Strategic Management

Tropic Assignment on the tropic ldquohow a manager strategically manage a Firmrdquo

Supervised ByTasneem Taranam

Senior lecturerDepartment of Business Administration

Submitted ToDepartment of Business Administration

Northern University Bangladesh

Submitted BySection- B

Sl No Name ID01 SM Al-Shahriar BBA 12030479002 Md Momin Mia BBA12030478303 Amit Hasan Prince BBA12030480804 Subha Saha BBA12030483205 Md Sajib Rahman BBA120204681

Submission Date 27-08-2015

1 Introduction

In every company they have a management structure and model to build up their business and for gain the business goal Vision mission statement is the important statement for any organizations Entrepreneurs and industry managers are often so lost in thought with in need of attention issues that they lose view of their eventual objectives That is why a business re-evaluates or groundwork of a strategic plan is a fundamental necessity This may not be a formula for success but not including it an industry is to a great extent more likely to fail By applying any type of strategic decision company can full fill their vision and mission Either its big or small organizations they have managed to achieve their aspirations or the management set up a decision to achieve that aspiration

11 Why strategic management

Strategic development and administration are more than a set of administrative instruments They represent an approach an approach to looking at the alterations in the inner and outer situation that meet the administrator Using planning and administration tools tactically then engage fundamentally a technique of opinion a psychological structure or approach as well as a set of logical tools For strategic management to be successfully used the manager must build up a strategic attitude or viewpoint The difficulty for the professional is how to help the manager obtain that attitude

12 What is strategic management

Strategic management Strategic management process is the pattern or plan of an organization by which the organization can achieve their desired goal This process is involved in the top-level management decision-making management led by the Chief Executive officer or the President of the company If business organizations have the strong strategic management then the company can get the strong output what is a main aim of the business

Strategic management is defined as the combination of formulating implementing evaluating cross-functional decisions that make possible a company to accomplish its objective

Strategy formulation involves

Doing a circumstances study

Synchronized with this consideration objectives are set

These objectives must in the light of the circumstances investigation recommend a strategic plan The arrangements supply the elements of how to gain these objectives

This three-step strategy formation system leads us to determine that at which stage a business is now determined where the business want to go and how they can achieve the goal point

Strategy implementation involves

Sharing of enough resources

Build up a sequence of directive or some alternative

Handing over some liability of precise tasks to precise individuals or grouping

It also engage supervision the procedure

When implementing particular programs that engage obtaining the necessary possessions implementing the method training procedure testing documentation and integration legacy processes

Strategic evaluation

Strategic evaluation is the last stage of strategic management process The management need to know in which particular strategies are not performing well By evaluating the business can achieve their success in an easy way

2 Company Profile

21 Background

A sister concern of Akij Group Akij Corporation Limited is the most organizeddistribution company in the country Akij Group is countryrsquos 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 Aminuddin 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

22 History of Akij Group

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 Groups 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 umbrella like cigarettes handmade cigarettes printing amp packaging textiles hand board pharmaceutical leather processing and real-estate business are in operation catering jobs for more than 32000 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 nations economy growth and will create job opportunities to various professionals

23 Mission and vision of Akij group of industries

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 companyrsquos 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 AkijGroup 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

Product of AFBL

Akij food amp Beverage limited started their journey officially on July 2006 with three products but within this four year company able to add lot of products on its rosters The products which are offering now by the company are given below

Product Category Brand Name Size

Cola MOJO 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Cloudy Lemon Lemu 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Clear Lemon Clemon 250ml pet and can 500ml pet 1 liter pet and 2 liter pet

Energy Drink Speed 250ml pet and can

Drinking water Spa 500ml pet 1 liter pet 2 liter pet

Juice Frutika (Mango Red grape Red orange)

250ml pet 1 liter

Milk Farm Fresh UHT milk frac12 liter tetra pack

Malt Beverage Wild Brew 250ml can

Business Philosophy

Akij Group diversified their business in Food amp Beverage industry because in Bangladesh we have 14 corers people It is large market size to serve and food is required continually for the population Akij food amp beverage want to serve quality food for their target market

In chips industry there are many local amp foreign companies Akij want to be local unique chips producer with the same quality of foreign company For this purpose AFBL produces chips for young target group who like to live styles life Main slogan of AFBL is ldquoBrings Quality in Liferdquo

AFBL has its own marketing amp sales department in Akij chamber The functions of this department are very wide and dynamic Main functions performed by this department are

1048766 Product development

1048766 Raw material sourcing

1048766 Find out or create market for its product

1048766 Price set up

1048766 Packaging development

1048766 Developing communication strategy

1048766 Preparing sales forecast

1048766 Maintain sales management in the field

1048766 Keeping record of sales and stock

1048766 Collection amp analysis of competitorrsquos information

Beside these it performs a number of activities to conduct their day‐to‐day business Under marketing amp sales department a Brand team performs the key role of real marketing

Chapter- 3

EVALUATION OF CURRENT CORPORATE LEVEL STRATEGIES

AKIJ has a well-established and consistent strategy for growth which allowed to strengthen core business and drive expansion into new markets The rationale for corporate level strategy is to broaden the scope of the business to enable it to deliver strong sustainable long-term growth by following the customer into large expanding markets at home such as Food non-food and new markets development in Bangladesh Akij adopted few strategies to survive and sustain in the market The few strategies are

1 Low Price Strategy - Everyday Low Price

2 Customer-focused Strategy - To create value for customer to earn their lifetime loyalty

3 Growth Strategy (business ndash product development) Own brand value

Low Price Strategy Everyday Low Price

An Every Day Low Pricing (EDLP) is a pricing strategy of Akiz is more popular with shoppers than one driven purely by promotions according to a survey in the BD Akij is the first hypermarket to launch a long-term EDLP campaign in a bid to address the rising cost of living Pricing was a key strategy and selling point for Akiz They have invested lot for the campaign to be able to reduce prices up to 30 Low prices were adopted to maximize sales Akijs value-added products at low prices attracted many customers After the launch of unbeatable value campaign Akij went into massive price reductions The company adopted the strategy of Everyday Low Pricing (EDLP) while continuing its other promotional activities Adopting the EDLP strategy demonstrated Akijs commitment to its customers putting customer interests first This is also a competition between companies EDLP is essentially an advertising strategy to attract more customers to buy their products It is mostly seen on food stuff

Customer-focused Strategy Create value for customer to earn their lifetime loyalty

The core purpose is to create value for customers to earn their lifetime loyalty Everything Akij did every innovation they bring to the market every business decision they take is driven by the customers The underlying aim is of course to make higher profits but there is a clear focus on customer service at the top level of the company Akij must be able to maintain this focus that it is widely perceived as a great corporate success story and the dominant company in Bangladeshi retail market Otherwise it will succumb to corporate arrogance as sometimes happens to dominant companies Akij believes that by living by the values they will encourage and demonstrate behavior that will help them achieve the core purpose and set them apart from the competitors Values enable them to build a common way of working They want people in the business feel comfortable with these values and feel they can genuinely demonstrate them They

arent about being soft and lovely but about being rigorous and single minded about how they achieve

Growth Strategy

Own brand value

Own brand value portrayed the strong brand image of Akiz based on effective strategy Akiz is very good at using design across their own label especially strategically Akiz is often used as one of the best examples of own brand label in the retail industry Majority of consumers buy the basic Akiz brand as it is quality good cheap and good value for money Brand values of Akiz are successfully throughout Akiz own brand ranges demonstrated through experience and way finding system Akiz uses design to give something back to customers for shopping Akij products As competition is so intense retailers such as Akij use design to differentiate from the competitors

Differentiation Strategy

The strategy to diversify the business was laid down in 1997 and has been the foundation of Akijrsquos success in recent years The new businesses which have been created and developed over the last decade as part of this strategy now have scale they are competitive and profitable In fact the International business alone makes about the same profit as the entire Group did a decade ago

Community

Making Corporate Service Responsibility (CSR) integral to the business is essential in applying our values as a responsible business Akij believes it is also an opportunity for growth and also is committed to stay close to the heart of the communities Akij is part of Akij Group is 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 amp children hospital previously owned by Save the Children (UK) The hospital is being operated as a non-profitable concern by Ad-Din Welfare Trust

SWOT Analysis for Akij food and beverage

The SWOT Analysis shows that Akij food and beverage has the resource capabilities to successfully enter the market and is capable of implementing a market development strategy The report recommends that Akij targets the high-end market segment with a differentiation strategy Success in companies that operate for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products or services being offered

