MARKETING STRATEGY ANALYSIS OF SNOWCEM BANGLADESH LTD
Marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic objectives. A detailed marketing plan will need for each business, product, or brand. The main section of the plan presents a detailed analysis of the current marketing situation as well as potential threats and opportunities.
The goals of the study were such as follows:
- To acquire understanding of convenient institutional operations and ways of implementation;
- To have knowledge about the generally operation of SNOWCEM so that I get ability of writing a report on the observation
- To get idea about the process of investment management;
- To assess critically the advance management;
- To know about the overall functioning of SNOCEM
- To suggest some remedial actions for addressing the problem mentioned above.
- To get the idea about the activity performed and Marketing strategy applied by SNOWCEM”
1.2. About the Company
SNOWCEM (Bangladesh) Limited is one of the largest private sector business conglomerate of Bangladesh. The journey of Snowcem (Bangladesh) Limited began on 17th March, 1999 and continued through bright and sunny days, through pain and pleasures. The company owns and operates a modern plant, and produces exterior paint and sells it in local market.
In 1998-1999 SNOWCEM (Bangladesh) Limited installed its first plant in Gazipur. On 1st October 1999 SNOWCEM (Bangladesh) Limited first product made and rolled out of the small manufacturing plant.
With the capital raised, it proceeded to expand its product line for formulation paints. SNOWCEM (Bangladesh) Limited has been growing rapidly since 2001, achieving its highest growth (60% growth in net profit) during 2003.
To create an organization in which fewer people can do more, SNOWCEM (Bangladesh) Limited is developing an organizational structure and reviewing assignments to ensure that skill of the people chosen to execute them match the task at hand. SNOWCEM (Bangladesh) Limited is committed to developing individual human, technical and conceptual skills through various educational and wide ranges of external and internal personal development and job related training programs each year.
SNOWCEM (Bangladesh) Limited has made progress in the area of health, safety and environment. Due to the high safety standards adopted for its employees, incidence of major injuries and other medical emergencies were absent during past years of operation
SNOWCEM (Bangladesh) Limited is dedicated to providing good quality to people throughout their day, throughout their lives, all over the country. With the focused interest in anticipating consumers needs and creating appropriate solutions. It contributes to the well-being and quality of people’s lives.
SNOWCEM (Bangladesh) Limited embarked on a very ambitious drive to create new, value-added, innovative and affordable products. Additionally, it will explore new sales channels. Through it newly created Channel Development Teams, it will cater to a diverse range of customers with tailor-made services and products.
(1) Extension of market
(2) Profit maximization, increase productivity, hook new customer, keep loyal customer.
(3) Provide quality products to its customers
(4) Delivery customer satisfaction better than competitors
(5) Send its product to every corner of the country
1.4. Board of Directors & Chain of Command of BRAC Bank
Board of Directors
Chairman – Alhaz Shamsul Huda.
Managing Director – N.S. Dowla.
Advisor/Director – Joader Nowser Ali FCA.
Director – Momtaj Ali Khan.
Chain of Command:
Deputy General Manager
Asst. General Manager
Manager/ Chief Accountant
Asst Manger/ Asst. Chief Accountant
The whole SNOWCEM (Bangladesh) Limited is going on as per above chain of command.
1.7. ORGANOGRAM of SNOWCEM
|Category of Position||Period|
|Provisionary officer||3-6 month|
|Junior Officer||6-1 Year|
|Sr. Officer/ Area Manager/ Sr. Accounts Executive||2 years|
|Asst Manger/ Asst. Chief Accountant||2 years|
|Manager/ Chief Accountant||2 years|
|Sr. manager||2 years|
|Asst. General manager|
|Deputy General Manager|
- Department wise have to fixing the basic and other facilities.
- Basic salary house rent will be half of basic, 5% medical & 5% convene from basic salary.
- Every permanent employee is eligible to be a member of the provident fund every month 12% of basic pay is deducted will be deposited to the provident fund accounts. If the worker completes three years service in the company 50% of the EPF deduction will be borne by the company. Similarly 75% and 100% will be borne by the company if the worker complete 4 years and 5 years of service respectively in the company. A separate trustee board controls the fund and if registered as per low. As per trusty deed deposited amount shall be returnable with interest. After a definite period of time loan be granted.
Market Opportunity Analysis
A market opportunity is an area of buyer need in which a company can perform profitably. Opportunities can be classified according to their attractiveness and their success probability.
