Dubai vs London - Competitive Profile Matrix - Report Example

Dubai and London [Type the document sub 9/30 user Contents Introduction Dubai is defined as the paradise of tourism centre as well as a place which had rapidly grown into a business hub depending on its natural resources. The anthem of UAE sings for the idea of nation’s prosperity as it is said "Ishy Bilady" ("Long Live My Nation"). The country is located in the southeast end of the Arabian Peninsula on the Persian Gulf and is presently attracting the attention of the whole world. UAE is a federation of seven emirates. Mohammed bin Rashid Al Maktoum is the Prime Minister of UAE and Ruler of Dubai. The country is consists of the seven small emirates of Abu Dhabi, Dubai, Sharjah, Ras Al-Khaimah, Ajman, Umm Al-Qaiwain, and Fujairah. The UAE covers 32,278 square miles and it population is growing due to increased expatriation from countries like India, Bangladesh, Iran, Pakistan etc. UAE is completely a Muslim country with strong traditional values and Moslem culture. For long the country was more or less a desert oriented culture where nomadic Bedouins were the only inhabitants in the land. Their civilizations were centered on small oasis and they mainly used to live by the profession like farming, pearling and sea trading (Al-Emaratiya, 2013). UAE’s growth rate is about 4.8 per cent by the IMF since the year 2007. The overall GDP growth of UAE is about 5.2 % and this is much ahead of the countries like Brazil, Russia, Turkey, India etc. In spite of regional turmoil UAE could excel in bringing in the best support recovering the consumer demand with in the nation (Arnold, 2013). The financial recession in different parts of the world had also not affected the region for long as the country is not being dominated by foreign investors. Dirham’s Currency is also about .27 US Dollar. UAE property sector has also realized a great growth and this was realized through double-digit expansion rates (Arnold, 2013). The country is more popular as a center of Global tourism as thousands of foreign tourists keep coming to experience the luxurious resorts in the country (D’Mello, 2013). The country is therefore known as a place which provides multi-faceted district of sporting, world-class sporting events, malls, top class resorts, cultural entertainment at Global Village, entertainment, and retail attractions. Dubai land experience centre is a place filled with leisure and experiences with a great time with dinosaur eggs, incubators, The Desert Ranch, Desert Camps, Roller coasters and space shuttles etc (Dubai Land Experience Center, 2013). London is the capital of England and the United Kingdom. The city is having around 13 million of population and therefore is being referred as the most populous city in UK. The history of London relates back to Romans and Anglo-Saxon people who had early civilizations in the land. The history goes back to the chapters that relates the land to Rise and Fall of Roman London, Anglo-Saxons to a Norman Invasion, Building of London Bridge, formation of Londons Royal Exchange to Inigo Jones - Renaissance Man, Samuel Pepys and the 1665 Plague, The Great Fire of London, Londons Coffee Houses etc (History of London, 2013). The land is also a place of literature and authors and this makes us to name the greatest of England’s novelists and authors like Charles Dickens - Victorian Author, Judith Flanders ( Writer of The Victorian City: Everyday Life in Dickens London) , and many such other names. City of London covers an area of 1.12 sq mi (2.90 km2) and is a centre of a busy lifestyle. 18th century saw the growth of the city at a very rapid speed. The city evolved and was greatly influenced by British Empire and therefore the English merchants could do business in every British colony. Slowly the country turned into a great heritage and people from all around the world had flocked in the city as it grew as a business hub, city of culture, health care centre, tourism and a city of best transport. London is considered as any of the most developed city on the earth. It is also being referred as the cultural capital of the world. London is also a place like UAE where many people from different countries has settled down and giving a completely different identity to the place. Almost 300 languages are spoken in Greater London and all these suggest how much the globalization does change the originality of the city. The city is not only a place for the British people as it has grown in to own cosmopolitan culture in itself. The city is ruled by a local Government as well as the National Government. London is the seat of the Government of the United Kingdom. The monarchy of UK is also referred as the constitutional monarchy. The current monarch is Queen Elizabeth II, Dubai and London Comparison In the below models we are trying to compare between London and Dubai so as to understand the competitive advantages of both. It will also help us to understand where they differ and where they are same. Dubai and London are countries which are equally influenced by monarchy and parliament and therefore comparison of these cities remain very contextual. Porter’s five forces: Threat of new entrants: Dubai is actually threatened by lot of new cities which are giving a tough competition to Dubai market. These are the countries like Colombo, Kuala Lumpur, Shanghai or cities of India. The United Arab Emirates government has also set out rules and regulation that govern the entry of players in the banking sector. This is aimed at protecting the local banks as well creating a competitive banking