NORTH SOUTH UNIVERSITY

SCHOOL OF BUSINESS

An In-depth
Analysis of ARLA
Foods Bangladesh
Ltd.

Assigned by-Noor-E-Hasnin

BUS101- Sec-14
 An In-Depth Analysis on ARLA Foods Bangladesh
Ltd.
Prepared For
Noor-E-Hasnin
Course: BUS101
Semester: Spring 2015

Prepared By

Muhtasim Mosharraf(Leader) 1512215630

Syeda Tanha Anwar 1510598630

Sara Bashneen Rahman 1510596630

Tashrifa Rahman 151142030

Ananna Haque 1511867630

Mehedi Hasan 151

NORTH SOUTH UNIVERSITY

SCHOOL OF BUSINESS
 Acknowledgement
First of all, we would like to thank the Almighty for blessing us with the ability to work
properly. Special gratitude to our respected instructor Noor-E-Hasnin for giving us the
opportunity to work on such wonderful topic. Without, her supervision and support this work
would not have progressed. Her support is indeed appreciated.

We would also like to pay our gratitude to the Head of Human Resources of ARLA FOODS
Foods Bangladesh Ltd., Ali Ahsan Khan, who helped us a lot. His co-operation is also highly
appreciated. Last but not the least we would like to thank our each group member who
worked really hard last couple of weeks. Their dedication and enthusiasm have made this
work possible. The whole program really brought us together to appreciate and respect the
true value of Friendship.
 Table of Contents

Serial No. Item Page no.

1 Introduction 1-2
1.1 Objective of the study
1.2 Sources of data collection
1.3 Scope of the study
1.4 Methodology of the study
1.5 Limitation of the study

2 Literature Review 3-6

2.1 Company Background
2.2 Vision of ARLA Foods
2.3 Mission of ARLA Foods
2.4 Organizational Structure of
ARLA Foods

3 Form of Business 7-8

3.1 Articles, Bylaws of ARLA
Foods
3.2 Advantages of ARLA Foods
3.3 Disadvantages of ARLA
Foods

4 Details of Products and

services of ARLA Foods

5 Industry Analysis
5.1 Major Competition
5.2 SWOT Analysis

6 Conclusion

7 Bibliography
 Executive Summary
We have prepared the following report on the profile of a renowned milk powder company
named, ARLA Foods Bangladesh Ltd. The following report has been divided into seven parts.
The first part includes Introduction which contains our scope, methodology, objectives of the
study etc. In the second part of the report we have covered the Literature Review of the
company where we have reviewed the company’s background, vision, missions and
organizational structure.
The third part is about the How the Business was formed where we have showed the articles
and bylaws of the company and also advantages and disadvantages of the company. The fourth
part of the report includes Details of Products and Services of the company. In the fifth part of
the report we have included the Industry Analysis of the company which contains major
competition and SWOT analysis of the company.
The sixth part is the Conclusion of the report. Finally, the seventh part of the report includes
Bibliography where are some references of books from where we collect information for the
report.
 1. INTRODUCTION
1.1 Objective of the Study
Broad Objective:
The broad objective of the study is to analyze the profile of the ARLA Foods Bangladesh
Ltd.
Specific Objective:
i. To know the company background, mission, vision of the ARLA Foods Bangladesh Ltd.
ii. To find out the organizational structure, advantages and disadvantages of the ARLA Foods
Bangladesh Ltd.
iii. To know the products and services and to know the major competitors of the ARLA Foods
Bangladesh Ltd.
iv. To find out the strength and weakness of the marketing activities of ARLA Foods
Bangladesh Ltd.
The objectives of the orientation are study various desk works of the ARLA Foods
Ingredients, Bangladesh and Mutual Milk Products Ltd

1.2 Sources of Data Collection

The report is based on both primary and secondary sources of information. Interviewing the
managers and officers of the ARLA Foods Ingredients, Bangladesh and employees of its
competitors & customers has provided the primary sources of information. Furthermore the
secondary sources of information are the different annual reports kept in the different journal.

1.3 Scope of the study

DANO Milk Powder is one of the leading products in Bangladesh. The scope of the study is
limited to the ARLA Foods Ingredients, Bangladesh. The report covers the organizational
structure, background, functions and the performance of the organization.
1.4 Methodology of the Study
For the procedure of different department operations, we had observed the operations and
worked with the Officers at the same time. We had interviewed the ARLA Foods Ingredients,
Bangladesh Officials for getting more information.
For the analysis part, data have been collected from different statements and the annual
reports of the organization.

