Robel Trading Company — SME Case Study (UAE)

Robel Trading Company, also known as Robel Bearings, was incorporated in 1990 with its headquarters based in the United Arab Emirates’ Dubai. Currently, this company functions as a global trade company that specializes in every type of power transmission and bearing solution spanning agricultural, power, and oil applications to automotive, industrial, and general purpose ones. The company is centrally situated at Deira’s Wholesale Market of Spare Auto Parts within the Emirate of Dubai and is directly 45 minutes from Jebel Ali, the third busiest location on Earth and 20 minutes from the International Airport of Dubai. Dubai’s strategic location is optimum for the company given that the emirate allows for worldwide product distribution by means of land, sea, and air routes. Robel’s main Robel Trading Company strengths in terms of its competitive edge include a broad variety of genuine quality products in order to further delivery timing whilst also stocking some of the most famed brands including KBC, IKO, KOYO, NACHI, NSK, NTN, FLURO, IBC, RHP, INA, SKF, TIMKEN, FAG, and many more. In particular, Robel supplies bearings to major, regional, and local users within the CIS regions, the Indian subcontinent, the Far East, Africa, and the Middle East. Primarily, the company holds the belief that its detailed comprehension and knowledge of its customers’ desires and aims to fulfill them have helped it become one of the most preferred bearing companies within the Middle East (Cherian, Jacob & Farouk, 2017).

Essentially, the company strives to offer an extensive variety of bearing solutions that are of world class quality.

The company’s strategy is to offer products of manufacturers that are not so dominant on the Middle East market at various price levels, and thus offer customers new alternatives. Today, the company Robel Bearings LLC offers not only bearings, but also spare parts, components, and service activities of many renowned global manufacturers. The range of bearings is sorted from the highest quality level to bearings for undemanding applications. Bearings are divided in the company according to quality and type. The quality is divided into premium, medium, and satisfactory.

Depending on the type, bearings are divided into ball bearings, cylindrical roller bearings, spherical roller bearings, tapered roller bearings, needle roller bearings, inch bearings, bearings for housings and bearing housings, linear bearings, and plastic bearings.

A specific market segment is bearings intended for the automotive industry. The production of these bearings is commissioned by the carmaker directly to the manufacturer on the basis of a contract. These are special bearings with atypical dimensions, which are intended to prevent cheaper alternative replacements (Aburayya, et al., 2020). The bearing is distributed through car parts dealers. Herein, Robel functions as a wholesaler connecting suppliers with retail outlets and directly with customers. Although the company acts as a whole, it is divided into two sectors. One sector is the seller of engineering parts and the other a seller of rolling bearings.

The company’s mission is that of becoming a top tier spare part and bearing supplier that is able to cater to customers around the world regardless of their field.

This means overcoming all of its competitors within the field in order to ensure that it remains a market leader with the most market share possible.

Vision The company’s vision focuses on allowing it to position itself as a leading spare parts and bearings supplier that exceeds the expectations of its customers in terms of prices, delivery, and quality. The company illustrates this in its high quality offerings, its efficient delivery of products, and its affordable price offering.

Organizational Structure

The company is managed by a single executive.

Wholesale and retail of bearings are provided by four employees, including the company’s executive. Three employees provide consulting services together with the purchase and subsequent sale of machine parts.

The warehouse is managed by one employee, but sales officers help with packaging and shipping of goods. The economic department is managed by one employee.

In particular, the company is divided into these three departments as they play a leading role in its services and offerings and are the main areas through which it exceeds within the market. Additionally, having each individual component of the company be segmented into a service or offering helps in ensuring that each of the areas that the company excels in is focused on by an entire department rather than a single employee or a group of employees working on other things. Herein, it can be seen that the wholesale and retail department is composed of three employees and one executive who takes the charge of this department and leads it. The consulting services department is composed of three individual employees with several years of experience in the field and entails providing consulting services to clients in the form of advice, research on pricing, and investment help. Lastly, the warehouse department involves one employee and two sales officers, all of whom work toward making sure that the company’s sales take place in a productive manner and that after sales services are regularly offered to customers.

Executive Employee Employee WHOLESALE AND RETAIL Employee Executive Employee Employee CONSULTING SERVICES Employee WAREHOUSE Sales Officer Sales Officer Figure 39: The Three Departments of Robel Leadership In particular, the founder of Robel Bearings, Hasan Parkar, hails from India and has been able to establish his business as well as himself as an entrepreneur within the United Arab Emirates. Completing his education from the University of Mumbai, Parkar went on to explore the business world and was able to greatly improve the bearings and spare parts trade industry through the inception of Robel. Apart from Parkar, no other individual is placed in managerial or executive positions within the company. In fact, all of the other employees of the company work as full-time employees within the wholesale and retail portion of it, the consulting services portion, and its warehouse. Parkar is excellent at his job and has been the key role in leading the company.

