a complete styduy of how strategic management concepts are actually practiced in practical world we have made different models of management for lucky cement after gathering a detailed information good luck :)
4. CEMENT INDUSTRY OF PAKISTAN
o All Pakistan Cement Manufacturer
Association (APCMA) is a governing
body for cement industry.
APCMA plays a significant role in
protecting the cement industry to the
governmentinrespect of formulation of
governmentpoliciesfor the cement
industry.
5. INTRODUCTION
• Lucky cement was founded in 1994 by Mr.
Abdul Razzaq Tabba.
• Lucky cement has been sponsored by one
of the largest business group in Pakistan
the Younus brothers (YB) group.
• Fulfills Customer Social Responsibility
(CSR) by offering scholarships to
students
• Donations for social welfare programs
7. VISION
We envision being the leader of
the cement industry in Pakistan,
identifying and capitalizing on
new opportunities in the global
market, contributing towards
industrial progress and
sustainable future, while being
responsible corporate citizen
8. MISSION
Our mission is to be a premium
cement manufacturer by building a
professional organization, having
state-of-the-art technology,
identifying new prospects to reach
globally and maintain service and
quality standards to cater to the
international construction needs
with an environment-friendly
approach.
9. EVALUATION OF MISSION STATEMENT
S.NO COMPONENTS AVAILABILITY
1. Customer Yes
2. Product/service Yes
3. Market yes
4. Technology Yes
5. Concern for survival
growth, profitability
yes
6. Philosophy No
7. Self-concept yes
8. Concern for public image yes
9. Concern for employees No
10. PROPOSED VISION
STATEMENT
• “To transform lucky cement into a
model cement manufacturing
company engaged in nation building
through most efficient utilization of
resources and optimally benefiting all
stakeholders while enjoying public
sector and goodwill in local and
international market.”
•
11. PROPOSED MISSION:-
“OUR MISSION IS TO BE PERCEIVED BY OUR
CUSTOMERS BY PROVIDING HIGHEST QUALITY OF
CEMENT USING STATE OF THE ART TECHNOLOGY AND
RETAINING
PERSONNEL OF EXCEPTIONAL ABILITY WHILE
MAINTAINING ITS LEADING POSITION AIMS TO BUILD
UP ON ITS PRESENT STATE OF PROFITABILITY WITH
A VIEW TO MAXIMIZE SHAREHOLDERS WEALTH AND
CARE FOR GLOBAL ENVIRONMENT.
12. INFORMATION GATHERED
OPPORTUNITIES
• Upcoming national
building projects
• Increasing demand for
cement in gulf region
• Market development and
penetration
• Infrastructure
development
• Population increase
causing increase in real
state
• Increase production to
reduce cost and achieve
economies of scale
• Global expansion
• Undiscovered markets of
northern regions of
Pakistan
THREATS
• Governmental regulations
• Fluctuation in currency
rates
• Price competition
• Alliance opposition
• Fluctuation in demand
• Political instability
• Increase production cost
13. STRENGTHS
• Financially strong
• High product quality
• Infrastructure near
ports
• Highest export share
• High pay scale
• Large dealer network
• Employee
development
WEAKNESSES
• High transportation cost
• Low advertising and
exposure
• Increasing general and
admin expense
• Capital intensive
industry
• Increased production
cost
• Highly Localized and
regionalized markets
• Low gratuity and PF
funds
14. THE STRATEGY-FORMULATION
ANALYTICAL FRAME-WORK
STAGE # 03 THE DECISION STAGE
QSPM Matrix
STAGE # 02 THE MATCHING STAGE
SWOT Matrix SPACE Matrix BCG Matrix IE Matrix GS Matrix
STAGE # 01 THE INPUT STAGE
EFE Matrix CPM Matrix IFE Matrix
15. input stage
• Stage 1 summarizes the basic input
information needed to formulate strategies.
•The information derived form IFE matrix , EFE
matrix & CPM a provides basic input
information for matching & decision stage.
•Good intuitive judgment is always needed in
determining appropriate weights & ratings.
