MBL 915P Group assignment 1 Strategic Management In Comet Transport share company

Group Members

Name Ali Nasreddin Asfawossen Shimelash Brhanu Arega Daniel Desalegne Dawit Derje Desalegn Mohammed Jemal Edris

Student No 7805003 77890175 77890183 77890434 77890450 77890248 77890159

Email alinasreddin@gmail.com astroied_2007@yahoo.com brhanuarega@yahoo.com dancomet2000@gmail.com dawitdj@yahoo.com desalegnmohammed@yahoo.com robitjemal@gmail.com

% Contribution 100% 100% 100% 100% 100% 100% 100%

SUBMISSION DATE: May 4, 2013

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Table of content
Executive Summary 1. Introduction 1.1The Background 1.1.The Method 1.2.Limitations 1.4. Company Profile 1.4.Mission of the Company 1.5.Interpretation of Related Activities of Company Mission 1.6.Companys Management 1.7.Duration of the Company 1.8. Company Location 1.9.Vehicles Load Capacity 1.10. Closed and Open Space Warehousing 1.11. Vehicle Maintenance 1.12. Organizational Structure 2.Vision of the Company 2.1. Core Values of the Company 2.2. Customers Profile 2.3. Customers Expectation 3. Overview of Strategy Management Process in CTSC 3.1. Developing a Strategic Vision, a Mission and a Set of Core Values. 3.1.1.The Vision Statement 3.1.2. The Mission Statement 3.1.3. Core Values of the Company 3.1.4.Setting Objectives 3.1.5.Crafting a Strategy 3.1.6.Executing the Strategy 3.1.7.Monitoring Evaluation and Corrective Adjustments

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14 15 15 16 18 18 19 19 19 20 20 20 21 21 21 21 21 22

CTSCs Strategy Strength and Weakness

4.1. Market Share 4.2. Financial Strategic Objective 4.3. SWOT Analysis 4.4. The Need for Change 5. Significant Factors and their Future Implication

5.1. The macro-environment 5.1.1. The Legal and Political Environment 5.1.2. Economy 5.1.3. Socio-Cultural 5.1.4. Technology 5.1.5. The Industry Environment 5.2. Internal Factors 5.2.1. Financial Capacity 5.2.2. Human resource 5.2.3. Service Rendering Capability and Facilities 5.2.4. Marketing and Business Development 6. Recommendations

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Executive Summary Comet Transport Share Company (CTSC) is one of the freight transport operating companies of Ethiopia which has strategically planned activities not only to fulfill the objectives of the Growth and Transformation Plan (GTP) of the country, but also to meet user expectations, with the objective of to remain competitive and accomplish companys vision. However, to meet such an objectives and the national transport system requirement and so to address the climate change in the local and global economy, the company is expected to do cumbersome works and continuous improvements in the process of strategic planning.

1. Introduction The cost of operating logistic business in Ethiopia currently became very challenging. To this effect, problems emanated from the deadlock access to port assumed to have aggravated costs and rates of transportation to increase cost of living on citizens. Because of these, studies on the transport sector today would have significant effect in order to reduce the general cost of living in the country. To fulfill such a requirement therefore, efficient and effective development of strategic planning process and execution could have an essential significance.

1.1.

The Background

According to Thompson et al, (2012, p.69), the process of crafting and executing company's strategy consist of five interrelated managerial stages. These may include: i. Developing a strategic vision to company's long-term direction, a mission statement to describes purpose, and a set of values to guide the pursuit of the vision and mission ii. Setting objectives and using them as yardsticks for measuring the company's performance and progress. iii. Crafting a strategy to achieve the objectives and move the company along the strategic course that management has charted. iv. Executing the chosen strategy efficiently and effectively. Page 3

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v. Monitoring developments, evaluating performance, and imitating corrective adjustments in the company's vision and mission, objectives, strategy or execution in light of actual experience, changing conditions, new ideas, and one new opportunity.

