Strategic management task_The postal corporation

docx

School

Kenyatta University *

*We aren’t endorsed by this school

Course

Subject

Business

Date

Nov 24, 2024

Type

docx

Pages

Uploaded by Guaranteedpassessays

The Postal Corporation 1 Strategic Change Interventions for the Postal Corporation of Kenya Pwani University Student name University Instructor Date

The Postal Corporation 2 Explain the Strategic Change Interventions that can be used to turnaround the fortunes of the Postal Corporation of Kenya Organizations are constantly implementing strategies to adapt, and most importantly attain their goals. However, they are not always successful. To better understand what they can or should change to improve their ability to perform, organizations conduct internal and external environment assessments. At times when businesses are at the verge of collapsing they are forced to develop and implement turnaround strategies. A turnaround strategy is a set of recuperative actions that are designed to rescue a failing business (Gluck, Kaufman & Walleck, 1980). This is a strategy that is implemented when the business is going into a spiral and is in a situation where it is at risk of closing. In order to successfully implement a turnaround strategy, it is important to first understand what caused the downturn. Postal Corporation of Kenya (PCK) is a commercial government business enterprise that operates under the Postal Corporation of Kenya act 1998. As a result of emerging market, technology and economic trends attempts to separate postal services from Telecommunications dates back in 1980. By July 1999, there was a tremendous improvement following the split of KP and TC. The postal Corporation of Kenya is charged with the responsibility of providing and operating postal services, postal financial services and other functions that might be accorded by the minister of communications (PCK, 2013). PCK is a self-funding business that utilizes its assets and resources to earn profits, the profits can be re-invested in the business or returned as dividends to its major shareholder The Kenya Government. PCK has remained on a self-destruction path for over 2 decades, unable to help itself. It started with failing to remit employees’ deductions to the National Hospital Insurance Fund (NHIF), National Social Security Fund (NSSF), Kenya Revenue Authority (KRA) and banks.

The Postal Corporation 3 PCK’s management would budget for employees’ net salaries only, but on the outside create the impression that they were catering for workers’ gross salaries, eventually hiding the business’ internal bleeding while unpaid dues were piling. Then as time went by, the corporation has started failing to pay suppliers and delaying payments when it did. PCK has failed in all aspects of its vision and mission and has killed the trust it had on clients. This is an indicator of a failing business that needs a turnaround strategy. Turnaround strategies for the Postal Corporation of Kenya Revenue Generating Strategies: Revenue generation refers to the way a company sells its products in order to make income. As Chowdhury (2002) noted that revenue generating strategies increase revenues and sales volumes are necessary. There are a number of revenue generating options that include price cuts, increased promotion, a bigger sales force, added customer services, and quickly achieved product improvements. Attempts to increase revenues and sales volumes are necessary. In some cases, especially in public corporations the government has major influences in influencing revenue generation through tax policies, regulations and even sometimes in terms of business policy. The Postal Corporation of Kenya needs to consider expanding its product or services portfolio to generate revenues. The company has stuck mainly to its mailing service and this has been a major hindrance. There is need for the company to consider new sources of revenue including digital money transfer services and modern Telecommunications services. Cost Reduction Strategies: Cost reduction is the process used by companies to reduce their costs and increase their profits. Depending on a company’s services or Product, the strategies can vary. Cost reductions must be supplemented with more drastic asset reduction measures for assets also consume a lot of revenue (Komen, 2014). Assets targeted for

