Market Structure of Akij Foods Bebarage Ltd.-libre

Group 9

Department of Finance,

Jagannath University,

Dhaka

6/29/2014

Market Structure

of

Akij Food & Beverage Ltd.

Market Structure of Akij Foods &Beverage Ltd

Department of Finance Jagannath University 2 | P a g e

Microeconomics

Report

On

Akij Food & Beverage Ltd.

Submitted to

Roushanara Islam

Lecturer

Department of Finance

Jagannath University.

Submitted by

Group-9

SL NO. NAME ID NO.

01 MD. MONOAR HOSSAIN B-120203005

02 SABIHA JHUMUR B-120203010

03 MD. SAIDUL ISLAM B-120203060

04 SUNJIDA PARVEN B-120203069

05 MD. SHAKHAWAT HOSSAIN B-120203080

06 MD. RAJU AHAMED B-120203091

07 EMDAD MUNSHI B-120203092

08 AYASHA SIDDIQUA MOUE B-120203099

09 MALEKA AKTER B-120203106

10 MILON SAHA B-120203108

Date of Submission: 25 June, 2014



Declaration

We hereby proclaim that, this report contains no objects which has

been approved for the prize of any other degree or diploma at any

university or correspondent institutions and that to the best of our

understanding and belief, this report contains no bits and pieces

previously available or written by another person, except where due

reference is made in the content of the report.

Group- 9



Letter of Transmittal

25 June, 2014

Roushanara Islam

Lecturer


Jagannath University.

Sub: Submission of the Report.

Dear Madam,

With due respect, we would like to inform you that, we are the student

of Department of Finance. It is our great pleasure to inform you that we

have got a IhaﾐIe to suHﾏit a ヴepoヴt oﾐさMarket Structure in

manufacturing companies of Bangladesh- A “tud┞ oﾐさAkij Food &

Beverage Ltd.ざ as a requirement for course named Microeconomics,

course no: 2104.

We therefore pray and hope that you would be kind enough to accept

this report and bless us heartily.

Sincerely yours

Group-9

B.B.A. 7th

Batch

2nd

Year 1st

Semesters


Jagannath University, Dhaka.



Acknowledgement

All praises are due to Almighty Allah, the ultimate authority of this

universe who has enabled us to submit the report in time for the course

named Microeconomics.

We express our pleasant sense of appreciation, thanks, true gratitude

and intense regards to our honorable supervisor Roushanara Islam,

Lecturer, Department of Finance, Jagannath University, Dhaka for his

scholastic way, pleasant support, regular encouragement, valuable

guidance, overall management and continuous importance throughout

the thesis work.

It’s a great delight to us to express reflective gratitude and warm

admiration to our dearly loved parents, well wishers and friends for

their ever ending wish, affections, support, sacrifice, inspiration,

encouragement and continuous endorse in the long process of creating

our academic career which can never be repaid.

Group-9



Executive Summary

Beverages and soft drinks sector is one of the fast growing sectors in

Bangladesh. Akij Food & Beverage Ltd is one of the local

manufacturers of soft drinks in FMCG sectors. In the age of

globalization and free trade, it is very tough to compete in this

beverage and the competition style of this sector changing very

frequently. The Akij Food & Beverage Ltd continuously managing

itself with changing environment of competition.

Our research report initially provides a nominal idea of the beverage

industry in our country. Then the overview of market structure of

manufacturing company in Bangladesh and also The Akij Food &

Beverage, which is a unit of Akij Group, is presented. After the

company profile, its product and competitor are described. Then

SWOT Analysis, Marketing Mix and Financial Analysis are also given

in this report.



Table of Content

Name of Content Page No.

