MIDLANDS STATE UNIVERSITY

FACULTY OF COMMERCE
DEPARTMENT OF STRATEGIC MANAGEMENT AND CORPORATE

GOVERNANCE

Name and Registration Number:

Mellisa T Nyangani R173102H

Lovemore Haisa R219491Z

Esther T. Nkhoma R2214112P

Nyasha Murape R146503J

Locardia Mundandi R222551W

Lorita Kanengoni R2213667N

Masimba Mapfuva R2215663M

Chidochashe Depute R2215134N

Josiah Dhliwayo R113918A

Edina Mudzinganyama R222155X

Dzingai Chazarira R169294P

Tendai R. Bwanya R2215367R

Module Code: MBM 734

Module Name: Strategic Planning Management

Year: 2022 - Level:1.1

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Using an organization of your choice, develop the following strategies:
a) Corporate level strategy
b) Business level strategy
c) Functional level strategy

Introduction
Strategic management is the comprehensive collection of ongoing activities
and processes that organizations use to systematically coordinate and align resources
and actions with mission, vision and strategy throughout an organization. Strategic
management activities transform the static plan into a system that provides
strategic performance feedback to decision making and enables the plan to evolve and grow
as requirements and other circumstances change. The strategic planning process culminates in
the development of a strategic plan document that serves as the organization’s collective
roadmap. A strategy is a road map. It is a dynamic roadmap that explains how a
company needs to evolve so that it can meet its goals and vision.  It is a plan that describes
how to allocate resources and support various business activities. It begins with a clear
understanding of where you are now and where you want to go. The strategic journey defines
the twists and turns in the road on the way to achieving set goals. It identifies the tasks along
the way, who will be responsible for specific results, and key performance indicators to
measure progress and results. With a well-designed strategy map, every employee can see
how they contribute to the achievement of the organization’s objectives.

Definition of Terms

Strategy

Alfred D. Chandler, Jr.(1962), defined strategy as the determination of the basic long-term
goals and objectives of an enterprise, and the adoption of courses of action and the allocation

of resources for carrying out these goals. Johnson and Scholes (2002) define strategy as the
direction and scope of an organisation over the long-term, which achieves advantage for the
organisation through its configuration of resources within a challenging environment, to meet
the needs of markets and to fulfil stakeholder expectations

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Strategic Planning – Kenneth Andrews defines strategic planning as an organisational
management activity that is used to set priorities, focus energy and resources, strengthen
operations, ensure that employees and other stakeholders are working toward common goals,
establish agreement around intended outcomes/results, and assess and adjust the
organisation's direction in response to a changing environment. It is a disciplined effort that
produces fundamental decisions and actions that shape and guide what an organisation is,
who it serves, what it does, and why it does it, with a focus on the future.

Strategic Analysis

Miller and Dess (1996) define strategic analysis as the conjugation of the consideration of the
organization’s strategic intent, exploration of the opportunities and threats presented in the
immediate environment surrounding the organization; and the study of the organization’s
internal strengths and weaknesses.

We do not negate that each organization is unique, and may therefore adopt different
approaches to strategy formulation. Under strategy formulation, an organization identifies its
strengths and weaknesses, as well as opportunities and threats. This helps managers decide on
which plans they should focus on or abandon and how best to allocate the company’s
resources. For this paper, we will be mainly looking at the initial stage of strategic planning,
that is strategic analysis. Strategic analysis is a theoretically informed understanding of the
environment in which an organisation is operating, together with an understanding of the
organisation’s interaction with its environment in order to improve organisational efficiency
and effectiveness by increasing the organisation’s capacity to deploy and redeploy its
resources intelligently. (Professor Les Worrall, Wolverhampton Business School)

Strategic analysis begins with the identification and evaluation of data relevant to strategy
formulation. The organization carries out an audit to find out the current position, direction
and resources available. It defines its external and internal environment by using analysis
tools which include the SWOT analysis, PESTELG analysis, Porter’s five forces analysis,
value chain analysis, gap analysis. The business also assesses it organizational culture, vision,
mission, current strategies, financial statement and market position.