Furthermore the ability of the company and its management to compete and maintain a competitive edge among its competitors is another basis to say that it is successful The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company This report analyzes the strategic capability of Akij

Strengths

The main strength of Akij is its strong brand name and its valued customer service The company is far less integrated than the other big company that which makes them

more flexible compared to others Competitive prices strategy Akij believes in direct marketing rather that via a middleman or agent Customer loyaltyrelationship

Weaknesses

Dependency on local business This could be the weaknesses for Akij to expand their business widely Burden of higher advertisement cost High turnover rate of employees Difficult to find perfect replacement of trained employee

Opportunities

There are only few large companies in food amp beverage sector in our country Akij is enjoying backward integration facilities so suppliers bargaining power is not high People in our country trust Akijrsquos product They have faith as itrsquos Akijrsquos product it will

good Akij products are enjoying brand value

Threats

Increasing competition within industry Other major companies are starting to invest in food and beverage Changing in customer tastes Customersrsquo tastes and preferences would change over time Global economic decline is the barrier and created an impact on business Some environmental factors such as climate changes political issue and taxes issue can

become a threat Raising the costs of raw resources from both food and non-food will crash general profit

boundaries

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

In every company they have a management structure and model to build up their business and for gain the business goal Vision mission statement is the important statement for any organizations Entrepreneurs and industry managers are often so lost in thought with in need of attention issues that they lose view of their eventual objectives That is why a business re-evaluates or groundwork of a strategic plan is a fundamental necessity This may not be a formula for success but not including it an industry is to a great extent more likely to fail By applying any type of strategic decision company can full fill their vision and mission Either its big or small organizations they have managed to achieve their aspirations or the management set up a decision to achieve that aspiration

11 Why strategic management

Strategic development and administration are more than a set of administrative instruments They represent an approach an approach to looking at the alterations in the inner and outer situation that meet the administrator Using planning and administration tools tactically then engage fundamentally a technique of opinion a psychological structure or approach as well as a set of logical tools For strategic management to be successfully used the manager must build up a strategic attitude or viewpoint The difficulty for the professional is how to help the manager obtain that attitude

12 What is strategic management

Strategic management Strategic management process is the pattern or plan of an organization by which the organization can achieve their desired goal This process is involved in the top-level management decision-making management led by the Chief Executive officer or the President of the company If business organizations have the strong strategic management then the company can get the strong output what is a main aim of the business

Strategic management is defined as the combination of formulating implementing evaluating cross-functional decisions that make possible a company to accomplish its objective

Strategy formulation involves

Doing a circumstances study

Synchronized with this consideration objectives are set

These objectives must in the light of the circumstances investigation recommend a strategic plan The arrangements supply the elements of how to gain these objectives

This three-step strategy formation system leads us to determine that at which stage a business is now determined where the business want to go and how they can achieve the goal point

Strategy implementation involves

Sharing of enough resources

Build up a sequence of directive or some alternative

Handing over some liability of precise tasks to precise individuals or grouping

It also engage supervision the procedure

When implementing particular programs that engage obtaining the necessary possessions implementing the method training procedure testing documentation and integration legacy processes

Strategic evaluation

Strategic evaluation is the last stage of strategic management process The management need to know in which particular strategies are not performing well By evaluating the business can achieve their success in an easy way

2 Company Profile

21 Background

A sister concern of Akij Group Akij Corporation Limited is the most organizeddistribution company in the country Akij Group is countryrsquos 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 Aminuddin 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

22 History of Akij Group

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 Groups 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 umbrella like cigarettes handmade cigarettes printing amp packaging textiles hand board pharmaceutical leather processing and real-estate business are in operation catering jobs for more than 32000 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 nations economy growth and will create job opportunities to various professionals

23 Mission and vision of Akij group of industries

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 companyrsquos 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 AkijGroup 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

Product of AFBL

Akij food amp Beverage limited started their journey officially on July 2006 with three products but within this four year company able to add lot of products on its rosters The products which are offering now by the company are given below

Product Category Brand Name Size

Cola MOJO 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Cloudy Lemon Lemu 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Clear Lemon Clemon 250ml pet and can 500ml pet 1 liter pet and 2 liter pet

Energy Drink Speed 250ml pet and can

Drinking water Spa 500ml pet 1 liter pet 2 liter pet

Juice Frutika (Mango Red grape Red orange)

250ml pet 1 liter

Milk Farm Fresh UHT milk frac12 liter tetra pack

Malt Beverage Wild Brew 250ml can

Business Philosophy

Akij Group diversified their business in Food amp Beverage industry because in Bangladesh we have 14 corers people It is large market size to serve and food is required continually for the population Akij food amp beverage want to serve quality food for their target market

In chips industry there are many local amp foreign companies Akij want to be local unique chips producer with the same quality of foreign company For this purpose AFBL produces chips for young target group who like to live styles life Main slogan of AFBL is ldquoBrings Quality in Liferdquo

AFBL has its own marketing amp sales department in Akij chamber The functions of this department are very wide and dynamic Main functions performed by this department are

1048766 Product development

1048766 Raw material sourcing

1048766 Find out or create market for its product

1048766 Price set up

1048766 Packaging development

1048766 Developing communication strategy

1048766 Preparing sales forecast

1048766 Maintain sales management in the field

1048766 Keeping record of sales and stock

1048766 Collection amp analysis of competitorrsquos information

Beside these it performs a number of activities to conduct their day‐to‐day business Under marketing amp sales department a Brand team performs the key role of real marketing

Chapter- 3

EVALUATION OF CURRENT CORPORATE LEVEL STRATEGIES

AKIJ has a well-established and consistent strategy for growth which allowed to strengthen core business and drive expansion into new markets The rationale for corporate level strategy is to broaden the scope of the business to enable it to deliver strong sustainable long-term growth by following the customer into large expanding markets at home such as Food non-food and new markets development in Bangladesh Akij adopted few strategies to survive and sustain in the market The few strategies are

1 Low Price Strategy - Everyday Low Price

2 Customer-focused Strategy - To create value for customer to earn their lifetime loyalty

3 Growth Strategy (business ndash product development) Own brand value

Low Price Strategy Everyday Low Price

An Every Day Low Pricing (EDLP) is a pricing strategy of Akiz is more popular with shoppers than one driven purely by promotions according to a survey in the BD Akij is the first hypermarket to launch a long-term EDLP campaign in a bid to address the rising cost of living Pricing was a key strategy and selling point for Akiz They have invested lot for the campaign to be able to reduce prices up to 30 Low prices were adopted to maximize sales Akijs value-added products at low prices attracted many customers After the launch of unbeatable value campaign Akij went into massive price reductions The company adopted the strategy of Everyday Low Pricing (EDLP) while continuing its other promotional activities Adopting the EDLP strategy demonstrated Akijs commitment to its customers putting customer interests first This is also a competition between companies EDLP is essentially an advertising strategy to attract more customers to buy their products It is mostly seen on food stuff

Customer-focused Strategy Create value for customer to earn their lifetime loyalty

The core purpose is to create value for customers to earn their lifetime loyalty Everything Akij did every innovation they bring to the market every business decision they take is driven by the customers The underlying aim is of course to make higher profits but there is a clear focus on customer service at the top level of the company Akij must be able to maintain this focus that it is widely perceived as a great corporate success story and the dominant company in Bangladeshi retail market Otherwise it will succumb to corporate arrogance as sometimes happens to dominant companies Akij believes that by living by the values they will encourage and demonstrate behavior that will help them achieve the core purpose and set them apart from the competitors Values enable them to build a common way of working They want people in the business feel comfortable with these values and feel they can genuinely demonstrate them They

arent about being soft and lovely but about being rigorous and single minded about how they achieve

Growth Strategy

Own brand value

Own brand value portrayed the strong brand image of Akiz based on effective strategy Akiz is very good at using design across their own label especially strategically Akiz is often used as one of the best examples of own brand label in the retail industry Majority of consumers buy the basic Akiz brand as it is quality good cheap and good value for money Brand values of Akiz are successfully throughout Akiz own brand ranges demonstrated through experience and way finding system Akiz uses design to give something back to customers for shopping Akij products As competition is so intense retailers such as Akij use design to differentiate from the competitors

