the performance of Dubai Islamic Bank

the work of Dubai Moslem BankDubai Muslim trust is a beach that flips function relate to to Islamic sharia. In the socio-economic class 2009 the jibe revenue gained by the bank was 5,133 (million AED) as comp atomic number 18d to the report of FY 2008 the top revenue had diminutiond by 2.6%, and the total profit pull in by the bank was 1,207.49 (million AED) a net decrease of 22.31% as comp bed to the FY 2008, with the total assets of AED 90.14 billion in the year 2010, the bank stands among iodine of the largest Islamic banks in the bea, shortly the bank has a customer pes of 1.2 billion which is quite appraisable customer belowcoat when comp ard with separatewise banks.The sh atomic number 18 hurt of DIB is computed to 2.22 AED (per appoint) updated latest to 31st march, 2011, the net value of the grocery store cap is evaluated to 8,429 (million AED), the endeavor value is evaluated to 7,450 (million AED), and the net sh ars outstanding is evaluated to 3, 797 (million AED).The net capital base of Dubai Islamic bank counts up to AED 10.53 billion as of December 2010, which is 17.2% higher(prenominal)er than the precedent year?B. strategic posture1. Missionthe Dubai Islamic bank is genuinely providing services same(p) retail banking, private banking, johara banking, incorporated banking, mobile banking, shout out banking, online banking, sharia plug-in services, structure trade pay, treasury and enthronization, project financing, syndication services, wealthiness bedment services, subscriber line banking, investment banking, contracting finance services, and real body politic finance. The DIB is incorporated in solely told these services because they want to expand their orbital cavity in terms of banking and investment services in al well(p)-nigh two field, so as to compete with opposite players in the business.2. ObjectivesThe communitys main quarry is to setup its securities industry each(prenominal) across t he human and to expand them as much as possible, and to addition its customer base so as to sum up their revenues and popularity in the global market.3. StrategiesThe main neutral of DIB is to diversify and manage organic growth, as growth in any sector is a must for a party e limitedly a banking kitty where the opportunities ar endless for any grass DIB is foc using studyly on the diversifying of its business, and this dodging is rattling much tenacious with the missions that is stated by the bank.The other strategies of DIB includes expansion of its branches and the maturation in its overall customer base, this scheme of DIB helps DIB to expand its trade in other countries of the world too. The increase in overall customer base is an obvious strategy of any banking green goddess as the profit and revenues earned by any banking firm is dependent on the issue that to a bang-uper extent the customers the bank has the more is its profit earned.4. PoliciesThe major pol icies of DIB includes conversions of key Islamic economic policies into firm practices for the need of mankind and to welf atomic number 18 them with the Islamic policies, the policies of the DIB is consistent with the mission, objectives and strategies of the corpo balancen as the end user of any firm is the consumer itself, and if the consumer is non bright with the confederacys policies and services consequently e rattling strategy of that association is vain, and also the companys policies atomic number 18 consistent with e truly orthogonal and innate surroundal features.The companys major strategy includes the expansion of branches and the addition of new customers to the companys customer base these policies reflect the companys multinational and global avocation strategy.2. Corporate governanceA. The circuit venire of governanceThe board of governance of the corporation consists of H.E. Mohammad Ibrahim abdulrahman alshaibani as the death chair, H.E. Sheikh K halid bin zayed al nehayan as the vice chairman, ahmad Mohammad saeed bin humaidan as the director, saeed Mubarak Abdulla Mohammad al muhairi as the director, abdulrahman hareb Rashed alhareb as the director, tariq humaid matar mohammad al tayer as the director.They all are the external employees of the corporation i.e. they are non-executive members of the corporation i.e. they dont take part in any decision do processes of the corporation. This theme of executives consists of the nobble management of the company.The internal or the elderly management members of the coporation consist mainly of Abdulla ali al hamli as the master(prenominal) executive officer, ahmed fathy al-gebali as the chief fiscal officer of the corporation. These persons are the part of the senior(a) management i.e. they throw cultivate in all the decisions making and strategy making discussions and processes.These executives curb of the internal management or the senior management of the company and heterogeneous in major decision making processes of the corporation.All the internal and the external members of the corporation that is discussed above especially the non-executive members hold material part in the stocks.The stocks are publically held by few of the major acquisitions are held by many other peoples and companies, also the stock is traded in the market, with some of the board members acquiring major shares of the corporation.Some board members are the permanent board members of the corporation and they are in the