Analyzing BCG Matrices for Strategic Business Decisions

This report analyzes how businesses can utilize the BCG (Boston Consulting Group) Matrix as a strategic tool for achieving organizational objectives. The case study involves a fictional company that employs internal and external analysis, including Porter's Five Forces and SWOT, to identify strengths, weaknesses, opportunities, and threats. It discusses the company’s vision, mission, and objectives, using various management tools like PESTEL and the Strategic Position and Action Evaluation (SPACE) Matrix for long-term strategy formulation. The report also explores BCG matrix application in product portfolio management and strategic decision-making for business growth. Additionally, it addresses resolving department-specific issues and evaluating strategies to sustain organizational culture and effectiveness.

STRATEGIC
MANAGEMENT

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
.........................................................................................................................................................1
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
1 Identification of existing vision, objectives, mission and strategies of organisation...............2
2 Formulation of mission and vision statement for concerned bank..........................................3
3 SWOT matrix to analyse internal strength and weakness of the company..............................4
4 PESTLE analysis and development of environmental scanning key points............................5
5 BCG matrix and recommendation for long term objectives & specific strategies...................6
6 Implementation of recommendations.......................................................................................7
7 Issues faced by different departments of bank and recommendations to resolve themselves. 8
8 Recommend the procedures for evaluation and strategy review.............................................9
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

EXECUTIVE SUMMARY
This report is based on Dubai Islamic bank which was established on 1975 and
headquartered in Dubai. It is the only bank which have incorporated Islamic laws and principles.
This bank is the largest financial institution in UAE. This report covers vision, objectives,
mission and objectives of a company. It also covers external and internal analysis which impacts
the working and success of a company. Along with it, there are various issues faced by different
unit of a company recommendations are given to solve them.
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INTRODUCTION
Strategic management is described as the continuous analysis, planning, assessment and
monitoring of all those aspects which are required by a company to achieve its organisational
aims and targets. Changing needs of customers, advanced technology and emerging trends forces
a firm to implement strategic decisions (Barney, 2012). Strategic management assists the
company in acknowledging their present situation in a desirable manner. This present report is
written in context of Dubai Islamic Bank which is an UAE based Islamic bank headquartered in
Dubai. This report covers mission, vision, strategies and objectives of the bank. This research
also covers internal and external factors which impacts the working of bank in a considerable
way. Also, BCG matrix is prepared to acknowledge long term objectives. At last, issues faced by
various departments of company are discussed and recommendations are given to resolve those
issues.
MAIN BODY
1 Identification of existing vision, objectives, mission and strategies of organisation
Dubai Islamic bank was established in 1975 and it is the largest bank in UAE by public
joint stokes and assets. At present bank is successfully operating around 90 branches within
UAE. Major goal of this bank is to develop Islamic finance as a norm other than being an
alternative (Eden and Ackermann, 2013). Every organisation has some vision, mission and
strategies which helps them to achieve their organisational goals and objectives. In respect of
DIB, existing mission, vision, strategies and objectives are mentioned below:
Vision: The vision of a firm help employees in acknowledging the values, purpose and
goals of a company. Existing vision of Dubai Islamic bank is “ To be one of the most progressive
and normed financial institution around the globe.”
Mission: Mission of a company emphasize and focuses on the today's requirement and
achievements. In context of DIB, current Mission of company is to “ sustain and improve the
position of bank as leading Islamic bank around globe by providing unsurpassed customer
services, improving employee engagement, growth and innovation.
Strategies: To sustain a firm position within market and to gain competitive advantage
over rival companies, it is vital for every organisation to formulate and implement effective
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strategies which will assists the company in standing against competitors. Existing strategies of
Dubai Islamic bank are mentioned below:
 Formulation of a excellent service culture so that DIB can became best service provider
around globe.
 Extending international presence of company by developing expansionary data which
majorly focuses on Asia, Africa, Europe and Middle-East.
Objectives: Every company have certain aims and objectives. To achieve them manager
of a company formulate different policies and strategies. These objectives provide guidance to
employees regarding their business activities (Godoy and Naidich, 2012). Existing objectives of
Dubai Islamic bank are mentioned below:
 Expansion of core Islamic franchise by emphasizing on customer acquisition, cross-sell,
penetration and innovation.
