Information for Marketing - Mission and Objectives of the European Islamic Investment Bank - Research Paper Example

Research Proposal: Information for Marketing Table of Contents Table of Contents 2 Introduction 3 Background Information on the Company 3 Mission and objectives of the EIIB 3 Literature Review 5 The company’s position in the market 5 Research Methodology 6 Data Analysis 10 Conclusion 10 References 11 Cheung, A. et al., 2003. Governance and Public Sector Reform in Asia: Paradigm Shifts or Business as Usual? London: RoutledgeCurzon 12 Clare, D., 2006. Channelling Wealth: A New Bank Is among a Range of European Institutions Springing Up to Offer Islamic Channels for Gulf Investors. London: MEED East Economic Digest. 12 Clare, D., 2006. Courting Muslim Investors: London Is Positioning Itself at the Heart of the Global Islamic Financial Industry, and Hopes to Entice Gulf Investors to the UK in the Process. London: MEED East Economic Digest. 12 Cooper, D., & Schindle, P., 2003. Business Research Methods. London: Mc Graw-Hill: Princeton. 12 Esposito, J., 2004. The Islamic World: Past and Present. New York: Oxford University Press. 12 Hafez, K., 2000. The Islamic World and the West: An Introduction to Political Cultures and International Relations. Boston: Brill. 12 Khorshid, A., 2004. Islamic Insurance: A Modern Approach to Islamic Banking. New York: RoutledgeCurzon. 12 Melissa, H., 2009. The Wests Islamic Finance Hub: London Has Quickly Established Itself as the European Leader in Islamic Banking, but It Will Need Continued Support from Gulf Institutions If It Is to Retain Its Position. London: MEED East Economic Digest. 13 Research Proposal: Information for Marketing Introduction Background Information on the Company The EIIB is an investment bank that is Sharia compliant. Structuring, sourcing and the distribution of investments in MENA Markets are the prime focus areas for this bank. Their investments are across Middle East and North America (Clare, 2006). This they do by providing hybrid capital investments, finances and equity to a range of clients, whether large or small corporations, entrepreneurial guided or even businesses. By the 31st f December 2011, the bank had financial services, investment management and banking as its major divisions. Activities in the banking sector include finance provision, receiving of deposits, services related with treasury, structured products and securities trading. On the other hand, the segment of investment management involves quoted equities, the real estate and private equity. Finally, the financing services include the corporate finance, business advisory services as well as brokerage services. The bank delivers services and products to the wholesale, high net worth individuals and institutions across asset classes (Esposito, 2004). Mission and objectives of the EIIB The bank’s mission is to be commitment to excellence in the delivery of Sharia compliant investment banking products and services. With the international rapid growth of Islamic finance, the EIIB’s categorical business model aims to fill the gap between western financial markets and those belonging to the Islamic world. They are particularly showing their determination in this pursuit because of the confidence they boast due to their unique position to benefit from London as the head financial center globally. In their annual report of 2006, they stated that their capabilities were then in place largely, and that in the subsequent year, they would demonstrate their teams full capabilities in the structuring and distribution of innovative and more developed products. This bank was formed and incorporated in 2005 January 11,th with the key objective of attaining a license as the very first independent FSA authorized Sharia compliant Islamic Investment Bank in the United Kingdom. Fortunately, by the second quarter of the same year of formation, a private placement share was completed, one which raised a total amount of 108 million pounds as the realized costs of shares issued. This was followed by a robust infrastructural system of technology and operations, the establishment of a risk management and compliance framework and the finalization f the business plan as well as staff recruitment for the key bank positions. They then moved to their permanent offices in London City. It was then that they received the FSA authorization in 2006 March 6th and as at now; they are included in the AIM 100 index. This coincided with an IPO which more or less raised a capital of 73 million pounds net of costs, thereby conferring to the bank 184 million pounds as the capital base. This was a very impressive financial performance and a successful licensing process completion by the early 2006, therefore business doors opening as early as April of the same year. By the first nine months of the bank’s operations, a profit of 1.9 million pounds had been realized; this significantly demonstrated the progressive transactional build as well as an effective use of the capital employed. In the 2006 annual report, it was also recorded that the bank found the UK to be very supportive especially considering the regulative environment for the Islam finance as observed in the very devoted commitment by the political and business leaders, for the purpose of making London a center of industry excellence. 2006 was a time for the bank’s establishment in the Islamic market place both in the UK and overseas (Clare, 2006). More objectives and problems to be addressed were the implementation of a bespoken IT systems solution, operational policies and procedures that were intended to robust and allow for flexibility, securing the bank’s assets and thus allow for a generation of a responsive decision metrics that would be customer centric. Literature Review The company’s position in the market Most world’s effervescent and fastest growing economies are found in the MENA. This could particularly be explained by the benefits enjoyed buy the GCC countries that are in the business of oil and natural gas that brings to them lots of revenues, thus the sustained boom. Such revenues are directed to the EIIB therefore it has a big potential of ready customers given the booming business in the area (Cheung et al., 2003). However, this hasn’t been free of challenges; for instance in 2011, Arab spring began in Tunisia. There were civil unrests and populist uprisings that spread to the neighboring countries so rapidly. None of them had immune to the on-going rivals; however, some of them independently