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• • • • • • • Pakistan Edible Oil Industry Overview Introduction & History Of Dalda Mission Statement Organization Structure Manufacturing Facility & Process Market Share Competitors Overview: Sufi Oil Habib Oil Mills
2-4 5-6 5-6 7-8 9-10 11 12-13 14-16
• • • • • • • • • • • • • • • • • • • Porter five forces model Political, Economic, Social and Technological EFE Matrix CPM Matrix 17-23 24 25-26 27
COMPANY AND COMPETITOR ANALYSIS INTERNAL ANALYSIS
Value Chain Management Core Competencies Strategic Cost Management IFE Matrix Generic Strategy SWOT Analysis TOWS Matrix SPACE Matrix BCG Matrix IE Matrix Grand Strategy Matrix QSPM Matrix The components of Strategic implementation Balanced Business Scorecard Diagnostic Survey 28 29 30 31-32 33 34-37 38-39 40-42 43-44 45 46 47-49 50-51 52-54 54-58
STRATEGIC ANALYSIS AND RECOMMENDATIONS
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PAKISTAN EDIBLE OIL INDUSTRYOVERVIEW
Edible oils and fats are an essential part of the daily needs of a Pakistani family. It is also a significant part of household expenditure of an average family - almost 6% of the household budget is spent on it. Branded as well as non-branded products compete in the market. Branded products are mostly at the high end of the market and non-branded towards the lower end of the market and mostly selling in loose form. Edible oils and fats are marketed in variety of packaging formats – tin cans, plastic bottles, plastic pouches, plastic buckets and in loose form. Ghee and cooking oil industry in Pakistan relies heavily on the imported edible oil and spends a hefty foreign exchange on the payment of edible oil imports. Currently, Pakistan spends about $1.0 billion per annum on the import of edible oil. At present the capacity utilization of ghee or edible oil is about 55 percent. A probable reason for this under utilization is the existence of unregistered ghee and cooking oil-processing units in the country. Edible oils market is a highly fragmented market with many brands and non branded players.
Total Consumer Cooking Fats & Oils Market
Branded 52% Unbranded
The Cooking Fats and Oils market in Pakistan is about 1.2 million tones of which Vanaspati market accounts for 0.875 million tones and edible oils for about 0.325 million tones. Of the total market of 1.2 million tones, the branded market is about 51.65% and the remaining 48.35% is un-branded.
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An analysis of the major players in the branded market reveals that most of this market is non-premium segment taken by a large number of very small regional brands. Companies with national presence dominate the premium segment. On the basis of its market, it is divided into three categories; national, regional and local. National brands are those popular in the whole country and marketable in the whole cities of Pakistan. Some examples are Dalda, Habib and Sufi. Local brands are those, which are present in a particular province like Punjab. Some examples are Kisan, Meezan, Kashmir or Shan. Regional brands are those which are present in a particular city like Rawalpindi.Some examples are Latif, Shahbaz etc.
The oil and ghee industry has 3 clear segments. Ghee (75.33%) with a total consumption of 1.75 Mil tons. Cooking Oil (23.33%) with a total consumption of 1.0 Mil tons Industrial Fat (1.34%) with a total consumption of 50,000 tons.
LIST OF ALL PLAYERS:
The names of various players in the industry with their respective sales volume per annum in the ghee and oil categories are as follows:
Dalda Habib Ghee Corpo. Of Pakistan Associated Hamza United Punjab Oil Gulf Continental
GHEE 65,000 85,000 144,000 66,000 30,000 30,000 20,000 6,000 2,500
OIL 100,000 105,000 1,200 1,500 800 700 600
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Mehboob Faisalabad (Kissan) Oil Shahbaz Khayaban Chniot Ent. Waheed Hafeez Piracha Ghee Hunza Madni PTC Agro (Soya Supreme) TULLO SUFI Evolin
20,000 20,000 30,000 30,000 20,000 40,000 10,000 20,000 10,000 15,000 25,000 20,000
2,500 2,500 3,000 65,500 85,000 81,000 5,000
Habib Oil Mill Habib, 13% Dalda, 11% Paracha Textile Meezan/ Kissan, 0.5% Sufi Group - Sufi Cooking Oil, 0.5% Wazir Ali - Tullo, 3% ATM Gases Soya Supreme, 2%
Loose & Other Small Branded Cooking Oil, 70%
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The Dalda brand has a strong heritage in Pakistan. It is synonymous with assured quality, which is why the business has been able to charge a premium over its competitors year after year. The Dalda brand is one of the 3 leading top brands in the Country. Current trademark and license rights in Pakistan only for: o Dalda Vanaspati o Dalda Melange o Dalda Cooking Oil o Dalda Planta
HISTORY OF VANASPATI
Dalda brand was first launched in British India in 1938. However, the Company launched the brand in Pakistan in 1952. The brand was successfully re-launched in 1997 when the Trans level in formulation was reduced to below 1% making it the healthiest Vanaspati available in Pakistan. The brand was again re-launched in 2001 with a new flavor “Irresistible taste with nutrition.
HISTORY OF COOKING OIL
Dalda cooking oil was first launched in 1981 and re-launched in 1997 with the addition of Vitamin-E to create functional differentiation. The brand was again re-launched in 2001 on the platform of “Good Health, Great Taste…” Dalda is an all-purpose Vanaspati used in the preparation of all types of meals and is branded as a high quality grade in the retail market. Dalda is the most established branded vanaspati and holds a significant market share of the premium branded vanaspati market (Excluding Industrial Vanaspati Market). Dalda Melange is a recently developed cooking medium that is typically used in the preparation of all types of meals. It has been developed as a middle product between Vanaspati and edible oil primarily to appeal to the health conscious customers Dalda Cooking Oil is a well-established name in the Edible Oils Market having significant share of premium branded cooking oil. Launched in 1981, the brand is on top of the recalled foods brands of Pakistan. It has seen a continuous volume growth over the years and is one of the most trusted household names.
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I.) Karachi. It enjoys very loyal customers’ base taking 4% of the branded edible oil market. Dalda products are manufactured in a Company-owned plant located at Sindh Industrial & Trading Estate (S.E.Planta was launched in 1989 specifically to attract the customers who wanted the health benefits of oil and taste of Vanaspati.T. The brand was transferred to the house of Dalda in June 2000 and the name was reformatted as Dalda Planta. Institute of Business Management 6 . The Company’s principal products compete in the categories of • Vanaspati and • Edible Refined Oils and are distributed primarily through an integrated channel of company distributors.
