Abu Dhabi Distribution Company Analysis

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Introduction

Every company is formed with objectives and goals that it lives to achieve. The mission and vision of an organization guide its activities throughout its lifetime. The two statements are of so much importance to an organization that they give the organization a purpose for living today and an aspiration to achieve tomorrow. The organization might not even exist without the two, or it might only exist without any motive. It is important to conduct a company analysis in order to understand the current position of a company and whether its activities are in line with its mission and vision. This is where an analysis of the company’s financial strength is conducted. Its strengths, weaknesses, as well as threats and opportunities are also established.

The Abu Dhabi Distribution Company (ADDC) will be analyzed in this essay. The company operates in the Abu Dhabi, United Arab Emirates. ADDC deals in the distribution of electricity and water in the country. A brief description of the company will be given before discussing its mission. The company’s objectives and strategies that it applies to achieve its vision will then be discussed. Financial ratios and other financial statements will be used to carry out the company’s financial status in the bid to understand the company’s financial position.

Relevant and appropriate models will be applied to analyze ADDC’s weaknesses and threats, as well as opportunities and strengths. This analysis will be important since it will give a direction on whether the current mission needs to be revised or should be left the way it is. In addition, it will be easy to develop effective strategies that can be adopted to achieve the company’s objectives. Finally, a discussion of the actions that should be taken in order to implement the recommended strategies will be given.

Brief Company Description

Abu Dhabi Distribution Company (ADDC) was established in the year 1998 in Abu Dhabi, United Arab Emirates. Its main operations involve distribution of electricity and water services in the country. It is a public company that is owned by the Abu Dhabi Water and Electricity Authority. ADDC is mainly involved in construction business, provision of electricity services, as well as distribution of water to Abu Dhabi residents. Its operations are divided into three major sections: the Island of Abu Dhabi, the Western region which includes Liwa and its communities, and finally the Eastern Region comprised of Mussafah and Bani. The company is said to have about 300,000 subscribers, thus the ADDC caters for over one million users across the Emirates of Abu Dhabi. The company ensures cost effective measures in meeting its customer needs and expectations. ADDC is committed to offering services that are reliable to all its customers.

Mission

The mission of the Abu Distribution Company (ADDC) is: “To develop, maintain and operate a safe, efficient, and economical water and electricity distribution system in Abu Dhabi” (Abu Dhabi Government, para 3). This is the mission that guides the company’s operations. The company’s activities are geared toward ensuring that there is clean water and sufficient supply throughout Abu Dhabi. Water is a very essential requirement in any society. Clean water is even more essential. A nation that does not have sufficient water faces the prospect of experiencing draught. In addition, lack of clean water leads to diseases.

Abu Distribution Company is committed to ensuring that water is enough and clean to avoid draught and illnesses. Electricity is another essential requirement for the growth of a nation’s economy. Most companies use electricity in their production. Abu Dhabi Distribution Company is aware that insufficient electricity would be harmful to the Abu Dhabi economy. It is also important to note that electricity can be dangerous if not safely maintained. Consequently, the company ensures that there is sufficient supply of electricity. ADDC also makes sure that electricity is safely maintained.

The vision of the company is: “ADDC is committed to supporting the government vision by becoming a leading water and electricity distribution and supply company, comparable with the best in the world” (Abu Dhabi Government, para 4). It is the responsibility of the government to ensure that its citizens have clean water and sufficient supply of electricity. It is not possible for the government to provide all the services it is required to provide directly.

The government, therefore, delegates some of the services to private firms. Abu Dhabi Distribution Company being a public owned company is given the responsibility of assisting the government in supplying water and electricity in Abu Dhabi. The company tries to ensure that it offers the best services that can be comparable with other remarkable companies in the world. In other words, Abu Dhabi Distribution Company works toward being the best in the world.

Objectives of Abu Dhabi Distribution Company (ADDC)

The objectives of a company should aim at fulfilling the company’s mission and vision. As mentioned earlier, the mission and vision statements of Abu Dhabi Distribution Company are aimed at ensuring sufficient water and electricity supply in Abu Dhabi. Therefore, the objectives of the company are: To ensure that there is economical water supply in Abu Dhabi, to operate safe electricity and water distribution in Abu Dhabi, to become the best water and electricity supply company in the world, to assist the government in ensuring that all the citizens of Abu Dhabi have access to sufficient water and electricity, to ensure that its customers get the best services that will maximize their satisfaction, to ensure that its employees are committed to the success of the organization, and finally to ensure team work within the organization. In addition, the company trains students on how to deal with electrical systems and water systems that are used in the United Arab Emirates.

