Executive summary
Haleeb Haleeb Foods was established established in 1983. 1983. Since then it has continued to prov provid idee qual qualit ity y prod produc ucts ts to its its cust custom omer erss with with prod produc ucts ts and and packag packaging ing innovat innovation ions. s. Haleeb Haleeb is Pakist Pakistan’ an’ss number number 1 and fastes fastestt grow growin ing g food food comp compan any. y. The The comp company any is tryi trying ng thei theirr leve levell be best st 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 This pro project ject repor eportt cov covers ers the the broad oad area area of impa impact ctss 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 techno technolo logic gical al advanc advanceme ements nts.. This This repor reportt also also provid provides es the information how these variables pose threats and offer opportunities for the the comp compan any y and and how how the the comp company any shou should ld neut neutra rali lize ze thre threat atss and 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 the company’s marketing, non marketing and management’s capability is given which tells us about the company’s internal strengths and weaknesses.
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Then Then come comess the the most most impo import rtant ant port portio ion n of the the comp compan any’s y’s operations, which is the strategic management of marketing mix I-e 4Ps. A compre comprehen hensiv sivee detail detail is provid provided ed about about the compan company’s y’s strate strategie giess 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 exte extent nt to whic which h they they are are succ succee eede ded d thro throug ugh h thei theirr prom promot otio iona nall 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 incl includ udin ing g the the swot swot anal analys ysis is,, twos twos matr matrix ix,, CPM, CPM, QSPM QSPM and and othe others rs 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 Pakistan with an annual annual turnover turnover of Rs. 9.2 Billion Billion (F2006). (F2006). It is is a private private limited limited company. company. It started started commercial commercial product production ion in July 1987 19 87.. Due Due to cons consis iste tent ntly ly supe superi rior or perf perfor orma manc nce, e, it has has achi achiev eved ed undisp undispute uted d leader leadershi ship p in the liquid liquid packag packaged ed milk milk catego category ry with with a market share of over 52%. HFL has a very strong brand portfolio consisting of dairy as well as non-dairy products. Haleeb Haleeb Foods Foods has segmented its product product portfolio portfolio in 3 leading 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 Haleeb has also also progr progress essive ively ly divers diversifi ified ed from from UHT UHT Milk Milk to other other produ product ct catego categorie riess as well. well. These These produ product ct line line extens extension ionss includ includee Hale Haleeb eb Butt Butter er,, Halee aleeb b Yogu Yogurt rt,, Halee aleeb b Crea Cream, m, Hale Haleeb eb Labb Labban an (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. HFL has one of the largest nation-wide na tion-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.
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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, a dulteration, 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 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
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large consumer base, high acceptance of packaged food, and a growing urban middle class consumer segment.
History:: History
Haleeb Foods Ltd. was incorporated on July 1 st, 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
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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. 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:
1997
Haleeb Asli Desi Ghee
1998 1998
Haleeb Haleeb Cream, Cream, Candi Candia a Skimz Skimz Milk Milk Powder Powder
1999 1999
Candi Candia a Milk, Milk, Candia Candia Skimz Skimz Liq Liquid uid Milk Milk
2000 2000
Tropic Tropico o Juic Juice e Drin Drink, k, Hal Haleeb eeb Dairy Dairy Queen Queen
2001 2001
Haleeb Haleeb N'rish N'rish Instan Instantt Full Full Cream Cream Milk Milk Powd Powder er
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
Haleeb Cream With Honey, Haleeb Tea Max with 2005 Cardamom, Haleeb Labban, Haleeb Good Day(Mix Fruit, Red Grapes, Mango Pineapple) 2006 2007 2007
Haleeb Reshmi Pack, Candia Classic, Skimz Pouch, Tropico Nectar Hale Haleeb eb Ched Chedda dar r Chee Cheese se
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Information about Haleeb Foods
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 Main Marke Markets: ts:
Pakist Pakistan, an, North North Amer America ica,, South South Americ America, a, Western Europe, Eastern Europe, Eastern Asia, Southeast Asia, Mid East, Africa, Oceania
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Work Force: It has has a team team of 3000 3000 exce except ptio ional nal indi indivi vidu dual alss to supp suppor ortt its its operations, out of which
900 are permanent employees
600 are on contract and
1500 are of 3 rd 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.
