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STRATEGIC ANALYSIS OF A MARKET AND INDUSTRY LEADER: A CASE STUDY

OF LUCKY CEMENT LIMITED PAKISTAN

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CD-ROM. ISSN: 2158-1479 :: 07(02):267–282 (2018)

STRATEGIC ANALYSIS OF A MARKET AND INDUSTRY LEADER: A

CASE STUDY OF LUCKY CEMENT LIMITED PAKISTAN

Jawaid A. Qureshi and Manzoor A. Isran

SZABIST

Muhammad Asif Qureshi

Universiti Uttara Malaysia

Lucky Cement Limited is a market leader cum industry leader in the cement sector of Pakistan. It is the
biggest producer, seller, and exporter in this category. This giant company looks like an icon and
records stupendous growth and expansion over the period of years. The aim of this case study is to
examine the strategic performance of the company as an external analyst. The internal analyst may
measure the company’s performance against pre-established objectives and targets, whereas as an
external analyst, the method of contemplation may stand different. From the website to the interim cum
annual statements and reports of the company, its financial progress in general and strategic
performance in particular is tracked for several years. Its sales, exports sales, market share, financial
statements, and a lot of informative stuff were recorded. Semi-structured interviews comprising open-
ended questions were conducted from its top tier of management, some dealers, and some consumers
(three from each category). Analysis of interview protocols and transcripts revealed interesting findings.
Even for Lucky Cement – apparently superb looking company, there appeared a room for improvement
especially from the perspective of consumer behavior, advertising, branding, and marketing strategy to
business strategy.

Keywords: Strategic analysis; Marketing strategy; Lucky cement Pakistan.

Introduction

Being the market and industry leader in cement industry, Lucky Cement Limited (LCL) is recognized as
an icon and shining star of cement sector.[1] Over the period of time, it survived economic shocks, such as
gas and energy outages, market slumps, extortions, law and order crises, war going on with militants in
some areas of the country, rampant corruption, mis-governance, legal-political instability, increase in:
unemployment, tax rates, inflation, debts, poverty, and cost of doing business, and decrease in: income,
savings, and rupee value against US dollars to tumbling domestic stock markets. [2][3] It encountered ever-
escalating stiff rivalry among key players in the cement market. It kept marking exponential growth over
time. But its chief executive officer, Muhammad Ali Tabba, the chief executive worried about the
unstable regulatory policies and taxation along with rising cost of doing business, leading to substantial
uncertainty and risk to it in an unpredictable environment. Hence, increasing transportation, general, and
administrative cost turned a big challenge for the company. Inefficient utilization of production capacity

267
268 Strategic Analysis of a Market and Industry Leader: A Case Study of Lucky Cement Limited Pakistan

appeared another bottleneck as it was hardly able to utilize 75% of its total capacity. Its marketing team
hinted low advertising and promotional budget that provided less exposure of its products to consumers
and institutional customers and affected the brand and corporate image building initiatives. [1]

Introduction of Lucky Cement Limited (LCL)