1.2. The Method As it was described above s, one of the inputs in the Government Grand Plan was to strengthen the road transport sector. To this effect, the GTP described the target as follows: An effective institutional framework will help to ensure private transport service providers are competent and provide proper standards of service. The human resource capacity for better management and service delivery will be developed. A national data base for freight and public transport will be created that will reduce the time processing administrative requirements and the costs of freight transportation (FDRE GTP, 2010:79). Considering the mentioned strategic plan, the group made a reason to choose one of the renowned freight transportation companies of Ethiopia, CTSC. And therefore, has undertaken a situation analysis. The major internal and external factors relevant to the company and its industry have been identified. This has been carried out taking primary and secondary data from the company in person. Hence, a thorough assessment in archives consisting of the strategic plan and annual plan-performance reports, trends and decisions made by the Board of Directors has been assessed. However, minor discussions which were held with company authorities were limited to time and cost.

1.3. Limitations Since the core process represent the overall efforts of the company, evaluation of the strategic plan has more directed to the core processes. Thus, assessment is likely to be constrained as a result of availability of sufficient data, time and cost. And in turn, inadequate data as a result of company insecurity may influence the general result of this strategic plan assignment.

1.4. Company Profile Comet Transport Enterprise was established upon the dissolution of former Ethiopian Fright Transport Corporation (EFTC) in the year 1994 by the council of Ministers Regulation No. 193 of 1994. The organization further as a Public Enterprise which later transferred to a Share Page 4

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Company transferred and merged with Addis Mechanical Enterprise on Commercial Registration and Business License vested from January 9th of the year 2002 and authorized a Share Company under the jurisdiction of the Ministry of Trade and Industry that noticed as one of the Share Companies of Ethiopia in the year indicated above on Ethiopian Herald, Vol. LVIII No. 212, and May 15, 2002. Comet has registered a capital of 204,823,000.00 ETB, divided in to 204,823 shares with par value of Birr 1,000 each. All shares are currently held by the government. Currently, capital of the company reached 225,822,142.59 ETB, including reserve and capital contribution in kind and legal reserve.

1.5. Mission of the Company Under the FDRE Proclamation No. 93/94 and license given by the state, the Company has the following mission: To render road freight transportation service. Agency service to private road freight transport associations. Engage in any other related activities conducive of the attainment of the purposes mentioned in the mission here above.

1.6. Interpretation of Related Activities of Company Mission CTSC up until 1994 had established to fulfill its mission persistent to transportation and agency service to private freight transport associations. Post 1994 companys mission had improved or reestablished to handle additional services to ensure maximum profitability by delivering fullfledged services to both internal and external customers. A part from the previous mission, the company engaged the following new activities as related ones: Provide vehicle maintenance service to both internal and external customers. Provide vehicle washing and greasing service to internal and external customers. Render warehousing and machinery service to internal and external customers.

1.7. Companys Management

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The overall activities of the company is directed and managed by the authority of Privatization and Public Enterprises Supervising Agency (PPESA) who has the mandate to assign the Board of Directors and so the Director General of the company, by the Board of Directors.

1.8. Duration of the Company Under the license given and Proclamation of Council of Ministers No. 193/94 the company is deemed to have established for an indefinite period of time.

1.9.Company Location CTSC is located in the capital city Addis Ababa, at Akaki-Kality Sub-City in Kebele 11 which is strategic site and situated within the diverse industrial zone around the southern margin of Addis Ababa right before the Ring-Road occupying 423,000 m2 of land.

1.10. Vehicles Load Capacity The company had a capacity to lift only 4,350 tons of vehicles load at once. However, now a day, it has been upgraded to a capacity of 89% to handle 8,220 tons of dry cargo at once.

1.11.

Closed and Open Space Warehousing

Open space warehouse service can be given for general cargo for customers of which can avail miscellaneous cargo types on 20,000 m2 asphalted and 100,000 m2 for non-asphalted ground accommodations facilitated by fifteen different types of cargo handling equipment.

1.12. Vehicle Maintenance Having a vast technical plant, the company has been licensed to provide 1st grade maintenance services for the overhauling of heavy trucks and automobiles including machinery repairs, shop services, washing and greasing services plus vehicles parking, caf and restaurant services for customers of different needs.

