ASSIGNMENT NO:1

Submitted by:

Muhammad Tayyab Ali (FA19-BBA-007)

Talha Ijaz (FA19-BBA-009)

Usama-Bin-Ahmad (FA19-BBA-010)

Submitted to:

Syed Tauqeer Ahmad Shah

Submitted on:

1 November, 2022

Semester:

7th

Course Title:

Strategic Management
Introduction:

According to the project the business is going to be established on national level which will
eventually be a multinational company and headquartered in Vehari. It will be founded as
fertilizer business, it will be one of the largest companies in the country with many employs
across the Group and will have operations in a diverse range of businesses. With a core
purpose to solve the pressing issues in Pakistan, It will operate through the following
verticals:

• Milk Plant
• .Pesticides

Pesticides products such as spray, fertilizers e.t.c. in general herbicides for destroying weeds
and other unwanted vegetation, insecticides for controlling a wide variety of insects,
fungicides used to prevent the growth of molds and mildew, disinfectants for preventing the
spread of bacteria, and compounds used to control mice and rats.

Milk processing will includes various operations ranging from collecting milk from the farm,
storing milk in tanks, After this, the milk will immediately transferred to chiller tankers that
carry it at optimum temperatures to Milk plant. Over there, the milk goes through an
extensive process which comprises of standardisation of fat, pasteurisation, homogenisation,
and then Nutri-Heat

Mission & Vision Statement:

Following will be the mission and vision statement of the company.

Vision Statement:

To bring synergetic benefits to farmers by providing a comprehensive range of chemical

product mix and Always provide pure, safe & high-quality milk under best hygienic

conditions. Mission Statement:

To produce and market high-quality milk in sufficient quantity to provide a good standard of
living for our family and our employees and to improve growth and productiveness of plans
through pesticides.

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Strategies used by the corporation:

The corporation will use different strategies to achieve more market share and get competitive
edge, which are as follows:

1. Integration strategies:
 Forward Integration
 Backward Integration

Forward Integration:

The corporation will have its own channels of distribution. It means the franchises will not be
given to any local person, and they will distribute according the policies of the corporation.

Backward Integration:

First of all we will explain what backward integration is, taking control of source of input or
supplier and the corporation is going to apply this strategy

The corporation will have their own dairy farms, milk processing units and all machinery for
production and packaging of their products.

Forward and backward integrations are collectively called Vertical integration.

The corporation will take control of their competitor not immediately but eventually and
hence the Horizontal integration will be applied in near future after gaining some success.

2. Diversification strategies:
 Related diversification
 Unrelated diversification

Related diversification:

Our company will do related diversification in pesticides business as we know related

diversification is Adding new but related products or services and our corporation will sell
fertilizer at first then, when it begins to sell spray as well it will be related diversification.

Unrelated diversification:

The company will also do unrelated diversification. As we know unrelated diversification is

adding new, unrelated products or services. When it will move from pesticides to milk plant.

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 3. Intensive strategies:
 Market penetration
 Market development
 Product development

Market Development:

Market development is introducing present products or services into new geographic area. We
are going to start our business of pesticides and milk from district vehari Punjab Pakistan and
will expand it into whole country and after ultimate success we will enter into international
market.

Product Development:

As we know product development is new product in existing market. To increase the demand
of our product we will introduce things such as introduce high quality dry milk for babies and
cheap but very effective pesticides and fertilizers for small growers. After that the products
from our company will be easily accessible and gettable.

Market penetration:

Market penetration is basically entering in market deeply with greater marketing efforts. So
we will promote our product through various mediums like commercials on Tv, ads in
newspapers and for the people of remote areas we will hire special persons to reach there and
guide the people who are illiterate.

Company Members:

Our business will be in the form of Partnership. There will be three partners and
there names are:

 M. Tayyab Ali (CEO + Production Manager)

 Talha Ijaz (Marketing Manager)
 Usama Bin Ahmad (Financial Manager+ MIS)

Financial Part:

Financial Resources:

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Our business will be in the form of Partnership . There will be three partner contributing
equal Capital for investment of 9 million rupees.

Balance Sheet:

Assets

Current Assets

Cash 1,900,000

Inventory 40,00,000

Fixed Assets

Maintenance of Building & Furniture 250000

Machinery & Tools 600,000

Prepaid Expense 200,000

Capitals 8,000,000

Most of the work will be done on Excel. But if we want some special work then doing any
other way of working..

