Strategic planning at East African Breweries Limited

Abstract

The research was undertaken in order to understand strategic planning at East African Breweries Limited. The objective of the study was to investigate and document the strategic planning system at East African Breweries Limited. A number of studies have been done in Kenya regarding strategic planning practices in several industries and companies. East African Breweries Limited (EABL), has continued to carry out outstandingly profitable operations in the region. Despite its complex, multi business and multi-country nature, it is ranked among the top performing firms in the region. It was therefore deemed of importance to understand the sort of EABL's strategic planning system that makes this organization successful in a constantly changing environment. It is for this reason that the study was done. In depth interviews were carried out on senior managers who played key roles in strategic planning. Although eight respondents were contacted, only seven interviews were conducted. The respondents were highly experienced people in corporate management. There is no uniform approach to strategic planning, different companies apply different approaches. It was evident from the research that East African Breweries Limited has put in place a strategic planning system that is unique to its context. The strategy development process is informal, continuous and is integrated into everyday aspects of work. The strategic planning process is an annual event that is highly formalized, rational and analytical. The two processes run in parallel. EABL's planning system integrates business experience and intuition with rigorous analysis. Factors such as organizational size, complexity, degree of competition, the need for internal consistency and comprehensiveness will determine how formal or informal a planning system will be. The group-managing director plays a dominant role in strategic planning and is a very influential figure in providing the right culture. However, the board's influence is minimal. Strategic plans are developed by top management, functional and operational staff. The planning horizon for these plans was one year due to the constantly changing environment, though company's planning cycle is 3 years. The marketing function plays a key role in strategic planning. Diverse sophisticated tools are utilized in due process 01 strategic planning. However, much emphasis is placed on marketing research and financial analysis tools. Strategic planning at EABL, takes place at both corporate and business levels. However strategies at both levels are interrelated. All the parts of the business work to accomplish the over-riding EABL's corporate mission. Implementation of results is routinely and rigorously measured and creative methods for encouraging breakthrough thinking are used to collect data to feed on to strategy development. Strategic planning at EABL is not without its complications and challenges. This is due to the complex nature, size, different environments and multiple businesses that pose problems during strategic formulation and implementation stages.