GROUP MEMBERS

AMEERA JAHANGIR

HUMERA M HANIF

MADIHA RAZZAQUE

CEMENT INDUSTRY OF PAKISTAN

o All Pakistan Cement Manufacturer Association (APCMA) is a governing

body for cement industry.

APCMA plays a significant role in protecting the cement industry to the

governmentinrespect of formulation of governmentpoliciesfor the cement

industry.

INTRODUCTION

• Lucky cement was founded in 1994 by Mr. Abdul Razzaq Tabba.

• Lucky cement has been sponsored by one of the largest business group in Pakistan the Younus brothers (YB) group.

• Fulfills Customer Social Responsibility (CSR) by offering scholarships to students

• Donations for social welfare programs

BRANDS OF LUCKY CEMENT

VISION

We envision being the leader of the cement industry in Pakistan, identifying and capitalizing on new opportunities in the global market, contributing towards industrial progress and sustainable future, while being responsible corporate citizen

MISSION

Our mission is to be a premium cement manufacturer by building a professional organization, having state-of-the-art technology, identifying new prospects to reach globally and maintain service and quality standards to cater to the international construction needs with an environment-friendly approach.

EVALUATION OF MISSION STATEMENT

S.NO COMPONENTS AVAILABILITY1. Customer Yes 2. Product/service Yes 3. Market yes4. Technology Yes 5. Concern for survival

growth, profitability yes

6. Philosophy   No 7. Self-concept yes8. Concern for public image yes

9. Concern for employees No

PROPOSED VISION STATEMENT • “To transform lucky cement into a

model cement manufacturing company engaged in nation building through most efficient utilization of resources and optimally benefiting all stakeholders while enjoying public sector and goodwill in local and international market.”

•  

PROPOSED MISSION:-“OUR MISSION IS TO BE PERCEIVED BY OUR CUSTOMERS BY PROVIDING HIGHEST QUALITY OF CEMENT USING STATE OF THE ART TECHNOLOGY AND RETAINING

PERSONNEL OF EXCEPTIONAL ABILITY WHILE MAINTAINING ITS LEADING POSITION AIMS TO BUILD UP ON ITS PRESENT STATE OF PROFITABILITY WITH A VIEW TO MAXIMIZE SHAREHOLDERS WEALTH AND CARE FOR GLOBAL ENVIRONMENT.

INFORMATION GATHERED

OPPORTUNITIES• Upcoming national

building projects• Increasing demand for

cement in gulf region

• Market development and penetration

• Infrastructure development

• Population increase causing increase in real state

• Increase production to reduce cost and achieve economies of scale

• Global expansion• Undiscovered markets of

northern regions of Pakistan

THREATS• Governmental

regulations• Fluctuation in

currency rates• Price competition • Alliance opposition• Fluctuation in

demand• Political instability • Increase production

cost

STRENGTHS

• Financially strong

• High product quality

• Infrastructure near ports

• Highest export share

• High pay scale

• Large dealer network

• Employee development

WEAKNESSES

• High transportation cost• Low advertising and

exposure• Increasing general and

admin expense• Capital intensive

industry• Increased production

cost • Highly Localized and

regionalized markets • Low gratuity and PF

funds

THE STRATEGY-FORMULATION

ANALYTICAL FRAME-WORK

input stage

• Stage 1 summarizes the basic input information needed to formulate strategies.

•The information derived form IFE matrix , EFE matrix & CPM a provides basic input information for matching & decision stage.

•Good intuitive judgment is always needed in determining appropriate weights & ratings.

EXTERNAL FACTOR EVALUATION MATRIX (EFE) OPPORTUNITIES WEIGHTS RATINGS WEIGHTED

SCORE

Increase in infrastructure development

0.20 3 0.60

Unexploited markets in North Pakistan

0.05 3 0.15

Increase in population causing growth in housing sector

0.10 4 0.40

Global expansion 0.15 4 0.60Increase production to reduce cost and achieve economies of scale

0.07 3 0.21

THREATSGovernment regulations 0.15 2 0.30Fluctuation in market demand 0.08 1 0.08Price competition 0.10 3 0.30Political Instability 0.03 3 0.09Rising input costs 0.07 2 0.14TOTAL 1.00 2.872.87

EXTERNAL FACTOR EVALUATION MATRIX

(EFE) The most important factor to being successful in Lucky cement is the ‘global expansion’ indicated by the 0.15 weight.

The company has a great opportunity to increase the infrastructure development.

Unfortortunatly, the company is facing its major threat in government regulation .

The price competition is also the second major threat that the company is tackling with in the present situation.