Lucky Cement Limited (LCL) is one of the Pakistan’s largest cement manufacturing companies and has
made its name in the top of the list of the biggest cement producers and exporters of the country, with
production capacity of 7.8 million tons per annum. It is a globally expanding company and has its
facilities in Iraq and Congo. It is planning to establish its facilities in India, Sri Lanka, and other countries
as well. LCL is the leading listed company which is listed in London Stock Exchange and Pakistan Stock
Exchange. It commenced its operation back in 1993. It is also Pakistan’s first and largest exporter of loose
cement and is the only cement manufacturer to have loading and storage terminal at Karachi Port. Other
exclusive attributes that allow Lucky Cement to stand ahead of its competitors are its unique supply chain
function with specialized loose cement carriers and ship loaders. [1][4][5][6][7][8][9][10][11][12]
Lucky Cement is growing rapidly and offers higher return to its stockholders. It has gained the
highest market share as compared to its competitors. It is successfully attaining its financial and non-
financial objectives on short term and long term basis. It is not only focusing to attain their financial
objectives, but also its strategic objectives, in which it decided to provide their customers with dynamic,
innovative products, and to provide cost benefits to its customers, which then tend to giving higher
satisfaction level to its customers. LCL prioritizes its corporate social responsibility (CSR) as a part of
strategic objectives and it assists its employees and communities by providing better educational and
health facilities. Its other CSR activities comprise of making generous contributions to educational
institutions, providing scholarships to destitute students, helping healthcare entities, acquisition of green
technology, plantation campaigns and general donations for community development. It regularly
publishes its annual sustainability report. These types of work will help grow and develop a better society,
culture, and country. LCL’s sustainability initiative adheres to Kyoto protocol and earns credits for
reduction in carbon dioxide. It is only company rated A+ by Global Reporting Initiative. LCL regularly
publishes its annual sustainability report. It installed a plant in Hyderabad which is generating the
electricity of 20 MW per hour and is supplying it to Hyderabad Electricity Supply Corporation (HESCO)
from waste heat recovery system. [1][4]
LCL has won many awards that reflect its national and international-level recognition. It has gained
Forbes Asia’s 200 Best under a Bullion Award, Karachi Stock Exchange Top 25 Companies Award,
Trade Development Authority of Pakistan’s Export and Innovation Award 2014, Brand of the Year
Award 2014, National CSR Award 2014, Green Supply Chain Award 2014, Environmental Excellence
Award, and Corporate Excellence Award 2014. LCL cares a lot about its employees and rewards them
above market salary and benefits. It has the policy of equal employment opportunities and non-
discriminatory behavior to its employees. However, its employees lodge grievance about relatively less
gratuity and pension funds. It is an ISO 9001:2008 and 14001:2004 certified company and has obtained
various international certifications from standards-related organization in India, Sri Lanka and some
African countries. [1][4]

History of LCL

Lucky Cement Limited was established in 1993 by Tabba Memon family. Its founders include Abdul
Razak Tabba and Azam Soofi. Today, LCL attributes its exponential success to over forty years’
dedicated services of Muhammad Yunus Tabba. Yunus Brothers Group (YBG), which can be traced back
to 1962 when the foundation of a trading house was laid. The establishment of the fabric trading business
house, which turned into one of the largest conglomerates in Pakistan in a period spanning four decades,
served as the first milestone in this prolific journey. Yunus Brothers Group has a diversified portfolio of
 Jawaid A. Qureshi et al. 269

companies. It has established various other business concerns in textiles, cement, construction, power
generation sectors, and real estate development. The group has proved its business standing in local and
international markets by virtue of its outstanding achievements. The Group’s annual turnover stands
around US$1.65 billion in which nearly half of the sales pertain to exports. Lucky Cement Limited set up
its first plant in Pezu in D.I. Khan District of Khyber Pakhtunkhwa province to cater to the needs of
northern areas of Pakistan. Later on, it set up its plant in Nooriabad, district Jamshoro, adjacent to Karachi
to cater to the needs of southern areas of the country. It has a distinct competitive edge of having its own
loading and storage terminal at Port Qasim Karachi. [1][4]

Vision and Mission Statements

“Lucky Cement Limited’s vision is to become the leader of the cement industry in Pakistan, identifying
and capitalizing on new opportunities in the global market, contributing towards industrial progress and
sustainable future, while being responsible corporate citizens.” It intends to transform the company into a
model cement manufacturing company engaged in nation building through most efficient utilization of
resources and optimally benefiting all stake holders while enjoying public respect and goodwill in local
and international market. “Lucky Cement Limited’s mission is to be a premium cement manufacturing
unit by building a professional organization having state-of-the-art technology, identifying new prospects
to reach globally and maintain n services and quality standards to cater to the international construction
needs with an environment-friendly approach.” It wants to be perceived by the customers as providing the
highest quality of cement, using the latest technology and retaining personnel of exceptional ability.
While maintaining its leading position, it aims to build up on its present state of profitability with a view
to ensure optimum returns to the shareholders with maximum care for global environment. [1][4]

