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SWOT ANALYSIS: ACI Foods Limited

Prepared for:
Dr. Syed Ferhat Anwar Course Instructor Strategic Marketing (M411)

Prepared by: Sadia Musarrat Chowdhury Saddruzzaman Noor Rowena Afreen Tawsif Saleheen S.M. Albaab-Ur-Rahman BBA Batch 14 Roll#09 Roll#10 Roll#19 Roll #52 Roll#59

August 12, 2009 Institute of Business Administration University of Dhaka

Kuwait. but moved on to initiate its Consumer Brands in 1995. Advanced Chemicals Limited (ACI) specializes in four primary sectors: Pharmaceuticals.2 Nestle (Maggi) Julius Maggi established the brand Maggi in 1884 with the intention to improve the diet of laboring class. 365 millions. Our main objective is to construct a market strategy best suited for ACI Foods Ltd. Then known as Imperial Chemical Industries. and Consumer Brands and Community Products. highly nutritious. has gone through expansions in its product line to enter new markets left untapped by its competitors. ACI Foods Ltd. Bahrain. 339 employees and in the year 2008 generated a net turnover of TK. releasing the instant noodles would not conflict or cannibalize the other products. Maggi 2 Minute Noodles was launched in Bangladesh in 1997 with local production. Agribusinesses. UAE. . 1. followed by “wurze”.1 ACI Foods Ltd. spicy taste to Maggi Soups and leguminous flour. snacks. He first started with leguminous flour. 1. giving a meaty. Later in 1886 he introduced Maggi Soups. ACI is responsible for simultaneously manufacturing. 7. Products under the 'Pure' brand are also exported to Australia. The organization has 3. Currently Maggi is leading the instant noodles and soups market. the organization started as a pharmaceutical company in 1968. and confectionary. Other products in this category include Puffed Rice and Pure Toast exclusively for the export market and Fun Chanachur for local and export. the snacks category is most appropriate for instant noodles.1. As a brand 'Pure' aims to cater to the demand of Bangladeshi customers to have pure. ACI Foods Limited is one of the major subsidiaries of ACI. Maggi soup was launched in 2000. The basic categories of its product portfolio are:     Basic Spices Mixed Spices Snacks Edible Oil  Confectionary Among these categories. Saudi Arabia. healthy food. edible oil. easily digested and simple and quick to prepare. to release a new line of instant noodles. marketing and distributing these food products. Qatar and many other countries.1 Advanced Chemical Industries Limited As one of the leading conglomerates in Bangladesh. cheap source of protein. After success full test market with Malaysian Noodles in 1996. Under this brand ACI markets a number of food products which includes spice. As such.1. The leading brand of ACI Foods Limited is 'Pure'.

It currently has two major product lines: A) Foods. Fruit Cake e. Chinese Bread b. Chicken Pattie e. It got its ISO certificate in 1998. Fu-wang Fast Food a. Flower Cake c.3 Fu-wang Foods Fu-wang Foods entered Bangladesh market in the Food & Beverage Processing Industry in 17 February 1997 and started production in the same year. Chicken Burger c. Under Foods it as three product sub-lines: A) 1. Fu-wang Cake a. Family Bread d. Egg Stick c. Green Ten 2. Milk Bread e. Sweet Bread i. It has got listed into both Dhaka Stock Exchange and Chittagong Stock Exchange in July 2000. Sachima h. B) Beverages. Marble Roll Cake g. Hot Dog B) The beverage line includes: 1. Mineral Water . Orange Please 3. Lemon Cake f. Birthday Cake b.1. Chicken Sandwich d. Beef Burger b. Mango Juice 4. Nutritious Biscuits g. Strawberry Cake h. Fu-wang Bread & Biscuit a. Vanilla Cake 3. Mini Bread f. Cheese Cake d. Tiffin Bread 2.

