40900985 Slides of Engro Foods

8/3/2019 40900985 Slides of Engro Foods

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Group Members

Waseem Azam

Fahad Tariq

Abu Bakar

Danish Aftab

Almas Umer

Waqas Aziz


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Muhammad Abu Bakar


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ENGRO


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INTRODUCTION

Incorporated in 1965.

Fertilizer in Pakistan.

With the name of EXXON Chemicals.

1991 Name changed as Engro.

Joint venture engaged in chemical related

activities.

New milk plant is established in Sukkar


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Diversified Portfolio

Fertilizer Business

Engro Energy Limited

Engro InnovativeAutomation Limited

Engro Vopak TerminalLimited

Engro Asahi Polymer&Chemicals. Limited

Engro Food Limited


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Our Affiliates


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MISSIONSTATEMENT

Our mission is two fold, to help farmersmaximize their farm produce by providing

quality plant nutrients and technicalservices upon which they can depend. Tocreate wealth by building new businessesbased on company and country strengths in

petrochemicals, information technology,infrastructure, food and other agriculturesectors.


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Vision Statement

To be the premier Pakistani enterprise with

a global reach, passionately pursuing value

creation for all stakeholders.


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WASEEM AZAM


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ENGRO FOODS


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Food industry in Pakistan

The food and its allied products

industry is considered Pakistans

largest industry

27 percent of its value-added

production

Total value of production is over Rs.46

billion


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Engro Food

More than 40 years in fertilizer and

chemical.

Engro Foods started its business operationsinMarch 2006

Successful launch of Olpers Milk, Tarang,

Olwell, and Olpers cream,Two processing plants at Sukkur and

Sahiwal.

Our aim is to dominate the food business.


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Our Brands


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Our Values

Integrity

Our PeopleInnovation

CSRConsumer Centric


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Vision according to Engro

Foods

Aims at transforming the company

within the next five years into first

a national food industry giant, then

into a regional force and finally

into a global player.


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Mission according to Engro Foods

Build Branded food business to

improve quality of life by offering

tasty, affordable and highly

nutritional products to our

consumers while maximizing stakeholders' value


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Objectives And Goals

Supply everyone their favorite olpersMilk to satisfy

the consumer needs and wants.

To provide profit to the shareholders and increase the

market share.

EFL dreams to be BIG

We want to be a major player in the food industry

"Elevating Consumer Delight Worldwide".EFL wants to challenge the industry norms and

surprise whoever has eyes on EFL.


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ANALYSISOFMISSION

Component of mission

statement

Description Addressed or not?

Customers Who are the firms customers? Yes

Products or service What are the firms major

products?

Yes

Markets Geographically, where does the

firm compete?

Yes

Technology Is the firm technologically

current?

No

Concern for survival, growth

and profitability

Is the firm committed to growth

and financial soundness?

Yes

Philosophy What are the basic beliefs, values,

aspirations, and ethical priorities

of the firm?

Yes

Self-Concept What is the firms distinctive

competence or major competitive

advantage?

Yes

Concern for public image Is the firm responsive to social,

community, and environmental

concerns?

No

Concern for employees Are employees a valuable asset of

the firm?

No


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DANISH AFTAB


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PORTERS FIVEFORCES MODEL


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COMPETITIVE RIVALRY

The food industry is becoming highly

competitive.

low cost structure, greater efficiency andbetter customer service will beat out

competitors.

Food companies also use higher investmentreturns

competition between Engro foods and

Haleeb is quite intense


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THREAT OF NEW

ENTRANTS

The average entrepreneur can't come along andstart a large food company.

Capital requirements

Production of packed products requires hugeinvestment of financial, human, technical, andmarketing resources.

Economy of scale

potential competitors either to enter on a largescale bases (a costly and perhaps risky move)or to accept a cost disadvantage.


