Project report

Instructor:
Sir. Suleman Anwer

Submitted by:

Name: Roll No.

Nabeel Hassan (181210015)
MBA 1.5 years

GIFT BUSINESS SCHOOL

GIFT UNIVERSITY, GUJRANWALA
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 Rice Experts
Enterprises!
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Contents:
Serial No: Page No:
1. Acknowledgment 5
2. Industry selection 6
3. Rice expert mission and vision 7
4. Business module convance 8
5. Pestl analysis 9
6. Economic variables 9
7. Political variables 15
8. Social, culture, demographic and environment variables 16
9. Environment impact 17
10. Technological impact 19
11. PEST impact matrix 21
12. Portal 5 forces 23
13. Portal forces impact on profitability 25
14. Hofsted dimentions 26
15. Value web of rice expert enterprise 28
16. Competitive profile matrixes 30
17. External factor evaluation(EFE) 31
18. Internal audit 32
19. Culture web 32
20. Structure of rice expert enterprise 32
21. Different commands 33
22. Management functions 33
23. Management audit 37
24. Marketing audit 38
25. Process audit 40
26. Finance audit 40
27. Research &development 41
28. Management information system 41
29. Internal factor evaluation (IFE) 42
30. SWOT analysis 43
31. TOWS Analysis 44
32. Strategic factor analysis summary (SFAS) 45
33. Strategy formulation process 46
34. Fred R devid Framework 46
35. Input stage (EFE & IFE) 46
36. Matching Stage 46
37. TOWS matrix 46
38. Space matrix 47
39. BCG matrix 50
40. IE matrix 53
41. Grand strategy matrix 55
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 42. QSPM 56
43. Thomson and Frinklson Framework 57
44. Johnson and Scolls Framework 61
45. References 63

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 ACKNOWLEDGEMENT

As we have completed our project report. First of all I would like to Thank ALLAH (SWT),
I would like to express my special thanks of gratitude to my teacher (Sir. Suleman Anwer) who
gave me the golden opportunity to do this wonderful project on the topic (industry analysis),
which also helped me in doing a lot of Research and i came to know about so many new things
I am really thankful lto them. Secondly i would also like to thank my parents and friends who
helped me a lot in finalizing this project within the limited time frame.

While doing this Project it was a great experience for me. As there were a lot of easier said than
done phases but our Instructor made them a real ease for us by his assistance. Our instructor
worked really hard on all of us and it’s all owing to their hard work that today we know each&
every single word of Strategy and really know the reason behind all Strategy now.

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 Industry

Chapter: 4

Section A: Agriculture, forestry and fishing

Division: 01

Group 011: Growing of non-perennial crops

Class: 0112

Description: Polishing end exporting rice

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 Rice experts Enterprises

Our Vision

At RICE EXPERTS ENTERPRISES, our vision is to bring the Best quality Pakistani rice to
the people around the world. We are proud to source our specialties from the acclaimed
geographical areas of Pakistan, where the best crops are growing.

Our Mission

Our mission is to make the world aware of the actual taste and aroma of pure basmati rice.
Our beliefs are our greatest strengths and have contributed immensely in helping us emerge
as one of the world’s best basmati rice and exporters. Taking forward the legacy of basmati
rice in Pakistan. our beliefs have re-enforced us through the last century and more.

Our beliefs:

-Providing the best service to the customers

-Giving real time price to the farmers for their work
-Constantly striving for more inspiring targets and greater achievements
-People oriented organization
-Appreciating the innovative ideas and team work
-Essential to achieve kaizen quality
-Responsibility towards nation and society
-Using world class technology to attain market leadership
-Developing work culture on the basis merit, integrity and transparency

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The Business Model Canvas:
Key partners:
- Naimat rice mill
- Forex rice mill
- Build good relations
- Timely payments to
partners
- Loyal with them
CRM:
- Build relations with
customers by attending
exhibitions
- Takes feedback from
buyers
- Try to provide best service
Key resources:
- Unique technology
- High financial resources
- Experience
- Good market
- Work system
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Key activities: Value Propositions:
- Polished rice exports to - - Different analysis reports
different countries done for making best quality
- Different test conducted for - Try to provide best service
checking quality - Secrets maintain of quality
- Good relations with
stakeholders
- Quality packaging
- Shipping
- Purchasing process
- Orders takes by attending
different exhibitions
Customer Segments: Channels:
- We only serve eurpion - Displays at different
countries exhibitions
- We select upper and upper - Transport
class
Cost structure: Revenue stream:
- Non-value added in - Our maximum profit
activities generated by selling
- Websites expenses baspati rice
- Traveling expense
- Different software’s develop
INDUSTRY THEN FIRM ANALYSIS:

External Analysis
PESTAL ANALYSIS:
 Political Legal factors
 Economic factors
 Social factor
 Technological factor

Economic variables:

 Power energy shortage:

Energy resources in Pakistan are not sufficient to meet the energy requirements / demand of
Pakistani industrial sector, so it is also a big challenge for the rice industry in Pakistan.
Artificial sources of energy are quite costly and this sector is based on large scale so it must
needed alternative sources. It may increase the cost of production.
Pakistan is an underdeveloped country whose most of growing economy depends upon energy
sector. So, it is very necessary for Pakistan to make extra-ordinary to steps to make its economy
better. Pakistan’s total capacity of energy production is about 18000 Mega Watt. But to
transmission line losses we can get only 14000-15000 Mega Watt. But Pakistan’s total demand
of energy is 18000-20000 Mega Watt. So, we are facing total short fall of about 3000-4000
Mega Watt. Which is damaging our economy, rice industry and agriculture sector too.
(Threat)

 Labor wage law:

The Finance Minister (asad umer) while announcing the Federal Budget (2019) has raised
the minimum wage rate for workers from Rs. 14,000 to Rs. 15,000 per month. its mean that
every year one thousand is increasing in worker wages and it’s a threat because it’s not
favorable because when the wage rate is increase it will make the recruitment cost high.
(Threat)

 Availability of credit:

Prime Minister’s Agriculture Package of Rs.341 billion: A mega relief package of Rs 341
billion has been announced by Prime Minister of Pakistan for small farmers including
direct cash support and provision of soft agriculture loans. It is aimed at introducing
progressive agriculture on scientific lines, reducing production cost of crops and makes the
small farmers prosperous. Under the package Small farmers would get the chunk of Rs 147
billion direct benefit while Rs 194 billion has been allocated for agriculture loans. The farmers

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cultivating rice and cotton at up to 12.5 acres of land would be given cash support of Rs. 5,000
per acre. The government on this facility will bear the cost of Rs 20 billion each for rice and
cotton crops.
(Opportunity)

 Inflation rate:
Pakistan's annual inflation rate eased to 6.50 percent in November 2018 from 6.78 percent in
the previous month, as prices rose at a slower pace for both food & non-alcoholic beverages
(1.02 percent vs. 2.04 percent in October) and education (10.01 percent vs. 11.54 percent).
Meanwhile, inflation picked up for: housing, water, electricity, gas & fuels (9.11 percent vs.
9.04 percent); clothing & footwear (7.49 percent vs. 6.73 percent); transport (19.77 percent vs.
18.61 percent); furnishing & household equipment maintenance (7.48 percent vs. 6.99 percent);
and communication (7.83 percent vs. 7.78 percent). Core inflation, which excludes volatile
items such as food and energy, rose to 8.3 percent from 8.2 percent. On a monthly basis,
consumer prices edged up 0.11 percent in November, following a 2.33 percent climb in
October. Inflation Rate in Pakistan averaged 7.75 percent from 1957 until 2018, reaching an all-
time high of 37.81 percent in December of 1973 and a record low of -10.32 percent in February
of 1959.
(Threat)

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  GDP:
The Gross Domestic Product (GDP) in Pakistan was worth 304.95 billion US dollars in 2017.
The GDP value of Pakistan represents 0.49 percent of the world economy. GDP in Pakistan
averaged 71.19 USD Billion from 1960 until 2017, reaching an all-time high of 304.95 USD
Billion in 2017 and a record low of 3.71 USD Billion in 1960. GDP in Pakistan is expected to
be 315.00 USD Billion by the end of this quarter, according to Trading Economics global macro
models and analysts’ expectations. In the long-term, the Pakistan GDP is projected to trend
around 360.00 USD Billion in 2020, according to our econometric models.
The Gross Domestic Product (GDP) in Pakistan was worth 283.66 billion US dollars in 2016.
The GDP value of Pakistan represents 0.46 percent of the world economy. GDP in Pakistan
averaged 67.19 USD Billion from 1960 until 2016, reaching an all-time high of 283.66 USD
Billion in 2016 and a record low of 3.71 USD Billion in 1960.

