Academic Master

Business and Finance


The Case Description

The UAE Exchange was founded in 1980 by HE Abdulla Hamid Ali-Mazroei and B. R. Shetty focusing its operation on providing remittance services to the people of UAE. From the year it was founded, UAE Exchange has enjoyed government support as it was formed by influential people. During its launch, Al-Mazroei was the Minister of Justice in the United Arab Emirates (UAE), and Shetty was a successful businessman who had established the largest hospital chains in Abu Dhabi. With the support of its founders and the government, by 2014 the company had expanded its operations to 800 offices globally. Over the years of its growth, the company has taken several steps to ensure it satisfies the needs of its consumers and expands its operations. In 1993, UAE Exchange became a member of the Society for the Worldwide Interbank Financial Telecommunication (SWIFT) which was one of the global providers of secure financial messaging services dedicated to promoting and developing of global interactions that are standardized for all financial transactions. Becoming a member of SWIFT helped the firm expand its operations to other geographical regions and launch services related to express transfer, bank notes, and gold cards. By 2015, the company had offices in UK, Bangladesh, Sri Lanka, Oman, Kuwait, and India. UAE Exchange has its other operations in the Asia and Africa continents, but India is currently its most massive consumer base outside UAE.

Company Profile

UAE Exchange is a company based in Abu Dhabi that focuses its operations both domestically and internationally rendering services in the remittance industry. Some of the services provided by the company include foreign exchange services, loan provision, sending and receiving money, and prepaid cards making its target market consumers interested in services related to the transfer of money, payment solutions, and currency exchange. The company has constantly worked to grow its operation by opening more branches to create convenience for its consumers, which has always been one of its priorities. The company has employed people in its regions of operation by both outsourcing and hiring natives to work in the organization to serve its consumer base which is estimated to have nearly 150 million customers. To manage and provide efficient services to its consumers, UAE Exchange has partnered with nearly 140 banks and technology companies whom it works to ensure operational excellence. Today, UAE Exchange has operations in over 31 counties with 800 direct offices that the company holds as its asset (UAE Exchange, 2016).

Vision, Mission, and Goals of UAE Exchange

The core values of UAE Exchange are integrity, commitment, empowerment, and care. The vision of the firm is to be one of the most admired brands in money transfer, payment solutions, and foreign exchange. The employees of the company are guided by the core values and vision of their responsibilities to ensure quality is maintained. The company believes in successful collaboration to help in advancing the interest of its customers by introducing and using innovative products and services. UAE Exchange is, further, built on trust, value, and simplicity to ensure that the company facilitates making the lives of its consumers easy. The mission of the firm is to explore its realm and explore opportunities that are present in the remittance industry (UAE Exchange, 2018).

Trends Affecting the Remittance Industry

The remittance industry plays a vital role in the development of economies. In 2014, the top countries that sent money in the remittance industry included the United States, Saudi Arabia, and UAE in that order.

Although technological advancement such as blockchain transfer technology continues to create modernized opportunities for money transfer across borders, various challenges threaten the growth of the industry. Strict banking laws and their unwillingness to work with the blockchains such as bitcoin have posed a threat to the efficiency and secure transfer of money across borders. The high costs associated with sending cash, especially between countries of different geographical areas have been a common challenge in the remittance industry. Currently, the estimated cost for transferring money is estimated to be 7.4 percent of the total sum of money being transferred. Consumers have complained that the rate is too high and they expect that the industry should lower this rate to 3 percent. The remittance industry can create more value for itself and facilitate growth if they address this customer need that has existed throughout history. De-risking is another threat to the industry. De-risking refers to the practice in which financial institutions take steps to reduce risks by closing the accounts of clients considered to be in the high-risk category. Factors such as anti-money laundering regulations and anti-terrorism financing regulations are the primary cause of de-risking in the industry (Todoroki, Noor, Celik, & Kulathunga, 2014).

