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INTRODUCTION AND HISTORY

Incorporated in 1964 as a Private


Limited Company
Conceived as a joint venture
Taking advantage of fruits and
technology
Largest food processing unit
Fully owned Pakistani company
Installation of plants
PORTER Five Forces Model

Low Threat of
new entrants

Somewhat High
Somewhat Low power of
power of the Supplier
the buyer
suppliers

Rivalry among the


firms is high

Moderate threat of the


substitutes
Pest Analysis
I.E Matrix
Score of IFE=2.32
Score of EFE=3.07
Results:
 
IE Matrix of Shezan is telling us that the company is in “Grow
and Build” quadrant.
 
IE strategies:
◦ Grow and Build
◦ Backward, forward, horizontal integration
◦ Market Penetration
◦ Market Development
◦ Product Development
Value Chain At Shezan
Value-Chain Yes/No How Does Shezan Create Value for the
Activity Customer
Primary:
Inbound Logistics Yes Shezan has its own fruit farms for raw material
Operations Yes Shezan is the largest food processing unit
having
Outbound Logistics No

Marketing and Sale Yes delivering what the customers exactly want

Service Yes Proper feedback is given to the customers


Support:
Procurement Yes Shezan has its own fruit farms for raw material
Technology Yes automation of the plant and machinery is the
development top priority
HRM Yes employees work with the senior worker to get
the experience
General Yes Supportive participation from management at
administration all levels of the co.
Interdependency of Value
 
chain of Shezan
Inbound Logistics Operatio Outboun Mkt ServiceProcureme Tech. HRM Genera
ns d &Sale nt Developme l
Logistics nt Admin.

Inbound
∙ ↑ ↑ ∙ ∙ ↑ ∙ ∙ ↑
Logistics
Operations
↑ ∙ ↑ ∙ ∙ ↑ ↑ ∙ ↑
Outbound
↑ ↑ ∙ ∙ ↑ ∙ ↑ ∙ ↑
Logistics
Mkt&Sale
∙ ∙ ∙ ∙ ↑ ∙ ↑ ∙ ↑
Service
∙ ∙ ↑ ↑ ∙ ∙ ∙ ↑ ↑
Procurement
↑ ↑ ∙ ∙ ∙ ∙ ∙ ∙ ↑
Tech.develop
∙ ∙ ∙ ↑ ↑ ∙ ∙ ∙ ↑
ment
HRM
∙ ∙ ∙ ↑ ↑ ∙ ∙ ∙ ↑
General
∙ ∙ ∙ ↑ ↑ ∙ ↑ ↑ ∙
Admin.
 
                 
Interdependencies = No Interdependencies = ∙
Resources
Resource/Activity Is It Valuable Is It Rare Few substitute? Difficult to Make

Inbound Logistics Yes Yes Yes Yes

Operations Yes No No No

Outbound Logistics No No No No

Marketing & Sale Yes No No No

Service Yes No No No

Procurement Yes Yes Yes Yes

Technology Yes No Yes Yes

HRM Yes No No No

General admin. Yes No No No


Resources
 SALES TEAM
 CAPITAL:
 HUMAN RESOURCE
 R & D DEPARTMENT
 QUALITY CONTROL & TRAINING
Strategic Group Map

Price
Nestle
High

Haleeb

Nurpur
Shezan

Low

Low High

Quality
Competitive Profile
Matrix
Shezan Nestle Haleeb Nur

pur
Critical weighRatin Scor Ratin Scor Ratin Scor Ratn Scor
Success t g e g e g e g e
Factors
Advertising 0.2 3 0.6 4 0.8 2 0.4 1 0.2
Product quality 0.15 4 0.6 3 0.45 2 0.3 2 0.3
Price 0.1 2 0.2 3 0.3 3 0.3 3 0.3
competitiveness
Management 0.1 3 0.3 4 0.4 3 0.3 3 0.3
Financial position 0.1 4 0.4 4 0.4 3 0.3 2 0.2

Customer loyalty 0.1 2 0.2 2 0.2 2 0.3 3 0.3

Global expansion 0.15 3 0.45 3 0.45 2 0.3 3 0.45

Market share 0.1 3 0.3 4 0.4 2 0.2 2 0.2


               
Total 1  3.05  3.40  2.4 2.25
Generic Strategies in the
Industry
Sr. # Company Generic Strategy

1
Shezan Differentiation
2
Nestle Differentiation focus
3
Haleeb Cost Leadership
4
Nurpur Cost Focus
Industry Life
Cycle

Industry

Shezan
Competency Tree of Shezan
Juic Ketc Ja Vegetables Pickles (in Sa Ispa
es hup ms (Cans) vinegar) lt ghol
Squa Sau Chutn Jelli Marmal Fruits Pickles
shes ces ey es ades (Cans) (in oil)

Juices Sauces Jams Pickles Salt Ispa


ghol

Twist, Ketchup Jams Pickles


Mango
Juice

Rich Taste Superior


Quality
Corporate Level Strategy:

Backward
Integration
Shezan’s Business
Portfolio:
Change in Business
Portfolio:
Change process in
Shezan:

Emphasis On Continuous Change


Perspective
Magnitude of Moderate, Piecemeal,
Change Undramatic
Pace of Change Gradual, Steady, Constant
Cont…
Steps taken to increase
core competency

Researchand development
New product development
◦ Two new flavors in Shezan Twist
Juice,
◦ Energy Drink,
◦ Carbonated Drinks
Financial Analysis
Financial Ratios 2009 2008 2007
leverage ratios
Debt to total asset ratio 0.43 0.44 0.45
Debt to equity ratio: 9.6 9.5 8.75
Long term debt to equity ratio: 0.77 0.86 1.15

Activity Ratios
Inventory turnover: 2.61 2.45 2.43
Total Asset Turnover: 2.01 1.89 1.49
Profitability Ratios
Gross Profit Margin : 28.38% 32.29% 31.49%
Operating Profit Margin 5.88% 10.87% 12.44%
Net Profit Margin: 3.75% 6.53% 6.46%
Return on Asset: 7.57% 12.32% 12.56%
Return on Equity: 13.17% 21.88% 22.49%
Earnings Per Share: 17.08 26.87 28.13
Growth Ratios
Marketing objectives:
◦ Maintain positive, steady growth in each quarter
◦ Experience a growth in new customers who are
turned into long-term customers.
◦ Realize an increase in occupancy in each
subsequent year

Financial objectives:
◦ A double digit growth rate for each coming year
◦ Reduce the variable cost
◦ Continue to decrease the fixed cost
Six Year Review at a
Glance
SALES

PROFITS
EXPENDITURE
BCG Matrix of
Shezan
7
0 Bottle juice Jams & sauces
6

?
0
5
0
4
0
Packet juice Pickles
3
0
2
0
1
0
0
10 9 8 7 6 5 4 3 2 1 0
0 0 0 0 0 0 0 0 0 0
Grand Strategy Matrix of
Shezan
GAP Analysis

•Lack of integration in
distribution
•Lack of information sharing
among departments
•Third Party suppliers
•Centralized distribution network
Suggestions
Improved communication
processes
Quality of raw material
Company owned transportation
Focus on primary and secondary
distribution centers