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For the purposes of this presentation and essay, we are going to be looking at ZB Financial
Holdings. ZB Financial Holdings Limited provides financial solutions to the commercial and
merchant banking sector in Zimbabwe, as well as retail banking services, insurance
operations and strategic investments. The company services its clients through a nationwide
footprint of branches in major towns and cities in Zimbabwe and electronic delivery
channels. The Insurance division provides structured insurance products for short- and long-
term insurance; and the Strategic Investment division offers shared services which include
risk management, compliance and human resources, microfinance and investments in
property holdings and sub-sectors of the financial sector.

Strategy comes in different levels depending on the level of an organization in the market and
the organization's size. A strategy may be created to guide the direction of an entire
organization with multiple businesses or it can be created for a department. As such, the
process will differ for each level as there are different objectives and needs. The three
strategy levels are corporate strategy, business strategy and functional strategy.

Corporate-level Strategy

Corporate Strategy takes a portfolio approach to strategic decision making by looking across
all of a firm’s businesses to determine how to create the most value. It is concerned with
the decisions regarding the two-way flow of company’s information and resources between
the various levels of management. Simply put, corporate-level strategy implies the topmost
degree of strategic decision making, which covers those business plans which are concerned
with the company’s objective, procurement and optimal allocation of resources and
coordination of business strategies of different units and divisions for satisfactory
performance. In order to develop a corporate strategy, firms must look at how the various
business they own fit together, how they impact each other, and how the parent company is
structured, in order to optimize human capital, processes, and governance. Michael Porter has
articulated the four corporate level strategies and these are stability strategy, growth strategy,

retrenchment strategy and combination strategy.

Stability Strategy

Jauch and Glueck observe that a stability strategy is a strategy that a firm pursues when it
continues to serve the customers in the same product or service, market, and function sectors
as defined in its business definition, or in very similar sectors. There are three basic

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approaches that can be adopted by companies assuming the stability strategy and these
involve the no change approach, profit approach and the pause/proceed approach. No change
approach indicates that the company is very much happy with the current operations, and
would like to continue with the present strategy. This strategy is utilized by companies who
are comfortable with their competitive position in its industry, and sees little or no growth
opportunities within the said industry.

In the profit approach, the company tries to sustain its profitability through artificial means
which may include aggressive cost cutting and raising sales prices, selling of investments or
assets, and removing non-core businesses. The profit strategy is useful in when a company is
experiencing tough times or temporary difficulty or wants to artificially boost the value of a
company. Pause/ Proceed with caution approach is used to test the waters before continuing
with a full-fledged strategy. It could be an intermediate strategy before proceeding with a
growth strategy or retrenchment strategy. The pause or proceed with caution strategy is seen
as a temporary strategy to be used until the environment becomes more hospitable or
consolidate resources after prolonged rapid growth. Stability strategy does not involve a
redefinition of the business of the corporation as products, markets and functions remain the
same. The stability strategy does not mean that the business completely negates concern of
business growth and improvement in profit. Firms adopting the stability route does plan for
business growth and profit improvement with modest achievable targets.

Expansion Strategy

Expansion strategy involves redefining the business by adding to the scope of activity or
substantially increasing the efforts of the present business. When expansion strategy is
pursued, it leads to addition of new products/markets/functions. Even without a change in
business definition many firms undertake major increases in the pace of activities. Expansion
strategy is often considered as the entrepreneurial strategy where firms develop and introduce
new products and markets or penetrate markets to build share.

