DEPARTMENT OF MANAGEMENT
MASTER OF BUSINESS ADMINISTRATION
BUSINESS POLICY AND STRATEGY
Group Assignment on;
XYZ General Import Export Company
Five Year Strategic Plan (2020/21 – 2025/26)
Group Four Members,
Name
ID No.
Abdisa Olana
001/MBA-B2/19
Hailay Haftu
016/MBA-B2/19
Hanna Gobisa
017/MBA-B2/19
Selamawit Befekadu
057/MBA-B2/19
Yared Desta
067/MBA-B2/19
Yonatan Birhanu
070/MBA-B2/19
Submitted to: Temesgen Dagne (Phd, Assistant Professor)
March 2020
1
Contents
Introduction ......................................................................................................................................... 3
1.
1.1.
Background .................................................................................................................................. 3
1.2.
Objective....................................................................................................................................... 4
1.3.
Significance .................................................................................................................................. 4
Environmental Assessment (External and Internal) .............................................................................. 4
2.

External Environment (PESTEL Model) ............................................................................................. 4
2..1.
Political ..................................................................................................................................... 5
2..2.
Economical ............................................................................................................................... 5
2..3.
Social ........................................................................................................................................ 6
2..4.
Technological............................................................................................................................ 6
2..5.
Legal ......................................................................................................................................... 6
2..6.
Ecological (Environmental) ....................................................................................................... 6

Internal Assessment .......................................................................................................................... 7

Industry Analysis .............................................................................................................................. 8

Competitor‟s Analysis ....................................................................................................................... 9
3.
Stakeholders‟ Analysis ........................................................................................................................ 11
4.
Strategic Issues ................................................................................................................................... 12
5.
Vision, Mission and Values ................................................................................................................. 14
6.
Overarching Strategic Results............................................................................................................. 15
7.
Strategic Framework .......................................................................................................................... 16
8.
Strategic Themes, Results and Objectives ............................................................................................ 17

Strategic Themes............................................................................................................................. 17

Strategic Results .............................................................................................................................. 19

Strategic Objectives ........................................................................................................................ 19
9.
Strategic Mapping .............................................................................................................................. 24
10.
Performance Measures ................................................................................................................... 26
11.
Initiatives ........................................................................................................................................ 28
12.
Budget ............................................................................................................................................ 29
13.
Strategy Implementation and Controlling ....................................................................................... 30
2
1. Introduction
1.1.
Background
XYZ General Import Export Company is a newly established private limited company engaged in
importing Steel bar and exporting oilseeds and coffee at an initial capital of Birr 20 million. The
commodities in which our company is traded have remarkable demand both in global and
domestic markets. Amazingly, since the change of new government, 1991, the import and export
business in Ethiopia has shown high growth and continued to contribute its share to the growth
of the country‟s GDP. Furthermore, the government has allowed different financial and nonfinancial incentives to encourage the export business. Correspondingly, exporters are permitted
to retain and deposit in a bank account up to 30 percent of their foreign exchange earnings for
future use in the operation of their enterprises and no export price control is imposed by the
National Bank of Ethiopia. In this ever-changing business environment, however; the need for
strategic thinking and planning is remarkably fundamental to be competitive and successful in a
market place. Now a day‟s, adopting strategic management has been purely an indispensable to
build a sustainable competitive advantage, and without having a comprehensive strategic
management process, it is very hard to survive and overcome the competition. Thus, XYZ
Company, to lucratively compete in the promisingly growing sector calls for devising five year
strategic plan for the period covering 2020/21 to 2025/26.
In designing this strategic plan, Balanced Scorecard (BSC) has been used as major strategic
planning design and implementation tool. Various contemporary strategic plan development tools
and models including RBV (Resource Based View), STEPLE, Porter‟s Five Force Model, SWOT
analysis have been employed for assessing the internal and external environment as well as the
import-export Business (industry) as a whole. From the analysis, the major strengths, weaknesses,
opportunities and threats of our company have been evidently recognized.
The company‟s strategic plan going to be formulated expects to display the overall industry‟s
competition, the external and internal determinant factors, required resources and capabilities to
mitigate recognized threats and weakness, and leveraging potential opportunities and upholding
internal strengths. Finally, based on the overall assessments, Vision, Mission, Values, strategic
issues, strategic goals, objectives and initiatives have been be formulated; detailed annual action
plans, implementation schedules and budget have also allocated.
3
1.2.
Objective
The general objective of this document is to formulate five year strategic plan of XYZ General
Import –Export Company that aims to address specific objectives not limited to the following:
 Examine the external environment
 Examine the internal environment
 Assess the import-export industry (sector)
 Analyze the industry‟s edge of competition
 Conduct SWOT analysis
 Conduct Stakeholders‟ analysis
 Develop strategic issues (Vision, Mission, Values, Strategic issue, Goals and Objectives)
1.3.
Significance
XYZ General Import-Export company is a newly establish business organization. As a new entrant
company, XYZ proposes to settle in the business being distinguished and profitable through
strategic management. Strategic management is all about critical thinking and strategic planning.
As strategic planning the process of defining organizational strategy, or direction, and making
decisions through allocating its resources to achieve its short and long term objectives strategy
formulation has the following benefits. 1) It allows our company to proactively execute activities
rather than reactive, 2) It helps us to set up a sense of direction and priority, 3) It facilitates to
increase operational efficiency and 4) It helps to increase our market share and profitability. To
take advantages of the benefits, formulating a five year strategic plan for our company sounds
undeniably.
2. Environmental Assessment (External and Internal)

