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INTRODUCTION OF THE COMPANY Company Name: Business Type: Product/Service: INTRODUCTION: MARHABA Laboratories is a household name with its

literal meaning (Bravo, Weldon, Welcome) MARHABA Laboratories was born in the mind of Hakim Muhammad Usman during his student days at Tibbia College Lahore. After Graduation, Hakim Muhammad Usman along with four younger brothers established Marhaba Laboratories on 1st July 1975 with the aim of producing Oriental Medicines and natural dietary Supplements in a modern and scientific manner. Marhaba is one of the largest phytoceutical company engaged in research, development, production and marketing of Health Food Products(honey, herbal tea, ispaghol husk) Herbal Cosmetics(acne clean cream, black hena) Herbal Remedies(inhaler, balm, joshanda) and many other OTC products. This company has been exporting its product for 15 years now and is still expanding around the world like USA, Canada, UK, Australia, Dubai, Japan, Korea, Greece, China, Indonesia, Sri Lanka, Tajikistan, West Indies, Maldives, & Botswana. Their business has also extended to Print Media by launching their own monthly magazine named as "Marhaba Sehat". Marhaba has a perfect GMP, Quality Assurance and ISO Quality Management System to meet the customer satisfaction, National & International standards. They are more keen towards quality and purity in their products. The aim is to produce oriental medicines and natural dietary supplements in a modern and scientific manner so that the age old prescriptions and remedies, reach the customer in a ready to use form, without in any way affecting their efficacy and natural qualities. MARHABA LABORATORIES Manufacturer Natural Health Food Products, Herbal Medicines, Herbal Cosmetics, Essential Oil, Natural Herbal Refreshing Drinks

BOARD OF DIRECTORS M. Usman sheikh (Chairman) M. Iqram (Director of Finance) M. Islam (Director of Production) M. Jameel (Director of Marketing)

M. Saleem (Director of Production) All these five BODs are top level managers and strategists at Marahaba. They have focus towards introducing new quality products. . Their activities typically involve active programs to expand into new markets and stimulate new opportunities. New product development is vigorously pursued and offensive marketing rivalry strategies are a common way of obtaining additional market share for them. They respond quickly to any signs of market opportunity, and do so with detailed research. So we can say that they are prospectors. Top management examines in detail the micro and macro environment to get benefit of all opportunities. Marhaba strategists tend to expand into areas close to their existing core competency. Rather than expanding into new markets, they gradually expand existing markets i.e. herbal products. So being analyzer they are getting benefits of opportunities and avoiding threats. Top management always take decisions by involving all managers and related employees regarding new product development which shows that they also empower their employees and preferring their ideas. So they are going towards team composition as well. All strategies of Marhaba strategists supporting Marhaba to accomplish their objectives and to move on the way to success in competitive environment. Marhaba strategists are prospector; they expand into new markets and stimulate new opportunities. They introduced new highly quality herbal products by doing details research so they are moving to attract new customers and to increase market share. All these efforts help them to achieve their objective, taking edge on competitors as well as to get profitability. Top management of Marhaba prefers to take decisions by involving their employees and related managers. This helps to come up with new ideas and to identify issues related to system and processes at laboratories. This also helps to identify that, who is suitable for what kind of task. A team composition helps to improve Marhabas ability to attain their objectives within time frame. OBJECTIVES a) First objective of Marhaba is to make this company a leading global brand of health and natural products by providing what is promised by staying firmly grounded in principles of the honorable herbal tradition. b) To preserve health and improve quality of life by providing thoroughly researched high quality new standardized herbal products and solutions to the mankind through highly capable and motivated human resource. c) To increase market share up to 40% of previous sales for seasonal products. d) To increase market share up to 20% of previous sales for medicine and other related products.

e) To serve mankind (locally, nationally, globally) by utilizing all resources and core competencies. CREDIBILITY OF OBJECTIVES Marhaba objectives are realistic as they have a realistic path to achievement. They have all the abilities, skills, Attitudes and financial capacity to achieve them. Their objective is also to preserve health by providing the standardized products, so they are offering high quality product by doing detail research in herbs. They are also consistent because they are introducing new products as well as increasing their market share. They want to be a leading global brand of health and nature products by improving quality of their products. They specify that they have to increase their market share for seasonal products up to 40% percent of previous year and for medicines up to 20% of sales of previous year. Employee turnover is very low. New technology has helped Marhaba in reducing their overall cost. SMART OBJECTIVES SMART objectives focus on outcomes rather than activities and allow to Measure Companys success. SPECIFIC: Marhaba Companys focus is towards becoming a leading global brand of health and natural products. Their objective is clear that their target market includes those customers who use herbal product and continuing their herbal traditions. Thats why they are just offering herbal products which are thoroughly researched. They are also specifying their objectives for market share for both seasonal, medicines and other related product which depends on previous years sales every year. MEASURABLE: Their objectives are measurable, as they specify that they have to increase their market share for seasonal products up to 40% percent of previous year and for medicines up to 20% of sales of previous year. ACHIEVABLE: Marhaba objectives are realistic as they have a realistic path to achievement. They have all the abilities, skills, Attitudes and financial capacity to achieve them. As they have identified their goal that they want to preserve health and improve quality of life by providing thoroughly researched high quality new standardized herbal products so they are expanding and growing themselves to match this goal and also introducing new herbal products for example recently they introduced menthol inhaler. Their objective is also to preserve health by providing the standardized products, so they are offering high quality product by doing detail research in

herbs. They are also importing herbs from Malaysia and India for this purpose. They mostly achieve their target of market share for those products which are seasonal like drinks (Sherbtay gulbahar) due to high demand. RELEVANT: They want to be a leading global brand of health and nature products by improving quality of their products. For this purpose they are doing detailed research in their own laboratories as well as government laboratories about herbs. They have all the resources, knowledge and time to achieve them, so their goal is both high and realistic. TIME BOUND: Marhaba set time frame according to the products category. If they want to introduce new products, it takes too much time for testing, Approval and certification of the product. So there is no time frame for new products. But they have time frame for already existing products according to seasons. For example before summer they have to achieve their target of production for drinks. VISION STATEMENT Our vision is to dedicate ourselves towards superior human health and well being of every household in a scientifically improved natural way. Vision statement of Marhaba is audacious, capitalizes on core competencies like research and development to produce natural and healthy products. It is Inspiring as it creates a vivid image in peoples heads that provokes emotion and excitement as they are dedicating themselves to serve every household with natural products. It is motivating: clarifies the direction in which your organization needs to move and keeps everyone pushing forward to reach it. This statement is Purpose-driven as well. MISSION STATEMENT We are committed to achieve our goals to produce the most nutritious natural diets, natural medicines and herbal medicines as a divine service to mankind in the name of Allah the Almighty. We shall continue to provide our consumers with the most innovative herbal products keeping their natural effect intact. COMPONENTS OF MISSION STATEMENT: 1. Customers: Under this component of mission statement, a company defines its focus on customers and evaluates who their actual customers are. In the mission statement of Marhaba laboratories, they have well defined about their actual customers, and also assure to deliver highly innovative product with natural preservatives.

2. Products or services: This component identifies what are the firms major products or services. In the mission statement they have clearly defined about their products i.e. HERBAL PRODUCTS. As they are producing, Natural diets and Medicines, Herbal Cosmetics, Herbal Remedies and many other OTC products. 3. Markets: This component is not addressed in the mission statement. 4. Technology: This component is addressed in mission statement as: MOST INNOVATIVE HERBAL PRODUCTS, that means they are using extensive research and laboratories testing that reflects the usage of technology to produce innovative and standardize products. And also its aim is of producing Oriental Medicines and natural dietary Supplements in a modern and scientific manner. 5. Concern for survival, growth and profitability: This component is not address in the mission statement. 6. Philosophy: Marhabas philosophy is mentioned as simple and ambitious. They are indulging themselves in inspirational activities by giving the most nutritious natural diets, natural medicines and herbal medicines as a divine service to mankind. 7. Self-concept: Marhabas distinctive competence is its products i.e. herbal products. Marhaba has consolidated its image as a (purity and quality) conscious company and has, over the years, demonstrated its firm commitment to quality. 8. Concern for public image: This component is not address in the mission statement. 9. Concern for employees: This component is not addressed in the mission statement. MISSING COMPONENTS OF MISSION STATEMENT: 1. Concern for survival, growth and profitability 2. Concern for public image 3. Markets 4. Concern for employees These components are key gaps in the mission statement; Marhaba should give emphasis to these components as well to make its mission statement more effective. As mission statement gives a holistic view of the firm so all the components should be addressed in the mission statement. Vision and mission statements of Marhaba laboratories pvt ltd. are not just stated, they are actually practicing these goals.

