Introduction

Strategic Management is all about identification and description of the strategies that managers
can carry so as to achieve better performance and a competitive advantage for their organization.
Strategic management is defined as the process of evaluation, planning, and implementation
designed to maintain or improve competitive advantage. The process of evaluation is concerned
with the external and internal environments. Planning involves developing business models,
corporate direction, competitive tactics, international strategy, acquisitions, and collaborative
action. The implementation phase requires leadership to build the appropriate organizational
structure, develop management culture, control the strategic processes, and steer the organization
through corporate governance (Figure 1). An organization is said to have competitive advantage
if its profitability is higher than the average profitability for all companies in its industry.
Strategic management can also be defined as a bundle of decisions and acts which a manager
undertakes and which decides the result of the firm’s performance.
Figure1: Components of strategic management.

Source: Adapted from McGee, Thomas, and Wilson (2010) and Hitt, Ireland, and Hosskisson
(2012).
The manager must have a thorough knowledge and analysis of the general and competitive
organizational environment so as to take right decisions. The managers should conduct a SWOT
Analysis (Strengths, Weaknesses, Opportunities, and Threats) in order to - make the best
possible utilization of strengths, minimize the organizational weaknesses, make use of arising
opportunities from the business environment and shouldn’t ignore the threats. The main
components of an internal analysis are the firm’s resources (such as premises, machinery,
financial capital, human capital, and distribution networks), which can be combined and
developed into capabilities. Examples of capabilities are
 Developing innovative technology products,
 Reducing the time to market,
 Creating more efficient distribution channels and retail outlets,
 Capturing the consumer’s attention through marketing, and
 Managing customer relationships for long-term brand loyalty.
Capabilities are converted into core competences, which are difficult to imitate and lead to a
position of competitive advantage. An internal analysis evaluates how they can be developed to
continue creating competitive advantage for the firm.

The external macro environment consists of variables that are beyond the control of an
organization, but require analysis in order to realign corporate and marketing strategy to shifting
business environments. Firms are affected by forces that can be political, economic, social, or
technological (summarized in the mnemonic PEST) as well as legal, ecological, demographical,
ethical, or regulatory.

Here this document is provided by student Mekdes Mulugeta for the course Strategic
Management in order to describe and evaluate selected firm (Awash Melkassa Aluminum
Sulphate and Sulfuric Acid SC (AMASSAS)) strategic management activities and conduct
SWOT matrix that may help suggest or recommend best strategies for the company.

1.1. History and Background Information

The Awash Melkassa Aluminum Sulphate and Sulfuric Acid SC (AMASSAS) now the company
change it naming into Awash Melkassa Chemical Factory (AMCF). Located 107 km east of
Addis Ababa, the Awash Melkassa chemical Factory mainly produces Aluminum Sulphate,
Sulfuric acid and Hydrogen peroxide chemicals. The factory supplies its products to the cities’
water and sewerage authorities which uses it to treat drinking water. AMCF was established as a
Public Enterprise, by the Council of Ministers Regulations No. 235/1995 and in accordance with
the Public Enterprise Proclamation No. 25/1992 on the 2nd of August 1995. The firm was
erected by Polimex Cekop Ltd - a Polish Engineering Firm in accordance the agreement made
between Ethiopian Government & Polish Government. The initial paid up capital of the factory
was birr 111million. AMCF obtained its registration certificate dated 1st January, issued by the
Ministry of Trade &Industry of the Federal Democratic Republic of Ethiopia with a business
license No. አማ 8 - 22/92 dated July 18/92 E.C. The company was re - established as a share
company on the 1st of January 2000 with a paid - up capital of birr 94.52 million in accordance
Article 314 (1) of the Commercial Code of Ethiopia & the Privatization of Public Enterprises
Proclamation.

