The Roles Of Ict In The Government Information Technology Essay

The Roles Of Ict In The organisation Information Technology EssayICT stands for training and communications technology, ICT master(prenominal)ly foc physical exertions on the role of communication that includes ph mavin lines and radio receiver data/signals as well as the ability to control schooling including hardw atomic number 18 for computers and networks and software. Throughout this essay, the course in which ICT has affected and continues to become of gamy importance to the United kingdoms Government allow for be explored, the main areas that will be conducted in this research are the Government ICT scheme, greening giving medication ICT, how the internet is transforming the UK Economy, a selected heel of Government departments and how ICT is important to their daily utilize and finally an end conclusion highlighting the importance of ICT development in the UK political science.Government ICT schemeIn October 2005, the first government ICT strategy was released am bit the schedule for the ICT commonplace sector (organisations funded by the government) towards the next five years. Its main aim was to focus on the areas that could enable transformed service obstetrical delivery, place the citizen at the heart of what we do, shared go and professionalising IT-enabled business change (Cabinet means 2010 URL Date Accessed 02/11/10). Five years later, after reviewing yearly reports and employing a recent Government chief randomness officer a new strategy was released. Its approach has been adapted to fit the current stinting humour in which the nation is in transforming services against a approvedrop of economic pressure change (Cabinet Office 2010 URL Date Accessed 02/11/10). The new strategy will straight off make possible an ICT infrastructure that will elaborate many problems across the board which the Government faces. It also encourages the development of delivery existence change magnitude via the public, private and third par ty sectors in say to meet the needs and requirements.In 1994 www.direct.gov.uk formally known as www.open.gov.uk was de none to hold all websites and links to government and agency websites, with all the increase pressure to deliver high and better public services, expectations had never been higher due to the potential of better services that was unforeseen when the website was first published. However, with the increased prospect of technology, expectations commence changed and so cede demands which has enabled the government to make it easier to bag their day to day business and help those in need of support, talktofrank.com was isthmus up to assist and explain the dangers of drugs and notschool.net was set up for those children excluded from school. On the opposite hand Denis McCauley, Global Technology Research Director at the economist Intelligence Unit, believes the government can do more(prenominal) recognizing that although it does well in terms of its internet we bsite, its popularity is decreasing rapidly and he thinks that even more can be done in terms of using randomness technology.Although the United domains Government is not solely to thanks for its success in its public sector ICT call, it reaches the top spot when compared to the rest of Europe, as its citizen-based services are 100% online compared with the average 71% that Europe has. Since the turn of the degree Celsius the UK was the first Government to even start to allow its citizen-based service online interpreted approximately four years till Europes average came became public.Turning Government ICT greenSince the governments increased use of ICT from owning some of the largest and most advocator fullest computers and public servants using their desktop computers at a higher rate than expected, be it from issuing tax disks to people across the country to saving x-rays on file. The Government is the countries largest purchaser of ICT equipment, and use a large amount of p ower and resources. They have decided to set an example amongst the nation and turn green, as they want the disposal of monitors, printers, computers and servers to happen in a sustainable and creditworthy way. To start the Governments reduction of carbon emissions another strategy has been created called the greening government strategy. According to the cabinet offices brochure on becoming green by turning just one computer off will bear on 235kg of carbon dioxide emissions a year. By turning off every one of Whitehalls 500,000 computers at night would have the same effect as victorious 40,000 cars off the road.How the cyberspace has transformed the United kingdoms EconomyMoving forward from the strategies recently formed for ICT, this essay will now review how the Internet has affected and transformed the UK Economy. The Internet has largely influenced societies in the United Kingdom with a majority of them having easy access to it, many modern phones now come with the capab ility to do such intimacy. Websites such as ebay.co.uk and amazon.co.uk have increased the populations spending habits, which further down the line companies pay tax, which turns back into the government. In 2009 the Internet contributed to 7.2 per cent of GDP in Britain, an estimated 100 cardinal making it larger than the countries transportation, construction or utilities industry. Whilst the large growth in Internet activity has increased it has disrupted many businesses but has had a positive effect on the medium and smaller based businesses that take anything from clothes to computer games with research showing that the United Kingdoms economy is apt(predicate) to increase by up to 15 per cent via the Internet.Government organisations and their use of ICTNow this essay will look at a number of government organisations and the importance that ICT plays in them.-Department of consort and Pensions (DWP)To begin with The Department of Work and pensions (DWP) pays money into mi llions of peoples accounts across the nation, from people on benefits to elderly people receiving their pension, its use of ICT is on a large-scale basis and as a altogether plays a major role in the social sector of todays lifestyle. ICT is a positive use in the DWP as it allows a quicker way of handling instruction and delivering an output service due to the large computer memory servers they have. However errors still occur in which the government loses millions at a time and because of this have called for an urgent change in the way their ICT strategy is changed-Ministry of DefenceThe Ministry of Defences (MoD) role is to protect the nation against any potential brat internally and externally, its team highlights dangers through many methods that involve ICT such as listening in on phone calls or checking the internet for major threats. Its ICT role again is very important to how its run due to safekeeping in contact with other global agencies to keep informed or so terrori sm strikes, it also informs local media in order to get information broadcasted across the UK. Another use of ICT within the MoD is to ensure military standards are kept high as well as the milieu. once again by using the Website they allow people to view the procedures and information of the MoD, which encourages responsibility.-Driver and fomite Licensing Agency DVLAThe use of computers in the DVLA is very important, as they have to mature tax certificates as well as driving licenses and number plateful registration forms in their large memory banks.ConclusionConcluding the report, ICT is credibly one of the most important aspects of the governments way in terms of tally its whole organisation, due to this it is hard to find any faults into the way they are actually sustaining their ICT, the only weak point is due to the fact that their website is not as popular as it was before however it still provides the information that you look for as well as email addresses and phone numbers pool if you need more help. With the Government also turning green they have taken another positive step in terms of being leaders and hopefully turning it in to a national thing they have started to release television adverts and produce leaflets to spread the word.http//www.parliamentandinternet.org.uk/uploads/Final_report.pdfhttp//www.cabinetoffice.gov.uk/media/66177/greening_government_ict.pdfhttp//www.direct.gov.uk/en/index.htmhttp//www.cabinetoffice.gov.uk/media/317444/ict_strategy4.pdfhttp//www.independent.co.uk/environment/climate-change/anger-as-uks-carbon-dioxide-emissions-reach-10year-high-442496.htmlhttp//www.publictechnology.net/sector/central-gov/martin-read-and-three-little-words-ict-painhttp//www.direct.gov.uk/en/index.htmhttp//www.independent.co.uk/environment/climate-change/anger-as-uks-carbon-dioxide-emissions-reach-10year-high-442496.html

Analysis of Nokias Competitive Policies

outline of Nokias Competitive PoliciesNokias Competitive Policies In Handset manufacturing in AsiaChapter 1. excogitationThe progress of tech zero(prenominal)ogy has altered our daily life piece dramatically. In modern 2 decades, people have seen the big whatsis brought by colour TV tele think laptops supple phone and and so on Among them, the contri thoion of expeditious phone is oddly prominent given the consolidation of technologies of Inter dismiss, laptop, and communication etc, the small and good looking handset bequeath change us ubiquitous application of modern multi-functions. The advantage of 3G even bring forward attracts our minds with colourful imagination.During the upgradation of our living style, we owe a lot to the companies of the handset pers invariablyance, especially those popular giants including Nokia, Motorola and Samsung. When they change our living successfully, they realize their develop targets as wellspring. For example, agree to the For tune Global 500 in 2005, Nokia and Motorola ranked 130th and 138 respectively1. Thus, they be recognized by the society.Its unpredictable for a comp each to strike great goals without correct strategies to employ. In the enraged competition of handset attention in china, the correct agonistical strategies argon required for the p finesseicipant to entice grocery store sh bes. Surely, some clock the right strategies are difficult for survival. Nokia, as the no. 1 in the handset industry of chinaware, is originally the biggest winner through exertion of correct agonistic strategies.As is mentioned above, the competition in handset industry in mainland mainland China volition receive even more(prenominal)(prenominal) fiercer a tenacious with the emerging tr wind up such(prenominal) as the coming of 3G, the adjustment of distributing channels, and the improved leval of industrial centralization etc. So competitors should promptly take for granted relevant changes of their competitive strategies to adapt to new environment.This dissertation aims rootage to psychoanalyze the competitive strategies already employed by Nokia1 Accessed on Feb.23rd, 2007, The contention of Fortune Global 500 in 2005 http// taint.icxo.com/brand500/top500_1.htmDuring the progress of Chinese handset industry. To confirm whether the competitive strategies are acurate, I use Porters 5 forces theory as the frame to anatomize the factors such as Economies of scale, Product differentiation, Capital requirements, Cost disadvantages, independent of size, Access to distribution channels, government activity policies, and Competitors Retaliation. Thereby, the rationalities of Nokias competitive strategies in Chinese handset industry whitethorn be authenticated. gibe to the great lots of demonstrate collected from website newspapers and catena, new trends of handset industry appear gradually. To grasp the future tense flux on foodstuff administer and industrial environme nt, it is necessary for Nokia to trim in the bud.As a natural extending of the aforesaid analytic thinking on competitive strategies, this paper also expounds the reason causing the new industrial trend in Chinese handset industry and suggests the probable strategies Nokia may adopt.As is well known, according to the Moores law, the chips of the handset is developing at a very rapid speed. to a greater extentover, the handset is salvage influenced by the chanceful vanguard fashion. It is not easy to survive in the fluctuate market, and pin nothing of being hint company in the industry. I attentiveness textual analysis might benefit the readers to recognize the industrial property and use Nokia for reference.This text takes a logical sequence to discuss the follow analysis, so the chapters are in turn as follows Introduction to cover upIntroduction on Nokia Corporate The wandering Handset manufactureindustrial digest Using Porters 5 Forces Theories Analysis on Nokias Com petitive StrategiesEvolution of Nokias Competitive Strategies and Conclusion. The content of each chapter encircles its name, and the detailed discussion will be deployed in the following chapter.Chapter 2. Introduction on Nokia CorporateWith hundreds of years nurture, Nokia has successfully realized its industry exchange within the knowledge base-wide range, and gradually completed its leading assign in the handset industry in China as well as in other area of all the domain of a function. The whole experience is full of legendary color, as is introduced as followsSection 1. Nokias Developing History1Brief Review on Nokias HistoryAccording to the creative activity from Nokias autobiography, the roots of Nokia go back to the year 1865 with the establishment of a forest industry enterprise in Southwestern Finland by exploit engineer Fredrik Idestam. Other proportional events were the foundation of Finnish Rubber industrial plant Ltd in 1898 and in 1912 Finnish Cable Works began operations. After decades of operation, the triad companies were merged to form Nokia Corporation in 1967.The worlds initiative international cellular wandering(a) sound entanglement, NMT, was introduced in S basindinavia in 1981 and Nokia make the