The general environment macroeconomic analysis: PEST ANALYSIS A pest analysis is one of the most popular and effective methods of analyzing the external macroeconomic factors that could impact on a business within a specific industry. The combination of the pest analysis with other factors will allow a company to create a strategic management plan of how to move its business forward in a way that maximizes the opportunities available to it, externally. P-POLITICAL Political issues include all sorts of factors that normally derive from the government in the form of policies or legislation. For the purposes of the pestle analysis of, in Marhaba there are trade and tariff restrictions as they their target markets are North America, South America, Eastern Europe, Southeast Asia, Africa, Oceania, Mid East, Eastern Asia and Western Europe. Many employees within the organization are employed workers (around 100-200 employees). Marhaba laboratories strictly follow employment laws. Rule for government regarding herbal products is that they should produce healthy, safe and hygienic product and that is why their products continually meet the rigorous certification requirements of National GMP Standards for quality and purity. Marhaba has a perfect GMP, Quality Assurance and ISO Quality Management System to meet the customer satisfaction, National & International standards. Stability of the government reflects the foreign investment but in Pakistan government is not stable. However, Government has given rebate and shows the politeness in its rules and regulation of import &export and has given free hand to industrialist to invest here. Also they are giving the legal safety to investor and following the encouraging policy for investor. After giving all these facilities and safety, investor do not show interest to invest here because the political parties are not stable. So in the end we can conclude that these political & legal factors reflect very bad effect on investors and discourage them to invest here. Some policies are good but cannot success whenever we dont have political stability in Pakistan E-ECONOMIC: Key areas for the pest analysis include inflation rates, interest rates and general economic conditions. ; when there is an economic downturn, the number of customers is likely to reduce obviously but not as such affect has been seen as the prices of herbal products are lesser than other medicinal products. However prices have increased during the years as fuel and energy cost surged up. The current economic climate in Pakistan is relatively weak and individuals are not feeling sufficiently wealthy to spend large amounts of their income on so our target market

is happy as Marhaba is trying to sell cheap products with high quality. Typically, Marhaba laboratories are focusing on reduction in costs in relation to generating additional revenue with discounts and enhanced services for clients. Government has reduced the import duty on plants and machinery of industry. They are importing high machinery from abroad to keep standard of their products. Affordable prices are their target and they are making it sure to reach to the standard. As economic policies encourage taking a decision for an industrialist that whether he should invest or he shouldnt invest in this country. For investment purpose Pakistans economy is not impressive because inflation rate is very high so we can say economic environment is very risky in Pakistan S-SOCIO CULTURAL: This part of the pest considers demographics such as age and wealth as well as issues including career aspirations and general interest in health issues. In this case, the Marhaba industry is doing extremely well. With a growing number of tensions, population and health consciousness people carving for herbal products have surged up. There is a growing demand from older people and also increasing ability by these individuals to be able to afford such treatments. These changing demands have led to substantial diversification and new opportunities within this industry. T- TECHNOLOGICAL: Technological developments also play a vital role. It becomes clear that Marhaba laboratories as it stands have relatively medium barriers to entry by virtue of the level of expertise and technology required. As consumers are becoming more demanding and experimental in the area of health and beauty there is a growing need for healthy products to ensure not only that they have the latest technology, but also that staff members are suitably trained to use such equipment. Their R & D department only holds 5-10 employees. In order to establish a truly competitive position, companies will have to offer the latest technology and a wide range of options. Its mention in their mission statement that Research and development is a passion at Marhaba and for the purpose company is keen to gain expertise and knowledge in the field of herbal sciences and to stay updated with the global trends. These expertise and knowledge has always leveraged Marhaba and the company is modernizing the old wisdom and knowledge of herbs through current research and development Now our government is encouraging technology competition in local markets especially Ecommerce is growing up and people buy their favorable product online and government establish a hardware development fund to finance IT hardware related R and D manufacturing activities.

PORTERs DIAMOND: National advantage It is the term used to refer to the factors that set each country apart, and determine the success and dominance of their businesses in a global market. The elements that determine this advantage can be both inherited and created. Companies that choose to employ the Porter Diamond in crafting corporate strategy may experience increased innovation and revenue.

The four different components of the framework are: Factor Endowment Related And Supporting Industries Demand Conditions Strategy, Structure, And Rivalry Factor conditions: Following are the factor conditions of marahaba: They have highly skilled human resource(qualification level, cost of labor, commitment) Linguistic ability of workforce

Rich amount of material resources (natural resources, vegetation etc.) Knowledge resources High quality of research in there laboratories.

Demand conditions: The market of Marhaba is larger locally than in foreign markets, so the local market demand is more than foreign market but demand is also increasing in foreign emerging market for herbal products. Their scope and growth rate is high. They have a sophisticated domestic market because the market demands are high for its products. Related and supporting industries: As local supporting industries and suppliers are competitive so they are more cost efficient and receive more innovative products. Demand for herbal products in Pakistan is high as compared to the international market, because of the perceived benefits these products have and the fact that they have no associated side effects. As Customers are more demanding in Pakistan, Marhaba is facing high pressure to constantly improve their competitiveness via innovative products. Firm Strategy, Structure and Rivalry: Strategy As Pakistan is with a long run outlook it will tend to be more competitive in industries where investment is long term. If Marhaba resides in countries with a short-run outlook will tend to be more competitive in industries where investment is short-term. They are facing intense competition both nationally and internationally. Rivalry: The major competitors operating in the market are Hashmi, Lifestyle, Qarshi and Serne. Marhaba is the market leader with almost 55% of the market share. Hashmi secures 30% of the market share which is less than that of Marhaba. Lifestyle, Serne, Qarshi, and a quite large number of illegitimate brands share the remaining 15% of the market. Structure:

BOARD OF DIRECTORS

Mr. Muhammad UsmanCEO

M.Iqram Director of Finance

M. Islam Director of Production

M. Jameel Director of Marketing

M.Saleem Director of Production

Role of government: The role of government in Pakisran is acting as a catalyst and challenger; it is to encourage companies like Marhaba to raise their aspirations and move to higher levels of competitive performance. Pakistan's government should encourage companies to raise their performance, stimulate early demand for advanced products, focus on specialized factor creation and to stimulate local rivalry by limiting direct cooperation and enforcing anti-trust regulations. The industry and international environment: Demand and supply: The market of Marhaba is larger locally than in foreign markets, so the local market demand is more than foreign market but demand is also increasing in foreign emerging market for herbal products. Their scope and growth rate is high. They have a sophisticated domestic market because the market demands are high for its products due to environmental changes and increase in disease and allergies. Trend is moving towards herbal products due to increase in side effects of scientific medicines. Marhaba supply herbal products including medicine, beauty products and food stuff in all over Pakistan and export to foreign countries too. Due to the strength of having vast distribution channel its quick and fast supply to customers. So Marhaba products are available in pharmacies, departmental stores and local stores.

Pricing: Buyers and sellers cannot individually influence the price at which the product can be purchased or sold. Price is determined by the market, so each buyer takes the price as given. The competition is imperfect or we can say oligopoly. In two or three competitor there prices and product line is all most same and. Marhaba always have low or moderate pricing strategy to serve customers and to fulfill their needs.

