| dc.description.abstract | All organizations exist and carry out their activities within the environment. The
environment provides the organizations with inputs which they transform to outputs
through internal processes and then the outputs are given back to the environment.
Therefore in order to survive in the environment, organizations have to pay attention to
the environment and match their activities to the environmental conditions.
The environment can be classified into the external and the internal environments. The
external environment is made up those factors that are beyond the firm‟s control but
which affect its operations. This environment is made of political, economic, sociocultural,
technological, ecological and legal variables. The internal environment on the
other hand consists of factors within the firm‟s control, which also influence the firm‟s
activities. The internal environment is composed of factors like financial resources,
technology, human resources, structures and processes. The environment is dynamic and
keeps changing. Since the external environment is uncontrollable, the firm has to match
its operations to the external environment in order to survive and succeed.
Strategy is a firm‟s game plan for surviving in the changing environment. This implies
that strategies are not static, they keep changing as the environment changes. For
organizations to be effective and hence successful, they should respond appropriately to
changes that occur in their respective environment. This is what is termed as strategic
responses, which are the actions that an organization takes to align itself with the
environment. Any firm that does not take actions to align itself with the environment
cannot survive in the environment and is soon forced out of the market.
This study set out to find out how East African Breweries Limited (EABL) had
responded to environmental changes. EABL had been a successful company and even
when it was faced by very fierce competition it managed to emerge successful. This study
set out to address two main objectives which were to determine the environmental factors
that had affected EABL and to determine the strategic responses that EABL had put in
place to address these changes.
In order to address these two objectives the study made use of both primary and
secondary data. Primary data was collected through personal interviews with some
members of the EABL management team. Secondary data was obtained from EABL‟s inhouse
publications, websites and newspapers. A content analysis was then carried out on
the data obtained and the findings were presented in form of brief discussions on the
environmental changes and key strategic responses identified.
The study found out that EABL carried out annual strategic planning sessions, which
were guided by long-term goals the company was pursuing. At the time of the study, the
long-term goals were summarized into what the company had termed as Vision 2010
whereby the company was targeting to be the number one drinks company in Eastern
Africa. During the annual strategic planning sessions, the company‟s executives would
determine the current environmental conditions affecting the company and expected
changes in those conditions. The executives would then determine the actions that could
be taken to deal with those changes and from that exercise they would determine the
strategic responses to relate the company to the environmental changes.
The study found out that the company did not respond to all the changes in the
environmental conditions but to those changes which were deemed to impact on the
company‟s activities to a large extent. The study identified the following factors to have
elicited responses from the company. In the political-legal environment the key variable
had been changes in taxation. In the technological environment the rates of obsolescence
and new technological developments had played a major role. In the economic
environment key variables had been the income levels and willingness to spend, cost of
factors of production, business cycles and liberalization. In the socio-cultural
environment, key variables had been gender, lifestyle changes, income distribution, lobby
groups, accident rates and safety concerns. In the physical environment key challenges
had been the weather patterns and in the competitive environment the key challenges had
been from exports and illicit brews.
EABL had put in place various strategic responses to address these changes in order for
the company to attain its Vision 2010. These responses were market development,
product development and modification, vertical integration, information systems change,
innovation, product differentiation, outsourcing, shared services centre, culture and
structure changes, aggressive marketing campaigns and corporate social responsibility.
The study identified that the strategies EABL had employed were consistent with Pearce
and Robinson‟s (1991) grand strategies.
The study therefore concluded that even for a company that was successful strategic
responses were still important in order to ensure continued success by aligning the
company to the environment it operated in. | en |
