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KYAMBOGO UNIVERSITY

SCHOOL OF MANAGEMENT AND

ENTREPRENUERSHIP

BACHELOR OF ACCOUNTING AND FINANACE

COURSE UNIT: STRATEGIC MANAGEMENT

TASK : INDIVIDUAL COURSEWORK

YEAR : THREE SEMESTER TWO

GROUP : EVENING GROUP A

LECTURER : AKECH MATHER

NAME REGISTRATION NO SIGN

SERWANGA DEVIS 20/U/AFE/4203/PE ……………………

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Introduction

Alfred Chandler's influential work focuses on the implementation of growth strategies within
organizations. This paper aims to explore Chandler's theories and concepts, specifically his
emphasis on market expansion, product line diversification, and vertical integration.
Additionally, this paper will delve into the components and process of strategy
implementation, highlighting the significance of Chandler's work in the field of management.

Alfred Chandler's Theory

Alfred Chandler, a renowned business historian and scholar, extensively studied the evolution
and management of large corporations. He emphasized the importance of strategic decision-
making in achieving long-term growth and success. Chandler believed that organizations
should adopt proactive measures to pursue growth opportunities rather than relying solely on
market demand.

Market Expansion

Market expansion entails increasing an organization's market share and customer base by
entering new markets or expanding the existing ones. Chandler argued that successful market
expansion requires a comprehensive understanding of customer needs, market dynamics, and
competitive forces. This strategic approach enables organizations to tap into untapped
markets, diversify their revenue streams, and gain a competitive advantage.

For instance, Apple Inc. effectively implemented market expansion strategies by introducing
the iPhone in 2007. By entering the mobile phone market, Apple expanded its customer base
and diversified its product portfolio, ultimately transforming the company into a global
technology giant.

Product Line Diversification

Product line diversification involves expanding an organization's offerings by introducing

new products or services. Chandler emphasized the need for organizations to adapt to
changing customer preferences and market trends. By diversifying their product lines,
companies can mitigate risks associated with relying on a single product or market.

A notable example of successful product line diversification is Amazon. Initially an online

bookstore, Amazon expanded its product offerings to include electronics, clothing, and even
cloud computing services. This strategic diversification allowed Amazon to capture a broader
customer base and establish itself as a dominant player in the e-commerce industry.

Vertical Integration

Chandler extensively discussed vertical integration as a growth strategy. Vertical integration

involves the integration of multiple stages of the production process, either by backward
integration (acquiring suppliers) or forward integration (acquiring distributors or retailers).
This strategic move enables organizations to gain control over their supply chain, reduce
costs, and enhance operational efficiency.

One prominent example of vertical integration is the automotive company Tesla. Tesla not
only manufactures electric vehicles but also owns its own battery production facilities and
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charging networks. This vertical integration allows Tesla to maintain quality control,
optimize production processes, and provide a seamless customer experience.

Components of Strategy Implementation

To effectively implement growth strategies, organizations must consider various components.

Chandler identified three key components of strategy implementation: structure, systems, and
human resources.

 Structure: Organizational structure refers to the formal arrangement of roles,

responsibilities, and reporting relationships within an organization. Chandler argued
that a well-defined structure is crucial for aligning strategic objectives with
operational activities. It facilitates effective communication, coordination, and
decision-making, enabling the successful implementation of growth strategies.
 Systems: Systems encompass the processes, procedures, and policies that support
strategy implementation. Chandler emphasized the importance of establishing robust
systems to ensure efficient resource allocation, performance measurement, and
control mechanisms. These systems enable organizations to monitor progress, identify
deviations, and take corrective actions to stay on track towards achieving strategic
goals.
 Human Resources: Chandler recognized the significance of human resources in
strategy implementation. He emphasized the need to align employee skills,
capabilities, and motivations with organizational objectives. Effective recruitment,
training, and performance management practices are critical in ensuring that
employees are equipped to contribute towards the successful implementation of
growth strategies.

