Strategic Analysis and Recommendations: United Finance Company SAOG

This management report delivers a strategic analysis of United Finance Company SAOG, a financial services provider in Oman. It begins by examining the company's mission, vision, objectives, and core competencies, followed by an assessment of factors crucial for effective strategic planning. The report then delves into the formulation of a new strategy, employing SWOT, Value Chain, PESTLE, and Porter's Five Forces analyses. It evaluates the significance of stakeholder analysis and proposes a new strategy for the organization. Further, the report addresses strategy formulation, considering alternative strategies related to market entry, growth, and retrenchment, and selects an appropriate strategy. Finally, it outlines the roles and responsibilities in strategic implementation, estimates resource requirements, and highlights the contribution of SMART targets for successful implementation, concluding with recommendations and theoretical frameworks to underpin the analysis.

Strategic Plans
of United
Finance
Company SAOG
1

Table of Contents
INTRODUCTION...........................................................................................................................3
1.1 Business mission, vision, objectives and core competencies. .........................................3
1.2 Factors that have to be considered when functioning strategic plans..............................4
1.3 Effectiveness of techniques used when developing strategic business plan....................5
TASK 2- Formulating a new strategy .............................................................................................6
2.1 SWOT analysis and Value Chain Analysis......................................................................6
2.2 PESTLE analysis and Porter's Five Forces analysis .......................................................7
2.3 Significance of company's stakeholders analysis when formulating new strategy..........8
2.4 New strategy for the organisation...................................................................................10
TASK 3 – Strategy Formulation....................................................................................................10
3.1 Appropriateness of alternatives strategies related to market entry, substantive growth,
limited growth or retrenchment............................................................................................10
3.2 Selection of a strategy....................................................................................................11
TASK 4- Implementing strategy....................................................................................................12
4.1 Roles and responsibilities of personnel who are charged with strategic implementation.12
4.2 Estimated resource requirement for implementing new strategy...................................12
4.3 Contribution of SMART targets for achievement of strategic implementation.............13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
2

3

INTRODUCTION
The strategy of business can be defined as a strategy that sets out to achieve its desired
ends i.e. goals. Further, it can be simply described as a long term business planning. It can also
be explained as the course of action or collection of decisions which assist the entrepreneurs in
attaining specific business objectives. In addition, strategy is considered important as it is not
possible to anticipate the future. As, without an appropriate prediction, the companies must be
prepared to deal with the uncertain events which constitute the business environment. Strategy
by the organisations is developed to take into consideration the probable behaviour of customers
and competitors. The major purpose is to achieve effectiveness, mobilising resources, meeting
challenges and threats and competitive advantage (Bull, Jobstvogt and Carter-Silk, 2016).
The chosen organisation is United Finance Company SAOG, that provides vehicle and
equipments financing in the Sultanate of Oman. The firm has been serving Omani business since
1997, and is listed in Muscat Securities Market. The assignment aim is to produce a management
report that provides a strategic analysis of United Finance Company that is operating in Gulf
region. The report will examine and critically evaluate the present strategy of the firm. Further,
recommendations are need to be made based on the analysis, and outline & evaluate a range of
options and selecting the most appropriate one for implementation. This report is supposed to
use some theoretical models, framework and theories in order to underpin the analysis.
TASK 1 – Strategic Planning process
1.1 Business mission, vision, objectives and core competencies.
United Finance Company SAOG, is an Oman based shareholding public company that
offers leasing and financial services solutions. A number of goods both conventional and non-
conventional are offered by this organisation, including corporate deposits and Banc assurance.
Moreover, the company is principally engaged in the provision of vehicle and equipment
financing, composite loans, bridge loans, debt factoring, hire purchase & leasing in Sultanate of
Oman. The company run its branches in Firaq, soahr, Ibra, Ibri, and Mawelah (Goetsch and
Davis, 2014).
Historically, the organisation came into existence and registered as a joint stock
Company on January 1995. Further, 40% of the Company's shares are owned by the public
presently, whereas the founder shareholders own 60%. The present shareholders of the firm are
4