 Increment in number of corporate accounts to 10% by the end of 6 months.
2 Formulation of mission and vision statement for concerned bank
A vision specifies the desired and expected future growth of a company. Vision direct
employees in right direction due to which it become easy for company to perform its business
operations and activities by appropriate means. In this respect, manager in Dubai Islamic Bank
have decided to expand their vision so that better outcomes can be achieved without facing any
complexity. New vision of bank is to “ setting appropriate standards by achieving excellence in
satisfying customers, enhancing employee's engagement, shareholder value and social
responsibility while emerging as a pioneer in financial institutions.”
The mission statement specifies the business of a company and its objectives along with
the approaches to attain those objectives. New mission of company is to offer personalised,
competitive and effective financial services to the customers along with implementing sound
policies which will benefits staff, customers and stake holders.
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3 SWOT matrix to analyse internal strength and weakness of the company
SWOT analysis is a technique which helps an organisation in evaluating its competitive
position within market by identifying the weaknesses, opportunities, strengths and threats in an
appropriate manner. It is an assessment model which specifies a company what can be done or
what should be avoided to sustain a firm position within market place (Hitt, Ireland and
Hoskisson, 2012). In respect with DIB, Strength-weaknesses-opportunities-threats are
mentioned below:
Strengths
 Bank is named as one of the best
Islamic bank within UAE by eminent
magazine named Banker Middle East.
 Bank is very proactive in formulating
alliances and partnerships at national &
international level due to which
customers are highly satisfied with the
services.
 Dubai Islamic bank has strong
capitalisation and financial stability.
Weaknesses
 Dubai Islamic bank has limited its
revenue and capital generation
opportunities as their operations are
operated within a limited region.
 Present lending profile of bank is not
good and denotes high impairment
charges due to which bank may face
heavy losses in future.
Opportunities
 Islamic finance and banking is
considered as one of the fastest
growing sector within economy. Due to
which it shows high futuristic growth
opportunities.
 Launching of new financial services
will assists the bank in sustaining a firm
position within highly competitive
atmosphere.
Threats
 Fluctuation in bank and interest rate
can be a potential threat to the growth
of company.
 Due to global financial crisis,
regulations and financial policies
changes often which can be a cause of
concern for bank.
 Other financial institutions like Abu
Dhabi Islamic bank, Emirates NBD
bank are giving tough competition to
DIB.
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4 PESTLE analysis and development of environmental scanning key points
It is a technique which is used by manager of a company to monitor and analyse the
external environmental factors which can have a considerable impact on the working of an
organisation. PESTLE is abbreviated as political, economic, social, technological, legal and
environmental. This analysis helps in examining these factors in a deep and desirable manner. In
respect with Dubai Islamic Bank, PESTLE analysis is carried out below:
 Political: United Arab emirates is situated on Arabic peninsula at south of Persian gulf.
Country is a constitutional federation formed by seven emirates. Dubai is considered as
the financial capital of the country and Sheikh Mohammed Bin Rashid Al Maktoum
which is ruler of the country is also the prime minister and vice- president of nation. Each
emirate of UAE have their own local and federal government & favours only a little
flexibility in rules. In case of Dubai, regulations and policies are flexible for local and
expatriate citizens due to which different innovative projects are taking place there and
Dubai has emerged as a global city (Keupp, Palmié and Gassmann, 2012). In case of
DIB, it can be said that the manager of Bank needs to formulate policies and regulations
in accordance with the rules specified by the ruler. If the words of ruler will not be
followed, Bank authorities may have to pay heavy fines and penalties which can also
results in business fail.
 Economical: Dubai is very rich in gas and oil resources and produces around 250,000 oil
barrels in a day and high volume of gas form offshore fields. In gas revenues of UAE,
Dubai has a share of 2%. City is a global financial centre and ranks at 37 within best 50
financial cities. Dubai is a major hub for finance and IT sector. Dubai financial market
deals with both foreign and local bonds & securities. Due to this, there are wide
opportunities for Dubai Islamic bank to expand its presence at global level without facing
any major complexities. Country is well efficient in financial services due to which
citizens and other customers will feel secure while investing their money within the bank.
