Importance of Strategic Management


Critically review the importance of Strategic Management and its
practices in an organisation, and analyse how it can be linked with
organisational objectives in overcoming business issues and challenges for
a better performance of the organisation.
Critically review and analyse the internal environment of the organisation
and assess the effectiveness of organisational strategies which are in
interface with management to maintain the organisation’s environment.
Suggest a suitable organisation strategy which suits best to its objectives.
Discuss the importance of strategy tools and use any tool to identify the
external environment of the organisation. Identify the stakeholders of the
organisation and analyse how managers can create and sustain a
competitive advantage that will give a company above-average
Identify the competitive forces of an organisation and based on them,
implement and justify the new directions in organisational strategies in-
terms of customer service and innovation strategies


Task 1


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Critically review the importance of Strategic Management in each of these cases. In other words, provide an overview – high level – of the role you think strategic management plays in these two organisations. Reflect on what you have been taught during this module and refer to that as you provide your view. You can answer it in a combined fashion, or by referencing to them separately. 
During the session, we focused on the dominant attribute differentiator (DAD). Indicate how the strategies of the two organisations in the case studies differ from one another in order to achieve success with regards to their respective DADs. 
Importance of Strategic management: Strategic management is important for any organization as it helps the company to identify its strengths and gain a competitive advantage over its competitors. The importance of strategic management can be identified by the impact it has on the implementation of activities and the overall performance of the company. Strategic management is a combination of all activities which can be performed by the company in order to exploit the core competencies of the company and work towards creating a competitive advantage for the company over its rivals.
Strategic management is important to enhance the financial benefits of the company by improving the management and recording of profits, return on assets and sales. It also gives numerous non financial benefits like providing a clear direction for the future, understanding, identifying and exploiting potential opportunities, increasing employee motivation as well as satisfaction, improve on cost savings, represent a framework of coordinated and controlled activities to be performed, simplify and speed the process of decision making with clear objectives in mind and improves the possibility and favorability towards change. (RYSZARD BARNAT,  2014)
Strategic Planning of Emirates NBD, UAE 
The Emirates Bank International (EBI) and the National Bank of Dubai (NBD) were mandated by the government in the year 2007 to merge into one single entity. The challenges which were going to be faced in any such merger are vast and need to be handled strategically. The strategic planning of this merger was based on six main objectives followed by the companies to complete the core transformation. The objectives included core transformation which was in line with the merger and the resulting changes in the working of the company, better control over transactions and increased efficiency to gain competitive advantage in the banking sector and increase customer satisfaction, standardization of data and workflows across both entities while working together to map out future product innovation and development to ensure sustainable growth and a smooth merger, data and application harmonization to have a common platform to operate from and overall integration of data of the company, using modern technology that is flexible enough to support advancements to keep pace with the growth and advancement in the technological field and take advantage of the improvements and creating a base and support for future growth and acquisitions.
 Emirates and NBD decided to work with the common platform Finacle for managing all data and working of the companies. Critical project management and training was employed at each phase to ensure meeting implementation goals. Strategic planning helped in effective success of the merger with minimum time delay and budget management.


