Executive Summary
This business concept proposal is for the National Bank of Kuwait scholarship scheme. This scheme’s seeks is to make available scholarships for student from Kuwait to obtain education in any college or private university with in the country. Once they students graduate with GPA of 3.5 or above, they would be employed to work in the bank or its subsidiaries with an endorsed contract for five years. In situations where the student does not attain the required GPA, he/she would have to pay back all study tuition fees as debt to the NBK bank. This scholarship scheme is in line with the mission of the bank both directly and indirectly. Directly in the sense that it solves the needs of many Kuwait citizens and indirectly in the sense that it enables more citizens go to school, therefore creating a better society. It would also enable the bank posses a good corporate social responsibility within the society.
This proposal is subdivided into seven parts namely, the introduction, aim of the project, key objectives, feasibility studies, financial projections ,considered requirements and lastly project viability. The introduction highlights a brief history of the bank as well as the objective of the research proposal. The project aims categorically lists the goals of the project. Key objectives were carried out using the SMART model. The SMART model entails categorizing and analyzing a project based on Specific, Measurable, Attainable, Relevant and Time Bound characteristics. Feasibility studies included analysing the macro environment using the STEEPLE model as well as evaluating the micro environment using SWOT (Strengths, Weaknesses, Opportunities and Strength) analysis. The financial projections involved creating a master budget as well as carrying out a cash flow analysis. The cash flow analysis was carried out using Microsoft excel. Considered requirements include the operational, technical and logistics requirement for the project. Lastly the project viability which was sub divided into competitive viability as well as economic viability.
Introduction
The NBK (National Bank of Kuwait) was incorporated in the year 1952 as the pioneer local bank as well as the pioneer shareholding corporation in the gulf region and Kuwait. Foundation of the NBK commenced in the year 1952 when a high-flying Kuwaiti trader went to a British bank to obtain a guarantee letter for the sum of ten thousand Indian rupees, (this is equal to 750 KD as of today). To the merchants’ surprise, the request was refused; on the terms that he makes available a guarantor. This prominent merchant was appalled and shocked by the treatment which he had obtained, and the news was all over the city. This event resulted in the notion as well as the idea of creating a national bank. The national bank will have the mission of serving the national needs and wants of Kuwait citizens as its major priority. It will also help the economic development of the nation, and cater for the savings of customers. In effect, a meeting took place with H.H. Sheikh Al-Salem Abdullah Al-Sabah (the Former Amir of Kuwait) , who applauded them for the idea and assured them his total support. An Amiri pronouncement was made on 19th may, 1952 to establish the NBK, and the national bank of Kuwait commenced operations within a small bank which started on 15th November, 1952 within an overall space of 3 shops along with a handful of workers relying on manual as well as traditional banking tools. Today the bank is one of the biggest and most lucrative banks within the region. NBK published net profits of approximately eight hundred and nineteen million U.S dollars (KD two hundred and twenty six million) for the initial nine months of the year 2011. Presently, the national bank of Kuwait, which is the biggest financial institution in the country with effectual market ascendancy in the business banking market, has the prime presence in Kuwait having sixty seven branches. When added with its increasing international representation, it totals a hundred and five branches worldwide. The national bank of Kuwait also dominates with regards its international and local network, which includes subsidiaries, branches as well as representative offices in London, Geneva, Paris, Singapore, New York, and china, it also has a regional presence in Jordan, Lebanon, Egypt, Iraq, Bahrain, Saudi Arabia, Qatar, Turkey and UAE.
This business concept proposal is the National Bank of Kuwait scholarship scheme. This scheme’s seeks is to make available scholarships for student from Kuwait to obtain education in any college or private university with in the country. Once they students graduate with GPA of 3.5 or above, they would be employed to work in the bank or its subsidiaries with an endorsed contract for five years. In situations where the student does not attain the required GPA, he/she would have to pay back all study tuition fees as debt to the NBK bank. This scholarship scheme is in line with the mission of the bank both directly and indirectly. Directly in the sense that it solves the needs of many Kuwait citizens and indirectly in the sense that it enables more citizens go to school, therefore creating a better society. It would also enable the bank posses a good corporate social responsibility within the society.