External Environment (PESTEL Model)
A PESTEL Analysis is carried out to understand the underlying forces of the external environment
which basically includes political, economic, social, technological, ecological, and legal.
Although, these forces are out of the control of our company‟s sphere, the entire industry need to
be mindful of the forces to adapt itself to exploit the opportunities and minimize threats in the
environment. According to this framework, the external environment of the Ethiopian importexport business (Industry) is examined in the following part.
4
2..1.
Political
For the past decades of year, Ethiopia has been ruled by a federal government system since the
beginning of EPRDF governance, 1991. The previous government was dominantly characterized
by highly centralized government system. During the EPRDF‟s governance period, Ethiopia was
comparatively considered as the island of stability. Starting two years before, however; continued
instabilities, social and political unrests, conflicts and internal displacements have been remained
as the distinctive identity of the country. Following the two year‟s strong anti-government
demonstrations almost throughout the country, there has been resulted to the appointment of
new prime minister. In due course of transformation, EPRDF has been dissolved itself and
replaced by the Prosperity Party (PP), excluding TPLF, which dominantly and reputably initiated
by the prime minister. Despite the tremendous political changes and reforms have been
implementing by the government since the inception, still unaddressed political issues from
different stakeholders, peace and security, social and political tensions remained alarming and
big assignment for the government as the 5 th election is approaching.
Obviously, the country‟s foreign diplomacy and relationship with the international communities
and neighboring countries considered to be healthy as different bilateral and trilateral
agreements on various issues have been signed. To sum up, though the global political situation
seems to be stable and less influential, the national political situation might be challenging for our
business in the beginning of the first two years of the strategic period.
2..2.
Economical
According to the IMF1 forecast, the global economic outlook predicts that the world economy will
show growth of 3.3 and 3.4 percent in 2020 and 2021 respectively. In addition, the economic
growth for the Ethiopian economy is projected to be 6.3 percent according to World Bank‟s 2
January 2020 update due to tight fiscal and monetary policy stances of the government.
Likewise, because of the world‟s population becomes more abundant, wealthy, and urbanized, it
is often assumed that growth in global demand for agricultural products will be increased. This
would become substantial prospect for our company.
1
World Economic Outlook Update, January 2020
2 https://www.bloomberg.com/news/articles/2020-01-08/world-bank
5
2..3.
Social
The population size is growing on average at a rate of 2.54 percent per annum3 and based on
2019 revision of the world population prospects, the Ethiopian population is estimated at above
113 million and growth rate is increased to 2.83%. This makes the country to hold 1.45% of the
total world population and ranks twelve in the list of countries by population. The portion of
children below the age of 15 was 41.5 percent, 55.8 percent was between 15 and 65 years of
age, while 3.3 percent was above 65 years or older. As per the UN medium variant projection,
the total population of the country will reach 153,036,000 by 2035.
Ethiopia has made substantial progress on social and human development in the past decades.
The government of Ethiopia has been also implementing poverty-focused development strategies.
According to the household consumption expenditure report, between 2010/11 and 2015/16
about 5.3 million people are lifted out of poverty. Ultimately, this tends to favorable to our
company as huge portion of the population are employable force and engaged in agricultural
farming activities that leads to high production and quality.
2..4.
Technological
As we are engaged in export business that may bump into high competition from the globe and
competitors from advanced technologies might be challenging for us. Because competitors might
came to the global market with agricultural products produced through highly advanced
agricultural technologies with high quality and productivity.
On the other hand, the
technological advancement has direct impact on the internal operational Excellency to on board
customers at blended intimacy. Thus, we will introduce modern technology to exceed our
customers‟ expectation and sustain our business continuity.
2..5.
Legal
There are different international and country level laws and regulations that may influence our
business activity. Thus, our company will remain compliant for the laws and regulations but not
limited with taxation, employment, import and export, healthy and safety, advertisement and
publicity and others. Undoubtedly, however; the legal situation of the country is suitable to run
our business smoothly.
2..6.
Ecological (Environmental)
The environmental issues related to climate and environmental degradation are serious issues of
concern. Climate changes had significant impacts on the economy of Ethiopia, which is highly
3
United Nations estimates. Ethiopia Population (LIVE)
6
dependent on climate-sensitive activities such as rain-fed agriculture production. The changes in
the climate of the country lead to the recurrent droughts and heavy rainfall in different parts of
Ethiopia, reducing the amount of land that can be used for agriculture and decreasing cash crop
productivity. In addition, other impactful developments like the desert locust outbreak may
negatively affect the agricultural productivity which in due course hinders the export earning of
the country. Thus, such eventualities may affect our business prospect in the future.