Differentiation Strategy

The strategy to diversify the business was laid down in 1997 and has been the foundation of Akijrsquos success in recent years The new businesses which have been created and developed over the last decade as part of this strategy now have scale they are competitive and profitable In fact the International business alone makes about the same profit as the entire Group did a decade ago

Community

Making Corporate Service Responsibility (CSR) integral to the business is essential in applying our values as a responsible business Akij believes it is also an opportunity for growth and also is committed to stay close to the heart of the communities Akij is part of Akij Group is 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 amp children hospital previously owned by Save the Children (UK) The hospital is being operated as a non-profitable concern by Ad-Din Welfare Trust

SWOT Analysis for Akij food and beverage

The SWOT Analysis shows that Akij food and beverage has the resource capabilities to successfully enter the market and is capable of implementing a market development strategy The report recommends that Akij targets the high-end market segment with a differentiation strategy Success in companies that operate for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products or services being offered

Furthermore the ability of the company and its management to compete and maintain a competitive edge among its competitors is another basis to say that it is successful The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company This report analyzes the strategic capability of Akij

Strengths

The main strength of Akij is its strong brand name and its valued customer service The company is far less integrated than the other big company that which makes them

more flexible compared to others Competitive prices strategy Akij believes in direct marketing rather that via a middleman or agent Customer loyaltyrelationship

Weaknesses

Dependency on local business This could be the weaknesses for Akij to expand their business widely Burden of higher advertisement cost High turnover rate of employees Difficult to find perfect replacement of trained employee

Opportunities

There are only few large companies in food amp beverage sector in our country Akij is enjoying backward integration facilities so suppliers bargaining power is not high People in our country trust Akijrsquos product They have faith as itrsquos Akijrsquos product it will

good Akij products are enjoying brand value

Threats

Increasing competition within industry Other major companies are starting to invest in food and beverage Changing in customer tastes Customersrsquo tastes and preferences would change over time Global economic decline is the barrier and created an impact on business Some environmental factors such as climate changes political issue and taxes issue can

become a threat Raising the costs of raw resources from both food and non-food will crash general profit

boundaries

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Strategy implementation involves

Sharing of enough resources

Build up a sequence of directive or some alternative

Handing over some liability of precise tasks to precise individuals or grouping

It also engage supervision the procedure

When implementing particular programs that engage obtaining the necessary possessions implementing the method training procedure testing documentation and integration legacy processes

Strategic evaluation

Strategic evaluation is the last stage of strategic management process The management need to know in which particular strategies are not performing well By evaluating the business can achieve their success in an easy way

2 Company Profile

21 Background

A sister concern of Akij Group Akij Corporation Limited is the most organizeddistribution company in the country Akij Group is countryrsquos 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 Aminuddin 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

22 History of Akij Group

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 Groups 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 umbrella like cigarettes handmade cigarettes printing amp packaging textiles hand board pharmaceutical leather processing and real-estate business are in operation catering jobs for more than 32000 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 nations economy growth and will create job opportunities to various professionals

23 Mission and vision of Akij group of industries

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 companyrsquos 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 AkijGroup 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

Product of AFBL

Akij food amp Beverage limited started their journey officially on July 2006 with three products but within this four year company able to add lot of products on its rosters The products which are offering now by the company are given below

Product Category Brand Name Size

Cola MOJO 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Cloudy Lemon Lemu 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Clear Lemon Clemon 250ml pet and can 500ml pet 1 liter pet and 2 liter pet

Energy Drink Speed 250ml pet and can

Drinking water Spa 500ml pet 1 liter pet 2 liter pet

Juice Frutika (Mango Red grape Red orange)

250ml pet 1 liter

Milk Farm Fresh UHT milk frac12 liter tetra pack

Malt Beverage Wild Brew 250ml can

Business Philosophy

Akij Group diversified their business in Food amp Beverage industry because in Bangladesh we have 14 corers people It is large market size to serve and food is required continually for the population Akij food amp beverage want to serve quality food for their target market

In chips industry there are many local amp foreign companies Akij want to be local unique chips producer with the same quality of foreign company For this purpose AFBL produces chips for young target group who like to live styles life Main slogan of AFBL is ldquoBrings Quality in Liferdquo

AFBL has its own marketing amp sales department in Akij chamber The functions of this department are very wide and dynamic Main functions performed by this department are

1048766 Product development

1048766 Raw material sourcing

1048766 Find out or create market for its product

1048766 Price set up

1048766 Packaging development

1048766 Developing communication strategy

1048766 Preparing sales forecast

1048766 Maintain sales management in the field

1048766 Keeping record of sales and stock

1048766 Collection amp analysis of competitorrsquos information

Beside these it performs a number of activities to conduct their day‐to‐day business Under marketing amp sales department a Brand team performs the key role of real marketing

Chapter- 3

EVALUATION OF CURRENT CORPORATE LEVEL STRATEGIES

AKIJ has a well-established and consistent strategy for growth which allowed to strengthen core business and drive expansion into new markets The rationale for corporate level strategy is to broaden the scope of the business to enable it to deliver strong sustainable long-term growth by following the customer into large expanding markets at home such as Food non-food and new markets development in Bangladesh Akij adopted few strategies to survive and sustain in the market The few strategies are

1 Low Price Strategy - Everyday Low Price

2 Customer-focused Strategy - To create value for customer to earn their lifetime loyalty

3 Growth Strategy (business ndash product development) Own brand value

Low Price Strategy Everyday Low Price

An Every Day Low Pricing (EDLP) is a pricing strategy of Akiz is more popular with shoppers than one driven purely by promotions according to a survey in the BD Akij is the first hypermarket to launch a long-term EDLP campaign in a bid to address the rising cost of living Pricing was a key strategy and selling point for Akiz They have invested lot for the campaign to be able to reduce prices up to 30 Low prices were adopted to maximize sales Akijs value-added products at low prices attracted many customers After the launch of unbeatable value campaign Akij went into massive price reductions The company adopted the strategy of Everyday Low Pricing (EDLP) while continuing its other promotional activities Adopting the EDLP strategy demonstrated Akijs commitment to its customers putting customer interests first This is also a competition between companies EDLP is essentially an advertising strategy to attract more customers to buy their products It is mostly seen on food stuff

Customer-focused Strategy Create value for customer to earn their lifetime loyalty

The core purpose is to create value for customers to earn their lifetime loyalty Everything Akij did every innovation they bring to the market every business decision they take is driven by the customers The underlying aim is of course to make higher profits but there is a clear focus on customer service at the top level of the company Akij must be able to maintain this focus that it is widely perceived as a great corporate success story and the dominant company in Bangladeshi retail market Otherwise it will succumb to corporate arrogance as sometimes happens to dominant companies Akij believes that by living by the values they will encourage and demonstrate behavior that will help them achieve the core purpose and set them apart from the competitors Values enable them to build a common way of working They want people in the business feel comfortable with these values and feel they can genuinely demonstrate them They

arent about being soft and lovely but about being rigorous and single minded about how they achieve

Growth Strategy

Own brand value

Own brand value portrayed the strong brand image of Akiz based on effective strategy Akiz is very good at using design across their own label especially strategically Akiz is often used as one of the best examples of own brand label in the retail industry Majority of consumers buy the basic Akiz brand as it is quality good cheap and good value for money Brand values of Akiz are successfully throughout Akiz own brand ranges demonstrated through experience and way finding system Akiz uses design to give something back to customers for shopping Akij products As competition is so intense retailers such as Akij use design to differentiate from the competitors

Differentiation Strategy

The strategy to diversify the business was laid down in 1997 and has been the foundation of Akijrsquos success in recent years The new businesses which have been created and developed over the last decade as part of this strategy now have scale they are competitive and profitable In fact the International business alone makes about the same profit as the entire Group did a decade ago

Community

Making Corporate Service Responsibility (CSR) integral to the business is essential in applying our values as a responsible business Akij believes it is also an opportunity for growth and also is committed to stay close to the heart of the communities Akij is part of Akij Group is 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 amp children hospital previously owned by Save the Children (UK) The hospital is being operated as a non-profitable concern by Ad-Din Welfare Trust

SWOT Analysis for Akij food and beverage

The SWOT Analysis shows that Akij food and beverage has the resource capabilities to successfully enter the market and is capable of implementing a market development strategy The report recommends that Akij targets the high-end market segment with a differentiation strategy Success in companies that operate for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products or services being offered

Furthermore the ability of the company and its management to compete and maintain a competitive edge among its competitors is another basis to say that it is successful The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company This report analyzes the strategic capability of Akij