Barriers of entry: 1. THREAT OF NEW ENTRANTS Comments on each determinant: Economies of Scale and experience: Successful entry requires that companies have high economics of scale because it reduced the cost and it provides the ability to facilitate your operation in multiple directions. Product Differentiation: Product differentiation is not a high barrier to entry. Brand Identity: Somehow brand is a critical factor for success. Some people refer branded products so it is necessary to provide the branded products in term of good quality. Switching Costs: High switching cost is a barrier to new entry because loyal customers cant switch from one product to another product. Capital Required: High capital is required for the purpose of infrastructure and in to invest in large resources in order to compete in industry. Cost advantage: Cost advantage are typically high barrier to new entrant because established companies have already create a good image in the customer mind and gain a market share in industry and access to modern technology.

2. THREAT OF SUBSTITUTION Price performance: A substitute product or service is a threat to competition and threat of substitute products means how easily your customers can switch to your competitors product. When there are actual and potential substitute products available then segment is unattractive. Profits and prices are affected by substitutes so; there is need to closely

monitor price trends. Switching Cost: Customer can easily switch to substitute products. So substitutes are a threat to your company.

Market Analysis: Segmentation:

Segment marketing offers several benefits over mass marketing. The company can more easily select the best distribution and communication channels and it will also have a clear picture of its competitors. Market segmentation refers to the different areas of the population that companies can aim their products towards. The market segment that Marhaba has chosen to aim is the health conscious people and to those who are interested in herbal as well as healthy food products.

Geographi c Demograp hic Psychogra phic Behaviora l

Segmenta tion

Geographic Segmentation: Marhaba is doing mass market which is not limited to one county but all over the world. This company has been exporting its product for 15 years now and is still expanding around the world like USA, Canada, UK, Australia, Dubai, Japan, Korea, Greece, China, Indonesia, Sri Lanka, Tajikistan, West Indies, Maldives, & Botswana.The main target of Marhaba is Pakistani market. In Pakistan, marhaba producrs are available in every city because its very famous and quality product of market.

Countries Density Climate

Pakistan and other countries Urban, Sub-urban, Rural All types of weather

Behavioral Segmentation:

Marhaba provides quality products to its customers. This company is purely based on demands and needs of the people, and they assure that their products will be acceptable by those people who are health conscious and who want to have herbal products. Following are the different possible segments in this regard for Marhaba. Purchase Occasion Benefits User status Loyalty status Readiness stage Attitude towards product Regular occasions Health Regular user, Non user, Potential user Strong loyalty Aware, Interested and Intending to buy Positive

Demographic segmentation: Demographics segmentation basically considers age and wealth as well as issues including general interest in health issues. For Marhaba the different demographic factors are:

age Sex Occupation Family size Family income

12 and above Female and male One earning member Nuclear family size

Psychographic segmentation Marahaba realizes that there are a lot of differences between customers of different localities, ages and nationalities. They have targeted different segments individually so as to maximize sales. These segments are divided on a variety of factors. Like age, sex, lifestyle, income level

and psychology. For marhaba the psychographic factors are: Social class Personality Lifestyle Upper ,Middle and lower class(health conscious people Not specific Not specific

Forms of competition: Nature of Competition in Business Monopoly: Pure competition Oligopoly Monopolistic Competition Monopoly

Forms of competition of Marhaba: Form of competition of Marhaba is oligopoly. Oligopoly An oligopoly is a small group of businesses, two or more, that control the market for a certain product or service. This gives these businesses huge influence over price and other aspects of the market. It is clear that Marhaba, Qarshi and Hamdard are controlling the market.As there are few sellers,they are aware of the actions of each other.So form of competition of Marhaba is oligopoly due to following reasons: Its products are similar to Qarshi and Hamdard. There are few sellers (Qarshi,Hamdard and Marhaba). It has fairly inelastic demand. All the businesses Qarshi,Marhaba and hamdard are big and of equal size.

Quality: Marhaba is one of the largest phytoceutical (A term for plant products with activity on biologic systems) company engaged in research, development, production and marketing of Health Food Products, Herbal Cosmetics, Herbal Remedies and many other OTC products. Marhaba has a perfect GMP (Good manufacturing practices), Quality Assurance.

PCSIR (Pakistan Council for Scientific and Industrial Research) certified products and ISO Quality Management System to meet the customer satisfaction, National & International standards. Consistent quality products, continuous high standards of service and affordable prices are playing a major role in the growth of our business. We take proactive steps to ensure that our products are safe, pure and effective. Our products continually meet the rigorous certification requirements of National GMP Standards for quality and purity. Marhaba has consolidated its image as a (purity and quality) conscious company and has, over the years, demonstrated its firm commitment to quality and strict adherence to international standards. Marhaba takes pride in maintaining a high quality in its products and superior skills and acquiring the latest in advanced technology. It is conscious of the need to improve efficiency and set new standard of excellence in the competitive phyto pharmaceutical market for the welfare of humanity. Research and development is a passion at Marhaba and for the purpose company is keen to gain expertise and knowledge in the field of herbal sciences and to stay updated with the global trends. These expertise and knowledge has always leveraged Marhaba and the company is modernizing the old wisdom and knowledge of herbs through current research and development. Hakeem Muhammad Usman (Founder and CEO of company) being the expert herbalist has a vast vision to provide innovative and affordable Natural Health Care Products for human beings in Pakistan and abroad. His efforts uplifted the company from a small business to a huge Neutraceutical project. Making a distinct identity for itself, Marhaba laboratories is committed to provide total customer satisfaction owing to its quality products. Internal factors Value chain: (table)

Core competencies: As to satisfy the customer with a wide range of health care and natural care dietary solutions are the primary concern of the Marhaba Laboratories. They have created a strong positioning of their brand through getting a sustainable competitive advantage. There are following core competencies that are the reason of making its a leading brand towards the natural health care supplements. Herbal products: Marhaba has highly distinguished itself on the bases of the its herbal products which has consolidated image of purity and quality that demonstrates its commitment towards becoming unique. All the herbal products are made after the extensive research and laboratory testing that reflects the usage of technology to produce

innovative and standardize products. And also its aim is about producing Oriental Medicines and natural dietary Supplements in a modern and scientific manner. Companys culture: The culture of Marhaba laboratories is highly differentiated among the same service providers. The credible employees are hard working, efficient and process oriented that always keen to make align the companies' strategies with the changing trends of the environment. The highly qualified professionals are from the areas of agronomy, botany, microbiology, oncology, bio-technology, pharmacology, chemistry, clinical pharmacy, and much more. Marhabas philosophy is mentioned as simple and ambitious. They are indulging themselves in inspirational activities by giving the most nutritious natural diets, natural medicines and herbal medicines as a divine service to mankind.

Standardized products: All the quality products are made through hygienic, environment-friendly processes where all the practices and operations are maintained under international standards. These standards are governed by the regulations applicable under the Marhaba laboratory Management System. Moderate price range: All the products of Marhaba laboratory are available at the moderate prices that tends to increase the sales volume. Such moderate prices are highly accepted by the targeted market customers that give credit to use the products of this company. This strategy ultimately resulted in company by gaining a huge profit that makes it different among the competitors. Distribution system: The distribution channel is focused on the easy access to the customers to the all differentiated products of the Marhaba Laboratories. All the distribution strategies of Marhaba strategists supporting Marhaba to accomplish their objectives and to move on the way to success in a competitive environment by assuring the availability of its products to the consumers. Economies of scale: The optimal use of infrastructure and the experience and expertise around a process are what generates the power of economies of scale. These arise when you buy and sell material, products and services in larger volumes. After analyzing the companys production operations, we have observed that the sales volume is high and they also purchase the material in bulk. This clearly depicts that the business operations and high profitability are higher which also makes them feasible for further investments. At Marhab R & D department is well equipped with modern research facilities where our highly qualified scientists work on diverse natural herbs. The logistics and the prices are highly attractive towards its target market that makes it stronger in achieving market share and ultimately its profitability. These are the factors that tend to achieve its economies of scale.

