Arab Academy

For science, Technology and Maritime Transport

Master of Business Administration
E-Business Track

Comprehensive Exam
10/1/2024
TAQA Arabia Strategic Plan

Registration NO: 22127876

 AASTMT MBA Program Comprehensive Exam
Table of Content

1. Current Situation 2
2. Input Phase 7
3. External Environment 8
4. Internal Environment 16
5. Matching Phase 24
6. Strategy Formulation 30
7. Strategy Implementation 35
8. Evaluation and Control 37
9. Business Plan 39
10. References 47

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PART ONE :

CURRENT SITUATION

32 21225992
22127876 TAQA ARABIA
Telecom Egypt Strategic Plan 22th2024
October
April 2024 AASTMT
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1. Company Overview

Based in Cairo and with more than 25 years of experience, TAQA Arabia became Egypt's leading energy and utility provider,
serving more than 1.8 million customers with their daily energy needs. TAQA Arabia invests, installs, constructs and operates
energy infrastructure including gas transmission & distribution, conventional and renewable Power generation & distribution,
marketing oil products and lubricants throughout several fuel stations across the country as well as water treatment and
desalination services for wide range of clients.

Established in 2006 TAQA Arabia has successfully managed to incorporate 15 operating companies with a great level of expertise
and know-how, in addition to the establishment of green field companies. All companies incorporated under TAQA Arabia’s
umbrella had been working in the market for a long time and each has its own track-record of projects. TAQA Arabia have
consolidated all its experience and expertise to become a full-power player operating mainly in Egypt with numerous successful
projects in several Middle Eastern & African countries including UAE, Qatar, Jordan, Libya, Tanzania and Mozambique.

Recently TAQA Solar, TAQA Arabia’s Renewable Energy arm has been one of the first companies to finalize a 65MW PV solar power
plant in Benban (Aswan)-part of the biggest PV solar park in the world. The project is Under the Egyptian governments feed-in
tariff program and started commercial operation in Feb 2019. The project total investment reached US$ 72Million and was funded
by the IFC along with other development banks from Finland, Austria, Bahrain & China. This project has received several
recognitions and is being praised by the IFC and the world bank leaders as the best and most successful project of the year 2019.

Furthermore, TAQA Arabia is an active associate member of the International Gas Union. Founded in 1931, the IGU serves to
promote the gas industry and represents more than 95% of the global gas market. This geostrategic membership allows us to
share expertise and best practices with thousands of gas professionals from around the world. TAQA Arabia is also the founder of
the Egyptian Gas Association (EGA) as well as a Co-founder and a significant key-player of the (Electricity distributors Association).

Type of organization Public Company-Profit based organization

Brands TAQA Arabia

Revenue LE 13.464 billion (FY 2023) – UP by 25.5% YoY

Total assets LE 17.348 billion (FY 2023) – Up by 18% YoY
Total equity LE 2.996 billion (FY 2023) – Up by 25% YoY

Owner Qalaa Holdings (60%), 40% Free Float

Number of employees 4,000+

Subsidiaries TAQA Gas, TAQA Power, TAQA Water, TAQA Oil

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2. Vision
Being the preferred regional energy services and utilities solutions provider, and to become a
significant key player in the sustainable development and economic progress of MENA, Gulf and
Africa.

Analysis for the Vision:

TAQA ARABIA current vision is clear, concise common understanding and no, Timing
But it is somewhat realistic when it should be unrealistic

New proposed Vision:

“To be the leader of providers of regional energy services and utilities
solutions, and to become the first player in the sustainable development and
economic progress all over the world.”

3. Mission
To provide high quality services and products to meet the growing energy demand of the region,
through our ethical practices and professional team in a way that would guarantee the highest value
for our customers, secure our growth and success and provide the highest returns for our
shareholders.

Analysis for the Mission:

Organization's mission shall consider the below components:

1. Product / service:
“Energy demand”
No comment on this component, as it clearly specifies the Products

2. Market:
The markets TAQA ARABIA operates in aren’t mentioned the mission statement,
although it is very important to be known for all stakeholders & interested parties.

3. Technology:
There is no indication of the implementation of information technology or AI
solutions achieving the “the best communications solutions

4. Survival / Growth / Profit:

No comment on this component, as it clearly specifies “, secure our growth and success and
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provide the highest returns for our shareholders”

5. Philosophy:
The phrase “Ethical practices and value for our customers” could be considered the
company philosophy.

6. Self-Concept:
The phrase “high quality & Ethical practices” could be considered how company
define its role.

7. Public image:
The company emphasizes social responsibility through ethical practices.
8. Employees:
The professional team is mentioned
9. Customers:
The mission focuses on customers seeking high-value energy solutions.

New proposed Vision:

“TAQA ARABIA is committed To provide high quality services and products
to meet the growing energy demand in Middle East & Africa, through our
ethical practices and professional team and using latest technology in a way
that would guarantee the highest value for our customers, secure our growth
and success and provide the highest returns for our shareholders.”

4. Core values

1. Integrity & Compliance

highlight everything, they do and form the principle of the Company’s Code of Business
Conduct and Ethics
2. Responsibility
In addition to, the compliance policies and regulations that govern all stakeholders and
employees of the company that are expected to conduct businesses and carry out their
duties and responsibilities transparently.