Cement Industry in Pakistan

In every economy, construction industry is the back bone of the country. Cement industry in construction
sector plays a vital role in the development of the country, in terms of contribution towards GDP,
employment opportunities, exports and imports. The cement industry in Pakistan is a market of 35 plus
million tons that grows at around 3% per annum in terms of production volume and nearly 8% in terms of
sales value. Out of total yield, around 8 million tons or 23% volume is exported. The biggest challenges
confronted by the cement industry, a fast thriving giant industry, consisted of: energy outages, especially
dearth of methane gas and lack of quality coal for energy production, adulteration in cement products by
many rivals to save cost, and fake exports to Afghanistan for claiming sales tax rebates from the
government by several rivals, which they utilize to offer additional sales discounts to their dealers and
gaining low cost competitive advantage by unfair means. [13][14][15]
According to the All Pakistan Cement Manufacturing Association (APCMA), Lucky Cement
contributes towards not only its own growth but also work very hard to strengthen cement sector in
Pakistan. It is the company that focuses on fulfilling not only domestic demand of its products but also
feeding international market. It exports in countries such as Afghanistan, India, Nepal, etc. It has major
exports in Nepal. The positive impact of its exports can be judged from its share price in stock markets.
The Exhibit 1 on the next page portrays that LCL exports to around twenty two countries of South East
and Middle East Asia and the African subcontinent. Afghanistan is the major importer of its brands. In the
wake of war against terror in Afghanistan, its people are now re-building their homes and infrastructure. It
can be seen in the pie chart in Exhibit 2 on the next page that its major exports are in Afghanistan and
India. [13]
The production capacity and sales chart of Lucky Cement portrayed on the next page in Exhibit 3
displays that in the fiscal year 2013-14, its production of clinker, cement and sales grew by 10.31%,
7.65%, and 9.23% respectively than the preceding year. It was learnt from the company officials that in
2010, it recorded its best performance due to higher demand by flood victims (who heavily suffered in the
270 Strategic Analysis of a Market and Industry Leader: A Case Study of Lucky Cement Limited Pakistan

same year) of its products. Then in 2011, its production and exports decreased due to conflict and
undermined relationships between Pakistan and Afghanistan for one year. In the wake of the flimsy
relations’ period, Pakistan and Afghanistan rebuilt trade ties and again LCL’s export sales grew there and
it enjoyed stable production for three year continually. [4]

Exhibit 1. Export Destinations of Lucky Cement Limited

Source: Lucky Cement Limited Annual Report (2014)

Exhibit 2. Percentage-wise Export Sales of Lucky Cement Limited

Source: Lucky Cement Limited Annual Report (2014)

Exhibit 3. Production Capacity and Sales of Lucky Cement Limited (in 000s tons)

Source: Lucky Cement Limited Annual Report (2014)

 Jawaid A. Qureshi et al. 271

The Organization Structure of Lucky Cement

Exhibit 4. The Organization Structure

Chief Executive

Executive Executive Director

Director and Chief Strategy

Chief Operating
Officer

Director Power Chief Operating

Generation Officer International
Projects

Director Director
Operations Operations

Director GM Government
Marketing Relations and
(North) Admin’

GM Marketing GM Finance
(South)

GM Human GM Production
Resources

GM Power Plant GM Power Plant

(Karachi) (Pezu)

GM Legal and GM Supply Chain

Corporate
Affairs

Head of Internal GM Information

Audit and Technology and
Compliance Systems

Source: Lucky Cement Limited Annual Report (2015)

272 Strategic Analysis of a Market and Industry Leader: A Case Study of Lucky Cement Limited Pakistan

The Exhibit 4 illustrated on the earlier page contains the organogram of Lucky Cement. In addition
to the stockholders and chairman, the company’s top leadership includes: the chief executive, Mr.
Muhammad Ali Tabba, Noman Hassan as executive director, Muhammad Faisal as executive director and
chief strategy, Amin Ganny as chief operating officer, Adnan Ahmed as chief operating officer
international projects, and so forth.