The companies’ success probability depends a weather its business and strength not only match the key success requirements for operating in the target market but also exceed those of its competitions. Many competences do not constitute a competitive advantage. The best performing will be the one that can generate the greatest customer’s value and sustain it over time.
Now we will discuss “how SNOWCEM analyze the market opportunities?” We found that SNOWCEM analysis market opportunity in the following ways
2.1. PRESENT MARKET OPPORTUNITIES
“SNOWCEM (Bangladesh) Limited” they are deal distributor and dealer. They are one of the leading Cement Paint in our country. They have a market share of 8% to 10%. In present market opportunity analysis they try to retain their market share and of course try to increase the market share by quality control. Timely delivery and ensure the after sales service. By doing this they are generating customer value and try to sustain it.
2.2. FUTURE MARKET OPPORTUNITIES
In the market opportunity analysis they have some plans. They are expanding their plant; they will try to utilize their 100% capacity. They will set up power plant. They try to skill their manpower; they will diversify their product to grab more market share.
2.3. CUSTOMER’S ORIENTATION
They have some loyal customers. But they have also some one time customer, & occasional customer. They analyze these onetime & occasional customers & try to motivate them to buy their products. They also ensure the pre-purchase service for their loyal customers.
2.4. MARKET SEGMENT
They segment their customer by geographical locations. Such as – Dhaka, Chittagong, Konapara, Narayangonj, Gajipur, etc. According to their customers demand they provide customer service.
2.5. PRICE & DISTRIBUTION
The price setting of yarn is totally depending on market demand. In the yarn market 9 months is pick season for selling & 3 months are Full season for selling. In those 9 months when the demand is pick the company increase their product’s price. But off course their comparative price.
In SNOWCEM they have a strategy for setting their products price & finance department does that. They set up their price on three bases
They have their own distribution channels; they use their own vehicles. When the demand is picking they hired some vehicles to distribute their products.
2.7. GOVERNMENT POLICY
In SNOWCEM’s view they said that the existing Government policy is in favor of Bangladeshi Paint industries.
For example- the Paint, which are using locally, produced yarn to make Cement pain are enjoying incentive 25%.
2.8. INTERNATIONAL MARKET
They are indirect exporter. As their 100% export oriented industry they also have to scan the international environment. They are setting up their target for 2007 because after 2007 there will be no quota- system in cement pain sector. So they are planning accordingly.
2.9. CHANGING ENVIRONMENT
One of the major strength of ‘SNOWCEM’ is that they have the facility to cope up with the changing environment. The yarn market is totally customer demand oriented. There is no stable market demand in painting. ‘SNOWCEM’ can provide yarn according to market demand & also can set up price competitively.
3.1. Management Process
Snowcem (Bangladesh) Limited follows the concept of Management By Objectives (MBO). MBO is an approach sometimes used for performance appraisal against verifiable objectives. There is no complete agreement on MBO. It is a comprehensive managerial system, integrating many key activities, consciously directed toward effective and efficient achievement of organizational and individual activities.
MBO process consists of setting goals at the highest level of organization clarifying the specific roles of those responsible for achieving the goals and setting and modifying objectives for subordinates. Goals can be set for line-managers as well as for staff personnel. Goals can be qualitative or quantitative. Among its other benefits, MBO results in better managing, often forces managers to clarify the structure of their organizations, encourage people to commit themselves to their goals and helps to develop effective control.
Some of its weaknesses are that managers sometimes fail to explain the philosophy of MBO (which emphasizes self control and self direction) to subordinates and give them guidelines for their goal setting. In addition, goals themselves are difficult to set, tend to be short-run, and may become inflexible despite changes in the environment of plan operations. People, in their search for verifiability, may overemphasize quantifiable goals.
The MBO cycle consists of two vital parts:
Planning phase has two parts.
First of all it has the setting of objectives and strategies. Objective can be both long and short term. Long term objective and grand strategy are set by the top management: chairman, vice-chairman and CEO. The long term goals are broken into short and more specific goals by mid level management under the guidance of CEO.
The mid level management with feedback from first line managers prepares action plans. The Central Product Management (CPM) guides the other departments for planning. They present the total planning for next year in front of the top management in the annual meeting, which is usually held on 15th December, the final plans are presented. Each manager has to present his or her own plan formally. After the approval of the top management the plans can go for implementation.
In the control phase monitoring performance and evaluating is done. Beside department wise objectives each employee has a personal objective according to the planning. The two steps involved in control are:
The managers meet their people in monthly conferences to compare the actual condition with the desired one. Deviation from previous plan is made, if needed, after the permission of top management.