environment. But London is a developed city and is perceived as the most important business hub as well as cultural capital. The growth of London had not been within 50 years like City of Dubai. There had been a long history before London could become the centre of World’s attraction. The city is therefore not truly challenged by the growth of the cities like Dubai or Colombo. The city of Dubai is actually over populous and therefore it finds hard to include such a growing population in the city. The city is however starting business terms with other new cities. FDI investment in Dubai is one of the major important issues which had helped in the excellent growth of the city. This is the reason why Dubai seems to be threatened by the other developing cities. But London had not been dependent on FDI and therefore is not being challenged by the growth of the other cities. Bargaining power of suppliers: The first part in this report is to understand the meaning of the suppliers for a big city. They are mainly investors, infrastructure developers, industrialists etc. UAE is enjoying good position as most of the foreign investors are attracted to the city and the Government is taking own initiatives to encourage investment. London is a place where business men dreams to invest as it is referred as an angel business framework. Best companies and entrepreneurs seek to invest in London and this makes supplier’s power really low. Bargaining power of the buyers: People of the city are considered as the buyer and their power is being compared keeping in mind both UAE and London. The residents of UAE are not enjoying bargaining power as they are not having any power to regulate government’s decision. It is being administered by Dubai development Authority and this is much Government centric. Threat of Substitutes: These are the places which are small developing places which may also create threats for the city’s popularity. One of such place may be Palm near Dubai which may grow as a threat to the city. In relation to London, Zoos and Wildlife Parks near to some places and private theme parks near the city may appear as threat to the city. Tourism and education thus offer a threat to the banking industry. Competitive profile matrix: Natural resources: Dubai is a city with best of oil resources in oil sector and this had always been an advantageous part of its growth secret. Other major revenues are got aviation industry, real estate, tourism, and financial sector. With the developed economy, the tourism sector is slowly picking up. This is because the city is symbolic for its high-rise structures as well as skyscrapers. On the other hand, London is full cultural diversity attracting visitors from around the globe. London has made the United Kingdom as the second most visited city in the world making it the globe’s cultural capital. London is famous for entertainment, fashion, commerce, arts, finance professional services, and healthcare, as well as research and development that have all contributed to its prominence. With 43 universities, London is regarded as a city with largest concentration of higher education globally. River Thames, oil, iron ore, natural gas, and limestone are the natural resources that are found in London. However, its oil revenues are lesser than Dubai’s. Competitive Profile Matrix: it is very crucial strategic management tool that is utilized to make comparisons to the firm with main players of the industry when making purchasing decisions. Due to high population of Muslims in Dubai, the Dubai Islamic finance has grown faster than the London Islamic finance. There are more Islamic financial institutions in Dubai than in London. Both the Dubai and London Islamic finance are able to increase revenues due to the expanding market. They all experience low switching costs since customers freely switch from one product to the other. In both entities, there are other firms competing for the same market share resulting to a struggle in market leadership. Both experience high fixed costs leading to an economy scale effect that enhances competition. Both firms have portrayed outstanding performance as well as contribution to Islamic financing. Population: Population of Dubai is about 2,106 million of people. And population of London is about 8.308 million according to 2013. GDP: 82.11 billion USD is the GDP of Dubai according 2008. London’s GDP is about $546.4 billion) in 2012. Infrastructure: The infrastructure of both the cities Dubai and London is comparable for its innovativeness. London’s infrastructure is well associated with its History as is being built over centuries and Dubai had been built over 3 decades and is a very well planned city. Both London and Dubai has excellent transportation facilities, excellent roads, and clean environment and make best places to live in. Cost of Living in London   Consumer Price Index (Excl.Rent): 113.24 Rent Index: 87.81 Groceries Index: 99.62 Restaurants Index: 105.72 Consumer Price Plus Rent Index: 100.95 Local Purchasing Power: 78.54 Cost of Living in Dubai   Consumer Price Index (Excl. Rent): 71.49 Rent Index: 70.2 Groceries Index: 65.86 Restaurants Index: 64.32 Consumer Price Plus Rent Index: 70.87 Local Purchasing Power: 106.7 Both the cities are expensive but Dubai is little less expensive tan London as compared to the Hotel price. There is different kind of hotels and some of them are too expensive and some are really affordable for middle class. Compared to that London is beyond budget. Integrative strategies: The integration strategies are very important for any city and country. This