STRATEGIC MANAGEMENT ANALYSIS OF

Submitted to: Mr.Asad Mengal

Submitted by: Nasibullah khan
Azhar Hussain

Balochistan University of Informational Technology Engineering and Management Science Quetta

Engro
 Engro Chemical Pakistan Limited is the second largest producer of Urea
fertilizer in Pakistan. The company was incorporated in 1965 and was
formerly Exxon Chemical Pakistan Limited until 1991, when Exxon
decided to divest their fertilizer business on a global basis and sold off its
equity of 75% shares in existent company. The Employees of Engro, in
partnership with leading international and local financial institutions
bought out Exxon’s equity and the company was renamed as Engro
Chemical Pakistan Limited. Engro is a public limited company listed on
the Stock Exchanges of Karachi, Lahore and Islamabad.
 The principal activity of the Company is manufacturing, purchasing and
marketing of fertilizers. The Company is also involved in the production
and marketing of seeds and has invested in joint ventures engaged in
chemical related activities. As part of its diversification strategy,
controlling interest was acquired in a company offering industrial solutions
in automation and control. A new milk plant has been established at
Sukkur the milk is branded as Olpers.
Engro Foods’ History

 Engro Foods Limited is subsidiary of Engro Chemical Pakistan

Ltd. which is one of the most reputed enterprises in Pakistan
with more than 40 years of diversified business operations in
the areas of fertilizer and chemicals. Engro Foods started its
business operations in March 2006 and with the successful
launch of Olpers Milk, Tarang, Olwell, and Olpers cream, it has
established itself as a major player in the foods business.
Engro Foods has already set up two processing plants at
Sukkur and Sahiwal. With the ever expanding milk collection
network and processing facilities, the Supply Chain has geared
us for the growing sales of our products
 We believe that our recent successes will take us to our goal:
To be one of the biggest players in the food business. Our aim
is to dominate the food business, and to achieve this we will
settle for nothing less than the cream!
Our Brands.
Our Affiliates.
Vision And Mission.
Vision
Aims at transforming the company within the next
five years into first a national food industry giant,
then into a regional force and finally into a global
player.
Mission
Build Branded food business to improve quality of
life by offering tasty, affordable and highly
nutritional products to our consumers while
maximizing stake holders' value
Core Values.

1. Leadership
2. Innovation
3. Diversity and International focus
4. Quality and continuous Improvement
5. Candid and open communications
6. Individual growth and development
7. Enthusiastic pursuit of profit
8. Ethics and integrity
9. Safety, Health and Environment
 ANALYSIS OF MISSION

Component of mission statement Description Addressed or not?

Customers Who are the firm’s customers? yes

Products or services What are the firm’s major products? yes
Markets Geographically, where does the firm compete? yes

Technology Is the firm technologically current? no

Concern for survival, growth, and Is the firm committed to growth and financial yes
profitability soundness?
Philosophy What are the basic beliefs, values, aspirations, and yes
ethical priorities of the firm?

Self-concept What is the firm’s distinctive competence or major yes

competitive advantage?

Concern for public image Is the firm responsive to social, community, and no
environmental concerns?

Concern for employees Are employees a valuable asset of the firm? no

STRATEGIC Internal and external Audit

 STEEPLE ANALYSIS

 S - Social Factors
 T - Technological Factor
 E - Economical Factor
 E - Environmental Factor
 P - Political Factor
 L - Legal Factor
 E - Ethical Factor
 PORTERS FIVE FORCES MODEL
SWOT Analysis
Strength

 Engro’s back.
 PR with farmers
 Positive response from customers
 Strong consumer & product research
 Third-Generation Plant
 Worldwide fame of Engro.
 Efficient milk collection system.
 Keeping high quality standards.
 Integrated distribution and warehousing facilities.
 Successful related diversification.
 Generic brand name of Olper’s
 Large market share of Engro innovative and chemicals.
 Having Good reputation in the market by strong brand name i.e. Engro
Weaknesses

 Olwell TVC
 Owning Red Color
 Low Quality Milk
 Packaging
 Milk collection & distribution costs
 Narrow brand portfolio
 Unable to compete in price sensitive segment of UHT milk market.
 Under-utilization of the capacity.
 Unable to fulfill the demand of local powder milk market.
 Not yet ISO certified
Opportunities.
•Increased funding by Government
•Increased consumption of PLM
•Awareness
•Third largest producer of milk
•Improving Economy
•Population growth rate.
•High urbanization rate.
•High literacy rate.
•Flexible government policies for food industry.
•Have significant growth opportunities
•Has sufficient capital to expand.
•Has the potential to innovate and differentiate the company's products to
sustain a competitive advantage
•May merge with other global businesses to eliminate competitors.
•Having Capable of expanding into other markets of the world
Threats

 Competition
 Perceptions and Price Differentials
 High inflation rate.
 Low purchasing power.
 Decrease in GDP growth rate.
 Increasing interest rates.
 Decreasing investment.
 Recessionary period in business cycle
 Competition with Nestle, Engro Foods and the new entrants.
 Engrofoods is currently facing are increase in Sales Tax
What is SWOT matrix?

