Pakola Strategic Report 2n352w

INTROCUTION & HISTORICAL BACKGROUND Pakola is a line of fruit flavored soft drinks, originally introduced in Pakistan in 1950 by Haji Ali Muhammad. It is produced by Mehran Bottlers (Pvt) Ltd. It is the first nationally branded soft drink of Pakistan. Hence its name Pakola meaning 'Cola of Pakistan.' The original green color Pakola ice cream soda is still popular in Pakistan. However, other Pakola flavours, like Pakola Lychee, have gained popularity. Another famous type of Pakola is Pakola Orange, which is an orange soda with an ice cream taste. It is also available in most Asian shops in the U.K. The drink itself is a very bright green color, much like the can, and tastes unlike most North American soft drinks. It has a distinctive and strong taste. Pakola have also launched their milk. Pakola brand name is owned by Teli Family and currently Zeeshan Habib is the owner of Pakola carbonated drinks and Yasin Teli, is the owner of Pakola flavoured milk. Yasin Teli is also the bottler for Pepsi Co for Sindh and Balochistan province.

CORPORATE PROFILE Pakola is one of the most popular brands in Pakistan. The brand was created on 14th August, 1950. As per our slogan, “DIL BOLA …. Pakola”, we believe that Pakola is the heart beat of the nation and with its amazing taste holds the potential to ride the taste buds of the consumers at home and abroad. Although the green drink “Pakola Ice Cream Soda” is anonyms with the name Pakola, but that’s not all, Pakola gives sensation by bottling other fruity flavors namely Pakola Orange, Pakola Lychee, Pakola Raspberry, Pakola Fresh Lime and Pakola Vino. Our Quality Food Safety and Environment Standards Mehran bottler is the 1st bottling plant is South Asia. Which has been certified to integrated management system based on (ISO 9001: 2000), (ISO 14001: 1996) and (RVA HAC) standard. Our quality and food safety system follows the FDA GMP requirements and codex. Our products are manufactured under strict CGMP and Hygiene controls. Our Technical Team Mehran bottlers has well experienced people in technical side. There experiences and on going trainings make them more confident and prepare to face all challenges. Painting the Globe Green Pakola is Pakistan's national drink but its might is spread all over globe. It’s the only Pakistani soft drink which is available in America, Africa, Australia, Afghanistan, Canada, Middle East, New Zealand and The United Kingdom. Production Mehran bottlers operate one of the most modern can filling plant in Pakistan with a filling capacity of 200 cans per minute. The plant is fully computerized and conforms to the highest international quality standards. Apart from the above, Mehran Bottlers also operate a bottle filling plant with a capacity of 240 bottles per minute. The plant can fill both glass and pet bottles of various sizes.

Distribution Pakola is distributed nation wide through our network of vehicles and distributors. The company maintains a fleet of trucks for operations in the Karachi base market. Human Resource The company employees 300 personnel at its Karachi plant. Constant efforts are initiated by the management to train and upgrade the employees and to provide better training and working environment.

Products of the Company

Carbonated Soft Drink         

Pakola Ice CreamSoda Pakola Orange Pakola Lychee Pakola Raspberry Pakola Guava* Apple Sidra Bubble Up Double Cola Diet Bubble Up

Mineral Water 

Vital

Flavored Milk Based Beverage     

Pakola Milk Ice-Cream-Soda Pina Colada Mango Rose

Analysis of Vision and Mission Statement of the Company Vision (Actual)

“Pakola has and will fulfill its promise to provide international

quality beverages made with the finest ingredients to its consumers and come up to their expectations at all costs”.

Mission (Actual)

“The company mission is to provide its consumer all over the

globe with quality beverages with a vast variety that guarantees consumer satisfaction an also provide opportunities for growth to its employees and the communities in which they operate”.

ANALYSIS OF MISSION Component of mission statement

Description

Addressed or not?

Customers Products or services

Who are the firm’s customers? What are the firm’s major products?

yes yes

Markets

Geographically, where does the firm compete? Is the firm technologically current? Is the firm committed to growth and financial soundness?

no

Technology Concern for survival, growth, and profitability Philosophy Self-concept

Concern for public image

no yes

What are the basic beliefs, values, aspirations, and ethical priorities of the firm? What is the firm’s distinctive competence or major competitive advantage?

no

Is the firm responsive to social, community, and environmental concerns?

yes

no

Concern for employees

Are employees a valuable asset of the firm?

yes

VISION STATEMENT (PROPOSED) It is our vision to be the best and leading provider of food and beverage products in Pakistan, and among the top ten food and beverage companies in the world, by continually challenging present conventions and always staying a step ahead of the competition.

MISSION STATEMENT (PROPOSED) It is Mehran Bottlers’1 mission to be the number one food and Beverage Company in Pakistan by providing our customers with the highest product quality in of taste, experience, and satisfaction. We will ensure this through an unwavering dedication to the continuous development of our products and processes ensuring that we remain best in class. We will strive to hire the most competent and dedicated employees whose work ethic will set the standard in the industry. We will be paymasters, as we strongly believe that human resource is the only asset that truly appreciates over time. We will also be a responsible social corporate citizen, and strive to enhance the quality of life in the markets we serve.

