Identifying Key Competitors
Pakistan having a huge population represents a huge market for
fast moving consumer goods (FMCG) and other sort of processed food.
As per the demand, this market is world 6th largest when we compare
it with other world markets globally and is mostly driven by the
middle and upper class of the population here. Now as the shift
from rural to urban is taking place the demand is also increasing
at an alarming rate creating more customer base and creating
further opportunities for the companies in this specific market, as
they can utilize their strengths to capture these opportunities.
http://consumerpak.blogspot.com/
Now as we selected Engro Foods, we are now going to have a look
at its strengths and then its key competitors in the market which
as per our analysis are Nestle, Unilever and National Foods. We ae
going to go through each one of these competitors and establish
their strengths they have acquired over the past few years.
Engro Foods LTD
As already being discussed about the company itself, we wont go
into the detail introduction but rather switch to its key
beneficial factors which it has developed over time and use those
key strengths to analyze and compare it with its competitors
afterwards
Strengths
It possesses a strong public relation with the farmers It has
gathered positive response from its customers over the past years.
Carries out a strong research on the market trends. It owns a third
generation plant. Has a strong brand name. It along with MCB has
offered farmers with certain loan programs for financial support.
In order to control loose milk segment, it has set up its own
branches like Mabrook milk in Karachi. One of its major revenue
product, Olpers milk is branded as all uses products capturing a
vast market segment.
http://www.engrofoods.com/
Analysis of the Key Competitors in Pakistan
Nestle PakistanNestle is the one of the world's leading
nutritional and health company today based on its resources. Its
model is based on strong captivating brands,
itsglobalpresence,innovation, environmental friendly products
making a social impact and hardworking passionate people.
It is a key competitor because of the following key points and
factors:Parental BackingBeing the worlds largest processed food and
beverage company and with a presence in almost every country,
Nestle Pakistan gets a huge backing from its parent company because
it can access its large portfolio of products and services gaining
insights and establishing its competitive intelligence.
ImageIt has a great image developed over the past few years
based on its globalized presence which is greatly beneficial in
handling bad situations and get through them which it has done due
to its strong image.Quality ProductsIts products have a quality
promise with them ensuring that they are consistent and hygienic.
This helps them establish customer loyalty and deliver their
promise in turn enhancing their image. It has no compromise for
quality and uses its state of the art technology to deliver
consistent brand promise.Well-developed StrategyNestle has
recognizes there is a right time and place for their product;
therefore,theirstrategy makesroomforadjustments and is tailored to
meet the needs and demand as per the market trends. Nestle
hascapturedmany markets with great sweep because of the developed
strategy.Market ShareNestle juices have a highest market share
almost in every strategic business units line, such as in Nestle
pure life. High market share always depicts the quality of the firm
& its strong management decisions. It also depicts that company
ensures its highest quality assurance checks to make its products
stand out and be as per the promise. It has been greatly working on
its marketing to increase its market share by creating more
awareness in the minds of people.Brand StrengthIt has developed
very strong generic brands like Nescafe, Maggie, Nestle water and
these brands are by far generic to their respective
productcategories and are a means of establishing strong customer
base as whenabrandbecomesgenericthenitdevelops a perception and a
feelofstrength in the minds of its customers. E.g. Google, Apple
etc.Research & Development TeamIts R&D dept.provides an
in-depth knowledge and understanding which helps incontinuous
knowledgeaboutitselfandcompetitors.Its competitive advantage can be
seen as in the form of its R&D because many of its competitors
dont have a R&D dept. Innovation is also at the heart of Nestle
Pakistan. It has been continuously introducing new products and
expanding its currentproductofferings. With theextra
ordinarytechnology adoption Nestle Pakistan is able to deliver
innovative products.Human Resource DepartmentNestle Pakistan has a
strong HR department which depicts Nestles strong committed
management of the company and its employee oriented nature as well.
