1.0 Executive Summary BD food of Bangladesh plays significant role from the beginning of its operation in our country. Now a days, BD food consider as one of the leading consumer based company with a marginal market share in our consumer based food industry. Due to their high market growth and low market share they are consider to be in the cash cow position according to BCG matrix growth. BD Food is in the growth stage and that’s why they follow corporate level strategy with vertical and horizontal integration. Because of their diversified product they can maintain their market share even though one particular product is in the dead position of product life cycle. In economic analysis, we have shown the recently changed factors in worldwide food sectors. Like, ADB forecasted that the Bangladesh would register the least gross domestic product (GDP) growth in the current fiscal year due to the impacts of global recession. BD Food industry’s sales did not get affected due to inflation or recessions. BD food’s exports rose 41.04 percent to $ 4.11 million in the January-March period of the current fiscal year, backed by competitive prices and up market buyers’ shift to ethnic snacks as recession squeezes pockets of the consumers in the western economies. Quarterly sales report of each product shows that all products have met targeted sales units expect for Mango Pickle and Beef sausages. Mango Pickle could not compete in the market because competing offers had better taste due to better recipe. Beef sausages experienced low sales because of the Anthrax alert. In addition according to porters five forces model we see that the threat of new entrants in this particular industry is very low. Substitute product for this industry available like square, Pran foods and many others consumer based company operating the market with same category of product. In SWOT analysis we have shown the strength, weakness, opportunities and threat of BD foods. In recommendation part, we have tried to give some suggestion based on our findings and analysis like, Setup organizational mission, goal and strategies than analysis SWOT’s action which can be taken.
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2.0 Background Recently, the world is facing a serious global crisis of recession and inflation. Bangladesh is mainly facing inflation which is causing price increase of almost every product. Most industries are finding it very difficult to cope up with increase in production cost and decrease in sales amount. Sales are decreasing obviously because price of products are increasing, as a result people are very careful about their purchase decisions. This is a challenge every business has to overcome. However, food is something people hardly compromise with. Therefore, the food sector is not harshly affected by inflation. BD foods limited, is therefore in stable position. Most products usually meet with the company’s budgeted units to be sold. Our report is concerning the quarterly sales of the period January to march 2010. Our products names are BD chatni, sauces, chanachurs, frozen foods and spices. We are also exporting these products to other countries especially to Dubai, Saudi Arabia, Malaysia and other countries in Europe. We are providing 100% halal food for people of those and our country. The following pie chart shows and overview of the products on the basis of its units sold in comparative to each product-
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3.0 Company Profile “BD Foods” is currently the most well known household name among the millions of people in Bangladesh and abroad also. Since its inception in 2000, BD foods have grown up in stature and became one of the largest fruit and vegetable processor in Bangladesh. It also has the distinction of achieving prestigious certificate like ISO 9001:2000, and being one of the largest exporter of processed agro products with compliance of HALAL & HACCP to more than 70 countries from Bangladesh including USA, KSA, UK, India, ,Saudi Arabia and different African nations. In 2001 ‘BD foods’ has been registered as private limited company. By the year 2006, BD foods went public. Authorized capital Paid up capital
: Tk. 500,000,000 : Tk. 80,000,000
Business line
: Food & beverage
Number of shareholder
: 46, 81,000
Stock exchange listing
: Dhaka and Chittagong
Number of factories
:1
Location of the factory
: Ghorashal, Palash, Narshingdi.
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4.0 Economic Analysis 4.1 Gross Domestic product (GDP) decline but food sector not affected ADB forecasted that Bangladesh would register the least gross domestic product (GDP) growth in the current fiscal year due to the impacts of global recession. This year’s growth at 5.6% is lower by 0.6% point of the previous year’s achievement. Activity in the manufacturing sector decreased for a sixth month in January (-3.1%). Export-oriented subsector was particularly cold as the volume of merchandise exports decreased 7.0% in January. The volume of wholesaling activity continued to fall in January (-3.4%). But the wholesaling of food product increased.
4.2 Impact due changing inflation: In 2009, inflation in our country was 9.10. Beginning of the year 2010, inflation
slowed
down, but still it is not good enough for Bangladeshi people. They are still struggling to manage their food. On the other hand, globally food price also increased. In the 12 weeks to 22nd march food inflation stood at 9.39% compared with a trade of 8.7% seen in the prior four-week period. So they looked for cheaper food product. It is good news for Bangladeshi food producers because of cheaper prices compared to their food product. As a result BD food took advantage of this opportunity and experienced high export sales in most of its popular products, during the period of January2010-March 2010.
