You are on page 1of 104

Maghreb Oxygne

Strategic Plan 2013-16

Maghreb Oxygne

Strategic Plan 2013-16

Acknowledgments

We express our sincere gratitude to all those people who have been associated with this
project and have helped us with it and made it a worthwhile experience.
All of us are deeply grateful for contributed to our learning process at Al Akhawayn
University, especially our Professors. In this respect, we thank Dr. Abderrahman Hassi for his
valuable advice, as well as Dr. Tariq Elouam and Pr. Imad Jebbouri for helping us to put the theories
we learnt into practice.
Last but not least, we are greatly thankful to Mr. Chafiq, Mr. Moustaid, Mrs. Touria, and Miss
Wissam who have shared their opinions and experiences through which we received the required
information crucial for our report.

Maghreb Oxygne

Strategic Plan 2013-16

Executive Summary

e objective of the present capstone project is to evaluate Maghreb Oxygne company


specializing in industrial gases in Morocco. In the sense of providing a thorough analysis of the
dierent departments and functions of the company, the team started with an external assessment of
the industry in which the company operates, featuring the PEST analysis, Porter's five forces model,
and a description and evaluation of the major competitors of the firm. en, an internal assessment
was provided including the financial analysis, the assessment of some of the internal departments of
the company upon information gathered from the managers of Maghreb Oxygne. A series of
strategic management tools were used in order to come up with the most profitable and appropriate
strategies matching the current status of Maghreb Oxygne. Finally, a strategy implementation
section was added with the purpose of generating a precise action plan for the company to follow,
including the costs of implementation and profitability of the chosen strategies.

Maghreb Oxygne

Strategic Plan 2013-16

Table of Content

Company Introduction
History
Equity Distribution Overview
Current strategies and objectives
Mission and Vision statements of the company
Maghreb Oxygne product oerings
Organizational structure of Maghreb Oxygne
Input Stage
External Analysis

7
7
8
9
10
12
15
16
16

Statistical facts on the industry


PEST Analysis
Porters five forces model analysis

16
19
21

Opportunities and reats Analysis

23

Opportunities:
reats
Competitive Profile Matrix Analysis
External Factor Evaluation Matrix

Internal Analysis
Strengths:
Weaknesses
Internal Factor Evaluation (IFE) Matrix
Financial analysis

Matching Stage:
SWOT Matrix:
e Boston Consulting Group (BCG) Matrix
e SPACE Matrix
e internal-External (IE) Matrix
Grand Strategy matrix
Decision Stage
Objective 1: To increase net income by 47%
Objective 2: to increase market share by 6% by 2015
Objective 3: to increase market share by 5% by 2015
Objective 4: To increase Total Revenues by 1.1%
Limitations:
References
Appendices:

23
25
28
31

33
44
45
47
49

60
60
63
64
64
65
66
69
74
78
82
85
86
87
5

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 1: IFE Matrix


Appendix 2: EFE Matrix
Appendix 3: Competitive Profile Matrix
Appendix 4: SWOT Matrix
Appendix 5: IE Matrix
Appendix 6: Space Matrix
Appendix 7: Grand Strategy Matrix
Appendix 8: BCG Matrix
Appendix 9: QSPM
Appendix 10: Fleet Management Process
Appendix 11: ArcGIS Server Process
Appendix 12: Snapshot of ArcGIS
Appendix 13: Maghreb Oxygne Website Template
Appendix 14: Forum Brochure For Market Penetration Strategy
Appendix 15: Flyer for the New Product: LABGAZ
Appendix 16: Stall for the Medical Forum

87
88
89
90
91
92
93
94
95
96
97
98
99
101
102
103

Maghreb Oxygne

Strategic Plan 2013-16

Company Introduction

History
Maghreb Oxygne (MO) is a Moroccan company created in 1977 to fulfill the need of industrial gas
in the country with two industrial units in Berrchid, specialized in manufacturing gas from air and
acetylene.
e history of Maghreb Oxygen can be summarized through the following events:
1982: Maghreb Oxygne increased its production level by investing in two new production
units specialized in manufacturing nitrous oxide (medical gas) and carbon dioxide (food gas).
1992: Launch of two new activities in specialized services which are medical equipment and
welding equipment.
1994: Edification of a new production unit, in its new plant in Had Soualem, specialized in
producing Oxygen and Azote for an investment of 130 million MAD.
1998: Opening of a new production unit specialized in Hydrogen at the Plant of Had
Soualem, for an investment of 9million MAD.
1999: Introduction of Maghreb Oxygne to Casablanca Stock Market.
2002: MO reorganized its structure and its commercial approach.
2004/2005: Launch of a new production site in Jorf Lasfar for an investment of 70million
MAD.
2008: As part of a joint venture with AIR LIQUIDE, MAGHREB OXYGEN created the
company SODEGIM for building an on-site production unit of oxygen, nitrogen and argon.
2010: Pursuing the investment in SODEGIM whose actual start is scheduled for in 2011.

Maghreb Oxygne

Strategic Plan 2013-16

Equity Distribution Overview


e following is an overview of the equity distribution of Maghreb Oxygne
Shareholders
Akwa Holding
ASMA Invest
Akhanouch and Ouakrim families
ATLANTA
AL WATANIYA
CDG
WAKRIM MEHDI
Employees
Others

Holding
61.54%
6.90%
5.30%
4.00%
4.00%
2.00%
1.89%
1.23%
13.13%

Source: Bourse de Casablanca


Table 1: Equity distribution of Maghreb Oxygne
e following is a summary of Maghreb Oxygnes subsidiaries:
Name

Holding

TAFRAOUTI

24%
51%
25%
28%
1%
2%

SODEGIM
PROACTIS
PHILCO ENVIROTECH
PETROLOG
SETTAT GOLF MANAGEMENT

Source: Bourse de Casablanca


Table 2: Subsidiaries of Maghreb Oxygne

Maghreb Oxygne

Strategic Plan 2013-16

Current strategies and objectives


Development policy of MAGHREB Oxygne revolves around the following:
e Development of new packing stations of industrial gases at
the level of dierent regions. At the end of the extension program, all the regional oces
will have a conditioning station.
Continuous seeking of opportunities for "on-site" gas production.
e development of "on-site" units will be conducted through the subsidiary SODEGIM.
is latter will allow Maghreb Oxygne to enhance the security of deliveries to customers
in case of snooze of the activity of one of its own production facilities.
e Expansion of the production capacity of Maghreb Oxygne which is under study.
Actively seeking a technical sales partnership with an international operator for the transfer
of know-how in industrial gas applications. Such a partnership should allow MO to reach
new customers and increase sales of industrial gases.
Special interest for the health sector to take full advantage of its growth.
Continuous Improvement of sales force through targeted training.
Optimization of the supply chain by the establishment of conditioning stations, inventory
management, procurement, etc

Maghreb Oxygne

Strategic Plan 2013-16

Mission and Vision statements of the company


When evaluating the company, it turned out that they did not have a vision statement. For that
matter, the team suggested a revised mission statement and a suggested vision statement.

Vision statement:
Regarding the vision statement, the team was seeking to answer the question of what Maghreb
Oxygne wants to become in the future. erefore, the team suggested the vision of MO
becoming the leading industrial gases company in Morocco.
Maghreb Oxygnes vision is to be the leading industrial gases company in Morocco.
is vision is realistic and achievable by Maghreb Oxygne, and it provides a sense of direction
to the company and its departments and functions.

Mission statement:
During the brainstorming session, the team decided to use the following table with the nine
components of the company as a first step to forming a sound mission statement. e table
below gives an overview of each component of the mission statement related to Maghreb
Oxygne following their current mission statement.
Current mission statement:
Specialist in industrial gases, medical gases and related services, distribution of welding products,
broadcast equipment and medical consumables, Maghreb Oxygne is committed daily to providing
solutions, products and services to its customers, anywhere in Morocco.

Components

Information

Customers

Suggestion

Not included

ree main segments: individuals and


SMEs, health-related companies, and
large companies

Products and
services

gases, welding equipment, and


healthcare equipment and installation

No changes

Markets

Moroccan market

No changes

10

Maghreb Oxygne

Strategic Plan 2013-16

Technology
Not included
Concern for
survival, growth or Not included
profit
Philosophy

Concern for
employees

Concern for maximizing profit and


surviving the competition

Not included

Focus on high quality products for the


well-being of customers

Not included

Maghreb Oxygne is celebrating its 30


years of caring and looks forward to
the next 100 years of looking after its
customers well being

Not included

Maghreb Oxygne is socially


responsible and strictly complies with
all safety and security regulations
related to the products

Not included

Maghreb Oxygne has a skilled team


of professionals and experts in the
domain, who work hard to provide the
best quality of products

Self-concept

Concern for public


image

Maghreb Oxygne seeks to using the


best technology in order to oer the
best quality to its customers

Table 1: Evaluation of Maghreb Oxygnes mission statement based on nine components


Taking into consideration the assessment in the table above, the team succeeded in suggesting the
following mission statement:
Maghreb Oxygne is a Moroccan company specializing in gases, welding and healthcare equipment to
dierent sectors in the country. We strive to use the most sophisticated technology in order to provide the
best quality products and services to our customers, within a healthy, socially responsible environment. We
are very much concerned about our growth as well as the well-being of our employees consisting of a team
of professionals and experts in the domain that work hard to serve the community in the best possible way.

11

Maghreb Oxygne

Strategic Plan 2013-16

Maghreb Oxygne product oerings


e table below shows the dierent product oerings of the company as well as the market
segments in which Maghreb Oxygen is operating. As it is clearly shown in the table, the company
oers 6 products, which are oxygen, nitrogen, hydrogen, acetylene, carbon dioxide and nitrous
oxide. ese products are provided within a wide range of industries such as the metal, glass, food,
steel, medicine among other industries.
Gas Type

Origin

Oxygen

After filtration of its solid


particles, purified air is sent
under pressure in a heat
exchanger for a first cooling.
Inside the cold box, the air
passes through battery
exchangers, against the
stream release of nitrogen.
The water vapor and carbon
dioxide are then eliminated.
The exhaust air passes by the
separation column where it
is liquefied and distilled into
oxygen and nitrogen.

Nitrogen

After filtration of its solid


particles, purified air is sent
under pressure in a heat
exchanger for a first cooling.
Inside the cold box, the air
passes through battery
exchangers, against the
stream release of nitrogen.
The water vapor and carbon
dioxide are then eliminated.
The exhaust air passes by the
separation column where it
is liquefied and distilled into
oxygen and nitrogen.

Customer
Markets
Metal
industry,
waste water
purification
, aerospace,
oil industry,
medicine,
steel
industry,
Electronic,
Glass
Industry.

Food
industry,
medicine,
plastics
industry,
chemistry,
aerospace.

Use
- Welding, cutting, and flame
cutting of metals
- At the base of oxidation
reactions
- Viscosity of oil reduction
- Health Sector: intensive
care, diseases, respiratory
- Manufacturing of semiconductors
- Improved combustion in the
glass industry and steel

- Used to make inert


atmospheres or as a reaction
intermediate.
- It has many applications as a
coolant for:
freezing and freezing foods
freezing blood
- It controls some exothermic
chemical reactions
- It operates in the field of
molding and for inflating
aircraft tires

12

Maghreb Oxygne

Strategic Plan 2013-16

Produced from the


electrolysis of water. It is
then led to the gas holder
Hydrogen after removal of moisture it
contains. It is then filtered,
compressed, dried and
contained in bottles.

Chemical
Industry,
pharmaceut
ical
industry,
aerospace
industry.

it intervenes in
- The manufacturing of
polymer, ammonia and
methanol
- Desulfurization of fuels
- The production of sorbitol,
and integrated in the
cosmetics including vitamins
- By oil companies to ease the
suffering of the oil it contains

Acetylene is made from


calcium carbide determined
according to a particle size
and from water. These two
elements interact with one
another in an acetylene
generator designed for this
purpose. The reaction
Acetylene produces acetylene gas and
milk of lime. Acetylene is
then purified (impurities
represent a danger of
explosion) neutralized dried,
cooled and compressed in
bottles filled with porous
materials and a powerful
solvent acetylene: acetone.

Steel
industry,
Plastics
industry
and
manufacturi
ng of
batteries

-Used as fuel for torches


-Used for the synthesis
products for the
manufacturing of plastics
-Intervenes in the
manufacturing of batteries
- Used as a pigment in paints,
varnishes and inks

Food
industry,
electronics
industry,
and
environmen
tal industry
and the
purification
of water

-Carbonation of soft drinks


-Food preservation, taste and
texture protection and the
use of preservatives reduction
-Acids replacement in the
structures of water
reprocessing
- Growth of plants
stimulation
- Refrigerant in the electronics
industry
- Fire extinguishing agent
- Propellant for drinks at the
pressure

Carbon
Dioxide

Carbon dioxide is produced


from the combustion of
propane. The fumes from the
combustion containing 12%
CO2 are recovered through a
basic product which the
MEA that has property to
absorb CO2 at cold and
release it at heat. Carbon
dioxide is then compressed,
purified in absorbers in sieve
molecular then liquefied.
The CO2 produced is then
led to the storage tanks.