Acknowledgement 5

Executive Summary 6

Part - I

1.1 Introduction 8

1.2 Scope of the study 8

1.3 Background of the study 9

1.4 Objective of the report 9

1.5 Methodology of the study 9

1.6 Limitation of the study 10

Part - II

2.1 Market Structure 10

2.2 Types of Market 11

2.3 Perfectly Competitive Market 11

2.4 Imperfectly Competitive Market 11

2.4.1 Monopolistic Competitive Market 11

2.4.2 Oligopoly Competitive Market 12

2.5 Perfect vs. Imperfect Competition 12

2.6 Oligopoly vs. Monopolistic Competitive Market 12

Part -III

3.1 Company Profile 13

3.2Literature review 14

3.3 AFBL In Perfectly Competitive Market 16

3.4 Main Product of Akij Food and Beverage Ltd. 16

3.5 Competitor of Akij Food and Beverage ltd 17

3.6 SWOT Analysis of AFBL 18

3.7 Marketing Mix of AFBL 20

3.8 The Current Situation of AFBL 24

3.9 Financial Analysis 25

Part-IV Conclusion 26

Bibliography 27



PART - I

1.1 Introduction

Market structure is defined by economists as the characteristics of the

market. It can be organizational characteristics or competitive

characteristics or any other features that can best describe a goods and

services market. The major characteristics that economist have focused

on in describing the market structures are the nature of competition

and the mode of pricing in that market. Market structures can also be

described as the number of firms in the market that produce identical

goods and services.

The different types of market structure are; the monopolistic

competition also referred to as the competitive market. The oligopoly

market (called a duopoly when only two firms exist in the market), a

monopsony (there exist only one buyer), the monopoly structure and

the perfect competitive market. The types of market structures can be

grouped into the perfectly competitive structure and the imperfectly

competitive market structure. The imperfectly competitive market

structures are the oligopoly, duopoly, monopoly and the monopolistic

competition.

In Bangladesh, manufacturing sector

1.2 Scope of the Study

There were huge scopes to work in the arena of the case. Considering

the dead line, the scope and exposure of the paper has been wide-

ヴaﾐgiﾐg. The stud┞ Hehiﾐd さMaヴket “tヴuItuヴe in Manufacturing Sector

of Bangladeshざ- A “tud┞ oﾐさAkij Food &Beverage Ltdざ has covered

http://www.whatiseconomics.org/oligopoly

http://www.whatiseconomics.org/oligopoly



overall analysis by Which we can know about the Marketing Condition

followed H┞ さAkij Food &Beverage Ltdざ.

1.3 Background of the Study

The following report was assigned by the course teacher of

Microeconomics, Roushanara Islam, as an academic requirement.

This course is approved by University Governing Council (UGC),

authorized and organized by Jagannath University, Dhaka-1100, and

Faculty of Business Administration (B.B.A).

1.4 Objective of the Study

This ヴepoヴt is aHout さMaヴketiﾐg “tヴuItuヴe of MaﾐufaItuヴiﾐg “eItoヴ iﾐ Baﾐgladeshざ. The puヴpose of the stud┞ is to help us to uﾐdeヴstaﾐd market condition, market policy and market strategy of a

manufacturing company which helps theﾏ to suヴvive iﾐ toda┞げs competitive market. Itげs also eﾐaHliﾐg us to gain knowledge about real

world market structure and its operation.

1.5 Methodology of the Study

Microeconomics (4th

Edition) by Dominick Salvatore

Principles of Marketing (13th

Edition) by Philip Kotler& Gary

Armstrong

Sources of Data

Web sites

Books

Different Business Publication & Notes



1.6 Limitations of the Study

We collected our information through secondary sources, so we

have not been able to collect more information which could

give us more clear knowledge about the signaling theory. While

conducting the report on ╉Market Structure in Manufacturing

Sector of Bangladesh- a Study on ╉Akij Food &Beverage Ltd╊. Some limitations were yet present there:

Lack of time shortage many related part cannot be paying

attention in depth.

Current data and information on different activities was

unavailable.

As a report analysis, it has been prepared shortly

PART- II

2.1 Marketing Structure

Market structure is defined by economists as the characteristics of the

market. It can be organizational characteristics or competitive

characteristics or any other features that can best describe a goods and

services market. The major characteristics that economist have focused

on in describing the market structures are the nature of competition

and the mode of pricing in that market. Market structures can also be

described as the number of firms in the market that produce identical

goods and services.