MENA Infrastructure Fund, International Finance Corporation, MGEC Holding Limited, and
Ministry of Defence Pension Fund of Oman. The company's key shareholders include Oman
hotels & Tourism company SAOG and First National LLC, including Global Holding Financial
Investment Company and Al Saud Company Ltd - Ubar Financial Investment.
Mission and vision statement of United Finance Company:
The company states that, it is their aim to be constantly the first choice and the best
finance company for their shareholders and the community. Further, it was also added that they
want to bring a brighter future for all (Dawes, 2015).
Their mission is to create Growth by:
 Giving timely and customised financial solutions to individuals, corporate and small
medium sized enterprises.
 Partnering with their business associates for mutual growth.
Core competencies:
It has been discovered that the United Finance Company is the largest of the Six finance
firms operating in Oman with a market share of approximately 25% according to the company's
website. It was also found that the firm has established a niche market for itself in small and
medium organisation financing, in the last one decade.
1.2 Factors that have to be considered when functioning strategic plans.
Developing successful strategic plans is of utmost importance for almost all type of
organisations that are operating at a global level. These strategies are apparent to fulfil the
undertaken vision of the organisations like United finance company (Holosko, Winkel, Crandall
and Briggs, 2015). Although, a successful attainment of these strategic plans depends upon the
consideration of few important factors that are as stated below- Engagement- This is on considering a well-known fact which states planning to be a
process in which all staff members of the cited firm should be involved thoroughly. This
is proven to generate some added inputs to further build their commitment level. It is also
significant to engage the workers while planning a strategy where it also provides a
successful direction to the firm. In addition to this, timely input by the employees is
expected to provide a thorough insight into any expected issues, concerns, opportunities
or challenges, etc., for taking suitable actions.
5

 Communication- It is yet another concerning agenda to make a successful strategic plan
with implementation of a bottom up plan supported to undertake top down approach of
communication. This will lead to a clear set of interaction among all involved parties,
keeping them mindful about the implementation of a strategic plan. Innovation- This is basically to drive the strategies related to new service deliveries
where many strategic plans often need an inventive approach to become successful and
its execution is required to be efficient enough to bring productive outcomes. Project Management- It is after planning a strategy together, the quoted entity is required
to refer the 2 critical elements of project management for its successful accomplishment.
first is to ascertain those projects that are needed to assure success while execution.
Second is to create a ranking of all aforesaid projects to be completed with proper
arrangement of resources required. This is basically to ensure any high priority project
and accomplish it on time (Flouris and Oswald, 2016).
 Culture- This is referred to be yet another pivotal aspect for effectively applying a
strategic plan and bring successful outcomes from it. Herein, the responsible bodies of
United finance company are required to maintain a positive culture at the workplace,
reflecting an optimistic attitude and belief of the employees towards bringing change.
1.3 Effectiveness of techniques used when developing strategic business plan.
A strategic business plan is of utmost importance for the entities like United finance
company to attain their stipulated goals and objectives on time. However, it also requires the
adoption of correct tools and measures to plan and usually involves-
· Benchmarking- This is a foremost tool that is commonly used with the purpose of
comparing one’s own metrics with that to the existing contenders in the marketplace. Its vital
effectiveness stands in terms of provisioning contending solutions to the business to continue
prospering in the market. It is therefore proven to help the cited entity in making sound decisions
and get profitable outcomes at the end (Galbraith, 2014).
· Planning budget- This is generally used as a principle tool of management to plan,
monitor and control the finances. It thereby results in estimation of revenues, costs as well as
resources within a specified time period for the speculation of organization’s financial condition
6