Chips 2. Family Pack Noodles 7.acibd.com/ N/A Cocola N/A N/A N/A N/A N/A N/A N/A N/A .fu N/A wanggroup.076 Million Liability Business Value Stock Value 5756.987 2.com/ Employees Annual Sales 3339 Revenue Net Asset Income 1.5.30 Customer Focus Fairness Transparency Continuous Improvement Innovation N/A N/A N/A 45. Competitor Information Web Address ACI http://www.81 2.205 Million Million Quality 521. Premium Pack Noodles 6.278 Million Million 4.00 Nestle FuWang Foods N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A http://www. Fu-wang.

Fulfills the quality gap between Cocola and Magi What are your core competencies 1.2.Strong financial backing 2. Own Product R&D facility 3.Commitment to positive public image Nestle : Maggi Cocola Fu-Wang: Food What are your business advantages? Pioneer and market leader (68%) in Instant Noodles Lowest Price in the market.Strong internal financial accountability 2. Consistent taste and quality 2.Production of raw material(Flour and spices) needed for Instant noodles under the same brand name 1. keeping 100% TOM awareness in instant noodles Toast Where are you making the most money? What are you doing well? Weakness What areas are you avoiding? Where do you lack resources Beverage Poor market research facility Ignoring the market for teens . Taste and perceived quality 2. Synergistic product diversification Pure Salt 1. Very strong brand image Instant Noodles 1. Making export quality goods for the local market 2.1 INTERNAL ENVIRONMENT – STRENGTH & WEAKNESS ACI: Pure Strength 1.

Trend follower ACI Puffed Rice Supply Chain Management 1. Low consumer household penetration 2. High MOGE Stagnating product line . Supply Chain Management 2.ACI: Pure Nestle : Maggi Cocola Fu-Wang: Food What are you doing poorly Where are you losing money? What needs Improvement? 1.

people have increased the proportion of income spent on food from 43% to 48% Nestle : Maggi Cocola Fu-Wang: Food Any beneficial trends? Global product portfolio Niches that competitors are missing? New Needs of Customers? Spicy Instant Noodles Implementation of SAP will enhance efficiency For teens Spicy Instant Noodles Only one using latest air-dried noodles For teens Spicy Instant Noodles For teens Spicy Instant Noodles New Technologies Threats Obstacles to overcome? Aggressive competitors? Successful Competitors? Negative economic factors? Government Regulations? Changing Business Climates? ROI is low Instant Noodles: Fu-Wang Instant Noodles: Maggi Income--because instant noodles is not a commodity Grey Market Invaded by foreign brands Changing taste and consumption behavior Low-price competitors Instant Noodles: Fuwang Noodles: Cocola Nestle has been affected by global recession 136% tax on imported instant noodles Invaded by foreign brands Changing taste and consumption behavior Invaded by foreign brands Changing taste and consumption behavior Vulnerabilities? Invaded by foreign brands Changing taste and consumption behavior .2 EXTERNAL ENVIRONMENT – OPPORTUNITIES & THREATS ACI: Pure Opportunities Over the last 15 years.2.

45 Cocola 280gm Tk. 98 Fu-Wang 560gm Tk. if ACI chooses to enter the noodles market. 13 Tk. 33 Family Pack/8 Packets Maggi 496gm Tk. Doing so. would help ACI achieve the taste and quality parity while providing added convenience over Fu-Wang at a lower price than Maggi. Rahman. Guest serving and the Family Pack: Brand Weight Price Tk. with some foreign brands taking a miniscule MS (0. According to Mr. 85 Cocola 700gm Tk. which has the lowest FMV among the three is the market leader with 68% MS. 11 Light Snack Maggi 62gm Fu-Wang 70gm Cocola 70gm Guest Serving [4 packets] Maggi 248gm Tk. Fu-Wang noodles still has a higher MS (19%) than Cocola (17%). Fu-Wang and Cocola are the primary competitors of Maggi in the traditional noodles section. Thus. Price and Selection The market is divided into 2 sections: Traditional Noodles and Instant Noodles. 50 Fu-Wang 280gm Tk. approximately 75% of the revenue comes from the spicier Masala Favor.1 Product.3. divided into 3 categories: Light snack. . there are two flavors from Maggi locally available: The Curry Flavor and the Masala Flavor. Maggi.01%).2 Analysis and recommendation It is interesting to note that while Cocola provides the same or higher quantity than Fu-Wang at a lower price. Maggi is the sole manufacturer of instant noodles. Thus. we can conclude the market is not sensitive to price-quantity ratio and rather depends on taste and quality assurance. its best bet would be to release instant noodles at the FMV of Fu-Wang. Currently. Given below is a chart containing the SKU of the three main industry players. 110 3. 12 Tk. Competitive Analysis (SW) – Comparison Sheet 3.

