MBA 645 - Capstone - Strategic Management: Individual Case study

Task: Identify O and T in the following case and construct EFAS and interpret the EFAS score.

1.Economy globally is experiencing declining oil prices.

2.30 years back, Dubai embarked on non-oil diversified growth strategy, by focusing on trade, tourism, finance, technology, smart city and infrastructure.

3.With its rich resource base, the Middle East (ME) economy is unsurprisingly weighted towards energy-related business.

4.But over time, we feel there is great potential to diversify through focus on:

4.1Renewable energy:

a.This is a strong growth area, acting as a potential hedge to hydrocarbon energy since ME is blessed with the two prerequisites for solar power-sun and space.

b.Investment in solar which was less than $200 million as recently as 2010, reached $3.5 trillion last year with a further $4 billion at the tender stage). By 2020, it is estimated that around 10 % of the region's energy will be renewable.

4.2Private sector:

a.This will come partly from privatization, but also from the development of the services sector.

b.We already see growth across the region in healthcare, education, financial services, real estate, tourism and retail. This growth creates valuable jobs for the youth, which can become the consuming middle class of the future.

5.Improved infrastructure:

a.The UAE has provided a strong template; which others in the ME can adapt.

b.We can also expect liberalization of foreign-ownership and investment regimes.

c.There are also opportunities for investors as governments manage their liquidity and budget commitments. We have seen a large bond issues from Abu Dhabi and Qatar this year, and Saudi Arabia and Kuwait will most likely debut their first international issuance later this year.

d.We will also see growth in international participation in the region's equity markets, given the attractive dividend yields available.

e.So, there are good opportunities in private placements as young companies look to fund growth. For example, we see strong potential in agriculture, renewable energies and tourism in several countries.

Thus, similar to Dubai, we will see the region transition in to a more diversified and ultimately, a more prosperous and sustainable economy, as private-sector growth makes the most of the potential of a talented and educated population

6.UAE's New Federal Bankruptcy Law

a.Mature economies have proven the need to implement a modern bankruptcy law in each country to strengthen its economic status. UAE has followed these foot prints.

b.The final draft of the UAE federal bankruptcy law was approved on 4^th Sep'2016 by the UAE Cabinet as an important legal initiative introduced by Ministry of finance, making it unique and the first law of its kind in the region.

c.The law will provide protection for all concerned parties and will be a key factor in bringing new capital to a safe and attractive environment.

d.It maximizes and protects the value of debtors' assets and allows companies that are able to carry on with their operations to restructure their business and finances instead of having to go bankrupt in accordance with clear and transparent legal conditions.