The Process of Strategy Implementation

Chandler outlined a systematic process for strategy implementation, which involves

several stages:

 Strategy Formulation: In this stage, organizations define their strategic objectives,

assess internal and external environments, and develop a growth strategy aligned with
their vision and mission.
 Resource Allocation: Once the strategy is formulated, organizations allocate
resources, such as financial, human, and technological, to support the implementation
process. Effective resource allocation ensures that the necessary inputs are available
to execute the growth strategy.
 Implementation Planning: Organizations develop detailed action plans, establish
timelines, and assign responsibilities to individuals or teams. This stage involves
breaking down the overall strategy into actionable tasks and setting milestones to
track progress.
 Execution: The execution stage involves implementing the planned actions,
monitoring progress, and making adjustments as required. Effective communication,
coordination, and leadership are essential during this stage to ensure smooth execution
and overcome potential obstacles.
 Evaluation and Control: Organizations continuously evaluate the effectiveness of their
strategy implementation efforts and make necessary adjustments. Monitoring key
performance indicators, conducting regular reviews, and learning from successes and
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failures are crucial in maintaining strategic alignment and achieving desired

outcomes.

The organization can support and implement the strategies they set by doing the
following. All organization capabilities, goals and long term objectives should be
considered while perusing the following not to divert the organization long term
aspirations;

 Organizations can support and implement the strategies they select by fostering a
culture of innovation and continuous learning. This involves encouraging employees
to generate new ideas, experiment with different approaches, and learn from both
successes and failures. In fostering such a culture, a research and development
department can be established and resources allocated to it. This is evidential in most
universities across the world where research is funded in that many innovations are
coming up for example the most recent innovation of a solar cooker by makerere
university student due to allocations to research and experimentation. Most
organization require a robust change in the attitude towards investing in research
because as they by imported technologies they increase their dependence on external
companies and thus failure to grow autonomously as an organization. Employee
motivation towards innovation can be improved from incentive appreciation,
scholarships and promotions that identify them to be part of the company.

 Furthermore, organizations should invest in employee training and development to

enhance their skills and competencies aligned with the chosen strategy. Effective
leadership and communication play a vital role in inspiring and motivating employees
to actively contribute to strategy implementation. This is the case in the many
growing companies where their employees are sent out for advanced education and
research studies to equip them with more knowledge and skills in all fields of
organization programs. This is evidential in key universities like government
universities where support is always rendered to scholars to develop research findings
and also innovative solutions to problems. Another example is the kira EVS motor
company of Uganda where a lot of resources have been allocated to student engineers
to go to Germany, china, Japan to benchmark and study new technologies in the
electric automotives industry.

 Additionally, organizations should establish robust performance management systems

to track progress, provide feedback, and reward desired behaviors and outcomes. This
can be done through use of progressive reports on employee performance,
measurement of employee innovative performance and customer responses towards
employees

Conclusion

Alfred Chandler's work on growth strategy implementation provides valuable insights into
the strategic decision-making process within organizations. By emphasizing market
expansion, product line diversification, and vertical integration, Chandler's theories offer a
strategic approach to achieving long-term growth and success. Furthermore, understanding
the components and process of strategy implementation outlined by Chandler enables
organizations to effectively execute growth strategies and adapt to dynamic business
environments. Chandler's contributions continue to shape the field of management, offering
practical guidance for organizations seeking sustainable growth and competitive advantage.
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References

- Chandler, A. D. (1962). Strategy and Structure: Chapters in the History of the

American Industrial Enterprise. MIT Press.

- Chandler, A. D. (1977). The Visible Hand: The Managerial Revolution in American

Business. Harvard University Press.

- Grant, R. M. (2016). Contemporary Strategy Analysis: Text and Cases Edition. John
Wiley & sons.
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Question two.

Long-term objectives refer to the overarching goals that a company or organization aims to
achieve over an extended period of time. These objectives are usually strategic in nature and
guide the overall direction and vision of the business. In the case of MTN Uganda, a
telecommunications company operating in Uganda, some relevant long-term objectives could
include:

Expand Network Coverage: One long-term objective for MTN Uganda could be to
enhance its network coverage across the country. This objective would involve investing
in infrastructure and technologies to reach more remote areas and provide reliable
connectivity to a larger customer base. By prioritizing this objective, MTN Uganda can
ensure that it remains competitive and meets the growing demand for
telecommunications services in Uganda.

Increase Market Share: Another long-term objective for MTN Uganda could be to
increase its market share in the telecommunications industry. This objective would
involve developing effective marketing strategies, improving customer satisfaction, and
offering innovative services to attract more customers. By focusing on this objective,
MTN Uganda can strengthen its position in the market and achieve sustainable growth.

Promote Digital Inclusion: MTN Uganda could have a long-term objective to promote
digital inclusion in the country. This objective would involve initiatives to bridge the
digital divide, provide affordable internet access, and promote digital literacy among
underserved communities. By prioritizing this objective, MTN Uganda can contribute to
the socio-economic development of Uganda and empower individuals and businesses
with digital tools and opportunities.