1.5 Limitation of the Study

The following limitation is apparent in the report—
The limitation of this report is ARLA Foods Ingredients, Bangladesh and Mutual Milk
Products Ltd. policy of not disclosing some data and information for obvious reason, which
could be very much useful.
 2. Literature Review
2.1 Company Background
The two companies behind ARLA Foods, the Danish MD Foods and the Swedish ARLA, are
both rooted in the co-operative movement.

MD Foods (Denmark)
The first Danish cooperative began in Hjedding in Jutland, in 1882. In the following decades, the
number of cooperative dairies rose dramatically so that by 1945, there were 1650 cooperative
dairies throughout the country.
1963: The concept of a nationwide dairy was aired for the first time.
1970: Mejeriselskabet Denmark (MD) was established on October 1 by four dairy groups
and three individual dairies. Initially, MD had a milk volume of 384 million kg.
1970 and 1980: Dairies and dairy companies across Denmark joined MD Foods through mergers
or acquisitions.
1988: the company changed name to MD Foods.
1989: MD Foods International A/S was formed for the purpose of acquiring dairies abroad.
1990: MD Foods International made its first acquisition: Associated Fresh Foods- the UK’s fifth
largest dairy company.
1992: MD Foods and Denmark’s second largest dairy company Kløver Mælk signed a
financially binding cooperation agreement. MD Foods International made further acquisitions in
the UK.
1999: MD Foods merged with Kløver Mælk to gain 90% of the Danish milk production.
ARLA (Sweden)
In Sweden, the ARLA name dates back to 1881 when the first cooperative was formed at stora
ARLA Farm in Västmanland under the name Arla Mejeriförening.
1915: The Company’s history began when Landtmännens Mjölkförsäljningsförening was
formed. The name was later changed to Mjölkcentralen. Subsequent years saw a substantial
number of larger and smaller dairies merging with Mjölkcentralen.
1970: In connection with a number of mergers in the early 1970s, it was proposed that the
company should have a new common name.
1974: The name Mjölkcentralen ARLA was registered, it was changed to ARLA the following
year.
1992: ARLA took a stake in the Copenhagen-based dairy, Enigheden, owned by Kløver Mælk of
Denmark.
1992: ARLA took a stake in the Copenhagen-based dairy, Enigheden, owned by Kløver Mælk of
Denmark.

ARLA Foods
1995: MD Foods and ARLA began to cooperate.
1999: MD Foods and ARLA announced merger plans.
2000: ARLA Foods AMBA was formed on April 17.
2013: ARLA Foods was entered into Bangladesh creating a joint venture with Mutual Milk
Products Ltd.

2.2 Mission of ARLA FOODS

“Our mission is to provide modern consumers with natural milk-based products the
create inspiration, confidence and well-being.”

ARLA FOODS is the 7th largest Diary in the World according to Turnover. The main
Mission of ARLA FOODS is to secure the highest value of our Farmer’s milk while creating
opportunities for their growth.
ARLA FOODS, as a corporate company owned by milk producers, our task is to ensure that
we can create as much as possible from the milk producers’ milk and thereby aims to create a
competitive milk price for both our owners and other suppliers.
For our Owners, it is important that they are confident that their milk can be sold not only
today, but also in future. Without a secure future outlook they would not be able to develop
their own farms.
ARLA FOODS also focus on its business do that a Dynamic business can be created. For
ARLA FOODS it is important that the farmers develop their farms, as this will ensure that
we have the milk we need. More milk can produce a dynamic business because we can
utilize scale benefits and grow as the retail sector expands. Our goal is that we can always
supply our consumer and customer according to their requirements.

We believe that, through growth, we can secure a sound and stable milk price, ensuring that
our owners have faith in the future, as well as confidence in ARLA FOODS. This growth
will be achieved by pursuing our strategy and fulfilling our vision.

2.3 VISION OF ARLA FOODS BANGLADESH LTD.

“Our vision is to be the leading dairy company in the world through considerable value
creation and active market leadership to obtain the highest possible milk price.”