Internal Assessment
Internal environmental analysis deals with factors which are internal to our organization with a
greater degree of influence. Internal analysis assumes that organizational resources and
capabilities differ from one organization to another and could be a source of competitive
advantage. If organizations would have the same amount and mix of resources and capabilities,
they would not have been employ different strategies to do better than each other since what one
company would do, the other could simply follow and no competitive advantage could be
recognized. Nevertheless, in the real world the capabilities of organizations are heterogeneous
which would allow them to apply different strategies and surpass each other. Therefore,
competitive advantage is achieved based on internal capabilities and its sustainability is likely to
depend on internal capabilities being of value to customers, rare, and inimitable. The basic
elements of internal capabilities are resources and capabilities. Resources are certainly important,
but how these resources are used matters a lot since a mere existence of these resources would
not be taken for granted to achieve sustainable competitive advantage. Due to this fact, capability
which is the skills and abilities to link processes through which resources are deployed is a major
source of sustainable competitive advantage.
Heedful of this assertion and to get an insightful understanding of the resources and capabilities
for developing five years strategic plan of our company, key internal factors specific to the XYZ
are analyzed as follow. Our internal assessment is carried out through the SWOT analysis matrix.
The key findings of the SWOT analysis are described as follow.
2.2.1 Strengths
 Quality products and services
 High employee commitment
 Strong financial capacity and management
 Automated work process
 Strong physical resource
7
 Strong stakeholder‟s management
2.2.2. Weaknesses
 Less accessibility
 limitation in marketing and promotion
 Shortage (lack ) of experienced employees in import export business
 Limited exposure in the business (Being new entrant)
2.2.3. Opportunities
 Potential Market
 Country‟s economy growth
 Increasing government expenditure
 Increasing Global Demand
 The commencement of African continent free trade zone
 Population growth
 Improved literacy rate
2.2.4. Threats
 Social and political unrest
 Stiff competition
 Changing climate condition
 Shortage of foreign currency
 Illegal/Informal Trade (Contraband)
 Limited credit accessibility

Industry Analysis
Over the past decade, Ethiopia has been one of the world‟s fastest growing economies. While
positive external conditions and increased exports contributed to this growth, the country also
successfully leveraged agriculture exports to developed countries. Contrary to the trend, however,
the of the country‟s export earning has exhibited a declining trend since 20124. The annual FCY
earning has dropped from $3.01bn in 2012 to $2.67bn in 2019 mainly due to the global price
fluctuation, poor quality, low productivity and internal political instabilities. Importantly, the
4
https://newbusinessethiopia.com/trade/ethiopias-export-earning-continues-to-decline/
8
export sector has been contributing on average 11% to the country‟s annual GDP growth.
Similarly, exports from agricultural commodities (Coffee, oilseeds, Khat and other) constitute 74
percent of the total annual export earnings. Indisputably, Ethiopia‟s long term development
policy is based on Agricultural Development Led Industrialization which gives due emphasis for
promoting agricultural commodities backed by various export incentives. Correspondingly, this
all positive implications and the government‟s focus to the sector encourage us to swim in the
business as distantly as we can touch and cover the competition. Thus, the export business shall
continue glowing to our company.

Competitor‟s Analysis
Competitors‟ analysis helps to understand profit potential and competition intensity of an
industry. Michael Porter‟s Five Force Model is one of the most renowned industry analysis models.
The model strongly stresses that profit potential and competition intensity of an industry is neither
random nor entirely determined by industry specific factors; rather, it is a function of the five
forces that shape competition: threat of new entry, threat of substitutes, bargaining power of
suppliers, bargaining power of buyers, and rivalry among existing firms. This framework
identifies five fundamental competitive forces that together establish the relative attractiveness of
the industry. Accordingly, the analysis on each competitive factors /forces has been illustrated as
follows.
2..1.
Entry Barrier
2..1.1.
Economy of scale
We noticed that to be beneficial from exporting and importing licensed products, our
company will focus to import steel bar and shall also export oil seeds and coffee in massive so
as to reduce our over heading costs and then sustain our long term profitability and business
continuity.
Consequently,
adopting
this
strategy
systematically
will
ensure
our
competitiveness in the market.
2..1.2.
Capital Requirement
The initial capital requirement (Birr 500,000) needed to establish and engage in the import
and export business in our country will not be considered as a barrier for entry of new
competitors.
2..1.3.
Product differentiation (Diversification)
9
Our company has engaged in diversified products (exporting oilseeds, coffee and importing
steel bar). These diversified products which have high global demand will promote to
sustainably keep us in the business.
2..1.4.
Cost disadvantages
We learned that there will not be serious cost disadvantages being new entrant to the business.
Importantly, our company will be equipped with highly competent employees and modern
technologies and well organized customer relationship management practices. Moreover; the
government‟s incentives for export business will help us to speed up our business to the fore.
2..1.5.
Distribution channel (accessibility)
Obviously, the current market distribution channels and infrastructures are weak and not
organized well yet. As a result this would be challenging for a new entrant business like ours to
compete with existing businesses. To overcome this identified possible treat, our company will
establish strong customer relationship with potential stakeholders through introducing different
marketing strategies like offering best price, advance payments, technical and theoretical
trainings as well as signing memorandum of understanding (MoU).
2..2.
The threat of substitutes
We analyzed that the threat of substitute products in the global and domestic market for oilseed,
coffee and steel bar is highly sound and customers can easily switch off due to quality, price and
other critical factors. Thus, our company will strive to exceed customers‟ expectation through
supplying high quality products at reasonable and competent price without interruption.
2..3.
Bargaining power of suppliers
The power of suppliers for exportable agricultural commodities (Oilseeds and coffee) will
continue to be high as in some case the producers have the privilege (right) to export themselves.
Due to this fact, they may be price setter and also be influenced by informal market brokers.
Regarding to the steel bar suppliers power is concerned we came to understand that they will not
have such an influencing power as the international market price is dropping from time to time
as forecasted by the IMF & World Bank‟s 2020/21 business outlook. But, the critical issue to be
asked here would be the availability of foreign currency exchange by banks.
2..4.
Bargaining power of buyers
10
In the contemporary business world it is important to consider and study the buyers‟ power in
terms of taste, preference and price. Consequently, there would not be a challenge in the buyers‟
power as far as high quality products with reasonable prices are provided. Besides, the demand of
the oilseeds, coffee and steel bar will increase steadily in the coming strategic periods as
forecasted by the international commodity market indexes.
2..5.
Rivalry
There are existing competitors in the market and the competition is very solid as well both in the
international and domestic markets for oilseeds, Coffee and steel bar products respectively.
However; as the demand for these products is forecasted to rise steadily from time to time, and
our company will rigorously aware of supplying quality products at reasonable price, it would
not be much worry to win the available market.
3. Stakeholders‟ Analysis
We certainly believe that identifying the key stakeholders and knowing their degree of influence
in our business endeavor should be our prime concern so as to devise strategic responses
depending on their extent of power and interest. In view of this, we have identified our major
internal and external stakeholders who have direct and indirect power and interest in our
company, namely; the employees, the customers, the government, banks and brokers. Based on
our assessment through conducting telephone interview and benchmarking from existing
companies engaged in similar business, we have developed stakeholders‟ analysis matrix as
depicted below.
Table 1: Stakeholders‟ Matrix
Ser.
No.
Stakeholder
Expectation

