Asia Ghee Mill

STRATEGIC INTENTION Vision “Mr. Majeed is visionary person and has an industrial mind, who always think,

To be best quality manufacturer of oil and ghee in the Ghee industry
Asia Ghee Mill don’t have any written mission statement but through our discussion we came at, and the mission of the Asia Ghee Mill should be: “We care the health of our customers by providing them, , the superior purity and best quality oil & ghee at comparable prices and continually improve our products to meet their needs which help us to maximize the wealth of owners which in turn, create more employment opportunities and provide maximum benefits to employees. Goals of Asia Ghee Mill a) To bring the company out of financial crisis, by decreasing its debt dependency. b) To utilize the full potential of the mill by arranging raw material, modernizing the process, and the workers mo. c) To ensure quality at each step of production for both ghee and oil to care the health of our consumers. d) To improve the morale and efficiency of employees. e) To increase market share in Multan division. f) To develop long lasting good relationships with distribution dealers. g) To dispose and utilize the wastage in a better way. Objectives of Asia Ghee Mill a) To increase production of ghee and oil from 35000 tons last year to 4500 tons this year. b) To sell 2000 tons of ghee and oil in coming year in Multan division, specially in Malsey, Wehari, Khanewal, and mia channoo. c) To manufacture the laundry soap from the wastage of ghee & oil and recycle the water for reuses purposes in the production. Problem statement In start the organization has faced a plenty of problems but due to proper planning and well implementation problems are decreasing day by day. But still the organization is not totally out of trouble, and facing a problem. problem

Backward Linkages Generically the company has got an advantage of access to the sources of raw material. you can take the example that they require at least Matric pass candidate for the post of helper. The raw materials. After taking charge of many responsibilities Mr. so that’s why inventory remains in the stores which cause the increase in holding cost and cash shortage problems Problem: The Company does not follow any standard procedure for purchasing. In fact the wok is less structured in the organization. Skilled Labor With High Morale In most of the factories skilled and semi skilled labor along with unskilled labor is hired from outside. receipts and payments. Abdul Majeed has worked very hard for the success of the mill.The major problem is related with the distribution network and utilization of production capacity of the organization. So this will create the most loyal employees with high morale. And now this is the result of his efforts that the company is showing very good performance and operating on professional basis. The other strength of the company is that they take the oil from their own cotton factories but their cotton factories meet only 10% of the total raw material required for the current capacity utilization Weaknesses of Asia Ghee Mills Lack of Awareness The major weakness of the Asia Ghee Mills is the lack of awareness among the consumers. But Asia Ghee Mills is clearly different in this aspect from other organizations. . People are usually guided through specified rules and regulations. In fact the owner of the company is big business man of Bahawalpur. Asia Ghee Mills has placed its new employees with the senior employees and trained them before they actually placed on job. are mostly available in Bahawalpur. There is always a risk associated with them that whether they work properly or not. Furthermore firm is relying on private dealers for distribution of its final products. Due to his professional abilities and leadership qualities he has also achieved many of his objectives. where as they had used electronic media in start but now they don’t have any advertisement for their products. Also the professionalism is lacking in most of the cases. SWOT Analysis Strengths of Asia Ghee Mills Professional Leadership Usually in such kind of traditional organizations leadership is deficient. which are available in Pakistan. so that’s why majority of the people even don’t listen the name of company. Asia Ghee Mills use print media one time in a month. They have the career opportunity to move upward to become an operator because helper has known all the responsibilities of the operator. The organization is utilizing limited production capacity because it has a limited market and not supplying its products all over the country but only in Bahawalpur and Multan. This mismanagement causes different types of costs. selling. because the Asia Ghee Mills don’t go for any type of advertising program. First of all Asia Ghee Mills always hire the educated people. which are more productive. Ch. which increases the overall expenses of the company. No proper records are made and no proper rules are followed. It causes a lot of time wastage and mismanagement. . So because of limited market some times these dealers refuse to take the supply because of having old stock unsold.

