The Sultan Center | TSC | Kuwait
The Sultan Center (TSC) is a dynamic organization that incorporates a diverse portfolio of successful companies in their respective fields. Making retail its primary operation, TSC is the largest retailer in Kuwait, and it is a leading supplier of departmental store items, general merchandise, and perishables within the Middle East region.
The Sultan Center operates in Kuwait with 14 outlets and a portfolio of convenience stores throughout the country. In addition to retailing, TSC uses trading, security, telecommunication, catering, restaurants, investment, and fashion.
TSC is listed in the Kuwaiti Stock Exchange as ‘SULTAN’ and holds approximately 15% share of the total retail market in the country. The employees working in the company are about 7,000 in quantity.
Differentiation Strategy of Sultan Center
Since the organization includes a diverse portfolio of successful companies, it operates with a vertical organizational differentiation strategy. Within vertical differentiation, the company has implied a chain of command within which the salesperson in the retail outlets will report to floor managers, who will then report to departmental heads, who will then report to the CEO. This is implemented to ensure that every department properly communicates with the other.
The Sultan Center, a center of diverse companies, comprises mainly retail stores operating with similar products and services; however, there are other portfolios for the group. Although retail stores include a considerable share in the portfolio of TSC; however, every store operates uniquely to enhance customer satisfaction. Moreover, to keep in line with the operations and activities of different departments, the employees of TSC are well-trained. In most cases, the employees are responsible for handling multiple tasks. A designated employee collects the daily sales revenues of the stores; however, if that employee is absent or unavailable for any reason, another designated employee by the store manager will be responsible for handling payments. Also, the daily revenue will be deposited with the bank by the designated employee only.
The center also has an effective vendor development system through which it measures and maintains the performance of its suppliers. Also, the inventory system has been rendered to be of high quality, and TSC manages its inventory through computerized database management, through which the stock required is determined effectively. Also, the items needed in the store are determined through this system. The employees have been trained adequately to respond to the customers’ and clients’ queries and issues for which they are offered rewards and incentives, which results in increased employee morale and customer relationship.
Integration Strategy of Sultan Center
The integration policy within the organizational structure includes rules that every business employee should follow. Most rules serve as guidelines; however, some rules are store-made and in accordance with the environment of the store’s location.
Decisions regarding issues with the suppliers, recruiting decisions, staff salary, downsizing, and outsourcing decisions are taken in the head office; however, decisions like product marketing, customer relationship, and promotions of the employees are made in the head office of The Sultan Center. However, the training decisions of the employees are made upon the mutual consent of the store employees and the head office. The training aspects include dealing with customers and vendors as well as assuring that products delivered are of high quality. The subordinates that one manager supervises are quite a few, which renders the company’s organizational structure flexible.
The level of quality within the products should be maintained under every circumstance, and for this, the staff members are provided with adequate training facilities through which they effectively deal with suppliers and customers while maintaining a quality assurance level to be high.
TSC operates with a flexible organizational structure, leaning more towards the flexible section. The employees are given the authority to make decisions while the store staff members also discuss major decisions such as promotions, suppliers, and customer-related aspects.
Retail Outlet Manager
Organizational Structure Of Sultan Center
Assistant Store and Area Manager
Financial Operations Manager
Advertising and Promotion Staff
Store Items and Merchandise Manager
Finance Department Head
Marketing Department Head
Planning Department Head
The differentiation and integration strategy adopted by TSC indicates that it operates with a hybrid organizational structure, emphasizing a flexible one. This can be said from the provision of set guidelines being a component of a flexible organizational structure. Also, all aspects are considered by the store manager, who believes the decisions as to how different products will be made easily available to the customers in less time, along with drafting an affordable pricing strategy. Also, the salespersons are given the authority to make snap decisions in an emergency, another example of a flexible organizational structure.
Goals of The Sultan Center
The retail outlet’s goals and objectives primarily focus on attaining a solid and loyal customer base and increasing the shareholders’ value. The attainment of these goals involves emphasizing the timely availability of items and merchandise so that customer expectations can be met. Various marketing efforts are being invested in making TSC a customer-centric organization through which the demands and requirements of potential customers can be understood and fulfilled. The practice of customer analytics is being implemented so that customers’ preferences and requests can be understood and the effectiveness of marketing campaigns can be measured.
To achieve the company’s stated goals, the employees are provided with a detailed written guide that emphasizes the objectives and the process of achieving them. These goals are based on the performance of the previous year of TSC. Moreover, the objectives are directed toward increasing revenue generation, so all marketing efforts are devised to incorporate this aspect. In addition to this, customer satisfaction is another concern for the retail outlet, and since The Sultan Center is operating on a large scale, the goals defined are team-oriented. The team is responsible for determining the customers’ changing preferences and incorporating them within marketing strategies.
Incentive programs have also been devised to appraise individual performance. It is because a team of experts can handle the tasks well; however, the company also believes in praising individual performances. Linking incentives with individual performances will increase the motivational level of the employees, and they will invest efforts with more determination. In this way, the company also aims to eliminate inefficiencies within teamwork as every employee will work for their job appraisal, eventually increasing team performance and thereby attaining goals effectively.
Concerning employee or customer satisfaction, the retail outlet believes both aspects are interrelated and attaining employee satisfaction will ultimately lead to customer satisfaction. The outlet considers all those factors crucial for employee motivation, including benefits and incentives. Stimulating employee motivation will positively affect the turnover rate, which is a good sign of successful operations. Moreover, they are provided with adequate training facilities and workshops so that they have the opportunity to improve their skills and abilities and deliver their work more efficiently. When employee morale is raised, they will work harder for the company, which will serve as a way to attain customer satisfaction.
