H.M. EXPORT IMPORT — SME Case Study (UAE)

By having an important geographical location and world class infrastructure, the United Arab Emirates has become an ideal place for import and export business.

According to the World Bank, foreign trade in the UAE is contributing 161% of its GDP. The UAE holds the 20th position among the countries of the world in terms of imports and exports. Crude oil, oil products, and other natural minerals are the largest part of the UAE’s export, including precious metals, pearls, and stones (The World Bank, 2020). Major imports of the UAE are food items, gold, electronics, medicines, and transport equipment.

The major countries to export from the UAE include Saudi Arabia, India, China, Oman, and other countries of the Middle East. However, imports are being received from Japan, US, Germany, India, and China. It is expected Chris Jones H.M. EXPORT IMPORT that the Israel UAE normalization will further flourish this industry.

Looking at the growing future of import and export, the organization H.M Exports and Imports was established in 2015 in the industrial area of Sharjah UAE. H.M Exports and Imports is dealing with vehicle spare parts, as it is importing vehicle spare parts from different countries including Japan, China, US, and others, and exporting them to India, Pakistan, Oman, and some other Middle Eastern, South Asia, and European countries.

This paper discusses the important aspects of the H.M Exports and Imports in the form of a case study to encourage other small businesses.

H.M Exports and Imports LLC H.M Exports and Imports is a limited liability company established by Mohammed Daoud in 2015. He is a British national with Afghanistan origin but spent most part of his life in the UAE. He has good experience in the imports and exports business as he served the industry for a longer time before the inception of this business. The company is located in the industrial area Sharjah, which is the biggest market of the UAE for vehicle industry.

H.M Exports and Imports has a mission to get recognized globally for being the best import and export dealer in the vehicle industry. Some important elements of the mission statement of the organization include superior quality products and services, high ethical and business values, maximum satisfaction of customers, and increasing happiness among employees and stakeholders of the organization.

Vision Statement To become an international important and export organization by having a head office in the UAE and branch offices in different countries of the world, almost in each continent. The company also wants to be the best automotive spare part company in the world and where customers can buy any part of any brand and of any model.

Organizational Structure

CEO Manager Warehouse in charge Workers Logistics officer Figure 6: Organizational Structure To define the flow of activity, authority, and information, it is really necessary to define the organizational structure within a business. It is helpful in allocation of tasks, developing good coordination among workers at different levels and also in directing supervision. There are different types of organizational structure, but it is always necessary to deploy one which best suits the needs of the organization (Hermalin, 1996). Five of the most popularly used organizational structure types are

as follows

¡ Functional: This is the most widely used structure where each department is separated according to their function such as accounting, human resource, marketing, and others.

¡ Hierarchal: In small organizations, since employees are few, a hierarchical structure is deployed because in this, employees are ranked as per their positions and so do they have authority.

¡ Flat: The level of hierarchy doesn’t exist in this structure, but all employees have equal rights in expressing their opinions.

¡ Divisional: This structure can be seen in large organizations and each business division is responsible for their tasks.

¡ Matrix: This organizational structure overlaps the functions of different departments. For example, the IT department has to fulfill the requirements of the whole organization. (Hermalin, 1996) The organizational structure of H.M Exports and Imports is hierarchical, where the owner CEO is the higher authority and other team members have their own duties as per their rank in the organization. There are five employees within the organization: one manager, one logistics officer, one warehouse in charge, and three workers working in the warehouse.

Leadership at H.M Imports and Exports The ability of the management of an organization is to set some goals and to strive to achieve them by appropriate decision making and important actions by outperforming in the competition, and by inspiring employees within the organization. The common leadership styles in business

are as follows

¡ Autocratic In this leadership style, the highest authority within the organization is responsible for all the decisions. Since decisions are being made by one person and is usually the owner, he is ultimately responsible for the outcome of results (Park, 1997). This leadership style is most common in small to medium organizations, but some large organizations are also being dealt in this way. An example is Amazon, where Jeff Bezos is the autocratic decision maker leader.

¡ Visionary In this leadership style, the management is usually a visionary and helps his team to take steps which can benefit the future looking at the trends in the market (Park, 1997). Steve Jobs is an example of a visionary leader because he knew people prefer aesthetics and class, thus his idea of developing the iPhone became a success.