1
Employees
XYZ Response
working 
Suitable
Create
a
environment
conducive

Job Security;
environment

Competitive
salary
and 
Transparency,
development,
and 
work 

and
Employee Turnover,
Dissatisfaction.
low
productivity
and
profitability
training facilities;
benefit scheme;

Set
suitable
Possible Corollary
fairness, 
recognition, and reward;
Avail competitive salary and
benefits
11
2
Government

Adherence to the directives 
Adhere government laws, 
Possible
and regulations,
regulations and directives
suspension and closure
Paying and clearing taxes
of business

periodic financial reports

Sustainability
of
3
4
5
Customers
Brokers
Banks
and obligations on time
the

business



Handling prudent financial 
penalties
Loss of incentives
Included to backlists
statements
Reasonable pricing

Offering reasonable prices

Provide

Quality Product& Service

Fair Price
and services on time at a

Fast Delivery
reasonable price

Reduce customers base

Flexibility

Increase accessibility

Eroded market share
Confidentiality

confer truthfulness

Decline revenue

Fair commission

Transparency
Defamation and possible loss

Trust and confidentiality


Long term relationship
Built strong relationship and of channels and customers
(Suppliers and buyers)
signing MoU

Financial Soundness

Keeping financial records and

Lack of credit accessibility
history

Face of liquidity mitigating

Well
recorded
and
financial
statements

Organizational profile

Capable management skill
Quality
products 

Strong ROA and ROC

Well organized organizational
profile

Lose
Customer
acceptance
mechanisms

Limitedness
in
business
diversification
Management‟s efficiency and
effectiveness
4. Strategic Issues
The very intention of conducting a systematic assessment on the external and internal
environment of our company (XYZ) is to identify the key strategic issues that are critical to our
success and growth in the competetive business industry that should be meticulously addressed in
the coming five years strategic period. According to strategy scholars, strategic issues are typified
as the basic policy issues, critical challenges affecting the organization‟s Mission, Vision values,
stakeholders, resources, structures, processes, management and etc. equally important, they are
referred as the strategic for the very purpose that they have a significant impact for the success of
12
a business which consequently need to be tackled on priority state. Acknowledging this rationale,
XZY Company has drawn the following strategic issues derived from our SWOT matrix.
4..1.
Strong financial position and management
Principally, our company should maintain healthy cash flow and a strong balance sheet
supporting for further sustainable profit growth. In addition, our company shall strive to preserve
adequate liquidity position so as to alleviate its short-term obligations with matched asset and
capital structure. Liquidity is one of the most important factors to consider in assessing a
company‟s financial position. As much as possible XYZ will attempt to increase its profitability
through deploying multidirectional business diversifications scenarios, adopting effective and
efficient resource utilization mechanisms. Equally important, searching for cheap capital source
from external sources such as credit facilities shall be considered as alternative working capital
constraint mitigating method. Most notably, increasing the sales volume in a continued
momentum will be the prime focus of our company so as to boost our market share in the specific
industry we engaged in. Above and beyond, implementation of prudent financial management
system through applying accounting policies and procedures as well as adhering international
accounting and auditing standards shall be indubitable.
4..2.
Marketing and Sales
The industry assessment plainly revealed that there is a promising market demand for the
products we traded in which might be a merit to our growth in the future. To be beneficial of
this, XYZ Company shall formulate a comprehensive marketing strategies and tactics to take over
the advantages of the business which in turn will help us to achieve our targets. Thus, special
focus shall be rewarded to the marketing and customer service activities. Unquestionably, XYZ
will adopt the four P‟s marketing mix (product, price, publicity, and place) and other important
marketing and sales techniques in order to accomplish effective marketing results in continual
manner.
4..3.
Customer relationship management
Our company will introduce well organized customer relationship management platform to
easily manage our interaction with customers and prospect customers. This will help us to
streamline processes, build customer relationships, increase sales, improve customer service, and
increase profitability through improved customer care, use of automated methods, improving
communications and creating alternative sales channels (on-line chat, social network, web-base,
13
WhatsApp groups, and etc). In addition, customer record and data analytics, preference tracks,
order frequencies, seasonality, sales trend and other essential issues will be easily managed. Based
on the analysis demand projection will be executed to exceedingly satisfy our customers.
4..4.
Human resource management
Human resource management is key resource of our company that has a decisive role for the
success of our business. The need to work on human resource management as a strategic issue
arises not only because it remains a noticeable weakness from our internal assessment comparing
to the existing competitors, but it has also a forward looking purpose since XYZ should work on
the required competencies in terms of skills, knowledge, and behaviour to ensure our successful
realization of short and long term objectives. Hence, our company will remain tough in human
resource development works such as learning, career development and advancement.
5. Vision, Mission and Values

Vision
Our company‟s vision is “to become globally distinguished company by 2025”.

