SWOT Analysis:

Opportunities:

Pakistan is the 7th largest producer of milk. Capitalize on its superior quality milk. Now a day’s consumers have become health-conscious. Therefore it is an important

opportunity for Milkpak to come up with variety of health-based products. Nestle Milkpak’s focus extensive milk collection system and agriculture extension

ensures that the milk you get is of the finest quality. Nestle Milkpak is using the latest technology in its production units. Joint venture with a foreign company Overall climate for private investment was favourable Milkpak competitors were few and week Increasing interest of people More people are coming toward processed milk because loose milk is dangerous for

health due to lot of containment Growth of processed milk increasing Government provided safeguard against nationalization and sought to ensure the safety of

investment

Threats:

Effects of seasonality upon sales

Decreasing the purchasing power of people

Raw materials which are imported

Introduce the consumer the idea of long life milk.

Uncertainty of economic conditions

EFE Matrix for Milkpak Limited

Key External Factors Weight Rating ScoreOpportunities      Pakistan is the 7th largest producer of milk.

0.1 4 0.4Latest technology 0.06 3 0.18Health based products 0.05 3 0.15Focus on extensive milk collection and agriculture extension 0.05 3 0.15Joint venture with foreign company 0.07 3 0.21Few and weak competitors 0.08 3 0.24Threats      Effects of seasonality upon sales

0.14 2 0.28Decreasing the purchasing power of people 0.1 2 0.2Raw materials which are imported 0.13 2 0.26Uncertainty of economic conditions 0.12 2 0.24Challenge to introduce the consumer the idea of long life milk 0.1 1 0.1

Total 1   2.41

Strengths:

Milkpak has a longer shelf life. It is a pure dairy product and so stays fresh even without

refrigeration for days.

Milkpak is considered safe and hygienic because of the brand name of Nestle backing it.

One of Milkpak’s major strengths is its distribution network. It is more widely available

than any other milk and extensively covers all the important areas. It therefore provides a

lot of convenience to loyal users.

Commitment to high quality products.

Solid financial position

Milkpak was positioned as pure dairy products, processed as scientific, hygienic way and

consistent in quality.

Expanded from UHT to fruit juices and other dairy products

Weakness:

Customers perceive that packaged milk contain many chemicals for their preservation.

This is a negative association for Milk Pak.

Weak advertising of Milkpak

Another weakness of Milkpak Ltd. is that its total packaging depends upon Packages

(Pvt.) limited.

Problems of transporting and distribution resulting in shortages in major centres milkpak

target market.

Poor management

The target market of MilkPak is only the upper and middle class. As poor class cannot

afford to buy UHT milk because of its premium price

Poor dairy infrastructure in rural areas

Lack of education among the farmers is making it difficult to change farm and dairy

management system

Increasing demand for imported products.

IFE Matrix for Milkpak Limited

Key External Factors WeightRating Weighted Score

Strengths  

Longer shelf life 0.0

8 3 0.24Safe and hygienic 0.15 4 0.6Commitment to high quality products 0.15 4 0.6Solid financial position 0.08 4 0.32Strong Distribution Network 0.06 4 0.24Weaknesses    Increasing demand for importing products 0.16 2 0.32Target market is only upper and middle class 0.08 1 0.08Weak advertising of Milkpak 0.17 2 0.34Dependence on packages limited 0.07 2 0.14Total 1   2.88

Internal-External (IE) matrix 

The Internal-External (IE) matrix is strategic management tool used to analyze working conditions and strategic position of a business. The Internal External Matrix is based on an analysis of internal and external business factors which are combined into one suggestive model. Basically it is combination of the EFE matrix and IFE matrix.

The IE matrix is based on the following two criteria:

Score from the EFE matrix -- this score is plotted on the y-axis Score from the IFE matrix -- plotted on the x-axis

The IE matrix works in a way that you plot the total weighted score from the EFE matrix on the y axis and draw a horizontal line across the plane. Then you take the score calculated in the IFE matrix, plot it on the x axis, and draw a vertical line across the plane. The point where your horizontal line meets your vertical line is the determinant of your strategy. This point shows the strategy that your company should follow.

On the x axis of the IE Matrix, an IFE total weighted score of 1.0 to 1.99 represents a weak internal position. A score of 2.0 to 2.99 is considered average. A score of 3.0 to 4.0 is strong.

On the y axis, an EFE total weighted score of 1.0 to 1.99 is considered low. A score of 2.0 to 2.99 is medium. A score of 3.0 to 4.0 is high.

So the total weighted score which we calculated in IFE matrix is 2.88 which points at a company with an average internal strength.

We also calculated the EFE matrix. The total weighted score calculated for the EFE matrix is 2.41 which suggest a company has average ability to respond to external factors.

IE Matrix

    The IFE Total Weighted Score   

The EFE Total

Weighted Score

IEStrong

3.0 to 4.0

Average 2.0 to 2.99

Weak 1.0 to 1.99

High 3.0 to 4.0

GrowI

And II

Build III

Medium 2.0 to 2.99

HoldIV

And V Maintain

VI

Low 1.0 to 1.99

Harvest VII

And VIII

Divest IX

This IE matrix tells us that the Milkpak should hold and maintain its position. The company should pursue strategies focused on increasing market penetration and product development.

BCG Matrix:

The BCG model is a well-known portfolio management tool used in product life cycle theory. BCG matrix is often used to prioritize which products within company product mix get more funding and attention.

Placing products in the BCG matrix results in 4 categories in a portfolio of a company:

BCG STARS (high growth, high market share) BCG QUESTION MARKS (high growth, low market share) BCG CASH COWS (low growth, high market share) BCG DOGS (low growth, low market share)

MILKPAK POSITION ON THE BCG MATRIX: CASH COW

MILKPAK is a low-growth business with a relatively high market share.

It is a mature, successful business with relatively little need for

investment (Advertising etc).

Milkpak needs to be managed for continued profit - so that it continues

to generate the strong cash flows that the company needs for its Stars

Grand Strategy Matrix:

This is also an important matrix of strategy formulation frame work. Grand strategy matrix it is popular tool for formulating alternative strategies. In this matrix all organization divides into four quadrants. . It is based two major dimensions i.e. Market growth and Competitive position and all quadrants contain all possible strategies.

As it lies in first quadrant so we should go for following set of strategies.

Market development

Market penetration

Product development

Forward integration

Backward integration

Quadrant 1

Milkpak Limited

Rapid Market Growth

Quadrant II

Quadrant III Quadrant IV

Weak Competitive

Position

Strong Competitive

Position

Slow Market Growth

Horizontal integration

Related diversification

Reasons:

It lies in 1st quadrant because of some reasons that are:

Excellent strategic position Concentration on current market /products Take risk aggressively when necessary