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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 AVAILABILITY
1. Customer Yes
2. Product/service Yes
3. Market yes
4. Technology Yes
5. Concern for survival yes
growth, profitability
6. Philosophy No
7. Self-concept yes
8. 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 THREATS
• Upcoming national • Governmental regulations
building projects
• Fluctuation in currency
• Increasing demand for rates
cement in gulf region
• Price competition
• Market development and
penetration • Alliance opposition
• Infrastructure
development • Fluctuation in demand
• Population increase • Political instability
causing increase in real
state • Increase production cost
• Increase production to
reduce cost and achieve
economies of scale
• Global expansion
• Undiscovered markets of
northern regions of
Pakistan
STRENGTHS WEAKNESSES
• High transportation cost
• Financially strong
• Low advertising and
• High product quality exposure
• Infrastructure near • Increasing general and
ports admin expense
• Capital intensive
• Highest export share industry
• High pay scale • Increased production
cost
• Large dealer network
• Highly Localized and
• Employee regionalized markets
development • Low gratuity and PF
funds
THE STRATEGY-FORMULATION
ANALYTICAL FRAME-WORK
STAGE # 01 THE INPUT STAGE

EFE Matrix CPM Matrix IFE Matrix

STAGE # 02 THE MATCHING STAGE


SWOT Matrix SPACE Matrix BCG Matrix IE Matrix GS Matrix

STAGE # 03 THE DECISION STAGE


QSPM Matrix
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 0.20 3 0.60
development
Unexploited markets in North 0.05 3 0.15
Pakistan
Increase in population causing 0.10 4 0.40
growth in housing sector
Global expansion 0.15 4 0.60
Increase production to reduce cost 0.07 3 0.21
and achieve economies of scale
THREATS
Government regulations 0.15 2 0.30
Fluctuation in market demand 0.08 1 0.08
Price competition 0.10 3 0.30
Political Instability 0.03 3 0.09
Rising input costs 0.07 2 0.14
TOTAL 1.00 2.87
2.87
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 WEIGHT RATING SCORE RATING SCORE RATING SCORE


FACTORS
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 0.15 4 0.60 4 0.60 4 0.60
competitiveness
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 0.36


High product quality 0.12 4 0.48
High pay scale 0.10 3 0.30
Highest export share 0.20 3 0.60
Inventory turnover up 3.58 to 0.05 3 0.15
4.00
Larger dealer network 0.08 4 0.32
Employee development 0.06 4 0.24

WEAKNESSES

Low advertising 0.05 2 0.20


Increase in cost of production 0.10 1 0.10
High transportation cost 0.07 1 0.07
Highly regionalized and localized 0.08 1 0.08
market.
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,opportunitie
s,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
“SO “strategies “ WO” strategies
STRENGTHS
1. Financially strong
2. High product quality
 SETUP NEW FACTORIES  BUILD UP EXPOSURE
3. Highest export share
IN NORTHERN AND BETTER BRAND
4. High pay scale REGIONS OF PAKISTAN IMAGE THROUGH
(S1 , O1 )
RIGHT
1. Low advertising and PROMOTIONAL MIX
 INCREASED EXPORTS
WEAKNESSES exposure ( W1 , O1 ,O2 )
TO GULF REGIONS
2. Low gratuity and PF ( S1 ,S2,O2)
funds  DIVERSIFY IN GULF
3. Increasing general and REGION (W1,O2 )
administrative expenses
1. Upcoming national
OPPORTUNIT “ST “ strategies “ WT “ strategies
projects
IES 2. Demand for cement in
gulf region  OVERCOMING  REDUCE GENERAL &
3. Expansion in cement COMPETITOR’S ADMIN EXPENSES TO
PRESSURE THROUGH COPE WITH NARROW
industry
MORE QUALITY (S2,T2) COMPETITION
(W3,T2)
1. Govt regulation on slots  RESOLVE ALLIANCE
THREATS 2. Price competition OPPOSITION THROUGH  CONSIDER EMPLOYEE’S
3. Opposition alliance TOP MANAGEMENT PERKS TO AVOID
INVOLVEMENT HASSELS OF LABOUR
(S1,T3) UNIONS
(W2,T3)
FINANCIAL POSITION :-
SPACE MATRIX
COMPETITIVE POSITION :- rates
RATING
Increase in net sales revenue 4
Strong distribution network. -2
Continuous increase in stock value (PRs 130/=) 6
Increased Earning price share-EPS (PRs 2.1 per 5share)
5
Total: 15 High quality products. -3
INDUSTRIAL POSITION :
Increasing competition in construction sector 4
Increasing domestic demand for cement i.e. 92% 5
High export share. -4
Enhancement in the budget for Annual 5
Development Plan
Increasing growth rate 3
Total: 17 Market development in Gulf -2
STABILITY POSITION :-
Allowance of subsidized cement imports & lesser rebates
-4
Cut throat competition has created instability. -3 Govt. Project as DGP Army. -3

Currency rate difference has given much loss. -3


Increasing rate of inflation. -4
Total:- 14

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 FACTORS
GLOBAL 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 0.20
Expansion in industry due to 0.10 1 0.20 4 0.40T
house building loans by banks
THREATS :-
Government regulations 0.15 4 0.60 3 0.45
Price competition 0.10 2 0.20 3 0.30
Alliance opposition 0.15 2 0.30 3 0.45
Fluctuating currency rates 0.10 4 0.40 2 0.20
1.00
STRENGTHS:-
Strong financial position 0.15 3 0.45 4 0.60
High product quality 0.12 3 0.36 4 0.48
Highest export share 0.20 4 0.80 3 0.60
High pay scale 0.10 3 0.30 4 0.40
Larger dealer network 0.08 2 0.16 3 0.24
WEAKNESSES :-
Low advertising 0.10 1 0.10 3 0.30
Increasing Gen & Admi expenses 0.05 - - - -
Low gratuity & PF funds 0.10 1 0.10 3 0.30
Increased production cost 0.10 1 0.10 4 0.40
1.00 5.2 5.92 5.92
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.
GENERAL RECOMMENDATIONS
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.
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