Academic journal article Journal of Competitiveness Studies

Daleel Alkhibrah: Integrated Fabric Solutions

Academic journal article Journal of Competitiveness Studies

Daleel Alkhibrah: Integrated Fabric Solutions

Article excerpt

INTRODUCTION

The textile industry has always been an important market segment in Saudi Arabia. The industry's production of highly customized textiles and fabrics is essential across multiple sectors - including hospitals, laboratories, universities, and the petrochemical industry - all of which operate in a dynamic, fast-changing environment. Recently, competitive pressures have forced a renewed emphasis on quality. This case profiles issues facing the textile industry by focusing on the Daleel AlKhibrah Company (DK), a quality-driven textile company which operates in Saudi Arabia.

As it looks ahead to the development of new products, DK is facing some industrial, social and technological policy questions which need to be resolved to assure its continued local and international growth. In confronting these questions, DK seeks to remain focused on ensuring quality in all its product categories, while also providing consumers with the best textile solutions. The following discussion of its product lines, clients, market needs, and future plans provides an analytic framework for those decisions.

Possible Expansion

In mid-April 2014, DK faced a decision regarding the expansion of its market to the Eastern and Western regions in Saudi Arabia, and to the Arab Gulf region, as well. Such a strategic approach was motivated by DK's confidence in the quality of its unique products, which has been internationally recognized with multiple quality certifications.

Yet DK has some competing priorities. Its clients are selective, and the segments are known, DK's continued success depends on preserving both its long-term company-client relationships and its reputation for guaranteed customer satisfaction. That reputation rests largely on DK's flexibility and responsiveness: in addition to guaranteeing prompt delivery of any of its routinely warehoused textile products, the company accepts any order with customized requirements -and in any quantity - from its clients, despite the higher distribution costs such small orders often entail.

As it ponders expansion, small-order distribution costs have become a major issue for DK, since expansion could mean an increase in smaller-size but higher-cost orders. The cost of distribution to new, more distant markets - especially for small orders - could make it challenging to sustain DK's guarantee of fulfilling all client orders, regardless of distribution costs.

Aside from the distribution problem, DK may also need to review its commitment to guaranteed small-order, fast-turnaround delivery of highly specialized products. This may be an issue when dealing with customers located in a larger geographic region.

Resolving the question of whether and how to expand - and at what additional cost to the company - is the responsibility of DK management. DK's Chief Executive Officer (CEO) is fully aware of the complex decisions they face.

The Textile Industry

The textile industry was first industrialized in England in the late 18th century, and it grew significantly during the Industrial Revolution. The first .American textile mill, opened by businessman Francis Cabot Lowell, began operations in 1811. During this period, the textile industry was based primarily on traditional, home-made production.

At the beginning of the 19th century however, textile factories increased their production through the use of machinery and other technological innovations, and the American textile industry began competing with advanced English technology. The most famous among these inventors and architects was Thomas Somers, who with his colleagues founded the first cotton mill in .America.

By the early 20th century, the textile industry in developed countries was facing competition from developing countries in Southeast Asia. Additionally, globalization enhanced outsourcing capabilities in overseas markets. In 2002, the textile and apparel industry reached $400 billion in global exports; this represented six to eight percent of world trade. …

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