2.2 Types of Market

2.3PerfectlyCompetitive Market

Perfect competition describes a market structure where competition is

at its greatest possible level. To make it more clear, a market which

exhibits the following characteristics in its structure is said to show

perfect competition

2.4 Imperfectly Competitive Market

Imperfect competition is a competitive market situation where there

are many sellers, but they are selling heterogeneous (dissimilar) goods

as opposed to the perfect competitive market scenario. As the name

suggests, competitive markets that are imperfect in nature.

2.4.1 Monopolistic Competitive Market

A situation in which a single company owns all or nearly all of the

market for a given type of product or service. This would happen in the

http://www.investorwords.com/4584/single.html

http://www.investorwords.com/992/company.html

http://www.investorwords.com/3563/own.html

http://www.investorwords.com/2962/market.html

http://www.investorwords.com/3874/product.html

http://www.investorwords.com/6664/service.html



case that there is a barrier to entry into the industry that allows the

single company to operate without competition (for example, vast

economies of scale, barriers to entry, or governmental regulation). In

such an industry structure, the producer will often produce a volume

that is less than the amount which would maximize social welfare.

2.4.2 Oligopoly Competitive Market

A situation in which a particular market is controlled by a small group of

firms.

An oligopoly is much like a monopoly, in which only one company

exerts control over most of a market. In an oligopoly, there are at least

two firms controlling the market.

2.5 Perfect vs. Imperfect Competition

Perfect and Imperfectly competitive markets are very different to one

another in terms of the different market conditions that need to be

satisfied. The main difference is that, in a perfectly competitive market

place, the competitive conditions are much less intense, than any other

form of imperfect competition. Furthermore, a perfectly competitive

market structure is healthier as buyers have enough options to select

fヴoﾏ aﾐd aヴeﾐげt, theヴefoヴe, pヴessuヴed to puヴIhase oﾐe / few products

and sellers are able to enter/exit as they please, which is opposite to

most market conditions within an imperfectly competitive market

place.

2.6 Oligopoly vs. Monopolistic Competitive Market:

http://www.investorwords.com/8968/barrier.html

http://www.investorwords.com/2447/industry.html

http://www.investorwords.com/8807/allow.html

http://www.investorwords.com/5467/competition.html

http://www.investorwords.com/1652/economy.html

http://www.investorwords.com/4399/scale.html

http://www.investorwords.com/425/barriers_to_entry.html

http://www.investorwords.com/5950/regulation.html

http://www.investorwords.com/4785/structure.html

http://www.investorwords.com/3872/producer.html

http://www.investorwords.com/5258/volume.html

http://www.investorwords.com/10174/less.html

http://www.investorwords.com/205/amount.html

http://www.investorwords.com/17822/welfare.html



Both Oligopoly and Monopolistic Competition have imperfect

competition. This means that firms in both market structures can

charge their own prices, without losing their consumers.

However, there are many differences in Oligopoly and monopolistic

Competition Market structures.

Oligopoly contains a small number of large firms while Monopolistic

Competition has a large number of small firms.

Oligopoly:

Small number of Large Firms

Have significant entry barriers of other firms.

Location-wise – Smaller towns

Monopolistic Competition:

Large number of small firms

Free entry and exit

Location-wise – Large cities

PART - III

3.1 Company Profile

Akij Food and Beverage Ltd, a concern of Akij Group. Akij Food &

Beverage Ltd. has been established at a beautiful site Krishnapura,

Dhamrai of Dhaka. It has come with the best food & beverage in

Bangladesh.

There are various types of drink. Mojo is the brand name of cola, Lemu

is the brand name of Lemon and Speed is the brand name of energy

drink. Immediately after the introduction of the brand it became very



popular among its consumer because of the high quality and intensive

distribution in every nook and corner of the country.

Checky Monkey is the brand name of banana chips produced from this

factory. It also is becoming popular chips in Bangladesh.

Most of our Raw materials come from various foreign countries. The

quality is very strictly controlled. At every stage, non standard products

are rejected.

Head Office

73, Dilkusha, Commercial Area,

Dhaka-1000, Bangladesh.

Phone : (+880-2)9563008-9, 7169017-8

Fax : (+880-2)9564519

E-mail : [email protected]

3.2Literature review

Vision

Any companyげs vision is actually the dream to which the company

always strives to

Reach where it may become possible or not. Here it is also not apart

for Akij Group. Expanding the business in the abroad fully and

becoming one of the market leaders internationally- this company

thinks in this way as a part of their vision.

