SRATEGIC MANAGEMENT

Final Project
Submitted to: Sir Imran Hameed

Submitted by: Tehreem Fatima (150723)

Hafsa Arif (150723)

FOOD INDUSTRY IN PAKISTAN:
The food industry in Pakistan is growing day by day specially the processed food
industry. With the emergence of increased population, increasing number of working
women, urbanization and also the importance of hygienic and healthy food has
increased the demand of processed food. As now a days time is very important factor
and people are seeking ways to save time due to which they prefer processed foods
that save the time of preparation and is also very convenient. The two major very strong
international players in the food industry are Nestle and Unilever. Local food companies
are Shan Foods, Engro foods, National Foods, Shezan International and Mitchell’s fruit
farms these are some of the large firms there are also many small and medium sized
companies. The products offered by these companies are available in departmental
stores and also small neighborhood shops. Providing the quality food on a reasonable
and affordable price is the major challenge of the food industry. The food processing
company has come a long way from traditional food items to a wide range of value
added products. Food industry in Pakistan still holds the potential to grow more and
more due to a very strong agricultural base that is the backbone of the food industry.

INTRODUCTION TO MITCHELL’S:
Mitchell’s is the oldest food company in Pakistan and it was established in 1933 by
Francis J Mitchell under the name of Indian Mildura fruit farms Ltd but later after
independence the name was changed to Mitchell’s fruit farms. Mitchell’s has gone from
strength to strength they not only extended their product line but also maintained the
quality standards. They are also exporting to different [arts of the world like UK, USA,
Canada, The Middle East and South West Asia. They provide a wide variety of products
with all the goodness of nature.

BRIEF HISTORY:
Francis J Mitchell arrived in Bombay from Scotland at the end of World War I. At that
time Francis was an old man of 60 years and he had to find a way to look after his
family. He leased land from Punjab Government that was near Renela Khurd and was
sandwiched between Arterial Lower Bari Doab Canal and Lahore/Karachi railway. He
started the business by growing grapes to sell them as dried raisins. The company was
named as Indian Mildura Fruit farms ltd in 1933.After independence the company’s
name was changed to Mitchell’s Fruit Farms Ltd.
MITCHELL’S VISION AND MISSION:
1. To be a leader in the markets we serve by providing quality products to our
consumers while learning from their feedback to set even higher standards.
2. To be a company that continuously enhances its superior technological skills to
remain internationally competitive in this day and age of increasing challenges.
3. To be a company that attracts and retains competent people by creating a culture
that fosters innovation, promotes individual growth and rewards initiative and
performance.
4. To be a company which optimally combines its people, technology, management
systems and market opportunities to achieve profitable growth while providing
fair returns to its shareholders.
5. To be a company that endeavors to set the highest standards in corporate ethics.
6. To be company that fulfills its social responsibility.

PRODUCTS OF MITCHELL’S:
Mitchells has a wide range of products that fall in following categories:
1. Beverages
2. Preserves
3. Ketchup and Sauces
4. Ready to eat
5. Ready to cook
6. Pickles and Chutney’s
7. Spreads
8. Sweet Spread
9. Vinegar
10. Chocolates
11. Sugar Confectionary

COMPANY VALUES:
1. Health
2. Innovation
3. Quality

PRODUCTION AND MANUFACTURING:

The major purpose of the production department is to produce quality goods by using
the resources of the organization. They are males as well as females in the production
department. There are two types of labor force that are Permanent work force and
Contract work force. The permanent workforce is working in factory on a permanent
basis and they receive all the benefits during service and after service on the other hand
the contract workforce is working on a contract basis they don’t have no incentives and
benefits as permanent work force. There are two major section in the production
department that are Groceries and Confectionery. In the groceries section different
groceries products are produced like Jams, Ketchup, Pickles, Sauces, Squashes,
Sweet corn, Garden peas, Vinegar etc. and there are two shifts working in this section
but it can be increased and decreased according to the order of the planning
department. The confectionery section is divided into three sub sections Countline
section, Sugar confectionery section and molded section. In these sections chocolates
and candies are produced.

