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Addis Ababa University School of Commerce

Supported Distance Education Program
Tutor’s comments and score form (TCS)

NOTE: Attach one copies that are eligible.

Section 1: To be completed by the student.

Name: - FISIHA FIKIRU ASRAT Course Title: - ‘Business Policy and Strategy’
ID. No: - GSD/8253/12 TMA No: - TMA-II
Tel No: - +251983373955 Tutor’s Name:-
Email- fishfikiru16@gmai.com

Section 2: To be completed by the co-tutor

Section 2: Marks for Each Part of the TMA
Part 1 Part 2 Part 3 Part 4 Part 5 Part 6 Part 7 Part 8 Part 9

Total Score

CO-TUTOR’S GENERAL COMMENTS AND ADVICE TO STUDENT:

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NAME- FISIHA FIKIRU ASRAT ID No- GSD/8253/12 AAU, SC- HRM

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NAME- FISIHA FIKIRU ASRAT ID No- GSD/8253/12 AAU, SC- HRM

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VMOST Analysis

First proposed by Rakesh Sondhi in 1999, VMOST Analysis is a technique for evaluating an
organizations [or any entity really] overall strategy and supporting activities, and determining
whether they are all in alignment.[1] The goal of the VMOST structure is to enable a view of
strategy (the S) translated into meaningful terms for the benefit of employees, customers, and all
other stakeholders by expressing it in the form of visions (the V), missions (the M), objectives (the
O) and tactics (the T). By expressing the overall strategy in this way, it can be analysed for
alignment with the current environment and internal consistency.

Most commonly, VMOST is used to analyze the current strategy of an organization or

organizational unit, but the VMOST structure and technique can be used for defining and analysing
current and possible future strategies of organizations, organizational units, projects, programs, or
even individuals (both in an organizational and personal context).

One way to think of the VMOST process is to think of it as a series of ends that are more difficult
to quantify, and a series of quantifiable means that are intended to achieve the stated ends.

Required
Take the strategic plan of any organization that you are familiar to. Evaluate to what extent
VMOST elements are formulated aligned in the overall strategic plan of the organization. Note
that the VMOST elements must be summarized before evaluation.

NAME- FISIHA FIKIRU ASRAT ID No- GSD/8253/12 AAU, SC- HRM

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VMOST Analysis
Understanding the VMOST Analysis
The VMOST Analysis is a tool that allows a business to evaluate its core strategies in terms of
whether the supporting activities of that strategy are being carried out. The VMOST analysis
tries to answer that by looking at five core elements: vision, mission, objectives, strategies, and
tactics.

The VMOST Analysis divides a strategy into five different elements. Each element is analyzed
individually based on how well it aligns with the overall business strategy.

In most cases, VMOST analyses are performed so that a business can define current and future
strategies, organizational units, projects, and programs. Employees – as a part of the business or
as individuals – can also be assessed using this technique.

Here is a look at each of the five elements that give the VMOST analysis its name.
i. VISION
 Vision encompasses ideas that summarize where a business sees itself in future. Where
will it operate? Which target audience will it serve? How will it position itself against the
competition? What does the business want to be known for?
 The answers to these questions should inspire and challenge the business do to better
without being completely unattainable.
 Example- Vision & Mission
- Vision: High-quality Food is very expensive and must be accessible to everyone.
- Mission: To offer high quality food in an affordable and attractive way for everyone.

ii. MISSION
 Mission is the series of steps, which guide a business to carrying out its vision.
 To change old and outdated ways of operating, missions must be adopted from senior
management down to the entry-level employee.

iii. OBJECTIVES
 Objectives define whether a mission has been accomplished, usually quantified in the
form of key performance indicators (KPIs).
 To maximise the chances of meeting certain objectives, businesses can adopt the SMART
goal attainment strategy.
 In other words, is the objective: Smart? Measurable? Attainable? Realistic? Time-
sensitive?
 Example- objectives
- Have the Restaurant Open and fully operational before 6 months.
- Have a 10% Profit Margin.
- 20% of Clients must be Loyal Clients.

NAME- FISIHA FIKIRU ASRAT ID No- GSD/8253/12 AAU, SC- HRM

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iv. STRATEGIES
 As objectives guide missions, so to do strategies guide objectives.
 If the goal of a taxi company were to increase revenue by $10 million annually, a
potential strategy may include expanding the service into five new cities by the end of the
year.
 Example- strategies
- Customer Satisfaction is at the center of everything.
- Focus on a Total Quality approach.

v. TACTICS
 Tactics encompass the specific, low-level actions that are taken for strategies to be
fulfilled. If we return to the example of the taxi company, possible tactics for expanding
into 5 new cities might include:
- Identifying competition in the form of ride-sharing across the proposed cities.
- Identifying areas in smaller cities where there are gaps in taxi coverage.
- Acquiring a fleet of new vehicles at a cost-effective price.
 Example – Tactics
- Implement a Continuous Learning process to find what your Customers value the most.
- Use recipes that people know but employing good products.
- Check Social media to track how the Customers perceive your Restaurant.
- Analyze the Income and Costs once a month.

