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strategic mamangement project on Haleeb foods

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Page 1: strategic mamangement project on  Haleeb foods

Executive summary

Haleeb Foods was established in 1983. Since then it has continued to provide quality products to its customers with products and packaging innovations. Haleeb is Pakistan’s number 1 and fastest growing food company. The company is trying their level best to differentiate themselves from other local companies and trying to win the competition in juice industry by adopting the modern trends and technologies in both operational fields as well as in marketing of their products.

This project report covers the broad area of impacts of controllable and uncontrollable variables in remote environment for the company, like economic boom or slump, segmentation on the basis of cultural likings and disliking of the consumers along with the social set up and their purchase behavior, food laws, taxation, import duties and the technological advancements. This report also provides the information how these variables pose threats and offer opportunities for the company and how the company should neutralize threats and exploits opportunities.

An important part of this project report comprises the market situation in which Haleeb is competing. Market acceptability of its products and the upcoming trends regarding to juices and drinks are also discussed. A detailed information about competitors like Nestle which is also the market leader and Shezan, and how they are affecting the company is also provided. An overview of distribution system and criteria of Haleeb in case of juices. A brief description of

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the company’s marketing, non marketing and management’s capability is given which tells us about the company’s internal strengths and weaknesses.

Then comes the most important portion of the company’s operations, which is the strategic management of marketing mix I-e 4Ps. A comprehensive detail is provided about the company’s strategies devised to maintain and develop the product line (juices), strategies to set and quote the prices, their distribution patterns and logistics. The image Haleeb wants to develop in the minds of their customer and the extent to which they are succeeded through their promotional campaigns is explained in this report.

The future expectation and objectives about the company’s financial position for next few years and the ratio analysis helps us to conduct the budgeting for the company. An additional portion of this report including the swot analysis, twos matrix, CPM, QSPM and others explain the strategic position of the company.

Haleeb Foods has built yet another plant in Rahim Yar Khan whose purpose is to provide Haleeb’s quality products to maximum number of consumers. And a plan to extend their product line in case of juices and has an intention to introduce new flavors of pure juices, nectars and juice drinks.

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Introduction of HFL:

HFL is now one of the fastest growing packaged food companies in Pakistan with an annual turnover of Rs. 9.2 Billion (F2006). It is a private limited company. It started commercial production in July 1987. Due to consistently superior performance, it has achieved undisputed leadership in the liquid packaged milk category with a market share of over 52%. HFL has a very strong brand portfolio consisting of dairy as well as non-dairy products.

Haleeb Foods has segmented its product portfolio in 3 leading brands including Haleeb, Candia and Tropico. Haleeb is the flagship brand of the company. Haleeb UHT Milk is available in 5 Sku’s of Tetrapak packaging. Due to its strong positioning of the thickest milk for best tea, it has the highest top of mind awareness and penetration in the dairy industry of Pakistan. In order to increase consumer and trade penetration of the brand, it is also available in Tetra Fino Packaging under the brand extension of Haleeb Dairy Queen.

Haleeb has also progressively diversified from UHT Milk to other product categories as well. These product line extensions include Haleeb Butter, Haleeb Yogurt, Haleeb Cream, Haleeb Labban (Drinking Yogurt), Haleeb Asli Desi ghee (Butter Oil), Haleeb Funday Juice Drink, Haleeb Skimz (skimmed milk), Haleeb N'Rish Full Cream Milk Powder & Haleeb Good day Pure Juices. Haleeb Good day is the only range of 100% pure juices in the country with a variety of 6 pure juice flavors.

Haleeb Foods, having a Franchise agreement with Cadillac France, launched Candia Double Sterilized Milk in bottle format in April 1999. Candia is also available in the Candia Classic variant which is positioned for Tea. Another recent initiative is Candia Candy Up, which is flavored milk for children.

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HFL has one of the largest nation-wide distribution networks delivering high quality products, even in the remote areas of Pakistan. With a network of +1100 distributors the company ensures that the product range is available in all the urban and semi urban areas of Pakistan. Furthermore, concerted efforts are being made to develop the rural market as well.

HFL has an efficient and resourceful Export department, which has successfully tapped opportunities in foreign markets including Korea, Hong Kong, USA, UK, China, Afghanistan, Bangladesh and the Middle East.

In order to provide best quality products to its consumers, HFL has a well-developed supply chain infrastructure. It has heavily invested in a vast network of company operated milk collection centers across the country. HFL has a strict and stringent quality policy regarding intake of raw milk. It is the only company that conducts 21 rigorous quality tests to ensure that only fresh milk of the highest quality is accepted at the plant premises. These internationally recognized tests are used to check for: a) adulteration, b) microbiological contamination and c) adequacy of nutritional contents. Further, Haleeb Foods is the only food company in Pakistan that has the following international certifications of quality and prestige:

HACCP (in process controls for safer products)

ISO 9001 – 2000 (better quality for greater customer satisfaction)

ISO 14001 (environment-friendly operations)

HFL believes in using cutting edge processing and packaging technologies to meet consumer expectations of hygienic and high quality food products. It has more than 30 Tetra machines for its UHT milk brands and 5 UHT units

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with a capacity of producing more than 1 Million Liters of Milk everyday. Keeping in view the volume potential and increasing growth trend of the market, the company has recently inaugurated a second independent UHT plant at Rahim Yar Khan.