The GDP will increase in future.

Agriculture Share in GDP

19 % is the share of agriculture in the GDP of Pakistan. (Opportunity).

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  Consumption patterns:
MY 2014/15 consumption is adjusted upwards at 2.8 million tons and MY 2015/16
consumption is forecast at 2.9 million tons. The slight increase in consumption is due to better
availability as a result of higher stocks. Unlike many other Asian countries, rice is not
considered a staple food crop in Pakistan. Traditionally, 40 to 45 percent of the crop is used for
local consumption, with the balance exported. Pakistanis, in general, prefer the higher priced
Basmati rice if they can afford it, if not they consume long grain IRRI rice, but wheat is the
favored staple. In 2014, domestic rice prices displayed a downward trend and the price of rice in
December 2014 was four percent lower than in December 2013 mainly due to higher stocks.
According to trade sources an estimated 200,000 tons of 40-100 percent broken rice is used in
poultry and animal feed annually.
(opportunity)

 Unemployment rate:

Forecast:
IN 2019, the unemployment rate will be 8.3%. it will increase year by year.
(Threat)

 Exports:
Pakistan has so far exported 1.22 million metric tons as compared to 1.72 million metric tons
during the same period a year ago. MY 2016/17 rice exports are projected at 4.0 million metric
tons down seven percent from the last year’s figure of 4.3 million metric tons. Pakistan’s rice
exports are facing stiff competition from Vietnam and Thailand. Currently the exporters from
these countries are quoting prices in the range of $355-360 per ton for 5% broken rice, while
prices for Pakistani rice in the same category is hovering around $380 FOB Karachi. Pakistan’s
rice exports during the current marketing year are provided below in Table 2, this data may be
subject to eventual revision. It may be too early to tell if higher prices in Pakistan are the result
of “hoarding” or market manipulation, a common, though difficult to prove refrain, or
something more fundamental with the supply and demand situation. Time will tell, though
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exports are expected to be somewhat lower. The domestic market is protected from imports by
a 10 percent tariff and strong preferences for domestic rice.

Table 2: Pakistan Rice Exports MY 2016/17 (Nov/October)

Months MY 15/16 MY 16/17
November 547,286 438,399
December 475,346 391,161
January 390,323 390,690
Total 1,724,690 1,220,250

Rice is a major Pakistani export to the United States. Out of $104 million in Pakistani
agricultural products exports to the United States in 2016, rice exports comprised $26.7 million
(26 percent of the total).

Stocks:
MY 2016/17 and MY 2017/18 ending stocks are forecast at steady 800,000 tons.

Policy:
Rice trade in Pakistan is carried out by the private sector with little or no intervention from the
government. Since the publicly-run Rice Export Corporation of Pakistan was disbanded 20
years ago, Pakistan’s rice traders have responded well to market liberalization and over the
years have become major players in world rice trading. The milling industry made significant
investments in state-of-heart processing machinery, but Pakistan exports most of its rice in bulk
with no modern packaging and branding. Export companies could be doing more to develop
brands and a more significant presence in foreign markets. However, the export industry is
comprised of a large number of relatively small firms that are often family-run and accustomed
to traditional trading practices. However, that is changing and Pakistan’s rice exporters are
becoming increasingly active advocates for their industry and their trade interests. With time,
the industry is expected to adopt more strategic and brand-based approaches to rice exporting.

Production, Supply and Demand Data Statistics:

Rice, Milled 2015/2016 2016/2017 2017/2018
Market Begin Year Nov 2015 Nov 2016 Nov 2017
USDA New USDA New USDA New
Pakistan
Official Post Official Post Official Post
Area Harvested 2740 2740 2660 2687 0 2700
Beginning Stocks 1209 1209 1019 909 0 809
Milled Production 6800 6800 6640 6800 0 6900
Rough Production 10201 10201 9961 10201 0 10351
Milling Rate (.9999) 6666 6666 6666 6666 0 6666
MY Imports 10 0 10 0 0 0
TY Imports 10 0 10 0 0 0
TY Imp. from U.S. 0 0 0 0 0 0

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Total Supply 8019 8009 7669 7709 0 7709
MY Exports 4300 4300 4200 4000 0 4000
TY Exports 4300 4300 4200 4000 0 4000
Consumption and 2700 2800 2750 2900 0 2900
Residual
Ending Stocks 1019 909 719 809 0 809
Total Distribution 8019 8009 7669 7709 0 7709
Yield 3.72 3.72 3.74 3.79 3.83
(1000 HA) ,(1000 MT)

These facts deal with the social environment and take into account trends of the industry,
demographics, population. The population of Pakistan is growing in a geometric trend. This
assures demand of rice for the future, hence promising good revenue to the farmers.
Furthermore, diet trends claiming rice to be nutritious are an attractive factor for the demand of
rice to rise in the future. The increasing popularity of the Asian Cuisine worldwide is also aiding
rice consumption because these are based on rice as the main ingredient. Example, Black Rice
and Chinese food. Rice is also considered to be eaten in a hurry and in a cleaner method than
curry with chapatti, therefore the social pattern depicts an increase in the rice consumption and is
a positive sign for the rice industry.
(Opportunity)

 Taxes & subsidies:

Announced setting up a Rs.20 billion fund to reduce prices of fertilizers which will lessen
Rs.500 perbag of Potassium and Nitrate fertilizers. Also, the government was negotiating with
local fertilizer manufacturers and gas companies to revert the increase in prices of fertilizers
which has gone up by Rs 200 per bag. It had been decided to provide Liquefied Natural Gas
(LNG) to fertilizer companies to overcome the shortages of gas supply. The government would
bear the Rs.2.5 billion premium on the agricultural insurance which will benefit 0.7 million
small farmers. Solar tubewells would be provided mark up free loans to the farmers who own
up to 12.5 acre of land. The Pakistan Economic Survey 2017-18. 24mark up of seven years
would be paid by the federal government with a cost of Rs 14.5 billion. This would ensure a
saving of Rs 1,600 and Rs 500 per day for the farmers running tube wells on diesel for five
hours daily and on petrol for same duration, respectively.

The electricity price for running tube wells at peak hours has been fixed at Rs.10.35 per unit and
Rs.8.85 at offpeak hours. The sales tax on these bills amounting Rs 7 billion would be borne by
the federal government. The custom duty, sales tax and withholding tax on the agriculture
machinery has been reduced from 45 percent to nine percent. The rice millers has been given
full exemption on the turn-over tax for year 2017-18. The traders of agriculture commodities,
fruits, vegetables and fish would get an exemption of three years on Income tax while the sales
tax on cold chain machinery has been reduced from 17 to seven percent. The installation of
production unit of Halal meat that will be registered before December 31, 2018 will be given a
four-year exemption on income tax. The government would provide Rs 30 billion as the fifty

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percent guarantee to banks on loans. This willbenefit around 0.3 million farmer households
through Rs 0.1million each with collateral loans. The time-limit to pay back Rs 34 billion
outstanding loan on the rice traders has been extended up to June 30, 2019. The government
and the State Bank of Pakistan are working over reducing the mark-up rate on agriculture loans
by two percent which would give a benefit of Rs 11 billion per annum to farmers. The Zarai
Taraqiati Bank Limited and commercial banks would provide one-window facility to the
farmers seeking loans. The value of production unit has been increased from Rs 2,000 to
Rs 4,000 which would help farmers get Doubled the amount of loan against their land value.
(Opportunity)

 EXCHANGE RATE:
The USDPKR decreased 0.2000 or 0.14% to 138.5000 on Saturday December 15 from
138.7000 in the previous trading session. Historically, the Pakistan Rupee reached an all-time
high of 138.70 in December of 2018 and a record low of 18.60 in December of 1988.