Mission
Our company‟s mission is “we are highly committed to enhance our shareholders‟ value
through providing quality products and services, deploying highly competent and dedicated
workforces and using cutting edge technology globally”.

Values
Our corporate values are the operating philosophies or principles that guide our
organization's internal and external responsibilities as well as the relationship with our
customers, partners, shareholders, communities and other key stakeholders. Our key
values are summarized below.
 Customer satisfaction

Continual focus and understanding of customers‟ needs & strive to surpass their
expectations

Providing customers with value-adding products and services

Unconditional commitment to superior quality products and services

Solid commitment to being a good partner
14
 Integrity

We are committed to the highest ideals of honor and integrity.

We are committed to act in an honest and trustworthy manner.

We are committed to firmly adhere to ethical principles and standards.
 Confidentiality

All exchanges and business transactions between our company and esteemed
customers shall keep confidential. No information will be shared to third part without
the consent and interest of customers.
 Fairness

We are at everyone‟s disposal to serve our customers equally and fairly. We are highly
devoted to serve our esteemed stakeholders through the “Golden Rule of the thump”.
“One should treat others as one would like others to treat oneself and one should not
treat others in ways that one would not like to be treated”5.
 Social Concerns

We value our importance on the community and we are committed to participate in
charitable and volunteer concerns of the community

We are governed by the laws of Ethiopia and other countries in which we do business.

We are concerned about society‟s welfare and the environment.
5.4.

MOTTO
XYZ is center of faithfulness and Fairness!
6. Overarching Strategic Results
XYZ has crafted a vision statement and visualized “to become globally distinguished company by
2025”. Obviously, formulating a vision statement by its self would not be witnessed the end
journey unless otherwise could be measured by an overarching parameters that weigh the
company has become a globally distinguished or not during the period. Accordingly, the vision
statement is decoded into the following quantifiable measures.
5
https://www.longfinance.net/research/research/behaviour/concepts-fairness/
15
Strong and sound Financial
position
•
•
•
•
Sustanable growth in profit
Strong Liquidity Position
Growth in total asset
Capital base
Customer Satisfaction
• Service Quality Index
• Customer Relationship Score
• Reputation Index
Efficient and Effective Work
Process
•
•
•
•
Employee commitment and
Engagment
Accessibility (Market Destination)
level of authomated process
Work process improvment
Service Delivery Time
• Employee satisfaction
• Human capital retaintion and attraction
• Level of Attrition
Figure 1: by group
7. Strategic Framework
In the due course of the development of our strategic plan, the Balance scorecard framework is
adopted in order to lineup our day-to-day activities with the vision, mission, and values. A
balanced scorecard (BSC) 6 is a strategic planning and management tool used extensively by
businesses and organizations. This system enables entities to sharpen focus, improve strategies,
streamline business activities, and increase communication. In addition, this framework tracks
financial and non-financial measures to determine the degree to which the XYZ is performing as
desired and when corrective action is necessary. It gives a framework to take a „balanced‟ view
across the company and define strategic objectives in the four business perspective areas such as
financial, customer, internal processes, and organizational capacity (Learning and growth)
6 https://www.investopedia.com/terms/b/balanced-score-card.asp
16
together with the associated KPIs to help our organization to understand and achieve its corporate
objectives.
Financial: Essentially, any key objective that is related to the company‟s financial health and
performance may be included in this perspective. Central to this perspective is whether XYZ has
ensured sustainable profit and growth in the market.
Customer: This perspective focuses on performance objectives that are related to customers and
the market. It represents the value proposition that our company offers in serving its customers.
Internal Processes: This perspective looks at the critical activities and processes of our company
that have an impact on the quality of services and efficiency.
Organizational capacity: It is the foundation of the strategy and focuses on building capabilities. It
considers the more intangible drivers of performance by covering broad spectrum and often
classified into Human capital (skills, talent, and knowledge-based on skills assessments,
performance management scores, training effectiveness), Information capital (databases,
information systems, networks and technology infrastructure) and organizational capital
(culture, leadership, employee alignment, teamwork and knowledge management based on staff
engagement, employee net promoter score, corporate culture audits).
8. Strategic Themes, Results and Objectives

