Professional Documents
Culture Documents
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Subject:
Business Policy and Strategy
Project
Final Project Report
Submitted to:
AmjadHussain
Submitted by:
Qasim Ali Pracha
L1S16MBAM0160
L1S16MBAM0020
Tauqeer Ahmed
L1S16MBAM0030
L1S16MBAM0034
MBA (Semester-1)
University of Central Punjab
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Threats
1. Consumers increased interest in restaurant meals may reduce demand for some Nestle
products.
2. A growing suspicion of prepackaged foods as unnatural and unhealthy in the world is
becoming common. This increases the demand for fresh and natural foods in some
markets. It also increases the demand for organic and other alternatives.
3. There is a possibility of increased government oversight and regulations in the market,
like Indias government ordered billions of dollars of Maggi instant noodles be pulled
from the shelves in the summer of 2015 because of allegations of excessive levels of lead
in the product.
4. Price fluctuations due to devaluation of money can increase the cost of production as raw
materials are imported from abroad.
5. The uncertainty of economic conditions poses a great threat as the major funds invested
in the country come from outside Pakistan.
6. The present economic crisis in the world, led to the withdrawal of foreign management
from the company and the investment has come to a halt.
7. Competition with Nestls own smuggled brands.
8. Market segment growth may attract new entrants which will increase competition.
9. Inflation is getting higher and higher which is causing economic slowdown and hence
reduced demand for the Nestle Products.
10. Growth of private labels. The growing number of supermarkets and other retailers are
introducing their own label products that cost less and can easily compete with Nestls
product portfolio.
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Weightage Rates WS
Strengths:
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
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0.07
0.02
0.06
0.06
0.1
0.09
0.09
0.02
0.07
0.05
4
4
4
4
4
4
4
3
4
4
0.28
0.08
0.24
0.24
0.4
0.36
0.36
0.06
0.28
0.2
0.01
0.06
0.01
0.08
0.04
0.03
0.04
0.03
0.04
0.03
1
2
2
2
1
2
2
2
1
1
2
0.02
0.12
0.02
0.08
0.08
0.06
0.08
0.03
0.04
0.06
3.09
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Rate
Weightage s
WS
0.02
0.05
0.06
0.05
0.07
0.05
0.08
0.05
0.04
0.03
3
4
4
2
4
2
3
4
3
3
0.06
0.2
0.24
0.1
0.28
0.1
0.24
0.2
0.12
0.09
0.03
0.05
0.05
0.03
0.08
0.05
0.02
0.1
0.08
0.01
1
4
4
2
2
2
2
4
3
3
4
0.12
0.2
0.1
0.06
0.16
0.1
0.08
0.3
0.24
0.04
3.03
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Weight
0.1
0.15
0.05
0.1
0.1
0.05
0.1
0.1
0.1
0.1
0.05
1
Nestle
Rate
4
4
4
2
4
4
4
3
3
3
4
Score
0.4
0.6
0.2
0.2
0.4
0.2
0.4
0.3
0.3
0.3
0.2
3.5
Engro Foods
Shakarganj
Rate
2
3
3
3
2
3
3
4
4
4
2
Rate
1
2
2
4
1
2
2
3
2
2
1
Score
0.2
0.45
0.15
0.3
0.2
0.15
0.3
0.4
0.4
0.4
0.1
3.05
Score
0.1
0.3
0.1
0.4
0.1
0.1
0.2
0.3
0.2
0.2
0.05
2.05
BCG Matrix
Milk Div.
Engro
(Olpers)
Shakarganj
(Goodmilk)
Nestle
Milkpak
Total
2015
2014
49,834,000
43,027,377
6,578,986
11,356,340
81,686,079
77,432,902
131,816,619
138,099,065
81686079/81686079
IG
(138099065-131816619)/131816619x100
Beverages
1
5%
2015
2014
Sheezan
6,817,635
6,760,527
Coka Cola
11,073,500
9,199,600
Nestle
Total
20,729,151
38,620,286
18,251,270
34,211,397
20729151/20729151
IG
(38620286-34211397)/34211397x100
13%
1.