It will decrease in future.

(Threat)

Political variables:

 Govt regulations:

The past Govt. in 2016 President Pakistan Businessmen and Intellectuals Forum (PBIF)
expressed concern over falling rice exports terming it damaging for the economy. Rice exports
have witnessed a fall of 8.60 percent during financial year of 2017 by fetching 2.035 billion
dollars which should be a matter of concern for the stakeholders Pakistan has missed annual rice
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export targets for five years necessitating government intervention before it is too late as
3,861,406 metric tons of rice was exported in 2017 as compare to the corresponding period in
which 4,262,216 metric tons of rice was exported.
In 2017(past Gov.) President of Pakistan Mamnoon Hussain has emphasized the importance of
research and development for introducing higher yielding and better quality rice seeds in order
to increase rice production and exports. The President underlined that REAP should itself take
the initiative to promote research and development in the rice sector which will benefit not only
the rice exporters but also rice farmers. President said that the government is committed to
provide an enabling business environment through a consistent policy direction for trade and
industry. The President appreciated the resilience of rice exporters in dealing with cyclical
business slumps as rice industry has been under pressure due to drop in international price of
rice. The President noted that rice sector is the second largest earner of foreign exchange adding
that the Government is determined to tap the full export potential of this sector and has taken
steps to encourage value-addition. The President assured REAP of his full support in
revitalizing this sector and removing hindrances in increase of rice exports. The President said
that Rice Research Institute, Kala Shah Kaku and Agriculture University, Faisalabad should
also strive to introduce higher yielding seeds in cotton and rice for strengthening the country’s
economy.

Pakistan’s soon-to-be harvested 2017/18 wheat crop is forecast at 25.2 million metric tons,
marginally lower than a year ago. Dry conditions at planting, especially in rain fed areas
countered generally ideal conditions during January and February. The government is likely to
procure over 6 million metric tons of wheat which will boost public stock levels to around 10.5
million tons shortly after the start of the marketing year in a few months. Pakistan’s MY
2016/17 wheat export estimate is revised down to 600,000 metric tons mainly due to lack of
momentum in wheat flour exports to Afghanistan. MY 2016/17 rice exports are forecast at 4.0
million metric tons, down seven percent from the last year’s figure of 4.3 million metric tons.
MY 2017/2018 corn production is forecast at 5.8 million tons three percent higher than the
current marketing year demand from the poultry industry and the increased use of hybrids spurs
production. New Govt. has strong aim to develop this sector and announced to fully support.
They remove the international trade barrier by make good relation with countries.
(Opportunity)

Social, cultural, demographic and environmental variables:

 Lifestyle:
Lifestyle of Pakistan people change rapidly. According to a study conducted by BBC, Pakistan
rice industry is booming. Studies show that almost every society member from top executives,
middle class housewives to teenagers have shown an increasing interest towards a healthy
oriented lifestyle.Now Pakistan people want to look and stay fit. And they show interest on
different type of quality rice to stay healthy, now days every person wants to look fit at any cost
there has definitely been an increase in a desire for healthier lifestyle. So this is a big
opportunity for the quality rice industry.
(Opportunity)
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  Population:
The population of Pakistan is expected to grow by 3,782,000 in 2019 and reach 208,362,000 in
2020. Migration (including immigration and emigration) decreases population by 214,356
people yearly. On average there are 5,437,630 births and 1,459,506 deaths in Pakistan per year.
Rate of natural increase is approximately 1.94 percent per year. The population density of
Pakistan has changed from 101.3 in 1980 to 255.6 in 2017.
(Opportunity)

 Environmental impact:
Impact of climate change on rice yield in Pakistan has been analyzed that the climatic variables
have significant impact on the production of rice. Rice production in Pakistan followed an
increasing trend from 1989-2009. In the future, the temperature is expected to rise more and it
can even cross the optimum limit. Similarly, drought conditions sometimes prevail and the
major cause of decreased production after 2000 in Pakistan was drought. When drought
prevails, production reduces and the foreign exchange which is earned by exporting rice will
also decrease. So the rice will have to be produced in such a way that it can adapt to the future
changes in climate which are expected to aggravate in the future. Adaptation involves
adjustments to decrease the vulnerability of rice production to climate changes, while mitigation
focuses on reducing the emission of greenhouse gases from rice production and minimizing
deforestation resulting from upland rice cultivation. There are a range of technological options
that are presently available or which can potentially be developed in the near future for
enhancing the rice production systems’ ability to adapt to and mitigate the effects of global
climate changes as mentioned below. Rice varieties have different abilities to tolerate high
temperature, salinity, drought and floods. The selection of appropriate rice varieties is,
therefore, a technical option for adaptation to global climate changes. Also, the development of
rice varieties that have not only high-yielding potential, but also a good degree of tolerance to
high temperature, salinity, drought and flood is strongly recommended. As already mentioned
that increase in CO2 concentration could increase rice yield so the high CO concentration
present in the atmosphere under 2 global warming could be harnessed to increase the
productivity of the rice crop.
(threat)

 Air pollution:
Think of the person who must have a new car every year. If the average car lasts 10 years, this
person will have created a demand for nine more cars unnecessarily. Now imagine 1 billion
people with the same lifestyle, applied to every product imaginable. Consumption is a big driver
of air pollution. Burning garbage is another practice that releases dangerous gases and dust.
This contributes to global warming and pollutes lakes, forests, oceans and cities. Pakistan has
one of the largest coal deposits in the world, consisting of 184,123 billion tonnes that can
produce 1 million megawatts of electricity for next 300 years. Coal mining produces methane, a
potent greenhouse gas.

The Inter government Panel on Climate Change says methane is 21 times worse as a contributor
to global warming than carbon dioxide over a 100-year period. Burning coal in power plants is
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most harmful to air quality due to the emissions of dangerous gases, but the process of mining
can release packets of hazardous gases.
(Threat)

 Water crisis in Pakistan:

Water crisis is one of the biggest issues of Pakistan. Pakistan is at the 17th position in the list of
the countries, which are facing water crisis. Some people do not have water to drink and they
are compelled to drink unsafe water, which is full of darts. These small dangerous bacteria
make the people sick and it is more painful to say that if some people in Pakistan have a small
amount of water they start wasting it; they do not bother to save water for the poor.

In Pakistan, people are dependent upon rains and monsoon downpours when water flows down
the rivers and also goes down the land surface to raise the underground water level utilised for
irrigation and drinking purposes. According to Pakistan Water Partner(PWP), the total available
surface water is about 153 million MAF and the total ground water reserves are approximately
24 MAF, of which a substantial part is pumped out without allowing for a natural research. The
population of Pakistan will be doubled by the year 2025 and hence the consumption of the
underground water will also add to the problem further aggravated by the factors of the global
warming and the climate change. Today in the modern world Pakistan is the largest contiguous
irrigation system in the world. 68 MAF is potentially usable water. If the canal system is
adequately repaired and maintained, sweet water availability of approximately 144 MAF and
97% is already being used in agriculture and agricultural owners demands for more and more
water to grow sugar cane and rice crops. In the monsoon season in 8% plants will be cultivated
but that is without irrigation. Pakistan is expected to face shortage of 31 million acre feet MAF
of water by 2025 which would pose a grave threat to Pakistan’s economy and stability. Indian
plan to build a dam on Wulur lake would affect the flow of water in Pakistan. According to the
media, India has ventured upon an ambitious plan worth $120 billion to divert water of the
Pakistani rivers. The government should start the construction of dams and provide secure water
for irrigation and domestic use.
(Threat)

 Waste management:
-Current Activities and Projects
According to the United Nations Environment Program, there are six current activities and
plans taking place towards an efficient Waste Management System. These current activities are
as follows:
-Solid Waste Management Guidelines (draft) prepared with the support of Japan International
Cooperation Agency (JICA), Japan.
-Converting waste agricultural biomass into energy/ material source – project by UNEP, IETC
Japan.
-North Sindh Urban Services Corporation Limited (NSUSC) – Assisting the district government
in design and treatment of water supply, sanitation and solid waste management.

