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Running Head: Advanced Strategic Management 1
Dubai as an International Finance center - Case Study
Question 1: Describe the strategic plan of Dubai in 2015. Paraphrase and add your criticism and comments that shows the comprehension of the case as well as the chapters from 1 to 4. Include at least two facts about each sector of the strategic plan. Feel free to bring those facts from primary or secondary resources but make sure that you reference those facts in the list of references. In your criticism show the possible improvements in the strategic plan.
Dubai’s Strategic Plan
The economical meltdown occurring globally and unleashing havoc all over GCC has forced various governments to create ambitious strategic targets for the economical welfare of their countries. Dubai’s Strategic Plan for 2015 (DSP) is considered to be the most ambitious strategic plan that was prepared and published in 2007 in the context of outpouring of direct foreign investment that was aggravating the boom in trade, tourism and construction projects.
Over the last four decades, Dubai has been able to diversify its economy from an oil base economy and transformed it into an investment and trade centre. Dubai has earned tremendous profits from its strategic geographical location with effective rule of the highness that made Dubai to accept change and implement such strategies in order to support rapid growth. The overall leadership oriented vision of Dubai has been incorporated and discussed elaborately in the DSP for 2015, with focusing on main five sectors:
- Economical development: Due to the rapid foreign investments with the versatile availability of land resources for construction purposes, effective leadership and blooming tourism sector the future of economical development in Dubai remains outstanding. As an integral aspect of Dubai’s strategic plan it targets to achieve an annual growth of eleven percent following the sustainability of per capita income of forty four thousand American Dollars and gross domestic product of about one hundred eight billion dollars till the end of the 2015. The statistics also prove an annual rise of four percent in labor productivity with the promotion of new sectors consisting of stable and effective competencies. Further the strategic plan targets various economical related sectors of Dubai like trade, construction, tourism, professional services while escalating the overall productivity of these sectors. Dubai consists of potential relative strengths in its various economical sectors
- Development of Infrastructure, land and resources:
Strategic plans regarding development of Dubai’s infrastructure are summarized as follow:
- Urban planning
- Preserving natural resources
- Developing energy sector
- Provision of surplus energy, water and electricity supplies
- Meeting Dubai’s growth demands
- Launching more power generation plants and desalination plants
- Social development:
UAE is considered to be the second largest power in the Arab region however it is battling immensely with its demographics. Regarding social developments of Dubai focuses on preserving the national identity of the Emirates as ‘Population imbalance’ found in this Middle power due to increasing immigrants which is effecting badly the national identity, original race and cultural norms and values of its very own national population which became minority now (Mohammed, 2015). Therefore strategies are formed in light of this issue and maintaining population balance.
- Government Excellence
Excellence will be achieved in every aspect of the business operations. The strategic plans will be focusing on ensuring procedures of accountability and the financial systems will be transformed from cash to accrual basis with updating the human resource practices.
- Justice, and Security
Regarding justice and safety, Dubai is considered to be the safest emirate. In fact the strategic approaches place their attentions and priorities upon security and justice devices. The government of UAE is very conscious of security of every citizen (Dubai’s 2015 Strategic Plan B, 2015).
Criticism: Possible improvements in Strategic Plan
Innovation and continuous improvement
Dubai, an Oasis in the desert transformed into a cosmopolitan within last two decades like UK, East Asia and US. All such rapid changes are due to its extensive economical growth, which made this isolated region with its own identical values pretty much attracted in the eyes of foreigners. Just as its global competitors, Dubai has also challenging issues in social, cultural, demographic and economical grounds. Despite of its effective full prove strategies through Dubai strategic Plan 2015 it still requires two improvements that are Innovation and Continuous improvement. Today innovation is “much more than new products and processes”. Indeed Dubai is striving hard for its immense development. The concept of continuous improvement is related to innovation. Continuous improvement is a management process that constantly monitors what the enterprise ids doing and how people are doing it. This enables leaders to identify and address problems and foster growth through ongoing improvement of products, services, procedures and processes. True leaders like Mohammed bin Rashid Al Maktoum, the people whom others instinctively look to for a direction are lifelong learners and observers who are constantly looking for ways to do things better and in unique ways.
Question 2: Identify the core competencies of Dubai strategic plan – 2015. Criticize those core competencies. Connect the core competencies of Dubai strategy in 2015 to the United Arab Emirates Vision in 2021.
Identification of core competencies in Dubai Strategic Plan – 2015
By identifying the core competencies of the Dubai strategic plan we will be identifying the design of competitive positions and strategies of the plan that will eventually capitalize on its corporate strengths. Furthermore it will enable Dubai’s Government to integrate the usage of technology in completing various business processes. Following are the identified core competencies of the Dubai Strategic Plan 2015:
- Entrepreneurial Orientation: the emirates of Dubai consists of the ability to identify and recognize seize profitable business opportunities as the government of Dubai is invalid in trade and construction projects merged with other foreign companies by encouraging entrepreneurial behavior in every stake holder.
