Think Globally Act Locally

Published Date: 02 Nov 2017

1. INTRODUCTION:

'Think globally, act locally' is often used in today's competitive world to account the managerial challenge confronted by global marketers of any industry. Significantly, for powerful economic growth and development the financial hubs of the country play the vital role. The Economy of the Arabian Countries (Middle East) is very diverse. Composed of the developed and emerging economies like Kuwait, Israel, Egypt, Iran, Jordan, Iraq the Palestinian territories Saudi Arabia, Turkey, Qatar, United Arab Emirates, and Yemen the individual economies range from hydrocarbon exporting rentier economies to government led socialist economies to free market economies. Together the region is well known for production and export of crude oil. The oil business does significantly influence the complete region, through the wealth it creates and the movement of labour. Nearly every country in this region has undertaken efforts to diversify their economies in past few years. In this report the main focus will be on the diverse opportunities offered by Arabian Countries (Middle East) to the global banks, the global logics applied for deutsche bank in context to the specific Arabian Country (Middle East) concerning the customer logic, the industry logic, the competitive logic, the regulatory logic, the information logic, the size logic and the purchasing logic and explaining these logics existence in the Deutsche Bank expansion and development in Arabian Countries (Middle East), then relating the business strategies and finally the conclusion. The new modern trends and traditional believes in the edge of today's competitive world has forced to economies and organisations to change the ways of doing banking business in Arabian Countries (Middle East), the Middle East countries like Kuwait is rendering diverse opportunities to global bank therefore the High crude oil prices boost the economy and increased the government spending like the Kuwait has earned record surplus 8.7 billion Kuwaiti dinar in 2008. The salary of the employed increased by 8%. Boom in the real estate and commercial sectors, High growth in infrastructural and industrial projects, Positive growth in the retail sector etc were the few economic indicators which showed business to banks in Kuwait, therefore the increase investments of foreign banks, launch of new products like financial cards (Credit cards, debit cards etc.), Insurance services, Loans etc. The innovative part was that the products offered by banks were actually following regulatory laws of the country the Sharia the Islamic business law. The major banks the Deutsche Bank (world famous for financial cards and loan schemes), the Citibank, and the National Bank of Kuwait etc. The global Banks such as Deutsche Bank earns revenue by imposing various duties on their products and services example like in credit card the banks never charge interest as it is against the sharia law, the charge some amount on credit card payments, transactions etc. which called as RIBA means surplus value, to assure equivalence in the real value an excess value is given example suppose if Person A borrows 100KD through credit card then bank will charge (riba) particular percentage of actual value same system in loans and other investments in Kuwait.

2. GLOBAL LOGICS:

The global logics are the imperatives in market that intend global organisations to adopt a global strategy. The global logics opt by the organisation plays a vital role in success of any organization in foreign market entry and for stability. The logics applied in Deutsche Bank are closely concerned with the economy in which it is expanding i.e. Middle East countries as in Kuwait.

Customer Logic: the customer logic concerns that when customer demands an desired service suppose credit card and is also available to the competitor. The customer logic applied for deutsche bank in context to the Kuwait the Middle East country is apt as Deutsche Bank is purely a financial organisation whose earn revenue through selling its various products and services like financial cards (credit cards), loans, Islamic insurance, Islamic bonds, safe keeping etc. The Deutsche Bank offers a joint modern and traditional environment of product and services which are allowed in Sharia Law. Substantial Increase in number of Credit Cards, purchase of goods like apparels, technical goods in context to other global banks in Kuwait.

Competition Logic: The competitor logic tells that when the organisation encounters the same competitors consistently wherever they market. Demand for banking services is closely tied to economic activity and the level of interest rates. The profitability of global banks depends onefficientoperations, marketingskills and risk management. Largeeconomies of scaleexist in some divisions of the industry, which has encouraged industry consolidation. Smaller banks can compete successfully in segments where customer service or knowledge of the local market is more important. The industry iscapital-intensiveand highly automated. Whereas the competitors of Deutsche Bank in Kuwait are National Bank of Kuwait, Citibank, HSBC etc. in middle east countries. E.g. The Bank of Kuwait and Deutsche Bank offers the Loans, Credit card but the competitive edge is the difference in duties charged. The Deutsche Bank operates mainly in personal credit cards and the Deutsche Credit Card division has seen an increase in its industry share in recent years, as the company exploits banks and retailers as distribution channels. Nowadays, the bank ranks sixth in the overall financial cards market, with a 4% market share across world.

Information Logic:
The information logic concerns that a customer scan the environment i.e. take full information about the product and services which he requires through different banks of the region before rendering its services. While in Middle East in Kuwait Deutsche also gives all primary information through advertisements, media, internet etc. Therefore, the information logic is the information acquisition strategy applied by deutsche bank.

Purchasing Logic: the purchase logic doesn't apply as Deutsche Bank is totally a financial service provider i.e. loans, credit cards etc. hence the purchase logic concerns about the purchasing behaviour of customer.

Regulatory Logic: The regulatory logic is a crucial logic applied to Deutsche Bank in Middle East countries like Kuwait is an Islamic country which follows sharia law in business. Since Islamic economies are rigid about their investment policies and imply religious beliefs. Deutsche Bank has to adhere these norms to penetrate in the banking sector of Islam. Strategy: DB shows that commodities can also be integrated into Islamic banking to offer a new direction. Here the strategy will imply lucrative products and services.