Mission

The mission of Akij Group is to be the market leader by 2009

through their best effort, suitable and competitive marketing

mailto:[email protected]



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.

Goal The companyげs goal is to maximizing the market share in their every

categorized business including Akij Food & Beverage Ltd, Akij Cement

Company Ltd, Dhaka Industries, Akij and Akij Particle Board Mills Ltd.

Objective

さThe ﾏaiﾐ oHjeItive of the Ioﾏpaﾐ┞ is to iﾐIヴease the ﾏaヴket shaヴe in related diversified

Products in Bangladesh and to assure the potential customers of the

ケualit┞ aﾐd duヴaHilit┞ of the pヴoduIts.ざ

Strategy

The company always believes in pull strategy rather than push

strategy. They first of all find out the customers demand about how,

when, where, and what type of product ad services they want. Then

according to that they provide their services at the right place and in

the right time.

The Organization Structure

AKIJ FOOD & BEVERAGE LTD. maintains a flat organization structure.

The company has many separate divisions for the smooth operations

http://www.akij.net/index.php?page=afbl.php

http://www.akij.net/index.php?page=accl.php

http://www.akij.net/index.php?page=accl.php

http://www.akij.net/index.php?page=dti.php

http://www.akij.net/index.php?page=apbml.php



in Bangladesh. Among them some divisions are related with business

and some are supporting divisions.

3.3 Akij Food and Beverage Ltd in Perfectly Competitive

Market

AFBL operate their business in perfectly competitive market. Because

its market has following characteristics:

AFBL market consists of buyers and sellers who are price takers.

Each firm in the market produces undifferentiated and

homogenous products.

Buyers and sellers have perfect information about the price

prevailing in the mark! About the availability of commodities at

any given point of time.

Any firms can enter or exit the market liberally.

3.4Main Product of Akij Food and Beverage Ltd

Mojo

Clemon

Frutika

Speed Energy Drink

Farm Fresh Milk

Cheese Puffs

Spam Mineral Water



3.5Competitor of Akij Food and Beverage ltd

Brand Name: MOJO

International Giants

Coca-Cola

Pepsi

Local Brands

Royal Crown Cola(Partex Beverage)

Pran Cola(Pran Foods)

Brand Name: Spa Mineral Water

International Brand

Aquafina

Local Brand

Jibon

Mum

Fresh

Brand Name: Clemon

Local Brand

RC Lemon

Pran Up

International Brand

Sprite

7 Up



Brand Name: Frutika

International Brand

Slice

Local Brand

Pran Fruto

Shezan Mango Juice

Brand Name: Speed Enrage Drinks

Competitor Name

Dark Horse

Shark

Tiger

3.6SWOT Analysis of AFBL

A scan of the internal & external environment is an important part of

the strategic planning process. Environment factors internal to the firm

usually can be classified as strengths(s) or weaknesses (w) & these

external to the firm can be classified as opportunities (o) or threats (t)

such as analysis of these strategies environment is referred to as a

SWOT analysis.

The SWOT analysis provides information that is helpful in matching the

firs resources & capabilities to the competitive environment in which it

operates. As such it is instrument in strategy formulation & selection.

The following diagram shows how a SWOT analysis fits into an

environment scan.



STRENGTH

A fiヴﾏげs strength is its resources and capabilities that can be used as a

basis for developing a competitive advantage.

Patents

Strong brand name

Good reputation among customer

Cost advantage from proprietary know how

Exclusive access to high grade natural resources

Favorable access to distribution networks

WEAKNESSES

The absence of creation strength may be viewed as a weakness. For

example each of the following may be considered weaknesses

Lack of patent protection

A weak band name

Poor reputation among customer

High cost structure

.lack of access to the best natural resource

Lack of access to key distribution channel

Opportunities

The external environment analysis may reveal certain new

opportunities for profit & growth some examples of such opportunities

include

An unfulfilled customer need

Arrival of new technology

Loosening of regulation

Removal of international trade barriers.



