NATIONAL

FOODS
LIMITED
SUBMITTED TO:
SIR NAVEED MUHAMMAD
KHAN
 FOOD INDUSTRY IN
PAKISTAN
◦ Oversized industry in Pakistan

◦ The industry produces

◦ cooking oils, hydrogenated vegetable oils
◦ sugar, flour, dairy products 
◦ biscuits, breads and confectionery
◦ fruit juice drinks, carbonated beverages
◦ snack foods 
◦ jams, jellies, squashes, sauces, pickles, masala etc.

◦ With an annual growth of 25%, Masala sector in Pakistan offers great opportunities for
local and international investors

◦ Masalas are utilized in every food in Pakistan. The materials for masala are easily available
so transportation costs aren't a controversy

◦ Food industry normally and masala particularly is at expanding in Pakistani market

 INTRODUCTION
NATIONAL FOODS

Liked by the consumers

Largest producer and
manufacturer of Masala in
Pakistan
and because of first mover
55% of market share
advantage has many loyal
customers

Closest competitor is Shan

Strong reputation within Exceptional taste and sound
while others include Naseem
the Pakistani households distribution network
Chef Pride

Highly efficient management Listed at KSE and excellent

and hardworking team of relationship with stake
Personnel holders
PRODUCT PORTFOLIO
DESERTS

CUSTARD JELLY

Vanilla Strawberry

Strawberry Mango

Banana Pineapple

Mango Mixfruit

Orange

Banana
 PRODUCT PORTFOLIO
RECIPE MASALA

VEGETARIAN SALAN RICE HALEEM

Daal makhni Korma Biryani Quick mix haleem

Vegetable pulao Paya Bombay biryani Danedaar haleem

Aloo Palak Fish curry masala Pulao Haleem masala

Punjabi chana Masaledar murghi Sindhi biryani

Veg biryani Kofta Achari biryani

Veg jalfrezi Murgh cholay Mutton biryani

Sabzi masala White qorma Chicken biryani

Nihari Masale dar biryani

 PRODUCT PORTFOLIO
PICKLES

Vinegar Hyderabadi Punjabi

SNACKS
Dahi bara Chat masala Pakora mix

KETCHUP

Cooking ketchup Chilli garlic Tomato ketchup

PRODUCT PORTFOLIO
JAMS

Marmlade Jellee Jam

National foods
Coriander
Salt Chilli chutney
chutney

NATIONAL FOODS
Classic &
Ginger paste Garlic paste Scene on
garlic mayo
ANALYSIS OF VISION
STATEMENT OF NATIONAL
FOODS

“To be a Rs.50 billion company in the convenience food

segment by launching products and services in the
domestic and international markets that enhance lifestyle
and create value for our customers through management
excellence at all levels”

◦ Vision statement is challenging and motivating for

the employees as they have set a high target for their
company

◦ They know the market they want to capture

◦ Vision Statement talks about giving values to their

customers
 ANALYSIS OF MISSION STATEMENT OF
NATIONAL FOODS
◦ No separate mission statement of the company
◦ Only core value mentioned

◦ Passion

◦ Teamwork

◦ Customer centric

◦ Excellence in execution

◦ Ownership
COMPONENTS OF
MISSION STATEMENT
1. Customers
2. Product or service
3. Market
4. Technology
5. Survival growth
6. Philosophy
7. Employees
8. Self-concept
9. Public image
INDUSTRY ANALYSIS

◦ Lot of growth potential and is at a growing stage

◦ Not much government regulations

◦ Government supports the food industry as it has a

lot of potential for growth

◦ There are risks and hazards related to food safety

issues which are related to the whole supply chain
of the food industry
MACRO
ENVIRONMENT OF
FOOD INDUSTRY

Computer software like ERP

Technology played
helps improve the
important factor in shaping
performance as it reduces the
the food industry
time and cost constraints

In near future companies Socio-cultural issues are

will acquire technology for shaping the food industry, as
the treatment of the waste people are moving toward
products convenience food item
PORTER Bargaining power of Suppliers is low