3. Transparency

4. Ethics
TAQA ARABIA aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligation

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PART TWO:

Input Phase
 AASTMT MBA Program Comprehensive Exam

• External Environment

o Societal Environment (PESTEL Analysis)

This analysis provides a detailed examination of the various external factors affecting
TAQA ARABIA across different dimensions.
PESTLE Potential
Notes Type
factor Impact

Egypt is 175th/205 in worldwide political stability ranking as of

2022. And 8th/15 in middle east region
Egypt political stability indicator has been increasing for the last
10 years and a good indicator comparing to surrounding countries
which means more attraction for investments in the field of
Energy.
Political
High Opportunity
Stability

Political • Direct Tax (Agriculture land tax, real estate Tax and Income
Tax)
• In-Direct Tax (Stamp Duties-VAT-Customs Duty)
Taxation Indirect tax system (VAT & Stamp Duties) as it is impacting Low Threat
Energy business in Egypt

• Tax Breaks: Regarding renewable energy

Govern-
mental • Customs Duty Exemptions n equipment and machinery
imported for renewable energy projects High Opportunity
Special
Incentives

TAQA Arabia is an active associate member of the International

Pressure Gas Union which represents more than 95% of the global gas
High Opportunity
groups market. TAQA Arabia is also the founder of the Egyptian Gas
Association (EGA) as well as a Co-founder and a significant key-
player of the (Electricity distributors Association).

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PESTLE Potential
Notes Type
factor Impact

Economic Indicators 2018 2019 2020 2021 2022 2023

GDP (Billion $) 262B 318B 384B 424B 477B 395B
GNP (Billion $) 286B 284B 323B 385B 455B 398(est)
National Income (Billion $) 2,760 2,690 3,010 3,520 4,100 -
Interest Rate (%) 16.75 12.25 8.25 8.25 16.25 18.25
Exchange Rate 17.8 16.6 15.65 15.7 24.25 30.9
Inflation Rate (%) 20.85 13.88 5.7 4.5 8.5 23.52*
Unemployment Rate (%) 9.86 7.85 7.98 7.44 6.4 7.31
Economic High Threat

- Egypt is facing a very high inflation rate and shortage on foreign

currency.
- Inflation rates raise during 2023 presents a significant challenge for the
energy industry, posing a double threat of rising costs and reduced
consumer spending.
- Higher interest rate affects Financing Costs and Reduces Investment.
- Energy cost fluctuations due to exchange rate pose a significant
challenge for Energy companies in Egypt.

Population
Medium Opportunity
Growth

A
growing population expands the potential customer base, driving
demand for network capacity and infrastructure expansion.

Socio-
Cultural

Age
Medium Opportunity
Distribution

Excessive energy demand from youth or digital devices and

transportation

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PESTLE Potential
Notes Type
factor Impact

Education
level &
High Opportunity
Work
pattern and
Growing
Environme - Individuals with higher educational backgrounds leads to
ntal increased awareness of environmental issues presents a
Awareness significant opportunity for energy companies to diversify its
portfolio by investing in renewable energy sources (solar, wind,
etc.)

Artificial Intelligence (AI) can be useful in several ways:

- AI-powered automation
Artificial - Traffic prediction and resource allocation to real-time monitoring
Intelligence of energy which can improve operational efficiency, and cut Medium Opportunity
(AI) & costs by embracing the Industrial Internet of Things (IIoT),
Automation machine learning, and advanced data analytics
and Digital - Enhanced Customer Experience through (Personalized services
Transform and recommendations
ation -
Research
Especially in the products of renewable energy
and High Opportunity
Development
(R&D)

Technol- energy companies become more reliant on digital technologies;

Cyber-
ogical the risk of cybersecurity threats increases High Threat
security

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PESTLE Potential
Notes Type
factor Impact

Environ- TAQA ARABIA is committed to sustainability and taking concrete

mental actions to reduce their environmental impact. While challenges
Low Threat
protection remain,
legislations
Ecological
Growing interest in renewable energy provides an opportunity to
Environ- Renewable
expand renewable energy projects Medium Opportunity
mental Energy
Adoption
and
Sustainabili
ty
Environment
al Compliance with environmental regulations is becoming
Low Threat
Regulations mandatory
and
Compliance

Applied in Egypt
Employment
Medium Opportunity
laws.

Legal Industry laws Applied in Egypt Medium Opportunity

Competition
law Applied in Egypt Medium Opportunity

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1.1.1. Industry Analysis (Porter’s Five Forces)

Porter’s five forces model has been applied to WE to analyze the competitive position
and attractiveness in that industry of the company as follows:
Effect
Porter’s Five Force Summarized Review
Low Medium High
Overall view of threat of new entrant is nearly
low because of:
1 – Government license has many
Threat of New Entrants barriers
2 – Huge capital cost investment

- New trends of relying on renewable systems,

reducing reliance on traditional energy
suppliers.

Threat of Substitutes

Buyers (e.g., industrial customers, government

entities, and households) have an influence over
energy prices and services, especially in a
competitive market considering low switching
Bargaining Power of Buyers
costs

All Energy companies are considered as large

companies This is due to the vast global market for
energy resources (oil, gas, and equipment for
energy production), which provides multiple
suppliers to choose from.
Bargaining Power of Suppliers

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The energy sector is highly competitive in

both local and international players

Competitive Rivalry

The Figure below is a representation of the variables to be explored with independent

variables comprised of entry barriers, rivalry among competitors, bargaining power of
buyers, bargaining power of suppliers and threat of substitutes, with dependent variable
as competitive advantage.