Threats

Changes in the external environment also may present threats to the

firm. Some examples of such threats include

Shifts in customer tastes away from the firm products.

Emergence of substitute products.

New regulations.

Increased trade barriers

3.7 Marketing Mix ゅ4P’sょ of AFBL

The Marketing Mix model can be used by marketers as a tool to assist

in defining the marketing strategy. Marketing managers use this

method to attempt to generate the optimal response in the target

market by blending 4 variables in an optimal way.

All produIts 4p’s aﾐal┞sis is diffiIult to showiﾐg so we showering an example of one product Akij Food and Beverage

Ltd. introduced lemon flavored carbonated beverage clear

driﾐk さCleﾏoﾐざ iﾐ its e┝istiﾐg produIt liﾐe oﾐ OItoHer 2007.

Analysis of 4P

Product

Lemon flavored CSD.

Clemon

Clear Lemon Drink in existing product line of AFBL.

“tヴiItl┞ ﾏaiﾐtaiﾐs pヴoduItげs high quality.

Underwater world scenario is used. Bottle and cap color Green &

White (respectively)

Can printed (150ml and 250 ml); Shrink Label (except- 2000ml).



150ml can; 250ml pet bottle and can; 500ml, 1000ml, 2000ml pet

bottle.

Dealeヴげs get daﾏage returns warranty from the company.

Promotion

Advertisement: Television, billboards, posters, Print media.

Sales Promotion: Different promotional activities has been

performed, e.g. a seminar in BUET introducing SCM from

Department of IPE. The official drink of the event was けCleﾏoﾐげ. Public Relations: Clemon Beach Carnival yearly. Sponsors Clemon-

Activate Bangladesh Sports Development Pilot Project under

Active Bangladesh Foundation (ABF).

Direct Marketing: All the promotional activities for customer as

direct marketing and greetings are given to the traders.

Place

Channel:

Coverage: Around 90% of Bangladesh

Location: Metros, Semi-urban & Rural areas.

Manufacturer

Dealer

Retailer

Customer



Inventory: Currently no specific amount of inventory is

maintained for backup.

Transport: The transportation is upon the choice of the

distributors. They may use their own transport or else the

company has arrangement for transporting the goods.

Price

List Price:

Decided as competitive price. The prices of various sizes are:

250ml = Tk.16;

500ml = Tk.30;

1000ml = Tk.55;

2000ml = Tk.85

Allowances:

Dealers enjoy allowances depending on their total purchase.

The crate sizes of Clemon delivered to the dealers are:

250ml (can & pet) = 24pcs./crate

500ml(pet) = 20pcs./crate

1000ml.(pet) = 12pcs./crate

2000ml.(pet) = 6pcs./crate

Credit terms:

With all the dealers dealing is done in credit. Only the dealers of high

business volume enjoys credit term allowance for clearing due

payments at an early date.



Analysis of 4C

Customer Solution

As a product Clemon has been designed to provide customers a

clear lemon carbonated beverage as per demanded sizes for self

and family/group consumption at a close similar quality

comparing to similar products in the market.

Customer Cost

The Ioﾏpoﾐeﾐt さPヴiIeざ of the ﾏaヴketiﾐg ﾏi┝ deteヴﾏiﾐed H┞ keeping an eye on Iustoﾏeヴげs willingness to spend for a beverage

product comparing to similar products of other brands. The other

pricing factors regarding allowances and credit terms are also

justified according to reasonability.

Conveniences

Clemon is available at local grocery stores, fast food shops and

super markets to ensure customers convenience

Communications

Clemon is being advertised using almost all the Medias which

communicate better with the targeted group.

Within the target group the media which communicates with

them the most is Television Advertisements and radio and

billboards communicate in a smaller scale.

The company of Akij Food and Beverage has a product line of

alﾏost all the t┞pes of dヴiﾐk aﾐd sﾐaIks. さCleﾏoﾐざ fulfilled the liﾐe of carbonated beverage by adding the lemon flavored carbonated

beverage.