Overall the weighted score is 2.87 which shows the company is above the industrial average.

COMPETITIVE PROFILE MATRIX (CPM)

LUCKY CEMENT DG KHAN CEMENT PIONEER CEMENT

CRITICAL SUCCESS FACTORS

WEIGHT RATING SCORE RATING SCORE RATING SCORE

Advertising 0.10 3 0.30 4 0.40 2 0.20

Product quality 0.20 4 0.80 3 0.60 3 0.60

Price competitiveness

0.15 4 0.60 4 0.60 4 0.60

Management 0.15 4 0.60 3 0.45 4 0.60

Financial position 0.15 4 0.60 2 0.30 2 0.30

Customer loyalty 0.10 3 0.30 2 0.20 3 0.30

Global expansion 0.10 2 0.20 1 0.10 1 0.10

Market share 0.05 3 0.15 2 0.10 2 0.10

TOTAL 1.00 3.5 2.75 2.80

COMPETITIVE PROFILE MATRIX (CPM)

The most critical success factor enjoying DG Khan is in advertising. Whereas, Lucky cement is weaker in advertising to its competitors. The most import factors for being successful in the organization are the product quality & the major strength lies in its financial position.

.However the market share of the company is far better to its competitors.

Overall the company is strongest as indicated the total weighted score of 3.5 .

INTERNAL FACTOR EVALUATION MATRIX (IFE)

STRENGTHS WEIGHT RATING WEIGHTED SCORE

Revenues increased 0.09 4 0.36High product quality 0.12 4 0.48High pay scale 0.10 3 0.30Highest export share 0.20 3 0.60Inventory turnover up 3.58 to 4.00 0.05 3 0.15

Larger dealer network 0.08 4 0.32Employee development 0.06 4 0.24 WEAKNESSES

     

Low advertising 0.05 2 0.20Increase in cost of production 0.10 1 0.10High transportation cost 0.07 1 0.07Highly regionalized and localized market.

0.08 1 0.08

TOTAL 1.00    2.90

INTERNAL FACTOR EVALUATION MATRIX (IFE)

The 12 key factors mentioned in the IFE Model shows the most attractive is its export share 7 its high product quality.

The major weakness of the company is high transportation cost & regionalized and localized market.

There is a room for improvement in the inventory turn-over.

Overall the weighted score is 2.90 which above than the average showing needs improvement in its internal policies & procedures.

PROJECTS - NEW & ONGOING

ANNOUNCEMENTS

The financial document for cement plant in DR Congo have been signed with multilaterals and International institutions in London on the 27th Nov 2014 & financial goals have been achieved.

The DR Congo Cement Plant is expected to be start commissioning from June 2016.It will open new door for growth & to implement the company future expansion plant outside Pakistan.

Pakistan leading & larger provider of quality cement organized Employee Volunteer Activity in collaboration with WWF Pakistan under the aim of social cause.

MATCHING STAGE

For the purpose of matching stage we made:

SWOT (Strength,weaknesses,opportunities,Threats) matrix

SPACE ( strategic position and action matrix) matrix

SWOT MATRIX

• The concept of determining strengths, weaknesses, opportunities, threats is the fundamental concept behind SWOT model

• To present the model in a more understandable way scholars came up with SWOT matrix

     

STRENGTHS

   

1. Financially strong2. High product quality3. Highest export share4. High pay scale

 

 

“SO “strategies 

 

“WO” strategies

    SETUP NEW FACTORIES

IN NORTHERN REGIONS OF PAKISTAN

(S1 , O1 )  INCREASED EXPORTS

TO GULF REGIONS ( S1 ,S2,O2)

   

   

BUILD UP EXPOSURE AND BETTER BRAND IMAGE THROUGH RIGHT PROMOTIONAL MIX

( W1 , O1 ,O2 )  DIVERSIFY IN GULF

REGION (W1,O2 )

 

 

WEAKNESSES 1. Low advertising and

exposure 2. Low gratuity and PF

funds 3. Increasing general and

administrative expenses

 

 OPPORTUNITIES

1. Upcoming national projects

2. Demand for cement in gulf region

3. Expansion in cement industry

 

 

“ST “ strategies 

 

“ WT “ strategies

  OVERCOMING

COMPETITOR’S PRESSURE THROUGH MORE QUALITY (S2,T2)

  RESOLVE ALLIANCE

OPPOSITION THROUGH TOP MANAGEMENT INVOLVEMENT (S1,T3)

 

  REDUCE GENERAL &

ADMIN EXPENSES TO COPE WITH NARROW COMPETITION

(W3,T2) 