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1.1.2. Competition Analysis (Competitive Profile Matrix (CPM))

TAQA Elsewedy Schneider

Chillout
Industry Success Wight Arabia Electric Electric
Rat W.
Factors Rate W. S Rate W. S Rate W. S
e S

Market Share 0.2 3 0.6 4 0.8 3 0.6 4 0.8

Innovation 0.15 4 0.6 2 0.3 4 0.6 2 0.3

Strong Financial Position 0.15 2 0.30 4 0.6 3 0.45 3 0.45

Diverse Product Portfolio 0.1 4 0.4 2 0.2 3 0.3 2 0.2

Customer Reach and Base 0.1 2 0.2 3 0.3 3 0.3 3 0.3

Sustainability and
0.1 4 0.4 3 0.3 3 0.3 3 0.3
Environmental Care

Efficiency in Operations 0.1 4 0.4 3 0.3 3 0.3 3 0.3

Compliance and Government

0.1 4 0.4 4 0.4 3 0.3 4 0.4
Relations
Sum 1 3.3 3.2 3.15 3.1

• The main objective of industry Matrix is to help organizations knowing its position in
the industry compared to other competitors according to the main key success
factors in that market.
• TAQA Arabia comes in first place

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1.1.3. Issue Priority Matrix

Renewable Energy Adoption and

Taxes Political Stability
Sustainability
Environmental
Competition law Competitive Rivalry
protection legislations
High

Environmental
Regulations and Age Distribution (Governmental) Special Incentives
Probability Of Occurrence

Compliance
Artificial Intelligence (AI) &
Research and Development (R&D)
Automation and Digital Transformation
High Population Inflation
Exchange rate
Difficulty of new
Bargaining power of buyers Pressure groups
Medium

entrants
Bargaining Power of Education level & Work pattern and
Difficulty of new Substitutes
Suppliers Growing Environmental Awareness
Cyber Security issues
Employment laws. Industry laws
Low

Industry laws
Low Medium High

Impact on TAQA ARABIA

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1.2. External Factor Analysis Summary (EFAS)

Weighted
External Factors Score
Weight Rating
Political Stability 0.08 3 0.24
High population growth 0.05 3 0.15
(Governmental) Special Incentives 0.15 3 0.45
Research and Development (R&D) 0.08 4 0.32
Opportunities Pressure groups 0.07 3 0.21
Education level & Work pattern and
0.06 2 0.12
Growing Environmental Awareness
Renewable Energy Adoption and
0.04 3 0.12
Sustainability
Artificial Intelligence (AI) & Automation
0.04 2 0.08
and Digital Transformation
Competitive Rivalry 0.14 4 0.56
Inflation 0.09 2 0.18
Threats

Exchange rate 0.1 2 0.2

Cyber Security issues 0.06 3 0.18
Bargaining power of buyers 0.04 4 0.16
Total Score 1.0 2.97

Conclusion:
Since the total weighted score is higher than 2.5, this means that the external
environment is favorable

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2. Internal Environment

2.1. McKinsey 7S

The goal of the model was to show how 7 elements of the company: Structure,
Strategy, Skills, Staff, Style, Systems, and Shared values, can be aligned together to
achieve effectiveness in a company

2.1.1. Corporate Structure:

The divisional structure based on products is matched with the strategy (Strength)

2.1.2. Strategy:

Quality is TAQA Arabia’s solid intentions and that is why brand loyalty is what we strive for. We aim
to fulfill our customers' needs, while covering their entire experience with nothing but wellness,
positivity and continuity. (Strength)

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2.1.3. Skills:
TAQA Arabia has strong skills in energy distribution, gas and power projects, and renewable
energy solutions. This expertise helps the company stay competitive in the MENA region.
(Strength)

2.1.4. Staff:
Highly skilled Staff with technical expertise more than 4K. (Strength)

2.1.5. Systems:
TAQA Arabia using ERP systems.

1.1.7. Style
Most of Decisions are autocratic. (Weakness)

2.1.7. Shared Values:

a. Quality

b. Customer Centricity

c. Sustainability

d. integrity

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2.2. Financial parameters

Year Industry
Indicator Parameters
2020 2021 2022 2023 Average

Gross Margin Gross Profit/Total Sales 11.20% 11.70% 12.10% 12.10% 20%
Operating Profit Operating profit /Total
Profitability Ratio

7.70% 7.40% 7.90% 8% -

Margin sales

Net Profit Margin Net Income/Total sales 5.60% 5.90% 5.60% 4.80% 6.5%
Net Profit(income)/Total
ROE 25.06% 26.80% 22.40% 18.61%
Equity
ROA Net Profit /Total Assets 5.06% 4.02% 3.67% 3.21%

CASH + A/R+ INV. +

Current Ratio 113% 105% 103% 101% 150%
Others/Current Liabilities
Liquidity
Ratio

(Cash + A/R)/Current
Quick Ratio 104.70 99.70% 93.90% 90.40% 101%
Liabilities
%
Cash Ratio Cash /Current liabilities 49% 65% 66% 63% -
Total debts
Debt Ratio 79.80% 84.90% 83.60% 82.60% -
(liabilities)/Total assets
Leverage (Debt Ratio)

Equity ratio Total equity/ Total Assets 21.3% 15.0% 16.3% 17.3% -

Debt to Equity Total Debts

394% 564% 513% 479% -
ratio (Liabilities)/Total equity
Assets to Debt
Total Assets / Total Debt 125.3% 117.8% 119.6% 121.1% -
Ratio
Assets to Equity
Total Assets / Total Equity 469% 665% 613% 579% -
Ratio
Interest Coverage
EBIT / Interest EXPENSES 1.68 1.37 0.95 0.75 -
Ratio
Inventory Cost of goods sold
16.42 15.59 15.1 11.9 -
Turnover (cogs)/average inventory
Efficiency Ratios

Net credit sales/ Average

A/R Turnover 3.34 2.27 2.32 2.55 -
A/R
Net credit purchases/
A/P Turnover 2.63 1.67 1.68 1.81 -
Average A/P
Fixed Asset Turn Net Sales revenue/
5.11 2.49 1.84 1.96 -
over Average fixed assets
Total Asset Turn Sales revenue/Average
0.98 0.76 0.73 0.78 -
over Total assets

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Summary:

• Profitability: There are weaknesses observed in net profit margins and returns on assets also
comparing with industry figures.