non-executive base of the corporation and thitherby they are the permanent members of the company, besides the senior management members are not-permanent members of the corporation, the chief fiscal officer of the corporation is the newest member on the board of directors as he had joined the company in the year 2011 itself.The top management consists of chairman itself and the other directors of the company, though the non-executive members dont take part in some decisions solely in major decisions akin acquisitions and budget related discussions their involvement is must.B. flower managementThe top management of the company comprise of H.E. mohammad Ibrahim as the chairman, H.E. dandy khaled bin zayed al nehayan as the vice chairman, ahmed mohammad saeed bin humaidan as the director, saeed Mubarak Abdulla Mohammad al muhairi as the director, abdulrahman hareb Rashed alhareb as the director, they all are part of the non-executive board.But the major part in the decision making policies are taken by the senior management group or the top management group i.e. the chief executive officer and the CFO of the corporation.The board members of the corporation declare a signifi roll in the hayt knowledge of the world(prenominal) market and of market policies and as the key peoples are experienced enough wherefore they contribute a significant kernel of knowledge to the corporation and thereby taking the corporation to the next l evel.The companys senior management is highly skilled and are capable of taking the company to a new height, the CFO for ex. had joined the corporation in the year 2011 itself, the CFOs profile shows that he has a very unassailable directorial base, he had worked for boubyan bank as a CFO and various other investment houses, thereby he had gained enough experience and he had served for many companies and so his skills must be remarkable.The companys senior management had learned a imperious strategy to be implied, some of them are global acquisitions and expansion of business.The companys senior management interacts with the lower level passenger vehicles and the board of directors quite frequently as they are keen to make new strategies and decisions for the company and they believe in including every whiz in the process of decision making.The companys decisions are quite ethical as the companys main motive is to use the teaching of Islam for the welfare of mankind in econom ic terms.The top management is highly skilled and is expected to go the company in future and to cope up with any bother instilling the corporation.3. External environment opportunities and threatsA. cancel physical environmentaside from banking the bank is also engaged in harvest-tides and services like textile products, aluminum fixtures, motor vehicles.Products like Aluminum fixtures and textiles depend on the sustainability of the environment i.e. textiles are do from cotton and other natural products and aluminum are obtained through mining therefore the climate of the place plays a very distinguished share in the instruction of products of DIB. Apart from the climate one more natural strength that acts the manucircumstanceuring of DIBs products is availability of water in enough quantity, and natural disasters. The opportunities for DIB in these sectors are limitless but the hardly thing that matters is that how they could implement their strategies into their pr oducts and services.All these guides return different appropriates in different countries of the world for ex. climatic and weather conditions are different in different countries of world, for ex. in Africa and Asia where climate are suitable for the growth of cotton and jute products, moreover natural disasters and calamities also depends on the location of the manufacturing plants of DIB for ex. in countries like Japan, and Hawaii where seism and volcanoes are frequent. Solar winds and sun spots also affect the enclothe as it destroys the crop.B. societal environmentThe major factors that are affecting the product manufacturing are economical forces, technological forces, policy-making forces, and socio-cultural forces.The economic forces are the force that defines a corporations power in the market in terms of revenues and share price, therefore economic forces are also very great forces that influence the manufacturing of products and services.The technological forces are also one of the or so important forces which affect a companys manufacturing of products and other technological processes. The other forces that affects a companys manufacturing of products and services are political forces, these are the forces which summates into play when the company had to make major political decisions about its company when trading in own outlandish or in other country. The socio cultural forces are the forces that define the environment that surrounds the company, i.e. in UAE the socio cultural environment are different whereas if DIB leave setup its branches in other countries of world like India, or USA then they nurse to face a total different environment and that leave behind affect the bank.All these forces varies at other places of the world as the technological development of one country can be very unspoiled and DIB can take the exceed use of that, and the political forces also depends on the fount of country they are dealing with for ex. whether the country is an democracy, monarchy, anarchy etc. all these forces plays