Executive Summary

Gourmet was founded by Mr. Nawaz Chatha in 1987 as a single outlet of a bakery unit. Over a period of two decades it has grown in stature and apart from excelling in bakery products it has introduced new trends in a variety of businesses such as restaurants and dairy products business. The main aim of the company is to provide quality products at a competitive price to its valued customers. To produce the best quality products, company has invested a huge amount of capital in placing state of the art technology to meet the demands of the customers. The company wants to increase its market standings by opening new outlets at key locations of the city. For any company market sustainability is very important and for this the company wants to break the monotony on a timely basis by introducing new products and enhancing the quality of current products through innovative ideas. The current disadvantages that the company is facing is that they dont have a paperless environment which is a major h urdle in effective communication among various departments of the company, to overcome this deficiency the company is committed to implement an ERP(Enterprise Resource Planner), in order to minimize the time wastage. The companys major strengths include h iring skilled personnel on a permanent basis, company owned outlets (no franchise), state of the art technology to produce quality products, innovative trends in providing services (especially in restaurants), the company believe in charity and for this they provide meals to the patients in hospitals of Lahore. To cope with the current and future threats, the company is committed in introducing change in the current and increase in the product lines. The company has a very comprehensive marketing program which includes both promotions and pricing. Promotions are generally made through POP, banners, brochures along with push strategy. Price is a key factor in the growth of a company. Gourmet has a very straightforward pricing strategy and is following cost leadership strategy. For bakery products the price ranges are uniform in all the outlets, but in dairy and restaurant business it depends on the income level of the target markets. In short the company is on a growth stage and they want to compete in the market in a positive way.

Company Description:
Gourmet Bakers and Sweets is the largest food retail chain of Pakistan. It is based in Lahore, the second largest city of Pakistan known for its traditional foods and passion for eating. With their 4 processing units and 73 sales outlets plus 3 outlets are under construction they try to reach out to a huge population for their food needs. The company has shown an explosive annual growth of more than 25 % in its business since1987, when Mr. Muhammad Nawaz Chatha started this unique business with only one sale outlet. With his commitment and strenuous effort to provide the consumers with best quality food products in a convenient and unmatched displaying manner, Gourmet has become a success story of business growth in Pakistan. At moment we have more than 1700 employees working in the organization.

Mission Statement
The mission of Gourmet Bakers & Sweets is to provide quality products at a low price to be the market leader.

Vision Statement
The vision of Gourmet Bakers & Sweets is to be the leading health, wellness and nutritional company at national level.

Non-Financial Strategic Goals

To get the maximum market share by taking an advantage of our strengths of latest technology, own distribution, best quality with competitive prices by maintaining good relations with suppliers. To increase outlets on key/main locations of every area of the city, Lahore. To expand the business to other main cities of Pakistan in next 5 years

To be among the top companies in the food business. To increase the number of outlets of the company 25 % annually. To increase the product mix by adding new product lines. To build strong customer relationships by providing them quality products at the low cost. To introduce quality products for health conscious people. To introduce unique ideas of product marketing. To implement paperless environment throughout the company. Using paper bags replacing plastic bags within next two years. To build better relationships with supplier

Financial Strategic Goals

Minimum branch revenue growth rate will be 10 % annually. To double the annual sales in a period of five years. To reduce the cost of production by backward integration strategy. To increase the companys profits by maintaining the current customers through consistent quality and low prices and getting new ones by opening new outlets. To reduce the cost by reducing the wastages during the production and transportation.

SITUATION ANALYSIS
Situational analysis involves in it both external and internal factors with respect to the environment that will have an influence on gourmet.

External Analysis Industry Analysis

Pakistan produces good quantity and quality of fruit but because of lack of proper storage, distribution and processing facilities, Pakistan could not earn as much revenue as it can. The fruit juices market is growing for several years, and will be continuing to expand, mainly because these products are aligned with general trends regarding food and beverages consumption. Currently the whole world economy is moving towards deflation. Overheads are sky high that is affecting cost of product and is not giving much profit in return. This depression on world economy will slash down our GDP growth as well. Several changes take place in the fruit juices distribution channels environment in Pakistan, growing importance of foodservice, the penetration of the global beverage brands (mainly Coca-Cola and Pepsi) These changes are threatening and also bringing opportunities to companies Gourmet has been in the food industry of Lahore for the last 21 years and is dominant in its industry because of having more market share than its competitors. Soon they will start a new product line of fruit juices in the next two months for which a better offering is needed in order to gain more share by attracting customers. For Example Nestle, Shezan, Haleeb, Coca Cola are Gourmets direct competitors in the field of fruit juices and beverages who have already captured reasonable market share by serving all the classes of customers (high to low). Indirect competitors are those offering bottled water, soft drinks, tea, coffee & red drinks. They are more focused on drinks also because of health conscious to use natural products and increase our immunity against diseases.