Main Products and Customers of LCL

The main products of Lucky Cement Limited contain: Ordinary Portland Cement, Sulfate Resistant
Cement, Clinker, Block Cement, Gray Cement, White Cement and others. Its main customers include:
household consumers, merchants, industrialists, corporate houses, government, and non-governmental
organizations engaged in civil works, whereas its trade channel customers comprise of: distributors,
wholesalers, and retailers. [1][4]

Key Players in the Cement Industry

The major competitors for Lucky Cement Limited include: DG Khan Cement Limited (DGKCL), Maple
Leaf Cement Factory Limited (MLCFL), Fauji Cement Company Limited (FCCL), Attock Cement
Pakistan Limited (ACPL), Kohat Cement (KOHC), Pioneer Cement Limited (PCL), Pakcem Limited, and
Bestway Cement Limited. The Exhibit 5 underneath and Exhibit 6 on the next page display the market
share of Lucky Cement and other industry players with their shipments records. [1][4][13]

Exhibit 5. Market Share of Lucky Cement Limited and Overall Cement Industry

Source: Lucky Cement Limited (2015)

LCL’s Environment

Social Environment

Pakistan is a densely populated country. Its population is growing at a rate of around 2% every year. The
masses from all socio-economic strata and the various public and private entities require houses,
 Jawaid A. Qureshi et al. 273

buildings, and infrastructure. They acquire funds either from their savings or borrowings, but they need
such structures. Hence, the demand for cement is ever rising. Besides the socially favorable environment,
LCL is building its corporate image among populace. It is ranked as the 6th in top-ten philanthropic
company. LCL has played a vital role towards improvement of environment. It planted 50,000 trees with
the collaboration of World Wide Fund for Nature (WWF) and large government agencies to make the
environment clean and safe. It has generously donated amounts of its profit for community development,
to educational institutions, and hospitals to create a disease-free environment. In recognition of its
services, it has been awarded CSR award and numerous other awards. [1]

Exhibit 6. Cement Shipments in and from Pakistan in 2014 (in Tons)

S. # Company Local Export Total

1 Lucky Cement Ltd. 3,183,063 1,456,900 4,639,963
2 D.G Khan Cement Ltd. 2,214,004 153,433 2,367,437
3 Maple Leaf Cement F. Ltd. 1,347,576 45,239 1,392,815
4 Pakcem Ltd. 1,283,568 75,856 1,359,424
5 Attock Cement Ltd. 1,187,571 117,191 1,304,762
6 Pioneer Cement Ltd. 1,136,956 131,985 1,268,941
7 A.C Nzp. Cement Ltd. 1,069,272 101,270 1,170,542
8 Bestway Cement Ltd. 913,898 249,239 1,163,137
9 Fauji Cement Company Ltd. 990,829 152,208 1,143,037
10 Bestway CHK Cement Ltd. 1,032,048 54,762 1,086,810
Source: Lucky Cement Limited (2015)

Economic Environment

The economy of Pakistan appeared slightly improving during the fiscal years of 2013-14 and then, 2015-
16. Many economic indicators improved such as decrease in inflation and Karachi Inter Bank Offered
Rate (KIBOR) or so-called discount rate, whereas foreign remittances, GDP, and various sectors of the
economy witnessed improvement, which became a good indicator for LCL and other businesses by
providing conducive business environment. [16][17] Though the government devised incentive schemes
under its periodic trade, monetary, and fiscal policies, but its overall policies were not executed well and
the taxation rates to cost of doing business kept escalating at an alarming level. In the year 2017, after the
ouster of the premier on the grounds of disqualification by the Supreme Court of Pakistan, the Pakistan
Stock Market was crashed and the business friendly environment in Pakistan became a nightmare. [2][3]

