Introduction: Historical Background

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1. INTRODUCTION:

i. HISTORICAL BACKGROUND

Haleeb Foods Pvt. Ltd. started its business in 1984 with the name Chaudhry Dairies Ltd.

The plant spreads over 37 acres of land which is situated at 62 kilometers from Lahore

District Court, with a capacity to process 80,000 liters of milk per day with a labor force

of 150 workers. The production process started in 1985 with UHT (Ultra High Treatment)

liquid milk such as an initial product which became very popular in no time. Haleebs

administrators claim that their plant adopted the latest technology for milk processing and

thus it had an edge over other around twenty plants in competition including Milkpak as

all other plants were based on obsolete European technology. The idea behind UHTinvestment was to provide consumers with the best quality of packaged dairy and food

products that no other company can produce. About four years later, the company decided

to enter a joint venture with Friesl and Frisco Domo (FFD) of Netherlands and continued

the activity from November 1989 to December 1991. This joint venture did not last very

long because of the change in global strategy of FFD and was amicably dissolved. Haleeb

then went on its own till December 1998 till it signed a contract with Candia that is a

market leader in France. Under this agreement, the company launched Candia value

added liquid milk products all over the nation. The advantage of this agreement that

Haleeb took is that Haleeb now has access to the latest technique of production, technical

know-how, etc. The major aim was the quality production and that is why Haleeb

discarded some of its products with the likelihood of loss in quality. This made the

company gain many successes on different frontiers and, now it competes very well with

all other multinationals and has an edge over all national companies active in the dairy

industry in Pakistan. The important happenings are described below.

1984 Founded as Chaudhry Dairies Limited

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1987 Started sale of packaged milk under Haleeb brand

1989 Established equity partnership with CC Friesland, Netherlands

1991 Discontinued the partnership with Friesland Frico Domo

1998 Entered in franchise agreement with Cedilac, France

2004 Changed corporate name to Haleeb Foods

2005 New production facility fully operational at RYK

ii. SITUATION ANALYSIS

These days, Haleeb Foods Pvt. Ltd. (Formerly CDL Foods Ltd.) is one of those few

leading national companies. It collects about six to eight hundred thousands liters of fresh

milk everyday from its large number of collection points Located all over Punjab, chills it

at the site and then processes it to manufacture different dairy products. The branded

products that Haleeb manufactures include standardized milks namely Haleeb, Candia,

Dairy Queen, etc. that are ultra heated. It also produces powdered milk namely Nrish.

Other than that it produces butter, cream, desi ghee which is animal fat obtained after

heating and removal of proteins from milk and lassi drink that is milk left after removal

of butter from yogurt. Apart from milk products, Haleeb also produces different kinds of

beverages such as fresh fruit juices under the brand name Tropico, in different flavors

such as Mango, Orange, Apple and Mango and Orange. The company is not only

supplying its products nationwide but also currently exporting its products to

Afghanistan, Bangladesh, Europe, America, etc. It exports desi ghee to South Africa,

cream, milk and fruit juices to Tajikistan, fruit juices to UK, powdered milk and ghee to

Qatar. It is planning to export its products to Canada, Dubai, Uzbekistan etc.

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The Executives of Haleeb Foods claim that the growth rate of Haleeb Foods Pvt. Ltd. is

the highest as compared to any other company in Pakistan (Khan, 2004). Its total sales

grew immensely in last few years. It has given jobs to around 2200 employees which

includes skilled, unskilled and temporaries. Its plant in Lahore runs on 3- shift basis daily

in which every shift lasts for 8 hours that means that the plant works 24 hours a day. As

the company is making products on large scale, it produces a lot of waste as well which is

being disposed off in an efficient way in order to keep the environment healthy and clean

as a respect for the National Environment Protection Laws.

The company is earning high profits and as a result it is sponsoring the welfare of

children as it runs about 600 schools in different parts of the country. Haleeb is also one

of the major tax payers of the country and it claims to be very honest in its taxassessments and paying of tax amount set by the government. The major secret of success

of the company as HBL claims is the practice of honesty in every field and on all

frontiers that are expanding day by day. The company investors and management teams

have unanimously decided since the start that there will be no compromise on quality of

the products. That is why it subjects milk to strict tests on the basis of which there is a lot

of reduction in supply due to rejection which is approximately more then 100,000 liters

per day; a big loss daily. The company bears this loss daily instead of selling it in the

market because they do not want to compromise on quality.