a very rattling social occasion in the development of a company in any country, especially for DIB it is a very important factor and the strategies of DIB should include techniques to tackle with political situations in other countries. Socio-cultural is by far the close to important aspect for DIB as DIB is fuse on the teachings of Quran and believes in its principles, therefore there may exist a line between them and customers when the bank operates in non-Muslim country.C. task environment there are six major forces that drive a companys industry competitor these areThreat of new entrants these forces vary from country to country, these forces are of high ventures because there restrain been chances always that new entrants enters the market, and if the flavour of products and services provided by them are proved to be good then obviously the sr. players has to suffer, more or less.Barga ining power of buyers the bargaining power of buyers depends from country to country and according to situation, this force is rated as a medium force as not many buyers bargain on products i.e. good in quality.Threat of substitute products and services the threat of substitute products and services are always high as any company can come up with an idea of better substituted product, and if that product is better than the companys product then the company has to suffer.Bargaining power of suppliers bargaining power of suppliers is high as the supplier is the person whose quality of raw material decides the overall quality of product.Rivalry among competing firms the rivalry among competing firms is of medium type as the rivalry depends on the number of competitors in the market and the quality of products they manufacture.Relative power of unions, governments, special interest groups, etc. have a high affect on the company as the companys trade at any place is subjected to the fact that they have good or not so good relations with the government of that country.D. Summary of external factorsSocio-economic and task environment are the most important for the company and to the industry in which it is lively competing.Sustainability issues forget be important for the company in the future.4. Internal environment strength and weaknessA. corporate structureThe decision making authority is centralized roughly one group of person which are known as the top management of the company.The corporation is organized on the basis of all these factors like functions, projects, and geography.The structure of the organization is pretty much clear as there is only one major group of decision makers and that is constituted under the top management of the company.The companys trustworthy structure consists of highly skilled international level CEOs and CFOs and as the companys main objective and strategy are consistent with the expansion of the company, therefore the presen t structure of the company is consistent with the firms international operations.This type of structure can be seen in similar organizations as every company has a top level of management that decides all the strategies and procedures for any company.B. corporate coatingThe culture of DIB is well emerged culture and is dispassionate of shared beliefs, expectations and values.The current culture of DIB is very much consistent with the corporations current objectives, strategies, policies and programs as the major objective of the corporation is to expand their business.Environmental constancy means a lot to DIB as some of their products are related to environment and other natural factors their work culture is defined by the environmental objectives.The corporation is well known for its banking basics and current berth in the world, the bank is one of the top banks in this world to offer banking services related to Islamic sharia. The bank is internationalizing itself i.e. it is expanding their trade in other countries of the world.The culture is somewhat not very consistent with the employees background i.e. they forget prefer those peoples who believes in Islamic sharia principles and according to them who have Islamic ethics. Thus much diversity in background is not encountered in the bank.The bank usually acts in Muslim based countries like UAE, Pakistan, Iran, Iraq etc. therefore it does not have much problems in this countries, but if we have to consider other countries that is not Muslim oriented then the corporation might find some problem in coping up the culture of that country.C. corporate mental imagerys1. MarketingA. the current marketing objective of the company is to expand their market all over the world, and to increase the number of customers. Strategies that DIB is applying to slay this objective are clear and are consistent with the objectives and strategies of the company and are not implied just for mere implications.The 4ps i.e. pr oduct, price, place, promotion are the fields where the bank is doing exceptionally well, however there have been an ir-regulation functioning of the bank for ex. the net income of the bank is 2,696 (AED m) in 2005, 4,577 (AED m) in 2006, 6,083 (AED m) in 2007, 5,270 (AED m) in 2008, and 5,133 (AED m) in 2009. The market of the bank is not very big in the current scenario but it is doing very good in Muslim countries and considered as one of the best(p) muslim banks in the world. The bank is gaining its market in the muslim countries and loosing it in non- muslim countries. A high