Cost Units

These are the following cultures on which the human resource management based:

Business Cycle:

Boom It comes when any disease comes and they have related product for that disease like that when eye disease come the demand of rose water go to its boom level. Recession It comes when the new Government come and suddenly changes the old Government Policies and taxes rates. Recovery Marhaba laboratoriesoratories Lab have advance payment system so it help a lot

if they have any financial problem to recover it. Organization culture: All organizations have their own distinct culture and management style. It includes the dominant values, beliefs and norms which develop over time and become relatively enduring features of the organizational life. It also entails the way managers interact with the employees and the way they spend their time. At marhaba laboratories, organization is pursuing two type of culture i.e. Role Culture & Task Culture. Marhaba has more open, innovative and friendly environment with fewer hierarchies and smaller chain of command. There is a bureaucratic management style. While staff is daring, devoted, dedicated and engaged. There is an ease of style, relaxed atmosphere and welcoming attitude. Even down to the members: everyone is very nice and unpretentious. Culture is also supporting organization to move towards becoming an industrial leader. These values and common goals keep the employees working towards a common destination as a coherent team and are important to keep the team spirit alive. Company has developed this culture to obtain goals mentioned in vision and mission statements.

Power culture: After interviewing the strategists of the company, we have come to know that the decision making in the Marhaba Laboratory mostly based on the small number of people which are usually taken by the senior management. Its biggest strength of the company that the decision usually taken are prove best to align the companies' strategies with their ultimate goals. Role culture: This culture tends to the individuals to assign roles and jobs according to the abilities of the staff. In the Marhaba Laboratories, this culture is followed where all the staff is assigned their roles according the knowledge, skills and abilities. Their responsibilities are based on their qualifications which helped to enhance the productivity of the company and ultimately resulted in higher profitability. Personal culture: According to the HR manager, the professionals of the Marhaba Laboratories are also concerned regarding finding the opportunities for employees to develop their career and skills. This culture helps the organization to cope with the changing trends of the strategies and the continuous professional development.

Impacts of culture on the strategic change: This culture of the companies has a great impact on its capability which clearly depicts the

ability of the organization to cope with the changing trends of the organization. The power culture has more faith in individuals than committees and can either change very rapidly and adapts or fail to see the need for change. Role culture is not subject to constant change and usually does not grab the first mover advantage. Personal culture rejects formal hierarchies for getting things done and exists solely to meet the needs of their members. This culture is not appropriate for the business organizations. Ratios:

The Role of Human Resource Management in Organization Excellence:

Human mind is a fundamental resource, the greatest achievement of any organization is to fully utilize this resource and it is possible by using one and only tool Human Resource Management As you know that Human resources make up the workforce of an organization and to manage, organize and to utilize this work force is essential to get the objectives and excellence. And the HRM Function in the organization plays the role of the unit taking care of the human capital or human resources. The HRM Function is responsible for the processes, which allow the organization to stay competitive on the external market and internally efficient. The HRM Function adds value in the organization and HRM function plays the role as the Finance Department plays in the organization. The Foremost and prime HR function in any organization is recruiting the right person and then getting required quality and quantity of work in line with organizational goals which uses various tools and techniques for motivation, appraisal, training and cross cultural management, which in return maximize organizations human recourses strength which helps to obtain goals and targets. HRM plays very important in organization especially in public sector organization. There are

many issues arise in the public sector organizations which need to resolve and HR managers are the persons who resolve these problems. In universities, there are all kinds of people from President to security guard, where issues are resolved and managed properly by HRM department. In organizations employees face problems regarding to the job, environment and culture and all these issues resolved by this department to continue the function of organization effectively and efficiently. HR is largely seen as a one-stop shop for all employee issues. Its true that HRM, effects organization culture, quality of work life, empowerment and productivity and high involvement of HRM practices positively associated with employees perceptual outcomes and process quality management and organization excellence. So, Its obvious that; People are the most important organizational resource and the key to achieving outstanding performance. HRM is a tool to utilize these resources in true meanings to achieve goals and objectives. A truly organized human resource department; Maximize return on investment in the organization's human capital. Minimize financial risk. Maximize organizations excellence. Human resource management: Human resource is the foremost vital resource of the company to whom other resources are intended to be used. As human resource is the need of organizations to be conducted with their different business activities so development of these people is the key task for the organizations. Human resource development is a strategic and comprehensive management area which involves establishing policies, practices, administrative structure that emphasizes on the organizations most valued resources. Human resource development includes the development of manpower and human capital through using different tools such as training, promotions, transfers and opportunities for career development which ultimate objective is to achieve organizational goals. The human resource of Marhaba Laboratory is very much efficient and have well trained qualified professionals from the areas of agronomy, botany, microbiology, oncology, bio-technology, pharmacology, chemistry, clinical pharmacy, and much more.

Competitive position: Competition Analysis and Market Share: The major competitors operating in the market are Hashmi, Lifestyle, Qarshi and Serne. Marhaba is the market leader with almost 55% of the market share. Hashmi secures 30% of the market share which is less than that of Marhaba. Lifestyle, Serne, Qarshi, and a quite large number of illegitimate brands share the remaining 15% of the market. Marhaba The market leadership of Marhaba is followed by the superior quality of the product which is a value to the customers and also by the trust and loyalty of the consumers which Marhaba has successfully built over time. Hashmi Hashmi is the only one who is following Marhaba and doing the marketing and advertising efforts which has paid him and he is the 2nd one in the industry leaving behind the big names like Qarshi. Serne Serne is following Marhaba and Hashmi by marketing same SKUs. Serne is also registering its name in the packed Ispaghol Husk industry and gradually increasing its share in the market though it is far behind Marhaba and Hashmi. Lifestyle Lifestyle is not into the SKU of sachets but offering many different SKUs like 80 gm, 160 gm etc. (all in jars). Lifestyle has successfully discovered a new channel by visiting doctors and initiated the prescription through doctors. Qarshi Amazingly Qarshi seems not interested in the Ispaghol market because they have not yet got into the 5 gm sachet and 150 gm jar SKUs which are major contributors to the sales of all other companies. Qarshi is just offering 3 SKUs of 25 gm, 50 gm & 100 gm. Apart from the direct competitors, the different levels of competition faced by Marhaba Ispaghol Husk are as appended below: The positioning is directed to the families, as any member of the family may face the problems of constipation, acidity or cholesterol and this problem is now more common in young people due to the consumption of junk and fast food. The strategic objective of such a positioning is to expand the consumers boundary and to make

it a product of regular use which will ultimately bring in more business.

Product life cycle: (plc) Product Life Cycle

Gro wth:

Ispaghol Husk is in the stage of Growth because constipation is one of the most common and known complaints of, especially habitual and constant, whereas no such problem is associated with Ispaghol husk. Ispaghol husk is also an excellent and easy therapy in patients with intestinal amoebiasis, ulcerative colitis and other anus-rectal diseases. Modern research has

shown the ability of Ispaghol husk to counter illness like hypercholesterolemia, obesity etc. Now a days people use Ispaghol Husk without any side effects and they use it freely. Maturity:

Marhaba laboratoriesoratories products maturity rate is seasonal , like in summer the Distilates product have more demand for example Arq Gaozaban - Borage Water, Arq Ajwain - Omum Seeds Water, Chuarqa, Arq Saunf - Fennel Water, Arq Podina - Mint because these drinks has not any side effect and they are healthy drinks. Same in winter the demand of Food Supplements increase Like Marhaba Honey, Marhaba Joshanda - Herbal Tea, because it is greatest gifts of nature and Marhaba try to give it 100% pure in its original shape. Decline:

In decline stage the Herbal Medicine are because people did not aware from this product and people are more toward the allopathic and there rely on that. The marketing strategy for the Herbal Medicine is not strong and they did not paying attention on this product. THE PORTERS 5 FORCES MODEL Porters five forces model is a commonly used tool that businesses can use to analyze their external environment and also can be used to determine whether the industry is attractive enough to sustain a small or medium size enterprise and we are going to look at how they have been applied to a company that is already thriving, namely Marhaba. (Following is Reference to the appendix 1) 1. BARGAINING POWER OF BUYER Comments on Each Determinant: Concentration: The barging power of buyer is high because the market is concentrated. Product Differentiation: Branding is important factor to success and also through product differentiation the buyer bargaining power is high. Switching Costs: If buyer have low switching cost then the bargaining power of buyer is high through low switching cost customer can freely switch from one product to another. Backward Integration: There is no threat of backward integration because customers cant make the products themselves that the company makes.