The Company Administration has taken keen interest in refining the environment of its

establishments and it developed all of its sites at the highest aesthetic standards. It has a

very attractive office at 135-Ferozepur Road, Lahore and a beautiful food processing

plant with amazing landscapes 62 kilometers on Multan Road. The plant is not only a

production unit but also has a big warehouse, a mosque, a fair price shop and a guest

house. It has now commissioned a similar type of a plant with a huge capacity in Rahim-

Yar-Khan to serve areas down to Karachi.

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HFL

QAD R & D

PRODUCTION MARKETING

MPD IMPORT & EXPORT

CUSTOMER COMPLAINTS FINANCE / ACCOUNTING

HUMAN RESOURCE ADMINISTRATION

TECHNICAL PERSONNEL DEPARTMENT

SUPPLY CHAIN SALES

iii. THE ORGANIZATIONAL SET UP OF HALEEB

The organizational setup was very interesting in which we observed that they had a

formal structure being followed for the information to go beyond. As at Haleeb Foods

they are using Umbrella branding strategy so they had managers brand wise. The senior

management for Haleeb UHT Milk included Mr. Iqbal Jutt as the Senior Brand Manager,

Mr. Hassan Wajahat Assistant Brand Manager, and Mr. Ahmer Shahzad. Their major

duties are the planning and image building efforts that they can do for their brand. The

training of the personnel is done in house at Haleeb institute of Leadership which is done

by the HR people and the people from related marketing departments. The functional

efficiency is monitored through the sales reports and different survey sessions that are

conducted by the company when they feel need of. TheInterface efficiency was not that

good which in an interview with their employee we came to know that even the co-

ordination between Sales and Marketing team turned out to be a night mare at times.

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ORGANIZATIONAL CHART

The above diagram is of the organizational chart for Haleeb Foods Pvt. Ltd. Thee

structure is a flat and a functional structure.

Advantages of a Flat Structure:

More greater communication between management and workers

Better team spirit

Less bureaucracy and easier decision making

Fewer levels of management which includes benefits such as lower cost as

managers are generally paid more than workers.

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iv. LOCATION OF OFFICE

REGISTERED AND HEAD OFFICE

135- Ferozepur Road, Lahore- 54600

Phone- (042) 111 135 135

Fax- (042) 7589359 & 7590376

PLANT

62- Km, Lahore- Multan Road, Bhai Pheru

Phone- (042) 7511636

(04943) 510874 5

FAX- (04943) 510877

E-mail: [email protected]

REGIONAL SALES OFFICES

Regional Office Peshawar

6-C Saddar Road

Near Jans Bakers

Peshawar Cantt.

Phone: (091) 279238

Fax: (091) 279563

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Regional Office Rawalpindi

Flat No. 15/15, Aftab Plaza

Saidpur Road

Rawalpindi.

Phone: (051) 4426502

Fax: (051) 4426503

Regional Office Multan

20-A, Gulgasht Colony

Multan.

Phone: (061) 221266

Fax: (061) 530927

Regional Office Sukkur

A-39, Sindhi Society

Near Airport Road

Sukkur.

Phone: (071) 31061

Fax: (071) 30679

Regional Office Karachi

Wing Song Palace

Suite No. 203, 2nd Floor

Plot No. 16-17, Block 7 & 8, KCHS

Shahrah-e-Faisal, Karachi.

Phone & Fax: (021) 4315778

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Regional Office Lahore

135- Ferozepur Road

Lahore.

Phone: (042) 111 135 135

Fax: (042) 7590376

v. NATURE OF BUSINESS

The food industry plays a vital role in supplying of food necessities for the survival of

humanity all over the globe. That is basis of installation of plants and factories that

process and manufacture dairy raw materials such as milk for manufacturing a large

number of dairy products that are very popular and are in business since long. This

manufacturing process is very common in the whole world even in the developing

countries.

Pakistan, since its creation in 1947, was in dire need of different forms of products related

to the dairy farming and food industry. This demand paved the way for different

multinational and local companies to make investments in food and dairy sector. Nestle isone of the important examples that set up a business related to food industry. Some local

companies such as Nurpur, etc, also joined the race to meet this rising demand. Later,

many companies came into this business because there was an increased demand in this

sector. Hence, companies with different product types were in competition. Thus, they

were in business and they diversified the spectrum of their products by inclusion of

different types of food brands. The examples are different fruit juices, cheese and butter

etc.