Haleeb Foods has a highly professional management team with a progressive operating style. The management team comprises of highly seasoned professionals with diverse global experience of managing and developing brands. It can lay claim to be one of the very few Pakistani organizations, which are truly following the model adopted by globally successfully corporations, with clearly defined roles for shareholders and the management team.

The company takes pride in being a model national organization delivering international quality products and higher value for money to its consumers. The management team at HFL strongly believes that Pakistan offers enormous potential for food business due to a large consumer base, high acceptance of packaged food, and a growing urban middle class consumer segment.

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History :

Haleeb Foods Ltd. was incorporated on July 1st,

1984 with a capital of Rs. 46 Million under the name of Chaudhry Dairies Limited

which was renamed as CDL Foods Limited and now it is known to be as Haleeb

Foods Limited. At that time it had the capacity of producing 80,000 / liters of

milk per day having total area of 32 acres. Initially 150 people were employed at

the plant. The production process started with UHT liquid milk. The liquid milk

was the first product launched in the market, it started its operation in 1985 at

that time 20 other dairy plants were also coming in, and all those including

MILKPAK were using obsolete technology that was used in EUROPE. Haleeb

Plant was the only plant based on the latest technology and the basic idea behind

that were particularly dairy foods products. Haleeb is one brand that is toady

known everywhere.

From November 1989 till December 1991 Haleeb had a joint venture with fries

land Frico Domo of Netherlands. This joint was amicably dissolved on account of

FFD's change in management in their global strategy. Today as an ISO 9002

certified company, Haleeb is the dominant market leader of UHT milk in

Pakistan by capturing 52 % share.

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Franchise agreement with Canada, a market leader in the liquid milk market

in France, was assigned in December 1998. Under this arrangement, the

company launched Candia range of value added liquid milk product and also

have assess to latest production, technical and marketing know how.

Initially company launched different products but some of them could

not become successful. As the company's core concern is quality

eventually company abandoned products that were not according to

the market needs. In 2002 the company contributed 54% to the

country's packed milk market.

Haleeb Foods was established in 1986 as a private limited company and its first product was Haleeb milk. Since then, it has continued to provide quality products to its consumers with product and packaging innovations. Other products and their dates of launch are as follows

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Year of Launch of the Products:

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Information about Haleeb Foods

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1997    Haleeb Asli Desi Ghee 

1998   Haleeb Cream, Candia Skimz Milk Powder

1999   Candia Milk, Candia Skimz Liquid Milk

2000   Tropico Juice Drink, Haleeb Dairy Queen

2001   Haleeb N'rish Instant Full Cream Milk Powder

2002  Haleeb N'rish Fortified Instant Full Cream Milk Powder

2003   Candia Tea Max Dairy Whitener, Haleeb Butter, Haleeb Plain Yogurt,   Haleeb Lassi Drink

2004  Haleeb Good Day Pure Juice, Haleeb Fun Day Juice Drink, Candia   Candy'Up Flavoured Milk

2005  Haleeb Cream With Honey, Haleeb Tea Max with Cardamom, Haleeb   Labban, Haleeb Good Day(Mix Fruit, Red Grapes, Mango Pineapple)

2006  Haleeb Reshmi Pack, Candia Classic, Skimz Pouch, Tropico Nectar

2007   Haleeb Cheddar Cheese

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Legal Representative/Business Owner:

Mr. Suleman Daud

Board of Directors:

Mr. Ilyas Chaudhry

Mr.Israr Ahmed

Mian Zahid Saeed

Mian Muhammad Amjad

Sheikh Muhammad Rasheed

Major General (Retd.) Shafiq Ahmad

Mrs.Nasreen Ilyas

Mrs. Zarina Saeed

Mr. Muhammad Ishtiaq Khan

Chairman:

Mr. Ilyas Chaudhry

Managing Director:

Mr. Israr Ahmed

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Auditors:

Hameed Chaudhry and company

(Chaudhry Accountants)

Legal Advisor:

Hassan and Hassan Advocates

Marketing Research:

Aftab Associates

Advertising Agency:

Paragon Evernew Concepts

Trade & Market:

Main Markets: Pakistan, North America, South

America, Western Europe, Eastern

Europe, Eastern Asia, Southeast

Asia, Mid East, Africa, Oceania

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Work Force:

It has a team of 3000 exceptional individuals to support

its operations, out of which

900 are permanent employees

600 are on contract and

1500 are of 3rd party

Market Share:

Haleeb foods is Serving 70% of the nation of Pakistan.

Area:

The total premises area of Haleeb foods Rahim Yar Khan

Factory is about 72 acres. Plant & offices are situated at 20

acres. The remaining 52 acres are vacant and for expentation

purpose.

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Distribution Channels:

Haleeb foods is not directly selling the products. It has

distribution channels. Firstly Haleeb foods supply their

products to their distribution channels and then products

delivered to the customers.

Position of Haleeb foods:

Haleeb foods, the largest dairy company in Pakistan.

The company also operates as a franchise of Candia Cedilac

of France.