The enterprise looks for considerable growth, either from the existing business or product
market or by entering a new business, which may or may not be related to the firm’s existing
business. Expansion is usually thought as the way to improve performance. If the business

environment is volatile, expansion may be a necessary strategy for survival. Expansion

enables the organization to reap advantages from economies of scale as a result of increased
scale of operations. This strategy can bring the organization more revenue and increase brand
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recognition. Diversification, strategic alliance, acquisition, mergers are a few examples of
this strategy. This strategy is aggressive and can affect the organization financially if not
planned well.

Retrenchment Strategies

Retrenchment strategies are pursued when a company’s product lines are performing poorly,
landing the company in a weak competitive position. The company may also be performing
poorly because of the general decline in industry or markets. The strategy seeks to improve
the performance of the company by eliminating the weakness pulling the company back.
Retrenchment strategy can be implemented in three ways and these are the turn around
strategy, divestment approach and the liquidation strategy.

Turnaround Strategy is adopted for the purpose of reversing the process of decline. This
strategy emphasizes operational efficiency and is most appropriate at the beginning of the
decline rather than the critical stage of the decline. Divestment Strategy drops the loss-
making venture or part of the company or minimizes the functions undertaken. It involves the
cutting off of loss-making units, divisions or Strategic Business Units. Liquidation Strategy is
considered a last resort strategy. It is adopted by the company when all their efforts to
bringing the company to profitability is futile. The company chooses to abandon all activities
totally, sell off its assets and see to the final close and winding up of the business.

Combination Strategy

When an organization adopts a mix of stability, expansion and retrenchment either

simultaneously or sequentially for the purpose of improving its performance, it is said to
follow the combination generic strategy. In this strategy, the enterprise combines any or all of
the three corporate strategies, so as to fulfil the firm’s requirements. The firm may choose to
stabilize some areas of activity while expanding the other and retrenching the loss-making
ones. The primary focus on corporate-level strategies is for managers to make optimum
utilization of firm’s resources.

In the case of ZB Financial Holdings, the group is currently employing a corporate level
strategy called the Peregrine Shift – One ZB Experience. ZBFH’s corporate strategy argues
that its customers and Zimbabweans at large have come to expect quality and rounded
financial services from ZB. This has necessitated the need to adopt a one stop shop for
financial services incorporating all our SBUs namely ZB Bank, ZB Life, ZB Re, ZB Capital,

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ZBTS, Qupa and Barcelona. The one-stop shop entails that its diverse clientele base is able to
access service from a single service point. ZB’s widespread brick and mortar infrastructure
provides a perfect platform for the group to offer this seamless service solution.

The Peregrine Shift entails that all the branches are going to morph into fully fledged service
centres capable of delivering service consistent with customer expectations and world-class
best practice. This envisaged set up should enable staff to resolve at least 50% of customer
needs on first contact for services and products being provided by all our SBUs. The bank’s
corporate strategy will be transformative and there is going to be need to multi-skill, re-skill,
up-skill and learn groupwide product offerings as the market dictates. The chosen identity
signifies the intended character of the team the bank is building and indeed the transformed
One Digital ZB, which promises speed, agility, accuracy and vision.

ZBFH in its newsletter of the Peregrine Shift notified that it will start by rolling out more
small solutions addressing huge headaches that were synonymous with the bank such as long
queues occasioned by payment of school fees and insurance premiums, or delays experienced
in the overall customer experience. It goes on to allude that the bank is in the advanced
preparations to begin on the bigger ticket items such as upgrade of the Core Banking System,
the Customer Relationship Management system, Big Data Analytics, Document Management
System and Digital OmniChannels. The effect of these changes should begin to be felt by the
end of second quarter of 2022.

ZBFH Group is using the combination strategy with the Peregrine shift. It is using stability,
expansion and retrenchment simultaneously and sequentially to improve its performance. It is
retrenching the fragmented way of doing things, in which different SBUs would operate
separately and putting them all under one roof. Its expanding is operations through
diversification of its services and strategic alliances with other companies such as Nyaradzo
Funeral Services and Cell insurance under the Kesto product. It is using the stability strategy
by employing the profit approach. It is repackaging itself to become more efficient, by fully
optimizing resources and cutting off any extra unnecessary costs through organizational
restructuring. More will be explained in the business and functional strategies.