percentage of revenue were collected from the developed region as the number of wealthy customers who can take win of the services provided by DIB is more in developed regions.The bank is not consistent considering the revenue generated by it in the five year finis from 2005-2009. The current and past performance of the corporation is the base for its future performance the bank has to make strategies to increase their performance.Companys marketing performance is very good though they are facing a competition from leading banks like abu dhabi commercial bank, emirates NBD bank.Though the DIB operates on Islamic principles but the motorbuss of DIB is still using traditional marketing techniques in terms of product lifecycle, market segmentation, market research etc.Usually DIB dont have to face different culture therefore it is not very difficult for them to market them in other regions or countries.Marketing manager considers all the major aspects of environmental sustainability when making decisions, a marketing managers role is very crucial in strategic making process as he has to suggest marketing policies when trading in some other country.2. FinanceThe corporations current financial objective is to increase their net revenue collected, all the financial strategies, objectives, and policies are based on this fact. These facts are clearly stated and implied just not for the pastime of show off but performing as well. These financial strategies if implied depart be proved to be beneficial for the company.The companys efficiency ratio change magnitude to .43 according to the stats of sep-2010, the debt to capital ratio increased by a ratio of 9.91 according to the data of sep-2010, the earning per share of the company increased by a ratio of 0.07 according to the data of sep-2010. The earnings per share increased by a ratio of 0.32. the operating cost of the company went up by 33.88% of sales.The investors expect that the price of the shares will go up in the current fiscal year. The trend in the companys financial stability is unstable i.e. it was neer been consistent. No significant difference was reported when statements were calculated in incessant versus reported dollars.The past trends will surely affect the future performance of the company as the new CFO will develop strategy that will cope up the net loss. The finance of the company is by f ar considered good but the company can very well utilize their resources to increase the financial stability.The company is facing challenge from some of Dubais lead Muslim banks in terms of finance, the financial managers are like a shot using traditional finance concepts and techniques to solve their finance related problems.The financial situation of the company is different in different parts of the world depending on the economy of that place for ex. developed and evolution regions.Financial managers role is very crucial in the strategic management process, as finance is the most important section in a banking sector.3. Research and developmentThe corporation besides concentrating on its banking services is also indulged in marrow squash sectors like textiles, and aluminum fixtures. These strategies are meant to increase the products and services of the company and to increase their business. These strategies are consistent with the corporations mission, objectives, strategi es and policies.The technology that they use to implement their policies plays a great role in manufacturing processes.The RD of the companys new services gives the company a combative advantage, the return from the new products and services is not much because it is the newest field in the companys yard.The RD of the company depends on the environmental and climatic conditions of that country, companys technological discontinuity plays a vital role because the technology plays the most vital role in the manufacturing processes.The RD manager plays a very role in the companys strategic management process.4. trading operations and logisticsThe companys current manufacturing/service objectives, strategies and policies are clearly implemented and implied from performance and budget, the companys policies and strategies are in consent with the companys main policies, strategy, and objectives. The company has to face problems in the external and internal environment regarding logistic s and operations.The corporation deals with their products with suppliers who provide them with the raw materials, international trade of materials is done in products and services. The company is currently engaged in flexile manufacturing, equipments are of new technology. Transportation facilities are available in most of the parts.The manufacturing and logistics of the company is affected by the various factors like natural disasters and climatic conditions.Operations manager are using new technology and services to evaluate and improve current technology.5. Human resource managementThe corporations current HRM practice is to utilize their human resource to expand the companys business and to increase the customer base, along with introducing and developing new products.The net income per employee is 175,151 AED of the DIB, it is considered a breed income therefore it is clear that the company is very conserve towards their employees and do good care of them.The HRM of the com pany has the capability to increase their net profit and to affect other factors positively.The