External Factor Evaluation Matrix

Pakola received a score of 1.94 in the external factor evaluation. This means that they are not currently well equipped to take advantage of opportunities in the external environment, nor defend against potential threats. Of the key external factors, the opportunity of health conscious trend in lifestyles got the highest rating because this has become a huge market which most major players in the industry are already tapping into with their diet products. Apart from Diet Bubble-up, Pakola is not catering to this potential gold mine of a market. Engro’s entry into the food and beverage market with Olper’s milk has presented Pakola with a competitive challenge. Launched a little after Pakola launched its line of milk products, Olper’s had the backing of a massive marketing and advertising campaign that clearly communicated their position and proposition to consumers. Pakola’s weak branding choices regarding its milk products reflect this ineffectiveness in communicating to end-s. The company stretched its Pakola brand name to its UHT milk as well as to its flavored milks, when the name stood mainly

for their ice-cream soda cola drink in the minds of consumers. Therefore, by stretching the brand name to milk, they create a mental conflict in s, between fizzy carbonated colas, and pure clean milk. This mistake coupled with ineffective marketing has put Pakola in this situation.

Competitive Profile Matrix

Pakola received a score of 1.95 in the competitive profile matrix. This low figure is representative of Pakolas’ inability to leverage its competitive advantage of unique tasting flavors successfully. This inability stems from the company’s lack of effective communication of their offering and its uniqueness. This is one of the major mistakes companies make when following a differentiation strategy, they assume that consumers will recognize the difference that they offer. This is exactly the mistake that Pakola has made. The areas where Pakola has taken a beating are in market share and distribution. From a strategic viewpoint however, distribution is the area which Pakola should target in the short run if they hope to achieve any type of success. Advertising programs that are basically demand-building exercises are useless if the product has little market reach and is not meeting the created demand. Therefore, before concentrating on marketing activities in the hopes of increasing market share, Pakola needs to strategically outsource their distribution setup to a distribution company such as Muller and Phipps, with the expertise in how to effectively increase a company’s reach into the

market. In due time the company should build up its own sales teams so as to make distribution a core competency of theirs. Yet they should trust an established distribution company in the shortrun to improve its product availability.

Internal Factor Evaluation Matrix

Pakola received a total score of 1.86 in the internal evaluation. This signifies that the company has a weak internal system and is not able to effectively manage any of their strengths in a meaningful manner. Also of their weaknesses, it is worthy to note that their weak distribution setup had the most weightage. Therefore, from our internal factor analysis we can form two possible strategies. One is the formation of a structured and competent distribution network through the enabling of sales force teams.

SWOT Matrix

Of the several strategies detailed above, we will now focus our discussions towards two of the main strategies that should be undertaken in the near future; 1. Hire Muller and Phipps to handle distribution concerns 2. Introduce diet versions of current products By allowing an experienced distribution expert like Muller and Phipps to handle its distribution,

Pakola can instead focus its short-term resources towards the structuring of its organizational setup. The issues with Payolas’ management setup are the root cause of its lackluster strategic business performance, and must be addressed before the company can expect extended success and profits. The second strategy that they can enforce is the introduction of diet versions of their current product portfolio. By tapping into this market they would be able to hit two birds with one stone. They would be targeting those consumers whose lifestyles revolve around healthiness, and also they would be targeting adults who wish not to drink extremely sweet sugary drinks.

SPACE MATRIX FINANCIAL STRENGTHS Return on Asset (ROA)

2

ENVIRONMENTAL STABILITY (ES) Rate of Inflation

Leverage

3

Technological Changes

-1

Net Income

2

Price Elasticity of Demand

-2

Net Asset

3

Competitive Pressure

-4

Return on Equity

1

Barrier to entry into the Market

-2

2.2

Environmental Stability (ES)

-2.4

Financial Strengths

(FS)

(FS)

-3

COMPETITIVE ADVANTAGE (CA) Market Share

INDUSTRY STRENGTH (IS) -2

Growth Potential

5

Product Quality

-1

Financial Stability

4

Customer Loyalty

-2

Ease of entry into the market

6

Technological know-how

-1

Resources Utilization

4

Control over supplier & Distributors Competitive Advantage (CA)

-2

Profit Potential

6

-1.6

Industry Strength (IS)

5

Financial strength = Environmental stability =

+2.2 -2.4

Competitive advantage Industry strength =

=

Y-axis: X axis:

=

2.2 + (-2.4) 5.0 + (-1.6)

-1.6 +5.0

=

-0.2 3.4

SPACE MATRIX FOR PAKOLA

Pakola is positioned towards a competitive approach due to its unique competitive advantage and the strength of the industry it is operating in.

BCG Matrix

Pakola bubble up Pakola orange

Blue Ocean Strategy CONCLUSION 1.

Induct a creditable and capable Human Resource Function, capable of

2.

Inducting a highly innovative and talented Marketing Department (which

currently does not exist in the organization) This Marketing Department will: •

Carry out extensive, accurate and decisive market research laying strategic

importance to market intelligence, consumer insight and modern techniques of marketing based on scientific research, and putting these to strategic use through effective communication of these decisive elements with the strategic level management. • Exert itself to marketing the product to the already brand loyal consumers in order to consolidate (and in the process also reacquire any of it’s lost market share) them while also targeting newer potentially loyal markets in it’s attempt to gain market share, but this targeting of the newer markets will only happen once the ‘Critical Distribution Issue has been resolved’ (which is one of the key reasons why Pakola continues to remain stagnant or reclining when it comes to market share)

• Outsource its Distribution function to Muller and Phipps, the best in distribution in Pakistan, temporarily, to make it’s over-hauling easier to bring about and at the same time