Challenges of Implementation of Growth Strategy by Wartsila Eastern Africa Limited

Abstract

Strategy implementation involves converting the strategic plans into day to day actions which then generate results. This process follows strategy formulation. Implementation involves organization wide actions, participation and is prone to challenges and sometimes even failure. As there is no one universal approach to strategy implementations different organizations utilize different means resulting in a wide range of challenges and success rates. This study undertook to establish the challenges of implementation of growth strategy by Wartsila Eastern Africa Limited. WEA was chosen due to the energy industry it operates in and the multi-country and multi-cultural East African region is serves from it Nairobi head offices. WEA is a subsidiary of Wartsila Corporation, with head offices in Finland, which is one of the largest engine builder and supplier in the world. WEA was established to provide after sales services to Wartsila customers in the East African region. This study had two objectives to establish the challenges faced by WEA in implementing growth strategy and establish how these challenges were addressed. The study utilized a case study research design. Primary data was collected through face to face interviews with the aid of an interview guide. Eight respondents were interviewed, these constituted the top and middle level managers of the organization. Secondary data was obtained form company publications, press releases and company website. Content analysis was used to analyze the collected data. Study findings indicate that the growth strategy was formulated from Wartsila corporate headquarters. The company targeted growth through doing more business with existing customer base, expanding by reaching new customers and acquiring new businesses in growing markets. From findings the study concluded that WEA faces challenges in implementing its growth strategy in the East African region. One challenge was that this strategy was developed at corporate level with the whole group in mind and no participation by WEA management, therefore some of it did not fully align to the conditions of the East African market. Other challenges identified were unsupportive aspects of company structure, lack of specific staff with relevant skills to support new business initiatives in the targeted growing markets. Findings also indicated challenges in the wider Eastern Africa market related to major changes occurring that had not been anticipated, uncontrollable effects from the environment, political instability in some countries and changes in environmental conditions due to local government policies in the different countries and also international trade policies and sanctions. The study also established that WEA tried to address some of these challenges through trainings for staff to acquire necessary skills and also leveraging for support from other Wartsila subsidiaries when needed. On policy front WEA has been engaging different stakeholders both internally and externally to find some workable solutions both currently and going forward. In some instances however like for government policy WEA had no option but to comply. On other environmental changes they have had to develop action plans to adapt or negate the effects, including lobbying and consultations with relevant stakeholders. The study recommends that parties tasked with responsibility of the strategy implementation at WEA should be involved at the formulation stage so that their input, from knowing the market, should be taken into consideration. Study also recommends that the company should consider different strategy for different regions when there exists a divergence in environmental conditions. The study also recommends to governments in the East African to engage each other and harmonize policies on key industries like energy to be able to maximize benefits from resources in the region.