Since September 11, 2017 the Factory reorganized as Chemical Industry Corporation Awash
Melkassa Chemical Factory by the proclamation of council of Minsters No.469/2017. AMCF has
title deed for its properties (about 15 hectares of land) at Awash Melkassa issued by Oromia
regional state, Awash Melkassa Municipality & pays land & building tax per annum. It has a
liaison office at Addis Ababa in rented premises. At the head office, the share company has main
office building; commerce building; engineering& technical staff building; workshop buildings
(mechanical maintenance workshop; electrical workshop; Mechanical workshop; brick & rubber
lining unit), garage; raw material & product warehouses, spare part stores; water treatment unit
building; cooling towers & 400m3 water reservoir; drinking water supply units (two underground
water wells); laboratory & social rooms; Weighing bridge & weigh bridge house; acid filling
room; clinic; cafeteria; cost & budget room; hangar; stationery room & oil & grease store; waste
water treatment plant; living quarter; 2km asphalt road the compound etc. The Company has
telephone, fax, & internet access to support its daily business management activities. AMCF is
strictly a public enterprise solely owned & operated by the Federal Democratic Republic of
Ethiopia.
1.2. Operation\Production of the Factory
Awash Melkassa Aluminium Sulphate and Sulphuric Acid Share Company (AMASSASCo) is
engaged in establishing in August 2014 a 5,500 ton per annum capacity hydrogen peroxide
production plant at its existing premises.
Notion International Business PLC (NIB) has been contracted by AMCF following the
evaluation of submitted proposal to conduct Environmental and Social Impact Assessment
(ESIA) and Environmental and Social Management Plan (ESMP) preparation of hydrogen
peroxide production plant.
The Company's main objectives are:
 Producing & selling chemicals such as sulphate, sulphuric acid, oleum, aluminum sulphate,
single super phosphate, sodium sulphate & magnesium sulphate; and hydrogen peroxide.
 Engaging in any other related activities necessary for the establishment of its purpose.
At present the only products produced by the company are aluminum sulphate & sulphuric acid.
Aluminum sulphate and hydrogen peroxide is a chemical used mainly as a coagulant in the
purification of drinking water, in addition to its minor industrial application in the country.
Sulphuric acid is one of the most important basic raw materials used as an input for numerous
industries such as Tanneries, Metal processing industries, Fertilizers, Petroleum processing
industries, Processing of Molasses (sugar factory byproduct) for ethanol production; Glue
manufacturing; Battery acid preparation, for Flowering, Cotton growing farms and hydrogen
peroxide used for soap and detergent, textile industries, medical purpose for surgery wound
cleaning, for sanitizer input etc.
The design production capacity of the Company is
 13,600 tones per - annum of aluminum sulphate,
 17,000 tons of sulphuric acid per - annum,
 5500 tons of hydrogen peroxide per annum &
 Has also the technology of producing 5000 tons of oleum; where the balance is
sulphuric acid production when both plants are made to run together.
At full capacity of production the Company has the capacity to absorb 287 employees; though
the existing manpower is not more than 240 because of under capacity production.
AMCFs’ Vision
The factory is envisaged to be the foremost and preferred chemical industry in Ethiopia and East
Africa by the year 2017 E.C
AMCFs’ Mission
Produce a high quality of aluminium sulphate, sulphuric acid and hydrogen peroxide at
competitive price, utilizing every opportunity available to use its full production capacity and
earns reasonable profit for its sustainable growth in the face of competition.
AMCFs’ Value
  Promote transparency, accountability and trustworthiness.
 Make motivation and commitment to a common purpose.
 Satisfy customer needs.
 Prioritize product quality.
 Increase leadership $ staff capabilities.
 Follow corruption free practices.
 Offer courtesy and respect to our customers.
 Take corporate social responsibility for surrounding community.