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AVAILABILITY OF SUBSTITUTES

There are plenty of substitutes in the

food industry

Companies focusing on niche areasusually have a competitive advantage

Most large food companies offer

similar suites of services


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BARGAINING POWER OF

SUPPLIERS

Number of suppliers

Raw milk is standard commodity and is

available in the open market from a largenumber of milkmen

Importance of volume to supplier

Suppliers also have less leverage to bargainover price


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BARGAINING POWER OF BUYERS

The individual doesn't pose much of a threatto the food industry

Large clients have a lot more bargainingpower with food companies. (Large corporate clientslike airlines )

Backward integration

Another reason of low bargaining power isthat no buyer/distributor has the resourcesto start involve in backward integration.


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Strengthsstrong brand name i.e. Engro

PR with farmers

Positive response from customers

Strong consumer & product research

Third-Generation Plant

Worldwide fame of Engro.

Efficient milk collection system.

Keeping high quality standards.

Integrated distribution and warehousing facilities.Successful related diversification.

Generic brand name of Olpers

S

W

OTAn

aly

sis


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WeaknessesOlwell TVC

Owning Red Color

Low Quality Milk

Packaging

Milk collection & distribution costs

Narrow brand portfolio

Unable to compete in price sensitive segment of UHTmilk market.

Under-utilization of the capacity.Unable to fulfill the demand of local powder milkmarket.

Not yet ISO certified

S

W

OTAn

aly

sis


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OpportunitiesIncreased funding by Government

Increased consumption of PLM

Awareness

Third largest producer of milk

Population growth rate.

High urbanization rate.

High literacy rate.

Flexible government policies for food industry.

Have significant growth opportunities

Has sufficient capital to expand.

Has the potential to innovate and differentiate the company's products to

sustain a

competitive advantage

May merge with other global businesses to eliminate competitors.

Having Capable of expanding into other markets of the world

S

W

OTAn

aly

sis


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Threats

CompetitionPerceptions and Price Differentials

High inflation rate.

Low purchasing power.

Decrease in GDP growth rate.Increasing interest rates.

Decreasing investment.

Recessionary period in business cycle

Competition with Nestle, Engro Foods and thenew entrants.

Engro foods is currently facing are increase inSales Tax

S

W

OTAn

aly

sis


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FAHAD TARIQ


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StrengthsEndowed with the very good breed of

buffalos and cows

Highest per capita consumption of

milk in AsiaRegular culling of lessproductive/unproductive animals

A high ratio of agricultural land to

agricultural ratioAn emergence of commercial dairyfarms on a large scale

INDUS

TRIAL

SWOT

ANAL

YSIS


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WeaknessesSmall and scattered animal holding

Prevalence of traditional raw milk marketing system

Poor quality of milk; lack of remunerative producerprice for milk

Milk processing predominantly dependant onobsolete UHT technology

Mushrooming growth of cattle colonies in suburbanareas; High cost of milk

Production; a long chain of middle men

Inadequate infrastructure and institutional facilities

and supportLow utilization of installed capacity of dairy plants

Poor quality of animal health care and breedingservices; lack of professional management

INDUS

TRIAL

SWOT

ANAL

YSIS


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Opportunities

Huge unsatisfied demand of milk and

milk products.

Substantial scope for increasing milk

production through improvement in the

marketing

system by ensuring a year round

remunerative price to milk producersIncrease consumer awareness of

healthy eating

INDUS

TRIAL

SWOT

ANAL

YSIS


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ThreatsUnregulated imports of dairyproducts at cheap prices

Inadequate public and privateinvestment in modernization of the

sector

Vested interests in perpetuating the

dependence on imports of dairy

commodities

INDUS

TRIAL

SWOT

ANAL

YSIS


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SWOT matrix


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STRENGTHS WEAKNESSES

Worldwide fame of Engro.

Unable to compete in price

sensitive segment of UHT milk

market.

Efficient milk collection system. Under-utilization of the capacity.

