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 6 th 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.
One of its major revenue product, Olpers milk is branded as all uses products capturing a
vast market segment.
http://www.engrofoods.com/
Nestle Pakistan
Nestle 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, its global presence, innovation,
environmental friendly products making a social impact and hardworking passionate people.
Being 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.
Image
It 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 Products
Its 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 Strategy
Nestle has recognizes there is a right time and place for their product; therefore, their strategy
makes room for adjustments and is tailored to meet the needs and demand as per the market
trends. Nestle has captured many markets with great sweep because of the developed strategy.
Market Share
Nestle 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 Strength
It has developed very strong generic brands like Nescafe, Maggie, Nestle water and these brands
are by far generic to their respective product categories and are a means of establishing strong
customer base as when a brand becomes generic then it develops a
perception and a
feel of strength in the minds of its customers. E.g. Google, Apple etc.
http://pestleanalysis.com/swot-analysis-nestle/
http://www.nestle.pk/
http://www.strategicmanagementinsight.com/swot-analyses/nestle-swot-analysis.html
http://www.mbaskool.com/brandguide/food-and-beverages/3227-nestle-ltd.html
Strengths
It 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/news
http://sadiqsomayari.wordpress.com/2014/12/17/unilever-pakistan-versus-engro-food-swotanalytical-comparison/
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 Strengths
Scope of the Products
It 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
Masalas
Owing 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 Coverage
It 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 Efficiency
A 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 Orientation
National 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.
Organizational Structure
The 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 Management
Resource 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.pdf
http://www.wikiwealth.com/swot-analysis:national-foods-pakistan-ltd
http://www.studymode.com/course-notes/National-Food-1712739.html
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/GrowthpotentialofUAEdairym
arkethighlighted.aspx?year=2013&wk=45
Major shareholders in the dairy and beverages category are as under:
Manufacturer
% Share
Al Ain Dairy
33%
Al Marai
28%
Marmum Dairy
26%
It 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 Range
Al 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 Strength
The 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 Advancements
Technological 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
These 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.
As 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.html
http://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/
Strengths
Customer Orientation
The 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 Efficiencies
It 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.
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 Responsibility
The 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-juiceexports-559158.html#.VMSdO_6UeW4
http://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-businessessay.php
Strengths
Product 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.
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 Determination
Another 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 Promotions
For the marketing and awareness of the products, various mediums are used which are as under:
Newspapers
Discounts
TVCs
Social Media
The 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 Network
The 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 Innovation
Almarai 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.
http://www.termpaperwarehouse.com/essay-on/Almarai-Swot-Analysis/66608
http://www.ukessays.com/essays/commerce/overview-of-the-company-almarai-businessessay.php
http://www.kippreport.com/fcs/almarai-vs-al-rawabi/