The company simplifies the methods used to pay electricity and water bills in its bid to ensure consumer satisfaction. ADDC provides water and electricity bills that are easy to read for all customers. The company also provides services to customers at a one stop point. ADDC install water meters for its customers, regulates a call centre and provides IT services. Generally, the major objective of Abu Dhabi Distribution Company is to ensure that the people of the United Arab Emirates are able to live quality lives.

Strategies

ADDC has to ensure that it applies the best strategies considering the fact that it has an objective of becoming the best in the world, if not becoming comparable with the best similar companies in the world. Technological development has been common to most organizations over the past few decades, especially business organizations that are willing to compete in the world market. Abu Dhabi Distribution Company’s strategy, therefore, is to use modern technology, as well as international business practices to meet its business objectives and goals. In addition, the company tries to extend its access to current customers, as well as potential customers. This way, the company is able to maintain its customers and attract new customers at the same time. In doing so, ADDC extends its services through a channel referred to as the service delivery channel (Abu Dhabi Government, para 6).

Abu Dhabi Distribution Company current financial condition

The success of a company is highly dependent on its financial strength. A company that has enough finances has higher chances of prospering compared to a company that is financially weak. A financially stable organization has money to invest in any perceived opportunity, thus making profits. On the other hand, a company that does not have enough finances is not in a good position to take advantage of opportunities that may come up. Such a company will have to borrow from a financial institution. It is important to note that borrowing is expensive since the company has to pay back with interest, thus its profitability reduces due to increased expenses.

Abu Dhabi Distribution Company can be considered as a financially stable company. The company has been able to grow in size and financial strength since its inception in the year 1998. ADDC has been recoding profits from its business operations. Its financial statements and balance sheet indicate a strong financial position. For instance, the company had an expenditure deficit of 446,013 AED in the year 2003. The company had recorded a surplus of 508,518 AED in the previous year.

However, the accumulated surplus for the two years was 157,487 AED and 605,500 AED for the year 2003 and 2002 respectively (Regulation and Supervision Bureau 35). The cash flows for the two years were 1,819,616 AED for the year 2003 and 866, 217 AED for the year 2002 (Regulation and Supervision Bureau 39). The company had been able to maintain a strong financial position for the last one decade succeeding the year 2003. Being in the United Arab Emirates, its performance was not affected significantly by the global financial crisis that hit most parts of Europe and America.

Abu Dhabi Distribution Company external opportunities and threats

The best and most appropriate model to use in analyzing the external opportunities and threats of Abu Dhabi Distribution Company is the SWOT analysis. Opportunities are those elements that the company can exploit to increase its competitive advantage. These are elements that are usually external to the organization; therefore, the management cannot control such elements directly. An organization should be in a position to take advantage of any opportunity that it comes across since this gives it a better advantage.

On the other hand, a threat is an element that is outside the organization and has the ability of causing trouble to the organization. Threats are also beyond the control of the management since they are external to the organization (Fine 23). However, it is important that the management takes note of any threat that is likely to affect the business in the future and strategize how to minimize or completely eradicate the effects.

Abu Dhabi Distribution Company has a number of opportunities that it can explore in the future to increase its competitive advantage. For instance, the company can improve the quality of its services to increase customer satisfaction using the increasing technological advancements. Making it easier for the customers to pay bills and access them through the use of technology is an opportunity that is likely to increase the company’s advantage. In addition, ADDC has a plan to extend its services to potential customers. This is an opportunity that will enable the company increase its consumer base. ADDC will, therefore, be able to offer services to more people and, in turn, increase its profitability.

Apart from the opportunities that are available, the company also faces a number of threats that have the ability to affect its business. For instance, generation of electricity requires turning of turbines that use fuel as a source of energy. There have been advocacy campaigns for green economy over the last few years. The company might lose some sales from electricity since its distribution of electricity might be reduced if green economy is adopted. To avoid this, ADDC should be strategizing on how supply energy in line with the green economy campaign.

Another factor that might threaten its business is competition from organizations that offer similar services. There are other organizations in the United Arab Emirates that offer electricity and water services. These firms strive to offer the best services to get as many customers as they can in order to increase their profitability. Such organizations are a threat to Abu Dhabi Distribution Company. The company should, therefore, take appropriate actions that will enable it defend its competitive advantage.