Aim of the project
This scholarship scheme is aimed at improving the corporate social responsibility (CSR) of the national bank of Kuwait. CSR is a procedure with the objective of embracing responsibility for the actions of the company and promoting a positive impact via company activities on the consumers, environment, communities, employees, stakeholders as well as all other elements of the public circle that might also be viewed as stakeholders.
The project also helps the bank achieve its primary mission which is to help Kuwait citizens. Through this scheme more individuals will obtain proper education and will help build a better society.
Lastly, the scheme makes available the best staff for the bank. Individuals have a GPA of 3.5 are employed to grow the bank and maintain its status as one of the world’s leading financial institution.
Key objectives
The key objectives will be defined using the SMART model
Specific
This term highlights the need for a precise goal and not a vague one. This suggests that the goal should be unambiguous and clear; without containing vagaries as well as platitudes. For goals to be specific, they must inform the organisation exactly what is to be obtained, why it is significant, who is involved, which factors are essential as well as where it’s going to happen.
The scholarship scheme is meant to provide funds for Kuwaiti students to study in colleges and private universities in Kuwait. It is significant because it improves the bank corporate social responsibility as well as enables the bank to further fulfil its mission. The scholarship scheme is open for only students in Kuwait; international students will not be given scholarships.
Measurable
This term highlights the importance of a concrete standard for measuring progress made towards the achievement of the defined goal. The essence of this is that when a goal or an objective is not measurable, it hard for the management to know if the project team in charge is making significant progress. Measuring progress enables managers stay on track, attain its target dates, as well as experience the delight of achievement which spurs it on constant effort needed to accomplish the ultimate objective.
The scholarship scheme is to commence on the 1st of January 2013. Forms will be sold from the above date to 31st January 2013. Students will be selected randomly based on how well the fill their forms and by March 2013 successful candidates will be able to access funds for their education. The month of December 2012 will be used to print application forms as well as create the needed framework for the scholarship.
Attainable
The term “attainable” stresses the significance of goals which are realistic as well as achievable. While attainable goals or objectives may stress the team or managers in order to accomplish it, the objective is not too extreme. That is to say the objectives are neither below standard performance nor out of reach, as these could be viewed as meaningless. When important goals have been identified, it is essential to figure out ways in which they can come to pass. Needed attitudes, skills, abilities, as well as financial capacity are identified to achieve the objectives.
The national bank of Kuwait has the necessary resources to fund this scheme. It is important to note that the money invested is not lost. The bank gets the best workforce to employ for a five year contract and individuals who perform below 3.5 in their graduating GPA pay the bank the scholarship as tuition debt.
Relevant
This term stresses the value of selecting objectives that matter. A construction company manager’s objective may be to create ten hotdogs in one hour during office hours. This may objective may be specific, attainable, measurable, as well as time-bound, but it does not possess relevance. Objectives which are relevant draws needed support and this makes success easier. Relevant goals when achieved move the department as well as organization forward.
The scholarship scheme is a very relevant objective. Its inline with the goals of the bank as well as improves its CSR. It also helps empower the general population through education. This project is a method through which the bank gives back to the community.
Time-bound
The last term highlights the significance of grounding objectives within a specific time frame, providing a particular target date. A pledge to a particular deadline enables the team to channel their efforts to completing the objective on or before the set date. This portion of the S.M.A.R.T. Objective or goal criteria is set to stop goals from being overrun by daily crises that habitually arise within an organization. A goal which is time-bound is planned to create a mood of urgency.
The first recipients of the scheme are to collect their funds by 1st march 2013. The scholarship scheme will be set up with three months from December 2012 to February 2013. A total of 500 students are targeted for the scholarship.
Feasibility analysis
Feasibility analysis of the macro environment was carried out using the STEEPL model.
• Sociological factors embrace the cultural aspects as well as incorporate health consciousness, age distribution and population growth rate. It also lays emphasis on safety and career attitudes. Current trends in sociological factors influence the need for an organisational products and this affects how the company operates. In addition, organisations may change several management plans to adapt to prevalent social trends. In Kuwait, the population is approximately 2,646,314 persons which includes about 1,291, 354 foreign nationals. The age distribution is 25.8 % for persons between o to 14 years, 72.2 % for persons between 15 to 64 years and 2% for persons above 65 years. The birth rate is 20.96 births/ 1000 population and 2.13 deaths/ 1000 population.