INTERNAL ANALYSIS S.W.O.T Analysis

Strengths
The major strengths of the company will be as under: To gain state of the art technology to produce the products. It is a major strength of gourmet that they have kept all their employees on permanent basis. This feature creates a sense of security of the job from lower to higher management. Great and neutral taste which suits all the family Quality is ensured at each and every step. Adequate pricing to meet the demands of the customers. Own distribution network. Excellent relationships with the suppliers. Outlets on key locations of the city. The company will ensure that it will do as much as it can for the society in terms of charity. Product assortment and placement.

Weaknesses
The weaknesses, which the company has to focus on and get rid of them, are as under: No paperless environment. The company needs to develop an integrated computerized system to make things happen efficiently. Non availability of a website. Focus on only one city that is Lahore. We need to reach out to as much cities as we can to gain more market share. No treatment plant for industrial wastes.

Advertisement on electronic media is not that much aggressive as their competitors do. So we need to focus this area in order to get to the maximum number of customers. Less communication among various functional departments. Employee politics.

Opportunities
The major opportunities for the company are as under. External markets. The company can advertise and introduce its outlets in other cities of Pakistan to gain more market share. Growth by vertical integration. o i. Backward Integration By growing through backward integration we mean that we will become the supplier of all the input materials. New housing and industrial units. It is a big opportunity for the company to open outlets in the new housing and industrial units. Publicity through trade shows.

Threats
The major threats to the company are as under. Competitors such as Nestle, Shezan & Malee in the field of beverages industry poses threat for gourmet. All restaurants, all major dairy products manufacturers. Law and order situation of the country. Oil pricing in the country. Political instability. Electricity shortage

Porters forces of competition:

Supplier power: i. Nature has blessed Pakistan with an ideal climate for a wide range of delicious fruits. So there will be no such thing as supplier monopoly, as we are not dealing with something thats supplied by only a couple of people. ii. There might be some degree of differentiation of the inputs as fruits from different territories have a bit different taste. Buyer power: i. Buyer power in terms of volume buying is not high. But in terms of his or her experience, because a buyer having a good or bad experience will immediately share it with others and may affect other buyers behavior. ii. The switching cost from one product to another is almost nonexistent which empowers the buyer. iii. The number of substitutes is so much high that any mistake in distribution will make buyer to use other product to fulfill its need. iv. Buying behavior is inclined more towards price sensitivity rather than quality or brand loyalty. Barriers to entry: i. ii. Luckily there are no barriers to enter the market on part of the government. The industry is easy to enter as the technology is not a very complicated one and the assets are not very specialized ones. iii. Considering that the behavior of general consumer is price driven therefore it also encourages others to enter the market.

Threat of substitutes: i. ii. A large number of substitutes are available in beverage industry. Because of highly competitive industry there is no switching cost of buyer from one product to another. iii. The buying behavior of customers is more sort of price depended rather than taste.

Degree of rivalry: i. Intensity of rivalry in beverage industry is very high. Big brands such as Coca-Cola, Pepsi, Nestle, Shezan, Country etc. are competing in this industry. ii. As the beverage industry itself is very vast for instance soft drinks, hot drinks, mineral water and juices no of direct and indirect competitors is also large iii. Most of the brands in competition are world recognized giants.

Market analysis:
I) Segmentation: Segmentation Variables Geographic
Country Cities Density Climate Pakistan Lahore, Islamabad, Karachi Urban, Semi urban Hot and Dry

Data

Demographic
Age Marital Status 10 and above Married, Unmarried

Income

Rs. 10, 000 or above

Psychographics
Social class Middle class, Upper class

Behavioral:
Occasions Regular Benefits User Status Readiness Stage Regular Usage Quality, Taste & Nutrition First time user Awareness

Environmental Analysis: PEST Analysis:

Political analysis
Political scenario in Pakistan has seen many important changes in recent years. The political environment directly influences all the industries working in the country. Similarly the production distribution and use of Gourmets products are subject to some federal laws, such as the Food and Drug Act. The businesses are subject to the Government stability in the countries as the businesses are directly subjected to the taxation policy of the country they are operating. They also have to comply with federal, state and local environmental laws and regulations.