Advantages and Disadvantages of the VMOST Analysis

Advantages
- Given the somewhat hierarchical nature of the VMOST structure, the analysis is easily
understood by various employees and stakeholders.
- The VMOST analysis provides clarity, agreement and focuses on the future direction of the
company. This discourages the formation of weak and vague strategies, which encourage
disharmony and malaise within a company.

Disadvantages
- A well-constructed VMOST Analysis does not guarantee employee buy-in.
- Strategies that are created by upper management with little employee involvement may be met
with inertia when presented to the whole company.
- Input must be sought by multiple levels of the organization to counter this.
- Some organizations start with missions and visions that are simply unachievable. Despite
perfectly sound objectives and strategies, they will find that they lack the necessary resources to
achieve their goals.

NAME- FISIHA FIKIRU ASRAT ID No- GSD/8253/12 AAU, SC- HRM

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Ethiopian Airlines
ABOUT ETHIOPIAN AIRLINES
Ethiopian Airlines (የኢትዮጵያ አየር መንገድ), formerly Ethiopian Air Lines (EAL) and often referred
to as simply Ethiopian, is Ethiopia's flag carrier and is wholly owned by the country's government.
EAL was founded on 21 December 1945 and commenced operations on 8 April 1946, expanding
to international flights in 1951. The firm became a share company in 1965 and changed its name
from Ethiopian Air Lines to Ethiopian Airlines. The airline has been a member of the International
Air Transport Association since 1959 and of the African Airlines Association (AFRAA) since
1968. Ethiopian is a Star Alliance member, having joined in December 2011. The company slogan
is The New Spirit of Africa.

Founded - 21 December 1945; 75 years ago

Commenced Operations - 8 April 1946
Hubs - Addis Ababa Bole International Airport
Secondary hubs - Lomé–Tokoin International Airport
Frequent-flyer program - ShebaMiles
Alliance - Star Alliance
Fleet size - 128
Destinations - 127 (passenger), 58 (cargo)
Parent company - Ethiopian Government (100%)
Headquarters - Bole International Airport, Addis Ababa, Ethiopia
Revenue -  (4.2 billion USD) ETB 155 billion (FY 2019)
Net income-  ETB 1.049 billion (FY 2012)
Profit -  ETB 6.8 billion (FY 2017)
Total assets -  ETB 26.368 billion (FY 2012)
Total equity -  ETB 2.772 billion (FY 2012)
Employees - 13,942 (December 2017)
Website - www.ethiopianairlines.com

Its hub and headquarters are at Bole International Airport in Addis Ababa, from where it serves a
network of 125 passenger destinations—20 of them domestic—and 44 freighter destinations. The
airline has secondary hubs in Togo and Malawi. Ethiopian is Africa's largest airline in terms of
passengers carried, destinations served, fleet size, and revenue. Ethiopian is also the world's fourth
largest airline by the number of countries served.

NAME- FISIHA FIKIRU ASRAT ID No- GSD/8253/12 AAU, SC- HRM

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VMOST OF ETHIOPIAN AIRLINES

VISION
To become the most competitive and leading aviation group in Africa by providing safe, market
driven and customer focused passenger and cargo transport, aviation training, flight catering, MRO
and ground services by 2025.

MISSION
To become the leading Aviation group in Africa by providing safe and reliable passenger and cargo
air transport, Aviation Training, Flight Catering, MRO and Ground Services whose quality and
price “value proposition” is always better than its competitors, To ensure being an airline of choice
to its customers, employer of choice to its employees and an investment of choice to its Owner,
To contribute positively to socio economic development of Ethiopia in particular and the countries
to which it operates in general by undertaking its corporate social responsibilities and providing
vital global air connectivity.

OBJECTIVE
Organizational objectives for Ethiopian Airlines Bringing Africa Together are the short to medium
term targets and goals that the organization sets to achieve the bigger strategic goals set for the
long term. The organizational objectives are important in shaping resource allocation within
Ethiopian Airlines Bringing Africa Together as well as in determining the policies, schedules and
processes that are implemented in Ethiopian Airlines Bringing Africa Together.

VALUE
As an airline, safety is our first priority, Ethiopian is a high performance and learning organization
with continuous improvements, innovation and knowledge-sharing. We accept change for the
growth opportunity it brings and always seek for and apply the best ideas regardless of their source,
We recognize and reward employees for their performance and demonstrate integrity, respect to
others, candor and team work, Act in an open fashion and be result-oriented, creative and
innovative, Adopt Zero tolerance to indifference, inefficiency and bureaucracy, Encourage 360°
free flow and sharing of information, Treat our customers the same way we would like to be treated
and always look for ways to make it easier for customers to do business with us, We are an equal
opportunity employer

NAME- FISIHA FIKIRU ASRAT ID No- GSD/8253/12 AAU, SC- HRM

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INTEGRATION OF VMOST OF ETHIOPIAN AIRLINES WITH ITS STRATEGIC PLANE

Planning is a forward-looking process in which we decide what to do, how to do it, when and
whom to do it. In planning, managers determine the goals of the organization or workgroup and
develop the overall strategies to achieve them. In line with this, planning has several benefits where
it facilitates professional growth, provide the framework for organization, aids in delegating
authority, help monitor work etc. Moreover, it helps to avoid errors, prevent wastage and avoid
delays and also aids to have an effort of becoming both effective and efficient.