13

Maghreb Oxygne

Nitrous
Oxide

Nitrous oxide is obtained


from the heating of the
ammonium nitrate at a
temperature of 200 C.
After it is released, and then
neutralized purified in
scrubbers, compressed, dried
in drying batteries, and
liquefied, it is then led to the
storage tanks in the liquid
state.

Strategic Plan 2013-16

Medicine,
and food
industry

- In anesthesia, it is used as a
common component of
general anesthesia combined
with injectable or inhaled
anesthetics.- In emergency
medicine , pediatrics or
delivery room.
- Used as a propellant,
particularly in the canisters of
whipped cream or dust
removal

Table 1: Summary of the product oerings of Maghreb Oxygen

14

Maghreb Oxygne

Strategic Plan 2013-16

Organizational structure of Maghreb Oxygne

Figure 1: Organizational chart of Maghreb Oxygne

15

Maghreb Oxygne

Strategic Plan 2013-16

Input Stage

External Analysis
Statistical facts on the industry
e figure below shows a clear evolution of the gas production in the Moroccan market. As one can
notice, the gas production has been evolving over the years to more than 434.2 million MAD in
2007 with a slight decrease from 2004 to 2005 by 15.5 million MAD of gas production.

Figure2: Gas production evolution in Morocco, Source: MICNT


e figure below shows the evolution of the turnover realized by all operators of industrial and
medical gases in Morocco and the evolution of the added value. As it is clearly shown, the turnover
has increased to a value of 626 million MAD in year 2008.

16

Maghreb Oxygne

Strategic Plan 2013-16

Figure3: Turnover evolution (in Million MAD), Source: MICNT

Figure4: Added value evolution (in Million MAD) and added value rate (%), Source: MICNT
eturnover ofindustrial and medical gases saleswas around630 millionMAD in2008 in
Morocco.is turnoveris experiencing an average annual growth rate (AAGR) of 8.4%over the
period 2004-2008, which provesthat the sectoris recording a strong growth.
e added valuereachedMAD308 millionin 2008meaningan added value rateof
49.2%andAAGR of7.3%between 2004and 2008.e averageadded value rate is 52% over the
period2004 -2008.

17

Maghreb Oxygne

Strategic Plan 2013-16

Figures 5 showthe volume of importsof industrial gasesin Moroccoin year 2008


and theaverage annual growthrate ofimportof these gasesover the period2004 2008.

Figure5 : Volume of imports of industrial gases in Morocco for 2008


e mainimportedgasesare Carbon dioxide andargon with 4,536tonsand1,911tons respectively
recorded in year 2008.is is explained bythe fact that production costs of CO2 are highly
significant compared to import costs, and that there is an increasing demand for soft drinks in
Morocco and also, argonis a noble gas. Import volumeofgashas increased dramaticallyover the
studied periodindicating theindustrial gases marketin Moroccois growing. In addition, importsof
hydrogen arein constant decline and representless than one tonin year 2008.is trendis
explained bythe increase of national productionof hydrogen by the major players of the industry
(Maghreb Oxygne and Air Liquide).

18

Maghreb Oxygne

Strategic Plan 2013-16

PEST Analysis
Political
Environment

Morocco happens to be an attractive country to do business in. Despite the


Arab spring, Morocco was not aect directly and is still considered as a stable

country to operate in. In addition, Maghreb Oxygne has made sure to hold a reasonable position
with regards to political issues and is continuously prepared for any problems concerning the
political sector. Any political noise is irrelevant to the company. Unless the political environment
changes its rules that relate to their operations, Maghreb Oxygne prefers to stay away from such
subject. e political environment has allowed the liberation of the market. e laws of Morocco are
not a barrier to the growth of the company.
Two legal texts are closely related to this industry, which are the Royal Dahir of August 25th, 1914
on dangerous and inconvenient production facilities and the Royal Dahir of January 12th, 1955 on
regulating gas pressurized equipment. In addition, the ministry of industry and mines is responsible
for the control of all the pressure equipment (every 5 years), and the evaporators ( every 10 years).
e ministry of equipment and transportation is responsible for the control of the means of
transportation of the company as they deal with dangerous products if they spill out on the middle
of a road.
Finally, because of some products of Maghreb Oxygne that are used in health care, the company is
subject to law number 17-04 regulating medicine production and pharmaceutical ministry of
Health, controls the medical gases (oxygen, nitrous oxide, carbon dioxide, air, nitrogen, nitric oxide
and liquid helium).
All in all, Maghreb Oxygne is respecting all the laws, norms and standards imposed by the
Moroccan government, and the political environment is fit enough, stable and attractive for the
company to operate and grow in.

Economic
Factors

As stated in earlier sections, Maghreb Oxygne provides a great support to all


major companies and it is present in almost every industry. It is present in the

19

Maghreb Oxygne

Strategic Plan 2013-16

health, food and manufacturing industries which make the growth of the company correlated with
the general trends of the economy. is makes the company benefit from the governmental plans
that aim to promote investments in the manufacturing sector (Plan National pour lEmergence
Industrielle 2009-2015) since the majority of the manufacturing companies requires the products
oered by Maghreb Oxygne.
Several free trade agreements were signed with many foreign countries such as the US, European
Union and Jordan that Maghreb Oxygne was able to benefit from, such as the ability to import gas
from these countries at lower customs duties. Concerning the benefits Maghreb Oxygne is bringing
to the Moroccan economy, one can discuss the partnership between Maghreb Oxygne and
SONASID, Maghreb Oxygne installed a cryogenic unit for the production and supply of oxygen
and nitrogen at the Jorf Lasfar so that it can serve the National Society of Steel. One can also talk
about the Tangier-Med project which would not be possible without the partnership with the two
co-leader and suppliers Maghreb Oxygne and the Air liquide.

SocialCultural
Environment

Morocco has witnessed an increase in the growth rate of the population by


1% (World Bank, 2012). Also, Morocco is experiencing an aging population
of 71.8 years in the total population, with 69.42 years and 74.3 years for

males and females respectively. As for the government investment, the evolution of the operating
budget and investment in the period 1997-2010 increased sharply from 3.5 billion MAD to 11
billion MAD (SEIS, DPRF, 2010)

Technological
Forces

Maghreb Oxygne makes use of sophisticated safety and security systems to


the plants and other facilities. Since technology rapidly changes, Maghreb

Oxygne makes sure they are updated with the current changes within the environment. However,
the production process used by Maghreb Oxygne is an internationally standardized one. ere is no
patent or license that protects it but costly machines are needed as well as energy.

20

Maghreb Oxygne

Strategic Plan 2013-16

Porters five forces model analysis


Porters model allows the evaluation of the competitions intensity within a specific industry. In
fact, Porters analysis lies under the assumption that a company ought to assess the industrys
attractiveness and then choose the right market to enter. ere are five distinct forces that need to be
evaluated; bargaining power of customers, bargaining power of suppliers, threat of substitution,
rivalry among competitors and the threat of new entrants. Let us know consider each of the five
mentioned forces.
In Morocco, the industrial gases area duopolistic industry, characterized by

Rivalry
among
Competitors:
High

a small number of players. Indeed, beside Maghreb Oxygne, there is the


Air Liquide playing as a co-leader in some segments and a leader in others.
In addition, there are few other companies in the national market putting

more pressure on the competition: Oxaire, Flosit, Mroxyco, Oxytech.


is market is characterized by the pareto principle, stating that the two co-leaders represent about
20% of the market have 80% of the market share. Still, the new entrants are trying to beat the
market by oering low prices, thus gaining more market share.

Threat of
New
Entrants:
Moderate

e threat of new entrants in this industry is considered as moderate


because there is a need for high capital in order to enter the market. Also,
government regulations and laws make it harder for entrants to introduce
the industry. In addition, the high number of players in the market and the

fierce competition make it dicult for prospective companies to enter the market. However, entering
the market does not require experts in the company, all they need is a abundant resources.
On the one hand, today the gases extracted from air are of use in many

Threat of
Substitutions
Low

industries: food (for food preservation, for example), the aerospace industry,
metallurgy, chemistry, industry pharmaceutical, diving; health and many
others. Moreover, with the environmental problematic, the hydrogen is a

21

Maghreb Oxygne

Strategic Plan 2013-16

product that tends to prevail at the expense of others that are less environmental friendly. On the
other hand, due to technological changes, there are some substitutes for the manufactured gases. For
oxygen, instead of the use of gas bottles, there are some Oxygen generators. ese generators filter
the ambient air. e input to the generator is 21% Oxygne and 79% of nitrogen; the filter retains a
lot of nitrogen and a little bit of impurities. As for the output, it retains a maximum of 90% of
oxygen witha +-3% margin, the remaining are impurities and dioxide of Carbone, this leads us to
say that although it might seem to be a substitute which is less costly than filling bottles
continuously, it is still a risky process especially in the health industry due to the impurities left at the
output stage.
Another substitute for nitrogen is the Nitrogen generator. is one has also the same problem.
e nitrous oxide is the gas for anesthesia has as a substitute injections for the same purpose.

Bargaining
Power of
Suppliers:
Low

e industry includes two main suppliers; one of the energy carriers and the
other of the transporters. When selecting the suppliers, Maghreb Oxygen has
certain requirements of reliability, safety and service that relate to its own
customers. Suppliers must adapt to its organization.

In addition to that, Nitrous Oxyde is imported. e Carbone dioxide is supplied by a subsidiary of


the group (Afriquia) and imported during peak seasons. e pure gases like Helium are imported
and finally the equipment and piping are imported from a variety of suppliers (France, Italy, Spain
and Germany: 99%) and some local ones. Concerning the other products, they are manufactured by
Maghreb Oxygne.

Bargaining
Power of
Customers:
Moderate

Maghreb Oxygne customers portfolio is well diversified; industrials (ranging


from craftsmen to MNE), health institutions (or health professionals at
home), individuals and many others. e companys diversification and high
number reduces their individual bargaining power. However, like any

business, the challenge is primarily to keep its portfolio of large customer (large Industries), which

22

Maghreb Oxygne

Strategic Plan 2013-16

represent a high percentage ofthe companys total turnover and that has brought a certain prestige to
the company (Example: Renault, CNSS, CHU, Coca-Cola, Mac Donalds...).

Opportunities and reats Analysis

Opportunities:
Maghreb Oxygne has several opportunities from which it can increase its sales, hedge
against unfair competition risk, and recover from the recent dramatic drop of net income. e
company recently launched a joint-venture with AirLiquide under the name SODEGIM (in which
Maghreb Oxygen owns 50%), which is considered an important opportunity for the sustainability of
Maghreb Oxygen. Since AirLiquide is the main competitor of Maghreb Oxygne, this joint venture
will strengthen long-term relationship of both companies, as well as facilitate collaboration on shortterm projects. Furthermore, it will allow Maghreb Oxygne to access new markets and distribution
networks, increase its production capacity, and share part of the risk with its partner. e
establishment of SODEGIM should also help Maghreb Oxygne improve its financial situation
starting 2012. Currently, SODEGIM has started gas production of argon (the first in Morocco to
produce this type of gas), with a production capacity covering the entire local market, and can be
even be extended to exports activities as well.
In addition, the healthcare and pharmaceutical sector in Morocco has known great
improvements, and the Moroccan government is paying special attention to this sector giving the
increased number of aging population in Morocco. e pharmaceutical and healthcare sectors grew
from MAD 8.64bn and MAD 39.76bn in 2010, to MAD 9.48bn and MAD 43.00bn in 2011,
respectively (Business Monitor International). With the current involvement of Maghreb Oxygne in
installing medical equipment in hospitals (including medical equipment: operating room,
resuscitation and first aid, hospitalization, sterilization and sanitation and fluids and medical

23

Maghreb Oxygne

Strategic Plan 2013-16

laboratories), the expansion of the pharmaceutical and healthcare sector will provide another income
generating activity to Maghreb Oxygne.
Also, the Moroccan parliament is in process of releasing a new law (Law 1704) that codifies
the standard of producing medical gases. e application of the 1704 law (which will take action
starting 2013) will set serious standards to the production, the distribution, and the dispensing of all
sorts of medical drugs, including medical gases that were mentioned in the ocial bulletin, article 2
n16. Also, articles 45, 46, 47, require medical gas companies to have a health director (who has to
be an approved pharmacist) to monitor and supervise all activities related to producing medical
gases. Consequently, all companies that meet these regulatory requirements will be classified as
pharmaceutical institutions. According to one of the responsible in the company, Maghreb
Oxygne already have a health director, and with the current safety standards, the legal aspects of
penetrating the pharmaceutical industry has already been met by Maghreb Oxygne. is will
certainly eliminate most of the small competitors that are not able to meet those standards, and thus
creating another opportunity for Maghreb Oxygne to increase its market presence.
Also, during the past few years, demand on soft drinks has been increasing, with a potential
industry earnings of $868.15 million in 2009 (Parker, 2008). Maghreb Oxygne is a key supplier of
carbon dioxide to the soft drink industry in Morocco, which consists of big players such as Coca
Cola and Pepsi. Moroccos soft drink market has been witnessing significant growth, which would
create ample opportunities for the company to increase its sales. According to in-house research, the
total consumption of soft drinks in Morocco is projected to reach 2.4 billion liters by 2020. e total
value of the countrys soft drinks market is estimated to reach $1 billion. Both carbonates and stills
experienced similar levels of volume growth but carbonates drove the value growth. Within
carbonates the cola, fruit and glucose/stimulant sub-categories all enjoyed growth. e sports and
energy drinks also recorded a considerable growth. Such growing market creates tremendous
opportunity for the overall growth of the company. Finally, demand on emerging markets worldwide
(namely India, China, and South America, and few countries in Africa) is increasing. Additionally,

24

Maghreb Oxygne

Strategic Plan 2013-16

the fact that the Moroccan government is becoming more involved in international trade makes huge
investment opportunities for Maghreb Oxygne to expand its scope beyond the Moroccan market.

reats
Maghreb Oxygne faces competitive pressure from several companies in the Moroccan
industrial gas market. Its key competitors include AIR LIQUIDE, which is a company operating
worldwide. Although Air Liquides annual revenue in Africa represents only 3%, the impact it has on
the Moroccan industry is tremendous. Among the major contracts signed during the past few years
in the industrial gas sector, Air Liquide seems to always grab an important percentage of them.
On the other hand, the company faces threat from other small companies selling industrial gases at
lower prices. During the last 5 years, the industrial gas sector has known new entrants that are
relatively small, and poorly regulated. ese companies are often involved in processing used oxygen
bottles, and reselling them for a lower price than the competition. ese bottles are either retrieved
from scrap heaps or imported from eastern European countries. Ultimately, for companies that
follow high safety and regulatory standards (like Maghreb Oxygne), it contributes negatively to
their level of sales, as well as their operating costs, and any failure to sustain a competitive advantage
by the company is likely to have adverse eect on its business, financial condition, and growth
prospects.
Also, crude oil prices worldwide almost doubled between 2007 and 2008, and will keep
increasing during the upcoming years (according to a forecast done by BMI). e company uses
fossil fuels in the production of carbon dioxide and several other materials that have been derived
from natural gases. e prices of these gases are eventually influenced by fluctuations in crude oil
prices. us, the volatility of fuel prices, which is commonly used in the production and
transportation of certain products, certainly poses another source of threat to the profitability of
Maghreb Oxygne.