in the future. It is thus effective in terms of making considerate decisions regarding future
investments and profits from it.
· Business models- It is mainly in context to use such effective models that can be applied
by the quoted firm to assess its position. This involves the application of models like SWOT,
Pestle and Porter’s 5 forces, etc. By which, it can conduct evaluation of both its internal and
external capabilities by together acknowledging its viable position in the market among the
contenders (Rosemann and vom Brocke, 2015).
TASK 2- Formulating a new strategy
2.1 SWOT analysis and Value Chain Analysis.
United Finance company SAOG, the company's profile and SWOT analysis involves in
depth information and data regarding the firm and its functions. SWOT analysis is referred to a
framework utilised to evaluate the firm's competitive position by recognising its strengths,
weaknesses, opportunities and threads. This analysis will help United Finance to measure what it
can do and cannot do, & its possible opportunities and threats.
Strengths of the company:
Oman is said to be distinct for its strategic location, by virtue of which it controls the
most crucial financing companies, one of them is United Finance company. Broad range of
financing products are offered by this company, with corporate deposits and Banc assurance. The
company has always believed in implementing creativity to its performance & work. It creates
the products that does not exist and make alterations in existing product if necessary. The
company has earned reputation as a finance firm in Oman.
Weaknesses :
People state that, United Finance can improve for more better services. The reason
behind this is that, when compared to other companies in the industry, United Finance has a
higher attribution rate and have to spend a lot more in comparison to its rivals. Apart from this,
the company is also not good at product forecasting that leads to missed opportunities (Morden,
2016).
Opportunities :
7

An opportunity is provided by new technology to the organisation to exercise pricing
strategy in the new market. This will further, allow the firm to keep its loyal consumers with
great service (Leonidou, Fotiadis, and Katsikeas, 2018).
Threats :
Threat to United Finance company is its competitor i.e. Oman Orix Leasing Company
that recorded the highest business volumes in its history. Other rivals to this company are; Al
Omaniya Finanicial Services, Muscat Finance, National finance, and Taageer finance.
Value chain analysis:
An entire range of activities is known as value chain that includes design, production
marketing and distribution. This analysis is conducted by the businesses to bring a product or
service from concept to deliver. This concept of value chain was first introduced by Porter to
show firms that where they stand in competition in the present market. Its key elements are;
inbound logistics, production, outbound logistics, marketing & sales, and service.
2.2 PESTLE analysis and Porter's Five Forces analysis
PESTLE analysis
 Political factors :- United Finance company which is a non banking financial firm, have
demanded income tax benefit on provisioning, similar to banks. A significant role is
played by political factors in determining the factors that can affect United Finance
company’s long term profitability in a certain country or market.
 Economic :- it includes forces such as; savings rate, foreign exchange rate, inflation rate
and economic cycle discover the aggregate demand and aggregate investment in an
economy. Basically the financial sector is inseparably connected with economy, as they
strongly influence each other.
 Social factors :- it is highly crucial for United Financial to consider social factors that
exist within countries it operates. It must take into consideration, about what customers
want, desire, and expect and how it can be provided on these forces to remain
competitive (Aithal, 2016).
 Technological factors :- these factors within financial sector are most crucial one because
of the emergence of mobile financing apps and modernised payment modes. Just with
one click financial payments can be made easily. Therefore, it is a key for United
financial company to have competitive advantage.
8

 Legal factors :- all the financial companies operate under strict laws, and it is supreme
that they are followed to. Just for example, rules within sector makes sure sensitive
consumer information is carefully managed (Nanduri, 2018).
 Environmental :- this force of macro environment is becoming increasingly important
across all sectors. Prior to enter into new market or beginning with a new business in
current market United Finance should carefully assess the ecological standards
Porter’s Five Forces
 Threats to new entry :- new entrance in financial sector brings innovation, new ways of
doing things and place pressure on discover financial service through lower pricing
strategy, decreasing costs, & providing new value to the customers.
 Bargaining power of suppliers :- raw material is purchased from various companies by
United finance company. Suppliers that exist in the market can reduce the margin
discover financial service can earn in the market.
 Bargaining power of Buyers :- it has been observed that customers are demanding a lot
and they prefer to buy the best offerings available by spending the minimal price as
possible.
 Competitors :- if competitors between the current marketers in financial sector is intense
then it will influence down the price and reduces the overall profitability of United
Finance company (Burns, 2016).
 Threats of substitute products :- United company’s profitability may suffer, if a new
product or service similar to the company meets customer’s needs.
2.3 Significance of company's stakeholders analysis when formulating new strategy.
Stakeholders, are individuals, group or organisation that are involved with the company.
These include creditors, workers, directors, shareholders, unions, government, suppliers, etc., all
the called as stakeholders of the firm. The technique which is utilised to identify the people who
support business activities is known as stakeholders analysis. It has been observed that, in recent
years, in the global competitive world it can be difficult for small establishments to succeed and
survive despite the globalization & appearance of large multinational challengers (Niederwieser,
Baldomero and Iida, 2016).
Significance of stakeholders analysis for formulating new strategy are:
 Receive crucial opinions from stakeholders.
9