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-The URBAN UNIT, Urban Sector Policy & Management Unit P & D Department, Punjab.
Conducting different seminars on awareness of waste water, sanitation & solid waste
management etc.
-Lahore Compost (Pvt.) Ltd. only dealing with the organic waste with the cooperation of city
district government Lahore, Pakistan. The company is registered as a CDM project with
UNFCCC.
-Different NGOs are involved at small scale for solid waste collection, and recycling.
-Additionally, in November 2013 a German company, agreed to invest in the installation of a
100 megawatt power plant which generates energy from waste from Lahore. Progress is being
made on the country’s first scientific waste disposal site in Lakhodair. With this in mind, the
Lahore Waste Management Company considered other possible technologies for their Waste-
to-Energy project. They opened up applications for international companies to hire as the
official consultant for LWMC and their project. The results of the feasibility study results
showed that the power plant has the potential to process 1035 tons of municipal waste daily, and
generate 5.50 megawatt electricity daily.
(Opportunity)

Technological impacts:

Introduction of new technology that may affect the competitiveness of the industry and its
efficiency and how, ultimately demand and supply would be affected. Research and
development, and automation fall in this category. Pakistan has been an agriculture based
industry since the time of its inception in 1947. The farmers from that time have only learnt the
traditional ways of farmers, and those ways are which they are comfortable with. With the
developments in technology on a daily basis globally, this has acted in our disadvantage because
international rice producers have attained efficient and cheaper ways of producing rice, exporting
them at cheaper price, hence we face competition and are susceptible to losing out our market
share in the international market. The farmers in Pakistan are also reluctant to learn these ways.
Moreover, they even lack the awareness of new and now a part of the rice market because they
found a gap in the rice market of Pakistan which they saw as one they could cover. Such firms
are also investing in the modern technology now available. They also hold seminars for the
education of rice farmers. Research institutes are also now establishing themselves in Pakistan
with the help of REAP, and so Pakistan can have the technological factors work in its favor.
(Opportunity and threat)

 Gov. Spending in R&D:

If all the research expenses are collected from the federal budget, they make up to 51.997
billion Pak Rupees. This is 53% higher than the previous year’s in which 30 billion Pak Rupees
were spent. With this much outlay, the R&D expenditures make 0.397% of the total GDP
against that of the 0.227% in the previous year. This is highest in the 9 years. Still it does not
include the defense related innovation, provincial R&D expenses (that make considerable
amount), agriculture related private working and other private sector spending for the purpose.

19 | P a g e
It amounts to 258.7 Pak Rupees per capital expense for scientific & technological development
against the previous year’s 149 Pak Rupees.
(Opportunity)

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 PEST IMPACT MATRIX

Nature of Impact of opportunities threats Strategic

change change response

Govt Strict rules More times Reduce

 political regulations needed to processing
change approve the time
product
Special Reduce tax Reduce cost Try to reduce
tariffs cost

Environment Wastage Quantity Needs to

al protection increase reduced improve
laws seeds quality
Govt Financial and Production will Serve new
subsidies non financial increase market
benefits
Export Govt Export can be Takes more
opportunities supportingex increased orders
port
Gdp Constantly Increase pie Leads toward
 economi increasing more
c investment
change

Inflation Increasing Cost increasing Reduce the

trend profit margin

Unemployme Increasing Cheaper labor Needs to

nt rate of available invest more
unemployme
nt

21 | P a g e
 Exchange Prices are at Good for export Bad for import In Import
rate peak products products profit margin
reduce, in
export profit
margin
increased
Recycling Wastages Material Work on
 s,c,d reduced available at low more
change price production

Water Water reduce Less Work on

pollution production technology

R&d Technology Costly to Needs to

 technolo availabilty purchase arrange
gical financial
change resources

Govt r&d Environment Increased Leads to

al products production Market
development

22 | P a g e
 Porter’s 5 Industry forces Analysis

Threat of new Entrants:

Threat of new entrants is low because:
-Need high investment
-Technology
-Expertise
-Brand name
-Professional teams
-Strong marketer

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Bargaining power of buyers:
Bargaining power is strong because:
-Lot of sellers
-Different prices in market
-No recognition of quality rice
-Different verities of rice

Bargaining power of suppliers:

Bargaining power of buyers is toward moderate because:
-Lot of processing mills
-Mostly mills have required technology
-Excess of rice
-Easily available rice

Competition Rivalry:

Competition among rivals is high because:

-Lot of exporters are working in Pakistan
-Different types of rice available
-Lot of sellers
-Based on personal relationships

Threat of substitute product:

Threat of substitute product is high because:

-Wheat
-Other varieties of rice

24 | P a g e
Portel forces impact on profitability:

Threat/Power

High Moderate low

Competitive Rivalry

New Entrant Threat

Substitute Threat

Buyer Bargaining Power

Supplier Bargaining Power

Profit
Profits
Low high

After analyzing and forecasting by portal 5 forces, there is competition moderate toward high.
But there is still opportunity of growth and investment.

25 | P a g e
 Hofsted dimentions

The six hofsted dimentions detail:

According to Geert Hofstede, culture is the mind’s collective programming that differentiates
between one category of people and members of one group from another. The term ‘category’
might imply nations, religions, ethnicities, regions across or within nations, genders,
organizations, or occupations.

1. Power Distance:
Power distance stands for inequality that is defined not from above, but from below. It is, in
fact, the extent to which organizations and societies accept power differentials. In Pakistan 55%
power distance fall. It means less decentralized culture fall in this country. So it is threat for our
business.

2. Uncertainty Avoidance:
Uncertainty avoidance is the extent to which the members belonging to a society are capable of
coping with future uncertainty without going through stress. 70% people of Pakistan avoid
future risk that can creates problems for Pakistan and for our business. Is is a big threat of a
company.
26 | P a g e
 3. Individualism vs. Collectivism:
Individualism set against its opposite collectivism defines the extent to which individuals are
inclined toward remaining in groups. 14% people of Pakistan are living their life like
individualism, it means families have rsources so it can be a opportunity for our business.

4. Masculinity vs. Femininity:

Masculinity and femininity revolve around the emotional role distribution between genders,
which is again a prime issue in a number of societies. In Pakistan 50/50% men’s and womens
are playing role in society means it can be opportunity for a business.

5. Long-Term vs. Short-Term Orientation:

50% people of Pakistan have future objectives and 50% people have no future concern. Means
it can be threat for an organization.

6. Indulgence vs. Restraint:

It is big threat for a business. People have attitude and they do not want to share their wealth
etc.

27 | P a g e
 Value web of rice expert enterprise
Rice expert enterprise has a value web which has certain gaps in it. A view of the
company’s value web is as follows:

PRIMARY ACTIVITIES:

 Packaging matareial:
In this rice expert enterprise use 50kg packets in packing the rice. And also conduct test that
rice should be safe in it.

 Shipping documents:
Rice expert enterprise arrange documents required by buyer for reciveing the goods on port and
payments.

 CUSTOMER SERVICE COST:

Shipment, loading and unloading cost paid by rice expert enterprise so it increase the
cost.
 MANAGEMENT COST:
Their management based on 9 people so they have less cost.

 Quality control:
In rice expert enterprise, there is an employee who insured the quality of rice.

 Food safety:
Firm conduct test after getting different samples during polishing and also takes some
sample at the end. Then they match test report with analysis report that send by buyer.

Supporting activities:
In this company do different things to make their image better and provide quality
product to their customer in right time.

28 | P a g e
  Analysis reports:

Rice expert enterprise attach final report with shipment documents to their customer.
This report takes from well known institute in Gujranwala whose reports are
accessable at international level.

 Purchasing:
Rice expert enterprise hired a person who perform purchase related things.
Resignation is purchaser who go in the processing mills done deal with them.

 Sales and marketing:

Mr.ijaz marketing their product in different exhibition in eurpion countries. So in this way he
takes orders.