first motorcar phones for it. At the beginning of the 1980s, Nokia strengthened its position in the telecommunications and consumer electronics markets through the acquisitions of Mobira, Salora, Televa and Luxor of Sweden. In 1987, Nokia acquired the consumer electronics operations and part of the component business of the German Standard Elektrik Lorenz, as well as the French consumer electronics company Oceanic. In 1987, Nokia also purchased the Swiss cable machinery company Maillefer.In the late 1980s, Nokia became the largest Scandinavian information engineering science company through the acquisition of Ericssons data systems division. In 1989, Nokia conducted a substantive expansion of its cable industry into Continent al Europe by getting the Dutch cable company NKF.In 1992, Jorma Ollila became the CEO of entire Nokia Group, who made a strategicalal decision to concentrate solely on telecommunications in the coming Digital Age. Thus, during the rest of the 1990s, Nokia continued to divest itself of all of its non-telecommunications divisions. This strategic shift consolidated the foundation for Nokia to become a worldwide illustrious leading company in telecom industry.22Nokias execution in Recent YearsAfter the strategic shift in 1990s, Nokia has established its leading position in the spherical telecommunication market. all(prenominal) business item, especially winding phone item, has exhibited high-speed of development ever since.At present, Nokia comprises four main business themes winding handsets, multimedia, enterprise solutions, and earningss. Among them, the sprightly handset is the pillar business for entire group operation.According to one-year report of 2005, Nokias net sales arrived at EUR 34 191 million3, realizing an augment rate of 12.56% when compared with EUR 30376 million in 20004. Among the total net sales, sales of winding phones reached EUR 20811 million, occupying 60.87% of the total net sales. In 1992, the mobile handset business precisely account for 20% of the total sales of entire group.Nokias in operation(p) earn for 2005 reached EUR 4 639 million, representing a 2005 operate margin of 13.6%, and Operating make in mobile handsets decreased 5% to EUR 3 598 million (operating profit of EUR 3 786 million in 20045), representing a 2005 operating margin of2 Accessed on Feb.23rd, 2007, The History of Nokia 1865-2002, http//r2.nokia.com/nokiahistory/index.html3 Accessed on Feb. 23rd, 2007, Key data of Nokia http//www.nokia.com/ touch on?cid=EDITORIAL_40264 Accessed on Feb. 23rd, 2007, yearly selective information 2000, http//www.nokia.com/A41265015 Accessed on Feb. 23rd, 2007, Annual Information 2004, http//www.nokia.com/A412649717 .3%. However, in comparison with the EUR 83 million in 19926, the operating profit of mobile handset in 2005 represents more than 43 times step-up.As is recognized by the global consumers, Nokia brand was ranked sixteenth among The being 500 Most Influential sends in 2005 by the World Brand Lab.According to the Fortune Global 500 in 2005, Nokia group ranked 130th and represented no. 1 among the diligence of meshwork and Other Communications Equipment, taking a position higher than any other competitors.From the aspect of mobile handset, till Sept. 2006, Nokia captures 35.1% of the global market. According to the Gartner institute, Motorola was in second place, with market cover of 20.6%, and Samsung of South Korea saw its share of the world market fall to 12.2 % from 12.5 in third quarter 2005. 7Obviously, Nokia has steadfastly established its leading position in its industry and has become the worlds leading provider of mobile telephones.Section 2. Nokias Development in Chin aThe year Nokia traded with China can be traced back to 1950s. And later, until 1985, Nokia opened its first offset in Beijing to initiate its development of early format in China.In 1995, Nokia set its joint venture in China to establish large scale of GSM system equipment. Then, in 1997, Nokia deliver China the first GSM 1800 network. Soon later, in 2000, Nokia started up the Chinese GPRS network that is first one compatible with newest business6 Martti Haikio (2003) NOKIA THE INSIDE bill. Published by Edita Publishing Ltd and Nokia Oyj, Copyright 2002, Chinese chance variable First Printed in Sept. 2003. pp.272-273.7 Accessed on Feb. 23rd, 2007, Nokia is top mobile phone maker for Q3-Gartner, Nov. 23,2006 http//telecomasia.net/article.php?id_article=2793 criterions in the world.8In 2001, Nokia invited its main global partners including mainly hardware providers to invest rough RMB 10 billion together in Star give the sack Industry dominion in order to form integrated yiel d capabilities and to decrease cost.9During 2003, Nokia released 15 styles of handsets and ranked no.1 of the GSM mobile handset. As is reported, the top 3 brands of GSM in 2003 are NokiaMotorola and Samsung, with market shares respectively 17.23% 16.46%and 11.81%.10When entering into the new century, Nokia strengthens its cooperation with China in the field of operations of communication technology and takes active part in the development of Information Industry in China. At the same time, Nokia commits itself to employment and cultivating of the local talents.To the end of 2004, Nokia arrived at no. 1 of the whole handset sales in China. In 2005, the rising trend continued. It is calculated that Nokia captures 25.8% of national handset market share in 2005, realizing 10.8% more than in 2004. By contrast, the second brand Motorola only gets 8.7% of market share11.After decades of tillage, Nokia has really established its leading position in the handset industry in China it is be lieved that Nokia will take in greater success in the mobile8 Martti Haikio (2003) NOKIA THE INSIDE STORY Beijing Strategies of Nokia, Published by Edita Publishing Ltd and Nokia Oyj, Copyright 2002, Chinese Edition First Printed in Sept. 2003. pp.234-236.9 Accessed on Feb.23rd, 2007, Explore Star Net Industry District, by Wangshucheng, Huoxiaoguang, Yujingzhong, character from Xinhua Agency. Yesky.com-Chinese IT website, http//www.yesky.com/135/215635.shtml10 Accessed on Feb.23rd, 2007, Synthesized analysis report on handset in China by YiGuan, Jun. 29th, 2004, http//www.c114.net/zhuanti_simple/3g/Read_3g.asp? accomplishment=3gzlkstyptID=3articleID=2611 Accessed on Feb.23rd, 2007, Domestic Handset Market theatrical role Declines abut, 28th, 2006, http//www.chinamobile.gov.cn/200603/61242.shtmlcommunication market in China under the 3G era.Chapter 3. The mobile handset industryAs is well known, competitive strategy is the outcome resulting from competitive environment. Without g iven circumstance, it will become meaningless to discuss whether the employment of certain competitive strategies by some enterprises is successful. Therefore, onwards anatomizing the competitive strategies of Nokia, we need to trace the notion of mobile handset industry and its main composing elements.1. DefinitionsWhat is a mobile handsetA mobile or cellular phone is a long-range, portable electronic de transgression for personal telecommunications over long distances.Most current mobile handsets connect to a cellular network of base stations (cell sites), which is in turn interconnected to the public switched telephone network (PSTN) (the exception are satellite phones). Cellular networks were first introduced in the early to mid 1980s (the 1G generation). Prior mobile handsets operating without a cellular network (the so-called 0G generation), such as wide awake shout out Service, date back to 1945. Until the mid to late 1980s, almost mobile handsets were sufficiently large that they were permanently installed in vehicles as car phones. With the advance of miniaturization, before long the vast majority of mobile handsets are handheld. In addition to the standard voice function of a telephone, a mobile handset can support many additional services such as SMS for text messaging, email, packet switching for access to the Internet, and MMS for sending and receiving photos and video.122. Brief Introduction on Global Mobile Handset IndustryBroadly speaking, the mobile handset industry consists of upstream supplierswhole handset12 Accessed on Feb. 23rd, 2007, Mobile phone Definition Introduction, Sirchin-The Free Encyclopedia And Other Stuff Beta. http//www.reference.sirchin.com/?wikidirectoriesmobile-phonemanufacturersnetwork operators downstream distributorsterminal retailers etc. From raw materials to handset product, from hardware suppliers to parcel providers, from the handset per se to service and content providers, mobile handset industry can be id entified as the whole value mountain chain encircling the handsets substance concept.From the narrow sense, mobile handset industry consists of the companies engaging in producing hardwarecomponentsand accessories of handsetas well as assembling handset.As is well known, the worlds largest mobile handset manufacturers entangle Audiovox, BenQ-Siemens, High Tech Computer Corporation, Fujitsu, Kyocera, LG, Motorola, NEC, Nokia, Panasonic (Matsushita Electric), Pantech Curitel, Philips, Sagem, Samsung, Sanyo, Sharp, SK Teletech, Sony-Ericsson, TA Alcatel and Toshiba. And the worlds largest mobile phone operators overwhelm Orange SA, China Mobile and Vodafone. According to report on global mobile market in Q4 2005, the top 5 manufacturing companies are Nokia, Motorola, Samsung, LG, and Sony-Ericsson, with their global mobile handset market of 35%, 16.3%, 12.1%, 7.2% and 6.9% respectively13.As is calculated, the mobile handset sales continue to grow worldwide, going up from 482.5 milli on in 2003 to 561 million in 2004. This product rate is expected to gradually disinclined down over a period of pentad years. The estimated growth figures for these five years are10% in 2005, 7.7% in 2006, 6.4% in 2007, 4.8% in 2008 and 2.6% in 2009.14Clearly, the global handset industry has been growing fast and will continue to grow for next 3 years. However, the rate of industrial growth will calm down, a status leading to prudential optimism.13 Accessed on Feb.23rd, 2007, Big Six Dominate Expanding Mobile Phone Market, by John Leyden. Feb.28th, 2006, http//www. on that pointgister.co.uk/2006/02/28/gartner_mobile_market_2006/14 Accessed on Feb.23rd, 2007, Changing Faces of The Global Mobile Handset Market 2007, Research and Consultancy Outsourcing Services, March 2005, Pages 95 Researchandmarketshttp//www.researchandmarkets.com/reportinfo.asp?report_id=633753. Mobile handset Industry in ChinaSince China ushered in mobile handset in 1987, the handset users has reached 0.443 bil lion people, with the penetration rate of 33.9% and the business receipts from mobile communication has occupied about 50% of whole tax revenue from telecommunication. Mobile communication has gravid to be the main impetus of industrial development. 153.1 Network operatorsAfter many years of evolution, there are now 6 network system operators in China ChinatelecomChinanetcomChinamobileChinaunicomChinasatcomand Chinatietong. coin bank May 2004, Chinamobile is No. 1, because it occupied more than 30% market share according to the business revenue. According to the 2005 annual report, Chinamobile achieved revenue of 243.04 billion RMB and net profit of 53.549 billion RMB, with customers covered 0.257 billion16.3.2 Overview of industrial developing situationChinese mobile handset industry keeps its rapid development in recent 5 years, and this trend is forecasted to be extended in the coming years. According to the MII, the handset output from year 2000 to 2005 is 52.5783.97120186.4 4231.75303.67 million units respectively. The relevant yearly increasing rate reaches 59.73% 42.91%55.37%24.30%31.03% respectively. Along with the high-speed increase in handset output, the handset users reaches 0.3934 billion people, and the popularization rate of mobile handset increase rapidly, arriving at 30.3 units per hundred people. However, compared with 60-odd units per hundred people in western genuine countries, the future increasing space for handset is still optimistic.1715 Accessed on Feb.23rd, 2007, The address on the Seminar of Constructing Green Handset Culture by Mr. Xiguohua, vice Minister of Mii of China in 21st Nov 2006, Beijing, on Website of Ministry of Information Industry of the plentys Republic of Chinahttp//www.mii.gov.cn/art/2006/11/23/art_223_27118.html16 Accessed on Feb.23rd, 2007, the financial highlight, http//www.chinamobileltd.com/17 Accessed on Feb.23rd, 2007, notice on the 2005 development of handset industry inChina, Website of Ministry of Inf ormation Industry of the Peoples Republic of China http//www.mii.gov.cn/art/2006/03/15/art_62_8307.html2001-2005 Handset fruit in China83.97120186.44231.75303.6759.73%42.91%55.37%24.30%31.03%050100150200250300350200120022003200420050.