Our deep roots in local cultures and markets around the world are our unparalleled inheritance and the foundation for our future growth. Our long-term success requires a total commitment to exceptional standards of performance and productivity. Our Purpose ”At the heart of the corporate purpose. We believe that to succeed requires the highest standards of corporate behavior towards our employees.MISSION STATEMENT OF DALDA Dalda …. profitable growth for our business and long-term value creation for our shareholders and employees.” Institute of Business Management 7 . We will bring our wealth of knowledge and international expertise to the service of local consumers – a truly multi-local. consumers and the societies and world in which we live. is the drive to serve consumers in a unique and effective way. to working together effectively and to a willingness to embrace new ideas and learn continuously. Our purpose in Dalda is to meet the everyday needs of people everywhere – to anticipate the aspirations of our consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life. multinational. which guides us in our approach to doing business. This purpose has been communicated to all employees worldwide”. This is Dalda’s road to sustainable.
consumers and the societies. 4.MAIN COMPONENTS OF MISSION STATEMENT 1. PRODUCTS OR SERVICES: It caters the requirement of everyday namely soap and detergents for washing and cleaning. SELF CONCEPT: Total commitment to exceptional standards of performance and productivity. CUSTOMERS: effective way. 5. CONCERN FOR PUBLIC IMAGE: Profitable growth for the business and long term value creation for shareholders and employees. tea for drinking and margarine for daily breakfast. PHILOSOPHY: The philosophy of the company is to provide highest standard of corporate behavior towards the employees. 7. Institute of Business Management 8 . The purpose of Dalda is to serve consumers in a unique and 2. CONCERN FOR SURVIVAL: The Economic objectives of Dalda are deep rooted in local cultures and markets around the world. CONCERN FOR EMPLOYEES: The Company also focus to look after the employees and to motivate them to look after the interest of consumers. 3. 6.
DALDA FOODS (PVT) LIMITED ORGANIZATION STRUCTURE CHAIRMAN BOARD OF DIRECTORS DIRECTOR PRODUCTIO N DIRECTOR COMMERCIA L DIRECTOR FINANCE DIRECTOR HUMAN RESOURCE GENERAL MANAGERPRODUCTIO N GENERAL MANAGERMARKETING GENERAL MANAGERFINANCE GENERAL MANAGERHUMAN RESOURCE FACTORY MANAGE R SALES MANAGE R FINANCE MANAGE R GENERAL MANAGERHUMAN RESOURCE Institute of Business Management 9 .
Organizational Chart Of a Department Business Unit Head Marketing Manager Commercial Manager Factory Manager Development Manager Brand Manager Institute of Business Management 10 .
Blending Filling V itamins flavours etc. furniture. Karachi near to the Karachi Sea Port to enable easy access to imported raw material.). The factory has an area of about 9.T. The Refinery includes all buildings. electrical and mechanical installations. which are located within the same vicinity. land. including the margarine plant but excluding the third party packing facilities. The oil refinery is highly automated and utilizes advanced technological processes. MANUFACTURING PROCESS Edible Re fine d Oil M aterial Intake Va na spa ti M aterial Intake B lending P hosphoric Acid Caustic Soda De-Gumm ing Neutralisation P hosphoric Acid Caustic S oda S odium Methylate De-Gumm ing Neutralisation Interesterification Bleaching Filteration Bleaching E arth Bleaching Bleaching Earth De-Gassing De-odourisation V itamins flavours etc. fittings.27 acres.MANUFACTURING FACILITY Production facilities are situated at a strategic location at Sindh Industrial & Trading Estate (S.I.E. De-Gassing De-odourisation B lending Filling Institute of Business Management 11 . machinery and equipment utilized by the business.
Dalda‘s market can be broadly divided in two parts. the premium segment accounts for 23%. In the branded market however. Edible oil market. Of the remaining 53% market. Institute of Business Management 12 .MARKET SHARE In a highly fragmented MARKET Dalda is the largest selling single brand. VANASPATI MARKET Total Vanaspati Market Dalda 4% Non-Premium Brands 41% Un-branded 47% Other Premium Brands 8% Branded Vanaspati Market Dalda 8% Other Premium Brands 15% NonPremium Brands 77% An analysis of the total market reveals that about 47% of the market are un-branded. premium segment constitutes only about 12% of the total market. Vanaspati market 2. 1.
35 % of GSV Total NPS Cost Total Cost CHANGE TOTAL COST ALL OTHER COSTS WILL CHANGE AS PER %.Edible Refined Oil Market An analysis of the total market reveals that about 52% of the market is un-branded. Of the remaining 48% market. Product Cost (per ton) Variable Costs Material Cost Variable FOE Distribution Cost Fixed Costs FOE Total Product Cost per ton 3. Period Cost (per ton) Direct Team Cost Admin Costs Finanical Charges Ammortization Advertising & Promotion Others . OIL COSTING SHEET A: COSTING Oil Ingredients Packaging Material Total Cost of Material / TON 2. In the branded market. the premium segment has a major share and accounts for about 62%. 2% 0% 2% 100% 2 0 2 100 Institute of Business Management 13 . premium segment constitutes about 30% of the total market. NPS COST Redistribution PER KG % 80% 1% 8% 89% EXAMPLE (RS) 80 1 8 89 89% 2% 2% 2% 94% 89 2 2 2 94 1% 1% 0% 2% 1% 3% 0% 1 1 0 2 1 3 0 TPR Shortages/ Damages . however.Taxation Total Period Cost Per Ton 4.
Their slogan is that customer is the lifeline of business and they need to be satisfied at any cost. detergent and edible oil business. Sufi provides products and services of superior quality and value their customers. Sufi has a long-standing commitment to the community and to giving back to society. Sufi Special Quality. Their customer oriented policy has given them a proper identity in the market. Sufi Glycerine. Serving the country since 1952. Institute of Business Management 14 . 1/2 kg. its energies and resources for the long-term benefit of society.COMPETITORS INTRODUCTION Sufi Group of Industries are one of the most dynamic and quality conscious companies with customer oriented approach towards their products. Sufi Group of Industries has emerged as one of the fastest growing. Sufi Darja Awwal. the company has diversified into the field of Soap chemical products. Right from recruiting and training top talent to setting new standards of product quality and promotional excellence. The top management of Sufi has believed that the Company has a responsibility to use its money. Over the last decade. Sufi Super. Sufi Brown. its people. forward-looking and most innovative consumer goods company in Pakistan. Products are Sufi Mini. Sufi Nirol and Sufi Ploy Bag 1 kg.