- Strategic Thinking and Ideology: Dubai’s competitive position is recognized in the context of industry trends with existing and potential opportunities and its SWOT analysis. The strategies developed in reference to the developing infrastructure of Dubai will enable it to conquer different worlds of businesses. Proposals are developed in advance for about five to ten years that is based upon situational analysis and its current and potential capabilities which is compared with its past performances and conditions.
- Analytical Planning: throughout the development of the Dubai’s strategic planning dilemmas and challenges are dealt by logical, rational and systematic, sequential approaches. Comparison is developed among alternatives and the best solution chosen is finally implemented. For future strategic planning discrepancies and inconsistencies with numbers are also analyzed. Decisions are based upon benefits, priorities and expenses.
- Building Collaborative Relationships: Cordial relationships are building on the basis of trust and confidence. Partnerships are made stronger with foreign partners and with local partners as well. Shared interests, experiences and information are shared deliberately by which experiences and learning processes grow. Rapport and common professional relationships are developed.
- Forward Thinking: the strategic plan for Dubai of 2015 was created in 2007. As plan for the year 2021 has also been created. This proves their forward thinking to be there basic core competency that enables them to anticipate the implications and after wards consequences of the various circumstances and taking appropriate action plan for contingencies being faced at time. The government of Dubai creates contingency plans in advance which further anticipate possible future dilemmas. Developing a strategic plan based upon future expectations and goals trends in various sectors and industries are also analyzed for developmental plans to take benefits from potential opportunities.
Criticism of the core competencies of Dubai Strategic Plan – 2015
While Developing the Entrepreneurial orientation, the government lacks to demonstrate willingness to calculate any forecasted risk or threat that is being created in order to achieve business goals. At the current moment Dubai consists of 3 billion square ft of land with twenty four projects being constructed upon regarding every sector, whether that is social, eco tourism, infrastructure or science related (Environmental concerns over Dubai tourism developments, 2015). Obviously for such a wide construction consists of large scale of employees. Even though strategic plan supports social developments still at the bottom there lays an exploited underclass. Dubai with its rapid economical development relies heavily upon labor. Eighty to ninety percent of the work force living in overall UAE is migrants. These are the people who built such beautiful ornaments and beautify the Emirates with creative and attractive aesthetics. But unfortunately these labors have no voice and no owners of the vision. They labor in infamously harsh conditions. Critics view this scenario as stating Dubai to be a morally bankrupt dictatorship built by a slave captive labor. This entire situation supports the argument that Dubai is a hierarchical utopian experiment with an Arabic version of a capitalist vision. This situation involves all five core competencies mentioned above. As these core competences are working effectively at the current moment but can totally divert the situation if migrated employees raise their voice against unfair practices and demand for extended rights.
Connections between Dubai Strategic Plan – 2015 and the United Arab Emirates Vision of 2021
Both of the plans are directed towards the fulfillment of economical development and future prosperity of UAE. Both of the plans are quite similar in their content and strategies. Theme one, in UAE’s Vision of 2021 that is the “United in Ambition and Responsibility” consists of same basic strategies as mentioned in the social development being taking place in Dubai. Citizens are socially made empowered and security and justice is provided to them on equal basis. Theme three, United in Knowledge supports the vision of Sustainable and diversified economy of UAE.
Question 3: Write introductory paragraph on how to measure the effectiveness of a strategic plan in Covering 2 guidelines from the given slide in measuring the effectiveness of Dubai Strategic Plan – 2015 by usage of two external references.
Introductory paragraph: how to measure the effectiveness of a strategic plan
For measuring the effectiveness of any strategic plan one has to analyze how the objectives are interconnected with the plans that have to be achieved. The strategies created can be completely effective if the resources utilized are according to the prepared plan and desired results are achieved. Usually strategic plans are developed under the sphere of forecasted results and past performances but the authorized person or the head of the plan should evaluate the whole plan with measuring resources and performances on continuous basis (Nelson, 2015). After six months or annually the performances can be matched for effectiveness. Following steps can be followed one by one to evaluate the effectiveness of the prepared strategic plan (Markgraf, 2015):
- Developing Strategies that are measurable
2. Variables should be measured During Implementation
3. Evaluating the Performances continuously
4. Reviewing the Effectiveness of the strategies In Terms Of its respective Objectives
Measuring the effectiveness of sectors’ sub-strategic plans in Dubai strategic plan of 2015
For measuring the effectiveness of the Dubai’s strategic plan I will be referring to the slide provided for this concern. For the implementation of effective strategic management one should indeed create an organization that operates with characteristics of ritualistic and rigid nature. One running such a vast empire such as the emirates of Dubai the leader must act and perform in such a way that he is always flexible and employees look upon him for guidance. As employees will be satisfied the business operation performances will also be up to mark. In other words the leader should be visionary and flexible in his teachings to provide a simple direction towards the organization goals. Other than being flexible in every procedure, the leaders and the upper management as well should be a self reflective learning process through which employees learn and follow you for fulfilling the organizational goals. The employees look for effective leadership as a source of reassurance and guarantee, as an anchor to provide a degree of security and stability.