CONSIDER EMPLOYEE’S PERKS TO AVOID HASSELS OF LABOUR UNIONS

(W2,T3)

 

THREATS 1. Govt regulation on slots2. Price competition 3. Opposition alliance

COMPETITIVE POSITION :- rates

Strong distribution network. -2

High quality products. -3

High export share. -4

Market development in Gulf -2

Govt. Project as DGP Army. -3

Total:- 14

SPACE MATRIX FINANCIAL POSITION :- RATING

Increase in net sales revenue 4 Continuous increase in stock value (PRs 130/=) 6 Increased Earning price share-EPS (PRs 2.1 per 5share) 5 Total: 15

INDUSTRIAL POSITION : Increasing competition in construction sector 4 Increasing domestic demand for cement i.e. 92% 5 Enhancement in the budget for Annual 5 Development Plan Increasing growth rate 3 Total: 17 STABILITY POSITION :- Allowance of subsidized cement imports & lesser rebates -4 Cut throat competition has created instability. -3 Currency rate difference has given much loss. -3 Increasing rate of inflation. -4 Rapid technological Change. -3 Total: -17

DIRECTIONAL VECTOR

COORDINATES

• X axis: (CA + IS) = -2.80 + 4.25 = 1.45

• Y axis: (ES + FS) = -3.40 + 5.00 = 1.60

FP

SP

DECISION STAGE

KEY FACTORSGLOBAL EXPANSION RIGHT PROMOTIONAL MIX

OPPORTUNITIES:- WEIGHTS AS TAS AS TAS

Upcoming national projects 0.15 1 0.15 4 0.60

Demand for cement in Gulf 0.20 4 0.80 1 0.20Expansion in industry due to house building loans by banks

0.10 1 0.20 4 0.40T

THREATS :-          Government regulations 0.15 4 0.60 3 0.45Price competition 0.10 2 0.20 3 0.30Alliance opposition 0.15 2 0.30 3 0.45Fluctuating currency rates 0.10 4 0.40 2 0.20  1.00        STRENGTHS:-          Strong financial position 0.15 3 0.45 4 0.60High product quality 0.12 3 0.36 4 0.48Highest export share 0.20 4 0.80 3 0.60High pay scale 0.10 3 0.30 4 0.40Larger dealer network 0.08 2 0.16 3 0.24WEAKNESSES :-          Low advertising 0.10 1 0.10 3 0.30Increasing Gen & Admi expenses

0.05 - - - -

Low gratuity & PF funds 0.10 1 0.10 3 0.30Increased production cost 0.10 1 0.10 4 0.40   1.00     5.92

5.92 5.2

QSPM -QUANTITATIVE STRARTGIC PLANNING MATRIX• This technique basically tells which strategy is the best for the

company.• The two alternative strategies considered are GLOBAL EXPANSION &

EXPOSURE THROUGH BRAND IMAGE & PROMOTIONAL MIX.• The demand for cement in gulf areas are high in gulf areas as

compare to domestic market.• The opportunity of expansion of cement industry due to house

building loan is more attractive with market penetraton strategy.• The major threat of governmental regulations ,price competition &

currency rate are associated withdraw both alternative strategies .• The strong financial position , high product quality & pay scale are

attractive to brand image whereas market share of 19% is highly attractive to capitalize the strengths.

• Advertising, gratuity fund & production cost should be reduced and convert in to the strength.

RECOMMENDATIONS

MARKET PENETRATION :- Because of number of construction projects have been initiated by the Government and the rising trend of house financing through banks and investment in real estate and property.

MARKET DEVELOPMENT :-The demand for cement has drastically increased in Gulf region. In order to cater to the increasing demand and to develop new markets, Lucky Cement should increase its exports towards Gulf region and also in other countries, hence developing a market in a new geographical segment.

o INCREASE PAY SCALE OF ITS EMPLOYESS :-

In comparison with its competing organizations still the turnover rate is very high. The reason being low gratuities and benefits after retirement due to which most of the employees quit. To retain its valuable Human Resource, Lucky Cement should pay attention towards this area.

GENERAL RECOMMENDATIONS

IMPLEMENT CONTINGENCY PLANNING :-

• Lucky cement need to implement contingency planning to cope with the future constraints

• Cost leadership through best value strategy

CONCLUSION

• Lucky cement like any other responsible organization is redefining its business operations in a fundamental way

• It is working to promote sustainable development and integrating its endeavors of profitable growth with the initiative of environment all protection &uplifting the quality of life of the present &the future generation

• The company is moving towards its growth mode and can aggressively employ the strategies of market development market penetration product development backward and forward integration as per need of demand of the org.

THANK YOU