Many remittance firms today are unwilling to work or partner with money service businesses in regions that are complicated or exhibit signs of high risks. Failure of the remittance regulators to embrace more efficient and modern ways of identifying senders is a threat to the money transfer industry. The operators in the remittance industry need to embrace innovations such as automated identification, better foreign exchange management, and real-time cross-border settlements. Lack of interoperability among the remittance operators acts as a threat to the industry since it limits cooperation and collaboration to help in addressing the remittance consumer demands. Despite the challenges, reports indicate that the global cross-border remittance volume has continued to grow from 2012 to 2017 and is expected to continue (Tech Insider, 2015). However, the industry will have to change if it hopes to improve its average growth in the number of cross-border volumes.

Strategic Challenges

UAE Exchange uses the customer-centric approach to deal with the trends affecting the remittance industry. The primary drives of the customer-centric strategy are people, products, and operation (UAE Exchange, 2018). The strategy aims at creating a competitive advantage for the company’s brand by focusing on the demands of the customer. The company also makes use of a compliance program to achieve its mission of dominating and becoming the global leader in the remittance industry. Although the strategies seem efficient, various tactics can be initiated to reduce the challenges being encountered by implementing the strategy.

Question 1: What other strategies can UAE Exchange implement to handle the challenges that threaten the remittance industry?
Question 2: What strategies that UAE Exchange applies as it aims to fulfill its vision, mission, and goals?
Teaching Notes
Question 1: What other strategies can UAE Exchange implement to handle the challenges that threaten the remittance industry?

Cost Leadership Strategy

The consumers in the remittance market are demanding a reduction in the prices in the sending of money using the money transfer operators. An effective strategy that the firm can implement to penetrate and assist in the growth of the remittance industry is a cost-leadership strategy. Cost leadership strategy requires a firm to reduce its operational costs so that it can offer its products and services at a considerably lower price than the competitors. Although the strategy in most instances is challenging to deploy, companies that have successfully implemented the strategy, like Walmart, have gained a competitive advantage in their respective markets and created their dominance. For the strategy to efficiently work, companies must ensure that they retain the quality of the product and services they offer. One advantage of cost leadership is the ability of the strategy to attract a large market share segment. A large portion of consumers in any market tend to purchase products and services from companies with lower prices and acceptable quality. Cost leaders in various markets tend to keep their operational costs low by minimizing their advertising, research, and development projects (Chang, Fernando, & Tripathy, 2015). UAE Exchange can apply the cost leadership strategy to fulfill the demand of the remittance consumers by lowering the prices of its products and services. Attracting a large consumer base will help in eliminating the challenge of derisking to the company. Having a large consumer base will limit the fear of loss possibility, lack of customers, and competitors that can encourage the firm to venture in challenging geographical regions.

Differentiation Strategy

UAE Exchange can use the differentiation strategy to overpower the challenges associated with the remittance market. The differentiation strategy calls for a firm to create sufficient distinct products and services that set the company apart from competitors. Excellent differentiation strategies aim at creating value for a product by making it unique in the eyes of consumers that in the long run provide a competitive advantage to the firm. Apart from products and services, firms can use pricing and the general organization to differentiate themselves in their markets. Pricing is aimed at supporting the organization and is usually based on supply and demand. Firms can differentiate themselves by using price by considering the lowest value, or higher prices to create superiority or innovative products. Organizational differentiation involves maximizing the brand’s power using specific advantages such as location, name recognition, and customer loyalty. Virgin Airlines and Nike are good examples of companies that have gained a competitive advantage in their markets by implementing the differentiation strategy (Leinwand & Mainardi, 2016). The differentiation strategy can help UAE Exchange overcome the challenges in the remittance market and achieve its goal, vision, and mission. The firm can decide to differentiate its price, organization, and services to a superior quality than the competitors to maintain its service prices at the current market prices. Although consumers in the remittance market consider the prices for the service high, lack of embracement to the modernized tools and platforms is the primary reason for the law services in the industry. The money transfer market, for example, can take a broad step and partner with one of the blockchain firms such as bitcoin. Although risky, the partnership can provide numerous opportunities for UAE Exchange to overcome the challenge in its industry and fulfill its goal.

