Core Operating Values - Case Study Example

THE YUSUF BIN AHMED KANOO GROUP OF COMPANIES A STRATEGIC PLAN 2013 – 2017 TABLE OF CONTENTS EXECUTIVE SUMMARY 3 BACKGROUND INFORMATION 4 Introduction 4 History 5 Direction and Results 5 Goals 6 ORGANIZATION OF THE STRATEGIC PLAN 7 The Vision 8 The Mission 8 Core Operating Values 9 Underlying Assumptions 10 SUMMARY OF MOST IMPORTANT POINTS IN THE ENVIRONMENT SCAN 11 SWOT Analysis 11 Strategic Direction 12 Goals Areas 13 Reflective Commentary 14 REFERENCES 14 EXECUTIVE SUMMARY The service mission of Kanoo Group of Companies is captured in the following: investment in technology, investment in the local population, investment in national development, providing a high level of quality support to divisions and joint ventures and lastly, systematic review of business activities to enable rapid adaptations to market forces (Kanoo Group of Companies, 2013). Throughout its operations, the group has maintained leadership positions in all the industries it operates in. This has been a result of the company building and maintaining a strong sense of trust, reliability and stability through a holistic approach to business that values and meets the needs of its stakeholders. Since the success of the Group has been a product of a long process, there is need to safeguard the gains made by the group over the years; at least in the short term. The overall objective of this strategic plan is to provide a brief roadmap for Kanoo Group of companies to assess and deepen its approaches to all its business operations in the next five years. BACKGROUND INFORMATION Introduction This strategic plan was developed by the Board of Directors and staff at Kanoo Group of Companies. It provides a guide for a five year period for the company, covering all its services, products, divisions and organizational development of all subsidiary companies. Throughout its process of implementation, this plan will be subject to a quarterly review by the Board of Directors. This will allow the management to appraise the course of events, institute correctional measures where necessary and initiate other measures that may be required in order to steer the company towards achieving the strategic objectives desired (Gupta 2009, p. 72). Although the entire process of developing this plan took into consideration the input of all stakeholders in the corporation, the bulk of the process was carried out by the Strategic Planning Committee. This committee comprised of members derived from the Board of Directors of the company as well as members from the executive management team from all member corporations operating under the umbrella of Kanoo Group of Companies. Further, a specialist examination of the technical aspects of the corporation was undertaken by the committee. This involved a thorough environmental scan process. The efficiency of the internal organization of the company was carried out to determine its inherent strengths, potential opportunities, weaknesses and threats (Hughes 1998, p. 159). This involved accurately assessing the efficiency of the internal organization of the company through interviews and by examining all available data. The examination formed the basis for outlining possible challenges that the company is more likely to face in the next five years and, consequently, proposing a number of available strategic choices which are outlined in this plan (Snyman & Kruger 2004, p. 11). History Kanoo Group of Companies started back in 1890 as a small trading company in Bahrain. Through a long period of growth and expansion, taking into advantage the oil boom of the 1970s, the company has grown into a leading multinational conglomerate in the Gulf region (Stuton, 2012). With over 120 years' experience in entrepreneurship, the company currently has interests in diverse sectors including: machinery and material handling solutions, a leading shipping agency in the Middle East, travel and holiday services, petrochemicals division (oil and gas), power and industrial projects, retail services, exhibition services, commercial and residential properties, information technology, worldwide freight and forwarding and lastly, professional training. Direction and Results For Kanoo Group of Companies, the strategic directions and goals included in this plan are a response to an understanding of what the customers value most about the company. Built on the long standing tradition of excellent customer service and business practices, it seeks to understand opportunities and challenges that exist for maintaining this tradition of trust, reliability and quality in the current global business environment. While bearing a fresh perspective on the mission of the company, a deep understanding of what the company excels in and the environment under which all the affiliate companies operate in, the Kanoo Group of Companies will pursue the following strategic direction: 1. The Kanoo Group of companies will seek to maintain its leadership role by achieving the highest standards of quality in all its businesses. 2. The Kanoo Group of companies will further assess unique market needs in its key sectors of operation in order to identify key opportunities of forming strategic partnerships with important entities. 