Strength and Weakness of Dubai Tourism - Case Study Example

Introduction The global economy has entered a growth phase where by which certain sectors has been witnessing unprecedented growth and to leverage the present day’s consumers buying and spending habits, a certain amount of management strategy should be there to cash on it. The countries have become borderless and the process has started pace with the introduction of new communication technologies. The internet has added a boost to the sale of products and many business and management organizations are facing a change in the traditional strategy. Firms and countries need to remain open to latest developments in technology and management to survive in this competitive world. There should be awareness of upgrading the management processes and enhance the performance standards. The scope and the approach of a management leader get changed by time and the aim of the article is to highlight the trends in management with Dubai tourism industry chosen as example. Planning The basic of management is planning (Planning, http://managementhelp.org/plan_dec/gen_plan/gen_plan.htm). By the term planning what is meant is that to set direction for something. It is done to ensure that the system will follow the planned direction. Every organization will have some inputs in the form of raw materials, money, technologies, and people. The inputs will be pushed through a process, aligined, moved along, coordinated to achieve the goals that has been set for the organization. The outputs can be set for the results that have been achieved like the products or the services for the consumers. This can be more jobs for the workers, more living conditions for the consumers and so on. The planning can be set for an organization as a whole or a part of department. The planning can start from the government level. In the Middle East, Dubai an example can be set as what planning can achieve and this can be understood by the growth of Dubai in the tourism industry. Dubai was an economy that was dependent on the oil economy for long time. Dubai is considered the second state in the UAE after Abu Dhabi. The primary planning was to establish Dubai as a center for telecommunications, finance and real estate. Tourism was made an important part of planning and this was demonstrated by the fact that tourism was headed by Family ruler. The reason for choosing tourism was that Dubai was considered as the most liberal state in Middle East and more than half of the residents of Dubai were expatriates. Determining the organization’s mission and goal The organization mission can be said in simple terms like the reason for the existence of the organization. The mission is usually expressed in the mission statement. This gives the idea of purpose to the employees and it also gives the image of the organization to the consumer. In short terms it sets the mood in which the company should go (“mission”, http://www.netmba.com/strategy/process/) The objectives can be termed as goals that the organization should aim to reach. The objective set should be challenging but achievable. The goal should be set in such a way that it is measurable and the organization should be monitoring the progress against the set goals. The goals that can be set as the output from the organization. Strategy is the method for achieving or reaching goals. The goal that Dubai was trying to achieve was that it should become a major tourism destination by 2010.For this industry partnership has to be done and the visitors should be treated to unique experience. The intention in terms of figure was to get 15 million visitors by the year 2010.The up gradation of the international airport in Dubai was being done in this process. The setting up of Emirate Airline was done to achieve the organizational goal. There were at least 15 million passengers who has gone through the Dubai airport in the year 2004 and many were transit passengers. The opening of the cruise terminal in the year 2001 was done to attract tourists and cruise ships. More than 26 international cruise ships have visited Dubai and that shows the increased attractiveness to the Dubai by international tourists. Dubai has been trying to position itself in between the destinations that have been termed as attractive and expensive like the Maldives, Caribbean and Australian. Dubai has considered itself in competition with cheaper destinations like Turkey, Morocco and Egypt. The first sign that the objective goal was getting achieved was understood when the receipts from tourism overtook the receipts from oil in the year 2003. Formulation business level strategy The business can be positioned against rivals using the business level strategy. There should be change in demand and that has to be anticipated. The technology changes should be understood in detail . Low cost The management will have to come up with a strategy of providing high quality goods at affordable price or at low cost. This can be achieved by economies of scale. By the term economy of scale what is meant is that there will be reduction in cost per unit that has been resulted from increased production and that can be realized through operational efficiency .The cost of production remains the same as the same or falls as the production reaches maximum capacity (economy of scale, http://www.investorwords.com/1653/economy_of_scale.html). Every organization will be looking to increase the profit by reducing the cost. There should not be a compromise on the quality of the products or services that is given. Dubai has been concentrating on the high end on the accommodation area and approximately 275 hotels and 96 apartment hotels were opened in the year 2004 .This had accounted for 75% of the accommodation in UAE.There is a plan to have at least 80000 hotel rooms in Dubai by year 2010 end. It was in this context that Palm Dubai and Dubai tower has been build. The sail shaped Burj al-Arab hotel has been considered as an icon by many tourists. The idea was to have more accommodation of high quality at reasonable international price and that can attract a lot of international tourists. It was in this context that the transportation charge was brought down by the Dubai Emirate. The bus fare was fixed at 2 Dirham’s to all distances. (Bus route, http://dubaiforvisitors.com/2008/06/25/bus-fares-for-internal-routes-fixed-at-dh2/)There is also another cheap way of travelling internally using the boat services in the creek areas situated in Bur Dubai, Gold Souk. The fare has been fixed at 1 Dirham’s for the boat travel and there is an option for travelling in air conditioned boats.