Regarding the economical developments, productivity growth and human capital excellence are improving quality wise rapidly. As it can be evaluated through different methods that the transformation of the infrastructure of Dubai is converting itself into a hub of business excellence through human capital as well. The work force is prepared for fulfillment of the organizational goals through effective leadership and strategic planning. At the current moment Dubai is engaged in businesses with Africa, Libya and Iraq (Dubai World-Class Infrastructure and a Global Hub for Trade, Transport and Tourism, 2015). The development of infrastructure can be witnessed through the construction of the marvelous Burj Al Arab Hotel that is presiding over the Jumeira’s beach coastline being the only hotel consisting of a seven star rating in the world. For the sake of astonishing developments reagrding economical sectors, UAE intends to spend more than about three hundred billion U.S dollars on the Dubai’s infrastructure till the end of year 2030.
Question 4: By using chapters 3 and 4 for introductory part about internal and external environmental analysis, determine two components in each factor of SWOT analysis from the case and how they interact with each other. Add two logical criticisms to the given SWOT analysis and how this criticism can lead to improve the SWOT analysis of the case.
As the process of strategic management initiates, managers are entitled to carry on the internal analysis of the organization. The internal analysis is considered to be the first part of the SWOT analysis that consists of two attributes, strengths and weaknesses. Primarily the strengths and weaknesses of a company are identified for further analyzing its core competencies and the current situation of the business. For the effectiveness of the strategic plans and approaches the companies must tend to exploit and ensure the extension of its potential strengths. Why entrepreneurs measure the strengths and weaknesses of the organization is related to the fact of gaining competitive advantage over its rivalries. For being competitive the company should develop its strengths and eliminate or reduce weaknesses. By identifying its strengths or core competencies the organization can differentiate itself on the basis of its offered products or / and services or some may decrease their costs for gaining large market share.
The second part of the SWOT analysis deals with leaders and managers recognizing the organizations opportunities and threats that is said to be the external analysis of a company. The identification of potential opportunities and threats are to be taken seriously as to develop strategies. Following are the factors stated that are involved in the process of external assessment:
- The potential threats of an entry by potential rivalries
- The intensity of competition among established organizations within an market
- Consumer’s purchasing power
- Supplier’s bargaining power
- Similarity among alternative products
Due to the rapid foreign investments with the versatile availability of land resources for construction purposes, effective leadership and blooming tourism sector the future of economical development in Dubai remains outstanding.
Burden created through Dubai financial Debts is an alarming concern for the UAE financial entities and investors. Further more if the situation is not handled in time it may cause instability in its financial ecosystem as the Dubai’s financial entity forms an integral part of the IFC (Srivastava, 2015).
Tourism sector is blooming and is at its top state that brings the capital inflows that welcomes a huge channel of opportunities with it. The vacant region of MENA brings numerous opportunities with relocating citizens there (Srivastava, 2015).
The migrated labors have no voice, rights and no owners of the vision. They labor in infamously harsh conditions. Critics view this scenario as stating Dubai to be a morally bankrupt dictatorship built by a slave captive labor. This entire situation supports the argument that Dubai is a hierarchical utopian experiment with an Arabic version of a capitalist vision. Hence it portrays a distorted image of Dubai’s Infrastructure.
There will come a state where there will be no place left vacant for construction purposes. Opportunity will reduce with the passage go time as construction will also be decreased. Regarding the tourism sector, it’s a highly competitive and challenging sector to be always maintained and fulfill expectations of the tourists that belong to every part of the world with high demands.
Dubai World-Class Infrastructure and a Global Hub for Trade, Transport and Tourism. (2015, March 16). Retrieved from Forbes custom: http://www.forbescustom.com/EconomicDevelopmentPgs/DubaiWorldClass.html
Dubai’s 2015 Strategic Plan B. (2015, March 15). Retrieved from Arabian business: http://www.arabianbusiness.com/dubai-s-2015-strategic-plan-b-40713.html?parentID=325206
Environmental concerns over Dubai tourism developments. (2015, March 16). Retrieved from Global Travel Industry News: http://www.eturbonews.com/2273/environmental-concerns-over-dubai-tourism-dev
Markgraf, B. (2015, March 16). Strategy Effectiveness. Retrieved from Chron: http://smallbusiness.chron.com/strategy-effectiveness-76012.html
Mohammed, E. (2015, March 15). The debate on UAE national identity. Retrieved from Gulf News: http://gulfnews.com/news/gulf/uae/general/the-debate-on-uae-national-identity-1.106921
Nelson, S. S. (2015, March 16). Implementing for Results: Your Strategic Plan in Action. Retrieved from Google Books: https://books.google.com.pk/books?id=qqKTAwAAQBAJ&pg=PA35&dq=how+to+measure+the+effectiveness+of+a+strategic+plan&hl=en&sa=X&ei=ovgFVdmtOc6qaafDgcAO&ved=0CD4Q6AEwBw#v=onepage&q=how to measure the effectiveness of a strategic plan&f=false
Srivastava, S. (2015, March 16). Dubai As An International Finance Center, a SWOT Analysis. Retrieved from Economic and Market Analysis That Matters: http://www.econmatters.com/2014/09/dubai-as-international-finance-center.html