3. The Kanoo Group of companies will seek to invest in technology, people and national development in order to provide a high quality of support to systematic review of the principal business activities. This will enable the Group to adapt to local market forces. Goals Following the completion of the environmental scan as part of the strategic planning process, the following goals were identified as what the Kanoo Group of Companies will pursue for the next five years as a response to the scan (Harrison & John 2009, P. 53). These goals provide the roadmap for fulfilling the strategic direction of the company. Goal 1. Service Delivery To be a leader in innovative business in the United Arab Emirates market, delivering complete satisfaction to all the stakeholders: customers, employees, owners, suppliers, the government and the society at large. Goal 2. Human Resources With a workforce of over 1, 000 individuals in its joint ventures, Kanoo Group will seek to develop and maintain a stable and highly motivated workforce that will play an active role in delivering the mission of the company. Goal 3: Resource Development. Kanoo Group of companies will seek to maintain its status of being a successful and most diversified conglomerate within the Gulf region. Strategic partnerships and joint ventures with internationally renowned names in the service and industrial sectors will be sought and maintained. ORGANIZATION OF THE STRATEGIC PLAN As noted earlier, this strategic plan is meant to be a management tool for the Kanoo Group of Companies. Its main purpose is to provide the most comprehensive compilation of the plan and its constituent parts (Mintzberg 1994, p. 108). It records the process of strategic planning and the decisions agreed upon by the Board of Directors and the staff of Kanoo Group of Companies. Kanoo Group of Companies will assess and deepen its service delivery, human resource management and management of general resources. This will be done through realigning the vision, mission and core operating values of the group to this strategic direction. The Vision With rapid changes in technology, the global economic environment and changes in local market forces, Kanoo Group of companies and its associates will be expecting to use utilise its overall goal of being an innovative company and adapt to local market dynamics. This changes will affect all industries and sectors the company operates in: shipping, travel, machinery, logistics, property, oil, power, information technology and training (Kanoo Group of Companies, 2012). Throughout the five – year period, Kanoo Group of companies will seek to maintain the position of its products and services by banking on the slogan of “Many Opportunities; One Address.” This will underscore the diverse business opportunities that the company offers; with its established tradition of ensuring trust, reliability and quality in its wide range of products and services (Stuton, 2012). Concerning the sources of funding for the entire period, Kanoo Group of companies will bank on its internal sources of capital for all its operations. The Mission The mission of Kanoo Group of Companies is to invest in technology, the people and the nation in order to enable a rapid response to local market forces in its business activities and provide a high level quality support to its divisions and joint ventures. Core Operating Values The following core operating values influence the culture and public image of the Kanoo Group of companies as a leading conglomerate with involvement in a broad array of sectors not only in the gulf region but also on the global arena. 1. Quality and excellence. The Kanoo Group of Companies demonstrates a committed pursuit of excellence and quality in business operations. Since this has been the key factor of stability, growth and success of the business for the past century, it will still for the basis of the companies' operation in the future. 2. Traditional business values. Since the relationship of the company with its clients and partners has been based on the traditional business values, the global vision of the company is based upon an adoption of the best models of business management and efficiency. 3. Philanthropy. The Kanoo Group of companies prides itself in being associated with development activities in the area of operation. The group seeks to make a difference in the world through philanthropy. 4. Partnerships. The Kanoo Group of Companies works through entering into strategic partnerships with key players in diverse markets the company seeks to gain a foothold in. 5. Financial sustainability. Kanoo Group of Companies believes that the tradition and loyalty it has built in all the sectors it operates in will remain relevant for a long time. As of this, the company strives to deliver on its mission with thoughtful strategic choices that ensure the company sustains its financial position in order to ensure service delivery and expansion (Bamford & West 2010, p. 138). Underlying Assumptions All of the Kanoo Group of Companies products and service and the way it goes about its work are based on the following fundamental beliefs: 1. That the current travel industry (both airline and marine) will continue to grow at the current rate thus allowing the Group's core businesses in corporate travel, marine and air travel to grow. 2. That the the Group will remain the leading player in the global machinery business with its strategy of moving from being a distributor of equipment to being a leading solutions provider in the market. 