1.13. Organizational Structure

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The company has recently structured and divided into two major core processes supported by other four sub-processes and two services which accounted for the Director General of the company.

2. Vision of the Company Currently, companys vision is to provide an integrated and multifaceted logistics service under one premise to be the leading customers choice in eastern Africa (CTSC, Report Aug. 30, 2013).

2.1.

Core Values of the Company

Comet has an inspiring core values to serve its different size and types of customers. Customers are the priority targets to the company. Hence, we are committed to serve with. We serve conveniently transparent with little waiting time. Companys culture is directed to customers beliefs and requirements. We respect and considerate customers. We serve with skilled and knowledgeable employees. We believe in high quality and manageable service with confidence. We have highly dedicated operational teams to ensure care and attention to customers and their properties. We are flexible to customers personalized approaches.

2.2. Customers Profile Customers of the company include governmental, non-governmental and private businesses. Because there are two core processes in the company however, the transportation process mostly is supported by government demands and non-government requisitions, while the warehousing and machinery process or the logistic service mostly is supported by the private, non-government organizations and government demands respectively. Among which, importers were more of local governments while international NGOs are very few but highly influential to support the fleet man. Page 7

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Customers Expectation

Customers are most important for Comet Transport Share Company where the company depends on. Customers do favor to the company by giving opportunity to develop and enhance its service capacity. In turn, customers do expect the company to be responsive, reliable, fast delivery, respectful and high performance of service at least on one key performance basics, likely timeliness or dependability to be needed as a result of one unique difference from others. 3. Overview of Strategy Management Process in CTSC Based on the above mentioned background stages of strategic management processes pointed out by Thompson , A. et al, (2012), the group has been evaluated the basic strategy management process of CTSC and compared whether the company's strategic management process is in line with the academic requirements indicated above.

3.1.Developing a Strategic Vision, a Mission and a Set of Core Values. Thompson, A. et al, (2012), have indicated that: a strategic vision delineates managements aspirations for the business, providing a panoramic view of where we are going and convincing rationale why this makes good business sense for the companycharts a strategic path for the futurecommunicates to stakeholders and helps steer the energies of company personnel in a common direction (Thompson, A., et al, 2012, pp.70-71). 3.1.1. The Vision Statement

Accordingly, CTSCs vision read as to provide an integrated and multifaceted logistics service under one premise to be the leading customers choice in eastern Africa. In this vision statement, we can understand that, companys vision is directional, focused in areas of what was intentional, it looks flexible, desirable and easy to communicate. However, the vision lacks distinctiveness and specificity rather looks like generic which could be used by many companies. Moreover, it includes what the company does at present, it also shows ambiguity that lacks selectivity in identification and needs of stockholders, and may not inspire its audience which also declare incapability of unique identity and not clearly directed to the point as well which does not lead to a common goal.

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The Mission Statement

As it was indicated in Thompson, A., et al (2012), a mission statement shows who we are, what we do and why we are here. CTSCs mission generally stated as follows: To render road freight transport service and agency service to private road freight transport operators, to provide vehicle maintenance service and vehicle washing and greasing service, to render warehousing and machinery service to internal and external customers and engage in any other related activities conducive of the attainment of the purposes mentioned in the mission statement.(CTSC, 2013). For clear understanding, Thompson, A., et al (2012. Pp.74-75) have stated that: the distinction between a strategic vision and a mission statement is fairly clear-cut. A strategic vision portrays a companys aspirations for the future (where we are going); where as a companys mission describes its purpose and its present business (who we are, what we do, and why we are he re), and well-conceived mission conveys a companys purpose in language specific enough to give the company its own identity." Accordingly, CTSCs mission identifies and conveys what the companys service is, specifies the buyers need, identifies the customer groups. However, it doesnt specify its approach how to please customers and it doesnt give the companys own identity since it uses ambiguous term in the establishment Proclamation No. 193/94, by saying Related Activities which leads additional legal interpretation before engaging in a formal activity and formulating its strategy. Above and beyond, the word related activities also leads to encompass to unnecessary acts of felony.