Distribution Channels: Halee aleeb b foo foods is not not direc irectl tly y se sellling ling the pro product ucts. It has has distribution channels. Firstly Haleeb foods supply their products to
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thei theirr dist distri ribu buti tion on chan channe nells and and then then prod produc ucts ts deli delive vere red d to the the customers. Position of Haleeb foods:
Hale Haleeb eb food foods, s, the the larg larges estt dair dairy y comp compan any y in Paki Pakist stan an.. The 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.
Location of Factory: 12
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 an d 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 Me et the the requ requir irem emen entt of all all rele releva vant nt legi legisl slat atio ion n and regu regula lati tion on related to consumer satisfaction & safety, environment and other applicable laws etc
➢
To prevent pollution through controlling levels of harmful emission, effluents and other wastes.
➢
Contribute to safe and healthy environment for our country.
➢
Prom Promot otee mutu mutual al trus trustt with with cust custom omer ers, s, supp suppli lier ers, s, em empl ploy oyee ees, s, shareholders and community.
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➢
Provide all the necessary resources for the continual improvement in quality, safety of our products, processes and environment.
Organ gram of Human Resource Department Departme nt
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GM Head AM HRD HR Finance ER Assistant Manager of M Personnal Personna Dept. anager anager l (Main Rahim (Omer Bhai umer Yar Pheru Hassan Saleem Khan Shahid Mohsin) sheikh Manager (Alam (Ali Baber) Janjua) Zaman Wahab) Khan) Head Office (Tanzeela hj Rafique)
(Asif Habib)
BRAND PORTFOLIO OF HALEEB FOODS LTD
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A Hale Haleeb eb food food is a cust custom omer er orie orient nted ed orga organi niza zati tion on 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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Haleeb UHT Milk
Good Day Fruit Juice
Tropico Juice Drinks
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Dairy Queen UHT milk
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Haleeb Gold milk
Skimz Milk
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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 highes highestt standa standard rds. s. Some Some people people think think that that perhap perhapss Haleeb Haleeb milk milk is made from chemicals or synthetically but this is not true. Following steps are including in the process of Haleeb Milk. 1. Coll Collec ecti tion on of of raw raw milk milk 2. Testing milk at the plant reception
3. Past Pasteu euri riza zati tion on 4. Standardization 5. Homogenization 6. Sterilization 7. Ultra Heat Treatment (UHT)
8. Pack Packin ing g
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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, w orld, 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 UInflation & 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:
Disposable & Discretionary Income of HALEEB is 95%.
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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:
BUSINES LIFE CYCLE
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Implications Opportunitie Hi h market size Low tax rate Economic development
Rati 2 3
Th re at s New rivals Strong competition Increasing rate of
Rati 3 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 represents an # extremely significant opportunity or threat that has a reasonable likelihood of occurrence. P
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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 � ·
Prod Produc uctt dif diffe ferrenti entiat atio ion n is is goo good d fe featur aturee fr from all all companies companies which is also a lso 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:
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
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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 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
•
•
•
•
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. Highly
•
Qualified work force.
•
Focus on research and development.
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•
certification. 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 Dependence on 3rd party for supply of milk.
No credit sales. Low sales margins due to highly value added products.
They cannot launch many of its expensive international 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.
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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 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.
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•
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. 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 Significance of opportunity H opportunity High Low
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High
• Untapped market
o Concentric diversification
Probabili ty Of Occurre nce
• Backward integration
o To become multinational
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
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also increase the demand and awareness of juices in market by best advertisement. Concen Concentr tric ic divers diversifi ificat cation ion is not the the high high opport opportuni unity ty but proba probabil bility ity and occurrence is high because the Haleeb can increase sale by little change in the flavor of juices.
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Backw Backwar ard d integr integrat ation ion is the high high opport opportuni unity ty foe Haleeb Haleeb but proba probabil bility ity 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 beco become me mult multin inat atio iona nall is very very diff diffic icul ultt beca becaus usee Ne Nest stle le is the the bigg bigges estt 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 international level.
Summary of threats: Significance Significance of threat High Low
• Strong market
High • Competition
Probabili ty Of Occurre nce
• Imported Tin juices
•
o
Low Switching Cost
Custom duties on import of plump
Haleeb face strong competition in market of juices, for Good day nestle juices are big big threa threatt and for other all juices juices like funday funday and tropico tropico shahz shahzan an,, Maza Maza and and
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country juices are big threat. Nestle is the big and 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, Impor Importe ted d tin juices juices are are great great threat threat for Halee Haleeb b juices juices espec especial ially ly for Good 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 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 Financial Position R&D Interfunctional
Rating 4 3
Weakness HRM
3 Competitive position
3
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Rating
2
5 3 Management Production capability
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 Marketing department department of the Haleeb food Company Company specially 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 Haleeb food food is work working ing well well and market market intell intellige igence nce and market marketing ing planning is very strong aspect of management of marketing.
