Strategic Analysis of Shan Foods

Strategic Analysis of Shan Foods
Table of Contents
Chapter No: 1 – Introduction .......................................................................................................... 5
1 Introduction of Project ................................................................................................................. 5
1.1 Introduction to Food Industry of Pakistan ................................................................................ 5
1.1.1 Phases of Food Industry of Pakistan .................................................................................. 6
1.1.2 Key Players of Pakistan Food Industry .............................................................................. 8
1.2 Introduction of Food Spices Industry ..................................................................................... 13
1.2.1 Production Process of Spices Industries .......................................................................... 19
1.3 Introduction of Shan Food Industries ..................................................................................... 21
1.3.1 History of Shan Foods ..................................................................................................... 23
1.3.2 Vision Statement of Shan Food Industries....................................................................... 24
1.3.3 Mission Statement of Shan Food Industries .................................................................... 24
1.3.4 Organizational Hierarchy of Shan Food Industries ......................................................... 25
1.3.5 Business Objectives of Shan Food Industries .................................................................. 25
1.3.6 Product Portfolio of Shan Food Industries....................................................................... 26
Chapter No: 2 – Strategic Analysis ............................................................................................... 29
2. Strategic Analysis ..................................................................................................................... 29
2.1 Tools of Strategic Analysis ................................................................................................. 29
2.2 SWOT Analysis of Shan Food Industries ............................................................................... 52
2.2.1 Strengths .......................................................................................................................... 52
2.2.2 Weaknesses ...................................................................................................................... 53
2.2.3 Opportunities.................................................................................................................... 54
2.2.4 Threats.............................................................................................................................. 56
2.3 Michael Porter’s 5 Forces Model ............................................................................................ 57
2.4 PEST Analysis of Shan Food Industries ................................................................................. 58

2.5 Internal Factor Evaluation of Shan Food Industries ............................................................... 60
2.5.1 Interpretation of Internal Factors Evaluation ................................................................... 61
2.5.2 Interpretation of Total Weighted Score ........................................................................... 64
2.6 External Factor Evaluation of Shan Food Industries .............................................................. 64
2.6.1 Interpretation of External Factors Evaluation .................................................................. 65
2.7 Competitive Profile Matrix of Shan Food Industries .............................................................. 68
2.7.1 Interpretation of Competitive Profile Matrix Factors ...................................................... 69
2.8 Grand Strategy Matrix of Shan Food Industries ..................................................................... 78
2.8.1 Interpretation of Grand Strategy Matrix of Shan Food Industries ................................... 79
2.9 Boston Consulting Group (BCG)Matrix of Shan Food Industries ......................................... 80
2.9.1 Interpretation of Boston Consulting Group Matrix of Shan Food Industries .................. 81
2.10 Internal External Matrix of Shan Food Industries ................................................................ 81
2.10.1 Interpretation of Internal External Matrix of Shan Food Industries .............................. 83
2.11 Strategic Position and Action Evaluation (SPACE) Matrix ................................................. 83
2.11.1 Interpretation of Strategic Planning and Action Evaluation Matrix of Shan Food
Industries ................................................................................................................................... 86
2.12 SWOT Matrix of Shan Food Industries ................................................................................ 86
2.13 Quantitative Strategic Planning Matrix (QSPM) of Shan Foods .......................................... 88
2.13.1 Interpretation of QSPM Matrix of Shan Food Industries .............................................. 91
Chapter No: 3 – Conclusion .......................................................................................................... 92
3.1 Conclusion .............................................................................................................................. 92
3.2 Recommendation .................................................................................................................... 94
(Muhammad Abubakr) Page 2

Table of Figures
Figure 1 - Food Trends in Pakistan ................................................................................................. 6
Figure 2 - Market Share of Engro Foods Limited........................................................................... 9
Figure 3 - Market Share of Mitchells Fruits Farm Limited .......................................................... 10
Figure 4 - Market Share of Nestle Pakistan Limited .................................................................... 11
Figure 5 - Market Share of National Foods .................................................................................. 11
Figure 6 - Market Share of Murree Brewery Company Limited .................................................. 12
Figure 7 - Market Share of Unilever Pakistan Foods Limited ...................................................... 13
Figure 8 - Preference of Food Taste ............................................................................................. 14
Figure 9 - Spices Imports and Exports.......................................................................................... 15
Figure 10 - Estimated Market Share of Spices ............................................................................. 16
Figure 11 - Estimated Market Share of Branded Spices Companies ............................................ 17
Figure 12 - Non-Branded Spice Industry Share ............................................................................ 18
Figure 13 - Production Process of Spices Industry ....................................................................... 19
Figure 14 - Estimated Market Share of Shan Food Industries ...................................................... 23
Figure 15 - Quality and Taste Rating ............................................................................................ 70
Figure 16 - State of Art Technology Ratings ................................................................................ 71
Figure 17 - Brand Loyalty Ratings ............................................................................................... 71
Figure 18 - Online Marketing Ratings .......................................................................................... 72
Figure 19 - Strict Credit Policy Ratings ........................................................................................ 73
Figure 20 - Advertising Campaigns Ratings ................................................................................. 73
Figure 21 - Global Expansion Ratings .......................................................................................... 74
Figure 22 - Increasing Trend of Women's employment in Pakistan ............................................. 75
Figure 23 - Unexploited Segments outside the Country ............................................................... 76
Figure 24 - New Competitors Ratings .......................................................................................... 76
Figure 25 - Change in Government Regulations Ratings ............................................................. 77
Figure 26 - High Rate of Inflation within Pakistan....................................................................... 78

Tables
Table 1 - Spices Imports and Exports ........................................................................................... 15
Table 2 - Classification of Spices Industry of Pakistan ................................................................ 16
Table 3 - Market Share of Branded Spices ................................................................................... 17

Chapter No: 1 – Introduction
1 Introduction of Project
This Project is based on the key player of Spices Industry of Pakistan which is Shan Food
Industries. In this project we have applied different tools of Strategic Analysis through which we
have analyzed Shan Food Industries current internal and external position. Based on Shan Food
Industries current internal and external position we have suggested them different strategies
which will help them in prospering in Food Industry of Pakistan. The recommended strategies
will also help Shan Food Industries in capturing more market share, through this gain they can
even achieve the status of a market leader in Spices Food Industry of Pakistan.
1.1 Introduction to Food Industry of Pakistan

Pakistan the country which is renowned as an agricultural country, contributing its 70%
population to agricultural sector. The remaining 30% population contributes to different sectors,
but within this 30%, 20% belongs to the Food Industry. Pakistan’s current population is
approximately around 216.5 million, out of which 20% are contributing towards food industry in
the form of employment. The other 70% as it is already stated belong to agriculture sector
working as a farmer, fishermen, cattle men, etc.
Pakistan’s culture is made up many cultures mainly due to the invaders that came to Pakistan.
The question arises here, that what does culture has to do with Food. Talking about Pakistan, in
our culture food plays a vital role, in the world we are famous for our traditions and from these
traditions one key role is played by food. People around world are familiar with our food, they
love eating our food due to different taste and spices that we add.
Moving towards the Food Industry of Pakistan, it plays a vital role as it contributes towards the
economy of Pakistan. Pakistan Food Industry is very huge in size and the interesting thing is that
comprises of International Food and Local Food. Going back towards the point that how did
International Food influence Pakistan Food Industry. The answer to this refers towards the
invaders, who came to Pakistan after independence and later on. People of Pakistan as they
prefer eating food and consider it as their basic tradition, they prefer international food or so
called as fast food, but if we go through statistics the results are different. Talking about Local

food it is highly influenced by the Indo-Pak Culture, our taste and the taste of India is almost
same even after 68 years.
Pakistan Food Industry compromises of many International Food Chains and Local restaurants
which are continuously providing quality taste and food to Pakistani people. Pakistan Food
Industry is classified under a major head on Karachi Stock Exchange which is named as “Food &
Personal Care Products”. There are total 20 companies which are listed under this head. People
of Pakistan still prefer Local Food more as compared to Fast Food, According to Google Trend
the comparison between Fast food and Local food for the past 10 years shows the following
result in figure 1 below;
Figure 1 - Food Trends in Pakistan
1.1.1 Phases of Food Industry of Pakistan

The Food Industry of Pakistan revolves around four phases and each phase has its own
importance. The four phases are;
Production
Process
Transportation
Distribution

Production
The first phase of Food Industry is the production phase. In production phase things are
very basic, 70% of Pakistan’s population is involved in the food production. People of
Pakistan living in villages plant seeds to grow plants, fruits, vegetables, etc. The farmers
also grow things that are related to food. People living in villages also grow animals that
are necessarily required for the food industry, as it is the Islamic country only Halal
animals are fed and grown by the farmers.
In the production phase raw material is made, most of the raw material required for the
food industry comes from the villages of Pakistan. People living in the villages consider
this as the only source of income for them. The production of raw material in the villages
is mostly done on farms and ranches.
In Pakistan, production of raw material is done in every village, whether the village is
located in the province of Punjab, Sindh, NWFP, Balochistan and Kyhber Pakhtun
Khawa. Every province has its own specialization depending upon the environment they
are dealing in.
Process
The second phase of Pakistan Food Industry has a lot of importance, this phase is called
as processing phase. In processing phase the raw material like the plants, vegetables or
fruit that have been grown or the animals that have been grown are transformed into
finished form. The finished form that would directly meet the need of consumers or
indirectly through restaurants.
The processing process is not as simple as it looks, it is very complex. For every raw
material produced it has different processing way. If we talk about the plants, fruits and
vegetables it has a different way of processing and if we talk about animals it has
different way of processing.
In Pakistan, the processing of food is either done by the people belonging to villages or it
is one by International Food Chains through their local suppliers. Local suppliers buy
from these villagers and sell them to the International Food Chains for processing.

Transportation
The third phase of Pakistan Food Industry is transportation. Transportation in any
industry has so much importance because it is said that producing the raw material may
not satisfy the consumer until and unless it is not delivered to him, but before delivering
the product it must be transferred near to consumer.
International Food Chains and other local suppliers contact the people who have
produced raw material and ask them to transport it, this is one way of doing it. The other
way is that companies themselves transport raw material or processed raw material to
their warehouses.
Seeing the current trend in Pakistan people they do not transport anything, local suppliers
and International Food Chains have done contracts with them, that they will do the
process of transportation themselves.
Distribution
The fourth phase of Pakistan Food Industry is called as distribution this phase is
interlinked with the third phase names as transportation. The processed raw material is of
no use if not being transported properly or distributed. Once the transportation is done,
which means processed raw material has reached the warehouses, the next thing is to
supply it within market to meet the need of consumers.
Distribution can be done in many ways either it can be provided to the market directly or
it can be provided indirectly.
Going through the overview of Food Industry phases, one thing is clear that it includes everyone
from farmers to the distributors. The important thing is that if one of the phase is not working
properly or is having an issue it may disturb the whole cycle.
1.1.2 Key Players of Pakistan Food Industry

Pakistan Food Industry consists of a lot of contributors, from local companies to International
Companies. All of the contributors are striving hard to provide quality food products to the end
consumers.

We will focus mainly on those contributors which are listed on Karachi Stock Exchange. Some
of the major contributors which are taken from the list are;
Engro Foods Limited

Mitchells Fruits Farm Limited
Nestle Pakistan Limited
National Foods
Murree Brewery Company Limited
Unilever Pakistan Foods Limited
For having a better knowledge about the contributors towards the food industry we must have a
bit of knowledge about each of them.
Engro Foods Limited

Engro Foods is considered as the major contributor due to its diverse offering of
products to the consumers. Engro foods is an owned subsidiary which is involved in
the process of manufacturing, processing and distribution of products, like dairy
products, desserts and drinks. Engro Foods has currently established so many brands
in the market like, Olper, Omore, Tarang and Dairy Omung. Engro Foods Limited
currently holds 71% share of the Food Industry as shown in the figure 2 below;
Figure 2 - Market Share of Engro Foods Limited 1
1
Market Share of Engro Foods Limited according to SMEDA Pakistan Study 2014

Mitchells Fruits Farm Limited

Mitchells Fruits Farm Limited is another company that is considered as a major
contributor towards the Food Industry of Pakistan. Mitchells was established in 1933
and since then its providing numerous number of products to the Pakistani market in
the form of grocery products and confectionary products. Mitchells Fruits Farm
Limited currently offers 140 products subbed under 9 different categories. Mitchells
major products includes, Mitchells Tomato Ketchup, Mitchells Fruit Jams, Mitchells
Pickle (Achar). Mitchells Fruits Farm Limited currently holds 1% share of the Food
Industry as shown in the figure 3 below;
Figure 3 - Market Share of Mitchells Fruits Farm Limited2
Nestle Pakistan Limited

The third contributor towards Food Industry of Pakistan is Nestle Pakistan Limited, a
renowned name which everyone is familiar with. Nestle Pakistan is operating in
Pakistan since 1988 and from then it has offered so many products which have almost
become a need for everyone. Nestle Pakistan main products include Mineral Water,
Dairy Products, Maggie Noodles, Nescafe, etc. All of these products possess high
quality. Currently Nestle Pakistan Limited holds 4% share of the Food Industry as
shown in the figure 4 below;
2
Market Share of Mitchells Fruits Farms Limited according to SMEDA Pakistan Study 2014

Figure 4 - Market Share of Nestle Pakistan Limited 3
National Foods
The fourth contributor towards Food Industry of Pakistan is National Foods. National
Foods began its journey in 1970 and from then on it is progressing. National Foods
offers numerous products but it is mostly recognized due to its spices, jams and
pickles (Achar). Along with these products National foods also offers variety of
products to the Pakistani market like, Ketchup, Rice, Snacks, Salt, Desserts, etc.
Currently National Foods holds 9% share of the Food Industry as shown in the figure
5 below;
Figure 5 - Market Share of National Foods4
3
Market Share of Nestle Pakistan Limited according to SMEDA Pakistan Study 2014

Murree Brewery Company Limited

The fifth contributor towards the Pakistan Food Industry is Murree Brewery
Company Limited, it was established in 1860 and it is recognized as the oldest
serving company to Food Industry of Pakistan. Murree Brewery offers beverages to
the Pakistani market, it provides wide variety of beers, liquor and non-alcoholic
beers. Murree Brewery is recognized mostly due to Malt drink of different flavors and
juices. Currently Murree Brewery holds 2% share of the Food Industry as shown in
the figure 6 below;
Figure 6 - Market Share of Murree Brewery Company Limited 5
Unilever Pakistan Foods Limited