Keeping high quality standards.Unable to fulfill the demand of

local powder milk market.

Integrated distribution and

warehousing facilities.Not yet ISO certified

Generic brand name of Olpers

Large market share of Engro

innovative and chemicals.

Having Good reputation in the

market by strong brand name i.e.

Engro

Strong R&D

OPPORTUNITIES SO Strategies WOStrategies

Improving EconomyIncrease production of quality milk to

cater the unsatisfied demand(S2,O2,O8)

Population growth rate.As per the increase demand of the milk they should fulfill the demand as EFL have the

ability to expand.(W3,O8).

High urbanization rate.They should go in the product line of

powdered milk. (S8,O2,O5)

High literacy rate.They should make a strong distribution system to cater to avail the full benefit of the

growing market.(W3,O2

Flexible government policies

for food industry.They should increase their exports. (S1,O6,O7)

Have significant growth

opportunities

May merge with other global

businesses to eliminate

competitors.

They should cater the wide range of

unsatisfied demand by improving their distribution

networks(S4,O8))

Having Capable of expanding

into other markets of the world

They should adopt affective marketing strategies for the promotion of their

product.(W2,O1)

THREATS ST Strategies WTStrategies

High inflation rate.

Invest more on the dairy product line as there is still a

large chunk of the market which require modernization

(S6,T5)

Low purchasing power.

The co-ordination between different

departments of EFL should be improved it will lessen the bureaucratic cost and

increase the efficiency of the company.


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InternalFactor Evaluation Matrix

Key Strategic Factors Weights Ratings Weighted Scores

StrengthsBrand Image 0.08 4 0.32

Growing Sales 0.03 3 0.24

Market Share 0.05 3 0.15

Distribution Channel 0.08 4 0.32

Product Quality 0.07 3 0.21

Capacity 0.08 4 0.32

Innovation 0.04 3 0.12

Customer Oriented 0.02 3 0.06

Qualified Work force 0.01 3 0.03

R & D 0.05 4 0.2

Business without Interest 0.02 3 0.06

Exporting 0.06 4 0.09

Weaknesses

Local Company 0.05 1 0.05Centralized Decisions 0.09 2 0.18

No Sales on Credit 0.06 2 0.12

High Price 0.05 2 0.1

Uncertain Economic & Political

Conditions

0.03 1 0.03

Market Demand 0.05 2 0.1

StrikerTerms And Conditions 0.03 1 0.03

Promotion 0.05 2 0.1

T tal 1 2.83


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ExternalFactor Evaluation

Key Strategic Factors Weights Ratings Weighted Scores

Opportunities

RawMaterial Availability 0.1 4 0.4

Market Capitalization 0.08 3 0.24

Diversification 0.07 2 0.14

Exports 0.07 3 0.21Haleeb Bottle 0.04 1 0.04

Credit Policy 0.06 2 0.12

JointVentures 0.06 3 0.18

Threats

New Entrants 0.08 3 0.24

Sales Tax 0.05 2 0.1

Changing Season 0.06 3 0.18Suppliers 0.07 3 0.21

Economic Conditions 0.05 2 0.1

Price Sensitive People 0.06 2 0.12

Gawala Milk 0.1 4 0.4

SmallT

argetM

arket 0.05 2 0.1


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Competitive Profile Matrix (CPM)