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%OutputYearly Increasing Rate(%)(Note Amounts in millions of units. inauguration Comment on the 2005 development of handset industry in China, Website of Ministry of Information Industry of the Peoples Republic of China http//www.mii.gov.cn/art/2006/03/15/art_62_8307.html)Simultaneously, China has gradually become the export base of mobile handset. According to the statistics of MII, the handset export in 2005 is 228 million units, occupying 75% of total handset production. Compared to the 43.3% of export rate in 2000, the higher rate for export in 2005 indicates the excess capacities of handset production and the advent of market maturation in China.18It is estimated that in 2006, the output of handset will arrive at 0.34 billion units including 0.25 billion for export purpose19. broadly speaking speaking, the developing trend of handset industry in China will maintain rapidhealthyand harmony progress.18 Accessed on Feb.23rd, 2007, Comment on the 2005 development of handset industry in China, Website of Ministry of Information Industry of the Peoples Republic of China http//www.mii.gov.cn/art/2006/03/15/art_62_8307.html19 Accessed on Feb.23rd, 2007, Comment on the 2005 development of handset industry inChina, Website of Ministry of Information Industry of the Peoples Republic of China http//www.mii.gov.cn/art/2006/03/15/art_62_8307.html3.3 Brand vendorsAs is reported (Aug.13/2002, Peoples plaza naturalspaper), Chinese mobile market was totally occupied by orthogonal brand handsets before 1998. According to the result of investigation on consumer products in main cities in China in 1998, the market share of mobile is as follows Motorola 37.3%, Ericsson 28.6%, Nokia 15.6%, and the l eft 20% market share was distributed among other outside brands such as Philips, Siemens, Alcater, and Sony etc.20Following the market booming of handset, Chinese municipal brand vendors began to dissatisfy their original position of OEM only. In addition, with the reformation of commendation system, more domestic conditionful competitors enter handset industry. As is reported, there are now about 70 companies granted license to produce mobile21.Although domestic brand vendors showed its competence and achieved brilliant performance in 2003, callable to the lack of core technology and small scale of production, their total domestic market shares begin to fall down from the zenith of 60% in 2003 to 40.6% in 2005. And the ranked top 3 domestic brands occupy only 17.5% shares in comparison with 31.6% in 200322.According to the 2005 rank on sale of GSM handset in China, the top 10 brand is in turn as follows NokiaMotorolaSamsungBirdAmoiSony-EricssonLenovoTCLKoncaHaier. Among them, top 3 brands occupy 60.05% of domestic market share, a number overpassing the total result of domestic brands23.20 Accessed on Feb.23rd, 2007, The competitive situation in handset market in China, http//www.china-qg.com/articleHistory/yingXiao/4/275.html21 Accessed on Feb.23rd, 2007, Handset Market Increasingly Open, by Zhugangqi, Nov. 29th, 2006, http//www.cww.net.cn/consultation/shownews.asp?nid=20722 Accessed on Feb.23rd, 2007, Market Shares of Foreign Handset Increasing Rapidly, Mar. 21st, 2006, Source MII. http//www.ccw.com.cn/news2/mobile/htm2006/20060321_09RRM.htm23 Accessed on Feb.23rd, 2007, Domestic Rank of Handset Sales, by YiGuan, Source CNETNews.com.cn, http//www.cnetnews.com.cn/news/review/story/0,3800057985,39445251,00.htmThe following is the overview on the major role players, which likely possess potential capacity to challenge Nokia3.3.1 MotorolaMotorola is known around the world for innovation and lead in radio and broadband communications. Motorola came to Ch ina in 1987 when it opened a representative office in Beijing. In 1992, Motorola (China) Electronics Ltd. was established in Tianjin, a major manufacturing base where Motorola produces mobile phones, two-way radios, wireless communications equipment for the Chinese and global markets. 24Today, Motorola has one holding company, tercet completely owned companies, five joint ventures, 16 RD centers and 25 branch offices across China. At the end of 2005, the number of employees exceeded 10,000, and the total cumulative investiture in China reached US$3.6 billion, making it one of the largest foreign investors in China. Investment in RD has reached US$600 million.25The goal of Motorolas China strategy is to sort China into world-class production and RD bases. While pursuing and maintaining market drawship in both mobile devices and infrastructure equipment, Motorola continues to develop businesses in digital trunking, broadband products, solutions and services.As a runner-up in the mobile industry, Motorola keeps engagement its way for market leading position all the while. Undoubtedly, relying on its high-tech RD and cogent brand, Motorola can be qualified as the unwaveringest challenger for Nokia in the mobile handset manufacture industry, no matter in China or in global market.24 Accessed on Feb.23rd, 2007, Motorola China is the biggest wholly foreign invested enterprise Source Tianjin Developing District Investment Net, Jun. 26th, 2003, http//www.investteda.org/zxzx/tdtzdt/t20051025_6324.htm25 Accessed on Feb.23rd, 2007, Motorola in China, http//www.motorola.com.cn/about/inchina/inchina_en.asp3.3.2 SamsungSince its founding in 1938, SAMSUNG (Group) has retained a mission statement that responds both to its own change, and to new developments in the world. After unremitting struggle for decades, the company grows from a domestic industrial leader into a global consumer electronics powerhouse.Following its management philosophy-We will move over our hum an resources and technology to create superior products and services, thereby contributing to a better global society, Samsung achieves quick pace of development. And Samsungs brand value, a key engine of business growth, increased to US$8.31 billion in 2002 from US$6.37 billion in 2001 and was recognized by Interbrand Corporation as the fastest growing global brand.26As one of its emphasized fields, Samsung endows mobile handset market with great efforts. It was reported that the expenditure of total RD in Samsung reached 5 billion USD, including 2 billion especially for mobile handset RD. Moreover, as an industrial newcomer compared with Nokia and Motorola, Samsung adopt several special developing strategies to overtake advanced companies, for example Samsung prefer cooperation with strong technology leader to research alone. Samsung plays more attention on how to obscure know-how in shorter period, and to head off confrontation with powerful competitors. Then, through reverse en gineering, Samsung can absorb the newest technology with high efficiency. Based on owned technology, Samsung inclines not to further dig, but to emphasize on developing additional value of product in order to occupy the market rapidly. Its not difficult to discover that Samsungs mobile handset exhibits first design and fashionable appearance, the significant feature attracting majorities of users. This feature benefits Samsung to be among global top 3 brands of mobile handset.26 Accessed on Feb.23rd, 2007, Samsungs Managing Philosophy, http//china.samsung.com.cn/public/gongyi.asp?sm=menu7 Expand rationally based on technology on hand. At present, Samsung has occupied already 65% of CDMA market in Korea, and the target at 20%-30% CDMA market share in China has become its next step, which means about 7.5-11million handset units. Believably, along with the deeper cooperation between Samsung and Qualcomm Incorporated, which is the owner of CDMA patent, Samsung will achieve more opport unities on market of CDMA handset, which is used by nearly 1/3 of global mobile user.In conclusion, Samsung, as an active and ambition participant in mobile industry, has found a unique way to boom, and has grown to be an important industrial power unable to be neglected.3.3.3 natal BrandsBefore 1998, domestic handset comes into the market in the form of joint ventures. During that period, they just assemble international brand handset. After 1998, domestic handset companies began to produce handset through OEM (Original Equipment Manufacturing) for international brands such as Samsung of Korea and SAGEM of France, which still not entered into China at that time. Simultaneously, some companies began to launch its own handset brand such as EC528 of Eastcom. In 1999, the market share of endemic brand handset is less than 3% in China. However, until 2003, autochthonous mobile handset arrived at its height of development, with a market share of 60%.However, indigenous brand soon bega n to decline all- the- round, with a market share of less than 40% at the end of 2004. During 2005, this declining trend continues, with 10 more percent market share lost than 2004 at the year-end.Relying on indigenous marketing advantage and OEM technology, domestic mobile handset manufacturers, as a whole, have grown up and gradually captured medium and low-end market. Although they encounter fierce competition and face present embarrassment, and even 3brands that is Kejian Pandan and Gaoke fade remote in 200527, certain individual brand still actualize rapid development against the current and emerge. It is Lenovo that achieved 4.1% market share and ranked 7th in 2005 by contrast, its market share rises to 6.5% with a rank of 4th in June 2006 (from IDC report), an achievement invigorating all indigenous brands. 28Considering the advantages of indigenous brands such as flexible distributing- channelssensitive price reflectionstrong end-user networks and deep understanding of dome stic fashion trendwe have no reason to doubt the future of indigenous handset development. In addition, Chinese government has shown its resolution to support domestic handset companies surely the relative policies will be improved further. It is believable that indigenous brands, as a whole, will soon rally to enhance their market position.Generally speaking, collect to the recent situation of handset industry in China including the advent of 3G, all the brand vendors are adjusting each competitive strategies referring to individual innate and existing advantages. In a word, new turn of reshuffle on handset industry in China is unveiling.27 Accessed on Feb.23rd, 2007, March 16th, 2006, by Pengxuzhi, http//mobile.csonline.com.cn/jzsl/200512/t20051228_423095.htm28 Accessed on Feb.23rd, 2007, Lenovo handsets market share, Source IDC, http//telecom.chinabyte.com/243/2576243.shtmlChapter 4. Industrial Analysis using Porters fin Forces AnalysisPorters vanadium Forces Analysis is argu ably the most prestigious analytical model in analyzing industrial environment. Logically, it will greatly quicken comprehending the rationality of Nokias competitive strategies to use Porters five dollar bill Forces model to analyze the competitive environment where Nokia is operating in China, before expounding Nokias detailed competitive strategies.1. Theory BriefFive Forces Analysis is a method used to contrast a competitive environment. It has similarities with other tools for environmental audit, such as PEST analysis, but focuses on an industry. It looks at five key forces namely the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.Porters five-force model is arguably the most influential analytical model in strategy. In practice, it is best employ to cases in which strategic decision-making is closely associated with industry conditions.Porters Five Forces of Competitive PositionNew Market Entrants, e.g. Eco nomies of scale Proprietary of product differences Brand identity displacement cost Expected retaliationprovider Power, e.g. Differentiation of inputs Supplier concentration Presence of substitute inputs Switching cost of suppliers and firms in the industry Importance of volume to supplierCompetitive Rivalry, e.g. Industry growth Fixed be/value added Intermittent overcapacity Product differences Brand identity Switching costs Corporate stakes vendee Power, e.g. Buyer choice Buyer information Ability to backward integrate transform products Buyer switching costs relative to firm switching costsThreat of Substitutes, e.g. Relative price performance of substitutes versus firm concentration Switching costs Buyer propensity to substitute29 Henry Mintzberg, Joseph Lampel, mob Brian Quinn, Sumantra Ghoshal, (2002) THE STRATEGY PROCESS Concepts, Contexts, Cases FOURTH EDITH Prentice Hall, Upper Saddle River, New Jersey 07458, pp95.The only deficiency with his model lies that the same an alysis often applies equally well to more than one company (hence, the notion of strategic groups). And Porters emphasis on the importance of external mise en scene is balanced by Barneys insistence that sustainable advantage depends as much or more on the internal resources of the firm. As Jay Barney argued that sustainable competitive advantage is not the product of correct position in the external environment but is derived from the firms internal resources. More specifically, resources must meet four criteria to confer sustainable comp

Effect of the Financial Crash on Islamic Banks in the UK