The Fifth and the last contributor discussed of Pakistan Foods Industry is Unilever
Pakistan Foods Limited. Unilever is ranked as the world largest supplier of Fast
Moving Consumer Goods (FMCG’s). Unilever Pakistan Foods Limited was
established in 2007 when it acquired Rafhan Best Foods Limited. Unilever in the
section of Food provides a numerous number of products to the Pakistani market, but
its main offerings are Energile, Knor, Rafhan Custards, etc. Currently Unilever
Pakistan Foods Limited holds 1% share of the Food Industry as shown in the figure 7
below;
4
Market Share of National Foods Limited according to SMEDA Pakistan Study 2014
5
Market Share of Murree Brewery Company Limited according to SMEDA Pakistan Study 2014

Figure 7 - Market Share of Unilever Pakistan Foods Limited 6
1.2 Introduction of Food Spices Industry

Pakistani Food is famous for its taste around the world, due to the addition of special spices,
which enhance the taste of food mostly making it spicy. The Food Industry all over the world
represents a small niche, named as spices. Spices now-a-days have a lot of importance due to
changes in the trends. People around the world and especially in Pakistan prefer more spicy
Foods.
The Spices not just only make the food spicy but it also takes the food cuisine to a new level.
According to Gilani Research Foundation as shown in Figure 8 below, 27% people living in
Pakistan prefer eating spicy foods, 23% people prefer eating non-spicy foods and remaining 50%
people of Pakistan were neutral on this matter.
6
Market Share of Unilever Pakistan Foods Limited according to SMEDA Pakistan Study 2014

Figure 8 - Preference of Food Taste7
Spices all over the world are made through a wide range of plants, these plants include herbs,
spices seeds, dehydrated vegetables and spice blends. According to an American Research
Institute related to Spices, it quoted that “Spices are considered as dry plants which are now-a-
days used mostly for the seasoning purpose”.
In Pakistan spices are used for enlightening the taste of traditional cuisine. The Food spices
industry of Pakistan is categorized in two dimensions, branded and non-branded industry.
Branded Spice Industry means that industry in which the spices sold are branded and they do
come under a company or a brand, whereas unbranded spice industry means the industry in
which the spices are openly sold in packets, there is no name means no affiliation or no
recognition.
In Pakistan, According to Small and Medium Enterprise Development Authority (SMEDA)

currently there are 8,500 spices and salt grinding units that are working. The figure of 8,500 have
grown over years, in 2010 the unit’s operating in Pakistan were almost 7,000.
Out of 8,500 units, 55% spices and salt grinding units are operating in rural areas of Pakistan
whereas the rest 45% of belong to the urban areas. Interestingly, as the technology is being
7
Preference of Food Taste according to Gilani Research Foundation

modernized around the world and in Pakistan, like newly equipped operating units are being
imported from the world. It is helping the Spices Industry towards growth and even the trend
which was first towards the rural areas is shifting towards urban areas.
The Spices Industry of Pakistan not only contributes towards the local market but it also
contributes towards Pakistan Economy in the form of Imports and Exports. Even though spices
are considered as a small portion of imports and exports but the numbers are increasing as years
are passing. According to State Bank of Pakistan, following are the figures of Import and Export
of Spices shown in table 1;
Table 1 - Spices Imports and Exports8
Spices Spices
Year Exports (in Imports (in
Thousand Thousand
US$Dollar) US$Dollar)
2010 26,582 78,414
2011 36,203 69,208
2012 36,718 74,403
2013 44,537 65,550
2014 63,771 79,489
Figure 9 - Spices Imports and Exports
8
Spices Imports and Exports Data according to State Bank Of Pakistan Publication

According to Small and Medium Enterprises Development Authority (SMEDA), statistics

related to Branded Spices Industry and Non-Branded Spices Industry are shown in table 2;
Table 2 - Classification of Spices Industry of Pakistan
Spices Business Estimated

Volume Market Share
Branded and Packed Rs. 14 Billion 45%
Non-Branded (Loose Spices) Rs 16-18 Billion 55%
Figure 10 - Estimated Market Share of Spices9
Pakistan’s Branded and Packed Industry currently holds 45% of Spice Industry, of this 45% the
major portion is achieved through the urban areas. Urban areas where people prefer more
towards the buying of packed spices rather than loose spices.
In the Branded industry there are some major players which are recognized by the market, they
are;
National Foods
Shan Foods
Mehran Foods
Along with them there are even other players which are considered as second priority by the
people of Pakistan, the players are;
9
Estimated Market Share of Spices according to SMEDA Pakistan

Chef’s Pride
Habib Foods
Zaiqa Foods
Ahmed Foods
The above mentioned names are those names which may be found in the market most often.
Moving towards their prices the branded spices are expensive than the loose spices, they are 30%
more expensive.
The Market share of these major players in Pakistan Branded Industry of Spices are shown
below in Table 3;
Table 3 - Market Share of Branded Spices10
Brands National Shaan Mehran Other

Foods Foods Foods
Market 45% 40% 10% 5%
Share
Figure 11 - Estimated Market Share of Branded Spices Companies
National Foods is currently leading the market with a share of 45% as shown above in Figure 11,
this is related to the branded and packed spice industry. National Foods is operating in Pakistan
since 1970. It has created a lot of brand loyalty in spices industry by providing its customers with
10
Market Share of Branded Spices according to SMEDA Pakistan

high class and hygienic taste. National Foods was mainly responsible for changing the trend,
they changed the mind of consumers that packed spices are much better as compared to Loose
Spices.
Mehran Foods is another name in the branded spices industry which is operating since 1975.
Mehran Foods currently has a market share of 15% and it is growing. The reason behind their
growth is the taste which they have been providing to their customers, Mehran Foods has also
created their brand loyalty which considered as very important in the field of spices.
The Major players of the branded industry are even operating at International level, they have
created repute of Pakistan Spice Industry all over the world by providing quality taste
Pakistan’s Unbranded Spice Industry or in other words industry of Loose Spices currently holds
55% share, which is greater than the Branded Spice Industry. According to Small and Medium
Enterprises Development Authority (SMEDA) in 2011 the market share of Loose Spices was
60% whereas in 2014 it has decreased to 55% as shown in figure 12 below. This change shows
that Loose Spices industry in Pakistan is decreasing.
Figure 12 - Non-Branded Spice Industry Share
Loose Spices Industry is the industry which does not have any kind of affiliation with major
brands. Spices in this industry are independently sold by businessmen. To work in this industry
you do not need to have any kind of documentation and this was the main reason behind the

progress of loose spices, but later on due to changes by Government in their regulations the trend
started decreasing. Along with this reason another major reason is the taste and brand loyalty
which is being created by major players of branded industry.
These Non-branded or Loose spices companies or individuals setup were and are involved in
unethical practices. These setups prefer earning profits instead of providing quality taste, even
though their prices are low as compared to the Branded Industry. For Non-Branded Spices
Industry low prices is an edge but in the recent time period they have to fail to capitalize on this
edge.
1.2.1 Production Process of Spices Industries

Spices are not produced as easy as it looks, the complete process goes through very complex
phases. One thing important to be considered before going towards the process is that spices
which have been planted must not be harvested before their maturity time, maturity time is
known as the time when plant of spice is ready to be harvested. The Production Process of Spices
industry revolves around 7 Phases, which are shown in Figure 13 below;
Cleaning
Drying
Grading
Grinding
Packaging
Distribution
Figure 13 - Production Process of Spices Industry

Cleaning
The Planted Spices when harvested at their maturity, the first step is to clean the
harvested plants and this process is known as cleaning. In cleaning process, farmers
carefully clean the plants from particles like dust, insects and stones. Farmers either clean
them manually or through machinery. In manual cleaning the other method is to clean
planted spices by dipping them into water for 2 to 3 hours. In this method one thing must
be considered that water must be changed every time to prevent recontamination. Using
machinery is not even a bad idea but sometimes the plants harvested are not cleaned
properly due to which mostly manual cleaning is preferred.
Drying
Once the harvested spices are cleaned properly the next phase which has the same
amount of importance like cleaning is called as drying. The Harvested plants or spices
when cleaned they are left to be dried either in the open air or machineries are used to dry
them. Drying the crops has so much importance that if they are not dried properly it may
result in loss, the harvest plant may be sold at 50% less than its original value. Harvested
Spices if dried properly may lead towards much better taste. Drying the spices gets
different when the season is dry and once the season is wet. In dry season as the amount
of moisture is less the crops are dried under sun, whereas when the season is wet the
plants are dried using artificial dryers.
Grading
The third process of spices production is related to grading, grading is mostly done where
machineries are equipped for the process of cleaning and drying. Grading is done
automatically by the machineries. Grading basically means to grade spice on the basis of
their taste, size, color and shape.
Grading is even done where there are no machineries but doing it manually it takes a lot
of time.
Grinding

Grinding is the fourth process which comes after cleaning, drying and grading. Once
grading is done and spices are categorized they move towards grinding. Grinding means
to crush spices or plants into small particles.
Grinding is either done manually or by machineries which are being used. The interesting
fact is that grinding depends on market requirements, if the market wants spices in dried
form then no grinding is done. The setup where machineries are used for grinding require
a huge place where there is proper room for ventilation to avoid spices from getting wet.
Packaging
Once everything is done, next process is to pack spices either in the raw form or in
powder for. Packaging of spices is not easy it looks, it requires proper attention. Mainly
three aspects are considered while packing spices, they are;
Type of Spice
Humidity of Storage
Raw Form or Powder
Every spice has its own kind of nature and taste, so for maintaining their taste it must be
determined that which will be packed in which kind of box or packet. Not only the type
but humidity of storage is also considered, more the humidity more it will affect the taste
of spices. So during the phase of packing much more importance is required.
Distribution
The spices whether in raw form or powder form once packed they need to be distributed
to fulfil the needs of market. Spices are either directly made available in market by local
suppliers or either indirectly through renowned suppliers.
1.3 Introduction of Shan Food Industries

Shan Food Industries a pioneer in the food industry of Pakistan. It is a well renowned company
not only in Pakistan but outside Pakistan, across the boundaries Shan Food Industries is known
for the quality and taste it has been providing since its establishment.

Shan Food Industries is a Private Limited Company that was established in 1981 by Sikander
Sultan. Since 1981, it has been providing products of exceptional quality and even after so many
years it is mainly recognized due to its spice, it has created so much brand loyalty within the
market of Pakistan that whenever the word spices are used people start referring towards Shan
Food Industries. The story of Shan Food Industries not only ends in Pakistan but you may even
hear their name across the boundaries. People living outside Pakistan know Shan Foods
Industries due to their spices but in Pakistan the story is bit different. It is recognized not only
due to spices but also due to other offerings which it is has been offering.
Shan Food Industries main operation center in Pakistan is located over the area of 100,000 sq. ft.
The Machineries which are equipped in Shan Foods are imported from countries like United
States and United Kingdom, due to which they are fully equipped giving Shan Food Industries an
advantage of State of Art Technology. As Shan Food Industries main aim is to provide Food of
highest quality they have set up different laboratories which are used for testing and analyzing
each product.
Shan Food Industries is currently operating in 60 countries outside Pakistan, major countries
where Shan Foods is recognized as a brand are, United Kingdom, United States, Middle East and
Far East Regions. Shan Food Industries is a brand that is exporting its products outside the
country and it is helping Pakistan’s Economy. Shan Food Industries offers a numerous number
of products to the market around the world it offers 70 different types of spices and 70 types of
mixed and ready recipes, its main offerings include pickles, spices, easy to cook mixes, etc. Shan
Food Industries as it comes under the Branded Spices Industry it currently hold 40% share right
after the Market leader National Foods as shown in Figure 14 below;

Figure 14 - Estimated Market Share of Shan Food Industries
Shan Food Industries during these 34 years have achieved many awards which have increased
their brand reputation, this was all due to the quality taste which they have provided and are still
providing within Pakistan and outside Pakistan. Some of the major achievements of Shan Food
Industries are;
2003-2004: Exports Performance Award, KCCI

2003-2004: Best Export Performance Award, FPCCI
2004-2005: Best Merit Performance Award, FPCCI
2005-2006: Best Export Performance Award. FPCCI
2010-2011: The Superior Taste Award, iTQi
1.3.1 History of Shan Foods

A company 34 years ago which was hardly known started its operations in a single room is
called as Shan Food Industries. Shan Food Industries was established in 1981 by an individual
named as Sikandar Sultan, he is currently the CEO and owner of the company.
The Journey of Shan Food Industries started in a room which belonged to Sikandar Sultan
himself. He carried the operations himself at the beginning and his main focus remained on the

masalas. Sikandar Sultan wanted to provide masalas in the Pakistani Market but as it was a
unknown brand he was only able to provide it to his close relatives, family friends and other
known people. Later as some months passed unknown people started contacting him for masalas
and this was the point which pushed Sikandar Sultan and Shan Food Industries towards proper
operations. The servant quarter which was available at his residence was used for the first time to
produce masalas to fulfil needs of other customers, this time period is considered as the time
when proper production started.
The Journey from single room to servant quarter almost took 1 year and from servant quarter to a
multinational company it almost took 25 years. Sikandar Sultan during this period faced many
difficulties but the taste which he was providing led him towards growth.
Shan Food Industries took around 2 years to establish itself as a brand in Pakistani Market. In
1983, Shan Food Industries was officially marketed in Pakistan. As Shan Food Industries grew in
these 2 years, Sikander Sultan in 1984 decided to export its products outside Pakistan and the
result was more than he expected, Shan Foods Industries got immense success outside Pakistan
due to quality taste which it provided.
Overall, the journey from a single room has reached to 400+distributors within Pakistan and 80+
distributors across 60 countries.
1.3.2 Vision Statement of Shan Food Industries

Shan Food Industries vision11 is;
“To be a market leader in Food Industry of the world by providing quality standards and
to be a socially responsible company that stands for traditions”
1.3.3 Mission Statement of Shan Food Industries

Shan Food Industries mission12 is;
“To strive hard to meet the customer and market needs by providing those superior
products enriched with taste. To be a company which gives consumers a lot of importance
11
According to Shan Food Industries website “www.shanfoods.com”
12
According to Shan Food Industries website “www.shanfoods.com”

by giving those superior products which are produced using state of art technology and this
technology will help them in achieving desired results. To be a company which motivates its
human resources by allowing them to participate to achieve the goals”
1.3.4 Organizational Hierarchy of Shan Food Industries
Managing
Director
CEO
General Marketing and

Sales
Manager Exports
Director GM Sales Office

Director GM Director GM
(Production) Manager
BM (Plain
Director GM Regional Sales Regional Sales Regional Sales Regional Sales
Spices, Instant
(Procurement) Manager Manager Manager Manager
Food)
Territory Sales Territory Sales Territory Sales Territory Sales Category

Manager Manager Manager Manager Owners
Category
Owners
Category
Owners
1.3.5 Business Objectives of Shan Food Industries

Shan Food Industries as it is a major Food company in Pakistan it has certain business objectives
which it have been fulfilling.
Shan Food Industries give utmost importance towards the client and customer interaction they
have made certain practices which revolve around this. Along with this Shan Food Industries has
also influenced on the practices in which suppliers are treated equally from best of raw material
is purchased.
Shan Food Industries also aims to provide the best quality of food products to the market
whether it is local or international market by using the latest technology which it has been using
in every phase. Shan Foods believe that enriched taste will help them in capturing market by

building brand loyalty. Shan Food Industries will also try to build the trust of customers on their
products by guaranteeing them hygienic products that are secure from harmful ingredients.
Shan Food Industries will also consider the overall food market of Pakistan and will keep on
competing with its competitors like National Foods, Mehran Foods, Shezan Foods, etc.
1.3.6 Product Portfolio of Shan Food Industries

34 years ago, a business which was started in a single room and was just providing basic masalas
to the market of Pakistan. Over the time main reason behind its growth is the products offering
which kept on increasing as time passed. Shan Food Industries within 34 years have created a
huge portfolio of products. All of the products which are offered by Shan Food Industries are of
extreme quality and taste.
The increase in the portfolio of Shan Food Industries over years was mainly due to its research
and development. Shan Food Industries owner Sikander Sultan had a belief that having a unique
and complete brand portfolio will lead towards success and he was right, Shan Food Industries
has achieved everything due to its portfolio.
Back in 1990’s when Shan Food Industries was just recognized as a spices brand, the research
and development team led by Sikander Sultan started going through different markets and they
realized that Shan Food Industries must come with more products so that it could be recognized
as a Food brand instead of Spices brand. New products which were introduced at that time made
their mission of becoming food brand successful. Shan Food Industries success was mainly due
to the research and development team but there was another reason, Shan Food Industries
whenever introduced a new product in market before that they use to take the product to
laboratories for testing and if the results were approved by laboratory then only it would be
launched.
After a journey of 34 years it is currently offering a numerous number of food products in the
market whether it is Pakistan or outside Pakistan. Shan Food Industries portfolio consists mainly
of spices, pickles, easy to cook mixes (recipe mix), dessert mixes, basmati rice and salt. Shan
Food Industries product portfolio consists of;
Recipe Mix
 Biryani Mixes

 Stir Fried Foods

 Curry Spice Mixes
 Deep Fried Foods
 Barbeque
 Vegetarian Foods
 Instant Foods
 Breakfast
Plain Spices
 Khushbudaar Lehsan
 Zaiqedaar Adrak
 Khatta Khatai
 Qasuri Methi
 Karara Zeera
 Taiz Laal Mirch
 Taaza Dhaniya
 Zaafrani Garam Masala
 Teekhi Kaali Mirch
 Khaalis Haldee
Dessert Mixes
Basmati Rice
Pickles
Salts
Seeing at the product portfolio of Shan Food Industries, one thing is clear that Shan Food
Industries is offering a numerous numbers of products in any section of Food. Shan Food
Industries currently has 70 different types of spices and 70 different types of recipe mix in the
market. Products offered by Shan Food Industries also reflects that it is for every occasion and
for every type of Taste. Within the portfolio of Shan Food Industries the oldest offering is the
spices whereas these recipe mix, basmati rice, pickles and others were introduced later and that is
why Shan Food Industries is still known by the name of Spices. Due to this reason Shan Food
Industries have put their complete efforts towards the spices products.


Chapter No: 2 – Strategic Analysis
2. Strategic Analysis
Strategic analysis is a very broad term that is being done by companies or we can it is research, a
research which is conducted by the company to analyze its internal environment and external
environment. The overview companies get from strategic analysis help them in selecting a
strategy for their business. Strategic Analysis is mostly used by companies when they prefer
bringing a change in their organization, change in organization will lead towards change in goals
and if goals change the strategy to achieve goals will also change. So, Strategic analysis play a
vital role in determining strategies for new goals which have been set.
2.1 Tools of Strategic Analysis

For Conducting Strategic Analysis there are many tools which can be opted by a company to
analyze its internal and external environment and to select a strategy which may best fit in. The
tools which are used are;
PEST Analysis
SWOT Analysis
Michael Porter’s Five Forces Model
Internal Factor Evaluation
External Factor Evaluation
Competitive Profile Matrix
Strategic Planning and Action Evaluation Matrix
Quantitative Strategic Planning Matrix
Boston Consulting Group (BCG) Matrix
SWOT Analysis
Strengths, Weaknesses, Opportunities, Threats Analysis is also referred as SWOT Matrix it is a

tool that is used by companies for strategic analysis. SWOT Matrix is used by companies when
they want to conduct strategic audit, a company conducting their strategic audit must necessarily
prepare or conduct SWOT Matrix. SWOT Matrix is used by companies to create different
strategies which they can adopt. Strategies in SWOT matrix are made on the basis of;

Strengths
Weaknesses
Opportunities
Threats
Every company has certain strengths, weakness, opportunities and threats and these are used to
make strategies which may help the company in achieving what it wants. Making strategies by
combining internal and external factors is considered as the most difficult part and all the
strategies are based on judgments, so to make strategies judgements must be realistic.
In SWOT matrix as it is already mentioned that strategies are made by combining internal and
external factors, so possibly there are 4 strategies which can be made they are;
S-O Strategies
W-O Strategies
S-T Strategies
W-T Strategies
The first strategy which could be made is called as S-O strategies, S stands for strengths and O
stands for opportunities. In this the company uses its internal strengths to capitalize on external
opportunities. The second strategy which could be made is called as W-O strategies, W stands
for weaknesses and O stands for opportunities. In this the company tries to improve its internal
weaknesses by capitalizing on the external opportunities which are present. The third strategy
which could be made is called as S-T strategies, S stands for strengths and T stands for threats. In
this the company uses its internal strengths to lower down the external threats which are being
faced. The fourth strategy which could be made is called as W-T strategies, W stands for
weaknesses and T stands for threats. In this the company tries to reduce down its internal
weaknesses and along with that it also tries to reduce down external threats.
Internal Factor Evaluation (IFE)
Internal Factor Evaluation even referred as IFE is a tool that is used by companies for strategic
analysis. Internal Factor Evaluation is used by companies when they want to conduct strategic

audit, a company conducting their strategic audit must necessarily prepare or conduct internal
factor evaluation. Internal Factor Evaluation also plays a vital role in determining or deciding
strategies that the company will adopt for its success.
In Internal Factor Evaluation the company by using their strengths and weaknesses evaluate their
current internal position. The company preparing or conducting its internal factor evaluation uses
realistic judgments for assigning weights and rating. In Internal Factor Evaluation as it is already
discussed that there are two necessary factors which must be considered, they are;
Strengths
Weakness
Strengths and weaknesses are the internal factors of company which are determined through
SWOT. Strengths and Weaknesses which are found through SWOT are carried towards IFE
matrix for evaluation. Once strengths and weaknesses are brought to IFE matrix, the nest step is
to assign weights and ratings which may help in getting the final score. In IFE matrix, weights
which are assigned are on basis of the industry. In actual it means that strengths and weaknesses
which company has determined that how much importance it has in industry. For Example,
ABC company determines Financial backup as their strength, whereas in the industry the
company currently working does not give importance to financial backup, So, it won’t be
assigned a high weight. Weight which are assigned within the strengths and weaknesses must
have a total of “1” it must neither be lower nor higher.
After weights are assigned on the basis of industry, next step is to rate the factors which
company has listed in its IFE matrix. Rating of factor is done in judgements, but these
judgements must be realistic. The rating of factors is done on the basis of company’s own
perception, it means that how well company is dealing with the listed strengths and weaknesses.
Rating of listed factors is done between 1 to 4. Rating is interpreted as;
Rating Interpretation
1 Low (Major Weakness)
2 Average (Minor Weakness)

3 Above Average (Minor Strength)

4 Excellent (Major Strength)
Weights and ratings once assigned by company, next step is to calculate the weighted average
score. For calculating weighted average score multiply each factor’s weight with their assigned
ratings. Hence, it clearly sums up that weight and ratings are necessary for internal factor
evaluation. The calculations once done, then you have to add up the column of weighted average
score to get the final score. Final score may vary company to company or within the company
because it is prepared on judgmental basis. The Final score of IFE matrix is interpreted as;
Final Score Interpretation

4 Strong
2.51 – 3.5 Above Average
2.5 Average
1.5 – 2.49 Below Average
1 Weak
External Factor Evaluation (EFE)
External Factor Evaluation even referred as EFE is a tool that is used by companies for strategic
analysis. External Factor Evaluation is used by companies when they want to conduct strategic
audit, a company conducting their strategic audit must necessarily prepare or conduct external
factor evaluation. External Factor Evaluation also plays a vital role in determining or deciding
strategies that the company will adopt for its success.
In External Factor Evaluation the company by using their opportunities and threats evaluate their
current external position. The company preparing or conducting its external factor evaluation
uses realistic judgments for assigning weights and rating. In External Factor Evaluation as it is
already discussed that there are two necessary factors which must be considered, they are;
Opportunities
Threats

Opportunities and Threats are the external factors of company which are determined through
SWOT. Opportunities and Threats which are found through SWOT are carried towards EFE
matrix for evaluation. Once Opportunities and threats are brought to EFE matrix, the next step is
to assign weights and ratings which may help in getting the final score. In EFE matrix, weights
which are assigned are on basis of the industry. In actual it means that opportunities and threats
which company has determined that how much importance it has in industry. Weight which are
assigned within the opportunities and threats must have a total of “1” it must neither be lower
nor higher.
After weights are assigned on the basis of industry, next step is to rate the factors which
company has listed in its EFE matrix. Rating of factor is done in judgements, but these
judgements must be realistic. The rating of factors is done on the basis of company’s own
perception, it means that how well company is dealing with the listed opportunities and threats.
Rating of listed factors is done between 1 to 4. Rating is interpreted as;
ratings. Hence, it clearly sums up that weight and ratings are necessary for external factor
evaluation. The calculations once done, then you have to add up the column of weighted average
because it is prepared on judgmental basis. The Final score of EFE matrix is interpreted as;

4 Strong


2.5 Average
1 Weak
Competitive Profile Matrix (CPM)
Competitive Profile Matrix even referred as CPM is a tool that is used by companies for strategic
analysis. Competitive Profile Matrix is used by companies when they want to conduct strategic
audit, a company conducting their strategic audit must necessarily prepare or conduct
Competitive Profile Matrix. In Competitive Profile matrix basically a comparison is done with
the competitors, that currently where the company stands and where the competitors are
standing, whether it is internal position or external position. Competitive Profile Matrix also
plays a vital role in determining or deciding strategies that the company will adopt for its
success.
In Competitive Profile Matrix the company by using their strengths, weaknesses, opportunities
and threats compare themselves with their competitors or with the industry they are currently
working. Competitive Profile Matrix majorly helps the companies in determining that what are
the strengths and weakness of the industry they are currently working in. The company
preparing or conducting its competitive profile matrix uses realistic judgments for assigning
weights and rating. In Competitive Profile Matrix as it is already discussed that there are four
necessary factors which must be considered, they are;
Strengths
Weaknesses
Opportunities
Threats
The First step to make CPM is to identify the companies with which comparison is going to be
done, once the companies are selected next step is to extract their strengths, weakness,
opportunities and threats.

Strengths, weaknesses, opportunities and threats of every company are identified through their
SWOT analysis. The Strengths, weaknesses, opportunities and threats which are found through
SWOT are carried towards Competitive Profile Matrix for evaluation. Once the identified and
selected factors are brought to Competitive Profile Matrix, the next step is to assign weights and
ratings which may help in getting each company’s final score. In CPM matrix, weights which are
assigned are on basis of the industry. In actual it means that factors which have been determined
how much importance they do have in the industry. Weight which are assigned within the factors
must have a total of “1” it must neither be lower nor higher. Remember, for every company the
weights will be same, it means that every company included in CPM will show the same
weights.
After weights are assigned on the basis of industry, next step is to rate the factors which are
listed in CPM. Rating of factor is done on judgements, but these judgements must be realistic.
The rating of factors is done on the basis of company’s own perception, it means that how well
company is dealing with the listed factors. Rating of listed factors is done between 1 to 4 and it is
interpreted as;
ratings. Hence, it clearly sums up that weight and ratings are necessary for competitive profile
matrix. The calculations once done, then you have to add up the column of weighted average
because it is prepared on judgmental basis. The Final score of CPM matrix is interpreted as;


4 Strong
2.5 Average
1 Weak
Boston Consulting Group (BCG) Matrix
Boston Consulting Group even referred as BCG Matrix is a tool that is used by companies for
strategic analysis. Boston Consulting Group Matrix is used by companies when they want to
conduct strategic audit, a company conducting their strategic audit must necessarily prepare or
conduct Boston Consulting Group. Boston Consulting Group matrix is used by companies to
identify the standing of their products currently in market, through this matrix we try to see the
actual position of products. Boston Consulting Group Matrix actually manages portfolio of
products which company has.
In Boston Consulting Group Matrix there are two dimension on which the complete matrix is
based, they are;
Industrial Growth
Relative Market Share Pattern
Industrial Growth is also called as I.G, industrial growth is used in BCG to determine that the
industry to which company belongs how it is working, and industrial growth can be either in
positive or negative, positive means high growth and negative means low growth. The formula
used to calculate Industrial Growth is;

The second dimension of Boston Consulting Matrix is relative market share pattern even referred
as RMSP. In BCG relative market share pattern is used to identify the market share company
has, along with that RMSP also gives information about the current market leader who has high
percentage of market share. Market Share can either be high or low depending on the product
and its progress. The formula used to calculate Relative Market Share Pattern is;
Boston Consulting Group Matrix is basically used by companies to determine strategies for their
product according the quadrant to which it belongs. In Boston Consulting Group Matrix there are
four quadrants, which are;
Stars
Cash Cows
Question Marks
Dogs
The first quadrant is known as Stars in which the market share of company or its product is high
and the industry to which it belongs is growing positively, it means the industrial growth is high.
Company products belonging to this quadrant generate more revenues and later on when they
become mature they shift to Cash Cows. There are some strategies which are suggested in this
quadrant which a company can adopt, the strategies are;
Market Penetration
Market Development
Product Development
Backward Integration
Forward Integration
The second quadrant is known as Cash Cows in which the market share of company or its
product is high and the industry to which it belongs is growing negatively, it means the industrial
growth is low. Company or its products falling in this quadrant are at maturity level. Most
companies generating revenues from their products falling in cash cows use it to invest in other

products. There are some strategies which are suggested in this quadrant which a company can
adopt, the strategies are;
Product Development
Diversification
Retrenchment
Divestiture
The third quadrant is known as Question Marks in which the market share of a company or its
product is low and the industry to which it belongs is growing positively, it means the industrial
growth is high. Company when introduces their products in the market it mostly falls in this
quadrant, because there is no idea that what will be the progress of product in market. There are
some strategies which are suggested in this quadrant which a company can adopt, the strategies
are;
Market Penetration
Market Development
Product Development
Divestiture
The fourth quadrant is known as Dogs in which the market share of a company or its products is
low and the industry to which it belongs is growing negatively, it means the industrial growth is
low. Company or its products falling in this quadrant are at declining phase, this quadrant is rated
as the worst position and that is why it is suggested to companies to dispose of their business
unit. There are some strategies which are suggested in this quadrant which a company can adopt,
the strategies are;
Retrenchment
Divestiture
Liquidation

Strategic Planning and Action Evaluation (SPACE) Matrix
Strategic Position and Action Evaluation Matrix even referred as SPACE Matrix is a tool that is
used by companies for strategic analysis. Strategic Position and Action Evaluation Matrix is used
by companies when they want to conduct strategic audit, a company conducting their strategic
audit must necessarily prepare or conduct Strategic Position and Action Evaluation Matrix.
SPACE matrix helps the company in determining and adopting strategies based on which
dimension it falls. In Strategic Position and Action Evaluation Matrix a company basically tries
to examine its position through four dimensions, which are;
Financial Position
Competitive Position
Industrial Position
Stability Position/ Economic Stability
The above mentioned for dimensions play a very vital role in determining the company that
which strategy it should select. Financial Position and Competitive Position are company’s
internal dimension, all data relating to financial position and competitive position is gathered
internally. Financial Position determines the current financial standing of company, that how
financially it is strong. Data relating to financial position is gathered directly from the accounts
of company. Competitive Position determines company’s overall competitive advantages, any
company having any competitive advantage will use it to see its current standing in the market
competition wise. Competitive advantage provides an edge to company over its competitors, data
regarding competitive advantage is mostly gathered from strengths of company. The two
remaining dimensions, Industrial Position or Stability Position are company’s external
dimensions. In Industrial position factors regarding industry are considered, industry in which
the company is currently operating. Whereas Stability Position even referred as Economic
Stability determines the overall environment in which the company is working, mostly in this
dimension stability is checked of the environment.
In Strategic Position and Action Evaluation Matrix on Y-axis two dimensions are mentioned and
on X-axis also two dimension are mentioned. On Y-axis at top Financial Position is mentioned
and at bottom Stability Position is mentioned, whereas on X-axis at right Industrial Position is
mentioned and on left Competitive position is mentioned. For preparing Strategic Position and

Action Evaluation Matrix different factors are taken into consideration for every dimension,
factors should be related to the dimension. Once factors are determined we give them rating
according to their importance. Rating in Strategic Position and Action Evaluation Matrix is bit
different, we rate Financial Position, Industrial Position, Competitive Position and Stability
Position in the following way;
Dimension Rating Interpretation

Financial Position Maximum +6 +6 means excellent
Minimum +1 +1 means bad
Stability Position Maximum -1 -1 means excellent
Minimum -6 -6 means bad
Competitive Position Maximum -1 -1 means excellent
Minimum -6 -6 means bad
Industrial Position Maximum +6 +6 means excellent
Minimum +1 +1 means bad
Once factors have been rated we add these ratings and then we divide it with the number of
factors that are taken, remember calculation is done for every dimension to get a final score for
the dimension. After getting the final score of each dimension we put them into the following
given formula;
X axis = I.P + C.P

Y axis = F.P + S.P
The score which is calculated through this formula is carried forward to be plotted in Strategic
Position and Action Evaluation Matrix.
In Strategic Position and Action Evaluation Matrix along with 4 dimensions there are 4
quadrants. Every quadrant in Strategic Position and Action Evaluation Matrix has its own value
and every quadrant also suggests different strategies which a company may adopt after
calculations. The four quadrants are;
Aggressive

Conservative
Defensive
Competitive
Quadrant I is called as Aggressive quadrant, in this quadrant the company falls in Financial
Position and Industrial Position. There are some strategies which are suggested in this quadrant
which a company can adopt, the strategies are;
Market Penetration
Market Development
Product Development
Related Diversification or Unrelated Diversification
Forward Integration
Quadrant II is called as Conservative quadrant, in this quadrant the company falls in Financial
Position and Competitive Position. There are some strategies which are suggested in this
quadrant which a company can adopt, the strategies are;
Market Penetration
Market Development
Product Development
Related Diversification
Quadrant III is called as Defensive quadrant, in this quadrant the company falls in Competitive
Position and Stability Position. There are some strategies which are suggested in this quadrant
Retrenchment
Divestiture
Liquidation
Quadrant IV is called as Competitive quadrant, in this quadrant the company falls in Stability
Position and Industrial Position. There are some strategies which are suggested in this quadrant

Market Penetration
Market Development
Product Development
Forward Integration
Quantitative Strategic Planning Matrix (QSPM)
Qualitative Strategic Planning Matrix is also referred as QSPM it is a tool that is used by
companies for strategic analysis. QSPM is used by companies when they want to reach on a final
conclusion of strategic audit, a company conducting their strategic audit must necessarily prepare
or conduct QSPM at end. QSPM Matrix is used by companies to select the best strategy which
they could adopt for future progress. QSPM is the last and final stage of strategic audit which is
prepared by the help of following;
Internal Factor Evaluation

External Factor Evaluation
Grand Strategy Matrix
SPACE Matrix
Internal External Matrix
BCG Matrix
SWOT Matrix
From the start to end strategic audit goes through different processes which helps in gaining
information about competitors, industry especially about the company itself. The above
mentioned play a vital role in developing QSPM because a company has already made different
strategies which it can adopt to prosper, but to reach on a conclusion only one strategy must be
determined and QSPM helps in doing that by evaluating. In evaluation process of strategies
different factors from following are taken into consideration;
Strengths
Weaknesses
Opportunities

Threats
Once the identified and selected factors are brought to QSPM, the next step is to assign weights
and ratings which may help in getting each strategy’s final score. In QSPM matrix, weights
which are assigned are on basis of the industry it can be either taken from IFE or EFE. In actual
it means that factors which have been determined how much importance they do have in the
industry. Weights which are assigned within the factors of strengths and weakness must have a
total of “1” and weights which are assigned within the factors of opportunities and threats must
have a total of “1” it must neither be lower nor higher, hence the total weight of all factors
should be “2”. Remember, for every strategy the weights will be same.
After weights are assigned on the basis of industry, next step is to assign attractiveness score to
the factors which are listed in strategies. Assigning of Attractiveness score of factor is done on
judgements, but these judgements must be realistic. The assigning of attractiveness score to
factors is done on the basis that what effect they will have on the strategy. Rating of listed factors
is done between 1 to 4 and it is interpreted as;
1 Not Attractive
2 Somewhat Attractive
3 Reasonably Attractive
4 Highly Attractive
Weights and attractiveness score once assigned by company, next step is to calculate the total
attractiveness score. For calculating total attractiveness score multiply each factor’s weight with
their assigned attractiveness score. The calculations once done, then you have to add up the
column of total attractiveness score to get the final score. Final score may vary strategy to
strategy because it is prepared on judgmental basis. Strategy with higher score will be opted as
the best strategy for company.

Grand Strategy Matrix
Grand Strategy Matrix is a tool that is used by companies for strategic analysis. Grand Strategy
Matrix is used by companies when they want to conduct strategic audit, a company conducting
their strategic audit must necessarily prepare or conduct Grand Strategy Matrix. In Grand
Strategy Matrix a company basically tries to examine its position through two dimensions, they
are;
Competitive Position
Market Growth
Along with that Grand Strategy matrix also plays a vital role in determining or deciding
strategies that the company will adopt for its success. In Grand Strategy first dimension which is
mentioned above as is Competitive Position. Competitive Positions is related to company’s
industry in which it is currently working, or we can say what competitive edge other companies
have who are working in same industry. Every company has one or more than one factor which
gives it a competitive edge on other companies. Well, this was just the competitive edge which
may provide a company a stronger position in the market. Competitive position is also referred
as how much amount of competition is there in the industry. Competitive position may be either
stronger or it may be weak depending on industry it’s currently working in. In Grand Strategy
matrix competitive position is mentioned on the X-axis. The second dimension which is
considered in Grand strategy matrix is market growth it is shown on Y-Axis. Market growth by
name reflects that how well market is working, how much the market is growing it could be
either rapid growth or slow growth. Rapid growth means that the market is currently growing
and it has much more opportunities for entrance, whereas in slow market growth the industry is
at declining phase, there are no opportunities for new entrants which may help them in earning
their targeted goals. Plotting of this matrix is done with the help of Competitive Profile Matrix
and Market growth, if market growth is above 5% it means that there is a rapid growth in market.
In Space matrix there are 4 quadrants and every quadrant has its own importance. The four
quadrants are shown below;

In the above figure Quadrants of Grand Strategy Matrix are shown. Quadrant I is also known as
an aggressive quadrant, any company based on its calculations if falling in this quadrant they
should adopt aggressive strategies for future. In this quadrant the market growth is rapid and the
competitve position of company is strong. Company falling in Quadrant I due to rapid market
growth and strong competitive position should keep on capitalizing on its competitive edge. In
this quadrant there are four aggressive strategies which a company can adopt, these strategies
are;
Market Penetration
Market Development
Product Development
Market penetration is a strategy that is mostly used to capture market share in the market or
which others have, penetration is done by a company when it cuts down its profit. Remember if a
company is leading in the market it won’t prefer penetration, it will go for market development.
Market Development means that the company starts moving towards those markets in which it

has no existence. Sometimes a company rather than adopting market development it selects
product development. Product development means that company looks after its products and
tries to bring a change in them which may attract customers towards it. The fourth and final
aggressive strategy which a firm can adopt is related diversification, it means that a company
starts making products of similar nature but bit different.
Quadrant II is also known as conservative quadrant, any company based on its calculations if
falling in this quadrant they should adopt conservative strategies for future. In this quadrant the
market growth is rapid and the competitve position of company is weak. Company falling in
Quadrant II due to rapid market growth and weak competitive position should try figure out a
way which would lead them to a competitive edge, they should make such strategies which help
them to gain competitive edge because the market in which they are working is growing rapidly.
Hence, the problem is with their own product. Most often companies are not able to gain a
competitve edge so it is better for them sell of a business unit instead of a whole business. In this
quadrant there are five strategies which a company can adopt, these strategies are;
Market Penetration
Market Development
Product Development
Diversification
Liquidation
tries to bring a change in them which may attract customers towards it. The fourth strategy which
can be opted in this quadrant is diversification, diversification has two types;
Related diversification
Unrelated diversification

Related diversification means that a company starts making products of similar nature but bit
different, whereas in unrelated diversification the company shifts towards different nature of
product. The last strategy which a company can adopt in this quadrant is Liquidation. A
company when continuously facing losses from their business and they feel that they will not be
able to generate anything from the business they completely dispose of the business owned, this
strategy is called as Liquidation.
Quadrant III is also known as defensive quadrant, any company based on its calculations if
falling in this quadrant they should adopt defensive strategies for future. In this quadrant the
market growth is weak and the competitve position of company is weak. Company falling in
Quadrant III due to weak market growth and weak competitive position should try figure out a
way which would help them in sustaining themselves in the market, it could either be done by
reducing cost or by adopting the strategy of diversification. Companies if they are not able to
sustain themselves in the market they should either dispose of their business unit or they should
completely sell their business. In this quadrant there are five strategies which a company can
adopt, these strategies are;
Retrenchment
Divestiture
Liquidation
Unrelated Diversification
Retrenchment is a strategy which is mostly adopted by companies who belong to this quadrant,
mainly preferred by those which have the potential to prosper in the market. In this strategy
company chooses to cuts its cost be reducing down its operations. Sometimes if a company feels
that there business unit is not generating them any return or profit then prefer to sell that unit,
this strategy is called as Divestiture. Whereas if a company is continuously facing losses from
their business and they feel that they will not be able to generate anything from the business they
completely dispose of the business owned, this strategy is called as Liquidation. The fourth
strategy which can be opted in this quadrant is related diversification, related diversification
means that a company starts making products of similar nature but bit different. The fifth and

final strategy which a company can adopt in this quadrant is unrelated diversification, in
unrelated diversification the company shifts towards different nature of product.
Quadrant IV is also known as competitive quadrant, any company based on its calculations if
falling in this quadrant they should adopt competitve strategies for future. In this quadrant the
market growth is weak and the competitve position of company is strong. Company falling in
Quadrant IV due to weak market growth and strong competitive position should try diversify
themselves in other markets because of the resources they do have, it just due to market which
restricts them. Companies belonging to this quadrant do have a competitive edge but they are not
able to capitalize on it. In this quadrant there are five strategies which a company can adopt,
these strategies are;
Unrelated Diversification
Joint Venture
Related diversification is a strategy in which a company starts making other products of similar
nature but bit different. Whereas unrelated diversification is a strategy in which a company shifts
towards different nature of product.
Internal-External (IE) Matrix
Internal External Matrix even referred as IE matrix is a tool that is used by companies for
strategic analysis. Internal External Matrix is used by companies while they are conducting their
strategic audit, a company that conducts its strategic audit must necessarily conduct Internal
External matrix.
Internal External matrix consists of 9 cells which are described in roman numbers, each cell has
its own importance. Internal External matrix is made up with the help of two tools they are;
Internal Factor Evaluation Matrix

External Factor Evaluation Matrix
Internal factor evaluation is the internal analysis of the company that how well it is dealing with
its strengths and weaknesses. Whereas External factor evaluation is the external analysis of the

environment in which company is working. In external factor evaluation opportunities and

threats are taken into consideration. These two matrixes IFE and EFE have their own final score,
also called as total weighted score. This total weighted score helps the company in making IE
matrix and through plotting it helps the company to know to which quadrant it currently belongs.
Before going towards the quadrants, one thing is important to know that there is a little bit of
similarity between IE matrix and Balance Scorecard.
In Internal External matrix as already told that there are 9 divisions or cells which are;
Division I
Division II
Division III
Division IV
Division V
Division VI
Division VII
Division VIII
These 9 divisions which are mentioned above are further grouped into 3 quadrants. The three
quadrants are;
Quadrant (I, II, IV)

Quadrant (III, V, VII)
Quadrant (VI, VIII, IX)
The first quadrant (I, II, IV) is named as grow and build. This quadrant is considered as the
strongest quadrant, any company falling in this quadrant is at its peak because internally and
externally it is performing well. Grow and build mean that the company should select those
strategies which help in growing in market, which moves the company towards more success. In
this quadrant there are many strategies which a company can choose to grow and build, the
strategies belonging to this division are;
Market Penetration
Market Development
Product Development

Integration
Diversification
tries to bring a change in them which may attract customers towards it.
In this quadrant the other strategy which a company can adopt is integration, Integration is of
two types;
Forward Integration
Forward integration means that the company buys its distributors, whereas in backward
integration the company buys their suppliers or we can say company buys their supply chain.
The last strategy which can be opted in this quadrant is diversification, diversification has two
types;
Related diversification
Unrelated diversification
Related diversification means that a company starts making products of similar nature but bit
different, whereas in unrelated diversification the company shifts towards different nature of
product.
The second quadrant (III, V, VII) is named as Hold and Maintain. This quadrant is rated
averagely, any company falling in this quadrant is considered that it is performing on average
whether it is externally or internally. Hold and maintain means that company should keep on
selling its products in the market and along with that it should find out a way which may help in
maintain its market share. The main thing about this quadrant is that mostly when a product
becomes mature it starts falling in this quadrant, so it should just be maintained by the company

properly. In this quadrant there are two strategies which a company can choose to hold and
maintain, the two strategies are;
Product Development
Market Penetration
Market Penetration is mostly preferred in this quadrant because it helps the company in maintain
itself in the market. Sometimes if a company is falling in this quadrant but their product is not
achieving them what they want then they go for product development. Product development
means that company looks after its products and tries to bring a change in them which may
attract customers towards it.
The third quadrant (VI, VIII, IX ) is named as Harvest and Divest. This quadrant is rated as the
worst quadrant, any company falling in this quadrant is considered that it is not able to perform
well internally or externally. Harvest and Divest means either to completely shut down a
business or it means to sell of the business or a business part. Harvest basically means to increase
company profitability whereas divest means to sell the market share which a company has. In
this quadrant there are three strategies which a company can choose to harvest and divest, the
three strategies are;
Retrenchment
Divestiture
Liquidation
Retrenchment is a strategy which is mostly adopted by companies who belong to this quadrant,
mainly preferred by those which have the potential to prosper in the market. In this strategy
company chooses to cuts its cost be reducing down its operations. Sometimes if a company feels
that there business unit is not generating them any return or profit then prefer to sell that unit,
this strategy is called as Divestiture. Whereas if a company is continuously facing losses from
their business and they feel that they will not be able to generate anything from the business they
completely dispose of the business owned, this strategy is called as Liquidation.

2.2 SWOT Analysis of Shan Food Industries

The SWOT Analysis of Shan Food Industries is as shown below;
2.2.1 Strengths
According to our analysis on Shan Food Industries we have found out the internal strengths,
which are;
Quality and Taste

The main strength is quality and taste, which they have been providing from 25 years
within Pakistan and outside Pakistan. Shan Food Industries as it belongs to Food sector, it
is necessary for them to provide taste and quality to the consumers they dealing with and
this is not just till Shan Foods, throughout the industry Quality and Taste is a basic
necessity to survive.
Financial Backup
Shan Food Industries a Private Limited Company and has enough finance to survive in
the market. In Pakistan Food industry financial backup is necessarily required for future
progress and expansion.
State of Art Technology

Every industry for it progress requires latest technology mostly in the form of machinery.
Shan Food Industries as it is operating within and outside Pakistan, it has to meet up the
standards of technology for future progress and it is currently equipped with latest
machinery which help them in going through different phases of production.
Brand Loyalty
Every company dealing in any industry pays a lot of importance in creating Brand
Loyalty. It is not so easy to create Brand Loyalty, it requires several years of dedication.

Shan Food Industries as its operating from the past 25 years it has created a lot of brand
loyalty within and outside Pakistan.
Strong Relationship with Farmers and Suppliers

Shan Foods as it belongs to food industry it has to buy raw material from local suppliers
or from farmers directly, so it is necessary for them to maintain strong relationships with
their suppliers and farmers. Through their 25 years Shan Foods has established strong
relations with their suppliers and farmers and that is why they are progressing in the
market.
Customer Relationship Management

Customer Relationship Management, in Food Industry it is necessary for every company
to deal with customers in a proper way by providing them what they need at exact time
and at reasonable price. Shan Food Industries has established proper management which
deals with their customers in a proper way and hence allows them in building relations
with their customers.
Research and Development Team

Research and Development now a days play a very important in the company whether for
it progress or anything, they look after every aspect. Shan Foods industries has
established a proper department that take cares of research and development and it is
considered as their main strength because through this department they identify the
changes in market.
2.2.2 Weaknesses
According to our analysis on Shan Food Industries we have found out the internal weaknesses,
which are;
Weak Distribution in Markets of Punjab

Shan Food Industry started its operation in the Sindh region and even after 25 years it has
a strong hold in Sindh region, despite this Shan Foods established good relations

throughout Pakistan and other world, but currently their main weakness is distribution in
markets of Punjab. Shan Food Industries distribution channel in Punjab is weak as
compared to Sindh and that is why they are currently ranked second in Spices Industry of
Pakistan.
Online Marketing
Now a days in every business e-marketing plays a very vital role towards progress,
whereas if we look towards Shan Foods it currently does not has proper existence on
internet world.
Strict Credit Policy

Business belonging to any industry now a days deal with more credit as compared to
cash, but sometimes the credit policy may affect the company in both ways. Shan Foods
credit policy is strict throughout their existence and this is considered as their weakness
because sometimes companies have to deal in credit if there is no cash and it may even
lead towards the disturbance in relationship of Farmers and suppliers.
Weak Marketing Communication in Punjab

Shan Food Industries as such it has not established itself properly in the areas of Punjab
and along with most of the promotional activities are carried in Sindh, so that is why it
considered as a weaknesses for them.
2.2.3 Opportunities
According to our analysis on Shan Food Industries we have found out the external opportunities,
which are;
Increasing Trend of Women’s Employment in Pakistan

In Pakistan, years ago women was not preferred to leave her house premises for working
but as time has passed the trend has also changed. Women in Pakistan are allowed to
work now a days and due to this they don’t have enough time to cook food in a traditional

way, so they prefer ready to cook spices which will help them in saving their time and
also help them in preparing traditional food.
Availability of Finest Quality of Raw Material

In Spice industry as it is detailed that raw material must be of highest quality for better
taste. From recent years Pakistan itself has started producing raw material of finest
quality for the spices industry, whereas this is considered as an opportunity for Shan
Foods because Shan Foods as it believes in providing finest taste and quality it prefers
high quality of raw material so instead of importing it from other countries it can buy it
locally from those suppliers and farmers which provide finest quality.
Global Expansion
Businesses now a days instead of working in their own boundaries they try to target
markets that exist across the boundaries, it even refers towards globalization or global
expansion. Shan Foods is currently operating in many countries across Pakistan but still
there are some countries which are not targeted by them, hence giving them the
opportunity to expand globally.
Increasing Trend of Branded Spices in Pakistan

Few years back people living in the urban areas and rural areas used to prefer unbranded
or open spices which were easily available at every small store at every corner, other
reason was that these spices used to cost less as compared to branded spices, but in 2 to 3
years which have passed the trend completely shifted towards the branded spices. The
main reason behind an increase in this trend was due to Government strict policies which
were taken, along with that open or unbranded spices were causing health problems to
people to rural and urban areas. Shan Foods as it belongs to branded industry of spices it
has a huge opportunity in Pakistan, it can capture this opportunity which may lead them
towards growth
Unexploited Segments outside the Country

Shan Foods has already established it brand name outside the country but there are
certain Asian segments which they haven’t reached yet, for example; Asian community
living in Germany are not able to access Shan Foods Spices and Ready to Cook recipes.
This is the story of one Asian community belonging to a country but in reality there are
many other unexploited Asian segments where there is immense need.
2.2.4 Threats
According to our analysis on Shan Food Industries we have found out the external threats, which
are;
New Competitors
In Pakistan, there are two sectors of food industry one is branded industry and the other
one non branded industry. So, Shan Foods has a direct threat from both the sectors
whether it is dealing in spices or in ready to cook recipes or others. Other important
aspect is that as spice industry of Pakistan is growing it attracts more competition.
Government Regulations
Government in any country plays a vital role in the development or downfall of any
industry. In Pakistan, from some years the Government has revised its policies but the
reality is that it has not created a big impact on branded industry only non-branded is
being affected.
Un-Branded Spices
Despite the changes in government regulations and the increasing trend towards branded
spices, un-branded spices still remain as a major threat to Shan Foods because these Un-
branded spices are cheaper in rates as compared to branded spices to which Shan Food
belongs.
High Rate of Inflation in Pakistan

Pakistan as it is not economically stable the inflation rate keeps on fluctuating, mostly the
inflation rate in Pakistan high and if inflation rate is high the buying power of consumer

decreases hence they will start switching towards un-branded spices which are cheaper in
rates as compared to branded spice.
2.3 Michael Porter’s 5 Forces Model

For evaluating Porter’s Five Forces Model on Shan Food Industries, we will discuss about the
following;
Bargaining Power of Suppliers

Bargaining Power of Customers
Threat of New Entrants
Threat of Substitute Product
Rivalry among Existing Competitors
Bargaining Power of Suppliers

Bargaining Power of suppliers within this industry is low, because as there are so many
suppliers who are providing food related products especially spices and ready to cook
products in Pakistani Market.
Bargaining Power of Customers

Bargaining Power of Customers within this is industry is high, because there so many option
which are available to customers in this market. In other words it means there are huge
number of suppliers in the same line of industry. Customers as they have high bargaining
power they will easily switch over to another product if prices are increased.
Threat of New Entrants

In spices industry of Pakistan to which Shan Food Industries belongs the threat of new
entrants has two dimensions. The first dimension is the branded spices industry, in branded
spices industry to which Shan Food Industries belongs there is as such no threat of new

entrants but considering the second dimension which is unbranded industry. Players which
are coming as new entrants in unbranded industry can become a threat to Shan Food
Industries.
Threat of Substitute Product

Shan Food Industries got recognition due the spices which it is providing in the market and
as such spices do not have substitute in Pakistan, so Shan Food Industries does not have a
threat of substitute product. Whereas if see company wise then there are substitutes to Shan
Food Industries.
Rivalry among Existing Competitors

The Rivalry among existing competitors in this industry which is spices industry is very high
especially between the market leader which is National Foods and catching firm which is
Shan Food Industries. The other players in the industry also force Shan Food Industries
towards more competition.
2.4 PEST Analysis of Shan Food Industries

For evaluating Shan Food Industries in PEST analysis we will be going through the following
factors;
Political
Economic
Social
Technology
Political
Political analysis of the industry to which Shan Food Industries belong reveals that as such
there is no pressure on the companies which are working in Industry. Existing branded

companies or any new entrants in the industry have to just follow the Companies Ordinance
1984. Government of Pakistan has not put any kind of legal restriction on Branded industry,
but if we see the dimension of Un-branded industry government has certainly imposed some
legal restrictions on them, so that their market share would decrease. The Government has
not imposed any restrictions on exports and imports of spices especially, but it is preferred to
export more than import. Overall if we see the political analysis of Shan Food Industries we
will find that there is no threat to Shan Foods because it comes under the head of Branded
industry, but the Government is forcing them to provide superior taste and quality.
Economic
Considering the economic condition of Pakistan, currently its trend is shifting towards
growth after the economic meltdown which was hit in Pakistan. The Economic Growth of
Pakistan is slow but if we see the growth of Food Industry it is rapidly growing, especially
the spices sector. Branded sector of spices industry over the past has rapidly grown and it has
laid its bases not only in Pakistan but also outside Pakistan. Economic growth has been great
but currently there is a major economic issue which food industry is facing and that is Food
Inflation. Food Inflation in general term means increase in prices over a period of time. In
Pakistan as such there are no bodies which look after the issue of food inflation. Hence, the
prices keep on fluctuating but due to buying power the prices do not go at an extreme level.
Social
Food plays a very vital role in the Culture of Pakistan, it is considered as a very important
tradition. People living in Pakistan prefer food products which provide superior quality and
taste and this is the reason due to which trends have shifted from unbranded spices industry
to branded spices industry. Socially Pakistani people due to education have got so much
awareness that companies belonging to food industry have to come with innovative and
creative ideas instead of old marketing traditions to attract more customers towards them.
Technology
Technology in any industry plays a very vital role. In modern era technology that too latest is
considered as a basic. Pakistan Food Industry from the past few years have started using

proper technology which has become a major cause in time saving and cost reducing.
Considering the Food Industry of Pakistan technology not only has helped the industry but it
also has created problems for the new entrants, because industry requires technology and
technology requires huge capital investment which sometimes becomes a problem for the
new entrants. Currently companies having State of Art of technology do have a competitive
edge on others.
2.5 Internal Factor Evaluation of Shan Food Industries

For evaluating Shan Food Industries internally we have found out strengths and weaknesses
which belong to the company. Factors which are considered during internal evaluation of Shan
Food Industries are;
 Strengths
Quality and Taste

Financial Backup
Brand Loyalty
Strong Relationship with suppliers and farmers
Customer Relationship Management
 Weaknesses
Weak Distribution in markets of Punjab

Online Marketing
Weak Marketing Communications within the markets of Punjab

Weak Advertising campaigns
Factors Weight Rating Weighted Average

(Weight x Rating)
Strengths
Quality and Taste 0.1 4 0.4
Financial Backup 0.1 3 0.3
State of Art Technology 0.1 4 0.4
Brand Loyalty 0.1 4 0.4
Strong Relationship with Suppliers and 0.05 2 0.1
Farmers
Customer Relationship Management 0.05 2 0.1
Research and Development Team 0.15 4 0.6
Weakness
Weak Distribution in markets of 0.1 3 0.3
Punjab
Online Marketing 0.05 2 0.1
Strict Credit Policy 0.05 2 0.1
Weak Marketing Communication 0.1 4 0.4
within the markets of Punjab
Weak Advertising campaigns 0.05 3 0.15
1 3.35
2.5.1 Interpretation of Internal Factors Evaluation

In the above internal factor evaluation matrix we have taken 7 strengths and 5 weaknesses of
Shan Food Industries. These strengths and weaknesses have been extracted from their current
situation. Talking firstly about strengths, each strength has been assigned weight according to its
importance in the industry and then it has been assigned rating according to the way company is
dealing with it.
On our Analysis of Shan food industries we found out that their main strength is quality and
taste, which they have been providing from 25 years within Pakistan and outside Pakistan. Shan

Food Industries as it belongs to Food sector, it is necessary for them to provide taste and quality
to the consumers they dealing with and this is not just till Shan Foods, throughout the industry
Quality and Taste is a basic necessity to survive. For quality and taste we have assigned 4 to
Shan foods considering their taste and quality. The second strength mentioned is financial
backup, Shan Food Industries is a Private Limited Company and has enough finance to survive
in the market. In Pakistan Food industry financial backup is necessarily required for future
progress and expansion. We have assigned 3 as a rating to Shan Foods for financial backup
because of the reason that they are Private Limited Company. The third strength mentioned is
State of Art Technology, every industry for it progress requires latest technology mostly in the
form of machinery. Shan Food Industries as it is operating within and outside Pakistan, it has to
meet up the standards of technology for future progress. We have assigned 4 to Shan Food
Industries for State of Art Technology by keeping in mind their latest technology equipment’s.
The fourth strength mentioned above is Brand Loyalty, every company dealing in any industry
pays a lot of importance in creating Brand Loyalty. It is not so easy to create Brand Loyalty, it
requires several years of dedication. Shan Food Industries as its operating from the past 25 years
it has created a lot of brand loyalty within and outside Pakistan. We have assigned 4 as a rating
to Shan Foods for their brand loyalty by considering their current situation in the market. The
fifth strength mentioned above is Strong Relationship with Farmers and Suppliers. Shan Foods as
it belongs to food industry it has to buy raw material from local suppliers or from farmers
directly, so it is necessary for them to maintain strong relationships with their suppliers and
farmers. Through their 25 years Shan Foods has established strong relations with their suppliers
and farmers and that is why we have rated them with 2. The sixth strength mentioned above is
Customer Relationship Management, in Food Industry it is necessary for every company to deal
with customers in a proper way by providing them what they need at exact time and at
reasonable price. Shan Food Industries has established proper management which deals with
their customers in a proper way and hence allows them in building relations with their customers.
We have assigned 2 to Shan Foods for their customer relationship management by keeping their
current situation in mind. The Seventh strength that has been mentioned is Research and
Development team, Research and Development now a days play a very important in the
company whether for it progress or anything, they look after every aspect. Shan Foods industries
has established a proper department that take cares of research and development and it is

considered as their main strength because through this department they identify the changes in
market. We have assigned 4 as a rating to Shan Foods for Research and Development team.
The second part of the IFE matrix given above details about the weaknesses that are being
related with Shan Food Industries. The first weakness mentioned is Weak distribution in markets
of Punjab, Shan Food Industry started its operation in the Sindh region and even after 25 years it
has a strong hold in Sindh region, despite this Shan Foods established good relations throughout
Pakistan and other world, but currently their main weakness is distribution in markets of Punjab.
Shan Food Industries distribution channel in Punjab is weak as compared to Sindh and that is
why they are currently ranked second in Spices Industry of Pakistan. We have assigned 3 as the
rating to Shan Foods for Weak distribution in Punjab because they have established certain
strategies which are looking after their distribution process. The Second weakness mentioned is
online marketing. Now a days in every business e-marketing plays a very vital role towards
progress, whereas if we look towards Shan Foods it currently does not has proper existence on
internet world. We have assigned 2 as a rating to Shan Foods for Online marketing by keeping
their current situation in mind. The third weakness which has been mentioned is strict credit
policy. Business belonging to any industry now a days deal with more credit as compared to
cash, but sometimes the credit policy may affect the company in both ways. Shan Foods credit
policy is strict throughout their existence and this is considered as their weakness because
sometimes companies have to deal in credit if there is no cash. We have assigned 2 as a rating to
Shan foods for their strict credit policy. Fourth weakness which has been mentioned is weak
marketing communication within Punjab. This weakness is some of related with the 2nd
weakness which has been mentioned above. We have assigned 4 as rating to Shan Foods on this
weakness because they have established certain strategies which are helping them in covering up
their deficiency. Fifth and the last weakness that has been mentioned is weak advertising
campaigns. Advertising campaigns play a very vital role in the success of a company because it
helps to attract the customers, Shan Foods till the last year had no proper marketing strategies
regarding advertising campaigns but in the current year they have worked a lot on this weakness,
but it still stays as a weakness for them. We have assigned 4 as rating to Shan Foods for this
factor because of their current advertising campaigns which are attracting customers towards
them.

2.5.2 Interpretation of Total Weighted Score

The Total weighted score which we got by assigning weights and ratings to each factor is 3.35, it
means Shan Foods falls in above average category. This score shows that Shan Foods is
efficiently capitalizing on their strengths by trying to minimize their weaknesses to an acceptable
level.
2.6 External Factor Evaluation of Shan Food Industries

For evaluating Shan Food Industries externally we have found out opportunities and threats
which belong to the company. Factors which are considered during external evaluation of Shan
Food Industries are;
 Opportunities
Increasing trend of women’s employment in Pakistan

Availability of Finest quality of Raw Material in Pakistan
Global Expansion
Increasing trend of branded spices in Pakistani market
Unexploited Segments outside the country
 Threats
Exchange Rates
New Competitors
Changes in Government Regulations
Unbranded spices
High rate of inflation within Pakistan

Factors Weight Rating Weighted Average

(Weight x Rating)
Opportunities
Increasing trend of women’s 0.15 4 0.6
employment in Pakistan
Availability of Finest quality of Raw 0.1 3 0.3
Material in Pakistan
Global Expansion 0.15 3 0.45
Increasing trend of branded spices in 0.1 4 0.4
Pakistani market
Unexploited Asian Segments outside 0.1 2 0.2
the country
Threats
Exchange Rates 0.05 2 0.1
New Competitors 0.1 3 0.3
Change in Government Regulations 0.05 2 0.1
Unbranded Spices 0.15 3 0.45
High Rate of Inflation within Pakistan 0.05 2 0.1
1 3
2.6.1 Interpretation of External Factors Evaluation

In the above external factor evaluation matrix we have taken 5 opportunities and 5 threats of
Shan Food Industries. These opportunities and threats have been extracted from their current
situation. Talking firstly about opportunities, each strength has been assigned weight according
to its importance in the industry and then it has been assigned rating according to the way
company is dealing with it.
On our Analysis of Shan food industries we found out that their main opportunity is the
increasing trend of women’s employment in Pakistan. In Pakistan, years ago women was not
preferred to leave her house premises for working but as time has passed the trend has also
changed. Women in Pakistan are allowed to work now a days and due to this they don’t have

enough time to cook food in a traditional way, so they prefer ready to cook spices which will
help them in saving their time and also help them in preparing traditional food. Shan Foods along
with providing spices it also provides Pakistani market with ready to cook recipes which helps
them in capturing these working women’s. So, we have assigned 4 as a rating to Shan Food on
this opportunity. The second opportunity mentioned is availability of finest quality of raw
material. In Spice industry as it is detailed that raw material must be of highest quality for better
taste. From recent years Pakistan itself has started producing raw material of finest quality for the
spices industry, whereas this is considered as an opportunity for Shan Foods because Shan Foods
as it believes in providing finest taste and quality it prefers high quality of raw material so
instead of importing it from other countries it can buy it locally from those suppliers and farmers
which provide finest quality. We have assigned 3 as a rating to Shan Foods on this opportunity
because they have made strategies which are efficiently capitalizing on this opportunity. Third
opportunity which has been mentioned is Global expansion. Businesses now a days instead of
working in their own boundaries they try to target markets that exist across the boundaries, it
even refers towards globalization or global expansion. Shan Foods is currently operating in many
countries across Pakistan but still there are some countries which are not targeted by them, hence
giving them the opportunity to expand globally. We have assigned 3 as a rating to Shan Foods on
this opportunity because they are continuously trying to expand themselves in other countries.
The Fourth opportunity that is mentioned is increasing trend of branded spices in Pakistan. Few
years back people living in the urban areas and rural areas used to prefer unbranded or open
spices which were easily available at every small store at every corner, other reason was that
these spices used to cost less as compared to branded spices, but in 2 to 3 years which have
passed the trend completely shifted towards the branded spices. The main reason behind an
increase in this trend was due to Government strict policies which were taken, along with that
open or unbranded spices were causing health problems to people to rural and urban areas. Shan
Foods as it belongs to branded industry of spices it has a huge opportunity in Pakistan, it can
capture this opportunity which may lead them towards growth. We have assigned 4 to Shan
Foods on this opportunity because they are working continuously on this opportunity. The Fifth
opportunity which has been mentioned is unexploited Asian segments outside the country. Shan
Foods has already established it brand name outside the country but there are certain Asian
segments which they haven’t reached yet, for example; Asian community living in Germany are

not able to access Shan Foods Spices and Ready to Cook recipes. This is the story of one Asian
community belonging to a country but in reality there are many other unexploited Asian
segments where there is immense need. We have assigned 2 as a rating to Shan Foods for this
opportunity because currently they are not focusing on these Asian segments around the world.
The second part of the EFE matrix given above details about the threats that are related to Shan
Food Industries. The first threat that has been mentioned is new competitors. In Pakistan, there
are two sectors of food industry one is branded industry and the other one non branded industry.
So, Shan Foods has a direct threat from both the sectors whether it is dealing in spices or in ready
to cook recipes or others. Other important aspect is that as spice industry of Pakistan is growing
it attracts more competition. We have assigned 2 as rating for Shan Foods on this threat because
Shan Foods is directly not paying any attention towards it. The second threats that has been
mentioned is change in government regulations. Government in any country plays a vital role in
the development or downfall of any industry. In Pakistan, from some years the Government has
revised its policies but the reality is that it has not created a big impact on branded industry only
non-branded is being affected. We have assigned 2 as rating to Shan Foods on this threat
depending on their current strategies. The third threat which has been mentioned is Un-branded
spices. Despite the changes in government regulations and the increasing trend towards branded
spices, un-branded spices still remain as a major threat to Shan Foods because these Un-branded
spices are cheaper in rates as compared to branded spices to which Shan Food belongs. We have
assigned 3 as rating to Shan Foods for this threat. The fourth threat which have been mentioned
is High rate of inflation in Pakistan. Pakistan as it is not economically stable the inflation rate
keeps on fluctuating, mostly the inflation rate in Pakistan high and if inflation rate is high the
buying power of consumer decreases hence they will start switching towards un-branded spices
which are cheaper in rates as compared to branded spice. We have assigned 2 as rating to Shan
Foods for this threat by keeping in the current situation of Pakistan and strategies which Shan
Foods has developed.

The Total weighted score which we got by assigning weights and ratings to each factor is 3, it
means Shan Foods falls in above average category. This score shows that Shan Foods is

efficiently capitalizing on their opportunities and along with that they are responding well
towards threats.
2.7 Competitive Profile Matrix of Shan Food Industries

For evaluating Shan Food Industries with its competitors we have found out different factors.
Factors which are considered during competitive profile matrix are;
Quality and Taste

Brand Loyalty
Online Marketing
Marketing Campaigns
Global Expansion
Unexploited segments outside the country
New Competitors
Change in Government Regulations
Rate of Inflation
Shan Food Industries National Foods Unbranded Spice

Companies
Factors Weight Rating Weighted Weight Rating Weighted Weight Rating Weighted
Average Average Average
(Weight x (Weight x (Weight
Rating) Rating) x Rating)
Quality and 0.15 3 0.3 0.15 4 0.4 0.15 2 0.2
Taste

State of Art 0.1 4 0.4 0.1 4 0.4 0.1 2 0.2

Technology
Brand Loyalty 0.15 4 0.6 0.15 4 0.6 0.15 2 0.3
Online 0.05 2 0.1 0.05 3 0.15 0.05 1 0.05
Marketing
Strict Credit 0.05 2 0.1 0.05 3 0.15 0.05 1 0.05
Policy
Marketing 0.1 3 0.3 0.1 4 0.4 0.1 1 0.1
Campaigns
Global 0.1 3 0.3 0.1 4 0.4 0.1 1 0.1
Expansion
Unexploited 0.1 2 0.2 0.1 3 0.3 0.1 1 0.1
Segments
outside the
country
Increasing trend 0.1 4 0.4 0.1 4 0.4 0.1 2 0.2
of women’s
employment in
Pakistan
New 0.1 3 0.3 0.1 4 0.4 0.1 2 0.2
Competitors
Change in 0.05 2 0.1 0.05 2 0.1 0.05 3 0.15
Government
Regulations
High rate of 0.05 2 0.1 0.05 3 0.15 0.05 2 0.1
Inflation within
Pakistan
1 3.2 1 3.85 1.75
2.7.1 Interpretation of Competitive Profile Matrix Factors

In Food sector, it is necessary for every company to provide taste and quality to the consumers
they dealing with and throughout the industry quality and taste is considered as a basic necessity
to survive. Shan Food Industries as it belongs to Food sector, it is necessary for them to provide

taste and quality to the consumers they dealing with. For quality and taste we have assigned 4 to
Shan foods considering their taste and quality.
National Foods as it is currently market leader in the spice sector of food industry and their
quality and taste has been exceptional throughout years, we have given 4 to National foods on
Quality and taste. The Unbranded sector of food industry has been given a rating of 2 because of
their taste and quality that is below the standards.
Quality and Taste

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Shan Food Industries National Food Industries Un-Branded Food Companies
Quality and Taste 3 4 2
Figure 15 - Quality and Taste Rating
State of Art Technology in every industry plays a vital role. Every company for it progress
requires latest technology mostly in the form of machinery. Shan Food Industries as it is
operating within and outside Pakistan, it has to meet up the standards of technology for future
progress. Shan Food Industries as it is operating within and outside Pakistan, it has to meet up
the standards of technology for future progress. We have assigned 4 to Shan Food Industries for
State of Art Technology by keeping in mind their latest technology equipment’s.
National Foods as it is currently market leader in the spice sector of food industry and they have
been serving all over the world so the machinery currently they have is latest equipped with
latest technology, we have given 4 to National foods on State of Art Technology. The Unbranded
sector of food industry has been given a rating of 2 because do not use modern technology they
prefer working manually.


4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Un-Branded Food
Shan Food Industries National Food Industries
Companies
State of Art Technology 4 4 2
Figure 16 - State of Art Technology Ratings
Brand Loyalty plays a vital role in company’s progress, every company dealing in any industry
pay a lot of importance in creating Brand Loyalty. It is not so easy to create Brand Loyalty, it
requires several years of dedication. Shan Food Industries as its operating from the past 25 years
it has created a lot of brand loyalty within and outside Pakistan. We have assigned 4 as a rating
to Shan Foods for their brand loyalty by considering their current situation in the market.
National Foods as it is currently market leader in the spice sector of food industry and they have
been serving all over the world, along with that they are first mover in spice industry so they
have a lot of brand loyalty. Whereas the Unbranded sector of food industry has been given a
rating of 2 because people rarely preferring buying from them hence they do not have enough
brand loyalty.
Brand Loyalty
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Brand Loyalty 4 4 2
Figure 17 - Brand Loyalty Ratings

Now a days in every business e-marketing plays a very vital role towards progress, companies
belonging to food industry of Pakistan have established themselves properly on internet, so that
they may be able to capture that niche. Shan Foods currently does not has proper existence on
internet world. We have assigned 2 as a rating to Shan Foods for Online marketing by keeping
their current situation in mind.
National Foods as it is currently market leader in the spice sector of food industry and the have
established there proper presence on Internet world and that is why we have given them a rating
of 3. Whereas the Unbranded sector of food industry has been given a rating of 1 because they
don’t prefer marketing themselves on internet.
Online Marketing
3.5
3
2.5
2
1.5
1
0.5
0
Online Marketing 2 3 1
Figure 18 - Online Marketing Ratings
Business belonging to any industry now a days deal with more credit as compared to cash, but
sometimes the credit policy may affect the company in both ways. Shan Foods credit policy is
strict throughout their existence and this is considered as their weakness because sometimes
companies have to deal in credit if there is no cash. We have assigned 2 as a rating to Shan foods
for their strict credit policy.
National Foods as it is currently market leader in the spice sector of food industry and they also
have a strict credit policy but during the last year they have certainly establish some strategies
which are helping them in covering up their weakness, so we have given a rating of 3 to National
Foods. Whereas the Unbranded sector of food industry has been given a rating of 1 because they
don’t’ deal in credit, they just work in cash.


3.5
3
2.5
2
1.5
1
0.5
0
Strict Credit Policy 2 3 1
Figure 19 - Strict Credit Policy Ratings
Advertising campaigns play a very vital role in the success of a company because it helps to
attract the customers towards them. Shan Foods till the last year had no proper marketing
strategies regarding advertising campaigns but in the current year they have worked a lot on this
weakness, but it still stays as a weakness for them. We have assigned 3 as rating to Shan Foods
for this factor because of their current advertising campaigns which are attracting customers
towards them.
National Foods as it is currently market leader in the spice sector of food industry and the have
been coming with some revolutionary ideas of advertising campaigns which are attracting more
people towards them as compared to others, that is why we have assigned them a rating of 4.
Whereas the Unbranded sector of food industry has been given a rating of 1 because they are not
involved in marketing or advertising campaigns which may attract people towards them.
Advertising Campaigns
5
4
3
2
1
0
Advertising Campaigns 3 4 1
Figure 20 - Advertising Campaigns Ratings

Businesses now a days instead of working in their own boundaries they try to target markets that
exist across the boundaries, it even refers towards globalization or global expansion. Shan Foods
is currently operating in many countries across Pakistan but still there are some countries which
are not targeted by them, hence giving them the opportunity to expand globally. We have
assigned 3 as a rating to Shan Foods on this opportunity because they are continuously trying to
expand themselves in other countries.
National Foods as it is currently market leader in the spice sector of food industry and along with
that they are also operating in numerous countries outside Pakistan, which means they have
globally expanded themselves, we have given a rating of 4 to National Foods. Whereas the
Unbranded sector of food industry has been given a rating of 1 because they have been only
working in Pakistan and they don’t have any linkage with global expansion.
Global Expansion
5
4
3
2
1
0
Global Expansion 3 4 1
Figure 21 - Global Expansion Ratings
In Pakistan, years ago women was not preferred to leave her house premises for working but as
time has passed the trend has also changed. Women in Pakistan are allowed to work now a days
and due to this they don’t have enough time to cook food in a traditional way, so they prefer
ready to cook spices which will help them in saving their time and also help them in preparing
traditional food. Shan Foods along with providing spices it also provides Pakistani market with
ready to cook recipes which helps them in capturing these working women’s. So, we have
assigned 4 as a rating to Shan Food on this opportunity.
that they are specially involved in those products which may help working women’s of Pakistan,
on these basis we have given them 4 as rating. Whereas the Unbranded sector of food industry

has been given a rating of 2, this sector has been trying to focus women but as such there main
preference is to serve women’s that do not go for work.
Increasing trend of women's employment in Pakistan

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Un-Branded Food
Companies
Increasing trend of women's
4 4 2
employment in Pakistan
Figure 22 - Increasing Trend of Women's employment in Pakistan
Shan Foods has already established it brand name outside the country but there are certain Asian
segments which they haven’t reached yet, for example; Asian community living in Germany are
not able to access Shan Foods Spices and Ready to Cook recipes. This is the story of one Asian
community belonging to a country but in reality there are many other unexploited Asian
segments where there is immense need. We have assigned 2 as a rating to Shan Foods for this
opportunity because currently they are not focusing on these Asian segments around the world.
that they are even concentrating on that Asian sector which is yet not reached by anyone and this
why we have assigned National Foods 3 as rating. Whereas the Unbranded sector of food
industry has been given a rating of 1 because they don’t have any link with those segments
which are yet to be exploited outside the country.


3.5
3
2.5
2
1.5
1
0.5
0
Un-Branded Food
Companies
Unexploited Segments outside the
2 3 1
country
Figure 23 - Unexploited Segments outside the Country
In Pakistan, there are two sectors of food industry one is branded industry and the other one non
branded industry. So, companies have a direct threat from both the sectors whether it is dealing
in spices or in ready to cook recipes or others. Other important aspect is that as spice industry of
Pakistan is growing it attracts more competition. We have assigned 2 as rating for Shan Foods on
this threat because Shan Foods is directly not paying any attention towards it.
National Foods as it is currently market leader in the spice sector of food industry and it does not
has any direct risk related to new competitors, but still they have made certain policies which
may help them in competing new competitors and that is why we have given them 4 as rating.
Whereas the Unbranded sector of food industry has been given a rating of 2 because they done
make such strategies which would help them in driving out their competitors from the market.
New Competitors
5
4
3
2
1
0
New Competitors 3 4 2
Figure 24 - New Competitors Ratings

Government in any country plays a vital role in the development or downfall of any industry. In
Pakistan, from some years the Government has revised its policies but the reality is that it has not
created a big impact on branded industry only non-branded is being affected. We have assigned 2
as rating to Shan Foods on this threat depending on their current strategies.
National Foods as it is currently market leader in the spice sector of food industry and as it is a
Public Limited Company that belongs to branded industry it does not has such risk that are
related with change in government regulations, so we have assigned them 2 as rating. The
Unbranded sector of food industry has been given a rating of 3 because they are the one who
suffer a lot if there are changes in government regulations and they do certainly make policies
which would help in avoiding this threat.

4
3
2
1
0
Un-Branded Food
Companies
Change in Government Regulations 2 2 3
Figure 25 - Change in Government Regulations Ratings
Pakistan as it is not economically stable the inflation rate keeps on fluctuating, mostly the
inflation rate in Pakistan high and if inflation rate is high the buying power of consumer
decreases hence they will start switching towards un-branded spices which are cheaper in rates as
compared to branded spice. We have assigned 2 as rating to Shan Foods for this threat by
keeping in the current situation of Pakistan and strategies which Shan Foods has developed.
National Foods as it is currently market leader in the spice sector of food industry and as it is a
Public Limited Company that belongs to branded industry it has to take care of inflation factor,
because already National Foods and other branded companies are selling at a high price. We
have given National Foods a rating of 3 for this factor by keeping their strategies in mind. The
Unbranded sector of food industry has been given a rating of 2 because inflation is considered a

plus point for them because as inflation increases consumers tend to buy those products which
are of less cost.
High Rate of Inflation within Pakistan

3.5
3
2.5
2
1.5
1
0.5
0
Un-Branded Food
Companies
High Rate of Inflation within Pakistan 2 3 2
Figure 26 - High Rate of Inflation within Pakistan

The Total weighted score which we got by assigning weights and ratings to each factor is 3.25
for Shan Food Industries, 3.85 for National Food Industries and 1.75 for Un-Branded Food
Companies. It means Shan Food Industries falls in above average category, National Food
Industries fall in excellent category and Un-Branded Food Companies fall in below average
category.
2.8 Grand Strategy Matrix of Shan Food Industries

For Grand Matrix as it is compulsory to know that what is the competitive position and market
position overall. From our findings we have found out that market of this industry in Pakistan is
growing by 8 % yearly. Whereas the competitive position of Shan Food Industries is also strong
despite the fact that it not currently leading the spices industry of Pakistan. The Grand Strategy
Matrix of Shan Food Industries is shown below;

2.8.1 Interpretation of Grand Strategy Matrix of Shan Food Industries

According to our calculation the growth in market is rapid, it grows by 8% yearly and the
competitive position of Shan Food Industries is also competitve. Based on our plotting Shan
Food Industries falls in the first quadrant where market growth is rapid and competititve position
is strong.
Shan Food Industries should adopt the strategy of market development, it means Shan Food
Industries should expand their markets within Pakistan and across the boundaries. This strategy
will help Shan Food Industries in developing its presence which may even lead them towards
market leader in future.

2.9 Boston Consulting Group (BCG)Matrix of Shan Food Industries

In BCG matrix, we have mainly focused on the spice sector because of limited data that is
available with us. The Market Share of National Foods is 45%, Shan Food is 40%, Mehran
Foods is 10% and other companies is 5%.

2.9.1 Interpretation of Boston Consulting Group Matrix of Shan Food Industries

Based on our calculations of Industrial growth and relative market share pattern we have plotted
the results as shown above. In BCG matrix we have concentrated on the spice sector of Pakistan
industry. In Spice sector as shown above National Foods is leading the market or it has high
market share, National Foods is currently falling in stars. Shan Food is right on second number
with market share of 0.85 as shown above and it is also falling in Stars. Whereas Mehran Foods
with a market share of 0.2 and other companies with a market share of 0.1 as shown above are
falling in question marks.
Shan Food Industries as it is not the market leader we will adopt the strategy of market
penetration. Through adopting this strategy Shan Food Industries can gain more market share
which would help Shan Food Industries in becoming the market leader. Through this strategy
Shan Food Industries will penetrate into Pakistani markets by reducing down their profits, they
will work on different promotional activities which will help them in gaining the market share.
2.10 Internal External Matrix of Shan Food Industries

For conducting Internal External Analysis on Shan Food industries we have also conducted
internal factor evaluation and external factor evaluation and by the help of their final score our
Internal External Matrix is as shown below;


2.10.1 Interpretation of Internal External Matrix of Shan Food Industries

According to our calculations which were brought from internal factor evaluation and external
factor evaluation we have plotted the Internal External (IE) matrix as shown above. The internal
factor evaluation score is 3.35 and external evaluation score is 3. After plotting these scores we
fall in quadrant (I,II,IV), this quadrant is called as grown and build and it is considered as the
strongest quadrant. Hence, Shan Food Industries as it falls in the strongest quadrant it must adopt
the strategy of market development it means Shan Food Industries should expand their markets
within Pakistan and across the boundaries. This strategy will help Shan Food Industries in
developing its presence which may even lead them towards market leader in future.
2.11 Strategic Position and Action Evaluation (SPACE) Matrix

For constructing Shan Food Industries Strategic Position and Action Evaluation Matrix we have
taken the following factors for the dimensions;
 Financial Position
Financial Backup
Return on Investment
Net Profit
Inventory Turnover
 Industrial Position
Growth Potential
Resource Utilization
Productivity
Profit Potential
 Competitive Position
Technology
Market Share
Quality Share

Customer Loyalty
 Stability Position
Competitive Pressure
Technological Position
Political Situation
Barriers to Entry
Financial Position Industrial Position

Financial Backup +5 Growth Potential +3
Return on Investment +5 Resource Utilization +4
Net Profits +4 Productivity +4
Inventory Turnover +4 Profit Potential +3
+18/4 +14/4
= +4.5 = +3.5
Competitive Position Stability Position
Technology -1 Technological Position -2
Quality Service -2 Competitive Pressure -3
Market Share -2 Barriers to Entry -3
Customer Loyalty -3 Political Situation -3
-8/4 -11/4
= -2 = -2.7
X axis = I.P + C.P

= +3.5 + (-2)
= +1.5
Y axis = F.P + S.P
= +4.5 + (-2.7)
= +1.8


2.11.1 Interpretation of Strategic Planning and Action Evaluation Matrix of Shan

Food Industries
According to our calculations as shown above we have plotted the Space Matrix above. In our
calculations X-axis value is +1.5 and Y-axis value is +1.8, which means Shan Food Industries is
falling in Financial Position and Industrial Position dimension. This dimension is also considered
as aggressive dimension so the strategy which we have selected is also aggressive.
Shan Food Industries as it is financially strong as compared to the industry, it can adopt the
strategy of backward integration. In this strategy Shan Food Industries will do a strategic
collaboration with their suppliers or even they can buy their suppliers which will help them in
making their industry position much stronger.
2.12 SWOT Matrix of Shan Food Industries

For creating SWOT matrix of Shan Food Industries we have taken the following internal and
external factors;
 Strengths
Quality and Taste

Financial Backup
Brand Loyalty
Strong Relationship with suppliers and farmers

 Weaknesses
Weak Distribution in markets of Punjab

Online Marketing
Weak Marketing Communications within the markets of Punjab
Weak Advertising campaigns
 Opportunities

Availability of Finest quality of Raw Material in Pakistan
Global Expansion
Increasing trend of branded spices in Pakistani market
 Threats
New Competitors
Changes in Government Regulations
Unbranded spices
High rate of inflation within Pakistan

Strengths Weaknesses
1. Quality and Taste 1. Weak Distribution in
2. Financial Backup Markets of Punjab
3. State of Art Technology 2. Strict Credit Policy
4. Brand Loyalty 3. Weak Marketing
5. Strong Relationships with Communications within the
suppliers and farmers markets of Punjab
6. Research and Development Team 4. Weak Advertising
Campaigns
Opportunities S-0 Strategies W-O Strategies
1. Increasing trend of i. Strategic Collaboration with i. Penetrating into the areas of
women’s employment in Farmers and Suppliers (S5,O2) Pakistan (W3,W4,O4)
Pakistan ii. Penetrating into women working ii. Market Development with
2. Availability of Finest areas of Pakistan (S1,S6,O1) easy credit policy
Raw Material in Pakistan iii. Setup of new operations outside (W2,W4,O4)
3. Global Expansion the country (S1,S2,O3,O5)
4. Increasing trend of
branded spices in
Pakistan
5. Unexploited segments
outside the country
Threats S-T Strategies W-T Strategies
1. New Competitors i. Provide exceptional taste to local i. Improve marketing efforts
2. Changes in Government markets (S1,S3,S6,T1) all over Punjab
Regulations ii. Backward Integration (S5, S2, T3) (W3,W4,T1)
3. Unbranded Spices ii. Unrelated diversification
4. High Rate of Inflation (W1,T1)
2.13 Quantitative Strategic Planning Matrix (QSPM) of Shan Foods


For creating QSPM matrix of Shan Food Industries we have taken the following strategies in
which comparison will be done;
Setup of New Operation Outside the Country

Strategic Collaboration with Farmers and Suppliers
Penetrating into the areas of Pakistan
Along with that we have taken the following factors through which comparison of strategies will
be done;
 Strengths
Quality and Taste
Brand Loyalty
Strong Relationship with Farmers and Suppliers
 Weaknesses
Online Marketing
Marketing Campaigns
 Opportunities
Global Expansion
Unexploited segments outside the country
 Threats
New Competitors
Rate of Inflation

Setup of New Operations Strategic Collaboration Penetrating in to the

Outside Country with Farmers and Areas of Pakistan
Suppliers
Factors Weight Attractiv Total Attracti Total Attracti Total
eness Attractive veness Attractiveness veness Attractiveness
Score ness Score Score Score Score Score
Strengths
Quality and Taste 0.2 4 0.8 3 0.6 4 0.8
State of Art Technology 0.15 4 0.6 2 0.3 3 0.45
Brand Loyalty 0.1 3 0.3 2 0.2 4 0.4
Research and 0.15 2 0.3 4 0.6 4 0.6
Development Team
Strong Relationship 0.1 1 0.1 4 0.4 3 0.3
with Farmers and
Suppliers
Weakness
Online Marketing 0.1 3 0.3 1 0.1 3 0.3
Strict Credit Policy 0.05 1 0.05 4 0.2 1 0.05
Advertising Campaigns 0.15 3 0.45 2 0.3 4 0.6
1
Opportunities
Global Expansion 0.15 3 0.45 1 0.15 1 0.15
Unexploited Segments 0.1 3 0.3 2 0.2 1 0.1
outside country
Increasing Trend of 0.15 1 0.15 3 0.45 4 0.6
women’s employment
in Pakistan
Increasing Trend of 0.2 1 0.2 4 0.8 4 0.8
Branded Spices in
Pakistan
Threats
New Competitors 0.15 2 0.3 3 0.45 3 0.45
Unbranded Spices 0.15 1 0.15 3 0.45 3 0.45

Changes in Government 0.1 3 0.3 2 0.2 2 0.2

Regulations
1 4.75 5.4 6.25
2.13.1 Interpretation of QSPM Matrix of Shan Food Industries

According to our calculations in which we have assigned weightage and attractiveness score to
all strategies we have found out the following results;
Strategy Total Attractiveness Score

Setup of New Operation Outside the Country 4.75
Strategic Collaboration with Farmers and Suppliers 5.4
Penetrating into the areas of Pakistan 6.25
Based on the calculation, we have to select that strategy which has the highest attractiveness
score. Shan Food Industries should adopt the strategy of Penetrating into the areas of Pakistan.
This strategy will help Shan Food Industries in capturing market share because currently it is not
the market leader.

Chapter No: 3 – Conclusion
3.1 Conclusion
Pakistan the country which is renowned as an agricultural country, contributing its 70%
population to agricultural sector. The remaining 30% population contributes to different sectors,
but within this 30%, 20% belongs to the Food Industry. Pakistan’s culture is made up many
cultures mainly due to the invaders that came to Pakistan. In our culture food plays a vital role, in
the world we are famous for our traditions and from these traditions one key role is played by
food. People around world are familiar with our food, they love eating our food due to different
taste and spices that we add.
Pakistan Food industry goes through 4 phases which are, Production, Process, Transportation
and Distribution. These phases includes everyone from farmers to the distributors and important
thing is that if one of the phase is not working properly or is having an issue it may disturb the
whole cycle. Currently the major players of Pakistan Food industry are, Engro Foods, Mitchells
Food, National Foods, Nestle Pakistan and Unilever Pakistan Food, etc.
Talking about Pakistani Food it is famous for its taste around the world, due to the addition of
special spices, which enhance the taste of food mostly making it spicy. The Food Industry all
over the world represents a small niche, named as spices. The Food spices industry of Pakistan is
categorized in two dimensions, branded and non-branded industry. Branded Spice Industry,
According to Small and Medium Enterprise Development Authority (SMEDA) currently there
are 8,500 spices and salt grinding units that are working. Out of 8,500 units, 55% spices and salt
grinding units are operating in rural areas of Pakistan whereas the rest 45% of belong to the
urban areas. In the Branded industry there are some major players which are recognized by the
market, they are, National Foods, Shan Foods and Mehran Foods. Currently in spices industry
National Foods is the market leader. The production of spices industry revolves around seven
phases, Cleaning, Drying, Grading, Grinding, Packaging and Distribution.
Moving towards Shan Food Industries, It is a well renowned company not only in Pakistan but
outside Pakistan, across the boundaries Shan Food Industries is known for the quality and taste it
has been providing since its establishment. Shan Food Industries is a Private Limited Company
that was established in 1981 by Sikander Sultan. Since 1981, it has been providing products of

exceptional quality and even after so many years it is mainly recognized due to its spices. Shan
Food Industries is currently operating in 60 countries outside Pakistan, major countries where
Shan Foods is recognized as a brand are, United Kingdom, United States, Middle East and Far
East Regions. Shan Foods currently holds a share of 40% in spices industry of Pakistan. Shan
Food Industries after a journey of 34 years it is currently offering a numerous number of food
products in the market whether it is Pakistan or outside Pakistan, the portfolio consists mainly of
spices, pickles, easy to cook mixes (recipe mix), dessert mixes, basmati rice and salt.
We have conducted strategic analysis or strategic audit on Shan Food Industries based on
strategic analysis tools. According to our first Strategic Analysis tool which is Porter’s 5 forces
model, we have found out that the bargaining power of suppliers in the industry is low, whereas
the bargaining power of customers is high and as such there is no threat of a substitute product
and new entrance to the branded industry to which Shan Food belongs. The second Strategic
Analysis tool used which is PEST Analysis. Through PEST we have found out that politically as
such there is not threat to the industry especially branded industry, but economically it is
effecting the industry despite the rapid growth and that is due to food inflation. Technology wise
Industry is flourishing because of the state of art technology which it has as a competitive
advantage.
The third Strategic Analysis tool used is SWOT through which we did the SWOT Matrix,
through this tool we determined the strengths, weaknesses, opportunities and threats of Shan
Food industries and according we prepared some strategies which are helpful for Shan Food
industries. The fourth Strategic Analysis tool used is Internal Factor evaluation or IFE matrix, in
which we used the internal factors of Shan Food Industries to determine its current standing. The
results determined that currently Shan Food Industries is performing above average internally.
The fifth Strategic Analysis tool used is External Factor evaluation or EFE matrix, in which we
used the external factors of Shan Food Industries to determine its current standing. The results
determined that currently Shan Food Industries is performing above average externally. The
sixth Strategic Analysis tool used is competitive profile matrix, which is used to do a comparison
between Shan Food Industries and other companies. On our analysis through this tool we have
found out that Shan Food just comes below National Foods which is the market leader and it
currently it is performing excellently in the industry. The seventh Strategic Analysis tool used is

Internal External Matrix which is prepared through internal factor evaluation and external factor
evaluation. On our calculations we have found that Shan Food industries currently falls in grow
and build quadrant. The eight Strategic Analysis tool used is Grand Strategy matrix, through
which we have identified that Shan Food Industries fall Quadrant I in which the market growth is
rapid and competitive position is strong. The ninth Strategic Analysis tool used is Strategic
planning and action evaluation matrix, in which we have identified factors for financial position,
competitive position, industrial position and stability position. Using these factors we have done
calculations and based on our calculations Shan Food Industries falls in Aggressive quadrant.
The tenth Strategic Analysis tool used is Boston consulting group (BCG) matrix, through this
matrix we have identified the current standing of spices of Shan Food Industries which is
currently falling in the stars zone.
In the above mentioned tools by using their calculations we have developed different strategies
which Shan Food Industries can adopt for its future progress, all of the strategies which were
suggested were carried into the eleventh Strategic Analysis tool known as QSPM matrix.
Through QSPM we had to select the best strategy and according to our Calculations the best
strategy is to Penetrate into the areas of Pakistan.
3.2 Recommendation
According to Strategic Analysis which is conducted on Shan Food Industries it should currently
adopt the strategy of “Penetrating into the areas of Pakistan”. This strategy is determined using
different tools of strategic analysis on Shan Food Industries.
We recommend Shan Food Industries to adopt this strategy so that they can fulfill the business
objectives which they have determined. Our recommendation suggests that through this strategy
Shan Food Industries will be able to attract customers and by attracting customers they gain
more market share. As currently Shan Food Industries is just ranked 2nd below the market leader
which is National Foods it can pressurize them by using this strategy. In this strategy Shan Food
Industries should reduce down their prices by reducing their profit margin up to an acceptable

level. The amount of profit which will be reduced should be invested by Shan Food Industries
into different promotional activities or advertising campaigns which may help them in capturing
more market share.
We also recommend Shan Food Industries to target mostly the rural areas of Pakistan because as
trends have been changing, people in Pakistan are shifting from unbranded spices to branded
spices. The reason behind targeting rural areas is that people living there used to prefer
unbranded spices but now they have also shifted towards branded spices. Currently in the rural
areas of Pakistan as such there is now Branded Spice Company which has proper existence, so it
can be a major opportunity for Shan Food Industries. As Shan Food Industries major revenue is
earned by Spices and ready to cook recipes we recommend them to keep on concentrating on
these products by providing superior taste and quality to the markets of Pakistan and across the
boundaries.

Strategic Analysis of Shan Foods

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Strategic Analysis of Shan Foods

1 Introduction of Project ................................................................................................................. 5

1.1 Introduction to Food Industry of Pakistan ................................................................................ 5

1.1.1 Phases of Food Industry of Pakistan .................................................................................. 6

1.1.2 Key Players of Pakistan Food Industry .............................................................................. 8

1.2 Introduction of Food Spices Industry ..................................................................................... 13

1.2.1 Production Process of Spices Industries .......................................................................... 19

1.3 Introduction of Shan Food Industries ..................................................................................... 21

1.3.1 History of Shan Foods ..................................................................................................... 23

1.3.2 Vision Statement of Shan Food Industries....................................................................... 24

1.3.3 Mission Statement of Shan Food Industries .................................................................... 24

1.3.4 Organizational Hierarchy of Shan Food Industries ......................................................... 25

1.3.5 Business Objectives of Shan Food Industries .................................................................. 25

1.3.6 Product Portfolio of Shan Food Industries....................................................................... 26

Chapter No: 2 – Strategic Analysis ............................................................................................... 29

2. Strategic Analysis ..................................................................................................................... 29

2.1 Tools of Strategic Analysis ................................................................................................. 29

2.2 SWOT Analysis of Shan Food Industries ............................................................................... 52

2.2.1 Strengths .......................................................................................................................... 52

2.2.2 Weaknesses ...................................................................................................................... 53

2.3 Michael Porter’s 5 Forces Model ............................................................................................ 57

2.4 PEST Analysis of Shan Food Industries ................................................................................. 58

2.5 Internal Factor Evaluation of Shan Food Industries ............................................................... 60

2.5.1 Interpretation of Internal Factors Evaluation ................................................................... 61

2.5.2 Interpretation of Total Weighted Score ........................................................................... 64

2.6 External Factor Evaluation of Shan Food Industries .............................................................. 64

2.6.1 Interpretation of External Factors Evaluation .................................................................. 65

2.6.2 Interpretation of Total Weighted Score ........................................................................... 67

2.7 Competitive Profile Matrix of Shan Food Industries .............................................................. 68

2.7.1 Interpretation of Competitive Profile Matrix Factors ...................................................... 69

2.7.2 Interpretation of Total Weighted Score ........................................................................... 78

2.8 Grand Strategy Matrix of Shan Food Industries ..................................................................... 78

2.8.1 Interpretation of Grand Strategy Matrix of Shan Food Industries ................................... 79

2.9 Boston Consulting Group (BCG)Matrix of Shan Food Industries ......................................... 80

2.10 Internal External Matrix of Shan Food Industries ................................................................ 81

2.10.1 Interpretation of Internal External Matrix of Shan Food Industries .............................. 83

2.11 Strategic Position and Action Evaluation (SPACE) Matrix ................................................. 83

2.12 SWOT Matrix of Shan Food Industries ................................................................................ 86

2.13 Quantitative Strategic Planning Matrix (QSPM) of Shan Foods .......................................... 88

2.13.1 Interpretation of QSPM Matrix of Shan Food Industries .............................................. 91

Chapter No: 3 – Conclusion .......................................................................................................... 92

3.1 Conclusion .............................................................................................................................. 92

3.2 Recommendation .................................................................................................................... 94

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Chapter No: 1 – Introduction

1.1 Introduction to Food Industry of Pakistan

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Figure 1 - Food Trends in Pakistan

1.1.1 Phases of Food Industry of Pakistan

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1.1.2 Key Players of Pakistan Food Industry

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Engro Foods Limited

Engro Foods Limited

Figure 2 - Market Share of Engro Foods Limited 1

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Mitchells Fruits Farm Limited

Figure 3 - Market Share of Mitchells Fruits Farm Limited2

Nestle Pakistan Limited

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