products to Etihad and Abu Dhabi schools which considered as a risk for the company. In addition, one of challenges that faces Popular popcorn is that limited capital due to financial support from Khalifa Fund. The company granted with only AED 2.4 million to start its operations by Khalifa Fund while the company needed AED 5 million which caused a problem for the company to start its operation and production. AED 2.4 million was not enough for the company to start its production due to the different expenses and liabilities such as rent of the facility, employee’s wages, buying vehicles, machinery, importing materials and ingredients, designing packages, marketing, and distributions. Therefore, the management was pushed to cover the shortage from own accounts. It worth to mention, one of the issues that the company faces is that availability of the products properly on the shelves of the market stores. Therefore, Popular Popcorn had to 17 | P a g e
implement its own distribution system which need more fund to develop and meet expectations. Popular Popcorn promises to deliver high quality and healthy popcorn in attractive packaging ways, this high standard need to be produced in higher cost. Therefore, the competitors get advantage over Popular Popcorn in pricing which means the company might be enforced to increase the price of unit due to higher cost of production which will benefit competitors that have lower price products. On other hand, Popular Popcorn was located in Al Ain city which is eastern province 150 km away from Abu Dhabi. This Facility was 330sqm and only 3 m of high sealing with annual rent of AED 245,000. So, the company was looking for a suitable location in Abu Dhabi to be in the centre between Al Ain, Abu Dhabi, and Western Area to facilitate distribution of popcorns to the different Abu Dhabi schools. After searching, Popular Popcorn found a new location in west of Abu Dhabi in the area called Al markaz with lower annual rent owned by “Waha Land Capital” company. In 2014, Popular popcorn signed a contract with the owner of the new facility which has a size of 500sqm and 6m of high sealing. The annual rent of the new location is AED 178,000 which is cheaper compared to the previous location. On other hand, the company faced some issues regarding the submission of the new facility due to the delay of power supply. Although, the company paid the annual rent for the owner, but there were no electricity for three months which costs the company some losses. Also, the company faced a problem with government regulations related with Visa issuing for new employees. The company needed drivers to distribute its products, and employees for manufacturing and packaging. So, there were some difficulties in issuing Visa for them because there is a limit on employee’s numbers for any company depending on the size and operations. Also, to issue Visa for employees the company needs to arrange residences for them before which will cost the company additional costs and expenses.
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- Summer '19
- Management, ........., ABU DHABI, Popular Popcorn