Strengths

The main strength of Akij is its strong brand name and its valued customer service The company is far less integrated than the other big company that which makes them

more flexible compared to others Competitive prices strategy Akij believes in direct marketing rather that via a middleman or agent Customer loyaltyrelationship

Weaknesses

Dependency on local business This could be the weaknesses for Akij to expand their business widely Burden of higher advertisement cost High turnover rate of employees Difficult to find perfect replacement of trained employee

Opportunities

There are only few large companies in food amp beverage sector in our country Akij is enjoying backward integration facilities so suppliers bargaining power is not high People in our country trust Akijrsquos product They have faith as itrsquos Akijrsquos product it will

good Akij products are enjoying brand value

Threats

Increasing competition within industry Other major companies are starting to invest in food and beverage Changing in customer tastes Customersrsquo tastes and preferences would change over time Global economic decline is the barrier and created an impact on business Some environmental factors such as climate changes political issue and taxes issue can

become a threat Raising the costs of raw resources from both food and non-food will crash general profit

boundaries

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

21 Background

A sister concern of Akij Group Akij Corporation Limited is the most organizeddistribution company in the country Akij Group is countryrsquos 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 Aminuddin 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

22 History of Akij Group

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 Groups 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 umbrella like cigarettes handmade cigarettes printing amp packaging textiles hand board pharmaceutical leather processing and real-estate business are in operation catering jobs for more than 32000 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 nations economy growth and will create job opportunities to various professionals

23 Mission and vision of Akij group of industries

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 companyrsquos 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 AkijGroup 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

Product of AFBL

Akij food amp Beverage limited started their journey officially on July 2006 with three products but within this four year company able to add lot of products on its rosters The products which are offering now by the company are given below

Product Category Brand Name Size

Cola MOJO 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Cloudy Lemon Lemu 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Clear Lemon Clemon 250ml pet and can 500ml pet 1 liter pet and 2 liter pet

Energy Drink Speed 250ml pet and can

Drinking water Spa 500ml pet 1 liter pet 2 liter pet

Juice Frutika (Mango Red grape Red orange)

250ml pet 1 liter

Milk Farm Fresh UHT milk frac12 liter tetra pack

Malt Beverage Wild Brew 250ml can

Business Philosophy

Akij Group diversified their business in Food amp Beverage industry because in Bangladesh we have 14 corers people It is large market size to serve and food is required continually for the population Akij food amp beverage want to serve quality food for their target market

In chips industry there are many local amp foreign companies Akij want to be local unique chips producer with the same quality of foreign company For this purpose AFBL produces chips for young target group who like to live styles life Main slogan of AFBL is ldquoBrings Quality in Liferdquo

AFBL has its own marketing amp sales department in Akij chamber The functions of this department are very wide and dynamic Main functions performed by this department are

1048766 Product development

1048766 Raw material sourcing

1048766 Find out or create market for its product

1048766 Price set up

1048766 Packaging development

1048766 Developing communication strategy

1048766 Preparing sales forecast

1048766 Maintain sales management in the field

1048766 Keeping record of sales and stock

1048766 Collection amp analysis of competitorrsquos information

Beside these it performs a number of activities to conduct their day‐to‐day business Under marketing amp sales department a Brand team performs the key role of real marketing

Chapter- 3

EVALUATION OF CURRENT CORPORATE LEVEL STRATEGIES

AKIJ has a well-established and consistent strategy for growth which allowed to strengthen core business and drive expansion into new markets The rationale for corporate level strategy is to broaden the scope of the business to enable it to deliver strong sustainable long-term growth by following the customer into large expanding markets at home such as Food non-food and new markets development in Bangladesh Akij adopted few strategies to survive and sustain in the market The few strategies are

1 Low Price Strategy - Everyday Low Price

2 Customer-focused Strategy - To create value for customer to earn their lifetime loyalty

3 Growth Strategy (business ndash product development) Own brand value

Low Price Strategy Everyday Low Price

An Every Day Low Pricing (EDLP) is a pricing strategy of Akiz is more popular with shoppers than one driven purely by promotions according to a survey in the BD Akij is the first hypermarket to launch a long-term EDLP campaign in a bid to address the rising cost of living Pricing was a key strategy and selling point for Akiz They have invested lot for the campaign to be able to reduce prices up to 30 Low prices were adopted to maximize sales Akijs value-added products at low prices attracted many customers After the launch of unbeatable value campaign Akij went into massive price reductions The company adopted the strategy of Everyday Low Pricing (EDLP) while continuing its other promotional activities Adopting the EDLP strategy demonstrated Akijs commitment to its customers putting customer interests first This is also a competition between companies EDLP is essentially an advertising strategy to attract more customers to buy their products It is mostly seen on food stuff

Customer-focused Strategy Create value for customer to earn their lifetime loyalty

The core purpose is to create value for customers to earn their lifetime loyalty Everything Akij did every innovation they bring to the market every business decision they take is driven by the customers The underlying aim is of course to make higher profits but there is a clear focus on customer service at the top level of the company Akij must be able to maintain this focus that it is widely perceived as a great corporate success story and the dominant company in Bangladeshi retail market Otherwise it will succumb to corporate arrogance as sometimes happens to dominant companies Akij believes that by living by the values they will encourage and demonstrate behavior that will help them achieve the core purpose and set them apart from the competitors Values enable them to build a common way of working They want people in the business feel comfortable with these values and feel they can genuinely demonstrate them They

arent about being soft and lovely but about being rigorous and single minded about how they achieve

Growth Strategy

Own brand value

Own brand value portrayed the strong brand image of Akiz based on effective strategy Akiz is very good at using design across their own label especially strategically Akiz is often used as one of the best examples of own brand label in the retail industry Majority of consumers buy the basic Akiz brand as it is quality good cheap and good value for money Brand values of Akiz are successfully throughout Akiz own brand ranges demonstrated through experience and way finding system Akiz uses design to give something back to customers for shopping Akij products As competition is so intense retailers such as Akij use design to differentiate from the competitors

Differentiation Strategy

The strategy to diversify the business was laid down in 1997 and has been the foundation of Akijrsquos success in recent years The new businesses which have been created and developed over the last decade as part of this strategy now have scale they are competitive and profitable In fact the International business alone makes about the same profit as the entire Group did a decade ago

Community

Making Corporate Service Responsibility (CSR) integral to the business is essential in applying our values as a responsible business Akij believes it is also an opportunity for growth and also is committed to stay close to the heart of the communities Akij is part of Akij Group is 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 amp children hospital previously owned by Save the Children (UK) The hospital is being operated as a non-profitable concern by Ad-Din Welfare Trust

SWOT Analysis for Akij food and beverage

The SWOT Analysis shows that Akij food and beverage has the resource capabilities to successfully enter the market and is capable of implementing a market development strategy The report recommends that Akij targets the high-end market segment with a differentiation strategy Success in companies that operate for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products or services being offered

Furthermore the ability of the company and its management to compete and maintain a competitive edge among its competitors is another basis to say that it is successful The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company This report analyzes the strategic capability of Akij

Strengths

The main strength of Akij is its strong brand name and its valued customer service The company is far less integrated than the other big company that which makes them

more flexible compared to others Competitive prices strategy Akij believes in direct marketing rather that via a middleman or agent Customer loyaltyrelationship

Weaknesses

Dependency on local business This could be the weaknesses for Akij to expand their business widely Burden of higher advertisement cost High turnover rate of employees Difficult to find perfect replacement of trained employee

Opportunities

There are only few large companies in food amp beverage sector in our country Akij is enjoying backward integration facilities so suppliers bargaining power is not high People in our country trust Akijrsquos product They have faith as itrsquos Akijrsquos product it will

good Akij products are enjoying brand value

Threats

Increasing competition within industry Other major companies are starting to invest in food and beverage Changing in customer tastes Customersrsquo tastes and preferences would change over time Global economic decline is the barrier and created an impact on business Some environmental factors such as climate changes political issue and taxes issue can

become a threat Raising the costs of raw resources from both food and non-food will crash general profit

boundaries

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

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 AkijGroup 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

Product of AFBL

Akij food amp Beverage limited started their journey officially on July 2006 with three products but within this four year company able to add lot of products on its rosters The products which are offering now by the company are given below

Product Category Brand Name Size

Cola MOJO 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Cloudy Lemon Lemu 150ml can 250ml pet and can 500ml pet 1 liter pet 2 liter pet