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Competitors:

Haleeb foods competitors are:

Nestle

Good Milk

Olpers

Shehzan

Location of Offices & Factory:

Head Office:

135 ferozpur road Lahore 5460 Pakistan

Phone +92 42 111 135 135

Fax +92 42 759 0376

Regional Offices:

Lahore,

Rawalpindi,

Karachi,

Peshawar,

Quetta,

Rahim Yar Khan, Dubai.

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Location of Factory:

There are two plants of Haleeb foods

i. 62-km Multan road Lahore, Near Bhai Pheru

ii. 22-km kLP road R.Y.Khan

International Certification:

Haleeb Foods is the only food company in Pakistan that

has the following international certifications of quality and

prestige:

HACCP (in process controls for safer products)

ISO 9002 (better quality for greater customer

satisfaction)

ISO 14000 (environment-friendly operations)

Haleeb’s Policy:

Build branded food business to improve quality of life by

offering tasty, sage, hygienically processed, and affordable,

highly nutritional food products through environment

friendly processes to our customers while maximizing

stake holders' value.

Meet the requirement of all relevant legislation and

regulation related to consumer satisfaction & safety,

environment and other applicable laws etc

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To prevent pollution through controlling levels of harmful

emission, effluents and other wastes.

Contribute to safe and healthy environment for our

country.

Promote mutual trust with customers, suppliers,

employees, shareholders and community.

Provide all the necessary resources for the continual

improvement in quality, safety of our products, processes

and environment.

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GM Finance sheikh Shahid Mohsin)

HRD Manager (Omer Hassan Janjua)

AM ER PersonnalBhai Pheru

(Alam Zaman Khan)

Assistant ManagerHead Office

(Tanzeela Rafique)

AM ER PersonnalRahim Yar Khan

(Ali Wahab)

HR Manager(Main umer Saleem

Baber)

Head of Dept.

hj

(Asif Habib)

O rgan gram of Human Resource Department

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BRAND PORTFOLIO OF HALEEB FOODS LTD

A Haleeb food is a customer oriented organization so it is manufacturing the products for every kind of consumers. Haleeb foods have a very rich brand portfolio with national and international brands. In order to provide their customers the wide range of products Haleeb Foods Ltd. is using every kind of management strategies like it was having a merger and franchise with two foreign companies.

One of the core competencies of Haleeb foods is their variety of products that they are using branding strategies in order to compete with rivals of dairy products, multi branding, brand extension and line extension. The wide range of products of Haleeb foods is the major contribution towards the success of the company.

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Manufacturing process at Haleeb Foods

Haleeb milk is not actually made but it is processed

milk. We collect raw milk from approved dairy farms and

process it ensuring the highest standards. Some people think

that perhaps Haleeb milk is made from chemicals or

synthetically but this is not true.

Following steps are including in the process of Haleeb Milk.

1. Collection of raw milk

2. Testing milk at the plant reception

3. Pasteurization

4. Standardization

5. Homogenization

6. Sterilization

7. Ultra Heat Treatment (UHT)

8. Packing

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PROPOSED VISION STATEMENT

It is our vision to be the best and leading provider of food products in Pakistan and among the top ten food companies in the world, by continually challenging present conventions and always staying a step ahead of the competition.

PROPOSED MISSION STATEMENT

It is our mission to be the number one food company in Pakistan by providing our customers with the highest product quality in terms of taste, experience, and satisfaction. We will ensure this through an unwavering dedication to the continuous development of our products and processes ensuring that we remain best in class. We will strive to hire the most competent and dedicated employees whose work ethic will set the standard in the industry. We will be paymasters, as we strongly believe that human resource is the only asset that truly appreciates over time. We will also be a responsible social corporate citizen, and strive to enhance the quality of life in the markets we serve.

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External environment – remote

environment

Economic forces

Scenario

U Inflation & Interest Rate:

Now in Pakistan inflation rate is almost 9% so if increase in

inflation rate then increase in prices of HALEEB JUICES

but if in Pakistan economy deflation when no decrease or

effect on prices of HALEEB JUICES. About interest rate

HALEED FOODS has own equity so no pay any interest.

Personal Saving Rate:

Personal saving rate of HALEEB is 5%

Disposable & Discretionary Income:

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Disposable & Discretionary Income of HALEEB is 95%.

Business Saving Rate:

Business Saving Rate of HALEEB is 10%.

Energy Availability & Cost:

Energy is easily available and cost on energy for HALEEB Rs.50m.

Budget Deficit OR Surplus:

There is no deficit but 8% surplus of HALEEB.

Rate of risk:

For HALEEB FOODS Rate of risk is 5%.

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Overall HALEEB FOODS business cycle:

B U S I N E S L I F E C Y C L E

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Implications

Opportuniti Rati Threats RatiHigh market size 5 New rivals 5Low tax rate 2 Strong competition 3Economic 3 Increasing rate of 4

Rating: 5-point scale degree of significance and for likelihood of occurrence: ‘extremely significant’ (5), ‘quite

to highly significant’ (4), ‘significant’ (3), ‘reasonably significant’ (2) and ‘not very significant’ (1).Probability of occurrence: Ranging from ‘high probability of occurrence’ (5) to ‘not likely to occur in this time horizon’ (1). For example a rating of 5–3 represents an extremely significant opportunity or threat that has a reasonable likelihood of occurrence.

