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Strategy of expansion

The continued strategy of expansion has given the bank a competitive edge in the banking sector of UAE. The bank believes immensely in the concept of taking services closer to the clientele. Based on this, the bank managed to open a massive 15 more branches in 2007 as compared to the mere 5 new branches it had opened in the previous year. The bank did not only increase the number of its branches but also placed them strategically across the UAE.

This is a strategy of positioning. Opening an additional service provision outlet only is not sufficient to increase the customer base sufficiently but placing this new outlet strategi...

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...cally scores all the marks in the outlet utility and thereby qualifying to increase the customer base sufficiently. A notable strength of the bank is its consciousness of its competitors.

It acts according to its ultimate vision of becoming the ultimate bank of choice and for this reason it realizes that this is not possible if it cannot compete relatively well with its competitors. Therefore, the bank management knows that the bank cannot become a bank of choice if the competitors are offering better initiatives and that they cannot compete by offering best initiatives if they do not have the resources to do so. This explains the rights issue in 2007 which helped increase the capital base to a massive AED 1.

5 billion which would then enable the bank realize some of its ambitious strategic plans (envisioned in the bank’s Vision) and initiatives which will not only help the bank gain competitive market advantage but also help the bank to compete relatively well with its competitors so as to achieve its vision of becoming the bank of choice. True to its word in the mission statement, the bank has not only committed itself to excellence but it has also hitherto aimed to differentiate its services and products through innovation and employment of the state-of-the-art technology.

It is for this reason that the bank set out to introduce the new products of services of SMS banking and internet banking services respectively in a bid to use technology to differentiate its products and services in its journey to becoming the bank of choice. It doesn’t matter whether or not the other banks in UAE have done so but what matters is the customization because the same technology can bear more utility for one bank than another based on the way it is customized to fit the culture, mission and even the vision of the bank.

The introduction of these new and highly differentiated product and services undoubtedly may have had a hand in the bank’s overall growth in the year 2007. According to the CEO of Dubai Bank, Salaam Al Shaksy, product innovations are crucial not only in retaining current customers but also in attracting new ones. The most recent development in product innovation commitment of the bank has been the ‘Mobile Banking’ provides the customers with the power to conduct nearly all bank transactions using their internet-enabled mobile phones in both a secure and safe manner possible.

This innovation was meant to help the ever growing busy and highly mobile customers to bank while on the go. Indeed this is a customer centred innovation which not only helps in building customer confidence and increasing mobile customer base but also a tool to help decongest the banking hall and venture into cost effective banking services (Harsh Munjal, 2008). The Bank’s dedication towards the deliverance of best and highly differentiated services and value for its entire UAE clientele has seen the bank continue in an ever annual upward growth trend.

This can be supported by the evidence that the bank had its deposits grow by a massive 110% increase in the first three quarters of 2008. This is an achievement as compared to the 73% in 2007. This increase, echoing the words of the bank’s chairman Fadel Al Ali’s words, is an indication of the customer’s confidence in they bank and this confidence is not awarded but earned through the banks dedication to delivering value to its entire clientele.

The bank, according to the Salaam Al Shaksy, CEO of Dubai Bank, has a mission of making each interaction with each of the customers a ‘moment of truth’ meaning that the bank always struggles to offer its services in a way to reflect eternal accountability, transparency, and professionalism. This explains the continued growth of the bank (Harsh Munjal, 2008). Finally, strategy and strength in Dubai bank is seen in its commitment to its corporate social responsibility, a field in which the bank has since become a corporate leader.

The bank finances a lot of programs in its corporate social responsibility spending. It has sponsored a number of orphans giving them scholarships among other kinds of help. This culture of giving back to society has helped it remain at the top. The corporate social responsibility at Dubai bank is taken seriously and this, when coupled with the moral and Sharia compliance leaves the bank nowhere other than the top or near the top in the list of the most celebrated banks in the UAE hence the competitive advantage the bank enjoys in the entire banking sector.

Weaknesses of Dubai Bank One of the major weaknesses of Dubai bank is the blatant absence of a non Islamic product for the potential non Islamic customers. The Sharia compliance means that the bank threads on interest issues with great care. Obviously, non subscribers of the Sharia principles would envision a well tailored product tot fit their banking believes and so far Dubai bank has not considered this. Secondly, on the issue of risk management, the bank leaves more to be desired.

As much as mergers are good in maximizing efficiency, expertise and capital base and minimizing parochial judgement, managerial plunders and risk in general, sole ventures are very desirable because they not only demonstrate the maturity of the bank but also reduce chances of spoiling the corporate image as a result of a possible bad name of the partners. The merger that the bank made with the National Bonds demonstrates nothing but a risk management strategy by one or both organizations (Hemmad et al, 2008).

Conclusion It is indeed a fact that what Dubai Bank has been able to achieve can be credited directly and rightfully to the sound strategic management at the bank. This success that has helped in pushing the bank to position 4 or even better position in the banking sector in the entire UAE is distinctive of operationalizing the link between the already linked decision making with strategic planning and the day-to-day managerial operations of the bank.

Sound strategy saw the bank convert to Sharia compliance in 2007 making it the 5th Islamic bank in the UAE and this helped a lot in catapulting the banks growth rate since in the same year the bank realizes astronomically high increases in deposits, capital, assets and profits. Despite its minimal weaknesses, the bank is headed for the skies and nothing will stop it but the current seemingly temporary recession that seems to be hitting every sector world over. Recommendations The bank needs to do the following to continue remaining at the helm of the banking sector in the UAE:

? Reduce the tendency of making mergers and alliances and venture alone for this increases experience and guards the corporate image of the bank ? Slow down on of increasing the number of branches because this may not only seem costly for the bank but may also lead to duplication of services hence possible reduction of product quality ? The bank should consider a carefully tailored and highly customized product for the non Muslims ? Bank should focus on other possible sources of money to keep on increasing the capital base other than rights issue. This may include ventures such as ploughing back profits and investments

? Mobile and internet banking should be regulated by logistical measures to avoid oversubscription to these services at the expense of retail and corporate banking services References Haines GS, (1995): Successful Strategic Planning, Merito Park: Crisp Publication Inc. Goodstein LD, Pfeiffer JW, & Nolan TM, (1992): Applied Strategic Planning- a Comprehensive Guide, San Diego: Pfeiffer & company Publishers Dubai Bank, (2007): Dubai Bank Annual Report 2007 Retrieved on 12th February 2009 from www. dubaibank. ae Gluck FW, Walleck AS & Kaufman S, (1982): The Four Phases of Strategic Management, Journal of Business Strategy, 2(3) 9-21

Harsh Munjal, (2008): Positive Outlook for Dubai Bank as Deposits and Profits Rise Again, Retrieved on 12th February 2009 from http://dubaiholding. com/en/media-centre/news/2008/October/positive-outlook-for-dubai-bank-as-deposits-and-profits-rise-again/ Harsh Munjal, (2008): Dubai Bank Launches Interactive Mobile Banking Service, Retrieved on 12th February 2009 from http://dubaiholding. com/en/media-centre/news/2008/October/dubai-bank-launches-interactive-mobile-banking-service/ Bartlett CA & Ghoshal S, (2002): Building Competitive Advantage through People, MIT Sloa

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