DISTRIBUTION:
They adopted the channel structure for distribution. Their believe is that the product
should be distributed directly from manufacturer to customer or indirectly through
intermediaries. Sometimes they sell their products directly and sometimes they sell
through retailers. They also export their products.

COMPETITION:
The demand for processed food has recently increased in Pakistan. Due to the
increasing number of working women, school going children and office going men.
Some of the major food processing companies in Pakistan are described below

NATIONAL FOODS:
National foods limited started in 1970, it is basically a multinational company. In start it
was only a spice company but with the passage of time it expands its products. Now it is
leading multi categories of Food Company over 300 different products. National foods
face a lot of challenges like economic booms, globalization, lifestyle of consumer,
technology advancements and they successfully meet the needs and demand of the
customers. National foods changes according to the market trends they can manage
this with its consumer basic and innovative product development. National food limited
is dedicated to improving the wellbeing of society not only through continuous
development but also wide range of corporate social responsibility program. National
food limited create its image through the concept of clean, healthy food all over the
world. National foods holds ISO 9001, ISO 22000, and HACCP certification along with
Sap business technology and it make company drive very strong commitment in quality
and management. National foods initiative to produce hygienic food and reduce time
spend in the kitchen for women, so that people experience rewarding life style with their
loved one and save their quality time as well. National food limited is one of those
companies who are dedicated to supplying their all products of highest quality yet a
reasonable price for worldwide customers. Human resource policy of NFL to hire young
fresh energetic people is to providing job opportunities to many people. Although NFL
has to sustain their glorious brand image and market share among all food companies
in the market.

SHAN FOODS:
Shan foods limited was established in 1981 as a home based industry selling recipe mix
and within no time it get a huge success and now it is a leading spice manufacturer in
Pakistan. Company is also slowly and gradually expanding their business and
operations throughout the globe. Shan export its products to various 65 countries. Shan
decided to launch its very own brand and start a full scale manufacturing unit to the
taste of local public. Shan is one of the largest exporters of quality packaged spices,
mixes, pickles, and desserts with products adding taste and flavors. Shan food always
has an aggressive strategy. Shan is capturing middle class who can’t afford restaurant
or prefer to eat at home. Shan tends to place the brand internationally by getting all
international certification and winning awards. The ware houses of Shan foods are
located in Karachi, Rawalpindi, Hyderabad, and Lahore. Shan foods sponsor different
festivals and competitions for their promotion. Shan foods offer online purchasing of its
products throughout the world not only in Pakistan. Shan food is effectively managing
the demand fluctuation by proper planning and proper safety covers. Inventory
management is very critical process for Shan foods and they monitor it on regular basis
and planned their management accordingly.

SHEZAN INTERNATIONAL:
Shezan established in May, 1964, owned by Shahnawaz group. Shezan is ISO certified
9001-2008 and 22000-2005. Shezan is famous Pakistani beverage manufacturing
company for its best quality fruits and vegetables from its own orchards and it provide a
great taste to the products.Shezan is also responsible for hygienic of any food product.
The product of Shezan Company are soft drinks juices ketchups and jams. This is the
largest mangoes grower company in Pakistan. The company is trying to win local
market and win the competition in juices by adopting modern technology in operational
and marketing sector. The image Shezan wants to develop in the mind of their
customers through promotion campaigns. They have strong brand name and image
also they focus on promotions and maintain the logistics. Today Shezan is the largest
food processing unit. The major threat was to compete Mitchell’s, because Mitchell’s
capture major market share and it was very costly for Shezan to overtake Mitchell’s.
Risk is involved in competing with Mitchell’s. Shezan grab the market only by offering
high quality and better as Mitchell’s gives to his customers. Shezan target market is
above than 60 years of age and their major target market is 20 to 30 years age group
people.

PESTEL ANALYSIS:
POLITICAL ANALYSIS:
Political factors are those, which are directly controlled by the political parties, and
Government they could be able to influence directly in any situation or in any industry.
Therefore, they create a major impact on any industry.
1. As we know in Pakistan there is no stable system and government this disturbs
the system of Mitchell’s fruit farms as every new government comes with its own
system and tax policies.
2. Import and export policies are also changing and this also affects the working as
Mitchell’s imports some products and also exports its products to several
countries.
3. Increasing percentages of tax.
4. As Pakistan is front line state in the war against terrorism so all the decisions the
government takes indirectly effects the company and its operations.