3. That the primary market for the Group's shipping services will continue to remain receptive to the primary product of the Group of offering premier tanker and off shore services. SUMMARY OF MOST IMPORTANT POINTS IN THE ENVIRONMENT SCAN SWOT Analysis The following is a brief summary of existing opportunities, strengths and weaknesses highlighted by the Board of Directors and the staff of the Kanoo Group of Companies after an extensive process of assessing the business environment in which the Group operates (Kaufman, Browne, Watkins & Leigh 2003, p. 262). Strengths: The key strengths of Kanoo Group of companies include: a diversified business portfolio covering a broad array of diverse and disparate industries and sectors, strong research and development programmes, a strong management and culture in terms of people, systems, technology and measures as a result of a heritage of a long history in business, heavy international presence and a loyal brand loyalty in the primary markets (this is augmented by multiple awards in recognition of excellence and business performance) and lastly, a strong brand presence in the Gulf region. The Kanoo Group of companies has a long history and is looked upon as a leader in the Gulf region. Weaknesses: Some believe that the Kanoo Group of Company's tremendous growth over the last century has led to challenges in terms of failure to take advantage of the international financial markets through public listing; this would fuel further expansion plans of the Group. Also, a strong presence in the Middle East and North Africa region at the expense of others has made Kanoo Group of companies fail to achieve a truly global presence and status. Opportunities: The opportunities considered most important are outlined below. 1. Increased growth in the travel industry. The implication of this trend is that Kanoo Travel, basing on its partnership with American Express and other leading service providers, is better placed to take advantage of new trends and growth opportunities in the industry. 2. The partnership with the world's leading paints and coatings company, AkzoNobel, presents a tremendous opportunity for growth. Kanoo Group of Companies can exploit the opportunities presented under the expanded joint venture agreement to fuel its own growth as a supplier of international paint brands and as well as coil and packaging coatings. 3. The new phase of development in the Middle East after the effects of the Global Financial Crisis and collapse of the real estate market in Dubai. The implication of this scenario is that the company can take advantage of the current construction boom in the Middle East to grow its business portfolio. Threats: The threats considered most important included: rising commodity prices, world economic slowdown and political unrest in some Middle East and North Africa countries. Strategic Direction Based on the Board of Director's understanding of the Kanoo Group of companies' mission, core operating values and the opportunities and threats in the current business environment, the next five years will mark a period of assessing and deepening its approaches to its operations in all the sectors the Group has a footprint (Kanoo Group of companies, 2013). Goals Areas In order to pursue the strategic objective described above, Kanoo Group of Companies will seek to fulfil the following goals and objectives during the five-year period (Drucker 1999, p. 123). 1. To become a competitor in the Middle East, Asia and Africa regions of operations as a pioneer provider of Fourth Party Logistics solutions (4 PL). The group will bank on its past performance as a provider of 3PL solutions in the market to build a strong client base for the new service (Stuton, 2012). 2. To maintain the position of the Group as a complete source of fuel supply, storage and logistics. The group will seek to deliver a focused supply chain solutions to its target markets through investing in start up acquisition initiatives. 3. To become a leader in the construction and engineering industry. This will be done by ensuring a strict observance of standards and safety (Occupational Safety and Health) in handling projects. 4. To maintain leadership position in the shipping industry by offering services that incorporate modular office, living and multi-purpose containerized solutions. This will enable the Group to take advantage of the current global demand for cost-effective and highly adaptive containerized solutions. Reflective Commentary Throughout the process of handling this exercise, I have learnt a number of things which I had not thought as being important in the first place. Handling this assignment has accorded me the chance to understand how complex the process of developing a strategic plan can be. The sheer amount of information required is fascinating. Also, doing this assignment has helped me realise the importance of the whole process of strategic planning. Its ability to place an organization in a situation that capitalises on opportunities and at the same time minimising the effect of its weaknesses has been an important realisation to me. REFERENCES Bamford, C., E. & West, G., P. (2010). Strategic management: value creation, sustainability and performance. Mason: South-Western Cengage Learning. Drucker, P., F. (1999). Management: Tasks, responsibilities, practices. Woburn: Butterworth-Heinemann. Gupta, M. (2009). Principles of management. New Delhi: PHI Learning Private Limited. Harrison, J. S., & John, C., H. (2009). Foundations in strategic management (5th ed.). Mason: South Western Cengage Learning. Hughes, O. E. (1998). Public management and administration. South Yarra: Macmillan Press. Kanoo Group of Companies. (2013). Kanoo corporate website. Retrieved 25 May 2013, from http://kanoo.com/news/news6.aspx Mintzberg, H. (1994). The fall and rise of strategic planning. Harvard Business Review, 94107, 107-114. Snyman, R., & Kruger, C., J. (2004). The interdependency between strategic management and strategic knowledge management. Journal of Knowledge Management, 8 (1), 5-19. Stuton, G. (2012). Kanoo Group: An Expert Partner. Business Excellence. Retrieved 25 May 2013, from http://www.bus-ex.com/article/kanoo-group Watkins, R., H., O., Watkins, R., & Leigh, D. (2003). Strategic planning for success: aligning people, performance and pay-offs. San Francisco: Jossey-Bass/ Pfeiffer. Read More