strategic marketing in aramex company: a case study

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@ 2015 AYAT A. SALEH, submitted as a part of the 'Strategic Marketing' course in the University of Warwick, United Kingdom

Strategic Marketing in Aramex Company: A Case Study

Aramex is a leading logistics and transportation company with revenues of more than

900 million USD and operations in more than 60 countries across the Middle-East,

Africa, Asia, Europe and North America. In 1997, Aramex successfully became the

first Arab company to trade its shares on the National Association of Securities

Dealers Automated Quotations (NASDAQ). Aramex provides different integrated

logistics solutions and supply chain services such as international and domestic

express delivery and freight forwarding (2014 Aramex Annual Report).

The purpose of this case study is to provide an analysis for the strategic marketing

development in Aramex Company using different marketing theories and concepts,

and provide a set of recommendations for the future.

The rest of this document is organized as per the following:

Firstly, a summary for the company's profile;

Secondly, an overview for the framework that was used in analyzing the

secondary data about Aramex Company;

Thirdly, an illustration for the macro environmental analysis of the strategic

marketing in the company;

Fourthly, an illustration for the micro environmental analysis in Aramex; and

Finally, a set of conclusions and recommendations for the company.

1. Aramex: Company Profile

Aramex is a public company, specialized in logistics and transportation solutions

based in Dubai, United Arab Emirates. It was established in 1982 and has grown

rapidly and became part of a global alliance network of 40 organizations namely

Global Distribution Alliance (GDA). The company operates in 372 locations in more

than 60 countries, with more than 16,000 of direct and indirect employees. Table 1

shows a timeline for the major historical development for the company.

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The company has a very clear mission which is "to be recognized as one of the top

five global logistics and express transportation service providers" (2014 Aramex

Annual Report, p.18). It does that by having clear strategy in four aspects;

1. Growth in which Aramex focuses on entering new markets and developing

acquisition and franchising relationships across the globe;

2. Performance where Aramex works hard to sustain good financial

performance through investment in new infrastructure and new business

partners;

3. Innovation which includes strategies to create new e-commerce solutions;

and

4. Sustainability in which Aramex invests in people, environment and social

programs to be engaged with the local communities.

Table 1 Aramex Timeline

Sources: Aramex Company Profile, Available on the WWW at

(https://www.aramex.com/content/uploads/109/200/44006/Aramex%20comprehensiv

e%20profile.pdf)

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A wider look at the company's stakeholders and according to its annual report, the

company has six groups of stakeholders namely, employees, customers,

shareholders, community, environment and finally business partners from the airlines

companies, sea cargos, vehicles and even Non-Governmental Organizations (NGOs)

(Aramex Annual Report 2014, p.104 and 109). In terms of customers, Aramex serves

over 74,000 customers by offering customized services and high- quality solutions.

The company provides five sets of core services which are:

1. International Express that includes documents and goods shipping all over

the world;

2. Freight Forwarding including a comprehensive network of land, sea and air

transportation;

3. Domestics Express which includes deliveries of small items on nationwide

level;

4. Integrated Logistics, Warehousing and Supply Chain Management; and

5. Publications and Distribution which covers shipping for catalogues,

documents storage, online tracking for air lines and managing travel

documents such as visas.

In addition to the core services, Aramex is working continuously to provide new

innovative solutions such as InfoFort (Information Management Solutions), Shop and

Ship, Cash on Delivery, Document Return, Aramex Solution Center, Aramex Bio,

Electronic Data Interchange (EDI), Import Express, “myaramex” on aramex.com,

REACH Customer Relations Management System, Sales and Tenders Support and

Global Case System (GCS).

According to the above, Aramex's value proposition consists of three elements;

customized solutions, public trust in their operations and reliable shipment tracking

system. More details about the competition, substitutes, and market position will be

addressed later.

2. Framework for Data Analysis

In order to analyze the strategic marketing in Aramex Company, secondary data

analysis was conducted over three steps. These data were published in public

communications and annual reports related to the company itself in addition to other

published reports. The reliability of this approach was ensured by using recent

content about Aramex Company, while the validity of this research was ensured by

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using trusted reports. For example, the company's annual report was developed as

per GRI (Global Reporting Initiative) framework and independently reviewed by

Earnest and Young Company. The other main sources of data were "Regional

Economic Outlook Report for the Middle East and Central Asia" published by the

International Monetary Fund (IMF) organization in October 2015, and a survey to

explore the change in the consumer's habits in the digital age conducted by PwC

(PricewaterhouseCoopers) and published in February 2015.