FIVE Too many suppliers of food related products

FORCES Bargaining power of Customers in this is industry is

high,
Buyers have so many options in the market

Bargaining power of substitutes is low as no such

substitutes for spices
The rivalry among the existing competitors is very high

Shan foods vs National foods

 EFE      

Key External Weighted EXTERNAL

  Factors Weight Rating Score
Opportunities       FACTOR
Growth potential in Rural areas
High Growth Rate Of Urban Pakistan
0.1
0.1
3
3
0.3
0.3
EVALUATION
Fast Lifestyle (less available time for cooking) 0.1 2 0.2
 EFE score 2.72
Quality Raw Materials Available in country 0.15 3 0.45

Untapped Asian Communities Living Aboard 0.1 2 0.2

 Performance is slightly above
Threats      
average
High Domestic Inflation Rates 0.8 2 0.16
Agriculture marketing mechanism of the
country 0.1 3 0.3  NF doing average job in taking

Emerging national/ International competitors 0.7 3 2.1 advantage of opportunities in the

Private/ Local Brands 0.1 3 0.3
Competition From Loose/ Open Spices 0.1 3 0.3
external environment, and
Total 1   2.72
defending against most potential

threats
 IFE       INTERNAL
Strengths
Key Internal Factors Weight Rating Weighted Score
FACTOR
EVALUATION
     

Strong brand image 0.1 4 0.4

Market leader with 55% share 0.1 4 0.4
R & D and Product Development 0.05 3 0.15
Strong distribution network 0.2 4 0.8
Integrated ERP (SAP) 0.05 3 0.15
Book Value improving 0.1 4 0.4
 IFE score of 3.2
Diversified Business 0.1 4 0.4
Weaknesses      
 NF has a strong internal system
Marketing Strategy formulation and execution 0.05 1 0.05
ROE in decline 0.05 1 0.05
 Effectively manage all their
Weak Position In Karachi (Trailing behind Shan) 0.1 2 0.2
Ronaq ‘heat and eat’ range of ready to eat meals failed in strengths in a meaningful manner
the market 0.1 2 0.2
Total 1  3.2
ANNUAL DATA
Current ratio 1.20
2020
1.06
2019 2018
0.88 1.05
2017
1.13
2016
FINANCIAL
Quick ratio
Gross margin
0.50
29
0.34
31.68
0.31
31.05
0.41
32.31
0.33
33.13
RATIOS
Operating margin 9.20 7.96 6.43 8.47 8.97
EBIT margin 8 6.84 5.43 7.84 8.37
EBITDA margin 12 10.15 8.26 10.08 10.57
Net profit margin 5.70 5.44 4.76 5.79 5.87
Asset turnover 2.0 2.08 2.12 2.08 2.20
Inventory turnover 4.0 3.99 4.19 3.40 3.27
ratio
Receivables 23 22.32 17.07 14.64 13.53
turnover
Days sales in 16 16.35 21.38 24.94 26.97
receivables
ROE- return on 30 30.34 27.77 32.80 29.88
equity
ROA- return on 12 11.32 9.39 10.34 11.82
assets
 FINANCIAL RATIOS
PERCENTAGE INCREASE OF SIGNIFICANT RATIOS FROM
2016-2020

TURNOVER INTERPRETATION
35%  Turnover kept increasing throughout the last
PERCENTAGE INCREASE

30%
25% five years
20%
 Main contribution of local district
15%
10%  Most significant increase recorded in FY 18 of
5%
0%
5%,
2016-2017 2017-2018 2018-2019 2019-2020
 From FY 19 the incremental percentage
TURNOVER

continued decreasing.
 FINANCIAL RATIOS

GROSS PROFIT
30%
INTERPRETATION
25%
PERCENTAGE INCREASE

 Gross profit margin increasing at a steady rate throughout

20%
the years
15%
 The least decrease was recorded in the year 2018-2019
10%

5%

0%
2016-2017 2017-2018 2018-2019 2019-2020

GROSS PROFIT
 FINANCIAL RATIOS
PROFIT AFTER TAX
35%

30%
INTERPRETATION
PERCENTAGE INCREASE

25%
 Increase profit after tax margin took a sharp dip in FY 18 by
20%
16% due to the increase in tax rate
15%
 FY 19, quickly recovered and recorded significant increase
10%
of 27%
5%

