REPORT ON THE MARKET EXPANSION OF DPL

(A Company of Hayleys Group)

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EXECUTIVE SUMMARY

This report provides a new market development of DPL company (Subsidiary of Hayleys

Company). This report is consisted with a brief introduction of the company and product,

market analysis through SWOT, PESTING, Five Forces theory etc. The current market

position has been identified via those analytical tools. In addition, the Risk associated with

the market, New market entry mode, Strategies to gain the competitive advantages is

described in the analysis. Finally, it ends with the suggestions and recommendation section

and Summary.

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TABLE OF CONTENTS

EXECUTIVE SUMMARY...........................................................................................................................2
1. INTRODUCTION.................................................................................................................................4
1.1 Background to The Company.................................................................................................4
1.2 Background to the Product..........................................................................................................5
2. DISCUSSION AND ANALYSIS...............................................................................................................6
2.1 SWOT Analysis.............................................................................................................................6
2.2 Management responses for the identified Opportunities and Threats.......................................8
2.3 PESTEL Analysis............................................................................................................................9
2.4 Porters 5 Forces.........................................................................................................................11
2.5 Entry Mode Strategy..................................................................................................................12
2.6 Risks Associated with the market of Gloves..............................................................................13
2.8 Strategical implementation.......................................................................................................14
2.8.1 Customers value creation...................................................................................................14
2.8.2 Handing Suppliers...............................................................................................................15
2.8.3 Handling Competitors.........................................................................................................15
2.8.4 Handlings Complements.....................................................................................................15
2.9 Suggestions & Recommendations.................................................................................................16
3. CONCLUSION...................................................................................................................................16
REFERENCES........................................................................................................................................17

Table of Figures

Figure 1 1: Hayley' s Logo......................................................................................................................4

Figure 2: DPL Logo.................................................................................................................................5
Figure 3: Gloves.....................................................................................................................................6
Figure 4 Porter' s Five Forces...............................................................................................................12
Figure 5 Value Creation Model............................................................................................................14

Table of Tables
Table 2- Product Mix.............................................................................................................................6
Table 3 SWOT.......................................................................................................................................7
Table 4 PESTEL....................................................................................................................................9

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1. INTRODUCTION

1.1 Background to The Company

Hayley’s can be identified as one of the leading

business entity in Sri Lanka which is a most diversified

and the largest business conglomerate in Sri Lanka.

Hayley’s is an enterprise which is having a history of

more than 143 years and it comprises of the business Figure 1 1: Hayley' s Logo

entities that expand over 16 sectors and a global footprint

reaching across to business strongholds in 5 continents and 17 countries in the world. And it

is considered as the first listed entity in Sri Lanka which is exceeded the revenue of USD 1

billion in the financial year of 2017/18.

Hayleys PLC started in 1978 and grown gradually throughout the past decades and had

become one of the biggest multinational business conglomerates in Sri Lanka. Hayley’s

(2020) shows that the company is owning a remarkable portfolio in the different sectors and

industries including manufacturing, agriculture, and services. The Group is having a good

brand name and maintained, globally recognised it as a leader in novelty and innovation,

which having the manufacturing hubs in different countries including Indonesia, India and

Thailand, marketing operations in Australia, India, Bangladesh, Italy, Japan, the Netherlands,

UK and USA, offering transportation and logistics solutions in Maldives, Myanmar, India,

Singapore, Indonesia and Malaysia. The Group accounts for approximately 3.2% of Sri

Lanka’s export income, and 3.6% of tea and 3.9% of rubber production [ CITATION Hay21 \l

2057 ].

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Out of the different industries rubber industry can be identified as a major industry that

contribute to the Sri Lankan Economy. When considering the sectors that covered by Hayleys

group DPL Holding can be identified as the main business entity that conduct the rubber

products manufacturing. DPL can be identified as a fully integrated rubber glove

manufacturing entity that produce the continuing stream of high value new product

innovations in the protective hand wear which were considered and popular with the high

quality and performance of the entity.

Dipped Products PLC is considered as the

leader in worlds protective hand- wear

manufacturing, with a global reputation for

innovation, quality and responsible

manufacturing practices. The company

Figure 2: DPL Logo products varying more than 300 variations

of 124 product varieties which are natural

and synthetic- latex based supported and unsupported gloves with numerous applications.

DPL products were traded throughout the world to the diversified needs of customers across

70 countries. Company manufacturing hubs are situated.

in Colombo and the manufacturing facilities are placed in Thailand and a marketing arm in

Italy.

1.2 Background to the Product

When analysing the product range of DPL,

Figure 3: Gloves

DPL was successfully nurturing strong

brands in the Retail, Industrial and Medical

glove segments. The brand is enhanced over

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the period with the superior product quality, innovation and led approach and excellent track

record of over 40 years.

The product Categories of DPL products are as follows.

Table 1- Product Mix

 Industrial Gloves

 Household Gloves
By Application
 Medical Gloves

 Industrial Sleeves
By Category  Unsupported Gloves

 Supported Gloves

 Disposable Gloves

 Sleeves
Eco- friendly Range
Kids Gloves

2. DISCUSSION AND ANALYSIS

Fruitful brands should have a clear view of the world in which they work, and the perspective

of their competitors and customers. Analytical understanding of the market may be a

spotlight assessment strategy for identifying hazards and opportunities and how customers

and clients react to the goods or administrations. It can be used different analytical tools to

analyse the market Each tools and the analytical views are as follows.

2.1 SWOT Analysis

Table 2 SWOT

STRENGTHS WEAKNESSES

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  Brand awareness  Less verities of products in product

 High quality levels of Expertise on portfolios

the rubber gloves business  Need to add more product lines for

 Entrepreneurial spirit and business.

commitment

 Complete and broad trained staff

 High quality service

 Increasing customer loyalty

 Strong product portfolio

 Strong revenue growth

 Corporate image developed over

time.

 Strong supplier base

 Adequate capacity levels at

manufacturing sites to cater for

higher demand.

 Have the own rubber plantations and

estates to address the input

requirements/ raw materials for

manufacturing process.

OPPORTUNITIES THREATS
 Increasing market demand for rubber  High competition within market.

products in global market.  High market expansion strategies by

 Can open new lines of business.

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  Consumers are living a healthier the global rubber leading suppliers.

lifestyle.  Competition from rubber

 Consumers prefer quality products manufactures.

that offer true value.  Limited number of raw materials

 Modern technology in the rubber  High quality rubber prices will

industry will be able to increase increase moderately.

productivity.  Gloves market is very competitive

and relative elastic.

2.2 Management responses for the identified Opportunities and Threats

In this field, it is stated that responsibilities of managers that should be implement for the

identified opportunities and threats via the SWOT analysis.

Table 3 PESTEL

OPPORTUNITIES THREATS
 Increasing market demand for rubber  High competition within market.

products in global market  High market expansion strategies by

 Can open new lines of business. the global rubber leading suppliers

 Consumers are living a healthier  Competition from rubber

lifestyle. manufactures.

 Consumers prefer quality products  Limited number of raw materials

that offer true value.  High quality rubber prices will

 Modern technology in the rubber increase moderately.

industry will be able to increase  Gloves market is very competitive

productivity. and relative elastic.

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2.3 PESTEL Analysis

PESTEL analysis focus on the macro environment analysis of a business and industry by

analyzing the Political, Economic, Social, Technological, Environmental and Legal Factors.

This analysis helpful to identify how the macro environment will effect on business and used

in strategic business decisions. PESTEL analysis of WTC is as follows.

FACTORS IMPACT
POLITICAL FACTORS
 Strict trading policies Medium

 Funding grants on tea development Medium

 Government policies and procedures on imports and exports High

 Support from government agencies on export development High

 Tax reductions on exporters High

 Strong political relationship of Sri Lankan government with Medium

global (including Russia)

 Trade Agreements between Russia and Sri Lanka High

(Ex: Agreement on avoiding double taxation on products)

ECONOMIC FACTORS
 High tax rates on profits High

 Fluctuations in interest rates High

 Increasing Inflation Medium

 Increasing per capita income of Russians High

SOCIAL FACTORS
Customer Loyalty and positive attitude towards DPL brand High

Brand Image High

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 Buying access and trends Medium

Market trends on black tea High

TECHNOLOGICAL FACTORS
 Technological development Medium

 Development in online Marketing strategies

ENVIRONMENTAL FACTORS
 Adaptation of sustainable development strategies Medium

 Advance production tactics used by rubber producers

 Increasing demand for green products and green practices

LEGAL FACTORS
 Laws and regulations Medium

 International trading policies and regulations

When analyzing the micro and macro environmental factors of DPL, it is showing that the

business has good base of strengths and opportunities from market and a favorable support

from macro environmental factors as well. With the demand for Sri Lankan rubber gloves in

in the globe and other favorable indications, we can identify that there is a good potential at

South African market for Sri Lankan rubber gloves.

2.4 Porters 5 Forces

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It is important to analyses the industry environment of DPL before entering into a new

market. Porter’ s five forces is used to identify the market forces of a business entity in terms

of identifying the treat of new entrance of competitors to market, substitute products,

bargaining power of buyers and suppliers and rivalry and existing competitors. Competitor

Figure 4 Porter' s Five Forces

Analysis of DPL as follows.

1. Treat of new entrance.

Rubber Glove market is open, and it can be access easily by new suppliers. However,

with the established brand of Sri Lankan rubber glove products have good demand for

the Sri Lankan Rubber.

2. Treat of substitute products.

Main substitute for the rubber gloves is the latex free alternatives available. The

Synthetic Polymers such as the vinyl and nitrile have emerged as the alternatives for

the gloves [ CITATION EHS02 \l 2057 ].

3. Bargaining power of suppliers

With the high competition in the existing suppliers or the other brands, dealers and

distributors can ask for higher commissions.

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 4. Bargaining power of buyers

DPL charge standard price for quality items from all the customers. With this the

price reductions cannot be seen. Also, with the well- established brand name for Sri

Lankan rubber, customers are looking towards to purchase Sri Lankan rubber gloves

brands. Therefore, the bargaining power is less.

5. Rivalry among existing customers

The main competitors for Sri Lankan rubber producers are countries like Thailand,

Indonesia and Malaysia which is on 70% of the total market production and the 90%

of the total global supply is fulfilled by the small-scale farmers [ CITATION Agr19 \l

2057 ].

2.5 Entry Mode Strategy

Mode of entry is a crucial factor to be considered. DPL can identify the mode of entry into

the international market by considering the nature and size of the business and the expansion

strategies of the company, potential size, and the expected demand of the selected

international market etc. With the business expansion business were able to enhance their

market share and being profitable through increasing the sales, getting economies of scale

with large production, reduce the dependence over other economies and fulfil the needs of

foreign customers. There are five main modes of entry into the international market including

the exporting, licensing, joint ventures, acquisitions, and foreign direct investments. When

enter an international market it is important to consider bout entry mode strategies. This

highlights the methods by which DPL share the resources and risks enter South African

market of Ghana. DPL is needs to partner up with a trading company in Ghana and directly

export the products. For that the required licensing and quality standards needs to be

obtained. DPL is planning to distribute and trade a standardized product for their customers

in the existing product rage.

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2.6 Risks Associated with the market of Gloves.

 Changing the exchanging prices of the products

 Losing the Market share

 Inflation rate risk

 Longevity Risk

 Reinvestment risk

 Credit risk

2.7 Creation of Value

Value creation can be recognized as the procedure which is giving something that is valued to

collect
Figure 5 Value Creation Model

something else

that' s additional valuable to you. This is broad and captures both costs and benefits. Further,

it applies to owners, customers, and employees, as I'll describe later [ CITATION CFO21 \l

2057 ].

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Value creation is highlighting the value creating segments and this will identify four types of

players that every company is facing and could be directly influence on the company. They

are customers, suppliers, competitors, and compliments. Each of these types of players offer

opportunities for cooperation with your company, even the competitors. This guide the

company to be more success on the in the distinct market that focus on via achieving the

competitive advantage over the market.

2.8 Strategical implementation

According to the prior analysis We have identified some common issues and unique risks

associated in the selected market. Hence to sustain in the market and develop in the market.it

need to identify some strategies that should be implement by the managers in the market

development process of the company. Value creation is a unique way to the company to gain

the competitive advantages over the competitors while maximizing the targeted profits via

expanding the market. Some essential strategies that need to develop in the company to

achieve the company goal ultimately as below.

2.8.1 Customers value creation

Customers can be recognised as the most important people to the company. Generally, in the

business world, customers are considered as the king. When analysing the value creation

process, the business income in generated through the customers. Hence, it is important to

consider about the customer expectations and concerns. More customers were helpful to

generate the more revenue and larger market share. Hence, customer satisfactory is much

significant. Therefore, DPL neds to be concern more about the quality aspect of the product

and the customer value can be enhance with the superior quality levels.

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2.8.2 Handing Suppliers

Suppliers can be identified as a major party that involved in the manufacturing process.

Suppliers are the once who were providing the resources to the company manufacturing.

They are significant external factors that influence to the company through the quality of the

products delivered. Hence, it is required to keep a pool of suppliers with DPL in order to

maintain a good position.

2.8.3 Handling Competitors

Market condition and competition is important to a business. When a company is having a

good demand and if the market competition is at a higher level. It has the possibility to reduce

the current market share with the increasing rivalry and competition in the market. Hence, it

important to considered amount the market competition and having strategic plans to face

them.

2.8.4 Handlings Complements.

Complemented can be identified as the Value Net where many business entities, owners and

managers fail to consider. Other than the competitors, this category includes business entities

which are offering the complementary products or services which might work well composed

with your own products to create the result of the study are more attractive to consumers

(Business to You, 2021).

2.8.5 Handling cross cultural issues and Human relations

Understanding standards pertinent to both human and regulation social competence will

increment understanding into their noteworthiness in responding to social issues within the

nations of South Africa. Hence via adopting flexibility, promoting open communication,

encourage team building activities, addressing conflicts immediately, creating cross cultural

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awareness programs are some major remedies to this kind of issues.as a result of that the

company has able t reduce the communicational barriers, different attitudes towards conflicts,

approaches to bargaining, approaches to complete tasks etc. And also, some unique rules and

regulations inherent to the overseas countries should be apply to our product before launch

the product to the market, If not, The market will rejected the certain product definitely.

2.9 Suggestions & Recommendations

Due to the pandemic situation Covid -19, the demand for the gloves has increasing day by

day. As the company have the capability of supplement gloves to a big portion of the whole

market share. Hence expanding the market for another region via a suitable market

identification is a big opportunity to te company. And also, to suggestion to locate the

operational factories in the overseas companies as well/In addition, Via a differentiated and

unique way fo products ultimately lead to a huge profit gain of the company.

3. CONCLUSION

In summary, it is a good decision making to expand the glove market to the south Asian

countries rather than limiting to certain countries in the world. Using the analytical tools to

identify the position of the market is guiding the company to the goals of the company as

well. Via implementing suitable strategies for h=the identified opportunities and threats leads

to gain the competitive advantage to the company.

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REFERENCES
Agro, Market Intelligence. (2019, 3 18). GLOBAL NATURAL RUBBER PRODUCTION ALL
SET TO INCREASE IN 2019. Retrieved from www.gep.com:
https://www.gep.com/blog/mind/global-natural-rubber-production-all-set-to-increase-
in-2019#:~:text=The%20top%20three%20producer%20countries,fulfilled%20by
%20small%2Dscale%20farmers.
Business to You. (2021). Retrieved from www.business-to-you.com: https://www.business-to-
you.com/value-net/
CFO Perspective. (2021). How Does Value Creation Lead to Business Success? Retrieved
from cfoperspective.com: https://cfoperspective.com/how-does-value-creation-lead-
to-business-success/#:~:text=Value%20creation%20definition,as%20I'll%20describe
%20later.
EHS Today. (2002). Saving Careers with New, Non-Allergenic Gloves. Retrieved from
www.ehstoday.com: https://www.ehstoday.com/archive/article/21910459/saving-
careers-with-new-nonallergenic-gloves#:~:text=There%20are%20completely
%20latex%2Dfree%20alternatives%20that%20must%20be
%20considered.&text=Synthetic%20polymers%20such%20as%20vinyl,by
%20workers%20wit
Hayley' s Group. (2021, 1 30). About Hayleys. Retrieved from www.hayleys.com:
https://www.hayleys.com/about/
IMS Marketing. (2020). Why id market research is so important. Retrieved from
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Topper. (2021, 1 30). Essay on Globalization for Students and Children. Retrieved from
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