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With reference to a successful organization you are familiar with, explain the strategies or

management practices that have contributed to the success of organization.

1. Introduction
The current dynamics of operating a commercial entity are challenging. There is a blurred
line between failure and success. Specifically businesses in Kenya continue to face a
litany of challenges. The Central Bank of Kenya (CBK) report published in 2015
indicates that 46% of Small Medium Enterprises (SME) fails within the first year of
inception. Similarly, in the second year, 15% will collapse.

The possibility of a business failing is not only associated with new enterprises. In Kenya
and beyond, businesses that were thriving and had become household names are no
longer in operations. For instance, Uchumi Supermarket was well known; not just in
Kenya but also in our neighboring countries. The same applies to Nakumatt. Today, the
two supermarket giants have either completely collapsed or downsized their operations
drastically.

Success in business is underpinned by strategies or management practices that can


withstand the turbulence that often prevail in our economy. A business that has
embraced, formulated and implemented sound strategies will always stand above the
competition and uniquely identify itself with success associated with good management
practices. Despite the challenges that always recur in the business world, an organization
with a progressive management and implementing good strategies will be prepared for
the future and its attendant uncertainties.
2. Management strategies
a. Management

Managing is one of the most important activities of human life. To accomplish aims that
could not be achieved individually, people started forming groups. Managing has become
essential to ensure the coordination of individual efforts. Management applies to all kinds
of organizations and to managers at all organizational levels. Principles of management
are now used not only for managing business but in all walks of life viz., government,
military, social and educational institutions. Essentially, management is same process in
all forms of organization. But it may vary widely in its complexity with size and level of
organization. Management is the life giving element of any organization.

b. Strategies

Johnson and Scholes (1999) define strategy as the direction and scope of an industry over
the long term, which achieves advantage for the industry through its configuration of
resources within a changing environment, to meet the needs of markets and to fulfill
stakeholders' expectations. They assert that strategy making is a deliberate and conscious
activity. Management concerned with strategy making may adopt an "umbrella" mode,
setting out broad deliberate guidelines with emergent specifics, or adopt a process mode,
where management concerns itself with setting up frameworks within which the strategy
will become operational (design structure, staffing, procedure for managing high
technology), but not the actual content of the strategy.

Ansoff and McDonnell (1990) reaffirm that strategy is a potentially very powerful tool
for coping with the conditions of change, which surround the firm today. Strategic
planning is a process that involves the review of market conditions, customer needs,
competitive strengths and weaknesses, socio-political, legal and economic conditions,
technological developments and the availability of resources that lead to the specific
opportunities or threats facing the organization (Donelly et al, 1992). It plays a key role
in achieving balance between the short term and the long term. This definition is further
reinforced by Grant (1998) who states that the strategic planning process involves
decision-making about long-term goals and strategies and therefore has a strong external
orientation. Strategic planning practice involves processes that enhance informed
decision making for the continued survival and relevant contribution at national level for
any industry. Strategic planning therefore is not a matter of coming up with a detailed
plan or program of instructions but it is a "unifying theme that gives coherence and
direction to actions and decisions".

Lynch (1997) identifies purpose, plans and actions as giving rise to strategy. Strategic
planning practices must comply with three conditions. First, they should be capable to
leading to the achievement of goals of the organization in terms of profitability and
growth. Second, they must be consistent with the present or likely future prospects of the
business and thirdly, they must not transgress any of the constraints or internally
generated responsibilities faced by the firm.

The purpose of strategic planning should take into consideration the elements of strategy
content and value addition. Thompson et al (1998) maintain that planning ought to be
focused on the factors within the firm's operating environment.

Strategy should be industry specific, functional, flexible, and technically superior to


maximise return on investment. Organizations succeed when strategies adopted for the
circumstances they face are feasible in respect to their resources, skills and capabilities
and are desirable to the stakeholders. Organizations fail when their strategies fail to meet
the expectations of these stakeholders or produce outcomes which are undesirable to
them i.e. strategic dissonance.

Essentially, strategic management processes have a direct impact on organizational


performance. Rue and Byars (1992) aver that organizational performance is measured in
terms of results. The term performance generally carries with it an understanding of a
degree of achievement of an operation or a set of connected operations, in so far as an
organization's goals and objectives are concerned. These operations may have been
formally put in place by the organization to evaluate and monitor the organization's
capability to successfully meet its goals and access its employees and stakeholder
responsiveness to what has been learned, through the adoption of efficient structures,
systems and capital investments (Sita, 2003).

Objective performance indicators need to be put in place to monitor processes and criteria
to evaluate organizational performance and change and to report any noted deviations
from the organizational expectations. Through this, the cause of failure may be addressed
and success enhanced within the organization. Performance measurement serves the
purposes of control and oversight of progress, recognizing and rewarding performers and
encouraging and improving non-performers.