Business level Strategy.

Business-level strategy is a plan that helps a business to provide value to the customers and
gain a competitive advantage by making the best use of its core competencies. It is mainly
concerned with the firms having multiple businesses and each business is considered
GROUP 5 STRATEGIC PLANNING MANNAGEMENT 7
as strategic business unit (SBU). It focuses on how the firm will compete successfully in each
line of business and how to effectively manage the interest and operations of a specific unit.
Michael Porter has propounded three business-level strategies in the year 1998, and these are
cost leadership, differentiation, focus and hybrid.  A cost leadership business-level strategy is
a strategy that businesses use to push their efficiency, cut down the production costs to make
it under the industry average, or the competition in the area. A business will be able to charge
lower prices for its items than others in the industry, if it so chooses. It can also choose to
price its products high to rack in more profits.

Differentiation

Being different is key to many businesses’ success. A business can position itself as a market
leader through this strategy. Businesses study the market to find what competitors are missing
and consumers’ requirements. They invest a lot of effort in ensuring their product fulfils
customers’ requirements and includes features missed by the competitors. The product must
be of high quality and the strategy is not applied to price sensitive clients. Implementing this
strategy is challenging, as developing a unique and different product is not easy. In order to
do this, the business must be innovative and do out of the box thinking.

Focus

In this business-level strategy, organizations focus on a particular group of consumers and

target them with special offers. Organizations can offer a unique experience and serve them
in the best possible way. Usually, competition is not tough in this segment, but consumers are

demanding and care about quality and reliability. The company following this approach
mainly considers that the target market is of considerable size, that the chances of potential
growth are high and that the competitors don’t have a considerable effect on the firm.

Focused low-cost strategy

Overall, in this type of strategy, your company will not only compete via price but also
choosing a small portion of the market to concentrate on. This approach also targets a
particular niche, but the firm also focuses on achieving economies of scale. Generally,
smaller firms those who cannot offer multiple products simultaneously opt for this option.
The idea is to provide maximum value to the customer but reduce the overall costs at all
levels.

GROUP 5 STRATEGIC PLANNING MANNAGEMENT 8

Focused differentiation strategy

Businesses utilizing a focused differentiation strategy can defend themselves in the same way
as businesses with a broad differentiation strategy. A firm following this strategy works on a
very specific niche of the market that has enough potential for profitability. The main focus is
to create a competitive advantage by offering a product that is difficult to substitute or
replace. Most importantly, the firm concentrates on unattended or vacant market areas and
builds a competitive advantage.

ZBFH group aims to adopt a one stop shop for financial services incorporating SBUs namely
ZB Bank, ZB Life, ZB Re, ZB Capital, ZBTS, Qupa and Barcelona. The one-stop shop
entails that its diverse clientele base is able to access service from a single service point. The
corporate strategy has been diffused down to business level strategy incorporating all
business units. In order for the bank to be able to fully implement the One Digital ZB, it
means that the specific SBUs should work tirelessly to see the strategy implemented
successfully. The Qupa SBU was launched in 2020. Qupa is the Microfinance division of ZB.
It was given a separate name because, earlier on, ZB had tried to launch a microfinance and it
performed dismally. A lot of people borrowed with no intention of repayment as they thought
they were government funds.

Thus, the microfinance brand was launched separately and it has grown significantly over the
two years. The Qupa brand is going to be relaunched with the green corporate colour. There
is an exercise to offer all services under one roof. There won’t be any need to move from one
branch to the other to get different services from the same bank. The ZB Life and ZB
Reinsurance had their own premises, so did the microfinance and the transfer secretaries. The
bank was not united and it did not present a unified front. Employees from the bank also had
divisions because of how separate the SBUs were. This new organizational structure will
bring unity across the units as all units will cross pollinate under one roof. The bank will
assume a more decentralized structure and the rigidity that was once in the bank will be
relaxed.