 Acquire support from compelling stakeholders.
 Learn their nature by making interaction.
 Able to calculate people's reaction regarding their business.
Below are the steps of stakeholders analysis for United Finance company:
 First step:- the first step in the analysis is to identify people who are engaged and
influenced by its business operations.
 Second step :- to recognise the power, interest and influence of stakeholders is the next
step of this analysis. For meeting this, United finance need to build a stakeholder grid.
High
Keep satisfied
Manage closely
Monitor Keep informed
Low Low Interest High
Here in this grid, High power, high interest stakeholders make the superior effort to satisfy,
determine strategies and promote commodity.
High power, low interest stakeholders also impact the strategies but they become uninterested
with the company early (Pham, Pham and Pham, 2016).
Lower power, high interested stakeholders have not much impact over the firm so that United
finance should give minimal efforts to monitor them.
 Third step :- in this final step of stakeholders analysis is to develop a good understanding
of the most crucial stakeholders for the organisation in order to receive their feedback and
enough support.
2.4 New strategy for the organisation.
The major challenge for business strategy is to figure out a way of attaining a sustainable
competitive advantage over the other competitive commodities and companies in the existing
10
Power

market. An advantage over rivalries gained by offering customers greater value is known as
competitive advantage, either by means of lower prices or by offering greater benefits & services
that justifies higher pricing. Below are some strategic decisions that United Finance company
may adapt to achieve growth in the business:
 Decision about which market to enter :- this strategy states that, decision by the company
to enter a new market overseas through various modes of entering. United Finance can
move to United Arab Emirates by the way of doing merger. Merger means when two
companies combine together and act as a single firm. As per growth matrix this decision
is also known as diversification strategy which means company progress into new
business by developing and designing new products for new market (Peng, 2017).
 Decision regarding existing product and service :- this is also known as product
development strategy as per Anoff's Growth Matrix model. Under this strategy company
focuses on the existing product and services and makes efforts to improve them, in order
to gain competitive advantage.
 Growing a new business :- this was of competitive advantage is also known as market
penetration. In the firm seeks to attain growth with current product and market segments,
with the objective to increase market share.
TASK 3 – Strategy Formulation
3.1 Appropriateness of alternatives strategies related to market entry, substantive growth, limited
growth or retrenchment
Market entry strategy :- in this strategy there are numerous modes of entering into the
new market. From some of these one has been already explained above i.e. merger. Others are:
 Organic growth :- in this, when the firm conduct development over its own organisation
as the same way it had done at the starting, it is known as organic growth.
 Acquisition :- this happens when a company buys 100% ownership of another firm.
 Licensing :- it is a design through which a parent firm enables another company to utilise
its trademark in exchange of a particular fees.
Substantial growth
 Related diversification :- diversification made by the company that is closely associated
to the product line, it is called as related diversification.
11