After 1 year, all the management people meet face to face in a conference where the result is evaluated. Performance of each employees and departments are evaluated on the basis of success achievement. Good performers are rewarded with incentives and promotions.
At the end of one MBO cycle a new cycle is started for the following year.
SNOWCEM (Bangladesh) Limited management does not believe in hiring and firing. Rather development is emphasized. Here learning is a continuous process. The Human Resource Development (HRD) arranges a variety of short and long training for employees. The communication process is basically lateral. Focus is given on teamwork. SNOWCEM (Bangladesh) Limited uses Total Quality Management (TQM) in all its approach to upgrade performance.
3.2. FUNCTIONAL DEPARTMENTS
The organization is divided into some divisions or departments. Each department has some particular responsibilities and objectives-short and long term. These responsibilities are in written form. This is how BPL avoids clash or repetition within its complex set of interdependent activities. The major divisions with their responsibilities are given below:
ü Central Product Management:
Central Product Management or CPM works as the heart of the company. It collects data on regional sales, demand, month wise sales, market growth rate, market share of BPL, market share of competitors and make environmental analysis. Then it set strategies not only for its own but also for all the divisions. Thus it works as a mentor in BPL.
Its major activities are:
b) Price analysis & price setting
c) Setting objectives
d) Selecting product promotion campaigns
e) Providing other departments with information and suggestion New products planning
ü Accounts & Finance Department:
As the name implies this department takes care of all financial activities of SNOWCEM (Bangladesh) Limited. It also prepares the budget for new or existing projects. Its activities are divided into three subunits. These are:
Treasury & Fund Management:
In this part the department mainly emphasis on:
a) Bank relation
b) Obtaining bank finance and allocation of funds
c) Withdraw cash from bank and spend it as per requirement
Reporting & Account Department:
Reporting and account department deals with the following activities:
a) Recording through MAPICS
b) Preparation of various financial statements which include Balance Sheet
c) Budget are prepared in order to guide SNOWCEM (Bangladesh)Limited its objective
e) Keeping inventory movement records
f) Preparing fixed assets accounts
g) Audit activities
Tax & Staff Department:
Their major activities are:
a) Keeping list of total amount of wages and salaries to be paid to the employees.
b) Preparing Insurance
c) Preparing provident fund accounting
d) Staff income tax
f) Corporate tax
ü Medical Service Department:
The medical service department provides academic and scientific support to the doctors, establishes credibility of the company, provides informational support to the doctors of urban as well as rural area and educates the doctors by conducting seminar and symposium. This department is divided into three major units:
ü Procurement Department:
The activities of this department can be divided into the following categories:
Obtaining raw materials from other countries
Doing local purchase and shipping
Under the procurement department there is a shipping department. The activities of the department are:
Processing imported materials
For local purchase the activities are again divided into two categories:
a) Purchase of standard materials
b) Purchase of non-standard materials
ü Human Resource Department:
This division is responsible for the following functions:
a) Security of company’s office, factory premises, vehicles, etc.
b) Utility Services – Electricity, Telephone, Water, Gas etc.
c) Protocol Services – Taking care of guests \ visitors coming in and going out of the country.
d) Repair and maintenance of Snowcem (Bangladesh) Limited transport.
e) Cleaning, repairing and maintenance of Snowcem (Bangladesh) Limited office\factory building.
Human Resource related functions:
The important HR functions are as follows:
a) Human resource planning
b) Job analysis
c) Recruitment and selection of employees
d) Employee motivation
e) Socializing the new employees
f) Employee training and management development
g) Job evaluation
h) Compensation administration
i) Rewarding the productive employees
j) Career development
k) Performance appraisal
l) Employee discipline
m) Better employee\labor relations
The quality department consists a highly dedicated team of more than hundred expert professionals comprising of pharmacists, chemists, biochemists, microbiologists, engineers, and others in order to offer the best in terms of product quality. The latest WHO approved current Good Manufacturing Practices (CGMP) are being followed. There is written Standard Operating Procedures (SOP) for every process and steps
Involved which are being closely monitored to ensure that all concerned personnel are complying with this procedure.
The Quality department has 3 units. These are:
Quality Assurance (QA)
Quality Control (QC)
Product Development (PD)
The QA and QC are involved in every steps of production from raw material checking to terminal sterilization of a product. PD introduces some new products each year as a continuous effort to provide superior value to customers.
ü Marketing & Commercial:
Marketing and commercial is the major department in BPL. This department is divided into two parts.