Natural and Technological Environment

Organizations are made through people and process. Developing an organization requires changing its
processes through technological upgradation. Technological change can substantially increase efficiency,
as employees have to put less effort, which increases employees and organizational development. For
cement manufacturing industry in Pakistan, state-of-the-art technology is available in the country, since
the import agents of large-scale industrial plants are available. They steer about the effective use of such
plants and their long-run maintenance. LCL has installed giant and modern plants and has implemented
many systems, which are eco-friendly and minimize the cost of the production. It has installed a system to
use alternate of coal for generating electricity. This leads to its cost efficiency and profitability. [1][4]
274 Strategic Analysis of a Market and Industry Leader: A Case Study of Lucky Cement Limited Pakistan

Legal-Political Environment

Pakistan is a country where people from different cultures, religions, languages, ethnicities, and races are
living together with peace and love, but unfortunately the peace is under fire now. Due to the political
conditions in Pakistan especially in Karachi, many businesses started moving from Pakistan to other
countries. The incidents of target killing and bomb blasting created a negative image of Pakistan in the
world. Investor are shy to invest here, even the local investors appear reluctant to invest here. Due to
legal-political instable conditions of the country, the policies remain unpredictable and taxation rates keep
rising. It is called a banana republic. Thus, investment and business climate appear unfriendly for LCL
and others. [2][3]

Competitive Rivalry among the Industry

Threat of New Entrants

The ease of entry for novice players include: the technology used for cement production is easily
available and the raw material used for cement production is also easily available. But the entry barriers
consist of: high fixed cost, requirement of large investment, high cost of electricity and power, and
achievement of economies of scale. Hence, the intensity of this threat is at medium level i.e. not posing a
threat for LCL.

Threat of Supplier Power

The raw materials are easily available from local vendors. The electricity power supplier to the industry is
increasing its prices on the command of government, and this is affecting every sector, but LCL is lucky
to have its own energy generation system too. Hence, the intensity of this threat is low.

Threat of Buyer Power

The price of the cement given by all the companies is almost the same in Pakistan. So, the buyer has no
other option if s/he is in need of it, which means switching cost of buyer is low. Hence, the intensity of
this threat is low.

Threat of Substitutes

There is no proper substitute available in the market for cement products, except the building blocks and
pre-fabricated walls and ceilings. Indeed, abruptly the building blocks (used instead of bricks) industry
seems booming as blocks (which use some cement as well) have been used in construction, which have
slightly diminished the demand of cement while construction. In the same way, pre-fabricated walls and
ceilings also play the same effect. But such decrease in demand is not noticed yet, since the overall
demand of cement for construction industry domestically and internationally seems rising. Hence, the
intensity of this threat is low.

Threat of Rivalry among Firms

The competition in the industry is very stiff, as there is almost no differentiation in products. The
production capacity of all the players is high. The top players inclusive of LCL has the cutting edge
technology, production capacity, alternate energy generation, huge financial backing, own transportation,
wide distribution network, and relationships with customers and dealers based on services. Even then, the
intensity of this threat is high. [1][4]
 Jawaid A. Qureshi et al. 275

Industry Dynamics and Growth Potential

Pakistan has one of the highest population growth rates in the world, touching approximately 2%. [18] This
has prompted a sizable demand for housing facilities in the country. According to estimates of
construction industry, there is a huge backlog of about 6.25 million housing units in the country. In
addition to the bulk current demand of houses, 0.6 million units are needed every year is for urban areas.
With greater urbanization, the demand for cement is expected to grow at an average of nearly 7% per
annum. [13] The basis of competition include: globalization that has made the world market highly
competitive; there is no differentiation in the cement products and there is almost no substitute of the
product, thus the basis of competition is on price, everyone is trying to give competitive price to increase
the sales and gain maximum market share. [14][15] Extended dealership network, customer services and
relationships, and marketing also play a significant role to win in the competitive arena. The most
dominating force of the industry include: the internal rivalry of the firms operative in this industry. The
production capacity is closely the same and there is no differentiation in the product, thus the companies
are competing on price basis. LCL and some other cement manufacturing companies are doing expansion
and they are working on their strategic plans. The demand for cement is growing in the country, since
construction activities keep on rising. Driven by the demand for housing and government spending on
infrastructure, the cement consumption has already witnessed unprecedented levels in recent years. The
cost of production and the supply of the cement have become the most important factors. In the upcoming
era, the basis for competition might change, if some new cost effective technology arises that sets new
standards of quality, and changes the competitive arena. [1][4]