0%
2016-2017 2017-2018 2018-2019 2019-2020

PROFIT AFTER TAX

 FINANCIAL RATIOS

EARNING PER SHARE

12

10
INTERPRETATION
8
 The company continued to pay an average EPS of 9.85
6
throughout the last five financial years.
4

0
2016-2017 2017-2018 2018-2019 2019-2020

EARNING PER SHARE

 COMPETITIVE PROFILE MATRIX

COMPETITIV
Critical Success Factors Weight National Shan Foods Mehran foods E PROFILE
Foods
MATRIX
Rating Score Rating Score Rating Score

 NF is leading in the CPM but still

Product Quality 0.1 4 0.4 4 0.4 2 0.4

getting head-to-head competition

Advertising 0.15 4 0.6 3 0.45 2 0.3

from Shan foods

Price Competitiveness 0.15 3 0.45 3 0.45 2 0.45

Global Expansion 0.2 3 0.6 4 0.8 1 0.2

 Both have above average score

Distribution & mangmnt 0.1 4 0.4 2 0.2 2 0.2  NF leading the chart because of

Market Share 0.1 3 0.3 3 0.3 2 0.2 diversified range of products

Financial strength 0.1 3 0.3 2 0.2 2 0.2  NF being public limited company

Diversification 0.1 2 0.2 2 0.2 1 0.2 gave them the competitive

1 3.25 3 2.15 advantage on

 SWOT MATRIX
 
STRENGTHS WEAKNESSES
  1. Innovation 1. Declining gross profit
2. Product 2. Low market share in Karachi
3. Brand 3. Weak communication
4. Manufacturing 4. Poor internal control and monitoring
5. Improved research & development performing audit.
6. Marketing approach 5. Mitchell’s advertising is better than
7. Organizational Structure NFL.
8. Financial management  
OPPORTUNITIES SO STRATEGIES WO STRATEGIES
1. New markets being developed 1. Expand operations in foreign countries 1. Increase market share internationally by
2. Expanding in foreign markets 2. Diversification of product advertising.
3. Increase in GDP 2. Outsourcing of distribution channel
4. Health and quality conscious consumer 3. Forward integration
5. Multicultural varied taste references  
THREATS ST STRATEGIES WT STRATEGIES
1. New entrants 1. Diversify operations 1. Operating cost
2. No barriers to entry 2. Cost strategy 2. Penetration of competitors in food
3. New cheaper substitutes 3. Competition in retail market. market.
4. Open spices
5. Dynamic hygiene and quality regulations
6. Political instability
  
  INTERNAL ANALYSIS  SPACE
MATRIX
  Financial position Ratings (+1 worst,+6 Best)

1 Net income 4
2 Return on investment 3
3 Leverage 2
4 Liquidity  2
5 Net sales 5 
6 Cash flow 2
7 Working capital 6
  Average 3.42
 CP+IP= -2+3.4= 1.4
  Competitive position Ratings(-6 worst, -1 Best)
 FP+SP= 3.42+ (-3) = 0.42
1 Product quality -2
2 Product life cycle -2
3 Advertising -2
4 Global expansion -3
5 Management -1
Diversification
6   -2
7 Price competitiveness -2 
  Average -2
   EXTERNAL ANALYSIS  
SPACE
MATRIX
  Stability position     Ratings(-6 worst, -1 Best)

1 Rate of inflation     -4    

2 Technological changes   -1    

3 Price elasticity of demand   -3    

4 Competitive pressure   -4    

5 Barriers to enter market   -3    

      Average   -3    

  Industry position     Ratings(+1 Best, +1 worst)

1 Resource Utilization     3    

2 Growth potential     5    

3 Financial stability     3    

4 Profit Potential     4    

5 Ease to inter into market   2    

      Average   3.4    
SPACE MATRIX
GRAPHICAL
REPRESENTATION

 National foods is more towards the

aggressive side adopting aggressive
strategy
 To acquire its competitor Shan foods, they
need to increase the level of aggressiveness
as Shan foods have high level of
aggressiveness than them
 This will help them in acquiring more
market share than Shan foods.
 STAR QUESTION MARK