The company defined its goals as producing the best edible oil for quality conscious consumers with the local market in mind and proper influx of quality management. o o o o Sufi Canola Oil Sufi Banaspati Ghee Sufi Sunflower Oil Sufi Soyabean Oil The Strong market presence with its marketing team and customer support has built a solid reputation of being committed to their quality.HISTORY OF SUFI Established in 1992 with state of the art facilities to produce quality guaranteed cooking oils. The Sufi oils have become a household name. Institute of Business Management 15 . This has led Hamza Vegetable oil to become a leading manufacture of quality oils. The company is currently producing oil under the following brand names.
Super Habib.000 tons of branded consumer packs of cooking oil and banaspati nationally through a well-established network of 350 distributors. which covers almost all commercially viable markets nation wide. and markets the products through its own distribution network. Habib Oil Mills (Pvt. and Habib banaspati are all flagship brands. Habib has the largest range of products.) Ltd. There is a growing concern with environmental issues in the organization.8% share of the total branded consumer pack market. The company covers all major segments of the market. Fryo Institute of Business Management 16 . "HOM" is the largest FMCG Company exclusively in the vegetable oil & fats sector in Pakistan. Super Habib and Habib Cooking Oil are the most profitable brands whereas Habib Banaspati has the highest volume tonnage sales. Handi and Mayar Banaspati Nayab. PRODUCTS The products of Habib Oil Mills include Edible Oil and Banaspati. Habib Cooking Oil. The company sells 52. These products are being marketed in a variety of sizes and packaging options. Out of all the products offered by the company. is one of the leading processors and marketer of vegetable oil and its products. The total turnover of Habib Oil Mills is Rs. ethical company marketing quality product. It has grown at the rate of 9-10% per annum for the last 5 years. The company produces premium brand cooking oils and hydrogenated cooking mediums.HABIB OIL MILLS Habib Oil Mills (Pvt. It enjoys an excellent marketing reputation and is viewed as a professionally managed.) Ltd. It has an 8. 2 billion. • • • • • • • Super Habib Habib Cooking Oil Habib Banaspati Habib Corn Oil Nayab. Handi and Mayar Banaspati are regional brands of Habib Oil Mills.
ANALYSIS OF THE INDUSTRY USING MICHAEL PORTER’S FIVE COMPETITIVE FORCES Potential Potential Entrants Entrants LOW MODERATE Industry Industry Competitors Competitors Suppliers Suppliers MODERATE Buyers Buyers Rivalry Among Rivalry Among Existing Firms Existing Firms MODERATE MODERATE LOW Substitutes Substitutes Worksheet on Industry Structure Institute of Business Management 17 .
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1. Low Moderate High Institute of Business Management 19 . It is therefore our opinion that the threat of entrants is low. This alone explains why in recent past we have seen hardly any new companies entering the edible oil industry. however. Threat of Entrants Yes (+) 1) Moderate No (-) Do large firms have a cost or performance advantage in your segment of the industry? Are there any propriety product differences in your industry? Are there any established brand identities in your industry? Do your customers incur any significant costs in switching suppliers? Is a lot of capital needed to enter your industry? Does the newcomer to your industry face difficulty in accessing distribution channels? Does experience help you to continuously lower costs? Does the newcomer have any problems in obtaining the necessary skilled people. we feel that factors such as capital requirements (and existing established brands would create problems for new entrants) have a higher weight age. materials or supplies? Does your product or service have any proprietary features that give you lower costs? Are there any licenses or qualifications that are difficult to obtain? Can the newcomer expect strong retaliation on entering the market? Is serviceable used equipment expensive? Total 2) 3) 4) 5) 6) 7) 8) 9) 6 6 10) 11) 12 ) ANALYSIS Although this matrix suggests that the threat of entrants is moderate.
Low Moderate High Institute of Business Management 20 . There is however a limit to which the company can exploit the buyers. Bargaining Power of Buyers (To what extent are your customers locked into you?) Yes (+) Are there a large number of buyers relative to the number of firms in the business? Do you have a large number of customers. there are large numbers of buyers as compared to the producers in the edible oil industry. for example if Dalda starts charging too higher price then the buyers would switch brands. buyers have little bargaining power. This is because.2. and the end consumer to some degree does purchases based on brands rather than prices. each with relatively 2) small purchases? Does the customer face any significant costs in switching 3) suppliers? 4) Does the buyer need a lot of important information? 1) 5) 6) Moderate No (-) 5 1 4 Is the buyer aware of the need for additional information? Is there anything that prevents your customer from taking your function in-house? 7) Your customers are not highly sensitive to price Your product is unique to some degree or has accepted 8) branding 9) 10) Your customers' businesses are profitable You provide incentives to the decision makers Total ANALYSIS The table above shows that buyers of the edible oil industry have low to moderate bargaining power. therefore.
The closest substitute is butter however that poses as a little threat to the industry. Low Moderate High Institute of Business Management 21 . their performance is not justified by their higher price. customer is not likely to substitute. there is basically no real substitute of the edible oil. And there is very little chance that consumers would use this substitute. 3) Your 4) Your 4 customer has no real substitute. Threat of Substitutes (some other product or service that performs the same job as yours) Yes (+) Moderate 1) Substitutes No (-) have performance limitations that do not completely offset their lowest price. 2) The customer will incur costs in switching to a substitute. Total ANALYSIS As the table suggests.3. Or.
Companies cannot easily switch from one supplier to another as they have signed contracts.) are standard rather than unique or differentiated.4. As producers. 7) My cost of purchases has no significant influence on my overall costs. 3) I 4) I 4 3 can substitute inputs readily. 2) I can switch between suppliers quickly and cheaply. 5) My business is important to my suppliers. Low Moderate High Institute of Business Management 22 . Total ANALYSIS Bargaining power of suppliers is moderate. there is virtually no substitute to the inputs that the firm uses. supplies. Bargaining Power of Suppliers Yes No (+) Moderate (-) 1) My inputs (materials. have many potential suppliers. labor. 6) My suppliers would find it difficult to enter my business or my customers would find it difficult to perform my function in-house. services etc.
8) My 9) My product is complex and requires a detailed understanding on the part of my customer competitors are all of approximately the same size as I am. end consumers would not switch brands easily. etc. Low Moderate High Institute of Business Management 23 . There are significant product differences and brand identities 4) between the competitors.5. My customers would incur significant costs in switching to a 7) competitor. 4 1 4 Fixed costs of the business are a relatively low portion of total costs. and unless there is significant price increase. industry is not cyclical with intermittent overcapacity. Total ANALYSIS This table illustrates that the rivalry among the firms in the edible oil industry is moderate. Determinants of Rivalry among Existing Competitors Yes (+) 1) The 2) The 3) Moderate No (-) industry is growing rapidly. existing firms have targeted specific end consumers. Since no new firms are entering the market. 5) The 6) It competitors are diversified rather than specialized would not be hard to get out of this business because there are no specialized skills and facilities or long term contract commitments.