Strategic Planning of National Commercial Bank, Saudi Arabia


The National commercial Bank was facing a challenge of improving customer satisfaction and enhancing the customer servicing in the bank. The strategy that the company adopted was to update its existing offerings in terms of services and application to make use of the latest technology available in the market. The company identified the strategic drivers as the reduction in cost, reduction in time and improved customer interaction by automating the manual services at the company. The company looked to adopt a web based solution for this purpose. The company looked to adopt the customer focused strategy in order to gain competitive advantage over its rivals. 
NCB made Infosys as its technology partner and chose Infosys’ Finacle Web-based cash management solution to be implemented within 12 months. Finacle helped in eliminate constraints of geography to provide anytime, anywhere access to information. This strategic planning approach helped the company streamline its operation as well as enhance the cost efficiency and customer experience, thus meeting its improvement goals.
Strategy is the juncture between the external and internal environments. With this in mind, explain how you view the importance of the internal environment of these organizations in terms of the successful implementation of their strategies. Compare the different internal requirements with one another. Remember to refer to all four generic resources being people, infrastructure, information and finances in your answer.
Environmental Factors in Strategic Planning
The most important factor affecting any business is the change in the environmental factors that it deals with. Change is certain in any environment and the ability of the company to be able to deal with these changes and sustain their position and growth in the industry enables them to prevail for a long term and develop sustainable competitive advantage. Some examples of internal factors are: Organizational structure, Shareholders, Organizational culture, Employees, Financial issues etc. The External factors of an organization are: Economic environment, Political or Legal environment, Social environment, Technological environment, Threat from competitors, the industry itself etc. Both, the internal and the external factors influence each other and work mutually to affect a business. (Leo Isaac, 2015)
Environmental factors for Emirates NBD
Internal Environment
The internal environment of the bank had the following crucial features:
The bank has in totality has 8000 dedicated employees, more than 120 branches and 650 ATMs/cash deposit machines. 
The bank uses the Finacle platform developed by Infosys for its smooth operations, Signature from 01 Systems, Retail Assets from Nucleus Software and CRM from Oracle. 
The channels of interaction offered by Emirates and NBD are 650 ATMs, Corporate and Retail Internet Banking, Mobile and SMS banking. 
Additionally, the company used the state of the art data center hosting IBM, Sun and Windows servers. 
Also the company had made provisions for risk management and disaster recovery by using a fully operational disaster recovery site with online replication.
Thus the company’s internal environment exhibited a dedicated force of workers who would work for the company as well as an infrastructure setup which was suitable to support sustainable growth. The company’s information systems were well developed to meet the needs of the customers and the data was integrated by use of the common banking information system Finacle which was developed by Infosys. 

Environmental factors for National Commercial Bank
Internal Environment
National Commercial Bank is one of the largest banks in all of the Middle East thus giving it an advantage of having a strong foothold in the industry.
The critical features of the bank’s internal environment are:
The bank had a paid-up capital of SR 6,000 million (US$ 1,600 million). The total assets for the bank at the end of 2007 summed up to US$ 55,658 million and net profit for the fiscal year 2007 was US$ 1,610 million. 
The company managed to provide some of the most modern services along with keeping in view the traditions of Saudi Arabia.
All 266 retail branches of the company were dedicated to Islamic banking services.
The company managed to have a customer base of over 2 million customers.
The bank has a array of distribution channels including 942 ATMs and 7000 point of sale (P.O.S) terminals.
The company has also pioneered the credit card facility in the country. Thus the company has a strong internal environment along the required personnel, infrastructure, finance and information system. The aim of the company was to enhance customer service by improving on the technological front. 
Comparison of the Emirates NBD and National Commercial Bank
For Emirates NBD the strategic dominant attribute differentiator is to improve the market capitalization of the company and become the largest bank in the UAE.
For National Commercial the strategic dominant attribute differentiator is to enhance the customer service provided by them.
The internal environment of Emirates NBD has has 8000 dedicated employees, more than 120 branches and 650 ATMs/cash deposit machines.
The internal environment of National Commercial Bank exhibits a paid-up capital of SR 6,000 million along with an increased reach to customers through 942 ATMs and 7000 point of sale (P.O.S) terminals.
The strategy adopted by Emirates NBD has helped the company improve the working of the company and work efficiently towards its target of becoming the largest bank in UAE irrespective of the challenges faced as a part of the merger of the two banks.
The strategy adopted by National Commercial Bank has helped the company streamline its operations by taking help of advanced technologies and achieve its target of reduced manual interaction and enhanced customer service.