Buyers Information: There is need of customer to have complete information about the product he purchases. So if the buyer has complete information on the product he may purchase then the buyer power is typically high.

Result: There are four 4,s so the bargaining power of buyer is high. If we sum up all the determinants and divided by the total number of determinants i.e. 23/7 = 3.28.So this show that the bargaining power of buyer is high and it implying strong downward pressure on prices. And also buyer have low switching cost then the bargaining power of buyer is high through low switching cost customer can freely switch from one product to another but there is also no threat of backward integration because customers cant make the products themselves that the company makes. 2. BARGAINING POWER OF SUPPLIERS Comments on Each Determinant: Concentration: The bargaining power of supplier is high because suppliers are concentrated and well organized. Presences of Substitute inputs: The suppliers are typically powerful because there are no many substitutes available for supplier products. Impact on Quality/ Performance: Suppliers are powerful because the quality is very important factor for any business. In almost every part of business from the product processes to human resource and whole management team the quality is big issue. Product Differentiation: The branding is a critical factor for success and differentiated products so the suppliers with differentiated products have more bargaining power than those suppliers selling commodity. Switching Costs: All successful companies build strong relationship with their suppliers. And the successful companies build bridges between their organization and suppliers. So it is very costly to switch from the suppliers. So the switching is high due to that supplier is powerful. Forward Integration: Suppliers cant produce the product that the company makes because it requires very high cost and technical expertise .So there is no threat of forward integration.

Result: There are three 4s and two 3s. If we sum up all the determinants and divided by the total number of determinants i.e. 22/7 = 3.14.So this shows that the bargaining power of supplier is moderate. And also there are no many substitutes available for supplier products, switching cost is high but also Suppliers cant produce the product that the company makes because it

requires very high cost and technical expertise 3. INTENSITY OF RIVALRY Comments on Each Determinant Industry growth: Industry growth rate is slow and slow growth rate causes firm to fight for market share everyone is trying to gain more market shares. And In a growing market, firms are able to improve revenues simply because of the expanding market. Fixed Cost: High fixed costs are moderate which in turn a little bit threat for the industry. And due to the high fixed cost result in an economy of scale effect that rivalry increase. Intermittent Overcapacity: There is no problem of excess capacity so there is no threat for the industry. Brand Identity: Brand is critical factor for rival success. So brand identification by buyers tends to constrain rivalry. Switching Costs: Lower switching cost increases rivalry. When a customer can freely to switch from one product to another there is great struggle to capture customer. Concentration and balance: There are a large number of firms of equal size and power, all chasing after the same customer so rivalry is typically intense. Diversity of competitors: There are lot of competitors with different strategies and frame of reference and when competitors are pursuing aggressive growth strategies to gain a sustainable competitive advantage so the threat from competitors is greater. Corporate Stakes: The intense of rivalry increases because the firms select alternative strategies and several industries take greater risk to expand their position in the market and gain a competitive market position. And the firms also able to improve revenues simply because of the expanding market. Exit Barriers: Exit barriers are high because of high cost on abandoning the product. So the firm must compete. And due to the High exit barriers cause a firm to remain in an industry, even when the venture is not profitable

Result: There are seven 4,s so the intensity of rivalry is high. If we sum up all the determinants and divided by the total number of determinants i.e. 33/9 = 3.6.So this show that the intensity of rivalry is high because there are numbers of companies producing the same product in the market and also Industry growth rate is slow and slow growth rate causes firm to fight for market share and everyone is trying to gain more market shares. There are also a large number

of firms of equal size and power, all chasing after the same customer and switching cost is also low so rivalry is typically intense. And if someone raises prices, they will be quickly undercut and strong competition put strong downward pressure on prices. 4. THREAT OF NEW ENTRANTS Comments on each determinant: Economies of Scale and experience: Successful entry requires that companies have high economics of scale because it reduced the cost and it provides the ability to facilitate your operation in multiple directions. Product Differentiation: Product differentiation is not a high barrier to entry. Brand Identity: Somehow brand is a critical factor for success. Some people refer branded products so it is necessary to provide the branded products in term of good quality. Switching Costs: High switching cost is a barrier to new entry because loyal customers cant switch from one product to another product. Capital Required: High capital is required for the purpose of infrastructure and in to invest in large resources in order to compete in industry. Cost advantage: Cost advantage are typically high barrier to new entrant because established companies have already create a good image in the customer mind and gain a market share in industry and access to modern technology.

Result: There are four 3,s & two 4s so the threats of new entrants are high. If we sum up all the determinants and divided by the total number determinants i.e. 25/9 = 2.7.So this show that the threats of new entrants is low because of high entry barrier such as brand identification, cost advantage to established companies and high capital required for new entrant. 5. THREAT OF SUBSTITUTION Price performance: A substitute product or service is a threat to competition and threat of substitute products means how easily your customers can switch to your competitors product. When there are actual and potential substitute products available then segment is unattractive. Profits and prices are affected by substitutes so; there is need to closely monitor price trends. Switching Cost: Customer can easily switch to substitute products. So substitutes are a threat to your company.

Result: There a one 4s and one 3s.If we sum up all the determinants and divided by the total number determinants i.e. 7/2 = 3.5.So this show that the threats of substitution is high because customers can easily switch to substitute products and substitute product or service is a threat to competition because it offers a higher performance at a given price or the same performance at a lower price Overall Result: These results are after completing the Competitive analysis is: PORTERS FIVE FORCES Buyer Suppler Intensity of Rivalry Threats of new entrants Threats of Substitution Overall industry analysis: As we know that Porter's Five Forces Analysis is an important tool for assessing the potential for profitability in an industry and this concept involves a relationship between competitors within an industry, potential competitors, suppliers, buyers and alternative solutions to the problem being addressed. The first porters force is the bargaining power of buyers which a firm is reliant on customers. Bargaining power of buyer is high because of low switching cost and concentrated market. Porters second force is the Bargaining Power of Suppliers. This means that the ability of a firm to negotiate good terms is influenced by the number of firms a company relies on. So the bargaining power of supplier is moderate because there are no many substitutes available for supplier products, switching cost is high but also Suppliers cant produce the product that the company makes because it requires very high cost and technical expertise Porter third force is the degree of existing rivalry, which is based upon the number of competitors that are of comparable size. Intensity of rivalry is high because there are numbers of companies producing the same product in the market and also Industry growth rate is slow and slow growth rate causes firm to fight for market share and everyone is trying to gain more market shares. The next force is the threat of potential entrants. Threats of new entrants is low because of high entry barrier such as brand identification, cost advantage to established companies and high capital required for new entrant. The last force is the threat of substitutes. The threats of substitution are high because customers can easily switch to substitute products. So the overall industry is attractive and profitable and gains a sustainable competitive High Medium High Low Medium

advantage. First mover advantage: By being the first to enter a new market, the business gains an advantage over its actual and potential rivals. This is true whether the business is seeking to develop new geographical/demographic markets or segments for existing products, or whether it is seeking to introduce new products to its existing market segments. If the business is first into a market, it can establish 'defensible ground'. First mover advantage of Marhaba is in following three products; Rumatil oil Rumatil relieves in sprain, strain backache, joint and muscular pain. Acne clean cream It contains ingredients from natural sources and enjoys a reputation of superior quality among satisfied customers. Extracts from natural medicinal plants are incorporated which are effective against most skin diseases, especially acne and pimples. Acne clean cream is effective for people of all ages with mild, moderate and severe acne. Nikhar ubtan (face scrub powder) Nikhar Ubtan is absolutely free from chemicals and contains the finest and purest herbs essential for a healthy skin. It copes with sun burns and routine exposure of the skin to natural elements. These products help Marhaba to capture market share much more easily without having to worry about rivals trying to capture the same customers. When the rivals do come along as they inevitably will the first-mover and its management team will have advantages in the ensuing competition, such as familiar products, brand loyalty, the best retail outlets, up-and-running distribution systems, and so on. By beating rivals into the market, these first-movers can consolidate its position and compete more effectively, not only defending its previously acquired share but even continuing to expand. Elements of competitive advantage: Key success factors:

Price competitiveness: Prices of products in Nutraceutical Industry should be viable as

compared to other competitors in the market to become the unbeatable. Product diversity: To be successful in this industry Products should comprise of variety and range. Technology: Well established and extensive laboratory research is needed in order to stay in this industry. Quality of Products: To be successful in this industry product quality should be up to mark means high quality product should be made. Because customer prefer high quality products for their health. Consumer satisfaction: Consumer satisfaction is a main priority to get along with this industry. As much as the customers would be satisfied with company, they will be more loyal with the products of the company. It will be helpful to be successful in the industry. Capacity and Productivity: To be successful use the capacity to the maximum level in production process to increase the productivity level. Distribution Network: Logistics, supplier and buyer networks should be well integrated and agile. Market penetration: it is a prime factor in the success of a company that its Products should be easily available, recognized and bought by the people. Better R&D strategy: To be the market leaders, better R & D strategy should be used. Global expansion: It is very necessary to compete in all world market of that product to be successful and survive in the industry.