3. Equity Bank Kenya Ltd


a. Growth and expansion.

The Bank arm was founded in 1984 as Equity Building Society (EBS). The Bank has
recorded various key milestones over the years. In 2004, it converted into a fully-fledged
commercial bank, Equity Bank Limited (EBL). In 2006, the Bank was listed at the
Nairobi Securities Exchange where it has become the largest Bank by market
capitalization.

On 31st December, 2014, the Group finalized an internal restructuring that culminated in
its conversion into a non-operating holding company, Equity Group Holdings Limited
(EGHL) in order to further meet its objectives.

The Group’s transformation into a rapidly growing Pan-African banking group has been
an inspiration to many. Over the years, the Group has built a social and economic brand
and scaled up by providing financial services to the masses through a diversified
distribution of its products and services. It has also had a very unique approach to
impacting the lives of the people in communities where it operates using existing
infrastructure, enormous human capital and a strong brand.

The Group’s strategic initiatives and innovations are geared towards enhancement of
access, convenience and affordability of financial services and have seen the group grow
into a regional diversified services firm maintaining an impressive growth momentum
and trajectory. The Group has established itself as the leading inclusive financial services
provider with a strong base for Pan-African growth, thereby becoming a movement for
social economic transformation of the people of Africa. The Group’s greatest challenge
and opportunity is to meet the expectations of all customers and stakeholders all over the
region.

In 2015, the Group took a step further in enhancing its reach and financial inclusion
agenda by commencing operations in the Democratic Republic of Congo after a
successful acquisition of Pro-credit Bank. The acquisition dovetails with the Equity3.0
strategy and is part of the commitment to deepen financial inclusion in Africa. By
inspiring a well understood, purpose-driven and passionate culture around its compelling
vision of being the champion of socio-economic prosperity of the people of Africa,
Equity has transformed itself from a small building society into the leading financial
services Group in the region and one of the most powerful brands in East and Central
Africa. The Group is executing the “Equity 3.0” strategy, a bold step that will ensure the
Group is able to leverage on breakthrough technology and innovation to achieve a
convergence of financial products and services, in addition to seamlessly integrating the
channels. Through Equity Group Foundation, the Group has continued to invest in social
and impact investments that have enhanced the growth of its customer numbers to over
10.1 million by the end of 2015. Transformation and modernization of agriculture
through agribusiness activities, micro-business enhancement through financial literacy
and entrepreneurship training, inclusion through social payments and development of
ethical leaders through scholarships under the Wings to Fly scholarship and Equity
Leaders Programs are just a few of the several initiatives in this regard.

In 2016 and beyond, the Group has positioned itself to take advantage of the
opportunities associated with Kenya becoming the hub for financial services in the
region. This will be achieved by offering differentiated, high quality offerings driven by
segmentation and cross-selling initiatives and responsiveness to the needs of the
customers across the different segments.
b. Management strategies used by Equity Bank (K) Ltd.

In its quest to become a market leader in the banking industry, Equity Bank (K) Ltd was
compelled to formulate strategies that were not conventional by then but resonated well
with the general public. Besides, by the time Equity Building Society (EBS) was
converting into a commercial bank, the banking industry was already dominated by the
seasoned and well-funded banks. These banks had structures and systems and reputation.

Equity faced a daunting task of gaining public trust and confidence in order to penetrate
the market. However, as it turned out, this was achieved with ease. Though the banking
industry had dominant players, their approach to conventional banking had systematic
failures. The market was ripe for a new entrant who was ready to change the approach
and embrace the unbanked who were mostly in rural and informal settlements with little
or no disposable income.

To achieve its current market status; Equity Bank segmented its strategies in three phases
as follows:

1994-2004:

Equity 1.0: Giving Dignity and Honor by offering access and affordability with
savings led Model.

The banking industry was characterized by difficulty in accessing banking products by a


huge chunk of the public. Then the existing banks saw no value in bringing on board the
rural folks and those in urban informal settlements. Banking was viewed as an elite
indulgence. It was expensive with bank levies having been exaggerated beyond the reach
of people with modest income.

To level the playing ground, Equity bank deployed the following strategies:

i. Savings Led Model:


The bank embraced a savings led model; convinced the populous unbanked public
to get their money out of their mattresses and take the money to the bank. There
norm were no levies; account opening was free of charge, no minimum balance
and ledger fees as was the norm with the so called market leaders.
The impact was instant. A record number of accounts were opened and people
started savings since loans were later on anchored on savings culture of an
individual.
ii. High volume low margins to offer accessibility and affordability:
The bank was able to figure out and conclude that since most Kenyans were
unbanked and most of them had been discouraged by exorbitant bank levies,
Equity bank encouraged them to embrace conventional banking by charging zero
levies on normal account operations and at the same time literally taking the
banking services to the public which breached the gap with accessibility.
iii. Social change banking services:
This strategy appealed hugely to unbanked who had been previously rebuffed by
established banks. Equity bank sought to transform their lives by giving them
dignity and honor. They were welcome into Equity Bank banking hall where their
dignity was restored and the bank provided services that enabled them to turn
around their lives for the best.