BPL has divided the whole country in 10 different zones. In each zone there is a Regional Sales Controller (RSC) who monitors and controls 6 FSs. RSC report to
Assistant manager, who in his part reports to the sales manager, The sales manager controls the overall department.
CPM is the heart of this department. It is consists of some small subunits. These are:
MRT (Market Research & Objective):
SNOWCEM (Bangladesh) Limited was the first to introduce this department. It does not do market research actually. It has a market audit team, which visits doctors and collects information of prescriptions.
SNOWCEM (Bangladesh) Limited has its own distribution channel I&I, which has a wide network. I &I have 15 depots and its own vehicles. But its distribution assistance visits a single chemist 6 times a month, more frequently than any other pharmaceutical company in our country.
Sales Education & Training:
This unit is to train sales force. It also works for development of other department by providing in house training.
This department is made up of 4 levels of employees. The first line managers are the product officers (PO). Their duties are:
a) Meeting month wise target for local marketing
b) Planning MRs will visit which doctors with what gifts (torch, pens, etc)
c) Implementing promotion campaigns
6 POs are under the guidance of 1 senior product officer. There is 1 senior product officer for each therapeutic group. They all report to the marketing manager.
3.3. Data Sources
To make the report more meaningful and presentable, two sources of data and information have been used widely:
Both Primary and Secondary data sources were used to generate the report.
The Primary Data (Sources) are as follow:
- Face-to-face conversation with respective officers and staffs of the Banks.
- Informal conversation with the Distributor.
- Study of the relevant files as instructed by the officers concerned.
- Personal diary (that contains every day experience in Company while under going practical situation.
The Secondary Data (sources) are as follow:
- Annual Reports of National Company.
- Annual Reports of other Company
- Various Book, articles, compilationetc.Regarding general functions, foreign exchange operations and credit policies.
- Personal diary maintained while under going practical orientation.
In order to accomplish the successfully completion of the report and to form an opinion on the research along with the necessary recommendations for solving the problem adequate data and information are necessary for the effective termination of the research work.
SNOWCEM (Bangladesh) LImited has set its marketing objectives at capturing 20% of the Dhaka City institutional client market share, and 35% out of the Dhaka City walk-in market share in the first twelve months. In order to support these objectives, company plans to use a marketing strategy which revolves around the “DEPENDABLE” theme, and will make itself associated with dependability in delivery, customer service, availability of items, availability of choices, and consistently reasonable prices.
There are plans to implement this strategy with an aggressive marketing campaign targeted at the disgruntled Dhaka City office products customer. Also, company plans to concentrate sales efforts on a few very large institutional accounts, and on attracting walk-in business from small, professional corporations in order to meet its objectives.
The most important unique selling advantage will be its customer service. The industry trend toward consolidation has left consumers with the choice of either a large office warehouse with minimum wage inventory personnel or a small, overpriced mall store with minimum wage counter clerks. company plans to offer career-oriented customer service agents/salespeople for its large institutional clients.
Company will add to its customer service advantage by offering institutional clients the fastest and most accurate delivery service possible. Its location in the heart of Dhaka City coupled with its vast inventory assures customers that their best option to fill an extensive delivery order rapidly is to rely on them.
Customer service will also be elevated to higher standards by a customized inventory system, which will allow the company’s employees to execute a proactive ordering policy which tracks and projects customer ordering needs.
As well, Quality Office Supply will offer the most knowledgeable and helpful customer service representatives available. Both mall shops and office superstores rely on low-wage workers who go through only a minimal training program. The company, on the other hand, has a directive from the top — we insist on hiring only well educated, caring individuals who demonstrate an aptitude for understanding the office supply business. The company’s customer service representative’s primary objective will be responsiveness to the wants and needs of customers. Thus, Quality Office Supply can assure clients that their questions will be answered in a correct and timely fashion and their orders will be filled accurately.
This advantage will be heavily promoted in the advertising theme of “DEPENDABILITY.”
Most sales for institutional clients will take place in two ways. First, Marketing Manager will leverage his current contact base through referrals and networking in non-business environments. He will employ direct selling methods and meets with each client personally to close the deal. Second, customer service representatives will learn how to emulate the leveraging tactics of Marketing Manager with their own clients, most of whom will be delegated as accounts by Managing Director. These representatives will use referrals and telemarketing to establish additional institutional accounts. All sales for walk-in clients will typically be acquired through word-of-mouth, yellow pages and print advertisements, as well as location.