29 | P a g e
Competitive profile matrixes:

Rice expert enterprise M.raheem rice processing mill and

exporter

Sr Critical weight Rating score weight Rating score

success
factors
1. Financial 0.15 4 0.6 0.15 4 0.6
position
2. technology 0.10 2 0.2 0.10 3 0.3

3. Market 0.10 3 0.3 0.10 4 0.4

position

4. Good buyer 0.10 2 0.2 0.10 3 0.3

and supplier
relation
5. management 0.05 1 0.05 0.05 3 0.15

6. infrastructur 0.05 1 0.05 0.10 2 0.2

e

7. Quality rice 0.10 3 0.3 0.15 4 0.6

8. location 0.05 1 0.05 0.10 3 0.3

9. Market 0.10 3 0.3 0.05 2 0.1

share

10. Price 0.15 2 0.3 0.10 3 0.3

Total =1 =2.35 1 =3.25

Vertical analysis.
Reflecting the industry score Overall our company weighted score is less then to our
competitors so our competitors performing well in industry average our competitor’s
performance high because we have less experience and less time spend in the market our
competitors have high grip on critical key success factors.

30 | P a g e
Horizontal analysis.
If we see each factor, mostly export related factors in which we are performing good otherwise
our competitor trying to perform well at each and every level.

External Factor evaluation(EFE)

key external Factor Weight Rating Weighted

Sr Score
Opportunities

1. Population 0.15 3 0.45

2. GDP 0.10 4 0.4

3. Technology 0.10 2 0.2

4. Govt subsidies 0.10 4 0.4

5. Exchange rate 0.05 3 0.15

Threat

1. New entrants 0.15 4 0.6

2. Water pollution 0.15 2 0.3

3. Inflation 0.10 3 0.3

4. Govt rules 0.05 2 0.1

5. Power energy shortage 0.05 2 0.1

Total 1 3

31 | P a g e
 Internal audit
Cultural web:
 Stories:
Stories say that the organization having high numbers of customers and customer satisfaction. It
creates good communication and reputation among customers. The owners started the business
himself with the mutual understanding by contributing the capital to provide the healthy and
quality product to their agents. Employees who are working tells that they have shortage of
finance but they captured value from customer in short time.

 Rituals and routines:

Employees come in office till 9am. They come read their task from register and start work on it.
Further duties assigned later in a day by owner mr.ijaz.

 Symbols:
Owners and employees talks in Punjabi, urdu and also use jorgans to explain the goal and
objective.

 Organizational structure:
Flat structure owners at the top then employees are working under 2 owners. They direct ally
report to owner. They are responsible for their task. Sweeper and cook also work in
organization.

 Control system:
Mr.ijaz conrol all the activities within the organization and outside the organization. So strongly
controlled each and everything.

 Power structure:
Owner has the real power in the organization. What owner said or assigned, mployees are
responsible fot performance.
Structure of rice expert enterprise:
Mr.ijaz(owner)

Export accountant analysis quality purchaser four

Manager officer manger employees

32 | P a g e
  Chain of command:
There is unity of command in an organization because only one person is giving command and
one has to report to only one person. Owner is giving command to all employees. All
employees’ direct ally report to mr.ijaz.

 Span of control:
There is small span of control in organization, as shows in structure diagram. All employees are
working under owner.

 Lines of authority:
There are employees have no authority. They just follow the suggestion gives by their owner.

 Formalization:
Thereis low formalization in Firm because the rules, regulations, policies and procedures are not
as much strict, formalized and rigid.

 Centralization vs. decentralization:

The structures highly centralized, because only top management is involved in decision making.
There is no empowerment given to other employees. The authorities only delegated to top
management.

 Departmentalization:
There is no any type of departmentalization.

 Flow of communication:
Three types of communication in observed:

Vertical: The flow of information is vertically along the hierarchy levels.

Downward: The information passes down from upper to lower hierarchy levels.
Horizontal: employees at same level of hierarchy can communicate with each other.

Management functions

 PLANNING:
Rice expert enterprise plainned their activities after getting orders from clients. They trying to
export rice as much as they can.

Specialization:
Rice expert enterprise specifically specializes in premium quality Basmati rice. Basmati rice is
the oldest cultivated crop and the crown jewel of rice around the world. Its exotic aroma,
delicious taste and excellent nutrition value makes it the ultimate choice of rice lovers across the
worl
33 | P a g e
Quality oriented:
Our rice products undergoes numerous quality checks prior to packing. We randomly draw
samples during the manufacturing process and verify the grain length, grain width, edges, color
and moisture content. Furthermore, at rice expert enterprise we also draw random samples and
put them under the ultimate test i.e. cooking. we also check and according to analysis report.
We leave no doubts about the quality of rice we make. The packing is then done as per client’s
requirements or in our brand packaging.

Objectives:
-To deliver quality of Product
-To Create brand loyalty on customer’s mind while satisfying their needs
-Achieve operational excellence
-To increase customer retention
-To work on getting more orders
-To work on increasing wealth of an organization

The objectives are not SMART therefore, it is the weakness for the company.

Strategies:

There are three basic types of strategies that company is using:

-Market Development
-Market Penetration
-Backward integration

The strategies are appropriate according to the nature, size and resources of the organization, so
it is the strength for company.

 Policies:
Company follow the all standard fixed by WTO such as:
-ISO 22000:2005 specifies requirements for a food
-Human resource policy(labor law)
-To have such ethical policies is strength for the organization.

 ORGANIZING:

Job specialization:
In rice expert enterprise, they have no enough experience about their specific task.
It is weakness for the company.

Job descriptions:
People hired through personal relations. There is no advertisement or other hiring process.
It is weakness for the company.

34 | P a g e
Job specifications:
The company declares the minimum qualifications and requirements necessary to perform the
essential functions of a job, in this way the right candidate is selected.
It is strength for the company.

Coordination:
There is coordination among all the employees, purchaser, qaulty controller and all other six
employees. This is strength for the company.

Job design:
There is no proper way to choose the employee.
It is weakness for the company.

Job analysis:
There is prioritization of jobs based on the importance of its responsibilities and tasks.
This is strength for the company.

MOTIVATING

Leadership:
There is autocratic style and unity command so owner mr.ijaz motivate and guide their
employees. It is weakness for the organization because it restricts the creativity and innovation.

Work groups:
There are work groups A rice expert enterprise firm.
It is strength for the company.

Behavior modification:
There is no methodology for behavior modification of workforce they remain consistent with
their behavior. Just talk in good manners with your colleages and your boss.
This is weakness for the company.

Delegation of authority:
There is no delegation of authority to the subordinates.
This is weakness for the company.

Job enrichment:
There is no job enrichment for the employees and they have to do repetitive work again and
again which leads to boredom and reduce the productivity.
This is a weakness for the company.

35 | P a g e
Job satisfaction:
According to the interview taken from the employees at Rice expert enterprise, there level of
satisfaction is moderate to high. This is strength for the company.

Organizational change:
Organizational policies do not change over time.

Employee morale:
Due to absence of job rotation and job enrichment, employee morale is less which is harmful for
the productivity. It is weakness for the company

 STAFFING:

Wage and salary administration:

In rice expert enterprise, all employees are salary based. They work in their own special task.
It is strength for the company.

Employee benefits:
Firm offers special dinners and outgoing to the workforce as intrinsic benefits .There is also
increase in salaries overtime which leads to employee satisfaction. They also support in medical
treatments to their employees. It is strength for the company.

Interviewing:
There is no proper formal method of interviewing the candidates for the job in search for a right
candidate. So, it is difficult to find the right person for the right job if there is no proper
interviewing. This is weakness for the company.

Hiring and firing:

There is no proper formal method of hiring and firing the employees. This is weakness for the
company.

Training:
On the job trainings done for the newly hired employees so that they learn the procedures of
work and know the skills required for the job. It is strength for the organization.

Management development:
There is no initiative taken at Firm for management development. This is weakness for the
company.

 CONTROLLING:

Product Quality control:

The product quality control policies are presented and implemented each individual to ensure
and enhance the quality of product offered. It is strength for the organization.

36 | P a g e
Financial control:
The monitoring of financial activities done by account holder as well as by the owner. It is
strength for the organization.

Sales control:
Targets are settled by the owner so employees follow the instructions from their boss. It is
strength for the company.

Inventory control:
Inventory control has been made by continuously evaluating and monitoring. It is strength for
the company.

Expense control:
The budget has been made by owner and allocated to mangers. These expenses are monitored
on monthly basis according to the budget allocated to them. It is strength for the company.