Clear Lemon Clemon 250ml pet and can 500ml pet 1 liter pet and 2 liter pet

Energy Drink Speed 250ml pet and can

Drinking water Spa 500ml pet 1 liter pet 2 liter pet

Juice Frutika (Mango Red grape Red orange)

250ml pet 1 liter

Milk Farm Fresh UHT milk frac12 liter tetra pack

Malt Beverage Wild Brew 250ml can

Business Philosophy

Akij Group diversified their business in Food amp Beverage industry because in Bangladesh we have 14 corers people It is large market size to serve and food is required continually for the population Akij food amp beverage want to serve quality food for their target market

In chips industry there are many local amp foreign companies Akij want to be local unique chips producer with the same quality of foreign company For this purpose AFBL produces chips for young target group who like to live styles life Main slogan of AFBL is ldquoBrings Quality in Liferdquo

AFBL has its own marketing amp sales department in Akij chamber The functions of this department are very wide and dynamic Main functions performed by this department are

1048766 Product development

1048766 Raw material sourcing

1048766 Find out or create market for its product

1048766 Price set up

1048766 Packaging development

1048766 Developing communication strategy

1048766 Preparing sales forecast

1048766 Maintain sales management in the field

1048766 Keeping record of sales and stock

1048766 Collection amp analysis of competitorrsquos information

Beside these it performs a number of activities to conduct their day‐to‐day business Under marketing amp sales department a Brand team performs the key role of real marketing

Chapter- 3

EVALUATION OF CURRENT CORPORATE LEVEL STRATEGIES

AKIJ has a well-established and consistent strategy for growth which allowed to strengthen core business and drive expansion into new markets The rationale for corporate level strategy is to broaden the scope of the business to enable it to deliver strong sustainable long-term growth by following the customer into large expanding markets at home such as Food non-food and new markets development in Bangladesh Akij adopted few strategies to survive and sustain in the market The few strategies are

1 Low Price Strategy - Everyday Low Price

2 Customer-focused Strategy - To create value for customer to earn their lifetime loyalty

3 Growth Strategy (business ndash product development) Own brand value

Low Price Strategy Everyday Low Price

An Every Day Low Pricing (EDLP) is a pricing strategy of Akiz is more popular with shoppers than one driven purely by promotions according to a survey in the BD Akij is the first hypermarket to launch a long-term EDLP campaign in a bid to address the rising cost of living Pricing was a key strategy and selling point for Akiz They have invested lot for the campaign to be able to reduce prices up to 30 Low prices were adopted to maximize sales Akijs value-added products at low prices attracted many customers After the launch of unbeatable value campaign Akij went into massive price reductions The company adopted the strategy of Everyday Low Pricing (EDLP) while continuing its other promotional activities Adopting the EDLP strategy demonstrated Akijs commitment to its customers putting customer interests first This is also a competition between companies EDLP is essentially an advertising strategy to attract more customers to buy their products It is mostly seen on food stuff

Customer-focused Strategy Create value for customer to earn their lifetime loyalty

The core purpose is to create value for customers to earn their lifetime loyalty Everything Akij did every innovation they bring to the market every business decision they take is driven by the customers The underlying aim is of course to make higher profits but there is a clear focus on customer service at the top level of the company Akij must be able to maintain this focus that it is widely perceived as a great corporate success story and the dominant company in Bangladeshi retail market Otherwise it will succumb to corporate arrogance as sometimes happens to dominant companies Akij believes that by living by the values they will encourage and demonstrate behavior that will help them achieve the core purpose and set them apart from the competitors Values enable them to build a common way of working They want people in the business feel comfortable with these values and feel they can genuinely demonstrate them They

arent about being soft and lovely but about being rigorous and single minded about how they achieve

Growth Strategy

Own brand value

Own brand value portrayed the strong brand image of Akiz based on effective strategy Akiz is very good at using design across their own label especially strategically Akiz is often used as one of the best examples of own brand label in the retail industry Majority of consumers buy the basic Akiz brand as it is quality good cheap and good value for money Brand values of Akiz are successfully throughout Akiz own brand ranges demonstrated through experience and way finding system Akiz uses design to give something back to customers for shopping Akij products As competition is so intense retailers such as Akij use design to differentiate from the competitors

Differentiation Strategy

The strategy to diversify the business was laid down in 1997 and has been the foundation of Akijrsquos success in recent years The new businesses which have been created and developed over the last decade as part of this strategy now have scale they are competitive and profitable In fact the International business alone makes about the same profit as the entire Group did a decade ago

Community

Making Corporate Service Responsibility (CSR) integral to the business is essential in applying our values as a responsible business Akij believes it is also an opportunity for growth and also is committed to stay close to the heart of the communities Akij is part of Akij Group is 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 amp children hospital previously owned by Save the Children (UK) The hospital is being operated as a non-profitable concern by Ad-Din Welfare Trust

SWOT Analysis for Akij food and beverage

The SWOT Analysis shows that Akij food and beverage has the resource capabilities to successfully enter the market and is capable of implementing a market development strategy The report recommends that Akij targets the high-end market segment with a differentiation strategy Success in companies that operate for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products or services being offered

Furthermore the ability of the company and its management to compete and maintain a competitive edge among its competitors is another basis to say that it is successful The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company This report analyzes the strategic capability of Akij

Strengths

The main strength of Akij is its strong brand name and its valued customer service The company is far less integrated than the other big company that which makes them

more flexible compared to others Competitive prices strategy Akij believes in direct marketing rather that via a middleman or agent Customer loyaltyrelationship

Weaknesses

Dependency on local business This could be the weaknesses for Akij to expand their business widely Burden of higher advertisement cost High turnover rate of employees Difficult to find perfect replacement of trained employee

Opportunities

There are only few large companies in food amp beverage sector in our country Akij is enjoying backward integration facilities so suppliers bargaining power is not high People in our country trust Akijrsquos product They have faith as itrsquos Akijrsquos product it will

good Akij products are enjoying brand value

Threats

Increasing competition within industry Other major companies are starting to invest in food and beverage Changing in customer tastes Customersrsquo tastes and preferences would change over time Global economic decline is the barrier and created an impact on business Some environmental factors such as climate changes political issue and taxes issue can

become a threat Raising the costs of raw resources from both food and non-food will crash general profit

boundaries

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Business Philosophy

Akij Group diversified their business in Food amp Beverage industry because in Bangladesh we have 14 corers people It is large market size to serve and food is required continually for the population Akij food amp beverage want to serve quality food for their target market

In chips industry there are many local amp foreign companies Akij want to be local unique chips producer with the same quality of foreign company For this purpose AFBL produces chips for young target group who like to live styles life Main slogan of AFBL is ldquoBrings Quality in Liferdquo

AFBL has its own marketing amp sales department in Akij chamber The functions of this department are very wide and dynamic Main functions performed by this department are

1048766 Product development

1048766 Raw material sourcing

1048766 Find out or create market for its product

1048766 Price set up

1048766 Packaging development

1048766 Developing communication strategy

1048766 Preparing sales forecast

1048766 Maintain sales management in the field

1048766 Keeping record of sales and stock

1048766 Collection amp analysis of competitorrsquos information

Beside these it performs a number of activities to conduct their day‐to‐day business Under marketing amp sales department a Brand team performs the key role of real marketing

Chapter- 3

EVALUATION OF CURRENT CORPORATE LEVEL STRATEGIES

AKIJ has a well-established and consistent strategy for growth which allowed to strengthen core business and drive expansion into new markets The rationale for corporate level strategy is to broaden the scope of the business to enable it to deliver strong sustainable long-term growth by following the customer into large expanding markets at home such as Food non-food and new markets development in Bangladesh Akij adopted few strategies to survive and sustain in the market The few strategies are

1 Low Price Strategy - Everyday Low Price

2 Customer-focused Strategy - To create value for customer to earn their lifetime loyalty

3 Growth Strategy (business ndash product development) Own brand value

Low Price Strategy Everyday Low Price

An Every Day Low Pricing (EDLP) is a pricing strategy of Akiz is more popular with shoppers than one driven purely by promotions according to a survey in the BD Akij is the first hypermarket to launch a long-term EDLP campaign in a bid to address the rising cost of living Pricing was a key strategy and selling point for Akiz They have invested lot for the campaign to be able to reduce prices up to 30 Low prices were adopted to maximize sales Akijs value-added products at low prices attracted many customers After the launch of unbeatable value campaign Akij went into massive price reductions The company adopted the strategy of Everyday Low Pricing (EDLP) while continuing its other promotional activities Adopting the EDLP strategy demonstrated Akijs commitment to its customers putting customer interests first This is also a competition between companies EDLP is essentially an advertising strategy to attract more customers to buy their products It is mostly seen on food stuff

