Swot analysis of Engro food ltd.prepared by Abaed ul Rehman M.com UAF

2. SWOT ANALYSIS OF ENGRO FOODS
AND ITS INTERNAL AND EXTERNAL
ENVIRONMENT
S U B M I T T E D T O ;
S I R S A R F R A Z

3. ACKNOWLEDGEMENTS
 Firstly we would thank to Allah for giving us
the opportunity and the resources to be
able to do something productive in our
lives…
 Than our sincere teacher Mr.Sarfraz who
provide the accurate knowledge and
gives us the chance to build up our
confidence level.

4.  Engro Foods (Pvt.) Limited (EFL) has been
established in 2005 as part of a
diversification process at the Engro Group.
 The plant located at Sukkur on 23 acre land,
has the raw milk reception capability of
300,000 liters per day
 The plant has been established at a cost of
Rs. 1 billion which provides direct
employment to 750 people.
 One plant is located in Sahiwal.

5. o Engro Foods has entered the Food business
through milk processing and sale with the
company’s vision to pursue growth
opportunities based on country
fundamentals and own strength.
 5 millions user per day nation wide.

6. Vision
• "Our vision is to become a fast expanding mega foods
company. To achieve our vision, the company will initially
focus on dairy by investing a substantial amount in plant,
milk collection capability and marketing.."

7. MISSION
“Engro foundation is committed to make positive impact on
lives of communities around its supply chain through
provision of improved basic services, education and skill
development by training in addition it will work with partner
organizations to provide the financial and technical support
in response to natural calamities”

9.  S , Strengths
 W , Weaknesses
 O , Opportunities
 T , Threats

10. STRENGTHS
(1) ENGRO’s back
 Olper,s is a brand of ENGRO foods.
 So consumers like it on behalf of previous records because
ENGRO is a well established brand name in Fertilizer, IT and
infrastructure business etc.
 ENGRO is world famous so it can easily attract foreign investors .
 ENGRO foods can easily afford research and development costs
for Olpers have in order to introduce new products.
 It can also distribute the brand through better channels because
of its long term relationship with distributors in the agriculture
sector.

11. Strengths (cont,d)
(2) PR with farmers
 ENGRO has been interacting
with the farmers for fertilizers
and has gained quite a good
reputation over the years.
 And has a good relationship
with the farmers who are
willing to supply milk to the
company.
 This is an added advantage and
strength for the company
because it will never be short of
milk production.
 The farmers also won’t have to
look elsewhere to sell their
milk.

12. Strengths (cont,d)
(3) Positive response
from customers
 In first year,(2005) engro
crossed 1.4 billion sales
figure which shows
customers’ satisfaction
upon EFL’s products.

13. Strengths (cont,d)
(4) Taste, Quality
It’s Taste, Quality
Proposition & World-
Class Quality.

14. Strengths (cont,d)
(5) Strong consumer &
product research
Olper’s done a strong
consumer & product
research before and after
launching the product.
This has provided them
the perfect launching
pad to get more
benefits..

15. 1). Owning Red Color
 The company has not owned the color red like
Nestle has a green Milkpak; Haleeb has a blue
carton etc.
 This may create problems because when a
consumer enters a grocery shop, then he/she
might have problems in recalling the brand.
 Because there is no color association attached to
Olpers.
 The company may need to find a suitable color
in which to focus its upcoming marketing
strategies.

17. 2) Low Quality Milk
 EFL is not having its own dairy farms;
 it largely collects loose milk from farmers &
gwalas through its 40 milk collection centers,
 which sometimes is of low quality and
impure.
 because they add vegetable oil to milk to get
higher prices.

18. 3) Packaging
 EFL is dependent upon Tetra Pak for the
packaging of its entire dairy products.
 Tetra Pak is the only option available to Olper’s
for packaging because it is having monopoly in
the packaging sector in Pakistan.
 Due to this reason, Tetra Pak can charge them
higher and it could increase the production
costs.