• Technological factors incorporate technological aspects for example research and development activity, technology incentives, automation as well as the level of technological advancement. They help determine the lowest efficient production level, barriers to entry as well as influence outsourcing decisions. In addition, technological shifts could influence costs, quality, as well as lead to newer innovation.
• Environmental factors encompass the environmental and ecological aspects for instance climate, weather, and climate change, that may especially influence industries such as farming, tourism, as well as insurance. Kuwait has a small land mass and is covered by essentially the sandy, flat Arabian Desert. Some segments of its land have been degraded due to oil spills and fires. The increasing awareness of the possible effects of climate change is influencing how companies operate as well as the products which they produce, both developing new markets and destroying or diminishing the existing ones.
• Economic factors comprise of the Kuwaiti interest rates, economic growth, exchange rates as well as the inflation rate. Kuwait possesses a gross domestic product of $202 billion for 2010 (Global finance, 2012). It is the fifth richest nation on the globe, with a per capita income of $81,800. Economic factors have an essential impact on how organisations operate as well as make decisions. Kuwait has approximately two hundred firms on its stock exchange making it the second largest stock market in the Arab world with a capitalization of $235 billion. Kuwait has international reserves of $25 billion.
• Political factors include how as well as to what level the Kuwait government participates in the economy. Particularly, political factors incorporate areas such as labour law, tax policy, trade restrictions, environmental law, tariffs, along with political stability. These factors may also include services and goods which the Kuwait government wants to make available or provide (merit goods) as well as those which the government doesn’t want to be make available. The governments have an enormous influence on the infrastructure, health, and education, of a country. Kuwait is a tax free country obtaining eighty five percent of its revenue from oil sale.
• Legal factors consist of consumer law, discrimination law, employment law, antitrust law, as well as laws for health and safety. These factors could also influence how the company functions, its costs, as well as the demand products
Feasibility studies
Feasibility studies of the micro environment were carried out through swot analysis. SWOT analysis can be described as a strategic planning procedure used to assess the strengths, limitations/weaknesses, opportunities, as well as threats in a business venture or a project 8 Renault, 2012). It involves stating the goals of the project or business venture as well as identifying the external and internal factors that are unfavourable and favourable to accomplish the set objective.
Strengths: this includes the characteristics of the project, or project team which gives it an edge over others. The scholarship scheme will enable the bank further accomplish its mission which is to help Kuwaiti citizens, improve its corporate social responsibility as well as help the general population. This in the long run will give the bank more customers.
Weaknesses: these are characteristics which place the project and its team at a disadvantage when compared to others .this scheme is capital intensive in that money which will have been used for further investment will be used to pay for tuition fees. Also in situations where student die, the bank cannot recover their funds.
Opportunities: these include external opportunities to boost performance (for instance make higher profits). The scheme provides quality work force for the company which reduces cost spent on searching for quality staff. It also increases the customer base of the bank since to obtain a scholarship you must have an account with the bank.
Threats: these include external elements within the environment which could problems for the project. An example of this element is an economic recession. In the year 2008 there was economic recession in Kuwait and this affected businesses and organisations. If this were to occurred again and the national bank of Kuwait was to reduce cost the scholarship scheme might be put on hold.
Financial projections
A master budget can be defined as the aggregation of the entire lower-level budgets generated by an organisational various functional areas. It also incorporates budgeted financial statements, a financing plan as well as cash forecast. Master budgets are usually documented in either a quarterly or monthly format, or it usually is for a complete fiscal year.
Project Master Budget
The master budget will be subdivided into various sections
A Salaries and Wages: For the project the bank will hire five staff to handle the processing of requests as well as the carry out the selection of candidates. The staff will consist of the project coordinator/ manager, the finance administrator and operational personnel
Personnel
B Equipment: An office will be provided within the bank for the staff. Equipments within that office are listed below
Equipment Quantity Unit cost ($) Amount
Computer workstation
Fax machine
Printer
Scanners 5
1
2
2 $ 950
$ 250
$ 200
$ 200 $ 4750
$ 250
$ 400
$ 400
Total $ 5800
C Supplies: this includes supplies such as pencils, pens, paper e.t.c. these will be utilized by staff to execute daily actions and activities.
