Strategic Planning in the UAE

Strategic Planning in the UAE References Griffin and Pustay, Chapter 11; Rugman and Collinson, Chapter 8 Topics addressed » » » » What is strategic...
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Strategic Planning in the UAE References Griffin and Pustay, Chapter 11; Rugman and Collinson, Chapter 8

Topics addressed

» » » »

What is strategic planning? SWOT Analysis as an analytical framework UAE strategic economic plans Key strategic economic goals

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Strategic Planning

Strategic planning is the process of evaluating an entity’s… » general operating ‘environment’ » their short, medium and longer term goals

… and then » formulating a plan for the given entity to achieve these goals

A strategic plan will address questions such as: » What do we do? For whom do we do it? How do we excel? (or how can we beat our competitors?) » What is our vision for our organization? In the medium run? (the next 3 to 5 years) In the long run? (a vision up to 20 years).

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Strategic Planning in the UAE

In the UAE, a wide range of entities formulate and implement such plans, examples include. These include: » UAE‐based MNCs » Federal government institutions, e.g. UAEU » Local government, e.g. Abu Dhabi Tourism Authority » ‘National’ government , e.g. Abu Dhabi Economic Vision 2030

For most such entities, the key longer term goal is: » How to compete internationally in a post‐oil environment

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Steps in Strategic Plan Formulation

1. Mission / vision statement

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Sets out the entity’s purpose and core values defines the desired future position in terms of strategic direction

2. Perform a SWOT analysis

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An external and internal environmental scan which identifies the internal Strengths and Weaknesses and external Opportunities and Threats to the entity.

3. Set strategic goals

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Strategic goals are the major objectives the given entity wants to accomplish as part of the overall strategic plan.

4. Develop tactical goals

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Tactical goals and plans usually involve middle managers and focus on the details of implementing the strategic goal e.g. Hiring staff, implementing infrastructural changes

5. Have a control framework

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Processes that ensure the entity is moving towards achieving its strategic goals. Control measures include : Regular monitoring of progress through targets, data collection etc.

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SWOT Analysis

SWOT is an acronym for » Strengths, Weaknesses, Opportunities, and Threats » A firm typically initiates its SWOT analysis by performing an external and internal environmental scan Internal scan » Strategic planners assess the internal environment, that is, the given entity’s strengths and weaknesses (the S and W in SWOT). E.g. what are the entity’s core strengths, key skills and resources – in what ways are its competitors more productive or innovative.

External scan » Strategic planners consider the external environment, they identify both opportunities (the O in SWOT) and threats (the T in SWOT) E.g. shrinking markets, increasing competition Strategic Planning in the UAE, MBA | 6

SWOT analytical framework

SWOT as a business analytical framework » Strengths and Weaknesses are internal, they are an assessment of the organization's resources, capabilities and core competencies: » Financial Issues, e.g. budget, Technological issues e.g. adoption of IT, Human resources e.g. employee training, Intangible resources e.g brand

» Opportunities and Threats consider the external environment, including the political, economic, social and technological trends. » List the business’s key internal strengths and weaknesses, external opportunities and threats in a SWOT matrix » Develop each point in the SWOT , providing evidence and then draw conclusions and make recommendations, e.g. how to defend against threats? How to exploit opportunities?

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Pros and Cons of SWOT

Some advantages of this framework include: » Simple ‐ Its implementation does not require technical knowledge and skills. » Flexible ‐ SWOT analysis allows the synthesis and integration of various types of information.

Some limitations of this framework include: » Subjective analysis – (compiler bias) therefore points must be backed up with evidence, data and information. » Static analysis – provides a static assessment at one point in time.

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SWOT Analysis

The SWOT analytical framework can be applied at a macro or micro level: 1.

At the national level e.g. A SWOT analysis of globalisation for the UAE

2.

At the local level e.g. A SWOT analysis for Al Ain

3.

At the sectorial level e.g. A SWOT analysis of the UAE’s banking sector

4.

At the company/institutional level e.g. A SWOT analysis for Emirates Airlines

See for example additional reading materials on Blackboard: SWOT-analysis-example-Emirates-airline.pdf

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Abu Dhabi’s ‘Economic Vision 2030’

The Government of Abu Dhabi recently published its long‐term strategic economic goal, it’s vision is to: “To achieve a safe and secure society and a dynamic, open

economy” The key organisations involved in the strategic plan are:

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Abu Dhabi’s Strategic Goals

» The UAE is actively seeking to diversify its economy. This will: » mean that the UAE will become more globally integrated » However: while this will create opportunities for some UAE businesses it will represent threats to others

Source: ABU DHABI STRATEGIC PLAN, 2030 Strategic Planning in the UAE, MBA | 11

Abu Dhabi’s Strategic Goals »

Abu Dhabi wants to achieve higher global competiveness rankings

For more details see additional reading materials on Blackboard: Abu Dhabi-Economic-Vision-2030.pdf

Source: gsec.abudhabi.ae, 2010 Strategic Planning in the UAE, MBA | 12

The ‘New’ Economy – Dubai

Economic development and diversification are cornerstones of the Dubai Strategic Plan 2015, a policy document that builds on the emirate's past successes and charts the course forward for this city, which is already the centre of business, trade, tourism and finance in the region... The Strategic Plan’s economic development goals build on these assets and seek to solidify Dubai’s region and global position... Dubai’s strongest sectors will lead this growth: travel and tourism, banking and finance, professional services, transport and logistics, trade industry and construction. Source: DUBAI STRATEGIC PLAN, 2015 Strategic Planning in the UAE, MBA | 13

Economic Outlook

ECONOMIC DIVERSIFICATION IS KEY

Both the Abu Dhabi and Dubai governments consider economic diversification to be a critical part of future economic planning This will (a) diversify future income streams and (b) provide the sorts of ‘private sector’ employment opportunities that Emiratis are more likely to consider as a viable alternative to a ‘government job’. Attracting more FDI and ‘technical know‐how’ will require an even greater engagement with the global economy and increasing the competitive advantage or attractiveness of the Emirates as a business destination. Nonetheless increased global competition will ‘threaten’ some inefficient UAE businesses – to survive they will need to be more productive and adopt the latest technologies. Strategic Planning in the UAE, MBA | 14