 Horizontal integration :- when various firms engaged in businesses at the same stage of
production in same or different industries is known as horizontal integration.
Limited Growth
 Market development :- it is the strategy under which a firm offers existing product or
service in a different marketplace.
Retrenchment
 Turnaround :- this strategy is used to convert an underperforming organisation to a
profitable company. This strategy is implemented on sick or distressed firm in order to
resolve financial crisis and enhance its financial performance.
 Liquidation :- when an entity reaches its large stage of its life cycle, this strategy is taken
into consideration. With the help of the strategy firm closes down its business and sells
all its worthy assets & return from those assets is used to pay creditors.
3.2 Selection of a strategy.
The main objective of United Finance company is to survive in the competitive business
world and success of the company. To accomplish this aim, United finance should go for
product development strategy i.e. decision about product and services. This strategy is justified
as appropriate as the firm's strengths are associated to its particular consumers instead to the
specific product itself. In this situation company can leverage its strengths by developing a new
product or making changes in the existing buyers. This strategy is based on developing a new
commodity or modifying the current services or products, so that they appear new and offering
those products to the current market (Scholes, 2015). It has been discovered that the financial
industry is quite adept at making new products and effectively merchandising them to the
masses. However, it is obvious that creating a new financial product requires a greater level of
risk as compared with manufacturing a widget.
The first step that United Finance company must take in developing a new financial
product is to conceptualize it. The thought of creating a new commodity can come from various
sources, such as; client demand or a third party. The next comes the product development, which
states that coming with a product idea is one thing, but creating a new product is another thing.
At this step a commodity development team has to convert their idea into a tangible product that
can be sold.
12

TASK 4- Implementing strategy
4.1 Roles and responsibilities of personnel who are charged with strategic implementation.
A person is required for implementation of a strategy who can lead over other personnel and
divide work among workers based on their roles and responsibilities in the firm (Yin, 2016). The
workers of United Finance who are responsible for application of the strategy must have some
roles and obligations. Furthermore, it has been discovered that for applying effective strategy
these roles and obligations of staff members should have to be clearly described. CEO of the
organisation is accountable for communicating strategy related details to workers and other
parties. Apart from this, another responsibility of him is to direct strategic planning. Moreover, in
United Finance company’s case, its people are charged for strategy application have
responsibility to keep proper record. Therefore, it is very essential for strategic planning and
assist to neglect legal accountability. It is also crucial to maintain ethical & legal standards,
which is another responsibility of workers for implementation of strategy (Keyes, 2016).
 Allocation of resources :- for applying tactics in the United Finance company, personnel
are obliged for measuring the proper allocation of resources.
 Communication :- here the personnel with the help of communication makes sure that the
objectives are clearly defined to the staff.
4.2 Estimated resource requirement for implementing new strategy.
There are simply three types of resources that are required by United Finance company are:
 Human resources :- for successful application of new strategy, the United Finance must
take into consideration the human resources. The reason behind this is that, these are
termed as key to apply any strategy as well as organisation’s performance relies on much
more in HR. given strategy for the company, its requires the human resources who have
sufficient technical knowledge and productivity (Sia, Soh and Weill, 201).
 Financial resources :- financial resources for United Finance means that how company
finance their strategy to make it more successful. It has been discovered that, finance can
be done in two ways i.e. debt or equity. The most preferable is equity as there is no
interest bearing cost on principle.
13

 Time and material resources :- for implementation of any strategy there is a particular
time limit and there is some material required for application of the project.
4.3 Contribution of SMART targets for achievement of strategic implementation.
In order to get where United Finance company desires to go on life, it is necessary to
decide in advance how they can reach there. Goals are specified signposts on the was to the
future, as they serve as a road may to personal career and financial success.
 Specific :- the first thing company needs to look is that, is their goal is specific.
Becoming rich is not a goal, rather a desire or a wish. So, for a goal to be powerful and
more significantly achievable, it requires to have some features. For example, United
company’s goal is to make brighter future for all, so company needs to maximise the
value of the company (Haughey, 2015).
 Measurable :- when goals are set, then company needs to begin working towards
achieving it. This will always make them feel good to look how much they have
accomplished.
 Attainable :- there are many companies or personnel who make mistakes of setting goals
that are too inflexible, where any unexpected event can throw the goal off course and
abolish the goal achiever’s motivation to keep going.
 Relevant :- in this case, company’s financial goals needs to be realistic. Set their
priorities, learn company’s capabilities and needs to stretch a little to obtain the extra
edge.
 Time line:- for United Finance company, setting a specific, adjustable, realistic, goal is
good but it is all waste without a time line, as it will be tough to measure.
Therefore, this procedure of setting goals is a practice that will provide company incredible in-
depth into itself and the things they value. Company will be able to see its aspirations taking
shape, becoming particular intentions that will assist organisation to take steps towards their goal
(SMART goals, 2018).
CONCLUSION
From the overall report it has been concluded that, an effective application of the strategy
relies upon proper analysis of macro and micro environment. United finance company's main
strategy is to offer heavy equipments and commercial vehicles, financing of receivables and
14

