MIDLANDSSTATEUNIVERSITY
FACULTY OF SCIENCE AND TECHNOLOGY
DEPARTMENT OF COMPUTER SCIENCE AND INFORMATIONS SYSTEMS
Strategy Formulation for Organization in Zimbabwe specific Challenges/OpportunitiesDelta beverages
Introduction
Strategy formulation refers to the process of choosing the most appropriate course of action for
the realization of organizational goals and objectives and thereby achieving the organizational
vision. Rumelt (1979) stressed that strategy is what a firm used to create and maintain an
‘asymmetric’ advantage in its product markets. Miles and Snow (1978) agreed with the widely
held view that “strategy reflects a pattern in a stream of conscious managerial decisions, aimed
at ensuring organizational adaptation.”
Fejza and Asslan (2013: 329) noted that a company should formulate proper strategies for their
organization that will make them profitable. Strategies are the ways showing the company how
they will achieve goals set by managers, for the interest of most stakeholders. Fejza and Asslan
(2013) also considered that a strategy is linked with the effective usage of development
potentials and results of an organization that reacts to adopt itself to the environmental changes.
A lot of companies or organizations nowadays are stuck in the gap between value creation and
value capturing. Some companies have even gone to the extent of developing websites so that
they can market and sell their goods and services, built infrastructure for sales and services
spent huge amounts on marketing hoping they could grab some of the customer’s interest and
revenue growth so as to maximize on their profits, unfortunately profits never materialized.
Therefore this document will justify where the problems in the Delta Corporation lies, this is
in value creation and value capturing
Brief history
Delta Corporation, which began as Zimbabwe's first brewery in 1898, is a holding company
that has invested in and taken management responsibility for a diverse portfolio of businesses
that operate around the country (Parker and Lewis 2015). Delta's primary activities are
extensive, as the company has grown to include more than just a brewery. It has investments
in affiliate companies whose operations are similar to its own. It deals with sorghum beer
brewery, bottling of carbonated and non-carbonated soft drinks, various agro – Industrial
operations. In terms of market capitalization, Delta is limited on the Zimbabwe Stock Exchange
and it is a profit marketing Organization. In 1946 it was first listed on the stock exchange as
Rhodesian Brewies Limited and later changed to Delta Corporation in 1978.According to
Gautchi (2019) Delta has a 90% share of beer market and 86% share of drinks market, thus
making it the largest beer and beverage maker in Zimbabwe.
Challenges
On the Zimbabwean market, Delta Corporation makes beer with a low level of competition.
However, if market channels and product identity are not established, actual marketing and
selling of created-value products may be more difficult, as this necessitates different
“procedures” such as market feasibility studies, marketing plans, and most producers require
new product production skills.
Executives face a difficult task in balancing their competing objectives, with the most common
conflict being between market share and margin. If a product manager in a consumer goods
company, for example, A low-preach attack by a competitor is likely to trigger a price decrease
for her own product, even though the profit suffers more from the price decrease than from the
market-share loss., packaged goods business is focused on winning market share within her
category (perhaps because her bonus is based on it), a low-preach attack by a competitor is
likely to trigger a price decrease for her own product, even if the profit suffers more from the
price decrease than from the market-share loss. Similarly, if an industrial equipment
manufacturer's sales force is rewarded, to meet revenue targets (“You get a $10,000 bonus if
sales exceed $5 million”), salespeople are likely to try to sell products at any cost
Whether value is captured or produced can also influence marketing risk. Adding value is also
a highly competitive endeavor. To capture the market position, integrating into a value chain
often necessitates delivering a large volume of production at a competitive cost to the next step
in the chain. As a result, direct-to-consumer producers must compete with a slew of other
producers, as well as supermarkets and other food suppliers. Price competition and market risk
for captured value can be exacerbated by competition from those seeking to enter the value
chain or past participants trying to reclaim their position.
