engro (s.m) presentation
TRANSCRIPT
Board of Directors' Meeting
TODAY December 2004
Engro Foods
Introduction
Engro Foods Vision Engro Foods will continue to make investments
aimed at impacting lives and delighting consumers each day, every day, in a multitude ways.
Mission To build food business to improve quality of life
by offering tasty, affordable and high nutritional products to our consumers while maximizing stakeholder’s value
Stage 1
Strategy formulation
EXTERNAL FACTOR ANALYSISKey Strategic Factors Weight Rating Weighted Score
OPPORTUNITIESTrend of cattle farming increase by 20% 0.3 3 0.9Competitor across town slow down their operations 0.1 4 0.4Diversification opportunities increased by 5% 0.05 1 0.05Reduction in Exports Restrictions 0.07 3 0.22Demand for UHT milk Growing by 9% 0.08 4 0.32Milk Consumptions Increased 0.1 3 0.3
THREATSNew Entrants 0.08 2 0.16Increment of Sales Tax 0.07 3 0.21Economic & Energy Conditions 0.05 3 0.15Fresh Milk market 0.05 2 0.1Small Target Market 0.05 2 0.1Total 1 2.91
Engro Foods
4= Superior 3=Responses above average 2= average response 1=poor response
INTERNAL FACTOR ANALYSISKey Strategic Factors Weight Rating Weighted Score
STRENGTHSBrand Image 0.08 4 0.32Growing Trend of Sales 0.03 2 0.06Market Share 0.05 3 0.15Distribution Channel 0.08 2 0.16Product Quality 0.07 3 0.21Innovation 0.04 3 0.12Customer Oriented 0.06 3 0.18Qualified Work force / Excellent Employee Moral 0.02 3 0.03
WEAKNESSESCentralized Decisions 0.17 2 0.34No Sales on Credit 0.21 2 0.42High Price 0.07 2 0.14Related Diversification 0.12 1 0.12Total 1 2.25
Engro Foods
4= Major Strength 3= Minor Strength 2= Minor Weakness 1=Major Weakness
COMPETITIVE PROFILE MATRIX (CPM)OLPERS NESTLE HALEEB
Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Research& Development 0.12 3 0.36 4 0.48 2 0.24
2 Financial Position 0.13 3 0.39 4 0.52 2 0.26
3 Market Share 0.09 4 0.36 3 0.27 1 0.09
4 Product Quality 0.08 3 0.24 3 0.24 2 0.16
5 Price Competitiveness 0.11 3 0.33 2 0.22 3 0.33
6 Management 0.12 3 0.36 4 0.48 2 0.20
7 Customer service 0.06 3 0.18 3 0.18 2 0.12
8 Sales And DistributionNetwork 0.09 2 0.18 4 0.36 2 0.18
9 Production Capacity 0.07 2 0.14 3 0.21 4 0.28
10 Customer Loyalty 0.13 3 0.39 4 0.32 1 0.13Total 1.0 2.93 3.28 1.99
SPACE MATRIX STRATEGIC MANAGEMENTFinancial Position
+7+6+5
Conservative +4 Aggressive+3+2+1
Competitive Position
Industry Position-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
-1-2
Defensive -3 Competitive-4-5-6-7
Stability Position
Y-Axis
INTERNAL STRENGTH POSITION EXTERNAL STRENGTH POSITIONCompetitive Position(CP) Industry Position(IP)
(Worst -7,Best -1)-1 Product Quality-1 Product Life Cycle-3 Market Share-2 Brand and image
Average Score =-1.75
(Worst +1,Best 7)+5 Barriers to entry+4 Growth Potential+4 Access to Financing+6 ConsolidationAverage Score =4.75
Financial Position (FP) Stability Position(SP)(Worst +1,Best +7)+5 ROA+5 Leverage+4 Leverage+6 Cash FlowAverage Score = 5
(Worst -6,Best -1)-2 Inflation -1 Technology-2 Demand Elasticity-4 TaxationAverage Score =-2.5
X-Axis
SPACE MATRIX STRATEGIC MANAGEMENT
Financial Position
+7+6+5 Aggressive
+4
2.5 +3 +2 +1
Industry Position-2 -1 +1 +2 +3 +4 +5 +6 +7
-1 6.5-2-3-4
CP = 1.75FP = 5SP = 2.5IP = 4.75
