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Established 1979
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Marketing/Sales Manager Muhammad Basharat
Auditors
Admin dept
Age: 18-50
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CEO Raja Muhammad Iqbal
Director Marketing
Raja Zahid Iqbal
Production workers
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Morning Bread provides non-gluten and high fiber, both baked goods and items to
health-conscious and taste-finding consumers. Special considerations are made for all
common food items such as dairy, yeast, wheat, and eggs.
Example of items:
۞ BREADS
Bran Bread Add fiber to life. MB Bran Bread freshly baked for health
conscious customers. This bread contributes towards the daily intake of
fiber to help maintain the right balanced diet.
Plain Bread This freshly baked and nutritious bread was one of the first
products to be introduced in the Pakistani market by MB.
۞ BURGER BUNS Oven fresh buns are a treat by themselves. It is baked by
using only the very finest of ingredients.
۞ CAKES PLAIN
۞ CAKES FRUIT
۞ RUSKS
۞ COOKIES
۞ SHEERMALS
۞ BISCUITS
Spelt flour is the most common wheat-alternative flour as it has the same characteristics
as wheat which provides similar taste; consistency and behaviors creating goods that are
just as good as any wheat baked good.
MARKET SEGMENTATION
The target market consists of three groups:
THE LOW INCOME GROUP C CLASS:
The low income group is moving form high calorie breakfast to low calorie breakfast.
The customers who are least bothered. The easy customers come in this category.
THE HIGH CLASS A GROUP:
This group comprises the most difficult customer group for MB. This group is the most
difficult to satisfy in terms of quality. Unfortunately this group pertains to residents of
F-6, F-7 and posh area of Islamabad
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THE NORMAL B GROUP:
For these normal items and breads are made. The most MB earns form this group.
Source: (Marketing Manager)
VITA BREAD
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Strengths: Makes spelt bread, and other items (same as MB)
Weaknesses: Does not produce a wide selection or large quantity of non-wheat goods.
Their main focus is wheat goods.
WONDER BREAD
CONTINENTAL BREAD
Strengths: is having a network with famous Islamabad stores like Best Price. It is
available Almost at every store of Islamabad.
PART 2 – STRATEGY AT MB
2.1 MISSION
MB aims to offer high quality bread (baking). It makes Products at a competitive price
and available technology to meet the demand of the middle- to higher-income local
market area residents. MB will base on (and currently bases) its growth and profitability
on:
۞ A primary focus on authentic products forms the biscuit and bread world.
Rusks, buns, fruit cakes, plain cakes, plain bread, and bran bread, cookies,
Sheermals. The products are distinctive in terms of quality, price and customer
satisfaction.
۞ A strong brand (MB) recognized all over which consumers trust blindly and feel
good while consuming.
۞ Clear leadership in its specialties.
2.2 VISION
MB vision is to be a market leader in all the specialty products they are offering. They
aim at pursuing leadership positions in the bread market. They aim to reach there by
getting a good economic value for their company, attain a strong competitive position in
the competing markets and exceed customer expectations for quality and value. They will
benefit from getting new networks with retailers. They aim to measure their performance
by customer feedback and loyalty, market leadership, returns, sales growth.
The competitive edge is the quality of goods. MB use only organic flours of the highest
quality that create incredible non-gluten goods that can't be matched anywhere else in
city. Other bread making firms do not emphasize on these things.
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POLITICAL:
MB sales and business is highly affected by political or country situation. For example, if
due to strikes roads are blocked from Rawalpindi to Islamabad, MB faces problems in
delivering items to Islamabad retailers or stores. Bread and other food items are
perishable; they need to be consumed quickly. Due to road blocks, strikes and other
issues, business is heavily affected.
ECONOMIC:
High inflation rates in Pakistan have led to higher production costs. MB is hardly getting
or managing to get a margin of 5%. Sugar and ATTA shortage have led to these things.
Their production costs are higher due to inflation (7pc). Sugar and ATTA (flour) both are
used for bread making or other baking. The baking industry overall may face a recession.
SOCIAL:
During the month of RAMADAN, sales are lowest. Bakeries earn the highest revenues.
(By offering aftari products and enjoy the most revenues). Diet conscious people who
have knowledge of what is to be consumed, and how to take care of diet.
TECHNOLOGICAL:
MB is using old bread making technology.
LEGAL:
MB plans to get ISO certified. It ensures nothing about product safety or people
working in the MB factory.
MB is producing and selling biscuits, breads and cakes mainly. MB seems to strengthen
each product’s leadership in region and create a market for it. The leadership is
expressed as a strong market position and highest market share in the bread making
business. The CEO is the biggest strategist at MB. CEO adds value to the company by
allocating resources and himself negotiating with the top managers. The managers and
other people cooperate fully and decision making is agreed upon. The CEO himself
guides managers about certain business issues. The CEO and managers are quick at
decision making and decision delays are avoided.
2.5 RESOURCES
To achieve these, MB has the following resources. MB is staying in the competition and
wants to outperform it as well. It has some threshold competences and resources to stay
in the business.
2.5.1 THRESHOLD PRODUCT FEATURES
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Shape, low price and good quality, being provided by all the bread making firms
(DAWN, WONDER, VITA) and local bakeries.
2.5.2 AVAIALBLE RESOURCES
Land, labor and capital: (production costs, trained employees, in time delivery of
products to general stores.