( Peter Mason) Differentiation The organization or company will be looking forward to make sure that the services or products sold are different from competitors. There are several firms in the field of automobile, refrigeration and other industries that have introduced remanufacturing technology as a method of differentiation from competitors. There are companies like the Diamler Chrysler who has tried to replace high speed diesel with bio fuel and prove a difference. The tourism in Dubai was based on the concept of sun, sea and sand in the initial phases. To get the differentiation, desert based activities were used by the Dubai tourism authorities. The safari was the biggest attraction for tourists. There has been a big shopping destination like the Mall of the Emirates which is the largest shopping destination indoors outside the North America. There is an indoor ski complex that has attracted many European tourists. There is a theme park in the name of Dubai land in Dubai and there are plans of heritage tourism and eco tourism being planned in Dubai.( Peter Mason) Formulation of Corporate strategy Corporate strategy is considered as the selection of business in which the organization should compete and the development and coordination of the portfolio of business. It should be concerned with the reach and that means the overall business that has to be integrated and managed. The competition has to be clearly defined and that can be stated in an example. The insurance group will be having two companies under its belt with both dealing in two different products and two different groups. That means managing the different business in the groups has to be done effectively to have the best sales and the best corporate strategy. There has to be clear management practice to understand how the organizations will be managed and it can be either in the form of centralized format or decentralized format. The concept of business has to be long term. The five forces model (Porter'sfive forces) Rivalry The companies in the same industry can indulge in rivalary.Regarding the tourism industry in UAE, there will be many hotels and tour operators offering services to tourists .The rivalry among the firms in the tourism industry is low means that the industry is disciplined. This can be said of code of conduct. There can be change in price that can be said under competition. In Dubai there are lot of hotels that are serving the high end tourists and the competition is open for hotels who can take the challenge of providing the services at affordable price. The competition of Dubai tourism comes with Abu Dhabi which is part of UAE.That can be considered as a group company and two different companies fighting each other. The states of UAE have different tourist attractions and they are vying with each other to gain tourist.( Peter Mason) Threat of substitutes There are various substitutes that can bring down the cost of product. In the case of Dubai tourism in this era, they have been facing competition from cheap tourist attractions that can satisfy the tourists who are facing financial crunch due to economic recession. Buyer Power The consumers should have the purchasing ability to buy the goods or services that has been offered. In the case of Dubai tourism, the main attraction is the Dubai shopping festival and that can bring lot of tourists who can buy goods at affordable prices and any carnivals or shopping festivals that can offer a good cheaper alternative can bring good. The buyer powers in Dubai shopping festival is concentrated and purchase a significant output. The buyers are strong as they can switch to cheaper products in the Dubai shopping festival and the buyers are fragmented as they come from different cultures and nations. Supplier Power The customer relationship can be termed as weak as travel agents relationship with airlines has meant that the low cost airlines in Dubai has not picked the pace though Emirate Airline I planning budget airlines. Barriers to Entry Dubai tourism has advanced making it tough for other emirate states to gin more market share in the overall tourism industry in UAE.There are high exit costs.( Peter Mason) Conclusion The model can be used to understand the impact, strength and weakness of Dubai tourism. Reference Bus route, viewed on May 21,2009,retrieved from http://dubaiforvisitors.com/2008/06/25/bus-fares-for-internal-routes-fixed-at-dh2 economy of scale, viewed on May 21,2009,retrieved from http://www.investorwords.com/1653/economy_of_scale.html Peter Mason," The key player in Tourism”, Tourism Impacts, Planning and Management,pp.112-135 Planning, viewed on May 21,2009 retrieved from http://managementhelp.org/plan_dec/gen_plan/gen_plan.htm mission, viewed on May 21,2009,retrieved from http://www.netmba.com/strategy/process/ Porter'sfive forces ,viewed on May 21,2009 retrieved from http://www.quickmba.com/strategy/porter.shtml Read More