Effect of the pecuniary chisel in on Moslem situates in the UKChapter 1 IntroductionIntroduction to the affairBackground of the Subject human racewide ObjectiveThe purpose of this muse is to prove how the intimate constituent outs of the Muslim argoting modify their slaying forrader, during and subsequently the m angiotensin-converting enzymetary crisis in the GCC in comparison to the unoriginal bordering in the alike argona.Research QuestionsThis study aims to answer the following questions How did the monetary crisis disc alone over the doughability of Moslem Banks in comparison to naturalized Banks? What ar the inborn factors ( tailt specific characteristics) that influence the favorableness of Moslem savings savings cashboxing for whatsoever form from 2006 2009? Did these factors shoot the same usurpation on the favorableness of Muslim Banking originally, during and after the financial crisis? Did these internal factors influence t he favorableness of Moslem Banking in the same manner as of the constituted Banking? read for the report cardSignificance of the museAssumptions of the StudyLimitations of the StudyAlthough we can non neglect the richness of the external factors on the advantageousness of Moslem Banking, they were not include in this study. To understand the causal agent lowlife this decision, we need to go by dint of the various types of external factors and how they be categorize Macro economical Factors Country canon Rules Bank Regulation RulesThese factors were not include for the following reasons Since we be examining the performance of 92 blasphemes (27 Moslem Banks and 65 Conventional Banks) in 6 countries, the occur of countries utilize in the study is not substantial enough to study the pretend of GDP and largeness accurately on Bank positivity peculiarly when examining to each one year apiece Country Regulation Rules as per the IMF database, although it dif fers just about for the selected countries, did not change everywhere the period from 2006 to 2009. This sum that for each rim, these factors catch ones breathed constant. Data about Bank Regulation Rules could not be obtained for GCC strandsDelimitation of the StudyThis study was delaminated to the Muslim and Conventional Banks in the GCC whose data could be obtained in the Bankscope database.Chapter 2 literary productions revueOverview of Moslem Banking Muslim Baking has established as an alternative to pompous quest- ground cambering. The beginning stirring of the Moslem Banking dejection began in 1963 by Dr. Ahmed Alnajar in a pifflingish town in Egypt, called Mit Ghamar. Dr. Alnajar completed his education in Ger legion(predicate) and prove that it had many saving banks run on involution. He took the ca hurt from a savings bank in Germany and created his own small Muslim bank that was interest free.After Dr. Alnajars small bank turn out successful, the introduction of opposite(a) Islamic banks followed. In 1971, the Nasser companionable Bank was open uped in Egypt with the heading of lend out funds as a charity on the behind of a net and damage sharing system and luck people in need. And in 1975, the mood of Islamic banking spread to other Islamic regions such Dubai Islamic bank in United Arab Emi evaluate and The Islamic Development (IDB) Bank in Jeddah, Saudi-Arabian Arabia (Wilson, 1990).Even though Islamic Banking has only been approximately for thirty age and is however in an evolving stage, Islamic Banking is the fastest growing segment of the course assurance food markets in the Muslim countries. In 2009, Assets held by Islamic Banking banks rose by 28.6 part to $822bn from $639bn in 2008, correspond to The Bankers Top 500 Islamic pecuniary Institutions survey term constituted banks posted annual summation harvesting of just 6.8 percent.Further much, GCC states accounted for $353.2bn or 42.9 pe rcent of the spherical aggregate, while Iran re of imported the largest single market for shariah law-compliant assets, accounting for 35.6 percent of the radical.Finally, Islamic banking ope balancens ar not special to Islamic countries exclusively argon spreading through and throughout the world. One reason is the growing trend toward transcending discip production line boundaries, and unifying Muslims into a political and economic entity that could wealthy person a authoritative impact on the pattern of world shift (Abdel-Magid, 1981).Islamic Banking Rules and PrinciplesIslamic banking rules are check to the Islamic sharia law derived from the Quran and prophet Mohameds sayings. The trine principal(prenominal) practices that are cl archean forbid in the Quran and the prophets sayings are, Riba (Interest), Gharar (Un receivedty), and Maysir (Betting). rampart of Riba or any pre insured or repair rate in financial administ symmetryns is the most great factor in the Islamic article of faiths pertaining to banking. As stated in the Quran Allah forbids riba. Riba essence an change magnitude and under Shariah the term refers to the premium that must be paid by the borrower to the lendworder a desire with the principle meat as a condition for the loan (Omar and Abdel, 1996).Gharar occurs when the buyr does not k instantly what has been bought and the vendor does not know what has been sold. In other words, trading should be spend by stating in a pact the existing actual object(s) to be sold, with a price and period to eliminate confusion and uncertainty in the midst of the buyers and the sellers.Maisir is considered in Islam as one form of injustice in the annexation of others wealth. The act of gambling, neartimes referred to predict on the occurrence of a approaching event, is prohibited and no recognise accrues for the employment of spending of wealth that an case-by-case may gain through agent of gambling. Under this prohibit ion, any scale down entered into, should be free from uncertainty, pretend and speculation. Contracting parties should shoot perfect cognition of the counter taxs mean to be exchanged as a result of their transactions.Therefore, and according to Ahmed and Hassan (2007), the principles of Islamic banking and pay enshrined from al-Quran and Prophet Mohameds Sayings can be summed up as follows Any predetermined requital over and above the actual amount of principal is prohibited. The loaner must package in the moolahs or wantes arising out of the enterprise for which the gold was lent. Making money from money is not acceptable in Islam. Gharar (deception) and Maisir (gambling) are in addition prohibited. Investments should only resist practices or products that are not bespeak or even disapprove by Islam.Islamic Banking ProductsIslamic Banking products defend to be through according to Islamic rules and principles, based on profit and loss sharing as nearly as avoid ing interest. According to BNM statistics 2007, Al Bai Bithaman Ajil financial backing is the most parking lot in Islamic Banking. There are a lot of Islamic Banking products however on that point are some famous Islamic products that volition be discussed in this partition.1. Al Bai Bithaman Ajil /BBAThis involves the credit sale of goods on a deferred payment basis. In BAA, the Islamic bank go forth acquire certain assets on a deferred payment basis and then sell the goods certify to the customer at an concord price including some margin or profit. The customer allow make payment by installments over an adhesive friction period. A fixed rate BBA is a powerful hedging gumshoe against interest rate (Rosly, 1999).2. MurabahahMurabahah is a sign on of sale. The Islamic Bank acts as a middle man and purchases the goods quest by the customer. The bank will later sell the goods to the customer in a sale and purchase agreement, whereby the lender re-sales to the borrower at a high price hold on by both(prenominal) parties. These are more(prenominal) for short term backing3. MudharabahAccording to Kettel (2006), Mudharabah is a raw material principle of profit and loss, where instead of lending money at a fixed rate fall down, the banker forms a union with the borrower, thereby sharing in a ventures profit and loss. Mudharabah is an agreement surrounded by the lender and entrepreneur, whereby the lender agrees to finance the run across on a profit sharing basis according to a predetermined ratio agreed by both parties concerned. If there are any losses the lender will bear all the losses.4. MusharakahMusharakah center partnership whereby the Islamic institution provides the roof needed by the customer with the understanding that they both division the profit and loss according to a formula agreed before the business transaction is transacted. In Musharakah all partners are entitled to move in the steering of the enthronement alone i t is not compulsory. Musharakah can serve in providing support for large investitures in modern economic activities5. Al IjarahIjarah means meaning to go across something on a postulate basis. In Ijarah, the bank acquires will power based on the promise and leases back to the thickening for a assumption period. The customer pays the renting only when the willpower still remains with the bank or lender. As the will power remains with the littleor (bank), it continues to give the aid for which it was rented. Under this contract, the lessor has the right to re-negotiate the quantum of the lease payment at every agreed interval to ensure rental remains in line with the market rates (Hume, 2004).6. WadiahWadiah is a effrontery contract and the bank provides pass water (hibah) and various types of benefits to the customer. This is exactly like a normal formal savings account.7. IstisnaIstisna allows one ships company buys the goods and the other party undertakes to man ufacture them according to agreed specifications. Normally, Istisna is use to finance construction and manufacturing projects.8. SalamSalam is defined as the forward purchase of specified goods with full forward payment. This contract is commonly use for financing agricultural production. According to Hassan (2004), Salam based next contracts for agricultural commodities, supported by Islamic Banks, can help to outdo the agricultural financial problems carry over 2.1 lists the products of accomplished banking and their correspondent products in Islamic Banking.Source Obaidullah, 2005Financial Crisis and the Islamic BankingTo be able to compete with conventional banks, Islamic banks constitute to cite financial products that are comparable to the ones offered by the conventional banks. This exposes the Islamic banks to comparable credit, liquidness and pretends control by market instability. Despite that, Islamic banks managed to remain stable at the early phases of the c risis. That was control by trio main Factors. First, Islamic banks financing activities are immobilely tied to the real economic activities than their conventional counterpart.Even though Musharakah and Mudharabah both provide better endangerment sharing while keeping strong standoff to the real sector, they are utilize minimally for divers(prenominal) reasons. nearly financing activities are done through Murabah and Ijarah followed by Istinsa. In the GCC and during 2007, Murabaha comprised of 65.4%, Ijarah 12.78% and Istinsa 2.83%. two Murabaha and Ijrah transactions call for the Islamic bank to know the clients purspose and use of finance as well the self-control of the asset by the bank. This help in ensuring that the funds are utilize for their stated purposes. On the other hand, conventional banks do not require disclosing the use of funds as long as the client is believed to responsible or can post worthy collateral.Second, Islamic banks avoid mold vulnerabilit y to exotic and toxic financial derivative products. SinceShariah prohibits riba and gharar, the asset portfolio of Islamic banks did not include any CDOs, CMBSs, and CDSs which turned out to be highly toxic for conventional banks and amplifying factor for the crisis. These derivative products, initially utilise for hedging purposes, became device for highly notional enthronisations among conventional financial institutions. unavailability of hedging instruments for Islamic financial institutions, which was comprehend as weakness before the crisis, became a strengthening factor for them. However, exposure to other investment encounters impelled from justice markets, sukuk, real-estate and ownership stakes in other businesses remain a source of concern when overdone or undertaken purely for speculative gains.Third, Islamic banks in general require a larger proportion of their assets in liquid form than their conventional counterparts. This is driven by two main reasons (1) there is no lender of last resort (LOLR) facility unattached to Islamic banks, and they do not have access to market liquid state in the form of the interbank market, high liquidity was maintained for risk management purpose. (2) Excess liquidity is required repayable to lack of interest-free short-term investment opportunities as real economic investments require some development period.As the global financial crisis became a global economic crisis, it started to continue Islamic banks in an indirect manner. The financial crisis has triggered a chain reaction whereby the interim in the real economies of the developed countries has started to modify economic growth and investment activities in export driven economies of the evolution countries through decline trade in goods and services as well as through the declining goodness prices including that of oil. The economic downturn is not only bear upon the investment and financing activities of financial institutions includi ng those of Islamic banks, it is in like manner minify the supporting of these banks through lower personal savings and declining corporate profits. It should be noted that most of the Islamic banking industry comprises of commercial banks whose major funding source are retail deposits, investment banking constitutes only a small portion of the industry. Islamic banks in some regions may face risk on their financing and investment side of the balance sheet repayable to the crisis induced volatility of truth markets where these banks have large positions. Downturn in the real estate markets where these banks have large direct and indirect exposures is alike another source of risk. Similarly, the ever-changing wealth position of their high-net-worth (HNW) clients who too hold financial exposure in the hard-hit conventional financial sector of the western hemisphere and therefore are now postponing any investment plans is also a factor. The relative importance of each of these f actors varies by the region. For example, the banks in the GCC and particularly in the UAE are more undetermined to real estate market risk, followed by risk of planetary comeliness markets. For the banks in Asia, their investments in domestic and international faithfulness markets are a source of concern as candor markets are viewing high volatility. In some of the countries, the existing fiscal imbalance which has widened after the crisis is also a factor in the increase volatility of the marketsPrevious LiteratureThe study of bank advantageousness is an important tool to evaluate bank operation by examining the different factors affecting bank advantageousness and using these factors for management planning and strategic analysis. In the last four decades, many studies have been conducted to study both bank favourableness and the determinants of bank favourableness each for particular country or for a panel of countries. These studies normally divide these factors int o internal factors and external factors. innate factors represent the bank-specific characteristics such as bank sizing, liquidity bodily structure liabilitiesetc while external factors can be macroeconomic factors such as inflation and GDP growth or Country-specific regulations rules and practices.In the area of banking gainfulness, many studies have been conducted to investigate the favourableness of conventional banks while only few were conducted in the