Matrix

Strengths | Weaknesses | Fast decision making|   Negative image of the Middle East|   Oil money, booming economy|   Barren desert, the lack of natural resources|   Political neutrality and impartiality|   Only 20% of UAE nationals|   Unique beauty, hotels and attractions|   The lack of fundamental infrastructure: transportation, water|   Luxury experience includes relaxing beaches and invigorating sport and exploration opportunities|   Luxuries might appeal too small a segment|   Safe environment|  | |  | Opportunities | Threats |

Increasing oil price|   Strong competitors: within the region: Abu Dhabi, Qatar; outside of region: Singapore, Hong Kong|   Increase job opportunities for immigrants and natives|   Oil running out in 30 years|   Growing luxury market|   Terrorism and war could further negative image of Middle East, UAE|   Increase in foreign investment|   Limited media coverage|   Proactive attitude|  | Well-developed MICE environment|  | A successful small business should communicate to the customer why they should pick you among the myriad of options in your industry today.

For that A SWOT analysis should be done from a realistic point of view and keeping in mind a very discerning customer. The analysis should also consider the standards of the industry and your major competitors. A basic SWOT analysis should be Strengths Anything that the industry requires, that you do well and your competitor doesn’t do can be your strength. For example your company’s distribution channels, your direct marketing approach, your patented high end product. Weaknesses We can all list strengths, but can we be realistic and list weaknesses?

This might be the take off point for any small business. Weaknesses can be anything from non efficient staff to a lack luster front end office. Opportunities Successful business turns threats to Opportunities. Opportunities abound today’s ever dynamic world, where new markets are being formed and the customer is being provided with revolutionary products. Opportunities can come as new business regulations or even a wrong move by your competitor. Threats How you identify and tackle threats will pave your path to success. A new competitor with a more sophisticated product can be a threat.

Being aware of this in advance and making a better package for the customer to stand up against the competitor’s new product is how a threat becomes an opportunity. SWOT is simple and like all simple and age old strategies very powerful. SWOT is a starting point and is also plays a major part in strategic planning. Pest analysis of UAE Name: United Arab Emirates. The Emirates are: Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah. Government: Federation of the seven Emirates, each with its own ruler.

President: Sheikh Zayed Bin Sultan Al Nahyan. Area: 83,600sq. Km (including 200 islands) Location: Middle East, bordering the Gulf of Oman and the Persian Gulf, between Oman and Saudi Arabia Population: 2,407,460 and includes 1,576,472 non-nationals July 2001 Language: Arabic (official), Persian, English, Hindi, Urdo Religion: Muslim 96% (Shi’a 16%), Christian, Hindu, and other 4% Climate: Desert; cooler in eastern mountains Currency: The UAE Dirham (Dh) or (AED), 1Dh = 100 fils Exchange Rate: 3. 671 Dh per US $1 (http://www. uaeforever. com) Political factors:

The political situation in the UAE is stable. The Emirates banking systems have developed; relationship based banking and monetary system that is capable to fulfill later stage funding supplies, whether it is equity, loans or leasing. Almost banking organizations, represented by almost every major financial institution in the world can either invest or assist in accessing UAE’s emerging capital markets. Gaining commercial loans in the UAE is based on established credibility and relationships with influential people to create a more stable political atmosphere.

The government mainly sets up the financial politics but there are organizations such as the ADCCI (Abu Dhabi Camber of Commerce and Industry) that serve as a bridge between the private sector and the government. ADCCI provides a wide range of services, such as setting up the Sheikh Khalifa Fund to provide technical and financial support for small-medium enterprises set up by the youth, they also organize trade fairs, sending delegations abroad to promote Abu Dhabi as a commercial center and initiating training programs that train nationals to join the private sector.

The strong banking system increases presence of venture capital and government funding provide substantial financial resources to foreign and local entrepreneurs. The most crucial factor is raising capital for a new foreign entrepreneur is to establish good relationships with local guarantors or other established foreign entrepreneurs. The best thing to do here is to get a network of contacts essential for successful business in the system Political risk factors Four types of political risk factors must be examined in assessing the climate for investment in any given country.

They are: 1. Regime change: A change in key government personnel through normal electoral or authorized political processes, or through illegal means. 2. Political turmoil: General levels of politically inspired violence, including violent strikes, guerrilla action, or civil war 3. Government policy: Decisions with respect to fiscal and monetary policies, trade restrictions or foreign investment regulations. 4. External events: other countries actions that affect the country of concern. (book: Global Investing page 89). Taxes The UAE does not have any enforced federal income tax legislation for general business nor is any such tax envisaged in the foreseeable future. Taxation on trade or business income would be, in theory, based on income tax decrees issued by the individual Emirates prior to the crediting of UAE as federation in 1971. To income tax decree has been enacted by each Emirate, in practice the enforcement of these decrees is restricted to foreign banks and oil companies. To incant investors there is no personal taxation in the UAE.