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#

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Porter’s five Model

1) Threats of new entrants:

There are following barriers of entry for new entrant foe juices in market.

� ·Accesses to distribution channels are very high form all companies exist in market.

� ·High capital requirement for new company to enter in market due to high competition

� · Product differentiation is good feature from all companies which is also a barrier for new comers.

2) Bargaining Power of supplier:

Suppliers of the raw material of juices specially of Plump of fruits are powerful in following points:

They are dominated because they are few numbers. Their product is very important input of Haleeb juices.

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Supplier product has high switching cost for Haleeb Food Company.

Supplier of Haleeb juices plump has no substitude

3) Bargaining Power of buyer:

There are in following point Haleeb food company is strong

� Haleeb present the threat to supplier of backward integration.� Haleeb food purchase plump of different juices from different

companies so Haleeb purchases are more as compare to one

supplier.

4)Threats of substitude products:

There is only one threat for juices of Haleeb in substitude products that is cold drinks in form of Pepsi and coca cola

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Pest Analysis:

POLITICAL CONDITIONS: The political conditions are not very stable in

the country, but this does not directly influence the trends and spending patterns

of the customers. There are no restrictions or barriers on the growth of this

industry. So the political conditions are favorable fir this market because food and

dairy chain products are consumer goods and they have to purchase it in any

condition.

ECONOMICAL CONDITIONS:

The economical conditions are not very favorable and the economy is facing

problems, but it is nit directly influencing buying power of consumers. If the

country is out of its current problems, it will further boost up growth of this

industry, as people will feel more secure economically and it will further

increase the attractiveness of the market.

SOCIAL CONDITIONS:

The social patterns are changing in the country, as the world is becoming a global

village, and mutually share and accept patterns. People are becoming more attractive

towards the branded products. It is becoming fashion and young generations as well as

the children are getting more attracted towards this industry. People are moving

towards branded food / dairy products due to hygienic reason.

TECHNOLOGICAL CONDITIONS:

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High technology is the basic requirement of dairy and food industry. The

companies that are using latest technology have some cost benefits over the

companies, which are not using high technology. The key to survival for

companies in this industry is using high technology for quality and cost

purposes.

SWOT Analysis

Strengths:

Haleeb Foods is the largest National Food Company.

Strong brand loyalty of customers of Haleeb company.

Haleeb Company has monopoly situation in different flavors of pure juices.

Haleeb foods have best distribution channel in all over the Pakistan.

Haleeb offer high quality products especially pure juices in market.

Management team of Haleeb Company is very strong and educated.

Haleeb foods have strong positioning in customer mind.

No 1 dairy company

Efficient Distribution networks through out the country

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Haleeb Food's products enjoy strong brand image and market pull.

Innovative and constantly growing product line.

Sales force is the major resource strength in terms of physical resources

of the company.

Marketing strategies established by the company are innovative and lure

customers.

Financial, marketing and sales strategies are formulated by gauging the

customer demands.

Periodic research carried out to judge market trends.

Highly sophisticated plant and equipment.

Qualified work force.

Focus on research and development.

First and the only dairy company in Pakistan to get ISO 9002 certification.

Weakness:

Less product awareness in customer mind. Packaging of juices product is not good, and not so much attractive. Haleeb company has very high prices in pure juices like apple,

pineapple, mix fruit, red grapes mango flavor. Haleeb Company conducts less promotional activities for its

juice products. Less display centers use for juices products in main shops of

different cities. Haleeb Foods Company has late recovery of claims.

Relatively a small and local company in comparison to its rivals.

Dependence on 3rd party for supply of milk.

No credit sales.

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Low sales margins due to highly value added products.

They cannot launch many of its expensive international brands due to

the lower income groups.

Selective investment due to uncertain economic and political

conditions.

Feasibility of new products needs to be analyzed, e.g. Candia

Drinking Yogurt was launched some years back but it failed because no

customer demand exist it.

The packing line installed for N'Rish has a higher capacity than the

actual demand of the product, resulting in higher overhead costs for

the product.

Inadequate marketing.

Low promotional activities.

Comparatively weak distribution system.

Opportunities:

There are a lot of untapped markets in different areas of Pakistan. The concentric diversification in different juices products. Backward integration can use in juice products of Haleeb Company. Haleeb Foods Company can become multinational and can

target different market of different countries.

Pakistan is the seventh largest producer of milk in the world with annual

output of over 22 billion liters.

There are substantial growth opportunities considering the average yield

of Pakistani animals at only 1,100 liters/annum as compared to 6,000

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liters/annum for animals in Europe and USA. There are nearly 20 million

milk producing animals in the country, mostly in Punjab (80%).

The overall milk market in Pakistan is 20 billion liters, out of which

processed milk contributes only 3 million liters. Haleeb Foods along with

other processed milk business contribute only 2% to this large market.

Haleeb Foods' has expanded its product range by launching milk in Tetra

Fino Packaging.

Credit policy can be adopted to increase sales.

HFL can export to others countries.

CDL has been changed to HFL, so this change in name can help them to

attract foreign customers.

HFL can go for related diversifications by producing pure juices and

flavored yogurt.

HFL can go for joint venture with other companies to attract the market

share.