 Social: In case of social factors associated with Dubai, religion is an essential and most
important matter for the citizens of the people. Due to which religion posses a
considerable impact on the society of Dubai. On example in this regard can be the
clothing pattern of women. Female natives in Dubai are not allowed to wear those clothes
which exposes their skin and if some people frauds other people in terms of money, they
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can be executed publicly. Other than this, due to globalisation Dubai has become amix of
many cultures and people prefer comfortable lifestyle there. If DIB wants to sustain a
firm position within region, manager of company require to formulate policies while
considering the social aspects of people. Otherwise, bank will not be able to operate in
area.
 Technological: People in Dubai are technologically advanced and tech-savvy due to
which all the companies and financial institutions leverage technology across Dubai. In
this respect, DIB needs to be technologically updated so that it can easily gain
competitive advantage over rival companies. If manager of company will avoid
technological advancement, people will start choosing other financial institutions over
DIB.
 Legal: In case of Dubai, taking about laws does not make any big difference as there are
limited legal rules within Dubai. Their legal system is based on the basis of civil law
principles and influenced by Shari'a law. Basic laws followed within Dubai are civil
procedure, intellectual property, maritime, employment law, industrial banking etc. UAE
federal constitution allow Dubai to have its own judicial system and courts of Dubai are
independent to take their decisions. Manager in DIB needs to consider legal aspects
before formulating and implementing different policies for bank. In case, if legal aspects
are ignored it can results in heavy financial losses (Killen and et. al., 2012).
 Environmental: Dubai has a dry climate and hot in nature due to which productivity of
products and services became slower. Carrying out farming is very hard. But as Dubai is
near around coastal area, one advantage is that it is easy for city to carry out sea trade.
Dubai uses Environmental impact assessment program which is a scientific technique to
evaluate negative or positive impacts of development project on environment. DIB needs
to sanction loans only for those projects which are not haring nature in any way. In case,
if these kinds of projects require capital, manager needs to avoid them unless they
changes their plans which were harming nature.
5 BCG matrix and recommendation for long term objectives & specific strategies
BCG matrix is a tool which assists organisations in allocating their resources, brand
marketing, strategic management and product management. In respect with DIB, BCG matrix is
specified below:
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 Cash cow: This condition emerges when an organisation posses a high market share but
industry growth is slow. These companies have cash generating capabilities but
considered as boring in a mature market.
 Dogs: These companies have less market shares and operates in a industry which have
slow growth. These kinds of institutions are barely sufficient to manage their cash flows.
In terms of finance, these companies are useless.
 Question marks: These companies are also considered as wild cat units. These
businesses also operates in low market share but works in high growth market. They have
potential to become stars but if these companies will not pay attention they can be
changed into dogs due to which they may need to face heavy loss of revenues.
 Stars: These businesses works in fast growing industries and posses high market shares.
These companies require large funding to manage their business operations and sustain a
steady growth rate. If stars will remain niche leader then they will become cash cows
(Priem, Li and Carr, 2012).
As per the scenario, at present DIB is a question mark as the region in which bank is
operation high market growth but due to recent financial crisis market shares are low. If bank
management will formulate appropriate strategies they can be transformed into stars which
posses high market growth and high market shares.
In case of DIB, recommendations to achieve long term objectives and strategies to
achieve growth share matrix are mentioned below:
 It is recommended to manager of Dubai Islamic bank to build and initiate strengthening
of strategic alliances with sovereign entities, financial institutions and important
stakeholders. This will benefit the bank in maximising their Islamic finance opportunities
and leadership abilities within the region especially UAE.
 Another recommendation for DIB to achieve their objectives properly is to reduce
customer complaints by 50% within 2 months by incorporating a quality control process
which will properly manage customer data.
6 Implementation of recommendations
To implement above suggested recommendations, manager in DIB can adopt different
solutions. Some of these solutions are mentioned below:
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 To decrease the issues and grievances of customers, manager of the bank needs to
provide appropriate training to employees so that they can resolve their problems in an
efficient manner and timely basis.
 Orientation sessions must be provided to employees so that they can appropriately use
quality control process (Renz, 2016). This will allow them to perform complex tasks in a
simplified and easy manner due to which their working potential will also enhance.