3.1.3.

Core Values of the Company

The values of a company (sometimes called core values) are the beliefs, traits, and behavioral norms that management has determined should guide the pursuit of its vision and mission. These are norms that company personnel are expected to display in conducting the companys business and pursuing its strategic vision and mission (Thompson, A., et al, 2012, p.75). Thus, as it was indicated above, CTSCs core values were stated as follows:

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We serve conveniently transparent with little waiting time, companys culture is directed to customers beliefs and requirements, we respect and considerate customers, we serve with skilled and knowledgeable employees, we believe in high quality and manageable service with confidence, we have highly dedicated operational teams to ensure care and attention to customers and their properties and are flexible to customers personalized approaches.

For Thompson, A., et al (2012), fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship are related to core values. In this respect, CTSCs core values can be evaluated very well. This is because, starting from company transparency, when we approach through each core values, we can find that more emphasis has been given to customers time constraints, beliefs and respect, including safety to their properties in most value statements that declare dependability. Likewise, the company has also given a fair respect to its personnels skills and teamwork flexibility to an ethical way of serving and socializing them up to personal approaches. Though the company falls under suspicions since Thompson, A. et al (2012) said, Most companies may not practice what they preach when it comes to their professed values.

3.1.4.

Setting Objectives

The managerial purpose of setting objectives is to convert vision and mission into specific performance targets. Well-stated objectives are specific, quantifiable, or measurable, and contain a deadline for achievement. Thus, objectives focus efforts and align actions throughout the organization; they serve as yardsticks for tracking a companys performance and progress and they also provide motivation and inspire employees to greater levels of effort and the two major objectives are financial performance objectives and strategic performance objectives (Thompson, A. et al, 2012, p.76). Based on the above mentioned explanation, the group tried to evaluate CTSCs objective setting method. Accordingly, CTSC strategic objectives that are depicted in the strategic plan are more of financial performances. i.e. financial objectives like maximizing revenue, cost reduction and Page 10

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making profit and are related to capacity utilization and on some reform programs. In addition, these objectives are more focused on short-term profitability other than fulfilling the vision and mission of the company. What is more, financial objectives those are not both clearly specified and quantifiable or related to accomplish companys vision. In some cases, there are objectives which seemed to have been specific, but either might not be measured or quantified. Yet, the strategic objectives encompass company's marketing objectives and competitiveness. But similar to financial objectives, they do not show how the company will achieve its competitiveness in quantitative basis or the strategic objectives do not indicate the process and the how of market segmentation, market share and penetration at all. Hence, in most cases, those objectives set by the company do not inspire its audience and meet academic requirements.

On the other hand, as Thomson, A., et al (2012) indicated, company objectives need to be broken down in to performance targets for each of organizations separate businesses, product lines, functional departments, and individual work units for desired companywide outcomes and results. In this respect, no document has been found witnessing companys experience. However, based on the reform program now a day, the company tries to implement tools like the balanced score card (BSC) in order to balance the financial objectives with the strategic objectives.

3.1.5. Crafting a Strategy As Thompson , A., et al (2012), stated; the task of stitching a strategy together entails addressing a series of how's: how to grow the business, how to please customers, how to outcompete rivals, how to respond to changing market conditions, how to manage each functional piece of the business, how to develop needed capabilities, and how to achieve strategic and financial objectives, choosing among the various alternatives, proactively searching for opportunities to do new things or to do existing things in new or better ways. For instance, among strategy formulation the following steps should be followed. These include the corporate level of strategies, the Business level strategies, the Functional area of strategies and the Operational level of strategies. In CTSC the following summary of steps are followed.