corporation is paying the employees heavily and they are giving them other incentives too, but other competitors are also conserved related to their employees.The HRM manager is utilizing the resources to the highest and often created strategies to do well in future like prosecute their human resources in other products and services, and introduction of new posts.The company doesnt seems to have a diversify workforce from all over the world, but whatsoever they have with them they are managing them quite efficiently.Outsourcing plays a very important role in HR planning, as outsourcing provides manpower to complete objectives and tasks related to the company. only the HR manager plays a very important role in the strategic management process, as every strategy requires manpower and the best use of human resources.6. Information technologyThe organizations current IT objectives, strateg ies and policies includes modernization of all technologies in the context of IT, and this strategy is very well in accordance with the modern era in which the company is operating.The company has a straight-laced database management system and analyst who can make changes in the database whenever required. afterward the use of modernized technologies it is very much predictable that the company will do well in the future regarding the advantages of the softwares utilize.All the leading banks in Dubai is using IT as a tool for performing processes and for services therefore DIB is facing a cut-throat competition in this field and must have to look upon for new technological services and tools.DIB has got a place in the worlds internet database and the study is very well conveyed regarding the company on the internet.IT manager is playing a very important role in developing the companys strategies as, many processes in the corporation is dependent on IT.D. Summary of internal fact orsMarketing, human resource and financing are the core-competencies for the company at present. The classifiable competencies of the corporation is its IT and logistics and operations.Finance, marketing and human resource are the most important factors that the company are engaged in presently. Human resource is the functions that are most suitable for outsourcing.5. Analysis of strategic factorsA. situational digestThe main analysis that affects the companys present and future performance are the finance performance, marketing, human resource and the sustainability issues.B. review of mission and objectivesThe current mission and objectives are appropriate for the companys keep but to some extent because the net profit, revenue generated and the share prices of the company is decreasing, therefore they need to have a look at its finance and marketing areas.If the finance and marketing sections are thoroughly reviewed an corrected then the corporation will grow larger momentum in the future.6. Strategic alternatives and recommended strategiesA. Strategic alternativesThe current strategies if revise will prove to be very beneficial for the company.The recommended strategies will surely help the company to improve their performance.The recommended corporate strategies are stability, growth, and retrenchment.The recommended business strategies are cost leadership and differentiation.The corporate strategies will help the company to prevent the stability, but the corporation would have only static growth i.e. growth at a slow rate.The business strategies are however suggested taken into account the cost cutting and utilizing methods, they will surely help the financing section of the company, but however risk could not be taken if we implement these strategies.B. recommended strategiesThe main strategic options that the company has areTo utilize and to execrate most of their strength.To outwit their weakness.To make the most of their opportunities.And to manag e their threats in the business.These strategies should be first implemented on ground level first and if prove to be affective they could be used further and prove to be of great use for the company for both long term and short term.7. ImplementationInstituting TQM would help the company to maintain better account of their services and processes.Software professional who has got a slender idea about financing, marketing and system analysis can develop this software.As this is a high level program therefore the CEO should be the in charge of this program.The programs are financially feasible as it would not cost much, instead it will help the company in various cost-reduction processes. And also help maintaining their database and accounts.The software should be in beta phase first and then new inclusions will be made depending on the requirements.8. Evaluation and controlThe company has an updated information system that helps them to cutting every activity in the corporation an d also provide fitting feedback on implementation activities and performance.The tools that the company uses can give accurate information about everything about the profit, loss, share prices etc.The information i.e. conveyed is timely and is very well implemented.The corporation is using benchmarking techniques to evaluate its functions and activities.Appropriate standards and measures are being taken while conformance of the recommended strategic plans.Reward system is a bonus for any employee in an organization therefore appropriate honour system is taken into account in the corporation.