The TVC‟s of Maggi are telecasted in television channels in India by Nestle India. . followed by Recommendations [28%] and Packaging [20%]. On the other hand. 3. ACI can also set-up kiosks selling cooked instant noodles in the places where footfall of the target consumers are highest in order to boost sales. These televi sion channels are more popular to our target market rather than the local channels used by ACI.6 Advertising and promotion As an international brand. Maggi Instant Noodles enjoys the highest perceived quality followed by Fu-Wang and then Cocola Noodles. They hung a separate basket just for Maggi in every store. But apart from using its distribution networks Nestle took some steps that enabled them to increase the popularity of Maggi more rapidly. If it tries to venture in instant noodles industry. Maggi also runs some very successful below the promotion in order to give people an experience of their product.3 Quality According to AC Nielsen‟s market report on the consumption pattern in the noodles industry. ACI has created a place in the mind of consumers for their transparency and reliability.4 Image Since its inception. ACI must need to use both ATL and BTL activities if they venture into instant noodle market to capture their target market. One of them is using a “Maggi Net Basket”. So in this aspect Maggi has a clear advantage in creating awareness. Maggi has some advantages in advertising sector than ACI products. For instance. Also Maggi regularly offers special promotional campaign i.e. Nestle also has a very good reputation in the consumer‟s mind and a very strong brand image. this sales force could be used. ACI can follow such innovative method to break into the market. 3.3. offering small gifts with the Maggi Noodles etc. the company immediately dismissed those employees and made public apologies. when some employees were caught importing goods without paying the proper taxes on behalf of ACI. One of them being sending Maggi Vans to schools across Bangladesh and feeding the kids noodles.5 Sales Method and location ACI has a distribution channel widespread in Bangladesh and also abroad. 3. Though this is a very costly campaign ( 17 tk per kids) but it is also very successful among the kids. The consumer perception of quality is most influenced by Brand Reputation [36%]. This way the consumer is instantly exposed to “Maggi Noodles” upon entering a store. This has been a great aid in building Maggi‟s market share and creating TOM awareness in consumers‟ mind. They have worked very hard to maintain this image.

ACI Foods Limited. Such MNC‟s are obliged to import various raw materials at a steep tax rate of 130%.8 Economy Being manufacturers of mostly commodities and other small involvement products. 176 millions. red and green predominantly in their packaging. However. care should be taken so that the brand of noodles launched by ACI should not be perceived as premium-priced in anyway. All the brands nowadays use the color yellow. This has been a problem significant enough for them to use the river network as much as possible to transport raw materials to the factory. However. It is noticeable that a package more successful noodles like Maggi Instant Noodles and FuWang Noodles contain the image of cooked noodles or the end product on their package. Thus the legal framework creates an opportunity for ACI to have cost effective advantage over its main competitors. as well as transportation of products and raw materials have to face extortion because of weak legal infrastructure. In 2008.3. Thus despite the bad economy ACI Limited has the opportunity to make more profit by extending its line of low involvement products. 3. whereas in 2006 it was TK 1. Luna. being higher in price. ACI Limited tried introducing higher end product in the form of Low GI Rice. Such negative reaction towards a higher end product can be attributed to the bad economy. In the aforementioned years.9 Legal Primary competitors of ACI Limited in the FMCG market are multinational companies (MNCs). However.7 Appearance Since snacks are impulse buys to a certain extent. (Information based on interview with Ms. ACI Limited has increased its product lines with small involvement products. catching the eye of the consumer is often half the battle won. ACI Limited had a Gross Profit of TK 2. the product did not receive popularity in the market. Pure. ACI Limited has not been negatively affected by the global recession. 278 millions. Factories at different locations. ACI Foods Limited. which was significantly higher than the Gross Profit in the previous years. Brand Manager. Luna. ACI Limited has factories in various locations based on availability of raw materials. In 2007 the Gross Profit was TK 1. The product was marketed at selected outlets and was expected to expand to further outlets based on its sales.) . Pure. (Information based on interview with Ms. Brand Manager. 3. 667 millions.) Keeping this in mind.