¡ Affiliate This leadership style is considered the most positive leadership style because it encourages employees to open up by developing a friendly environment for them and encouraging them to give their feedback. Also, the feedback of each employee is heard and actions are taken according to the importance or usefulness.

¡ Democratic In this style, the employees have the ability to choose their leader based on performance. The employees are also free to record their opinions, which come with good demands being accepted.

¡ Pacesetter Since this works by increasing the capacity and productivity of employees, it is best considered in achieving targets. This leadership style is full of enthusiasm.

¡ Coach In this leadership style, the managers are paying close attention in refuting the problem of subordinate employees, helping them in overcoming their issues to enhance their problem (Park, 1997).

Coaching SIX STYLE OF LEADERSHIP

• D. Goleman (2000) Leadership That Gets Results

Visionary Affliative Democratic Commanding Pacesetting Figure 7: Types of leadership styles (Park, 1997) The leadership style of H.M Exports and Imports is autocratic, where the owner Muhammed Dauod is ultimately responsible for all the decision making and for managing his team.

Restructuring Restructuring means reorganization of an organization, especially in terms of legal ownership, operations, and some other big structures in order to enhance the profit ratio of the organization to increase its brand awareness and effectiveness (Hermalin, 1996). For H.M Export and Import, there had not been any legal changes in the ownership. However, the operations are changed from time to time to enhance the efficiency of the organization, such as to hire new employees and firing those who are not showing serious productivity.

Product Design A product is an article, a piece, or a substance in business which is manufactured and traded in order to earn revenue, but not all businesses are manufacturing. Most businesses are procuring the manufactured products and selling them to the other markets where they are needed. On the other hand, some businesses are purely service based. The business of imports and exports is a mix of trading and service business. The products which are being traded are actually the products of that import organization, and the services i.e. on time delivery to sell quality material and being able to be trusted by customers, are services of this business.

H.M. Exports and Imports deals with genuine automotive spare parts as well as used, so the headlights of different vehicles, engines, and parts of engine, and different accessories such as bearing, roof, doors, mirror, glasses, and all other equipment of automotive vehicles, are products of H.M.

Figure 8: An example of an H.M. export

Business strategies are of four basic types and these are the positioning strategy, execution strategy, disruption strategy, and the innovation strategy.

Position Strategy This business strategy takes advantage of location in order to get a larger audience. The main focus of this strategy is to look for an ideal location to open a business where relevant customers can easily come in (Strohhecker & Größler, 2012). If we look at international brands, KFC is such a restaurant which pays attention to position. That is because it will open its new branch in a mall or an area where people are regularly coming and going. Moreover, in food courts in malls, you will find KFC just next to washrooms. The strategy is that more and more people coming and going can notice it and can buy their products.

Execution Strategy In the execution strategy, the main focus is paid to the quality of products and services because in this, the ultimate purpose is to satisfy the customer to its maximum (Strohhecker & Größler, 2012). Usually the high-end brands such as Apple Inc. and five star hotels are examples of this strategy, because they prefer to bear loss but will try to provide maximum comfort to their customers.

Disruption Strategy The businesses who want to disrupt the industry in their own way deploy a disruption strategy (Strohhecker & Größler, 2012). Uber and Careem are best examples of the disruption strategy as they didn’t do something innovative, but they developed new strategies to meet the old needs of people in newer and more comfortable ways.

Innovation Strategy An innovation strategy is deployed by businesses that prefer to attract customers by offering unique experiences, which also helps them solve real world problems (Strohhecker & Größler, 2012). Google is an example of such an innovation strategy, because Google offers innovative marketing and business ideas to customers. It also introduces the world to several genuine marketing techniques and fast browsing services.

The H.M organization deploys the positioning strategy because it chose the location of Sharjah Industrial Area to do business because it is an ideal place to do business related to the automotive industry. Here it is hardly necessary to approach customers because customers from all over UAE and other GCC countries visit for their automotive needs.

The above mentioned strategies are basic business strategies, but to further streamline the business, more focused business strategies needed to apply. These

strategies could be any of the following

¡ Differentiation: This strategy focuses on being different.

¡ Focused Differentiation: The focus of this strategy is also in being different but it is focusing on a narrow market rather than for a larger group of customers. Thus these products must be more customer specific.

¡ Integrated Cost leadership: Cost as well as leadership is in focus in this business strategy.

¡ Focused Leadership: In this strategy, the focus of the organization is to offer the best services in comparison to the market but at the cheapest possible price.