25

Maghreb Oxygne

Strategic Plan 2013-16

e increasing prices of raw materials could also aect the companys overall business. Raw
material prices constitute a significant part of the production cost of the company, specifically for
producing certain gas and welding products. In addition, the continuous supply of the raw materials
could be aected by weather conditions, national emergencies, strikes, governmental controls,
natural disasters, supply shortages or other events. us, price fluctuations and non-availability of
these raw materials may have a material eect on the product cost and the operation of the company.
e production of industrial gases requires significant amounts of electrical energy. e procurement
of electrical energy is important particularly in air separation and in the use of natural gas to operate
steam reformers. Increasing global demand and limited production capacity has pushed hydrocarbon
prices, which are primarily utilized in generation of electricity. As energy costs are a key component
in the manufacture of industrial gases, further rises in energy cost would push the group's production
costs thereby adversely aecting overall profitability.
Often delivering gas related products can be extremely dangerous since mishandling gas
bottles can lead to sudden explosions, and thus putting the life of worker and even customers in
danger. Maghreb Oxygne certainly takes this into consideration; however, it is still one of the
threats that is faced by the industrial gas in Morocco and worldwide.
Maghreb Oxygne is subject to a variety of environmental laws, regulations and policies
formed by the Moroccan state level authorities such as Department of the Environment and the
Moroccan association of Industrial and Medical Gases. ese laws and policies principally cover
issues such as air emissions, transportation measures, wastewater discharges, hazardous waste
handling and disposal, and the investigation and remediation of contamination. New government
regulations related to the companys products and services may result in significant additional
expenses, hampering its business growth. Any changes in existing regulations could aect the
companys financial and operating position. In addition, non-compliance with these laws and
regulations or failure to obtain any required permits and licenses may expose it to fines, penalties or
interruptions in operations.

26

Maghreb Oxygne

Strategic Plan 2013-16

e fact that the industrial gas sector in Morocco has a lot of room for improvement places a
danger of increasing the number of potential foreign entrants. e Linde Group, a German
international industrial gas and engineering company currently operating in Algeria and Tunisia can
be considered as a perfect example of a potential entrant to Morocco. Headquartered in Munich, the
Linde Group employs over 48,400 people and currently operates in the engineering sector in
Morocco, which gives it more advantage to penetrate the industrial gas sector than other potential
entrants.
Lastly, their initial public oering (which started in 1999) as the only industrial gas company
publicly traded is aecting Maghreb Oxygne. ey are the only one in this sector that has financial
statements publicly disclosed, which makes it easy for the competition to access and evaluation
information about their financial standing.

27

Maghreb Oxygne

Strategic Plan 2013-16

Competitive Profile Matrix Analysis


Within the framework of the external analysis, an in-depth analysis of the competitive
market has been conducted. In this sense, five main companies were selected as the fiercest
competitors of Maghreb Oxygen.
Air Liquide: According to Ministry of Industry, Trade and New Technologies, in the
industry of industrial and medical gases, there are six main players, including two major
co-leaders: MAGHREB OXYGEN and AIR LIQUIDE. e latter one is a multinational
company created in 1956 and its headquarter is located in Paris. e company produces
industrial and medical gases and its turnover is estimated to MAD 388.5 million, with a
net income of MAD 68.8 million.
Oxair: this company is a subsidiary of Delta Holding. Similar to the competitors, the
company operates in the industrial, medical and laboratory gases. e company
implements facilities and distribution networks of the same range of gases. Also, the
company imports and distributes paramedics material as well as welding equipment and
accessories.
Flosit: e Company was created in 2001 with a production unit in Nouasser and it
manufactures medical and industrial gases. As for its turnover, it is estimated to be MAD
20.9 million with a net income of MAD 6.1 million.
e companies stated above (including Maghreb Oxygen) are members of the AMGIM, which is a
Professional organization created in June 2006 between operators carrying out in Morocco
production, distribution and marketing activities of industrial and medical gases.
Other than these large competitors, Maghreb Oxygen still has to deal with smaller competitors
which are Oxytec and Mroxyco.

28

Maghreb Oxygne

Strategic Plan 2013-16

OxyTech was founded in 2004 and is specialized in the production of industrial and
medical Gases, with a unit of production in Mohammedia.
Mroxyco is specialized in industrial and medical gases and related services. It was created in
2002 and operates in 15 cities with 80 distributors. In addition, Mroxyco has 2 units of
production: one in Berrechid and the other in Settat with an additional one expected to
open in Fes.
Using the Competitive Profile Matrix (CPM), twelve success factors were identified through
the literature review and analysis of the industry. ese success factors are important in the success of
the industrial gases industry. As for the weights given to every success factor, the team decided that
distribution network, product quality, cost management and price competition are the most
important factors to be successful in this industry and the weight attributed to them was of 0.1. e
distribution network in such an industry is very important as long as this is their only way to be close
to their customers and gain more market share. e product quality is essential in the production of
gases as the industry deals with hazardous material. Cost management is important for every
company as they need to be optimized as much as possible. Finally, price competition plays a major
role in this industry as a consumer might sometimes look for the best price. A value of 0.09 was
provided to the market share since this component is important to compare Maghreb Oxygne with
its competitors. Brand name and financial stability are the next success factors in the matrix with a
weight of 0.08 simply because they are not as important as the factors previously stated, but at the
same time, they can be of a high value to competitive assessment.
On the other hand, the lowest weights were assigned to the economies of scale, partnerships and
technology. ese three factors are obviously important for the success of industrial gases industry
but at the same time they are not as important as the one mentioned previously. As for the ratings
given to every factor, these were specific to every company. e assessment was based on the
respective presence of every company, their financial statements and other information provided by
the literature review. e weighted scores of the CPM show that AirLiquide is the most competitive

29

Maghreb Oxygne

Strategic Plan 2013-16

company with a score of 3.55, followed by Maghreb Oxygne with a score of 3.06 and then by
Oxair, Flosit, Mroxyco and Oxytech with scores of 2.29, 1.99, 1.81, and 1.5 respectively. (See
Appendix 3)

30

Maghreb Oxygne

Strategic Plan 2013-16

External Factor Evaluation Matrix


After conducting the SWOT analysis, the team used the external factors being the
opportunities and threats in order to evaluate the company from an external dimension using the
External Factor Evaluation matrix. e figure in the appendix summarizes the assessment conducted
by the team. ree major opportunities were considered as the most important factors in the first
part of the matrix, and they were indicated by the weights assigned to them of 0.1; In fact, from a
socio-cultural aspect of the environment, Morocco is witnessing an increasing trend of the aging
population, as well as an increasing demand in both the health and pharmaceutical sectors. e
second important factor is the application of the 1704 law, which states that all companies operating
in the medical gas market will be considered as pharmaceutical organization (AMIP, 2007). is is
clearly an opportunity for Maghreb Oxygen because it will give them legitimate authorization to
enter the pharmaceutical industry if they ever decide to. e third important factor is about the
existing market gaps outside Morocco, meaning that there are international markets that can be
attractive for Maghreb Oxygne to enter such as Senegal, with a world rank of 626 in terms of
industrial gas utilities, and Cameroon with a world rank of 516 in 2009 (ICON Group, 2008).With
regards to the major threats, the team assigned a weight of 0.09 for the competitive pressure simply
because Maghreb Oxygen is facing fierce competition in the industry from AirLiquide, Oxaire, and
other small firms that have been trying to kill the market by oering the same products with lower
prices.
After assigning a weight to each of the factors mentioned in the matrix, a rate has been
conveyed based on how well the company was reacting to each one of the opportunities and threats.
Taking the example of the possible opportunities at the international market, Maghreb Oxygen has
not adopted any strategy of growth or market development, which would explain the rate 1 assigned
to it.
After summing the weighted scores for each factor, the total weighted score for Maghreb
Oxygen reach a value of 2.725 which is above average (2.5), meaning that the company is in a

31

Maghreb Oxygne

Strategic Plan 2013-16

moderately good standing. at said, there is still room for improvement, where the firm could take
advantage of the opportunities and find strategies to minimize the threats and turn them into
opportunities.

32

Maghreb Oxygne

Strategic Plan 2013-16

Internal Analysis
Sales Policy
Maghreb Oxygne has decided to change its business strategy since 2003. It is defined based on its
customers rather than based on the activity. erefore, Maghreb Oxygne presents a global oering
(products and gases) according to the particularities of each customer. e organization of the
customer portfolio is defined as follows:
-

e activity called companies: that includes all customers with a global turnover that allows
deferred payments from the customer and requires further advice and technicalities from
Maghreb Oxygne.

e activity called SME-Individuals brings together potential clients whose turnover


requires cash settlement.

e Health activity gathers all users of health products; gas, medical equipment, furniture,
medical consumables, installation of fluid flow, etc

Meanwhile, Maghreb Oxygne has made a split of the territory leading to the creation of seven
regional oces, which are equipped with four conditioning stations. (See map below)

Figure : Map illustrating the 7 regional oces of the company; Source: Maghreb Oxygne

33

Maghreb Oxygne

Strategic Plan 2013-16

Distribution
e main objective of distribution is to cover the maximum of national territory while fulfilling
specific requirements related to the gas distribution (volume, temperature, loss, security, etc).
us, given the constraints related to gas transmission, the distribution network is based on a process
of three major steps:
-

Conditioning and storage centers,

Point of sales or depositories,

Welding centers.

Oxygen storage is provided in liquid form in tanks either from on-site production (and Berrechid,
Had Soualem), or from infilling centers (Casablanca, Agadir, Oujda, Fes and Berrechid). As for other
gases, the filling plants are directly refueled by bottles from production sites. e regional centers
have a role of commercial leadership and logistics optimization as they provide the track sales and
shipments to the major customers and depositories, rom the filling centers or directly from the
production sites.
Moreover, with the introduction of the new sales organization in 2004, Maghreb Oxygne granted
more autonomy to its regional centers. ey have become real profit centers, oering all ranges of
medical products, welding, and related services (installation of pipes for fluids), where were
previously centralized in the companys headquarter at Casablanca.
Revenues by Geographic Areas
-

Central region: the axis of Knitra-El Jadida, including the cities of Casablanca and Rabat;

South region: Essentially Agadir and Marrakech;

North Region: Mainly in the cities of Fez, Meknes, Oujda and Tangier.

Revenues in K MAD
Central region

2009
135 936

% of total revenues 65,5%


South Region
39 490

Variation 2008/2009
-3.6%
5.7%

% of total revenues 19,0%

34

Maghreb Oxygne

North Region

Strategic Plan 2013-16

32 154

% of total revenues 15,5%


Total revenues
207 580

53.9%
4.2%

Table: Revenues by region; Source: Maghreb Oxygne


e central region accounts for about two third of Maghreb Oxygnes sales. e decrease observed
in 2009 is linked to the economic downturn and the eects of the global financial crisis.
e Marketing Policy
e marketing department was established in 1999 with the objective of developing and monitoring
the marketing plans and communications for the three market types of Maghreb Oxygne
(companies, Health, SMEs/individuals).
However, since late 2001, as part of the group policy, the marketing of all subsidiaries has been
centralized within the marketing department of AKWA group. A brand manager is dedicated to each
Group subsidiary. e brand manager is responsible for ensuring the marketing policy and the
consistency of the subsidiary with the group marketing policy.
e marketing plan of Maghreb Oxygne is primarily based on the main roads of development,
which are:
-

Awareness, loyalty, and service concept for large companies;

Customer proximity and diversification of the product oerings and prices for the SME/
individuals.

e Medias used vary between the taken actions and market segments. erefore, Maghreb Oxygne
favors press and exhibitions, conferences, forums as means of media for companies and health sector
activities, while it uses direct marketing mediums such as print, mailing, animation at points of sale
for SMEs and individuals.
e Pricing Policy
epricingvaries byproduct typeandcustomer.
e sale ofgas:

35

Maghreb Oxygne

Strategic Plan 2013-16

o SMEs/ Individuals:application of a public priceto the customers.e price isincreased


by the distribution cost that is region-specific.
o Companies andHealth divisions:application of a scale depending on price ranges and
negotiable pricesforexceptional volumes.