ECONOMIC ANALYSIS:
Economic factors are directly controlled and influenced by the financial institutions like
State Bank of Pakistan (SBP). So they help the industry in giving economic soundness
and provide financial aids to survive in the time of crises.
1. Interest rates also plays a very important role like if the interest rates are high the
company have to obtain finance on a higher interest rate.
2. Exchange rates are changing on daily basis which will also have an impact on
the company’s profits and expenses.
3. As we know in Pakistan Inflation is a major problem so we cannot ignore it.
Inflation have an impact on the company because its imports raw material and
exports products.

SOCIAL ANALYSIS:
Social analysis is directly attached with the people and with the culture in which they are
working if they try to dictate the social factors that create the threats to that industry and
if they work with in the social norms then social factors become the key to success
1. Mitchells have a complete green natural environment.
2. Mitchells conduct health programs for the employees.
3. They also participate in helping other like they helped the victims of Swat,
Balakot and other destroyed areas by providing them food and clothing.
4. Mitchell’s products are very famous among the customers so they keep a good
relation with its customers.
5. They also provide benefits for the retired workers.

TECHNOLOGICAL ANALYSIS:
Technology is the most known word in the modern world so any advancement in the
technology affects the company if they settles them accordingly then it opens lot of
doors of success and achievement if they do not respond toward the advancement then
that particular company goes into the darkness.
1. Mitchells is using the latest technology to complete its operations efficiently.
2. The offices of Mitchells are equipped with latest and updated hardware and
software to connect worldwide with its customers and suppliers.
3. IT professionals are there to resolve the issues and keep the systems updated.
4. Mitchells is spending a lot in its Research and Development department.

ENVIRONMENTAL ANALYSIS:
The food production, processing, transportation, storage, distribution and marketing all
the steps has some impact on the environment. Various food processing, handling and
packaging create different types of wastes which can lead to severe pollution problems.
Legal Factors:
Legal factors include all the laws like consumer laws, employment laws, discrimination
laws, health and safety laws. All these factors affect the operations, cost and demand of
products of the company. Mitchells is following all the Pakistani laws in its context.
 SWOT ANALYSIS:
Threats

Strengths Weakness

Opportunities Threats

STRENGTHS:
1. Mitchell’s fruit farms limited was incorporated in 1933 before the independence
so it is the oldest food company of Pakistan as all the other companies started
their operations after independence.
2. Mitchell’s received ISO 9001 certification in 1998 when they completed their sixty
five years of providing quality products to the customers.
3. Mitchell’s have fully integrated operations they have their own growing and
processing facilities in one location. They have modern equipment, trained
workforce and professional management.
4. They have their own reputation in the market.
5. They are Pioneer in Pakistan for chocolate production.
6. They have variety of products in different flavors.
7. They have export quality products in Pakistan.
8. Mitchell’s have strong financial base.
9. They can compete in food industry because of latest technology and quality
products.

WEAKNESSES:
1. The style of management that they have adopted is bureaucratic and
formalization and centralization is very high.
2. The don’t focus much on promotional activities and advertisements they are okay
with their good repute and brand image so we can say that they don’t focus much
on advertising their products.
3. The availability of the company’s products is very poor.
4. Lack of proper decision making regarding production, purchasing and marketing.
They don’t have any short and long term decision making plan.
 5. Mitchell’s is highly contended with its brand name.
6. Packaging variants are very less.
7. The deficiency is the high cost of the products.
8. The customers are diverted towards other brands due to low cost.
9. Access to distributors is poor.