A change in the quality level of subcontracting (for example, bearings for a washing machine) means that some large companies (e.g. Bosch) as customers of Robel could switch from quality goods that the company supplies to them, such as Japanese bearings from NTN, to bearings from China, Korea, Poland, or the Czech Republic, which are not as high-quality, but are cheaper. This is due to the worrying financial situation of customers of these large companies, who can no longer buy expensive but high-quality products and therefore prefer the lower-quality ones at lower prices. This has mainly been caused by the pandemic.

Primarily, the pandemic has caused the company to fall short of supplies and customers, whilst also harming its exporting and importing business. This has made the company move away from its international scale of numerous customers to a handful of customers.

Nonetheless, given its small number of loyal employees, the company has not had to fire any employees. Overall, the company currently relies on both in-house as well as work from home accommodations of employment according to the needs of each individual employee.

Thus, there has not been a need for it to entirely restructure, but the overall restructure that has taken place has been restricted to accommodating the working circumstances of each individual employee.

Services The company’s services consist of economic and efficient delivery, competitive pricing, and excellent technical support. These also include the consulting services that the company offers.

Economical and Efficient Delivery Robel delivers its products in a way that meet the requirements of its customers around the world at the smallest possible lead time through transport modes that are economic, thereby offering customers an economical, reliable, and excellent forwarder network be it through land, air, or sea.

Competitive Pricing Robel has a massive supplier network that spans the world, making sure that its customers receive their product at highly competitive prices. It offers a number of brands within the bearings industry through a single network and its suppliers allow it to procure mass quantities at unmatchable pricing.

Superior Technical Support Through the years, the company has maintained an excellent team of sales personnel, engineers, and technicians who are both competent and well-trained in order to procure customer bearing requirements and offer drawings and technical details. These vary from large diameter to miniature to stainless steel and high temperature bearings.

Products Bearing Products As a company in existence for more than 30 years, Robel is able to easily meet customer requirements from aftermarket applications to original equipment with a portfolio of products that spans well over 25,000 different bearing types in varying specifications from 45,000 millimeter outer diameters to 1.5 millimeter inner diameters. In particular, the company specializes in industrial application of extra large bearings.

Linear Motion Products Robel is continually working in order to increase its range of products, offering linear motion ones that include lead screws, cross roller guides, actuators, guides, ball splines, ball slides, roller tables, slide rails, and ball screws.

Lubricant Products Robel is an autonomous lubricant product supplier that offers such products for general as well as industrial purposes.

Power Transmission Products Beginning as a company only specializing in car bearings, Robel currently deals in automotive and industrial pulleys, conveyor belts, timing belts, chain links, roller chains, and v-belts.

Seal Products In terms of seal products. Robel offers O-Ring and Oilseals products.

Robel chooses products that are attractive to customers, but also to meet their pricing requirements. The company attempts to learn to make better use of the possibilities of its suppliers’ production so that it can offer the customer high quality even at a good price. The money saved is spent on promotions for not only Robel itself but also its suppliers.

Primarily, the company uses three operational strategies.

These include supply chain optimizations, which allow the company to improve its chain of supply in such a manner that reduces costs, makes full use of the transport and systems available to it, and ensures that it is able to easily deliver the end product to its customers. The second operational strategy that the company uses is that of inventory management to ensure that its customers do not have to wait long to receive their desired product but are given said product within a reasonable timeframe (Garcia, et al., 2020). The last operational strategy that the company employs is that of employee training to ensure that it has a highly trained, talented, and efficient workforce that can easily take on the challenges at hand whilst being able to further their own competence as well as the competence of the company itself.

The company’s CEO places particular emphasis on customer satisfaction, which means that he will do his best to meet their wishes and requirements. Due to the change in the quality level of subcontracting, the company’s goal is to acquire 5–10 new customers per year for primary production and 2-3 new customers for distribution.

Another marketing goal of the company is to increase turnover by at least 5-7% every year. Furthermore, in the coming years, the company’s executive is considering the appointment of a representative who would better manage and revitalize the company’s overall marketing management. Furthermore, the effort in the target customer group next year is to increase awareness of the company’s range of bearings in the minds of customers (Doniec, et al., 2020). The aim is also to improve the speed of deliveries to the customer and in the following years to expand the main warehouse with bearings for better handling of goods.

Although the company had relied on traditional marketing such as flyers and billboards as well as posters, the pandemic has allowed it to move more toward digital marketing, thereby allowing it to reduce its marketing budget and focus on digital marketing strategies such as SEO, social media, and mass message marketing.

The company’s marketing strategy for the coming years will be based on all the above facts, i.e. customer needs, goals and mission of the company, etc. The company’s strategy in the coming years is to focus on consulting activities, which operates and which is its main advantage.

Furthermore, the company has been focused on greater use of NTN - SNR bearings. Specifically, the company has been attempting to learn to make better use of the possibilities of the NTN - SNR bearing production, so that it can offer these bearings not only as high-quality and innovative ones, but also as bearings at advantageous and affordable prices for the customer. In the following years, Robel is likely to increase awareness of these high- quality bearings through investments in its supply.