Except for oil and gas-producing companies that pay royalties and taxes on their proceeds and foreign banks that pay 20% of their profits, there are no direct corporate income taxes; there are no preservation taxes. In the free zones, enterprises are granted at least a 15-year tax exemption guarantee regardless of the changes in the laws. The currency is fully convertible and there are no taxes on the repatriation of capital or earnings. Further, there are no foreign exchange controls, quotas or trade barriers and import duties and tariffs are extremely low. (Book: Banking in the UAE) Economic factors:

In the last fifteen years the economy of UAE has move very quickly. The discovery of oil and its development provided the drive to the local trade, which earlier mainly represented the entrepot trading activities of Dubai. The primary trade strength of the UAE has been reconfirmed by the really strong economy, which was almost unconstrained by the Gulf War and other regional events. (book: UAE Economy) The banking system consists of the Central Bank, 21 national banks with 281 branches, 28 foreign banks with around 1,001 branches, one restricted license bank, two investment banks and 10 representative offices.

The Central Bank acts as the government’s advisor on financial and monetary matters, issues currency and controls the banking sector. The national banks have a dominant share of the market. The leading institutions are National Bank of Abu Dhabi, Emirates Bank International, National Bank of Dubai, Abu Dhabi Commercial Bank and Mashreq bank. The foreign commercial banks have about 25% of the market share and hold roughly the same amount in total bank assets.

The regulation of the UAE financial market was taken a further step in March 2000 with the launch of the Dubai Financial Market, which made the buying and selling of stocks official previously, this had to be carried out informally through private investment agencies. With less than 10 companies listed and Volume of $1 million in daily transactions, the Dubai Financial Market is early to provide an environment sufficiently attractive to act as a magnet for the massive overseas reserves (estimated at $600 billion by the IMF). There are even investments for foreigners now in the Emirates.

A recent announcement made by public joint stock company EMAAR properties (owned 32% by the Dubai government) to allow foreigners to own up to 20 percent of shares is a major move towards opening up of the UAE financial market to international capital. Economic analysis in the UAE is difficult as there are delays by the federal and emirate governments in publishing comprehensive and accurate statistics in a timely manner. The private sector institutions including banks and foreign oil companies are not allowed to disseminate statistics directly to the public.

The UAE has an open economy with one of the highest GDP per capita in the world and a sizable annual surplus. (www. emirates. org/economy). This pie outlines the economic sectors GDP for year 1994: The UAE has good economic conditions including strong currency; strong GDP and population growth (present rate approximately 6. 5% per year) therefore, provides significant opportunities for entrepreneurs in non-oil related sectors Porter five force model on Dubai The UAE retail sector continues to grow, supported by the upgrading of existing retail stores and the addition of state of the art new mega retail stores.

The UAE market presents retailers with diverse relatively high-income consumers. Exporters who are willing to establish personal relationships, consolidate shipments, and meet the labeling requirements of the UAE market will find a rapidly growing sector in which to sell a wide range or products. Annual sales in the industry are estimated at $3. 5 billion. The UAE food retail sector continues its aggressive growth. More large type stores are being built. French retail chain already operates in the market while a new one is being prepared to launch its services. Value of retailed products are currently estimated by trades at about $2. billion. The French Retail Giant, Carrefour, has moved aggressively into the retail of food and non-food products in the United Arab Emirates and is expected to open at more locations across the UAE. Other Arabian Peninsula markets are definitely in the cards for this retailer as consumers go more and more for low prices and everything under one roof. The author analyzes the Food Retail Industry in the UAE in Michael Porter’s Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market.

Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace Food Retail Industry in the UAE– Porter’s Five Forces Strategy Analysis The UAE retail sector continues to grow, supported by the upgrading of existing retail stores and the addition of state of the art new mega retail stores.

The UAE market presents retailers with diverse relatively high-income consumers. Exporters who are willing to establish personal relationships, consolidate shipments, and meet the labeling requirements of the UAE market will find a rapidly growing sector in which to sell a wide range or products. Annual sales in the industry are estimated at $3. 5 billion. The UAE food retail sector continues its aggressive growth. More large type stores are being built. French retail chain already operates in the market while a new one is being prepared to launch its services.

