2.

THE CHALLENGE:
Pakola has an organizational structure which has evolved as a result of a
need to be and do basis. If the business were to be described in one word,
that word would be chaos. Department since its very inception, this business
has no eyes no ears. It continues to trudge blind. No marketing
intelligence, no market researches and virtually zero market feedback and
almost absolute consumer ignorance are at the very core of this business
which has amazingly continued to survive for such a surprising span of time,
most likely because of the intense brand loyalty that its consumers have
even without any strategic marketing efforts being executed by the company
itself, is poof of the potential that this brand has and the magnitude of
success it is capable of.

3. SITUATION ANALYSIS
COMPANY ANALYSIS

GOALS:
To be SECOND TO NONE in exceeding customer expectations for Taste
and Flavor, Product Safety, Quality and Price Competitiveness.

FOCUS:
Pakola can instead focus its short-term resources towards the structuring of
its organizational setup. The issues with Pakola's management setup are
the root cause of its lackluster strategic business performance; and must
be addressed before the company can expect extended success and
profits.

CULTURE:
The distinctive competence of Pakola is its ability to create unique
tasting flavors which none of its competitors are able to do. This core
competence leads to its competitive advantage of being, a beverage
manufacturer of unique flavored drinks. Presently Pakola has three
unique tastes which is currently absent. In the other beverage
companies. Such unique flavored soft drinks such as Ice-cream Soda,
Apple Sidra, Lychee, and Raspberry are all examples of Pakola's
internal ability to create different and previously unheard-of drinks
successfully. It is through this that they have managed to build brand
loyalty with consumers, because it is a unique taste that consumers

demand for when they choose a drink, and oftentimes when Pakola's
ice-cream soda is not available, brand loyal consumers will settle for
anything n the beverage industry, distribution is of vital importance.

STRENGHTS:

WEAKNESS:
Pakola received a total score of 1.86 in the internal evaluation. This
signifies that the company has a weak internal system and is not able
to effectively manage any of their strengths in a meaningful manner.
Also of their weaknesses, it is worthy to note that their weak
distribution setup had the most weightage.

MARKET SHARE:
Pakola has 4% market share of the cola- market.

Pakola caters to whichever markets it finds convenient to cater to.

Operating without a Marketing Department since its very inception,
this business has no eyes no ears. It continues to trudge blind. No
marketing intelligence, no market researches and virtually zero market
feedback and almost absolute consumer ignorance are at the very core
of this business which has amazingly continued to survive for such a
surprising span of time, most likely because of the intense brand
loyalty that its consumers have even without any strategic marketing
efforts being executed by the company itself, is poof of the potential
that this brand has and the magnitude of success it is capable of.

COMPANY ANALYSIS
PAKOLA
Critical

Weight

PEPSI
Rating

factor
Market

Weighted

Rating

score

Weighting
score

0.30

0.30

1.20

Distribution

0.25

0.25

1.00

Customer

0.20

0.80

0.40

share

loyalty

Financial

0.15

0.30

0.60

0.10

0.30

0.30

1.OO

1.95

position
Product
quality
Total

3.50

CUSTOMER ANALYSIS:

NUMBER:
Pakola is distributed nationwide through our network of vehicles and
distributors. The company maintains a fleet of 56 trucks for operations
in the Karachi base market

TYPE
The distinctive competence of Pakola is its ability to create unique
tasting flavors which none of its competitors are able to do. Such
unique flavored soft drinks such as Ice-cream Soda, Apple Sidra,
Lychee, and Raspberry are all examples of Pakola's internal ability to
create different and previously unheard-of drinks successfully.

VALUE DRIVERS:
They have managed to build brand loyalty with consumers, because it
is a unique taste that consumers demand for when they choose a
drink, and often times when Pakola's ice-cream soda is not available,
brand loyal consumers will settle for anything n the beverage industry,
distribution is of vital importance.

DECISION PROCESS:
As per our analysis Pakola, being a Seth-owned company, Is not
effectively managing Its costs. As stated in their current mission
statements, one of their focuses is to reduce costs so as to be a low
cost operator. This is a misinterpretation of what is required for a
differentiator. Rather than reducing costs seeking to be a loss leader, a
company following a differentiation strategy should instead aim to
manage cost strategically In order to optimize resources and internal
efficiencies.