developed measured transformation processes to liberate themselves. These socio-political wrangles in one way or the other affected he economy and thus the operations of EIIB. The Arab spring presented a period of economical transformation and entrepreneurial opportunities were unleashed as well which placed the Bank in a better position business wise. In the same year, there was a global macroeconomic depression that led into the decline of capital markets and this negatively impacted the overall business confidence as regional investors lowered. However, according to the EIIB 2011 annual report, the markets have stabilized and are better positioned for future growth. However, the Bank is facing challenges of credits, market risks, operational and liquidity risks. They however have a Board Risk Committee which is mandated to ensure that the Bank’s risk policies are implemented. As stipulated in the EIIB’s annual report for 2011, an essential element of the business is the effective risk management and good corporate governance. In the research industry quality is a primary entity, which exceeds quantity by a far greater margin. The bank, in this case should opt to use a policy that is efficient, direct and straight to the point. It’s important for a research report to be full of the required details in the least words possible. It’s important for researchers to understand that the report quality is guaranteed by its brevity and straight forwardness. All these factors per se are certainly considered in a research bordered on quality. Research Methodology Most scholars tend to lean on the quality edge. The merits of a qualitative research against that of a quantitative research and analysis serve different purposes; the first objective of a qualitative research is to achieve an indulgent understanding of the inclusive reasons, impulse to research and motivation. On the other hand, quantitative data collection (research), involves the under taking of data quantification, (this involves indiscriminate results from a sample/ section of the whole point of research to the interested party. This has had the domino effect of being overly costly in terms of resources (time, funds, labor etc). The second and more vital point of qualitative research in the banking industry (bearing in mind that we are dealing with a Sharia compliant bank), is the stipulation of insights into the field of practice i.e. Banking, generating new ideas for the improvement of the industry in question. All this is done with a view in mind that later on, it will be necessary to undertake another session of quantitative research. Quantitative research has been developed over the years to include a model of the banking industry operational mechanisms to observe and study the link between bank market structure, identifying entry and exit points along the market cycle. The bank, is therefore necessitated to undertake a study of where it’s mostly dominant (the NEMA regions) and understand how to improve their loan supply strategically before a large number of the ‘competitive fringe” make their loan choices. This is why it’s necessary for a bank to understand its strengths and work on its weaknesses. This is done to improve the banks financial position while also making it a leader in financial trouble shooting (Annual Report and Accounts, 2006). Primary research is a type of data collection that involves the collection, analysis and categorization of primary/ initial data. The quantification is arrived at after the researcher has collected the needed information through various methods, including the use of questionnaires interviews, market research and/or experiments. In terms of its benefit to the banking industry, it can be less expensive since its focal point is small groups compared to quantitative research which impose large groups of participants, high levels of financing and expensive data collection tools. On the other hand, researcher bigotry/discrimination cannot be over looked. This is a situation whereby the researcher is prejudiced against rival products, making it arduous for a pure outcome based on the tests carried out. This has the overall result of making the reports and or recommendations a bit faulty as they depend on an individual’s opinionated judgment. In the banking industry, primary research is a tool that is paramount for a bank to use especially when considering venturing into new market, expansion, and/or expansion. In this case we are going to compare several types of market research and then come up with the one that offers the best in terms of efficiency, cost input required and its versatility, in this case we intend to observe its ability to serve many purposes. 1) Observation. 2) Online surveys. 3) Face-to-face interviews. 4) Focus groups. Observation; this is a type of market research that deals with observing/ observing how customers of a particular commodity behave in terms of their purchasing power, adaptability to a commodity and their reliance to that particular commodity. This type of market research works well in retail markets, especially when dealing with newly created and/or recently introduced products. The explanation therefore suggests that observation is not ideal for the banking industry since it time consuming, requires a great manual input in terms of employees. It’s also impractical since it requires observation and this is a practice that cannot be carried out in a bank. Online surveys:-deals with asking consumers a series of questions via the internet. Its popularity has seen a marginal increase year on year. This is greatly attributed to its relatively low cost in terms of advertisement. It’s also very common with small businesses used mainly as a way of endearing customers to them. Needless to say, a bank with a solid capital base requires better methods of promoting its activities. The method is undesirable in the case of a bank because of its inconsistency. If the bank was to use this as a source of gathering information, it would require several technicians to work on the ever changing world of digital media. Face to face interviews: These are personal, indulgent face to face conversations with the targeted market to understand their take on whatever new product the bank is offering or any anticipated changes and their overall effect on the current market trends. It’s a costly and not too efficient method because the researcher only gets one idea at a particular moment. Not advisable for when the work is colossal, or needed urgently because