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IMPLICATIONS Strengths
Rating
Market intelligence Market organization
4 3
Organization Market planning
3 4
Weakness Market control Promotional cam ai ns
Rating 3 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
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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 Internal Factors
W e i g h t Ra ti n g
W e i gh t e d Score
STRENGTHS • • •
L ar e s t N at i o n al f o o d S t r on g br a nd l oy al t y Mo n o p ol y s it u at i o n in p u r e
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0. 0 0. 1 0 0. 1 5
4 3
0. 2 0. 4 0. 4 5
• • • •
Pr o d u c t p os i t i o ni ng S t r on g di s t r i b ut i on c h an n e l Hi g h qu a li t y p r o d u c t s S t r on g m an ag e m e nt t e am WEAKNESS
• • • • • •
No t go o d p ac k ag i n g Hi g h e r pr i c e s in p u r e j u i c e s L o w p r o m ot i o n a c t i vi t i e s L e s s di s p l ay c e n t e r s L at e r e c ov e r y o f cl ai m s T o t a l w e i g h t e d S co r e
0. 05 0. 1 0 0. 1 0 0. 05
2 4 3 3
0. 1 0. 4 0. 3 0. 1 5
0. 05
3
0. 1 5
0. 1 0 0. 05 0. 1 0 0. 05 0. 05
2 3 4 3 2
0. 2 0. 1 5 0. 4 0. 1 5 0. 1
1.00
3.15
The The ind industr ustry y aver averag agee is 3.5 3.5 so the the IFE IFES of the the Halee aleeb b Food Food company is not good in juices according to the average of the industry
External factors evaluation (EFE)
47
Haleeb Foods Company
W e i gh t
Ra ti n g
External Factors
Weighted Score
OPPORTUNITIES • • • • • • • • •
Unta ed market Diversification in products Backward integration Int e rnat io nal mar ke t s THREATS Strong competitor Nestle in Products advancement Fluctuation in tax rates Imported juices Custom duties on plump TOTAL
0.20 0.10 0.15 0.05 0.10
3 3 2 3
0.8 0.3 0.45 0.1 0.3
0.15 0.05 0.05 0.05 0.10
4 3 2 2 2
0.6 0.15 0.1 0.1 0.2
1.00
3.1
The The ind industr ustry y aver averag agee is 3.5 3.5 so the the EFES EFES of the the Hale Haleeb eb Food Food company is not good in juices according to the average of the industry.
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CPM (Competitive profile matrix) Ha lee b Critical
Weight RatingScore
Factor Product quality0.20 Prices 0.10 Advertisement 0. 0.20 Positioning 0.15 Financial 0.10 Customer 0.15 Market share 0.10 T ota l
Nestle
1. 0 0
3 4 3 2 4 3 3
0.6 0.4 0.6 0.3 0.4 0.45 0.3 3. 05
Rating Score 4 3 4 4 4 3 4
0.8 0.3 0.8 0.6 0.4 0.45 0.4 3 . 75
S ha h z a n Rating Score 2 3 3 3 2 4 3
0.4 0.3 0.6 0.45 0.2 0.6 0.3 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 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.
49
S O W T M A T R IX O F H A L E E B F
47
STRENTHS(S) •
•
•
•
•
WEAKNESS(W)
Haleeb offer high quality products products especiall especially y pure juices juices in market. Haleeb Foods is the largest National Food Company. Mana Manage geme ment nt team team of Hale Haleeb eb Comp Compan any y is very very stro strong ng and and educated. Haleeb foods have strong positioning in customer mind. Haleeb foods have best distribution channel in all over the Pakistan.
SO strategies.
•
•
•
•
•
Packaging of juices produc productt is not good, and not so much attractive. Haleeb company has very high prices in pure juices. Less promotional acti activ viti ities for for its its juic juicee products. Less Less disp display lay cent center erss use use for juices products in main shops of different cities. Less product awareness in customer mind.
WO strategies. •
Extensive marketing campaign.
