Sitota & Yonathan Strategy Plan Assignment
Sitota & Yonathan Strategy Plan Assignment
STRATEGIC MANAGEMENT
(MAPMC-631)
GROUP PROJECT
Prepared by
1) Sitota Kebede SGS/ 0475 / 2013A/
2) Yonatan Daniel SGS/ 0503 / 2013A/
Instructor
Ephrem Assefa, PhD
September 2021
Addis Ababa, Ethiopia
Table of Contents
INTRODUCTION.....................................................................................................................................3
STRATEGIC MANAGEMENT....................................................................................................................3
BENEFIT OF STRATEGIC MANAGEMENT................................................................................................3
FIVE STAGES OF STRATEGIC MANAGEMENT PROCESS..........................................................................3
BACKGROUND OF THE COMPANY.........................................................................................................4
CULTURE OF THE ORGANIZATION ASSESSMENT...................................................................................6
CORPORATE STRATEGIC PLAN...............................................................................................................8
STRATEGIC PLANS..............................................................................................................................8
Vision.....................................................................................................................................8
Mission Statement.................................................................................................................8
Value Statement....................................................................................................................8
ASSESSMENT OF ETHIOPIAN AIRLINES CURRENT VISION, MISSION AND VALUE FORMAT....................9
OVERVIEW...........................................................................................................................................10
Strategic Intent........................................................................................................................10
Strategic Assessment...............................................................................................................10
Strategic Choice.......................................................................................................................11
ALIGNMENT STRATEGIC DEVELOPMENT.............................................................................................11
Alignment With The Leadership Team.....................................................................................11
Alignment With The Vision & The Strategy..............................................................................11
Alignment With The Whole Organization................................................................................11
ENVIRONMENTAL ANALYSIS................................................................................................................12
External....................................................................................................................................12
SWOT ANALYSIS...........................................................................................................................12
Internal....................................................................................................................................13
HOW THEY BUILT & IMPLEMENTED THE STRATEGY/ strategy behind Ethiopian success....................13
RISKS TO GOOD IMPLEMENTATION....................................................................................................13
Leadership...............................................................................................................................13
Communication.......................................................................................................................13
Resources................................................................................................................................14
Buy-In.......................................................................................................................................14
IMPLEMENTATION CONSTRAINTS.......................................................................................................14
Time.........................................................................................................................................14
Budgets....................................................................................................................................14
Human Resources....................................................................................................................14
Technology..............................................................................................................................15
STRATEGIC PLANS
Vision
To become the most competitive and leading aviation group in Africa by providing
safe,
market-driven,
customer-focused passenger,
cargo transport,
aviation training,
flight catering,
MRO, and
ground services by 2025
Mission Statement
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 the 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.
Value Statement
As an airline, safety is our 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
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regardless of their source, We recognize and reward employees for their performance and
demonstrate integrity, respect to others, candor, and teamwork, Act openly 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.
Appropriateness of the vision, mission, and value statement with respect to the
company type of business.
Clarity of objective/purpose
Since the vision, mission, and values statements serve as the framework for all actions of
Ethiopian airlines company.
The vision statement
Describes the organization's future direction after 15 years. It is a wide and inspiring
statement designed to elicit support from participants;
The vision statement has a clear plan about the future in which sector want to work and make
a difference even though the future is uncertain;
The vision states not only based on the service that is giving but also on the clients' side how
to make a comfortable;
The vision is simply clear and easy to understand;
OVERVIEW
Ethiopian Airlines (Ethiopian) is the leading and most profitable airline in Africa. In 2014
IATA ranked Ethiopia as the largest airline in Africa in revenue and profit. Over the past
seven decades, Ethiopian has been a pioneer of African aviation as an aircraft technology
leader. Ethiopian provided the first jet service in the continent in 1962, the first African B787
Dreamliner in 2012, and is leading the way again by providing the first African A350 XWB.
Ethiopian joined Star Alliance, the world’s largest Airline network, in December 2011.
Ethiopian is currently implementing a 15-year strategic plan called Vision 2025 that will see
it become the leading airline group in Africa with seven strategic business units. Ethiopian is
a multi-award-winning airline, including SKYTRAX and Passenger Choice Awards in 2015,
and has been registering an average growth of 25% per annum for the past ten years.
Strategic Intent
Strategic intent assures consistency in resource allocation over the long term. Articulated
corporate challenges focus the efforts of individuals in the medium term. Finally, competitive
innovation helps reduce competitive risk in the short term.