Projected Income State of 1st Month:

Sales 3,500,000

Cost of Goods Sold 20,10,000

Gross Profit 450,000

Advertisement Expense 150,000

Wages of Employees 70,000

Total Income of 1st Month 100,000

For Ratios:

Expected Liability = 2000,000

Inventory = 3,340,000

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Expected Debt = 1,000,000

Liquidity Ratio:

Current assets

1900,000

3.24%

Activity Ratio:

Total Assets Turnover:

Sale / Total assets

2,500,000 / 8,000,000

0.35

25%

Profitability Ratio:

Gross Profit Margin:

Sales minus cost of goods sold / Sales

2,500,000 – 1,260,000 / 2,500,000

0.30

20%

Profit Margin:

Net income / Sales

500,000 / 800,000

0.10

8%

Marketing part:-

Marketing:-

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 Marketing can be described as the process of defining, anticipating, creating, and fulfill ing
customers’ needs and wants for products and services.

Customer Analysis:-

Our company analysis-the examination and evaluation of consumer needs, desires, and wants
involves administering customer surveys, analyzing consumer information, evaluating market
positioning strategies, developing customer profiles, and determining optimal market
segmentation strategies. Successful our organizations continually monitor present and
potential custom errs buying patterns. Business analytics has become an integral part of
customer analysis and strategic planning.

Selling Products and Services:-

Successful strategy implementation generally rests on the ability of an organization to sell

some product or service. So our company will do many marketing activities, such as
advertising, sales promotion, publicity, personal selling, sales force management, customer
relations, and dealer relation.

Product and Service Planning.

Product and service planning includes activities such as test marketing; product and brand
Positioning, devising warranties; packaging: determining product options, features, style, and
Quality, deleting old products; and providing for customer service. Product and service
planning is particularly important when a our company is pursuing product development or
diversification. One of the most effective product and service of us is planning techniques is
test marketing. Test markets allow to our company to test alternative marketing plans and to
forecast future sales of new products .The technique can enable our organization to avoid
substantial losses by revealing weak products and ineffective marketing approaches before
large-scale production begins.

Pricing:

Our pice should be competitive and low as compared to our competitors in a market.

We offer a products that are affordable to all customers and also we introduce a wide of
products in a price range.

Distribution:-

Our company distribution includes warehousing, distribution channels, distribution coverage,

retail site locations, sales territories, inventory levels and location, transportation carriers,
wholesaling, and retailing. Most producers today do not sell their goods directly to
consumers. Various marketing entities act as intermediaries; they bear a variety of names
such as wholesalers, retailers, brokers, facilitators, agents, vendors or simply distributors.
Some of the most complex and challenging decisions facing a firm concern product

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distribution. Intermediaries flourish in our economy because many producers lack the
financial resources and expertise to carry out direct marketing. Manufacturers who could
afford to sell directly to the public often can gain greater returns by expanding and improving
their manufacturing operations.

Marketing Research:-

Marketing research is the systematic gathering, recording, and analyzing of data about
problems relating to the marketing of goods and services. Marketing researchers employ
numerous scales, instruments, procedures, concepts, and techniques to gather information;
their research can uncover critical strengths and weaknesses. Marketing-research activities
support all of the major business functions of an organization. Organizations that possess
excellent marketing research skills have a competitive advantage.

MIS part:
The parnters will communicate with each other at first the data will be save on
excel and then according to need we buy our own software.
And we will discuss the relationship among people, technology and organization.
This IFE Model based on assumption which will be of our pesticides company,

Stage 1: The Input Stage:

Internal Factor Evaluation Matrix(IFE):

This IFE Model based on assumption which will be of our pesticides company,. The strengths
allows for the company to increase their advantage edge whereas their weaknesses serves as
the company’s room for improvement so as to prevent getting behind the market.

Internal strength weight Rating Weighted

score

1. Largest manufacturer in the market. 10 % 4 0.40

2. Supplier major airlines. 12 % 4 0.48
3. Good reputation and image 4% 3 0.12
4. Close proximity to the airport 8% 4 0.32
5. Strong management team. 4% 3 0.12
6. Increasing cash flow. 5% 3 0.15
7. Loyal employees. 4% 3 0.12
8. Access to cheap and reliable financing 3% 4 0.12
9. History of minimal services complaint. 4% 3 0.12
10. Financial ratio. 5% 4 0.20

Internal weaknesses

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 1. Saturated market. 15% 1 0.10
2. Sensitive of oil prices. 18% 2 0.30
3. Absence of strategic partner. 4%. 1 0.04
4. Limited access to international markets 4.% 1 0.04

Total weighted scores 100% 2.63

Major weakness(1). Minor weakness(2) minor strength (3) major strength (4)

EFE Model:-

External strategic factor:-

Opportunity. Weight Rating Score

1. Increase public awareness of the important 0.125. 2 0.250

Healthy life
2. Availability of still extensive organic rice market. 0.142. 2 0.376
3. Government support for organic farming to 0.169. 3 0.563
Support environment Sustainability

Threats:-

1. The conversion of agriculture land. 0.144. 2 0.384

2. Circulation of counterfeit organic products. 0.132. 1 0.22
3. The purchasing power of the people is still low. 0.136. 2 0.317
4. Weather change and issue of natural disaster. 0.153. 2 0.408