Tradingof welding productsandmedical devices:application of a pricewith the possibility of


grantingdiscountsbased on sales volume.

Logistics
Distribution is organizedinto twodistinct phases:
First,the gas is transportedin liquid formin tankers from the production unitstothe filling
plantsordirectly to the customers who havethemselves fixedstorageunits.
Second,from thefilling plants, the gas is transported as bottlesto retailers,who themselvesmay be
supplyingtheir customerswith their own transport.
To minimizetransportation costs,and ensurean optimized distribution ofstocks,
the organizationof the distribution isensured by TIMLOG, a subsidiary of AKWAGroup that
isspecialized in transportation.It invoicesits servicesaccording to the volume transported.
Information, Accounting and Financial Management Systems
Originally, the information systems of Maghreb Oxygne were centrally managed by the
AKWA Group IT department.e lack of integration and scalability of this system led to its change
in 1996 and its replacement with an integrated software package. Since January 1999, the modules
for tracking sales and purchasing are integrated into this system. e software used is an American
product, JD Edwards, installed initially on an IBM AS400 and currently on a Windows platform.
In addition to the installation of this integrated software package, the management
information systems of AKWA GROUP has developed and made available to MAGHREB Oxygne,
and other subsidiaries, a tool for decision support that allowsaccess to accounting, financial and

36

Maghreb Oxygne

Strategic Plan 2013-16

commercial through Intranet.is tool, called is called "Afriware" which can substantially improve
the quality of reporting, and provides better access to information needed at each level.
In order to ensure business continuity, system Backup data is set up for performing a daily
backup and test restoring data from a weekly basis. e accounting and financial organization of
MO is part of the Group's policy and relies on supporting functions by PROACTIS.e latter is a
subsidiary of AKWA Group and is responsible for the management of accounting, insurance,
heritage, tax optimization and information technology on behalf of the Group and its subsidiaries.
Human Resources
e average numberof MAGHREBOxygne employees amountedin 2009 to162 people
with anaverage annual reductionof 4.1% over the period2007 to 2009.
edeclining enrollmentin 2007-2009is explained by theretirements, the
redeploymentofsome profilesto better suited positionsin othersubsidiaries within the Group and
finally due to the voluntarydepartures.

Figure: Breakdown of sta by categories (year 2009); Source: Maghreb Oxygne

37

Maghreb Oxygne

Strategic Plan 2013-16

Figure: Breakdown of employees by regions; Source: Maghreb Oxygne


Employees at Maghreb Oxygne are highly skilled and experienced since the two third of them are
aged over 40 years old and 71% of them have over 10 years of seniority in the company.

Investment policy
e alpha investments made by Maghreb Oxygne were stable between 2007 and 2008, then
witnessed an strong rise in 2009 of 83.1% related to technical installations, machinery, equipment
and other tangible assets. In addition, the total annual recurring investment is about 15 to 16 million
MAD. is includes mainly the purchase of spare parts, cryogenic tanks, bottles, faucets, and
hardware. With regards to investments in transportation equipment, it is related to equipment for
logistics within the society (primarily forklifts).
Operations analysis

38

Maghreb Oxygne

Strategic Plan 2013-16

e Pareto's Principle or Pareto's Law as it is sometimes called, can be a very eective tool to help
you manage eectively. is means that the 80/20 Rule means that in anything a few (20 percent)
are vital and many (80 percent) are trivial.
In the case of Maghreb Oxygne, an internal analysis has been conducted and demonstrated that 20
percent of the stops impact 80 percent of the productivity. e value of the Pareto Principle for a
manager is that it reminds you to focus on the 20 percent that matters. Of the things you do during
your day, only 20 percent really matter. ose 20 percent produce 80 percent of your results. e
Pareto's Principle would thus serve as a daily reminder to focus on 80 percent of your time and
energy on the 20 percent of you work that is really important. Don't just "work smart", work smart
on the right things. For this reason, we will be focusing on idle times that occur the most, do for
them the fishbone diagram and find the adequate solution.

Types of Idle times that impact


productivity
Settings
Logistics
Adjustment
Maintenance
Development
Product

Percentage of occurrence
32%
22%
17%
13%
9%
7%

Cumulative Percentage
32%
54%
71%
84%
93%
100%

39

Maghreb Oxygne

Strategic Plan 2013-16

e problems encountered during the supply chain process of manufacturing industrial gases
are mainly due to iddle time during settings, logistics, adjustment, development and product. ese
types of iddle time cited below all impact productivity negatively. When we talk about settings, this
means the time to change from a reference (article) to another. In other words, it concerns the
machine programming before the production of a product X. For instance, to extract oxygen from a
machine X we need dierent settings than when we extract nitrogen.
As for the internal logistics, it concerns the power positions in commodities and products. It also
concerns the handling and planning of the dierent stages of this process. When it comes to talk
about adjustment, we mean by that the machines operators interventions that aims to correct a
derivative or to repair a minor failure in the production. is intervention is supported by the
production team. Concerning the maintenance stops, these are the fault repairs made by the
maintenance team (technicians).Regarding the development part, this is the time operated by the
development service to achieve a new product using the machine in question. Finally, we have the
idle time that is linked to the quality of the product once entering a job. For example, if at the input
stage the air is very impure this may aect the quality of the oxygen or nitrogen at the output level.
us, the job cannot be processed and this will consequently impact productivity.
All the idle times that we have reported above are problems that are detected and recorded in the
production book over a period of 3 months. In this production book, there is the objective of each
job during the process and what has been met. If the objective production is higher than the actual
one, then this must be justified by one of the problems listed above. After that, the worksheets were
these problems have been reported are collected and then a data capture is performed to have their
respective percentages.

40

Maghreb Oxygne

Strategic Plan 2013-16

Fishbone Diagram:
e fishbone Ichikawa diagram is a tool used for team brainstorming. It also helps categorize
potential sources of defects or root causes and possible failure modes. In our case, we will be
concentrating on the settings problem, find its main probable causes and then find a possible
solution that might reduce it. e bones coming from the main spine of the Ishikawa Diagram are
usual named according to the 4Ms, 5Ms, or 6 Ms, depending on the complexity of the problem or
the process that we are looking to improve. In our fishbone diagram, we decided to look at the 6 Ms
which are the following:
Man/People: these are the causes that can be attributed to the people working on the
process. In the settings idle time, machine operators may need more training and experience
acquisition.
Methods: Which are about how we conduct the operation that can cause the eect that we
are trying to solve. In our case, product complexity is one of the causes once we see from the
methods and procedures side. Also, the production of the former product can lead to a long
time of space emptying and thus an idle time related to methods and procedures (an already
used bottle once it needs to be filled for the second time or more, it needs to follow a specific
process and be sterilized).
Machines: ese are the causes due to the machines or the equipment in the process. e
machines need a lot of time to start and be settled. Moreover, the condition of both the
machines and equipment also impact the settings idle times (if there is corrosion).
Materials: ese are potential causes due to the materials used. For example, the quality of
the raw materials may aect the idle times linked to setting. For example, if the air at the
input stage is very impure, this may delay the process. Also, if in a given stage the needed raw
material is not available; the idle time increases at this stage. Another case is the unavailability
of the raw material at the first stage which will make the machine idle until it arrives.

41

Maghreb Oxygne

Strategic Plan 2013-16

Management: Are the causes linked to the strategy of the company. ese are in our case the
diversity of the gases manufactured within the company, as they need each time to change
their respective settings and also the fact that their customers ask for Just in Time deliveries
making higher weekly orders and thus more settings update.

e solution for this type of idle time is the Single-Minute Exchange of Die (SMED) method.
is technique is one of the manylean productionmethods for reducing waste in a manufacturing
process. It provides a rapid and ecient way of converting a manufacturing process from running
the current product to running the next product. is rapid changeover is key to reducing
production lot sizes and thereby improving flow .
e phrase "single minute" does not mean that all changeovers and startups should take
onlyoneminute, but that they should take less than 10 minutes (in other words, "single-digit
minute"). is method has been using by many companies. e need for SMED and quick
changeover programs is more popular now than ever due to increased demand for product variability,
reduced product life cycles and the need to significantly reduce inventories.

42

Maghreb Oxygne

Strategic Plan 2013-16

To implement it, several basic stepsare needed. First of all, the current methodology must be
observed (using a camera for example). After that the setting mode must be identified and described.
en the INTERNAL and EXTERNAL activities must be separated. Internal activities are those
that can only be performed when the process is stopped, while External activities can be done while
the last batch is being produced, or once the next batch has started. For example, go and get the
required tools for the job BEFORE the machine stops. Afterward try to convert (where possible)
Internal activities into External ones (pre-heating of tools is a good example of this). Finally, the
decrease of the internal activities is the last step in terms of time and number. is procedure will
normally save up to 45% in set-up times, so it may take several iterations to cross the ten minutes
line.

43

Maghreb Oxygne

Strategic Plan 2013-16

Strengths:
Maghreb Oxygne oers a broad range of products and services tailored to dierent customer
needs in fluids among several sectors, mainly industry, food and health. It produces packages and
sells industrial, medical, food and special gases. is diversification in their portfolio helps them to
cater to a larger group of customers, with varied preferences and purchasing choices. It also trades in
welding products and equipments, medical equipment, industrial fluid dispensing, and medical
laboratories. e companys products are used in diverse applications such as beverage, agribusiness,
rubber and plastics, chemistry, environment, heat treatment and metallurgy, petrochemical, welding
cutting and others. is involvement in various sectors gives the company a potential strength to
making profit, and thus increasing its financial standing.
Maghreb Oxygne ensures quick delivery of its products to customers through its
sophisticated network of production, distribution and sales units. e distribution network consists
of 100 outlets of both resellers and dealers, which gives it the capability to distribute the products on
a national level. e company operates a network of production units including the plants of Had
Soualem and Berrechid. It has an 18 million meter cube production capacity of oxygen and nitrogen.
Furthermore, Maghreb Oxygne has key place in all formats of delivery, including gas cylinders and
cryogenic tanks. It is also involved in design engineering and storage installation for industrial gases
in both liquid and gas forms.
Maghreb Oxygne is the second subsidiary of Akwa Group. Also, being an aliate of such a
leading holding allows it to have several advantages such as liquidity, financial stability and brand
name.
Maghreb Oxygne is one of the leading gas producers and distributors in the country. It has a
dominant market presence in industrial gas sector that was built thanks to the many years of
experience in the gas market. e overall market share of 36% (compared with 50% of Air Liquide,
7% for Oxaire, and 2% for Flosit) gives a competitive edge to the company over its peers.

44

Maghreb Oxygne

Strategic Plan 2013-16

For the fiscal year ended December 2010, the company reported current assets of MAD
171.54m, compared to current liabilities of MAD 78.37m. e current ratio of 2.17 in 2010 shows
a good standing for the companys amount current assets compared with current liabilities. It also
recorded a cash position of MAD7.90m and an account receivable of MAD 122.67m, which puts
the company in a strong financial position. e performance of the company largely depends upon
the cash position and its ability to generate cash from operations. Sucient cash or cash equivalents
would contribute to the ongoing operations of the company.
Maghreb Oxygne was able to grab major contracts in various industries in Morocco. Coca Cola and
Pepsi are one of the two major clients of the company, with a 5-year renewable contract of supplying
carbon dioxide. CNSS and CHU are another two major clients of Maghreb Oxygne with a 3-year
renewable contract. Recently, the company was able to sign a contract (whose conditions and time
length were not disclosed for confidentiality purposes) with Renault.

Weaknesses
Maghreb Oxygne published a profit warning in the first half of 2011 saying that their net
income is expected to drop by 49% compared with 2010. e industrial and medical gas industry
has known a severe disruptions in terms of the worldwide performance, however, the main causes
behind the drastic drop of Maghreb Oxygne (according to sources from the company) are the
following: the unfair competition from poorly structured competitors, fraudulent activities of some
of the new entrants, dramatic decrease in prices of medical gases specifically. Maghreb Oxygne is
currently trying to mitigate this great loss by cutting some of its operating costs, however, this
sudden drop of net income weakens the financial situation of the company.
e turnover and dividends also decreased between 2010 and 2011 by 6.5% and 6.11%,
respectively. However, surprisingly, the magnitude of the net income drop wasnt way more than the
percentage drop of turnover, which put the financial statements into questions as to what exactly
caused the sudden decrease in net income.