Economic analysis
Despite inhospitable domestic and international environment resulting from the either the global recession or due to the terrorism acts, Pakistans economy grew by 2 percent in the financial year 2008-09according to Economic survey 2008-09. Reports have shown increase in

GDP, increase in per capita income and increase in IT development as well which are positive signs for the industry but there are some negativities as well. Like all the other companies are subject to the harvest of the raw material that they use in their soft drink and juice, like corn, oranges, grapefruit, vegetables etc. Gourmet also relies heavily on trucks to move and distribute many of their products, fuel is a very important subject, so they are subject to the fuel prices. Moreover, there has been a crisis in the production of sugar in Pakistan, with prices sky rocketing. Another crisis that Pakistan is dealing is the shortage of electricity. Such economic factors have resounding impact on such industries and increase the cost of goods.

Socio-culture analysis
The population of Pakistan is on the rise whereas the health consciousness among the people is also a lot more than it has been in the past. The age distribution of Pakistan is also very balanced; major portion of its population consists of youth. Gourmet beverages and moreover Juices are subject to the lifestyle changes as the awareness of health consciousness is rising in the people now. Sociocultural impacts hugely such industries where the carbonated water industry has ruled but now the trend of health consciousness is taking place which give a positive signs for entering juice industry. Gourmet has to pay a special attention on the lifestyle changes. Further Income of people is increasing more trends towards FMCG. Further a major social trend in the rural areas of Pakistan has been a shift from presenting guests with drinks such as lassi towards such beverages. All these situations are calling for new and new opportunities and investors.

Technological analysis
Pakistan is considered as developing country. Although it is a nuclear power yet it lacks behind in other technologies. Technology plays a secondary role in this industry, as it is not heavily dependent on technological advancements like the consumer electronics industry, or the software industry. Because beverage products are non-tech based in nature, technology in this industry is therefore limited to function as a catalyst to improve production capacities, speed of product manufacturing cycles, inventory management. It has to pay attention to the new

distribution techniques as well. Even though one have to take into account that specialized factors involve a heavy and sustained investment, but also at the same time if one is able to achieve them, he could generate competitive advantage. CURRENT STRATEGY: Firstly we are offering a consumer base product, secondly the product belongs to a very competitive industry the beverage industry. In it we have a number of direct competitors as well as indirect competitors ranging from multinational firms to domestic firms with history of success behind them. While delivering a product a manufacturer can opt for either of the two strategies Supply lead strategy or Demand lead strategy. Because of the extreme intensity of competition in beverage industry well be entering the industry with demand lead strategy. Further because of the intense competition well be facing high Elasticity of Demand. Getting into the market and surviving therewith the names such as Pepsi, Coke, Nestle, and Shezan etc requires more than just quality. Moreover the success of Gourmet cola has revealed the trend that the consumer market is price driven. The increase in sales of Gourmet soft drinks is not because of their superior taste. Everyone knows that their taste is not as good as international brands are giving but their prices are low. Mostly Gourmet drinks are used in1.5 liter which is of Rs. 45 and other big brands are of Rs. 60. Similarly lesser prices are not the only factor contributing to the sale increase of their soft drinks, if only that wouldve been the case the other domestic players like Amrat cola, Maka Cola etc. wouldve never diminished. Other reason is their outlets, which are very neat & clean and give a high quality look. Generally people like Gourmet outlets environment

and believe that products are of good quality. So our strategy for launching juices will be quite similar as well be differentiating our product on basis of price from our direct competitors such as Nestle, Shezan etc. because the name Gourmet is recognized for its quality products in the minds of people of Lahore. Well be launching juices in the most commonly accepted flavors like Apple, Orange, Mango, Pineapple and Mixed Fruit in three different packaging to get hold of different segments of consumer market i.e. children, households and youth. Getting into

industry of highly intense competition will also require us to be very rational with the pricing strategies as price higher than our competitors and customer will not be inclined towards buying our juices. Price will be the difference that will push a customer to buy our product over another, as long as most things are fairly similar. The 250 ml juices will be sold on the same prices as the others in the market are currently selling as there is not enough profit margin that we can reduce and well be using competition base pricing for this range of juices whereas for other sizes well use cost plus pricing to penetrate into the market.