will actually help the city to move beyond and to excel in all possible way. Dubai had been excelling in such integrative strategies. The integrative strategies are more apparent in the educational field where many foreign universities like AUE had started its operation in Dubai. Dubai Health care city is such an example. This had helped the country to experience the advance technology in the city and also to bring best doctors from other countries. London has also been into such integrated management system. Some of them are in health care technology, or in sports, or in improving transport system. The European Commission’s guidance has prepared sustainable Urban Transport Plans through horizontal integration between local authorities and European transport system. Comprehensive strategies: In relation to the comprehensive strategies, the Dubai Islamic finance aims at evolving the banking sector to cater for both local and international customers in such a way that will they will reap the best rewards from both worlds. On the other hand, the London Islamic finance is focused towards growth, product and service standardization so that the customers do not easily switch to other financial institutions, and increase product diversification, as well strengthening risk management along with practices of governance in the financial institutions. Intensive strategies: Dubai Islamic finance has contributed significantly to the growth of over 300 Islamic financial institutions. In the same way, with London being a commercial hub, the London Islamic finance has also made significant contributions. Both the Dubai and London Islamic finance provide diverse Sharia’ah compliant services as well as products including Johara banking, business banking, private banking, retail banking, real estate finance, and Sharia board, among many other services. SWOT matrix: London Dubai Strength: People of different origin has created new niche. Good infrastructure with road and best transport facility. Place of historical importance. Business hub and a place of culture. Well developed banking sector Diverse population providing ready market for financial services as well as products. Expatriates are majorly counted among the population. Best e- Governance structure. Tourism hub. Best infrastructure Dubai expo 2020 Shopping Malls Sky Festival State-of-the-art technology in the banking sector. Large population of people especially Muslims, thus promoting the Dubai Islamic finance. Weakness: Expensive Any class of people cannot survive in the country Racism The London Islamic finance is inclined towards serving the Muslim population. Poor English and orthodox nature of people. Acquaintance factor and more inclination towards Emiratization. Labor unrest. Illegal immigration Climate is extremely hot Dubai Islamic finance is inclined towards serving the Muslim population. Opportunities; New scopes and investment in the city. Technological growth. Old reputation and new projects Development of country sides. Better investment in IT Better transportation facilities. Use of high-standard technology and innovation in the banking operations Global tourism New business opportunities. Investment in education and technology with initiative like smart schools, foreign universities, and research centers. Use of high-standard technology and innovation in the banking operations Threats: The new cities like Louisiana, Valletta etc. Emerging banks Local labor unrest and threats from other countries like Bangladesh regarding migration or wage limits. Unethical practices like smuggling and exploitation. Stiff competition to the banking industry from the oil and the transport sector BCG matrix: Dubai is the star as it is having high market growth and high market share. This is because the country is developing country and it more scope to grow further. London is a cash cow as it has high market share and low growth being already a developed city. With regard to Dubai and London Islamic finance, they are stars since they have provided financial assistance to growing Islamic firms in Dubai as well as London. Both firms have incorporated internet banking so as increase their market share. Following this further, since the BCG matrix is an innovative cross-selling tool in the banking industry, the Dubai banks are now aware of the requirements of both their external and internal customers. On the other hand, the London Islamic finance institutions are focusing on reaching more customers and providing them with customized products. In some instances, they are offering language translators in language management of customer portfolio. Conclusion As a whole, Dubai and London cannot be compared with each other looking at their history. London is an old city with a lot of history. But in the present context both are doing well as modern cities. Both have advanced their ways of doing things. In the same way, their commercial activities are at advanced stages compared to other cities. Bibliography Al-Emaratiya, A.-T. (2013) United Arab Emirates. Arnold, T. (2013) UAE economic growth at fastest since 2007. D’Mello, S. (2013) Dubai set to become global tourism hub. DUBAILAND Experience Center (2013) DUBAILAND Experience Center, [Online], Available: HYPERLINK "http://www.dubailand.ae/details.aspx?hid=7&t=DUBAILAND-Experience-Center" http://www.dubailand.ae/details.aspx?hid=7&t=DUBAILAND-Experience-Center . History of London (2013) History of London, [Online], Available: HYPERLINK "http://www.history.co.uk/study-topics/history-of-london" http://www.history.co.uk/study-topics/history-of-london . Read More