A given organization can have different planning levels where, strategic plan is one among them.
Strategic planning is the process in which overall company objectives are set and strategies for
each segment of the organization are formulated. Ethiopian Airline is an enterprise which has its
own strategic plan which includes its vision, mission, and values. These plans are set by the top
management which comprises short term and long term plans.

Prior to the vision of 2025, Ethiopian Airlines had five years plan for the year 2010 which has
several targets to meet. Ethiopian Airline in the year 2003/04 had 44 destination places and had a
plan to make it 60 in 2010. It had increased 13 destination places and attained 98% of its target by
stretching its service to a total of 59 international destinations. Regarding the fleet size, it had 23
fleets in 2003/04 and it planned to make it 30 in 2010 but fortunately it had acquired 2 more fleets
beyond its target and in 2010 Ethiopian Airline had 32 fleets which is 107 % achievement of its
plan in terms of its fleet size. Likewise, in the year 2003/04 Ethiopian Airline had served 1.2
million passengers (PAX number), and earned 390 million US dollars Revenue and Operating
Profit of 31 million US dollars.

After having achieved this plan, the airline had a plan to serve 3 million passengers with a target
of 949 million US dollars revenue and 75 million operating profit in the year 2010. However, in
the same year, the Airline had surpassed its planned targets and obtained 105%, 135% and 136%
achievement in the three variables respectively. From the above given evidence one can understand
that Ethiopian Airline had met its target plan very well even by surpassing its targets which is the
result of rigorous effort and commitment of its staff. Similarly, the company again set a fifteen
year plan with a vision of becoming the most competitive Airline and a leading aviation in Africa
by the year 2015.

The Airline‟s far-reaching objective constitutes providing safe transport of passengers and cargo,
to be market driven and customers focused, undertaking aviation training, provision of flight
catering services, Maintenance Repair and Overhaul (MRO), and ground services (Ethiopian
Annual Report 2010). Besides, Ethiopian Airline had envisaged for the provision of the
aforementioned services with better quality and price than its competitors, ensuring of being an
Airline of choice to its customers, employer of choice to its employees, and an investment of choice
to its owners (Ethiopian Annual Report 2010).

NAME- FISIHA FIKIRU ASRAT ID No- GSD/8253/12 AAU, SC- HRM

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It also has a mission to contribute positively to socio- economic development of Ethiopia in

particular and the countries to which it operates in general by undertaking its corporate social
responsibilities and providing vital global air connectivity (Ethiopian Annual Report 2010).

Regarding to values of Ethiopian Airlines, it gives priority to safety and then it has the following
values: It values high performance and to be a learning organization with continuous
improvements, innovation and knowledge sharing, it accepts change for growth, brings
opportunity and it always seeks for and apply the best ideas regardless of their sources.

In addition to this, it recognizes and rewards employees for their performance and demonstrate
integrity, respect to others, honesty and team work. It acts in an open fashion and be result oriented,
creative and innovative, adopts zero tolerance to indifference, inefficiency and bureaucracy. It
encourages free flow and sharing of information and always looks for ways to make it easier for
customers to do business with the company and it is an equal opportunity employer (Ethiopian
Airlines unpublished material source 2010). Hence, having the above mentioned vision, mission
and values; Ethiopian Airline is expected to work so hard to meet those objectives and strategic
plans.

SUMMARY
The vision statement for Ethiopian Airlines Bringing Africa Together is its strategic plan for the
future – it defines what and where Ethiopian Airlines Bringing Africa Together Company wants
to be in the future. The vision statement for Ethiopian Airlines Bringing Africa Together is a
document identifying the goals of Ethiopian Airlines Bringing Africa Together to facilitate its
strategic, managerial, as well as general decision making processes.

The mission statement for Ethiopian Airlines Bringing Africa Together is a public document that
details the values and strategic aims of Ethiopian Airlines Bringing Africa Together. The strategic
plane with mission statement of Ethiopian Airlines Bringing Africa Together also identifies the
purpose of the organization existence, highlighting the services and the products it offers. Further,
the mission statement also identifies the organization’s operational goals for Ethiopian Airlines
Bringing Africa Together, the processes the company uses to achieve those, the target customer
groups, and the region where the company operates.

NAME- FISIHA FIKIRU ASRAT ID No- GSD/8253/12 AAU, SC- HRM