Future plans of expansion embrace additional selling tactics.Existence in a high profile location is itself expected to be a powerful selling tactic. Additionally, Marketing Manager will plan to provide a list of business names and numbers from among Dhaka City small professional corporations to the customer service representatives to augment their telemarketing efforts.
Channels Of Distribution
Company will purchase its products primarily from manufacturers. However, some items (such as computer peripherals) must be purchased from wholesalers who have exclusive contracts with the manufacturers. The connections of Managing Director will establish and maintain in the office supply world will help the company take advantage of competing channels of distribution in order to find the lowest wholesale prices available, especially for the most common items. Expert purchasers in the inventory department, who will have been trained by “Expert” to know standard margins in the wholesale office supply world, will negotiate for the best deals. When an issue arises, Managing Director will intervene for direct negotiations.
Company will sell retail directly to the public through its store and its customer service account representatives. The Quality Office Supply location will be its secondary distribution channel, at least in terms of gross sales. The primary channel will be through the deliveries to large institutional accounts. The company will use its customer account representatives to stay in constant contact with its institutional clients. These representatives will also be sales persons in charge of keeping the office managers up to date on the latest sales and promotional items. As orders come in or are successfully solicited, the delivery channel will go into effect.
The pricing structure of this company will be largely governed by industry standards, but will remain quite competitive with the larger chain stores. The pricing structure will be designed to encourage institutional clients to make bulk purchases — progressive discounts are offered for these orders, and will also be divided according to classes of product.
The pricing schedule will be roughly in line with competitors in this industry. The following comparison reveals the differences between competitors in the industry. Generally speaking, the larger chain stores tend to be more competitive in prices, and the mall stores tend to be more inflated. The low ranges for Quality Office Supply in the following table (Price Comparison) for the company assume the lowest prices the sales representatives will be able to negotiate. Only Managing Director will be able to authorize a departure from this structure:
This company will concentrate on advertising techniques found to be most effective in the office supply industry. We insist on maintaining a visible presence in the local print media, and will always have a small, straightforward ad in the weekly Dhaka City News, as well as regular ads announcing special prices in the larger Metropolitan Times. Quality Office Supply will also consistently advertise in the local yellow page directories. Twice yearly, the company plans to use direct mail to advertise its semi-annual sales. The advertising budget will amount to 7% of gross sales. The table (Advertising) below represents the projected advertising efforts:
This company will initiate a number of promotional offers in conjunction with its grand opening in Dhaka City. A number of loss leader items will be advertised and sold at cost in order to attract heavy foot traffic, stimulate initial demand for delivery orders, and prompt persons who patronize competitors to try Quality Office Supply. The company will also use a discount pricing structure for institutional clients in order to induce heavier volumes of purchases and to be competitive with the large office supply chains.
This company also plans to institute an incentive program for its sales force. A profit sharing program has been designed for the sales force based on their total commissions earned each year. The money will be paid out in mid-December in the form of a holiday bonus. The estimated budget impact of this plan has been estimated and included in the projected wages section of the financial statements.
Sales will also play an important part of promotional efforts. Quality Office Supply plans to have semiannual sales during peak periods of business in Dhaka City — late summer (the Summer Clearance Sale), and December (the Holiday sale). The necessary expenditures to promote these sales have been included in the advertising budget.
This company has taken the position that the most favorable public relations strategy stems from efforts to make a positive impact on the local community. We believe it will attract favorable attention from efforts to improve the community via an employee volunteer force. Different firms, Managing Directors institute programs in which employees volunteer time as a group at local community service events. The local media used to carry story about this innovative program, and many of their clients will ask them to assist their office managers in setting up the same program in their companies.
As well, the company plans to use its grand opening to generate additional free publicity. Managing Director will speak with several members of the local media, who will plan to cover the event. Networking with members of the local chamber of commerce (of which he is supposed to be a member for several years) Managing Director will arrange for several chamber officials to attend the event. Wherever these officials go, many elite members of the local business community also go, improving the odds that the grand opening will generate additional revenue for the store. The budget for promotion of the grand opening event is included in the advertising costs.
5.3. Specific Marketing Program(S)
This company intends to implement following product/service programs within next year:
1. Add five new product lines to the company existing product base. These additional lines were determined through conducting informal surveys over the last 3 months, evaluating the competitors, and researching industry publications that describe the top-selling products in detail.
