Sohar University Investment Analysis

Introduction

All communities depend on investment as a main source of reaching business goals and achieve profits and enhance its economy because investment is important for increasing work opportunities, gaining hard currency, increasing the financial movement of any country and supports the economic development of it. Investment can be in many fields and areas and it can be within large amounts of finance or small ones. To make successful investments, investors are asked to work on specific business plans and analyze the costs and benefits of the investment process, study the feasibility of the process and measure the potential profits that an investing project can produce. Investment can be defined as using finance assets to make profits and achieve business success through some trade processes and projects in different fields of business. It also represents the purchasing process for goods and products or services of certain values in order to make future returns out of them though reselling them or reusing them in the business operations.

Types of Investment

There are many types of investment as there are many factors affecting investments and these factors result in the variety in investment types. Risk and return makes the difference sometimes and making different investments regarding types reduces the risk and leads to better results. Among these types are the ownership investment which includes stocks, businesses, real estate and precious objects, there is also the lending investment which includes the bonds and the savings accounts in banks, there is also the cash equivalents such as the money market funds. There are also other types of investment such as the national, international, direct, indirect, long term and short term investment. This means types of investments can be numerous according to the effecting factor.

Investment Portfolio

It is a pool of various investments done by investors whether they are people or organizations with a target of achieving profits and keeping the invested assets. There are various risk reward combinations control choosing these investments such as low risk and high risk ones.  An investment portfolio should be effective in reducing risks and achieve high revenues.

Investment Policy Statement

Purpose and Scope

The purpose of this IPS is to make a project that will be useful individually and for the society as the IPS will set the potential expectations, guidelines and objectives of the portfolio within its assets. Then there will be a classification for assets and how they will be invested and allocated. It will encourage the relationship between the advisor and the investor, prepare a framework for diversifying the mix of assets for getting returns on the long term on a suitable risk level. It describes the investment policy for both the investor and the advisor.

The portfolio

The portfolio is representing a strategy for the active assets allocation and there are mutual funds for investments so the assets will be liquid. There will be investment managers for fund advice and they will be monitored by the board of trustees. There will be criteria for choosing the investment managers based on adherence specifications. Each manager will provide advice regarding the assets according to the stated objectives of the fund and the investor will study the advice before performing the investment process.

Objectives

• The investment process tends to make profits with capital appreciation on the long term to be insurance against life difficulties.
• The investment is tending to grow a strong business in the Gulf area within different countries to enrich the Gulf market with products and goods it needs.

Guidelines and Policies

Time Horizon

The portfolio represents an investment horizon of 15 years long term in stock and 5 years in bond as short term.

Risk Tolerance with Return and Performance Expectations

The portfolio is comprised of investing in stocks and in bonds according to specific allocation in order to get returns but risk is expected too. The risk associated with stock is high but the return is high too and the risk associated with bonds is low but returns are low too. The statement is not guaranteeing any future performance.

Asset allocation

Assets will be distributed as 25% stock and 25%bond in Oman and 25%bond in KSA and 25% stock in Kuwait.

Rebalancing Procedures

There could be market conditions that may cause the investments of the portfolio to vary from the current set allocation so from time to time, each fund invested within the portfolio will be under revision and rebalance to its normal weight if there is a variation in the actual weight for about 3% or more from the preferred weight. 

Ethical Position

This portfolio ensures legal investments with clear and clean levels of investments following laws and regulations of the three countries invested in.

Duties and Responsibilities

Investor

The investor is to provide the advisors with all relevant and important information such as financial situation, risk tolerance, net worth, rebalancing procedures and ethical position.  The investor is well aware of all details within this portfolio.

Investment Advisor

Advisors are responsible for studying and analyzing this portfolio and the market in order to provide the investor with all information about asset allocation, investing decisions, risk tolerance and return expectations. The advisor will also provide periodically revisions for the portfolio in order to discuss the status with the investor and provide the proper advice.

Analysis for current and projected financial, economic, political, and social conditions and the portfolio investment plan

Investment Illustration

The amount will be invested in is 10 million Omani Riyal to be allocated as follows

Reasons for Investing in Oman

Economic

Oman is a country with strong economic growth as it is ranked as a competitive country in 2012-2013 Global Competitive Report of the World Economic Forum to be the 32nd most competitive country. Oman also attracts many companies and corporations from all over the world to invest in it such as companies of USA as Microsoft, Dover Energy and Oracle. This makes Oman of good investing climate for any investors to get good returns in it. (Michelle, 2014)Oman has strong economic reports compared with its neighbors and it is a great country for oil producing and manufacturing and has great production level of oil barrels as it is the largest producer of oil and natural gas in the Middle East. Oman has oil reserves estimated with 5,5 billion barrels in 2014 to be ranked 7th in the Middle East for energy investments with a refining sector controlled by The Oman Oil Refineries and Petroleum Industries Company. The GDP was 81 billion Dollars in 2013.   (Eia.gov, 2015)

Political

Oman has a stable political situation which makes investment there is a good idea as the efforts made by Sultan Qaboos Bin Said to enhance national and international trade are great in addition to the good relationships with other countries in the Gulf area and around the world. (Oman.org.au, 2015)

Financial

Oman is advantaged with a financial and banking sector which is efficient and secured enough for safe investments and it can be catered locally and internationally. There are a number of commercial banks, Islamic and other national and international banks with different sectors and services.  Short, medium and long term finances can be found in the commercial and international banks. Oman has banks which are owned by the government which are Oman Development Bank and Oman Housing Bank. These financial organizations provide its customers with a variety of services and business consult and experiences that provide Oman with a good rich financial environment full of accounting services and other services as marketing, legal and banking services. Many companies are found in Oman and they are national and international which provides lots of different types of investment in Oman.