The analysis was conducted as per the following:

Firstly, the macro-environmental factors that shaped the big picture of Aramex

were analyzed by critically evaluating the available body of literature around

the company. Two methods were utilized here: PEST analysis to identify the

Political, Economic, Social and Technological factors that affected Aramex

and the market, and Porter's five forces analysis to understand the five

powers that affected the competitive position of Aramex;

Secondly, the micro-environment of Aramex was illustrated using the concept

of Service Life Cycle and service portfolio, followed by a practical employment

for Ansoff's matrix and BCG matrix; and

Finally, presenting a set of recommendations for the different strategies that

Aramex can implement to pursue its mission. The recommendations were

generated using TOWS matrix (which is the different arrangements of the

words Strengths, Weaknesses, Opportunities and Threats).

These stages are visually illustrated in figure 1.

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Figure 1 Framework for Data Analysis

3. Macro Environmental Analysis

The macro analysis in this research was conducted using two tools: PEST Analysis

and Porter's Five Forces as shown below.

3.1 PEST Analysis

A summarized PEST Analysis for Aramex Company is shown in table 2, while the

rationales behind these points are shown in Appendix A.

Table 2 PEST Analysis for Aramex Company

Political Economical

Unstable political situation

Increasing in the number of

refugees

Well- regulated industry

Fluctuating oil prices

Moderate inflation rate

Budget shortfall for different

government

Low investment in different vital

sectors

Social Technological

High unemployment rate in the

public sector

Rapid changing in shopping

habits

Mobile and social networking

E-commerce blooming

Technological innovation

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3.2 Porter's Five Forces Analysis

A summarized Porters' Five Forces analysis is shown in table 3 and the detailed

forces are shown in Appendix B.

Table 0 Porter's Five Forces Analysis for Aramex Company

Threats of New

Entry Buyers Power

Suppliers

Power

Threats of

Substitutes

Competitive

Rivalry

Low Low Low Moderate to

High High

4. Micro Environmental Analysis

The micro analysis were covered using three theories; Service Life Cycle, Ansoff's

Matrix and BCG Matrix.

4.1 Service Life Cycle

As highlighted before, Aramex provides five core services under four markets; Middle

East and Africa, Europe, North America, and Asia. The company achieved good

results in 2014 where there was 10% increase in revenues and 15% increase in net

profits versus 2013 (Aramex Annual Report 2014, p. 4).

In order to understand the Service Life Cycle and service portfolio, two types of

analysis were conducted. Firstly, the revenues per each service group were analyzed

and secondly, the revenues per each market. The detailed graphs are shown in

Appendix C.

As a summary for the Service Life Cycle analysis for Aramex Company:

The highest revenues were coming from the international express service

(34%) and the freight forwarding service (34%), and the publication and

distribution service was almost contributing for nothing (0.3%);

International express, freight forwarding, domestics and logistics services

were showing positive trends, while publication and distribution service

showed a negative one;

Although the contribution of the other services was small (5.7% of the total

revenue), they were showing a positive trends. The other services included

the new e-commerce solutions that Aramex is continuously provide;

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Middle East and Africa region represented the highest market in all services

with a positive trend between 2013 and 2014;

The second highest market in the international express service was Asia

followed by Europe, while in the freight forwarding service, the second highest

market was Europe followed by Asia; and

In the domestic service, there was a change in the trend, where the second

highest market after Middle East and Africa market was Europe followed by

Asia. In 2014, the results were flipped and Asia market became in the second

place.

4.2 Ansoff's Matrix

Aramex developed different strategies to meet customers' needs. Applying Ansoff's-

four strategies resulting in the following:

Middle East and Africa region represents the exiting market for Aramex while

Asia, Europe, and North America are the new markets.

International express, domestic express, and freight forwarding are the

existing services, while e-commerce solutions are the new services.

Accordingly, the strategies that Aramex follow are shown in table 4.

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Table 4 Ansoff's Matrix for Aramex Company

Service Growth M

ark

et

Gro

wth

Existing Service New Service E

xis

tin

g M

ark

et

Market Penetration

International express service in the Middle East and Africa market Domestic express service in the Middle East and Africa market

Product Development

e-commerce solutions such as Information Management Solutions (InfoFort) and Shop and Ship in Middle East and Africa market Joint Venture with InPost to introduce parcel lockers network solutions to Middle East and Africa market

Ne

w M

ark

et

Market Development

Acquisition a in key markets in Asia-Pacific and Africa (such as Mail Call Couriers in Australia, Leo Global Logistics in Asia and PostNet in Africa) Franchising contracts with Cyprus, Pakistan, Angola and Burkina Faso markets

Diversification

e-commerce solutions such as Shop and Ship and Import Express Service in Europe, North America and Asia market

4.3 BCG Matrix

Due to the unavailability of relative market share and market growth rate, BCG matrix

was analysed based on the graphs that are shown in Appendix C. Further

improvement can be done by having accurate market research.

According to the matrix, the investment decisions that Aramex did are summarized in

table 5.

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Table 5 BCG Matrix for Aramex Company

Relative Market Share M

ark

et

Gro

wth

Ra

te

High Low H

igh

Domestic express service in Asia

Market

All services in North America and

Europe

E-commerce solutions in the five

market

Lo

w

International express, freight

forwarding and domestic express

services in the Middle East and

Africa

Publication and distribution service in

all markets

As a summary for this macro and micro analysis, the political situation and the

changes in oil prices play key roles where Aramex operates, and positive projection

for the increase of the overall demand of e-commerce services is expected.

Moreover, the logistics market has strong competitive power and moderate threat of

substitutes' power.

The last section in this document will present the conclusion and the recommended

strategies for Aramex Company.

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5. Conclusions and Recommendations

Multiple sources of information about Aramex Company were analysed as per the

previous framework in Section 2. The micro- stage analysis helped to understand the

market and the forces that may control it, while the macro- stage analysis helped to

understand the Service Life Cycle and the growth strategies using Ansoff's matrix

and BCG matrix. Life Cycle analysis showed the trends in each service groups and

the revenue breakdown per each market, Ansoff's Matrix showed how Aramex

utilized the four marketing strategies to sustain its position and finally, BCG matrix

classified the service portfolio of Aramex into Star, Cash Cow, Question Mark and

Dogs. The two stage of analysis were used to formulate a set of strategic

recommendations for Aramex using TWOS matrix as shown in Appendix D.

As a conclusion, the main recommended strategies that Aramex Company may

consider in the future can be grouped under four buckets which are:

5.1 Growth

Seek acquisitions and franchise relationships with partners in Asia and Africa

markets.

Phase- out the publication and distribution service (which is its Dog) in order

to use the money in other services especially the e-commerce one.

Utilize the revenues generated from the Middle East market (which is its Star)

to finance the e-commerce services (which is its Question Mark).

5.2 Performance

Implement lean six sigma program to reduce delivery time, costs and ensure

more efficient operations in order to meet the expected growth in the market.

Develop business continuity plans for the stressed countries.

Seek financial support to cope with the fluctuating oil prices.

5.3 Innovation

Utilize the good knowledge in building new innovative solutions especially in

the e-commerce side.

Establish detailed advertisement strategies to meet the rapid changes in

consumer habits.

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5.4 Sustainability

Sustain the good image by investing more in sustainability and engage the

company’s team with more projects with the local communities.

Develop strong relationships with different business partners (such as NGOs,

governments, transportation providers in terms of airlines, sea cargos, vehicle

leasing…etc) to ensure a good back up and support in case of global

consolidation or changes in regulations.

Utilize the sustainability projects to create new employment opportunities.

Cut expenses in publication and distribution service to fund other projects that

can help the refugees and reduce the unemployment rate.

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References

Ghandour, F. (2011). How I did it: the CEO of Aramex on turning a failed sale into a

huge opportunity. Harvard Business Review, 89 (3), p 43 - 47.

www.pwc.com. Total retail consumer survey. Available on the WWW at

(http://www.pwc.com/totalretail). [Accessed in 15th October 2015].

Saadi, D. (2015). Aramex seeks e-commerce acquisitions to boost profit. Available

on the WWW at (http://www.thenational.ae/business/economy/aramex-seeks-e-

commerce-acquisitions-to-boost-profit). [Accessed in 25th November 2015].