• Liquidity: Ratios have been declined, which affects company’s ability to meet short-term
obligations (weakness)

.
• Leverage (Debt): increasing numbers of debts, and low interest coverage, which shows very
big depending on borrowing, which indicates a financial risk (weakness).
•
• Efficiency: There are issues in efficiency, especially in managing inventory and assets
(weakness).

In conclusion, TAQA Arabia should work on improving profitability ratios, debt performance and
increasing efficiency to enhance financial position.

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2.3. Corporate Value Chain

TAQA ARABIA’s value chain is a model that ideally explains the value chain analysis.
It describes the flow of activities involved in creating and delivering a product or
service to the customer. It is best known as an approach to understanding how
companies create value for their customers. It includes two distinct types of value
chain activities:

Primary Activities: These are directly linked to the customer. They include product and
service development, production, distribution, and sales. Primary activities are often
referred to as value chain activities because they are the most important in a chart.

Inbound Logistics Operations Outbound Logistics Marketing & Sales Services

Strong Supply chain - Diverse Energy - Distribution network – Effective – Strong and reliable
as TAQA ARABIA Portfolio: is average comparing Marketing strategies customer service
established efficient investment on 4 with the industry but not exploited (Strength)
logistics system to get types of energy enough so need
and move the natural products to avoid more efforts to
gas from the source depending on increase market
to the customers in one type which share
efficient way through could be
huge pipeline network impacted with the
over 8 M meters changes in the
(Strength) demand
(Strength)

Support Activities: These are the baseline of TAQA ARABIA’s strategy of vertically
integrating its operations processes as below:

Management and administrative

- A lack of agility in decision-making could impact the company’s competitive
position due to autocratic system in decision making.
- (weakness).

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Human Resources Management
- Hiring Skilled and professional employees.
- Affect the operation positively.
- (Strength)
Technological Development
- Investing in advanced technologies, including renewable energy initiatives.
- (Strength)
Procurement
- Dependence on External Suppliers.
- Risk of shortage on foreign currency.
- (weakness).

2.4. Corporate Resources

1.4.7. Core Competencies

Strong brand recognition: TAQA ARABIA is a well-established brand in Egypt with a

strong reputation for quality and reliability. This brand recognition gives them a significant
competitive advantage in the market.

Diversified product portfolio: TAQA ARABIA offers a wide range of products and
services to meet the needs of both individual and business customers. This diversification
helps them to mitigate risk and grow their customer base also the combination of resources
and market knowledge is difficult to replicate.

Experienced management team & Skilled Workforce: TAQA ARABIA has a team of
experienced and qualified managers who have a deep understanding Enhances
operational effectiveness and service quality and HR processes support recruitment and
training effectively.

2.4.7. Distinctive Competencies

Diversified product portfolio: TAQA ARABIA has the combination of resources and
market knowledge is difficult to replicate and the company is structured to leverage this
diversity effectively.

Government support: TAQA ARABIA has the strong support from the government
especially in the renewable energy products.

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2.1.6. VRIO Framework

Distinctive competency Valuable Rare Inimitable Organized

Diversified product portfolio Yes Yes Yes Yes

Focus on innovation Yes No No Yes
Experienced management team Yes No No Yes
Regulatory Compliance Yes No No Yes
Marketing & Sales skills Yes Yes No No
R&D Yes No No Yes
Efficient Supply Chain Yes No No Yes
Government support Yes Yes No Yes
Strong Customer Relationships Yes No No Yes
Brand Reputation Yes No No Yes

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2.2 Internal Factors Analysis Summary (IFAS)

Internal Factors Weight Rating Weighted Score

Diversified Service Portfolio 0.2 4 0.8
Marketing & Sales 0.15 3 0.45
Strengths

Efficient Supply Chain 0.05 3 0.15

Highly Skilled Staff 0.05 3 0.15
Efficient Operations 0.05 3 0.15
Technological Development and R&D 0.17 4 0.68
Divisional structure 0.02 3 0.06
Weakness

Financial Position 0.25 1 0.25

Procurement 0.03 2 0.06
Autocratic Management Style 0.03 2 0.06
Total Score 1 2.81
Conclusion of IFAS: As the score is more than 2.5, then the business in TAQA ARABIA is doing
well

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PART Three:

Matching Phase

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3 Situational Analysis (SWOT and TOWS)

Opportunities Threats

TOWS 1 Political Stability 1 Competitive Rivalry

2 High population growth 2 Inflation

3 Gov Special Incentives 3 Exchange rate
4 R&D 4 Cyber Security issues
5 Pressure groups 5 Bargaining power of buyers
Education & Work pattern &
6
Environmental Awareness
Renewable Energy Adoption
7
and Sustainability
(AI) & Automation and Digital
8
Transformation
Strengths SO Strategies ST Strategies
Make Offers for renewable
Take advantage Diversified
energy offerings using the
Service Portfolio to
1 Diversified Service Portfolio S1,O7 existing diversified service S1,T1
differentiate from
portfolio. Targeting sectors that
competitors
are adopting sustainability
Using the unorganized value of Use Diversified Service
marketing & sales in Promoting Portfolio to differentiate from
diverse portfolio targeting competitors. Through
industrial and residential clients effective marketing
with marketing strategies that campaigns to decrease the
2 Marketing & Sales S2,O1 S2,T1
focus on secure and reliable impact of competition,
energy solutions taking
advantage from political
stability environment, to reach
market penetration.
Unused marketing and sales
Unused marketing and sales
have the ability understand
force can get benefit from
customer needs and develop
growing population to promote
pricing strategies or
2 Marketing & Sales S2,O2 existing services . Tailored S2,T5
promotional offers, offering
marketing campaigns focusing
value-added services, loyalty
on sustainable and affordable
programs, to decrease the
energy solutions
Bargaining power of buyers