As discussed earlier, Mehran Bottlers has 56 vans with which it

supplies its products, whereas FMCQ companies like Unilever have a
significantly lesser number of vans even though they have much better
market reach. Pakola needs to reduce this unnecessary expense; along
with costs that arises.

CONCENTRATION OF CUSTOMER BASE FOR PARTICULAR PRODUCT:

Pakola should concentrate on driving its core competencies to create
differentiation in product research and development, distribution, and
marketing. For companies of a low cost strategy it is necessary to focus
instead on purchasing, production R&D, and manufacturing activities.
Thus because Pakola is a differentiator, it should communicate this
differentiation. One of the main drawbacks of Pakola's current strategy
is that it hardly conveys its message to its consumers

COMPETITORS ANALYSIS:

MARKET POSITION:
Pakola received a score of 1.95 in the competitive profile matrix. This low figure is
representative of Pakola's inability to leverage its competitive advantage of unique tasting
flavors successfully

STRENGHTS:
Pakola is privately owned concern with a highly centralized
authority base that results in a tall organization structure. They
do not publish any kind of financial information and instead
guard as a closely held secret, This mindset Is highly limiting in
Its nature, and will only serve competitiveness of the company
itself

WEAKNESS:
The low figure is representative of Pakola's inability to leverage
its competitive advantage of unique tasting flavors successfully.
This, inability stems from the company's lack of effective
communication of their offering and its uniqueness. This is one of
the major mistakes companies make when following a
differentiation strategy, they assume that consumers will
recognize the difference that they offer. This Is exactly the
mistake that Pakola has made. The areas where Pakola has taken
a heating are in market share and distribution.

MARKET SHARE:
Pakola received a score of 1.95 in the competitive profile matrix

COMPETITOR ANALYSIS
PAKOLA

Critical

Weight

PEPSI
Rating

factor

Weighted

Rating

score

Market

Weighting
score

0.30

0.30

1.20

Distribution

0.25

0.25

1.00

Customer

0.20

0.80

0.40

0.15

0.30

0.60

0.10

0.30

0.30

1.OO

1.95

share

loyalty
Financial
position
Product
quality
Total

3.50

COLLABORATORS:

Pakola is a line of fruit flavored soft drinks, originally introduced in Pakistan

in 1950 by Hajji Ali Muhammad. It is produced by Mehran Bottlers (Pvt) Ltd. It
is the first nationally branded soft drink of Pakistan. Hence its name Pakola
meaning 'Cola of Pakistan. Mehran bottlers are the 1st bottling plant is South
Asia. Which has been certified to integrated management system based on
(ISO 9001: 2000), (ISO 14001: 1996) and (RVA HACCP) standard. Pakola
quality and food safety system follows the FDA GMP requirements and codex.
Pakola products are manufactured under strict CGMP and Hygiene controls.

CLIMATE:

PEST ANALYSIS:
Political: There is significant political pressure on the beverage industry in
Pakistan. This pressure mostly arises from a high levy of taxes, 15% central
excise duty, as well as 18% sales tax, which totals up to about 36K. of retail
prices. This extremely high double taxation rate greatly deters the players in

the industry from charging premium prices for perceived value addition.
Another political factor that impacts the beverage industry, however this
time positively, is the government's policy of banning the serving of food at
wedding receptions. This has prompted an increase in the consumption rates
of soft drinks and carbonated beverages.
Economic: There are several implications of the economic situation of Pakistan
upon the beverage industry. For one, there have been complaints from
several quarters regarding the excess wastage of water in the production of
aerated beverages, which for a population compounded with astounding
poverty levels raises points for concern. Recently, there has been a crisis in
the production of sugar in Pakistan, with prices skyrocketing. Such economic
factors have a resounding Impact on related Industries; and although most
companies In this Industry have switched from sugar to high-fructose corn
syrup, some were affected by the agri-based crisis.
Social: A major social trend in the rural areas of Pakistan has been a shift from
presenting guests with drinks such as lassie red sherbet, and fruit juices,
towards cold drinks. This trend has spume more from impressive distribution
networks and less from increased advertising, yet the result is positively in
favor of beverage companies
Technological: Technology plays a secondary role In this Industry, as It is not
heavily dependent on technological advancements like the consumer
electronics industry, or the software industry. Because beverage products are
non-tech based in nature, technology in this industry is therefore limited to
function as a catalyst to improve production capacities, speed of product
manufacturing cycles, Inventory management, and e-commerce applications