Customer-focused Strategy Create value for customer to earn their lifetime loyalty

The core purpose is to create value for customers to earn their lifetime loyalty Everything Akij did every innovation they bring to the market every business decision they take is driven by the customers The underlying aim is of course to make higher profits but there is a clear focus on customer service at the top level of the company Akij must be able to maintain this focus that it is widely perceived as a great corporate success story and the dominant company in Bangladeshi retail market Otherwise it will succumb to corporate arrogance as sometimes happens to dominant companies Akij believes that by living by the values they will encourage and demonstrate behavior that will help them achieve the core purpose and set them apart from the competitors Values enable them to build a common way of working They want people in the business feel comfortable with these values and feel they can genuinely demonstrate them They

arent about being soft and lovely but about being rigorous and single minded about how they achieve

Growth Strategy

Own brand value

Own brand value portrayed the strong brand image of Akiz based on effective strategy Akiz is very good at using design across their own label especially strategically Akiz is often used as one of the best examples of own brand label in the retail industry Majority of consumers buy the basic Akiz brand as it is quality good cheap and good value for money Brand values of Akiz are successfully throughout Akiz own brand ranges demonstrated through experience and way finding system Akiz uses design to give something back to customers for shopping Akij products As competition is so intense retailers such as Akij use design to differentiate from the competitors

Differentiation Strategy

The strategy to diversify the business was laid down in 1997 and has been the foundation of Akijrsquos success in recent years The new businesses which have been created and developed over the last decade as part of this strategy now have scale they are competitive and profitable In fact the International business alone makes about the same profit as the entire Group did a decade ago

Community

Making Corporate Service Responsibility (CSR) integral to the business is essential in applying our values as a responsible business Akij believes it is also an opportunity for growth and also is committed to stay close to the heart of the communities Akij is part of Akij Group is 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 amp children hospital previously owned by Save the Children (UK) The hospital is being operated as a non-profitable concern by Ad-Din Welfare Trust

SWOT Analysis for Akij food and beverage

The SWOT Analysis shows that Akij food and beverage has the resource capabilities to successfully enter the market and is capable of implementing a market development strategy The report recommends that Akij targets the high-end market segment with a differentiation strategy Success in companies that operate for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products or services being offered

Furthermore the ability of the company and its management to compete and maintain a competitive edge among its competitors is another basis to say that it is successful The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company This report analyzes the strategic capability of Akij

Strengths

The main strength of Akij is its strong brand name and its valued customer service The company is far less integrated than the other big company that which makes them

more flexible compared to others Competitive prices strategy Akij believes in direct marketing rather that via a middleman or agent Customer loyaltyrelationship

Weaknesses

Dependency on local business This could be the weaknesses for Akij to expand their business widely Burden of higher advertisement cost High turnover rate of employees Difficult to find perfect replacement of trained employee

Opportunities

There are only few large companies in food amp beverage sector in our country Akij is enjoying backward integration facilities so suppliers bargaining power is not high People in our country trust Akijrsquos product They have faith as itrsquos Akijrsquos product it will

good Akij products are enjoying brand value

Threats

Increasing competition within industry Other major companies are starting to invest in food and beverage Changing in customer tastes Customersrsquo tastes and preferences would change over time Global economic decline is the barrier and created an impact on business Some environmental factors such as climate changes political issue and taxes issue can

become a threat Raising the costs of raw resources from both food and non-food will crash general profit

boundaries

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Chapter- 3

EVALUATION OF CURRENT CORPORATE LEVEL STRATEGIES

AKIJ has a well-established and consistent strategy for growth which allowed to strengthen core business and drive expansion into new markets The rationale for corporate level strategy is to broaden the scope of the business to enable it to deliver strong sustainable long-term growth by following the customer into large expanding markets at home such as Food non-food and new markets development in Bangladesh Akij adopted few strategies to survive and sustain in the market The few strategies are

1 Low Price Strategy - Everyday Low Price

2 Customer-focused Strategy - To create value for customer to earn their lifetime loyalty

3 Growth Strategy (business ndash product development) Own brand value

Low Price Strategy Everyday Low Price

An Every Day Low Pricing (EDLP) is a pricing strategy of Akiz is more popular with shoppers than one driven purely by promotions according to a survey in the BD Akij is the first hypermarket to launch a long-term EDLP campaign in a bid to address the rising cost of living Pricing was a key strategy and selling point for Akiz They have invested lot for the campaign to be able to reduce prices up to 30 Low prices were adopted to maximize sales Akijs value-added products at low prices attracted many customers After the launch of unbeatable value campaign Akij went into massive price reductions The company adopted the strategy of Everyday Low Pricing (EDLP) while continuing its other promotional activities Adopting the EDLP strategy demonstrated Akijs commitment to its customers putting customer interests first This is also a competition between companies EDLP is essentially an advertising strategy to attract more customers to buy their products It is mostly seen on food stuff

Customer-focused Strategy Create value for customer to earn their lifetime loyalty

The core purpose is to create value for customers to earn their lifetime loyalty Everything Akij did every innovation they bring to the market every business decision they take is driven by the customers The underlying aim is of course to make higher profits but there is a clear focus on customer service at the top level of the company Akij must be able to maintain this focus that it is widely perceived as a great corporate success story and the dominant company in Bangladeshi retail market Otherwise it will succumb to corporate arrogance as sometimes happens to dominant companies Akij believes that by living by the values they will encourage and demonstrate behavior that will help them achieve the core purpose and set them apart from the competitors Values enable them to build a common way of working They want people in the business feel comfortable with these values and feel they can genuinely demonstrate them They

arent about being soft and lovely but about being rigorous and single minded about how they achieve

Growth Strategy

Own brand value

Own brand value portrayed the strong brand image of Akiz based on effective strategy Akiz is very good at using design across their own label especially strategically Akiz is often used as one of the best examples of own brand label in the retail industry Majority of consumers buy the basic Akiz brand as it is quality good cheap and good value for money Brand values of Akiz are successfully throughout Akiz own brand ranges demonstrated through experience and way finding system Akiz uses design to give something back to customers for shopping Akij products As competition is so intense retailers such as Akij use design to differentiate from the competitors

Differentiation Strategy

The strategy to diversify the business was laid down in 1997 and has been the foundation of Akijrsquos success in recent years The new businesses which have been created and developed over the last decade as part of this strategy now have scale they are competitive and profitable In fact the International business alone makes about the same profit as the entire Group did a decade ago

Community

Making Corporate Service Responsibility (CSR) integral to the business is essential in applying our values as a responsible business Akij believes it is also an opportunity for growth and also is committed to stay close to the heart of the communities Akij is part of Akij Group is 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 amp children hospital previously owned by Save the Children (UK) The hospital is being operated as a non-profitable concern by Ad-Din Welfare Trust

SWOT Analysis for Akij food and beverage

The SWOT Analysis shows that Akij food and beverage has the resource capabilities to successfully enter the market and is capable of implementing a market development strategy The report recommends that Akij targets the high-end market segment with a differentiation strategy Success in companies that operate for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products or services being offered

Furthermore the ability of the company and its management to compete and maintain a competitive edge among its competitors is another basis to say that it is successful The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company This report analyzes the strategic capability of Akij

Strengths

The main strength of Akij is its strong brand name and its valued customer service The company is far less integrated than the other big company that which makes them

more flexible compared to others Competitive prices strategy Akij believes in direct marketing rather that via a middleman or agent Customer loyaltyrelationship

Weaknesses

Dependency on local business This could be the weaknesses for Akij to expand their business widely Burden of higher advertisement cost High turnover rate of employees Difficult to find perfect replacement of trained employee

Opportunities

There are only few large companies in food amp beverage sector in our country Akij is enjoying backward integration facilities so suppliers bargaining power is not high People in our country trust Akijrsquos product They have faith as itrsquos Akijrsquos product it will

good Akij products are enjoying brand value

Threats

Increasing competition within industry Other major companies are starting to invest in food and beverage Changing in customer tastes Customersrsquo tastes and preferences would change over time Global economic decline is the barrier and created an impact on business Some environmental factors such as climate changes political issue and taxes issue can

become a threat Raising the costs of raw resources from both food and non-food will crash general profit

boundaries

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

arent about being soft and lovely but about being rigorous and single minded about how they achieve