OPPERTUNITIES(O) •
•
•
•
•
Ther Theree are are a lot lot of unta untapp pped edmark market etss in diff differ eren entt area areass of Pakistan. The concentri concentricc diversifi diversificati cation on Market • in different juices products. Backward integration can use development in juice products It can become become multin multinati ationa onall (S1,O1) and can target different market Product • of different countries. Usage rate of juices is increasing
ST strategies. •
Positi Positioni oning ng as qualit quality y product
•
WT strategies.
among
•
Increase budget on packaging
&
consumer.(S1,T1)
promotional activities
Acquiring the local
(W1,T1)
competitors(S5,T3)
THREATS(T) •
•
48
There is strong competition in food products market. Diff Differ eren entt str strateg ategie iessadop adoptted by com competi petittors ors
•
48
Nestle in juices products New product advancement by different competitors.
Quantitative Strategic Planning Matrix (QSPM) Hale Haleeb eb Food Food Comp Compan any y
Weig Weight ht AS
Factor analysis USTRENGTHU STRENGTHU •
Largest National Food 0. 0.05 • Strong brand loyalty 0.10 • Monopoly situation in 0.15 0.05 juices
• • •
4 4 2 4
TAS
AS
TAS
0.20 0.40 0.30 0.20
4 3 3 2
0.20 0.30 0.45 0.10
3 4 4
0.30 0.40 0.20
Strong distribution 0.10 High quality products 0.10 Strong management 0.05
4 4 3
0.40 0.40 0.15
0.05
3
0.15
WEAKNESS
• • • •
ProductMarket Product Market
mind
0.10
-
Higher prices in pure Low promotion Less display centers Late recovery of
0. 0.05 0.10 0.05 0.05 0.20
OPPORTUNITIES
2
0.10
-
-
-
2 4 3 -
0.10 0.40 0.15 -
2 4 2 -
0.10 0.40 0.10 -
2
0.40
4
0.80
3 1
0.45 0.05
4 4
0.60 0.20
0.10
3
0.30
3
0.30
0.15
4
0.60
4
0.60
0.05 0.05 0.05 0.10
3 4 -
0.15 0.20 -
4 3 -
0.20 0.15 -
• • Diversification in 0.10 • Backward integration 0.15 • International markets 0.05
-
THREATS • •
Strong competitor
• Products • Fluctuation in tax • Imported juices • Custom duties on plump
T ot al
5
5.5
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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56
57
58
59
60
61
62
FINANCIAL HIGHLIGHTS (RS,000) 2007
2008
7,086,175
5,941,780
Trading Results Sales-net Gross Profit O eratin Profit Profit Before Tax Profit After Tax
1 0 0 860 11 86 11 345,697
8 0 68 1 80 6 232,888
Shareholders’ Funds
1,060,133
755,620
Reserves O eratin Fixed Assets Net Workin Ca ital Current Assets
2 000 10 12 6 18 711,306
2
Balance Sheet
63
000 26 6 ( 8) 561,179
FINANCIAL ANALYSIS
Sales Growth
%
200 19.26
Gross Profit Margin
%
15.39
14.6
Operating Profit Ratio
%
7.69
7.0
Profit Before Tax
%
6.86
6.41
Profit After Tax
%
4.88
3.9
Pretax Profit Growth
%
27.70
23.
Net Profit Growth
%
48.44
21.3
1.07
0.9
6.61
6.41
*Current Ratio Fixed Assets Tunover
Times
Return On Equity
%
Return On Total Assets
%
200 26.
32.6
30.
15.7
14.
* while calculating Net Working Capital and Current Ratio , Current portion portion of liabilities against assets subject to finance lease is not accounted for.
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S e g m e n t F in in a n c i a l a n d M a r k e t Attractiveness Estimated (Rs million) Sales 1 Variable costs 2
GOOD DAY 2 5
TROPICO FUNDAY 5 3 8
6
Contribution margin 3
10
7
Market share3
18
22
11
Total segment sales 2%
5%
1%
65
Segmentposition: Business strength High
Medium
Low
Attractiveness
Medium
Mediu
Medium
66
SALES FORECASTING = 162419946
Total Total o ulatio ulation n of Pakist Pakistan an Target people having age 5-above Peop People le havi having ng age age a abo bove ve 5 = 90 % of 16 1624 2419 1994 946 6 = 146177951.4 People who like other juices
= 75 % of 162419946 = 109633463.6
People who willing to drink Haleeb uices Price range Average price Avg Quantity Sales
= 36544489 = 10 + 25 + 65 = Rs.33 =2 = 33 * 2 * 36544489 = Rs.2411936274
PROJECTED INCOME STATEMENT Rs Sales = 2 11 62 Cost of goods sold = 2098360250 Gross profit = 313576024 Administr Administration ation Expenses Expenses = (34691250) (34691250) Distribution cost = 81 000 Operating profit = 197407774 Other income = 2591400 Profit before interest
64
and taxes
Net profit
= 199999174 = = 1508532
From all the above data we find out that there is a lot of demand for Haleeb juices but they are spending low low as per per requ requir irem emen entt . As far far as prom promot otio iona nall 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 they have have intro introduc duced ed other other produc products ts like like juices 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 a nd 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 an and sa 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 n ature of the tasks or task’s importance fot the company. To increase the ability to put right people on right jobs .i.e the person person of finance finance dept. dept. should should not be given given the tasks tasks of R&D , which is highly sensitive and innovational field. Page 70
• C. RESPONSIBILITIES FOR IMPLEMENTATI IMPLEMENTATION ON Create the effectiveness of the personnel to focus on critical aspects of their job. Other remedies to enhance implementation includes •
1. Organi Organizat zation ional al Desig Design n Organizational design should consist of multifunctional teams, including at least 1 member of each department to solve the problem or to achieve the targets.