Task 2


Make use of the Power PESTLE framework to which you were exposed to during the module and draw the canvass of internal, transactional and contextual environmental systems for each of the companies. Highlight the difference and clearly indicate how the different environmental dynamics, call for a different strategic approach with each of the companies. How would you advise the managers of these two organisations to create and sustain a competitive advantage against one another?
The PESTLE framework is a critical business analysis tool which helps the companies to understand the macro environment in which they are operating based on the various factors. The major factors affecting the company are the political factors, economical factors, social factors, technological factors, legal factors and environmental factors. In order to perform a PESTLE analysis for the given companies we see the impact of each of these factors separately. (Pestle Analysis, 2016)
Political Factors: Political factors include any impact the government may have on the functioning of the company. It mainly deals with the stability of the government and the way in which it can impact the industry. Government can impose new taxes or change the tax policies, fiscal policies etc.  which may impact the business. For Emirates NBD the political factor deals with the political environment in UAE. The political environment in UAE is stable and favours business growth. 
Economic Factors:  The economic factors of an industry have a direct impact on the profitability of the company and hence it is important to include economic factors analysis when analysing the industry. The various factors include the economic growth patterns, interest rates, inflation rate, foreign exchange rate, etc. These economic factors must be analysed for both countries to identify the industry potential.
Social Factors: These factors take into account the various social dynamics of the industry like the population, cultural trends, demographics, etc. Here the National Commercial bank has been able to capture great market share by providing different services to the customers of the country while keeping in mind the traditions of the country as well. These factors have a significant impact on the company progress. 
Technological Factors: The market favourability and operations of the company are affected by the innovations in technology. The analysis of technological factors is important as the technology is continuously advancing to include improvement over the existing technology. The Emirates NDB as well as National Commercial bank have identified the need for technological competence of the company and have adopted Finacle by Infosys as the base of their banking system.  National Commercial Bank is also looking for advancement in its existing technology to enhance customer service.
Legal Factors: The legal factors take into account the various business laws which affect the running of the business. The companies must comply with these laws to expand their business in a given country. The effect legal factors in the country depend on the strictness of their implementation as well. Some of the legal factors which must be considered are consumer laws, labour laws, etc.
Environmental Factors: These factors consider the effect of the industry on the surrounding environment. The banking sector is generally not prone to be affected by environmental concerns as the functioning of the sector does not involve any direct hazard to the environment. The companies most affected by these factors are chemical industries, farming industries, etc.
We see that the Emirates NDB are more affected by a mix of economic, legal, technological and political factors which will help them to progress in the country and move towards becoming the largest bank in the country where as the aim of the National Commercial bank revolves more around the improvement in the technology used by them to enhance customer service which is most affected by the changes in the technological factors. Thus the companies will look to capitalize on their strengths and improve their weaknesses in order to achieve sustainable growth.( Research and Markets, 2014)
Identify the different competitive forces of these two organisations and in doing so, defend the different directions of their organisational strategies in-terms of their different DADs
The competitive forces in the banking industry which are relevant to the two given banks are the finance and technology. The banking industry is the most important part of the financial sector of the country and it thus impacts the banks and their profitability. The Banking sector in the UAE has been experiencing significant progress in the last few years with the reflection of this progress being seen in profitability, economic growth, credit growth, declining non-performing assets, and monetary policy. The Ministry of Finance of UAE has been working on improving the regulations in the financial sector and thus making it an attractive opportunity for investment. (A. T. Kearney, 2016)  
The Dominant Attribute Differentiator (DAD) for the company Emirates NDB is to become the largest bank in the country in terms of market capitalization. Hence the competitive factor for this company is finance. The company has adopted an overall competitive strategy to be the best provider in the market and thus gain market share. The company has been able to gain profits in the retail banking sector, establish its position in the corporate banking sector, expand their Islamic banking segment, use efficient technology to keep pace with the advancements and create an overall mix of value which helps it to gain market share. Thus based on their DAD the company has adopted the overall expansion strategy by using the best practices in all the areas of performance to get the best possible results which may help to gain a competitive advantage over their rivals.
The National Commercial Bank is already one of the major banks in the Middle East and has a huge customer base of over 2 million customers. The issue that the company has identified is that a lot of the working of the company is based on manual tasks which are prone to error and thus may lead to loss of customer satisfaction. The company has thus defined its Dominant Attribute Differentiator as enhancement of customer service and the strategy it is looking to adopt for this purpose is automation of the manual jobs which are performed in the company. Thus the company is looking to improve its position in terms of the competitive factor technology. Here based on the company strategy and the Dominant Attribute Differentiator the company must look at using the best technology available in the market which is suitable to service the needs of their customer base and align its system to adopt the best practices. 




RYSZARD BARNAT. 2014. Strategic Management: Formulation and Implementation. [ONLINE] Available at: [Accessed 12 April 2016].
Leo Isaac. 2015. Environmental Factors in Strategic Planning. [ONLINE] Available at: [Accessed 12 April 2016].
 Erica Olsen. 2010.  Internal & External Analysis. [ONLINE] Available at:  [Accessed 12 April 2016].
Pestle Analysis. 2016. What is PESTLE Analysis? A Tool for Business Analysis. [ONLINE] Available at: [Accessed 12 April 2016]. 
Research and Markets. 2014. Country Analysis Report: United Arab Emirates, In-depth PESTLE Insights. [ONLINE] Available at: [Accessed 12 April 2016]
A. T. Kearney. 2016. Five Forces Shaping the Banking Industry. [ONLINE] Available at: [Accessed 12 April 2016].

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