To become the most competitive and leading aviation group in Africa by providing;
In the coming 15 years to be one of the best-chosen Airline;
Strategic Assessment
Construction of Maintenance Hangar (Already done)
Expansion & upgrading of Ethiopian Aviation Academy (Already done)
Construction of Simulator building for different fleet types (Already done)
Construction of a 5-star hotel (Complished the first phase)
Expansion of Cargo Terminal (Already done)
Construction of new Catering facility (Already done)
Construction of parking building (Not yet)
Construction of new Headquarters (Not yet)
Construction of a new terminal Mojo Terminal ( Ongoing Construction)
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Strategic Choice
Save time;
Save money;
Save resource
The employees they gonna be happy and you get more done
You gonna have a big impact on the organization
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ENVIRONMENTAL ANALYSIS
External
SWOT ANALYSIS
Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis is a strategic internal
factor such as Hub Ethiopian's strengths and weaknesses, as well as external factors such as
Hub Ethiopian's opportunities and threats, determine Hub Ethiopian's strengths.
Strengths
Leadership team with extensive experience and success – The Hub as a result of their
ability to accurately predict industry trends, the Ethiopian management team has
enjoyed great success over
Stable Financial Statements – Hub Ethiopian's financial statements appear to be in
good shape, which bodes
Air travelers were carried at a much higher rate, while freight was transported three
times as much due to increased traffic to Europe, North America
Leadership team with extensive experience and success – The Hub as a result of their
ability to accurately predict industry trends, the Ethiopian management team has
enjoyed great success over
Weaknesses
Low revenue from home market
Lack of financial support from Government
Opportunities
Expanding reach to Latin America, Asia
Additional Revenue Possibilities from Training and Maintenance Facilities
Leverage mentorship of Lufthansa
Threats
Increasing Aviation fuel cost
It is possible that improvements in road and rail infrastructure could reduce the
demand for air travel.
Global players are increasingly interested in Africa's lucrative aviation industry,
which is putting pressure on South Africa'
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Internal
The Enterprise is wholly owned by the Federal Government of Ethiopia;
Ethiopian Airlines is government-owned and the Foreign Minister is the Chairman of
Ethiopian. It is the major single source of hard currency income for the country.
HOW THEY BUILT & IMPLEMENTED THE STRATEGY/ strategy behind Ethiopian
success
Coordinated Succession Plan;
A 2025 Vision was Adopted in 2010
Maintained Its Structure;
Investment in Cargo Terminal;
Investment in Training;
Investment in a new destination;
Upgrade Its services;
Commitment to Its employees' development;
Investment in Technical Capabilities;
Committed to Its employees future; (housing project for the employees)
Invested in Tourism & Hospitality Development;
Leadership
If we don’t have the whole management team on board is going to pull back the strategy
because they are on giving the marching for the staff or employees;
Communication
Having clear communication with the leaders helps to see the gap in the working unit;
In some cases, the employees wouldn’t understand the vision, mission & goal of the company
they only take the others from their leaders they wouldn’t understand how it’s important for
the organization their task so making a clear understanding about their task it’s important for
the employee to get motivated.
If the employees hold important information may take a big risk for the organization that is
very crucial to the plan.
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Resources
Knowing what we have in terms of material resources, the human resource helps the
organization to save time, money to go with the plan.
Buy-In
Creating the plan and push on the people helps to allow them to work to their maximum
effort by allowing their new ideas and creativity.
IMPLEMENTATION CONSTRAINTS
During the implementation, there are several constraints to achieve the vision, mission &
value of the organization. An organization can be determined based on time, budget, human
resources, and technology during the implementation strategy.
Time
Strategy planning is based on a time limit to achieve its goal, every strategic plan is bounded
by a time frame to implement ;
Ethiopian airlines have developed different projects for the comming15 years that must be
implemented, all these projects are bounded with a time frame;
Budgets
When an organization formulate a strategic plan considering the budget of the project it’s one
of the important aspects for the success of the organization;
Setting the budget it’s very difficult because there is always inflation of budget in the market,
to stick to the plan it’s always important to have a contingency plan.
Human Resources
Setting the right human resource for the right place help to achieve the plan effectively;
Selecting the right person for the right place is important for a project;
In Ethiopian Airlines there is an assessment of the employee based on their performance
these helps to distinguish whether the employee is in the right place and is working
effectively;
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Technology
Technological advancement has been the driving factor for improving airlines’ operational
efficiency. Airlines have been able to reduce costs and improve operations by using advanced
aircraft engine technology, IT solutions, and mobile technology. The technology has created
better connectivity and enhanced passengers’ travel experience.
Fuel is an airline’s largest cost component. Currently, it accounts for more than 30% of total
operating expenses. According to Boeing, one of the largest aircraft manufacturers, advanced
aircraft technology provides the following benefits:
New aircraft—like the Q-400 Aircraft, AirBus 350, Boeing-787, 737 MAX—reduce
fuel consumption by double-digit percentages compared to older ones. Aircraft performance
also improves by using advanced technology winglets.