Clear Brand image: Well reputed brand image should be possessed in the industry to be market leader or capture the maximum market share. Strategic advantage profile:

Internal area

Competitive strengths and weaknesses

Accounts

+ Provide detailed production cost of all the products and update data timely Face problems in maintaining balance sheet as other departments

do not provide data timely and accurately Human resource + Recruit employees according to needs of other departments and develop employee as well Difficult to manage issues when employees dont agree from their feedback.

Marketing

+ Creating awareness by using different promotional campaign Less advertising efforts for all products

Research & development

+ Extensive research and laboratories testing. Company bears cost if research is not authentic

Production

+ Efficient capacity utilization Lack of alternative resources to meet electricity shortage.

Accounting department

Strength: The accounts department provides detailed production cost of all the products and update timely whenever new information comes regarding cost of new products. Weakness: Face problems in maintaining balance sheet as supply chain do not provide timely and accurately information about quantity required due to which department face difficulty in data compiling and filing. Human resource

Strength: human department is fully coordinated and aligned with all departments in the company and recruit employees according to needs of other departments and maintain strong communication throughout the organization. HR department develops employees personal skills by providing training programs to them to enhance their competencies Weakness: Sometimes employees dont agree on results; they get from their performance appraisal feedback which lowers their morale and it becomes difficult for the department to manage such issues

Marketing

Strength: Company is using different marketing campaigns to create awareness among people about their products. Currently they are organizing promotional events in different colleges for awareness and benefits of using herbal products. They are targeting their identified segments globally through advertising due to which their sales are increasing outside the country as well. Weakness: Less advertising efforts for all products as they are not promoting their all products through advertisement instead their focus is towards advertising some specific products like isphagol husk which are already successful in the market. Research & development

Strength: Scientific techniques used by Marhaba as they are focusing on extensive research and laboratories testing for providing healthy and superior quality products to their customers. As Marhabas aim is of producing Oriental Medicines and natural dietary Supplements in a modern and scientific manner. Weakness: Sometimes research is not authentic, so company has to bear cost for this. Production:

Strength: Efficient capacity utilization; Marhaba is currently operating at full capacity, with the implications that a system exists which can control costs. Weakness: Company has lack of alternative resources like generators or other power sources to meet electricity shortage. Due to which production badly suffers during power shortage.

GENERIC STRATEGIC ALTERNATIVES: Corporate strategy: From four corporate generic options i.e. stability, expansion, retrenchment and combination, Marhaba preferring to go for EXPANSION: Corporate strategy of Marhaba is to think big for whole company to enhance their market position by increasing market share and to offer moderate price with high quality. They are going to focus on increasing the market share by going towards expansion. Reasons to go for expansion: Diversifying risk in related industry Searching for competencies to compete competitors

To grow faster than competitors to get dominant market position To get advantage of the improving economic conditions For the managerial motivation to ensure that they are in growing company

Business strategy: There are two basic strategies for any organization; Low cost strategy or Differentiation strategy. We have four options for business generic strategy cost leadership. Differentiation, focus and stuck in the middle, while Marhaba Laboratories (pvt) limited is doing its business on the basis of DIFFERENTIATION strategy. Differentiation is an Approach under which a firm aims to develop and market unique products for different customer segments. Reasons to go for differentiation strategy: Marhaba R & D department is well equipped with modern research facilities where our highly qualified scientists work on diverse natural herbs. The highly qualified professionals are from the areas of agronomy, botany, microbiology, oncology, bio-technology, pharmacology, chemistry, clinical pharmacy, and much more. Through the ceaseless quest of our workforce, we have been able to produce the highly result-oriented products that cover almost all the aspects of human health. To compete competitors, to increase market share and to make a valuable positioning in minds of customers, it is focusing to introduce new products with unique attributes for new market segments. For example Marhaba introduced new Herbal medicines for Diabetic and hypertension patients which are not yet introduced by its competitors. They have introduced Rumatil pain relief oil and herbal acne cream which is not yet introduced by herbal pharmaceutical competitors. Focus: Marhaba also desiring for focus generic strategy as to keep away itself from competitors in some product categories. Focus means to have niched for a particular product so that to increase in market share by the help of sales of regarded product which is not being offered by competitors. Marhaba offer NOSE INHALER to target those customers who are sensitive to weather conditions and pollen allergy specially people living in Islamabad and Pindi. This inhaler is not in competition by the competitors while Marhaba getting advantage by serving this niche. Competitive scope and competitive advantage: Marhaba has selected Narrow target or niche within differentiation generic strategy. So Marhaba lies in second quadrant. This shows that its focus is narrow but to get competitive advantage it will go for differentiation strategy.

COMPETITIVE ADVANTAGE LOWER COST DIFFERENTATION BROAD TARGET


COST LEADERSHIP DIFFERENTATION

COMPETITIVE SCOPE
COST FOCUS DIFFERENTIATION FOCUS

NARROW TARGET

GENERICE STRATEGIES Competitive Scope and Competitive Advantage

Related activities of Marhaba to go for narrow target & differentiation strategy: Differentiation: 1. They are focusing on introducing different brands in herbal medicine, herbal beauty products. 2. They have their focus on product design so that to fulfill customers expectations. 3. For brand recognition and to attract market share they are making efforts in marketing

through, Advertising Personal selling Public relation or publicity Sale promotion

4. To ensure quality their first priority to meet customers needs and satisfaction level 5. They are getting success in R&D due to new research and developments in herbal medicines. Focus: 1. They are matching their product according to target market of customers like they are offering nose inhaler in KPK and nearest hill stations to serve allergic sensitive customers. 2. They have dedicated, motivated & devoted work force to meet their targets and to move forward according to strategies. Strategic variation diversification: 1. Related and unrelated products: Marhaba have both type of diversification related and unrelated. Related diversification: Herbal medicines Related diversification is in the product line of herbal medicine i.e Herbal syrups for different disease and allergies as well as health complications, Medicine in form of tubes for treatment of burned areas, Balm, pain relief oil Marhaba joshanda Rose water for eyes e.t.c

Reasons to go for related diversification: Marhaba prefer to serve in herbal medicines to get advantage ofl

Core competencies in producing herbal products Same marketing and selling efforts Production processes and capacity Minimize risk to go for unrelated products

Unrelated diversification: Somehow Marhaba is moving forward towards unrelated diversification by offering herbal food intakes and beauty products. These products are also having content of herbs and shrubs but category is different to serve customers as segment based on health and beauty conscious customers. (a) Herbal food intake Some sort of unrelated diversification is in the category of food intake like; Beverages: Gul bahar, elaychi shrbt, sandal shrbt, herbal tea Honey and Husk for healthy life.

