How narrowing the focus of an investment company, that works on all the investments' activities, to working on one or two activities would enhance the company's financial performance in the future?

Focusing Strategy around Core Capabilities for an Investment Company

Part 1: Proposal

Company Overview

Athman Investment Company (AIC) is a shareholding 'closed' company that was established late in 2006 with a capital of KD 16.5 million. The company was set to operate as a general investment company taking on all sorts of investment specialties; portfolio management, investment banking, direct-investment and private equity management.

Unfortunately, after almost 4 years from inception, AIC has made no significant progress in the various investment specialties it chose to undertake. The only exception is the stock trading activities it handles on behalf of a key client in a form of “stock market portfolio management”. Although it was unable to expand its client-base in this specialty, AIC performance with regard to this job can be considered satisfactory. However, in general, the financial statements as of 31/12/2009 show weak financial results.



Aim and Objective

In light of the poor financial indicators and the company's lack of focus, the board of directors has decided to make a shift in the company's focus. It has been decided that company should focus only on one or two activities, and to be a market leader in at least one of those activities. Therefore, the purpose of this study is to build a new strategy that helps the company to focus on the activities that would position it as market leader. The activities will be chosen based on the company's resources and capabilities.

Research methodology

The methodology for the strategy formulation will be based on the role of the firm's resources and capabilities. To be able to do so, the resources and capabilities will be indentified and appraised. First, resources will be identified and classified as tangible, intangible and human resources. Second, the capabilities will be classified based functional analyses, and value chain analysis.

Then, an evaluation of the potential for the company's resources and capabilities to confer sustainable competitive advantage will be conducted. Meanwhile, the results of the resources and capabilities' analysis will be used to formulate a strategy that exploits internal strengths while defending against internal weaknesses. On the other hand, the means through which the company can develop its resources and capabilities will be identified in relation to the key-success factors for the skilled-related businesses.

Data Sources

1-The Audit Financial Statements

2-Reports from Kuwait Stock Exchange

3-Kuwait Central Bank Regulations

4-Evacuative Management Workshops

Part 2: Project

Introduction

Traditionally, marketing and operations functions have been revised individually in management publications (Karmakar, 1996). Marketing concentrated on creation of customer demand and how to offer customers a exclusive worth proposition. On the other hand, operations concentrated on management of provide to fulfill customer demand. Porter (1985) contended that all functional localities of business assist in the direction of consignment of items and services but marketing and operations are the two key functional localities that add and conceive worth to ...