Its management is key success factor of the company which by its
virtue is willing to devote themselves towards the betterment of
the company and the society as a whole.
http://pestleanalysis.com/swot-analysis-nestle/http://www.nestle.pk/http://www.strategicmanagementinsight.com/swot-analyses/nestle-swot-analysis.htmlhttp://www.mbaskool.com/brandguide/food-and-beverages/3227-nestle-ltd.html
Unilever Pakistan Foods LTDUnilever Pakistan Foods Limited
develops and offer consumer and commercial based food products
globally. Its product lines include noodles, soups, meal makers,
sauces, and ketchups. It also produces and sells instant energy
sports drinks, health drinks and desserts. Its Brand names include
Rafhan, Knorr, Glaxose-D and food solutions. The company changes
its name from Rafhan Best Foods to Unilever Foods in 2007. A list
of its food and beverages products are as under:-Walls Ice
Cream(Magnum Classic, Peddle Pop, Cornetto).-Brooke
Bond-Lipton-Blue Band-Rafhan-Knorr
http://www.unilever.pk/aboutus/introductiontounilever/UPLfoofs/
StrengthsIt is a competitor based on its following strength
factors Unilever Giant: It is a part of Unilever which is a global
giant and one of the oldest MNC. So it enjoys a brand backing and
immense reputation benefits. Management: It has a management which
is experience and established well over the past few years enabling
it to develop learning curves which help Unilever in overcoming bad
situations here in Pakistan whether internal or external. UPL has
potent managerial experience that goes back to 1958.
Image: Unilever numerous brands image are very much into the
minds of people and its customers due to their appeal and age
factor which helps in creating more awareness among its audience
and it uses it to its benefit during its marketing. Quality
Assurance: It follows strict mechanisms for ensuring quality so
that the value products offer are in accordance to the quality
promised by the company. The quality of UPL products is very
superior with highest international standards and is made to remain
consistent throughout. Promotion: Its strong marketing and
advertising is also beneficial in establishing density of its
campaign to its target market which is its one big advantage.
Diverse Portfolio: Its competitiveness is based upon its strong
portfolio segmentation which comes with wide range of products
within every category it offers, e.g. Lipton, Supreme etc. which
makes it further more competitive and tough to compete, giving it a
sustainability in the market. Innovativeness: Innovation is also a
key essential ingredient in its success as it delivers top products
both internally in Pakistan and externally
worldwide.http://www.unileverfoodsolutions.pk/who-we-are/newshttp://sadiqsomayari.wordpress.com/2014/12/17/unilever-pakistan-versus-engro-food-swot-analytical-comparison/
National Foods PakistanNational Foods came into existence in the
year 1970 as a privately owned firm and then was gradually
transformed into a public limited company. At present, National
Foods is one of the big players in the food industry of Pakistan
having a vast variety of above 110 products which are further
categorized into 13 major categories owing to their type. It is
meant for delivering convenience based food products to its
consumers. http://www.nfoods.com/
Now we perform an analysis of its key factors and strengths
which enable it to be direct competitor to Engro Foods LTD:Key
Factors and StrengthsScope of the ProductsIt has a wide and big
product line which extends to 5 major categories depending on the
type of products. The major categories are listed below: Desserts
Ketchups Custards Pickles MasalasOwing to this diverse range of
products it is able to cater to various untapped segments as well
in Pakistan which gives it a competitive edge.Broad Market
CoverageIt carries this 80% market share in powder mix category
just because of its coverage and distribution. It has a strong
broad market coverage through its distributive penetration that it
has developed. As mentioned from an internal source that National
Foods has a distribution network that extends across Pakistan
ensuring timely and easy access points to the consumer fulfilling
the product availability factor in a very convenient manner best
possible.Product Development EfficiencyA vastly competent staff
from engineering discipline and from the technical perspective is
deployed which works at its maximum potential, that delivers
innovation in practice producing superior products than the
competitors creating a differentiation between National Foods and
its competitors. To maintain the product quality, it has efficient
manufacturing mechanisms which are its competence that enable it to
deliver consistent quality throughout the product lifetime. The
mechanisms are supported by the use of imported manufacturing
equipment and environmental friendly quality ingredients mix in the
product development ensuring high standards of manufacturing and
quality control in its products. E.g. powder mix etc.Thought-out
Marketing It has its own advertising agency that promotes its
products which is a big plus that helps its marketing team to
create awareness for its products across Pakistan which the team
