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Emirates Investment Bank: Short-Term and Long-Term Strategies Research Paper


Strategic Planning

Emirates Investment Bank is one of the leading financial institutions in the United Arab Emirates. Founded in 1976 by three prominent business families, the company’s primary focus has always been to offer asset management services to its customers in the country (Stowell & Stowell, 2012). The company has attracted both local and international individuals of high net worth keen on making smart investment decisions. The company is currently facing competition from both local and international companies keen on tapping into the growing opportunities in the country, especially the city of Dubai. This paper focuses on formulation of both short-term and long-term strategies that the company can use to overcome challenges in the market while at the same time taking full advantages of the opportunities available in the country.

Current Performance and Mission

Emirates Investment Bank has registered impressive performance over the last two decades. Although the company registered a relatively sluggish growth in its initial years of operations, the company is currently growing at impressive rates. According to a report released by the company, its assets grew by over 400% from 2008 to 2012 (Young, 2014). It is important to note that during the same period, many financial companies all over the world struggled to stay afloat in the market because of the global economic recession. However, it Emirates Investment Bank was one of the few firms in the region, which registered growth at a time when others experienced numerous challenges. The mission of this company is deeply entrenched into its philosophy. The mission emphasizes on the commitment of the company towards its customers and internal stakeholders as it seeks to ensure that they achieve mutual growth. The philosophy states that as the company grows, so should the wealth of its customers.

EFAS Matrix

In its market operations, Emirates Investment Bank is faced with numerous opportunities and threats that it must manage effectively to achieve its vision in the local market. To understand the magnitude of the market opportunities and threats, it is important to develop external factors analysis summary (EFAS) matrix. Table 1 below shows a summary of these factors.

Table 1 EFAS Matrix.

The Internal Strategic Factor Weight Rating Score
  1. Opportunities
Improved technology 0.10 3 0.3
Growing size of the middle class and the rich 0.15 4 0.6
Increased number of experts 0.05 2 0.1
Growing relevance of investment banking 0.09 2 0.18
Growing relevance of Dubai city as a global business hub 0.11 3 0.33
  1. Threats
Growing bargaining power of customers 0.08 2 0.16
Increased level of rivalry in the local market 0.12 3 0.36
Ease of entry into the market by foreign firms 0.06 2 0.12
Increased government regulations 0.13 1 0.13
Changing tastes and preferences of customers 0.11 1 0.11
Total 1 2.39

As shown in the table above, the most significant opportunity is the growing relevance of Dubai city as a global business hub. The trend has not only increased the population of the city but has also expanded the market share for companies in this industry. Improved technology is another major opportunity as it makes doing business in this industry easier than it was in the past (Malphurs, 2013). Other major opportunities in this market include growing size of the middle class and the rich, growing relevance of investment banking, and increased number of experts in the city. As Emirates Investment Bank moves to take advantage of these opportunities, it must be able to deal with the threats in the market. The table above shows that the biggest threat in the local market is the increased rivalry in the market that is forcing firms to use various strategies to protect their market share. The growing bargaining power of the customers is another major issue that this company must learn how to deal with in this industry. Other major concerns include ease of entry into the local market by foreign firms, increased government regulations, and the changing tastes and preferences in the local market. As Braysher (2017) states, success of a firm is always determined by its ability to take full advantage the market opportunities while at the same time managing the threats that may affect its operations.

IFAS Matrix

According to Schober (2017), internally, strength and weaknesses of a firm determines its level of success in the market. Emirates Investment Bank registered an impressive growth of 400% of its assets from 2008 to 2012. It was a sign of its strength in the market that enable it to overcome the impact of recession that affected other firms. It is important to look at these individual factors as shown in the internal factors analysis summary (IFAS) matrix shown in table 2 below:

Table 2: IFAS Matrix.

The Internal Strategic Factor Weight Rating Score
  1. Strength
Highly skilled human resource 0.14 4 0.56
Flexible management policies 0.11 3 0.33
Improved internal communication system 0.08 3 0.24
Growing asset base 0.07 4 0.28
Close relationship and improved communication with clients 0.10 3 0.30
  1. Weaknesses
High level of reliance on expatriates 0.07 3 0.21
High cost of implementing new technologies 0.11 2 0.22
Limited interaction between top managers and employees 0.08 1 0.08
Average rate of new technology adoption 0.11 1 0.11
Limited ability to attract international clients 0.13 2 0.26
Total 1 2.59

The main strength of Emirates Investment Bank is pool of highly skilled human resource. The company has managed to hire and retain skilled employees who have helped in implementing various critical strategies for the company. Flexible management policies have also made it possible to implement new strategies in line with the changing market trends. Other critical factors that have benefited this firm include improved internal communication system, growing asset base, and improved communication with the clients. However, the firm also has a number of weaknesses it must address, with the main one being limited ability to attract international customer. Another weakness is the high cost it has to incur when implementing new technologies. Other major areas of weakness include limited interaction between junior employees and top managers, average rate of new technology adoption, and high level of reliance on expatriates.