45

Maghreb Oxygne

Strategic Plan 2013-16

Currently, Maghreb Oxygne uses standardized methods in the process of producing


Oxygne and other related products. According to one of the responsible of the company, the
methods of producing oxygen do not require high level of expertise, and pretty much all the
information about procedures can be found online. is puts Maghreb Oxygne in a weak position
with potential new entrants.
For the fiscal year 2010, the company recorded a total debt of MAD120.09m. It total longterm debt witnessed an increase of 80% over 2009. is could impair its ability to obtain additional
financing for working capital, capital expenditures or general corporate purposes, especially if the
ratings assigned to its debt securities by rating organizations were revised downward. It could also
restrict the flexibility of the company in responding to changing market conditions and make it more
vulnerable during times of slowdown. Another major consequence of the company's indebtedness
would be that the company would require allocate a substantial portion of the cash flow from
operations to pay the principal and interest on debt, thereby reducing funds which could be used for
expansion through acquisitions, on marketing and the expansion of product oerings.
Also, Maghreb Oxygne has a basic tracking system for all deliveries. is system is not very
useful in the sense that it doesnt optimize the deliveries. Often the trucks that are on delivery
missions have a very low capacity utilization (the amount of products delivered over the total
capacity of the truck expressed as a percentage). In addition, the company doesnt master production
schedule and thus, the demand and capacity are sometimes not synchronized. is makes the
company in a weak position against some of its potential competitors.

46

Maghreb Oxygne

Strategic Plan 2013-16

Internal Factor Evaluation (IFE) Matrix


Based on the SWOT analysis, the team conducted an internal evaluation using the Internal
Evaluation Factor matrix as a proper tool. e table above summarizes the process with two parts,
one dedicated to the strengths, and another to the weaknesses of the firm. In this sense, a weight of
0.11 was assigned to one factor that is considered as the most important one in this analysis, which is
the fact that the company is a well-established firm, and it has a distinctive reputation compared to
other companies that may consider entering the market. Long-term agreement with dierent
customers is considered as an important factor, and it has a rate of 0.1 in the matrix. In fact,
Maghreb Oxygen has agreements with dierent clients such as CHU (Centre Hospitalier
Universitaire), Coca-Cola, Pepsi, CNSS, and Renault, which guarantee a great deal of sustainability
and continuity of the companys operations. In addition, three other factors have been assigned the
same rate of 0.09. e first one is the diversification and wide product portfolio, which can be
justified through the fact that Maghreb Oxygen oers more than 6 products that are customized and
tailored to the needs of the dierent sectors that it serves such as the food and the health industries.
is diversification of the firms portfolio enables it to reach a larger customer base. e second factor
is the ecient network of distribution; Maghreb Oxygen has been able to ensure a fast delivery of its
products through a sophisticated network of production, distribution and sales unit. Also, the
company has a wide national coverage with over 100 outlets in the network. e third factor with
the high rate is the strong liquidity of the company. In fact, Maghreb Oxygnes current ratio was
172% in 2009 to 217% in 2011. Knowing that Maghreb Oxygen is a subsidiary of AKWA Group,
this latter benefits from the perks of being linked to that company, such as the fact that they can
outsource dierent services in order to cut their costs, and they can also rely on the organization
from a financial standpoint. On the other hand, the lowest weight was assigned to the expertise of
the employees simply because it was considered as having the lowest importance compared to the
other factors. e expertise of the sta can be illustrated with the fact that more than 71 % of the
executive ocers have an experience of at least 10 years (Company Statistics, 2010).

47

Maghreb Oxygne

Strategic Plan 2013-16

With regards to the weaknesses, the factor with the highest rate of 0.08 is the fact that the companys
net income has dropped by 49%. Also, the company is witnessing a decrease in the turnover of
6.5% and it has debts to total assets of 86% in 2011, these two factors have a rate of 0.7 while a 0.6
rate has been assigned to a weak MIS that the company has. In fact, the company does not have an
IT department, which can be very critical for a company with that caliber in the market. e factor
with the lowest rate (0.03) assigned is the weak organizational structure, because the company
follows a matrix structure and it creates a confusion for the employees as to whom they should report
to; and also there is the issue of a redundancy of some tasks, as the company would have to hire
twice as much managers as for a line management.
After assigning a weight to each of the factors mentioned in the matrix, a rate has been
conveyed based on how well the company was reacting to each one of the strengths and weaknesses.
Taking the example of the long-term agreements, the rate that was assigned to it was 4 because the
company is taking advantage of this strength and it is seeking an increase in the number of
agreements with other possible clients.

48

Maghreb Oxygne

Strategic Plan 2013-16

Financial analysis
Income Statement:

Growth Ratios:
e growth ratios allow the analysis of the evolution of the sales of the company and its net income.
Sales:
Maghreb Oxygne experienced a net increase between 2007 and 2010 and this is mainly thanks to
its development of products for large accounts and its sub-welding activity and also by the retention
and adoption of the best prices to the most major markets. However, Maghreb Oxygne Net Sales
decreased in 2011. e decrease was of -6.5% compared to 2010 sales. is decrease can be
explained by the fierce competition and also the black market. In other words, the small new
entrants decreased the prices drastically as they diverted the used bottles of Maghreb Oxygne and
Air Liquide or imported them from eastern countries to sell them at much lower prices.

Net income:
Concerning the Net income of Maghreb Oxygne, this latter decreased from 18,044,000 MAD to
9,118,000 MAD meaning a colossal decrease of 49%. In addition to the reasons stated above, this
decrease was also due to the increase in the operating costs

49

Maghreb Oxygne

Strategic Plan 2013-16

Figure: Net sales

Figure: Sales Growth

50

Maghreb Oxygne

Strategic Plan 2013-16

Figure: Net Income

Figure: Net income growth


Liquidity Measurement Ratios:
e liquidity ratios are there to measure the ability of a company to pay its short-term debt
obligations.

51

Maghreb Oxygne

Strategic Plan 2013-16

Figure: Liquidity measurement ratios

For Maghreb Oxygne, the current and acid-test ratios were used to measure its liquidity. e reason
behind the use of this last ratio instead of the cash ratio is the fact that Maghreb Oxygnes account
receivables are very high due to the fact that the government pays them. e acid-test ratio includes
in it cash, accounts receivable, and short-term investment. is ratio is far more strenuous than the
working capital ratio, because the working capital ratio allows for the inclusion of inventory assets.
Both ratios allow inferring that the company is able to repay its short-term obligations.
Leverage ratios:
ese ratios are used to calculate thefinancial leverage of a company to get an idea of the company's
methods of financingor to measure its ability to meet financial obligations. ere are several
dierent ratios, but the main factors looked at for the company include debt and equity.

52

Maghreb Oxygne

Strategic Plan 2013-16

Figure: Debt-to-total assets ratio


e first ratio used is the debt to total assets ratios, which is used to measure MOs financial risk by
determining how much of the company's assets have been financed by debt. Starting 2009, the
companys debt to total assets ratio started increasing and reached 86.73% in 2011 (an increase of
43% compared to 2009). is means that it is becoming more important for Maghreb Oxygne to
finance its total assets from long-term debt.

Figure: Debt-to-equity ratio

53

Maghreb Oxygne

Strategic Plan 2013-16

e Debt-to-equity ratio is used to measure MOs financial leverage and it indicates the proportion
of equity and debt the company is using to finance its assets.
From the graph, one can see that MO was aggressive in financing its growth with debt in 2007 since
it attained the highest percentage of 108.23%. However, the company reduced this aggressive
financing until 2009 where it readopted the high debt financing in 2010 and 2011.

Operating performance ratios

Figure: Days in Inventory


Days in inventory turnover was used to measure the number of days an item of MO is held in the
inventory before it is sold. e graph shows that the days in inventory increased from 2009 to 2011
by 15 days, which means that MO is less ecient at handling its inventory.

54

Maghreb Oxygne

Strategic Plan 2013-16

Figure: Days in Accounts payable


Days in accounts payable turnover ratio was used to measure the average number of days MO takes
to pay its bills. e graph indicates that the company is taking fewer days to pay its trade creditors
from 2009 to 2011 as it decreased by 35 days.

Figure: Days in cash

55

Maghreb Oxygne

Strategic Plan 2013-16

e cash balance ratio was used to measure the number of days MO can pay its debts, as they
become due, out of current cash. e graph indicates that this number of days decreased drastically
from 2009 to 2011 as it decreased from 19 days to 1 day respectively.

Figure: Evolution of EBIT and net profit


For the evolution of the EBIT and Net profit, MO witnessed 3 years of continuous increase followed
by a decrease in 2011 for the two ratios. e EBIT decreased by 39.3 % and the Net profit by 49%.

Figure: Profitability indicators ratios

56

Maghreb Oxygne

Strategic Plan 2013-16

In 2011, the companys operating margin and net margin suered from the decrease in sales. e
operating costs remained the same even though there was an increase in salaries. Operating margin
dropped to 9% and net margin dropped to 4.7%.

Figure: Operating ratios

Return on assets and return on equity show an alarming decrease in profitability. Indeed, Return on
Assets is of 2.3%, which is far below the industry average of 5%. Return on Equity is in bad
position, with a 5.2% it is below the 12% industry average.
ese returns show that the company does not take full advantage of its assets and equity.

57

Maghreb Oxygne

Strategic Plan 2013-16

Balance Sheet:

Figure: Evolution of the financial structure

Maghreb oxygen financial structure is well balanced. Indeed, they keep a 45% debt across the years.
In 2011, the company issued corporate bonds with a 5 year maturity in order to renew its borrowing
through debt.

Figure: Working capital

58

Maghreb Oxygne

Strategic Plan 2013-16

Maghreb oxygens working capital shows a strong financial situation which means that the company
can easily pay o their short term liabilities.
Forecasted elements:
Year
Net Sales
EBIT
Net Profit

2012F
197372,7049
23123
12192

2013F
204131,3414
23914
12609

2014F
211121,4139
24733
13041

Due to the lack of information for several elements in both the income statement and the
balance sheet, the team managed to forecast only the net sales, EBIT and Net profit. As can be
noticed from the table above, the forecasted results predict an increase in the net income resulting
from the net sales of the company, which are expected to rise due to both the industry growth and
the implementation of the new strategies.

59

Maghreb Oxygne

Strategic Plan 2013-16

Matching Stage:

SWOT Matrix:
After a thorough description and assessment of the internal and external environment of the
company, it is time to go to the matching stage of the study. e first matrix conducted at this phase
is the SWOT matrix. Basically, the team took the internal and external factors that were evaluated in
previous sections, and used to produce the matrix in the table above.
e table shows a list of possible strategies that Maghreb Oxygen could adopt in the future, which
can be summarized through the following points:
SO strategies (Strategies to make use of opportunities through Maghreb Oxygens
strengths):

Taking into consideration the strengths of the firm in terms of its liquidity, which
means that they are in a strong financial position to pay any obligations or debts, as
well as the fact that they have a fast and ecient network distribution, and matching
it with the opportunities that can illustrated in the aging population and the
increasing demand within the healthcare and the pharmaceutical sectors, as well as
the application of the new 1704 law that would make the company a pharmaceutical
institution, the team suggested that a related diversification might be a feasible
strategy in this case. is related diversification would consist in the company
entering the pharmaceutical industry and manufacturing of medicines (medical
drugs).

Another strategy suggested is product development, through matching the strengths


of having a strong liquidity, a strong team of experienced employees and experts in

60

Maghreb Oxygne

Strategic Plan 2013-16

the field, a strong reputation gained through the fact that Maghreb Oxygen is an old
company that has already established its reputation in the market.

Market penetration through opening more retail stores in the market could be
another possible strategy that Maghreb Oxygen could adopt in order to match the
strength of having a strong liquidity with the opportunity of having an aging
population and an increasing demand in both the healthcare and pharmaceutical
sectors.

Market development through a possible expansion in the international markets such


as in Africa could be another possible strategy that Maghreb Oxygen could adopt.
is strategy is the result of matching the strengths of having an ecient distribution
network and a strong financial position, with the opportunity of a joint venture with
AirLiquide, which is a French multinational that is operating in other markets in the
world, and also the opportunity of existing market gaps outside of Morocco such as
in Africa, as it was previously stated in the SWOT analysis section.

With the well-established and reputation of the company, and strong financial
position of Maghreb Oxygen matched with an increasing demand in the soft drink
market, a possible strategy for that would be to build a new manufacturing plant in
order to cover the increasing demand during the summer time with regards to carbon
dioxide.

e company has a well-diversified portfolio with many products and it operates in


the healthcare, gas, and the welding markets. Interestingly, within the healthcare
sector, even though the company does the manufacturing of the medical equipment,
they still do take full advantage of this opportunity; which brings one to suggest that
they could make more extensive eorts in this area.

WO (Strategies to make use of opportunities to minimize Maghreb Oxygens weaknesses)

61

Maghreb Oxygne

Strategic Plan 2013-16

By taking the opportunity of an increasing demand within the healthcare and


pharmaceutical sectors and the joint venture with AirLiquide, while looking at the
weaknesses of not having an IT department, hence, a weak Management Information
System, the possible strategy that the company could adopt is to develop their own
inventory management system.

ST (Strategies to prevent threats through Maghreb Oxygens strengths)

Taking the strengths of the firm in terms of an ecient distribution network and
matching with the threats of the rivals and the fierce competition, and the fact that
the company is listed on the stock exchange market, which means that their
information and financials are available to the competitors, the possible strategy that
Maghreb Oxygen could adopt is do a market penetration through extensive
promotional eorts in order to increase their market share.