has successfully done over the past years and this has played to
increasing its sales and awareness across the country.Research
OrientationNational Foods considers this food market to be
constantly evolving thats why it has a research oriented culture
considering its effectiveness in creating innovation and high
quality products. The importance of research and innovation can be
seen in the company as the Chief Executive himself governs a team
under his supervision making sure that the innovation and
creativity in the products is a never ending process and to ensure
that continuous improvements take place as a result of feedback
gathered after a product is launched in the market.Brand Name It
has taken 34 years of hard fought effort for National Foods to
create such a strong brand name which is now one of those brands
that are capitalizing on this aspect of established brand names in
this particular sector. This factor helps National Foods in
establishing credibility among the minds of consumers for its newly
launched products and to earn sustainability for its products
grasping a quick mind share among its target audience as compared
to its competitors.OrganizationalStructureThe company has both
employee and customer oriented culture. The levels in hierarchy are
functioning well and are properly managed because of its well
sought out co-ordination with the culture and functions ensuring a
stable organizational design. Roles are clear and there is no
conflict in reporting to the superiors as Chief Executive is at the
top level of hierarchy. Reporting to the CEO is the Managing
Director of the company who falls in the second tier followed by
the functional managers of the different departments such as
Marketing, Finance etc. The company has a strong concern about its
human resource as it understands that a competent human resource is
an asset for long term benefits to the organization.Finance
ManagementResource allocation is very crucial in the success of any
company and National Foods has a competitive and capable finance
department which after a thorough analysis allocates resources and
funds to the companys business divisions ensuring a proper tracking
and accountability. Good and timely financial management is another
strength of company that helps in sorting out its current financial
position and then to establish its future goals based on its
finances.http://pdf.marketpublishers.com/bac_swot/national_foods_swot_analysis_bac.pdfhttp://www.wikiwealth.com/swot-analysis:national-foods-pakistan-ltdhttp://www.studymode.com/course-notes/National-Food-1712739.html
Analysis of the UAE marketThe dairy and beverages market is
maturing in UAE as it is one of the upward economies considering
the region it falls in. UAE also enjoys a fast growing income which
is supported by a valued economy. The sector under consideration is
forecasted to grow at a rate of 3.1% in this decade indicating a
huge opportunity for companies to tap this market in a more compact
fashion. Preference for the dairy products has also increased due
to high disposable cash that the population carries which has
forced the market to adopt innovation and bring out new improved
products. If we consider the different category wise share of
value, we will find that there exists a value share among the
categories characterized by milk obtaining 41% share and cheese
with 29% share. Yogurt is that category which is considered to be
maturing and increasing in this decade. Milk, Yoghurt and Laban are
the largest segments in the dairy market so they are mostly
produced locally and the focus is on these three segments. Imports
for these products are minimal and are not much relied upon as
obvious by 24% imports of Milk followed by 13 % Yoghurt import and
Laban constitutes for 11% import whereas in case of exports we see
a healthy percentage of these components being exported. Ghee,
butter and other canned milk are not produced in large amounts.
http://www.marketresearch.com/MarketLine-v3883/Dairy-United-Arab-Emirates-8645813/http://www.bordbia.ie/industry/manufacturers/insight/alerts/Pages/GrowthpotentialofUAEdairymarkethighlighted.aspx?year=2013&wk=45Major
shareholders in the dairy and beverages category are as under:
Manufacturer% Share
Al Ain Dairy 33%
Al Marai28%
Marmum Dairy 26%
Source: IMES Estimates
ENGRO FOODS Key Competitors in UAEAl Ain DairyIt is the largest
producer of dairy products in United Arab Emirates with a market
share of around 33%. It started its operations in 1981 and with the
passage of time has grown sufficiently and its growth can be seen
as having three cattle farms now having more than 3000 animals and
a camel farm as well which has more than 200
camels.http://www.alaindairy.com/EN/Pages/default.aspx
Strengths
Products RangeAl Ain Dairy has a wide range of dairy products
and beverages which are classified under the following categories:
Fruit yoghurts Coffee drinks Drinking yoghurt Crme caramel Custards
Fruit desserts Besides that, milk is being delivered in many
flavors such as strawberry, chocolate, vanilla and banana. Fresh
juices are also being produced in many flavors that are
concentrated from fresh juices. The company also supplies fresh
fruit juice in six flavors produced from fresh juice concentrate.