Strategic Themes
Strategic themes are the main, high-level business strategies that form the basis for the company‟s
(organization‟s) business model. Sometimes refer to themes as “pillars of excellence”. The
strategic themes are very broad in scope, applied to every part of the organization and define
what major strategic thrusts the organization will pursue to achieve its vision. Besides, a good
method frequently used to determine strategic themes in a strategy formulation is through asking
the question such as “Looking back, what was it that led to our success?” then after getting the list
of critical success issues in different ways.
The next step is to look at relationships between the reasons given and to show any connections
diagrammatically. It then takes a little effort to determine how best to describe the relationships in
two or three words, these then become the strategic themes. It is important to note that, when
creating labels for things like strategic themes, and this is equally true of strategic objectives,
description or narrative should also be created. This ensures the true meaning of the label is not
17
lost when it is used in other parts of the organization. Based on the above fact, the following four
strategic themes are derived.
Theme 1: Business Growth
In consideration of our growth strategy, XYZ continues to increase its size and scope of the
business in the market. It focuses on raising financial and non-financial measures in the coming
strategic period. In particular, XYZ shall ultimately focus on recording high and sustainable
growth in Profit, export proceedings, asset size, capital, sources of income, ROA, ROC, profit,
accessibility, market share and other performance indicators and growth parameters.
Theme 2: Operational Excellence
It embraces certain principles and tools to create sustainable improvement within the company,
thus achieved when every member of the organization can see the flow of value to the customer
and actively try to improve both the value, as well as its delivery. It is all about creating the
company culture that will allow produce valuable products and services for our customers and
achieve long-term sustainable growth.
It is our journey that involves applying the right tools to the right processes. When the XYZ is
successful in this regard, the ideal work culture is created where employees are provided for in a
way that enables them to stay empowered and motivated. Besides, so as to operationally exceed,
our company must combine cutting edge technology with a human touch, because offering just
one or the other is no longer enough. Therefore, having a quality customer experience, efficient
and effective processes, and strong underlying capabilities, streamlined core business processes can
enhance the XYZ‟s overall performance level.
Theme 3: Human Capital
It emphasis on “the knowledge, skills, competences and other attributes embodied in individuals
having a critical impact on the quality of service provided to customers especially in a service
giving organization like ours. Without the qualified and committed workforce, all initiatives of
our company are ineffective as their success largely depends on whether employees have the right
blend of knowledge, attitude, and skill to perform the critical organizational tasks. Therefore, XYZ
shall have work in the next strategy to improve the competency of human resources management
by attracting and retain competent employees, improving employees and leadership capacity,
building organizational culture, and enhancing employee satisfaction. Depend
18

Strategic Results
Each of our strategic themes has a “strategic result” associated with it. This is a statement of the
desired end-state. In other words, how will the XYZ know when themes are achieved or not? The
result is stated in such a way that our company will clearly recognize success when seeing it.
Strategic results are measurable and clearly defined using outcome language. It is known that
Strategic themes could be often similar from organization to organization. Though, the strategic
differentiator mainly depends on the strategic result. The specificity of the result gives guidance to
the organizational transformation. To this regard, the under listed are our company‟s strategic
results of the themes.
Table 2: Themes and Results
No. Strategic Themes
Strategic Results (Goals)
1.
Growth
Achieve sustainable profit growth and market share
2.
Operational Excellence
Exceeding customers‟ Expectations
3.
Human Capital
Qualified and high-performance employees