Growth Strategy

Own brand value

Own brand value portrayed the strong brand image of Akiz based on effective strategy Akiz is very good at using design across their own label especially strategically Akiz is often used as one of the best examples of own brand label in the retail industry Majority of consumers buy the basic Akiz brand as it is quality good cheap and good value for money Brand values of Akiz are successfully throughout Akiz own brand ranges demonstrated through experience and way finding system Akiz uses design to give something back to customers for shopping Akij products As competition is so intense retailers such as Akij use design to differentiate from the competitors

Differentiation Strategy

The strategy to diversify the business was laid down in 1997 and has been the foundation of Akijrsquos success in recent years The new businesses which have been created and developed over the last decade as part of this strategy now have scale they are competitive and profitable In fact the International business alone makes about the same profit as the entire Group did a decade ago

Community

Making Corporate Service Responsibility (CSR) integral to the business is essential in applying our values as a responsible business Akij believes it is also an opportunity for growth and also is committed to stay close to the heart of the communities Akij is part of Akij Group is 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 amp children hospital previously owned by Save the Children (UK) The hospital is being operated as a non-profitable concern by Ad-Din Welfare Trust

SWOT Analysis for Akij food and beverage

The SWOT Analysis shows that Akij food and beverage has the resource capabilities to successfully enter the market and is capable of implementing a market development strategy The report recommends that Akij targets the high-end market segment with a differentiation strategy Success in companies that operate for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products or services being offered

Furthermore the ability of the company and its management to compete and maintain a competitive edge among its competitors is another basis to say that it is successful The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company This report analyzes the strategic capability of Akij

Strengths

The main strength of Akij is its strong brand name and its valued customer service The company is far less integrated than the other big company that which makes them

more flexible compared to others Competitive prices strategy Akij believes in direct marketing rather that via a middleman or agent Customer loyaltyrelationship

Weaknesses

Dependency on local business This could be the weaknesses for Akij to expand their business widely Burden of higher advertisement cost High turnover rate of employees Difficult to find perfect replacement of trained employee

Opportunities

There are only few large companies in food amp beverage sector in our country Akij is enjoying backward integration facilities so suppliers bargaining power is not high People in our country trust Akijrsquos product They have faith as itrsquos Akijrsquos product it will

good Akij products are enjoying brand value

Threats

Increasing competition within industry Other major companies are starting to invest in food and beverage Changing in customer tastes Customersrsquo tastes and preferences would change over time Global economic decline is the barrier and created an impact on business Some environmental factors such as climate changes political issue and taxes issue can

become a threat Raising the costs of raw resources from both food and non-food will crash general profit

boundaries

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Furthermore the ability of the company and its management to compete and maintain a competitive edge among its competitors is another basis to say that it is successful The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company This report analyzes the strategic capability of Akij

Strengths

The main strength of Akij is its strong brand name and its valued customer service The company is far less integrated than the other big company that which makes them

more flexible compared to others Competitive prices strategy Akij believes in direct marketing rather that via a middleman or agent Customer loyaltyrelationship

Weaknesses

Dependency on local business This could be the weaknesses for Akij to expand their business widely Burden of higher advertisement cost High turnover rate of employees Difficult to find perfect replacement of trained employee

Opportunities

There are only few large companies in food amp beverage sector in our country Akij is enjoying backward integration facilities so suppliers bargaining power is not high People in our country trust Akijrsquos product They have faith as itrsquos Akijrsquos product it will

good Akij products are enjoying brand value

Threats

Increasing competition within industry Other major companies are starting to invest in food and beverage Changing in customer tastes Customersrsquo tastes and preferences would change over time Global economic decline is the barrier and created an impact on business Some environmental factors such as climate changes political issue and taxes issue can

become a threat Raising the costs of raw resources from both food and non-food will crash general profit

boundaries

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Value Chain Analysis of Akij

The value chain analysis is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy A firmrsquos values chain is segmented into primary and support activities Primary activities are involved with a products physical creation its sale and distribution to buyers and its service after sale Support activities provide the assistance necessary for the primary activities to take place

Inbound Logistics

Akijrsquos purchase raw martial form supplier Establish warehouse in different place and produce their product

Operations

Akijrsquos operations are product packaging and account maintenance They know and have approved the manufacturing for all their raw materials and packaging materials

Outbound Logistics

Akij keep their final product to their warehouse Operation has been done that deliver to their regional offices according to their customer demand

Marketing and Sales

Akij charge value price product designing promoting and advertising Akij promote their produce by personal marketing TVC sales promotion and public relation

Services

Akij distribute the product by distributing channel among customer They distribute by exclusive selective on shops restaurants hotel etc Their service is very efficient as compared to others

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Support Activities

Procurement

The key raw materials purchased by Akij are milk coffee cocoa etc These as well as fruit mango and potatoes are partly sourced directly from farmers Sugar oil meat spices and other ingredients are sourced only through the trade Sourcing has to contribute to the sustainable and profitable development of their company by providing the base for quality differentiation of finished products to customer or consumer satisfaction This requires a supply of raw materials at specified quality in the quantities and the timing needed at the lowest possible system costs

Technological Development

Akij is strengthening its leadership in research and development by enlarging its global Product Technology Centre for confectionary

Human Resource Management

Human research is dedicated to their employees and ensures that they have all the right people with the right skills Understanding their people are the bedrock of all their business strategies it is their mandate to enhance their skills with cutting edge training and provide them with world standard facilities

Firm Infrastructure

The Akij Report provides a fact based analysis of how over time their manufacturing plants have helped to create large skilled labor forces in rural areas and educate the people who supply them as well as build an important infrastructure such as roads and water treatment systems Through its infrastructure the firm strives to effectively and consistently identify external opportunities and threats identify their resources and capabilities of Akij and support their core competencies

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Defining the Key Success

NO Key Success Factor Cause Facts

1 Brand Value amp Reputation The company appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness It creates brand value and high reputation on consumerrsquos mindLike while we think to drink any energy drinks the 1st name comes to our mind is akijrsquos ldquoSpeedrdquo

2 IT Integration Akij use high quality automated machines Production are controlled by computer Whole production are run without any single touch of human hand They insure high quality and purity Like Frutika is produced by German machine and while making this juice they donrsquot use any kinds of preservative to preserve it but it is preserves by their modern machine using temperature control technique

3 Supplier Management Draw goods from suppliers into regional distribution centers for preparation and delivery to stores Akij is extending this logistic practice to cover collection from suppliers (factory gate pricing) and input to suppliers in a drive to reduce costs and improve reliability

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Competitive Profile Matrix (CPM) Analysis

Key SUCCESS FACTORS

Weight Akij Pran Square

Rating Score Rating Score Rating Score

Brand Value amp Reputation

043 4 172 4 172 3 129

IT Integration 037 4 148 3 011 4 148

Supplier Management 020 3 060 3 060 4 080

Total 1 38 343 357

From the CPM analysis we can see that Akij CPM value is 38 which is ahead of the other competitors such as Pran and Square It is clear to know that Akij is the industry leader From this analysis we can see that Pran is the closest competitors for Akij

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Chapter- 4

EVALUATION OF CURRENT BUSINESS LEVEL STRATEGIES

Business Level Strategy is a plan which sets out how a business deploys its resources to achieve its goals The companyrsquos values set the tone for the decision-making process Generic strategies are characterized by an individual retailerrsquos response to the industry structure For a giant producer such as Akij to obtain a sustainable competitive advantage they follow one of three generic strategies developed by Porter Other than that Akij also focus on market development and diversification

Cost Leadership

Cost leadership is one in which Akij can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices This strategy is based on Akij ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins

Market Development

Joint development and strategic alliances by entering new markets like a new development Akij interest in Bangladesh are likely to continue growing as the markets are showing an increase in consumer spending and increased trend towards retailing These new markets are also demographically high opportunity markets It is considered as a method of development and may be formed to exploit current resources and competence

In order to gain a larger economy of scale and large market presence Akij will draw on the extensive local knowledge and operating expertise of the partner whilst adding its own supply chain product development and stores operations skills to deliver a better product experience to customers