Total 1.000. 2.510

CPM matrix model:-

Your company competitor 01. Competitor 02

Critical source weight score weighted score Weighted score weight

factor. Score. Score score

Marketing. 0.25 4 1.00. 4. 1.00 1 0.25

Brand reputations 0.25. 3. 0.75. 4 1.00. 4 1

Location. 0.05. 2. 0.10. 1. 0.05. 1. 0.05

Product quality. 0.1. 1. 0.10 4. 0.40. 3. 0.3

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Customer service. 0.2. 1. 0.20. 4. 0.80. 1. 0.2

Customer loyalty 0.05. 1. 0.05. 3. 0.15. 1. 0.05

Product range 0.1. 3. 0.30. 1. 0.10. 3. 0.3

Total 1. 2.50 3.50 2.15

Stage 2: The Matching Stage:

SWOT Matrix:

In SWOT Analysis we will describes our companies strengths, weeknesses, opportunies and
threats.The SWOT Analysis of our pesticides company is as follows:

Strength:

 Strong marketing chain

 International Brand
 High skill working staff
 Quality of Pesticides

Weakness:

 Lack of awareness in some farmers

 Unavailability of database of farmers.
 Unavailability of standard infrastructure to reach door step of farmer
 Less employs according to other companies.

Opportunity:

 Wide availability of markets.

 Can capture market of the all crops growers/ farmers of sugarcane and vegetables of
other areas.

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  Enlarge the working area.
 To achieve the large scale of market share in Pesticide industry
 Increase the employs number according to region

Threats:

 Strong competitors
 New Local entries in Pesticide market

The space matrix of Pesticide company:-

SPACE matrix which stands for Strategic Position and Action. Evaluation is one of these
tools which have gained high reliability for considering macroeconomic, microeconomic and
financial factors in the process of determining the position of the organization.

In developing a strategy, managers must examine the marketing opportunities in each

business and product-market, as well as the organization’s distinctive competencies or

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strengths relative to its competitors. The SPACE matrix is a valuable method for analyzing
the competitive position of an organization.

Steps essential to construct a Strategic Position and Action Evaluation Matrix are described
below:

1. Choose a combination of factors that best characterize Competitive Advantage (CA),

Environmental Stability (ES), Financial Strength (FS) and Industry Strength (IS).
2. To the CA and ES dimensions allot a numerical value ranging from -6 (worst) to -1
(best) to each of the factors. Allot value ranging from +6 (best) to +1 (worst) to all of
the factors that constitute the IS and FS dimensions.
3. Calculate an average score for IS, ES, CA and FS by summing the numbers allotted to
the factors of the entire dimension separately and dividing by the set of factors
included in the particular dimension.
4. Plot the average scores for each dimensions such as ES, CA, IS and FS on the proper
axis in the matrix.
5. Add or combine the scores of two dimensions that lay in the x-axis and design the
resultant point on X, in the same way add scores of dimensions that lay in the y-axis
and plot the consequential point on Y. Then, plot the intersection of the both new XY
points.
6. Sketch a directional vector from the basis of the Strategic Position and Action
Evaluation (SPACE) matrix throughout the new intersection points. This vector
discloses the kind of strategies suggested for the firm such as aggressive, defensive,
conservative or competitive.

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Using the Strategic Position and Action Evaluation Matrix method we find the strategic
position/posture of an organisation. We have analyzed four dimensions in this method; two
contribute to the internal dimensions and the other two to external dimensions. The internal
dimension includes competitive advantage and the financial strength which are the major
factors to determine the strategic position of any organization. The external dimension
includes the industry strength and the environmental stability which is used to identify the
strategic position in the industry. By evaluating these four dimensions, we result in four
different strategic postures namely;

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Aggressive Posture indicating that the company can fully exploit available opportunities
and enhance its market share. As the company has high financial strength, high industry
strength, enjoys competitive advantage and belongs to an attractive industry and operates in
a relatively stable environmental conditions. This posture is a kin to Michael Porter’s generic
strategy of overall cost leadership.

Competitive Posture indicating limited financial strength, medium competitive advantage

in an attractive industry and operating in a relatively volatile or unstable environment,
necessitating the company to maintain and enhance competitive advantage by
improving/differentiating product; widening the product line, improving marketing
effectiveness and mobilizing, augmenting financial resources. This posture is considered to
be quite similar to Michael Porter’s generic strategy of product differentiation.

Conservative Posture indicating a company having limited competitive advantage, in a not

so attractive industry but enjoying financial strength and operating in a relatively stable
environment. Such a company should endeavor to cut down non-performing product, control
costs, improve productivity, introduce new products and enhance sales by profitable market
expansion. This posture can be compared with Michael Porter’s generic strategy of focus.

