A PUBLICATION OF THE KENYA INSTITUTE OF MANAGEMENT October 2016 KSHS 350 TSHS 6,490 USHS 10,330 RWF 2,700 US$4 Three lessons I learnt after losing a job >>Pg 72 THE CHANGE JOURNEY KRA`s five years of progressive transformation under the leadership of Commissioner General, John Njiraini. 6164001 157003 > Posta`s key innovations to meet the needs of Kenyans >> Page 34 CONTENTS 26 October 2016 REGULARS 14. NEWS ANALYSIS - In the interest of the borrower 26. SPECIAL REPORT - Measurement is key in sports marketing LEADERSHIP 48. EXECUTIVE CHAT - Beyond skin colour 60. HANDS ON MANAGEMENT - Why companies fail in strategy execution FEATURES 64. TACTICS - Impress the customer through the 5s philosophy 76 68. MONEY MATTERS - Kenya’s economy looks up 70. HEALTH - The travellers’ sickness ENTERTAINMENT 76. TRAVEL - Ngong Hills escapade 78. MOTORING - Smooth road to car ownership October 2016 1 Management Magazine FIRST THOUGHTS The benefits of sporting activity By MARIANNA KEMEI o doubt, sporting is a big Williams are reported to be the highest- industry not only locally but earning sports personalities. Nalso internationally. Powerful 3. Media organisations are in existence just to Sports has also impacted the media HEAD OF COMMUNICATIONS AND CORPORATE AFFAIRS: manage certain sports. In football, industry significantly. We have Miriam M. Chege ([email protected]) there is Confederation of African television channels and magazines Football (CAF) for the continent with EDITOR: that are dedicated to sports stories. Tabitha Areba ([email protected]) 54 members. Council for East and Special desks dedicated to sports have Central Africa Football Associations been established in newsrooms with SUB EDITOR: (CECAFA) manages regional football, journalists and editors that are fully Murugi Ndwiga ([email protected]) whereas Kenya Football Association dedicated to this beat. This has created STAFF WRITER AND PHOTOGRAPHER: (KFA) manages Kenyan soccer. We also employment and revenue opportunities Sammi Nderitu ([email protected]) have the International Amateur Athletic for media houses. Federation (IAAF) among many other DESIGN & PRODUCTION: associations. These organisations have 4. Social-psychological benefits Vincent Mwai ([email protected]) a lot of influence on issues related to Under education, various authorities sports rules and beyond. Sporting have data that shows that children who CONTRIBUTORS: has created opportunities for various play certain games are less likely to drop Marianna Kemei, Joseph Nyanchama, Kenneth sectors. out. Young sportspersons are likely to Gitonga, Pouline Lumiti, Stella Rop, Tyler C. Beaty, Lizz acquire emotional control, appreciate Wambua, Michael Wachira, Sammy Likhali, Joyce 1. Manufacturing teamwork, and people’s skills that can Kaduki, Chris Harrison, Rick Rogers, Obiero Onyango, Manufacturers and suppliers of contribute to a better public. Muindi Kimanzi, Sanchia Temkin, Francois Van Dyk, Kevin facilities, equipment, kits, and gear Mabonga command a sizeable economic share. No 5. Goodwill activities one factory that can claim to cater for PHOTOS: Sammi Nderitu, Shutterstock photos Sportspersons are hired as goodwill an entire range of sporting needs. They ambassadors for commercial brands HEAD OF SALES: can specialise in clothing and further and social causes since they command Anthony Githendu ([email protected]) narrow down to footwear, swimsuits, influence. Tegla Loroupe is a powerful helmets, or tracksuits, or specialise in ADVERTISING SALES (KENYA): peace ambassador for warring societies, Elizabeth Mbinya, Boaz Kisero, making kits such as balls, rackets, bats, especially among cattle rearing Rose Osok, Titus Omondi, Charles Chege. and nets. Others will supply facilities communities. such as the golf courses, racing tracks, ADVERTISING & SUBSCRIPTION (UGANDA) gyms, and stadia. 6. Wellness and health Boaz Amutuheire ([email protected]) The United Nations Inter-Agency Task 2. Clubs and sports people ADVERTISING & SUBSCRIPTION (RWANDA) Force on Sport for Development and Patrick Ojil ([email protected]) Some football clubs are hugely Peace found that young people can endowed with financial resources. profit from physical activities as it adds CIRCULATION ENQUIRIES Forbes names top three world’s most to developing fit bones, effective heart [email protected] valuable football teams as Real Madrid and lung function, as well as improved PRINTED BY: MORDERN LITHOGRAPHIC LTD. with a worth of 2.52 billion pounds motor skills and cognitive ability. With Barcelona, 2.46 billion pounds and PUBLISHER sports, idle time can be filled with THE KENYA INSTITUTE OF MANAGEMENT, Manchester United 2.3 billion pounds activities that are healthy and Luther Plaza, 2nd and 3rd Floor, respectively. Some of these