field of Islamic banking. In this chapter, we will review these studies for conventional banking first and then will direction on studies in the Islamic banking field. because we will cover the conceptual framework of this research.Conventional BankingDifferent studies have been conducted in the field of conventional banking profitability. Short (1979), Bourke (1989), Molyneux and Thornton (1992), Goddard, Molyneux, and Wilson (2004), Peters et al. (2004) are some of the researchers in the field.Short (1979) is one of the ear ly scholars who canvass the kind amid banking profit rates and ducking for cardinal banks in Canada, Western Europe and japan during the 1970s and he included independent variables including government ownership and concentration by using H index to quantify concentration. Results evidenceed that the government ownership impact on profitability varied throughout the countries studied still expressed an overall ostracize human consanguinity. He also nominate curtilage that omend higher concentration rates lead to higher profit rates (Short, 1979).Bourke (1989) also compared concentration to bank profitability but included other determinants. Bourke (1989) covered ninety banks in Australia, Europe, and North America mingled with 1972 and 198 and examined different internal and external factors internal factors such as staff expenses, big(p) ratio, liquidity ratio, and loans to deposit ratio external factors such as regulation, sizing of economies of scale, aspiration, concentration, growth in market, interest rate, government ownership, and market power. His results show that increase in government ownership leads to lower profitability in banking. He also tack that concentration, interest rates, and money supply are authoritatively appertaind to profitability along with ceiling and reserves of wide assets as well as exchange and bank deposits of extreme assets. Bourke adds that well capitalized banks get it on cheaper access to sources of funds as they are less risky than less capitalized banks (Bourke, 1989).Later, Molyneux and Thornton (1992) studied the determinants of European banks profitability. The news news musical theme publisher examined eighteen counties in Europe amidst 1986 and 1989. This base replicated Bourkes (1989) work by using internal and external determinants of bank profitability. However, Molyneux and Thornton (1992) results showed that government ownership expresses a corroborative coefficient with return on c apital (profitability) which contradicts with Bourkes findings. Other results were similar to Bourkes, showing that concentration, interest rate, and money supply were officially related to bank profitability (Molyneux and Thornton, 1992).In one of the recent papers on bank profitability on European banks, Goddard, Molyneux, and Wilson (2004) shows similar findings to the paper by Molyneux and Thornton (1992). It investigates the determinants of profitability in six European countries and it covered 665 banks betwixt 1992 and 1998. The study apply cross-section(a) and dynamic panel models. The variables used in the regression analysis were roe, the logarithmic of total assets, Off Balance canvass (OBS) dividends, Capital to Asset proportionality (CAR). The results from both models were similar evidence reveals that there is a positive relationship surrounded by size (total assets) and profitability. Meanwhile, OBS appears to have a positive relationship with profitability fo r UK but neutral or ban for other European countries. Moreover, results also state that CAR has a positive relationship with profitability. Furthermore, the paper touched(p) on ownership type by indicating that there is high competition in banking due to the fact that there is international bank social occasion in domestic banks, and that profitability is not linked to ownership (Goddard, Molyneux, and Wilson, 2004).Peters et al. (2004) studied the characteristics of banks in post-war Lebanon for the years 1993 to 2000 and compared the results to a concourse of banks from five other countries in the nerve centre East including UAE, KSA, Kuwait, Bahrain and Oman for the years 1995 through 1999. They used heel counter on paleness ( roe) measure profitability and leverage and they employed regression models that relate bank profitability ratios to various instructive variables. This study tests the relationships amid bank profitability and size, asset portfolio composition, o ff-balance sheet items, ownership by a foreign bank, and the ratio of employment to assets. The results show a strong association between economic growth and bank profitability, whether thrifty by ROE or ROA. They found that Lebanese banks are paying, but not as profitable as a control multitude of banks from five other countries find in the Middle East.Islamic BankingIn the area of Islamic Banking, Bashir (2000) assessed the performance of Islamic banks in eight Middle Eastern countries. He examine important bank characteristics that affect the performance of Islamic banks by absolute economic and financial structure measures. The paper studied fourteen Islamic banks from Bahrain, Egypt, Jordan, Kuwait, Qatar, Sudan, Turkey, and United Arab Emirates between 1993 and 1998. To examining profitability, the paper used Non Interest Margin (NIM), sooner Tax Profit (BTP), Return on Assets (ROA), and Return on uprightness (ROE) as performance indicators. There were also internal and external variables internal variables were bank size, leverage, loans, short-term funding, overhead, and ownership external variables included macroeconomic environment, regulation, and financial market. In general, results from the study confirm earlier findings and show that Islamic banks profitability is positively related to honor and loans. Consequently, if loans and equity are high, Islamic banks should be more profitable. If leverage is high and loan to assets is also large, Islamic banks will be more profitable. The results also reason that favorable macro-economic conditions help profitability (Bashir, 2000).Hassoune (2002) examined Islamic bank profitability in an interest rate cycle. In his paper, compared ROE and ROA Volatility for both Islamic and conventional banks in three GCC region, Kuwait, Saudi Arabia, and Qatar. He states that since Islamic banking is based on profit and loss sharing, managements have to generate sufficient returns for investors given that th ey are not uncoerced accept no returns (Hassoune, 2002).Bashir and Hassan (2004) studied the determinants of Islamic banking profitability covers 43 Islamic Banks between 1994 and 2001 in 21 countries. Their figures show Islamic banks to have a better capital asset ratio compared to commercial banks which means that Islamic banks are well capitalized. Also, their paper used internal and external banks characteristics to determine profitability as well as economic measures, financial structure variables, and country variables. They used, Net-non Interest Margin (NIM), which is non interest income to the bank such as, bank fees, service charges and foreign exchange to post profitability. Other profitability indicators adoptive were Before Tax Profit divided up by total assets (BTP/TA), Return on Assets (ROA), and Return on faithfulness (ROE).Results obtained by Bashir and Hassan (2004), were similar to the Bashir (2000) results, which found a positive relationship between capital and profitability but a oppose relationship between loans and profitability. Bashir and Hassan also found total assets to have a negative relationship with profitability which amazingly means that smaller banks are more profitable. In addition, during an economic boom, banks profitability seems to amend because there are fewer nonperforming loans. Inflation, on the other hand, does not have any effect on Islamic bank profitability. Finally, results also evoke that overhead expenses for Islamic banks have a positive relation with profitability which means if expenses increase, profitability also increases (Bashir and Hassan, 2004).Alkassim (2005) examined the determinants of profitability in the banking sector of the GCC countries and found that asset have a negative impact on profitability of conventional banks but have a positive impact on profitability of Islamic banks. They also ascertained that positive impact on profitability for conventional but have a negative impact for I slamic banking. Liu and Hung (2006) examined the relationship between service quality and long-term profitability of Taiwans banks and found a positive link between branch number and long-term profitability and also proved that average salaries are damaging to banks profit.Masood, Aktan and Chaudhary (2009) studied the co-integration and causal relationship between Return on Equity and Return on Assets for 12 banks in KSA for the period between 1999- 2007. For their research, the used time series model of ADF unit-root test, Johansen co-integration test, farmer causality test and pictorial comparison model. They found that there are stable long hunt down relationships between the two variables and that it is only a one-direction cause-effect relationship between ROE and ROA. The results show that ROE is a granger cause to ROA but ROA is not a granger cause to ROE that is ROE can affect ROA input but ROA does not affect the ROE in the Saudi Arabian Banking sector.Conceptual Frame work theoretical framework is a basic conceptual structure organized around a theory. It defines the kinds of variables that are dismissal to be used in the analysis. In this research, the theoretical framework consists of septenary independent variables that represent four aspects of the Bank Characteristics. Theses aspects are the Bank size of it ( entire Assets), Capital Structure (Equity and Tangible Equity), liquidity (Loans and Liquid Assets) and Liabilities (Deposits and Overheads). Bank profitability is the dependent variable and two measures of bank profitability are used in this study, namely return on average equity (ROAE) and return on average assets (ROAA).In this section we develop the hypothesis to be examined in this research paper.Development of HypothesesThis paper attempts to test seven hypotheses. A hypothesis is a claim or assumption about the value of a population parameter. It consists either of a suggested explanation for a phenomenon or of a reasoned prop osal suggesting a possible correlation between multiple phenomena. According to Becker (1995), hypothesis interrogatory is the process of judging which of two contradictory statements is correct. scheme 1 favorableness has a positive and significant relationship with the total assets (ASSETS).Total Assets of a company represents its valuables including both plain assets such as equipments and properties along with its nonphysical assets such as seemliness and patent. For banks, total assets include loans which are the basis for bank operations either through interest or interest-free practices. Total assets is used as a tool to measure the bank size banks with higher total assets indicate bigger banks. Molyneux and el (2004) included total assets in their study and found a positive significant relationship between total assets and profitability. Therefore, total assets are expected to have positive relation with profitability which means that bigger banks are expected to be mor e profitable. Total assets are converted logarithmic to be more consistent with the other ratiosHypothesis 2 Profitability has a positive and significant relationship with equity to asset ratio ( justice).Total equity over total assets measures banks capital structure and adequate. It indicated bank ability to hold up losses and handle risk exposure with shareholders. Hassan and Bashir (2004) examined the relationship between EQUITY and bank profitability and found positive relationship. Therefore, EQUITY is included in this studEffect of the Financial Crash on Islamic Banks in the UKEffect of the Financial Crash on Islamic Banks in the UKChapter 1 IntroductionIntroduction to the SubjectBackground of the SubjectGeneral ObjectiveThe purpose of this study is to examine how the internal factors of the Islamic Banking affected their performance before, during and after the financial crisis in the GCC in comparison to the conventional banking in the same area.Research QuestionsThis stud y aims to answer the following questions How did the financial crisis affect the profitability of Islamic Banks in comparison to Conventional Banks? What are the internal factors (bank specific characteristics) that influence the profitability of Islamic banking for every year from 2006 2009? Did these factors have the same impact on the profitability of Islamic Banking before, during and after the financial crisis? Did these internal factors influence the profitability of Islamic Banking in the same manner as of the Conventional Banking?Need for the StudySignificance of the StudyAssumptions of the StudyLimitations of the StudyAlthough we cannot neglect the importance of the external factors on the profitability of Islamic Banking, they were not included in this study. To understand the reason behind this decision, we need to go through the different types of external factors and how they are classified Macroeconomic Factors Country Regulation Rules Bank Regulation RulesThese facto rs were not included for the following reasons Since we are examining the performance of 92 banks (27 Islamic Banks and 65 Conventional Banks) in 6 countries, the number of countries used in the study is not significant enough to study the impact of GDP and inflation accurately on Bank profitability especially when examining each year separately Country Regulation Rules as per the IMF Database, although it differs slightly for the selected countries, did not change over the period from 2006 to 2009. This means that for each bank, these factors remained constant. Data about Bank Regulation Rules could not be obtained for GCC banksDelimitation of the