RISK
Critical Risks Facing the Aviation Industry
System Failure and Aging Technology Infrastructure;
Climate Change;
Oil Price Volatility;
Air Craft Reputation Damage;
Economic Recession;
Government Shutdown due to war, political problem, natural disaster;
Decreasing Insurance Capacity;
Pendemic deases (Covid-19);
People
Identifying the key people in the organization that are responsible for the functional area to
manage helps to minimize the time & budget.
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Communication the plan
Knowing the way how to share the strategic plan with n the organization helps the employees
to understand what they are doing;
There are different types of people within the organization the communication method must
be easy in their level like explaining in:- Words
Audio or verbal
Picture,
Company Email,
Company portal page,
This method helps to identify the gap and come up with a solution.
Ethiopian Airlines has 7 subsidies under the corporate company every subsidy are related to
each other, it’s a serving type of organization in hospitality and for the success of the
organization every subsidy is important to have the bigger picture of the organization.
In the area of participation, all hotel and tourism services will take action to achieve their
specific goals. As mentioned earlier, Ethiopian Airlines has entered into a hotel service, using
its extensive network for operations. In the case of the EAA, the hotel service movement is a
milestone in new business strategies and will work with Ethiopian to provide standardized
service to its customers and support the airline industry. Hotel and Tourism are operated by
Ethiopian Airlines and employ specialized training and capacity-building professionals such
as professional chefs. Also, when a flight is canceled, staying at your hotel instead of staying
at another hotel will reduce costs. This approach is one way to reduce potential security risks
and harassment for customers and shows that the organization is one of the strategies used to
address those potential risks.
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SKYLINE HOTEL
Ethiopian Skylight Hotel, owned by Ethiopian Airlines, is the most luxurious and the largest
hotel in Ethiopia located at the heart of Africa’s diplomatic hub Addis Ababa, just five
minutes away from Bole International Airport. With outstanding, international-standard
service, the luxurious hotel awaits you for your leisure and business needs.
A total of 373 stunning rooms with relaxing and superb designs are suitable for both
corporate and leisure travelers. Enjoy spectacular city and/or airport view in all of our rooms.
The Grand Ballroom which can accommodate 2000 for sitting setup and 4000 for the cocktail
set up at a time, can also be divided into 5 individual halls along with a spacious foyer area
(can accommodate 500-800 guests). is Ideal for big conferences, big corporate events, and
lavish weddings, our venues provide impeccable and world-class service. 3 Daylight meeting
rooms and 2 VIP private holding rooms are fit for your corporate meeting demands.
The outstanding facilities of Green Apple Health Club include Fitness Center, outdoor heated
swimming pool, Thai spa and massage, pool bar, mini-golf courses, and beauty salon.
Since Skylight hotel is a new business strategy for Ethiopian Airlines Based on the interview
findings on the issue of promotion most of the respondents said that the Ethiopian
government was following the backward system to promote the Ethiopian tourism industry
and expecting a lot from the government and still Ethiopia poor in promoting Ethiopian
tourism when it compares the other African countries.
On the issue of physical infrastructure, the phase II infrastructures are not completed.
There is good availability of good hotel accommodation in Addis Ababa, however, there is a
lack of good hotel accommodation outside of Addis Ababa, particularly in tourist
destinations.
On the issue of security, most of the respondents confirmed that there is no security problem
inside and outside Addis Ababa.
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On the issue of image perception, most of the foreign tourists were feeling that Ethiopia is the
place of indications of war, insured and not this much have a tourist attraction.
On the issue of the availability of enough tourist attractions area, most of the respondents said
that Ethiopia has enough tourist destiny.
In the past years when flights are canceled the passengers stay at Hilton hotel because of
these, they spend a lot of money on accommodation, but now they save a lot of money at the
same time its another income for the company not using not only for the international users
but also for the local accommodation especially during the pandemic time.
Ethiopian MRO Services Strategy
Vision
Ethiopian MRO Services shall be the most competitive and leading provider of commercial
aircraft Maintenance, Repair, and Overhaul (MRO) services in Africa by 2025.
Mission
To become the leading MRO organization in Africa by providing airframe, engine and
component maintenance, repair and overhaul and procurement and material services whose
quality and price “value proposition” is always better than its competitors 9 As a profit center
of the Ethiopian Aviation Group, we ensure to be MRO organization of choice to our
customers, employer of choice to our employees and an investment of choice for the group. 9
To support the fast growth strategy of the passenger and cargo profit centers of our group and
to contribute our share to the development of MRO services in Africa.