Since there are very few producers in the edible oil industry as compared to the buyers. Rivalry to some degree is non existent. there have been one or two occasions where this has happened but this doesn’t occur in the industry very often. however rivalry would occur when competing firms target each other target market. Institute of Business Management 24 . at the same time buyers of this industry have a tendency to switch to other brands if firms try to exploit them too much. And existing firms that are doing well would have no real threat of new entrants and there is no real threat of substitutes. however we feel that the remaining factors do not show that the industry is un-favorable. We feel that the current profit margins would remain the same.Summarized Worksheet Favorable Moderate Unfavorable 1) 2 ) 3) 4) Threat of new entrants Bargaining Power of Buyers Threat of Substitutes Bargaining Power of Suppliers Intensity of Rivalry among Competitors Overall Rating 2 5) 3 0 FINAL ANALYSIS The porters 5 forces model shows that the edible oil industry is a two star industry. and the general end consumer does look at brand when making a purchase decision rather than the price. Therefore we feel that buyers have low to moderate bargaining power.
an increase in price would not result in decrease in sales due to the fact that edible oil has an in-elastic demand. Technological Technology doesn’t impact highly on this industry. So companies have found it difficult to purchase raw materials at high costs and not to increase prices. who has tried to differentiate themselves but introducing VTF technology) firms create core competencies but that doesn’t greatly influence the firms profitability as consumers are becoming more and more price sensitive. and causing problem for our local producers as the cost of imports has increased substantially. existing oil producers have not been able to create that “premium brand” image (one in which snob value cannot be created). on top of that countries from which we import oil raw material (e. but the main expense comes from purchases of raw material and that cannot be reduced. Also. therefore the effect is on all firms. any changes in the government regulation would affect the entire industry. directly on the port. Even if the government changes the import duty or tax structure. The PKR Rs is also devaluating. factors such as strike. however they start smuggling raw materials. the government has introduced sales tax on items that are imported. as mentioned before although brands do influence purchasing decision making however it is not that significant as consumers are becoming more and more price sensitive. Recently. riots are increasing in this country and they are greatly affecting the profitability of all industries. EXTERNAL FACTOR EVALUATION Institute of Business Management 25 .ENVIRONMENTAL ANALYSIS AND INDUSTRY ATTRACTIVENESS PEST (Overall Industry) Political Political factors play an insignificant role. even if firms are able to reduce production cost.g. Economic Economic factors greatly influence the edible oil industry. due to consistent increase in inflation. Geo-political factors influence greatly (as it does all other industries). their currencies have appreciated. This has greatly reduced the profit margin for the industry. Social Social factors play very insignificant role in this industry. This reduced the chances of small producers from tax evasion. the purchasing power of the end consumer is decreasing. Technology has helped (as in the case of Dalda. Also. the increase in cost can be transferred to the consumer. Malaysia) have improved economically.
04 0. we found that Setting up Refineries and emerging modern trade departmental chains like Macro and Metro carry more weights and Dalda’s rating to these factors is also very good means Dalda is taking full advantage to these opportunities.05 0.15 0.32 0.12 0.12 chains like Macro and Metro Institutional Selling People are becoming more health conscious Untapped rural Market Export potential Population growth Increase in per capita consumption of edible oil THREATS Unbranded edible oils New entrants Lower pricing by competitors Intense competition in the industry Deteriorated law and order situation Declining real purchasing Non-availability of basic utilities power Political influence is used Reduction in the purchasing power of people due to inflation International brands are entering in the market 1.10 0. After that.06 0.18 0.05 0.15 0. When we analyze the EFE Matrix by separating the opportunities and threats.05 0.04 0.12 0. It appears that Dalda is responding in a good way to existing opportunities and threats in the industry.04 RATING 4 3 4 3 3 3 3 3 3 WTD.06 0.15 0.18 0.06 0.83 which is above industry average.07 0.05 0.08 ANALYSIS The average total weighted score of EFE Matrix is 2.28 0.83 0.07 0. Local production of Raw Material.00 2.06 0.08 0.05 0.05 0.08 0.04 0. Untapped rural Market and Export potential carry . The average weighted score shows that Company’s performance is good but not outstanding in the industry.08 0.15 0.WEIGHT OPPORTUNITIES Setting Refineries Local production of Raw Material Emerging modern trade departmental 0.10 0.18 0.04 3 2 2 3 2 2 3 2 2 2 0.21 0.04 0. SCORE 0.08 0.06 weights each and company’s rating to Institute of Business Management 26 .
6 3 .8 4 .20 .6 4 .45 27 Critical Success Factors Price Competitiveness Market Share Product Quality Promotion Efforts Customer Loyalty Financial Position Total Weight .each factor is 3.6 3 . Dalda has to work on the local production of the raw material to have an easy accessibility of raw material to increase production at a lower cost to meet local demand and also taking advantage from export potential. • • COMPETITIVE PROFILE MATRIX Dalda Rating Wtd.00 Institute of Business Management 3. Untapped rural market is one of the biggest opportunities for Dalda where people still use unbranded or loose cooking oil. because Dalda import the basic raw material for production. Soya bean etc.6 3.45 3.05 .Dalda has to work on the easy availability and distribution of cooking oil in the rural area/markets. where people know Dalda and also having emotional attachment with Dalda. When we analyzed the threats we found that the biggest threat in the industry is intense competition and company’s rating is 3.45 3 .6 3 .8 3 .8 3 .3 3 .20 .2 Sufi Rating Wtd. Score 4 .in these markets there is a high export potential.20 .10 . STRATEGIES • Dalda has to focus on the local production of raw materials. Score 3 . It shows that competition is the biggest threat for Dalda (competition from the local as well as from unbranded/ loose edible oil) after that Deteriorating law and order situation and Non-availability of basic utilities power are also severe threats face by the whole industry.7 Habib Rating Wtd. Score 4 .15 .6 3 . These are the areas where Dalda needs improvement to take advantage of the market opportunities. cotton seed.8 4 .15 1.3 4 .3 3 . The demand of Pakistani cooking oil is high in Asian countries like Afghanistan and Middle Eastern countries like Dubai.3 3 .6 2 .they can enter into joint venture with Malaysian companies for getting help in the local production and refining of raw material like.