Williams, J. (2013). Ordering off the menu: Entrepreneurship Arab-Style. INSEAD

Knowledge Publications, special section, pp. 1- 4.

www.aramex.com. Year 2014 annual report. Available on the WWW at

(https://www.aramex.com/news/item.aspx?id=ea38ac71-6017-4cd3-88c6-

ba0d7a0c829a). [Accessed in 10th October 2015].

www.imf.org. Regional economic outlook: Middle East and central Asia for 2015.

Available on the WWW at

(https://www.imf.org/external/pubs/ft/reo/2015/mcd/eng/pdf/menap1015.pdf).

[Accessed in 25th November 2015].

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Appendix A: PEST Analysis for Aramex Company

PEST Analysis for Aramex Company is shown in table A.1.

Table 0A.1 PEST Analysis for Aramex Company

Political Economical

Unstable political situation

Increasing in the number of

refugees


Fluctuating oil prices

Moderate inflation rate

Budget shortfall for different

government

Low investment in different vital

sectors

Social Technological

High unemployment rate in the

public sector

Rapid changing in shopping

habits


E-commerce blooming


This analysis was done based on information (history and projection) from four

sources.

First: IMF Report

The report provided analysis and expectations for the situation in the MENAP region

(Middle East, North Africa, Afghanistan, and Pakistan). The main points are:

1- IMF report highlighted that the risk in MENAP region is increasing due to

political conflicts and fluctuating oil prices. This risk makes the growth in the

region slower and the report described it as "Intensifying conflicts and

depressed oil prices are weakening growth prospects and raising risks across

the region, a situation compounded by the recent bout of global financial

market volatility. Growth is expected to decelerate over the near term, but

only moderately, as countries use fiscal buffers and financing options where

possible" (IMF Report 2015, p. 17).

2- The report addressed the increase in the number of refugees and the risk that

they add to the hosting countries and to the home countries themselves:

"Deepening conflicts and the rise of violence, including by non-state actors

such as the Islamic State of Iraq and the Levant (ISIL), have caused a sharp

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increase in the number of refugees in the MENA region" (IMF Report 2015, p.

34).

3- In terms of inflation rate, the current rate is reasonable: "Inflation in most

countries of the region is moderating, with decelerating food price growth and

the appreciating U.S. dollar, to which many countries effectively tie their

currencies" (IMF Report 2015, p. 18)

4- The report expects that there will be budgeting problems in different

government which is a result of the oil prices: "Because oil prices are already

low and most MENA governments are projected to post a budget deficit, a

further drop in oil prices would accelerate fiscal adjustment, with adverse

implications for growth" (IMF Report 2015, p. 19).

5- The report predicts an increase in the unemployment rate in the public jobs:

"Lower oil prices will eventually force governments of oil exporters to hire

fewer public servants. In the GCC (excluding the United Arab Emirates), more

than 2 million nationals are expected to join the workforce by 2020. If private

sector job growth were to follow past trends, and public sector employment

growth is consistent with the current fiscal projections, more than half a million

job market entrants will end up being unemployed" (IMF Report 2015, p. 27).

6- The report discussed the impact of the political situation on the investment

options in the region, where they concluded that only reluctant efforts are

done in terms of investing in domestic services, trade, production and even

the tourism sector: "Bigger rebounds in domestic investment and production,

trade, and tourism are obstructed by continued security risks, social tensions,

and spill overs from regional conflicts" (IMF Report 2015, p. 37).

Second: PwC Survey

A recent survey by PwC for to measure consumers' response from more than 19,000

people around the world was conducted in 2015. The target was to get their

response in questions related to their online shopping behaviours. The survey

concluded that the traditional or physical retail store is being changed due to the

revolution of new technologies (such as smart phones, mobile applications, and

social network), the payment system is changed, and the level of engagement is

changed due to the social media. As a result there are changes in the shopping

habits. The report described this as "Grow at the expense of store visits, the premium

in the future will be on creating unique, brand-defining experiences that keep

customers coming back— whatever the channel" (PwC survey 2015, p. 2)

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Third: The National Business

According to an article by Dania Saadi in the National Business (Online journal based

on Abu Dhabi) in August 2015, E-commerce is expected to be increased in the Arab

world in general and the Gulf region in specific. She said: "The e-commerce market

in the Middle East was forecast to be worth US$15 billion this year, according to a

2013 report released by the electronic payment platform PayPal in conjunction with

the research company Ipsos" (Saadi 2015).