The same treadmill situation that commodity production agriculture has always faced (e.g., the
need to increase productivity and production constantly to remain competitive) will occur in
captured value-added markets. As a result, Delta Corporation expanded its production in order
to compete with other foreign beer producers, as well as producing Super Chibuku beer and
cane spirit. Stable and potentially higher prices with limited direct competition may result if
additional produced demand (value) is created. As a result, according to Stearns (1989), a
distinctive or branded product distinguishes itself from other products, thus generating its own
demand. Contractual agreements for value chain identity-preserved products limit competition
from other producers who may be willing to sell for less money or attempt to make and sell
lower-quality goods. A farm that offers an activity experience has a one-of-a-kind location with
one-of-a-kind geographic characteristics that rivals can't normally match. Delta Corporation,
for example, makes traditional beer that faces less competition in Zimbabwe's beer market.
Producing value by producing identity-preserved grain with unique features may not
necessitate a large investment, but marketing a branded specialty food product may necessitate
substantial processing, distribution, and growth expenditures. As a result, when Delta
Corporation switched its traditional beer packaging from two litres to one litre containers, it
had little effect on its market because the packaging is nearly identical.
Delta drinks typically runs promotions in which some goods are sold at a very low price to
entice consumers and others are sold at a high price to retain customers. With so many tradeoffs to handle, it can be difficult for businesses to make clear decisions about priorities. This
demonstrates why pricing strategies can be difficult to formulate and stick to in the real world.
and explore a variety of options for capturing more value in addition to pricing prices.
Because the business must meet cash-flow needs before value-added income is generated,
business finance should include sufficient operating funds (working capital) to sustain the
value-added enterprise through the start-up phase. The amount of money and time required for
both captured and created value-added enterprises varies greatly.
Delta Corporation began producing Super Chibuku, which was similar to the one it was already
making. Both beers are traditional; only the shelf life and a few ingredients vary. Delta's move
was a value-added initiative aimed at attracting more customers.
When assessing production and marketing risk, as well as deciding capital it's critical to
understand how value is added. Delta Corporation began producing Super Chibuku, which was
similar to the one it was already making. Both beers are traditional; only the shelf life and a
few ingredients vary. Delta's move was a value-added initiative aimed at attracting more
customers.
Companies may spend a lot of money and resources on better pricing data and research tools,
only to achieve little in the end because executives' priorities aren't aligned. Delta Corporation,
for example, used to have different prices where lager pints were sold for $0,75 in some regions
and $1, especially in rural areas where there is less competition.
According to Roff and Fairbain (2007) experience of working with companies in various
industries around the globe, two types of misalignment are most common. The first type
happens when various stakeholders make decisions that favour their own preferences over
other goals, and everyone is aware of it. The more dangerous situation of misalignment occurs
when the various stakeholders are unaware of competing goals and objectives.
To address both types, the advice is to take on the task as a management team of defining and
widely communicating the strategic priorities that should guide decision-making and value
capture innovation. Profit maximization is rarely a firm's sole goal, but rather one of many to
consider, so a good place to start is to look at the company's balanced scorecard and draw some
conclusions.
Then, as the emphasis shifts to value capture specifically, everyone should be reminded of
some fundamental truths. First and foremost, market share is a risky key performance indicator
(KPI). It's a regressive measure that'll almost certainly lead to price wars if a rival challenges
the status quo with a low-cost strategy. Second, revenues and sales metrics must not be used
alone to evaluate rewards or decisions of any kind; they should always be used in conjunction
with contribution margin and profit figures. Some practitioners justify their emphasis on the
top line by claiming that income is much easier to measure than profit (which is sometimes
even confidential).
Delta Corporations must identify proxy variables to avoid bidding on unprofitable deals. Third,
when a company's value capture goals aren't aligned, that leads to inconsistency and frustration.
Conversely, a shared understanding of what needs to be accomplished fosters effective crossfunctional cooperation. Of course, there are numerous reasons for management teams to strive
for greater strategic clarity. But one of them is the fact that poor priority alignment is a major
roadblock to capturing value. When it comes to generating value for customers, most
businesses have developed very sophisticated processes and heuristics to balance competing
goals.
They are, however, less strategic in their approach to capturing value. Managers should always
try to maximize profits, except when they shouldn't. This may sound counterintuitive as a rule
of thumb, but it is true. When other strategic priorities must be considered and specifically
taken into account, they should not be used. As a result, capturing value rather than creating
value is more difficult.