Size Logic: The size logic concerns with the investment done in the market where the organisation is existing or planning to exist i.e. the share of the organisation in market competing the business rivals. Therefore the Deutsche Bank's market share has improved to 22% than earlier, which is a high ratio of percentage attained by any Global Bank functioning worldwide. It has considerably diversified regionally and has a strong revenue collection from most important economic regions which has improved its functioning all around financial prospects. Their foreign exchange business has considerably turned in an year and has been chosen as the number one foreign exchange provider by the annual poll of Euro money magazine (Global Markets, 2008).This bank is ranked by revenues and profits as one of the banks which has made vast investment worldwide (Ackermann, 2009). The management report of Deutsche Bank with consolidated financial statement reveals its net sales in the fiscal year 2005 was 755 million Euro, followed by 781 million Euro in 2006 and 831 million Euro in 2007. The total net revenue of the bank in the year 2008 was £13,490 million. The net profit of these three consecutive years was £167 million, £152 million and £19 million. As declared, from 31st December Bank's total assets were 2,202,423 million Euros (Annual report, 2008). It has passed loans worth 269,281million Euro by the end of the year 2008. Its total liabilities were of 2,170,509 million Euro and deposits of 395,553 million Euro (Euro monitor International, 2009). Hence, Deutsche Bank occupies a major share size in the globe in all its products and services compared to other global banks. Thus, it also has major share in financial cards worldwide.

Industry Logic: The industry logic concerns that how an economy could beneficial for a organisation to leverage its operations into different geographic regions. Therefore in Arabian Countries like Kuwait is a boost economy and as it is a part of Free trade agreement among the Middle East area it is quite beneficial for foreign banks like Deutsche Bank to invest in this region. Because as Deutsche Bank is an market leader in Financial cards sector (Credit cards, Debit Cards) and the new thing is that it has launched its products and services according to sharia Law. As well as Arabian Countries (Middle East) is being also well known for well established retail sector which will definitely give deutsche bank a good market in future.

3. GLOBAL BUSINESS STRATEGY:

The Global Business strategy of Deutsche Bank is being undertaken as Global Entry strategy, Market strategy, the branding strategy and the advertisement strategy.

GLOBAL ENTRY STRATEGY:

The main factors that have contributed to Deutsche Bank's growth in the market of credit cards were the Alliances and partnerships with retailers and associations that the bank established since its arrival in Middle East

GLOBAL MARKET STRATEGY:

Global Markets embark on trading and product structuring across a wide range of financial products, including financial Cards, bonds, equities and equity-linked products, exchange traded and over-the-counter derivatives, foreign exchange, money market instruments, securitised instruments and commodities. The origination, underwriting and syndication of debt and equity securities are managed jointly by Global Markets and Corporate Finance. Whereas the main market strategy synchronized by Deutsche Bank in Arabian Countries (Middle East) like Kuwait is efficient and effective working of business is following the cultural traits for success and working according to the sharia law only.

GLOBAL SEGMENT STRATEGY:

The brand strategy that Deutsche Bank would apply in Middle East would be co- branding tactic as it is being used by Deutsche Bank worldwide. As Kuwait is has well established retail sector it would definitely have strategic Brand alliance with the famous retail companies. A high light of top Branded Banks worldwide and in Middle East as Deutsche Bank holds 18th rank in worldwide and in top 30 in Middle East as it has been new entrant in this region.

GLOBAL ADVERTISING STRATEGY:

The Advertising strategy adopted by Deutsche Bank for Arabian Countries (Middle East) like Kuwait is unique worldwide as it advertise through social events, like in Kuwait (Devania a local trade fair) is organised for companies to advertise their products, as in Kuwait television Advertisements are preferred less than the print media the Deutsche Bank basically use this source od advertisement only.

4. CONCLUSSION

While no one can fully predict what might happen next, in Middle East ,the focus is on finding the lessons in and making the most of the current economic situation to rebuild more sustainable and responsible businesses through the Global logics, ethical practices and Global business Strategies applied. The Deutsche Bank is a global organization which adhere relevant norms of Sharia Law. It focuses on emancipation in the social context with profit maximization. It is a bank which provides tangible and intangible assets to its customers with augmented services globally. They create opportunities through investments which are in favour of society. A credit card issued by this bank has a potential to upgrade and capture majority of the Bank and investment sector in the Middle East Countries and Global arena in the upcoming years.

REFERENCES:

1. Euromonitor International (2009), Company Shares (by Global Brand Owner) • Retail Value RSP • % breakdown, Available From: http://www.portal.euromonitor.com/passport/DocumentView.aspx ,Accessed on:12-12-2009.


2. Ackermann, J. (2008), "Corporate Social Responsibility", Social Investment: Creating Opportunity, Available at: http://www.db.com/unitedkingdom/content/social_responsibilty.htm, Accessed on 10/12/09.


3. The Annual Report, (2008), 'Global Presence ', Available at, http://annualreport.deutsche- bank.com/en/2008/ar/deutschebankgroup/corporateprofile/globalpresence.html [Accessed on 9/12/09].


4. Jeannet, J.P. & Henessey,H.D. (2004), "Global marketing strategies", Developing a global mindset: The global logic concepts, 6th ed., pp 225-232.


5. Woolsy, B & Schulz, M, (2009), 'Credit Card Statistics', Available at, http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php [Accessed on 9/12/09].