Abu Dhabi Council in Relation to Volvo Ocean Race

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Abstract

This report seeks to analyze some components of the Abu Dhabi Council in relation to the Volvo Ocean Race. In essence, it seeks to determine the factors related to the investments, finances, and operations of the undertaking. In regard to the findings, it was evident that the council made the investment on the basis of forecast, market research and budgeting. With regard to the financing, the balance sheet and the income statement are crucial because he assist the council to determine the financial position of the portfolio. Lastly, it was indicated that the council must evaluate its performance through comparative studies and conduct benchmarking.

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Introduction

Indeed, the financial management of a firm, company, and other entities is a crucial undertaking. The documentation of operations, evaluation of investments portfolio and financing plays a fundamental role when it comes to ensuring success. As such, it important to evaluate the performance and management of organizations from the three perspectives, including operations, investments, and financing in order to determine the solvency of the company as well as its capability to improve its output. Importantly, the financing and operations aspects of an organization are probably the most significant from a critical point of view. This assessment is based on the fact that operations oversee the day-to-day performance of the business. This, therefore, implies that the survival of the company, organization, or entities relies on the efficiency of those operations. On the other hand, the components of financing that include bookkeeping, auditing, and documentations of expenditures are used to inform management decisions. As such, this paper will discuss some of the aspects relating to finance, operations, and investments of Abu Dhabi Sports Council. In particular, the Volvo Ocean Race will be used as the real-life example for the analysis.

Operations

Performance Measurement

The most crucial aspect of operation is assessing their economic validity in order to determine whether the company is operating efficiently. As such, one of the ways of assessing the operations performance in an entity is comparison. In comparison, the company seeks to measure that performance of one operation in relation to other internal undertakings. In addition, it is crucial to understand that an organization, such as Abu Dhabi Council, compete with other organizations for market share. As a result, the performance assessment is conducted in relation to other competing entities in the industry. For example, Abu Dhabi Sports Council experiences stiff competition from the Dubai Sports Council (Low, 2012). Indeed, it is known that Dubai has become a significant rival of Dubai as far as sports and other economic realms are concerned. This necessitates the comparative evaluation of various operations in order to form the basis of further implementations. For example, Abu Dhabi Volvo Ocean Race incurs competition from the Ocean Sports FZE in Dubai (Mariam & Taylor, 2011). This implies that Abu Dhabi should evaluate the cost and time that Dubai uses when servicing and acquiring the Volvos. As such, they will determine the operational efficiency of Dubai Sports Council. This will be meant to form the basis of determining the current operational efficiency as far as resources are concerned.

Performance Improvement through Benchmarking

After evaluating the operational efficiency using comparative studies across the competing rivals, Abu Dhabi should initiate a benchmarking undertaking. This undertaking will help the council to understand the process and strategies used by Dubai Sports Council. In fact, bench marking does not require that the rival is wholly better than the other party. Instead, it can be based on a single operation that the former does in a better way than the latter. For example, safety in Dubai ocean sports if beyond reproach and essentially efficient. In that regard, Dubai has employed state-of-the-art technology to ensure proficient safety to participants. As such, Abu Dhabi should undertake a bench mark in order to identify some of the strategies used to protect participants. Understandably, safety is a crucial factor of operation that cannot be ignored. Indeed, ensuring safety increases the reliability of the sport council and the future confidence of participants (Mosedale, 2011). In other words, it implies that increased safety is an assurance of future participation and more income.

Financial Stability as Performance Indicator

In addition to benchmarking and comparative evaluation, performance of operation is measured and improved from a financial perspective. In this case, the performance is evaluated and improved from the cost as well as expenditure point of view. In this case, Abu Dhabi Council should first evaluate the cost incurred during the operations. For example, the cost of ensuring safety can be used to indicate whether efficiency is attained. Importantly, the cost incurred should be studies for a considerably long time in order to study the relationship between cost and the casualties. In case the cost of safety decreases and the number of casualties, this implies that the operations are more efficient. If the cost increases while the number of casualties increases, the operational efficiency is poor. As such, this can be used as a basis of determining whether the council is making significant progress as far as the safety assurance is concerned.

Investments

Market research

According to the case study presented in the handbook, a new investor must conduct a market research. In this case, the market research seeks to determine the target customers and their interests. With regard to the Volvo Ocean Race, Abu Dhabi seeks to target foreign and local tourists (Ryan & Stewar, 2009). In this case, Abu Dhabi Council seeks to explore and exploit the sport tourism. Indeed, Abu Dhabi is one of the upcoming tourism destination bearing in mind the sandy beaches and modernism. As such, it has identified the overwhelming pursuit that people harbour towards sea races and sporting. Bearing the rising clamour for sporting in the oceans, the council seeks to tap this market potential and raise income from the undertaking. Indeed, this will also boost the sporting tourism in Abu Dhabi and contribute to the economy of Abu Dhabi at large. In addition to these market factors, the council researched the segmentation of the market in terms of age and sex. Indeed, the appetite for sports is determined by the age and gender to a large extent. There are different preferences across different ages, including the young, adults and the old-aged. In the case of Volvo Race, the company is targeting the young and averagely aged adults in the foreign and local market.