Key Strategic Factors (SFAS)

It is important to come up with a summary of the strength, weaknesses, opportunities, and threats that this company must deal with in the market as it seeks to expand its market share in the local market. Strategic factor analysis summary (SFAS) brings together these forces in order to establish the approach that can enable the company to achieve the desired goals. The table 3 below shows the SFAS matrix.

Table 3: SFAS matrix.

Strategic Factors Weight Rating Score
S 1: Highly skilled human resource 0.12 4 0.48
S2: Flexible management policies 0.10 3 0.30
S 3: Improved internal communication system 0.07 3 0.21
W1: High level of reliance on expatriates 0.06 3 0.18
W 2: High cost of implementing new technologies 0.11 2 0.22
W 3: Limited interaction between top managers and employees 0.07 1 0.07
O 1: Improved technology 0.08 3 0.24
O 2: Growing size of the middle class and the rich 0.13 4 0.52
O 3: Increased number of experts 0.05 2 0.10
T 1: Growing bargaining power of customers 0.04 2 0.08
T 2: Increased level of rivalry in the local market 0.11 3 0.33
T 3: Ease of entry into the market by foreign firms 0.06 2 0.12
Total 1 2.85

As shown in the summary table above, the magnitude of the company’s strength is greater than the weaknesses. Similarly, the opportunities that the market presents to this company are greater than the threats it has to face. It means that the positive forces are greater than the negative forces. Emirates Investment Bank has a perfect environment that is needed to achieve the maximum success.

Discussed Strategic alternatives

Emirates Investment Bank is currently experiencing impressive growth in the market. However, the above analysis shows that the company has various issues that it must address to enable it achieve maximum success in the market that is increasingly becoming competitive. The company will need to embrace strategic alternatives in its operations. One of the alternative strategies that this company should consider is increasing its brand recognition that can be achieved through celebrity endorsement. Using top celebrities such as Christiano Ronaldo or Tiger Woods, this company can make its brand appealing to the global market audience.

As shown in the above analysis, one of the biggest weaknesses of this firm was identified as its inability to attract international customers. Using these celebrities to promote its brand image can enable it attract international customers. Other than using top celebrities, this company should initiate aggressive market campaigns that will inform its customers about the products it offers and reasons why they are superior to that of the rival companies. Differentiation of products may be another strategic alternative approach that can help Emirates Investment Bank to achieve success in the market. The bank should also consider introducing other products in its portfolio. As the market becomes more competitive than it was before, the bank should consider increasing its revenues. That can be achieved by introducing new products in the market. Other strategic alternatives include the following:

  • The company should consider introducing Islamic finance in its portfolio of products. This product is becoming popular in most of the GCC countries.
  • The company should increase its online presence. It should create a platform where its customers can operate their accounts remotely without having to visit the premises of this firm.
  • The firm should increase its corporate social responsibility engagement in the country. It should focus on issues affecting the country such as environmental conservation and education of needy students.
  • Acquisition and takeovers is another popular strategy that Emirates Investment Bank can use. By acquiring smaller struggling firm, this company will not only increase its market share but also reduce the level of competition in the market.

References

Braysher, M. (2017). Managing Australia’s pest animals: A guide to strategic planning and effective management. Hoboken, NJ: Wiley Publisher.

Malphurs, A. (2013). Advanced strategic planning: A 21st-century model for church and ministry leaders. New York, NY: Bakers Books

Schober, M. (2017). Strategic planning for advanced nursing practice. New York, NY: Springer.

Stowell, D., & Stowell, D. (2012). Investment banks, hedge funds, and private equity. Burlington, NJ: Elsevier Science.

Young, K. E. (2014). The political economy of energy, finance, and security in the United Arab Emirates: Between the Majilis and the market. Hampshire, UK: Palgrave Macmillan.

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IvyPanda. (2021, January 4). Emirates Investment Bank: Short-Term and Long-Term Strategies. Retrieved from https://ivypanda.com/essays/emirates-investment-bank-short-term-and-long-term-strategies/

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"Emirates Investment Bank: Short-Term and Long-Term Strategies." IvyPanda, 4 Jan. 2021, ivypanda.com/essays/emirates-investment-bank-short-term-and-long-term-strategies/.

1. IvyPanda. "Emirates Investment Bank: Short-Term and Long-Term Strategies." January 4, 2021. https://ivypanda.com/essays/emirates-investment-bank-short-term-and-long-term-strategies/.


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IvyPanda. "Emirates Investment Bank: Short-Term and Long-Term Strategies." January 4, 2021. https://ivypanda.com/essays/emirates-investment-bank-short-term-and-long-term-strategies/.

References

IvyPanda. 2021. "Emirates Investment Bank: Short-Term and Long-Term Strategies." January 4, 2021. https://ivypanda.com/essays/emirates-investment-bank-short-term-and-long-term-strategies/.

References

IvyPanda. (2021) 'Emirates Investment Bank: Short-Term and Long-Term Strategies'. 4 January.

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