Value of retailed products are currently estimated by trades at about $2. 5 billion. The French Retail Giant, Carrefour, has moved aggressively into the retail of food and non-food products in the United Arab Emirates and is expected to open at more locations across the UAE. Other Arabian Peninsula markets are definitely in the cards for this retailer as consumers go more and more for low prices and everything under one roof. Aruvian’s R’search analyzes the Food Retail Industry in the UAE in Michael Porter’s Five Forces Analysis.

It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace

CRT MONITORS AND ACTIVE AND PASSIVE MATRIX DISPLAYS The texts “CRT Monitors” and “Active and Passive Matrix Displays” gives us the necessary basic knowledge about the types of monitors. Most desktop computer systems sold now by default come with LCD monitors. But if you are one of those who want to know the difference between CRT and LCD monitors, these texts are immense help. To start with, a CRT monitor in general is nothing more than cathode ray tube with millions of diminutive red, green and blue phosphor dots.

The working principle of CRT monitor is sustained by the theory of electron beam traveling across the tube to the area of deflection system where the beam is given direction to a specific pixel on the screen. The first CRT monitor has been invented in 1970s. However, monitor was greenish and the only possible sphere of usability was text-based computers. On the other hand, it was just a start. In 1987 when the VGA display system was invented and CRT monitors took a step into the astonishing success and recognition. As years went by, new technology of monitors was invented.

These were an active and passive matrix display technology using monitors. First of all, these monitors were different from CRT because of the new thin film transistor technology. It was that kind of technology where particular row was switched on and a charge was generated and sent down the column. As result, the pixel appeared on the monitor at the intersect place of the row and the column. Moreover, it was a revolution in making computers portable. To sum up, it is essential to mention that technologies are not staying fixedly so it is natural that one technique displaces other as time goes by. 285 words

Vladimir Dobric , Boris Delibasic Faculty of organizational science, vdobric@fon. rs 2 Faculty of organizational science, delibasic. boris@fon. rs 1 Abstract: Portfolio matrix is probably the most important tool for strategic marketing planning, especially in the strategy selection stage. Position of the organization in the portfolio matrix and it’s corresponding marketing strategy depends on the aggregation of values of relevant strategic factors. Traditional approach to portfolio matrix analysis uses averaging function as an aggregation operator.

This approach is very limited in realistic business environment characterized by complex relations between strategic factors. An innovative approach to portfolio matrix analysis, presented in this paper, can be used to express complex interaction between strategic factors. The new approach is based on the logical aggregation operator, a generalized aggregation operator from which other aggregation operators can be obtained as special cases. Example of traditional approach to portfolio matrix analysis given in this paper clearly shows it’s inherited limitations.

The new approach applied to the same example eliminates weaknesses of traditional one and facilitates strategic marketing planning in realistic business environment. Key words: Portfolio matrix analysis, strategic marketing planning, logical aggregation, aggregation operator.

INTRODUCTION

The portfolio matrix analysis is widely used in strategic management [2, 3, 6]. It offers a view of the position of the organization in its environment and suggests generic strategies for the future. Some of the most frequently used portfolio matrices are the ADL (developed by Arthur D. Little), the BCG (Boston Consulting Group) and the GE (General Electric) McKinsey matrix. Other models that can be considered as versions or adaptations of the original GE McKinsey matrix are the Shell directional policy matrix and McDonald’s directional policy matrix (DPM) that is used in this paper. The application of any of these portfolio matrices can be, roughly, divided into two stages: the first stage, which includes the analysis of the business position of the organization, and the second stage in which the strategies that should be used in future are recommended based on the estimated position.

The difference between aforementioned matrices lies in number and meaning of factors used in the analysis process as well as in the number and generality of recommended strategies. It is common for all the portfolio matrices that the position of the organization in a portfolio matrix is based on estimated values of two factors: the one describing external environment (market attractiveness in DPM) and the other describing inner characteristics of the organization compared to the major competitors (business strengths/position in DPM).

On the basis of portfolio matrix analysis , a generic marketing strategy is recommended based on an organization’s position in the portfolio matrix. In the portfolio matrix analysis, values of two factors describing external and internal environment are estimated as aggregations of values of strategic factors influencing respective environment. The choice of the most adequate aggregation functions depends on the condition in which organization operates, i. e. an aggregation functions describing external and internal environment should have a behaviour which models organization’s external and internal environment conditions respectively.