Environment of The Sultan Center
Kuwait has been rendered as the second largest country where international brands are being promoted within the entire MENA region. The Sultan Center’s service center in Sharq operates in a dynamic environment. The Sharq district is one of the oldest districts in Kuwait, along with a special business district with some famous buildings and hotels. Moreover, the community is also central for shopping purposes, making this place a reasonably favorable environment for the Sultan center.
The communities within the area are pretty supportive since The Sultan Center is considered among the pioneers of retail stores in the country. There are many international stores throughout the country; however, TSC, being a local company, has received adequate appreciation from the local citizens of Kuwait.
The location of the store is considered to be ideal. Sultan center, having its preliminary operations started in Saudi Arabia, has settled in Kuwait as there was no major retail outlet at the time of its establishment. This factor eventually led the store to build a positive customer base. The outlet’s operations are directed toward serving the entire family’s needs.
TSC is a strong competitor as it has attained a huge market share in the presence of other renowned international retail stores. Moreover, the competition level is gradually increasing as the number of retail outlets within the area increases. In a nutshell, the environment for The Sultan Center is highly competitive, which eventually reduces its element of being operative in a stable and simple environment.
As a listed company with the KSE, the company operates with a controlled law and order situation. All in all, the business environment of The Sultan center is stable.
Technology implications have been a major part of the retail outlet’s strategy. The outlet has implemented complete technological solutions catering to every store section. Handling all the information pertaining to the products, customers, and suppliers of the store helps improve business decisions. The Point of Sale (POS) system has been installed throughout the store so that every item sold is automatically entered into the database. In this way, sales receipts are generated automatically, benefiting the store to analyze their sales situation for reordering products. A strong online payment system is also operative through which customers can make purchases online and pay through the same mode.
The inventory control system is being carried out in a computerized manner, and every item stored and displayed within the outlet is stored in the computer database used to prepare documents. POS software has been installed all over the store, with a cash drawer and a receipt printer. A credit card reader and a barcode scanner are also installed to enhance the software’s functionality. In this way, the huge inventory of the outlet can be assessed accurately. In the case of perishable items, the store staff is responsible for checking every item frequently so that fresh items can be delivered to the customers. The store’s First In, First Out method helps maintain its product line efficiently.
TSC also has a vendor performance assessment system which helps the store in improving collaboration level with its suppliers to meet the business objectives in a better way. Moreover, with this system, vendors have the opportunity for initiating to perform tasks like updating their current information so that everything remains updated. The store considers this system to help reduce expenses and improve the accuracy of invoices.
The order processing system is updated and automates the entire ordering process, starting from receiving the order from the customer to creating the ERP system. The store tracks customer orders with accuracy, efficiency, and visibility.
The store includes a vast range of different products, so the sales staff have been trained to provide expert advice on these products. The customers are allowed to test products under special promotional plans, which the store holds twice every year. Also, the complexity and wide range of products allow the company to appoint salespeople to every department so that specific information about the products can be provided to the customers.
Life Cycle Of The Sultan Center
The increasing customer loyalty rate to TSC renders it a renowned name in the retail business in Kuwait. The store is operating in the growth stage of the life cycle and has spread its outlet all over the country. The organizational structure of the store aims more towards being flexible. The salespersons directly dealing with the customers are given the authority to make decisions on the spot so that the issue is resolved and their motivational level is increased as well. This step will take the organization to a new level of customer satisfaction. By incorporating flexibility within its organizational structure, The Sultan Center can efficiently move ahead to the next phase of the life cycle.
The size of the store is enormous, and it has operated for a long time in the Kuwaiti and international markets. Having a staff of more than 7,000 employees, The Sultan Center is contributing significantly to increasing the employment rate in the country.
The profitability level of The Sultan Center has been meeting expected standards. However, the management is investing more effort as well as portfolios to improve profitability. Presently, profitability levels are stable in the company; however, the increasing competition rate will impact this aspect. Compared to Kuwait’s overall retail store industry, The Sultan Center enjoys an advantageous position that it maintains every year.
The different aspects of The Sultan Center have been evaluated, including environmental, technological, and other factors that affect the performance of the retail store. This analysis derived the result that the company is operating with a mixed organizational structure, focusing more on being mechanist. Although there are strategies through which employee motivation is ensured; however, the formalization and centralization within the outlet are high. Various reporting levels can reduce the intensity of the issue under question. Moreover, it also results in employee demonization as they are vested with the power of making on-the-spot decisions.
The life cycle stage of the store is in its growth stage, where the implementation of a flexible organizational structure is considered very important. The only problem with the structure is its centralization element, where lower-level staff does not have decision-making powers.
The Sultan Center is a renowned retail outlet with franchises all over Kuwait. It grabs a huge market share and aims to attain customer satisfaction within all its operations and increase its profitability. The organizational structure includes 4 – 5 levels which increase formalization.
The outlet’s environmental factor can be considered relatively stable as the store entered the retail industry when not many players were in the market. However, with the increasing number of retail stores within the country, the level of competition is increasing. Also, the technological aspect is up to the mark, and the entire process, from obtaining items and merchandise to that of processing orders of the customers, every task is performed in a technologically-effective manner.
The only recommendation for the retail outlet is to provide its sales staff with certain authorities to deal with the store matters effectively and increase their motivation level.
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