SOUTHEAST UNIVERSITY

Topics Name
A Report on Operations Management Practices in Akij Group

Course Title & Code

Operation Management
MGT 517
Section- 2

Submitted By Submitted To

Tusher Kanti Das Sajjadul Mawla

2020010004114 Lecturer
35th Batch Southeast Business School
Master of Business Administration Southeast University
(1 Year)

Submission Date
12. October. 2021
Executive Summary:

A sister concern of Akij Group, Akij Corporation Limited is the most organized distribution
company in the country. Akij Group is country’s one of the leading business conglomerates.
Initially Akij Corporation Limited was known as Amin Enterprise and started its operation in
1992. In June 1997 Amin Enterprise was renamed as Aminuddin Enterprise Limited and in 2001
Amin Uddin Enterprise Limited was again renamed as Akij Corporation Limited. Akij
Corporation Limited is responsible for the marketing and distribution of three industries of Akij
Group namely Dhaka Tobacco Industries, Akij Match Factory Limited and Akij Zarda (chewing
tobacco) Factory.

Introduction:

Akij food and beverage ltd started their journey in 2006 as a unit of Akij group. AFBL produce a
wide range of Snacks and Beverage of both National & International market. AFBL is a $70
million project which was provided by Akij group. First production capacity was 400 bph in the
carbonated soft drinks line and 300 bph in the juice line. Within a span of one and a half years it
has increased capacity to 1800 bph. Now the capacity of production is at the ground-breaking
rate of 1900 bph. Most of our brands are leading brands in Bangladesh among these SPEED is
the most famous energy drinks brand in the market. AFBL is very conscious about their quality
of product and there is no compromise in terms of quality of product. To manufacturing the food
and beverage product AFBL used automated machineries which are mainly imported from
German. Even they imported machineries from world famous Tetra Pak, Crones ect.

Organization Overview:

History of Akij Group stretches back to later part of the forties. In its infancy, the Group started
in humble way with jute trading which was known as the golden fiber of the country, earning
highest amount of foreign exchange. Akij Group's ceaseless efforts with dynamic management
and support from their numerous clients have led their Group in diversifying its business
activities. In the second phase, the Group went into manufacturing handmade cigarettes
popularly known as bidis. This sector gave a real boost to the revenue earning of the Group as
well as making substantial contribution to government exchequer. With the passage of time, the
Group undertook new ventures and presently there are 15 units of industries under its
umbrellalike cigarettes, handmade cigarettes, printing & packaging, textiles, hand board,
pharmaceutical, leather processing and real-estate business are in operation, catering jobs for
more than 32,000 people in various categories. The Group has plans for setting up more projects.
The projects are already in pipeline. Foreign investors have shown keen interest in joining with
us for joint ventures. The matter is under our active consideration and will hopefully soon
mature. This will also help the nation's economy growth and will create job opportunities to
various professionals.

Akij Group is also involved in socio-cultural activities. The Group has been operating a sizeable
orphanage free of charge in district town. The Group has also acquired a modern mother &
children hospital previously owned by Save the Children (UK). The hospital is being operated as
a non-profitable concern by Ad-Din Welfare Trust.

The Akij Group is one of the biggest conglomerates in Bangladesh. It consists of 14 big
companies with diverse activities and different products, and launched its venture as a small jute
trader more than 50 years ago. Since then it has been progressing with tremendous pace in the
industrial arena of Bangladesh. From its humble beginning, it has been developed into a huge
corporation of infallible quality and excellent service. It highly values its consumers as unique
individuals and always ensures quality merchandise to suit the needs of each distinct consumer
group. It works hard to preserve the environment and culture of Bangladesh, side by side, plays
an outstanding role to develop the country economically advanced. The industrial wastage means
little to them because their factories have been built up with recycling and the environment
concept. A large number of people are employed by the group and cared for as members of the
Akij family. The non-profit concerns are also involved in sustaining development of the country.
Flexibility is the niche of the group to cope with the current versatile market. Akij Group is one
of the largest Bangladeshi industrial conglomerates. [1] The industries under this conglomerate
include textiles, tobacco, food & beverage, cement, ceramics, printing and packaging,
pharmaceuticals, consumer products etc. In 2009, Akij Group paid 390 million euros in tax,
making it the biggest local tax-payer, contributing two per cent to this nation's entire budget.
Akij also provides services in healthcare, information and communication technology. Its
turnover in 2009 was 89 billion Taka.In 2018, Akij sold their tobacco division to JTI for a sum of
$1.47 billion. It was the biggest ever single foreign direct investment in Bangladesh.
Vision and Mission of Akij group of industries:

Vision:

In this era of mass production, as it is very hard to stand out with one product, Akij Group
focuses on making the best in all sectors. Any company’s vision is actually the dream to which
the company always strives to reach where it may become possible or not. Akij Group is not
something different. Expanding the business in the abroad and becoming one of the market
leaders internationally are the visions of Akij Group.