4.3 Even if recession is going on but food industry a “Sound Investment”: The food industry is a particularly attractive investment due to the low risk factor it offers, especially in light of the recent economic slump. People always need to eat which sustains the food industry and makes it a stable economic prospect during tough times. Therefore, BD Food industry’s sales did not get affected due to inflation or recessions.
4.4 Food export rise 41 percent 4
BD food’s exports rose 41.04 percent to $ 4.11 million in the January-March period of the current fiscal year, backed by competitive prices and up market buyers’ shift to ethnic snacks as recession squeezes pockets of the consumers in the western economies.
Export by Commodities (January-March 2010)
Commodities
Million US$
Share %
Frozen Food
5.32
4.23
Agricultural product
7.62
0.72
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5.0 Products BD food limited is highly motivated and dedicated towards producing and delivering high quality and tasteful products. Our products gained quick popularity among Bangladeshi citizens, when it was first introduced in the market, after immense anticipation. Our products are BD pickles, snacks, spices, sauces and frozen foods. In the period January to March 2010, we have experienced satisfactory sales in most of our products. Sales summary of each product, for the above mentioned period has been reported in this section of the report 5.1 BD Pickles and chatnis: Pickle is a special traditional food item loved by people from the Indian subcontinent, especially Bangladeshi people. Thus, these categories of product always obtain successful sales. There are three flavors of pickles and chatnis manufactured by BD foods limited in the bottles of 400 grams, which are: i.
BD Boroi chatni
ii.
BD Tarmarind chatni
iii.
BD Mango pickles Sales unit of chatni for this quarter(In context of Bangladesh) Months
Boroi Chatni Units sold
Tamarind Chatni Units sold
Mango pickle Units sold
January February March Total units sold
63500 63567 63275 189442
63567 72033 75011 210611
52001 52533 63677 168211
From the above table we can see that during this quarter BD chatni and tamarind chatni had sales above 200,000 units respectively. Thus these two flavors have reached the company’s sales target. Whereas, mango pickle failed to hit the standard company target of 200,000
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units by a margin of 31789 units exported sales unit for the period where Boroi pickle 100,000 units and tamarind pickles 100,000 and mango people 50,000 units. 5.2 BD spices: Spices are ingredients that are regularly used in Bangladeshi dishes. Spices are manufactured by BD foods limited, especially by keeping Bangladeshi kitchens and dishes in mind. BD foods ltd mainly produces two types of spices. Packets come in two different sizesi.
BD red chilie powder (100 gms , 300 gms)
ii.
BD turmeric powder (100 gms , 300 gms) Sales unit of BD Spice for this quarter(In Context of Bangladesh) Months
January February March Total units sold
Red chili powder Units sold 100 gms 66000 85367 90501 241868
300 gms 30776 36324 40336 107436
Turmeric Powder Units sold 100 gms 66540 88367 89994 244901
300 gms 30544 36675 40120 107339
From the above table we can see that both red chili powder and turmeric powder have successfully reached the company’s’ quarterly sales target of 200,000 units for 100 gms packs and 100,000 units for 300 gms packs. BD food exported sales unit for the total period were 100,000 units of red chili powder for each 100 gms and 300 gms packs. Exactly same amount for turmeric powder as well. 7
5.3 Snacks: Chanahcur is a popular snack for Bangladeshi people. It is a great way to pass time. Because of its popularity we have launched our own chanachur in 2006. We have 3 sizes of packets available in the market. Normal Chanachur: Mainly this chanachur is for kids and people f who donot like spicy foods. The sales unit of 500gm packets of chanachur were 4500, 250gm packets of chanachur was 2500; mini packets of chanachur were highly accepted in the rural areas because it is very cheap. From this package we had satisfactory profit. Sales unit of chanachur for this quarter(In context of Bangladesh) Months
January February March Total units sold
small Units sold Normal 20000 25000 20000 65000
Jhal 15000 30000 25000 295000
Large Units sold Normal 15000 20000 20000 57000
Jhal 10000 22000 15000 45000
5.4 Frozen Foods: Frozen food makes our life very easy. It saves our time. Sausages are very popular among all frozen food, because children like it. As a result, children are our main target. There are two types of flavor, Chicken and Beef and there are 100% halal. Sausages always give us satisfactory profit.