LCL’s Generic Strategies for Gaining Competitive Advantages

Lucky Cement’s strategy is best cost and value strategy. Through cost competitive advantage and quality
of its products, it is delivering its customers high level of satisfaction. Its strategy is to be the market
leader and gain the highest market share. It possesses the most modern technology to manufacture the
best quality, and employ cost cutting strategies to offer the best price and please their customers. It
capitalizes the dry process which is almost 70% and optimizes gas-based power engines as the substitute
of the furnace oil to reduce the cost. LCL strategic priority is to cut down its transportation cost, because
from the last several years, it has been facing huge cost in this head. [1][4]

Marketing Strategies of LCL

LCL has adopted its marketing model based on the industry practices. It has high quality products
prepared under state-of-the-art technology and international specifications for quality. It has stern quality
control tests to adhere to international standards. Its packaging is also up to the market standards.
Different stock keeping units (SKUs) are used to meet the demand of the buyers. It pricing reflects its
ideology in best cost or value strategy, which means it strives hard to cut its cost down and provide a
price to the buyers that is competitive and desirable by them. It owns a network of two hundred plus
dealers across the country to supply its products to even far flung territories of the country. It has its own
transportation network to supply its products. As its major buyers are distributors and dealers, so its focus
is on business-to-business (B2B) customers, who then take care of business-to-consumer (B2C) market.
Hence, it spends less on advertising and promotional tools. It believes in customer service, public
relations and relationship marketing. Its export marketing strategy revolves around the individual
customers’ needs and specification and sticks to the overseas standards. It offers competitive prices and
services to its international partners. A lot of Pakistani cement exporters faced severe problems in India.
When they exported there, their stock was confiscated at borders and they were asked to provide lab
testing certification for quality of their cement. They had to rush toward Delhi to get their products tested
and acquire relevant certificates. In the meanwhile, they had to disburse heavy forfeit against demurrage
276 Strategic Analysis of a Market and Industry Leader: A Case Study of Lucky Cement Limited Pakistan

claims to the Indian government warehouses, hence they incurred losses. Many exporters thought of it as
technical or non-tariff barriers to trade by Indian authorities. LCL also underwent this trouble but then,
got its cement tested by adopting the Indian standards. Its move toward gradual global expansion helps it
in handling tariff and non-tariff barriers to trade and reaping the benefits in the World Trade Organization
(WTO) regime. [1][4]

Financial Performance of Lucky Cement Limited

LCL enjoys a very strong financial position. It can be seen from the financial statements provided in the
very end of this case study that its total assets exceeded Pak Rs73 billion at the end of fiscal year 2015
with total liabilities reached below Rs14 billion and share capital and reserves exceeded Rs59 billion. Its
turnover exceeded Rs44 billion (with Rs20+ billion in gross profit), which grew by less than 4% from the
preceding year. Its total comprehensive income exceeded Rs12 billion, which grew by 9+ % over the
preceding year. In the year 2016, it is marking new laurels of success and is reaping great profits. [4]

Investors’ Ratios

1) Earning per Share (EPS)

The earning per share exhibits how much earning each share of stock has gained, usually in various
financial years. Investors judge a company’s lucrativeness through EPS. The Exhibit 7 beneath displays
that from 2010 to 2014, the stockholders of LCL have substantially gained from earnings per share. In
2010, the EPS value stood 9.7, which kept thriving by 35.08 in the year 2014. This reflects the trust of
investors in LCL. [4]

Exhibit 7. Earnings per Share

Source: Lucky Cement Limited Annual Report (2014)

