Salamuddin Trading Organization — SME Case Study (UAE)

Salamuddin Trading Organization was developed 10 years ago and is located in Sharjah, UAE. The company trades IT equipment such as laptops, LCDs, monitors, CPU, hard disks, key board, mouse, printers, and several other accessories. The UAE is considered a big market for technology related business, so Salamuddin Trading earned huge profits. The company is a sole proprietorship and run by one person which is the owner. The company when first established was a shop to fix technology gadgets and slowly it developed into trading business, where the products are available to direct customers, but the main focus is to sell it to the other businesses, organizations, and enterprises in bulk.

The owner of this company now owns other trading Salamuddin Trading Organization businesses that he established by earning profits from here. During the COVID-19 pandemic, the business suffered but only during the days of strict lockdown.

However, when businesses opened in the UAE, the company was able to earn triple time revenue in 2020.

It is because the demand for IT equipment increased.

These devices became the need of every household and office. The company hired new staff to manage its operations.

This research paper discusses the small business of Salamuddin Trading Organization and shows how it turned into a medium sized organization.

To meet the technological needs of people and businesses within the UAE. The company has a mission to serve all businesses in their IT needs, even individuals within the society and play its part to turn the UAE society into a digital society.

Vision To emerge globally and to expand business into other countries of the GCC and to develop network branches in the Middle East by becoming a one stop shop for all technology needs.

Organizational Structure

The organizational structure is defining the hierarchy of authority within the workplace and it is important to determine the parameters of each employee as per their position. The organizational structure of Salamuddin Trading Organization is hierarchical, where the owner is the head of the organization while there are several other staff to support his tasks. This staff include manager, accountant, four operational staff, one technician, one customer service, and one sales and marketing officer.

However, there are some other organization structures such as functional where each department performs its own specific tasks. A flat organizational structure is where all the employees are on equal level and are free to share their opinions. A divisional organization structure is separating each unit of the organization from others, but this suits large and multinational organizations (Hermalin, 1996).

OWNER Marketing

Administrator Operational staff Manager Figure 9: The Organizational Structure of Salmuddin Trading Leadership The management style of the organization is usually known as the leadership style and it is important to achieve organizational goals. There are several leadership styles such as autocratic, in which the leader has the authority to decide upon matters. He is usually of strict nature and always wants to fulfill orders. This leadership style best works when the leader is a capable person.

If the leader has the ability to foresee the future and to develop strategies accordingly, then it is known as visionary leadership. In the democratic leadership style, the employees within the company can make a decision democratically by looking at the majority of the opinion.

One of the leadership styles which works to increase the ability and performance of its employees is known as pacesetter. Finally, the coach observes its team members and helps it to overcome limitations (Burns, 2017).

The leadership style of Salamuddin Trading is visionary and autocratic.

Figure 10: Salamuddin Trading Leadership Style Restructuring Restructuring happens in an organization when a major change is required such as an ownership change, management change, or a big change in operations.

Salamudin Trading underwent several restructuring changes when it was just a shop, it was managed by one single person, then looked at growing business and hired two more employees. Now, the company is owned by around 10 people. The management already hired some more staff to meet the increasing needs of the business, but due to travel bans, these new employees are still unable to join the organization.

Product Salamuddin Trading is a trading business. They are not manufacturing anything but the products it deals with, including laptops, computers, peripherals, printers, and several other devices related to information technology. Along with this, it also provides installation services of these devices, so it can be said that the organization is offering both products and services to its customers.

Business strategies which can define the core focus of the organization includes differentiation, focused differentiation, integrated cost leadership, focused leadership, and cost leadership. The main element of the differentiation strategy is to be different from what is in the market. The services of Salamuddin are not much different than its competitors, hence this strategy is not being applied. In focused differentiation, the organization needs to focus on the specific niche of the target market by understanding the exact needs of these audiences. Integrated cost leadership strategy focuses on the best price and also on high quality of the product. The main element of cost leadership is to make it possible to sell the products and services cheaper than the market, regardless of caring about quality, whereas focused leadership makes it possible to sell the best products and services but with smaller prices in comparison to competitors (Strohhecker & Größler, 2012). Looking at the core of each business strategy, it could be said that the organization deploys focused leadership, where it is keeping prices lower than the competitor, but offering good quality of products and services.

Operational strategies are those strategies which lead the organization toward its defined goals. In an operational strategy, corporate strategy is such which defines the core of the operations across all departments as to focus on customer happiness, on quality, cost of the products, or to focus on the benefit of the organization. The corporate strategy of Salamudin Trading is to pay attention to customer happiness and quality of services.

Corporate Level Business Level Functional Level Operational Level Corporate Strategy Business Strategy Functional Strategy Operational Strategy Figure 11: Types of Business Strategies Other strategies include customer driven, where customers need to be satisfied to the maximum. In a competitive advantage strategy, the organization is defining a competitive edge on its competitors. In core competence, the organization develops such elements of service or product which don’t exist in competitors (Sachdeva & Malhotra, 2014). Salamudin Trading is deploying a core competence business strategy and its differentiation point is that it offers installation services along with selling products.