Table: Summary of Description of CTSC Strategy Page 11

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CTSC Tactic Description Justifications

Level of Strategy

Market Penetration Diversification Business Strategy New Service Development Backward Integration Cost Reduction Functional Strategy Improving Resource Utilization Introduce new technology of truck, equipments and machinery and expand service capacity Research and Development Add relevant detail to the hows of the business strategy Provide game plan for managing a particular activity in ways that support the business strategy Add detail and completeness and functional strategies Provide a game plan for managing specific lower-[level] activities with strategic significance How to strengthen market position and gain competitive advantage Actions to build competitive business capabilities

Operation Strategy

In view of that, we have evaluated the strategy making tasks of CTSC as compared to the academic notion, the company implements only the three levels of strategy-making activities and yet, on incomplete manner. Hence, even if the company develops some basic assumptions of the strategy development, it is identified in most cases that signifying poor quality performance and the process that was stated in the strategic plan also lacks broad based observation analyses which views and results in targets of very narrow and mismatching the existing industrial technology, market situation and communication style.

As a result, the company exhibits shorter life span. More significantly, since the company operates its business more in local import and has a minor involvement records in out boarder freight transport service sector, it shortly fails to achieve its goal. Because, in this sector, the Federal Transport Authority of the Government of Ethiopia has registered more than 25,452 heavy trucks to flog in the industry which must result in high and stiff competition where effective and efficient cost and quality management service companies could win and achieve the strategic goals to the better. Because of these, for companies like CTSC, which exhibits generally inefficient and ineffective strategy development measures, as compared to rivals, neither achieves their goals nor accomplishes their vision. For such a reason therefore, poor crafting of strategy for CTSC could be very challenging business to succeed.

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3.1.6. Executing the Strategy "Converting strategic plants in to actions and results , tests manager's ability to direct organizational action ,motivate people, build and strengthen company competencies and competitive capabilities--"( Thompson et al; 2012:86) Executing a company's strategy has to be done efficiently and effectively. The action at this stage begins with what management will have to do to achieve its financial targets and strategic performance. The implementation process can take as long several months to several years--"(Thompson et al; 2012:75) The strategic execution in CTSC star with creating awareness /shared strategy / to the employees. This is done to make the implementation process smooth thereafter, the company fulfils/allocate/ the human and other resources which are planned to facilitate the strategy's implementation through the company's incentive program system, which is given to employees for their achievements. According to Thompson et al, in the most situations, managing the strategy execution process includes the following principal aspects: Staffing the organization with the needed skill and expertise. Building and strengthening strategy- supporting resources and competitive capability. organizing ample resources to the activities critical to strategic success Ensuring the policies and procedures facilitate rather than impede effective strategy execution. Installing information and operating systems that enable company personal to carry out their roles effectively and efficiently Motivating people and tying people and trying rewords and incentive directly to the achievement of performance objective. Creating a company culture and work climate conducive to successful strategy execution

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Exerting the internal leadership needed to proper implementation forward and drive continuous improvement of the drive continuous improvement of the strategy execution processes.

As mentioned above, CTSC follows almost all of the principal aspects of managing the strategy execution process thereby improving its successes.

3.1.7. Monitoring Evaluation and Corrective Adjustments Thompson, A., et al; 2012, p.87) have pointed out that: "Monitoring new external development, evaluating the company's progress, and making corrective adjustments" is the trigger point for deciding whether to continue or change the company's vision, mission, objectives, strategy and/or strategy execution method." CTSCs vision, mission and objectives will not be exposed to yearly evaluation and the vision may not even compare with the yearly achievements. This may be done when its necessary. However, the strategy execution process has to be evaluated by the higher official body before implementation. If the strategic plan needs adjustment for corrective actions, it will be carried out which the process again may take very long period of time. This is because; it must again be evaluated and approved by the Board of Directors on its part, after all, the final approval takes place by the Federal Privatization of Public Enterprises and Services Agency (PPESA). PPESA on the other hand, many take its own time for the execution to approve. And initiation will be based on the criteria that satisfies PPESA after evaluated and approved by the Board of Directors by the fact that it must fulfill government needs and requirements not only the evaluations that had taken by CTSC will implemented or placed into effect or executed. Nonetheless, there are consecutive monitoring and strategy evaluation processes monthly, quarterly, half a year and on annual basis that may or may not request an adjustment to be made, that may also need swift decisions as soon as possible. 4. CTSCs Strategy Strength and Weakness Evaluating the strategic managing process of CTSC, we observed the following strengths and weaknesses. Page 14

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Strengths Company's financial strategies are clearly stated in the company's strategy. The strategy of diversifying the business well fits the industry situation.