Acquisition of smaller competitors could be a possible strategy that would solve the
matching between the strengths of being an already established firm, a highly liquid
one, and the threat of the rivals.

With an established presence of the firm and a highly liquid position of Maghreb
Oxygen, mixed with the threat of the industrial gas leaders targeting emerging
markets such as Morocco, the company could do a joint venture with AirLiquide to
export oxygen.

WT (Strategies to minimize the potential dangers lying in sectors where Maghreb


Oxygens weaknesses meet threats)

Taking into consideration the weakness of Maghreb Oxygen characterized by a drop


of 49% in net income during 2011, and the threats illustrated through the sharp
fluctuations of oil prices and the economic downturn, along with high risks in prices
of raw material, the possible strategy that the company could adopt is retrenchment

62

Maghreb Oxygne

Strategic Plan 2013-16

by putting certain projects on hold in order to cut their costs. According to the
financial analysis, the company has a return on assets of 2.3% that is less than 5%
which means that the investors will not be attracted enough to invest in the firm.
Basically, this means that the company is not taking full advantage of its assets and
they are not managing their cots eciently.

Acquiring Geographic Information System (GIS) could be a winning strategy that


would solve the matching of the weakness of the firm in terms of the weak if not
non-existence of MIS, and the threats of the fierce competition, the sharp fluctuation
of oil prices and the economic downturn, and the increasing energy costs.

Due to the fact that the company has a weak MIS, and did not acquire an inventory
management system and the fact that there is an increasing pressure in the
competition, Maghreb Oxygen could adopt the forward integration strategy and take
the control over their distributors.

e Boston Consulting Group (BCG) Matrix


In order to best enhance the multidivisional eorts of Maghreb Oxygne, and formulate
sustainable strategies, we have drawn the BCG matrix that will help us portray the dierences among
the divisions (namely the gas, welding, and the health divisions) in terms of relative market share
position and industry growth rate. According to the data that we retrieved from the financial
statements, as well as the representatives of Maghreb Oxygne, the relative market share positions
(RMSP) of both the gas and the welding divisions are 72%, whereas the RSPM of the health division
is 100%. is ratio is calculated by dividing the divisions own market share by the market share (or
revenues) of the largest rival firm in that industry. e reason why the health divisions RMSP worth
100% is due to the fact that Maghreb Oxygne is the largest rival firm in the health division.

63

Maghreb Oxygne

Strategic Plan 2013-16

Because all divisions belong to Quadrant II (stars), they represent the organizations best long-run
opportunities for growth and profitability. In return, they should receive substantial investment to
maintain their dominant position. Accordingly, strategies like forward, backward, and horizontal
integration; market penetration; and product development seemed possible and appropriate in this
case.

e SPACE Matrix
e Strategic Position and Action Evaluation matrix is another technique that helps
generating possible strategies that the company could adopt. Based on the financial strength,
competitive advantage, environmental stability and industry strength analysis shown in the table
above, the quadrant in which the company falls under is the aggressive one, that generates the
following possible strategies: backward, forward, horizontal integration, market penetration, market
development, product development, and diversification (related or unrelated).

e internal-External (IE) Matrix


e table above shows that the gas division falls under cell I, welding division falls under cell
IV in which the prescription can be described as grow and build. Intensive (market penetration,
market development, and product development) and integrated strategies (backward integration,
forward integration, and horizontal integration) are the most appropriate ones in this region of the
figure. On the other hand, the health division falls under the quadrant VIII which implies that it can
be managed best with harvest or divest strategies. e two strategies that are commonly employed are
retrenchment and divestiture.
at said; this matrix remains a tool that would identify the possible strategies the company could
follow. However, because it is important to note that the team decided not to take this strategy as a
possibility because the company is the leader in the health sector; however, they are only generating

64

Maghreb Oxygne

Strategic Plan 2013-16

less than 1% of profit out of this operation, which means that they do not operate fully in this sector.
is would explain the retrenchment and divestiture strategies suggested by the model.

Grand Strategy matrix


According to the figure above, Maghreb Oxygen falls under quadrant I, because it is
operating in a rapidly growing market since the annual growth is 6% (Infinancials,2011) , and it has
a strong competitive position since it is the second leading company after Air liquid. As the firm is
located in quadrant 1 it makes it in an excellent strategic position and the possible strategies
suggested by the matrix within this quadrant are:
Market penetration
Market development
Product development
Backward Integration
Forward Integration
Horizontal Integration
Related diversification
After analyzing the case of Maghreb Oxygen, the team suggests that the company should
continue to concentrate on its current markets by adopting market penetration and market
development and also to concentrate on current products by adopting a product development
strategy. In addition, Maghreb Oxygen could adopt a forward integration, backward integration or
horizontal integration since it has excessive resources by being part of Akwa group. Finally, since the
Law 1704 will give Maghreb Oxygen the status of pharmaceutical company, the company could
adopt a related diversification strategy as they will have the right to manufacture medicines products.

65

Maghreb Oxygne

Strategic Plan 2013-16

Decision Stage

After the strategy formulation stage, the team conducted the Quantitative Strategic Planning
Matrix (QSPM), which showed that the strategy that got the highest weighted score is related
diversification with a value of 4.86, followed by product development with weighted score of 4.47,
then market development with a value of 3.64. Market penetration and retrenchment strategies were
the ones with the lowest weighted score of 3.52 and 2.43 respectively.
at said, it is important to note that the QSPM remains a tool that helps visualizing the
important external and internal factors that are related to the company, and definitely helps the team
make an informed decision.
After a thorough analysis and discussion, the team decided to disregard the related diversification
strategy even though it is the strategy that got the highest score. e problem with this strategy is its
implementation as it turned out to be infeasible for the time being. In fact, the production of generic
drugs cannot be done for a starting company within the pharmaceutical industry, because it requires
heavy capital, a high level of expertise in the field, and most importantly, importing these products
do not require any special license, hence, it can be done by any other competitor that wish to enter
the same business. Also, this strategy would imply an investment in a land for a manufacturing plant;
however, the financial status of Maghreb Oxygne does not allow it to start with such a heavy
investment.
Although the market development strategy is attractive for the company, it turned out that it
is not feasible upon the discovery of an insight about the company, which is that it had already
thought of adopting the market development strategy by expanding to the international market,
specifically to two African countries, which are Senegal and Ivory Coast. However, this strategy was
not able to be fully implemented because of the political instability of the countries, as well as the
huge delays in payment, which made it dicult for the company to successfully operate and generate
maximum profit.

66

Maghreb Oxygne

Strategic Plan 2013-16

As for the retrenchment strategy, other than the fact that this strategy had the lowest
weighted score, the team conducted a research about the company, and discovered that the firm does
not have any departments that are particularly unprofitable, or any specific products or services that
they could dispose of or abandon.
However, for reasons that will be further explained in this section, the team decided to go for
another direction. In fact, the recommended action plan can be summarized through the following
points:
Objective 1: To increase net income by 47%
is objective can be achieved within one year through an extensive cutting of costs by:
Investing in fleet management
Investing in inventory cost management
Decreasing the yearly employee bonuses
Decreasing the marketing budget
Objective 2: To increase market share by 5%
is objective can be reached by year 2015 through the adoption of product development strategy.
is strategy consists of improving an existing service that Maghreb Oxygne oers. is product is a
package that the company could provide to its customers and it consists of the following:
e installation of piping and medical equipment to a hospital
Supply of oxygen
Maintenance service
Objective 3: to increase sales by 5% by 2015

67

Maghreb Oxygne

Strategic Plan 2013-16

is objective can achieved within a timeframe of 3 years through the adoption of the market
penetration strategy. e company will be expected to invest in geo-marketing in order to evaluate
the environments conditions, customers, the locations of the dierent distributors and networks,
which will automatically help the company plan and maximize sales within the most profitable stores
as well as enhance customer service.
Objective 4: to increase total revenue by 1.1%
is objective can be achieved started year 2014, and it consists of manufacturing new products that
Maghreb Oxygne does not but its competitor does. is strategy is also a product development
because MO will manufacture laboratory gases.
e next section is dedicated to explain each strategy and objective, with a thorough analysis of its
costs.

68

Maghreb Oxygne

Strategic Plan 2013-16

Objective 1: To increase net income by 47%


As it was stated in the previous section, the first objective that the company needs to
accomplish is to increase net income by 47%. In order to reach this objective, the company needs to
start by cutting its costs.
e main problem that the company faces is that it incurs high transportation costs illustrated
by high fuel consumption. e way the company operates is that it sends an average of 40 trucks per
day that go to the dierent depositories and hospitals, but it does not do it in an ecient way. e
costs of transportation can be summarized through the following:
Average daily transportation cost:
(In MAD)

Daily

# Trucks

40

Fuel Consumption

200

Transportation Cost

8,000

Monthly

Annually

x 28

x 336

224,000

2,688,000

e solution suggested by the team would be for the company to invest in fleet management
system. For a company that relies heavily on transportation, fleet management would allow the
increase of productivity and eciency, because it would help manage the speed, the transportation
costs, the tracking of the vehicles and the shortest routes location, among other functions that can be
oered through this system. Specifically, Maghreb Oxygen will be able to decrease its fuel
consumption by 20%, which means that within one year, the firm will be able to decrease its fuel
consumption costs by -537,600 MAD per year.
e second problem that the company faces is the loss of 10% of their customers due to bad
inventory management. Basically, customers had to deal with a shortage of Maghreb Oxygne
products, which pushed them to switch to other competitors. is problem is essential to solve
because the costs of this loss accounts for a decrease of 53,280 MAD per week, which is equivalent
to 2,557,440 MAD per year.

69

Maghreb Oxygne

Strategic Plan 2013-16

In order to solve this issue, the team suggests that the company invests in an inventory
management system, which would be used in order to control the sales and the demand of each
client of the company. is inventory control system will be included as an application in the
Geographic Information System. By following this strategy, the company will be able to recover and
regain the 10% lost customers.
Maghreb Oxygen sells an average of 2000 bottles per week within 48 depositories in Morocco.
e process works as follows; Maghreb Oxygen provides the products to the depositories. ese
depositories sell the products for an average of 300MAD per bottle, and they keep 20% of the price
for them, leaving the remaining 80% to Maghreb Oxygne, which is equivalent to 240MAD per
bottle. is last amount will then be used to pay for the dierent costs related to the manufacturing
of the products, transportation costs, and any other related costs.
When calculating the revenues of the firm regarding this operation:
Revenues= 2000 * 240 = 480,000 MAD per week.
Taking into account the loss of 10% customers:
X ! 100%
2000 ! 90%
X= 2222 total bottles to be sold
Following these calculations, Maghreb Oxygne incurs a loss of 222 bottles per week. erefore, the
company incurs a loss of 53,280 MAD per week justified through the following calculations: 222 *
240 MAD = 53,280 MAD per week, which is equivalent to 2,557,440 MAD of losses per year.
Moreover, the company has been oering employees yearly bonuses regardless of the 49% drop
in the net income. erefore, Maghreb Oxygen should definitely consider cutting costs of these
bonuses. e estimated amount that the company should consider decreasing from the employee
bonuses accounts for 3,450,000 MAD, which represents 11.5% of the total salaries payable.

70

Maghreb Oxygne

Strategic Plan 2013-16

Following this cutting cost strategy, the total costs that will be decreased accounts for an
amount of 8,311,440 MAD
Amount

Explanation

Total before Tax

6,545,040

(537,600 + 2,557,440 +
3,450,000)

Tax rate of 34%

2,225,314

(6,545,040 * 0.34)

After Tax

4,319,726

(6,545,040 - 2,225,314)

Net Income after cost cutting


operation

13,437,319

(9,117,593 + 4,319,726)

% increase of net income after


cutting costs is

47%

(13,319,726/9,117,593)-1

e results show that if Maghreb Oxygne were to purchase the software solution of both
inventory management and fleet management systems, they will be able to increase their net income
by 60%.
After extensive research, the team found a a geographic information system including three
applications, which are fleet management system, inventory management system and geo-marketing
system, with a cost of 1,027,212.00 MAD. Please note that the geo-marketing system will be further
discussed within the market penetration strategy implementation.