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Marketing campaigns that
highlight any government
incentives available for energy-
saving solutions or renewable
energy use, can increase
awareness and encourage
2 Marketing & Sales S2,O3
customers. TAQA’s
unorganized marketing & sales
force can actively promote how
its energy services align with
government initiatives, making
its offerings more attractive.
Take advantage from
efficient supply chain to
reduce costs and risks
3 Efficient Supply Chain S3,T3 resulted from exchange rate
changes. This can be
achieved through depending
on local supply sources
develop services using the
Utilize skilled staff to develop
capabilities of staff to provide
4 Highly Skilled Staff S4,O2 energy infrastructure for
better customer service &
population growth regions
higher value-added services
Get benefit from the political
stability to expand operations
5 Efficient Operations S5,O1
into new regions with long-term
investment opportunities
Invest more in R&D and
technology development to
Using technology to
innovate in energy distribution
Technological Development and automate processes and
6 S6,O3 and supply Taking advantage S6,T2
R&D reduce operating costs in the
of government incentives
face of inflation
especially in sustainable and
green energy.
7 Divisional structure
WO
Weaknesses WT Strategies
Strategies
Enhance financial position
Take advantage from through strategic to reduce
government incentives to the impact of competitive
enhance financial position. Can rivalry which helps company
1 Financial Position W1,O3 W1,T1
get benefit from tax breaks reduce costs, increase
related to green energy market share, and improve
initiatives its financial position to face
the strong competition.
2 Procurement
Change the management
Shift towards more inclusive style to be more adaptable
decision-making practices by and responsive to the fast-
3 Autocratic Management Style W2, O6 W3,T3
educating the management changing global financial
team environment to react quickly
to exchange rate changes

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3.1 Strategic Position and Action Evaluation (SPACE) Matrix

Financial Strengths (FS) Rate Environmental Stability (ES) Rate

ROA 2 Political Stability -1

Efficiency Ratios above industry 1 GDP maintained Growth Rate -1

average
Working Capital 4 Inflation Rate increased -3
Average 2.3 Average -1.6
Competitive Advantage (CA) Rate Industry Strength (IS) Rate
Very Strong Product Portfolio -1 Industry Profitability is very attractive 4
Product Quality -1 market demand growth rate 2
Market Share -3 High industry barrier for new entrant 5
Creative and innovative R&D -1
Average -1.5 Average 3.6

(0.7, 2.1)

After analyzing the four factors of the SPACE Matrix, FS + ES = 0.7 & CA + IS = 2.1
The industry is promising, and the company position is good, the direction will be towards aggressive strategy and the company has
many external opportunities and many internal strengths that the organization has to take advantage of the suggested strategies
for such position will are: Backward, forward, horizontal integration, market penetration, market development, Product
development and diversification

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3.2 The Internal-External (IE) Matrix

The IFE total weighted score

Strong Average Weak
The EFE total weighted score

3.0__4 2.0 __2.99 1.0 __1.99

4 3 2 1
Strong 1 2 3
3
.
3.0__4
Average 4 5 6
2.0__2.9 2
Hold & Maintain

Weak 7 8 9
1.0__1.99 1

As EFE= 2.97 & IFE = 2.81 TAQA ARABIA company is found on cell 5 which can be described as “hold and
maintain” strategies which need to stabilize its situation and upgrade the company then push itself to the
first bundle, accordingly market penetration and product development are two commonly for these
types of divisions

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Quantitative strategic planning matrix (QSPM)

Market Product
Penetration Development
Strategic Factors

Weight
AS TAS AS TAS
Opportunities
1 Political Stability 0.04 4 0.16 4 0.16
2 High population growth 0.025 4 0.1 3 0.075
3 (Governmental) Special Incentives 0.075 2 0.15 4 0.3
4 Research and Development (R&D) 0.04 2 0.08 4 0.16
5 Pressure groups 0.035 4 0.14 2 0.07
Education level & Work pattern and Growing
6 0.03 4 0.12 2 0.06
Environmental Awareness
7 Renewable Energy Adoption and Sustainability 0.02 4 0.08 3 0.06
Artificial Intelligence (AI) & Automation and Digital
8 0.02 0 0
Transformation
Threats
1 Competitive Rivalry 0.07 4 0.28 3 0.21
2 Inflation 0.045 3 0.135 2 0.09
3 Exchange rate 0.05 3 0.15 2 0.1
4 Cyber Security issues 0.03 0 0
5 Bargaining power of buyers 0.02 4 0.08 1 0.02
Strengths
1 Diversified Service Portfolio 0.1 4 0.4 3 0.3
Marketing & Sales 0.075 4 0.3 3 0.225
2 Efficient Supply Chain 0.025 2 0.05 3 0.075
3 Highly Skilled Staff 0.025 4 0.1 4 0.1
4 Efficient Operations 0.025 3 0.075 4 0.1
5 Technological Development and R&D 0.085 3 0.255 4 0.34
Divisional structure 0.01 0 0
Weaknesses
1 Financial Position 0.125 4 0.5 2 0.25
3 Procurement 0.015 0 0
4 Autocratic Management Style 0.015 0 0

Total 1 3.16 2.70

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The Quantitative Strategic Planning Matrix (QSPM) is a strategic management approach
for top-level management. The method is also used to formulate the strategy. It is mainly
used in evaluating different strategic options and determining the most attractive of the
strategies at hand. From the previous sections, we can conclude that we have 2 strategies
to compare them using the QSPM.
We can conclude from the QSPM analysis above that the business should be following 2
main strategies:
- Market Penetration Strategy.
TAQA ARABIA should use the not exploited marketing skills to boost its efforts to
increase salespersons, advertising expenditures, promotions and increase
publicity efforts in order to increase market share.
Enhance current services quality to achieve customer satisfaction and loyalty

Use AI solution to improve customer service channels.