 The concept of determining strengths, weaknesses, threats, and

opportunities is the fundamental idea behind the SWOT model. To
present the model in a more understandable way, scholars came up
with so-called SWOT matrix. SWOT matrix is only a graphical
representation of the SWOT framework.
 The Below is a schema of how SWOT works. You start at the top
level and go down to details. When this is filled with content, it gets
the shape of a matrix, such as Example below:
Engrofood SWOT Matrix
Strengths Weaknesses
1. Worldwide fame of Engro. 1. Unable to compete in price sensitive segment
2. Efficient milk collection system. of UHT milk market.
3. Keeping high quality standards. 2. Under-utilization of the capacity.
4. Integrated distribution and warehousing 3. Unable to fulfill the demand of local powder
facilities. milk market.
5. Generic brand name of Olper’s 4. Not yet ISO certified
6. Large market share of Engro innovative and
chemicals.
7. Having Good reputation in the market by
strong brand name i.e. Engro
8. Strong R&D

Opportunities SO WO
1. Improving Economy Increase production of quality milk to cater the unsatisfied As per the increase demand of the milk they should fulfill
2. Population growth rate. demand(S2,O2,O8) the demand as EFL have the ability to expand.
3. High urbanization rate. They should go in the product line of powdered milk. (W3,O8).
4. High literacy rate. (S8,O2,O5) They should make a strong distribution system to cater to
5. Flexible government policies for food They should increase their exports. avail the full benefit of the growing market.
They should cater the wide range of unsatisfied demand by (W3,O2)
industry. improving their distribution networks They should adopt affective marketing strategies for the
6. Have significant growth opportunities promotion of their product.(W2,O1)
7. May merge with other global businesses to
eliminate competitors.
8. Having Capable of expanding into other
markets of the world

Threats ST WT
1. High inflation rate. Invest more on the dairy product line as there is still a large The co-ordination between different departments of EFL
2. Low purchasing power. chunk of the market which require should be improved it will lessen the bureaucratic
3. Decrease in GDP growth rate. modernization(S6,T5) cost and increase the efficiency of the company.
4. Increasing interest rates. Introduce new technology for quality assurance and better Engro must get the ISO certification as to beat their
5. Decreasing investment. productivity(S4,T7)
competitors(W4,T8)
6. Recessionary period in business cycle
7. Competition with Nestle, Engro Foods and the
new entrants.
8. Engrofoods is currently facing are increase in
Sales Tax
 INTERNAL FACTOR ANALYSIS
Key Strategic Factors Weight Rating Weighted Score
STRENGTHS
Brand Image 0.08 4 0.32
Growing Sales 0.03 3 0.09
Market Share 0.05 3 0.15
Distribution Channel 0.08 4 0.32
Product Quality 0.07 3 0.21
Capacity 0.08 4 0.32
Innovation 0.04 3 0.12
Customer Oriented 0.02 3 0.06
Qualified Work force 0.01 3 0.03
R&D 0.05 4 0.2
Business without Interest 0.02 3 0.06
Exporting 0.06 4 0.24
WEAKNESSES
Local Company 0.05 1 0.05
Centralized Decisions 0.09 2 0.18
No Sales on Credit 0.06 2 0.12
High Price 0.05 2 0.1
Uncertain Economic & Political 0.03 1 0.03
Conditions

Market Demand 0.05 2 0.1

Striker Terms And Conditions 0.03 1 0.03
Promotion 0.05 2 0.1
Total 1 2.83
 EXTERNAL FACTOR ANALYSIS
For Engrofoods
Key Strategic Factors Weight Rating Weighted Score
OPPORTUNITIES
Raw Material Availability 0.1 4 0.4
Improving Economy 0.08 3 0.24
Population growth rate. 0.07 2 0.14
High urbanization rate. 0.07 3 0.21
Engro Bottle 0.04 1 0.04
High literacy rate 0.06 2 0.12
Joint Ventures 0.06 3 0.18
THREATS
New Entrants 0.08 3 0.24
Changing Season 0.05 2 0.1
Sales Tax 0.06 3 0.18
Suppliers 0.07 3 0.21
Economic Conditions 0.05 2 0.1
Price Sensitive People 0.06 2 0.12
Gawala Milk 0.1 4 0.4
Small Target Market 0.05 2 0.1
Total 1 2.78
Competitive Profile Matrix (CPM)
For food industry
Critical Success Factors Weight OLPERS NESTLE HALEEB
Rating Score Rating Score Rating Score