2004-2014:

Equity 2.0: Creating Wealth and Prosperity by Driving Financial Inclusion and
scaling Enterprises:

Having successful penetrated the Kenyan market; Equity bank was now poised to
embrace bigger challenges for the next decade. It was now time for Equity 2.0 phase.

The bank formulated the following strategies to guide its operations during this phase:

i. Positioning for the future


The bank set upon laying the foundation for the future. The management had
envisioned a future where the clients would now view the bank from a different
perspective. The consumer would be knowledgeable and service delivery would
have to change drastically. To this end, the bank laid a solid Information
Technology system was going to be the backbone of service delivery to its
millions of customers. Earlier on the bank had introduced mobile banking,
however mobile banking was scaled to higher level where now the bank’s client
were receiving sim-cards. The bank was able to launch a mobile application later
on which enhanced service delivery.
ii. Expansion beyond the Kenyan boundaries
The bank opted to scale up its operations by venturing into the neighboring
countries. The brand had gained trust within the country and it was not difficult to
export the brand abroad. This expansion phase enabled the bank to open branches
in Uganda, Tanzania, Rwanda and South Sudan.
iii. Legal and operation strategies
The bank through its management resolved to alter the legal and operational
frame work. This culminated in the creation of Equity Group Holding Limited
(EGHL). This holding company opened an avenue for the bank to focus on its
core objectives. The holding company could invest in other areas of interest
without any hitch.
iv. Fast growth model
This strategy involved the bank reaching out to potential clients through creating
new branches and embracing agency banking. Accessibility was improved and the
bank recorded impressive numbers in account opening.
v. Socio-Economic Identity
Equity Bank has been on the forefront of transforming the lives of the people in
the society. Through MasterCard Foundation and Wings to Fly; the bank has
heavily invested in education of young scholars. The bank continues to award
scholarship to students both in primary schools and high school to better their
lives through education.

2014-2024

Turn Equity from Somewhere You Go to something you Do-Lifestyle (Freedom,


Choice, Control): Equity 3.0

The bank is poised to permeate every aspect of our life by turning the brand into a life-
style. The following strategies are already being used;
i. Scaling of Agency Banking
Agency banking has been the best option for customers since inception. It has
reduced the long queues in the banking hall and at the ATM. In addition services
have been taken at the doorstep of the client. The bank has been able to avoid
over reliance on “brick and mortar” that’s the physical branch as the only way of
serving its clients.
ii. Digitize the Process
By issuing the Uquitel Sim-cards and launching the mobile application, the bank
is already way ahead as the only bank with a sim-card. Again, this has had a huge
impact on the revenues of the bank since it now serves at the platform where
clients are able to transact and more importantly access loans and repay without
having to visit the branch.

iii. Increase Access and improve experience

Both agency banking and the mobile phone platform have enhanced the client
experience through ease of access and convenience. Clients rarely have take the
journey to the branch which saves on their time and they hardly have to queue
anywhere to obtain the banks services.

iv. Leverage on Technology and Innovation

Technology and innovation is the mantra that drives the banks operations today.
The bank has heavily invested in a robust technology platform that has
continually sustained its operations. Again this has helped to improve client
experience and endeared many people to the bank. The bank continues to
innovate and invent better ways of approaching the banking industry even as it
moves into the future.
4. Conclusion.

In summary, success in business does not just happen. It takes deliberate effort to
painstakingly formulate strategies that will secure the bottomline. Visionary and progressive
managers should know value of strategies and understand the art of strategy making. Strategy
is at the heart of success.

If Equity Bank had not embraced futuristic strategies, today the banking industry would be
probably different. Strategy revolutionized the banking land scape; it will never be the same
again. Today most Kenyans owe to Equity Bank for having the foresight to formulate
pragmatic management strategies that have even been embraced by the competitors to change
the banking industry for better services and inclusion.
5. References.

Alcantara, C.M. (2001). Strategic Corporate Leadership, New Strait Times.

Ansoff, H. I., (1987), Corporate Strategy. McGraw Hill, New York.

Equity Bank website.

Grant, R.M. ((1991), Contemporary Strategy Analysis. 3rd Edition, Blackwel Publishers Inc.

Porter, M. (1980), Competitive Strategy. Free Press.

Lynch, R. (1997), Corporate Strategy, Pitman Publishing,