Weakness Company's strategy is focused on short-term goals rather than long-term goals. Companys strategy fails to incorporate strategies that enhance the companys competitive advantage. CTSCs Situational Analysis This section provided synoptic analysis of industry under which CTSC operates and the impacts on its activities. Thomson, A., et al (2012, p.52) have pointed out that "what is our present situation?" prompts managers to evaluate industry conditions, its competitive strengths and weaknesses, and changes taking place in the business environment that might affect the company". Based on such concept, CTSCs situation analysis has been assessed as follows.

4.1. Market Share It should be noted that other freight transport operating companies can be the major competitors of CTSC who can easily access better technology and technical capabilities. As it was discussed in the introductory part above, freight transport business in Ethiopia is highly stiff and not easily penetrable sector. Hence, competition in such a sector requires cumbersome work to survive. To have a competitive advantage therefore, the company must introduce new technology, relatively offer lower tariff and credit seal could be the strategy of the market to compete with those giant companies and sustain the market share of the company as well.

4.2. Financial Strategic Objective Service revenue is collection of integrated logistic service fee, operational and administrative expenses and payable tax. The following table shows planed and actual revenue from services rendered by the CTSC during the past five years. As it can be seen from the table bellow, there is a similar pattern of service provision with that of the physical performance. Page 15

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Salse grouth rate of comet transport share company 2008 2012

300000
250000

200000
150000

PLANND('000) ACTUAL ('000)

100000 50000 0
2008 2009 2010 2011 2012
Source: CTSC Strategic Plan and Performance Report (2008-2012)

Average growth rate for the past five years is plane from actual it decreased by 2.2%, thus we can understand that the sales growth opportunity of comet transport Share Company is unattractive. Financial Statements The major component of profit and loss statements are revenue from operation, other incomes, cost of sales and administrative expenses. The summary of planned and actual profit before tax from operations for the fiscal years of 2007/2008 -2011/2012 is shown in the table below. As it can be observed from the table, the Share Company was profitable throughout the five years trend.

Fiscal Years 2008 2009 2010 2011

Planed Service Revenue ETB('000) 13577.70 20747.90 56643.80 81379.00

Actual Service Revenue Performance (%) ETB('000) 14951.00 110 44906.00 216 69124.30 122 59712.90 73 Page 16

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62133.60 51920.00 84

4.3. SWOT Analysis An essential element in evaluating a company's overall performance entails examining the company's resources and competitive capabilities in terms of the degree to which they enable it to pursue its best market opportunities and deafened against the external threats to its future well being. The simplest and most easily applied tool for conducting this examination is widely known as SWOT analysis, so named because it zeros in on a company's internal strengths and weaknesses, market opportunities, and external threats. Just as important, a first rate SWOT analysis provides the basis for crafting strategies that capitalizes on the company's resource strengths, overcome its resource weaknesses, aims squarely at capturing the company's best opportunities and defends against the threats to future well-being (Thompson, A., et al, 2012, pp.150-151).

Strength CTSC has strong financial position in the last ten years. CTSC has 858 employees with long term work experience and professionals. Reasonable workshop. CTSC has 120000 m2 areas for handling of containers with fully equable machineries. The location of CTSC is suitable for logistic business. Weakens Incomplete marketing strategy (pricing, product development, distribution, promotion.) Poor market segmentation skill. Weak utilizations of workshops. Poor collection of account receivable. Unwise use of human resources. Page 17

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Government policy focus on agricultural and industrial products to overall economy of the country supports the opportunity to enable the fright transport business. The import/export goods are increased every year which also support the opportunity to enable the terminal and the fright transport business.

Treats 41% of the trucks are obsolete models and are 30 tons of carrying capacity while 40 tons or above are trucks of competitors. Introducing the railway service in the country will be the most rival of the company in the near future. High cost of imported spare parts. Limited capacity in research and development works to introduce new technology to provide high quality service.