OPPURTUNITIES:
1. The ratio of working women, school going children and office men has increased
which also increased the demand for processed foods because people want to
save their time and processed food save the time of preparation. This creates a
great opportunity for Mitchell’s to grow.
2. As the market for the food industry is growing and increasing in size this also
creates a great opportunity for Mitchell’s to seek benefits from the growing
market.
3. People now a days are more concerned about healthy and nutritious food with a
measure of calories so this trend also provide an opportunity for food processing
companies.
4. As the fast food industry is also growing which provides an opportunity for
Mitchell’s because ketchup and sauces are used in every restaurant.
5. They company can increase the product range and add flavors to the existing
products and the company can also offer different packaging sizes and styles.
6. The company can also invest in more snacks and they can also add dairy
products.
7. They have an opportunity to target the untapped market segment.
8. Highly skilled and capable engineers are available in their labor market.

THREATS:
1. The competition in the food processing industry is very hard these days as many
companies are joining hands with the multinational corporations for support in
marketing and financial activities.
2. The taxes are imposed in the food items due to which the power of people to
purchase the product is decreased.
3. The market share of competitors is also increasing.
4. The advertising used by the competitors is also very aggressive.
5. They have serious problem with the new entrants due to cost.
6. Poor, macroeconomic conditions.
7. Energy crisis.
8. Rising fuel prices
PORTER FIVE FORCE ANALYSIS:
THREAT OF NEW ENTRANTS:
1. Threat of entry always depends on the extent of entry barriers.
2. Food companies require a large manufacturing unit for its operations which
require a very large amount of investment.
3. Manufacturing unit is highly capital intensive and due to a large investment it is
risky for the new entrants to enter this business.
4. With the new companies in the market the market share is also dropped.

SUPPLIER’S POWER:
1. The foreign suppliers have the power to bargain because some of the material is
not available in Pakistan and the only option left is to import. So supplier can
charge higher prices and the transaction is done through banks by opening the
letter of credit and the buyer has to pay for import duties and transaction costs.
2. There are a large number of raw material suppliers for food industry so the buyer
checks the quality of the products and see if the material meet the requirements
of the buyer and if its affordable for the buyer or not.
3. Another reason is that Mitchells produces its own fruits and vegetables. In this
way backward integration reduces the power of suppliers of raw material.
4. Mitchell’s has a very good repute in the market and it is one of the older company
so many suppliers are in favor of working with Mitchells.

BUYER’S POWER:
1. The buyers have no power because the prices of the products are fix.
2. Competition among the food companies creates problem for the company in
price competitiveness.

COMPETITIVE RIVELRY:
1. The food market is highly competitive because there are a lot of large and small
firms engaged in this industry.
2. The degree of competition is increasing day by day.
3. This competition can cause Mitchell’s to change its premium pricing strategy.

SUBSTITUTES:
As there are many substitutes of the Mitchell’s products in pickles the consumer have
the option to buy Shan’s pickles and when it comes to beverages the buyer has the
option to buy Shezan’s products and when it comes to sauces and ketchups the
consumer has also the option to buy National’s Ketchup and Sauces.

VRIO ANALYSIS:

organized to
capture values

cost to Imitate

rare

Valuable

Valuable
The first question of the framework asks if a resource adds value by enabling a firm to
exploit opportunities or defend against threats.
Mitchell’s ads value as it is the same quality as Shan, National and other competitors in
every aspect so it creates value which is not a competitive disadvantage for Mitchell’s.

Rare
Resources that can only be acquired by one or very few companies are considered
rare. Rare and valuable resources grant temporary competitive advantage.

Mitchell’s uses its own farm fresh fruits and vegetables which is an advantage for them.

Costly to imitate
a resource is costly to imitate if other organizations that doesn’t have it can’t imitate, buy
or substitute it at a reasonable price. Imitation can occur in two ways: by directly
imitating (duplicating) the resource or providing the comparable product/service
(substituting). So in Mitchell’s there are many other organizations that provide the same
range of products so they have to work harder to create competitive advantage.

Organized to Capture Value

the resources itself do not confer any advantage for a company if it’s not organized to
capture the value from them. A firm must organize its management systems, processes,
policies, organizational structure and culture to be able to fully realize the potential of its
valuable, rare and costly to imitate resources and capabilities. Only then the companies
can achieve sustained competitive advantage.

As the market size is increased so the company had to work hard in order to capture
value there are many areas where company’s products are not available.