Social

Oman has a diversified society with its main native citizens and other residents from many countries around the world who come to work. The main religion is Islam with welcoming to other religions of people living there. There are Arab majority, Ibadi and Sunni Muslims with ethnic groups and native languages. This social diversity results in great opportunities in business and investment as this creates a wider range and scope for business customers with their different needs and purchasing natures. (Peterson, 2004

Education      

Majan College

Majan college  is a part of a company which is a joint stock company and it is based in Oman for educational purposes. It provides higher education services for people in Oman by operating a campus college since 1995 according to a royal decree then. It is a private college in Darsait and it includes many educational academic disciplines such as business administration, English language, IT and others that provide degrees for its students and it is approved and supervised by the Ministry of Education. The college is chosen because of the great development it witnessed through the past years as it expands its services which are favored by many people in Oman and it is accredited by Bedfordshire university and its success and profits make it a good choose for investment in stock.

25% of my money will be invested in this company (2500000 Omani Riyal) as the company's net profits were increasing the past years to have a net profit growth of 35% in 28 February 2015. It is expected to have a net profit of 1,307 million OMR =3,397 $ as its net profit of 2014 was 967,249 OMR=2,512million $.

Market Capital=3million OMR

Price of share=0,1

Investment Price/Price of share=2500000/0,1=25000000

Investment Price/Total Price of investment= 2500000/10,000,000=25%.

Islamic Banking     

National Bank of Oman

The National Bank of Oman SAOG (the Bank) is based in the Sultanate of Oman since 1973 and provides many banking and financial services for people in Oman such as retail banking, investment, corporate banking, international and Islamic banking . The Bank's shares are listed in the Muscat Stock Exchange with company code which is "NBOB". At 31 December 2013, the Bank was listed as the second largest bank in Oman by having total assets of about 13.0 per cent of total assets, 13.6 per cent of total deposits and13.9 per cent of total loans. There are about65 branches for the bank all around Oman and 169 ATM automatic teller machines. The bank is famous for making great success and high profits especially in Islamic banking which has been regarded as very successful in the Middle East and in the Gulf area specifically in Oman.

Islamic banking was chosen because it has reported worldwide competitiveness as international Islamic banking assets were reported to be more than US$778b in 2014, The Islamic banks global profit is expected to triple by 2019, Global Islamic banking assets had a growth rate (CAGR) of about 17% from 2009 to 2013 and Islamic Banking is preferred by most Omani people today. National Bank of Oman is providing Islamic Banking services which are very distinguished and preferred by most people all around Oman.

I will invest 25% of my money in National Bank of Oman as in Islamic Banking =(2500000 OMR). This is because of many reasons as the bank in 2014 achieved a net profit of OMR 23 million, with an increase of 22.3 per cent, compared to OMR 18.8 million for the same period the previous year. 

 Market Capital= 2,000,000,000 OMR

Price of share=0,1

Investment Price/Price of share=2500000/0,1=25000000

Investment Price/Total Price of investment= 2500000/10,000,000=25%.

Reasons for Investing in KSA

Economic

Kingdom of Saudi Arabia is a favored country for most investors because it has a very good economic status as it is one of the 25 largest economies in the Middle East, it is also among the largest economies in Africa and Gulf area. Its economy is fast growing with a great capital income which is expected to rise for USD $33,500 by 2020 as it reached USD $25,000 in 2012. Saudi Arabia has a cost advantage which is substantial because of the costs of energy which are low and because it has a great oil industry which enriches other industries and investments there. It has a stock exchange market which enriches all stock markets in the Gulf area. The Saudi currency which is Saudi Riyal is a stable currency that has no changes occurred to it through the past decades which raises its value and makes it good to invest in KSA. Saudi Arabia is considered the biggest free economic market in the Middle East as 25% of the total Arab GDP is hold by it and having the largest oil reserves in the world estimated with (25%) and it provides energy for projects that invest there with very reasonable prices. It is advantaged with the huge population who are interested in investments and purchasing.

Political

Saudi Arabia enjoys a stable political status in addition to a favorable political situation among all Arab countries, countries of the Middle East and countries of the Gulf area. KSA has a political power over all participants in the oil market and it doesn't have the political tensions occurring in most Arab countries today. The Saudi government provides many opportunities for foreigners and people of the Gulf countries to invest in almost all sectors without restrictions without local partners. The government provided many chances for people out of the country to invest with all availabilities such as setting up Investment Services Centre (ISC) by the Saudi Arabian General Investment Authority(SAGIA). The ISC is to decide for granting or refusing a license within 30 days of receiving an investor application.

Financial

Saudi Arabia has a very successful financial environment with high comparative advantages with its largest free market in the Middle East that bears 25% of the total Arab gross domestic product (GDP), biggest reserves of oil internationally, a stable currency and great investment projects in addition to its encouragement for small projects from KSA and from outside. Investors can get great benefits from the corporative agreement the government holds regarding taxations and its reduction for foreigners in addition to its being free of personal income taxes. Companies of KSA have 20% of its total profit. It has also the Human Resources Development Fund that provides support for any activity that involves recruiting or sharing Saudi employees. It is privileged with its Islamic Banking and its compatible avenues of Shari'a. Another reason is that the Arab Fund for Economic and Social Development (AFESD) is involved into financing economic and social development projects in many Arab countries.

Social

The Saudi social conditions are suitable for investment there due to the great variety of people living there as there are many people from different nationalities from all countries of the world living there and investing their money there. It has a unique social framework that witnessed great changes in the past decades which resulted in the existence of a vivid investing market there. Saudi people are Muslim in general and it has the most important holly places for Muslim worldwide which makes it a place for all people to come from all over the world and this raises the investment advantage of this country.

Saudi Orix    

KSA is a leading country in the finance leasing activities as it is an important market in the Gulf area. The company was established in 2001 for leasing activities such as rental services. The company was a closed joint stock set by an issue from the Ministry of trade and industry. It included many shareholders such as Group Investment and Trade Development Co, Saudi Investment Bank, ORIX Corporation and ORIX Pakistan Leasing ltd. There are many branches for the company all around the kingdom.