Entering in to the market of baby cereals, which will help them in

increasing their revenue.

Launching cheese would also beneficial for them to create the brand awareness.

Threats:

There is strong competition in food products market. Different strategies adopted by competitors Nestle in juices products New product advancement by different competitors. Government policy changes and fluctuation in tax rates on food items.

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Imported tin juices are great threat for good day. Changes in Custom duties on plump.

Competition with Nestle, Engro Foods.

Effect of Seasonal ties upon sales.

Dependency on contractors for supply of milk.

Price fluctuations due to rupee devaluation as raw material are

imported.

The uncertainty of economic conditions poses a great threat.

The present economic crisis in the world, led to the withdrawal

of foreign management from the company and the investment has

come to a halt.

Price sensitive people.

Milk man (Gawalas) providing non branded milk in homes.

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Summary of Opportunities:

Significance of opportunity High Low

• Untapped market

o Concentric

41

High

Probability Of Occurrence

Low

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• Backward integration o To become

Untapped market and Demand of juices are the high opportunity for Haleeb and probability of occurrence is also very high so Haleeb juices sales can increases if it target the all market and demand is increase in market day by day and Haleeb also increase the demand and awareness of juices in market by best advertisement.

Concentric diversification is not the high opportunity but probability and occurrence is high because the Haleeb can increase sale by little change in the flavor of juices.

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Backward integration is the high opportunity foe Haleeb but probability of occurrence is low because it very difficult foe Haleeb to make its juices plump itself because Haleeb import the high quality of plump from different countries which it can’t prepare due to lack of technology.

To become multinational is very difficult because Nestle is the biggest competitor of Haleeb and Nestle is already a multinational company. In Pakistan Haleeb face competition only due to nestle so it is very difficult for Haleeb to compete the Nestle at international level.

Summary of threats:

Significance of threat High Low

Strong market

Competition• Low Switching

Cost

• Imported Tin juices o

Custom duties on

import of plump

Haleeb face strong competition in market of juices, for Good day nestle juices are big threat and for other all juices like funday and tropico shahzan, Maza and country juices are big threat. Nestle is the big and

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High

Probability Of Occurrence

Low

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strong competitor because Nestle is an international company and people mostly know about international company due to good quality.

There is not any huge difference in prices of different juices of the company so customer can any time select juice of different company which is threat for Haleeb Food Company.

The government of Pakistan changes the policies of tax on different commodities,

Imported tin juices are great threat for Haleeb juices especially for Good day because Haleeb offer good day in market with high quality and tin juices also focus on quality so there are competitor for each other.

Haleeb import plump of all juices from different countries Germany and France, Haleeb paid high custom duties on plump, so increase in custom duty can increase the cost of juices due to which prices of all juices increase which is not good for the company.

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Situation analysis – Internal capabilities

Non marketing capabilities

(Financial position, management and leadership, HRM, R&D, operations-production capabilities and supply, interfuntional coordination and responsiveness and competitive position)

REVIEW:

Many of the non marketing capabilities are strengths of the Haleeb food company due to which they are very successful at national level in many products especially in milk and its related products. R&D of Haleeb is very aggressive due to which new flavors of juices comes one after an other. Financial position is very strong all on all equity .The HRM is not working up to the mark. The interfunctional coordination is very strong and the management team is very cooperative.

IMPLICATIONS

Strengths Rating Weakness RatingFinancial 4 HRM 3R&D

Interfunctional

3

3Competitive

position2

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Management

Production capability

5

3

Note Rating is based on a 5-point scale degree of significance and for likelihood of occurrence: ‘extremely significant’ (5), ‘quite to highly significant’ (4), ‘significant’ (3), ‘reasonably significant’ (2) and ‘not very significant’ (1).

The probability of occurrence ranges from ‘high probability of occurrence’ (5) to ‘not likely to occur in this time horizon’ (1). For example a rating of 5–3 represents an extremely significant opportunity or threat that has a reasonable likelihood of occurrence.

Marketing capabilities – Management

(Marketing organization, market intelligence, market planning and market control process)

REVIEW

Marketing department of the Haleeb food Company specially in juices is sufficient but not up to the requirement because for juices advertisement and promotional campaigns are conduct in different areas of Pakistan but in not all areas of Pakistan but marketing organization of Haleeb food is working

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well and market intelligence and marketing planning is very strong aspect of management of marketing.

IMPLICATIONS

Strengths Rating Weakness RatingMarket intelligence 4 Market control 3Market organization 3 Promotional

campaigns3

Organization 3Market planning 4

Note Rating is based on a 5-point scale degree of significance and for likelihood of occurrence: ‘extremely significant’ (5), ‘quite to highly significant’ (4), ‘significant’ (3), ‘reasonably significant’ (2) and ‘not very significant’ (1).

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The probability of occurrence ranges from ‘high probability of occurrence’ (5) to ‘not likely to occur in this time horizon’ (1). For example a rating of 5–3 represents an extremely significant opportunity or threat that has a reasonable likelihood of occurrence.