Creating the future of dairy

Part of ARLA FOODS’s historical roots, their DNA, is their constant aim to progress and
create something greater and better. Since the cooperative movement began 130 years ago,
milk producers and colleagues have worked together to create a common future in the dairy
industry. Their achievements over the years have laid the foundations for ARLA FOODS
today, which is now one of the world's leading dairy companies.
Every day, we seek to improve and refine what we deliver and develop solutions for the
future. These may take the form of new products and new inspiration for our consumers.
New technologies and more effective ways of working. More value in the collaboration with
our customers. Healthier and more natural foods. Greater social responsibility. A reduced
impact on the environment and climate. Improved food safety.
We will not only follow others in the dairy industry - but also help to shape its future, and
participate actively in developing the dairy structure of tomorrow and creating new trends in
dairy consumption. Therefore, we will keep asking ourselves how we can set the standard for
the dairy activities of the future. Are we first? Are we best? Can we research and develop our
professional field even more than we do today? Can we challenge ourselves and each other
more? They want to do our best and realize ARLA FOODS's full potential.
 2.4 ORGANISATION CHART

Managing
Director

Director Head of Chief Commerci DGM

General al Medical Plant
Human Financial Industrial
Manager Manager Manager
Resources Officer Sales

Sales Marketing
Manager Manager

Commerci
al
East West
 3. FORM OF BUSINESS
Formed in 2000, through the merge of Danish MD Foods and Swedish ARLA. ARLA Foods
is a global dairy company and cooperative owned by over 7,000 Danish and Swedish dairy
farmers. Its core markets are Sweden, Denmark, Finland, the UK, Germany and the
Netherlands. ARLA Foods is also the world’s largest producer of organic dairy products.
ARLA Foods is ranked seventh by both milk intake and turnover among dairy companies
worldwide in 2010.

3.1 The Articles of ARLA Foods Bangladesh Ltd.

 Name
The Company’s name is ARLA Foods Bangladesh Ltd.
 People who incorporated it

 Its Purpose
Its purpose is to secure the highest value of our Farmer’s milk while creating
opportunities for their growth.
 It’s Duration
Usually perpetual
3.3 Advantages and Disadvantages of ARLA Foods Bangladesh Ltd.
Advantages of Corporation
 Limited Liability- As ARLA FOODS Group is a corporation business so it has limited
liabilities. So, related to ARLA FOODS owners of a business are responsible for their
losses only up to the amount they invest in it.
 Ability to raise money- ARLA FOODS has share on international share market, which
means millions of people are able to buy shares from ARLA FOODS therefore this will
help ARLA FOODS to raise their money.
 Size- Size is many of the advantages of ARLA FOODS Group. With some developed
facilities and latest equipment, ARLA FOODS can build modern factories.
 Ease of an ownership change-
 Ease of attracting talented employees- As ARLA FOODS is a Brand name so many
talented workers would join ARLA FOODS as their future career. ARLA FOODS offers
employees a huge amount of bonus even they allow employees to purchase share from
ARLA FOODS for a fixed price.

Disadvantages of Corporation
 As ARLA FOODS is a big company so it may cost thousands of dollars and also require
highly experienced expensive lawyers. For every department of ARLA FOODS high
expensive lawyers and accountants are required which will cost ARLA FOODS a lot.
 ARLA FOODS needs to keep every details of the company like the financial records and
need to arrange regular meetings to get to know the everyday updates of the business.
 ARLA FOODS has owners in 6 countries so it is difficult to respond quickly to any
market changes. It is also difficult to communicate with each other at a time.
 Since ARLA FOODS started from the 19th Century so it will be difficult to shut down the
corporation if they want
 There is a huge risk of disagreement with the stockholder and the board of directors.
 ARLA FOODS’s income is taxed twice. It needs to pay double taxation. It could be a
negative impact on the dividend and bonus paid to the stockholders.
 As ARLA FOODS is a big company it needs to pay two taxes return.
 4. Products & Services of
ARLA Foods Bangladesh Ltd.

4.1 PRODUCTS

SL No Name of products Selling Price

1 DANO FCMP INST BOX 400gm 245 tk.

2 DANO FCMP INST BOX 1kg 680 tk.

3 DANO FCMP INST POLY 500gm 295 tk.

4 DANO FCMP INST Tin 1kg 1100 tk.

5 DANO FCMP INST Tin 2kg 2100 tk.

6 DANO Slim Non Fat Milk Powder 350gm 295 tk.

7 DANO MOM 160gm 450 tk.

8 DANO Sterilized Cream 170gm 130 tk.

9 ARLA Deelac-1 Infant Formula Tin 400gm 595 tk.

10 ARLA Deelac-2Follow on Formula Tin 595 tk.

400gm
 5. INDUSTRY ANALYSIS

5.1 Major Competition

SL NO. Brand Name Country of Origin Marketing By

1. MARKS Australia Abul Kair Bhuiyan

2. NIDO New Zealand Nestle Bangladesh

3. DANO Denmark Arla Foods & MMPL

4. Diploma Australia New Zealand Dairy

Products Ltd.
5. Red Cow Australia New Zealand Dairy
Products Ltd.