I will use 25% of my money (2500000 OMR) to invest in Saudi ORIX due to the great success and profit it achieves as it made SAR 30.4 million net profits for the first quarter of 2015 with a rise of 7.7% year-over-year. The company announced its financial results for 2014 as the table: 

ELEMENT	CURRENT YEAR	PREVIOUS YEAR	% CHANGE
NET PROFIT (LOSS)	116,948,453	100,202,366	16.71
EARNING OR LOSS PER SHARE, RIYALS	2.58	2.23	-
GROSS PROFIT (LOSS)	181,837,784	157,898,621	15.16
OPERATIONAL PROFIT (LOSS)	183,295,101	160,318,777	14.33

So its net profit for 2014 was 116,948,453 which means it increased from that of 2013 which was 100,202,366 OMR. Gross profit also increased from 157,898,621 in 2013 to be 183,295,101 in 2014.

Liquidity= Total assets / Total liabilities

= 1,841,687/ 1,303,201= 1.413

Investment price / Total price of investment= 2,500,000 / 10,000,000= 0.25= 25%

Reasons for investing in Kuwait

Economic

Kuwait has a currency which has the biggest world value and it is a leading country in oil manufacturing and production. The country is trying hard to versify its economics since Gulf war and it makes high profits. Kuwait is the Arab world largest foreign investor as in 2013 its outflows were 8,4 billion $ for FDI. It has oil reserves estimated with 102 billion barrels and representing 6% from the world reserves. In 2010, Kuwait prepared an economic development plan that tends to spend up to $130 billion throughout five years for diversifying its economy away from oil, attracting more investment, and boosting private sector share in the economy. It has a solid condition due to oil trade and oil reserves which raises the scope of investment in Kuwait. The Kuwait government has low debts.

Political

Kuwait is a very small country with stability in political conditions as the country's businesses flourished after the Gulf war finished and the country has a strong government which provides foreigners and citizens of the Gulf countries with many business and investment opportunities and its taxation system is very good as there are no personal taxations in addition to reducing the taxations on successful investment projects. Kuwait has good political relationships with all Gulf countries, Middle East countries and countries of the world because this small country attracts human resources from every place in the world to work there. It is advantaged with a parliament that issues very updated laws regarding business and investments which are very useful for any investor wishes to get high profits.

Financial

Kuwait is a country that includes many financial institutions that have a future vision for investment extending to 30 years. The Kuwait government has many financial bodies that enhance investments such as Kuwait Investment Office and Kuwait Investment Authority and they can provide financial aids and consults for investors. A great variety of banks and financial organizations are there in Kuwait representing a strong finance background for investors. There are many multinational investment companies with great assets and investment branches all over the world. Banks are varied among national banks as Kuwait National Bank and foreign banks such as Central Bank of Kuwait, City Bank, HSBC and others, there are also Kuwait Finance House, the Commercial Bank of Kuwait and the Kuwait Stock Exchange.

Social

The country has a great and interesting variety of people living there of citizens and residents who are almost more than citizens which makes Kuwait a country that has big chances for investing there and making profits. Most Kuwaiti are Muslims who are either civil or Beduin and there are Bedun people and the residents who come for work and they are of all nationalities and religions. Kuwait people has a nature of purchasing and seeking new products and new trade mark which raises the opportunities of making profit in a society such as that of Kuwait.

Financial sector

Kuwait Gulf Bank    

 Kuwait's Gulf Bank is the a great lender by assets in the Gulf area and it provides various banking services for all customers from all nationalities. I will invest25% of my money in this bank (2500000OMR). The bank is chosen for investments because it has high records of net profits and has a good reputation in the whole Gulf area. Its latest report asserted that the bank's net profit raised to 12%. The bank asserted having a net profit for the three months to March end was 9.78 million dinars ($32.4 million), compared to 8.73 million dinars in the year-earlier period. The bank is forecasted by KAMCO Investment Company to have net profit of 11.86 million dinars during the quarter. Gulf Bank confirmed the net profit rise and attributed it to a net interest income increase, which rose 8.8 percent to 31.2 million dinars. ($1 = 0.3021 Kuwaiti dinars)

Investment price / Total price of investment= 2,500,000 / 10,000,000= 0.25= 25%

Conclusion

Investment is very interesting when the country where investment is done is well chosen and the market conditions of it are well studied and analyzed according to the profits and the general financial situation of both the country and the company where investments are run in. The current paper is representing a portfolio of investment in three countries of the Gulf area which are Oman, KSA and Kuwait due to many economic, financial, social and political reasons.

  

References

1. Eia.gov,. (2015). Oman - Analysis - U.S. Energy Information Administration (EIA). Retrieved 22 April 2015, from http://www.eia.gov/countries/cab.cfm?fips=mu
2. Michelle. (2014). Why Invest in Oman?. Diversified Finance. Available at: http://diversifiedfinances.com/why-invest-in-oman/
3. Oman.org.au,. (2015). Business. Retrieved 22 April 2015, from http://www.oman.org.au/business
4. Peterson, J. (2004). Oman Diverse Society: Northern Oman. Middle East Journal. Vol. 58, No. 1 ,pp. 32-51
5. http://english.mubasher.info/MSM/news/2717535/Majan-College-Q2-profits-leap-35-#.VTiD7dKqqko
6. The Report: Oman 2014. Oxford Business Group. https://books.google.com.eg/books?id=BKNtBgAAQBAJ&pg=PA246&dq=the+report+Oman+2015&hl=ar&sa=X&ei=FY84Vc3aB4jPaJr-gPgJ&ved=0CCQQ6AEwAA#v=onepage&q=the%20report%20Oman%202015&f=false
7. https://www.nbo.om/en/Pages/About-Us/Investor-Relations.aspx
8. http://www.ey.com/EM/en/Industries/Financial-Services/Banking---Capital-Markets/EY-world-islamic-banking-competitiveness-report-2014-15
9. https://www.sagia.gov.sa/Investment-climate/Some-Things-You-Need-To-Know-/Investment-Incentives/
10. http://english.mubasher.info/TDWL/news/2737394/Saudi-Orix-posts-8-profit-rise-in-Q1#.VTkp9NKqqko
11. http://www.tadawul.com.sa/wps/portal/!ut/p/c0/04_SB8K8xLLM9MSSzPy8xBz9CP0os3g_A-ewIE8TIwN_D38LA09vV7NQP8cQQ_dgE_3g1Dz9gmxHRQDvjvPB/?ANNOUNCEMENT_NO=37119
12. http://www.theodora.com/wfbcurrent/kuwait/kuwait_economy.html
13. http://www.reuters.com/article/2015/04/21/gulf-bank-results-idUSL5N0XI0PY20150421
14. http://www.kuwaitse.com/Stock/Stock.aspx?Stk=102