16. EXTERNAL FACTOREVALUATIONMATRIX(EFE)
OPPORTUNITIES WEIGHTS RATINGS WEIGHTED
SCORE
Increase in infrastructure
development
0.20 3 0.60
Unexploited markets in North
Pakistan
0.05 3 0.15
Increase in population causing
growth in housing sector
0.10 4 0.40
Global expansion 0.15 4 0.60
Increase production to reduce cost
and achieve economies of scale
0.07 3 0.21
THREATS
Government regulations 0.15 2 0.30
Fluctuation in market demand 0.08 1 0.08
Price competition 0.10 3 0.30
Political Instability 0.03 3 0.09
Rising input costs 0.07 2 0.14
TOTAL 1.00 2.872.87
17. EXTERNAL FACTOR EVALUATION MATRIX
(EFE)
The most important factor to being successful in Lucky
cement is the ‘global expansion’ indicated by the 0.15 weight.
The company has a great opportunity to increase the
infrastructure development.
Unfortortunatly, the company is facing its major threat in
government regulation .
The price competition is also the second major threat that the
company is tackling with in the present situation.
Overall the weighted score is 2.87 which shows the company
is above the industrial average.
19. COMPETITIVE PROFILE MATRIX (CPM)
The most critical success factor enjoying DG
Khan is in advertising. Whereas, Lucky cement
is weaker in advertising to its competitors.
The most import factors for being successful
in the organization are the product quality &
the major strength lies in its financial position.
.However the market share of the company is
far better to its competitors.
Overall the company is strongest as
indicated the total weighted score of 3.5 .
20. INTERNAL FACTOR EVALUATIONMATRIX (IFE)
STRENGTHS WEIGHT RATING WEIGHTED SCORE
Revenues increased 0.09 4 0.36
High product quality 0.12 4 0.48
High pay scale 0.10 3 0.30
Highest export share 0.20 3 0.60
Inventory turnover up 3.58 to
4.00
0.05 3 0.15
Larger dealer network 0.08 4 0.32
Employee development 0.06 4 0.24
WEAKNESSES
Low advertising 0.05 2 0.20
Increase in cost of production 0.10 1 0.10
High transportation cost 0.07 1 0.07
Highly regionalized and localized
market.
0.08 1 0.08
TOTAL 1.00 2.90
21. INTERNAL FACTOR EVALUATION MATRIX (IFE)
The 12 key factors mentioned in the IFE Model
shows the most attractive is its export share 7 its
high product quality.
The major weakness of the company is high
transportation cost & regionalized and localized
market.
There is a room for improvement in the
inventory turn-over.
Overall the weighted score is 2.90 which above
than the average showing needs improvement in
its internal policies & procedures.
23. ANNOUNCEMENTS
The financial document for cement plant in DR Congo have been signed
with multilaterals and International institutions in London on the 27th Nov
2014 & financial goals have been achieved.
The DR Congo Cement Plant is expected to be start
commissioning from June 2016.It will open new door for
growth & to implement the company future expansion plant
outside Pakistan.
Pakistan leading & larger provider of quality cement organized
Employee Volunteer Activity in collaboration with WWF Pakistan under
the aim of social cause.
25. For the purpose of matching stage
we made:
SWOT
(Strength,weaknesses,opportunitie
s,Threats) matrix
SPACE ( strategic position and
action matrix) matrix
26. SWOT MATRIX
• The concept of
determining strengths,
weaknesses, opportunities,
threats is the fundamental
concept behind SWOT
model
• To present the model in a
more understandable way
scholars came up with
SWOT matrix
27. STRENGTHS
1. Financially strong
2. High product quality
3. Highest export share
4. High pay scale
“SO “strategies “WO” strategies
SETUP NEW FACTORIES
IN NORTHERN
REGIONS OF PAKISTAN
(S1 , O1 )
INCREASED EXPORTS
TO GULF REGIONS
( S1 ,S2,O2)
BUILD UP EXPOSURE
AND BETTER BRAND
IMAGE THROUGH
RIGHT
PROMOTIONAL MIX
( W1 , O1 ,O2 )
DIVERSIFY IN GULF
REGION (W1,O2 )
WEAKNESSES
1. Low advertising and
exposure
2. Low gratuity and PF
funds
3. Increasing general and
administrative expenses
OPPORTUNIT
IES
1. Upcoming national
projects
2. Demand for cement in
gulf region
3. Expansion in cement
industry
“ST “ strategies “ WT “ strategies
OVERCOMING
COMPETITOR’S
PRESSURE THROUGH
MORE QUALITY (S2,T2)
RESOLVE ALLIANCE
OPPOSITION THROUGH
TOP MANAGEMENT
INVOLVEMENT
(S1,T3)
REDUCE GENERAL &
ADMIN EXPENSES TO
COPE WITH NARROW
COMPETITION
(W3,T2)
CONSIDER EMPLOYEE’S