amounts positive. Nyerere Road/University Way Roundabout can run a small country. For the sports P.O. Box 43706 - 00100 Nairobi, Kenya. people, Cristiano Ronaldo, Lionel Tel: 020 2535277 Messi, LeBron James and Serena Email: [email protected] 2 October 2016 Management Magazine October 2016 3 Management Magazine Perspective Why a clear business model is key for every venture that interrelate to make it work in various segments. It defines how effectively. These components include the organisation builds and gains the the producer - the entity that offers a customer’s trust. It defines how the product or service. In most models, customers perceive the organisation the organisation itself fills this and its products. This is where brand position as it is the producer of the recognition and customer service care product. fall. The primary purpose of a business Where the organisation is involved model is to define what the business in distribution rather than actual is, or what it intends to be over time. It production, that organisation is the helps clarify the purpose, direction and producer of the delivery system. vision of the business even better. The delivery system is the product. There is then the value proposition. Business plan This is the perceived value your The business model is the mechanism The primary C products provide as the solution to through which the organization purpose of a M the consumer’s problem or need. generates its revenues, while the business model is Y This does not have to be a physical business plan is a document presenting to define what the product, it also includes services, the organisation’s strategy and the CM business is, or what digital products, intellectual property projected financial performance. The MY it intends to be and ideas. Value preposition business model describes how the CY over time. It helps addresses and solves a specific organisation is positioned within CMY clarify the purpose, need. It is common practice to have its industry and how it organises its K direction and vision interrelated value prepositions, where relations with its suppliers, clients, and of the business even several needs are addressed by the partners in order to generate revenue. better.” same organisation on related needs. The business plan then translates this The most common of this is sale and positioning in a series of strategic after sale services. actions and quantifies their financial By DAVID MUTURI impact. It is therefore safe to say that Market segment the business model is at the centre of the t is common for organisations Market segment is the group of business plan. to struggle with their business consumers the organisation intends Business models are evolving very Imodels, especially where there to offer the value of its product fast, sometimes with catastrophic has been no deliberate effort to craft to. Different markets will use the effect on traditional models. Some are and constantly review the model same product, or similar products. so disruptive that they are confining or where too many activities are Organisations segment the market some industries into the annals of confused with the business models. based on various characteristics to history, particularly where they ride Creating a business model isn’t offer maximum value and maximise on new technologies. That is why it simply about completing your revenues. is important to constantly review an business plan, or determining which The sixth component is the organisation’s business model to test its products to pursue. It is about distribution channel. This is the how robustness, but even more importantly mapping out how you will create of getting the product to the target to continuously innovate so as to stay ongoing value for your customers. market through advertising and ahead. Quite simply, a business model distribution to retail outlet. is how the organisation makes Finally, there is the consumer Email: [email protected] money. It explains the sources of the relationship. This is how the This article was first published in organisation’s revenues; how much organisation establishes its the Daily Nation newspaper on 13th and how often. A business model is relationships with its customers September 2016. made up of seven key components 4 October 2016 Management Magazine C M Y CM MY CY CMY K October 2016 5 Management Magazine Advertising Feature We mitigate investment risk in Africa The African Trade Insurance Agency (ATI) was created to fill a market gap in trade and investment risk mitigation in Africa. GEORGE OTIENO, ATI Chief Executive Officer gives highlights about the company’s role in the provision of insurance and financial products, in partnership with the private and public sectors. domestic banks, our