Fourth: Aramex Annual Report for the year 2014

Companies in this market should adhere to a lot of international and national laws

and regulations. Aramex annual reports mentioned part of them such as "The World

Economic Forum’s Partnering Against Corruption Initiative (PACI), UK bribery act,

U.S foreign corruption practice act (FCPA), Accountability principles standards

AA1000, International Labour Organization (ILO)" (Aramex Annual Report 2014,

p.100). In addition, the company should follow human rights laws, environmental

standards, and health and safety regulations. Aramex's report highlighted also the

need to follow the recent technological advancement in this field (Aramex Annual

Report 2014, p. 13).

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Appendix B: Porter's Five Forces Analysis for Aramex Company

Porter's Five Forces analysis for Aramex Company is shown in table B.1.

Table 0 Porter's Five Forces Analysis for Aramex Company

Threats of New

Entry Buyers Power

Suppliers

Power

Threats of

Substitutes

Competitive

Rivalry

Low Low Low Moderate to

High High

The details are:

1- Threats of New Entry (Low Power)

New entry to the logistics and supply chain field is possible, however, in order

to compete; a company should provide huge investments in terms of

warehousing, vehicles, information system and even aviation systems.

Although Aramex’s asset-light business model heavily relays on different

international and local suppliers, total assets by 2014 was 873 million USD

(2014 Aramex Annual Report, p. 9 and 15). This huge number, even under

the given business model, represents a barrier for an easy entry to this

market.

2- Buyers Power (Low Power)

Aramex provides huge efforts to sustain its customers, reputation and brand.

According to its annual report for the year 2014 "The reputation of the Aramex

brand depends on the general public’s trust in our service integrity.

Customers need to be able to trust the credibility of the information they are

given. Official authorities such as customs and security officials should be

able to trust in Aramex’s legal and regulatory compliance, discipline and

diligence" (2014 Aramex Annual Report, p. 36). The switching cost in this

industry is low, however, trust, credibility and even information privacy are

priceless factors and are developed over time, which make the switching

option is very difficult for any customer.

3- Suppliers Power (Low Power)

Aramex has multiple suppliers in terms of oil, fleet, spare parts, packaging

materials and Information Technology solutions and it depends on local

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resources most of the time (2014 Aramex Annual Report, p. 16). The

company is a major player in the Middle East and continuously mentioned as

one of the top companies in Forbes Middle East Magazine (which is available

at http://www.forbesmiddleeast.com). Accordingly, its suppliers will seek a

win-win relationship rather than a negative one.

In addition, Aramex’s business model is to have a light asset business where

it doesn't own the fleet; instead it depends on multiple suppliers internationally

and locally. (Aramex Annual Report 210, p.16)

4- Threats of Substitutes (Moderate to High Power)

E-mail replaces the post e-mails and an online shopping replaces the

traditional shopping. These are just examples for the substitutes that

happened in this market. One substitute can create a positive impact on the

companies in that market, and one can create a negative impact. For

example, the evolution of on-line shopping increased the need for delivery

companies, but e-mails reduced the need for documents shipping. In order to

sustain a leading position, Aramex continuously adjust its services to meet

the new changes and growth (Aramex Annual report 2014, p. 12).

5- Competitive Rivalry (High Power)

There are a lot of local and international companies in the logistics and freight

industry. The Middle East in general was not considered as an attractive

investment due to civil wars and bureaucracy in a lot of countries there

(Ghandour 2011), therefore, the competition in this market depends on the

country itself, pricing, local regulations and many more. Some of the

international companies who are completing in this market are" United Parcel

Service (UPS), Federal Express (FedEx), Japan Post Service, Royal Mail,

and DHL. On the local side, there are different competitors such as Agility

Logistics, Al-Futtaim Logistics, and Gulf Agency Company.

http://www.forbesmiddleeast.com/

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Appendix C: Service Life Cycle and Services Portfolio in Aramex Company

First: Revenues per Each Service Group

Table C.1 shows the breakdown of revenues for the last five years.