Mission

The mission of Akij Group is to be the market leader through their best effort, suitable and
competitive marketing strategy and the consumers support. Now they are in the position of
challenger and their vision focuses on those missions, goals and objectives which will make
them able to be the leader from the challenger to the leader in the market.

Discussion and Findings:

Product Offering:

The products which are being served by a company to the market is product offering. Akij Group

has number of products in the market. They always try to bring differentiation on their products.

R&D department work hard. They have products in many categories. Some of their products are

described as follows:

At present Akij food and beverage ltd is offering diversified product in Bangladesh as well as in
the foreign market. Day by day Akij food and beverage is gaining popularity among the people.
Speed is the most popular and revenue generated product of Akij food and beverage. The
demand of Aafi juice is too high in the foreign market that’s why the company can’t supply in
local market as far market demand. Akij Food and Beverage Ltd, a concern of Akij Group,
launched in the local market three varieties of fruit juice under the brand name ‘Frutika’.

The three varieties of juice mango, red grape and red orange are already available in shops in
250ml PET bottles with prices ranging between Tk 20 and Tk 22. The officials of the company,
at a press conference held on the factory premises in Dhamrai, said Frutika is a aseptically filled
juice in PET bottle introduced for the first time in the local market. Akij Food and Beverage
installed state-of-the-art machinery, imported from Germany, to manufacture the juice, said Sk
Nasir Uddin, chairman of Akij Group. “Frutika juices have zero preservatives and no artificial
colouring, which helps maintain the pure taste of fruit in these products,” he claimed. Nasir
Uddin said they import mango pulp from India and pulp of other fruits from Germany to
manufacture the juices. Akij Group Directors Sk Jamil Uddin and Sk Shamim Uddin, attended
the press conference. Other high officials were also present.

Product Quality

Akij food and beverage limited produce quality of product and their tagline is “bring quality in
life”. Their products contain following qualities:

• Good performance

• Attractive Feature

• Reliable

• Good conformance

• Positive aesthetics

• Desire serviceability

AFBL: Morale, Ethics &Values:

 High quality and excellence service

 Open communication, personal responsibilities, integrity, and active participation
 Supporting the creative diversity and share of ideas
 Learning based on leadership, teamwork, accountability, and cooperation.
Defining Quality:

The definition of quality depends on the role of the people defining it. Most consumers have a
difficult time defining quality, but they know it when they see it.

Conformance to specifications: Measures how well the product or service meets the targets and
tolerances determined by its designers. Other objectives are analysis market monitoring of the
products and financial growth and future prospect of the company and investigate Consumers
requirements and demands. Report also discuss the advertisement of Akij Food and Beverage
Ltd and find out what makes the Akij Food and Beverage attractive to its user.

Fitness for use: A definitions of quality that evaluates how well the product performs for its
intended use. Distinct taste and superior quality that’s what consumers aim for when buying your
product. The constant need for efficiency, variety and flexibility in production puts additional
pressure on food and beverage processors.

Quality Control Department & Production Department which encompassed the following
activities:

 Maintain all quality control parameter as per specification.

 Ensure quality of production.

 Knowledge on product costing.

 To prepare & to submit necessary reports required by the management.

 Have to submit report to authority every day for production consumption, costing,

quality etc.

 To make necessary production plan as per the schedule provided by the production

department.

Brand development process of Akij Food and Beverage:

It was more than fifty years ago, Akij Group emerged into the market. Founder and life time
Chairman Late Mr. Sheikh Akij Uddin initiated the business in 1950s with a single product of
cigarette naming Akij Biri. This brand is one of the biggest and well-known unit of Akij Group.
Akij Food & Beverage started its journey in 2006.Today AKIJ GROUP has over 18 business
units in different sectors including tobacco, jute mills, cement, particle board, housing, textile,
ceramics, zarda, and match. The report is prepared on "An Analysis on Akij Food & Beverage".
Akij Food &Beverage has a large products line like mineral, energy drinks, different types of
juices, chips, various types of cold drinks and their latest addition is milk. To maintain this large
product line, Akij built a strong network in all over this country. Moreover, Akij has specialized
and skilled HR to run different strategies to capture large number of shares. Akij Food &
Beverage organize different and exciting promotional activities to maintain their current market
share and capture other’s share. In this case, Akij Food & Beverage got extra facilities because it
is performed under the shadow of Akij Group which is one of the biggest groups of Bangladesh.
The entire report in strategically divided in to three parts, first part involves relevant and accurate
in formation of the company Akij Food & Beverage Ltd (AFBL). Overviews of the parent
company AKIJ GROUP, its business units, functional and operational units are also discussed. In
the second part, I analyzed the AFBL’s overview followed by SWOT analysis, Competitive
analysis. The third part involves the in-depth analysis of my research work formatted as per
research Speed &its Branding Strategy (Speed Track Master Racing), hypothesis, and data
presentation and analysis, hypothesis testing, research findings summary etc. The derived
recommendation part of my research is also being compiled on this segment.