Small businesses should use added value as a strategy to attract and retain customers, raise
brand awareness, and distinguish themselves in the marketplace. There are five ways to add
value to Delta Corporation's business plan that are simple to implement:
 Always consider their customers’ perspective
The ability to see their business through the eyes of their clients is the first step in adding value.
Consider their target market's priorities and how their product or service will benefit them.
What problem does it solve, and how will it assist them in overcoming obstacles or performing
their jobs more effectively? By focusing on features rather than benefits, many companies miss
the boat. They can start helping and stop selling by changing their focus to providing content
that focuses on their customers' needs. Creating customer personas can help you learn more
about your current and future clients, as well as what matters to them. It also gives you a
roadmap for the types of content you can create and share to add value.
 Implement marketing models into their strategy
Delta Corporation will use popular marketing models to help shape their strategy as they look
for ways to add value. The Four Cs model, Brand Essence Wheel, and SWOT Analysis tool
will help small and medium businesses create their brand's value statement, identify their
unique selling point, and even forecast customer demand based on market trends.
 Consistently work to improve customer satisfaction
While the debate over whether the customer is always right (or wrong!) rages on, a lack of
customer satisfaction is a sure-fire way to keep customers away. Soliciting honest feedback
through surveys on daily basis will help Delta Corporation keep their finger on the pulse of
their customers' needs throughout their relationship with the company, as well as monitor their
brand's image in the marketplace. Free survey tools such as Survey Monkey, KwikSurveys,
and SurveyPlanet provide simple templates and unrestricted responses, allowing Delta
Corporation to gather feedback and develop an action plan based on the results.
 Develop a memorable customer experience
Word-of-mouth referrals, positive online reviews, and higher retention rates are more likely for
businesses that provide memorable customer experiences. Building a customer experience also
helps you to form relationships with your clients, allowing you to communicate on more than
just a transactional level. Above all, unforgettable customer experience models strive to
provide unexpected intangible value that cannot be packaged or sold. This includes
personalized service, meticulous attention to detail, and a sense of urgency in responding to
issues as they arise.
 Never underestimate the value of free resources
Free resources, whether they're a free guide, a printable PDF, or a company-branded calendar,
are a great way for businesses to add value and demonstrate their brand's ability to provide
consumers with "a little something extra." Delta Corporation, for example, provides calendars
to its customers. Free resources can also be beneficial in increasing a small business's brand
awareness and exposing their target market to a variety of goods and services. Delta
Corporation responds by providing free t-shirts to its customers.
A personalized sign up form can be used by businesses with an online presence to encourage
visitors to sign up for more information about special offers and promotions. Even if the
company is giving anything away for free, it must be relevant to their target market and
consistent with their brand's overall intent.
Early birds and greener grasses are rarely mentioned by economists in practice. To represent
the world of scarcity and choice, they've developed their own more technical vocabulary. A
trade-off, for example, is when we give up one thing in exchange for something else. Have
enough money to buy either a bike or a snowboard, but not both? That's a cost-benefit analysis.
Trying to decide whether to spend the Fourth of July with family or go to work and work extra
hours? That's a cost-benefit analysis.
Opportunity costs, one of the most important concepts in economics, are created by trade-offs.
The thing that a company does not want when making a trade-off is their opportunity cost. The
poet Robert Frost, according to Philipson, et al (2014), argues that opportunity cost is the path
not taken (and that makes all the difference). Have you bought that bicycle?
Everything has a cost of chance. If one had just purchased something, they could have always
replaced it with something else. They could have done something else if they had simply
chosen to spend their time in a certain way. Their opportunity cost is "something else."
However, opportunity costs will often far outweigh the item's sticker price.
Value creation is the starting point for any business. It is the institution's mission to develop
and deliver value in such a manner that it generates profit after expenses. Value creation is a
basic concept to grasp because it is the starting point for all companies, whether successful or
not.
If an industry is in competitive equilibrium, the demise of one company would have no impact
on the rest of the world because another undifferentiated rival will always be willing to take its
place. Most companies are in this situation: their products aren't special and can be found
elsewhere. If a business wants to create the kind of value that builds a lasting and successful
business, Haak et al (2012) say they must be unique by being unique.
Every happy company is unique. By solving a special problem, each of them wins a monopoly.