1 Research & Development 0.08 3 0.24 3 0.24 4 0.32

2 Advertisement 0.09 3 0.24 4 0.36 3 0.27
3 Financial Position 0.09 3 0.27 3 0.27 3 0.27
4 Market Share 0.07 2 0.14 4 0.28 3 0.21
5 Product Quality 0.08 3 0.24 3 0.24 3 0.24
6 Price Competitiveness 0.11 3 0.33 3 0.33 2 0.22
7 Management 0.10 3 0.30 4 0.40 3 0.30
8 Global Expansion 0.08 3 0.24 4 0.32 3 0.24
9 Customer service 0.06 3 0.18 3 0.18 2 0.12
10 Sales And Distribution 0.09 3 0.27 4 0.36 3 0.27
Network
11 Production Capacity 0.07 2 0.14 3 0.21 4 0.28
12 Alliances 0.08 3 0.24 4 0.32 3 0.24
Total 1.0 2.76 3.51 2.98
SPACE MATRIX STRATEGIC
MANAGEMENT METHOD
The SPACE matrix is a management tool used to analyze a company. It is used to
determine what type of a strategy a company should undertake. The Strategic
Position & Action Evaluation matrix or short a SPACE matrix is a strategic
management tool that focuses on strategy formulation especially as related to the
competitive position of an organization. The SPACE matrix can be used as a basis
for other analyses, such as the SWOT analysis, BCG matrix model, industry
analysis, or assessing strategic alternatives (IE matrix). The SPACE
matrix calculates the importance of each of these dimensions and places them on a
Cartesian graph with X and Y coordinates.
The following are a few model technical assumptions:
- By definition, the CA and IS values in the SPACE matrix are plotted on
the X axis.
-CA values can range from -1 to -6.
- IS values can take +1 to +6?
-The FS and ES dimensions of the model are plotted on the Y axis.
- ES values can be between -1 and -6.
- FS values range from +1 to +6.
Engrofoods factors for SPACE MATRIX

Internal Strength Position External Strength Position

Competitive Advantage(CA) Industry Strength(IS)
Axix (Worst -6,Best -1) (Worst +6,Best +1)
X -1 Product Quality +5 Barriers to entry
-1 Product Life Cycle +4 Growth Potential
-3 Market Share +4 Access to Financing
-2 Brand and image +6 Consolidation
Average Score = -1.75 Average Score = 4.75

Total X-Axis score: 3.00

Financial Strength(FS) Environment Strength(ES)

Axis (Worst +6,Best +1) (Worst -6,Best -1)

Y +5 ROA -2 Inflation
+5 Leverage
+4 Leverage
-1 Technology
+6 Cash Flow -2 Demand Elasticity
-4 Taxation
Average Score = 5
Average Score = -2.5

Total Y-Axis score: 2.75

SPACE Matrix for Engrofood
Conclusion

This particular SPACE matrix tells us that our

company should pursue an aggressive strategy. Our
company has a strong competitive position it the
market with rapid growth. It needs to use its internal
strengths to develop a market penetration and market
development strategy. This can include product
development, integration with other companies,
acquisition of competitors, and so on.
BCG Matrix Model

The BCG matrix or also called BCG model relates to marketing.

The BCG model is a well-known portfolio management tool
used in product life cycle theory. BCG matrix is often used to
prioritize which products within company product mix get more
funding and attention.
The BCG matrix model is a portfolio planning model developed by
Bruce Henderson of the Boston Consulting Group in the early
1970's.
The BCG model is based on classification of products (and
implicitly also company business units) into four categories
based on combinations of market growth and market share
relative to the largest competitor.
Division wise data for Engrofoods BCG
Matrix

Division Revenues Percent Revenues Profits Percent Profits Percent Market Value Percent Growth Rate

Olper’s $4500 49.90% $2000 41.62% 60 +8

Olwell TVC $2550 24.87% $1500 31.21% 25 -6

Tarang $3200 31.21% $1305 27.18% 35 +4

Total = $10250 100% 4805 100% ---- ----

BCG Matrix for Engro food

Relative Market Share Position

Internal External (IE)Matrix

 The Internal-External (IE) matrix is another strategic management tool

used to analyze working conditions and strategic position of a business.
The Internal External Matrix or short IE matrix is based on an analysis of
internal and external business factors which are combined into one
suggestive model.
 The IE matrix is a continuation of the EFE matrix and IFE matrix models.
Score from the EFE matrix -2.75- this score is plotted on the y-axis
Score from the IFE matrix -2.83- plotted on the x-axis
As blue lines indicate
Conclusion
This IE matrix for Engrofoods tells us that our company should hold and
maintain its position. The company should pursue strategies focused on
increasing market penetration and product development
 Grand Strategy Matrix.
For Engrofoods

Conclusion
The grand strategic Matrix for EFL is show that it lies in the first
quadrant which recommend that for EFL continued concentration on
the current Market (market penetration and market development) and
products development) is an appropriate strategy.
QSPM OF Engrofoods

 Based on strategies in the stage 1 (IFE, EFE) and stage 2

(BCG, SPACE, IE), company executives determined that
Engrofoods needs to pursue an aggressive strategy aimed at
development of new products and further penetration of the
market. They also identified that this strategy can be executed
in two ways. One strategy is acquiring a competing company.
The other strategy is to expand internally. They are now
asking which option is the better one.
(Attractiveness Score: 1 = not acceptable; 2 = possibly
acceptable; 3 = probably acceptable; 4 = most
acceptable; 0 = not relevant)
Q&A