- Product Development Strategy.

TAQA ARABIA should develop present products especially the renewable energy products
However, this strategy requires significant financial investments, which may be a limiting factor
in its full execution. Thus, while both strategies offer growth potential, market penetration
appears more aligned with TAQA's current strengths and opportunities

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1. Corporate Strategy

1.1 Directional Strategy

Speaking of strategies & according to previous analysis, TAQA ARABIA should

adopt 2 mainintensive strategies focusing on both Market Penetration and Product
Development.

Market Penetration Strategy:

Increase market share for present business units:
• Gas Distribution Services
• Electricity Distribution
• Fuel Distribution (Petroleum Products
• Water Desalination and Treatment
• Renewable Energy Solutions

• Gas Distribution Services:

Partnerships with Government and Private Developers: Collaborating with governmental
bodies or real estate developers to become the primary energy provider for new projects,
industrial zones, and residential compounds especially newly developed areas or urban
expansion projects like the New Administrative Capital. Also offer competitive pricing
models, or discounts for long-term partnerships with businesses and individuals

• Electricity Distribution:
Cross-selling to existing clients by targeting clients already using gas services to use
TAQA’s electricity solutions by bundling services together and offering promotional
deals. Customer Loyalty Programs by introducing loyalty programs and after-sales
support to retain existing customers while attracting new clients through referral
incentives.
• Fuel Distribution (Petroleum Products:
Increase Presence in High-Traffic Areas: Open more service stations in high-traffic regions,
especially in urban and suburban areas where there is an increasing demand for petrol and related
services and improve retail experience by introducing value-added services at fuel stations such as
convenience stores, car wash facilities, and maintenance services to improve the overall customer
experience and making marketing and Promotions by utilizing aggressive marketing campaigns and
loyalty programs to attract customers of fuel stations.
• Water Desalination and Treatment:
Focus on increasing market share in industries such as agriculture, by offering customized water
treatment and desalination solutions. Being sponsor of agricultural conferences.
• Renewable Energy Solutions:
Target High-Growth Segments: With renewable energy growing in demand by focusing on expanding
solar and wind energy solutions to industrial clients looking for green energy alternatives and take
advantage from governmental incentives for renewable energy projects, such as solar and wind farms,
to increase penetration in both public and private sectors and promoting corporate social
responsibility (CSR) by promoting the adoption of renewable energy as a CSR initiative for
companies, highlighting the benefits of sustainability and reduced carbon footprints
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Product development strategy:

TAQA ARABIA should increase market share by implementing new features & services on
its products depending on AI and technological advancement and enhance efficiency.

Gas Distribution Services: Additional services like maintenance, safety inspections, and
energy consultancy, enabling clients to optimize their gas consumption and improve
overall efficiency.

Electricity Distribution: improve energy storage systems such as battery technologies

that can store additional electricity generated by renewable sources and provide backup
power during peak times or outages.

Fuel Distribution (Petroleum Products: Share to shift toward electric vehicles, TAQA Arabia can
introduce EV charging stations at its fuel stations to capture a growing market segment.

Water Desalination and Treatment: Develop more advanced and cost-effective water desalination
and treatment technologies that consume less energy and reduce waste.

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2. Business Strategy

A. The cost leadership for market penetration (The highest priority)

Market Penetration focuses on increasing market share in existing markets so cost

Leadership strategy would support this by allowing TAQA Arabia to offer
competitive pricing to attract more customers, maintaining lower operational costs
and passing these savings to customers through affordable pricing can help TAQA
Arabia capture a larger portion of the market and retain customers in an
increasingly competitive environment by leveraging benefits from efficient
operations and an efficient supply chain as TAQA Arabia penetrates the market,
scaling its operations would allow it to achieve economies of scale which means
lower per-unit costs, which aligns with a Cost Leadership strategy and taking
advantage from Government incentives in the energy sector, particularly around
renewable energy and sustainability to provide lower-cost energy solutions and
penetrating new market segments or increasing share in existing ones.

B. The differentiation for product development (The lowest priority)

Differentiation strategy would allow the company to offer innovative, high-quality

energy products and services and tech-savvy customers by taking advantage from
its strengths in technology development, R&D, efficient operations, and brand
loyalty.

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PART FOUR:

STRATEGY IMPLEMENTATION

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1. Functional Strategy

Functional Area Functional Objective Activities, Actions & Polices KPI

Streamline logistics and supply

% increase in
Increase operational efficiency chain operations to ensure timely
operational
by 15% by 2026 to support energy delivery.
Operations efficiency.
market penetration in new Implement lean manufacturing
-% reduction in
geographic regions. practices to reduce waste and
costs.
optimize output.
Develop localized marketing
Achieve a 15% increase in campaigns tailored to new areas % Market share
market share by 2026 through (e.g., New Administrative Capital). growth by region.
Marketing
targeted marketing campaigns in -Enhance digital marketing - Customer
new urban areas. strategies targeting energy satisfaction rate
consumers.
% workforce
Train 90% of the workforce in trained.
market penetration and % workforce trained. Employee
HR customer service skills by end of - Employee retention and retention and
2024 to support expansion satisfaction score satisfaction score
efforts. regarding
customer surveys
Allocate 15% of annual budget Implement financial tracking
ROI on expansion
Finance to support Market Penetration & systems to monitor ROI from market
initiatives.
Marketing campaigns penetration activities
% increase in
Improving the Company's Enhance liquidity ratio liquidity ratio.
Finance
financial position 15% by 2026 Increase ROI ratio -% increase in
ROI ratio.