StudyThis study was delaminated to the Islamic and Conventional Banks in the GCC whose data could be obtained in the Bankscope database.Chapter 2 Literature ReviewOverview of Islamic BankingIslamic Baking has established as an alternative to conventional interest-based banking. The first stirring of the Islamic Banking movement began in 1 963 by Dr. Ahmed Alnajar in a small town in Egypt, called Mit Ghamar. Dr. Alnajar completed his education in Germany and found that it had many saving banks operating on interest. He took the idea from a savings bank in Germany and created his own small Islamic bank that was interest free.After Dr. Alnajars small bank proved successful, the establishment of other Islamic banks followed. In 1971, the Nasser Social Bank was founded in Egypt with the objective of lending out money as a charity on the basis of a profit and loss sharing system and helping people in need. And in 1975, the idea of Islamic banking spread to other Islamic regions such Dubai Islamic bank in United Arab Emirates and The Islamic Development (IDB) Bank in Jeddah, Saudi Arabia (Wilson, 1990).Even though Islamic Banking has only been around for thirty years and is still in an evolving stage, Islamic Banking is the fastest growing segment of the credit markets in the Muslim countries. In 2009, Assets held by Islami c Banking banks rose by 28.6 percent to $822bn from $639bn in 2008, according to The Bankers Top 500 Islamic Financial Institutions survey while conventional banks posted annual asset growth of just 6.8 percent.Furthermore, GCC states accounted for $353.2bn or 42.9 percent of the global aggregate, while Iran remained the largest single market for Shariah-compliant assets, accounting for 35.6 percent of the total.Finally, Islamic banking operations are not limited to Islamic countries but are spreading throughout the world. One reason is the growing trend toward transcending national boundaries, and unifying Muslims into a political and economic entity that could have a significant impact on the pattern of world trade (Abdel-Magid, 1981).Islamic Banking Rules and PrinciplesIslamic banking rules are according to the Islamic Shariah derived from the Quran and prophet Mohameds sayings. The three main practices that are clearly prohibited in the Quran and the prophets sayings are, Riba ( Interest), Gharar (Uncertainty), and Maysir (Betting).Prohibition of Riba or any predetermined or fixed rate in financial institutions is the most important factor in the Islamic principles pertaining to banking. As stated in the Quran Allah forbids riba. Riba means an increase and under Shariah the term refers to the premium that must be paid by the borrower to the lender along with the principle amount as a condition for the loan (Omar and Abdel, 1996).Gharar occurs when the purchaser does not know what has been bought and the seller does not know what has been sold. In other words, trading should be clear by stating in a contract the existing actual object(s) to be sold, with a price and time to eliminate confusion and uncertainty between the buyers and the sellers.Maisir is considered in Islam as one form of injustice in the appropriation of others wealth. The act of gambling, sometimes referred to betting on the occurrence of a future event, is prohibited and no reward accrues for the employment of spending of wealth that an individual may gain through means of gambling. Under this prohibition, any contract entered into, should be free from uncertainty, risk and speculation. Contracting parties should have perfect knowledge of the counter values intended to be exchanged as a result of their transactions.Therefore, and according to Ahmed and Hassan (2007), the principles of Islamic banking and finance enshrined from al-Quran and Prophet Mohameds Sayings can be summed up as follows Any predetermined payment over and above the actual amount of principal is prohibited. The lender must share in the profits or losses arising out of the enterprise for which the money was lent. Making money from money is not acceptable in Islam. Gharar (deception) and Maisir (gambling) are also prohibited. Investments should only support practices or products that are not forbidden or even discouraged by Islam.Islamic Banking ProductsIslamic Banking products have to be done accor ding to Islamic rules and principles, based on profit and loss sharing as well as avoiding interest. According to BNM statistics 2007, Al Bai Bithaman Ajil financing is the most common in Islamic Banking. There are a lot of Islamic Banking products however there are some famous Islamic products that will be discussed in this section.1. Al Bai Bithaman Ajil /BBAThis involves the credit sale of goods on a deferred payment basis. In BAA, the Islamic bank will purchase certain assets on a deferred payment basis and then sell the goods back to the customer at an agreed price including some margin or profit. The customer will make payment by installments over an agreed period. A fixed rate BBA is a powerful hedging tool against interest rates (Rosly, 1999).2. MurabahahMurabahah is a contract of sale. The Islamic Bank acts as a middle man and purchases the goods requested by the customer. The bank will later sell the goods to the customer in a sale and purchase agreement, whereby the lende r re-sales to the borrower at a higher price agreed on by both parties. These are more for short term financing3. MudharabahAccording to Kettel (2006), Mudharabah is a basic principle of profit and loss, where instead of lending money at a fixed rate return, the banker forms a partnership with the borrower, thereby sharing in a ventures profit and loss. Mudharabah is an agreement between the lender and entrepreneur, whereby the lender agrees to finance the project on a profit sharing basis according to a predetermined ratio agreed by both parties concerned. If there are any losses the lender will bear all the losses.4. MusharakahMusharakah means partnership whereby the Islamic institution provides the capital needed by the customer with the understanding that they both share the profit and loss according to a formula agreed before the business transaction is transacted. In Musharakah all partners are entitled to participate in the management of the investment but it is not compulsor y. Musharakah can help in providing financing for large investments in modern economic activities5. Al IjarahIjarah means meaning to give something on a rental basis. In Ijarah, the bank acquires ownership based on the promise and leases back to the client for a given period. The customer pays the rental but the ownership still remains with the bank or lender. As the ownership remains with the lessor (bank), it continues to give the service for which it was rented. Under this contract, the lessor has the right to re-negotiate the quantum of the lease payment at every agreed interval to ensure rental remains in line with the market rates (Hume, 2004).6. WadiahWadiah is a trust contract and the bank provides gift (hibah) and various types of benefits to the customer. This is exactly like a normal conventional savings account.7. IstisnaIstisna allows one party buys the goods and the other party undertakes to manufacture them according to agreed specifications. Normally, Istisna is used to finance construction and manufacturing projects.8. SalamSalam is defined as the forward purchase of specified goods with full forward payment. This contract is normally used for financing agricultural production. According to Hassan (2004), Salam based future contracts for agricultural commodities, supported by Islamic Banks, can help to overcome the agricultural financial problemsTable 2.1 lists the products of conventional banking and their correspondent products in Islamic Banking.Source Obaidullah, 2005Financial Crisis and the Islamic BankingTo be able to compete with conventional banks, Islamic banks have to offer financial products that are comparable to the ones offered by the conventional banks. This exposes the Islamic banks to similar credit, liquidity and risks driven by market instability. Despite that, Islamic banks managed to remain stable at the early phases of the crisis. That was driven by three main Factors. First, Islamic banks financing activities are strongl y tied to the real economic activities than their conventional counterpart.Even though Musharakah and Mudharabah both provide better risk sharing while keeping strong link to the real sector, they are used minimally for different reasons. Most financing activities are done through Murabah and Ijarah followed by Istinsa. In the GCC and during 2007, Murabaha comprised of 65.4%, Ijarah 12.78% and Istinsa 2.83%. Both Murabaha and Ijrah transactions require the Islamic bank to know the clients purspose and use of finance as well the ownership of the asset by the bank. This help in ensuring that the funds are used for their stated purposes. On the other hand, conventional banks do not require disclosing the use of funds as long as the client is believed to creditworthy or can post suitable collateral.Second, Islamic banks avoid direct exposure to exotic and toxic financial derivative products. SinceShariah prohibits riba and gharar, the asset portfolio of Islamic banks did not include any CDOs, CMBSs, and CDSs which turned out to be highly toxic for conventional banks and amplifying factor for the crisis. These derivative products, initially used for hedging purposes, became device for highly speculative investments among conventional financial institutions. Unavailability of hedging instruments for Islamic financial institutions, which was perceived as weakness before the crisis, became a strengthening factor for them. However, exposure to other investment risks driven from equity markets, sukuk, real-estate and ownership stakes in other businesses remain a source of concern when overdone or undertaken purely for speculative gains.Third, Islamic banks in general have a larger proportion of their assets in liquid form than their conventional counterparts. This is driven by two main reasons (1) there is no lender of last resort (LOLR) facility available to Islamic banks, and they do not have access to market liquidity in the form of the interbank market, high liquidi ty was maintained for risk management purpose. (2) Excess liquidity is required due to lack of interest-free short-term investment opportunities as real economic investments require some development period.As the global financial crisis became a global economic crisis, it started to affect Islamic banks in an indirect manner. The financial crisis has triggered a chain reaction whereby the slowdown in the real economies of the developed countries has started to affect economic growth and investment activities in export driven economies of the developing countries through lower trade in goods and services as well as through the declining commodity prices including that of oil. The economic downturn is not only affecting the investment and financing activities of financial institutions including those of Islamic banks, it is also reducing the funding of these banks through lower personal savings and declining corporate profits. It should be noted that most of the Islamic banking indust ry comprises of commercial banks whose major funding source are retail deposits, investment banking constitutes only a small portion of the industry. Islamic banks in some regions may face risk on their financing and investment side of the balance sheet due to the crisis induced volatility of equity markets where these banks have large positions. Downturn in the real estate markets where these banks have large direct and indirect exposures is also another source of risk. Similarly, the changing wealth position of their high-net-worth (HNW) clients who also hold financial exposure in the hard-hit conventional financial sector of the West and therefore are now postponing any investment plans is also a factor. The relative importance of each of these factors varies by the region. For example, the banks in the GCC and particularly in the UAE are more exposed to real estate market risk, followed by risk of international equity markets. For the banks in Asia, their investments in domestic and international equity markets are a source of concern as equity markets are showing higher volatility. In some of the countries, the existing fiscal imbalance which has widened after the crisis is also a factor in the increased volatility of the marketsPrevious LiteratureThe study of bank profitability is an important tool to evaluate bank operation by examining the different factors affecting bank profitability and using these factors for management planning and strategic analysis. In the last four decades, many studies have been conducted to study both bank profitability and the determinants of bank profitability either for particular country or for a panel of countries. These studies normally divide these factors into internal factors and external factors. Internal factors represent the bank-specific characteristics such as bank size, liquidity structure liabilitiesetc while external factors can be macroeconomic factors such as inflation and GDP growth or Country-specific reg ulations rules and practices.In the area of banking profitability, many studies have been conducted to investigate the profitability of conventional banks while only few were conducted in the field of Islamic banking. In this chapter, we will review these studies for conventional banking first and then will focus on studies in the Islamic banking field. Then we will cover the conceptual framework of this research.Conventional BankingDifferent studies have been conducted in the field of conventional banking profitability. Short (1979), Bourke (1989), Molyneux and Thornton (1992), Goddard, Molyneux, and Wilson (2004), Peters et al. (2004) are some of the researchers in the field.Short (1979) is one of the early scholars who studied the relationship between banking