Internal factors evaluation (IFE)

Haleeb Foods Company

Weight Rating

Weighted

Internal Factors Score

STRENGTHS

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• Largest National food 0.05 4 0.2• Strong brand loyalty 0.10 4 0.4• Monopoly situation in 0.15 3 0.45• Product positioning 0.05 2 0.1• Strong distribution 0.10 4 0.4• High quality products 0.10 3 0.3• Strong management team 0.05 3 0.15

WEAKNESS0.05 3 0.15

• Not good packaging 0.10 2 0.2• Higher prices in pure 0.05 3 0.15• Low promotion activities 0.10 4 0.4• Less display centers 0.05 3 0.15• Late recovery of claims 0.05 2 0.1

Total weighted Score 1.00 3.15

The industry average is 3.5 so the IFES of the Haleeb Food company is not good in juices according to the average of the industry

External factors evaluation (EFE)

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Haleeb Foods Company

External FactorsWeight Rating

Weighted

OPPORTUNITIES

• Untapped market 0.20 4 0.8• Diversification in products 0.10 3 0.3• Backward integration 0.15 3 0.45• International markets 0.05 2 0.1

THREATS 0.10 3 0.3

• Strong competitor Nestle 0.15 4 0.6• Products advancement 0.05 3 0.15• Fluctuation in tax rates 0.05 2 0.1• Imported juices 0.05 2 0.1• Custom duties on plump 0.10 2 0.2

TOTAL 1.00 3.1

The industry average is 3.5 so the EFES of the Haleeb Food company is not good in juices according to the average of the industry.

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CPM (Competitive profile matrix)

Haleeb Nestle Shahzan

Critical Success

Weight

Rating

Score Rating

Score Rating

ScoreFactor

Product 0.20 3 0.6 4 0.8 2 0.4Prices 0.10 4 0.4 3 0.3 3 0.3Advertiseme 0.20 3 0.6 4 0.8 3 0.6Positioning 0.15 2 0.3 4 0.6 3 0.45

Financial 0.10 4 0.4 4 0.4 2 0.2Customer 0.15 3 0.45 3 0.45 4 0.6Market share 0.10 3 0.3 4 0.4 3 0.3

Total 1.00 3.05 3.75 2.85

In the CPM the industry average take as 3.50, so the Nestle performing is the best as compared to their competitors in juices.

Haleeb lunched its juices two years ago but their performance is good and it is in second number in field of juices due to their pure and nectar juices with high quality and reasonable prices.

Shahzan only deal in nectar juices and target the lower income group of people and it all sale is due to customer loyalty.

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SOWT MATRIX OF HALEEB FOOD

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STRENTHS(S)

Haleeb offer high quality products especially pure juices in market.

Haleeb Foods is the largest National Food Company.

Management team of Haleeb Company is very strong and educated.

Haleeb foods have strong positioning in customer mind.

Haleeb foods have best distribution channel in all over the Pakistan.

WEAKNESS(W)

Packaging of juices product is not good, and not so much attractive.

Haleeb company has very high prices in pure juices.

Less promotional activities for its juice products.

Less display centers use for juices products in main shops of different cities.

Less product awareness in customer

OPPERTUNITIES(O)

There are a lot of untapped markets in different areas of Pakistan.

The concentric diversification in different juices products.

Backward integration can use in juice products

It can become multinational and can target different market of different countries.

Usage rate of juices is

increasing

THREATS(T)

There is strong competition in food products market.

Different strategies adopted by 48

SO strategies. WO strategies.

Extensive marketing

campaign.

(W1,O1)

Market development

(S1,O1)

Product development

(S4,O5)

ST strategies.

Positioning as quality

product among consumer.

(S1,T1)

Acquiring the local

competitors(S5,T3)

WT strategies.

Increase budget on

packaging &

promotional activities

(W1,T1)

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competitors Nestle in juices products New product advancement by different

competitors.

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Quantitative Strategic

Planning Matrix(QSPM)

Haleeb Food Company

Weight

Product development

Market developmentFactor analysis AS TAS AS TAS

USTRENGTHU

• Largest National 0.05 4 0.20 4 0.20• Strong brand loyalty 0.10 4 0.40 3 0.30• Monopoly situation 0.15 2 0.30 3 0.45

juices 0.05 4 0.20 2 0.10

• Strong distribution 0.10 4 0.40 3 0.30• High quality 0.10 4 0.40 4 0.40• Strong management team

0.05 3 0.15 4 0.20

WEAKNESS 0.05 3 0.15 2 0.10

mind 0.10 - - - -

• Higher prices in 0.05 2 0.10 2 0.10• Low promotion 0.10 4 0.40 4 0.40• Less display centers 0.05 3 0.15 2 0.10• Late recovery of claims

0.05 - - - -

OPPORTUNITIES0.20 2 0.40 4 0.80

• Diversification in 0.10 - - - -• Backward 0.15 3 0.45 4 0.60• International markets

0.05 1 0.05 4 0.20

THREATS0.10 3 0.30 3 0.30

• Strong competitor Nestle in

0.15 4 0.60 4 0.60

• Products 0.05 3 0.15 4 0.20• Fluctuation in tax 0.05 - - - -• Imported juices 0.05 4 0.20 3 0.15• Custom duties on plump

0.10 - - - -

Total 5 5.5

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According to this result Haleeb Food Company goes for Market development in different remote areas of Pakistan, because many markets in Pakistan are untapped if Haleeb target all these market it can increase its sales and can gain a lot of profits.