Sales unit of frozen foods for this quarter(In Context of Bangladesh) 8 pcs
12 pcs 8
Month
Beef Unit sold 2500 2000 3500 8000
January February March Total
Chicken Unit sold 3500 3000 4000 10500
Beef Unit sold 3000 2500 4000 9500
Chicken Unit sold 4000 3500 5000 12500
From the above table we can see that during this quarter chicken sausages had sales of 10000 units. Thus this flavor has reached the company’s sales target. Where as, beef sausages failed to hit the standard company target of 10000 units. Nuggets: Nuggets are highly acceptable among every age group. Mostly it is popular among teenagers. Nowadays, we are so busy that we don’t have that time to spend on preparing food. Nuggets are very tasty and 100% halal. We are very happy with its profit. Sales unit of nuggets for this quarter(In Context of Bangladesh) Month January February March Total
8 pcs Unit sold 4000 3000 4500 11500
12 pcs Unit sold 5000 4000 4500 13500
From the above table, we can see that during this quarter nuggets have sales above 10,000 units thus; this product has reached the company’s sales target. Exported sales unit for the total quarter was 5000 for sausage and 7000 for nuggets. French Fries: There is not a single person who can resist this product and as a result it is highly popular and very profitable.
Sales unit of French fries for this quarter(In context of Bangladesh) Month
small
Large 9
January February March Total
7000 8000 9000 24000
6500 7500 8500 22500
From the above table we can see that during this quarter, French fries have sales above 20,000 units. As a result sales target of 200000units have been reached.
6.0 Findings
Porter’s Five Forces Model
Threat of New Entrants (Low) - High cost for capital investment. - High start up cost. - Long time needed to capture market share.
Threats of Substitutes (High) - Different substitutes are arising in home as well as from abroad. 10
Rivalry among the existing competitors (High) -
Bargaining power of supplier
(Low)
-
-
- Prices of raw material are comparatively low.
Competitors arise in previous years. Carbonate drink are taking a strong market position. Introducing new product line by the rivalry.
- Government incentives toward farmers.
Bargaining power of buyer (Low) -
Due to current economic slump countries like USA, UK is more depended on Bangladeshi food products and beverage. Because of high quality and cheaper price.
SWOT Analysis
Strengths
Potential Market in USA, KSA, UK, India and some other countries. Low manufacturing Cost Innovative product.
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Threats
Weaknesses
Local competition Foreign Competition Price wars with competitors Competitors have superior access to channels of distribution Taxation
SWOT Analysis
Relatively new fields Distance and transportation cost Perishable item Competitors have better recipe for mango pickle.
Opportunities
Huge demand Developing market
Moving into new market segments that offer improved profit.
Huge market
7.0 Recommendation
1. They should implement vertical integration for their raw material collection. That means they should concentrate on producing raw material by their own rather than collecting from the suppliers. 2. They should concentrate on continuous improvements of their product. It also involves new product development. 3. Quality can be considered as competitive advantages for them. So they should be concern about it and try to implement it in every phase of their organization.
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4. Reengineering will be a good option for them. It involves with high-tech machinery and innovation. 5. Pay more attention on exporting products. 6. Build more strong relationship with marketing intermediaries, such as distribution channels. 7. Since, factory is situated relatively far from target markets, transport cost can be reduced by making arrangement of company’s own transport system rather than depending on other goods delivery firms. 8. Come up with better improved recipe for Mango pickle.
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8.0 Conclusion Overall, BD Food has been stable in the period January – March 2010. Despite of local and global recession, it has managed to makes sales according to its budget and of course profitably. There are strengths and opportunities, which can be used in favor of the company. On the other hand, it should make serious efforts to overcome weaknesses and minimize threats. It should continue to follow its current sales and marketing strategy, in order to perform with such success.
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9.0 References
Website:
1. http://www.thedailystar.net/ 2.
http://www.khaleejtimes.com (Dubai based Newspaper)
3.
http://www.bd-foods.bd.com
Publications: 1. Annual report of BD foods 2. Product manual of BD foods
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10. Acknowledgement
At the very beginning we would like to express my deepest gratitude to the almighty Allah for giving us the strength and the composure to finish the task within the scheduled time.
This is high time to convey our special gratitude to our respected teacher Mr.Moinuddin Chowdhury, faculty of Independent University of Bangladesh, for his careful suggestions, guidance and support to complete this report. Special thanks should go to those people who really tried their level best to make this report effective and successful like:
Raisa Hasan Priya, CEO of BD Foods Ashraful Alam Abir , Managing Director of BD Foods Tasnia Tabassum, Head of the HR of BD foods Azizul Hakim Auvi, Head of Marketing of BD Foods
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