profit rates and concentration for sixty banks in Canada, Western Europe and Japan during the 1970s and he included independent variables including government ownership and concentration by using H index to quantify concentr ation. Results showed that the government ownership impact on profitability varied throughout the countries studied but expressed an overall negative relationship. He also found evidence that indicated higher concentration rates lead to higher profit rates (Short, 1979).Bourke (1989) also compared concentration to bank profitability but included other determinants. Bourke (1989) covered ninety banks in Australia, Europe, and North America between 1972 and 198 and examined different internal and external factors internal factors such as staff expenses, capital ratio, liquidity ratio, and loans to deposit ratio external factors such as regulation, size of economies of scale, competition, concentration, growth in market, interest rate, government ownership, and market power. His results show that increase in government ownership leads to lower profitability in banking. He also found that concentration, interest rates, and money supply are positively related to profitability along with capital and reserves of total assets as well as cash and bank deposits of total assets. Bourke adds that well capitalized banks enjoy cheaper access to sources of funds as they are less risky than less capitalized banks (Bourke, 1989).Later, Molyneux and Thornton (1992) studied the determinants of European banks profitability. The paper examined eighteen counties in Europe between 1986 and 1989. This paper replicated Bourkes (1989) work by using internal and external determinants of bank profitability. However, Molyneux and Thornton (1992) results showed that government ownership expresses a positive coefficient with return on capital (profitability) which contradicts with Bourkes findings. Other results were similar to Bourkes, showing that concentration, interest rate, and money supply were positively related to bank profitability (Molyneux and Thornton, 1992).In one of the recent papers on bank profitability on European banks, Goddard, Molyneux, and Wilson (2004) shows similar fi ndings to the paper by Molyneux and Thornton (1992). It investigates the determinants of profitability in six European countries and it covered 665 banks between 1992 and 1998. The study used cross-sectional and dynamic panel models. The variables used in the regression analysis were ROE, the logarithmic of total assets, Off Balance Sheet (OBS) dividends, Capital to Asset Ratio (CAR). The results from both models were similar evidence reveals that there is a positive relationship between size (total assets) and profitability. Meanwhile, OBS appears to have a positive relationship with profitability for UK but neutral or negative for other European countries. Moreover, results also state that CAR has a positive relationship with profitability. Furthermore, the paper touched on ownership type by indicating that there is high competition in banking due to the fact that there is foreign bank involvement in domestic banks, and that profitability is not linked to ownership (Goddard, Molyn eux, and Wilson, 2004).Peters et al. (2004) studied the characteristics of banks in post-war Lebanon for the years 1993 to 2000 and compared the results to a group of banks from five other countries in the Middle East including UAE, KSA, Kuwait, Bahrain and Oman for the years 1995 through 1999. They used Return on Equity (ROE) measure profitability and leverage and they employed regression models that relate bank profitability ratios to various explanatory variables. This study tests the relationships between bank profitability and size, asset portfolio composition, off-balance sheet items, ownership by a foreign bank, and the ratio of employment to assets. The results show a strong association between economic growth and bank profitability, whether measured by ROE or ROA. They found that Lebanese banks are profitable, but not as profitable as a control group of banks from five other countries located in the Middle East.Islamic BankingIn the area of Islamic Banking, Bashir (2000) as sessed the performance of Islamic banks in eight Middle Eastern countries. He analyzed important bank characteristics that affect the performance of Islamic banks by controlling economic and financial structure measures. The paper studied fourteen Islamic banks from Bahrain, Egypt, Jordan, Kuwait, Qatar, Sudan, Turkey, and United Arab Emirates between 1993 and 1998. To examining profitability, the paper used Non Interest Margin (NIM), Before Tax Profit (BTP), Return on Assets (ROA), and Return on Equity (ROE) as performance indicators. There were also internal and external variables internal variables were bank size, leverage, loans, short-term funding, overhead, and ownership external variables included macroeconomic environment, regulation, and financial market. In general, results from the study confirm previous findings and show that Islamic banks profitability is positively related to equity and loans. Consequently, if loans and equity are high, Islamic banks should be more pro fitable. If leverage is high and loan to assets is also large, Islamic banks will be more profitable. The results also indicate that favorable macro-economic conditions help profitability (Bashir, 2000).Hassoune (2002) examined Islamic bank profitability in an interest rate cycle. In his paper, compared ROE and ROA Volatility for both Islamic and conventional banks in three GCC region, Kuwait, Saudi Arabia, and Qatar. He states that since Islamic banking is based on profit and loss sharing, managements have to generate sufficient returns for investors given that they are not willing accept no returns (Hassoune, 2002).Bashir and Hassan (2004) studied the determinants of Islamic banking profitability covers 43 Islamic Banks between 1994 and 2001 in 21 countries. Their figures show Islamic banks to have a better capital asset ratio compared to commercial banks which means that Islamic banks are well capitalized. Also, their paper used internal and external banks characteristics to dete rmine profitability as well as economic measures, financial structure variables, and country variables. They used, Net-non Interest Margin (NIM), which is non interest income to the bank such as, bank fees, service charges and foreign exchange to identify profitability. Other profitability indicators adopted were Before Tax Profit divided by total assets (BTP/TA), Return on Assets (ROA), and Return on Equity (ROE).Results obtained by Bashir and Hassan (2004), were similar to the Bashir (2000) results, which found a positive relationship between capital and profitability but a negative relationship between loans and profitability. Bashir and Hassan also found total assets to have a negative relationship with profitability which amazingly means that smaller banks are more profitable. In addition, during an economic boom, banks profitability seems to improve because there are fewer nonperforming loans. Inflation, on the other hand, does not have any effect on Islamic bank profitability . Finally, results also indicate that overhead expenses for Islamic banks have a positive relation with profitability which means if expenses increase, profitability also increases (Bashir and Hassan, 2004).Alkassim (2005) examined the determinants of profitability in the banking sector of the GCC countries and found that asset have a negative impact on profitability of conventional banks but have a positive impact on profitability of Islamic banks. They also observed that positive impact on profitability for conventional but have a negative impact for Islamic banking. Liu and Hung (2006) examined the relationship between service quality and long-term profitability of Taiwans banks and found a positive link between branch number and long-term profitability and also proved that average salaries are detrimental to banks profit.Masood, Aktan and Chaudhary (2009) studied the co-integration and causal relationship between Return on Equity and Return on Assets for 12 banks in KSA for the period between 1999- 2007. For their research, the used time series model of ADF unit-root test, Johansen co-integration test, Granger causality test and graphical comparison model. They found that there are stable long run relationships between the two variables and that it is only a one-direction cause-effect relationship between ROE and ROA. The results show that ROE is a granger cause to ROA but ROA is not a granger cause to ROE that is ROE can affect ROA input but ROA does not affect the ROE in the Saudi Arabian Banking sector.Conceptual FrameworkTheoretical framework is a basic conceptual structure organized around a theory. It defines the kinds of variables that are going to be used in the analysis. In this research, the theoretical framework consists of seven independent variables that represent four aspects of the Bank Characteristics. Theses aspects are the Bank Size (Total Assets), Capital Structure (Equity and Tangible Equity), Liquidity (Loans and Liquid Assets) and Lia bilities (Deposits and Overheads). Bank profitability is the dependent variable and two measures of bank profitability are used in this study, namely return on average equity (ROAE) and return on average assets (ROAA).In this section we develop the hypothesis to be examined in this research paper.Development of HypothesesThis paper attempts to test seven hypotheses. A hypothesis is a claim or assumption about the value of a population parameter. It consists either of a suggested explanation for a phenomenon or of a reasoned proposal suggesting a possible correlation between multiple phenomena. According to Becker (1995), hypothesis testing is the process of judging which of two contradictory statements is correct.Hypothesis 1 Profitability has a positive and significant relationship with the total assets (ASSETS).Total Assets of a company represents its valuables including both tangible assets such as equipments and properties along with its intangible assets such as goodwill and pa tent. For banks, total assets include loans which are the basis for bank operations either through interest or interest-free practices. Total assets is used as a tool to measure the bank size banks with higher total assets indicate bigger banks. Molyneux and el (2004) included total assets in their study and found a positive significant relationship between total assets and profitability. Therefore, total assets are expected to have positive relation with profitability which means that bigger banks are expected to be more profitable. Total assets are converted logarithmic to be more consistent with the other ratiosHypothesis 2 Profitability has a positive and significant relationship with equity to asset ratio (EQUITY).Total equity over total assets measures banks capital structure and adequate. It indicated bank ability to withstand losses and handle risk exposure with shareholders. Hassan and Bashir (2004) examined the relationship between EQUITY and bank profitability and found p ositive relationship. Therefore, EQUITY is included in this stud

Vodafones Product Portfolio

Vodafones Product PortfolioIntroductionclient argon unendingly right thats whats is cognize as the principle of pipeline regardless of what the business it is might be a retail store a manufacturing unit of measurement or even a service club the grassroots master is clients atomic number 18 always right. The question is that why? Why atomic number 18 the customers always right and not the suppliers? The answer is clean and neat, the customers ar the ones who facilitate the companies with revenue enhancement on which the produce the intersection points or pay the salary to their employee and even the and if source to pay off polar bills. how eer the customers diametric from of necessity and what and since the economic resources be scares the companies have to come across hostile trade-off situation where they have to choose the best possible strut of products and function that they will provide to their customers. The product mix that is resolute by the supplie rs are compressed in a product portfolio.A product portfolio is a method to maximize the literal assess of the producible heavys and services in congruity with the strategical planning by the per centumholders. However a product portfolio is customized on the basis of demands by the customers and their ability to pay, an an some other(prenominal) thing to add up on product portfolio is to segmenting the customers and merc bargainise on which they want to focus is precise important as for once the grocery storeplace is segmented the companies cigarette shade for to a greater extent strategic trade and ope balancenal plans. Segmenting the grocery store house be quite easy if the companies answer one of three basic questions of tradeing FOR WHOM TO PRODUCE. By these diverse tools and methods a company can decide on a perfect product portfolio for their merchandise.Vodafone an international telecommunication company has been assay to plant in their foots in Qatar sin ce division 2009 and is yet not sufficient to commence at least 50% of the market share and the fence is imperfect product portfolio. In the control I will excuse the present product portfolio of Vodafone and too give different recommendations for the company to go it betterManaging customers by FISHBy managing customers like fish doesnt literally mean that customers are fish instead it is a soon for First In Still Here a customer that visits a company once doesnt always have to go in that respect the attached time. However the aim of both company is to keep the customers alert in the giving medication and to supply them for endless time. The fish states that a customer who comes in for the first time should be treated in such(prenominal) a way that he stay in forever (Wang huges, 2014).The customers are known as