As the demand for camel milk increased over the past years, the
company has also inducted in its portfolio camel dairy products in
order to compete in a well-mannered fashion.
Network StrengthThe company enjoys its own retail stores which
are named as FARM FRESH. All the best quality dairy products
catering to all ranges have been made available in these stores and
there is no compromise on quality and all products are fresh and
fit for health. The company also has its own fleet of vehicles
having cooling mechanism inside them making sure that all the
products stay fresh and are quality oriented while they are
transferred to the retailers. The temperature factor is taken care
of in the best possible manner possible during these transportation
phases and all products are made available when required. Besides
that, its salesman also monitor the cold storage temperature that
retailers have when they sell products ensuring that there is no
ambiguity what so ever in the freshness and quality assurance
procedures.Technological AdvancementsTechnological advancements are
seen to be the key factor in this region considering the climatic
constraints so for this purpose AL AIN Dairy has a quality
mechanism in place at its farm houses and the manufacturing plants.
Recently it purchased and established new technologies namely Food
Lab System Somatic Cell Counter The voluntary testing
equipmentThese technologies are to ensure that the quality criteria
is fulfilled and international standards are met as many of its
products are exported as well so for that matter the company has
made every step to ensure that quality remains consistent
throughout according to ISO certifications. Somatic Cell Counter is
a testing device that is used to test the raw milk, somatic cells
are white blood cells that are secreted by a cow and indicate
whether the raw milk is acceptable for refining or not. In this
way, state of the art mechanisms ensure a tough quality standard in
place. The company has also made working environments in such a way
that the processing facilities deliver the best ever products. An
example is of a High Efficiency Particulate Air Filter (HEPA) which
filters the working environments air ensuring a healthy processing
site.
Certifications and AssetsAs mentioned earlier about the
different technological advancements in place, the company due to
the efficient use of those technologies was able to gain HACCP
certifications in 2009 which is ISO 22000-2005 certified meaning
thereby that company was issued a license to export the products to
international markets as well as to supply in UAE. The company
being one of the leaders in the dairy market and dairy products has
its own cows and procedures to increase and enhance the milk
production and has taken steps to minimize the import of cows
making the importance of local breed more critical and considering
it as an asset for superior milk production than its
competitors.http://www.studymode.com/subjects/swot-analysis-for-al-ain-dairy-page1.htmlhttp://www.rak-realestate.de/rak_pic/d03/d03i/Food%20Sector%20Report-12-1-0=10.pdf
MARMUM Dairy Dubai Investments Industries acquired Marmum Dairy
Farms in 1996 partially but at present they have 100% stake at
Marmum Dairy Farms which is now a subsidiary of Dubai Investments
Industries. It has an annual production of around 20 million liters
and is the first of its kind to gain the HACCP certification in
UAE. It also has this honor of being the largest dairy production
facility in UAE. It specializes in producing dairy products such as
milk, creams, yoghurt and also is delivering its production in
non-dairy products such as juices etc. so we can say that it has a
very much diversified portfolio and is doing well to maintain and
prosper its current position.http://www.marmum.ae/
StrengthsCustomer OrientationThe company enjoys a positive word
of mouth from its consumers due to the fact that it is regarded as
a customer centric company which puts customer first. It has a
great reputation as it has a policy coupled with helping the nation
at various times and is dedicated to play its part in maintain the
food standards. So in this way it has created a customer and
environmental friendly image that is related to social
responsiveness. Maintain a quality standard has led to the great
unparalleled customer experience which the company enjoys and
capitalizes upon. The products are made according to the needs of
the customer and the taste is kept to the customer satisfaction
level using its expertise and different quality mechanisms. Due to
which it has a customer loyalty which comes in the form of repeat
purchases. The quality of its products is only matched by Al Ain
dairy and there is a competition between the two on the quality and
consistency grounds.Production EfficienciesIt has its wholly owned
cows which are nurtured in such a way that they produce maximum
milk. It has a capacity of producing more than 20 million liters of
milk annually which signifies its procedures and mechanisms due to
which it is at 3rd position in this industry with bright prospects
for the future. It manages to produce such a large amount of milk
just because of the fact that its cows are of high quality and
require less maintenance. In this way, maximum milk production is
ensured at such a low cost and the revenue generated is re-invested
and the whole profit is maximized. In this way, the capital is
generated for future investments. The cows are bred locally and are
environment habituated which means that they are resilient to the
changing conditions and thus provide a greater lactating span then
the normal cows, which is an indicator of greater milk production
in contrast to its competition.