STRATEGIES Dalda should increase the frequency of advertisement. But in promotional efforts Sufi’s position is better than Dalda. Customer loyalty and financial position is better as compare to competitors. In product quality the company’s position is same as the competing firms. So. In CPM if Dalda’s rating is higher than the competing firms it doesn’t mean that Dalda is better than the second or third. Institute of Business Management 28 .ANALYSIS From the analysis of CPM. So. we found that overall rating of Dalda is better than Habib and Sufi. Also Dalda need to keep a track of competitor’s promotional activities. If we take a look to individual factors we found that the price. we have to take a look to individual success factors. to make sure that the target market gets the exposure. Market share. Dalda has to pay more attention to the promotional efforts.
However “Dalda” employs procedures which help purify the final product. Most of Dalda’s consumers are aware of this fact. Institute of Business Management 29 . 5 departmental heads and a director straight away joined the new company and apart from them the management of the new company was given the option of picking the employees working at the plant after they were given “Golden Hand Shake” by Unilever. Company is providing the best quality product available in the market. Procurement Most of the large companies in the industry purchase their raw materials from the same suppliers. This is how Dalda has gotten the advantage of employing the best skilled workers available in the industry. Technological Development Dalda has the plant that manufactures the banaspati which is Virtual Trans-Fat Free (VTF). Technology which manufactures VTF is only available with Dalda.INTERNAL ANALYSIS VALUE CHAIN Human Resource Management When the Dalda foods got de-merged from Unilever in 2004. It has given the company a superior edge over its competitors. The sales forces that the company has is well trained and has all the traits that any sales team would require to perform at highest level. Ultimate goal is to have a high product availability which is getting achieved through the well-structured distribution network Marketing & Sales Dalda’s slogan “Jahan Mamta Wahan Dalda” is still in people’s mind and it is the marketing of the product which has taken the brand to such new heights. The brand awareness is also very high and this along with the marketing campaigns has played a major role in bringing such success to the brand. since most of them reveal that they purchase Dalda because of its superior quality. The distribution network has made it possible for the management to make sure that product is available at every possible place and at the same time the distribution network is also a very effective one. Most of Dalda’s competitors are not employing these procedures and we feel this is giving Dalda a competitive edge. Efforts were made in the past by major competitor like Habib to develop such technology but they could not succeed in developing a plant that manufactures VTF banaspati. Outbound Logistics Dalda’s distribution network is one of the biggest strength the company has right now.
Competent Sales Team Sales personnel are always the front-liners for every company. Distribution Dalda is the only company in Pakistan which has the distribution network spread all over the country. Most of the brands in the country are either sold in a particular city or in a particular province and those who have their presence in more than one province either don’t have presence in all the four provinces and if they have the presence then they are not in every city. The brand awareness is around 90-95 %( as been told by an employee). CORE COMPETENCIES Quality Dalda is not just meeting the standards which are set by PSQCA but also the more stringent ones which have been stated by the U. Through this service consumer can ask any question regarding the product. Dalda is the only company in Edible Oil industry which is providing such service to its consumers. Efficient Supply Chain The supply chain of the company is very efficient which has made the availability of the product quite effective. They are the ones who are representing the company in the market. which itself is a proof that Dalda has been able maintain the quality levels which are at par with international standards. Dalda has the most wide spread and efficient distribution network among its competitors. The exponential growth which is been achieved by the company clearly shows how good is its sales force. Strong Brand Dalda is there in the industry for more than 50 years and has great brand equity. It has been learnt that in the recent past the company has even exported the product to the European countries. Institute of Business Management 30 .Service There is “Rabta Advisory Service” which is provided through a toll free number.N. Dalda is best equipped with the human capital in sales department.
but also helped the company decrease its cost per unit of production slightly (economies of scale). since it no longer had to outsource its operations any more. They save considerable distribution/transportation costs. This not only gives them a competitive advantage but also a cost advantage. Previously during certain seasons Dalda had to increase production. Due to this the company was incurring huge costs. the company’s costs were reduced. However after acquiring Tullo. and since it was working at full capacity it had to outsource some of its production. Institute of Business Management 31 . and the distributors stay satisfied with the timely deliveries. This move not only helped Dalda to broaden/increase the number of customers it had. Through this large network of depots Dalda is able to deliver goods to all their distributors quickly and cheaply.STRATEGIC COST MANAGEMENT Increased number of Depots Dalda has increased its depots all over the country. Planning to Develop Logistics Network The company is planning to buy and develop a logistics network. this way delivery of goods will become more efficient and company can provide this service to other companies as well. Acquisition Dalda recently acquired “TULLO”.
21 0.06 0.24 0.10 0.10 0.INTERNAL FACTOR EVALUATION WEIGHT RATING WTD.08 0.06 0.20 0.32 0.08 0. SCORE STRENGTHS A respectable position in the eyes of the consumers Brand Name Dalda’s slogan Market leader – not a follower Loyal customers Production facilities Efficient supply chain management system Pricing Strong sales and distribution network 0.12 0.05 0.20 0.48 0.07 WEAKNESSES Centralized Decision Making Huge amount of Import Lack of company-owned R&D Institute of Business Management 32 .32 0.07 0.00 3 4 3 4 3 4 4 3 4 2 2 1 0.12 0.30 0.48 0.12 0.08 3.18 0.02 0.08 1.
05 which is above industry average.ANALYSIS The total weighted score of IFE Matrix is 3. Dalda has to be self sufficient in it. Dalda should enter in joint ventures with raw material producing and refining companies like Malaysian oil refining companies to get help in cultivating basic raw material like: cotton seed. It means that company’s internal position is good. When we analyzed the weaknesses. Soya bean etc. Such as strong distribution network. production facilities and efficient supply chain management system. It appears from this analysis that Dalda is overcoming its weaknesses quite fairly with its strengths. centralized decision making and huge amount of import are the weaknesses that need to be overcome. STRATEGY • In order to decrease the amount of import of raw material. Factors like efficient supply chain management system and sales and distribution network are getting higher weights and company’s rating to these factors are also very strong. in Pakistan and also refining it Institute of Business Management 33 .
We have observed that Dalda has been able to create a high quality brand image of it.STRATEGIC ANALYSIS AND RECOMMENDATIONS GENERIC STRATEGY ANALYSIS We feel that Dalda has a large target market. In the edible oil industry. the two most important factors that do influence decision making are product price and brand image. As we know that companies that fall in the product differentiation category consistently try to reduce costs. we would advise Dalda to stay in the broad differentiation strategy and continue to differentiate itself. By following this strategy Dalda not only differentiate itself but also working on cost reduction. Companies in the edible oil industry are consistently trying to reduce their cost. Institute of Business Management 34 . product information does not play a vital role in influencing end consumer purchasing decision. RECOMMENDATION Keeping in view the current standing of Dalda and the edible oil industry in general. therefore it is our strong belief that even though Dalda is trying to develop methods to reduce their expense but their main strategy would be creating a product differentiation for their brand. but we feel that reducing cost should not be the primary strategy.