X- Axis1.75 + 4.75 =
6.5
Y- Axis-2.5 + 5 =
2.5
SPACE MATRIX STRATEGIC MANAGEMENT
BCG Matrix Model
1- Question mark ↑↓2- Star↑↑3- Cash Cows ↓↑4- Dogs ↓↓
Internal External (IE) Matrix
IGrow and Build
IIGrow and Build
IIIGrow and Build
IVGrow and Build
VGrow and Build
ENGRO
VIHarvest
VIIGrow and Build
VIIIHarvest
XIHarvest
Strong3 to 4
Average2 to 2.99
Weak1 to 1.99
Low1 to 1.99
Medium2 to 2.99
High3 to 4
IFE
EFE
Strategy Selection
Stage 2
Internal External Factor WeightDIVERSIFICATION (TARANG
POWDER) MARKET PENETRATION
Strengths AS TAS AS TAS
Brand Image 0.08 3.00 0.24 2.00 0.16Growing Trend of Sales 0.03 1.00 0.03 1.00 0.03
Market Share 0.05 3.00 0.15 1.00 0.05Distribution Channel 0.08 4.00 0.32 4.00 0.32
Product Quality 0.07 Innovation 0.04 1.00 0.24 1.00 0.24
Customer Oriented 0.06 Qualified Work force / Excellent Employee Moral 0.02 2.00 0.04 3.00 0.06
Weaknesses Centralized Decisions 0.17
No Sales on Credit 0.21 3.00 0.63 2.00 0.42High Price 0.07 4.00 0.28 4.00 0.28
Related Diversification 0.12 1.00
QSPM of Tarang
Opportunities Trend of cattle farming increase by 20% 0.3 1.00 0.30 3.00 0.90Competitor across town slow down their operations 0.10 3.00 0.30 3.00 0.30Diversification opportunities increased by 5% 0.05 4.00 0.20 1.00 0.05Reduction in Exports Restrictions 0.07 Demand for UHT milk Growing by 9% 0.08 1.00 0.08 4.00 0.32Milk Consumptions Increased 0.10 4.00 0.40 4.00 0.40Threats New Entrants 0.08 4.00 0.32 4.00 0.32 Increment of Sales Tax 0.07 2.00 0.14 3.00 0.21 Economic & Energy Conditions 0.05 4.00 0.2 3.00 0.15 Fresh Milk market 0.05 2.00 0.1 2.00 0.1 Small Target Market 0.05 Total 1.00 3.97 4.31
Internal External Factor WeightDIVERSIFICATION (TARANG
POWDER)MARKET
PENETRATION
AS TAS AS TAS
QSPM of Olper’sInternal External Factor Weight
MARKET DEVELOPMENT
PRODUCT DEVELOPMENT
Strength AS TAS AS TASBrand Image 0.08 2.00 0.16 1.00 0.08
Growing Trend of Sales 0.03 Market Share 0.05 2.00 0.10 1.00 0.05
Distribution Channel 0.08 4.00 0.32 2.00 0.16Product Quality 0.07
Innovation 0.04 2.00 0.08 4.00 0.16Customer Oriented 0.06 1.00 0.06 3.00 0.18
Qualified Work force / Excellent Employee Moral
0.02
Weakness Centralized Decisions 0.17
No Sales on Credit 0.21 2.00 0.42 1.00 0.21High Price 0.07
Related Diversification 0.12 1.00 0.12 1.00 0.12 1.00
QSPM of Olper’sInternal External Factor Weight
MARKET DEVELOPMENT
PRODUCT DEVELOPMENT
AS TAS AS TASOpportunities Trend of cattle farming increase by 20% 0.30 3.00 0.90 1.00 0.30
Competitor across town slow down their operations 0.10
4.00 0.40 1.00 0.10Diversification opportunities increased by 5% 0.05 Reduction in Exports Restrictions 0.07 4.00 0.28 2.00 0.24Demand for UHT milk Growing by 9% 0.08 3.00 0.24 2.00 0.16Milk Consumptions Increased 0.1 2.00 0.20 2.00 0.20Threats New Entrants 0.08 1.00 0.08 2.00 0.16 Economic & Energy Conditions 0.05 3.00 0.15 2.00 0.1 Increment of Sales Tax 0.07 Fresh Milk market 0.05 3.00 0.15 2.00 0.1 Small Target Market 0.05 Total 1.00 3.66 2.32
Stage 3
Strategy Implementation
SBU’s StructureCEO
Chief Finance officer
Chief operating
officer
Brand head of olpers
Brand head tarang
Brand head of omang
Brand head of omore
VP of HR VP of Marketing
Chief management
officer
Subordnate
VP of HR
VP of HR
VP of HR
Conclusion