‘PRAN’ stands for Program for Rural Advancement Nationally. PRAN GROUP was born in 1980.

Since
then, over the years, we have diversified our activities. Today we are the largest processors of fruits
vegetables in Bangladesh. We have shown the way of contract farming in Bangladesh for the first time and
procure raw material directly from the farmers and processes through high-tech machinery at our several
factories into hygienically packed food and drink products. As we are the largest contract manufacturer, we
promote contract farmers and help them produce quality crops with increased yields and to obtain fair
prices.

Interpretations:
From the above statements, it is observed that the sales have gone up in 2013, which is from 147,90,83,463
taka to 155,444,6836 taka. Cost of goods sold (COGS) have been increased in 2014, compared to the year
of 2012 & 2013, which is 78.35% in 2014, compared with 2012 (77.86%) & 2013 (77.76%). Net profit after
tax is also increased to the extent of 3.53% in 2013, compared with 2012. This indicates the overall
profitability of the concern is good.

The total current asset of the company has increased by 38.20%. While current liabilities have increased
8.37% in 2015. This indication of liquidity position of the firm is highly satisfactory. It is observed that
overall financial position of the business concern is good.
Degree of actual & potential competition:
There are three potential sources of competition in an industry:
1) Rivalry between existing firms
2) Threat of entry of new firms
3) Threat of substitute products or services.

Industry Growth rate:

If an industry is growing very rapidly firm need not grab market share from each other to grow. In contrast,
in stagnant industries, the only way existing firm can grow is by taking share away from the other players.

Concentration and Balance of Competitors:

The number of firm in an industry and their relative size determine the degree of concentration in an
industry. At present, Pran Food Company having their two or three equal sized players for instance- Square,
Bombeysweets, BD Food, they can implicitly cooperate with each other to avoid destructive price
competition.

Degree of Differentiation & Switching cost:

Pran Food Company has the low switching cost low, there is a greater incentive for the firm in an industry to
engage in price competition. Product differentiation is high compared to the other players of the food
industry.
Excess Capacity & Exit Barrier:
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Pran Company’s capacity is larger than the customer demand, so there is strong incentives for firm to cut
price to fill capacity.
Exit barriers are high when the assets are specialized as well as the regulations which make exit costly.

Competitive Advantage:
PRAN AMCL has a great competitive advantage over the other competitors. As mentioned earlier it is the
largest fruit and vegetable processing industry in Bangladesh and holds the biggest share in markets in
Bangladesh among the local companies. PRAN has the largest sales in fruit drinks after Coca-Cola and
PepsiCo.
PRAN anticipate pressure on price due to competitive activities and strong power. Its impact will be felt on
profitability’s and break-even volume. Even with a sufficient cushion at present, PRAN envisages tight cost
controls consisting of lean organization, long term cost contract with orchard owners and efficient use of
resource. It is also keeping sufficient Capital cushion use of resources. It is also keeping sufficient capital
caution to manage the enhance working capital requirement due to delays in payment, and the need to keep a
sufficient inventory. We all know that, today’s fast moving world respect the new, innovative ideas. To keep
the same pace with this situation our company had decided to launch a Juice and it has a bright future in its
market. As the product is innovative,
the consumers are going product will be a strong product mix for our company. And once our Juice will
reach to the hand of our targeted customers, we will be able to capture the most market shares.

Cost Leadership:
Provide reasonable product with reasonable price. Features of products are acceptable to all. Relatively
standardize Product. Monitoring cost and customer’s choice. As a market leader RFL has to always apply
defensive pricing strategy. Enhancement of market segmentation strategies.

Differentiation:
Some Non Standardize product. Some differentiated product out of reasonable price.

Threat of new entrants:

Changing consumer behavior. Aggressive competitors. Availability of foreign product. Limited target
segmentation.

Threats of Substitute Products:

Relevant substitutes are not necessarily those that have the same form as the existing products but those that
perform the same function. The threats of substitutes depend on the relative price and performance of
competing product and services and on customers’ willingness to substitute. Threat of substitute product in
this industry is very low.

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Bargaining Power of Buyers:
Bargaining power of buyers is very high. Because the products are almost identical and switching cost for
the buyers are very low. •

Bargaining Power of Suppliers:

Bargaining power of suppliers is very low as there are a lot of suppliers in the market. On the basis of the
analysis of the ‘Five Forces’, we can say that the industry is currently profitable though there are extreme
rivalry among the firms in the industry, severe bargaining power of the buyers and threat of new entries.
Despite these factors, the industry has been able to place itself in a profitable position because Industry is
growing rapidly as the consumers both in rural and urban areas are becoming habituated more and more
gradually on processed food than homemade food items.

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