2. Change packaging to reflect education and more vibrant colors and it will disclose exceptionality.
3. Plan and design survey to evaluate packaging changes.
4. Design, order and distribute the new t-shirts with the Smart University colors.
5. Improve packaging of product shipping box. To improve brand awareness and eye-catching position on the shelf, change color of box from plain color with black writing to plain with logo and black printing. Include “Solutions for Excellance” slogan on shipping box.
6. Enhance packaging by including additional Internet literature (for computer components) and the uses of the components, as published by industry periodicals, to increase post-purchase satisfaction and usage.
5.3.2. Pricing Programs
1. Plan and implement new volume discount program for families purchasing two or more products at the same time.
2. Re-evaluate price points through current market literature.
3. Establish volume discount programs for the new Quality Office Supply products.
The Quality Office Supply is relatively new, demonstrations in-house and at the local retailers will educate the channel and customer. This can be accomplished through the following programs:
1. In-store demonstrations by Quality Office Supply employees to local retailer customers. This will be run in conjunction with publicity and promotion campaigns detailed later in the plan.
2. Meet with key suppliers (shipping vendor, distribution vendor) to negotiate timelines and secure guaranteed delivery performance.
3. Monitor suppliers to ensure they meet the new delivery performance requirements.
1. Establish monthly incentive bonus system for the sales associates. The bonus criteria will be based upon percent to sales goal.
2. Implement a quarterly incentive program that rewards the individual who has the most profitable sales in the given quarter. The sales associate whose sales reflect the highest profit margin will be awarded a check in the amount of 2% of that individual’s profit contribution.
3. Offer product collateral at point of purchase for direct pick-up customers. Company representative will hand each customer a Quality Office Supply product information sheet and inform them of “Exciting New Office Equipments”.
4. Schedule sales visits for the projected year.
5. Shoot new footage and develop new version of the sales video.
6. Distribute sales video to current and potential customers as appropriate.
1. Place additional advertisements in weekend editions for 90 days. Emphasize the “Solutions for Excellance” slogan.
2. Place advertisement in the local Yellow Pages.
3. Place advertisement in magazine that highlights the wide selection of large products available.
4. Place Product related advertisements in local college publications during first two weeks of each semester.
5. Place additional advertisements in free weekly local newspapers, Dhaka City and Sunny View.
6. Place ads via a billboard in the football stadium during home games.
7. Design new brochures and flyers for the fall quarter.
8. Use different website for the advertisements.
5.3.6. Direct Marketing Programs
1. Use SmartSurvey to establish the areas with less than average household incomes. Select random sample from CD-ROM database and send direct mail literature to these households. The mailing will include Internet Information, Product Information, and Quality Office Supply Product Line. The current tele-sales staff will handle the in-bound calls, but additional staffing will be necessary.
5.3.7. Sales Promotion Programs
1. Plan and implement inventory reduction discounts periodically throughout the year when inventory needs streamlining.
2. Publicize periodic inventory reduction discounts to current and potential customers.
3. Plan and organize trip program.
1. Continue employee T-shirt distribution for local athletic events and volunteer participation. Specifically, expand campaign by sponsoring “Team” events that are all-employee participation such as the run.
2. Continue boys and girls little league sponsorship.
3. Participate in local public school technology seminars, demonstrating Internet uses with the new Quality Office Supply machines.
4. Write article about the history of the Bangladesh Office Equipment Market and issue related press releases to key industry journals.
SWOT Analysis of SNOWCEM (Bangladesh) Limited
? Staff knowledgeable of paints materials and Modern Technology
? Provide services to small / medium size organizations
? Our business does not require large investment and, therefore, is flexible to adjust our product/service to changing demand
? Lack of name recognition
? Difficult to expand geographically
? Hard to recruit additional staff with BOTH Office Equipment and computer knowledge
? Many paints companies are still in progress of transforming themselves into the high-tech information age companies
? Many paints companies have little time or skills to become expert in product knowledge.
? Paints items become more and more diversified, and thus make it difficult for smaller companies to find out what an appropriate solution is for their needs
? Needs of clients demand construction staff to be more computer literate (field report, equipment report, QC report)
? May be difficult for clients to see the full benefit of computer exterior paint.
? Slowdown in economy
? New competitors entering the field
? Weather coat becoming more user-friendly
6.5. Competitive Strategy
According to Michael Porter, competitive strategies fall into three categories:
1. Price Leadership:
In this strategy, attract customers by having the lowest price. Profit is realized by capturing large market share
2. Product Differentiation:
This strategy provides something different (not necessarily cheaper) from existing competitors. Market share is captured by doing something no one else is doing.