In the traditional approach to portfolio matrix analysis, weighted arithmetic mean is commonly used as an aggregation function. This aggregation operator describes an averaging behaviour, thus, it can be used to model business environment in which high and low values of strategic factors average each other. In the realistic business environment strategic factors can interact in a more complex way, i. e. they can average each other, reinforce or weaken each other (disjunctive or conjunctive behaviour), or exhibit various forms of mixed interactions [2, 3, 6].

It is clear that the use of weighted arithmetic mean as an aggregation operator can’t express all the possible interactions between strategic factors that exist in a realistic business environment. This explains why the traditional approach to portfolio matrix analysis is highly limited, with the inherited weaknesses that can’t be overcome without substantial modification. Therefore, under previous conditions, it is obvious that a new approach to portfolio matrix analysis is needed.

This new approach must take in consideration all the possible forms of interactions between strategic factors that can occur in a realistic business environment. These interactions can be expressed with a logical aggregation operator, so a new approach to portfolio matrix analysis can be based on this operator. W eighted arithmetic mean and other known aggregation operators are just, as we will see in the following sections, special cases of logical aggregation operator.

THE MCDONALD’S DIRECTIONAL POLICY MATRIX (DPM)

Although the DPM, like other models of portfolio matrices, attempts to define an organization’s strategic position and strategy alternatives, this objective can’t be met without considering what is meant by the term „organization“. The accepted level at which an organization can be analysed using the DPM is that of the „strategic business unit“. The most common definition of an SBU is as follows:

• It will have common segments and competitors for most of the products;
• It will be a competitor in an external market;
• It is a discrete, separate and identifiable „unit“;
• Its manager will have control over most of the areas critical to success.

DPM has two dimensions each built up from a number of factors:

1. Market attractiveness and

Business strengths/position. Using these factors, and some scheme for weighting them according to their importance, strategic business units are classified into one of nine cells in a 3 X3 matrix. Each cell is connected to a generic strategy recommended by the DPM. Factors used to form aggregated dimensions of DPM vary according to concrete circumstances in which SBU operates. Notice that previous explanations taken rom [3] suggest weighted arithmetic mean as an aggregation operator, thus, traditional approach to DPM analysis only considers a case of averaging behaviour between strategic factors. That is only one of the possible interactions between strategic factors that can occur in realistic business environment. Other possible interactions like conjunction, disjunction or mixed interaction can’ t be modelled by using weighted sum of factors as an aggregation operator. Definitions of market attractiveness and business strengths/positions dimensions are g iven in.

Market attractiveness is a measure of the marketplace potential to yield growth in sales and profits. It is important to highlight the need for an objective assessment of market attractiveness using data from the organization’s external environment. The criteria themselves will, of course, be determined by the organization carrying out the exercise and will be relevant to the objectives the organization is trying to achieve, but they should be independent of the organization’s position in its m arkets [3]. Business strengths/position is a measure of organization’s actual strengths in the marketplace (i. . the degree to which it can take advantage of a market opportunity). Thus, it is an objective assessment of an organization’s ability to satisfy market needs relative to competitors. DPM, together with generic marketing strategy options is shown in Picture 1. Picture 1: Directional policy matrix

TRADITIONAL APPROACH TO DIRECTIONAL POLICY MATRIX ANALYSIS

In this section, traditional approach to DPM analysis using simple example will be presented, highlighting it’s inherited limitations originating from using non-adequate aggregation functions.

In our example market leader is Competitor A (from Table 2), thus, organization’s relative business strengths/position value (BR) is calculated as: BR = B/A  Relative business strengths/position value (BR) is then plotted on the horizontal axis of the DPM using a logarithmic scale. These explanations are not of importance for the domain of our investigation, so no futher considerations regarding relative business strengths/position value (BR) and DPM plotting are given. In the rest of this paper, the only consideration will be given to market attractiveness (M) and business strengths/position (B) evaluation.

W eighted arithmetic mean used for an aggregation function assumes that the interactions between strategic factors show averaging behavior, i. e. it is used to model business environment in which values of strategic factors average each other. This is the mayor drawback of traditional DPM analysis. Realistic business environment demands more modelling power for more complex factors interactions. Besides averaging, strategic factors can reinforce or weaken each other (disjunctive or conjunctive behaviour respectively), or exhibit various forms of interactions which are neither strictly averaging, conjunctive or disjunctive, but mixed, i. . aggregation function exhibits different behaviour on different parts of the domain (mixed behaviour). Under these circumstances, it is obvious that a new approach to portfolio matrix analysis demands an usage of different aggregation operator, the one capable of modelling all the possible interactions between strategic factors that can take place in a realistic business environment. The paper presents an approach to portfolio matrix analysis, using logical aggregation operator, which eliminates weaknesses of traditional one. If we return to ur example shown in Tables 1 and 2, we can restate possible business external and internal environment conditions in the following way:

It is possible that interactions between market attractiveness or business strengths/position strategic factors show averaging behaviour, i. e. scores {s1, …, s6} or {s7, …, s10} given to strategic factors {F1, …, F10} can average each other using weights {w1, …, w10}. In this case market attractiveness and business strengths/position are evaluated as shown in equations (1) and (2) , or in their matrix equivalents (3) and (4). It is possible that interactions between market attractiveness or business strengths/position strategic factors show conjunctive behaviour, i. e. scores {s1, …, s6} or {s7, …,s10} given to strategic factors {F1, …, F10} can weaken each other. In this case market attractiveness and business strengths/position evaluation depends upon the lowest score among the relevant factors: M = min(s1, …, s6) (6) B = min(s7, …, s10) (7) 3) It is possible that interactions between market attractiveness or business strengths/position strategic factors show disjunctive behaviour, i. e. cores { s1, …, s6} or {s7, …, s10} given to strategic factors {F1, …, F10} can reinforce each other. In this case market attractiveness and business strengths/position evaluation depends upon the highest score among the relevant factors: M = max(s1, …, s6) (8) B = max(s7, …, s10) (9) 4) It is possible that interactions between market attractiveness or business strengths/position strategic factors show mixed behaviour. For example, scores {s1, …,s6} or {s7, …,s10} given to strategic factors {F1, …, F10} can average, reinforce and weaken each other depending on their values.

Thus, the aggregation function can be conjunctive for low scores, disjunctive for high scores, and perhaps averaging when some scores are high and some are low (different behaviour of aggregation function on different parts of the domain). Example for this kind of aggregation function’s behaviour will be given in the following sections. Logical aggregation operator can express all previous types of interactions, so it naturally imposes itself as a replacement to weighted arithmetic mean aggregation operator in the new approach to portfolio matrix analysis.

Notice that interactions between strategic factors from organization’s external environment (market attractiveness factors) and those from organization’s internal environment ( business strengths/position factors) are not recognized in traditional approach to DPM analysis. If those interactions can be recognized, they can easily be integrated into the model in the new approach. In the following section basic theory of logical aggregation will be briefly examined. After examining the theory, a simple example of new approach to portfolio matrix analysis using Tables 1 and 2 will be presented.

LOGICAL AGGREGATION

Aggregation functions are functions with special properties. The purpose of aggregation functions (they are also called aggregation operators, both terms are used interchangeably in the existing literature) is to combine inputs and produce output, where the inputs are typically interpreted as degrees of preference, strength of evidence or support of hypothesis [1]. If we consider a finite set of inputs I = {i1, …, in}, we can aggregate them into single representative value by using infinitely many aggregation functions.

They are grouped in various families such as means, triangular norms and conor ms, Choquet and Sugeno integral, uninorms and nullnorms, and many others. The question arises how to chose the most suitable aggregation function for a specific application. This question can be answered by choosing logical aggregation function – a generalized aggregation operator that can be reduced to any other known one. Logical aggregation is an aggregation method that combines inputs and produces output using logical aggregation operator.

A NEW APPROACH TO PORTFOLIO MATRIX ANALYSIS

If we consider again Tables 1 and 2, and four cases of possible business environment conditions as defined in Section 3, we can design new aggregation functions that model all the aforementi oned conditions using logical aggregation operator.

Remember that when plotting the DPM, the exact position of the organization on the business strengths/position axis (horizontal) is calculated using relative business strengths/position value (BR) and logarithmic scale (see equation (5)), for all aforementioned types of strategic factors interactions .

CONCLUSION

Traditional approach to portfolio matrix analysis uses weighted arithmetic mean as an aggregation function, thus, it can only be used to model business environment in which strategic factors’ interactions show averaging behavior. This is only one of the four cases of realistic business environment conditions, i. . strategic factors’ interactions showing conjunction, disjunction or mixed behavior are not covered in the traditional approach. The new approach uses generalized aggregation function – operator of logical aggregation. This operator can model all the possible business environment conditions – types of interactions between the strategic factors. This paper shows that traditional approach to portfolio matrix analysis is just a special case of the new one, since the weighted arithmetic mean is actually a special case of logical aggregation operator.

Usage of logical aggregation operator in the new approach clearly improves the traditional one, allowing more modeling power for complex relations among the strategic factors. Since the new approach to portfolio matrix analysis covers all four types of strategic factors’ interactions, it facilitates strategic marketing planning in a realistic business environment.

BIBLIOGRAPHY

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