Internal audit:
-Management
-Marketing
-Finance/accounting
-Production/operations
-Research & development
-Management information systems

 Management audit:

Does the firm use strategic-management concepts?

Firm use strategic management concept in their organization.

Are company objectives and goals measurable and well communicated?

Yes organization clearly explained to employees what they want to be done in future.

Is the organization’s structure appropriate?

No because they have few employees.

Are job descriptions and job specifications clear?

Yes Employees knows what organization expected from them.

37 | P a g e
 Is employee morale high?
Yes because of moral and other finantial incentives to their employees.

Are employee turnover and absenteeism low?

Yes because they have only 9 employees who working under mr.ijaz.

Are organizational reward and control mechanisms effective?

In this they appreciate to their employees by annual dinners, cash incentives and recreational
tours.
Management Function Audit Checklist:

Question Yes/No Strength/Weakness

1- Does the firm use strategic-management yes Strength

concepts?
2- Are company objectives and goals measurable Yes Strength
and well communicated?
3- Is the organization’s structure appropriate? no Weaknesses

4- Are job descriptions and job specifications Yes Strength

clear?
5- Is employee morale high? Yes Strength

6- Are organizational reward and control yes Strength

mechanisms effective?
7- Are employee turnover and absenteeism low? yes Strength

 Marketing Audit:
Are markets segmented effectively?
Yes they are serving only eurpion countries.

Is the organization positioned well among competitors?

Yes because they takes orders through exhibitions.

Has the firm’s market share been increasing?

Yes by .50 percent.

38 | P a g e
Does the firm have an effective sales force?
No because only one persong doing marketing activities.

Does the firm conduct market research?

No they have information about market.

Are product quality and customer service good?

Yes they process the product according to customer requirement.

Are the firm's products/services priced appropriately?

Yes they provide product at best quality with best price.

Does the firm have an effective promotion, advertising, and publicity strategy?
No they have no any marketing department.

Do the firm’s marketing managers have adequate experience and training?

Yes he has experienced about market.
Marketing Audit Checklist:

Details Yes/No Strength/Weakness

1. Are markets segmented yes Strength
effectively?
2. Is the organization No Weakness
positioned well among
competitors?

3. • Has the firm’s Yes Strength

market share been
increasing?

4. Does the firm conduct no weakness

market research?
5. Are the product quality and Yes Strength

39 | P a g e
 service good?
6. Are the firm’s products and Yes Strength
services prices
appropriately?
7. Does the firm have an no Weekness
effective promotion,
advertising, and publicity
strategy?
8. Do the firm’s yes Strength
marketing mangers
have adequate
experience and
training?

9. • Has the firm’s yes Strength

market share been
increasing?

 Process audit:
-First rice come from field to rice processing mills.
-Then rice polished according to requirements.
-Then packed in 50 kg pack brand name zaineb
-Then through containers all rice packets send to Karachi port.
-Then from Karachi port, they send to different eurpeon countries like USA, Germany to
contractor.

 Finance audit:

Can the firm raise needed long-term capital?

They have no needed capital. They have enough capital to do the business.

Does the firm have sufficient working capital?

Yes they have enough capital to do the business.

Does the firm have good relations with its investors and stockholders?
Yes they have strong relations with their investors and stockholders.

Are the firm’s financial managers experienced and well trained?

Yes they have experience about company cash inflow and outflow.
40 | P a g e
Finance Function Audit Checklist:

Question Yes/No Strength/ Weakness

1- Can the firm raise needed long-term Yes Strength

capital through debt and /or equity?
2- Are the firm’s financial managers Yes Strength
experienced and well trained?
Does the firm have sufficient working yes Strength
capital?
3-
• Does the firm have good relations yes Strength
with its investors and stockholders?
4-

 Research and development:

Rice expert enterprise, they have concern with quality product and they give analysis report to
rice processing mills for polishing the rice according to requirement.

 Management information system:

In this rice expert enterprise save all type of information related to product and orders delivering
and taking etc. they can also easily use system but they have not good MIS.

41 | P a g e
Internal factor evaluation :( IFE)
Internal
Factors analysis

Strength weight Rating Weighted

Score
Financial position .15 4 0.6

Brand image .10 3 0.3

Strong buyer 0.10 3 0.3

&supplier relation

Market position 0.10 3 0.3

Experienced work 0.05 2 0.1

force

Weakness

Informal way of .10 3 0.3

business

Existing competitors .10 3 0.3

Product dependency .15 2 0.3

infrastructure .15 2 0.3

No formal hiring 0.05 2 0.1

Total =1 =2.9

In IFAS, rice expert enterprise have some strength and some weaknesses. Financial position,
experienced work force and they have strong brand image in the market. In weaknesses, firm
faces strong competition from existing firms. Rice expert enterprise totally takes rice from
suppliers, means they have no processing mill or production unit.

42 | P a g e
SWOT:
STRENTH:
- Financial position
- Brand image
- Strong buyer &supplier relation
- Market position
- Experienced work force
WEAKNESSES:
- Informal way of business
- Existing competitors work system
- Product dependency
- Infrastructure
- No formal hiring

OPPORTUNITY:
-Population
-GDP
-Technology
-Govt subsidies
-Exchange rate

THREATS:
-New entrants
-Water pollution
-Inflation
-Govt rules
-Power energy shortage
-Existing competitors
-Govt duty on import machinary

43 | P a g e
Tows matrix:
Internal factor analysis Strengths
(IFAS) 1. Financial position
2. Brand image
3. Strong buyer &supplier
relation
4. Market position
5. Experienced work force
External factor
analysis
(EFAS)
Opportunity SO Strategies
1. Population
2. GDP S1: with finance, we try to
3. Technology develop our own
4. govt subsidies competitive processing unit
5. exchange rate (O3).
S3,S4:with good relation
and market position, we try
to cover more market(O1)
O5:with experienced work
force, we try to take more
orders and work on
maximum export(O5)..
Threat ST strategies
1. new entrants
2. water pollution S2:with strong brand image,
3. inflation we try to reduce risk of new
4. govt rules entrants(T1).
5. existing competitors S5:with experienced work
force, we try to reduce cost
by creating innovation(T3).
44 | P a g e
Weaknesses
1. Informal way of business
2. Existing competitors work
system
3. Product dependency
4. Infrastructure
5. No formal hiring
WO Strategies
O3:through technology, we
established our own unit to
reduce product
dependency(W3).
O4:through govt support, we
will try to make good
infrastructure(W4).
WT Strategies
W5:we reduce product
dependency by establishing own
unit for reducing risk of
competition.
W1:formulization of business
will reduce competition(T5).
 Strategic factor analysis summary(SFAS)

Key strategic
factor
Duration

Sr.n weight Rating score Short medium long

S1 Financial position 0.15 4 0.6


S2 Brand image 0.10 3 0.3


W Product 0.15 3 0.45

3 dependency 

W Existing 0.10 2 0.2

2 competitors work 
system
W Infrastructure 0.05 1 0.05 
4 

O Population 0.15 3 0.45 

1

O Govt subsidies 0.15 3 0.45 

4

T1 New entrants 0.05 2 0.1 

T5 govt rules 0.10 1 0.10



1 2.7

45 | P a g e
 Strategy formulation:

3framworks:
-Fred R devad
-Thomson and frinklson
-Johnson and scoll

First framework:
Fred R devad
1. Input stage:
In input stage we conduct external factor analysis (EFE), internal factor analysis
(IFE) and competitive profile matrix (CPM). These three analysis I have done in internal
and external audit which scores I have EFE=3, IFE=2.9 and CPM=2.35/competitor-3.25. all
scores of our company is less than competitor means we are performing less in that
industry.

2. Matching:
The matching stage of the strategy-formulation framework consists of five techniques that
can be used in any sequence:
 TOWS Matrix
 SPACE Matrix
 BCG Matrix
 IE Matrix
 Grand Strategy Matrix

 Tows:
The Strength-Weaknesses-Opportunities-Threats (SWOT) Matrix is an important
matching tool that helps managers develops four types of strategies.

 SO (strength-Opportunities)
 WO (weaknesses-Opportunities)
 ST (Strength-Threats)
 WT (Weaknesses-Threats)
46 | P a g e
-SO Strategies use a firm’s internal strengths to take advantage of external opportunities.