To solve that one-of-a-kind problem, they'll need to develop one-of-a-kind skills or processes.
Outside of economic theory, every company is successful to the extent that it accomplishes
something that no one else can. This set of ideas is intended to serve as a springboard for
further research into Competitive Advantage, or the "how" of creating and delivering on this
one-of-a-kind value proposition.
Delivering a commoditized product with a drastically reduced cost structure is unquestionably
a Low-Cost Competitive Advantage, and it is an extremely valuable method of value creation.
It is also necessary to have a value creation chain that runs through an organization. This
includes primary activities, which are the ones that do the ‘work' to create the value that
customers are willing to pay for. They include:
Inbound logistics which encompasses all internal processes for receiving, storing, and
distributing inputs. Supplier relationships are critical to generating value in this situation.
Operations-These are the operations that convert inputs into outputs that are then sold to
consumers. In this case, one's operational processes add value.
Outbound logistics--These tasks are responsible for getting a customer's product or service.
Collection, storage, and distribution systems, for example, may be internal or external to their
organization.
Market Sales-These are the processes used by businesses to encourage customers to buy from
them rather than their rivals. Here, the value comes from the benefits they provide and how
well they interact with them.
Service-Service — These are the activities involved in maintaining the value of a product or
service once it has been purchased by a customer. Even if it's just a one-person service
company, any business will have some version of each of these activities. This set of main tasks
serves as the foundation for an organization's value creation.
Any business entity's primary goal is to create value. Creating value for customers helps sell
goods and services, while creating value for shareholders ensures the future availability of
investment capital to fund operations through stock price increases. When a business receives
income or a return on capital that exceeds costs or the cost of capital, value is said to be
generated from a financial standpoint.
However, some analysts argue for a wider definition of "value creation" that is distinct from
conventional financial metrics. "In today's economy, traditional methods of evaluating
organizational performance are no longer sufficient." Earnings and asset base are becoming
less and less important in determining stock price. In today's businesses, intangible drivers such
as creativity, people, ideas, and brand are increasingly important.
Value creation, when widely defined, is increasingly being recognized as a better management
goal than strict financial performance measures, which often prioritize cost-cutting that
produces short-term results over investments that improve long-term competitiveness and
growth. As a result, some experts advise prioritizing value creation for all employees and all
business decisions.
If a company prioritizes value creation in the right way, its executives will know where and
how to expand, how to invest capital more effectively than rivals, and how to create more talent
than competitors. As a result, Delta Corporation provides its own transportation for the
transportation of its goods.
Understanding the sources and drivers of value creation within the industry, business, and
marketplace is the first step toward reaching an organization-wide emphasis on value creation.
Understanding what creates value will enable managers to concentrate their resources and
talent on the most profitable growth opportunities. If consumers value consistent quality and
on-time delivery, the skills, systems, and processes that produce and deliver high-quality goods
and services are extremely valuable to the company. Furthermore, if consumers value
innovation and high performance, the skills, systems, and processes that result in new products
and services with superior functionality become extremely valuable.
Although the intangible factors that drive value creation vary by sector, technology, innovation,
intellectual property, alliances, management capabilities, employee relations, customer
relations, community relations, and brand value are some of the main categories of intangible
assets. According to Albuquerque, Bonine, and Garland (2015) the link between these
intangible assets and value creation is corporate strategy.
It's worth noting that investments in intangible assets like research and development, employee
training, and brand building, for example, are more likely to yield indirect rather than direct
benefits. Focusing on value creation forces an organization to take a long-term view and align
all of its resources toward long-term goals in this manner.
Conclusion
Understanding the sources and drivers of value creation within the industry, business, and
marketplace is the first step toward reaching an organization-wide emphasis on value creation.
Understanding what creates value will enable managers to concentrate their resources and
talent on the most profitable growth opportunities. If consumers value consistent quality and
on-time delivery, the skills, systems, and processes that produce and deliver high-quality goods
and services are extremely valuable to the company.
Furthermore, if consumers value innovation and high performance, the skills, systems, and
processes that result in new products and services with superior functionality become
extremely valuable. The core of strategy execution is ensuring that actions and capabilities are
consistent with the customer value proposition.
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