(b) Herbal beauty products Herbal beauty product category is newly introduced few years ago to serve customers who are conscious for their beauty. Herbal Ubtan New Herbal Acne Cream Black Hina

Reasons to go for unrelated diversification: To expand the pool of companys core competencies To learn new skills to serve new segments To minimize risk of being player of just one market To get advantage of research and information systems

2. International expansion: Marhaba also export herbal products outside country to attract new emerging markets. Due to core competencies in herbal medicine specially for Husk, Honey, beverages, herbal tea and acne

cream market is attractive in foreign countries as people are conscious for their health and now trend is moving from scientific high potency medicine to herbal medicines. They have number of different countries in their list. USA, Canada, UK, Australia, Dubai, Japan, Korea, Greece, China, Indonesia, Sri Lanka, Tajikistan, West Indies, Maldives, & Botswana. Factors: Number of factors affecting to do business in foreign countries is less as they have production capacity in Pakistan. So due to just selling herbal products to foreign pharmacies they have to bear low labor cost and administrative cost. Culture has no so much influence as people of different regions have believe on herbal treatment. While workforce exist in Pakistan so they are comfortable here to do work in existing management structure. From generic to variations: This table shows that corporate generic strategies and business generic strategies of marhaba are aligning with the implementation of variations. Marhaba strategic choices are interlinked as its understood that;
Generic Strategy Corporate Expansion Investment International Stability Cost control Restructure Retrenchment downsiz Divest Rationalise Acquisition Defend Variation

Corporate view: Cost Leadership

Business

Scale Economies

First Mover Experience

If Marhaba strategy is to go for expansion then they have to make investments and to increase Differentiation Segmentation Branding Research market share through acquisition or internationally expanded. And above generic strategies and variation explanation shows that Marhaba invest money and resources to expand business locally as well as internationally. Business view: If Marhaba is preffering differentiation than they have to do detail research for new related and unrelated products of different segments. So Marhaba is doing same efforts to attract segments by searching about different products categories to serve different segments. While to focus on

niche Marhaba keep their attention to attract specific customers by assuring reliability in form of herbal medicines lead time and quality. Strategic variation acceptability: Strategic variations are acceptable as all strategies are consistent with; 1. Objectives of Marhaba: 2. Suitability in terms of resources 3. Feasibility Company wants to utilize its resources (investment, skilled workforce, core competencies) to serve mankind (locally, nationally, globally) to ensure health by offering researched based herbal products (expansion and new segments for new products) Strategic choice: Performance Gap Analysis: After analyzing performance of Marhaba of 5 years they can stand firmly with existing strategy that is Expansion and Diversification. As performance showing that they are moving towards their desired objectives. Performance gap is small so Marhaba can achieve its targets by continuing existing strategies.

SWOT analysis: STRENGTHS:

Global expansion is one of the major strength of Marhaba laboratories. Vast distribution network within Pakistan as well as beyond the boundaries Quality products; herbal as well as healthy food products Financial position strong due to no liabilities in banks and self-financed project Scientific techniques used by Marhaba as they are focusing on extensive research and laboratories testing that reflect the usage of technology to produce standardize products Low start up and operation cost Large profit margins; as approximately 23% per year Interest of people towards Marhaba products i.e.; Herbal Cosmetics, Herbal Remedies and many other OTC products. Strong Brand image

WEAKNESSES: Customers perception of people about some of the Marhabas product is not strong as compare to Hamdard and Qarshi for Herbal drinks Advertising efforts are not enough to compete competitors globally Poor management facilities as compare to competitors Less awareness among consumers about some of the products i.e.; Low differentiation among competing brands Herbal Cosmetics and Herbal remedies (therapies) Shelf life is less as compare to competitors Government intervention for the license and approval of some medicine Shortage of power resources due to energy crises Product lines less than competitors

OPPORTUNITIES IN MACROENVIROMENT: Government Taxes for the export of herbal products decreasing. Cholesterol and stomach problem increasing due to spicy food so more people are attracted towards herbal product. Demand for the herbal products increasing among people of all ages as people are conscious about beauty and health. Demand for the seasonal products increasing. As Seasonal infection increasing due to change in environment which boost the sales of Marhaba products. Reduction in costs of healthy products somewhat help them in doing market penetration and gaining more customers. Hygienic products which are fully processed are becoming a part of culture and Marhaba

is already following internationally set standards of each and every product. Products are more reliable and suited to local climatic environments than the synthetic drugs, most of which have known and unknown side effects. Government shows politeness in its rules and regulation of import &export and has given free hand to industrialist to invest here. Also they are giving the legal safety to investor and following the encouraging policy for investor. Emerging Markets of herbal pharmaceutical. Demand of herbal products in Middle East.

THREATS IN MACROENVIROMENT A price of raw material for herbal products increasing as inflation rate is increasing. Increase in energy crises leads to increase in product cost. Average disposable income decreasing as consumption power reduces. Income and sales tax increasing due to unstable economy. Shelf life for herbal product decreasing due to environmental changes. Energy cost increasing as already its availability is less in country. Wastes increasing in the machines due to power failure. Trade and tariff restrictions are increasing. Investors not willing to invest in Pakistan due to poor economic conditions. SWOT STRATEGIES SO STRATEGIES: 1. 2. 3. 4. 5. 6. Expand herbal products globally by getting advantage of low taxes. (S2,O1) Invest more to produce herbal products to meet the demand. ( S4,O3) Maintain quality to enhance demand of natural dietary herbal products. (S3,O4) Use scientific technology to reduce cost. (S5,O5) Enter into emerging markets by global expansion.(Unknown) Utilize distribution network to meet the demand in Middle East. (S2, O10)

WO STRATEGIES: 1. To meet demand focus on advertisement. (O3,W2) 2. Increase advertisement efforts to aware people about the importance of hygiene herbal products. (W2,W4,O6) 3. Invest to increase product line. (W9,O5) 4. Encouraging foreign investors for joint venture so that to increase product line. (O8,W9)

ST STRATEGIES: 1. Use scientific technology to reduce wastages. (T5, T7, S5) 2. Use brand image to attract investors. (S9, S4, T9) 3. Utilize profits to reduce power failure by introducing alternatives. (S7, T7) WT STRATEGIES: 1. Increase shelf life. (T5, W6) 2. Overcome shortage of power resources to reduce waste. (W8, T7) 3. Increase awareness among customers about herbal products. (W4, T3) 4. Government should make policies for getting license t reduces trade tariffs. (W4, T3) SPACE MATRIX Financial strength: 1. Profit margin of Marhaba laboratories is increasing by 23% per year 2. Net profit is increasing to 55% from a year earlier. 3. Return on asset was greater in previous years, but decrease in 2011 by 2.33% Industry strength: 1. Taxes to export herbal products are decreasing by government. 2. Competition is increasing due to legal safety provided by the government. Environmental stability: 1. Less developed countries are experiencing high inflation rate and political instability.4.0 2. Demand is increasing for seasonal products. 3. Technological changes are emerging in industry. 4. Prices of raw materials are increasing due to inflation. Competitive advantage: 1. Marhaba is getting competitive advantage for having vast distribution network. 2. Marhaba is using scientific techniques on extensive research. 3. Interest of people toward Marhaba product is increasing. -1.0 -2.0 -2.0 -2.0 -2.0 -3.0 4.0 3.0 5.0 6.0 3.0

Conclusion: FS average = 4.67 IS average = 3.5 ES average = -2.75 CA average = -1.67

`DIRECTIONAL VECTOR COORDINATES X-axis: CA+ (IS) = -1.67 + (+3.5) = +1.83 Y-axis: ES+ (FS) = -2.75+ (+4.67) = +1.92 "MARHABA SHOULD PERSUE AGGRESSIVE STRATEGY" INTERPRETATION: SPACE MATRIX is a four quadrant framework which indicates that whether aggressive, conservating, competitive or defensive strategy is most appropriate for a company. In four quadrant framework upper right quadrant is for aggressive strategy, upper left quadrant is for conservative strategy, lower left quadrant is for defensive while lower right quadrant is for competitive strategy. The axes of the space matrix represents two internal dimensions, financial strength and competitive advantage while two external dimensions environmental stability and industrial strength. Rating for these four factors is according to following pattern; +1 (worst) to +6 (best) for each of the variables of FS and IS -1 (best) to -6 (worst) for each of the variables of ES and CA Calculation shows that scores of x-axis and y-axis (company's directional vector) located in the Aggressive quadrant (upper right quadrant). This shows that MARHABA is in excellent position to use its internal strengths to take advantages of external opportunities, overcome internal weaknesses, and avoid external threats. Therefor following strategies are feasible for MARHABA; 1. 2. Market penetration (Increasing market share through marketing efforts) Market development (introducing present product in new geographical areas)

3. Product development (increasing sales by improving or modifying present product or services)

4. 5.