The SWOT Matrix

Internal Strength(S) Strong financial position Beigest work shop Suitable for logistic business Weakness(W) Incomplete marketing strategy Utilizations of workshops usage Un collected of account receivable

External Opportunities (O) Government economics police focused on agricultural and industry products import and export goods are increase Threats(T) Introducing the railway service in Ethiopia 41% of the truck is old and 30 ton carry capacity

OS

OW

TS

CTSC

TW

4.4. The Need for Change

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"Every company operates in a market and business climate that is changing to one degree or another and that, in turn, requires internal operating response and new behavior or the part of organizational member"(Thompson, A., et al; 2012, p.448). From the analysis undertaken above, it has been observed that CTSC although it was profitable in the previous years, the management must revise and change the strategy of the company in order to improve and rehabilitate itself to more competitive advantage and sustainable progress of the company. Concentration may direct towards the marketing strategy, on performance of account receivables, and vehicle replacement policy to fully utilize its resources. 5. Significant Factors and their Future Implication "Every company operates in a larger environment that goes well beyond just the industry in which it operates. This "micro-environments" includes seven principal components: population demographics, societal values and lifestyle, political, legal and regulatory factors, the natural environment and the ecological factors, technological, general economic conditions, and global forces"(Thompson, A., et al, 2012, p.98).

5.1. The macro-environment As Thompson, A., et al (2012, p.98) pointed out, "The macro-environment encompasses the broad environmental context in which a company's industry is situated." And for our purpose the following were taken into account.

5.1.1. The Legal and Political Environment This referred to the regulatory framework in which the organization with the share company proclamation no 146/02 under the supervision of PPESA to compete and perform the following action. Render freight road transport service. provide maintenance and washing and greasing service Agency service to private road freight transport associations. Engage in any other related activity.

The Constitution of the Federal Democratic Republic of Ethiopia (FDRE) guarantees foundation freedoms and rights, including undertaking of business and own property in Ethiopia. This and Page 19

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other issues related to the organization has created a conducive environment for promoting and attracting the business based on the vision of the organization and in turn are expected to induce the demand for integrated logistic services .

5.1.2. Economy The government has committed to ensure private capital plays a significant role in the economy by launching a free market economic system. There is a change of reform in issues that are related to the government need which can be controlled and there has been major and positive change in the government's policy towards the market economic policy in general and foreign investment in particular. The fundamental development objectives of the country are to build a free market economic system that will enable rapid economic development change. Hence, adopting this economic system strategy the company may earn the better from the growing market. Moreover, the situation would also attract local and regional states as well as attracting other companies and investors to be partner with us.

5.1.3. Socio-Cultural "Social forces include the societal values, attitudes, cultural factors, and life styles that impact business."(Thompson; 2012:100). In addition to stable fiscal and monetary policy setting, the availability of adequate social and physical infrastructures in a country is very crucial for the business environment. In this regard, positive measurements are generally being undertaken by the government as part of its endeavor to stimulate economic growth and reduce poverty through education and job opportunity in the country. This development will have a positive contribution to the creation of better business environment by way of ensuring a sustainable supply of skilled and healthy labor force.

5.1.4. Technology "Technological factors include the pace of technological change and technical development that have the potential for wide ranging effects on societies including activities and institutions involved in creating new knowledge and controlling use of technology (Thompson, A., et al 2012, p.100). Since freight transportation service is in the advent of science and technology in Page 20

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the invention of telemetric in particular, the world of information science and the spread of such technologies in the country will favor their influence and rendering capacity to the industry. Thus, spread of automobile technology including the GPS will create an opportunity for the fright transportation service industry to become more effective in the near future.