3 Focused Method:
The last strategy provides same service as competitors but concentrate energy only at certain area, market, or niche.
In light of these three strategies, we have concluded that “price leadership” is a poor strategy for our business. “Office Equipment” is not a commodity product (i.e. salt) but a value-adding service. Our customers purchase our services based upon perceived benefits, not on cost alone. Instead, we have developed competitive strategy hybrids both the “differentiation” and the “focused” elements. While other firms are just offering only “Durable Goods” like Chair, Tables, Furniture etc. we are offering “Consumable Goods” too like Pen, Paper, and Ink etc.
6.6. Financial part of SNOWCEM (Bangladesh) Limited:
Yearly sales – positive outlook for 2005-2007
Sales by management responsibilities and Geographic Area
|July-June||July-June||Variation||Real internal growth|
As we announced at first that Snowcem (Bangladesh) Limited sales reached 59.5 crore during 2005-2006. up 9.5 percent over the period. This confirms the generally good perspectives for the full year 2005-2006. At comparable structure and constant exchange rates, sales growth amounts to 4.9 percent.
Cumulative real internal growth at the end of year stood at 4.2 percent, even though the comparison basis was clearly more difficult than during the year. As expected, exchange rates had a slightly low positive impact of 5.7 percent, while divestitures, net of acquisitions, lowered the consolidated sales by 1.1 percent.
Snowcem (Bangladesh) Limited succeeded in making the necessary price adjustments amounting to 0.7 percent of turnover.
SNOWCEM (Bangladesh) Limited; market share analysis:
Profit and loss A/c
|Sales||74 660||71 747|
as % of sales
as % of sales
as % of sales
as % of sales
as % of average equity
|Expenditure on tangible fixed assets
as % of sales
Market Capitalization, as of 31 Dec 1999
|Personnel number at year end||230929||231881|
|Factories number at year end||509||522|
Risk Analysis And Planning
Every business faces risks in today’s economy, and paints market will be no exception. The first identifiable area of risk for paints market will be its competition. Several competitors have been in the Dhaka City market for a long time and are already well established. Other companies are expected to launch swift responses to the company’s entry into the Dhaka City market in the form of price competition and more aggressive marketing. The second identifiable element of risk for paints market will be the high fixed prices it will incur for startup. The Dhaka City facility itself will be expensive, and anticipated expansion costs will be substantial, including advertising and promotional costs, and special low prices. This also leads to the third area of concern for paints market — cash flow shortages. Realizing substantial startup expenses and low initial revenues will make paints market a cash-poor enterprise within the first few months of opening in Dhaka City. Larger competitors may seek to take advantage of this under-funding by increasing advertising expenditures and by slashing prices.
As with other successful businesses, paints market has plans of action in place to counter any of the aforementioned problems. Competition will be challenging, but alternate plans are in place to face those challenges.
Competitors seeking to respond to the entry of paints market into the market will face strong opposition. First, new inventory system will assure the company’s patrons of more effective inventory service in the form of increased availability of items they need, want, and order most. Additionally, paints market will have much closer access to the Dhaka City market to cut down delivery times drastically above the larger chains. Finally, Quality Office Supply will provide access, to assure clients that when things do go wrong, there will be someone available who can immediately correct the problem.
Paints market recognizes that expenses will be high during its initial months of operation in Dhaka City, but is extremely confident that a quick entrenchment in the Dhaka City market will yield a fast buildup in revenues. Looking to the long-term, both market research and financial projections support the belief, has that a quick, powerful entry into the market is a most successful and necessary strategy for long-term profitability. Finally, Managing Director will make contingency arrangements for potential cash-flow problems. Should sufficient investors fail to become available from this business plan, paints market has secured a line of credit at a local bank on the personal reserves and good name of Managing Director (Assumed To Be).
Business Risk (In Short):
What is the risk that the business fails to generate sufficient performance?
o Industry Risk:
What is the risk that the company fails for external reasons?
a) Supplies risk: What is the risk of failure due to disruption in supply of inputs?
b) Sales risk: What is the risk of failure due to disruption to sales?
o Company Risk:
a) Company Position Risk: Risk of failure for weakness of position in its industry?
I) Performance Risk: What is the risk that the company’s position is so weak that it cannot perform well enough to repay the loan, given expected external conditions?
II) Resilience Risk: What is the risk of failure due to lack of resilience to unexpected external conditions?
b) Management Risk: What is the risk of failure due to management not exploiting effectively the company’s position?