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2015
2014
6
61,569
5
70,686
Mitchels
Nestle
Total
486,2
82
773,5
71
1,259,853
1,232,255
570686/661569
0.86
IG
(1232255-1259853)/1259853x100
-2%
Products
Milk & Nutrition
Beverages
Others
(Confectionery)
RMS
1
1
IG
5%
13%
Revenues
81,686,079
20,729,151
0.86
-2%
570,686
Question
Marks
BCG Matrix
15%
10%
5%
RMS
1.2
0.8
0.6
0%
0.4
-5%
-10%
-15%
Industry Growth
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0.2
SPACE MATRIX
Financial Position
Liquidity (Current ratio): +6
Return on Investment (ROA & ROE): +5
Leverage (Debt to Equity Ratio): +4
Profitability (Earnings Per Share): +6
Efficiency (Inventory Turnover): +5
FP = +26/5 = +5.2
Economic Position:
Inflation: -5
Gov. Policies (Taxation): -4
Demand Variability: -1
Price Elasticity of Demand: -4
Risk Factor: -4
EP = -18/5 = -3.6
Industry Position:
Growth Potential: +6
Capacity utilization: +5
Profit Potential: +6
Ease of Entry in Industry: +4
Financial Stability: +4
I.P = +25/5 = +5
Competitive Position:
Market Share: -1
Product Life Cycle: -2
Customer loyalty: -3
Product Quality: -4
Technology: -2
CP= 12/5 = -2.4
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Y-axis
IP = +5.0
CP = -2.4
Total = +2.6
Space Matrix
6
4
2
CP
-6
-4
-2
-2
-4
-6
SP/EP
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IE Matrix
Key Factors
Increased Demand for Packed Milk due to
urbanization
More demand for hygienic food items like milk
Growth in Middle Class population in Pakistan
Productivity of Milk producing animals
Market penetration of processed milk
Weightage
Rates
WS
0.15
0.09
0.1
0.15
0.12
4
4
4
4
4
0.6
0.36
0.4
0.6
0.48
0.04
0.09
0.1
3
2
3
0.12
0.18
0.3
0.1
0.06
1
4
3
0.4
0.18
3.62
1
2
3
4
5
0.12
0.09
0.14
0.1
0.11
4
4
4
4
4
0.48
0.36
0.56
0.4
0.44
1
2
3
4
5
0.15
0.08
0.07
0.05
0.09
1
1
2
2
2
2
0.15
0.16
0.14
0.1
0.18
2.97
Threats
Strengths
Weaknesses
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Key Factors
Changing lifestyles pull up demand for branded
beverages
Increased interest in Restaurant meals triggering
higher demands for bottled water
Growth in Middle Class population in Pakistan
Attractive weather conditions in Pakistan
Lack of pure drinking water in country
Weightage
Rate
s
WS
0.12
4 0.48
0.07
0.08
0.11
0.15
3 0.21
3 0.24
3 0.33
4 0.6
0.08
0.11
0.12
0.09
0.07
1
3
4
4
2
2
0.13
0.15
0.12
0.1
4 0.52
4 0.6
3 0.36
4 0.4
0.14
4 0.56
1
2
3
4
0.05
0.06
0.1
0.08
2 0.1
1 0.06
2 0.2
2 0.16
0.07
1
2 0.14
3.1
2
3
4
5
Threats
1
2
3
4
5
Private labeling
Market growth is attracting new competitors
Inflation is affecting consumers purchasing power
Increased Govt. oversight and regulations
Increasing cost of plant
TOTAL
IFE
0.24
0.44
0.48
0.18
0.14
3.34
Strengths
1
2
3
4
Weaknesses
Expiry Product scandals
Higher distribution costs
Lack of awareness and Poverty in rural areas
Lack of Availability in remote areas
Products are relatively expensive than other
5 brands
TOTAL
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EFE
Opportunitie
s
Rate
s
WS
0.06
2 0.12
0.12
0.08
3 0.36
3 0.24
0.1
0.4
0.15
3 0.45
1
2
3
4
5
0.1
0.15
0.08
0.06
0.1
1
1 0.1
2 0.3
2 0.16
2 0.12
3 0.3
2.55
1
2
3
4
5
Strong Management
Globally recognized multinational brand
Diversified Workforce
High growth potential
Strong Brand Name of Nestle products
0.15
0.12
0.09
0.12
0.12
4
4
3
3
4
0.6
0.48
0.27
0.36
0.48
0.1
0.1
Threats
IFE
Strengths
Weaknesses
1 Higher distribution costs
Lack of awareness of Nestle Products and Poverty in
2 rural areas
3 Lack of Availability in remote areas
4 Products are relatively expensive than other brands
Less focus on marketing of products other than milk
5 & beverages
TOTAL
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0.14
0.07
0.12
1 0.14
2 0.14
2 0.24
0.15
1 0.15
2.96
Average (2-2.99)
Others (Confectionery)
Weak (1-1.99)
High
(3-4)
Medium
(2-2.99)
Low
(1-1.99)
Divisions
Milk & Nutritions
Beverages
Other (Confectionery)
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Particulars
2015
2014
Total Sales
177,951,60
6
167,287,86
9
Industry Growth
6.37%
Competitive Position
-2.40
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QSPM Matrix
IFE
Sr.