Strategic Objectives
Strategic objectives are statements that indicate what is critical or important in the XYZ‟s
organizational strategy. In other words, they are objectives that the XYZ trying to achieve in a
certain period of time, normally during its strategic period. Strategic objectives are expressed in
continuous improvement terms and designed to be SMARTERS (which signifies that objectives
should be Specific, measurable, attainable, realistic, time bounded, evaluative, revisable and
strategic) and translations of the strategic themes. Objectives are developed for each perspective
and theme. While developing strategic objectives, the strategic result of each strategic theme was
kept in mind and the question: “What should our company (XYZ) do under each perspective to
achieve the desired strategic results?” is raised. In view of this, our company‟s key strategic
objectives are displayed here below together with respective themes for the purpose of alignment
and further understanding.
19
Table 3: Strategic Themes, Perspectives and Strategic Objectives
Strategic Theme and
results
Perspectives
Strategic Objective
Diversify revenue sources
Financial
Ensure financial soundness
Sustainable market share growth
growth and market share
Strategic Objective: Achieve sustainable profit
Strategic Theme One: Business Growth
Ensure high profitability
Enhance customer satisfaction
Customer
Expand accessibility (Market destinations)
Internal Process
Improve efficiency and effectiveness
Enhance Strategic management capability
Organizational Capacity
Build high-performance culture
Increase profitability
Finance
Increasing sales performance
Strategic Result: Exceeding customers‟ Expectations
Strategic Theme Two: Operational excellence
Improve customer service
Customer
Improve customer retention and acquisition
Strengthening the customer experience
Enhance process automation
Internal Process
Enhancing organizational efficiency
Reducing complexity
Enhance changing management capability
Improve Employee satisfaction and competency
Organizational Capacity
Create a performance-based culture
20
Strategic Theme and
results
Perspectives
Strategic Objective
Strategic Result: Qualified and high-performance Employee
Strategic Theme Three: Human Capital
Increase Profitability
Finance
Improve Productivity
Develop customer engagement
Customer
Enhance Customer Satisfaction
Internal Process
Improve service responsiveness
Develop leadership ability and capability
Build high-performance team
Enhance employee satisfaction
Organizational Capacity
Develop employee competency
Improve attraction and retention Rates
Develop high Employee Engagement
Improved Organizational Communication
On top of that, every themes and objectives shall be merged, reorganized, and rephrased, into
other objectives to formulate organizational objectives. The following table depicts a list of
summarized strategic objectives of XYZ.
Table 4: Summary of Strategic objectives
S.No
Strategic Objective
Perspectives
1.
Ensure high profitability
2.
Diversify revenue sources
3.
Ensure financial soundness
Financial
4.
Enhance customer satisfaction
Customer
21
5.
Enhance organizational efficiency and effectiveness
6.
Expand accessibility (Market destinations)
7.
Build high-performance culture
8.
Improve Employee Satisfaction and Engagement
9.
Enhance changing management capability
8..1.
Internal Process
Organizational Capacity
Commentary and Intended outcomes of Objectives
Organizational strategic objectives should be accompanied by a commentary which in turn
constitutes a description of objectives and intended outcome aiming to create clarity and common
understanding among performers. Hence, our company‟s strategic objectives are described in the
table below with their intended outcomes.
Table 5: Strategic Objective commentary
Perspectives
Strategic Objective
Objective Commentary
Ensure high
We provide to secure the sustainable profit
Intended outcome
 Wealth maximization
of XYZ by increasing the sources of income,  Image building
 Satisfied Stakeholders
supplying quality products, enhancing our
profitability
market destinations (accessibility), efficiently
and effectively turn utilizing resources.
Diversify
revenue
sources
Financial
We strive to enhance the revenue sources of  Increase in profit
our company through prudently assessing  Diversified income
 Reducing risks
prospects and engaging in diversified
business.
Ensure financial
soundness
 Enhanced image building
and credibility
XZY through maintaining adequate financial
 Smooth business relations
working capital, liquidity position and
We work to preserve the financial health of
implementing prudent financial reporting
system.
22
Perspectives
Customer
Strategic Objective
Objective Commentary
Enhance customer
We strive to satisfy our existing and potential
satisfaction
Improve
organizational
efficiency and
Internal Process
effectiveness
Increase market
destinations
(Accessibility)
Intended outcome
 Increased
customer
retention
and
customers by delivering Quality at their
acquisition
disposal, availing competitive pricing and  Build a reputation
fast service.
 Increase profitability
 Consistent and standard
service
effectiveness of the processes and practices
 Reduce operating cost
of our company through standardization,
 Satisfied customer
automation and streamline of the workflow.  Customer retention and
attraction
We work to enhance the efficiency and
We strive to increase our company‟s  Increased
customer
satisfaction
accessibility through opening additional
 Increase source of fund
sales and buying outlets so as to increase our
through increased sales
volume
availability
and
create
customer
convenience.
Build highperformance
culture
 Empowered and Engaged
Employees
culture through embracing a change  Loyalty and motivation
mindset,
implementing
effective  Continuous Learning and
Employee Development
performance
management,
teamwork,  High
employee
productivity
empowering employees to make decisions,
We work to maintain a high-performance
maintaining
a
sense
of accountability,
Organizational
creating
Capacity
authority, reinforcing positive behaviour.
employee
empowerment
Improve employee
We strive to achieve higher employee
satisfaction and
satisfaction and engagement through
Engagement
creating better working environments,
and
attractive benefit packages, establishing a
merit-based performance appraisal,
 Motivated and committed
employees
 High employee attraction
and retention
 High
employee
productivity
promotion, career and succession practice in
our company.
Enhance changing
We
strive
to
enhance
the
changing
 Continuous improvement
23
Perspectives
Strategic Objective
Objective Commentary
Intended outcome
management
management capability of our employees
 Change readiness
capability
through
building
change
competency,
managing employee resistance to change
and getting with the concept of change
liveliness.
9. Strategic Mapping
Strategic objectives have a cause and effect relationship. Overall linkages between the Strategic
Objectives of our company are depicted in a Corporate Strategy Map. A strategy map is a visual
representation of an organization‟s overall objectives and how they relate to one another. It is also
a visual communication tool and shows the links between objectives as a pathway to corporate
mission and vision. Besides, strategy map serves as a tool to test the validity of the objectives.
Cause and effect relationship between objectives are indicated with arrows and the logic of the
strategy map is reviewed by asking the questions “how” and “why” upon reading the map from
top-down and bottom-up, respectively.
24
Table 6: Strategy Map of XYZ Company
Perspectives
Financial
Ensure
Profitability
& Growth
Objectives
Diversified
Income
Source
Enhance Customer
Satisfaction
Ensure
Financial
Soundness
Fast Service
Delivery
Customer
Internal Process
Organizational
Capacity
Enhance Organ.
Efficiency &
Effectiveness
Improve
employee
satisfaction &
engagement
Increase Market
Destination
(accessibility)
Build high
Performance
Culture
Enhance
Change
Management
Capability
25
10. Performance Measures
Performance measures are quantifiable indicators used to evaluate how well the our
organization‟s objectives are achieved. Performance measures are concise sets of metrics, which
may be financial or nonfinancial, long or short term, etc that support for decision-making
processes of the company. Our company (XYZ) measures its performances to monitor its progress
towards its objectives. Measures need to answer the question: “How XYZ do to meet its Strategic
Objectives?” Strategic measures usually developed from the aforementioned objective
commentary (objective description and intended outcome) that are prepared for each our
strategic objectives. Basically, our performance measures have been formulated on the under
listed fundamental assumptions and principles;
 Be simple and easy to use.
 Have a clear purpose.
 Provide fast feedback.
 Cover all the appropriate elements (internal, external, financial and nonfinancial).
 Relate to performance improvement, not just monitoring.
 Reinforce the firm's strategy.
 Relate to both long-term and short-term objectives of the organization.
 Match the firm's organization culture.
 Not conflict with one another.
 Be integrated both horizontally and vertically in the corporate structure.
 Focus on what is important to customers.
 Focus on what the competition is doing.
 Help accelerate organizational learning.
 Help build a consensus for change when customer expectations shift or strategies and
priorities call for the organization to behave differently.
 Establish specific numeric standards for most goals.
 Be available for constant review.
26
Table 7: Strategic Objective Measures
Perspectives
Objectives
Measures
Unit of Source of Data
Measure
Performance
Frequency
Type
of
Measure
Gross profit
Amount
Income
statement
Quarterly
Lag7
ROA
%
Income
statement &
Balance sheet
Quarterly
Lag
ROC
%
Income
statement &
Balance sheet
Quarterly
Lag
Diversify
revenue source
Sources of revenue
Number
Performance
report
Quarterly
Lead
Ensure financial
soundness
Liquidity ratio
%
Balance sheet
Quarterly
Lag
Enhance
customer
satisfaction
Customer
Satisfaction score
%
Survey
Annually
Lag
Enhance
organizational
efficiency and
effectiveness
Service
Time
performance
report
Quarterly
Lead8
Organizational capacity
Internal Process
Custo
mer
Financial
Ensure high
profitability
8
Operating expenses
%
performance
report
Quarterly
Lag
Customer
Responsiveness
Index
%
Survey
Annually
Lead
Enhance
Accessibility
(market
Destinations)
No of sales outlets, Number
branch offices and
representatives
performance
report
Quarterly
Lead
Build high
performance
culture
Gross Profit per Amount
Employee
performance
report
Quarterly
Lag
Employees who Number
take Trainings
performance
report
Quarterly
Lead
Employee
Satisfaction score
%
Survey
Annually
Lag
Employee
Engagement score
%
Survey
Annually
Lag
Improve
Employee
Satisfaction and
Engagement
7
Delivery Number
are typically output oriented, easy to measure but hard to improve or influence
are typically input oriented, hard to measure and easy to influence
27
Perspectives
Objectives
Improve
organizational
communication
Measures
Unit of Source of Data
Measure
Performance
Frequency
Type
of
Measure
Employee Attrition %
(turnover) Rate)
performance
report
Quarterly
Lag
Brand
Perception/Reputati
on
Index
Survey
Annually
Lag
No. of Processes Number
Studied
for
Improvement
performance
report
Annually
Lag
Number
performance
report
Annually
Lag
No.
of
Employees Aware
of Change Issues
%
11. Initiatives
Strategic initiatives are the means (tactic) through which our company could translate its goals
and visions into practice. To succeed the competition in advance, XYZ needs to systematically
build a portfolio of strategic initiatives. Such initiatives are typically aligned with the
organization‟s strategic priorities, and so the pressure to execute them well is often very high.
Essentially, Initiatives will support the achievement of an objective or multiple objectives.
Initiatives are executed to meet and /or exceed stretched organizational performance targets.
Strategic Initiatives also answer the question: “What strategic projects must be implemented to
meet the company‟s Strategic Objectives?”
Moreover, a strategic initiative mainly designed to solve this problem; instead of declaring a
general goal or desire, the strategic initiative has a very specific goal that is constrained by welldefined parameters. Each strategic initiative should be designed with one specific goal and should
have both a start date and an end date during which the initiative is active. The candidate
strategic initiatives were developed from two sources: an inventory of existing initiatives (for
existing organizations) and new strategic initiatives that are developed through brainstorming
and benchmarking. Initiatives are prioritized based on their importance to achieving the different
strategic objectives of an organization. Moreover, Strategic Initiatives that do not support any
strategic objectives should not be considered as they will be misleading issues.
28
Table 8: List of strategic issues
S.N
Strategic Initiatives
1.
Develop HRM & dev‟t 
strategy