ADDC’s internal strengths and weaknesses

Strengths are usually internal to the organization, thus the management has a direct influence on these factors. The strengths of a company depend on the resources that it possesses and its management, as well as its employees. In addition, past experiences and processes, as well as activities also are part of the organizational strengths. On the other hand, weaknesses refer to the characteristics within an organization that are likely to reduce its competitive advantage.

Rival firms utilize a firm’s weaknesses to become more competitive. Therefore, the company should identify its weaknesses and then devise strategies that can be used to improve on the weaknesses. The management should be realistic in identifying the weaknesses in order to face the truth about them and improve on them. It is important to note that the weaknesses are also internal, thus the management has direct control on the firm’s weaknesses (Fine 24).

Abu Dhabi Distribution Company has a number of strengths that has enabled its success. To begin with, the company has a strong human resource base that work tirelessly to ensure that Abu Dhabi Distribution Company always offers the best services to its customers. ADDC is committed to innovation, as well as any other activity that can improve the performance of the company. The company motivates its employees to get the best from them in return. Apart from offering employees with employment, the company also provides them with platform on which they can learn and improve their skills, as well as develop in their careers.

Workers are considered as the most important and valuable assets of Abu Dhabi Distribution Company. Secondly, the company’s financial strength gives it an advantage over its competitors. ADDC is in a good position to acquire any asset and equipment that can help it improve its services. In addition, the company is able to take advantage of any opportunity that can improve its performance. The company can also invest in technology using its financial strength. Technology aids in improving the quality of services, as well as increasing chances of innovation. The stakeholders of Abu Dhabi Distribution Company also give it competitive advantage. ADDC has a diverse base of stakeholders who are vital and committed to ensuring the success of the company’s business operations.

For instance, the chairman of its executive council is His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. Local government officials are also part of the company. Moreover, the Prince also appoints other members as stakeholders. Finally, the physical resources available to the company are also a source of strength. The company has assets that help it in offering services to its consumers. ADDC has sufficient resources that can finance most of its investment. The strength of a company is partially dependent on its physical resources and partially on its financial resources.

Abu Dhabi Distribution Company has a number of weaknesses that are likely to affect its business performance and competitive advantage. One of the major weaknesses is that the company does not have a well established platform through which it can innovate. Consequently, the company has not been able to fully adopt innovation.

Mission and objectives revision

The company’s main business is to ensure efficient and sufficient supply of electricity and water in Abu Dhabi. Its mission seems to give direction toward this cause. It is a good mission since it is in line with the company’s purpose. However, I would suggest that the mission be added some words so that it would read: “To develop, maintain and operate safe, efficient, sufficient, and economical water and electricity distribution system, as well as water and electricity services in Abu Dhabi.” The mission would sound more detailed if it was to be revised as described above, despite the fact that the mission is still sound the way it is. The objectives of the company need not be revised since they already give guidance in the achievement of ADDC’s vision and mission.

Recommended strategies:

I would recommend that the company improves its mission and objective achievement by improving its technology. This can be done through automation of services. The company should also step up its marketing strategies.

Specific actions needed for implementation of your chosen strategies

The specific action that needs to be taken in order to implement the strategy would be to invest more in technology. This would mean training the current human resource on matters related to technology. Hiring IT experts would also be helpful. The company should also improve its marketing by investing more on advertisements through various media. The expected results would be better and high quality services would be achieved once these actions are taken. The efficiency of the IT systems will improve and more customers will be expected due to improved marketing strategies.

Specific procedures for strategy review and evaluation

It is important to review and evaluate the progress of strategies once they have been implemented. This can be done by comparing the performance of the organization before and after the strategies are implemented. It is expected that the general performance will improve. There would be a need to revise the strategies if no improvement is noted. Customer turnout change would also be an effective measure for reviewing the strategies.

Works Cited

Abu Dhabi Government. Abu Dhabi Distribution Company (ADDC). 2013. Web.

Fine, Lawrence G. The SWOT Analysis: Using Your Strength to Overcome Weaknesses, Using Opportunities to Overcome Threats. Seattle, D.C.: CreateSpace, 2009. Print.

Regulation and Supervision Bureau. Annual Report Regulation and Supervision Bureau: for the Water and Electricity Sector in the Emirate of Abu Dhabi. 2003. Web.

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