Purchasing Strategies

purchasing procedure

Other than the transactions described below, there is no, and there is not currently proposed any transaction or series of similar transactions to which Almarai is or will be a party in which any director, executive officer, holder of five percent or more of any of the Company’s Shares or any member of their immediate family had or will have a direct or indirect material interest.

Based upon a competitive analysis of comparables, the Management has determined that thetransactions set forth below were executed on terms no less favourable to Almarai than it could have obtained from unaffiliated third parties. It is Almarai’s intention to ensure that all future transactions between the Company and its officers, directors and principal

shareholders and their affiliates, are approved by a majority of the Board of Directors, including a majority of the independent and disinterested members of the Board of Directors,

and are on terms no less favourable to the Company than those that it could obtain from unaffiliated third parties. 11.2.1 Feed Supply Agreements and Management Agreement with Al Kabeer

Arable Farms Almarai entered into agreements for the procurement of animal feed from Al Kabeer Arable Farms providing for the purchase of hay, grass and maize. The agreements vary in duration,

of between one to three years, and value, with certain agreements in excess of SAR 25,000,000. In addition, Almarai has entered into a management agreement with Al Kabeer Arable Farms, which provides that Almarai shall manage the operation of Al Kabeer Arable Farm in Hail. The

duration of the management agreement is one year and the management fee payable to Almarai is SAR 864,000. HH Prince Sultan bin Mohammed bin Saud Al Kabeer, Almarai’s principal shareholder, is the owner of Al Kabeer Arable Farms. 11.2.2 Supply and Purchase Agreement with Savola Group Almarai entered into a supply agreement for the provision of its products to Savola Group's retail division. Under this agreement, Almarai sells products to Savola Group's retail division for a period of one year and extends a progressive rebate on the sales of its products depending on the volume of net purchases. Savola Group is a major shareholder in the Company. 11.2.3 Trademark License Agreements with Markley Holdings Limited Almarai entered into trademark license agreements for the use of certain Class 29 “Almarai” trademarks registered under the name of Markley Holdings Limited in Egypt, Yemen and Lebanon, all of which are secondary markets with combined sales volume amounting to less

than 1% of the total sales of Almarai. The agreements generally provide that Almarai shall

CORPORATE STRUCTURE

45 have an exclusive right to use a relevant trademark and that Markley Holdings Limited reserves the right to inspect Almarai's premises and to condition the use of the trademark upon on the Company’s good manufacturing practice in accordance with standards and

specifications approved by Markley Holdings Limited. The agreements provide for a catch-all termination provision in which either party may provide six (6) months prior written notice of termination of the agreement. Almarai will not be authorized to use trademarks in the three

relevant countries following the termination of the trademark license agreement under this class. See “Trademarks, Patents and Other Intellectual Properties” section. Markley Holdings Limited is an offshore company owned by the following Selling Shareholders: HH Prince Sultan bin Mohammed bin Saud Al Kabeer, the Savola Group, Abdulaziz bin Ibrahim Al Muhanna and Abdulrahman bin Abdulaziz Al Muhanna. Ownership of Markley Holdings Limited is currently in the process of being transferred to Almarai.

4-purchasing structure and design:

Interested in pasture access directly to the consumer. To achieve this goal, the organization has  reorganized marketing team and the restructuring of this section to increase our ability to respond to the demands and tastes of consumers. Where they divide their products into seven main categories: fresh dairy products, fresh fruit juices, canned products, sweets, meals light housework, kids products and bakery products. Each of these categories targeting a specific segment of consumers and respond to their requirements.  And remain fresh milk, on top of milk, yogurt, mainstay of the company's business and its success. Where these products continue to occupy the first position in the markets of Saudi Arabia and a market share of up to 59%.  In this context, it was put skim milk pastures which will enhance the ability of our products to reach new categories of consumers, in particular those with tastes and requirements.  Where he achieved good results have reached the market share of 50% of this product has been redesigned product as well as brick and whipped cream which has helped to attract more consumers.

Continued success in the market of juices pastures which started in the previous year, and this year we have introduced a new design and unique packaging juice 200 ml where this creative excellence in forms of packaging in the growth of the sales volume increased by 33% compared to the previous year increased market share overall in the juices.

The packed home light for sensitive seekers taste delicious and perfect food canning and ease of consumption in times of snacks. There is no doubt that cheeses such as cheddar, cheddar-flavored cups cheese and cream, and sliced cheese, and cheddar cheese boxes and templates (provide consumer quality and taste the wonderful addition to their prices.

Almarai products also saw used in cooking, which includes dairy products such as butter, margarine, cheese, feta cheese and whipping cream. Some developments through the redesign of the packaging and the products to enter the markets in the coming year.

The category of children's products that are especially attractive to those between the ages of 4 and 14 years old. And in this age which is the precise stage children begin to differentiate products and choose the product that meets their needs and combines quality and good taste. This category includes products: cheese triangles, long-term milk flavors  (Maher), Zadie, elasadi other products as light healthy meals to children. In 2008 started two major projects represent the first amendment project combination cheese triangles to meet the needs of consumers. The second project was the launch of a new 150 ml milk.

On the other hand continued to grow sales of bakery products that could attract more consumers by launching new products under the trade name luisine. These new products include:

Place cake slices, add to the cake the new Cup cake toffee. The bakery Department under the brand "luisine" of achieving a marked increase in sales volume as well as

To develop new containers have had a significant impact on sales growth.