Strategic Objectives - Provide full airframe MRO services to all aircraft models operated by
ETHIOPIAN on terms (price, TAT, and quality) each better than the competition - Provide
MRO services to the majority of engines and components installed on ETHIOPIAN fleet at
the lowest cost compared to alternate service providers. - Generate an annual revenue of
USD 520 Million (and a profit of 100 Million) from third-party MRO work by 2025.
USD 87 Million from maintenance of 79 Airframes Per annum. USD 414 Million
from maintenance of 153 Engines per annum. USD 19 Million from Component
Maintenance per annum
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Fast and Profitable Growth Strategy
Ethiopian MRO Services shall pursue a fast and profitable growth strategy.
In line with the corporate business strategy, MRO Services shall pursue a cost-leadership
strategy and shall derive a competitive advantage by delivering standard MRO services at the
lowest cost.
Organization
The MRO function shall be established as an autonomous Business Unit by 2015. This must
be done based on a detailed study and adequate preparations in advance.
Engine Overhaul Capabilities shall be developed and/or maintained for PW 4000, GENX,
CFM56-3, CFM56-7, PW100 Series Engines, and GE90 (subject to a feasibility study) -
Overhaul Capabilities shall be developed and retained on APU - GTCP 331, GTCP 85, and
GTCP 131. - Subject to feasibility studies, additional capabilities shall be developed on
more:
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In-house maintenance capabilities shall be developed for more components of current-
generation aircraft models (both ET & Customers). Particular attention shall be given to:
A. Pneumatic Components
B. Hydraulic Components
C. Avionics Components requiring Automatic Test Equipment (ATE)
Facilities
Additional wide-body hangar by 2012 and one more every five years.
A paint hangar with proper facilities, Aircraft Interior Refurbishment Hangar, Composite
Repair Facility, Engine Overhaul Facility Upgrade will be done.
State of the art MRO IT system shall be implemented.
Regulatory Approvals
Ethiopian MRO Services shall obtain and maintain EASA Part 145 approval in addition to its
FAA repair facility approval.
Partnership
Ethiopian MRO Services shall forge partnerships with selected OEMs and reputable MRO
organizations both on sales and marketing and capability development. This includes the
Wire Harness production project being started with Boeing.
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CONCLUSION
In conclusion, Ethiopian Airlines is one of the old corporate organizations under the
Ethiopian government that has more employees. We try to see the strategic plan of the
corporate plan how the work, how is the alignment with the leadership, how they
communicate, how they use their resource, what are the constraints.
Ethiopian airlines based on the strategic plan is ahead of the schedule that gives him to win
many prices for several years.
Ethiopian Airlines is Certified as a 4-Star Airline for the quality of its airport and onboard
product and staff service. Product rating includes seats, amenities, food & beverages, IFE,
cleanliness, etc, and service rating is for both cabin staff and ground staff.
Ethiopian Airlines, the largest Aviation Group in Africa and SKYTRAX certified Four Star
Global Airline, is pleased to announce that in addition to being honored as the ‘Best Airline
in Africa’, it has won the Best Business class in Africa 2018’, ‘Best Economy Class in Africa
2018’ and topped among Skytrax’s World’s Top 100 Airlines 2018 list, moving up from
number 48 last year to 40, as voted for by airline customers around the world.
Finally, when it comes to the conclusions section of Ethiopian Airlines' hotel and tourism
department, Ethiopia is the capital city of Africa because the African Union was founded and
is headquartered in Ethiopia. Aside from this Ethiopian carrier, practically all of the top
African airlines are members of the Star Alliance and have many direct flights throughout the
world
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RECOMMENDATION
During the assessment we try to see some of the gaps in communication with the employees,
we observe that not all of the employees have enough knowledge about the general strategic
plan of the organization.
There are some of the constraints of human resources in some cases because the employees
work in the shift so we recommend having a flexible schedule because an organization exists
when there is human power.
On the issue of human resources in the Ethiopian hotel industry, there is a shortage of human
trained power in the hotel & tourism sector and even the existing professionals are not well
experienced.
On the other hand, Ethiopia is now constructing the Grand Renaissance Dam, Africa's first
man-made dam, to generate electricity. After the dam is completed, it will be a popular tourist
destination in Ethiopia and beyond the world. Finally, Ethiopia is a renowned African
country that has been designated as a UNESCO World Heritage Site. In general, they are
good opportunities to grow Ethiopia's tourism economy.
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REFERENCE
Ethiopian Airline official website
Questionary
Nongo, E.S. and Ikyanyon, D.N. (2012). The Influence of Corporate Culture on
Employee Commitment to the organization. International Journal of Business and
Management.7(22);1-8.
The deal, T.E., and Kennedy, A.A. (1982). Corporate Cultures. Addison-Wesley,
Reading, MA.
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