Forecast

The handbook tackled the business forecast using the cash flow statements and analysis. As such, the cash flow can be used to forecast components such as income and cost. This forecast seeks to predict the trends of income as well as costs in order to determine whether the investment is valid or not. Importantly, the forecast income statement is meant to determine the entity’s financial position over a given period of time. As such, this forecast can be used to inform the decision to expand the investment portfolio. In regard to the Abu Dhabi Council, the organization conducted a forecast of other similar investments in order to determine whether the undertaking is viable (Sharpley, 2008).

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Strategic Planning

After conducting a market research and forecast, the next step should incorporate strategic planning. Indeed, strategic planning is crucial to ensure that the event and investments are made at the right time and funds are deployed in proportion to the income expected. In essence, the strategic planning answers the question of how resources will be deployed and competitors defeated. Understandably, the use of resources and the subsequent outcomes are determined by the manner in which they have been deployed. A suitable strategy ensures that the company obtains a competitive advantage over other organizations in the industries including Dubai Sports council (Stephenson, Russell & Edgar, 2010).

Financing

Balance Sheets

The operations and investments require financial management to ensure prosperity as far as economic performance is concerned. Indeed, the balance sheet ensures that the company determines the use of assets and existence of liabilities. As such, the analysis of balance sheets ensures that the organization determines the financial position. According t the handbook, the components of a balance sheet include the current and fixed assets. In addition, it incorporates both the current and long-term liabilities. In this case, the assets for the Volvo Ocean Race include the Volvos, the ocean, and other gadgets such as the safety kits. On the other hand, liabilities include the depreciation occasioned by the wearing out and maintenance cost.

Income statement

When it comes to the income statement, some of the components include which seeks to determine the loss or profit of an investment. Indeed, this is a very critical undertaking since it enables an organization to determine whether the activities lead to a loss or a profit. In that regards, therefore, Abu Dhabi Sports Council must take into account their revenue and compare it with the costs of Volvo Ocean Race. As such, this undertaking will enable them to determine whether the costs are more than the revenues, if the cost is bigger than the revenue, the Volvo Ocean Race will make a financial loss. If the cost is lower than the revenue, the race will make profits. In accordance to the profitability of the race, the council will make a decision on whether to terminate, uphold, or improve it. As such, the profitability may require the council to reduce the cost and increase the return by adding the value of subscription for participants (Wajma, 2010).

Budgeting

Besides the profitability of the Volvo Ocean Race, the council has engaged in the budgeting. In this case, budgeting is basically the art of allocating resources to undertaking in order to facilitate operations and initiate investments. With the budget, the council manages its resources better in order to ensure that all operations are funded in accordance to priority.

Conclusion

This report has indicated that the operation, investment, and financing are some of the critical undertaking of a business entity. In that regard, the investment by council requires to focus on three distinct undertakings including the market research, forecasting and strategic planning. Performance can be evaluated using comparative studies and improved by benchmarking. Comparative studies enable the council to determine the strategies of their competitors in order to come up with individualized solutions to the existing challenges. In regard to financing, it was evident that the Volvo Ocean Race Project is an investment with assets such as the Volvos. On the other hand, the liabilities include the depreciations and maintenance.

References

Low, L. (2012). Abu Dhabi’s Vision 2030 an Ongoing Journey of Economic Development. Singapore: World Scientific.

Mariam H., & Taylor, E. (2011). Strengthening food control in a multi-cultural society: Abu Dhabi food safety training initiatives. Worldwide Hospitality and Tourism Themes, 3(5), 422-431.

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Mosedale, J. (2011). Political economy of tourism: a critical perspective. Milton Park, Abingdon, Oxon: Routledge.

Ryan, C., & Stewart, M. (2009). Eco-tourism And Luxury – The Case Of Al Maha, Dubai. Journal of Sustainable Tourism, 17(3), 287-301.

Sharpley, R. (2008). Planning for Tourism: The Case of Dubai. Tourism and Hospitality Planning & Development, 5(1), 13-30.

Stephenson, M. L., Russell, K. A., & Edgar, D. (2010). Islamic hospitality in the UAE: indigenization of products and human capital. Journal of Islamic Marketing, 1(1), 9-24.

Wajma, N. (2010). Tourism in the united arab emirates: list of tourist attractions in dubai, tourism in dubai.. S.l.: General Books.

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BusinessEssay. (2022) 'Abu Dhabi Council in Relation to Volvo Ocean Race'. 31 March.

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BusinessEssay. 2022. "Abu Dhabi Council in Relation to Volvo Ocean Race." March 31, 2022. https://business-essay.com/abu-dhabi-council-in-relation-to-volvo-ocean-race/.

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