Change management in practice: why does change fail?

Introduction

The article is discussing how resistance to change can be useful if management regarded the reasons behind it as managers have to be trained on how to implement change and prepare the organization for change before implementing it by removing obstacles to change and making employees aware of such change. According to Anderson and Anderson, (2010), reasons for change have to be clear, leaders have to be prepared for applying change and there should be steps for implementing it gradually. Reiss, (2012) The current paper is critically analyzing the article with reference to relevant change management theories such as Lewin's model and ADKAR to show the strengths and weaknesses in the author's views in addition to presenting my personal view on how change can be implemented based on the evaluation. (Cameron and Green, 2015)

Analysis

According to Voehl and Harrington, (2016) there are models of change management that can be applicable to the article's such as Lewin's model of change management as according to Liu, Akram and  Bouguettaya, (2011) it depends on three main stages to implement change in order to avoid failure in change application as they are unfreezing, change and refreezing; this is identical with the author's opinion as he stresses the need to prepare the organization for change and the need to train managers on this, the second phase which is change is reflecting the author's opinions about making change a part of the organization's culture and making leaders very close to change, the third is unfreezing refers to the author's opinions of making sure that change is accepted and properly implemented in the organization. Another theory that can support the ideas of the author is the ADKAR model that was explained by Bogner, (2008) who stated that there are five stages change should pass which are awareness, desire, knowledge, ability and reinforcement as this can be applicable to the author's views as awareness of the change nature and reasons should exist in managers and employees before implementing change, desire according to Procsi, (2016) can refer to the managers and employees' desire in making such success based on change, knowledge and ability according to Day and Leggat, (2015) can be maintained according to the author by training managers and employees on change management and reinforcement can be enhanced by applying change by understanding how it is going.

The author's opinions have weaknesses and strengths as the author is correct in seeing that change should be prepared for before implementation as according to Creasey, (2007), change needs an alteration system that should cover the whole organization and not a part of it only which is identical with the author's views but the author exaggerated in describing resistance to change as a pearl and can be very useful to the organization as when change is resisted it can lead to many damages, losses and problems as it can't be compared to a "pearl" as the author referred as according to Boonstra, (2008) who confirmed that resistance to change can work against any development that can be applied within the business organization and that the organization that has resistance to change is not advantaged but failing in achieving organizational goals which may lead to great loss. The article's change capabilities are clear in the author's opinions about the steps that the organization should follow to apply change such as preparing for change, understanding the reasons behind change, preparing leaders, following a change methodology, making change a part of the organizational culture and overall business and having a strategic direction for change as these capabilities according to Grady, (2012) can enable the business organization to achieve its goals that lie behind change implementation.

After studying views of authors as Leonard and McGuire, (2007), I can see that change management needs much interest from the business organization to be implemented as there are many different models the organization can choose from or the organization can even initiate a change model based on deep research and analysis for the organization and employees' needs in order to choose the most convenient method for change implementation. According to Auguste, (2013), Kotter's eight step model can be used in such case as the model can have the eight steps of creating urgency, forming a powerful coalition, creating a vision for change, communicating the vision, removing obstacles, creating short term wins, building on the change and anchoring the change in corporate culture; these steps are identical to the author's views as according to Mourfield, (2014), the Kotter's model seems to be very suitable to change management application as they are including all needed details for effective change. This was also confirmed by Rothwell et al, (2009) who asserted that the Kotter's model is suitable for maintaining sustainable change as it is based on deep analysis of the organization and employees' needs.  

Conclusion

In conclusion, it is important to refer to the need for applying change after preparing the organization for it, training employees and leaders on how to implement it and involving the change as a main component of the corporate culture in order to ensure its success. There are different models for change implementation such as Lewin's model, ADKAR model and Lotter's eight step model and the organization should make analysis for each model and then choose the most suitable model and apply it.

Strategic Management PEPSI, McDonald's

Introduction

According to Narayan, (2000); strategic management model depends on some basic organized steps the organization depends on in order to improve its current strategic position in the market and reach higher competitiveness that can raise the company's profitability. The video related to cola wars explains how Cocacola and Pepsi companies competed together in order to reach market rivalry since they began as according to Mishra and Lomash, (2003) each company depended on a different strategic model such as using advertising campaigns, making good deals with restaurants as KFC and Burger King and making blind tasters tests which helped the two companies boost all other companies in the market and according to Karami and Analoui, (2003) the strategy of franchising the two companies helped making them global businesses. The current portfolio aims at discussing strategic management issues such as models of strategic management based on a video for Cocacola and Pepsi and using case study of CEMEX that shows how the company faced challenges by its strategic management plans.

Analysis

According to Shahri, (2011) corporate branding strategy is very important as Cocacola company began in the American market with a unique branding strategy as the product was delivered in high quality and unique skirt shaped and then the main competitor appeared as Pepsi with a bigger sized bottle as Pepsi focused on providing a product with a digestive quality so as to attract customers to try a healthier product that helps in the digestion process. Pepsi depended on culturally relevant marketing and providing a reasonable in price product which was a remarkable strategic decision for Pepsi. Sustainability was focused on by the two companies as this was seen through the companies' advertising strategies. (Yoffie, 2009) The two companied depended on making relationships with the bottlers to make them strategic partners as Cocacola depended on fountain sales and Pepsi focused on retailers. Cocacola made good deals with restaurants as McDonald's and Burger King while Pepsi tried to follow inimitability strategy and made a deal with KFC and Pizza Hut. (McKelvey, 2006)The two companies were faced by social claims of the products causing diabetes and obesity so Cocacola presented Coke diet that was welcomed by many people and this helped in raising profits as the product was seen as regarding corporate social responsibilities. Pepsi used public figures such as Michale Jackson in its advertisements and sustainability can be seen by adapting with time and using a figure as Brittney Spears which left great impressions on people. Refranchising and operations were focused on by Cocacola as main strategies to beat the market other brands as Shweppes.(Whitaker, 2016)

Grundy, (2006) discussed how Porter's five forces model can be applied to different strategies and this can be applied on Coal industry as follows:

Barriers to entry

The two companies have international franchises where the bottling network controls bottlers from producing any new brand. The two companies are following special advertising strategies that depends on targeting different cultures as according to Hill and Jones, (2012); this technique is effective in finishing the cultural problems with the products. 