SWOT ANALYSIS

Strengths
55 years establishment shed presence
Extremely brand loyal customers
Automated bottling plant

Online order booking system

Public percepli on of being an innovator

Weaknesses:
Weak distribution setup
Ineffective marketing
No formal organization structure
Centralized decision making process
Lack of professional employees
Opportunities

Health conscious trend In lifestyles

High growth rate of food industry
Increased demand in rural markets

Threats

Engro's entry into the food and beverage (milk) industry

Increase in foreign imports of beverages
Rising prices of sugar and sugar substitutes
Main competitors are International giants of the Industry

MARKET SEGMENTATION:

DESCRIPTION:
The areas where Pakola has taken a heating are in market share and
distribution. From a strategic viewpoint however, distribution is the
area which Pakola should target in the short run if they hope to achieve
any type of success. Advertising programs that are basically demandbuilding exercises are useless if the product has little market reach and
is not meeting the created demand.

PERCENT OF SALES:

Pakola makes about Rs.2.3 billion per annum in revenues, selling

8million cases of cola per year. In an increasingly growing industry, this
figure is not impressive in the least bit. Pakola's revenues seem
lackluster at best; this trend can be immensely improved by focusing
on weak areas like distribution and marketing.

WHAT THEY WANT:

Pakola needs to strategically outsource their distribution setup to a
distribution company such as Muller and Phipps, with the expertise in
now to effectively increase a company's reach into the market.

HOW THEY USE PRODUCT:

Pakola's weak branding choices regarding its milk products reflect
this ineffectiveness in communicating to end-users. The company
stretched its Pakola brand name to its UHT milk as well as to its
flavored milks, when the name stood mainly for their ice-cream soda
cola drink in the minds of consumers. Therefore, by stretching the brand
name to milk, they create mental conflicting users, between fizzy
carbonated colas, and pure clean milk. This mistake coupled with
ineffective marketing has put Pakola in this situation

SUPPORT REQUIREMENT:

The generic strategy that Pakola needs to pursue is that of

differentiation. In their current vision and mission statements, the
company says it aims to be a low cost leader, yet through our thorough
analysis of the strategic direction the company needs to adopt a
generic strategy of differentiation. This will allow Pakola to do three
things;
1. Charge a premium
2. Increase unit sales
3. Gain buyer loyalty
However, at the expense of sounding simplistic, it is necessary that the
company communicate its differentiation to its customers, otherwise
these three advantages will not avail themselves.

Initially Pakola will need to adopt a focused differentiation approach,

which means that they should selectively choose which markets will
profit them the most and then target only those markets until such
provisions are in place from where the company is able to expand its
target base. After which they should opt for a broad differentiation
generic strategy

HOW TO REACH THEM:

FIRST STRATEGY is the formation of a structured and competent
distribution network through the enabling of sales force teams. An
alternate path would be tout source the function to an existing
distribution company like Muller and Phipps in the short-run, and over
time develop the organization required for an internal distribution
setup.
SECOND STRATEGY that they can enforce is the introduction of diet
versions of their current product portfolio. By tapping into this market they
would be able to hit two birds with one stone.

BRAND POSITIONING:
The original green color Pakola ice cream soda is still popular in
Pakistan.
However, other Pakola flavors, like Pakola Lychee, have gained
popularity.
Another famous type of Pakola is Pakola Orange, which is an orange
soda
with
an
ice cream taste. It is also available in most Asian shops in the U.K. The
drink itself is a very bright green color, much like the can, and tastes
unlike most North American soft drinks.It have a distinctive and strong
taste. Pakola have also launched their milk. Pakola brand name is
owned by Teli Family and currently Zeeshan Habib is the owner of
Pakola carbonated drinks and Yasin Teli, is the owner of Pakola flavored
milk. Yasin Teli is also the bottler for PepsiCo for Sind and Baluchistan
province

CARBONATED SOFT DRINK

Pakola Ice CreamSoda

Pakola Orange
Pakola Lychee
Pakola Raspberry
Pakola Guava*
Apple Sidra
Bubble Up
Double Cola
Diet Bubble

MINERAL WATER

VITAL

FLAVOURED
MILK
BASED BEVERAGES
PAKOLA MILK
ICECREAM SODA
PINACOLADA
MANGO
ROSE