Table 0.1 2014 Revenues in Aramex Company

2010 2011 2012 2013 2014

Revenues

International express 689,111 832,370 968,673 1,054,126 1,230,531

Freight forwarding 924,101 1,073,301 1,169,037 1,233,524 1,247,260

Domestic express 331,153 373,120 592,899 644,929 755,058

Logistics 103,764 110,760 138,284 169,648 197,976

Publications & distribution 30,035 28,318 25,630 20,272 9,547

Others 133,832 152,844 177,064 198,244 209,130

Total Revenues 2,211,996 2,570,713 3,071,589 3,320,742 3,649,502

Shipping costs 1,021,830 1,219,022 1,417,247 1,521,764 1,646,771

Gross profit 1,190,166 1,351,691 1,654,341 1,798,979 2,002,731

Source: Aramex Annual Report 2014, p. 8 (All numbers are in Thousands UAE

Dirhams)

Below is the graphical analysis for these numbers.

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Figure 0.1 Breakdown for Aramex Revues in 2014

Figure 0.2 Aramex Revenues from International Express Service

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Figure 0.3 Aramex Revenues from Freight Forwarding Service

Figure 0.4 Aramex Revenues from Domestic Express Service

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Figure 0.5 Aramex Revenues from Logistics Service

Figure 0.6 Aramex Revenues from Publication and Distribution Services

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Figure 0.7 Aramex Revenues from Other Services

Second: Revenues per Each Market

Table C.2 shows the geographical breakdown of revenues for 2013 and 2014 years.

Table 0.2 Geographical Breakdown of Revenues 2013 -2014

Description

International

Express

Freight

Forwarding

Domestic &

Others

Total

Company

2014 Year

Middle East & Africa 1,352.0 76.3% 985.1 66.1% 902.6 76.2% 3,239.7 72.8%

Europe 164.4 9.3% 400.3 26.8% 136.0 11.5% 700.7 15.7%

North America 69.5 3.9% 35.8 2.4% 0.9 0.1% 106.1 2.4%

Asia 187.2 10.6% 70.0 4.7% 145.3 12.3% 402.4 9.0%

Elimination (542.5) (243.9) (13.0) (799.4)

Total 1,230.5 100% 1,247.3 100% 1,171.7 100.0% 3,649.5 100%

2013 Year

Middle East & Africa 1,177.8 77.4% 1,015.8 67.8% 848.3 81.3% 3,041.9 74.9%

Europe 132.5 8.7% 373.7 24.9% 121.8 11.7% 627.9 15.5%

North America 48.7 3.2% 39.9 2.7% 3.9 0.4% 92.6 2.3%

Asia & Others 161.7 10.6% 69.5 4.6% 69.7 6.7% 301.0 7.4%

Elimination (467.3) (265.4) (10.8) (743.4)

Total 1,053.5 100% 1,233.5 100% 1,033.0 100.0% 3,320.0 100%

Source: Aramex Annual Report 2014, p.9 (All numbers are in Thousands UAE

Dirhams)

Below is the graphical analysis for each service under each market:

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Figure 0.8 Revenue from International Express Service per Market

Figure 0.9 Revenue from Freight Forwarding Service per Market

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Figure 0.10 Revenue from Domestic & Others Service per Market

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Appendix D: TOWS Analysis for Aramex Company

Table 0.1 Aramex TOWS Matrix

Strengths Weaknesses

Good performance in the last five years

Light- asset business model

Excellent know-how knowledge

Customized e-commerce solutions

Excellent image and credibility

Good performance in sustainability development

Diverse team

Trust in their information security system

Light-asset model might complicate the financial transactions with banks who are reluctant to deal with low-asset companies

Limited advertisement budge

The publication and distribution service group contributes to less than 1% of the total revenues

Opportunities SO Strategies WO Strategies

Rapid changing in shopping habits


E-commerce blooming


Promising and growing market

Growing market in Asia and Africa especially in the domestic service

Utilize the good knowledge to build new innovative solutions especially in the e-commerce side

Sustain the good image by investing more in sustainability and engage its team with more projects in the local communities

Seek acquisitions and franchise relationships with partners in Asia and Africa markets

Utilize the revenues generated from the Middle East market (which is its Star as per BCG matrix) to finance the e-commerce services (which is its Question Mark as per the same matrix)

Implement lean six sigma to reduce delivery time, costs, and ensure more efficient operations in order to meet the expected growth in the market

Phase- out the publication and distribution service (which is its Dog as per BCG matrix) in order to use the money in other services especially the e-commerce one