Suppliers

While Cocacola depends on fountain, Pepsi focused on retailers in their distribution strategy. According to Harrison and John, (2013); suppliers are very important to the business as applied by the stakeholders' theory. Cocacola and Pepsi applies the theory by choosing the most important suppliers and focusing on them such as food stores, retailers and fountains.

Rivalry

The two companies rivalry depends on sharing the market with the biggest share for each of them beating other competitors.

Customers

The two companies follow pricing strategies and advertising campaigns that attract customers.

Substitutes

The two companies depend on providing substitutes as mineral water, chips and other products for filling the market with them.

Recommendations

The two companies are recommended to make a new strategy to follow such as for example, making a mixing strategy that depends on providing new mixed products that customers can purchase based on the reputation of the two companies. They are also recommended to make a joint venture to boost the market.

Conclusion

In conclusion, strategies followed by business companies should be based upon models such as Cocacola and Pepsi's strategies that are shown in the video as the two companies witnessed strong beginnings when each tried to compete the other and get more competitive advantages over the other. The two companies followed steps in their strategies and they focused on sustainability and inimitability in the ways they followed to boost the market. The two companies were faced by claims of being harmful to customers' health which made Cocacola present its Coke Diet that was welcomed by large scales of customers worldwide. Depending on Porter's five forces' model, it can be understood how each company addressed the market and followed many strategies to invade the international market by making different franchises all over the world with high control in addition to producing other different products such as mineral water and others.

CEMEX Strategic Management

Introduction

Any business organization that seeks success should give much interest to its strategies and strategic management in order to boost other business rivals and increase its competitive advantages. (Gates, 2010) CEMEX is a big cement company established by a Mexican family. The company's strategy to be among the leaders companies in that field globally depends on three major orbits which are strengthening its existence in Mexico, focusing on internationalization and focusing on the global market. The company that began as a simple local business in 1906 in Mexico grew to be interested in many fields including oil, mining and tourism to be listed on the stock exchange of Mexico but cement was focused on to be its main business. CEMEX had good international opportunities in the mid 1980s but the chairman focused more in Mexico and then went globally by investing the company's noncore assets to be the best cement producer in Mexico first and then to internationalize the business. The company succeeded in Europe as in Spain and then Asia as in Philippine, Thailand and Indonesia. The company's production capacity raises in 2005 to be a global company with a current international network but there are still two main markets where CEMEX is still absent from which are China and India. The current paper is aiming at discussing the strategic management of CEMEX and its critically analyzing its future state and aspiration explaining its competitive advantage in addition to designing an alternative strategic plan for CEMEX to sustain growth in Oman market and face the challenges in it.

Analysis

Organizational vision, mission, objectives and strategic capabilities

CEMEX has a vision that depends on serving the requirements and needs of buildings for customers on a global level in addition to building a strong value for all the company's stakeholders via building a worldwide brand that reflects the most  profitable and efficient business and cement company. CEMEX is having a commitment for raising the effectiveness of the cement industry to be a partner in building nations with producing high quality cement. CEMEX mission is based on promoting the cement industry to be a key partner in the economic growth of nations and in building the infrastructures of countries and developing them. The company's mission includes having an effective advocate for all members of international cement and construction industry in addition being a responsive organization for the various issues relevant to the industry globally as well as establishing better stakeholders' relationships. (Husted and Alan, 2010) The company has organizational goals including making the company a global leader in cement industry, producing high quality products ensuring corporate social responsibility shown in many areas such as being environment friendly and helping for the world society, ensuring safety and security for all stakeholders, reaching higher levels of profitability and competitiveness in the field of cement production and ensuring sustainability in all activities and processes relevant to the business. The company also aims at invading new markets in the near future such as India and China, raising its human resources job satisfaction and retention rates and being a leader in the charity and helpful activities for the local and global societies. (CEMEX, 2016)The company has a number of strategic abilities that are used on a very professional level such as its capabilities in using technology for modernizing the techniques used in manufacturing and distributing its products and its capabilities un having strong human resources with different skills that are well used by the company to boost the global market yet the company should maintain some more core competencies that can be used for invading new markets such as India and China as these markets require new core competencies to be maintained by the company that are not found in other cement companies in these areas. (Ahlstrom and Bruton, 2009) 

Evaluation of the organization's Strategic management implications

Strategic management implications of CEMEX can be evaluated according to the international market expansion and the risk management processes. CEMEX has different strategic management processes as the company creates an environment that depends on making strategic alliances with the company's stakeholders especially shareholders who are well acknowledged with all the companies activities and policies, there are also the company's human resources who are given high interest to reduce turnover rates and retain them as the company invests in them in addition to other stakeholders including the world and local societies as CEMEX shares in many charity projects and sponsorship activates.(Harrison and John, 2007) CEMEX also tries to create value by establishing a global portfolio that includes many different activities related to integrated cement, aggregates and ready-mix concrete as the company makes sure of many steps such as valuing people who are the company's main competitive advantage as it helps customers succeed, help purchasers have long term profitability opportunities and ensuring sustainability to be fully embedded. (cemex, 2016) Yet the company should consider more risk management processes in order to consider risk as a core competency that can raise its competitive advantage as according to Lucia and Lessard, (2006), CEMEX has focused on two areas in risk management processes which are at first: growing in a very strong market and a strong institutional environment , CEMEX had the ability to succeed in markets that more powerful competitors didn't dare to enter. CEMEX has been famous for achieving many risky processes rather than avoidance of them which is a valued core competency for the company such as entering new markets in Asia and Europe; the second risk process is that CEMEX tried to make risk management as everyday activity of the company and nit as a separated process of the company's business as it became part of its cultural and organizational fabric. CEMEX includes risky decisions in the strategic planning of the company and align them with needs of the market and customers as it follows new innovative techniques in production and distribution of cement around the world. The biggest strategic risk CEMEX faced and succeeded in managing it is when its economic viability was threatened by the Mexican economy opening and the cement industry globalization as the company reacted to this threat by setting a stronger global scale and at the same time narrowing its product focus to cement and concrete only but the company has to develop new capabilities that can cope with new emerging risks in its field globally such as studying the demand risks in markets as India and China .