PERKS TO AVOID
HASSELS OF LABOUR
UNIONS
(W2,T3)
THREATS
1. Govt regulation on slots
2. Price competition
3. Opposition alliance
28. COMPETITIVE POSITION :- rates
Strong distribution network. -2
High quality products. -3
High export share. -4
Market development in Gulf -2
Govt. Project as DGP Army. -3
Total:- 14
SPACE MATRIXFINANCIAL POSITION :-
RATING
Increase in net sales revenue 4
Continuous increase in stock value (PRs 130/=) 6
Increased Earning price share-EPS (PRs 2.1 per 5share)
5
Total: 15
INDUSTRIAL POSITION :
Increasing competition in construction sector 4
Increasing domestic demand for cement i.e. 92% 5
Enhancement in the budget for Annual 5
Development Plan
Increasing growth rate 3
Total: 17
STABILITY POSITION :-
Allowance of subsidized cement imports & lesser rebates
-4
Cut throat competition has created instability. -3
Currency rate difference has given much loss. -3
Increasing rate of inflation. -4
Rapid technological Change. -3
Total: -17
32. KEY FACTORS
GLOBAL EXPANSION RIGHT PROMOTIONAL MIX
OPPORTUNITIES:- WEIGHTS AS TAS AS TAS
Upcoming national projects 0.15 1 0.15 4 0.60
Demand for cement in Gulf 0.20 4 0.80 1 0.20
Expansion in industry due to
house building loans by banks
0.10 1 0.20 4 0.40T
THREATS :-
Government regulations 0.15 4 0.60 3 0.45
Price competition 0.10 2 0.20 3 0.30
Alliance opposition 0.15 2 0.30 3 0.45
Fluctuating currency rates 0.10 4 0.40 2 0.20
1.00
STRENGTHS:-
Strong financial position 0.15 3 0.45 4 0.60
High product quality 0.12 3 0.36 4 0.48
Highest export share 0.20 4 0.80 3 0.60
High pay scale 0.10 3 0.30 4 0.40
Larger dealer network 0.08 2 0.16 3 0.24
WEAKNESSES :-
Low advertising 0.10 1 0.10 3 0.30
Increasing Gen & Admi expenses 0.05 - - - -
Low gratuity & PF funds 0.10 1 0.10 3 0.30
Increased production cost 0.10 1 0.10 4 0.40
1.00 5.92 5.925.2
33. QSPM -QUANTITATIVE STRARTGIC PLANNING MATRIX
• This technique basically tells which strategy is the best for the
company.
• The two alternative strategies considered are GLOBAL
EXPANSION & EXPOSURE THROUGH BRAND IMAGE &
PROMOTIONAL MIX.
• The demand for cement in gulf areas are high in gulf areas as
compare to domestic market.
• The opportunity of expansion of cement industry due to house
building loan is more attractive with market penetraton strategy.
• The major threat of governmental regulations ,price competition
& currency rate are associated withdraw both alternative
strategies .
• The strong financial position , high product quality & pay scale
are attractive to brand image whereas market share of 19% is
highly attractive to capitalize the strengths.
• Advertising, gratuity fund & production cost should be reduced
and convert in to the strength.
34. RECOMMENDATIONS
MARKET PENETRATION :- Because of number of
construction projects have been initiated by the
Government and the rising trend of house
financing through banks and investment in real
estate and property.
MARKET DEVELOPMENT :-The demand for cement
has drastically increased in Gulf region. In order to
cater to the increasing demand and to develop new
markets, Lucky Cement should increase its exports
towards Gulf region and also in other countries,
hence developing a market in a new geographical
segment.
35. o INCREASE PAY SCALE OF ITS EMPLOYESS :-
In comparison with its competing organizations still
the turnover rate is very high. The reason being low
gratuities and benefits after retirement due to which
most of the employees quit. To retain its valuable
Human Resource, Lucky Cement should pay attention
towards this area.
GENERAL RECOMMENDATIONS
36. IMPLEMENT CONTINGENCY PLANNING :-
• Lucky cement need to implement
contingency planning to cope with the
future constraints
• Cost leadership through best value strategy
37. CONCLUSION
• Lucky cement like any other responsible
organization is redefining its business operations
in a fundamental way
• It is working to promote sustainable development
and integrating its endeavors of profitable growth
with the initiative of environment all protection
&uplifting the quality of life of the present &the
future generation
• The company is moving towards its growth mode
and can aggressively employ the strategies of
market development market penetration product
development backward and forward integration as
per need of demand of the org.