Product Development Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the expense of established provision Ansoff matrix also suggests that if new products are developed for existing markets then a product development strategy has to be considered by the management level of the company In expanding and diversifying Akij product mix it is crucial to implement internal development when new products are developed By following the changing needs of the customers Akij introduced new product lines This require more attention for RampD leading to additional spending The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage Therefore innovation is a major driver for

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Akijrsquos product development Akij has exploited its internal strengths and minimize the internal weakness in order to achieve sustained competitive advantage

Market Penetrations

The main objectives are to maintain or increase the market share of current products secure dominance of growth markets and restructure a mature market by driving out competitors and increase usage by existing customers Akij maintains and increases its market share by having a competitive pricing strategy huge add campaigns showing this and sales promotions

INDUSTRY ANALYSIS PESTEL FRAMEWORK

General Environment Analysis

The general environment is composed of dimensions in broader society that influence an industry and indirectly the firms within it They group these dimensions into six environmental segments such as demographic economic political socio-cultural technological and global These structured segments are external to the firm The challenge to the firm is to scan monitor forecast and assess those elements in each segment that are of the greatest importance These efforts should result in recognition of environmental changes trends opportunities and threats

Demographic Segment

Akijrsquos product is for everyone People from any area any culture any age and income will drink water It is not any luxury item which is used by a specific people Nearly all age from young to old people can use Akijrsquos product And all six continents are their customer For instance Akij segment into different of age For baby they have Nestleacute baby foods while young people can drink Speed Mojo and Milk

Economic Segment

Although Akij is leading food industry it shares its knowledge and expertise with local small and medium companies It helps entrepreneurs to compete in the new free trade environment which will ultimately benefit the industry and the economy by making the market growth

PoliticalLegal Segment

Political factors are important especially in food industry The company policies are affected and its budget is also affected Akij provide food assurance to provide assurance to the consumers

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

that Akijrsquos products are manufactured imported and distributed under the strictest hygienic and sanitary condition Besides that to ensure that consumers do not buy any fake products Akijrsquos products are always come with the best quality

Socio-cultural Segment

A good diet and adequate food supply the central for promoting health and well-being is the focus of every person even these days whether people tend to value products that incorporate with them healthy benefits Obviously these types of goods are preferred more than that of junk foods and its relative products Akijrsquos products are always come with the best quality

Technological Segment

Internet and Mobile Technology is currently growing so rapidly in the market where almost all of the people nowadays will get contact with it Nestleacute could use this advantage to benefit them by using technology to promote their products over those advanced technology Customer could get any information from their site Akijrsquos employees could use this internet service to connect to its industry in other country such as Australia Singapore UK and more They did research and development by using the technology to find more information to satisfy the local tastes and cultural flavors in each country market

Global Segment

Akij Company improves their operational efficiency by integrating the companyrsquos businesses on a global scale They are now transitioning to become a genuinely global food company to behave as one Nestleacute has a dynamic global network of Akij RampD centers working on scientific research and product development

INDUSTRY ANALYSIS PORTERrsquoS FIVE FORCES

Threat of New Entrants

The food processing industry is very large and competitive It is uncommon for firms within the industry to do quite well As a result many companies enter into the market every year in an attempt to gain a portion of the profitable market Akij is one of them

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Bargaining Power of Supplier

Akij creating and maintaining Negative relationships with its suppliers Due to the low purchasing power from supplier Akij flow backward integration because Companies will pursue backward integration when it will result in improved efficiency and cost savings For example backward integration might cut transportation costs improve profit margins and make the firm more competitive

Bargaining Power of Buyer

Customers have a large amount of bargaining power regarding to their consumption of Akijrsquos products There are close substitutes for Akijrsquos products which allows for the preferences of the customer to be very influential Akij understands the power of the customer and has taken specific steps to meet the needs of its products consumers Specifically Akij is incorporating health and wellness into the creation of its products as society has started becoming more health conscious

Threat of Substitute Products

Due to the nature of the industry Akij is afflicted with the threat of substitute goods There are lots of substitute products of Akij such as Speed Mojo Frutika and Spa It is vital for Akij to continuously find new ways to improve its products and generate new sources of growth for the companyrsquos future expansion because competition is so violent

Bargaining Power of Competitors

In Bangladesh retail industry there is stiff competition between food and beverage industries Names such as Pran Square BD food are the biggest rival for Akij to compete in the industry Threat of occurrence of new competitors in the food-processing industry is low It requires huge capital investments to be competitive and to create a brand New participants should make something at extremely low price andor high quality to establish their market

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Chapter- 5

Conclusion and Recommendation for Improvement

Conclusion

Many kind of strategic decisions makes the firm to involve the discrete choice By the strategic decision firm take the decisions to open a new business in a new place determine that where the product should be place or what option to offer in a service contract These decisions are typically involved with the consideration of a number of demands cost and competitive factors The learning of consistent distinct decisions poses several procedural challenges such as large state spaces the incidence of various stability and dynamics in firm decisions

The interrelation in selection performance staunch from the fact that firm takes into account the action of their opponents when building their own judgment For example firm are prejudiced of their selection of position by their anticipation of where their competitors will situate In the same way when deciding what kind of pricing strategy to implement firmrsquos base their decisions on what they anticipate their competitors will do

Like Any business org Akij have vision mission objective and organizational structure For cover the all of Criteria Akij need to make or build up a strategic decision by which they can reach in their main goal point Akij should maintain all major process also the others factors

Recommendation

Improve customer offer

Listening to customers in a wide variety of ways is the key of what to do Engage with customers through a range of focus groups and ongoing research trackers and actively seek feedback on what is good or not so good such as through Every Comment Helps scheme Online and social media make it easier to listen and respond to large numbers of customers in real time through web chats Facebook and Twitter

Promote the right products at the right time

Akijrsquos network of distribution centers and advanced technology support a modern efficient and cost-effective supply chain An efficient distribution system starts with understanding which products the stores need Tesco must plan the distribution processes systems and network to maximize efficiency Labor scheduling and transport planning systems enable the pickers and

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

drivers to operate highly effectively and to develop distribution networks to minimize the mileage needed to get products to store in perfect condition

People Development

Great service can make a customers day and this can be achieved when the employees live the Akij Values No one tries harder for customers and Treat people how we like to be treated Akij business is built on the commitment of more than 1 million people across the country and in return for their commitment Akij offer them good jobs and careers with Akij

Developing employees take many forms from training in our state-of-the-art training academy to offering jobs to the long-term unemployed through Regeneration Partnerships and supporting the development of women to management positions

Ensuring that growth is sustainable

By operating responsibly Akij not only benefit and secure the future of its business but also bring real benefits to the communities in which itrsquos operate It is Akijrsquos commitment to operating responsibly in providing the customers with good quality safe and affordable food This is easily taken for granted in developed economies but can be a real challenge in economies with low penetration of modern retail and under-developed supply chains

This can be achieved by working closely with the suppliers to ensure the supply chain is both resilient and efficient Strong fair mutually beneficial long-term partnerships with suppliers from local to global are at the heart of this Akij is committed to the responsible sourcing of raw materials ensuring the resilience of our supply chain and managing our impact on the environment

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10

Appendix

Questionnaires

1 Has your association articulated a vision for the association (10 -if YES 1 -if NO)1 2 3 4 5 6 7 8 9 10

2 Is the vision statement relevant to the associationrsquos activities and mandate (10 -for very relevant 1 -not relevant at all) 1 2 3 4 5 6 7 8 9 10

3 Has your association developed a mission statement (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

4 Do you feel that your current mission statement is compatible with the activities being carried on by the association (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

5 How would you rate participation in developing the mission statement by the (10 -very involved 1 -not involved at all) Membership 1 2 3 4 5 6 7 8 9 10 Board of Directors 1 2 3 4 5 6 7 8 9 10

6 Is a SWOT analysis employed when dealing with significant issues outside of strategic planning (Score 10 for regularly - 1 for never) 1 2 3 4 5 6 7 8 9 10

7 Has your association established long term objectives (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

8 Does your association maintain a policy manual (10 -if YES 1 -if NO) 1 2 3 4 5 6 7 8 9 10

9 Rate the motivation to maintain and support the implementation of strategic initiatives by the Board of Directors 1 2 3 4 5 6 7 8 9 10 Staff 1 2 3 4 5 6 7 8 9 10

10 Rate the human resource capability to manage and implement a change process or new strategic direction by the Membership 1 2 3 4 5 6 7 8 9 10

Board of Directors 1 2 3 4 5 6 7 8 9 10