-WO Strategies aim at improving internal weaknesses by taking advantage of external

opportunities. Sometimes key external opportunities exist, but a firm has internal weaknesses
that prevent it from exploiting those opportunities.

-ST Strategies use a firm’s strengths to avoid or reduce the impact of internal threats. This does
not mean that a strong organization should always meet threats in the external environment
head-on.

-WT Strategies are defensive tactics directed at reducing internal weakness and avoiding
external threats
NOTE: tows did at the end of internal audit.

 Space Matrix:

Internal Analysis: External Analysis:

Q1:Financial Position (FP) Q2:Stability Position (SP)

Return on investment 6 Rate of inflation -2
Cash flow 5 Demand variability -3
Ease of exit from market 4 Price range of competing products -2
Risk involved in business 4 Barriers to entry -3

Financial position FP Average=4.75 Stability position average= -2.5

Q3:Competitive position(CP): Q4:Industry position(IP):

Market share -2 Productivity, capacity utilization 4

Product quality -3 Growth potential 6
Customer loyalty -3 Technological know how 4
Control over suppliers & distributors -2 financial stability 4

Competitive position average= -2.5 Industry position average=4.5

47 | P a g e
The following strategies are offered by 4 Quadrants.

Quadrant 1

Aggressive:
 Background, forward, horizontal integration
 Market Penetration
 Market Development
 Product Development
 Diversification (related or unrelated)

Quadrant 2

Conservative:
 Market Penetration
 Market Development
 Product Development
 Related Diversification

Quadrant 3

Defensive:
 Retrenchment
 Divestiture
 Liquidation

Quadrant 4

Competitive:
 Market penetration
 Market development
 Product development

48 | P a g e
Space Matrix

FP

Conservative Aggressive

6
5
4
3
2
CP 1
IP

-6 -5 -5 -4 -3 -2 -1 1 2 3 4 5 6
-1
-2
-3
-4

-5

-6

Defensive
Competitiv
e

SP

Y-axis 4.75+ (-2.5) = 2.25

X-axis -2.5+ (4.5) = 2

49 | P a g e
Interpretation:

When we plot data on space matrix the resultant vector lies in Aggressive quadrant. In this
section this matrix suggests backward, forward and horizontal integration for company in
future, market penetration, market development and product development are also suggested
strategies. The company can adopt from these strategies for future growth.

The Boston Consulting Group (BCG) Matrix

The Boston Consulting Group (BCG) Matrix is designed specifically to enhance a

multidimensional firm’s efforts to formulate strategies.

The BCG Matrix graphically portrays difference among divisions in term of relative market
share position and industry growth rate. The BCG matrix allows a multidimensional
organization to manage its portfolio of business by examining the relative market share position
and industry growth rate of each division relative to all other divisions in the organization.
The size of circle corresponds to the proportion of corporate revenue generated by that business
unit, and the pie slice indicates the proportion of corporate profits generated by the business.

It consists of 4 Quadrants:-

Quadrant I (Question Mark):-

Divisions in Quadrant 1 have a low relative market share position, yet they compete in a high-
growth industry. Generally these firms’ cash needs are high and their cash generation is low.
These businesses are called Question Marks because the organization must decide whether to
strengthen them by pursuing an intensive strategy (market penetration, market development or
product development) or to sell them.

Quadrant II (Stars):-
Quadrant II business stars represent the organization’s best long-run opportunities for growth
and profitability. Divisions with a high relative market share and a high industry growth rate
should receive substantial investment to maintain or strengthen their dominant positions.
Forward, Backward and horizontal integration, market penetration, market development, and
product development are appropriate strategies for this quadrant.

Quadrant III (Cash Cows):-

Divisions positioned in Quadrant III have a high relative market share position but compete in a
low-growth industry called Cash Cow because they generate cash in excess of their need.
Product development, diversification, retrenchment or divestitures are the attractive strategies
for this division

50 | P a g e
Quadrant I (Dogs):-
Organization has a low relative market share position and competes in a slow or no market
growth industry. They have weak internal and external position, these business are often
liquidated, divested or trimmed down through retrenchment.

BCG Table

Devision Revenues %Revenues Profit %Profit RMS I.GR.Rate

1. 100m .8 5m .8 15% 5.88%

Note: due to informal sector we are assuming market leader share.

Market Share:-
Our market share: 8%
Market Leader share;. 15%

Relative market share:

= 8/ 15 x 100
= 53.33%
53.33% is relative market share
Industry Growth Rate:-
P2-P1*100
P1

Expected current year sale P2 = 1.8 US Billion$

last year sale P1 = 1.7 US Billion$
1.8 – 1.7 * 100
1.7
= 5.88%

51 | P a g e
BCG Matrix:

Relative Market Share Position

High Medium Low
1.0 .50 0.0
High
+20
Stars Question Marks
Industry II I
sales
growth
rate Medium
0 Cash Cows Dogs
III IV

Low
-20

Interpretation:

In BCG matrix, rice expert enterprise fall with relative market share in quadrant II. They need
to focus market development, penetration, and product development and integration strategies.

52 | P a g e
 Internal-External (IE) Matrix:
The IE matrix is based on two key dimensions: the IFE total weighted scores on the x-axis and
EFE total weighted scores on the y-axis. Recall that each division of an organization should
construct an IFE Matrix and an EFE Matrix for its part of the organization.

The IE matrix can be divided into three major regions that have different strategy implications.

 First, the prescription for divisions that fall into cells I, II or IV can be described as grow
and build. Intensive (market penetration, market development, and product
development) or integrative (backward integration, forward integration, and horizontal
integration) strategies can be most appropriate for these divisions.
 Second, division that fall into cells III, V, VII can be managed best withhold and
maintain strategies; market penetration and product development are two commonly
employed strategies for these types of divisions.
 Third, a common prescription for divisions that fall into cell VI, VIII or IX is harvest or
divest. Retrenchment and divestiture are the attractive strategies for this division.

IE Table

Division Sales %Sales Profit %Profit EFE Score IFE Score

1. 100m .8 5m .5 3.0 2.9

NOTE: Due to informal sector, we assume other market profits and their share.

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 RICE EXPERT ENTERPRISE IFE Score=2.9
RICE EXPERT ENTERPRISE EFE Score=3

Interpretation:
Rice expert enterprise IFE fall in II quadrant and EFE fall between I and iv, it means we should
go toward market development, market penetration, and integration strategies.

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 Grand Strategy Matrix

Interpretation:
space matrix, BCG matrixes suggest that we should go toward integration strategies and market
development, penetration and product development etc.

Strategies:

1. Backward integration
2. Market development
3. Product development

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 QSPM

(1) (2) (3)

Sr.n Key factors WEIGHT AS TAS AS TAS AS TAS

opportunities
1. Population growing by 2.7% 0.15 4 0.6 3 0.45 2 0.3
2. GDP Growth 0.10 3 0.3 3 0.3 3 0.3
3. Technology improvements 0.10 4 0.4 2 0.2 4 0.3
4. Govt subsidies 0.10 3 0.3 4 0.4 1 0.10
5. Exchange rate 0.05 1 0.05 4 0.2 3 0.15
Threats
1. New entrants 0.15 3 0.45 1 0.15 2 0.3
2. Water pollution 0.15 - - - - - -
3. Inflation 0.10 - - - - - -
4. Govt rules 0.05 - - - - -
5. Power shortage 0.05 4 0.2 1 0.05 2 0.1
Strength
1. Financial position 0.15 4 0.6 4 0.6 3 0.45
2. Brand image 0.10 2 0.2 3 0.3 1 0.1
3. Strong buyer and supplier 0.10 - - - - - -
relation
4. Market position 0.10 2 0.2 3 0.3 2 0.2
5. Experienced work force 0.05 3 0.15 4 0.2 3 0.15
Weaknesses
1. Informal way of business 0.10 - - - - - -
2. Existing competitors 0.10 4 0.4 3 0.3 3 0.3
3. Product dependency 0.15 4 0.6 1 0.15 1 0.15
4. Infrastructure 0.15 - - - - - -
5. No formal hiring 0.05 3 0.15 2 0.1 3 0.15
Total =4.6 =3.7 =3.05

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Interpretation:

In grand strategy matrix, 4.6 total attractive score of backward integration tells that this strategy
is better for company. Market development=3.7 and product development=3.05.