I) Management Competence Risk: What is the risk of failure due to lack of management competence?
II) Management Integrity Risk: What is the risk of failure due to lack of management integrity?
· Supplies Risk:
It measures the risk of failure because of disruption of supply of inputs. Labor, raw materials, equipment, power, premises, and other supplies are taken in considered as the supplies. Each of the component’s cost with respect to total cost is taken in terms of percentage and whether each of the supply has average or worse than average risk of disruption is also taken. Nature of power supply connection and number of day’s production lost is also taken in to account.
· Sales Risk:
In analyzing sales risk the industry’s turnover over the years, its likely trend for the next few years are first accounted for. Beside the industry, two of the major competitor’s market share, turnover and profit of past 3 years, and the firm’s competitive advantage over its competitors are taken into account to measure the sales risk. Barriers of entry for new firms, regulatory changes are also considered as these two significantly affect sales of a firm. The firm’s 5 largest customers, their contribution to the total sales in percentage terms is also required.
· Performance Risk:
- Performance in terms of sales, capital, profit.
- Company’s rank in the industry in terms of turnover.
- The company’s strengths and weaknesses.
- Strategies for both price and quality. Here the company is specifically asked to about strategies that will adopt considering its strengths and weaknesses.
- Cash flow forecasts. Here the analyst’s opinion about whether the company’s cash flow forecasts show that the firm will be able to repay loan in time. Beside whether high, low or average confidence in repayment is also asked to perform the analysis.
· Resilience Risk:
- Values of asset, liabilities, equity reported both by the company and the bank itself, and exposure to other banks.
- Any indication of problem by credit bureau report.
- Readiness of shareholders to support company in future.
- Resilience of company to bankruptcy, political changes, illiquidity etc.
- The proportion of costs that are fixed with respect to total costs, and whether the firm is able to reduce cost if sales fall.
· Management Competence Risk:
This risk category involves the persons involved in managing the business and whether their ability to manage that business is better than average, average, or worse than average. Management competence risk is mainly analyzed by analyzing the strength and weaknesses of the key personnel in decision-making. In addition to these- deficiencies in organ gram, changes of key personnel, relationship of management with owners, decision-making ability etc is also taken into consideration.
Considering all of the above whether risk due to lack of management ability and managerial teamwork is low, high or average is found out.
· Management Integrity Risk:
- Auditors of the company, their period of association with the company.
- Reliability of the company in terms of supply of information to the banks.
- Association of the company with the bank.
- Dependability of the management in meeting commitments.
7.3. Market share Analysis Summary
Our marketing strategy is based on becoming the resource of choice for people looking for office furniture’s, do-it-yourself, and buy-it-yourself resources to create a look in their home. Our marketing strategy is based on superior performance in the following areas:
- Product selection.
- Product quality.
- Customer service and responsiveness.
Our marketing strategy will create awareness, interest, and appeal from our target market for what Quality Office Supply offers our customers.
7.4. Market Segmentation
The general profile of the company’s customer consists of the following geographic, demographic, psychographic, and behavior factors, with additional comments regarding the Web attributes of this customer base. It is important to understand the attributes of the current retail customer, as we develop the Web customer base.
- Our immediate geographic market is the Dhaka City, with a total population of 1,00,000
- A 50-mile geographic area is in need of our products and services and this factor will impact Web visitors.
- The total targeted area population is estimated at 10,000 offices.
- Male or Female.
- Married or Unmarried
- Have Jobs, but not necessarily at home.
- Have attended college.
- A combined annual income in excess of 50,000.
- Age range of 35 to 55 years, with a median age of 42.
- Owns their home, townhouse and/or condominium valued at over 145,000.
- If they work out of the home, it’s by choice in a professional/business setting.
We know the following regarding the profile of the typical resident of Boise:
- 67% have lived in Dhaka City for seven years or more.
- 23% are between the ages of 35 and 44.
- 40% have completed some college.
- 24% are managers, professionals and/or owners of a business.
- 53% are married.
- 65% have no permanent jobs living at home.
- 56% own their residence.
- The appearance of his or her office is a priority, and entertaining and showing her or his home is important.
- He or she perceives him or herself as creative, tasteful and able, but seeks validation and support regarding his or her decorating ideas and choices.
- He or She reads one or more of the following magazines:
- Daily Ittefaq
- Daily Inqilab.
- Daily Ajkar Kagoj.
- Weekly Jai Jai Din
- Daily Manov Jamin.
- Weekly 2000
- Daily Financi