Dalda Melange 3. • Brand Name: The name “ Dalda” is a great strength for the company as some people buy the product just because of the name. wahan Dalda” (“Mother’s Love is Dalda”) became a synonym for purity and quality and has been the platform for the brand for many. • Market leader – not a follower: Dalda is the overall market leader in the vanaspati and edible refined oils market in Pakistan as it has a significant market share position both in the edible oil market and vanaspati market. This has enabled Dalda to be a leader in the market and not a follower. Dalda has reserved the right for using the name Dalda for itself through trademark. Institute of Business Management 35 .SWOT Analysis STRENGTHS • A respectable position in the eyes of the consumers: The Dalda brand is one of the 3 leading top brands in the Country. It means that Dalda is as pure as a mother’s love. This is a strong message. which has given Dalda an edge over the competitors. • Loyal customers: Dalda enjoys very loyal customers all over Pakistan. Current trademark and license rights in Pakistan only for: 1. many years. This prohibits any other company or individual from using the name Dalda for their products. The company has hold true to the message by maintaining their quality and standards over the years. This is strength for the company in the market as it gives a respectable position to Dalda in the eyes of the consumers and ensures brand loyalty. Dalda Cooking Oil 4. Dalda Vanaspati 2. Dalda Planta • Dalda’s slogan: Dalda’s slogan “Jahan Maamta.
WEAKNESSES • More like a family owned business: Being a family owned business. This makes Dalda vulnerable to changes in the conditions of the countries in which its suppliers are situated. • Efficient supply chain management system: The Company has an efficient supply chain management system.T. the marketing plan and the final budgets comes from the owners of the business so some times the marketing department faces problems in implementing certain decisions which have to be taken immediately in the competitive environment. • Strong sales and distribution network: The company has a very strong sales and distribution network in Pakistan. • Pricing: The pricing of Dalda’s is almost equivalent to the pricing of Habib.I. • Centralized Decision Making As discussed it’s a family owned business.). There is a dedicated specialized oil-buying department within the Company catering to all the input needs of Dalda. • Hugh amount of Import: The Company imports most of its needs for palm oil from Malaysia whereas most of soya bean oil is imported from South America. • Lack of company-owned R&D Institute of Business Management 36 .• Production facilities: Production facilities are situated at a strategic location at Sindh Industrial & Trading Estate (S. although a very professional team of expert looks after the marketing department. This cuts down transportation costs for Dalda. Karachi near to the Karachi Sea Port to enable easy access to imported raw material. so most of the decision making is centralized.E. This has given Dalda a similar platform to compete in the industry. which is a major player in the industry.
• Untapped rural Market There is a lot of potential to cater untapped market where people still use unbranded/ loose cooking oil. • Export potential There is potential to export in Middle Eastern countries where people prefer strong established brands like Dalda. are the low category brands which price their products at much low cost then Dalda but they feature their brand in such a way that the people think that the brand is very hygienic and nutritious. • Local production of Raw Material Now the government is taking steps to grow Soya beans and different type of seeds at the coastal line of thatta. • • Population growth Increase in per capita consumption of edible oil THREATS Unbranded edible oils: One of the threats for Dalda. • • Emerging modern trade departmental chains like Macro and Metro Institutional Selling • People are becoming more health conscious Now the people become more health conscious and they prefer branded products. • New entrants: Institute of Business Management 37 .OPPORTUNITIES • Setting Refineries Industry players believe the setting up of refineries would encourage crude edible oil import. which is much cheaper in terms of cost than the refined product.
due to which Dalda has to keep a close eye on its competitors.Edible oil industry is a growing market and hence many people are entering the market. • Lower pricing by competitors: Sufi is charging a low price for its product. This is increasing competition in the industry. International brands are entering in the market Institute of Business Management 38 . Although Dalda is well established all over the country it still needs to be careful of Sufi’s action as it can steal some of Dalda’s customers. unbranded and competitive local ghee and cooking oil brands. • • • • • Deteriorated law and order situation Non-availability of basic utilities power Weak Infrastructure of the country Political influence is used Smuggling of unbranded edible oil from Afghanistan The edible oil businesses were now facing fierce battle with the combined pressure from smuggled. • Intense competition in the industry: There is an intense competition in the industry. • • Reduction in the purchasing power of people due to inflation Consumers might shift to open packet oil due to rise in prices.
Setting Refineries. Efficient supply chain management system. 2. 5. 6. Strong sales and distribution network. 3. 6. • • • • Institute of Business Management 39 . People are becoming more health conscious. Production facilities. Untapped rural Market. O2). Hugh amount of Import. Export potential. Increase in per capita consumption of edible oil. Emerging modern trade departmental chains like Macro and Metro. -Strong sales and distribution and sales network can be use to tap rural market (S9. 3. 8. Population growth. 7.O4). Institutional Selling. S-O STRATEGIES • -By using efficient distribution network. Brand Name. 7. -Dalda’s production facility is very strong if it succeeds to establish local production of raw material Dalda can further increase the production of cooking oil (S6. Market leader – not a follower. -If Dalda decreases W-O STRATEGIES • -If Dalda improves the R&D it able to have local production of raw material (W3. O1. Lack of company-owned R&D. 9. External Factors OPPORTUNITIES (O) 1. Centralized Decision Making. O2). 5.TOWS Int STRENGTHS (S) ernal Factors 1. WEAKNESSES (W) 1. 3. • -If Dalda decrease import and focus on local production of raw material can increase the export (W3. O6). Loyal customers. O7). A respectable position in the eyes of the consumers. 9. O2). 8. O3. Local production of Raw Material. -Dalda’s name and image is very reputable in the international market help Dalda to get export potential (S7. Dalda can increase the market share by targeting modern trade departmental chains and institutions (S9. Dalda’s slogan. 2. 4. Pricing. 2. 4.
able to get share in the rural market (S8. S9. 2. Lower pricing by competitors. it helps Dalda to decrease the cost of production and become more competitive and strong in the industry (W2. 6. T1). T9) • Dalda should further strengthen its brand name and positioning to increase threat for new entrants (S1. T3. Unbranded edible oils. Political influence is used 9. T4) Institute of Business Management 40 . 4. O4) W-T STRATEGIES • If Dalda become self sufficient in raw material production. S2. Deteriorated law and order situation. O6). Intense competition in the industry. International brands are entering in the market. Reduction in the purchasing power of people due to inflation. Weak Infrastructure of the country. 10. New entrants. • If Dalda decrease its prices by lowering its cost. • Dalda can use its strong sales and distribution to compete with unbranded oil in rural markets (S9. 8. T3) • Strong sales and distribution ca be used to face the competition (S7.the price by lowering its cost. 3. 7. THREATS(T) S-T STRATEGIES 1. can cope with the decreasing purchasing power (S8. 5. Non-availability of basic utilities power. T10) • Dalda should decrease the prices by lowering cost to make prices competitive and reasonable(S8.
