Damas plans IPO in two months

This article is about DAMAS announcement for going public in the coming two months, the proceeds will be used to expand the company's retail presence in the key overseas markets, and to expand its diamond jewellery manufacturing facility in Dubai Metals and Commodities Centre.

By reading the article from the point of view of Barney’s Gaining and Sustaining Competitive Advantage and by applying VARIO framework on DAMAS we can notice the following:

The Question of Value: Do a firm’s resources and capabilities enable the firm to respond to environmental threats or opportunities?

This advantage can be attributed mainly to its resources and capabilities namely brand name that satisfy all tastes, experience, human resources, and geographical coverage.

DAMAS has a long experience in designing, manufacturing, and selling gold and jewelry all around UAE and the Middle East since 1907. This long experience allowed them to operate effectively and efficiently in the Jewelry industry, enabled them to understand the customer needs and to create a long term loyalty relationship with their customers.

DAMAS is serving its customers over a wide geographic area through 75 outlets in UAE only in addition to outlets in the GCC, U.S., Lebanon, Jordan, Maldives, and India operating under different brand names and price levels to satisfy all types of customers.

DAMAS has built its brand name though strong marketing and public relation that allowed it to become one of the most valuable brand names in UAE and GCC. In addition to being the brand that satisfies all tastes and budgets.

Their human capital is including the entrepreneurs Tawfique Abdullah, Tawhid Abdullah, and Tamjid Abdullah who learned the jewelry business since their early days from their father Mohd Taher Abdulla.

We can notice that DAMAS is not wasting time in exploiting the opportunities by the proposed IPO, that will increase its paid up capital to AED 2 Billions, to expand its presence over seas and by expanding its facilities in Dubai Metals and Commodities Centre to satisfy the increasing demand for DAMAS brand and to become a key regional player in the gold and jewellery industry.

The Question of Rareness: How many competing firms already possess particular valuable resources and capabilities?

DAMAS experience and resources allows them to lower their costs and provide the customers with differentiated products and styles by innovative methods in production and by relying on energetic and creative designers and craftsmen.

The Question of Imitability: Do firms without a resource or capability face a cost disadvantage in obtaining it compared to firms that already possess it?

Other firms without the resources and capabilities of DAMAS already face a cost disadvantage in obtaining them. Competitors will need to invest in research and development and to increase their capital in order to achieve the cost efficiency of DAMAS.

DAMAS poses a competitive advantage in this field in terms of experience and scale making it difficult for competitors to keep up with DAMAS

The Question of Organization: Is a firm organized to exploit the full competitive potential of its resources and capabilities?

It seems that DAMAS is one of the organizations that mostly encourage innovation and its focus on the educational and training aspects of its employees.

The company was successful in implementing MBS Navision system that put all their 100 stores online.

From all of the above I’m confident that DAMAS enjoys a sustained competitive advantage.