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

The Postal Corporation 4 reduction are those determined to be underproductive. In contrast, more productive resources are protected from cuts and labeled critical elements of the future core business plan of the company, i.e. the turnaround response. First the Postal Corporation off Kenya needs to consider shedding off all current and fixed assets that have become redundant. Buildings, mailing infrastructure, communication masts, automobiles and other assets that are not currently in use should be disposed of. These assets come with maintenance costs which would be major cost cuts if the assets were sold. Then the company needs to find adequate financing to be able to slash its workforce through retrenchment. Currently, the corporation cannot slash its workforce due to inadequate finances to facilitate their retrenchment. Finally, the company needs to lower its operating expenses by cutting down on all operating expenses. Advertisement expenses, marketing expenses, transport expenses and all other expanses must be reduced. Only research and Development expenses should be sustained for the company needs to restructure and this is possible only through Research and Development. Organizational Performance strategies: In the twenty first century, organisational environments have continued to experience changes as a result of competition in the global market. Each change, be it technological, political, environmental or economical; these external changes exert pressure to organisations for them to remain competitive (Howard, 2005). The Kenya Government forms public corporations to meet both commercial and social goals. Some Public Corporations exist to correct market failures. This is the case, where, for instance, the service they give cannot be profitably provided by the private investors, for example tourism or infrastructure such as roads.

The Postal Corporation 5 The Postal Corporation of Kenya has recorded unsatisfactory performance for a period of up to 2 decades. The company has registered poor performance on various elements including customer satisfaction, financial performance, internal operations and Innovation and learning. The management needs to get out of their comfort zone and look at the other areas they can exploit. The management has to purchase infrastructure to enable it provide services the current client needs and stop running the current loss-making ventures. The company’s management also needs to find a way of stopping employees from stealing what is lost. Most importantly, the management has to find a way of motivating and engagement its employees. There cannot be any meaningful performance when employees are demoralized and not sure of their job security. Cooperative turnaround strategies: Many organizations are turning to cooperative strategies that involve ways of responding to strong competitive pressures between organizations where resources, capabilities and core competencies are combined to pursue mutual interests Cooperative strategies may be short term or long term and may include partial or contractual ownership (Chesenge & Njuguna, 2022). These strategies help the organization in accessing new markets, entering new businesses, introduction of new products, overcoming trade barriers, avoiding predatory competition, gaining access to complementary resources, sharing risk, research and development expenses, and risk capital Cooperative strategies includes strategic alliances, partnerships, mergers, acquisitions, integrations, outsourcing and offensive as well as defensive strategic moves to secure competitive advantage and protect a firm’s position. Strategic offensives can be either aimed at competitor’s strengths or at their weaknesses and they can involve end runs or grand offensives on many fronts (Porter, 2000). They can be designed as preemptive strikes or guerrilla actions. The target of the offensive strike can be a market leader, a runner up or the smallest or weakest

The Postal Corporation 6 firms in the industry. Defensive strategies to protect a company’s position usually take the form of making moves that put obstacles in the path of would be challengers and fortify the company’s position while undertaking actions to dissuade rivals from even trying to attack. It is certain that the Postal Corporation of Kenya needs strategic help to effectively turn around. The company needs to consider strategic alliances with Telecommunication companies such as Safaricom and Telkom as well as banking companies such as Equity Bank. Strategic alliances or partnerships with these companies will enable the Postal Corporation to revolutionize its products and align them with the needs of the modern customer.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

The Postal Corporation 7 References Chesenge, K.D. & Njuguna, J.W.(2022). Organizational culture and knowledge management: a case of postal corporation of Kenya in Nakuru county. International Academic Journal of Human Resource and Business Administration ,4(1), 71-87 Chowdhury, S. D. (2002). Turnarounds: A stage theory perspective. Canadian Journal of Administrative Sciences , 23(8), 467-76. Gluck, F. W., Kaufman, A & Walleck. B (1980). Strategic Management for Competitive Advantage. Harvard Business Review , 5 (58), 62-74 Howard S. R. (2005). Turnaround strategies for declining small business: the effects of performance of SMEs in Tanzania. Journal of Development Entrepreneurship , 10 (3), 1-5 Komen, B.(2014). Effect of turnaround strategies on performance of public corporations in Kenya. International Journal of Management & Information Technology, 10(4), 2032- 2045 Porter, M. (2000). Competitive strategy techniques for analyzing industries and competitors . Free Press, New York, NY.

Strategic management task_The postal corporation

Related Documents