5.1.5. The Industry Environment "To gain a deep understanding of a company's industry and competitive environment, mangers do not have gathered all the information they find and spend lots of time digesting it rather, they can focus more directly on using some well-defined concepts and analytical tools to get clear answers."(Thompson; 2012:100-101)

In Ethiopia, the situation relies on local freight transport service who will be contending for freight road transport service market. The business requires relatively medium investment in addition to the possession of necessary skills and profession. As a result there has been a lot of new entrance in the freight transport service. However, most of them are one-man business organization without adequate facilities. Hence, it is expected that most of them could dropout very soon. Nevertheless, it should be borne in mind that some of them could be strong competitors to CTSC. This is particularly true if they are different share companies in freight transport services. CTSC with its better organization and experiences, and integrated logistic service that it provides could be the preferred company in Ethiopia.

5.2. Internal Factors The internal factors are the resources and capabilities of the organization and we focus to assess the following issues.

5.2.1. Financial Capacity The financial position of CTSC has been good since the last five years. However, its liquidity position has been affected as a result of dividend payables to the government that constitutes 100% of its profit.

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Human resource

Currently, CTSC has a total of 858 permanent employees. This much of human resource will be expected to remain for the planed period. On job training shall be necessary to refresh the existing staff. In addition, collaboration with higher institutions and researchers is vital for the organization during the strategic plan period.

5.2.3.

Service Rendering Capability and Facilities

CTSC has rich and accumulated experience in undertaking and utilizing opportunities related to road freight transportation services for the last two decades. It also has built good experience in undertaking tasks related to dry port activities, vehicle maintenance, car washing and greasing services and other related activities in the service sector.

5.2.4.

Marketing and Business Development

The need for strong and effective business development unit for service providers like CTSC, it is important to include the marketing plan at the business level strategy to help the organization stay on tracks of competitive strength. Hence, business development and promotion tasks shall be accorded special emphasis during the plan period to promote and advertise CTSCs activities to potential customers.

6.

Recommendations

To take advantage of opportunities indicated in situation analysis and promising industry market profit comet transport Share Company shall have the following strategies for the coming five years. Hence, the strategy is expected to be deliberate (Top-down strategy),

Business level strategy Market strategy for CTSC, have a promising and sustainable profit comparing with strong competition from rivals change to benefit from huge opportunities is its potential market. To exploit these opportunities the company needs to have complete marketing strategy include marketing mix (Service development, pricing, Promotion, placing).

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From the detailed assessment of the strategic plan of CTSC, it is found that the cost of service has increased year-to-year on significant proportion. Therefore, the company shall give attention to decreasing cost of services. On the other hand, it must introduce new technologies in order to reduce delivery time the coming five years.

Operation Level Strategy Research and development is necessary to take sustainable competitive advantage to become quality service provider. CTSC needs to have strong and high standard research and development center.

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Strategic Management]
References

Comet Transport Share Company, (2008), Strategic Plan and Performance Report. Vol. 14, No. Addis Ababa.: Ethiopia. Comet Transport Share Company, (2009), Strategic Plan and Performance Report. Vol. 15, No. Addis Ababa.: Ethiopia. Comet Transport Share Company, (2010), Strategic Plan and Performance Report. Vol. 16, No. Addis Ababa.: Ethiopia. Comet Transport Share Company, (2011), Strategic Plan and Performance Report. Vol. 17, No. Addis Ababa.: Ethiopia. Comet Transport Share Company, (2012), Strategic Plan and Performance Report. Vol. 18, No. Addis Ababa.: Ethiopia. Comet Transport Share Company, (2008-2012), Strategic Plan Report for the Five Years Period Addis Ababa.: Ethiopia. Gattorna, J., (1983). Hand Book of Distribution Management. 3rd edition, Gower Publishing Company Ltd. Aldershot, Hants, England. Ministry of Finance and Economic Development, (2010).Federal Democratic Republic of Ethiopia-Growth and Transformation Plan 2010/11-2014/15. Volume I: Main Text. Artistic Printing Enterprise, Addis Ababa Ethiopia. Thompson, A.A., Peteraf, M.A., Gamble, J.E. and Strickland, A.J. (2012). Crafting and Executing Strategy: The Quest for competitive Advantage; Concepts and Cases. 18 th Global Edition, McGraw- Hill, Irwin.

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