SET-D Case Study STRATEGY MODULE A CASE STUDY OF OMAN CEMENT COMPANY INTRODUCTION (Company profile and Background) In the beginning of 1978, the government intended to encourage and support the Omani projects which serve the infrastructure and in the same year Omani Cement Company was established. The first plant for the company was Rusayl Cement plant which was established in 1983. In the same year the plant taking place to produce cement with production capacity of 624,000 tons from Ordinary Portland Cement and Sulphate Resistant Cement (the very common types of cement). In 1999 clinkering production capacity expanded to a total of 1.2 million tons per year. The second production line was completed in mid of 1998. In the present the company is working to expand the capacity of plant form 1.26 million tons per year to 1.70 million tons per year by upgrading production line No.1 and No.2 (www.omancement.com). In 2005, OCCI was listed on the Muscat Securities Market (MSM) with 33 million shares, and after two years it was listed on Bahrain Stock Exchange (BSE) which was the beginnings to inter to the GCC securities market (MSM, 2007) and (BSE, 2007). In 2008 the cumulative clinker available for cement production was 1,479,762 MTS and the company produced 1,470,296 MTS of cement to meet the high demand. The company achieved a sale of 1,520,682 MTS of cement in the same year and the profit before tax for 2008 was RO 12.109 million (OCC Annual Report 2008). Recently OCC has signed an agreement for expansion project to install a new production line to increase the capacity of clinker production Also OCC has been appointed a consultant for supervision services for upgrading, modernizations and replacement of existing packing plant (OCC Annual Report 2008). In this table we will summarized some additional information about OCC. Social trend Oman population in 2007 exceeded 2,743,000 plus expatriate approximately 672,000 thousand (http://www.moneoman.gov.om). Growing income and globalization have changed people living style and thinking about usage of their properties. These changes came with new building or reconstruction and replacement of simple house with large multiple-flats. These are real derives for local cement companies plus the unlimited government encouragement for local industries to contributes in the Omanisation and society development. Strength and weakness for the competitor The strongest competitor to Oman Cement Company (OCC) is the local Omani cement company namely Raysut Cement Company (RCC). OCC located the industrial area in Muscat and dominated the cement market in the centre and the northern region of the country. RCC production plant is located in port Salalah in the southern region of Oman that is 1000 Km from Muscat (capital of Oman). Both Companies are listed in Muscat security market. RCC is the strongest local competitor to OCC Growing income and globalization have changed people living style and thinking about usage of their properties. These changes came with new building or reconstruction and replacement of simple house with large multiple-flats. These are real derives for local cement companies plus the unlimited government encouragement for local industries to contributes in the Omanisation and society development Strength and weakness for the competitor The strongest competitor to Oman Cement Company (OCC) is the local Omani cement company namely Raysut Cement Company (RCC). OCC located the industrial area in Muscat and dominated the cement market in the centre and the northern region of the country. RCC production plant is located in port Salalah in the southern region of Oman that is 1000 Km from Muscat (capital of Oman). Both Companies are listed in Muscat security market. RCC is the strongest local competitor to OCC in cement industry, RCC cement and clink production exceeds OCC and hence gained more profit than OCC. COMPETITIVE STRATEGY OPTIONS FOR OCC In order to achieve some competitive advantages in the cement market, OCC has to think about competitive strategy. Here we apply the Strategy Clock to study and analyze OCC, competitive situation in comparison to the others competitors. Form our view OCC is following option five (focused differentiation) according to the strategy clock. As we know Oman is one of Petroleum Exporting Countries, so OCC started to produce of very rare type of cement which is using specifically for oil wells. The type of cement is conforming to the specifications of American Petroleum Institute, and even now it is the only company producing this type of cement in Oman. Also OCC started to produce another type of cement which is Sulphate Resistant Cement. It is using where high resistant to sulphate attack is needed, where the need arises for this type of cement, because of the geographical location of Oman and discriminate faces salinity and humidity, especially in areas adjacent to the sea. This type is also in conformity with the standard specifications in the U.S. and Britain. CONCLUSION Seems Oman cement itself efficiently and effectively meets and fulfil Oman market requirement including gulf countries, we can establish them as a market leader in cement industry. Source: http://ecm.co.uk/wp-content/uploads/2015/01/3158.pdf Case Discussion Questions Q1. What is globalization? how globalization product works in economy? In what ways globalization has changed and influenced society? (4 Marks) Q2. What are the conditions leading to high degree or rivalry? Elucidate. (3 Marks) Q3. What is OCC 's differentiation strategy? What is the difference between differentiation and focused differentiation? (3 Marks) Page 3 of 3