Establish a detailed advertisement strategies to meet the rapid changes in consumer habits

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Table 0.1 Aramex TOWS Matrix

Strengths Weaknesses

Good performance in the last five years

Light- asset business model

Excellent know-how knowledge

Customized e-commerce solutions

Excellent image and credibility

Good performance in sustainability development

Diverse team

Trust in their information security system

Light-asset model might complicate the financial transactions with banks who are reluctant to deal with low-asset companies

Limited advertisement budge

The publication and distribution service group contributes to less than 1% of the total revenues

Threats ST Strategies WT Strategies

Business consolidation

Unstable Political Situation

Increasing in the number of refugees


High unemployment rate

Fluctuating Oil prices

High bargaining power of competitors

Develop business continuity plans for the stressed countries

Develop strong relationships with different business partners (such as NGOs, governments, transportation providers in terms of airlines, sea cargos, vehicle leasing…etc to ensure a good back up and support in case of global consolidation or changes in regulations

Utilize the sustainability projects to create new employment opportunities

Seek financial support to cope with the fluctuating oil prices

Cut expense in publication and distribution service to fund other projects that can help the refugees and the unemployed people.

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The detailed rationales behind this matrix are shown below:

Strengths

Aramex did very well in 2014 where revenues increased by 10% and profit by

15% in 2014 vs. year before (2014 Aramex Annual Report, p. 4).

Aramex’s asset-light business model heavily relays on the supply chain of

international and local suppliers (Aramex Annual Report 2014, p.15).

Aramex has strong technical knowledge in this industry because of its old

experience with Airborne Company, which was acquired later by FedEx

Company (Ghandour, 2011).

Aramex provides customized e-commerce services to meet the different

needs of its customers (Aramex Annual report 2014, p.39)

Aramex has excellent image and credibility since it was the first company

from the Arab world to trade in NASDAQ (Ghandour, 2011).

Aramex always seeks to implement sustainability projects where 90% of its

locations are engaged with sustainability initiatives (Aramex Annual Report

2014, p. 49).

Aramex has a strong team where its workforce grew by 17% in 2014 reaching

16,273 employees and representing 91 nationalities (Aramex Annual Report

2014, p. 22).

Aramex is working continuously to ensure high information security practices;

as a result Aramex got deeper trust with its customers and in its brand

(Aramex Annual Report 2014, p. 37).

Weaknesses

Light asset model may create trust issues with big financial institutions as per

an article by Jane Williams in INSEAD Knowledge (Williams 2013).

Aramex spends small amount on direct advertisement as per the annual

report which says: "Our continuous efforts resulted in a deeper trust with our

customers and in our brand, and have enabled us to limit our advertising

efforts for our services and focus more on direct interactions with customers

and prospects" (Aramex Annual Report 2014, p. 37).

The publication and distribution service contributes minimally in the total

revenues as shown in Appendix C.

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Opportunities

"Rapid changing in shopping habits, Mobile and social networking, E-

commerce blooming, and Technological innovation" are opportunities for

Aramex as shown in Appendix A.

Promising and growing market as shown in Appendix C where the analysis

shows growing market in Asia and Africa especially for the domestic service

The transport and logistics sector in the Middle East region is growing and

creates more attractive investment opportunities.

Aramex provides high focus on Asia and Africa. "Both Asia and Africa will

continue to play important roles in Aramex’s aggressive expansion plans

across emerging markets. The Asia-Pacific region is home to over 4.2 billion

people, and accounts for nearly 60% of the world’s population." (Aramex

Annual Report 2014, p. 5).

Threats

Business consolidation threat as illustrated by Ghandour in an interview with

Harvard Business Review (2011) is a probable threat. "The global logistics

industry was consolidating: FedEx and UPS had acquired companies such as

Gelco and IML in Europe and Asia; Emery and Purolator had merged. FedEx

bought Flying Tigers—an all-freight airline. In addition to expanding our

presence geographically, we diversified our revenue stream by becoming a

one-stop shop for freight forwarding; shipping by air, sea, and land; and a

variety of logistics services across the region." (Ghandour, 2011).

Unstable Political Situation, Increasing in the number of refugees, and Well-

regulated industry, Fluctuating Oil prices and High unemployment rate in the

public sector as discussed in Appendix A.

High bargaining power of competitors as shown in Appendix B.

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