Haleeb joined the caravan little late in early 1980s by the name Chaudhary Dairies Ltd.

(CDL) and developed at a very high growth rate. Its major flagship brand was the packed

Haleeb Milk. This brand had phenomenal sales and was very popular among the

consumers and thus, it forced the management to rename their company as Haleeb Foods

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Ltd after 2000. The company continued processing of milk to produce a large number of

dairy products:

Haleeb Milk.

Candia

Dairy Queen

Nrish

Butter

Cream

Desi Ghee

Lassi drink

Like Nestle Pakistan Ltd, it supplemented its dairy range with the fruit products such as

different types of fruit juices, and also combined different fruit flavors with the dairy

products and came up with a number of significant products which come in the category

of flavored dairy products. The company continued to do a good job with an annual

growth rate around and above 25% per annum since last many years and thus is now

capable of competing with any other national or multinational company in Pakistan.

Building an excellent reputation over the years, Haleeb Foods continues to be at the

forefront of product and packaging innovation. By the grace of God, it has achieved

market leadership in several food categories with a very strong portfolio, consisting of

leading national and international brands Haleeb, Candia, Dairy Queen, Tea Max,

Skimz, Tropico and Good Day. Apart from its extensive nationwide distribution

networks, Haleeb Foods is also serving several export markets including South Korea,

Bangladesh, Afghanistan and the Central Asian states.

Haleeb Foods has the distinction of being the first company in Pakistan to use Tetra Paks

novel packaging formats, Tetra Brick Aspetic (TBA) and Tetra Fino Aseptic (TFA).

Haleeb Foods has also introduced a number of unique products previously unknown to

the Pakistani market, like Haleeb Labban, delicious traditional lassi (buttermilk)

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prepared with pure thick milk and yogurt, Candia Tea Max, cardamom flavored tea

whitener, Candia milk, packed in distinctive food grade plastic bottle, and Haleeb Good

Day, 100% pure and natural fruit juice, free of added sugar, artificial flavors and

preservatives.

All this and more makes Haleeb Foods Pakistans number 1 and fastest growing

packaged Food Company. As of fiscal 2006, its annual turnover is Rs. 9 Billion.

vi. TYPE OF OWNERSHIP

Haleeb is a Private limited company. The private company, as the object of these rules,

has the internal characteristics of a partnership and the external characteristics of a

corporate body. In addition, shareholders are financially and personally deeply involved

in the private company and have no easy exit. These characteristics should be

determinative for a private company statute.

vii. NUMBER OF EMPLOYEES

Haleeb have more than 3000 employees.

viii. KEY PLAYERS

BOARD OF DIRECTORS

Ilyas M. Chaudry

Suleman Daud

Mian Mohammad Amjad

Saqib Ali

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Mohammad Imran Amjad

Mrs. Nasrin Ilyas

Sh.Mohamed Rasheed

Mohamed Ishaque Khan

COMPANY SECRETARY

Salman Z. Siddiqi

AUDITORS

Hameed Chaudri & Company

Chartered Accountants

LEGAL ADVISORS

Mian Iqbal Hussain Kalanuri

2. MISSION/ VISION/GOALS/ OBJECTIVES

MISSION STATEMENT

Build Branded food business to improve quality of life by offering tasty, affordable and

highly nutritional products to our consumers while maximizing stake holders' value

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VISION STATEMENT

Most Innovative and fastest growing food company offering products enjoyed in "everyhome every day"

COMPANY OBJECTIVES

To built maximum market share by providing convenience to the consumers in the form

of products and make sure that the product is available easily and everywhere

VALUES

Enterprise, Empowerment,Accountability,Trust,Teamwork

3. STRATEGIC EXTERNAL AUDIT

i. STEEPLE Analysis

No organization exists in a vacuum; the environment within which the firm has to operate

will affect the way that strategy is both planned and carried out and changes in the

environment is also the most likely reason for making changes in the strategy. Changes in

the environment are also the most likely cause of failure of strategic plans. The most

carefully calculated strategy would be able to drive the market in the favor of the

organization and will maneuver the external environment in the best possible way. Haleeb