Supplies quantity Unit cost amount
Scholarship pamphlets
Pens and pencils
Paper
Scholarship forms 8000
50
20 cartons
5000 $ 0.5
$ 1
$ 20
$ 0.3 $ 4000
$ 50
$ 400
$ 1500
Total $ 5950
D Scholarship cost
SCHOLARSHIP COST AMOUNT
1 student
500 students
$20,000
$ 10,000,000
The amount of money given to each partaker of the scholarship for a full academic session is $200. A total of five hundred students will partake in the scholarship for the first year but this number will increase in the subsequent years as more funds are made available by the bank.
E Advertisement
Monthly Yearly
Advertisement
Marketing $500
$500 $6000
$6000
Total $ 1000 $12000
Advertisement costs include money spent on publicity. Proper awareness of the scholarship scheme is very necessary.
E Utilities
Monthly Yearly
Internet
Phone
Electricity $ 50
$50
$70 $600
$600
$840
Total $170 $ 2040
Utilities include monthly fees spent on paying bills incurred by the office.
MASTER BUDGET
Monthly cost Yearly cost
Salaries and wages $ 23083.33 $ 277,000
Equipment – $ 5,800
Supplies – $ 5,950
Utilities $ 170 $ 2,040
Advertisement and marketing $ 1000 $ 12,000
Student fees $ 10,000,000
Miscellaneous $ 200 $ 2,400
Grand total $ 24,453.33 $ 10,323,190
The cash flow forecast is attached as an excel document.
Requirements to ensure project can be implemented
Operational requirements include the statements that categorize the necessary capabilities, related requirements, performance measures, as well as the processes or series of activities to be executed in accomplishing the results which are desired so as to address project area deficiencies, growing threats, emerging hitches and cost improvements. Before the project commences, the project team developed a comprehensive project plan to cover the whole span of the project for the first year. The project plan is a formal document utilized to guide in the project execution as well as project control. The basic function of this plan is to highlight planning decisions and assumption; facilitate information transfer among stakeholders, as well as document approved cost, scope, and schedule baselines. The plan is also a document of how as well as when the objectives of a project are to be accomplished, by showing the key products, activities milestones, and resources needed for the project.
Logistics can be described as the supervision of the movement of resources from the position of origin to the point of usage in order to satisfy certain requirements, for example the movement of necessary stationeries to ensure the office is operational. The resources managed within the framework of logistics may include physical items for example food, office materials, liquids, equipment, and staff along with abstract items for example information, energy and particles. The logistics for physical items normally involves the amalgamation of material handling, information flow, packaging, production, transportation, inventory, warehousing, as well as in some cases security. Minimizing the utilization of resources along time are widespread goals in logistics.
Business logistics can also be viewed as having the appropriate item in the needed quantity at the appropriate time at the appropriate place for the appropriate price in the appropriate condition to the appropriate customer. Logistics in business is very vital it cuts across all industry sectors. In the scholarship scheme, the financial administrator is also in charge of logistics. His work aims to supervise the completion of project with the given time frame, handle the supply chains as well as resultant deficiencies.
Logistics as a concept in business evolved in the fifties as a result of the growing complexity of supplying materials as well as shipping out of products in a developing globalized supply-chain, resulting in the creation of “supply chain logisticians”. Logistics could have either an internal focus which is inbound logistics, or an external focus which is outbound logistics overseeing the flow as well as storage of materials starting from position of origin to position of consumption. The essential function of the projects logistician includes purchasing; inventory management, transportation, consultation, as well as the planning and organizing of these activities. The financial administrator combines the professional knowledge from each of these specified functions to synchronize resources to produce maximum output. There are two essential different types of logistics: the first one optimizes a constant flow of material via a network of transportation links as well as storage nodes while the other in our case coordinates a series of resources to execute the project.