Diversification (related or unrelated ) Vertical integration (forward,backward,horizontal integration)

STRATEGIC IMPLEMENTATION: Organization structures: Mrhaba organization structure indicates that who control what function, and who will allocate related resources, identifies responsibilities and will take actions against unexpected results. Two types of structures are there; 1. Functional Mr. Muhammad UsmanCEO

M.Iqram Director of Finance

M. Islam Director of Production

M. Jameel Director of Marketing

M.Saleem Director of Production

2. Divisional structure: by product components Herbal Medicines Functions Healthy living

Management of change: For the implementation and allocation of strategy top management and workforce have need for the ability for change. Marhaba developed a corporate culture which rewards adaptability, innovation and flexibility and thus create an atmosphere conducive to the introduction of changes which save costs, increase productivity, and get people to do things in better way to

achieve set targets. Marhaba keep analyse changes in internal as well as external environment and revise strategies according to the requirements. From vision mission statement to the trainings and incentives, all processes revised if necessary according to situations.

Managerial style: (Has described in detail in feedback portion) Incentives: Incentives are important to encourage workforce and to make them sure that they are going in right direction and whole organization is satisfied with their efforts and devotion. Marhaba made a list of incentives to motivate workforce and to ensure implementation of strategies. Example: Marketing department incentives Strategy: To increase market share up to 40% of previous sales of seasonal products. (Marhaba refreshing drinks) Marketing department: marketing department did efforts to increase market share through different marketing techniques, sales promotions, events & advertisements. Marketing department assigned Product group targets to every sales person so that they continue their efforts to achieve targets. (Product group targets means a particular product category will have a particular sales target, different from other products) Incentives: Incentives have been set for marketing manager and sales person. Car and promotions for those employee, who will achieve above 80% of Product group Target. Gifts and cash prize for employees, those will achieve above 50% of Product group Target. Dinners and lunch for those employees, who will achieve above 40% of Product group Targets.

RESOURCE ALLOCATION: Resources Allocation: In order to implement on strategies it is necessary to make sure that all resources are being allocated according to strategies. Marhaba has all type of resources; 1. Skilled and experienced human resources

2. Financial resources (Budget) 3. Intellectual resources 4. Physical resources Now there is need to understand strategy first. Marhaba strategies are to increase market share, increase sales through expansion and diversification. Marhaba can link resources allocation with strategies by understanding these two steps; 3. BCG matrix of Marhaba product line 4. Value chain linkage BCG Matrix: Marhaba has Marhaba husk in Star quadrant; as market share of Husk is more than other products i.e 40% of total sales. So they should allocate resources to advertise this product to make it cash cow and should not invest money for Marhaba Joshanda. Because without advertisement this product is making enough profit. While they have no need to invest money for Ubtan cream as this product is not profitable and participate slight in sales.

Critical success factors: Critical success factors clarify the direction of efforts that to get success and to achieve goals what factors are needed to accomplish. Marhaba has eight critical success factors. As Marhaba strategy is to go for market share and expansion so they have to focus more on product quality, advertisement, market share. We have assigned weightage to all success factors. This shows that top management, managers and employees have to concentrate on which factors first for the strategy implementation.

CRITICAL SUCCESS FACTORS


1 market share

MARHABA

WEIGH T 0.2

2 product quality Price 3 competitiveness 4 financial position 5 customer loyalty 6 brand name 7 advertising 8 global expansion

0.2 0.05 0.1 0.1 0.05 0.2 0.1

1
EVALUATION AND CONTROL: Performance management of Marhaba: Companies that seek competitive advantage through employees must be managing the behavior and results of all employees. So the performance management is the means through which managers ensure that employees activities and outputs are congruent to the organizations goal. Purpose of performance management: The purpose of performance management system is of three types; Strategies purpose Administrative purpose Development purpose

Performance appraisal system: The performance appraisal system is the primary means in Marhaba for managing employee performance. And it the process through which an organization gets information on how well an employee is doing his or her job. Performance appraisal can provide several valuable benefits to both employees and organization. They consider the organization strategy to examine the alignment of performance of employee with organizational strategy. Evaluation and Control: When plan is implemented it is necessary to measure and evaluate actual performance to find out if the expectations are being fulfilled. Plan for controlling provides a benchmark against which actual outcomes can be compared, so that when variations between expected and actual outcomes occur their causes can be investigated. In model of degree of planning and type of control here are two dimensions to know where company stands to control organization.

Our analysis shows that Marhaba lies in the region of Strategic Control as Marhaba have different types of planning. Some plans are related to financial goals while others are related to market share. Focus is also towards getting competitive advantage so Marhaba lies in the center of model. This shows that Marhaba has Tight Strategic Control within moderate degree of Planning FEEDBACK: Communication: For strategy implementation its important to know that either information is disseminated both upward and downward in organization. Different procedures should be in practice to set up proper information system throughout the company. In Marhaba communication system is very strong. Quarterly meetings arranged by top management to analyses performance and to share feedback. They have their own communication system Internal electronic mail system. Manager and assistant manager have access on this system while any information quickly shared in staff and workforce through meetings and phone calls.

Managerial style: Sometimes companys management style does not match with the required changes in organizations and planned strategies. So Marhaba has to assure that top management is involved with corporate decision making. For the implementation of strategies managers and work force have to be experienced skilled and innovative to increase marketing efforts for increasing market share. For implement of change, management style should be a democratic style so that they can involve everyone in decision making. New ideas arise and all workforces do work collectively for development of organization. Learning: Feedback is always beneficial if company wants to move to become a learning organization. Weather the targets are achieved or not, no matter how challenging the goals are. Top management of Marhaba should motivate workforce to get experience and learning. Organization should learn from feedback to improve further, to re-invent and to come up with new ideas. Marhaba has focus to share knowledge and learning through training workshops and feedback meeting held quarterly in every department and semiannually collectively. Adaptability: For the implementation of stratey and for the know how about performance improvement top management and workforce have need for the ability of adaptability. So that they can learn how they can align themselves and their efforts with strategies. Marhaba encourage those workforce, having adabtability according to organization culture.

References: http://www.marhaba.com.pk/hom%20ceo.html http://www.alibaba.com/member/marhabalabs/productlist.html http://www.scribd.com/doc/47647453/Final-Project-Smm-All-Ayad http://marketingteacher.com/lesson-store/lesson-pest.html http://www.alibaba.com/member/marhabalabs.html

http://www.scribd.com/doc/44148032/Project-Report-Rooh-Afza http://www.valuebasedmanagement.net/methods_PEST_analysis.html http://www.amcy5.com/projects/marketing/amcy13.htm

MARKETING: Promotion:

"It means activities that communicates the merits of product and persuade the target customers to buy the product" Promotion is of four types... 1) Advertising 2) Personal selling 3) Public relation or publicity 4) Sale promotion Advertising:

"Any paid form of non personal presentation and promotion of idea, good or services by an identifies person." In Advertising first of all inform a customer about the product and then persuade them to use that product. Usuallyt print and electronic media is used for the advertising of the product. Especially in electronic media it uses T.V, Internet and in print media, it uses Newspaper, Digest and magazines. Personal Selling:

"To verbally persuade in conversation with one or more perspective purchasers for the purpose

for making sales"The person selling has the great impact on the company product. Actually the Marhaba laboratories also uses the strategy for the promotion of their product by keeping the sales men for direct selling. Public Relation:

It means making best relationship with publics by obtaining publicity. For such purpose Marhaba laboratories. Pakistan had performed a lot welfare work. Therefore the name Marhaba is well popular in common people. Sale Promotion:

Sales promotion is one level or type of marketing aimed either at the consumer or at the distribution channel (in the form of sales-incentives). It is used to introduce new product, clear out inventories, attract traffic, and to lift sales temporarily. Marhaba laboratories. Pakistan use sale promotion technique by give different scheme in different way of the year to increase the sale of the product.

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