Strategic Management II
Business world is very challenging and trick. Thus, it becomes indispensable for companies to comprehend the corresponding business environment, its strong and weak aspects conjoined with opportunities and threats in the setting. If the leaders of an organization are well-versed with it, there is not any question left behind regarding the prosperity and success of the company. This analysis and evaluation of the business environment is termed as ‘Strategic Management’. The complete procedure of strategic management consists of formulation and implementation of effectual strategies in response to the ongoing business transformations, assessment of power and flaws of the organization and always attempt to maintain sustainability and competitive advantage (DeWit & Meyer, 2010). Organizational objective is the prime concern of the strategic management. To understand the association among strategic management and business environment, the following paragraphs will assist in a better way.
Strategy defines environment or environment defines strategy
Getting prepared for a business setting is not as complicated as it is supposed to be. If the mentors or the decision makers of the business organization are specialists in their domains, they can easily generate a successful pathway for their operations. Therefore, it is better to accept challenges and formulate those business strategies which are in proposition with the business environment. In accordance with Kim and Mauborgne, there are two kinds of strategies: structuralist strategy and reconstructionist strategies (Kim and Mauborgne, 2009). Among the two, former refers to the assumption of strategies as per given environment while later seek to shape the business environment as per their requirement. I think, the former one, is highly admirable as in this situation the strategies are sought to perform best in boundaries, and the strategist can take full utilization of available resources and capabilities to build a distinctive position in the business world.
In this kind of work situation, a perfect strategic vision is necessary. If strategies get bounded within an environment, there seems no challenge in work, and more or less every business competitor is trying to prove his capability by any means. Strategy is an intellectual task and thus it must not be bounded or stated by any means. Strategic plans are prolific, simply when they are kept dynamic and effective. Strategic plan explains the industry’s pathway derived from the vision of the business. For minuscule businesses, strategic plans come out to be more comprehensive. However, it is solely the decision of the stakeholders, leaders and executives of a company to take any strategy formation approach. But, if adequate resources and capabilities are accessible, then the business organizations must go in favor of structuralist process. In this way, environment is defining strategy. A proper environmental analysis assists in pinpointing the existing and prospective opportunities or threats, both in external as well as internal environment of the business organization.
Dubai success story and Kuwait business environment
Within the short span of 2002-2007, Dubai suddenly turned out to be a cosmopolitan representation of new Arab aspiration and prosperity. Dubai is the fastest emergent city in the Middle East and also acts as financial-viable and cultural conduit between the East and the West. Nowadays Dubai is a strategic base to several top companies and markets in Middle East and North Africa. As compared to other countries of Middle East like Kuwait, doing business in Dubai is easier and more profitable. The core of the success story of Dubai is based on numerous significant aspects of the country like its advanced infrastructure, multi-lingual human capital, business freedom, and most important easy access to Western Europe and East Asia. Hence, it can be said that the success story of Dubai cannot be applied in Kuwait business environment. All the above mentioned aspects of the business environment are present in Dubai and not in Kuwait. In addition to those beneficial features, the economy of Dubai is also well-diversified as it is based on banking and finance, international trade, tourism and real estate and information and communication technology. Although both these countries have high oil reserves, but oil basin is not only enough to get success in business there are lots of other essential factors, as well.
There are many free trade zones in UAE and Dubai is one of them. Investing in a free zone permits 100% possession to the venture, 100% repatriation of investment and profits, no bare minimum capital investment, no corporate or else personal tax and no call for a local associate. Dubai Airport Free Zone (DAFZ) was forenamed the most excellent Free Zone in the Middle East and the second best in the world by the Foreign Direct Investment magazine of the Financial Times (Davidson, 2008). Dubai is one of the chief gold and diamond trading hubs in the world. · With special types of visas, immigration and other restraints in a range of Middle Eastern Countries like Kuwait, Dubai all the way through its open trading policies has turn out to be a real hub for doing significant business in the Gulf and the Middle East. Kuwait has lots of business restrictions like registration, associating with a local partner, language issue, lack of human and monetary capital, political situation all are not apt for a successful business atmosphere.
Davidson M Christopher, 2008. Dubai: The Vulnerability of Success. Columbia University.
DeWit, B, Meyer, R. (2010): Strategy: Process, Content, Context, 4th Edition, Thomson
Kim Chan and Mauborgne Renee, 2009. How Strategy Shapes Structure. Pp- 73-80.