2.


Marketing strategy



3.
Develop
Time Frame
Description
a 
Performance
Management System


Initiative owner/s
Assess the internal and external
environment
Identify strategic issues
Develop major strategies
Develop an implementation plan
and follow-up
Revise and update every three years
Assess the internal and external
environment
Identify strategic issues
Develop major strategies
Develop an implementation plan
and follow-up
Revise and update every three years
April 01-28, 
2020
Human capital Mgt
Dep't
May 01-30, 
2020
Marketing Dep't
Identify gaps
Design the system
Implement the system
Up to June 
2020
Human capital Mgt
Dep't
12. Budget
In a broad sense, budget is described as a precise statement, representing a financial estimate of
income and expenditure of an organization for a certain period, usually one year. In other words,
a budget is a document that management makes to estimate the revenues and expenses for the
upcoming period based on their goals for the business period. Consequently, our company has
prepared annual budget in order to execute its targets without any financial constraints so as to
achieve the desired goals. Thus, the underneath table displays the financial budget for the coming
fiscal year.
Table 9: Budget Summary
Amount
Sales Revenue
5,000,000
Other Income
750,000
Commission income
250,000
Total Income
5,900,000
Advertisement & Publicity
350,000
Professionals Expense
170,000
29
Salary and Benefits
1,250,000
Stationary & printings
50,000
Telephone & Internet
25,000
Transportation
250,000
Utility Expense
5,000
Wages
250,000
Total Expense
2,350,000
Income Before Tax
3,550,000
13. Strategy Implementation and Controlling
Strategy Implementation refers to the execution of the plans and strategies, so as to accomplish
the long-term goals of the organization. It converts the opted strategy into the moves and actions
of the organization to achieve the objectives. Thus, specific targets with detailed activities and
action plan have been cascaded to all functional units which correspondingly aligned with the
company‟s corporate goals and objectives. At this stage, all the necessary resources would be on
board to translate plans in action. To this regards, our company has made the required
preparation for the implementation of the strategy. Consequently, the strategy has been
communicated to all performers at every functional unit, extensive trainings, workshops and
seminars have been carried out, sufficient resources have been mobilized and adequate budget is
allocated. Equally important, monitoring and evaluation guideline has been developed in order to
periodically evaluate, monitor and take remedial corrective actions for any significant deviations
that might be observed in the future. Besides, all plans and budgets have been communicated and
subsequent discussions have been carried out with all managers and front line performers.
Furthermore, plan execution and controlling team has been formed to quarterly review the status
and forward progress report to the general manager.
XYZ: Center of Faithfulness and Fairness!
30