Defensive Posture indicates a company that lacks both competitive advantage and financial
strength and belongs to a not-so-attractive industry and operates in an unstable environment.
All the four dimensions are weak and works against the company. It is advisable for a such a
company to initiate measures like discontinue nonviable products, tightly control costs and
monitor cash flows strictly, cutting down/reducing capacity and postponing or limiting
investments.

The internet external matrix IE:-

IE Matrix evaluates internal factor scores on the x-axis and external factor scores on the y-
axis and hence the axes of both the matrices are different.

IE Matrix for Apple Company:

 Grow & Build Region which is specified through I, II & IV cells of the IE matrix.
 Hold & Maintain Region which is covered by the III, V or VII cells of the IF matrix.

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  Harvest or divest region which is covered through the VI, VIII or IX cells of the IE
matrix.

The grand matrix:-

Grand Strategy Matrix is one of important matrix of strategy formulation frame work. For
formulation of alternative strategies, it is popular tool. In Grand Strategy Matrix there are
four kinds of quadrants and an organization is placed in one of these four quadrants. In each
quadrant of the matrix there is set of strategies specified on the sequential order of
attractiveness that are considered by the organization.
It has four quadrants:-

First Quadrant:
The first quadrant of Grand Strategy Matrix indicates that the organization has strong
competitive position & there is rapid growth rate in the market. The organization that lies in
the first quadrant has the excellent strategic position. The organization of the first quadrant
should concentrate on the current market and need to adopt the strategies of Market
Development, New Product development & Market Penetration.

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Second Quadrant:
The second quadrant highlights that the organization has weak competitive situation and there
is fast market growth. The organization that lies in the second quadrant should evaluate its
current strategy for the marketplace seriously. Although there is growing industry but the
organization is not able to compete effectively. The organization of second quadrant should
find out the reason that why its current strategies are not effective enough to make it
competitive in the market.

Third Quadrant:
The third quadrant of the Grand Strategy Matrix specifies that the organization has the weak
competitive situation and the market growth rate is quite slow. The organization that lies in
the third quadrant competes in the industry of slow growth and holds weak competitive
position. The organization should seriously adopt certain drastic changes that can minimize
further demise and the resulting liquidation. It is better option for the organization that it
should adopt extensive asset & cost reduction.

Fourth Quadrant:
The fourth quadrant of highlights that the organization has strong competitive
situation and the market growth rate is slow. The organization that lies in the fourth
quadrant has strong competitive position but the industry in which the organization
relates has slow growth.

Every organization must fall in any one of the four quadrants. The organization that
lies in the first quadrant must adopt those set of strategies that are specified in that
quadrant. Similarly the organization that lies in the second quadrant must adopt the
given set of strategies in that quadrant. In the same manner the organizations lie in
the third & fourth quadrants must follow the set of strategies of the third & fourth
quadrants respectively.

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BCG matrix of Pesticide company :-
BCG matrix is a portfolio management framework so it should be used when an organization
is running different businesses in either different markets or different industries. BCG
Matrix / Growth Share matrix helps the My pesticides company to efficiently deploy the
resources in various businesses in Chemical Manufacturing industry those are most likely to
deliver higher rate of return.
What are Cash Cows in BCG matrix ? How Anhui Guangxin Agrochemical can use it?

The cash cow businesses are the one that has high market share but low growth rate. These
are often established businesses in their segment. As these segments are mature, the marginal
effects of new investment or resource allocation is relatively small. So my pesticides
company should continue to use the revenues from these businesses to reinvest into the faster
growing segments.

What are Stars in BCG matrix ? How Anhui Guangxin Agrochemical can use it?

Stars are the businesses that have high growth rate and high market share in the industry they
operate in. The star businesses represent not only present cash flow but also have huge
potential for future growth. My pesticides company should continue to invest in these
businesses to not only defend the present market share but also to increase market share and
profitability.

What are Question Marks in BCG matrix ? How Anhui Guangxin Agrochemical can
use it?

Question Marks are the businesses that have low market share in industries that have high
growth rate. Questions Marks often represent the lack of capabilities or skills that are
required by the companies to excel in the booming industries. My pesticides company needs
to figure out whether Question Marks represent a potential Star or a potential Dog. If my
pesticides company have resources to turnaround the business by either by procuring new
technology, hiring skilled human resources, or building better processes then it should invest
in the question mark. If the organization after analysis comes to a conclusion that investing
into a question mark is not feasible with resources at hand then my pesticides company
should divest from the segment and employ those resources in star businesses.

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QSPM Matrix:-

The Quantitative Strategic Planning Matrix (QSPM) is a strategic management approach for
top-level management. The method is also used to formulate the marketing strategy. A
QSPM is mainly used in evaluating different strategic options and determining the most
attractive of the strategies at hand.

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