3.8 The Current Situation of AFBL

Porters 5 forces model

Criteria High Moderate Low Reason

Bargaining power

of Suppliers

There are enough

competitors in the

market for bargaining

Bargaining power

of customers

There are some

established company in

the market

Treat of new

entrants

There are so many local

company and big

company in the market

Treat of

substitutes

The price of the product

is more or less same

Competitive

Rivalry Between

existing players

Quality of the product

and the price are almost

same

Identifying the problem

Low quality product

Low variety of products

Poor band image

Poor marketing strategy and

Service according to their service segment are very poor though

having a strong distribution channel



Explaining what success it will bring

Increase products quality

Diversified products

Strong brand image

Strong Marketing state

3.9 Financial Analysis

Liquidity Analysis

2009 2010 2011 2012 2013

5.62 4.47 4.30 4.23 5.48

Acid Test Ratio

2009 2010 2011 2012 2013

4.99 3.91 3.97 4.10 4.45

0

1

2

3

4

5

6

2009 2010 2011 2012 2013

Liquidity Analysis

Liquidity Analysis

0

1

2

3

4

5

6

2009 2010 2011 2012 2013

Acid Test Ratio

Acid Test Ratio



Profitability Performance

Net Profit Margin

2009 2010 2011 2012 2013

1.15 2.23 2.56 2.21 3.17

Cash Efficiency

Cash cycle

2009 2010 2011 2012 2013

34days 39 days 31 days 45 days 41 days

PART - IV

Conclusion

As the Akij Food and Beverage Ltd of Akij Group is a well known

company in Bangladesh. But there are some foods and beverage of Akij

Group Which consumer did not know about them. Lack of awareness

and proper advertisement make the process is complex. So they have

0

0.5

1

1.5

2

2.5

3

3.5

2009 2010 2011 2012 201

Net Profit Margin

Net Profit Margin



to consider on improving Akij foods and beverages weakness and try to

capture its opportunity and utilize its market through proper operation.

Bibliography

BOOKS

Microeconomics (4th

Edition) by Dominick Salvatore

Principles of Marketing (13th

Edition) by Philip Kotler& Gary

Armstrong

Website

http://www.preservearticles.com/201104115243/what-are-the-

characteristics-of-a-perfectly-competitive-market.html

http://www.whatiseconomics.org/microeconomics/market-

structures

http://economictimes.indiatimes.com/definition/perfect-

competition

http://economictimes.indiatimes.com/definition/imperfect-

competition

http://www.investopedia.com/terms/m/monopoly.asp

http://www.investopedia.com/terms/o/oligopoly.asp

http://www.differencebetween.com/difference-between-perfect-

and-vs-imperfect-competition/

www.akijgroup.com/akij-food-beverage-ltd/

http://www.preservearticles.com/201104115243/what-are-the-characteristics-of-a-perfectly-competitive-market.html

http://www.preservearticles.com/201104115243/what-are-the-characteristics-of-a-perfectly-competitive-market.html

http://www.whatiseconomics.org/microeconomics/market-structures

http://www.whatiseconomics.org/microeconomics/market-structures

http://economictimes.indiatimes.com/definition/perfect-competition

http://economictimes.indiatimes.com/definition/perfect-competition

http://economictimes.indiatimes.com/definition/imperfect-competition

http://economictimes.indiatimes.com/definition/imperfect-competition

http://www.investopedia.com/terms/m/monopoly.asp

http://www.investopedia.com/terms/o/oligopoly.asp

http://www.differencebetween.com/difference-between-perfect-and-vs-imperfect-competition/

http://www.differencebetween.com/difference-between-perfect-and-vs-imperfect-competition/

http://www.akijgroup.com/akij-food-beverage-ltd/



http://www.assignmentpoint.com/business/entrepreneurship-

development-business/portfolio-of-akij-food-and-beverage-

limited.html

http://en.wikipedia.org/wiki/Akij

http://www.assignmentpoint.com/business/entrepreneurship-development-business/portfolio-of-akij-food-and-beverage-limited.html



http://en.wikipedia.org/wiki/Akij

Market Structure of Akij Foods Bebarage Ltd.-libre

Documents

student of department

tud o akij food beverage

saidul islam b

g e microeconomics report

monoar hossain b

shakhawat hossain b

epot o market structure

emdad munshi b