2nd step of strategy formulation process

THOMSON AND FRINKLSON 7 QUESTIONS SERIES:

Q.1 What is the Industry’s Dominant Economic Trait?

 Market size and growth rate:

Pakistan rice industry is growing by 5 to 6% per year. Sales of rice 6.7 million ton in last
year, in which 4 million ton rice export to other countries.

 Scope of competitive rivalry:

Completion is moderate which explained in detail portal analysis.

 Number of competitors and their relative sizes:

In rice export industry, many large, medium and small firms are working in Pakistan.

 Capacity utilization and resource requirements:

Pakistan is an agricultural country so there is huge potential for earning.

 Industry profitability:

Pakistan is 4rth largest rice growing country in the world. So there are chances to earn
good profits by exporting quality rice.

Question 2: What Is Competition Like and How Strong Are the Competitive
Forces?
As we discussed earlier detail analysis of porter five forces we come to the following results
which are stated below

• Bargaining power of supplier (toward moderate)

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 • Bargaining power of buyer (high)
• Threat of substitute (High)
• Threat of new entrants (low)
• Rivalry among competing firms (High)

Question3: What Forces Are at Work to Change Industry Conditions?

Entry or exit of major firms:
Yes entry or exit of large firm can give the huge competition or market gap so we should have
information about our competitors and potential competitors.

Changes in cost and efficiency:

Technology brings change in production so we should have information about about new
technology.

Regulatory policies / government legislation:

Now government support agriculture through different ways like loans without interest and
different subsidies.

Environment scanning:
I conduct external analysis at the start of project which score have 3.

Question 4: Which Companies are in Strongest / Weakest Positions?

Group Mapping

High
REE
eengro
KRE

Quality

low
low High
Price

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Interpretation:
According to sir ijaz: in quality and price our firm is at first number, at 2 nd is engro and 3rd is
Karachi city rice exporter.

Question 5: What Strategic Moves Are Rivals Likely to Make Next?

According to sir ijaz: our competitors have their own rice processing mills and technology.
They are moving toward covering more market by personal relationships and marketing
activities. They are going to offer different varieties and prices to customers like grain rice,
baspati rice and super fan etc.

Question 6: What are the Key Factors for Competitive Success?

On what basis do customers choose between competing brands of sellers?

The customers choose on the bases of price and quality of our product. Customers who are
quality conscious should prefer our product which has good position in the market.

What resources and competitive capabilities does a seller need to have to be competitively
successful?
Strong marketing force, strong financials/resources, goodwill of company, right service,
attractive design packages, strong operations, strong customer relations these are the few
strategies which must be adopt by company to gain the competitive edge from their competitors.

What does it take for sellers to achieve a sustainable competitive advantage?

Strong customer relation, maximum resources, good will of company, Advertisement, Fulfill
customer wants on time, services, packing, different verities/prices and quality. These are the
few elements which can achieve a sustainable competitive advantage.

Technology- Development of employees, Innovative machinery

related

Organizational Meet customer’s demand, Ability to manage resources, Managing employees,

capability Competitive advantage, Accountability, Learning.
Organizational Meet customer’s demand, Ability to manage resources, Managing employees,
capability Competitive advantage, Accountability, Learning.

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Question # 7 Is the Industry Attractive or Unattractive and Why?
According to the assumption, if the intensity of all the porter’s five forces is high then the
industry will have low attractiveness or will be unattractive.

According to the porter five forces:

-Bargaining power of supplier (toward moderate)
-Bargaining power of buyer (high)
-Threat of substitute (High)
-Threat of new entrants (low)
-Rivalry among competing firms (High)

According to porter five forces in our industry three forces are on high side one is toward
moderate and one is weak so that’s why our industry is moderate. There is potential due to
different reasons:

Industry’s market size and growth potential?

According to economic indicators: in future rice export industry will grow by 10 to 20%.

Whether competitive conditions are conducive to rising/falling industry profitability?

Yes competitive conditions are conductive to rising/falling industry profitability as we
discussed in the porters five forces our industry profitability is moderate..

Will competitive forces become stronger or weaker?

Yes competitive forces become stronger.

Whether industry will be favorably or unfavorably impacted by driving forces?

Driving forces like Technology, People, Change societal concerns, Life styles & Internet and E-
commerce opportunities have a favorable impact on industry.

Potential for entry/exit of major firms?

Potential for entry of new entrants is low because financial resourses and technology needed at
high level.

Stability/dependability of demand?
Demand will increase in future due to increasing in population. Which is increasing by 2.7 %
per year.

Strategy
After analysis of 7 questions series, yes we can move toward market development, market
penetration, product development and integration strategies.

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 3rd formulation process
Johnson and Scolls Method
Suitability:
We identify 2 basic strategies for rice expert enterprise that it should be implemented as soon as
possible. At the end of external and internal analysis, we have done swot analysis which tells
strength, weaknesses, opportunities and threat to rice expert enterprise. so according to swot
analysis, these strategies are best for the firm.

Feasibility:
Feasibility based on 8M models. I have done interview with sir ijaz: who said: we have
capability to arrange these things:

 Machinery
According sir Ijaz: we will import machinery from china, India and Japan. Its cost will be 2
or 2.5 hundred millions Pakistani rupees.

 Makeup:
We construct at 7 acres our rice processing mill.

 Management:
Our management based on corporate hierarchy level. Means 30 to 40 persons we hired.

 Markets:
In future we will our local market with foreign market. We offers varieties of products.

 Materials:
Materials will be supplied by local farmers.

 Men and women:

we need more than 100 employees who work at bottom level so these will be available
easily.

 Methods:
We use modern technology imported by different countries which help us in arranging and
achieving our goal.

 Money:
we need more than 3 hundred million rupees to adopt that strategy so have money and we
will implement that strategy.

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Acceptability:
Yes there is lot of potential in industry so we can implement these two basic strategies which
mention before that. These strategies shall be acceptable by our current customers and potential
customers. Good profit expected and lot of things that in support of these strategies.

FINAL STRAGIES

Backward integration

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References:
Availability of credit -economic survey of Pakistan.
Inflation - file:///C:/Users/nabeel/Downloads/%E2%80%A2%20Pakistan-
%20Inflation%20rate%202022%20_%20Statistic.html.
GDP- https://tradingeconomics.com/pakistan/gdp.
https://www.brecorder.com/2018/04/27/414437/highlights-of-pakistan-economic-survey-2017-
18/.
Consumption- http://www.agrochart.com/en/news/2833/pakistan-rice-annual-apr-2015.html.
Unemployment rate- https://www.studysols.com.pk/unemployment-rate-in-pakistan-last-10-years/.
Exports- Source: Pakistan Bureau of Statistics.

Taxes and subsidies-

https://r.search.yahoo.com/_ylt=AwrJ7FgbK0RcMIcA8RxXNyoA;_ylu=X3oDMTEyYWQyZWg3B
GNvbG8DYmYxB.

Exchange rate- https://tradingeconomics.com/pakistan/currency

Political-https://businessnewspakistan.com/govt-asked-to-intervene-to-stop-fall-in-rice-
exports/. https://businessnewspakistan.com/president-emphasises-steps-to-enhance-rice-
exports/
Forecast; Source: USDA Foreign agriculture service, Grain Report.
Population- https://www.populationof.net/pakistan/
air pollution- https://www.greenleft.org.au/content/severe-air-pollution-chokes-pakistan.
Water pollution- https://pakobserver.net/water-crisis-in-pakistan/
Waste management- https://www.bioenergyconsult.com/solid-waste-management-in-
pakistan.
Technological- https://www.technologytimes.pk/research-development-budget/
Power energy shortage: http://www.cssforum.com.pk/css-compulsory-subjects/essay/103773-
energy-crisis-hurts-pakistans-economy.html

Labour wage law: https://paycheck.pk/main/salary/minimum-wages/minimum-wage-in-

pakistan-2014)

Lifestyle:(https://tribune.com.pk/story/237791/fit-hai-healthy-living/

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