Core Competencies:
Core competency is an organization's defining strength, providing the foundation from
which the business will grow, seize upon new opportunities and deliver value to
customers. A company's core competency is not easily replicated by other
organizations, whether existing competitors or new entries into its market. Their core
competency is that they have their own farms and use their own material and provide
better quality products and their competitors.

CRITICAL STRATEGIC/COMPETITIVE ISSUES:

Internal Issues:

Main internal issue are of:

 Management:

As the management style is bureaucratic and rigid which discourages initiatives and
creativity. The organizational goals are neglected in this style because the lower level
seek for their own personal objectives due to which the overall objectives of the
organization are neglected. Organizational rules are regulations are given more priority.

 Strategy:

They need to properly communicate with their employees the Vision and Mission of the
company and the goals and objectives. There is no Marketing activity in order to
generate demand. Promotion of the product is very important in order to capture value
and create demand.

External issues:

 Opportunities

They have many opportunities as the demand for processed food in increasing with time
due to increasing number of working men and women. They can capture the market by
introducing new product categories or work on the existing products by providing
different packaging. As fast foods and restaurants use sauces and ketchups so this also
creates an opportunity for Mitchell’s to provide their sauces and ketchups to different
restaurants in the brand name of Mitchell’s.

 Threats:

Shan, Shezan and National are also providing the same products which creates a very
high competition so Mitchell’s have to create their own value and demand in order to
remain stable in the market. Many new and existing companies are joining hands with
multinational corporations for support in their operations.

Roadmap for next five years for ripple:

technolog
y

add-ons marketing

Mitchell's

market
strategic
positionin
intent
g

Technology:
As Mitchell’s is always good in technology but with the passing time they need to adopt
new technologies for their operations.
Today’s world is more of technology, so dynamic capability creation is that you upgrade
yourself according to upcoming future trend and today’s trend. So the should work on
dynamic capabilities and their upgrading.

Marketing:

Mitchell’s enjoys its good repute and they don’t focus much on advertising and
marketing as it is very important to promote the product so they need to do promotional
and marketing activities in order to capture a market share.
They can market their products in following ways:
 Sponsorship:
They can take big and famous brand of any type whether it’s a clothing brand or
another. They can sponsor them. They can also sponsor games and teams.
 Hoardings:
Mitchell’s can make different hoardings in main areas or near universities and offices
to make people aware of their brand.
 Contests and gaming:
They can arrange different contests and games in schools and universities and play
their advertisement there this can also create awareness.
 Free Products:
Employees of the Mitchell’s can go to crowded areas and give people their products
in small packaging for them to try.
 Advertisements:
They can create innovative advertisements in order to generate demand for their
products and remain in competition.
Market Positioning:

Mitchell’s can position itself in mass market where they have high opportunities. As
many of the firms are joining hands with the multinational corporations. As many of the
Mitchell’s products are not available in many areas so they can focus on this and
provide their products to the areas where their products availability is less.

Strategic intent:

Strategic intent is what u wants to achieve except thinking about resources you have
what you can do with resources only. As Mitchell’s have no shortage of resources they
have their own farms so they have a greater opportunity to implement what they dream.

Add-ons:

They can add complimentary products with the purchase of any product like with a
large pack of tomato ketchup they can give free small size chilli garlic sauce. They can
also go into new product line and manufacture something different from the competitors
and increase their production line.

CSR:

Plantation in Pakistan is a hot trend in Pakistan. They can arrange an activity for
planting trees that will be open for everyone and they can give free products like
candies and chocolates to the people. In Ramadan they can provide the poor people
with grocery packages that would contain some useful food items for Ramadan and
some of their own products.
CONCLUSION:
As the competition in the food industry is increasing day by day many small and large
sized firms are entering into this industry and the products categories are also similar in
the situation it is very important for Mitchell’s to create value in order to remain in
competition. They also need to focus more or marketing and promotional activities as it
is very important to create awareness of product and they can also sponsor their
product. They should try to become as much cost efficient as possible. Mitchell’s need
to create and implement proper strategies to create competitive advantage. Mitchell’s
can maybe go to different product line as well.