Explanation of competitive capabilities in improving trade margin and focus

CEMEX has competitive capabilities in improving trade margin and focus as the company focused on diversifying its geographic distribution areas to reach many new areas in addition to focusing only on cement as a main product of the company which raised its profit margin. In end of 2005, CEMEX got profits estimated with 1.5 million dollars out of its projects focusing on poor people in Mexico and although the trade margin of the company wasn't that high but it was improved by the company's capabilities in sharing in CSR projects in poor countries as Mexico and others in Asia and Africa which raised the trade margin as a result of improving the company's image at the countries where such projects were made and in other global countries based on such profitable partnerships with such countries. (Werhane et al, 2009). CEMEX is making deep analysis for the industry and this is among its competitive capabilities as the company has strong analysts who are able to study the market before entering it in addition to measuring loss and profit via different types of cost benefit analysis that can tell how much the company can gain from a specific market as for example, CEMEX is improving its trade margin by making good business in the USA as  the reasonable low price of portland cement and clinker the American companies import from CEMEX has made CEMEX get a disproportionate share of the U.S. market but at the same time this caused CEMEX problems such as the complaints of the  U.S. producers who accused CEMEX of selling its portland cement and clinker in prices that are less than the fair market value in which they described as predatory. (Bowman, 2010) According to Bovet, Martha and Consulting, (2000), margins of CEMEX are improving aligning with the strategy of CEMEX for paying down debt via selling off some of its real estate. As a way for investment; Cemex focused on its $520m contribution to its 2015 EBITDA from higher pricing policy and predicted a greater contribution in the year 2016. Debt reduction is a capability of CEMEX that is followed to raise trade market. CEMEX is also following a value before volume strategy that is able to raise its profitability and was followed for the past three years as the company's contribution was raised to $520m in 2015 after it was below $400m in years 2013 and 2014 at $395m and $390m.

Alternative strategic plan for CEMEX 's challenges and growth sustainability in Oman

Oman is a big market that all international businesses seek to inter and make business in due to many reasons such as the vivid investment conditions and supportive business environment as the government gives good opportunities to businessmen in related to taxation systems and import and export policies and tariffs. According to Hegazy and Doust, (2016) Oman is a main country of the Middle East where CEMEX is focusing as it has a large population and different industries that all requires construction projects for both housing and manufacturing needs. CEMEX needs to have an alternative strategic plan for facing any challenges in Oman and in improving the business there as the plan should be built on main goals of increasing the products distributed in Oman and perhaps there should be special plants for the company and this depends on the relationships between CEMEX and Oman government as the company can find many good opportunities for cement manufacturing in Oman with its different deserts and nature. The plan can be short term or long term as this depends on the size and volume of investment s set to be practiced by the company in Oman. CEMEX can also make deep analysis for the needs of the Omani market and how to control prices in the country and then to expand the business in other Gulf countries such as KSA and Kuwait where there are many construction projects. CEMEX should change its plans in Oman from those in other developing countries as Oman is not in that need for CSR via building homes for the poor but the company can be a sponsor for many sport activities such as football and others which improves the company's image at its customers' eyes. Oman also needs the company to make different advertising campaigns for manufacturing the product in Oman because the people in Oman needs to learn more about how powerful and effective CEMEX cement is in order to increase profitability and success in a country such as Oman that is a great opportunity to any business to invest in.

Conclusion

In conclusion, it is important to refer to how CEMEX became in such a successful position in the market of cement today as the company began simply in Mexico but with great efforts to focus only on cement and the different risk policies maintained by the company and how the company is applying them; the company was able to get a very high position in the world as there were three basic orbits the company focused on since its start as they are: the local market, international markets and global ones. As CEMEX has succeeded a lot in that field, it seems that it gives much interest to all stakeholders as the company is keen on making shareholders acknowledged with all about the business and its profits and the human resources are highly regarded by the company in addition to the different activities such as charity and others the company is sharing in them. CEMEX tries to have strong strategic capabilities that enable it to boost the international market such as being risky and taking risk decisions after deep analysis as when CEMEX makes such analysis; the company is also successful in improving its trade market by pricing policies, CSR projects and other ways. The company was also successful in taking serious decisions like focusing on cement only as a main product. The company is recommended to take more risks to reach markets such as India and China. CEMEX has also to put a different alternative strategic planning that can depends on goals and objectives that can share for raising the company's profitability and trade margin.

Critical analysis and evaluation of change initiated by the CEO of the Australian coal mine with relevant application of change and leadership theory

The CEO of the Australian coal mine applied a new system of appraising work performance and he didn't make any consultation before applying the change which lead to implement a performance appraisal system that is so simple and lacks main components relevant to HRM such as pay, performance and others. Miners were in need for a union official and this should have been regarded by the CEO and other managers as the miners should be job satisfied in order to do well at work as the lack of their needs made them refuse such change and just accept it by law and by force. This lead to reduced productivity and low performance as according to Wittig, (2012) the lack of understanding the occupational culture by managers can lead to not regarding the needs of workers which occurred with miners, the rating process also wasn't fair and was not accepted by miners. Lack of regarding needs and complaints of miners lead to their feeling of a lack of respecting them. Miners feel that they are abused by such appraisal system as they need to feel safe which is lacked in such a system. Another problem is that miners complained of being unfairly scored as this lead miners to work harder but not smarter which reduced the level of performance. Miners identities and the culture forming them were not understood by the CEO before applying the change which lead to problems and refuse to change as legitimating the process of change implementation lead to isolating miners and making them perform without the correct supervision of managers.  Pryor et al, (2008) discussed the reasons that make change fail referring to theories of change management such as using the change model that is suitable to the organization needs and nature of employees and their needs as they discussed organizational change versus organizational transformation; they explained that change should pass some steps in order to succeed as there should be a transformation not a change to occur, this was confirmed by Nickols, (2016) who added that preparing for the change is a very important stage and that change should be studied well and tried before its last implementation as employees' reactions to change should be studied and their needs must be considered when applying the change. Cummings and Worley, (2014) discussed how Lewin's model of change can be effective when it is applied by management as it consists of three stages that are unfreezing which includes preparing for the change and then change which refers to implementing it and refreezing which means to stress the change in the organization, this is useful as it can help managers adapt and modify the change in the unfreezing phase to the needs of employees and the nature of the organization to improve performance as a main goal. This was confirmed by Hiatt, (2006) who referred to ADKAR model of change that involves five phases or main components for implementing the change which are awareness, desire, knowledge, ability and reinforcement.