Bahrain. and each department has its own P&L account. This way the organization has the threat of losing cost effectiveness in the market as a potentially profitable product may get unnecessarily overpriced. ACI brands purchase raw materials made within the same organization at market price.com) ACI puffed rice has a good market in Saudi Arabia. and Qatar. among which the demand for traditional noodles is 4.10 International Trade ACI is also exporting its Pure Brand products to Australia. usually breakfast and evening snacks. Kuwait.11 People ACI currently employs 3.12 Industry Instant noodles are generally targeted towards children of 7-12 years of age.) 3. growing at 40%MAT). if any product requires input from another section – like Fun Chanachur sometimes requires raw materials from Pure Ata – then they have to do so at close to market price at certainly higher than cost price.3. Children find instant noodles tasty. This instant noodles are mainly targeted towards SEC A. internal competition further motivates the people in the organization. If ACI does not come up with alternate ways. mothers (ages 25-40) are the secondary target audiences or shoppers.000 tons noodles. UAE. ACI Foods Limited. Lack of co-ordination between various departments hinders efficiency. Fu-wang (market share 19%) and Cocola instant (market share 18%). Success of Pure Brand overseas suggests that ACI has the opportunity to promote Fun Brand in the international arena. There is an annual demand for more than 9. urban and semi urban. Thus. . In semi urban areas 80% buyers are fathers. Brand Manager. In fact. (Information based on interview with Ms. 3. No internal purchase is practiced in the company. Departments in ACI are value driven. Though they are the core target group. B & C. Saudi Arabia. due to low shelf life of puffed rice the product is not being exported to other countries nor sold in the domestic one except in a limited way during Ramadan. Pure. They can have it whenever they want to. the company would lose the market in Saudi Arabia. However.aci-bd.000 tons. 339 people. they buy for their children. Mothers also like it because children like it and it easy to cook as well as healthy. (Source: www. Top players in this market are Maggi (market share 68%. Luna.

the growing teen population has become increasingly net savvy and completely detached with local Television channels. ACI Foods Limited) the highway transport of Bangladesh is not reliable. B and C. companies producing consumer goods generally use these media tools: ATL o Television o Radio o Billboards o Printed Advertisements (both newspaper and specialty magazine) o Internet (not yet used by any of the companies) .BTL o Sampling o Road shows o Activation campaigns However. Pure. while „Fu-Wang‟ noodles are leading the traditional noodles market. Instant noodles are very popular among children within the range of age of 7 to 15. Noodles are targeted towards SEC A. because of its taste and preparation time. It is also used to serve in front of guests in semi-urban areas. 3.15 Media access General people of Bangladesh are exposed to several media.432 million BDT with 12. they always use marine route to transport raw materials from their - . because it has become a convenient snack for all the classes.13 Purchasing Power Bangladesh having a GDP of 6.16 Infrastructure According to Mrs. the children.3. Basrin Luna (Brand Manager. Most of them are not open to internet yet.149.14 Social According to a report on AcNielson (a leading Marketing Research firm) we found out that the noodles are generally used as morning and evening snacks.66% growth rate is often listed among Least Developed Countries. a substantial potential lies in marketing strategies focusing less on costly TV campaign and more cost-effective and accurate internet marketing. Currently „Maggi‟ instant noodles brand from Nestle is leading the instant noodles market with a market share of 68%. So. 3. Thus. So. 3. It has become the first choice of mothers for its easy to prepare kind and taste attracting the core target group.