50 Ease of Entry into New Markets +3 Institute of Business Management 41 .50 Industry Strength (IS) International Growth Potential +4 Profit Potential Capital Intensity IS Average +3 +4 +3.75 EXTERNAL STRATEGIC POSITION Environmental Stability (ES) International Economic Instability-4 -4 -3 -3 -3.THE SPACE MATRIX INTERNAL STRATEGIC POSITION Financial Strength (FS) Return on Investment Liquidity Debt to Equity Ease of Exit from Markets FS Average +4 +4 +3 +3.5 +4 Rate of inflation Prices of Competitor’s Products Competitive Pressures ES Average Competitive Advantage (CA) Market Share Product Quality New Product Development Customer Loyalty CA Average -1 -2 -1 -2 -1.
75 -3.5 3.5) = 2.5) = 0.50 -1.50 Y axis: 3.0 Institute of Business Management 42 .5 + (-1.75+ (-3.Y axis Financial strength Environmental stability X axis Industry strength Competitive advantage +3.25 X axis: 3.
(- IS +2 ES Competitive Dalda is in an excellent position to use its internal strengths. STRATEGIES • Market penetration and Market development – is a good strategy and this can be increased by targeting rural markets where people are still using unbranded/ loose cooking oil. Dalda is taking full advantage of external opportunities and overcoming internal weaknesses and avoiding external threats.75) and having good competitive advantage 1. Dalda should use its efficient distribution network to increase market penetration.5) in a growing industry.Conservative FS +2 +1 * Aggressive CA -1 +1 -1 -2 -3 Defensive ANALYSIS Dalda is financially very strong (3. Institute of Business Management 43 .
Further new product development can be a good strategy. Backward integration – backward integration is like acquiring supplier as the suppliers of Dalda are the raw material providers and Malaysian refining companies.• Product development – Dalda is currently is working on this strategy. • BCG GROWTH MATRIX Institute of Business Management 44 . recently it introduced olive oil as people are becoming more health conscious. New product development is a good strategy. Acquiring suppliers or join venturing with them is a good strategy to driven out cost and decreasing cost of production. acquiring supplier is a good strategy because raw material costs 70% of total cost of production.
therefore require larger investments. Their sales are consistent throughout the year.Star • • • Dalda Cooking oil Dalda MunPasand Dalda Olive Oil These are products which have a large market share in a fast growing industry. Their cash generation is also high and at the same time has a high growth potential. Question Mark Institute of Business Management 45 .
And the company has chosen to decrease its additional investments. Dalda’s product has a low market share in this category. IE Matrix Institute of Business Management 46 . Dog • Dalda Canola This is a declining market. However during recent years there has not been consistent growth in the industry. And the company is not considering heavy investment in this product. Right now it has a small market share in a market with a high growth rate.• Tullo This product of Dalda’s requires plenty of additional investment. Cash Cow • Dalda Banaspati This product of Dalda has one of the largest market shares in the category of banaspati. It was acquired only a few years ago.
0 to 1.0 to 3.99 V VI VIII IX ANALYSIS In IE Matrix. STRATEGIES • Market penetration Dalda need to work on market penetration. Dalda lies in the region of Hold and Maintain.99 II Weak 1.99 III High 3. Recently Dalda introduced olive oil.99 Total DALDA Weighted Score Low VII 1.0 to 4.0 to 1. in order to cater health conscious people.0 to 2.0 to 2. In this why Dalda can further strengthen its position and increase its market share. • Product development Product development is another strategy that Dalda is following. Means that Dalda has to maintain and hold its current position.0 I Average 2.The IFE Total Weighted Score Strong 3. Institute of Business Management 47 . it should capture rural markets where people still use loose or unbranded cooking oil.99 Medium IV The EFE 2. Further product development is a good strategy to maintain and hold current position.
Dalda should continue its current strategies. • Market development. • Product development. As we discussed earlier: • Market development. Institute of Business Management 48 . • Horizontal and Backward integration is good strategy for Dalda.THE GRAND SRTATEGY MATRIX RAPID MARKET GROWTH Quadra nt II Quadrant I DALDA WEAK COMPETITIVE POSITION STRONG COMPETITIVE POSITION Quadrant III SLOW MARKET GROWTH Quadrant IV ANALYSIS Dalda is in an excellent strategic position.
06 0.08 0.32 0.04 4 2 3 4 3 3 2 2 3 0.08 Institute of Business Management 49 .16 0.15 0.15 0.2 0.15 0.28 0.05 0.16 0.12 3 4 4 3 2 4 4 4 2 0.2 0.07 3 3 0.07 0.04 0.18 4 4 - THREATS Unbranded edible oils New entrants Lower pricing by competitors Intense competition in the industry Deteriorated law and order situation Declining real purchasing Non-availability of basic utilities power Political influence is used Inflation 0.05 0.2 0.06 0.15 0.05 0.24 0.06 0.04 4 4 3 4 0.2 0.THE QSPM MATRIX QSPM Key factors Strategic Alternatives weigh *Strategy Attractiveness t 1 score stratgey1 *Strategy 2 Attractive ness score strategy2 0.08 0.04 0.18 0.18 0.12 0.05 0.2 0.24 OPPORTUNITIES Setting Refineries Local production of Raw Material Emerging modern trade departmental chains like Macro and Metro Institutional Selling People are becoming more health conscious Untapped rural Market Export potential Population growth Increase in per capita consumption of edible oil 0.12 0.12 0.05 0.06 0.21 0.24 0.08 0.16 0.05 0.04 0.1 0.16 3 3 4 3 0.
