Ton (2003)

121.85

129.58

82.63

93.29

113.65

93.32

83.02

67.44

98.10

Net profit
SR/Ton (2002)

119.83

104.78

78.78

98.96

97.34

75.07

74.62

71.63

94.32

Cost of Sales
SR/Ton (2003)

88

Not
Available

Not
Available

Not
Available

Not
Available

80

112

105

N/A

Cost of Sales
SR/Ton (2002)

87.3

82.31

114. 1

84.42

66.97

79.64

112.38

107.6

90.21

Ave. Price
Ton (2003)

206

Not
Available

Not
Available

Not
Available

Not
Available

177

199

183

N/A

Ave. Price
SR/Ton (2002)

203.86

209

211

211

224

159.81

196.23

189.76

200.58

Sales Million
Ton (2003)

2.076

3.123

5.026

2.758

4.407

4.174

2.628

1.151

Total
25.343

Sales Million
Ton (2002)

1.995

3.069

4.788

3.218

4.956

4.154

2.624

1.128

Total
25.932

SR/

STRENGTHS
Among Industry profitability leader.
Industry highest clinker capacity utilization rate resulting to high productivity
and efficiency.
Huge resources of raw materials.
Well equipped & maintained modern machinery & skilled staff
Committed & visionary Board
Major investment in assets (PL#3,PL#1,PL#2) improvement & capacity
addition.
Central Location served with good roads.

WEAKNESSES
Cost above the market
Spares rotation is low compared to inventory of spares-cash flow is tied-up
on idle assets.
Increasing employee turnover, less transparency in personnel policies &
procedures, inadequate employee facilities with some not satisfactory.
No distribution channel.
No established distribution channels on major markets.
Strategic measurements system not working well.
IT system does not support decision making.
Emission far above standards & Increase environmental concerns since the
city growth is towards the direction of the site.
Safety & security policy needs improvement & training.