Critical Success Factors WeightRating Score Rating Score Rating Score

1 Research &

Development

0.08 3 0.24 3 0.24 4 0.32

2 Advertisement 0.09 3 0.24 4 0.36 3 0.27

3 Financial Position 0.09 3 0.27 3 0.27 3 0.27

4 Market Share 0.07 2 0.14 4 0.28 3 0.215 Product Quality 0.08 3 0.24 3 0.24 3 0.24

6 Price Competitiveness 0.11 3 0.33 3 0.24 2 0.22

7 Management 0.10 3 0.30 4 0.40 3 0.30

8 Global Expansion 0.08 3 0.24 4 0.32 3 0.24

9 Customer service 0.06 3 0.18 3 0.18 2 0.12

10 Sales And Distribution

Network

0.09 3 0.27 4 0.36 3 0.27

11 Production Capacity 0.07 2 0.14 3 0.21 4 0.28

12 Alliances 0.08 3 0.24 4 0.32 3 0.24

Total 1.0 2.76 3.51 2.98


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WAQAS AZIZ


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KEY SUCCESS FACTORS

Research & DevelopmentFinancial Position

Market Share

Product QualityPrice Competitiveness

Management

Global Expansion

Customer serviceNetwork Sales And Distribution

Production Capacity

Alliances


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SPACE MATRIX


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SPACE MATRIX


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SPACE MATRIX


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SPACE MATRIX

our company should pursue an aggressive

strategy. Our company has a strong

competitive position it the market with rapid

growth. It needs to use its internal strengths to

develop a market penetration and market

development strategy.


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BCG Matrix Model

Division Revenues

Percent

Revenues Profits

Percent

Profits

Percent

Market

Value

Percent

Growth

Rate

Olpers $4500 49.90% $2000 41.62% 60 +8

Olwell TVC $2550 24.87% $1500 31.21% 25 -6

Tarang $3200 31.21% $1305 27.18% 35 +4

Total = $10250 100% 4805 100% .. ..


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Division wise data forEngro foods BCG

Matrix


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Internal External (IE)Matrix


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Internal External (IE)Matrix

Score from the EFE matrix -2.75- this scoreis plotted on the y-axis

Score from the IFE matrix -2.83- plotted on

the x-axis As blue lines indicate

This IE matrix for Engro foods tells us that ourcompany should hold and maintain its

position. The company should pursuestrategies focused on increasing marketpenetration and product development


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Grand Strategy Matrix forEngro foods


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QSPM Matrix OFEngro foods


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QSPM Matrix OFEngro foods

we came to a conclusion that Expansioninternally a is a better option. This is given

by the Sum Total Attractiveness Scorefigure. The expansion strategy yields higherscore than the acquiring of competingcompany. The acquisition strategy has ascore of 2.75 in the QSPM shown abovewhereas the internal expansion strategy hasa smaller score of 2.78


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ALMAS OMER

FINANCIAL RATIO


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FINANCIAL RATIO

ANALYSIS

Liquidity Ratios


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Leverage Ratios


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Activity Ratios


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Profitability Ratios


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SUGGESTIONS

The co-ordination between different departments of EFL should be improved it willlessen the bureaucratic cost and increase the efficiency of the company.

The activities like customer satisfaction day should be performed on regular basis

so the company should know the feedback and satisfaction level of customers

regarding the product and the image of the company.

The shopkeeper complains that EFL is not providing replacement for the expired

products, EFL should provide proper replacement to the shopkeeper to enhance the

image of the company, and create better working relations with such an important

stakeholders.

EFL has shifted to branding concept but it really has not adopted it fully, for smoother working of the different brands, the sales teams should merged with

respective brand management.

There is no check on the performance of the distributor, and this has led to huge

problems in the delivery of many products in some areas of the city


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SUGGESTIONS

They should also start to manufacture powder milk in order to

meet the domestic demand

Explore the market potential in a way, so that it can utilize its

full capacity in order to gain economies of scale in the

production.

Develop theMKT program that distinguishes the

characteristics of existing available substitutes to their highly

quality & hygiene oriented product.

Develop an integrated awareness plan in order to aware thepeople about the quality of the UHT milk as compared to other

pasteurized or loose/fresh milk.


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THANKS

"Whatever you can do, or dream you can, begin it. Boldness has

genius, magic, and power in it."--Johann Wolfgang Von Goethe

Date post:	06-Apr-2018
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40900985 Slides of Engro Foods

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