71

Maghreb Oxygne

Strategic Plan 2013-16

Designation

Qty

Price per
unit

Total Price
MAD

Completion of the application


Inventory Management and fleet
management under ArcGIS server
ArcView 9.3.x Server

300,000.00

300,000.00

License ArcGIS Server Standard


Edition for one server Windows with
four cores

200,000.00

200,000.00

Geocode the network of Maghreb


oxygens depositories

200,000.00

200,000.00

GPS Trimble

50

5
6

HP DL380-G7 E5620
UPC Reader

1
50

110,000.00
2,200.00
27,260.00
376

27,260.00
18,800.00

TOTAL HTVA

856,060.00

TVA 20%

171,212.00

TOTAL TTC

1,027,212.00

Source: Interview with Geomatic a GIS company based in Casablanca


Table: Invoice of GIS costs for Maghreb Oxygne
Before going to the next objectives and strategies, let us discuss the two systems that the team
suggested for Maghreb Oxygne:
Fleet management process: Maghreb Oxygne will have all its vehicles connected to a GPS
in order to locate them and be able to track them via satellite networks from which data is
retrieved and automatically sent to a base server that records all data and saves it on the
companys database. With this new system, managers of Maghreb Oxygne will be able to

72

Maghreb Oxygne

Strategic Plan 2013-16

track the vehicles and make informed decisions that would increase eciency during
transportation of products. e software used in this system is called ArGIS, and it is
basically a tool based on geographic knowledge. Maghreb Oxygne will be able to localize its
vehicles through a map, where they can get all sorts of information in real time such as the
exact address, the number of products there are in each vehicle, the number of products left
in the inventory, etc (See Appendix)
Inventory management system: is system will solve the issue of the 10% loss of
customers due to shortage of supply. is system deals with the flow of products that go in
and out of the depositories of Maghreb Oxygne. e idea is for managers to be able to keep
track of the number of products in inventory and to be notified when a particular depository
is about to run out of a given product. Inventory management system enables a better
organization of the items in the dierent depositories of Maghreb Oxygne, it helps keep
track of inventory and minimize the safety stock, and it also provides assistance in
anticipating deliveries in the depositories of the company. If the company were to invest in
this system, they will definitely be able to increase customer satisfaction, hence, a higher
customer loyalty. (See Appendix)

73

Maghreb Oxygne

Strategic Plan 2013-16

Objective 2: to increase market share by 6% by 2015


is objective will be reached by the end of 2013 through product development strategy.
is strategy consists of launching a package including that would include three components:
e installation of piping and medical equipment to a hospital
e oxygen supply
e maintenance service
e health sector in Morocco has shown an increasing demand with over 33,275 in bed
capacity in year 2005, from which 79% were for the public sector, 16% for the private sector, and
the remaining 6% for various funds such as NSSF-CNOPS-CRM. In addition, a number of private
hospitals have been created due to the increased demand and they had improved medical equipment
through the usage of new technologies. Until year 1998, the number of private hospitals did not
exceed 109. However, this number doubled to reach 230 private hospitals with a capacity of more
than 20% of bed hospitals in Morocco. Still, this capacity remains insucient; there is one bed
available per 903 inhabitants at the national level, two beds available per 1000 citizens in developed
areas, and 0.1 per 1000 citizens in rural areas.
erefore, the construction of new hospitals whether within the public or the private sector
is an opportunity that both the government and doctors are considering. For that matter, Maghreb
Oxygne should consider oering a new product or perhaps improving existing ones in order to
attract investors and generate more profit.
e objective of the teams strategy is to market share by 6%. e idea is to oer a bundle of
products that would make it practical for customers to do business with Maghreb Oxygne. e
value proposition would be to avoid customers the trouble of contacting dierent suppliers and limit
their business activity into one contact. It is important to note that the company is meeting the legal

74

Maghreb Oxygne

Strategic Plan 2013-16

and quality requirements, and it has the ISO9002 quality standards, which can also be used as a
competitive advantage by Maghreb Oxygne.
e actual prices that Maghreb Oxygne oers:
-

The pricing of the bottles:

Public Hospitals
200 to 300 MAD per bottle
Average of 6 bottles per week (1 bottle = 10 m3)
Tank of 3000 liters (equivalent to 252 bottles (3000*0.843)/10)
Tank of 6000 liters (equivalent to 504 bottles (6000*0.843)/10)
The price of 3000 liters tank is 30240 MAD
The price of 6000 liters tank is 60480 MAD
Private Hospitals
200 to 450 MAD per bottle
Average of 10 bottles per week

e costs of the package of Maghreb Oxygne will be as follows:


The installation of piping (between 200 meters and 4 kilometers), pumps,
ramps, and power plants.
For the public sector
- 850,000 MAD for regional hospitals and health centers
- 3.6 Million MAD for specialized Hospitals and small hospitals with a
capacity less than 200 beds
- 7.5 Million MAD for university Hospitals
For the Private sector
- 127,500 MAD for specialized private hospitals
- 510,000 MAD for private hospitals
The maintenance contract will be a contract between 1 and 5 years. In other
words, the company will provide this service for free and this will cost
Maghreb Oxygne between 100 and 2000 MAD per contract. The customer
on the other hand will pay for the equipment to be changed only.

75

Maghreb Oxygne

Strategic Plan 2013-16

e team suggests two dierent packages for the public and private hospitals:
Package for public hospitals:
Regional hospitals and health centers

Installation of piping (500m), pumps, ramps and power plants at 1 Million MAD

1 bottle every 2 weeks at 600 MAD to be paid monthly

Free Maintenance

Specialized Hospitals and small hospitals with a capacity less than 200 be

Installation of piping (2 km), pumps, ramps and power plants at 4 Million MAD

A tank of 6000L + 10 bottles every 2 weeks at 60480 MAD to be paid monthly

Free Maintenance

University Hospitals:

Installation of piping (4 kms), pumps, ramps and power plants at 8 Million MAD

A tank of 3000L+ a tank of 6000L + 6 bottles a week at 90720 MAD to be paid monthly

Free maintenance

Package Private Hospitals:


Private general hospital:

Installation of piping (1km), pumps, ramps and power plants at 600,000 Dhs

10 bottles a week for 8000 Dhs to be paid monthly

Free Maintenance

Specialized private hospital

76

Maghreb Oxygne

Strategic Plan 2013-16

Installation of piping (500m), pumps, ramps and power plants at 4 Million MAD

3 bottles a week for 4200 MAD to be paid monthly

Free Maintenance

77

Maghreb Oxygne

Strategic Plan 2013-16

Objective 3: to increase market share by 5% by 2015


is objective can be justified through two steps:
e opening of depositories in attractive regions
Sponsoring events and participating in exhibition in order to advertise products and increase
brand awareness of Maghreb Oxygne.
is objective can be achieved within a timeframe of 2 years through the adoption of the market
penetration strategy. e company will be expected to invest in geo-marketing in order to evaluate
the environments conditions, customers, the locations of the dierent distributors and networks,
which will automatically help the company plan and maximize sales from the most profitable stores
as well as enhance customer service.
Concerning the details of the opening of new depositories:
After an extensive research conducted for ICONE group online by Philip M. Parker (2008),
a ranking of the industrial gas utilities (latent demand) for Moroccan cities was reported. From those
statistics, the team found out that the optimal cities in which Maghreb Oxygne should add
depositories are Rabat, Fes, Oujda, Kenitra, Tetouan and Safi.
is strategy is attractive to the company especially when the costs lower than the costs of the
other strategies. e costs can be summarized through the following:
- A small reception for the opening day, a billboard for Maghreb Oxygne, the distribution for
symbolic gifts to potential clients of the new depositories, hotel and other related expenses for the
salespeople that will be on the sites during the opening of these depositories. e total costs will
account between 10,000 and 15,000 MAD per city.
erefore, the total costs related to this strategy are of 72,000 MAD that can be justified through the

78

Maghreb Oxygne

Strategic Plan 2013-16

following calculations:
The cost to be invested in each region is
12,500 MAD (10,000 + 15,000)/2
The number of cities to be opened is
6
The total cost related to opening new cities 72,000 MAD (12,500 * 6)

Table : Summary of costs for opening new depositories


Regarding the costs of this strategy, compared to other strategies it is the less costly. With
regards to the average costs per region (12,500MAD), the cost varies between 10,000 and 15,000
MAD depending on the size of the depository and its value. Although, there are additional
requirements that need to be met prior to the opening of these depositories; such as the fact that
Maghreb Oxygne needs to get a third class authorization showing that the company follows a series
of standards to open a depository. Examples of standards are the fact that the depositories need to be
in a secure location, within an industrial area in order to have danger of some gases such as the
acetylene.
In addition, Maghreb Oxygen could invest in geo-marketing, which is basically a system that
helps gather all sorts of socio-demographic information that can be extremely helpful to the
company. As a matter of fact, this system can provide the company with concrete information that
would help them make the right decision regarding the locations of their next retail stores, as it
provides information in a form of tables, charts, figures, and any other format that the managers of
the company wish to. Not only this, but the system can provide information about the competitors
location in any region the company wished to look up, as well as the size of the population, and the
demand for a particular product.
Concerning the details of sponsorship and participation in exhibitions
Maghreb Oxygen can achieve this objective through heavy marketing eorts that can
characterized by two actions. e first one would be for the company to use one of the most popular
advertising mediums that is sponsorship in order to show a presence in the Moroccan market. As a

79

Maghreb Oxygne

Strategic Plan 2013-16

matter of fact, the team spotted an event with a high importance within the industry. is event is
POLLUTEC MAROC 2012, which is basically an international exhibition of Environmental
Equipment, Technology and Services for Industry and Local Authorities. is event will take place in
Casablanca on October of this year. rough sponsoring this event, Maghreb Oxygen will succeed in
projecting a positive brand image, which will eventually positively aect the future purchase
intention of both existing and potential customers. e purpose of this action will also to show that
Maghreb Oxygne is positively involved in the community, and is customer oriented and most
importantly, eco-friendly. is advertisement might represent a competitive advantage over the
competitors and possibly, it will have a positive impact on the market share of this latter.
e second action that Maghreb Oxygne could take is to start participating in exhibitions
related to its industry in order to increase its brand awareness. Knowing that the company has a wide
range of customers going from food to health industries, then, the importance of being actively
participating in exhibitions and other business gatherings becomes essential.
Luckily, there is a series of events taking place this year, in which Maghreb Oxygne could be
involved:
Side Morocco 2012: is is an international Energy Exhibition and Conference on oil, gas,
mining, and renewable energies. is would be a good opportunity for Maghreb Oxygne to
expose their products and increase their brand awareness. e event will take place in
Marrakech on October 2nd of this year.
Medical Expo 2013: this is an international exhibition of Health care, where Maghreb
Oxygne could expose their medical equipment and gases. e company could take
advantage of this event and use it as an opportunity to expose and advertise for the new
special package, consisting of installation of piping and equipment, supply of medical gases
and maintenance. is package will be further discussed in the next strategy. is event will
take place in Casablanca on January of year 2013.

80

Maghreb Oxygne

Strategic Plan 2013-16

Aero-expo Marrakech 2012: is is the international aerospace exhibition which will take
place in Marrakech on April of this year. is exhibition will include over 250 companies,
and it has large audience coverage since more than 42,000 people visit the site. In addition,
about 350 media representatives will be present for the event, which is why Maghreb
Oxygne could take advantage of this event in order to expose and advertise for three main
products that are hydrogen, azote and nitrogen.
e costs related to the market penetration strategy can be summarized in the following table:
Events
Costs
SIDE MOROCCO 2012: International
(3,500 MAD * 15 m2)= 52,500 MAD
Energy Exhibition & Conference. Oil, gas,
(2,000 unit * 15 MAD)= 30,000 MAD
Mining, Renewable Energies
Sponsoring POLLUTEC MAROC 2012
MEDICAL EXPO 2013 : International
Exhibition of Health Care: Casablanca:
January 2013
AEROEXPO MARRAKECH 2013

TOTAL: (52,500+30,000)= 82,500 MAD


150,000 MAD
(4,500 MAD * 15 m2)= 67,500 MAD
(2,500 unit * 18 MAD)= 45,000 MAD
TOTAL: (67,500+45,000)= 112,500 MAD
(5,000 MAD * 15 m2)= 75,000 MAD
(2000 units * 15 MAD)= 30,000 MAD
TOTAL: 105,000 MAD

Table : Costs related to the exhibitions and the sponsorship


Additionally, the team suggested an upgraded version of the companys website. Since the company
operates mainly on a B2B basis, having a professional website is essential for attracting more
potential customers. (see appendix 13)

81

Maghreb Oxygne

Strategic Plan 2013-16

Objective 4: To increase Total Revenues by 1.1%


This objective will be reached within 2 years through a product development strategy.
The idea is to produce a special type of product that is not manufactured by Maghreb Oxygne.
This product is laboratory gases, which are used for control of laboratory standards, detection,
sample preparation, environmental monitoring and analysis applications. Unfortunately, this
product is already being produced by the fiercest competitor of Maghreb Oxygne, which
explains the urgency and the importance of adopting this strategy.
Knowing that the laboratory gases include a mixture of 2 to 40 types of gases that
Maghreb Oxygne has already been manufacturing, the costs related to this strategy will not be
high. In fact, the only major requirement to make this strategy feasible is the purchase of a
special machine that will proceed with the manufacturing of the laboratory gases.
The costs related to the product development can be summarized as follows:
Costs
The cost of one machine
1,900,000 MAD
The number of machines needed
3
The total cost of the machines
5,700,000 MAD (3*1,900,000)
Depreciation Expenses
1,320,000 MAD (6,600,000/5) Straight line method
Energy Consumption fees
36,000 MAD per year (3,000*12)
*Additional bottles for the new gas mixture 40,000 MAD (800 bottles*50)
The total costs related to the strategy
Additional Transportation costs

18,200MAD (7*650*4)

Training needed for employees

1,500 MAD (500*3)

Wages and salaries

54,000 MAD (1,500*3*12)

Revenues
**Expected revenues from the strategy

2,880,000MAD (900*800*4)