 Work together for a common purpose.
Objectives of the AMCF
The main objective of the organization is to substitute import of chemicals with locally produced
ones. And increasing the number of chemicals produced in the country because other small scale
plants are being established based on sulphuric acid. However, foreign countries competition in
Ethiopia is also increasing using the opportunities in the free market policy. Producers in the
European and Asia countries such as the China, India that enjoy economies of scale in
production could become more suppliers of aluminum sulfate and sulfuric acid at reduced prices
to areas that are taken for granted as secured trade domains of Ethiopian chemical company,
including domestic markets. These countries exporting to the neighboring countries due to long
time establishing tread line in which Ethiopia could have used this opportunity due to its
nearness and market agreement in Sudan Kenya etc…. Failure to confirm to international
standards is also a potential threat to win markets.
a) The Company's main objectives are:
 To be the number one aluminum sulphate, sulphuric acid and related chemicals
manufacturer and sealer in East Africa
 Producing & selling chemicals such as sulphates, sulphuric acid, oleum, aluminium
sulphate, single super phosphate, sodium sulphate & magnesium sulphate; and hydrogen
peroxide.
 Engaging in any other related activities necessary for the establishment of its purpose.
 to be the number one aluminum sulphate, sulphuric acid and related chemicals
manufacturer and sealer in East Africa
b) Marketing Objectives of AMCF
Marketing objectives are the goals place by a company when they promote their products or
services to specific customers that must be reached within a certain period of time. Marketing
objectives are the marketing strategy established to accomplish general organizational goals
 Increase the revenue by 80% within next 5 years
 Increase the customer satisfaction
 Differentiate the products
 Improve Product Quality
 Increase brand reputation within the year
SWOT Analysis
2.1.1. Strength
Strengths could include a company’s specialist, expertise and its location. They are any aspect of
the business that adds value to its product or service. AMCF strengths include:
 Has modern technology and machineries for the production of aluminum sulfate and
sulphuric acid
 Availability of free area in the compound for construction of other related chemical(s)
producing plant(s)
 Sole producer of aluminum sulfate and sulphuric acid in the country
 Becoming competitiveness in the market with imported products
 Give transportation service to the customers to deliver the products to their sight.
2.1.2. Weaknesses
AMCF must acknowledge its weaknesses in order to improve and manage them. This can play a
key role in helping it to set objectives and develop new strategies. AMCF’s weaknesses may
include:
 Not able to produce at maximum capacity of sulphuric acid and aluminum sulfate
 High production cost that lead to negative response for aluminum sulfate and sulphuric
acid market demand inland and abroad
 Skilled manpower is one of the possible weakness problems identified in the area of
limited specialists in production, and market area.
 Poor access to information and technology due to this lack of access to international
buyer information
 Unstable local market and lack of price stabilization mechanism.
  Lack of market information on price, quality, supply, exports etc...
 lack of advice & technical assistance in the production and market
 Poor access to information and technology due to this lack of access to international
buyer information
 Shortage of research inputs and out puts, in general inadequate attention from concerned
bodies. The company doesn’t have a development strategy in the alternative chemical
production
2.1.3. Best Strategies Available to the AMCF (SWOT Matrix)
To develop strategies that take into accounts the SWOT profile, a matrix of these factors can be
constructed the SWOT matrix
Table 1: SWOT matrix
Strength Weaknesses
Opportunities S-O strategies W-O strategies
Threats S-T strategies W-T strategies