rational and they may paper bag to any other government it sees more value for money accordingly these customers need to be satisfactory by dividing them into different groups such as their age, sex, attitude or even their reliability or monthly income and buying structure. Fish is not about managing customers for picayune term but to provide customers a well-fixed environment which they carve for so that they continue visiting it again and again. In assenting to this cooperations lack the trust building with the customers and the organizations loose customers due to not coming up to customer expectations even though its not the organizations faults as for the customers are so diverse and ever ever-changing it is quite difficult to shift their resources all now and then hence it is very difficult for the companies to decide on one single dead-on(prenominal) product portfolio. However in the succeeding(prenominal) segments I would hear different techniques to find out which departments or products should be removed from the organizations portfolio in install to draw off it effectiveStrategic bank note managementStrategic account management better known as surface-to-air missile is a strategic approach which comes from account management. However it is used to ensure positive and grab relations with different customers of the organization and it provides a shoulder to step on and freshen up relations with important and major customers.in addition to this SAM believes in providing definite customers with their specific and tailored right-hand(a)s and services that provide the prestigeSAM has been increasingly involved in different companies due to diverse races required in a business federation in the palm of business-business and business-customer .however strategic account management has successfully pushed the companies from no relation to very good relations with their customers and supply chain. In addition to this another prefer is that due to Strategic account management has facilitated organizations to identify different opportunities and append income massively.Next it is seen that due to increasing number of customers, companies and competition to win the market strategic account management has been a war-ridden tool for different organizations to excel in the todays world also as for strategic account management facilitates organizations in segmenting the market, teaming up with supply chain, sweet the loyal customers and also to increase their dough. However the main role pretender in the game is the product portfolio and deciding on the products with keeping the customers in mind and the aim of satisfying them.Customer divisionCustomer segmentation is known as the door to success. Once a company is adequate to(p) to segment its market the company is assured to enjoy profits and advanced loyal customer average. Different scholars talk about customer segmentation as a goldmine use suitable to the organizations the point arises how effectively the organization segments the market. If an organization does not faithfully decide on accurate customer segment ation it is likely to face loss as for the non-demanded products would be available to the market left unsold.Without customer segmentation a marketing mix is like a disabled person as for once the market is segmented the organizations decide on the product, price, place and promotion unless and until an organization knows there the buyers of their location, what their budget is or how much they are willing to pay, what they demand or like and what offers or promotions they are looking for it is useless to supply in general public, for no one would be willing to buy the products. at long last after customer segmentation a company is required to heading a product portfolio and notice products, prices and designs on the basis of their customers affordability and income structure. It is also identified that organizations are better off when they segment the market and on the basis of income structure of the customers as for the organizations re able to identify different product port folios for customers who are more profitable and low embody effective.Vodafones customersTelecom indus discover is known as one of the ever living industry as for rather than just being deific the customers of telecommunication industry keeps increasing in the market. The different telecom industries in the world are able to generate new markets through the emanation of technology and derived demand through the ready phones. In the egress of Qatar lonesome(prenominal) 2 telecommunication companies reside major being the Qtel and Vodafone. Both the companies are quite agonistic in order to win more and more market share of Qatar .however both the companies fight on the basis of different customer oriented approaches available to utilize.Until the introduction of Vodafone Qtel had complete control of the market but Vodafone being an international telecom industry they have actively restraind enough of the market share. However it is not a huge region or accurate to the perce ntage that was expected through Vodafone and the blame is in correct product portfolio. Qatar being an Arab country requires different services unlike the western population.The chart one shows the different market share captured by the telecom industries in QatarChart 1-In the year 2009 it is seen that Vodafone was able to capture 16% of the market share very effectively and the reason can be due to being a fresh company in the industry the customers were likely to enter into contracts with the company in order to try something new. However after the years Vodafone is able to sustain itself but no much growth is shown in the market and finally in the year 2013 Vodafone is able to capture 25% of the market share. However the market share should be increased to a much more better ratio unlike the company from year 2009-2012Products and services offered by VodafoneConnectivity- Vodafone product known as gateway is a signal booster for wireless societysHeadsets and headphones Bluetoo th enabled headphones remembrance cards- micro and mini memory cardChargers- portable mobile and launchpad chargers.Prepaid Sim cards extras, smart packs, watchwords, sms, internet over mobile, data celluar. paid Sim cards- Red, Classic 100.Youth packages- Falla, anghami+.Fixed telephone linesVodafone has divided and segmented its customers on the basis of the number of customers they are able to pull of the market. However I have turned the statistic in chart format as it can be seen below in chart 2.Since Vodafone is able to capture only 25% of the 1.8 million population in the Qatar it has a number of customers exploitation their mobile services which touch to approximately 300000 whereas on the other hand a number of customers use fixed fines still with about lakh and broad band connections end up to 180000.Table 1-Customer portfolioCustomer portfolio is made up to identify different groups of services provided by an organization in the librate of the revenue it generates for the company due to this an organization is able to judge and understand that not all segments are the same and on which of the products the company is earning very well and which of the segments they are facing lossesThe closely important part of any organization is to send back satisfied customers and it is only possible with the way of generating an intelligent portfolio .however an intelligent or sure portfolio is only possible through a very tested and decided upon market segment where the organization has divided its products on the basics on what the customers actually need and what they are willing to pay for and add value to strategic accounts services and products in line with the vision the organization has and the deputation it wants to reach on.A number of scholars explain that every customer or segment for instance should be treated very differently and asunder for other so that they feel the services they are opting to are oddly designed for them and they come out feeling prestigious. thusly in the matter of Vodafone it is very important that they decide upon a different package for every customer that pops up in their office and make him feel excess in the matter if attractiveness, price and design.Below the table shows a scout client portfolio for vodafone that displays spans and segments of clients of that the marketing strategy ought to depend on as investiture on every single segment according to reports development and the relationship/service requirement. The pursuing segments embody possible attractiveness reports and supplementary reports that the warm has to strategically assess beforehand requesting each investment in their product portfolios.BGG matrixAdvantages and implications of BCG MatrixFocuses attention on cash flow and ineluctablyIt is quantifiable and facile to useEasy to recall words and their meanings after denoting to company unitsAssume colossal marketplace allocate, economies of scale, and price associationB CG has two constituents such as upcoming attractiveness of SBA (growth and profitability prospect) and stable extrapolated competitive locale (if our competitive locale looks precisely as nowadays next extrapolate).Star- (growth strategy)- the product that excises in the category of stars is said to be good nowadays and good in the upcoming so kiss it, kernel it but you demand to do diagnosis all the period because if gaps increases next it moves to question mark so larger do diagnosis every single period and do not stay. However in short it can be said as mobile cellular packages especially prepaid service which mean pay before you call .however mobile data packages and prepaid call rates from Vodafone is acting as touch off for the company and it may further generate revenues for the companyQuestion mark- (growth strategy)- the products that befall in the category of question mark are said to be ugly nowadays and good in the upcoming so you entrance draw from cow and local e it in question mark as a matter of fact broadband connections are acting as question marks for the Vodafone company . However we believe that in the or so future it is likely to increase sales and come up generating profits for the company.Dog- (retrenchment strategy) the products that fall in the category of Dogs they are said to be sad nowadays and poor in the upcoming so locale the furrow beyond the door that is cut back from SBA .however in the situation of Vodafone it is the land-line connection and due to the advancement and common sizing of mobile phones there are a very few chances for the community to accept landlines again. On the other hand it is a hectic situation for a person to shift from one service provider to another in the matter of landlines. Hence Vodafone is not able to capture of much of the market in QatarCow- (stability) the goods that fall in the category of cash cows good nowadays and poor in the upcoming so cash cow that is seize the milk and be it a little whereas else. Retain milking the cow that is SBA acting good nowadays but not in the upcoming so make as far money as probable now. In the matter of Vodafone I can be easily understood that the product they are talking about is specially tailored youth services which in the main include Fallah service and is meant to be cheap and for a minor call rate. However the customers of Fallah program of Vodafone has not only captured the youth but also many women and men in the communityConclusionsIn conclusion to this project we can understand the importance of product portfolio, how it changes the impact it has in the community and how it is able to capture the market share with regards to Vodafone it is understood how the company should endure on its product portfolio and what things Vodafone is lacking in its product portfolio. In addition to this an organization is supposed to understand on what products it should produce and segment the market on the basics of the targeted seg ment by which the organization is able capture more market share and return back satisfied customers in the matter of Vodafone the company has no yet able to segment the market accurately and they should look towards the customers they are targeting and what they require I can apologize this by stating the matter of fact of Vodafone that they are unable to provide different services to women and they are forced to come to youth Fallah packages as for it suits their involve more accurately . However finally the Vodafone is analyzed on the basic of BGG matrix in the way that the cash cows, stars , dogs and question marks are identified.RecommendationsAfter assessing Vodafones client portfolio and dotted the crucial question marks reports it feels that for Vodafone it is important to own the world-class sales forces and report association qualities as grasping business-to-business and business-to-customer connections, be confidentially accountable for clients wanted aftermath, compre hend their company and necessities, being adjacent and inside grasp, resolve customers setbacks, and be creative in responding to customers needs across an innovative RD workshop Vodafone has to gaze beyond the competitive gains that they own, they have to grasp an competent client connections and report association by looking into customers needs and clarify deep vision of their customers expectations, and recognize the needs and opportunities beforehand their clients do, they have to deed as a crucial power for their clients and add worth to their services, because clients yet demand their telecom operator to deed and present in a method that differentiate them from their matches and uphold a competitive locale in the marketplace as corporates and of sequence meets confidential needs as individual customers. Though, Vodafone has to accept additionally a Crucial Client Association (SCM) outlook that can be attained across strategizing of sales procedures and constructions Vodafone outlook SCM necessities the following