To assess whether this strategy should be adopted or not we calculated its Net Present Value.
The first step in the calculation of the NPV is finding the weighted average cost of capital.
The WACC is actually the minimum return that a company must earn on an existing asset base to
satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere. As for
its computation it is as follow:
WACC = (Weight of Equity * Cost of Equity) + (Weight of Debt * Cost of Debt) * (1 Tax
Rate)

82

Maghreb Oxygne

Strategic Plan 2013-16

The following is the WACC for Maghreb Oxygne:


WACC
CALCULATION
Risk free
Beta Unlevered
Market Risk Premium
Terminal Growth
Cost of debt
MO cost of equity
WACC

4.0%

0.92
11.00%
2%
8%
14.1%
10.2%

The next step is calculating the discounted expected cash flows of our investment for the next
coming years. The discounting factor is the WACC.
Year
Expected cash ows (discounted)

2014
2371534

2015
2152027

2016
1952838

The last step is the calculation of the NPV which is the sum of the expected cash flows
discounted to the present minus the initial investment (the machine and bottles acquirement) :
NPV=(2371534 + 2152027 + 1952838) - 5740000= 736398MAD
As the NPV is positive, then the project should be accepted and adopted by the company.
As for the financing of this strategy we did the EPS/EBIT analysis to see by which mean should
the company be financed: issuing either by debt, common stock or a combination of the two. The
results of the analysis are assessed through the highest earnings per share.
CS Financing
Debt Financing
Combination Financing
Recession Normal Boom Recession Normal Boom RecessionNormal Boom
EBIT
9,5
19
28,5
9,5
19
28,5
9,5
19
28,5
Interest
0
0
0
0,553
0,553 0,553 0,2765 0,2765 0,2765
EBT
9,5
19
28,5
8,947 18,447 27,947 9,2235 18,7235 28,2235
Taxes
3,325 6,65 9,975
3,325
6,65 9,975
3,325
6,65
9,975
EAT
6,175 12,35 18,525
6,175
12,35 18,525
6,175 12,35 18,525
number of
0,8423
shares
0,84234
40,84234 0,8125 0,8125 0,8125 0,8274 0,8274 0,8274
EPS
7,33 14,66 21,99
7,60
15,20 22,80
7,46 14,93
22,39
Table: EPS/EBIT Analysis for Product Development Strategy

83

Maghreb Oxygne

Strategic Plan 2013-16

Figure: Comparison of the best source of financing


As we can see from the graph above, the best source of financing is the debt financing reaching
the highest values in the three economic states (boom, normal and recession).

84

Maghreb Oxygne

Strategic Plan 2013-16

Limitations:

Although the experience of Maghreb Oxygne was an interesting and appealing one, the
team still had to face some obstacles that made it difficult to reach the intended objective,
which is to conduct a deep and a thorough analysis of the company. These limitations can
be summarized through the following points:
Getting access to the University's facilities was not easy for the team to work
together, especially when all the laboratories on campus were full with other
capstone teams and students working for their final projects.
The industry in which Maghreb Oxygne operates was not an easy one to analyze,
and understanding the product offerings and all the operations the company was
involved in made it hard for the team to analyze.
Getting information from the company is also among the limitations of the
experience, as well as the obligation of keeping some information provided by the
firm as confidential, made it hard for the team to provide a better assessment.
Dealing with team members having different personalities and coming from
different backgrounds was also a tough situation that the team had to overcome
throughout this experience.

85

Maghreb Oxygne

Strategic Plan 2013-16

References

Direction de la Plannification et des Resources Financires. (2010). Sant en Chires. Retrieved


fromhttp://srvweb.sante.gov.ma/Publications/Etudes_enquete/Pages/default.aspx
Infinancials. (2012). e Right tools for Comparative Financial Analysis. Retrieved from
Www.infinancials.com
WorldBank. (2012). Population Growth Rate. Retrieved from
http://www.google.com/publicdata/explore?
ds=d5bncppjof8f9_&met_y=sp_pop_grow&idim=country:MAR&dl=en&hl=en&q=population
+growth+morocco
Side Morocco. (2012). International Energy Exhibition and Conference. Oil, gas, Mining and
Renewable Energies. Retrieved from
http://www.side-morocco.com/profil_des_participants.html
Sponsor POLLUTEC Maroc. (2012). International Exhibition of Environmental Equipment,
Technology and Services for Industry and Local Authorities. Retrieved from
http://www.eventseye.com/fairs/f-pollutec-maroc-14322-1.html
ENER EVENT. (2012). International Renewable Energy and Energy Eciency Trade Fair. Retrieved
from
http://www.ener-event.com
MEDICAL EXPO. (2013). International Exhibition of Health Care. Retrieved from
http://www.medicalexpo-maroc.com/medical/
AEROEXPO MARRAKECH. (2012). Salon International de l'aeronautique et de spatial.
Retrieved from
http://marrakechairshow.com/fr/exposer-marrakech-airshow.html

86

Maghreb Oxygne

Strategic Plan 2013-16

Appendices:
Appendix 1: IFE Matrix
#

1
2
3
4
5
6
7

1
2
3
4
5
6
7

Key Internal Factors


Strengths
DiversicaXon and wide product porYolio
Ecient network of distribuXon
Being a subsidiary of Akwa Group
Established Market presence
Long term agreements
Strong liquidity posiXon
ExperXse of their employees
Weaknesses
Drop of 49% in their net income
Turnover decreased by 6.5%
Decrease of their dividends by 6.11%
Use of Standardized methods
Debt obligaXons
Weak MIS
Weak organizaXonal structure
Total

Weight Ra5ng Score





0.09
4 0.36
0.09
4 0.36
0.07
4 0.28
0.11
4 0.44
0.1
4
0.4
0.09
4 0.36
0.05
3 0.15



0.08
1 0.08
0.07
2 0.14
0.05
2
0.1
0.04
2 0.08
0.07
2 0.14
0.06
2 0.12
0.03
2 0.06
1
3.07

87

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 2: EFE Matrix


#

1
2
3
4
5

6

1
2
3
4
5
6
7
8

Key External Factors


Weight Ra5ng Score
Opportuni5es



Recent launch of its joint venture "on-site" through "SODEGIM"
0.095
4 0.38
Aging populaXon
0.1
3
0.3
The applicaXon of the 1704 law
0.1
4
0.4
Increasing demand of Sog drink Market
0.09
2 0.18
ExisXng market gaps outside Morocco
0.1
1
0.1
Increasing demand in the healthcare and pharmaceuXcal
sector
0.065
1 0.065
Threats



CompeXXve Pressure
0.09
3 0.27
Sharp uctuaXon of oil prices and economic downturn
0.05
3 0.15
The danger of handling hazardous material
0.04
4 0.16
Raw material price risks
0.07
3 0.21
Increasing energy costs
0.08
2 0.16
Stringent regulaXons
0.04
4 0.16
Industrial gases leaders targeXng emerging markets
0.05
2
0.1
IPO
0.03
3 0.09
Total
1
2.725

88

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 3: Competitive Profile Matrix



Key success factors Weight
Economies of Scale
0.07
Brand name
0.08
Market Share
0.09
Technology
0.07
Customer Loyalty
0.07
Safety Standards
0.07
DistribuXon Network
0.1
Partnerships
0.07
Product Quality
0.1
Cost Management
0.1
Price CompeXXon
0.1
Financial Stability
0.08

Total

Maghreb Oxygne
Air Liquide
Ra5ng Score
Ra5ng Score
4
0.28
4
0.28
4
0.32
4
0.32
4
0.36
4
0.36
2
0.14
4
0.28
3
0.21
3
0.21
4
0.28
4
0.28
3
0.3
3
0.3
3
0.21
4
0.28
4
0.4
4
0.4
2
0.2
3
0.3
2
0.2
3
0.3
2
0.16
3
0.24

3.06

3.55

Oxair
Flosit
Oxytec
Mroxyco
Ra5ng Score Ra5ng Score Ra5ng Score Ra5ng Score
3
0.21
2
0.14
2
0.14
3
0.21
3
0.24
2
0.16
1
0.08
1
0.08
2
0.18
1
0.09
1
0.09
1
0.09
3
0.21
2
0.14
1
0.07
2
0.14
2
0.14
2
0.14
2
0.14
2
0.14
3
0.21
3
0.21
1
0.07
1
0.07
2
0.2
2
0.2
1
0.1
2
0.2
2
0.14
1
0.07
1
0.07
2
0.14
3
0.3
2
0.2
1
0.1
1
0.1
1
0.1
1
0.1
1
0.1
1
0.1
2
0.2
3
0.3
3
0.3
3
0.3
2
0.16
3
0.24
3
0.24
3
0.24

2.29

1.99

1.5

1.81

89

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 4: SWOT Matrix

90

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 5: IE Matrix
Segment
Gas
Welding
Health

%Prot

Total

EFE
87
12
1

IFE
3.57
2.89
1.7

2.72

3.65
3.03
2.46
3.05

91

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 6: Space Matrix


Internal Strategic Posi5on

External Strategic Posi5on

CompeXXve Advantage (CA)


(-6worst, -1 best)

Industry Strength (IS)


(+1 worst, +6 best)

Market share
Product Quality
Customer loyalty
Axis X CompeXXons capacity uXlizaXon
(delivery)
Control over distributors

Average

-2 Growth potenXal
-1 Prot PotenXal
-2 Financial stability
-4 Resource uXlizaXon
-3 Ease of entry into market
ProducXvity, capacity uXlizaXon
-2.4

Total AXIS X score average (CA+IS)


Financial Strength (FS)
(+1 worst, +6 best)

Net income
Net sales
Working capital
Current raXo
OperaXng Margin
Axis Y ROE
ROA
Financial structure
Cash raXo
Average

5
4
4

Technological changes
Rate of inaXon
Demand variability
Price range of compeXng products
Barriers to entry into market
CompeXXve pressure
Ease of exit from market
Price elasXcity of demand
Risk involved in business

3.22

Total AXIS X score average (CA+IS)

3.83

1.43

Environmental Stability (ES)


(-6 worst, -1 best)

3
3
4
4
5
2
2
3
3

4
1
5

-2
-3
-2
-2
-2
-1
-4
-4
-2
-2.44

0.78

92

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 7: Grand Strategy Matrix

93

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 8: BCG Matrix


Segment

%Prot

Gas
Welding
Health
Total

RMSP

87
12
1
100

IG Rate %

0.72
0.72
1

3.15
1.53
1.32
6

94

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 9: QSPM
1

Market
Related
Product
penetra5on diversica5on development

Market
development

Retrenchment

Key Factors

Weight

As

Tas

As

Tas

As

Tas

As

Tas

As

Tas

Opportuni5es

Recent launch of its joint venture "on-site"


through "SODEGIM"

0.095

0.38

0.285

0.19

0.475

0.095

Aging populaXon in Morocco

0.1

0.3

0.4

0.5

0.2

0.1

The applicaXon of the 1704 law

0.1

0.3

0.5

0.4

0.2

0.1

Increasing demand of Sog drink Market

0.09

ExisXng market gaps outside Morocco


Increasing demand in the healthcare and
pharmaceuXcal sector

0.1

0.2

0.4

0.3

0.5

0.1

0.065

0.195

0.325

0.26

0.13

0.065

CompeXXve Pressure
Sharp uctuaXon of oil prices and economic
downturn

0.09

0.36

0.27

0.45

0.18

0.09

0.05

The danger of handling hazardous material

0.04

Raw material price risks

0.07

Increasing energy costs

0.08

0.08

0.16

0.32

0.24

0.4

Stringent regulaXons
Industrial gases leaders targeXng emerging
markets

0.04

0.08

0.2

0.12

0.16

0.04

0.05

IPO

0.03

DiversicaXon and wide product porYolio

0.09

0.18

0.45

0.36

0.27

0.09

Ecient network of distribuXon

0.09

Subsidiary of Akwa group

0.07

0.21

0.35

0.14

0.28

0.07

Established Market presence

0.11

0.22

0.55

0.44

0.33

0.11

Strong liquidity posiXon

0.1

0.3

0.5

0.2

0.4

0.1

Long term agreements

0.09

ExperXse of their employees

0.05

Drop of 49% in their net income in 2011

0.08

0.24

0.16

0.32

0.08

0.4

Turnover decreased by 6.5%

0.07

0.21

0.14

0.28

0.07

0.35

Decrease of their dividends

0.05

Debt obligaXons

0.04

0.12

0.08

0.16

0.04

0.2

Weak organizaXon structure

0.07

Use of standardized methods

0.06

Weak MIS

0.03

0.15

0.09

0.03

0.09

0.12

3.525

4.86

4.47

3.645

2.43

Threats

Strengths

Weaknesses

Total

95

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 10: Fleet Management Process

Source: All rights reserved 2009, Telespazio France

96

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 11: ArcGIS Server Process

Source: Esri Organiza1on (2011)

97

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 12: Snapshot of ArcGIS

98

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 13: Maghreb Oxygne Website Template

Figure 1: A Screenshot of the Current Website

99

Maghreb Oxygne

Strategic Plan 2013-16

Figure 2: A Suggested Template of the Website

100

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 14: Forum Brochure For Market Penetration Strategy

101

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 15: Flyer for the New Product: LABGAZ

102

Maghreb Oxygne

Strategic Plan 2013-16

Appendix 16: Stall for the Medical Forum

Copyright (c) 2012. The Capstone Team.

103