 S-O strategies: pursue opportunities that are a good fit to the company’s strategies
 W-O strategies: overcome weakness to pursue opportunities
 S-T strategies: identify ways that the firm can use its strength to reduce its vulnerability
to external threats
 W-T strategies: establish a defensive plan to prevent the firm’s weaknesses form making
it highly susceptible to external threats.
2.1.4. W-O Strategies
In AMCF there are weaknesses that make the company not to be competitive and have
opportunities. In this section we look in weakness and opportunity that suggest available
strategies to the company.
Table 2: Weakness and Opportunities (W-O) strategies
Weakness and opportunities of AMCF
Weakness Opportunities
 AMCF not able to produce Future industrial developments in the country create more
sulphuric acid and market opportunities for the company’s product.
aluminum sulfate at AMCF products would be used as a source of raw
maximum capacity material for many sub-sectors.
 Poor access to information The factory, with such vital and necessary product to
 and technology due to this many other processes as raw material, by having a number
lack of access to of customers and future expansion of the sub-sectors
international buyer would create an opportunity for AMCF. For example
information organizations which use these products are:-
 Unstable local market and  Leather factories
lack of price stabilization  Soap factories
mechanism  Textile factories
 Sugar factories
 Paper and pulp factories
 Battery charging – Tele
 Beverage industries
 Cement factories
 Mining areas
 Flower production
 Pharmaceutical areas
 Schools
 Transportation organization etc
 Water treatment
 Any organization which uses chemical at least in
lab
 Not considering the  Raw material Kaolin is produced in Ethiopia and the
production and price, related
to domestic and foreign removal of international tread barriers
demand  Introduction of foreign technology and innovative
 Lack of market information methods to improve productivity and
on the area of advertising the
implementation of new project. In Ethiopia, as is the
product, promotion, price,
quality, supply exports. There case with most developing countries, water and
is no introduction of new effluent treatment form by far the largest sub-sector
product like
of alum consumption
“WATERMAKER” small
packages for water treatment,
not able to develop new
products etc...
 Under capacity utilization  Future expansion of in larger size potential industries
and market, and development of larger sub-sectors,
which would help AMCF to produce at full capacity.
There are unfulfilled customer’s needs. And the
plant have been designed for production capacity of
13,600 & 17,000 tons per year aluminum sulfate and
 sulfuric acid respectively
Proposal: as it is seen on Table 2 there are weaknesses that the company has and also there are
Opportunities Company faces. By using W-O strategies overcome weakness to pursue
opportunities.
2.1.5. W-T Strategies
In AMCF there are weaknesses that make the company not to be competitive and have
opportunities in which the company could. In this section we look in weakness and treats of the
company establish a defensive plan to prevent the firm’s weaknesses.
Table 3 Weakness and Threats (W-T) strategies analysis
Weakness and Threats of AMCF
Weakness Threats
 Shortage of skilled Despite the country's great potential in developing different sub-
manpower is one of the sectors, there are many constraints that limit the company
possible weakness production and selling. Some of the major ones are:
identified in the area of  Shortage of skilled manpower and training institutions.
limited specialists in  Shortage of research inputs and out puts, in general
production, and market inadequate attention from concerned bodies. The country
area doesn’t have a development strategy and policy for the
chemical sectors.
 High price of production equipment compared to the low
purchasing power of the customers, poor infrastructure for
exporting the product.
 General absence of policy to assist the development of the
sub-sector
 High production cost  A lack of cost-competitive infrastructure is one of the most
that lead to high selling critical factors constraining. This can remain a constraint
price create negative well into the future as most infrastructure resources are
response for aluminum expensive to create and require significant economies of
sulfate and sulphuric scale to reduce the user costs to acceptable levels and take
acid market inland time to plan and implement. Although, utilities /
infrastructure such as electricity, roads and ports are the
current focus in Ethiopia, all resources should be viewed
holistically
 Poor market access to the  Strong competition in the export market and declining price
key distribution channel trends. The capacities the company produce and the
nearby countries like customers demand do not much.. From the point of view the
Sudan, Kenya etc… and
production of AMCF is quite small, and market in Ethiopia
lack of advice &
technical assistance. to sell its product is very narrow
 Under capacity
utilization of existing
plants
 Not much effort is done  In general inadequate attention from concerned bodies about
on the company to the market policy. Lack of information on available
convince the technological options, size of the market. Shortage of
government in order to
research inputs and out puts. Country doesn’t have a
improve the company
sells development strategy in the chemical sectors
 Under developed research  More technological development, and more research work in
capacity& uncoordinated the world for production of alternative product
research work for
developing the market
performance ,
competitiveness, studying
the neighboring country
chemical need, and buying
price .
 High production cost  Not sure on the price of raw material imported. Price of raw
materials and spare parts purchased from abroad. Goods are
purchased on the world market Are not at a predicable price,
there might be inflation in the price
Proposal: as it is seen on Table 3 there are weaknesses that the company has and also there are
threats the company faced. W-T strategies the company should establish a defensive strategies
prevent the firm’s weaknesses from making it highly susceptible to external threats.
2.1. Conclusion
This Report is about the strategic management and its basic concept. For the Analysis the student
has used Awash Melkasa chemical Factory. This Report indicates the strengths and weakness
related to the Awash Melkasa chemical Factory. Awash Melkasa chemical Factory has weak or
moderate strategies to do not overcome its weakness successfully. This Report also conduct
SWOT matrix in order to pursue best strategies available to Awash Melkasa chemical Factory.
As a conclusion the report showed as or provided proposal for the company after conducting
weakness to opportunity (W-O) and weakness to treat (W-T) SWOT matrix that may show or
provide an insight to create best strategies for AMCF managements.
Reference
Awash Melkasa Chemical Factory Website [Link] (Accessed October 19,
2024)
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E. (2012) Strategic Management Cases:
Competitiveness and Globalization, South-Western Pub.
[Link] Accessed October 19,
2024)
McGee, J., Thomas, H. and Wilson, D.C. (2010) Strategy: Analysis and Practice, McGraw-Hill.