Technology and SystemsNew technology expands the efficiencies
and develops new markets by providing new and better prospects for
the business the company operates in. It is therefore crucial for a
particular business to stay updated with what is going on at
present with the trends in technologies. Recently, the company
bought 175-200 heifers from Australia, enabling the company to
further increase its herd strength to around 3500. This new import
would not only increase the milk production but also assist in
ensuring a good quality milk as compared to the competitors as the
new purchase is of top quality.Considering the quality control
system, the company has devised a system which uses advanced
engineering tools allowing it to meet the latest technological
needs and requirements for the dairy production market. The tools
are concerned with the handling of the standardized functions in an
efficient manner making sure that the finished product meets the
quality mark as promised. The tools deal with all the steps
starting from the initial production to the intermediate stage
leading to the finished product. The new tools not only enable the
quality standards but also assist the company to bring about its
strategy in coherence with its production.
Social ResponsibilityThe company has had a history of being a
socially responsible organization. It has shown goodwill gestures
in the past when it supported the Ministry of Social Affairs and
played its part in helping the disabled people. Another instance is
when it backed the UAE census board towards the implementation of
the Te-dad logo which benefited in creating a caring sort of image
for the company and since then it has been doing various social
activities presenting a caring image. Another example is of the
2009 Be My Friend campaign in which it joined hands with ministry
helping the disabled children to be inducted into the mainstream
schools giving them a sense of belonging and an inclusion to the
world at large. So by and large company enjoys an image a socially
responsible organization and its consumers have a positive mindset
about the company.
http://www.arabianbusiness.com/dubai-s-marmum-dairy-farm-eyes-big-rise-in-juice-exports-559158.html#.VMSdO_6UeW4http://uae.superbrandsmena.com/pdf/pdffile1394026753.pdf
Al Marai Al Marai is a well-established company operating in not
only UAE but also in the entire Middle East region. It is renowned
for its quality and has developed a name in the different
households of the region. The company enjoys a powerful technical
expertise driven by innovation and is famous for its customer
service as well. The success of the company is centered in its
commitment to quality and consistency throughout its entire set of
operations which has led to its rapid growth in the region since
its inception in 1977. It specializes in the manufacturing and
selling of high quality dairy food products ranging from dairy to
beverages to other dairy food products. It serves around 45000
customers in the Middle East region which also includes UAE. It was
a private company till 2005 but then it moved to a publicly owned
company and currently it has over 70,000 shareholders. After
converting to a public listed company it further expanded its
product range to bakery products as well improving its distribution
and inculcating innovation in its norms.
http://www.ukessays.com/essays/commerce/overview-of-the-company-almarai-business-essay.php
StrengthsProduct Width and Range The company has the wide range
of products which are listed in the following categories.Juices:
Taste and Health are the balance indicators in its juices which are
made out of best fruits and are available in various flavors. The
juices are as per the customer requirements and research.Snacks:
The Company also delivers snacks which are tastier and the product
itself is a simple one giving a good sweet taste. Yoghurts and
Desserts: Quality is the main aspect of yoghurt and desserts and
the health stake is never compromised upon. The products are pure
and rich in calcium and there is no preservatives being added in
the desserts which are 100 % pure.Culinary Products: Almarai also
provides the best cheeses and an array of creams keeping in mind
the mothers routine so as to provide an easy way to work in the
kitchen. Dairy Liquids: Milk based dairy products are also being
manufactured and are a crucial part of the entire portfolio and
play their role in generating revenue.Kids Products: These products
are for kids and are meant for fun times. It also includes a brunch
which is healthy and delicious for kids.