Technical requirements
These requirements are subdivided into five categories and are discussed below
• Project Planning
The foremost technical requirement for this project was to create project planning guidelines. The project manager at this step created project plans with the aim of evaluating project resources as well as identifying risks. The plans created highlighted and described management system processes, benefits as well as possible weaknesses of the project. During the planning phase, the project manager established the project goals and aims.
• Configuration Management
This can be defined as a controller function used by the project team to monitors sudden changes or hindrances in the project management plan. Once a problem has taken place during the project that could cause setbacks, this technical requirement evaluates the baseline requirements of the project as well as suggests alternate solutions to avoid disruption.
• Documentation
This incorporates the descriptions of current procedures, systems, amendments as well as the utilization of information systems within a project management framework. Without proper documentation, there exists no reference or account of activities for project development. Documentation could be utilized as a means of aiding project managers to understand the project as well as where particular activities fit in. Documentation also incorporates exception reports, which provide individuals with “what if” as well as other “decision support” information.
• Quality Assurance
At each step in the course of the project, quality assurance will be implemented to make sure individuals involved are following agreed procedures. All technical requirements will possess a quality assurance audit or inspection checklist to evaluate different segments of the plan. For instance, the scholarship scheme will have quality assurance element implemented in the distribution and collection of forms as well as in the selection of candidates. Checks for quality assurance are usually written and documented when a new phase of the project is about to commence.
Viability
Viability denotes the capability to grow and develop (Tuma, 1978 pp. 1)
The ROI (return on investment) is one method of considering profits with regards invested capital. ROA (return on assets), RONA (return on net assets), ROC (return on capital) as well as ROIC (return on capital invested) are similar methods with minor differences on how possible investments are defined. Marketing does not only affect net profits but it also may influence investment levels. New equipment, inventories, as well as receivable accounts are some of the major categories of investments which could be affected via marketing decisions. Decision making has obvious potential links with the numerator of return on investment (profits), but this same decisions usually influence assets usage as well as capital requirements (for instance, inventories and receivables). Managers should fully understand the situation of their company as well as the expected returns. Return on investment is usually compared to anticipated return rates on invested dollars.
Competitive viability: this can be defined as a strategic advantage a business entity possesses over its rivals within a competitive industry. Accomplishing a competitive advantage positions and strengthens an organisation better within the corporate environment. The scholarship scheme is designed to take care of students which are the future generation. The scheme empowers students to complete their education but in situations where the students do not graduate with a GPA of 3.5 the pay back the money to the bank as a loan. In this situation the bank puts a small interest of 0.5 percent and still recovers its initial capital spent on the student. The idea of a scholarship scheme along boosts the viability of the bank since every student who obtains the scholarship must operate an active account with the bank. It builds the banks corporate social responsibility, many parents seeing what the bank has done to their wards will bring their accounts to the bank seeing this as a method to repay the good will done by the bank.
Economic viability: A project is viable when it is able to maintain its operations with regards projected and current income equal to or more than current and forecasted expenditures that is, an activity or procedure that can sustain itself financially. The scholarship scheme affects the general Kuwaiti population essentially its citizens. It will in the long run increase the literacy levels as well as create job opportunities for individuals who graduate with a good GPA of 3.5 and above.
References
Elias H. Tuma (1978) the economic viability of a Palestine state: Journal of Palestine Studies
Vol. 7, No. 3 pp. 102-124 University of California Press Viewed 15th November, 2012 <http://www.jstor.org/stable/2536203>
Global finance, 2012, “Kuwait country report” viewed 14th November, 2012 < http://www.gfmag.com/gdp-data-country-reports/239-kuwait-gdp-country-report.html#axzz2BKjhTXZM >
Renault, V 2012, “SWOT analysis: strengths, weakness, opportunities and threats”, The Community tool box. Viewed 15th November, 2012,< http://ctb.ku.edu/en/tablecontents/sub_section_main_1049.aspx >
Appendix
My project team consists of five members namely the project manager, finance administrator, and three operational members. The project manger is the head of the team. The finance administrator is in charge of finances, drawing budgets and cash flow projections. The operational staff serves as the ground staff carrying out different tasks as well as reporting to the project manager.