2) Dividend Payout Ratio

The Exhibit 8 beneath exhibits the dividend payout ratio. From the year 2010 to 2014, LCL dividend
payout to its shareholders remained fluctuating. In 2010, it paid 41.23% dividend from its net income,
which kept declining over the period of time. Up to 2014, it decreased to 25.65%. [4]
 Jawaid A. Qureshi et al. 277

Exhibit 8. Dividend Payout Ratio

Source: Lucky Cement Limited Annual Report (2014)

Way Forward

Lucky Cement Limited is the largest manufacturing and export company in the cement industry of
Pakistan, since it is a market cum industry leader. It is financially very strong and is owned by a mighty
conglomerate cum diversified group of industrial magnates, Yunus Brothers, having annual turnover of
US$1.65 billion. LCL’s total assets exceeded Pak Rs73 billion in 2015 with turnover exceeding Rs44
billion. It enjoys the highest export market share and its domestic market share is around one fifth of the
total industry share. It possess the latest technology containing green technology features, standardization
certifications, alternate electricity generation system, its own transportation, and warehousing facilities at
Karachi Port Trust. Its products possess very high quality, priced smartly through best cost or value
strategy, enjoys a dealership net of two hundred plus dealers across the country, and offers promotions
cum services to its customers, and maintains a bond of relationship with its customers. It has earned
several awards in recognition of its corporate social responsibility (CSR), green initiatives, and
operational excellence. Lucky Cement is successfully attaining its financial and strategic goals. It is
steering its operations according to its vision and mission.
Apparently looking like a gigantic company, there appear some areas of improvements for LCL, if it
endeavors to overcome some of its weaknesses and menaces, it can perform even better. It is encountering
the menace of unstable regulatory policies and taxation along with rising cost of doing business, which
increase its business risk. Increasing transportation, general, and administrative cost is another big
challenge for it. It has to re-strategize about its transportation system, since it owns it but it substantially
escalates its cost due to heavy maintenance and depreciation outlays, drivers’ remuneration, etc. It can
think of bargaining with private transporters to close a suitable deal. It is barely able to utilize 75% of its
total production capacity; it needs to focus on its marketing programs for efficient utilization of that
surplus capacity. The major threat faced by LCL is the price assault by its rivals whereas, LCL is
continuously focusing on cost cutting strategy in a bid to transfer this cost to their customers in terms of
offering them the best price. It has to be very conscious about its rivals and unfair marketing strategies by
some of them such as, selling adulterated cement and offering hanky-panky or off-the-record discounts
and deals to distributors and dealers on the basis of sales tax refund claims or incentives from the
government against fake export claims. It also has to be conscious about indirect competitors like building
blocks manufacturing facilities cum pre-fabricated walls and roofs’ manufacturing concerns. In order to
stay as a market leader, it has to keep on innovating its technologies, operations, processes, and systems,
in a bid to bring differentiation. It has to do extensive market research, garner market intelligence, and
regularly assess its internal and external environment. It needs to understand the dynamics of consumer
behavior; in nexus with its marketing strategy, it can consider increasing its advertising budget to enhance
consumers and customers’ exposure to its brands. This way, it might be able to build a superior brand
image and corporate reputation for its long-haul sustainable growth, expansion, and maintenance of its
278 Strategic Analysis of a Market and Industry Leader: A Case Study of Lucky Cement Limited Pakistan

market leadership position. The marketing and business strategist at LCL can consider critically thinking
or answering all these concerns or questions.

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17. Business Recorder. (2017). Pakistan’s economy is a pleasant surprise: Bloomberg report.
https://www.brecorder.com/.../pakistan39s-economy-is-a-pleasant-surprise-bloomberg
18. Pakistan Economic Survey. (2017). Population Growth of Pakistan. Ministry of Finance, Government of
Pakistan.
 Jawaid A. Qureshi et al. 279

Appendix
280 Strategic Analysis of a Market and Industry Leader: A Case Study of Lucky Cement Limited Pakistan
 Jawaid A. Qureshi et al. 281

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