PHYSICAL RESOURCES
The available resources to MB include physical resources like bread making machines,
building (production plant), and production capacity.
HUMAN RESOURCES
It includes human resources like knowledge and skill of people.
FINANCIAL RESOURCES
The financial resources include capital, debt and creditors. MB has less financial
resources (venture capital) and more profit reinvestment.
INTANGIBLE RESOURCES
Goodwill is an intangible resource and adds value to MB since 1979. These are the
threshold resources for MB as well
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Chakwal, Tallagang, and Chakwal as well. The nature of competitive environment is
stable and mature. MB is not a cost leader.
The business strategy is further linked with marketing and finance strategy.
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dimensions that MB is meeting (strikes and road blocks impose problems). Every day
MB cars rush to deliver products to stores in Rawalpindi and Islamabad.
Flexibility
MB is not flexible. It offers little range of products.
2.8 MB FINANCIAL STRATEGY
MB is facing problems in raising capital, just like any other small business. Its ability to
raise capital is low. It does not want to go for debt financing. MB strategy does not
contain an optimal capital structure to offer the lowest WACC. The main mode of
financing is unleveled. This is where the financial strategy is integrated with the
corporate level. The CEO wishes to keep business away from markup. (Equity is more
expensive than debt). MB is a private business, no shares at KSE or Initial Public
Offerings for investments. Running the business effectively and ability to finance
business without debt is a part of their strategy.
2.9 MB MARKETING STRATEGY
MB current marketing is weak. DAWN and VITA are keeping celebrities like Pakistani
film stars. MB doesn’t focus on it. In the beginning, it focused a lot on TV ads, but now
does not much capital/ cash to spend on advertisements. Though sales and marketing
people are doing a good job, they get customer feedback about the product.
Their strategy focuses on serving a niche market with quality goods. MB wishes to
become a part of to achieve these goals, they are currently providing:
۞ Focusing on good retail relationships with middleman
۞ Quality baked goods for everyone to enjoy at a fair price.
2.10.1 SALES STRATEGY
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۞ Bread sales in the summer months will be slightly higher since more people will
be having BBQs and picnics requiring items such as hamburger and hotdog buns.
۞ Bread and cakes sales will be, and are actually, higher in March and April because
of the food-oriented moderate weather. Summers also prove to be profitable since a long
day, and a breakfast is a must.
۞ The sales will decline in Ramadan since people do not eat to have breads and
rusks, the diet and eating pattern changes in Ramadan.
۞ During monsoon, bread catches fungus quickly and sales decline a little bit.
Source: (CEO & Marketing manager)
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Date: 01-10-07
Interviewee: Raja Muhammad Iqbal
Designation: CEO and Owner
Interview Duration: 3 hours
Interviewers: Sadaf Fayyaz, Wajiha Arif
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Food Production
IT/Net
Crafts
Professional services
Financial Services
Not-For-profit
Other
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Very superior to some competitors
Superior than them
In line with competition
Below (inferior)
Very inferior as to competitors
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Date: 01-10-07
Interviewee: Raja Muhammad Iqbal
Designation: CEO and Owner
Interview Duration: 3 hours
Interviewers: Sadaf Fayyaz Wajiha Arif
Q1 What is the corporate level strategy of morning bread? Would you like to share
it with us?
Ans: The CEO is the main strategist of the company. Since it is a small, private business,
the CEO has played a role in transferring the values of his ancestors to the lower level.
Hence the
idea was to keep business interest free. The financial strategy is mainly affected by this
value.
Q2 How value is added to different parts of the organization?
Ans: The CEO adds value to different parts of the company.
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Q4 What is the diversity of products? Does the company have many product or
single product line?
Ans: The company has a plan to expand its product line. Currently the company has 1
product line (only breakfast and tea stuff). The competitor DAWN bread has a broader
product line. It has started offering FROZEN PARATHS as well. These can be
refrigerated for months and are not as perishable as bread.
Q6 What is the business level strategy of Morning bread? How does it compete
successfully in markets?
Q 7 How does it get advantage over its competitors? (like DAWN, WONDER and
VITA BREAD)?
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Q10 To what extent is the company meeting customer needs?
Ans: The sales are in line with the competition.
Ans: Improved packing, hygiene, cost cutting programs, to achieve economies of scale,
product improvement, waste production to a least, to maintain a network with retailers,
Q 12 What changes are taking place in the environment? Will these changes affect
the business?
Ans: Definitely, the government instability is the biggest change. High inflation gives us
least profits. Economic changes like atta shortage also affected our business badly. Sugar
crisis also had a dreadful impact on business. (sugar used in making cakes, cookies,
biscuits, etc.) Government elections and road blocks also affect our business. Because
bread has a small life. Perishable product. It has to reach the retailers in time. Otherwise
it’s no use.
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Q15 What are the core competencies of Morning Bread? (in terms of people, HR,
product)? What is it that gives you an advantage over DAWN and VITA?
Q 17 What is the threshold product features? (What are the product features that
are almost same for DAWN and VITA as well?)
Ans: Details in report.
Q18 What are the threshold resources? (that makes you stay in the business)
Ans: They include HR, financial, intangible and physical. (Details in report)
Q19 What are the unique resources (Difficult to imitate for MB)?
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Q 20 How do the corporate level (The CEO) adds value to business?
Ans: Details in report
Q22 How does MB considers the expectations of owners in developing its strategy?
Q23 What latitude is given by owners to allow management to develop and pursue
strategy?
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