2. Ince Incent ntiv ives es Various 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. Commun Communica icatio tion n Rapid 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 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 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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Strategic Marketing Evaluatio and Control Conduct strategic marketing audit
Select performance criteria, measures, and metrics
Obtain and analyze information
Assess perform and take necess ne cessary ary act ion
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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 mark market et for for Bata Bata be beca caus usee they they took took adva advant ntag agee from from Hale Haleeb eb’s ’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 comp compet etit itor orss are are havi having ng rela relati tive vely ly larg larger er shar sharee than than the the othe otherr competitors which is 50%.
WHAT SHOULD COMP WHAT COMPETIT ETITIVE IVE POSITION POSITION BE IN 3 YEARS 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 inno innova vati tio ons and and fash fashio iona nabl blee pro product ucts must must be intr intro oduced uced 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?
○ Haleeb should introduce more innovative products in the market to increase its demand. demand. Those innovations innovations must be according to the customer’s demands and their preferences.
○ Whe Whene neve verr Bata Bata open open its its new new dist distri ribu buti tion on cent centre re Servi Serviss take take advantage from its strategies and open a store in front of their store, Haleeb should take steps to overcome this threat.
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○ Bata should gain the sustainable competitive advantage. ○ Most of Bata’s wholesales were in the northern areas, when earth quake ake cam came it sud suddenly nly fall all down. own. Bata Bata sho should uld wind ind up wholesale from northern areas and should shift it towards the citi cities es of Rawa Rawalp lpind indi, i, Laho Lahore re and and Hyde Hydera raba bad d be beca caus usee more more footwear units are located in these cities.
ESTIMATED REVENUE FROM EXISTING PRODUCTS IN EXISTING MARKETS (MARKET PENETRATION)
Market size (Value): Current size: Market projections
$ 16 million Year 1
Year 2
Year 3
$ 180 18000 0000 000 0 $210 $21000 0000 000 0 $230 $23000 00 000 Current market share: Projected market share Year 1 (Via new strategies)
65%
Year 2 69%
73%
Year 2
Year 3
Estimated value of existing Products in existing
Year 1 150100.7$
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Year 3
153102.7$ 156164.75$
ESTIMATED POTENTIAL REVENUE FROM EXISTING PRODUCTS IN NEW MARKETS (MARKET DEVELOPMENT)* Year 1
Year 2
2311550$
2357782$
Year 3 23194937$
ESTIMATED POTENTIAL REVENUE FROM NEW PRODUCTS IN EXISTING MARKETS (NEW PRODUCT DEVELOPMENT)* Year 1
Year 2
480322$
489929$
Year 3 499727$
ESTIMATED POTENTIAL REVENUE FROM NEW PRODUCTS IN NEW MARKET SEGMENTS (RELATED DIVERSIFICATION) * Year 1
Year 2
60040$
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61241$
Year 3 62466$
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 prop proper erly ly perf perfor orm m thei theirr oper operat atio ions ns.. They They are are foll follow owin ing g inter interna nati tion onal al standards like ISO standerds and are using different tools to continuously improve their operations. They are introduced new technology in their produ producti ction on proces processs first first time time in Pakist Pakistan. an. They They are provid providing ing quali quality ty products. There human recourse policies are also good. The locations whi which ch they they have have sele select cted ed for for thei theirr oper operat atio ions ns are are be bene nefi fici cial al for for the 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 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
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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.
Recommendations:
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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. 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 Accommodation should be provided to the employees.
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