It is a necessity and no one can avoid it. and other than Bahawalpur the company don’t have so much demand because of no advertisement. C Concentric Diversification “Adding new. The reduction in disposable income is also a cause of decrease consumption of ghee. which the company is enjoying. Decrease in Consumption Due to the increase in awareness level of the people the consumption rate is decreased. This is a source of continuous threat for the company. Dealership Marketing Asia Ghee Mills distribute its products through outside dealers which cause increase in price of the products which the consumers receive. Also the product has no substitute. It is due to the low productivity of the varieties and due to the less area cultivation. including consumer goods and industrial goods. but in Multan division the firm has started its distribution. for instance. In Pakistan. but related products or services”. The high rate of heart disease in the country is another cause. Threats Low Production of Cottonseed The cotton is not produced sufficiently in the country. where they are distributing their products at mass level and having a market share of 70-80%. STRATEGIES CORPORATE LEVEL STRATEGIES orporate level strategy focuses on strategies for enterprises consisting of more than one business. because the dealers and retailers take their margin which cause a 1-2 rupees difference in the Ex-factory price and Retail price. Due to this low production the mill faces a shortage of raw oil. which is always a problem for the company. Because of this limited distribution network the company is unable to utilize its full capacity because currently Mill is utilizing 50% of its full capacity which is enough to meet the need of consumers in Bahawalpur. As we have already told that Asia Ghee Mills is distributing their products only in Bahawalpur. so people have to buy it in any case. Opportunities Generic Opportunities The ghee/oil has so many opportunities due to its product nature. the consumption rate of ghee/oil is high in the world. Asia Ghee Mills involve more than one business is said to be diversified. and absence of distribution network which forced the company to operate half capacity. . comprises several businesses. Because of all these factors the consumption rate of ghee is decreasing in Pakistan.Limited Distribution Network The other weakness of the Asia Ghee Mills is of having limited distribution network. and as the population growth rate is also very high so the company has an opportunity to meet the demand of local market. These are the natural opportunities. Asia Ghee Mills. which restrict the people to use ghee.

laundry soap and CO2 gas. so we will focus on crafting successful competitive strategies. In fact cost reduction is the only way to stay in the industry. Asia Ghee Mills has developed a setup to sold laundry soap under brand name of “Asia Laundry Soap” so Asia Ghee Mills is adding new but related products in to the market. Backward Integration “Seeking ownership or increased control of a firm’s suppliers”. product cannot be differentiated. Then we said it concentric diversification because they manufacture the soap from the by products they receive.Asia Ghee Mills involved in concentric diversification because Asia Ghee Mills has two by products. Because competition takes place at the business level.) 48 47 Weights 16 kg 16 kg Prices (Rs. Asia Ghee Mills involved in backward integration because they receive the cottonseed oil from their own cotton factories. Asia Ghee Mills has the following two major competitors: Major Competitors Sultan Banaspati Shehbaz Banaspati Weights 1kg 1kg Prices (Rs. Instead of selling laundry soap as a raw soap to any other soap manufacturer. So company is using right strategy. industry is producing standardized product. All the characteristics are fully applied in ghee industry. Asia Ghee Mills has cost leadership strategy. including both total quality management and core process reengineering. According to the text. Here from the above table we can see that the price of the Shehbaz Banaspati is equal to the prices of the Asia Banaspati. they themselves start cutting and packaging of the soap and sold in the market as their own new products under their own brand name. Although these three cotton factories provide only 10% of its total requirement but this will increase the bargaining power of the Asia Ghee Mills if it has to negotiate upon the prices of oil purchasing from other factories. Business Level Strategy Firms compete directly with one another at what is called the business level of strategic management. the level at which work inside the organization actually takes place.) 790 785 Asia Ghee Mills is following cost leadership because the competitors especially Sultan Banaspati has a very old name in the ghee industry so Asia Ghee Mills has to charge the low prices to compete with the competitors. market Development . But in Bahawalpur the sale of Asia Banaspati is more than Shehbaz Banaspati. This involves applying strategic management concepts to what is known as the operations level. product has same usage and switching cost is low. the low cost strategy is good when. strategic management at this level is crucial to the overall success of the firm. but in Multan division the sale of Sultan Banaspati and Shehbaz Banaspati has more sales than Asia Banaspati. Operation Level Strategy Operation level strategy focuses at how to develop capabilities in process execution that will yield competitive advantages for a firm. Cost Leadership In manufacturing and especially in industries where the product differentiation is not possible the only strategy the organization is left with is "Low Cost Production" or cost leadership. We focus on how organizations go about improving their process capabilities.

recommeded Strategies this time when industry is fully mature. Asia Ghee Mills has a good image in the Bahawalpur. because the Asia Ghee Mills is continuously improving the quality of the ghee/oil for the consumers. Advertisement Asia Ghee Mills is not using any mode of advertisement. . The Asia Ghee Mills is also facing the same problems. so that’s why they are improving their products through TQM. topping out and loss of profitability. In this dynamic and competitive environment the firm has to maintain its current position of cost leadership to be competitive. Forward Integration “Gaining ownership or increased control over distributors or retailers”. The firm should use their own distribution network because the motive behind that when they have their own distribution system the additional cost will be avoided which had been kept by dealers as their own margin. They believe that advertisement without availability of the product is useless and creates a bad image. ISO Certificate Although the firm is working better than required ISO certificate but the firm should take the ISO certificate. Currently Asia Ghee Mills is following the product development strategy. Because ISO certificate create a good image among the consumers. In order to create awareness Asia Ghee Mills must go for advertisement. because of low demand and unavailability of their products. and the competition in terms of access to final consumer is very high the companies usually face the problems of slow demand growth. and they try to develop the same good image in all over the country. Although it has tackled the major problems very well but still there is some room of improvement in its existing strategy. emphasize on cost and services.“Seeking increased sales by improving or modifying present products or services”.

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