Swot analysis of engro foods, created by Aabaed ul rehman,M.com.UAF

SWOT ANALYSIS OF ENGRO FOODSAND ITS INTERNAL AND EXTERNAL

ENVIRONMENT

S U B M I T T E D T O ;

S I R S A R F R A Z

ACKNOWLEDGEMENTS

Firstly we would thank to Allah for giving us the opportunity and the resources to be able to do something productive in our lives…

Than our sincere teacher Mr.Sarfraz who provide the accurate knowledge and gives us the chance to build up our confidence level.

HISTORY OF ENGRO FOOD Engro Foods (Pvt.) Limited (EFL) has

been established in 2005 as part of a diversification process at the Engro Group.

The plant located at Sukkur on 23 acre land, has the raw milk reception capability of 300,000 liters per day

The plant has been established at a cost of Rs. 1 billion which provides direct employment to 750 people.

One plant is located in Sahiwal.

HISTORY (CON,T)o Engro Foods has entered the Food

business through milk processing and sale with the company’s vision to pursue growth opportunities based on country fundamentals and own strength.

5 millions user per day nation wide.

Vision

• "Our vision is to become a fast expanding mega foods company. To achieve our vision, the company will initially focus on dairy by investing a substantial amount in plant, milk collection capability and marketing.."

MISSION

“Engro foundation is committed to make positive impact on lives of communities around its supply chain through provision of improved basic services, education and skill development by training in addition it will work with partner organizations to provide the financial and technical support in response to natural calamities”

ENGRO FOODS PRODUCTS

S , Strengths W , Weaknesses O , Opportunities T , Threats

SWOT ANALYSES OF ENGRO FOODS

STRENGTHS(1) ENGRO’s back  

Olper,s is a brand of ENGRO foods. So consumers like it on behalf of previous records

because ENGRO is a well established brand name in Fertilizer, IT and infrastructure business etc.

ENGRO is world famous so it can easily attract foreign investors .

ENGRO foods can easily afford research and development costs for Olpers have in order to introduce new products.

It can also distribute the brand through better channels because of its long term relationship with distributors in the agriculture sector.

Strengths (cont,d) (2) PR with farmers

ENGRO has been interacting with the farmers for fertilizers and has gained quite a good reputation over the years.

And has a good relationship with the farmers who are willing to supply milk to the company.

This is an added advantage and strength for the company because it will never be short of milk production.

The farmers also won’t have to look elsewhere to sell their milk.

Strengths (cont,d) (3) Positive

response from customers

 In first year,(2005) engro crossed 1.4 billion sales figure which shows customers’ satisfaction upon EFL’s products.

Strengths (cont,d)

(4) Taste, Quality

It’s Taste, Quality Proposition & World-Class Quality.

Strengths (cont,d)

(5) Strong consumer & product research

 Olper’s done a strong

consumer & product research before and after launching the product. This has provided them the perfect launching pad to get more benefits..

1). Owning Red Color   The company has not owned the color red like

Nestle has a green Milkpak; Haleeb has a blue carton etc.

This may create problems because when a consumer enters a grocery shop, then he/she might have problems in recalling the brand.

Because there is no color association attached to Olpers.

The company may need to find a suitable color in which to focus its upcoming marketing strategies.

Weaknesses

DIFFRENTS COLORS

2) Low Quality Milk   EFL is not having its own dairy farms; it largely collects loose milk from farmers &

gwalas through its 40 milk collection centers,

which sometimes is of low quality and impure.

because they add vegetable oil to milk to get higher prices.

Weaknesses (con’t)

3) Packaging   EFL is dependent upon Tetra Pak for the

packaging of its entire dairy products. Tetra Pak is the only option available to

Olper’s for packaging because it is having monopoly in the packaging sector in Pakistan.

Due to this reason, Tetra Pak can charge them higher and it could increase the production costs.

Weaknesses (con’t)

4) Milk collection & distribution costs EFL’s 34 out of 40 milk-collection centers

are located in Punjab, whereas its only milk processing facility is situated near Sukkhur (Sindh).

It increases the milk collection & distribution costs; and also increases the chances of milk getting spoiled because of increased travelling time.

Weaknesses (con’t)

Opportunities (1) Increased funding by Government • Government has decided to increase farmers’

funding.• This is an opportunity for ENGRO foods because

previously due to weather conditions and other reasons there was lots of wastage of milk.

• but now that can be reduced as farmers will be better able to store milk for longer time periods.

Opportunities (con,t)

(2) Increased consumption by competitors • Competition may create opportunities for the company

because each competitor in the milk industry wants to increase penetration of processed liquid milk,

• So they will create awareness for consumers through different advertising media.

• This will ensure the increase in the consumption of processed milk instead of lose milk

(3) Awareness  • Growing dissatisfaction with loose milk and increasing

awareness about health and hygiene issues have led to increased processed milk consumption.

Opportunities (con’t)• (4) Third largest producer of milk  • Pakistan is the Third largest producer of milk in

the world with a total production of 32 billion liter of milk a year,

• Livestock accounts for 46.8 percent of agricultural value added and about 10.8 percent of the GDP.

• Milk is the largest commodity from the livestock sector accounting

• for 51 percent of the total value of the sector.• (5) Improving Economy

Threats

(1) Competition   Competition is large threat for co. because the company will have to

maintain its leadership in an expanding market

So that it doesn’t lose its market share to its competitors. For Olper’s it might be difficult to penetrate in front of others.

Threats (con,t)

(2) Perceptions and Price Differentials   Consumers’ perceptions and price

differentials can cause a threat for the company.

It is important that Consumer’s preferences change with time and prices might create certain barriers in terms of the profit margins for Olper’s.

For example, lose milk is still cheaper than packaged milk and that is also one factor that people still prefer to buy lose milk.

External Environment1)POLITICAL/LEGAL FACTORS 2)Economic Factors Inflation rate of Pakistan for the current fiscal year

has grown to 7 percent. This thing is really hurting the purchasing power of Pakistani consumers.

Competition is also increasing with the entrance of new domestic players in the dairy and food sector and plans to increase investments by the already established companies. .

Leading industrial groups such as Jamal Din Sugar Mills, Dewan Group of Industries and Shakar Ganj Sugar Mills have already made substantial investments in dairy & livestock sectors.

External Environment (con,t)

3)Socio-Cultural FactorsFor example, lose milk is still cheaper than

packaged milk and that is also one factor that people still prefer to buy lose milk and want to purchase fresh milk..

4)Technological Factors In year 2005, the Ministry of Industries and

Production established Dairy Pakistan Company on the lines and model of Dairy Australia. The main objectives of the company are as under:

External Environment (con,t)

a. To promote milk and other value added dairy products in the domestic as well as international markets.

b. To promote development and up-gradation of dairy supply chain in Pakistan by supporting and facilitating the farmers, processors and other stakeholders across the value chain.

c. To support dairy sector growth by way of supporting and facilitating business development services for the enterprises across the dairy value chain. etc

INTERNAL ENVIROMENT

Employess satisfactionAs all organizations In the Engro food employees satisfaction is the most important factor and work on it to ensure that workers are satisfied are not

Empowerment of emloyees Centralization Departmentalization Span of control Chain order

• ABAED UL REHMAN

• HAMID ALI

• AFTAB IQBAL

• ZEESHAN AHMAD

• JAFFER ALI

• ALI AHMAD

• MARYAM MAQBOOL

• AROOJ FATIMA

• MEHREEN ASGHAR

PREPARED BY,M.COM , SEC – CUNIVERSITY OF AGRICULTURE FSD

THANKS