Defensive and Alliances Strategies

Defensive and alliance strategies can help UAE Exchange maintain its competitive advantage and leverage the challenges in the remittance industry. Defensive strategies refer to those tactics that a firm puts in place to distance itself from competitors to maintain and increase its competitive advantage. Defensive strategies have closely been linked to differentiation and cost leadership since they tend to keep the benefits gained by a firm in check. The major difference between the defensive and the two other strategies is that the latter is offensive. Defensive strategies are used by firms in the category of global leaders (Reeves & Haanaes, 2015). UAE Exchange is considered one of the global leaders in the remittance industry as a result of its achievement. Western Union and MoneyGram are its main competitors, providing leverage for itself for the implementation of the defensive strategy. Alliance strategy involves creating a competitive advantage by seeking strategic alliances with other companies in the same market or from other sectors. Strategic alliances are considered joint ventures that require the involved businesses to combine their operational activities to pool resources and provide exposure to themselves at the expense of competitors. Strategic alliances are meant to bring organizations together so that they can accomplish a common goal. The agreements between the involved parties can either be formal or informal but place each of the companies with responsibilities that must perform. Strategic alliances further allow businesses to pursue opportunities in their markets at a faster rate than they would if they did individually. Additionally, both companies are guaranteed access to additional knowledge and resources. Strategic alliances must not necessarily involve the merging of assets and funds reducing complexity in the strategy. UAE Exchange can use the strategy to act as deal with the problem of interoperability that is present in the remittance industry. Currency, there is a lack of information sharing between the money transfer operators, which has created the blindness in clearly seeing the demands of the consumers. UAE Exchange can try to create a partnership with other businesses to overcome the challenge of interoperability.
Question 2: Which Strategies that UAE Exchange applies as it aims to fulfill its vision, mission, and goals?

Customer-Centric Approach

Customer-centric strategies aim at providing customers with positive experiences to help drive profit and provide a competitive advantage for the firm. Right customer-centric strategies that help a company gain the loyalty of customers. Achieving customer loyalty is vital for any organization that wants to be valued in its markets (Kumar, Lahiri, & Dogan, 2017). The vision of UAE Exchange is to be one of the most admired brands in the remittance industry. Achieving customer loyalty is, therefore vital for the company to the realization of the vision. The customer-centric strategy applied by the firm focuses on improving customer experience with UAE Exchange’s products and services. The company has put in place innovative features in its products and services and has hired customer care professionals to deal with customer complaints. The tactics applied by the firm are vital since they pose the ability to help the firm gain the consumer’s loyalty. Customers prefer to purchase products and services from an organization that values their challenges and continually works to improve them. Having customer care professionals to assist the consumers with their challenges is a tactic that will help in creating value for UAE Exchange.

To achieve its goal of becoming the most valued brand in the remittance industry, UAE Exchange will have to satisfy its customers. One way of achieving customer satisfaction is by addressing the demands of the consumers. A customer-centric strategy can help UAE Exchange improve the level of its customer satisfaction. Successful customer-centric strategies aim to reveal to an organization the customers’ preferences and help it tailor its operations in a way that fulfills the needs of its consumers. Research indicates that customer-centric approaches help a firm have a clear view of its consumers so that they can segment them and know those with the highest lifetime value. Excellent customer-centric strategies focus on nurturing relationships with customers that exhibit high customer lifetime value. Companies that profit from customer-centric approaches increases their bottom line and experience profit growth from their operations. UAE Exchange has already started benefiting from its customer-centric approach. The company has spotted the need for innovative features in its products and services, and it has currently started introducing these features to its consumers. Recently, in the Digital Leader Awards Ceremony, UAE Exchange won the Emerging Digital Award, which proves that it is working towards overcoming the demand by remittance consumers wanting innovative products and services. The company was recognized for encouraging an innovative culture in its operations and work by adopting the latest technology such as the contactless wearable (Gigabit, 2017). The modern consumers in the remittance market are more digitalized and demand services and products that are digitalized and efficient. By adopting a rich, innovative culture in its customer-centric approach, UAE Exchange will increase its level of customer satisfaction, which can help it create value for itself.