¡ Cost leadership: Businesses that deploy this strategy are focusing mainly on keeping the prices lower. (Strohhecker & Größler, 2012) The business of H.M is demanding enough not to deploy differentiation or focused differentiation because the products it deals with are general. However, the organization is deploying integrated cost leadership where it is focused on providing the best quality products at the best possible price with high standards of customer service.

Operational strategies are those strategies which help in carrying the daily operations of the organization but determine where to focus more. There are five operational

strategies as mentioned below

¡ Corporate Strategy: Corporate strategy is like the heart of the organization as all the departments must follow this strategy and it is derived from the mission and vision of the organization.

¡ Customer Driven Strategy: This strategy mainly focuses on the satisfaction of customers.

¡ Core Competence: The main purpose of this strategy is to develop core competence which doesn’t exist in other competitors.

¡ Competitive Advantage: In this strategy, the focus of the business is to develop competitive advantages to their competitors.

¡ Product and Service Development: This strategy is basically useful for manufacturing or service business so that they can focus on the development of product or service such as innovation, low cost, high quality, etc. (Gao, 2009)

Marketing strategies are those strategies which define how to reach target customers. The marketing strategies

deployed by H.M. Exports include

¡ Social Media Marketing: The marketing through social media platforms especially Facebook and Instagram.

¡ Radio Marketing: Advertisements on local radio channels because in the UAE, radio marketing is most useful for automotives.

¡ Word-of-Mouth Marketing: When people speak good about the organization.

¡ Referral Marketing: When other business associates will refer the customers to the H.M. organization.

Challenges Faced by the Business One of the biggest challenges faced by the H.M.

organization is dealing with the COVID-19 situation, especially those days when the whole UAE was under lockdown and business activities were at their minimum.

As of now, the business is in operation, but there are several issues relating to import and export shipments.

It is expected that the business will grow only after the world gets out of the situation of COVID-19.

Overcoming Business Challenges It is always understood that the business will face ups and downs on its path of success, so does H.M, but its management very successfully recovered from those challenges. However, the problems created by COVID-19 are unbearable because all of sudden, the sales reached its minimum, with a warehouse full of materials which were ordered, but demand got lower. To counter this problem, management decided to send some employees on leave and hence, take help from a few people. Also the owner invested in the capital to support the business so that it recovered from the crisis of COVID-19.

Successful Business Practices The successful business practices of H.M. Export and Import include the experience it got from managing operations related to imports and exports. It is necessary to consider that the organization was working successfully and generating a good amount of profit for the investors, but COVID-19 just squeezed any extra assets. This is the reason that investors injected it with capital and are expecting that the organization recovers

from the issues. Some other best practices include

¡ Motivating the employees and enhancing their productivity.

¡ Stay committed in difficult times.

¡ Be honest with customers and suppliers.

¡ Bring clarity and transparency in business operations.

Since the CEO of the organization has an autocratic attitude, he believes that he can control his employees even when they are not on job and also when they are at their job, they need to be pressured to do good performance. But this thought failed and employee turnover became high due to this attitude of the CEO. Later, he was able to understand that instead of pressuring, he should motivate them.

Even today, the organization is a small enterprise dealing with import and export. It was growing steadily before COVID-19, but is now struggling to survive. However, the management cut their expenses as much as they could.

Also, the investors injected it with capital and hence, it is expected that the company will recover from this impact and again will be on the road to success.

One of the recommendations is to develop a website in order to provide an online platform for customers around the world. The online presence for such business is really needed when dealing with suppliers and customers from different geographical regions. Along with developing online platforms, it is recommended to run aggressive digital marketing. This is essential for a business to survive through pandemic.

The most important lesson for this organization is to understand the value of employees and to treat them with dignity and respect. Also, the management learns how to survive through difficult times. The management also came to know how to prepare for unforeseen problems.

The H.M.

Export and Import organization was established in 2015 and was running its business operations successfully. The business was growing so the management was thinking of opening another branch in Oman, but all of sudden, the unforeseen problem of COVID-19 came across. The organization is trying to recover from the aftermath of this pandemic.

It is expected that in 2021, the losses will be recovered and the organization will be back on track. In conclusion, it needs to be said that determination is very important in business and those businesses that stand through difficult times become strong enough to face any challenges in the future. Also, the restrictions of COVID-19 are lowering, thus it is expected that the future of the organization under experienced leadership is bright.