Robel Bearings has gained a good reputation with customers mainly from the consulting activities provided to customers. Its advantage is not only excellent professional knowledge in the field of bearings and machine components, but also excellent language skills, especially knowledge of English and German. Another advantage of the company are the bearings offered by the Japanese company NTN - SNR, which is the main partner and supplier of Robel. These bearings excel primarily in their quality and reliability, which every customer will appreciate. However, today’s customers are also looking for advantageous alternatives. Then there are also customers who are looking for the lowest possible price and they don’t care so much about quality.

The company offers FK Chinese bearings to these customers, which boasts a low price and acceptable quality. If the company wants to succeed in the coming years, it will have to learn to make better use of the NTN - SNR bearing production, so that it can sell these bearings at better prices than before, and thus attract more customers (Cherian, Jacob & Farouk, 2017). Today’s customers, as already mentioned, often prefer price to quality, but NTN - SNR bearings still bring the company the highest profits of all the bearings on offer.

Furthermore, the company will have to think about the marketing management of the company in the future, as it is currently insufficient and unsystematic.

The company will have to choose a responsible person from among the employees who will take care of the marketing carefully. Not only this function, but also many others are now performed only by the company’s executive. In the following years, if the company would like to expand the warehouse space, which is also a weakness of the company, it should take into account the fact that the built-up space around the company does not allow this possibility well enough. Thanks to this, the company cannot currently expand the range of goods offered, which also manifested itself as a weakness of the company, as today’s customers are very demanding.

In the future, the company may also have certain opportunities, such as more advanced deposits, which may come with the company NTN - SNR, which is one of the most advanced companies in the industry.

In particular, the company should attempt to improve its marketing. The biggest threat in the coming years should be the arrival of new competitors, specifically Chinese companies, such as today’s FK, which can begin to offer new, innovative bearings on the market, which will not only be better, but also at better prices. Thus, by focusing on improving its relations with its suppliers and also attempting to reduce pricing, the company would be able to greatly improve its position in the market and ensure that it does not fall short due to the presence of possible competitors (Cherian, Jacob & Farouk, 2017).

Successful Best Practices

The price is chosen by the company to satisfy customers, but also to reassure the company in terms of profits. Pricing is a difficult thing for a company. The first problem in choosing the right price is the large customer requirements for a low price of bearings.

Today’s customer demands the lowest possible price, but also expects the quality of bearings to be high. The company has to consistently monitor its competition to know what prices its competitors set for the customer and accordingly choose the right strategy to make the price more attractive to the customer than the competition. The purchase price is reflected in the product price, which forms the basis of the future selling price of the product. The purchase price for the company Robel is mainly determined by its customers, suppliers, and competitors. Then the company chooses its selling price of bearings. These prices are subject to a discount depending on the number of bearings taken.

This means that a lower cost is granted to the customer who procures a larger number of bearings. There are also special prices for customers that apply exclusively to primary production. The special price depends on the individual agreement between the parties, the quantity taken, and the type of product.

The main failure of the company has been inability to capitalize on the bearing market as a whole, given the fact that Robel has been gradually branching out into different sectors and thus as the number of products that the company offers increases, its capitalization on each individual sector decreases.

Starting out as a small local company, Robel has been able to become an international organization within the span of 30 years and is still continually growing.

Additionally, the company began its operations mainly as a bearings wholesale retailer, but has quickly moved on to spare parts as well as original equipment for various different industries.

Through the current work, the author was able to find that Robel should attempt to improve its overall branding and marketing approach in order to successfully capitalize on the different sectors that it operates.

Mainly, the company has to attempt to focus on the type of marketing that its customers prefer rather than utilize generic forms of marketing that are unable to sufficiently focus on individual customers. In particular, the company should attempt to focus more so on local markets rather than international ones alone as shipping, catering, and revising products delivered to the local market is a task much more simple than focusing on the international market itself. Additionally, the company should attempt to reduce the number of sectors that it operates in as having its hold on so many different sectors may prove to be challenging in the coming future and may harm the company’s reputation of delivering high quality products.

Lesson Learned Through the current work, the author was able to learn

the following lessons

¡ That companies should not attempt to surpass their overall focus and supply.

¡ That the business of bearings and spare parts is one that is immensely competitive.

¡ That the marketing for companies within this industry is often a challenge as most customers do not focus on the type of spare part or bearings that they want.

In conclusion, it can be stated that Robel is an excellent example of a small organization operating on a large scale through its close focus on product quality and supply. Over the years, Robel has been able to build good relations with its customers and has been able to greatly improve its outreach and has been able to establish itself on a large scale through its loyal customer base. In particular, it can be stated that Robel is a highly successful organization that other entrepreneurial ventures within or outside of the United Arab Emirates should try to emulate, especially with the fact that the company has been able to expand to the international scale within such a short period of time and in such a niche market.