BCG
MATRIX
CASH COW DOG
 STRATEGIC ALTERNATIVES
Expand operations in Concentrate efforts on increasing
   
foreign countries share in urban markets
KEY FACTORS
Strengths
WEIG
HT
 
AS
 
TAS
 
AS
 
TAS
 
THE
Strong brand image
Market share with 55% share
R&D and product development
0.1
0.1
0.05
3
3
2
0.3
0.3
0.1
4
3
3
0.4
0.3
0.15
QUANTITATI
Strong distribution network
Integrated ERP (SAP)
Book value improving
0.2
0.05
0.1
4
3
-
0.8
0.15
-
4
3
1
0.8
0.15
0.1
VE
Diversified business
Weakness
Marketing strategy formulation and execution
0.1
 
0.05
4
 
1
0.4
 
0.05
3
 
2
0.3
 
0.1
STRATEGIC
ROE in decline
Weak position in Karachi (trailing behind Shan)
Ronaq ‘heat and eat’ range of ready to eat meals
failed in market
0.05
 
0.1
-
 
-  
 
 
4
 
1
0.2
 
0.1
PLANNING
  0.1 4 0.4 3 0.3
           
Opportunities          
Growth potential in Rural areas 0.1 - - - -
High growth rate in Urban areas of Pakistan 0.1 2 0.2 4 0.8
Fast lifestyle 0.1 4 0.4 3 0.12
Quality raw material available in country          
Untapped Asian communities living abroad 0.15 - - 2 0.3
  0.1 4 0.4 - -
Threats          
High domestic inflation rates 0.8 - - 1 0.8
Agriculture marketing mechanism of the country 0.1 - - 2 0.2
Emerging national/ International competitors          
Private/local brands 0.3 1 0.3 2 0.6
Competition from loose/open spices 0.3 2 0.6 3 0.9
  0.3 1 0.3 1 0.3
           
TOTAL SCORE     4.7   6.92
EVALUATION OF BUSINESS MODEL
Business Model of National foods

Customer Customer
Key Partners Key Resources Value Proposition
Relationships Segment
Financial
Local farmers huge range of products Customer creating value for
Resources
Satisfaction
mothers,
retailers and wholesalers
housewives
Unique
Human resources Loyalty and daughters
taste

Recipes of different Discount to Middle class and

dishes customers above

Free East
High
items/gifts on lifestyle
quality seeker
purchase
Need for readymade
spices
with
recipes
Key Activities Channels
product
distributor
development/
market testing wholesaler
retailer
Research and
customer
development
consumer
Revenue
Cost Structures
Stream
labor cost Vary depending on product line

Manufacturing cost
 BLUE OCEAN
STRATEGY
ELIMINATE RAISE  Consumers are becoming more
Paper packaging Market coverage concerned about sustainability issues
  Untapped areas with time thus National foods should
  Awareness of branded spices in rural focus on reducing plastic usage
areas
More flavors of Jams
 They should raise awareness of
packaged and branded spices in rural
REDUCE CREATE
areas as well as untapped urban areas
Pricing Sustainable packaging
  Organic raw material used product
 They can introduce value offers and
  Social media presence
reduced prices to its consumers
   They should also work on increasing
their social media presence through
campaigns, engaging activities and
challenges.
 CONCLUSION
 National Foods Limited is doing great and holds a strong position
 Has vast area of opportunities as well as enough strength to lead the
industry
 They have power to minimize their weaknesses.
 The score in IFE and EFE shows a strong hold of National foods on its
business opportunities, but it can also be said that National foods is not
making in use of external forces.
 They have a big market share and is leading in the competitive chart as
well
 There are some grey areas which they needs to focus on and eliminate
negative impact and threats
 They are going right on its path towards more success and within few
years they will be able to outsource its competitors as well
RECOMMENDATIONS
 They should focus on their advertisement area, as it will help them attract more
customers and will be helpful in creating strong brand equity as well

 They should also focus on global expansion, because as compare to Shan foods,
National foods brand awareness is low and there is low availability of products in the
markets overseas

 The demand of National foods is high in global market expanding their business
globally will help them capture more market share

 They should add ready to eat products.

 They should introduce products for lower middle class as well