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FINANCIAL HIGHLIGHTS (RS,000)

2007 2008Trading Results

Sales-net 7,086,175 5,941,780

Gross Profit 1,090,860 870,368Operating Profit 544,711 417,773Profit Before Tax 486,114 380,673Profit After Tax 345,697 232,888

Balance Sheet

Shareholders’ Funds

1,060,133 755,620

Reserves 275,000 275,000Operating Fixed 1,071,235 926,645Net Working 46,189 (59,748)Current Assets 711,306 561,179

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FINANCIAL ANALYSIS

2007

2008Sales Growth % 19.26 2

6.5Gross Profit Margin % 15.39 1

4.6Operating Profit Ratio % 7.69 7

.03Profit Before Tax % 6.86 6

.41Profit After Tax % 4.88 3

.92Pretax Profit Growth % 27.70 2

3.0Net Profit Growth % 48.44 2

1.3*Current Ratio 1.07 0

.90Fixed Assets Tunover Times 6.61 6

.41Return On Equity % 32.6

130.8

Return On Total Assets % 15.73

14.0

* while calculating Net Working Capital and Current Ratio , Current portion of liabilities against assets subject to finance lease is not accounted for.

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Segment Financial and Market

Attractiveness

Estimated

(Rs million) GOOD DAY TROPICO FUNDAYSales 1 2 5 3

Variable costs 2 5 8 6

Contribution margin

3 10 7

Market share3

18 22 11

Total segment sales 2

%5% 1%

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Segment position:

Medium LowBusiness strength High

Attractiveness Medium Medium Medium

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SALES FORECASTING

Total population of = 162419946

Target people having age 5-abovePeople having age above = 90 % of

= 146177951.4People who like other juices

= 75 % of 162419946= 109633463.6

People who willing to drink = 36544489

Price range = 10 + 25 + 65

Average price = Rs.33Avg Quantity = 2Sales = 33 * 2 *

36544489= Rs.2411936274

PROJECTED INCOME STATEMENT

RsSales = 2411936274Cost of goods sold = 2098360250Gross profit = 313576024Administration Expenses = (34691250)Distribution cost = (81477000)Operating profit = 197407774Other income = 2591400Profit before interest

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and taxes = 199999174

Tax = 4914595Net profit = 150853

224

From all the above data we find out that there is a lot of demand for Haleeb juices but they are spending low as per requirement . As far as promotional activities are concerned they have introduced many product as concentric and conglomerate diversification but when we talk about Haleeb to a common person he knows that they are offereing just milk at market place , he does not know that they have introduced other products like juices , ghee, rita , powder milk etc.

So in order to remain competitive at market place they have to focus extensive marketing campaigns so that they can capture potential customer. In order to attain and retain the existing customer they have to offer discounts , occasional offers etc.

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A. ACTIVITIES TO BE IMPLEMENTED

Sales representatives target all the untapped markets and niches, by using current products. Revenue objectivity should be given high attention ,

and it should increase by 45% every year (for the next 3 years.)

Product line should be extended by adding new flavors of juices. Related and unrelated diversification in the form of

eatables , made up of fruit extracts and food pulp. Role of R&D should be increased to help

a) target markets most effectively

b) to get knowledge about consumer’s table and preferences.

More budget and resources should be allocated to advertisement and sales promotion.

B. HOW IMPLEMENTATION TO BE DONE

Develop desirable skills in the employees who are assigned the basics of target implemented these skills may include.

The ability of sales force, personnel in finance department ,expert in R&D etc , should first understand , the nature of the tasks or task’s importance fot the company.

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To increase the ability to put right people on right jobs .i.e the person of finance dept. should not be given the tasks of R&D , which is highly sensitive and innovational field.

C. RESPONSIBILITIES FOR IMPLEMENTATION

Create the effectiveness of the personnel to focus on critical aspects of their job.

Other remedies to enhance implementation includes

1. Organizational DesignOrganizational design should consist of

multifunctional teams, including at least 1 member of each department to solve the problem or to achieve the targets.

2. IncentivesVarious rewards may help achieve successful

implementation. For Example in case of Haleeb juices, bonuses or commission should be given to members of sales force/personal selling teams who sales more units of juice packets.

3. CommunicationRapid and accurate movement of information should

be confirmed .To do so efficient and effective feed back systems should be introduced. For example in case of Haleeb the smooth flow of information should be confirmed from a single member of sales force / distributors up to the brand manager and vice versa.

D. TIME AND LOCATION OF IMPLEMENTATION

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Proper time period should be given for the start and end of the task and each personnel related to that specific job should be given complete information about the geographic area of his/her sales and the volume to be sold in case o personal selling and sale promotion.(the balanced score board technique may be adopted)

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They get comprehensive information from all the departments carefully and its analysis is conducted with great care . The results are analyzed with great emphasis on the company’s behalf. If there appears any deficit then revise their strategies implement them and then get the results and if there are no loopholes found they continue to implement that strategy for the specified period of time. This evaluation conduct twice a year.