Compliance Program Strategy

Benefits associated with compliance programs is the proactive nature of the strategies. Compliance programs create structures regarding the obligations and risks of the company’s operation in specific areas. Good compliance strategies help employees and the organization proactively understand what is required of them. Through compliance programs, organizations can avoid crises such as monetary loss, financial penalties, and legal issues. Such prevention will help a company to build and retain its reputation in the eyes of the consumers. Reputation maintains vital for a company that visualizes creating and maintaining value for itself in the market. However, effective compliance strategies require the management to dedicate themselves to the strategy and follow up on compliance incidents, which can be time-consuming. To create value, UAE Exchange will have to maintain the good reputation that it has created itself in becoming one of the global leaders in the remittance industry. The good compliance strategy initiated by the company is an excellent tool for achieving the set objectives, mission, and vision. The compliance program initiated by the company sensitizes the employees to specific key issues in their areas of operation. UAE Exchange compliance strategy initiates tactics such as following the chain of command, adhering to the state laws, and engaging in ethical practices in and outside the workplace. UAE Exchange compliance programs take into consideration the communities in the region that it operates through hiring natives and supporting community service institutions such as education and healthcare.
Differential-Focus Strategy

Today’s modern markets have changed and applying one strategy to achieving organizational objectives is insufficient. The strategy of UAE Exchange majorly focuses on providing exceptional services to its customers in its market. The compliance program is another strategy that is meant to guide employees on how to behave to create a good image for the company. The customer-centric approach guides the overall operations of UAE Exchange on how to handle the customers to guide. Analyzing the tactics applied reveals the presence of the focus differentiation strategy. A focused differentiation strategy involves a firm offering unique features in its products and services to its consumers in a specific market to fulfill their demands. Focus differentiation strategies can concentrate on particular channels such as sales or specific demographic groups. The focus differentiation strategy concentrates on demographics as its market niche, which are the consumers of the remittance industry. Excellent focus differentiation strategies aim at creating uniqueness in a brand to provide it with a competitive advantage in the market (Dobni, 2016). UAE Exchange creates uniqueness in its products and services by incorporating technology as it tries to fulfill the demands of its consumers. The concentration is also on improving the customer experience, which the firm hopes it will differentiate itself from its competitors such as RIA and Western Union. UAE Exchange hopes that creating a different experience for its customers will assist to make its brand unique in its market and gain value. The differentiation strategy seems to work in its favor as it expands its operation to other regions.


Reference List


Chang, H., Fernando, G. D., & Tripathy, A. (2015). An Empirical Study of Strategic Positioning and Production Effeciency. Advances in Operations Research , 11.
Dobni, C. B. (2016). Getting to clarity: New ways to think about strategy. Journal of Business Strategy , 12-21.
Gigabit. (2017, November 29). UAE Exchange Group: Enriching customer experience, differently. Retrieved March 12, 2018, from Gigabit Magazine: experience-differently#
Kumar, V., Lahiri, A., & Dogan, O. B. (2017). A strategic framework for a profitable business model in the economy sharing economy. Industrial Marketing Management , 145-161.
Leinwand, P., & Mainardi, C. R. (2016). Strategy That Works: How Winning Companies Close the Strategy-to-Executive Gap. Boston: Harvard Business Review Press.
Reeves, M., & Haanaes, K. (2015). Your Strategy Needs a Strategy: How to Choose and Execute the Right Approach. Boston: Harvard Business Review Press.
Tech Insider. (2015, July 22). Business Insider: Australia. Retrieved March 12, 2018, from The global remittance industry is huge, and digital-first startups are taking advantage: remittances-2015-7
Todoroki, E., Noor, W., Celik, K., & Kulathunga, A. (2014). Making Remittances Work: Balancing Financial Integrity and Inclusion. World Bank Publications.
UAE Exchange. (2016, July 25). UAE Exchange: Service is our Currency. Retrieved March 12, 2018, from Finance:
UAE Exchange. (2018). UAE Exchange: Service is Our Currency. Retrieved March 11, 2018, from About Us:
UAE Exchange. (2018). UAE Exchange: Service is Our Currency. Retrieved March 12, 2018, from Core Values:
Appendix A
The remittance industry is comprised of systems such as Remittance Service Providers (RSP), Remmittance Corridors, the Money Transfer System, and Remittance Network. The services in remittance market are divided on the basis of how the network access points are created and linked. The four categories of remittance system are negotiated services, franchised services, open services, and unilateral services. The key factors for the growth of the remittance market are international migration, growth in urbanization, economic growths, and rising employment.
Apendix B
Figure 1: Top Remittance Sending Countris
Figure 2; Global Cross-Border Remittance Volume



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