Effective supply chain management and logistics facilitate the growth of international trade; the opportunity to venture in logistics business offered by the growth in international trade has attracted a number of players. Multinational logistics companies are strengthening their market command by putting on barriers to entry in the industry. In Saudi Arabia, Amarex has dominated the market, however, as it is in different countries, the economy has many players in the industry.
High competition from international companies and domestics companies in Saudi Arabia, and in the international market calls for the adoption of strategic management tools. Amarex management team has the role of ensuring they have up-to-date strategies to fight the competition in the market. They should not assume that the future will be bright but they should work on the current strategies to improve the future.
Despite the failure of Doha round of talks, international trade continues to prevail among different countries, tariff and non-tariff barriers continue to reduce and more people and companies are engaging in international trade. In international trade, the services offered by international supplies and logistics companies are crucial for smooth operation of the trade. The main task played by these companies is to facilitate the transportation of goods and services across different boundaries.
Amarex is an international transportation and logistics services provider with over 12,000 offices across major cities managed from its head quarters at Amman, Jordan; the company offers a number of services which include variety of express, freight forwarding, supplies/logistics, and domestic logistics services.
This report analysis the international business as operated by Amarex; it will use the company as a case study as it tries to discuss the challenges and prospects for international business and expansion of multinational corporation in foreign countries.
Amarex was founded in the year 1982 to provide transports and logistics services in the wake of an increase globalization and growing international trade; in its initial operations, the company started as an express operator; however, its strategy development allowed the company to develop into the global logistics business.
Fadi Ghandour is credited as the founder of the company, he is also the current Chief Executive officer; the brand name Amarex is an acronym of “Arab American Express”. when the company was formed, the founder concentrated as a wholesale expresses company to North American express delivery companies like FedEx, Purolator, and Burlington Northern, but in 1990, it had enough financial base and strategies to venture into international business.
In January 1997, the company was listed at NASDAQ stock exchange as the first ever Arab originated company to be listed in the stock exchange. It did not stay long in the stock exchange but in February 2002, a decision was made to revert the company back to a private company so as it can concentrate on international expansions and alliances.
Three years of strategizing after the private ownership, another decision was made to make the company public again by and on June 2005, it sold its shares to the public through Dubai Financial Market (DFM) as Arab International Logistics (Aramex).
The company’s mission statement is “To be recognized as one of the top five global logistics and transportation companies,” where its vision statement is “To enable and facilitate regional and global trade and commerce”. To fulfill these mission and vision statements, the company embarks on massive innovation in processes and products.
Although there are a number of logistics companies in Saudi Arabia, Amarex has remained to be the domestic logistics company of choice; According to financial results released by the company’s Chief Executive investors reports of first quarter of 2011, he said “Aramex’s position here in the Middle East remains consistently strong”.
The company has started to expand to Hong Kong, Asia, and Africa and European countries. The main target markets that the company targets, other than in Europe, are countries that have high dominance of Muslims; the company chairs Global Distribution Alliance (GDA) and as a show of its dominance in Saudi Arabia, it represents the country.
Globally, the company has 12,000 offices, 33,000 vehicles and 66,000 employees; they are spread in over 240 countries; the offices are spread in main urban centers, and cities. In KSA, the company provides a number of services; they include express services, freight forwarding, supplies/logistics, transport service, courier, and domestic logistics services.
To maintain confidence in its customers, the company ensures that it has high quality services that can be predicted; it has highly invested in technology, innovation and strategic alliances. Aramex has a high technological base of a computerized operating system (DQMS (Documented Quality Management System), called Info Hub, the system made the company be awarded, ISO 9001:2008, the system is aimed at improving the company’s services.
The company ensures that it has high security systems that customers can trust that it has its products in place and secure. In its corporate objectives, the company has the customer as the main stakeholder; it aims at improving the services they offer to their customers in the efforts of developing and maintaining customer loyalty.
The chart below shows the international logistics supply chain system as adopted by Amarex: