1.

0 Introduction

At present, in Bangladesh, the most popular brand of CP Bangladesh Company Ltd is CP Fried
Chicken. Also known as Five Star Fried Chicken or CP Foods, it is one of the most popular
brands in Asia with presence in Thailand, Myanmar, Cambodia, Vietnam, Laos, Malaysia,
China, Bangladesh and India having more than 7000 outlets. It was launched in Bangladesh in
April 07, 2008 with the mission of "Kitchen of Bangladesh”.

CP Foods places utmost importance to “product quality” that meets standards, serves variety
needs, tasty, hygienic and safe for consumption. Adapting to the local taste and flavor;
developing products which appeals to masses has been one of the key strength of CP Foods.
They offer variety of delicious both ready to eat (RTE) and ready to cook (RTC) foods for the
people of Bangladesh. Some of their popular fast food items are Crispy Fried Chicken, Spicy
Fried Chicken, and Masala Chicken. Besides marinated chicken, CP is now producing Chicken
Balls and Chicken Sausages too.

Currently, C.P. Food has around 200 branches mostly located in Dhaka and Chittagong as well
as other divisions of the country. Apart from the stores, it takes online order from its customers
for home delivery as well. Through a growing network of stores, they are becoming a strong
neighborhood brand offering great quality chicken at convenience to customers of all strata of
society.

1.1 Objectives of the Study

o To provide an overall idea about the business of CP Fried Chicken;
o To determine the strategic position of CP Food in Bangladesh;
o To know about the practices of statistical tools in decision making at CP;
o To identify customer attitude towards CP.

1.2 Problem Statement

 Lack of scope, time and proper access to actual data have deterred the work from some
feasibly pertinent findings;
 Hypothetical consideration of data may lead to less accurate findings and conclusion
 Drawing conclusions using sheer judgments may question the objectivity of the output.

1.3 Background

With the vision of becoming “Kitchen of the World”, Charoen Pokphand Foods Public
Company Limited (CPF PLC) is engaged in the operations of agro-industrial and integrated food
businesses in Southern Thailand since1978 and became public in 1994. The businesses of CPF
PLC are divided into two segments i.e. the livestock business segment, which comprises
chicken, duck and swine, and the aquaculture business segment, which consists of shrimp and
fish. The vertically integrated businesses incorporates the manufacturing of animal feed,
breeding and farming; meat processing, manufacturing of semi-cooked meat and fully-cooked
meat; food products and ready meal products, as well as the meat and food retailer and
restaurant businesses. The products are distributed and exported under the brand name CP in
Asia, Europe and America. Currently, it exports to over 40 countries in five continents. CPF
PLC operates six types of outlets as follows-

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o Five Star Business: Operates as a franchise business.
o Chester’s Grill: A fast-food restaurant business.
o CP Kitchen: A fast-serve restaurant with a concept of a ‘fresh, full and fair price’.
o CP Fresh Mart: Engages in the retail business, selling fresh food, cooked food and ready-to-
eat products under the CP and CP Fresh Mart brands.
o CP Fresh Mart Plus: New- format retail business known as ‘super convenience store’. 
o CP Food World: Provides diverse food shops, both Company-owned and private.

C.P. Bangladesh Co. Ltd. (CPB), a sister concern of CP Group Thailand established in
Bangladesh on 14th January 1999 and has been doing business in the Agricultural industry,
Poultry sector since then. CPB produces and brands its products under CP, V Pork, Kitchen Joy,
Thai Thai, Five Stars, BK, and BKP as well as private labels.

2.0 Methodology

 Research Design: This research is designed as descriptive one which attempts to study CP
Food in Bangladesh.

 Sources of Data: This study incorporates both primary and secondary data. The primary
data was collected by interviewing the Branch Officials of CP Food outlet in Mirpur 01,
Mirpur 02, and Mirpur 10 with a formal questionnaire. We talked to the employees and
customers regarding various aspects of CP Food. We also engaged our fellow batch mates in
this study by having their opinions towards CP Food documented through a questionnaire.
The secondary data was mainly collected from the website and media release of CPF PLC
and Other sources including journal articles, newspaper publication, blogs etc.

 Data Analysis: In qualitative analysis, we have considered two widely used tools for
strategic analysis i.e. SWOT analysis. For quantitative analysis, the data considered are
imitated for Mirpur 10 branch and from those and other related application are shown.
Statistical techniques like average, regression analysis etc. are used in relevant cases.

3.0 Analysis

In this section, the strategic position of CP Food Bangladesh is analyzed through popular SWOT
analysis and Porter’s Five Forces Analysis.

3.1 SWOT Analysis of CP Food Bangladesh

SWOT is a tool to understand the strengths, weaknesses, opportunities and threats involved in a
project or business activity. It provides an analytical framework that can help a company
identifying its greatest challenges and most promising opportunities.

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 Table 3.1: SWOT Analysis of CP Food Bangladesh
 Production processes are computer controlled to ensure consistency.
 Possesses one of the strongest brand presences.
Strength
 Highest number of outlet compared to the related brands.
(S)
 Product Quality is the main concern.
 Developing specialty on single product line i.e. chicken items
 Limited global presence compared to market leaders.
 Disease outbreaks may cause panic and affect people’s confidence in chicken
Weakness meat consumption, resulting in reduced volumes of demand.
(W)  Lower brand Image.
 Lack of sales promotion and advertisement.
 Lack of innovation and variation in taste and services.
 Investment in expansion of distribution channels through its own outlets
 Implementation of eco-friendly policy would help to reduce waste disposal
expenses, save production costs, thus, increase earnings from higher selling prices
Opportunity that consumers are willing to pay for and promote the good image of being an eco-
(O) friendly company.
 Growing food industry of Bangladesh with a large customer base
 Changing Food Habit of people and increased attraction to fast foods
 Differentiation can be easily equipped by recipe or promotional variation
 Bird flu and other associated risks that may hamper the sales
 Innovation in the product quality or promotion by the competitors
Threats
 Unpredictable Weather and Environmental Conditions
(T)
 So many existing competitors
 Entrance of multinational companies in this sector

3.2 Economical analysis: Revenue, Cost, and Profit of CP

To determine whether CP Mirpur 10 Branch is operating under profit or not we have calculated
the total revenue and total cost of CP by the following way:

Determining Revenue
The revenue for CP is determined by the marginal relation of revenue and output. In addition to
the total revenue the marginal revenue is also determined for the optimization analysis. They are
calculated by the following equation:

Total Revenue, TR = P x Q, where P = a + dQ

ΔTR
Marginal Revenue, MR =
ΔQ

From the total revenue analysis of CP Mirpur 10 branch for masala chicken it is found that the
total revenue is increasing with the quantity increment. From periodical analysis it is found that
CP had the maximum TR of Tk. 108, 000 taka on February and March 2014 and got its lowest
revenue of Tk. 62,400 on April and December 2014.
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Determining Cost
The total cost is found from the summation of Fixed Cost and Variable Cost. Here, we have
considered the furnishing and infrastructural cost as the fixed cost and raw material, serving and
utility cost of the CP Mirpur 10 branch as the variable cost.

Total Cost, TC = FC + VC, where FC = Fixed cost and VC = Variable Cost

ΔTC
MC = ; AC=TC/Q
ΔQ
Total Cost analysis of CP Mirpur branch for masala chicken is showing that the total cost is
increasing with the quantity increment up to a certain level and after that it has become constant.
On the other hand, from periodical analysis it is found that CP had the lowest TC of 50,500 taka
on February and March 2014 and got its highest total cost of 59,050 on August 2015.

Determining Profit
From the total revenue and total cost the total monthly profit of CP Mirpur 10 branch is
determined. The Total profit of CP is calculated in the following way:
Profit, Π = TR – TC

The total profit of CP Mirpur Branch’s Masala chicken is in increasing trend. It has got its
highest profit of 57500 taka on February 2014 and lowest profit of 7100 taka on December
2014. The Total revenue, Cost and Profit of CP Mirpur 10 Branch’s Masala Chicken for
different quantity is shown below in figure 5.1.
125000

105000

85000

65000

45000

25000

5000
1200 1300 1400 1500 1600 1700 1800 1900
Q
TR Linear (TR) TC (VC+FC) Linear (TC (VC+FC))
Profit (TR-TC) Linear (Profit (TR-TC))

Figure 5.1: Total Revenue, Cost and Profit of CP

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3.3 Analysis of Consumer Response
In customer survey, total respondents were 52. Followings are the major conclusions derived
from the responses of the consumers collected through questionnaires.

 Frequency of Visit: Approximately, 44% of the respondents usually eat in CP “3 to 6 times

per month” and 27% eat in CP “0 to 2 times a month”; 23% eat “7 to 10 times a month” and
6% eat “More than 10 times a month”.
 Food Choice in CP: Approximately, 37% respondents normally choose Chicken fries
including crispy, spicy, and masala taste when they eat in CP. 20% respondents normally
choose Chicken Nuggets; 17% respondents choose Sausages & Chicken balls and 13%
choose Rice items and the rest 13% of respondents choose Hot Dogs.
 Value for Money: Approximately, 47% respondents described the food as “Reasonable”
thinking about value for money; 36% described as “Good Value” and 17% described as
“Bad”.
 Variety in Menu and Suggestions: Approximately, 40% of the respondents described the
variety of foods on offer as “Fair”; 27% described as “Not Good” and 20% as “Good”. Most
of the respondents suggested CP Food to display more ‘Innovation’ and ‘Variation in Tastes
and Flavors’ for further improvements in the variety of foods.
 Ranking of Different Aspects: The maximum portion of the respondents ranked Food
Quality as “Fair” (47%), Service Quality as “Not Good” (46%) and Food Pricing as
“Reasonable” (54%). As most of the respondents have not used CP’s Home Delivery
Service, they did not answer. So, the ranking would not be fruitful for this question.
 Satisfaction on Offer: About 57% of the respondents are satisfied with the seasonal
offerings and discounts on food items offered by CP Food and 43% are not.
 Comparison with Competitors: Based on five aspects i.e. Food Pricing, Taste, Food
Quality, Service Quality and Variation in Food Items Availability, KFC was given
maximum score of 23 on average out of 30 by the consumers and was placed in the first
position among the six competitors followed by Pizza Hut in 2 nd (scoring 21), Domino’s
Pizza and BFC in 3rd position (both scoring 20). CP Food was ranked as Fifth (scoring 19)
followed by FFC in sixth position with score of 18.

3.4 Analysis with Statistical Tools

So, we can use Simple Linear Regression to solve:
Σy= Na+b Σx ………i
Σyx= a Σ x+b Σ x ² …………. ii

4.0 Findings

Based on the above analysis, the following findings can be of derived.

o Demand and Supply analysis showed that demand of CP is affected by branch’s food item
price, the number of the competitor of CP in the Mirpur area, the competitor’s price changes
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 on that area, and their advertisement and the supply is affected by CP’s price, cost of the raw
material, and the cost of serving at Mirpur.
o CP had meet its quantity demand with quantity supplied on October 2014 at equilibrium
price of 55 taka and equilibrium quantity 1400 unit.
o The revenue maximizing quantity of Masala Chicken is 2454 units at Tk. 38.06, the cost
minimizing quantity is 167 units at Tk. 73.53 and the profit maximizing quantity is 1214
units of Masala Chicken at a rate of Tk. 57.30.
o The cross price elasticity of CP and BFC is 1.85953 that means if BFC’s price increases by 1
taka then CP’s Masala Chicken demand will increase by about 2 unit.
o The analysis of the prisoner’s dilemma between CP and BFC shows both can be better off by
regular price or achieve higher revenue by early discounting.

5.0 Conclusions and Recommendations

CP Food has an overall image of being reasonable, available, less innovative and less dynamic
food shop compared to the other market participants in Bangladesh. But, to be the key market
player in this sector, they need to reconsider some issues related their operation. So, following
recommendations are made for the betterment of CP.
 CP should maintain their low cost pricing market strategy as their demand for masala
chicken is largely depends on price. In addition, they should also increase their food quality
and infrastructure to compete with other emerging competitors.
 CP should match their quantity supplied and demanded to achieve the equilibrium level to
avoid the shortage or surplus of quantity in almost every month
 CP Mirpur Branch should sell 1214 unit of Masala Chicken at a rate of 57.30 taka to get the
maximum profit. At this optimal price and quantity combination both the revenue and cost
will be achieved in an efficient level
 CP should be aware of the price change of its potential competitor of BFC, as BFC price
discount can negatively affect CP’s sell of Masala Chicken. CP can go for a cooperative
strategy with BFC that they both will charge the regular price. If CP cannot do this, then they
should be the first mover in the price discounting to gain the sucker’s profit.
………………………..

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