Marketing strategies are defining how to reach customers and who those customers are. There are several marketing strategies from which business can benefit. However, when the Salamuddin organization started its services, marketing was not so common.

Especially for small businesses like shops, there was no concept of marketing but they heavily relied on walk- in customers and then word-of-mouth. Hence, getting benefits from quality service, reliable products and good customer service, the customers were doing word-of- mouth marketing on their own. Also these customers refer the organization to other potential customers. Over 10 years, the company earned a huge customer base and their loyalties. However, in this competitive time, the company really has to take help from marketing to remind old customers and target new customers about the organization.

So the company’s main focus is marketing in print media.

It regularly publishes advertisements in local newspapers such as the Khaleej Times and the Gulf News. Also, it is promoted through the Al Waseet marketing magazine.

In addition to this, the organization is printing brochures, business cards, flyers, and banners to distribute to customers and to gain their attention.

Also, to meet the needs of modern day customers, it has its own Facebook page where it has a good following and uses this page as online marketing very regularly.

Email marketing is also one of the important parts of its marketing strategy as it sends bulk emails to existing and potential customers on regular intervals.

Challenges of the Business The Salamuddin organization doesn’t face any difficult challenges, even if they survive during a pandemic. It is not wrong to say that it grew during the pandemic because more and more people were in need of technology products and services, especially laptops and iPads.

However, throughout the 10 years of the business, it faced several challenges related to labor. In the beginning, the organization was not able to pay high salaries to its staff, thus new staff came in, but as soon as they developed some skills, they left the company in search of a good salary. However, the management decided to pay salaries a bit higher than the market so that the experts stayed.

It is especially important for technicians because every new technician must learn from the beginning, however, the situation is quite stable. The other challenge faced was when the government introduced VAT, because despite knowing that the VAT is from the government and for government customers, the company was not happy to pay. Then just to keep the business going, the organization decided to pay the VAT amount from its profit. This keeps the bill of customers lower and this strategy attracts a large number of customers.

Overcoming Challenges The owner of the business believes that challenges are there to teach you. He is the kind of person who never is afraid or nervous from challenges. This can be seen by the way he successfully managed his business for more than 10 years. Currently, he has three other companies and is supervising the operations of four different businesses. The management tackled each issue with due diligence because as soon as they understood the reason for employee turnover, they solved the problem.

Then they understood the reason for low sales and they decided to not burden the customer with VAT until they are familiar with this. Hence, they decided to pay the VAT from their profit but eventually earned more than before.

The first business practice which became a success was to make its employees happy. Because the day the management decided to lower the profit but increase the payments of the staff from that very day, the management noticed an element of association and responsibility among employees. The management also feels that the employees turn to productivity as well as loyalty. These were the same employees who were looking for ways to escape from the job, but when they started getting a good salary, they wanted to show their capabilities to be on the list of promotion or salary increment.

Another business practice which became successful was taking responsibility of customer’s VAT, which introduced the company to new highs in earning revenue.

Moreover, the organization believes in truthfulness and transparency as the management believes if they have to go a long way, they have to be honest.

As per the experience of the owner of the organization,

the following are failed business practices

¡ Lack of good location- If the business is not located in a suitable place, it contributes to failure of the business.

¡ Poor management- He believes that if the business is not managed well, it will collapse in no time, so it is the requirement of business sustainability to always focus on the business.

¡ Negligence from employees- The owner believes that to stay negligent from employees is a big failure in business because the more you know your employee, the more you understand how to enhance their productivity.

Current Position of the Company Salamudin Trading Organization, which started from a small shop of computer repairing and with one person employee, which was the owner himself, has now turned into a medium sized organization, employing more than 10 people and looking to hire more in upcoming days.

The organization has three other subsidiaries which derived from this business and these deal with trading of some other kind of commodities.

To be successful in business, the management must

need to pay attention to the following

¡ To increase the productivity of employees.

¡ To consider employees as an important part of organization and not to consider them separate from organization.

¡ To increase the technology implementation in its operations.

¡ To take care of the business values.

¡ To give respect to its customers and to work for their happiness.

Important Business Lessons The first and most important lesson which organizations learned from their own practices is how important employees are for the business. Also, if employees are learning something new and getting expertise, then it is good for the organization and the organization must take advantage of the skills of their employees.

It must also keep customers happy, even if it looks a bit difficult in the beginning. Most importantly, the organization needs not to compete with others but needs to focus on creating excellence.

In conclusion, it is good to say that the organization didn’t reach this point very smoothly, but its journey was not much different than a bumpy road. However, the struggles, dedication, and passion of the owner made it happen so that the organization enjoys steady growth and has partners in three other subsidiaries. The organization and its management learned a lot from the experience over the past 10 years.