Can Arla Foods Navigate the Complexity of the Future Geopolitical Environment in Saudi Arabia?

Abstract

In a world where the geopolitical landscape is ever changing, pursuing growth and sustainability objectives can be challenging. Exactly this is what the thesis explores. Can Arla Foods navigate the complex geopolitical landscape of Saudi Arabia (KSA) while pursuing its strategic targets and objectives of growth. With the official launch of the Saudi Vision 2030, KSA has taken the first steps to transform the country by implementing economic, environmental, regulatory and social reforms with the aim of diversifying the economy and be less dependent on oil revenue while encouragement of foreign investment. Changes that provide Arla Foods significant opportunities to meet their strategic objectives and targets. Nonetheless, these opportunities come with a batch of regulatory changes, competition, cultural and geopolitical risks and challenges. Taking a strategic management approach integration PESTEL, SWOT and Porter’s Five Forces frameworks to examine the internal and external environment influencing Arla Foods business operations in KSA. Leveraging on a single case study with a deductive research approach along with the use of secondary data. This thesis finds that Arla Foods cooperative business model, its European brand heritage along with Arla Foods’ strategy on improving sustainability aligning with emerging trends among policy makers and consumers in KSA. Where increased focus on health, high-quality and sustainability drives up the demand for dairy products. Along with growing GDP, urbanization and a higher share of young people in KSA all factors that expand the potential for Arla Foods to meet its strategic objectives and targets. Limitations of Arla Foods current operations in are explored. Alignment with the Saudi Vision 2030 is a key opportunity for Arla Foods and essential for their presence in KSA in the future. In conclusion, the thesis outlines adjustments to Arla Foods strategy through increased local stakeholder engagement and new partnerships will decrease Arla Foods exposure to external factors while improving their long-term resilience in KSA.