Pure Confectionary Growth The position of products on BCG Matrix has been decided through extensive interview with the Brand Manager of ACI Pure. however. cannot take the advantage of this naval route because of their factory location. low growth) 2. Dog (low market share. . Other companies. low growth) 3. Cash Cow (high market share.0 BCG Matrix Product Pure Salt Pure Atta Pure Basic Spice Pure Mix Spices Pure Cnfectionary Pure Snacks Positions: 1. 4. they have to depend on highway transport. high growth) 4.factories to factories. although in case of distribution channel. Star (high market share. high growth) CASH COW Pure Salt. Question Mark (low market share. Pure Atta Position Cash Cow Cash Cow Question Mark Star Question Mark Dog STAR Pure Mix Spices Market Share DOG Pure Snacks QUESTION MARK Pure Basic Spices.

Advertising 5. Social 9. Technology 02. Economy 10. Selection 2. Appearance 3. Company Reputation 1. International Trade 05. Company Reputation 4. Media Access Based on these factors we will further focus on both the internal strengths and weaknesses as well as external opportunities and threats around these factors in order to have a strategy more accurately reflecting the consumers‟ expectations. Purchasing power 5. Image External 01. Sales Method 4. Purchasing Power 08. we found that the top 5 Internal Factors are: Internal 1. Price 3. . Expertise The top 5 External Factors are: 6. Rank the factors below according to their importance to you: Factors Rank From the pilot survey. Location 2. However. we conducted a pilot survey on 15 individuals using this particular questionnaire: Sir/ Madam. People 06. We are students of BBA Program of Institute of Business Administration (IBA) conducting a survey on the importance of various factors concerning a company that is important to a consumer. Industry 07. Quality 1. Price 3.0 Consumers’ Viewpoint The Importance of the variables to the consumer cannot be gauged as there is no accessible market information in this area. Advertising 11. Thank you. Social 09. Technology 8. Quality 4. Media Access 7. Selection 5. We would greatly appreciate your participation and insight concerning this matter.5. All information collected will be used for purely academic purpose and confidentiality and anonymity of the respondent will be strictly maintained. A second part of the survey was also conducted to gauge consumer perception and insight about the noodles industry and its main players along with that of ACI. Legal 04. Products 2. Economy 03.

If yes. we are a group of students from the Institute of Business Administration. Have you ever purchased any product from ACI Pure brand? 2.Pilot Survey For Consumer Insight Into Instant Noodles Industry Dear Sir/Madam. Please fill up the questionnaire below to help us understand the current scenario better. Age: ______ ________ Gender: M/F Occupation:____________ Monthly Income: 1. All the information provided by you will be used for educational purposes only and will be kept strictly confidential. conducting a survey on consumer perceptions of the instant noodles industry. Have you purchased instant noodles? Yes No . University of Dhaka. How did you come to know about ACI Pure? Please Tick Television Advertisement Magazine Shopping Outlets Newspaper Family and/or Colleagues Others ______________________ 4. what product did you buy? Pure Salt ____ Pure Atta____ Pure Basic Spice____ Pure Mix Spice____ Pure Confectionary____ Pure Snacks____ Yes √ No 3.

How would you rank the following company‟s instant noodles in terms of quality? [1 = Very Poor. 5 = Very Good] Feature Quality Selection Price Company Reputation Advertising Maggi Noodles Fu-Wang noodles Cocola Instant Noodles 9. 3 = Indifferent. What do you think of the following company‟s noodles in terms of the following features? [1 = Very Poor. Do you recall any advertisement of ACI Pure brand? Yes No . What quantity of instant noodles do you purchase every month? Please Specify ______ 6. 3 = Neutral. 5 = Very Good] Maggi Noodles____ Cocola Noodles____ Fu Wang Noodles___ 7. What level of importance do you attach to each of these features when purchasing instant noodles? [1 = Not important at all.5. 5 = Very Important] Feature Quality Selection Price Company Reputation Advertising 1 2 3 4 5 8.

From the survey.5 4 3. . the numbers were collated and resulted in the average scores for each company given below: Feature Quality Selection Price Advertising Maggi Noodles Fu-Wang noodles Cocola Instant Noodles 4.5 2 4 2.5 2 3 2 4 3 3 Company Reputation 5 This survey was conducted only to get a rudimentary idea of what consumer thoughts are on the market and will be delved into further as we go into a proper survey ona much larger sample group.5 3 3.