Business Strategy project

Case Study 

Prepared for:            Business Strategy essay

Date:            5 July 2012

Case:            Azza Fahmy Jewelry 2010

Dr.:            Dr. Lutta

Disclaimer:

This study has been prepared according to the questions given in the case study. All answers, material and information in this document depend on independent research of the student (Imad DeirAtany, 2012).

The material contained is published for essay in the business strategy course in the Canadian University of Dubai.

Question 1: In your opinion, who are Azza Fahmy’s biggest competitors? Explain your choices. How would you respond to those competitors?

Answer: 1:

In the local Egyptian jewelry market, Azza Jewelry is the only on who produce the luxury pieces, and in the international market there are different products and brands, and its divided into Traditional, International and Small jewelry retails. In my opinion the most competitors in this stage (As Azza’s brand became international) is the international brands (such as Cartier and Bulgari, Arab brands such as Damas).

Azza’s brand has different production lines, and I would act differently towards each segment.

The Culture Line is one of Azza’s production lines that constituting 60% of her sale, and that would compete with the International competitors as its unique designs presenting the Egyptian and Arab folklore, and that would differentiate these jewelries from the International brands.

As for the Arab brand competitions, I would focus on the Fashion line and also on the Exclusive Line production that will related into different occasions such as Mother’s day specially that Azza has also the lines to produce gift items such as silver spoons, picture frames, key chains, etc.

Question 2:  What, in your opinion, were the most significant steps undertakes by Azza Fahmy jewelry towards the successful repositioning of the company as a global luxury brand?

Answer 2:

I believe in the Jewelry market, it’s very important to be related to the A class celebrities and top famous models that can create a good spot light on the product and help brand positioning (AFJ has top A class clients such as the Queen Rania, the famous Arab actress Yosra, etc.).

Azza did few steps to repositioning her company, but the most important one was when the company’s products start regularly displayed in the industry’s   top exhibitions and trade shows. And also, AFJ started showcasing its pieces at high-end retails such as Harvey Nichols in Dubai and Kabiri in the UK.

Although, she was collaboration with some of the biggest British fashion houses, designing special pieces to complement their creations.

Question 3: What other efforts do you suggest for the company to further establish itself as a global luxury brand?

Answer 3:

I always believe that owning the distribution channels are effective to the company. As for example, there are no AZZA Fahmy-owned stores or shops abroad, I would suggest to start establishing new stores carrying the name of AFJ starting in the Arab petrodollars countries which considered one of the biggest markets for jewelry in the world capturing US$ 14.5 billion or 10% of the world market. And later, AFJ can go west for her own shop targeting the Arab customers especially in US.

However, AFJ has to be aware of the customers taste and the difference between nationalities so differentiation in distributing the product is also important by targeting different segments by different products.

Question 4:  What approach did Azza Fahmy Jewelry adopt to target the attractive Arab Gulf state segment? Would you adopt the same strategy? Why or Why not? Suggest other ways to attract this segment.

Answer 4:

As AFJ still doesn’t have any owned stores abroad, it opts for either franchising; such as it did with Al Tayer in UAE, partnering with local seller in the country of destination on a consignment basis.

I will take this strategy at the beginning when I want to penetrate the market, and to check and study all the risks and threats that might face in that market.

But later, I would take another strategy to target this segment by having owned stores abroad, and that will give the brand more stability and more controlled on the segment to understand customer’s needs closely specially that AFJ has different production lines (Fashion line, Executive Line, etc.).

Question 5: What do you think is the company’s largest challenge moving forward? What would you do to overcome this challenge?

Answer: 5

In every business, companies will face almost the same as the Azza Fahmy Jewelry had went through when she decided to go forward, and apart from securing the finance and the resistance to change from her employee, I believe that Brand and Image Management is the most challenging factor that will face AFJ during any expansion or moving forward, and that of course because the company has an international competitors.

And to overcome this challenge, AFJ can try different ways. One of the steps will be that AFJ has to start opening its own shops and stors starting in Egypt and expanding into the rich Arab countries as GCC, especially that the company has different production lines that can fill all the customer needs either from the fashion line up to the customize line. This step will establish the company’s brand name as independent distributor for its own product.

Question 6: Do you perceive any particular challenge facing Azza Fahmy Jewelry as a Middle Eastern company? How would you recommend that the company respond to these challenges?

Answer 6:

Being a Middle Eastern company has different challenges, and I can see one of these challenges is the costumer taste. Most of Arab consumers are often attracted to westernized styles, and getting them to adopt products emphasizing Arab ethnicities will require considerable marketing and branding efforts.

In that case, AFJ can focus on the trendy products its produce in the Fashion Line to cover the Arab Market, and if they choose to penetrate any western market, AFJ can go with the Arabic style as we can see most of the western are attracted into the Arabic and the Egyptian designs which Azza Fahmy has a production line for it called the Culture Line.

Question 7:  How can the company overcome the expected resistance to change from its employees?

Answer 7:

Employees of companies that explained decisions more fully were more than twice as likely to support decisions as workers who received less information.

Therefore, I would suggest few steps:

-       Call the front-line managers for small group meetings, and give them the full explanations behind the change, and be honest about whether decisions can be changed.

-       Inform the supervisors of the decision in advance and provide opportunities for them to discuss the implications before it filters down to their employees.

-       Clarify the intended outcomes for the company

-        Segment the message about the change into different explanations related to different departments. Sales staff would like to know something different than the staff in the production line.

-       Be clear that the change may bring difficulties for some employee.

-       Employee, who will not respond positively into the change, will be called for a meeting to hear and understand their resistant point and to explain to them why the change has to go further. If the employee kept resisting, it would be better to terminate his contract but giving him the full rights as end of service etc.

End.