19. 4) Milk collection & distribution costs
 EFL’s 34 out of 40 milk-collection centers are
located in Punjab, whereas its only milk
processing facility is situated near Sukkhur
(Sindh).
 It increases the milk collection & distribution
costs; and also increases the chances of milk
getting spoiled because of increased
travelling time.

20. Opportunities
(1) Increased funding by Government
• Government has decided to increase farmers’
funding.
• This is an opportunity for ENGRO foods because
previously due to weather conditions and other
reasons there was lots of wastage of milk.
• but now that can be reduced as farmers will be
better able to store milk for longer time periods.

21. Opportunities (con,t)
(2) Increased consumption by competitors
• Competition may create opportunities for the company
because each competitor in the milk industry wants to
increase penetration of processed liquid milk,
• So they will create awareness for consumers through
different advertising media.
• This will ensure the increase in the consumption of
processed milk instead of lose milk
(3) Awareness
• Growing dissatisfaction with loose milk and increasing
awareness about health and hygiene issues have led to
increased processed milk consumption.

22. Opportunities (con’t)
• (4) Third largest producer of milk
• Pakistan is the Third largest producer of milk in the
world with a total production of 32 billion liter of milk
a year,
• Livestock accounts for 46.8 percent of agricultural
value added and about 10.8 percent of the GDP.
• Milk is the largest commodity from the livestock
sector accounting
• for 51 percent of the total value of the sector.
• (5) Improving Economy

23. (1) Competition
 Competition is large threat for co.
 because the company will have to maintain its
leadership in an expanding market
 So that it doesn’t lose its market share to its
competitors. For Olper’s it might be difficult to
penetrate in front of others.

24. (2) Perceptions and Price Differentials
 Consumers’ perceptions and price differentials
can cause a threat for the company.
 It is important that Consumer’s preferences
change with time and prices might create
certain barriers in terms of the profit margins
for Olper’s.
 For example, lose milk is still cheaper than
packaged milk and that is also one factor that
people still prefer to buy lose milk.

25. External Environment
1)POLITICAL/LEGAL FACTORS
2)Economic Factors
 Inflation rate of Pakistan for the current fiscal year
has grown to 7 percent. This thing is really hurting
the purchasing power of Pakistani consumers.
 Competition is also increasing with the entrance of
new domestic players in the dairy and food sector
and plans to increase investments by the already
established companies. .
 Leading industrial groups such as Jamal Din Sugar
Mills, Dewan Group of Industries and Shakar Ganj
Sugar Mills have already made substantial
investments in dairy & livestock sectors.

26. External Environment (con,t)
3)Socio-Cultural Factors
For example, lose milk is still cheaper than
packaged milk and that is also one factor that
people still prefer to buy lose milk and want to
purchase fresh milk..
4)Technological Factors
In year 2005, the Ministry of Industries and
Production established Dairy Pakistan
Company on the lines and model of Dairy
Australia. The main objectives of the company
are as under:

27. External Environment (con,t)
 a. To promote milk and other value added dairy
products in the domestic as well as international
markets.
 b. To promote development and up-gradation of
dairy supply chain in Pakistan by supporting and
facilitating the farmers, processors and other
stakeholders across the value chain.
 c. To support dairy sector growth by way of
supporting and facilitating business development
services for the enterprises across the dairy value
chain. etc

28. INTERNAL ENVIROMENT
 Employess satisfaction
As all organizations In the Engro food
employees satisfaction is the most important
factor and work on it to ensure that workers
are satisfied are not
 Empowerment of emloyees
 Centralization
 Departmentalization
 Span of control
 Chain order

29. • ABAED UL REHMAN
• HAMID ALI
• AFTAB IQBAL
• ZEESHAN AHMAD
• JAFFER ALI
• ALI AHMAD
• MARYAM MAQBOOL
• AROOJ FATIMA
• MEHREEN ASGHAR
PREPARED BY,
M.COM , SEC – C
UNIVERSITY OF AGRICULTURE FSD

30. THANKS