On the other hand, short-term objectives are specific, measurable, and time-bound goals that a
company sets to achieve within a shorter timeframe. These objectives are more tactical and serve
as stepping stones towards the long-term goals of the organization. Examples of short-term
objectives for MTN Uganda could include:

 Increase Customer Acquisition: A short-term objective for MTN Uganda could be to

acquire a certain number of new customers within a specific period. This objective would
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involve implementing targeted marketing campaigns, offering attractive promotions, and

improving the on boarding process for new customers.

 Enhance Customer Satisfaction: Another short-term objective could be to improve

customer satisfaction by reducing service-related issues and enhancing the quality of
customer support. This objective would involve conducting customer surveys, analyzing
feedback, and implementing corrective actions to address any identified shortcomings.

 Launch New Value-added Services: MTN Uganda could set a short-term objective to
launch new value-added services, such as mobile money solutions or digital content
offerings. This objective would involve market research, product development, and
effective marketing to ensure successful adoption of these services by customers.

By setting and achieving these short-term objectives, MTN Uganda can make progress towards
its long-term goals, strengthen its market position, and deliver value to its customers. It is
important for the company to regularly review and adjust these objectives based on market
dynamics, customer needs, and technological advancements to stay competitive and relevant in
the rapidly evolving telecommunications industry in Uganda.

Developing functional strategies that differentiate an organization from its competitors is crucial
for maintaining a distinctive position in the market. To guide departmental managers at MTN
Uganda in this process, here are some key steps they can take:

 Understand the Competitive Landscape: Managers should have a deep understanding of

the market dynamics and competitors in Uganda's telecommunications industry. Analyze
the strengths and weaknesses of key competitors and identify opportunities where MTN
Uganda can differentiate itself.

For example, in a market dominated by price competition, MTN Uganda can differentiate itself
by focusing on superior network quality and coverage. This could be achieved through
investments in infrastructure, such as expanding 4G or 5G coverage, or offering innovative
services like mobile money.

 Identify Unique Value Propositions: Managers should identify and leverage MTN
Uganda's unique strengths and capabilities that set it apart from competitors. These might
include factors like brand reputation, customer service, or partnerships with local
businesses.
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For instance, MTN Uganda can leverage its extensive network of agents for mobile money
services to provide additional value to customers. This could involve partnering with local
merchants to offer exclusive discounts or rewards for using MTN's mobile money platform.

 Align Functional Strategies with Corporate and Business Unit Objectives: Functional
strategies should be aligned with the long-term objectives and strategies set at the
corporate and business unit levels. This ensures that all departments work cohesively
towards the same goals, strengthening the organization's distinctiveness.

For example, if one of MTN Uganda's long-term objectives is to increase market share in rural
areas, functional strategies for the sales and marketing departments could focus on targeted
advertising campaigns or partnerships with local community leaders to drive adoption and
awareness.

 Foster Innovation and Continuous Improvement: Encourage departmental managers to

foster a culture of innovation and continuous improvement within their teams. Encourage
them to seek out new opportunities and developments in the industry that can be
leveraged to stay distinctive.

For instance, MTN Uganda can establish cross-functional teams to explore emerging
technologies like Internet of Things (IoT) or develop new services tailored to the unique needs of
the Ugandan market, such as localized content or mobile healthcare solutions.

 Monitor and Evaluate Performance: Establish key performance indicators (KPIs) and
regularly monitor and evaluate the effectiveness of functional strategies. This enables
managers to make informed decisions, identify areas for improvement, and adapt
strategies accordingly.

For instance, if a functional strategy aimed at improving customer satisfaction is implemented,

managers can track metrics like Net Promoter Score (NPS), customer retention rates, and
response times to gauge the impact and make necessary adjustments.

.In conclusion, developing functional strategies that differentiate MTN Uganda from other firms
requires a deep understanding of the competitive landscape, identification of unique value
propositions, alignment with corporate and business unit objectives, fostering innovation, and
continuous monitoring and evaluation. By following these steps, departmental managers can
contribute to keeping MTN Uganda distinctive in the market. In such competitive environment
they need to remain focused on delivering to the needs of customers 24/7 is always a priority
especially for the telecommunication industry where the biggest capital of the organization is to
ensure that customers are sure that your company is to offer the best services than all the
competitors in the industry.
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References

https://www.mtn.co.ug

Mtn ambitions 2025 archives

https://umispace.umi.ac.ug

https://technotree.com