there is a requirement of time to compile all the date for a detailed and carefully weighed analysis (Patton, 1990). Focus groups: a focus group is a combination of several potential customers brought together to give information on their feelings about a new product in the market, or to offer their opinions on a yet to be introduced product or service, telling about how the product and/or service is bound to change their lives, giving the merits and demerits of such a product (Cooper & Schindle, 2003). This method of data collection is widely acknowledged as being most efficient, time conscious and moderately expensive as it comprehensively involves the ideas of many people gathered to offer their opinions. It is also the best way for the bank to understand the changes it needs to make before rolling out the pilot program/product/service since during the group meeting, new ideas are brought aboard for greater discussion. It allows the bank the prerogative to amend its product, or include other services not in the original strategy. It, without a doubt, also give the bank a look at the competition offered since a majority of the people are not originally banking with the said bank. This gives the bank the opportunity to try and match up the competition, while at the same time avoiding the unnecessary pit falls that come with every new enterprise (Hafez, 2000). The respondents required in this survey are: 1) The chairman of the European Islamic Investment Bank. 2) The regional managers of the bank in Africa and the Middle East. 3) Chief accountants in all the three regions (Europe, Africa and the Middle East). 4) Financial advisors for the bank 5) Investment policies managers from the three regions. 6) The general public. For the set objective to materialize, it’s paramount to have as few but fruitful sessions as possible. This is to ensure that all parties involved get their aspirations fulfilled within the provided opportunity of time. It is ideally understood that it’s possible to have the top management in three or a maximum of four sessions with the prospective bank clientele, giving the opportunity to the public to understand the undertakings of a bank with strong footholds in three diverse regions, Africa, Europe and Middle East. The data obtained in the research is to be compiled, edited, and chronicled then published in the European Islamic Investment Bank’s annual report, giving full insights into the results of the research and its full implications on the international (Annual Report and Accounts, 2006). Data Analysis According to Khorshid (2004), data analysis is a process of gathering, modeling and transforming data with the aim of highlighting useful information, suggesting conclusions to create useful information that will support decision making. The purpose of data analysis is to prepare the crude data into interpretable designs. Data will be analyzed descriptively and using statistical methods like the use of tables, charts, frequencies and percentages. These comparative methods are the best for quantitative data. Qualitative data from the focus group respondents will be summarized under various themes in regard to the research. Quantitative data shall complement the qualitative data. Conclusion Establishment of the EIIB was primarily, to bridge the gap that existed between the Islam financial markets and those of the western and OECD countries. The bank’s operations (Islam Banking) however, observe the Muslim (Quran) stipulations that are based on the circumvention of anything resulting to gaining of interest, any uncertainties and/or speculations, and an undue fortification or an iniquitous exploitation (Melissa, 2009). It is in the line of duty of the Bank’s Sharia Supervisory Board, majorly comprising of the eminent Islam scholars, to ensure that all the Bank’s products and services are structured around these principles. Under the primary research, specific tools chosen were the face to face interactions, observations online surveys but the most appropriate one is the focus groups. This is because it would take less time both for the interviewer and the respondent, as well as less resources. A pool of diverse ideas shall be brought to the table in an open discussion at the same tome and this will allow for interactive debates as the respondents are at a central place at the same time. Our focus respondents for this research include the board of directors in the Northern Africa for the bank and a ray of clients/customers in the banking industry as well as another portion of those in the Middle East. The best type of research to be employed in this research is the qualitative research which provides in-depth information and explanations to the subject under discussion. The focus group discussion to be employed is very instrumental in the provision of elaborative data. References Annual Report and Accounts, 2006. European Islamic Investment Bank PLC. Accessed from http://www.eiib.co.uk/documents/Annual-report-2006-final.pdf Retrieved on December 11th, 2012 Annual Report and Accounts, 2011. Your Brodge to the Markets of Middle East and North America. Accessed from http://www.eiib.co.uk/documents/AnnualReport2011.pdf Retrieved on December 11th, 2012 Cheung, A. et al., 2003. Governance and Public Sector Reform in Asia: Paradigm Shifts or Business as Usual? London: RoutledgeCurzon Clare, D., 2006. Channelling Wealth: A New Bank Is among a Range of European Institutions Springing Up to Offer Islamic Channels for Gulf Investors. London: MEED East Economic Digest. Clare, D., 2006. Courting Muslim Investors: London Is Positioning Itself at the Heart of the Global Islamic Financial Industry, and Hopes to Entice Gulf Investors to the UK in the Process. London: MEED East Economic Digest. Cooper, D., & Schindle, P., 2003. Business Research Methods. London: Mc Graw-Hill: Princeton. Esposito, J., 2004. The Islamic World: Past and Present. New York: Oxford University Press. Hafez, K., 2000. The Islamic World and the West: An Introduction to Political Cultures and International Relations. Boston: Brill. Khorshid, A., 2004. Islamic Insurance: A Modern Approach to Islamic Banking. New York: RoutledgeCurzon. Melissa, H., 2009. The Wests Islamic Finance Hub: London Has Quickly Established Itself as the European Leader in Islamic Banking, but It Will Need Continued Support from Gulf Institutions If It Is to Retain Its Position. London: MEED East Economic Digest. Patton, M., 1990. Qualitative evaluation and research methods. Newbury: Sage Publications. Read More