Savola Group SWOT & PESTLE Analysis

Strength

1. Diverse and expanding portfolio of managed and non-managed assets: Savola Group has a diversified range of managed and non-managed assets spanning over 30 countries.. It currently owns the biggest grocery store chain in Saudi Arabia and has a strong presence in the food and retail sector. The company manufactures products like oil, sugar, pasta and frozen foods. The long term strategic investments of the company are greatly responsible for helping it increase its profits. The company is also the biggest shareholder of Almarai, one of the biggest food manufacturer and distributor within the Middle East. It has a 34.52% stake in the business. In 2018, Savola also acquired a majority stake in Al Kabeer Group of Companies, a leader in the frozen foods manufacturing and distribution industry. The specialist market knowledge and itsconsistant strong performance have made Savola a popular choice for investors since 1979.

2. Largest shareholder in Almarai Company: With the acquisition of a 34.52% stake in Almarai, Savola has become its largest shareholder. Almarai is not only a major food manufacturer and distributor of the Middle East, but is also the world’s biggest vertically integrated dairy company. it is considered as being one of the most powerful brands within the Middle East. Apart from this, Almarai also engages in the manufacturing of products within the dairy, juices, bakery, poultry and infant nutrition segments. Almarai’s headquarters are situated in Riyadh and it has its operations and reach stretched out across the GCC, Egypt and Jordan. The company has a customer base of 42 million consumers.

3. Strategic investments in restaurants, food and grocery retail: Savola Group has recently also entered the KSA region with the help of certain strategic investments. The acquisition of Panda Retail was a step in that direction as the chain has massive reach within the region. It is Saudi Arabia’s biggest modern grocery chain with a customer base of 134 million customers annually who get served via the retail chain’s 214 stores. The strong geographical reach of the company combined with a robust history and good market share have benefited the company significantly. Panda Retail, with a 49% stake, is also the largest shareholder in Herfy Food Services Company, which is a major restaurant, industrial bakery and meat processing business in Saudi Arabia.

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Weakness

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Opportunity

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Threat

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Political

1. Political instability, war and terrorism tensions in the Middle East region: The Middle East region has long been plagued by an almost continuous state of political instability and war. Recurring conflicts and tensions are seen within the region due to internal political and factional strife. The recent September 2019, drone attack on Saudi’s oil production facility, Saudi Aramco could be a conspiracy of one of the following, the Houthis, a Yemeni rebel group, as they cross swords with the Kingdom; by Iran, as a response to debilitating U.S. sanctions; or by an Iranian-backed Shiite militia in Iraq. Egypt and Turkey, the two largest countries in the eastern Mediterranean are regarded as the two most formidable conventional military powers in the hinterland; a deep-rooted dispute between the two countries is currently in action across the region, though Ankara and Cairo have consistently avoided direct confrontation or hostilities. Beside these nations are also battling internal strifes and coups. Poor governance, corruption, economic failures, demographic pressures and other civil sector forces have contributed to causing escalated tensions putting it in the brink of war alongside continued anarchy looming large over the EMEA region. This jeopardizes the prospects of profitability and expansion for the Savola Group.

Economic

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Social

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Technological

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Legal

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Environmental

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