6. Fresh China Tanvir Foods

( Meghna Group)

7. Kwality Australia Sanowara

Corporation

8. Anchor New Zealand New Zealand Dairy

Products Ltd.

9. Farmland New Zealand New Zealand Dairy

Products Ltd.

10. Starship China Abul Kair Bhuiyan

11. Milk Vita Bangladesh Bangladesh

5.2 SWOT ANALYSIS

ARLA FOOD beings the World’s 3rd largest Corporative Dairy has some Strength,
Weakness, Opportunities and also Threats. After analysing several reports and sample
SWOT analysis provided by ARLA FOODS we came to know about the Strength,
Weakness, Opportunities and Threats.

STRENGTHS:
 As ARLA FOODS is a global organization it has its own identity and hence it is widely
accepted by the consumers and customers of our country.
 As a global organisation the products of ARLA FOOD are of high quality. The quality
is also maintained centrally.
 ARLA FOODS have a good will and as a result the company’s products are widely
used by the consumers and customers.
 In Bangladesh one of the product of ARLA FOOD, that is, DANO Milk powder has
been continuing their journey in Bangladesh since 1961. They were the leading brand at
that time.
WEAKNESS:
 ARLA FOODS have a very limited product in Bangladesh.
 ARLA FOODS is an import based organization in Bangladesh. So, the prices of
the products are high due to the transportation costs.
 ARLA FOODS have a short portfolio.
 It is found that majority retailers express their opinion about sales promotion and
advertisements of DANO milk powder are not sufficient to compare with
competitors in Bangladesh.

OPPORTUNITIES:
 As Bangladesh is a densely populated country hence more people can afford to buy
the products.
  Bangladesh have a high economic growth. So, more people can afford to have the
products.
 ARLA FOODS is going to launch new products in the market and a group of
people can easily afford to buy that products.

THREATS:
 Due to political instability along with other organization ARLA FOODS is also
facing some problems regarding transportation.
 ARLA FOODS has to face unethical competition in Bangladesh.
 6. CONCLUSION
In sum, it is clear that while ARLA’s operations are spanning across many countries, the
company’s key markets still remain in Europe. ARLA is now undertaking various activities
that will allow it to strategically expand further into other markets that have growth potential.
This review has evaluated ARLA’s growth strategy and outlined various actions the company
has taken to further globalize, including the reconfiguration of its IT network, identification
of key development markets, acquisition of other companies and establishing partnerships.
ARLA’s involvement in the 2005/6 Middle East cartoon controversy and the 2008 Chinese
milk scandal has also been reviewed. Despite the initial negative effects experienced by the
company, ARLA was able to react quickly and make timely adjustments to remedy the
adverse impacts. Finally, the company’s efforts to further ensure safe practices and pursue
sustainability have been reviewed and summarized.
 7. BIBLIOGRAPHY

BOOKS:-

 philip kotler, marketing management , prentice hal of india private limited, new delhi-
110001, the milliennium edition, 1999, 719 pp.
 philip kotler & gary armstong,principle of marketing, prentice hall of india, new delhi –
110001, eighth edition, 1999, 635 pp.
 charles t. horngren & others, introduction to management accounting, prentice hall of
india, new delhi –110001, tenth edition, 1998, 837 pp.

 leon g. schiffman & leslie lasar kanuk, consumer behavior, prentice hall of india, new
delhi – 110001, sixth edition,1999, 672 pp.

 thompson, strategic management, irwin, chicago, usa, ninth edition, 1996,1023 pp.

 richard i. levin & david s. rubin, statistics for management, prentice hall of india, new
delhi – 110001, seventh edition, 1999, 969 pp.

 herta a. murphy, effective of business communication, mc grow hill of india, third

edition, 663 pp.

 talukder, m.q.k.2003.benefits,protection,promotion and support breastfeeding,

published by bangladesh beastfeeding foundation.

PUBLICATIONS:-

 BANGLADESH STANDARDS & TESTING INSTITUTION, BANGLADESH

STANDARD SPECIFICATION FOR DRINKING WATER, BDS 1240: 189, JULY
1990, 9 PP.

UNPUBLISHED MATERIALS
We have used few term-papers, project profiles, AND ASSIGNMENTS of different students of
different universities of Bangladesh.
Web site: www.arla.com