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PART FIVE:

EVLAUATION AND CONTROL

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• Balance Score Card:

Time Frame
Component Objective KPI Target
2024 2025 2026

85% 75% 80% 85%

% increase in
operational efficiency.
Operations Increase operational efficiency by 2026

Reduce by Reduce Reduce Reduce

% reduction in costs.
15% 5% 5% 5%

increase in market share by 2026

Increase Improve Improve Improve
Market share
by15% 5% 5% 5%
Marketing
increase customer satisfaction

Customer Satisfaction Improve Improve Improve

Grow by 15%
5% 5% 5%

Train 90% of the workforce in market % workforce trained.

90%
90%
HR penetration and customer service skills by Employee retention and
Improve Improve Improve
end of 2024 to support expansion efforts. satisfaction score Improve 15%
5% 5% 5%

Budgeting Allocation Allocate 15% 15% 15%

25%

Allocate 15% of annual budget to support Improve by Improve Improve Improve

Market Penetration & Marketing
campaigns Liquidity ratio 15% 5% 5% 5%
Finance
Improve by Improve Improve Improve
Improving the Company's financial position ROI Ratio 15% 5% 5% 5%
15% by 2026 Reduce by Reduce Reduce Reduce
Debt - to - Assets ratio 15% 5% 5% 5%

Conclusion:
By implementing robust evaluation and control processes, TAQA ARABIA can effectively monitor
performance, identify areas for improvement, and make informed decisions to optimize operations,
enhance customer satisfaction, and achieve its strategic objectives. Regular evaluation and control
enableTAQA ARABIA to adapt to changing market conditions, mitigate risks, and drive sustainable, growth
and success.
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PART SIX:

Business Plan

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1. Executive Summary:

Based in Cairo and with more than 25 years of experience, TAQA Arabia became Egypt's leading energy and
utility provider, serving more than 1.8 million customers with their daily energy needs. TAQA Arabia invests,
installs, constructs and operates energy infrastructure including gas transmission & distribution, conventional and
renewable Power generation & distribution, marketing oil products and lubricants throughout several fuel stations
across the country as well as water treatment and desalination services for wide range of clients.

Established in 2006 TAQA Arabia has successfully managed to incorporate 15 operating companies with a great
level of expertise and know-how, in addition to the establishment of green field companies. All companies
incorporated under TAQA Arabia’s umbrella had been working in the market for a long time and each has its own
track-record of projects. TAQA Arabia have consolidated all its experience and expertise to become a full-power
player operating mainly in Egypt with numerous successful projects in several Middle Eastern & African countries
including UAE, Qatar, Jordan, Libya, Tanzania and Mozambique.

Recently TAQA Solar, TAQA Arabia’s Renewable Energy arm has been one of the first companies to finalize a
65MW PV solar power plant in Benban (Aswan)-part of the biggest PV solar park in the world. The project is
Under the Egyptian governments feed-in tariff program and started commercial operation in Feb 2019. The project
total investment reached US$ 72Million and was funded by the IFC along with other development banks from
Finland, Austria, Bahrain & China. This project has received several recognitions and is being praised by the IFC
and the world bank leaders as the best and most successful project of the year 2019.

Furthermore, TAQA Arabia is an active associate member of the International Gas Union. Founded in 1931, the
IGU serves to promote the gas industry and represents more than 95% of the global gas market. This
geostrategic membership allows us to share expertise and best practices with thousands of gas professionals
from around the world. TAQA Arabia is also the founder of the Egyptian Gas Association (EGA) as well as a Co-
founder and a significant key-player of the (Electricity distributors Association).

Type of organization Public Company-Profit based organization

Brands TAQA Arabia, Master Gas, TAQA Power, TAQA Water

Revenue LE 13.464 billion (FY 2023) – UP by 25.5% YoY

Total assets LE 17.348 billion (FY 2023) – Up by 18% YoY
Total equity LE 2.996 billion (FY 2023) – Up by 25% YoY

Owner Qalaa Holdings (60%), 40% Free Float

Number of employees 4,000+

Subsidiaries TAQA Gas, TAQA Power, TAQA Water, TAQA Oil

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5. Vision

“To be the leader of providers of regional energy services and utilities solutions, and to
become the first player in the sustainable development and economic progress all over
the world.”

6. Mission

“TAQA ARABIA is committed To provide high quality services and products

to meet the growing energy demand in Middle East & Africa, through our
ethical practices and professional team and using latest technology in a way
that would guarantee the highest value for our customers, secure our growth
and success and provide the highest returns for our shareholders.”

7. Core values

1. Customer centricity
As the Energy industry grows more competitive, TAQA ARABIA continues to
invest in customer care excellence to ensure business continuity.