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S t r a t e g i c M a r k e t i n g E v a l u a t i o a n d C o n t r o l

Conduct strategic marketing audit

Select performance

criteria, measures, and metrics

Obtain and

analyze information

Assess perform and take necessary action

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CURRENT COMPETITIVE POSITION

Haleeb competitive position is quite superior to other competitors. haleeb is having the major threat of local brands because they are prospering day by day in the market is the major competitor in the market for Bata because they took advantage from Haleeb’s strategies rather than using their own strategies. The relative market share of Haleeb is 18.3%, MAZA is4.17%, Shezan 12.5% and the local competitors are having relatively larger share than the other competitors which is 50%.

WHAT SHOULD COMPETITIVE POSITION BE IN 3 YEARS TIME?

In the next three years Haleeb competitive position should be stronger, company seems to have more quality features and better products. There will be more improvement in current products but company is also willing to enter in some new projects. They should go for more innovations and fashionable products must be introduced in ladies.They must increase their relative market share with aggressive sales and promotion. More advertising campaigns should be made to augment it in the coming three years.

WHAT ARE THE STRATEGIC IMPLICATIONS – IN TERMS OF OUR EXISTING AND POTENTIAL NEW PRODUCTS AND MARKETS? THAT IS, HOW WILL WE GROW THE BUSINESS?

o Haleeb should introduce more innovative products in

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the market to increase its demand. Those innovations must be according to the customer’s demands and their preferences.

o Whenever Bata open its new distribution centre Servis take advantage from its strategies and open a store in front of their store, Haleeb should take steps to overcome this threat.

o Bata should gain the sustainable competitive advantage.

o Most of Bata’s wholesales were in the northern areas, when earth quake came it suddenly fall down. Bata should wind up wholesale from northern areas and should shift it towards the cities of Rawalpindi, Lahore and Hyderabad because more footwear units are located in these cities.

ESTIMATED REVENUE FROM EXISTING PRODUCTS IN EXISTING MARKETS (MARKET PENETRATION)

Market size (Value):

Current size:

$ 16 million

Year 2 Year 3

$ 18000000

$21000000

$23000000

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Current market share:

Projected market share

Year 1 Year 2

Year 3

(Via new strategies)65% 69% 73%

Estimated value of existing

Products in existing markets:

Year 1 Year 2

Year 3

150100.7$ 153102.7$ 156164.75$

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ESTIMATED POTENTIAL REVENUE FROM EXISTING PRODUCTS IN NEW MARKETS (MARKET DEVELOPMENT)*

Year 1 Year 2 Year 3

2311550$ 2357782$ 23194937$

ESTIMATED POTENTIAL REVENUE FROM NEW PRODUCTS IN EXISTING MARKETS (NEW PRODUCT DEVELOPMENT)*

Year 1 Year 2 Year 3

480322$ 489929$ 499727$

ESTIMATED POTENTIAL REVENUE FROM NEW PRODUCTS IN NEW MARKET SEGMENTS (RELATED DIVERSIFICATION) *

Year 1 Year 2 Year 3

60040$ 61241$ 62466$

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Conclusion

Haleeb Foods is well establish company which is

competing with multinational companies and has 70% market

share in dairy industries which makes it market leader. The

Haleeb Foods are trying their best to properly perform their

operations. They are following international standards like ISO

standerds and are using different tools to continuously improve

their operations. They are introduced new technology in their

production process first time in Pakistan. They are providing

quality products. There human recourse policies are also good.

The locations which they have selected for their operations are

beneficial for the collection of milk and distribution. There

layout helps to facilitate their employees, flow of information

and operations. But there are some short falls which they must

overcome.

The HFL Company has a very rich history and spread over the world, the study in this report specially the particular SPACE matrix tells us that HLF Company should pursue an aggressive strategy. HLF Company has a strong competitive position in the

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market with rapid growth. It needs to use its internal strengths to develop a market penetration and market development strategy. This includes focus on Water and Juices products, and catering to health consciousness of people through introduction of different coke flavor and maintaining basic coke flavor. Further company should integrate with other companies, acquisition of potential competitor businesses, innovation in branding and aggressive marketing strategy can bring long term profitability.

As a whole HFL is a good organization to work in but there are certain departments

that need improvements. It is surviving in the FMCG’s sector with some strengths and

weaknesses. I am of the view that if the management of HFL wants to show the same

results in the future that it should have to take some decisions before time, because in

the 21st century only those organizations can survive who are utilizing all their

resources efficiently and effectively.

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Recommendations:

Haleeb Foods Limited should also allocate a healthy budget for the

advertising of its products.

HR Department of HFL should introduce HRIS to increase the

efficiency of the company.

The co-operation among the different departments of HFL should also

improve it will lessen 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 about the feedback of the

customers regarding the products and image of the company.

The shopkeeper complains that HFL don’t provide replacement to the

expired products so they should provide proper replacements to the

shopkeepers to enhance the image of the company.

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Haleeb Foods Limited should improve its distribution system specially

the retailers are not happy with distribution of Haleeb Milk.

They should use latest technology for quality maintenance because

even now they are using manual based inspection.

They should try to maintain high quality which they are already

producing.

They should use Automated Storage and Retrieval System to minimize

the storage cost.

They should implement on Computer Integrated Manufacturing to be

the ware housing and shipping department computed aided.

They should use vision system in inspection.

Accommodation should be provided to the employees.

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