leasing as well as bill discounting bancassurance. In this report, it has been recommended to the
company that it should focus on its existing services of providing finance services likewise to
banks with two major differences that are; the company do not hold a banking license and they
cannot accept monitory deposits from individual consumers. Apart from this, United Finance can
make use of product development strategy in its target market in order to run an effective
business internationally and attract its buyers. The company acquires an asset base of OMR 100
million, more than 12000 customers, seven branches and 160 workers. Moreover, through this
strategy company can earn a reputation as a finance firm that can be counted on to provide,
offering customised solutions in corporate finance or developing an appropriate deal for the
customers.
15

REFERENCES
Bull, J. W., Jobstvogt, N. and Carter-Silk, E., 2016. Strengths, Weaknesses, Opportunities and
Threats: A SWOT analysis of the ecosystem services framework. Ecosystem Services. 17.
pp.99-111.
Dawes, J., 2018. The Ansoff Matrix: A Legendary Tool, But with Two Logical Problems.
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review. 24(1). pp.32-45.
Galbraith, J. R., 2014. Designing organizations. Jossey-Bass & Pfeiffer Imprints, Wiley,.
Leonidou, L. C., Fotiadis, T. A. and Katsikeas, C.S., 2015. Environmentally friendly export
business strategy: Its determinants and effects on competitive advantage and
performance. International Business Review. 24(5). pp.798-811.
Nanduri, V. S., 2018. How the participants experienced a coaching intervention conducted
during company restructure and retrenchment: a qualitative research study using
interpretative phenomenological analysis. Coaching: An International Journal of Theory,
Research and Practice. 11(2). pp.144-154.
Niederwieser, D., Baldomero, H. and Iida, M., 2016. Hematopoietic stem cell transplantation
activity worldwide in 2012 and a SWOT analysis of the Worldwide Network for Blood and
Marrow Transplantation Group including the global survey. Bone marrow
transplantation. 51(6). p.778.
Peng, M. W., 2017. Cultures, institutions, and strategic choices: Toward an institutional
perspective on business strategy. The Blackwell handbook of cross‐cultural management,
pp.52-66.
Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
Sia, S. K., Soh, C. and Weill, P., 2016. How DBS Bank Pursued a Digital Business Strategy. MIS
Quarterly Executive. 15(2).
Yin, N., 2016. Application of AHP-Ansoff matrix analysis in business diversification: The case
of Evergrande Group. In MATEC Web of Conferences (Vol. 44, p. 01006). EDP Sciences.
SMART goals. 2018. [Online]. Available on: <
https://www.yourcoach.be/en/coaching-tools/smart-goal-setting.php>
16

Goetsch, D. L. and Davis, S. B., 2014. Quality management for organizational excellence.
Upper Saddle River, NJ: pearson.
Holosko, M. J., Winkel, M., Crandall, C. and Briggs, H., 2015. A content analysis of mission
statements of our top 50 schools of social work. Journal of Social Work Education. 51(2).
pp.222-236.
Flouris, T.G. and Oswald, S.L., 2016. Designing and executing strategy in aviation management.
Routledge.
Rosemann, M. and vom Brocke, J., 2015. The six core elements of business process
management. In Handbook on business process management. 1 (pp. 105-122). Springer,
Berlin, Heidelberg.
Morden, T., 2016. Principles of strategic management. Routledge.
Aithal, P. S., 2016. Creating innovators through setting up organizational vision, mission and
core values: a strategic model in higher education.
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Pham, T., Pham, D.K. and Pham, A., 2016. From Business Strategy to Information Technology
Roadmap: a practical guide for executives and board members. Productivity Press.
Keyes, J., 2016. Implementing the IT balanced scorecard: Aligning IT with corporate strategy.
Auerbach Publications.
Haughey, D., 2015. SMART goals. ProjectSmart. co. uk. Np, nd Web, 11.
17