24 0.05 0.07 0.2 0. it is found that strategy: 2 is more attractive as the sum total score of the strategy: 2 is 5.10 0.12 3 3 3 2 4 2 4 0.63 4 4 0.International brands are entering in the market 0.08 0.10 0.32 0.0 1 1 0. because raw material costs 70% of total cost of production.16 0.36 0. ANALYSIS From the QSPM Matrix.28 0. in this way Dalda can reduce its cost of production.66.3 0.36 WEAKNESSES Centralized Decision Making Huge amount of Import Lack of company-owned R&D Sum Total Score Attractiveness 0.06 0. capturing the rural markets of Pakistan where people still use unbranded / loose cooking oil for cooking.12 0.15 0.08 3 0.4 0.08 0. STRATEGY 2 Institute of Business Management 50 .12 0. *Strategy 2: Joint ventures with Malaysian companies for the production and refining of raw material.12 0.08 1.32 5.1 0.66 *Strategy 1: Market penetration.12 STRENGTHS A respectable position in the eyes of the consumers Brand Name Dalda’s slogan Market leader – not a follower Loyal customers Production facilities Efficient supply chain management system Pricing Strong sales and distribution network 0.21 0.48 0.48 4 4 4 4 3 4 3 0.08 4.02 0.04 2 0.4 0.
In this way Dalda can also increase its market penetration. Through this strategy Dalda can easily get raw material as the raw material of cooking oil are cotton seed. Institute of Business Management 51 . because raw material costs 70% of total cost of production. Just being able to devise bold new strategies to outperform the competitors is not enough. Soya beans etc are not easily available in Pakistan by joint venturing with Malaysian companies for the production and refining of raw material. The strategic vision has to be translated into concrete steps & the internal processes and management system have to be aligned accordingly. in this way Dalda can reduce its cost of production. 99% of the strategies fail at the implementation stage. by increasing production and lowering the prices. Dalda will be to reduce the cost of production and make the prices more reasonable in the market. STRATEGIC IMPLEMENTATION Strategy implementation is the most important area of the whole strategic management process.Joint ventures with Malaysian companies for the production and refining of raw material.
Target Increase profits by 15% Customer Objective 1. BALANCED BUSINESS SCOREBOARD Initiative Acquiring Tullo has helped Dalda to broaden its market share and increase profits. Bring Prime in 16 Kg tin. Initiative 1. Increase customer base.THE COMPONENTS OF STRATEGIC IMPLEMENTATION • Building an organization with the competencies. 52 . decision making Measure 1. Create a 2. supportive work Institute of Business Management Real time communication. Increase in sales volume by 25% by June. Collective corporate culture. capabilities and resource strengths to carry out the strategy successfully Developing budgets to steer ample resources into critical value chain activities. Target 1. Increased one-to one contact at all Measure levels. 2. Financial • Objective 1. Take advantage of International modern trade chains. Capturing more rural markets. Introduce Sales Promotion schemes for modern trade chains. • • Creating Strategy Supportive Structure Creating a Strategy-supportive work environment and corporate culture Pitfalls of Strategy Implementation • • . environment & 3. 2. 2. Increase profits & ROI Measure 1. Drive out cost to increase profits. 2008. Increase the institutional selling. Learning & Growth Target 1.
2. Continuous training and development 2. Initiative Empowerment. Forward integration 2. Bring in R&D 3. Initiative 1. Lower production costs/ process efficiency. Target Drive out costs. Restructuring of Human Resource department and policies. 3. Acquire a logistics company. Objective 1. Organizational culture which encourages change and development. Leading by example. Measure Acquire a transport company and establish logistics network to drive out cost & decrease cost of production. Institute of Business Management 53 .• Internal processes Objective 1.
The company has strong external antennae and quickly anticipates external shocks. emerging opportunities. short-term focus on cost reduction and low-price competition. and services to customers. and market downturns. Subtotal of Strategy score: Inferior Average Superior 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 16 Institute of Business Management 54 . • • • • Financial: How does Dalda look to shareholders? Customers: How do customers see Dalda? Internal process: What must we excel at? Innovation and Learning: Can we continue to improve and create value? Diagnostic Survey of Primary and Secondary Management Practices Strategy The company has a clearly articulated and widely understood strategy. The company is focused on extending/improving its core business or businesses and is committed to growing them aggressively. value-added products.Balanced Scorecard aligns organizations to new strategies: away from the historic. The company has a very good understanding of its competitors and can anticipate competitors’ moves. and toward generating growth opportunities by offering customized.
Inferior Average Superior 5 1 2 3 4 The company consistently improves employee productivity. 1 2 3 4 5 Subtotal of Execution score: 16 Culture The company sets demanding performance standards for all of its employees. and fun. 1 2 3 4 5 The company’s programs and initiatives consistently achieve desired outcomes. 1 2 3 4 5 The company’s IT systems enhance its ability to execute its value proposition. The company consistently raises the performance bar. The company’s culture is exciting.Execution The company’s products and services consistently meet customer expectations. The company has clear values that people in the company abide by. engaging. Subtotal of Culture score: Inferior Average Superior 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 11 2 3 4 5 Institute of Business Management 55 .
Inferior Average Superior 1 2 3 4 5 The company minimizes bureaucracy. The company designs jobs that intrigue and challenge talented employees. The company successfully develops talent.Organizational Structure The company makes decisions quickly. Subtotal of Talent score: Inferior Average Superior 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 15 2 3 4 5 Quality of CEO/Board Leadership The CEO is uncanny at spotting opportunities and problems before others. Inferior Average Superior 5 1 2 3 4 Institute of Business Management 56 . The company’s senior management is personally involved in recruiting and developing talent. Subtotal of Organizational Structure score: 13 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Talent The company has great “talent” and “bench strength” at each position. The company effectively cooperates across the organization. The company’s business processes are simple.
The CEO matches words with actions (“walks the talk”). or innovations are better than those of its competitors. devices. People who have new ideas are respected and enjoy high status in the company. The company’s products. Subtotal of Innovation score: Inferior Average Superior 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 15 2 3 4 5 M&A Growth The company consistently identifies good M&A possibilities. The company is consistently better than its competitors at integrating mergers and acquisitions. Subtotal of CEO/Board score: 18 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Innovation Capability The company is continually transforming or reshaping its industry.People at all levels of the organization feel connected to the CEO. The company does not hesitate to cannibalize its existing business or businesses. The company’s board members know the business and have a significant stake in the success of the company. Inferior Average Superior 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Institute of Business Management 57 . The company rarely overpays for mergers & acquisitions.
Subtotal of M&A score: 1 16 2 3 4 5 TOTAL SCORE: 113 EVALUATION OF DIAGNOSTIC SURVEY BIBLIOGRAPHY Institute of Business Management 58 .The company’s mergers and acquisitions achieve most of their projected cost and revenue benefits.
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