Critical explanation and analysis of miners' general views

Miners views show that they have fears of threats to their occupational community as one of the miners said that he had a problem with the rating process as he thought that he is rated without real understanding for his work abilities, performance and outcomes as he mentioned that he is rated before he goes into the rating room and there is no chance for changing the score he gets; this leads to reduction in the level of miners' performance as according to Thomas, (2014), effective leadership is the one that regards employees' needs and complaints about any new change otherwise they will resist change and find ways to work against the organizational goals. This occurred in the current case and many miners feel threatened in such work environment as a miner commented that the place they work in is dangerous and that leadership doesn't consider safety measurements for miners as if their safety is not regarded by the organization or managers. Adamshick, (2007) explained how risky work environment are in need for safety measurement applications rather than any other work environment as safety climate can raise the employees' morale and make them feel appreciated and respected by the work organization and managers which in turn can improve performance and productivity. Samuel, (2013) explained that change management is a crucial process that leaders and managers should understand before implementing any change as they should realize how far employees regard change and if they have different needs that change can't apply because this can lead to making the needed change instead of a change that will lead to passive results and negative outcomes in relation to performance. In the current case, one miner explained that he was very proud that he expressed his opinion to the manager and that he was able to change his score which tells how far the work environment in threatening to employees and may lead to high turnover rates because it lacks effective communication as it is clear that when one employee had negotiated a problem and was able to communicate it with the manager, he sees this is a great thing to do and not a common thing. This is very dangerous as it makes employees feel not respected or regarded by managers which was another opinion of another miner. Another opinion of miners show that change is not fairly implemented in the organization as some miners are low rated while others are highly rated without clear explanations for reasons for such unequal rating system as the miner expressed that he will react as other miners who work smarter not harder in a hint of not correct actions with managers. Farell, (2009) discussed this problem and he referred to equal and fair implementation for rating systems that can bring in the best results in performance of employees; this was confirmed by Mone and London, (2014) who stressed the need for avoiding errors of rating by managers via using successful rating systems that can satisfy all employees and really measure their performance.

Communication plan  

Erskine, (2013) confirmed the importance of communication plans in change management as he focused on two types of communication which are the communication that can discuss the change with employees and the communication that can get information when needed either from employees or managers. This was confirmed by Newton, (2012) who added that communication plans can help in managing change step by step.

Communication type	Objectives	Medium	Frequency	Audience	Owner	Deliverable
Meetings with managers	To make managers understand how to apply change with a model	Face to face	Weekly	Manager	Trainers and consultants	Agenda
Project team meetings	To make employees understand change and express opinions	Face to face By reports By e-mail	Weekly	Miners	Trainers and managers	Agenda
Reports about miners' satisfaction by managers	Realizing needs of miners and modify change to them	Written Reports Questionnaire Interviews	Monthly	miners	Managers consultants	Performance Reports
Reports about managers' performance	Monitoring managers implication for change	Written reports	Monthly	Managers	Supervisors and consultants	Performance reports

Source: https://www.csu.edu.au/__data/assets/pdf_file/0005/187430/Research-Office-Communications-Plan.pdf

The plan can be achieved according to what was reported by Biech, (2016) as he reported that change management needs training for both employees and managers and this can be reached by implementing a communication plan for managing change and as confirmed by Attong and Metz, (2016) who asserted that to make a business change succeed, there should be a communication plan that can be updated to match the needs of the project applied as a change.

The current communication plan is set to focus on both managers and miners as managers are in need for understanding the process of change and to realize that it needs to pass different stages before implementing and there are right ways for the correct implementation of change. The plan has four types of communication which are meetings with managers, project team meetings, reports about miners' satisfaction by managers and reports about managers' performance in applying change. This can be done by the help of some trainers, consultants and supervisors who can provide managers with training needed for change implementation in order not to fall in errors as the occurred before. Supervisors and consultants can monitor managers' performance and report it in order to be estimated and to evaluate change. Miners' opinions and complaints should be listened to by the reports or via the meetings with them that can strengthen the communication process between miners and managers. The plan can be adapted and updated according to the needs of the miners, managers and the organization. The communication plan can be effective when needs of miners are met and when they have a supportive performance appraisal system that can help them have their rights, feel better and perform better in the work which can raise productivity and profitability as well as raising miners' moral which ensures better work environment as the communication process will reveal many opinions and complaints the miners may have which is helpful in meeting their needs and making them job satisfied.

Conclusion

In conclusion, it is important to refer to the importance of understanding change management process and how to implement change properly in the business organization. As seen above, the CEO of the coal mines in Australia has committed mistakes as he didn't prepare for the change or make analysis for miners' needs which resulted in great failure and resistance to change as well as a reduction in the level of miners' performance that reflected on the organizational productivity. The organization should give much interest to miners' opinions in order to raise their morale and make them job satisfied and this can be applied by implementing a communication plan that focuses on both managers and miners in order to establish a work environment where communication is well applied as this will help in recognizing needs and complaints of miners and apply a new change that can satisfy them.