Statement of the Problems :

In Akij foods and beverage there is no proper route planning and proper plan to distribute their
product as a result they haven’t created the proper delivery plan with effectively. Every month
they have huge transport fuel cost. AFBL products first load to the large capacity truck and
unload in Dhaka warehouse and again the product has to load small delivery van to deliver
distribution point as a result they have to pay three times loading unloading cost. Due to lack of
proper demand forecasting, there is creating shortage of product in Dhaka ware house; is creating
disturbance in distribution channel. More ever there is no enforcement of keeping safety stock in
dealer point on the basis of company policy.

The threat of substitute products:

Within the food industry it’s a big threat. Basically, one product types is a substitute for another.

For carbonated soft drink (CSD) Substitutes are mineral water, energy drink, fruit juice etc. For

mineral water, substitute products are CSD, energy drink, juice etc. that’s why they have all

products which are substitute one to another. They have all types of drinks, chips and chanachur

etc. The entire industry compiles of many substitute arenas and thus conceptualizing on that,

AFBL operates eight different types of product lines to captivate and sustain in the huge

beverage industry.

The degree of rivalry among competitors:

Competitors are very concerned on this industry. Pepsico is being marketed by Transcom

beverage and selling worlds famous Pepsi, 7up, Mirinda, Mountain Dew in beverage sector. And

having mineral water named Aquafina. They have intensive distribution channels by which

products are available everywhere. Recently Coca-Cola Company launched and started operation

intensively they having mineral water too. Pran and Abdul Monem are now producing products

for them under the strategic alliance contract. They have world’s best coca cola, Fanta, and sprite

in the beverage sector. Also launched the world’s famous mineral water Kinley. Beside this two

there is Globe soft drinks, Partex beverage with RC cola; Pran etc are the competitors of AFBL.

Actually they are not competing with the Pepsico and Coca-cola. Basically, all the local
companies are in 2nd category. There is a competition among the local companies only. And

there is high rivalry among them. They only fight with the price. Because consumer of their

products is price sensitive. In all other category they have rivalry among the competitors.
AFBL's competitor list as per the product category is presented in the following Table:

Product Category AFBL Brands Competitors Brand

Carbonated Soft Drink MOJO Coca-Cola

URO Cola
(CSD): Zam Zam Cola
Carbonated Soft Drink RC Lemon
LEMU
(CSD): Cloudy Lemon URO Lemon
7UP
Carbonated Soft Drink Sprite
CLEMON
(CSD): Clear Lemon Pran-up
Fizz-up
Energy Drink SPEED Tiger, Power
Mum
Fresh
Mineral water SPA Pran
Aquafina
Kinlay
FRUTIKA Frooto
Aafi Pran Juice
Fruit Juice Acme Juice
Shezan Juice
Others (Foreign Brands)
Aarong Milk
Pran UHT
Dairy products: UHT milk Farm Fresh
RD UHT
•Milk-Vita

Conclusion:

AFBL is conducting its business with good reputation. Its sale is increasing over time.
Consumers as well as retailers are satisfied with AFBL in terms of price, quality and service.
AFBL is successfully doing its business in Dhaka rather than other districts. This report and
survey really helped me to know regarding products and financial condition of this company. It
helped me better to correlate my theoretical knowledge with practical domain. The Brand
department of AFBL makes intensive effort regarding the brand building of the products. The
reflection of the efforts could be seen from the strategic marketing communicational theme and
brands like MOJO, SPEED, FRUTIKA, CLEMON etc. All the ratios we took in consideration
presents that the company is doing very well over the time. The pace at which AFBL is currently
accelerating, will undoubtedly lead the company to the peak of success where majority of the
market shares will be held by the brands of AFBL. I will be concluding my research report by
stating that, being able to work with a company which is in the growth stage of the
organizational life cycle (OLC) enabled me to acquire a bundle of practical knowledge which
will turn out to be a great support for my future strategy formulations and implementations
achievements.

Bibliography:
https://www.akij.net