The bank is assuming the differentiation strategy with the Peregrine Shift. Other banks such
as CBZ holdings are not offering their products under one roof. They have branches which do
specific transaction. Thus, the One Digital ZB is something new to the market. This strategy
is also low cost as some branches will be closed down and some positions that were

GROUP 5 STRATEGIC PLANNING MANNAGEMENT 9

previously there will not be there when the strategy is fully implemented. This results in low
operating costs for the bank in terms of branch networks and staff remuneration costs.

Functional Level Strategy

Functional level strategy can be defined as the day to day strategy which is formulated to
assist in the execution of corporate and business level strategies. These strategies are framed
as per the guidelines given by the top-level management. Functional level strategy is
concerned with operational level decision making, called tactical decisions, for various
functional areas such as production, marketing, research and development, finance, personnel
and so forth. Functional strategy states what is to be done, how is to be done and when it is to
be done, which ultimately acts as a guide to the functional staff. And to do so, strategies are
to be divided into achievable plans and policies which work in tandem with each other.
Hence, the functional managers can implement the strategy. A functional level strategy must
reflect the corporate and business level objectives/goals, it must ensure an optimum
allocation of resources in all functional areas and it should to maximize the coordination
between all functional areas to optimize their outcomes.

The One Digital ZB strategy was further broken down into functional strategies. The ZBFH
Group formed a department running the One Digital ZB strategy called the Peregrine Shift
Team. It consists of departmental heads. The team’s main purpose is to ensure that the
Peregrine Shift is fully implemented in their different departments. The Marketing and
Branding department were tasked to give the bank a new look. They are working tirelessly to
facelift the banking halls of the different branches. The state of some ZB branches is quite
appalling and changes are being made. The Rotten Row branch and the First Street branch
has been refurbished and the new changes implemented. The logo for the bank was also
changed and the new logo has a smile under it. There are also working towards promotional
material and running ads in the newspapers communicating the changes taking place at the
bank.

The human resources department has also been working tirelessly to ensure that the they have
the proper workforce to fully implement the strategy. It is a well-known fact that most bank
employees were employed by banks straight from high school and most of them do not have
degrees or other certifications. Most of them were promoted by virtue of experience. A lot of

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bank mangers have been there for years and there is no room for innovation. Most traditional
banks are stuck in the old way of doing things because of these structures. There is no new
blood in the banks and thus the systems are highly rigid. Thus, a directive was passed by the
Group CEO that all employees were to reapply for their jobs and no one was safe. The human
resources department was tasked with providing the job descriptions for all the positions.
These were used to create the new organogram incorporating the peregrine shift. An
independent recruitment firm was used to do the recruitment process. The internal job adverts
were flighted and applications were made.

Employees were encouraged to apply even for higher positions as long as they had the
qualifications. This saw some employees being promoted, some being offered lower positions
than before, some resigning and some losing their jobs. Appointments are still underway and
the GCEO informed the members of stuff that for some positions, recruitments will have to
be done externally. Other departments have had to assume the new structures and work in
line with the new organogram and goals of the bank.

The functional level strategies have since been seen with the introduction of the new school
fees payment portal and the eradication of long queues outside the banks. Renovations are
underway at different branches, transforming them into service centres. The logo for ZB has
been changed and now has a smile underneath it. The organizational structure has also
changed. There was a new organogram is being implemented and new operating systems are
being implemented. The One Digital ZB corporate strategy is doing a complete overhaul of
the old way of doing things, giving the bank new direction and a fresh new look to its
customers.

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References

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Boulton, Dr. W.R. (2001). Understanding the strategic analysis model.

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Porter, M.E. (1998). Competitive advantage: creating and sustaining superior performance.
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Worrell, L. (1998). Strategic analysis: a scientific art. Wolverhampton: Wolverhampton

Business School

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