 To enhance strategic alliances with other organisations and institutions, bank
management can hold different meetings and conferences where various other institutes
will discuss their opinions and expected collaborations in an appropriate manner.
7 Issues faced by different departments of bank and recommendations to resolve themselves
Different departments associated with Dubai Islamic Bank are marketing, management,
CIS, R&D and finance. There are some issues which are faced by these departments which are
specified below:
 Management: This department of bank formulates effective planning, policies and
regulations which will benefit the bank in achieving their objectives and targets in an
efficient manner. Aspects performed by this department are planning, staffing,
controlling, directing and organising. Form some time this department of bank is facing
some issues in directing the employees in right direction. Due to which working potential
of employees got impacted. To resolve this issue, it is recommended that members of this
department needs to build strong communication skills with employees. Also, they need
to monitor and encourage them so that they can deliver their best performance.
 Marketing: It is the responsibility of marketing department to sell services to people
which are offered by bank management. Goods and services in case of DIB can be
opening of saving account, fixed deposit account, fund transfer, saving of valuables,
leasing of equipments etc. Issue faced by marketing department is that employees
working there are not able to properly recognise the needs of customers due to which
revenues of bank has suffered. To overcome this problem, manager needs to analyses
economic condition of market in a desired way so that policies can be formulate in
accordance with the need of customers (Vogel and Güttel, 2013).
 Finance: It is the responsibility of financial department of bank to manage all the capital,
funds, loans of company. It is this department which takes and receives money from
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customers according to their requirements. The issue faced by this department is that
during work load, employees are not capable to perform their functions efficiently due to
which mismanagement within work takes place. To resolve this issues, finance manager
of bank requires to prepare a proper schedule regarding job duties so that all the
employees can perform their duties accordingly.
8 Recommend the procedures for evaluation and strategy review
Below is mentioned the procedure and process for strategy review and evaluation:
 One way is to set a specific benchmark for desired performance. In this aspect, the
strategists answer questions like what benchmark to set and how to set it.
 Another way yo review strategy which can be used by DIB is to measure the overall
performance of Bank on timely basis. If appropriate means are used then measuring
performance becomes an easier task.
 Other than this to review strategy in an effective manner, company need to analyse
market conditions in a desired way due to which it will become easy to formulate and
implement strategies according to the requirement of customers (Ward, 2012).
CONCLUSION
From above mentioned report, it can be concluded that vision, mission, objectives and
strategies of a company plays a vital role in achieving organisational targets. Internal and
external analysis helps in specifying the factors which can impact the business in desirable
manner. BCG matrices will help the organisation in achieving their long term objectives and
strategies. There are different issues which can be faced by different department of an
organisation. Resolving them will helps in sustaining an appropriate working culture.
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REFERENCES
Books and Journals
Barney, J. B., 2012. Purchasing, supply chain management and sustained competitive advantage:
The relevance of resource‐based theory. Journal of supply chain management. 48(2).
pp.3-6.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Godoy, M. C. and Naidich, D. P., 2012. Overview and strategic management of subsolid
pulmonary nodules. Journal of thoracic imaging. 27(4). pp.240-248.
Hitt, M. A., Ireland, R. D. and Hoskisson, R. E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
Keupp, M. M., Palmié, M. and Gassmann, O., 2012. The strategic management of innovation: A
systematic review and paths for future research. International Journal of Management
Reviews. 14(4). pp.367-390.
Killen, C. P. and et. al., 2012. Advancing project and portfolio management research: Applying
strategic management theories. International Journal of Project Management. 30(5).
pp.525-538.
Priem, R. L., Li, S. and Carr, J. C., 2012. Insights and new directions from demand-side
approaches to technology innovation, entrepreneurship, and strategic management
research. Journal of management. 38(1). pp.346-374.
Renz, D. O., 2016. The Jossey-Bass handbook of nonprofit leadership and management. John
Wiley & Sons.
Vogel, R. and Güttel, W. H., 2013. The dynamic capability view in strategic management: A
bibliometric review. International Journal of Management Reviews. 15(4). pp.426-446.
Ward, K., 2012. Strategic management accounting. Routledge.
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