No
.
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
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Forward
Integratio
n (Opening
Retail
Outlets)
Product
Developmen
t (Lassi &
Icecream)
AS
TAS
Unrelated
Diversificatio
n (Tea
Products)
AS
TAS
AS
TAS
2
4
2
0.14
0.08
0.12
3
3
3
0.21
0.06
0.18
4
2
4
0.28
0.04
0.24
1
3
2
4
0.06
0.3
0.18
0.36
3
2
4
3
0.18
0.2
0.36
0.27
2
1
1
2
0.12
0.1
0.09
0.18
-4
2
-0.28
0.1
-2
3
-0.14
0.15
-1
4
-0.07
0.2
0.02
0.04
0.04
4
1
4
0.24
0.01
0.32
3
4
2
0.18
0.04
0.16
2
3
3
0.12
0.03
0.24
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
4
-4
0.12
-0.12
2.45
2
-2
0.06
-0.06
2.29
3
-1
0.09
-0.03
1.87
Opportunities:
1 High Trend for E-Commerce
Growing Middle Class in
2 Pakistan
3 Changing Life Styles
Higher Demand for Tea related
4 products
Increased interest in Health &
5 Nutrition
6 Reduced Interest Rates by SBP
Increasing Urbanization in
7 Pakistan
Improved Economic Conditions
8 in country
Productivity of Milk Producing
9 Animals PA
Market penetration of Milk
10 related products
Threats:
Increased interest in Restaurant
1 Meals
2 Suspicion of Prepacked Foods
Increased Govt. Oversight &
3 Regulations
4 Devaluation of money
Uncertainty of economic
5 conditions
6 Global Economic crises
Competition with Smuggled
7 brands
8 Entry Barrier
9 Higher Inflation
10 Private labeling
Total
Grand Total
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0.02
0.05
0.06
0.05
0.07
0.05
0.08
0.05
0.04
0.03
0.03
0.05
0.05
0.03
0.08
0.05
0.02
0.1
0.08
0.01
1
0.08
0.04
0.02
4
4
0.2
0.24
2
3
0.1
0.18
3
2
0.15
0.12
0.15
0.05
0.2
4
4
0.28
0.2
2
2
0.14
0.1
3
3
0.21
0.15
0.24
0.16
0.08
0.15
0.05
0.1
0.08
0.16
0.04
0.12
0.06
0.03
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
4
--4
0.08
--0.04
1.86
4.31
2
--3
0.04
--0.03
1.11
3.4
1
--2
0.02
--0.02
1.14
3.01
REFERENCES:
http://sml.com.pk/reports.php?year=2014%20-%202015
http://engro.com/wp-content/uploads/2015/04/02-ECorp-AR-2014-Full.pdf
http://www.sbp.org.pk/ecodata/Productselect.pdf
http://www.nestle.pk/asset-library/documents/financial_reports/nestle_financial_ar_2014.pdf
library/documents/financial_reports/nestle_financial_ar_2015.pdf
https://www.scribd.com/doc/55470472/Compettive-Analysis-of-Sufi-Water
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