• Integrity & Compliance

highlight everything, they do and form the principle of the Company’s Code of Business
Conduct and Ethics
• Responsibility
In addition to, the compliance policies and regulations that govern all stakeholders and
employees of the company that are expected to conduct businesses and carry out their
duties and responsibilities transparently.
Transparency

Ethics
TAQA ARABIA aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligation
•

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Products Provided

1. TAQA Gas pioneers in gas activities including transmission and distribution as well as EPC works,
TAQA Gas provides residential, commercial and industrial clients with natural gas and secures their
daily supply.
2. TAQA Power is the platform responsible for conventional & renewable power generation and
distribution with contracted capacities of about 1 GW and more than 1 GWHR annual sold electrical
energy for several sectors (Oil & Gas, Petrochemicals, Industrial, Touristic, Real Estate) in different
geographical locations across Egypt covering more than 60 Million sqm and reaching about 8,000
customers.

3. TAQA Petroleum is the first privately owned Egyptian company with a license to supply and market
petroleum products, it now operates 65 stations across Egypt under the brand name (TAQA) and have
a JV with BP/Castrol to manufacture and distribute Castrol Products & Lubes in the Egyptian market.

4. TAQA Water is the latest corporate addition which transforms the group into the very first
integrated services provider in the field of Energy & Water utilities throughout the MENA region. TAQA
Water with a team of professionals and expertise exceeding 15 years in the water treatment field based
on a highly experienced track-record primarily caters the industrial, agricultural, tourism & real estate
development sectors through a variety of water treatment solutions adopting the latest energy saving
technology.

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5. Board of Director

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• Marketing plan

Product Pricing Place Promotion

Tiered Pricing
Electricity Regional service TV & Radio ads, social
(based on
media campaigns,
Distribution usage) centers, Digital channels Customer education
(website, app) programs

Natural Gas Subscription- Service centers, Local

based pricing offices, Online Direct Mail, Local events,
Supply
platform Sustainability-focused outreach

Renewable Captive pricing, Direct sales through

Energy (Solar) Financing options branches, Online Sponsorships, CSR projects on
consultations sustainability, Green energy
campaigns

Water Subscription- Local service centers,

Treatment based pricing Digital channels (app, TV & Radio ads, Social media,
Solutions website) Educational campaigns on
water conservation

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9. Financial and Budgeting

Fiscal Period: December 2019 2020 2021 2022 2023 2024 2025 2026
Net Debt 790 -84 3,128 824 676 642 608 574
ROE (net income / shareholders' equity) 5.13% 5.06% 4.02% 3.67% 3.21% 3.37% 3.53% 3.69%
ROA (Net income/ Total Assets) 24.04% 25.06% 26.80% 22.40% 18.61% 19.54% 20.47% 21.40%
Current ratio 111.00% 113.00% 105.00% 103.00% 101.00% 106.05% 111.10% 116.15%
Acid test (Quick) ratio 101.50% 104.70% 99.70% 93.90% 90.40% 94.92% 99.97% 105.02%
Cash ratio 35.00% 49.00% 65.00% 66.00% 63.00% 66.15% 71.20% 76.25%
Assets 7,128 8,089 11,922 14,698 17,348 18,215 19,083 19,950
Revenues 7,724 7,924 9,102 10,728 13,464 14,137 14,810 15,484
Operating Margin 514 610 675 828 1,074 1,128 1,181 1,235
Earnings before Tax (EBT) 525 595 716 799 898 943 988 1,033
Net income 365 410 480 539 557 585 613 641
Net margin 365 410 480 539 557 585 613 641
Free Cash Flow -357 731 -216 -392 182 191 200 210

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10. Operational Plan

Operations are the center of gravity of the Energy industry value chain.

especially in its critical role as one of Egypt's leading energy providers. TAQA ARABIA
operates across multiple energy sectors, providing reliable power, gas, and water solutions to
various customer segments.

Business Lines:

• Power Services
• Gas Services
• Water Services:
• Renewable Energy
•
Key Operational Highlights:

• Diverse Energy Portfolio:

• Technological Innovation:
• Investment in Technology
• Skilled Staff:
• Strategic Partnerships
• Customer-Centric Service Enhancement
• Sustainability Initiatives

• TAQA ARABIA should prioritize the enhancement of its energy distribution network
to ensure reliability, scalability, and sustainability, implement efficient processes to
streamline operations and reduce costs, while investing in digitalization and smart
grid technologies for better energy management, use digital platforms for real-
time monitoring of power, gas, and water consumption, improving customer
experience through transparency and proactive service and use advanced energy
management systems and smart grids to optimize energy distribution and
consumption, enhancing efficiency.

• TAQA ARABIA 's supply chain has to explore local manufacturing capabilities for
energy-related equipment, reducing reliance on external suppliers and lowering
costs, collaborate with technology companies specializing in energy efficiency to
implement energy-saving initiatives across operations and implement a digital
ecosystem for real-time inventory and logistics tracking, ensuring optimal energy
supply levels, efficient distribution, and seamless operations considering the high
strength of supply chain found on the company
•

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References

1. https://www.taqa.com.eg/
2. https://www.taqa.com.eg/page.php?name=Investors
3. https://taqainvestors.azurewebsites.net/Home/financial_statements
4. https://www.worldbank.org/en/topic/energy
5. https://www.investing.com/equities/taqa-arabia-ratios
6. https://stockanalysis.com/quote/egx/TAQA/statistics/
7. https://www.mondaq.com/renewables/1416338/renewable-energy-in-egypt-investment-and-
sustainability
8. https://www.irena.org/-
/media/Files/IRENA/Agency/Publication/2018/Oct/IRENA_RE_Outlook_Egypt_2018_EN_summary
.pdf
9. https://www.theglobaleconomy.com/rankings/wb_political_stability/
10. https://www.statista.com/statistics/377343/unemployment-rate-in-egypt/
11. https://www.ceicdata.com/en/indicator/egypt/gross-national-product

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