Product Positioning and StrategyAlmarai is successful in product
positioning and strategy because it has a unique and novel
infrastructure which includes the different entities such as farms,
operations and a system ensuring the availability of products
termed as a go to market system. Product differentiation is also at
the heart of the company as in 2007 it launched its fresh juices to
complement its other dairy products in the market and also added
bakery products to its portfolio in the expansion phase. It has a
differentiation strategy in the sense that it offers flavored milk
which is UHT treated and targeted at kids which falls in the kids
product category and this particular category then gives a chance
to further launch new and innovative products targeted at kids
giving a differentiation benefit to the company. So in a way the
products are positioned in a way that they occupy a mind share of
the target and fall in their evoked set which is the plus point
that the company enjoys with investment in its
marketing.Competitive Price DeterminationAnother strength of the
company is its pricing as it is surrounded by competition so it
ensures that its products are priced in such a way that they over
power their competitors and consumer end up buying them. Price
decision is taken on the basis of competitive price making i.e.
what the competitor is offering. For example, all branded products
are priced between 2 to 4 dirhams so owing to this criteria a pack
of juice having a weightage of 300 ml is priced at 2 dirhams
instead of 2.5 which is the competitive offering, thereby giving
the company a price differentiation as well. The customer is given
an image of low cost quality products which seem affordable to the
customer.Advertising and PromotionsFor the marketing and awareness
of the products, various mediums are used which are as under:
Newspapers Radio Network Campaign Discounts TVCs Billboards and
Holdings Social MediaThe above mentioned mediums are used to spread
awareness among the target audience and to interact with them.
Taste is being emphasized and the discount coupons are also
marketed bringing an inflow of customers to purchase the product.
Products are also offered on promotional discount basis giving a
signal of goodwill to gesture to the consumers hence increasing the
profit margin due to repeat purchases as it does in case of its
juices by offering them on a discount basis frequently and using
the above mentioned mediums effectively gaining a competitive edge
in the region. TVCs are also designed in such a way to attract
majority of the target audience and in case of kids the ads are
quite attractive and the kids feel resonating with the ad in turn
initiating a purchase momentum among its target audience.
Billboards are also used to spread knowledge and informative
marketing is done through these billboards at various locations. So
the company uses marketing to its advantage reaping revenues
through increased purchases.Distribution NetworkThe company has a
distribution network that spreads to more than 42000 shops within
the Middle East daily. It enjoys a huge fleet of transport network
which delivers the products from different intermediate locations
to the final point of purchase location. The intermediate locations
include the processing plants, the dairy farms and the
manufacturing sites. The transport mechanism is such that ensures
the packaging of the product remain intact and the freshness stays
as per the standard temperatures prescribed by the international
standards. The whole process is developed and implemented in a way
to ensure product safety and long lasting. The products are
delivered to the markets and grocery stores. The company then gains
the upcoming demands from the supermarkets and capitalizes on
increasing demands.
Technological InnovationAlmarai has the second largest central
processing plant and also acquires a cheese plant as well. It has
invested heavily in the advancement of its technological equipments
which are installed at various production facilities. It also
includes an advance planning and forecasting system which manages
the production and demand supply mechanism giving a leverage to the
company. A system for recruitment is also there which ensures that
the right person gets selected for the right job.In short following
are the key factors that make Almarai a key competitor to Engro
Foods: It is a market leader if we consider the entire gulf market
and not only UAE and its fresh products are available throughout
the region.
It has tight cost controls mechanisms in place and ensures a
minimum waste level percentage as compared to its competitors
increasing its efficiency in the whole production process. It also
enjoys a state of the art quality process system in place which is
supported by:
- Integrated supply chain and replenishment system. - Marketing
and Promotional expertise coupled with sales benefits. - Efficient
distributive network which is further scalable. - Updated
technological improvements throughout its lifecycle. The companys
expansion in the form of acquisitions and mergers.
http://www.termpaperwarehouse.com/essay-on/Almarai-Swot-Analysis/66608http://www.ukessays.com/essays/commerce/overview-of-the-company-almarai-business-essay.phphttp://www.kippreport.com/fcs/almarai-vs-al-rawabi/