Foods like all the organizations they also have to face such kind of environment which is

very dynamic. Being in the market as a challenger they have to face all the external

factors and have to cope up with them accordingly

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S - Social Factors

Haleeb Milk has helped to bring about a change in life style of the Pakistani People by

introducing UHT Milk, as the literacy rate is improving and it is resulting in a better

awareness of the Haleeb UHT treated milk and is helping them improve their sales and

Milk with its basic benefits has helped improve the image and more usage has been seen

in the past years. Special awareness Campaigns can also be launched and can help

portray a better image of the product in front of the customers. The attitudes of the people

are also changing with the passage of time so as a result the usage of open gawala milk is

changing and people are opting out the usage of standardized packed milk

T - Technological Factor

The type of the technology available within the industry states the competitive

environment because creative use of new technology is what often gives firm there

competitive advantage. This environment does not change that much quickly but the

changes that come are strong enough that can change the way the industry is currently

running. Haleeb production process uses UHT (Ultra High Treatment) technology.

Haleebs administrators claim that their plant adopted the latest technology for milk

processing and thus it had an edge over other around twenty plants in competition

including Milkpak as all other plants were based on obsolete European technology. The

idea behind UHT investment was to provide consumers with the best quality of packaged

dairy and food products that no other company can produce.

E - Economical Factor

Haleeb Foods is strongly affected by both the Economic and the Demographic

environment around and have to keep on taking different steps to respond accordingly.

There is no sales tax on the milk. Hence it is a real plus point. Material supply and

shortages are faced by the company for both Packaging and for the product it, as milks

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production is seasonal and keeps fluctuating and adequate steps are required to be taken

in order to keep it working smoothly. Haleeb also dont charge interest on its products

which also makes a huge difference economically.

E - Environmental Factor

As, the environment always effect the way strategies are being carried out and

implemented. Haleeb Foods like all the organizations they also have to face such kind of

environment which is very dynamic. Being in the market as a challenger they have to

face all the external factors and have to cope up with them accordingly. Haleeb have the

strategies to positively engage the staff in work and boost up their moral. Haleeb have a

friendly environmental culture within the organization to make their employees

comfortable and to deal with the external problems. There are few seasons in which the

availability of milk reduces that effect the production of milk and left Haleeb with

fluctuated sales.

P - Political Factor

Haleeb foods also abide by the rules formed by the Government and set their strategies

that are according to the laws and legislations of the Government they are working under.

Haleeb had the monopolistic control over the market when they started selling the Haleeb

Milk in the form of Tetra Pack (brick pack), that was for the first time that milk came in

that form soon followed by the Nestls Milk Pak which as a multinational rocked the

UHT Milk industry of Pakistan. They are not actually bound under any sort of trade

agreements. As far as the employment laws are concerned Haleeb foods abides to laws

set by the government for trade policies, government policies and completes its

responsibilities in a better manner.

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L - Legal Factor

Haleeb foods always stand by the rules and legal conditions imposed by the Government

and set their strategies that are according to the employment laws and legislations of the

Government they are working under. Haleeb always keep its department updated about

what is happening in the sector or milk industry, and that will help them to make their

strategies accordingly. Haleeb have the legal laws like, Minimum wage, working time,

Food stuffs, Haleeb dont believe in Under 18 working, Occupational/ industrial Training,

Environmental regulations, Consumer protection Industry-specific regulations etc.

E - Ethical Factor

Haleeb is well renowned company operating in the milk industry since long. And the

reason for this is importantly their ethical values. They dont sale on credit or on interest

because they consider it unethical and not according to the law of our religion.

ii. PORTERS FIVE FORCES MODEL

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1. THREAT OF NEW ENTRANTS:

The average entrepreneur can't come along and start a large food company. The threat of

new entrants lies within the food industry itself. Some companies have carved out niche

areas in which they underwrite dairy supply. These food companies are fearful of being

squeezed out by the big players. Another threat for many food companies is other food

services companies entering the market.

Capital requirements

Competing in a new industry requires resources to invest. Production of packed products

requires huge investment of financial, human, technical, and marketing resources. At the

moment Haleeb have some threats like from new entrants olpers milk product of Angro

foods.

Economy of scale

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Economy of scale determines entry because they force potential competitors either to

enter on a large scale bases (a costly and perhaps risky move) or to accept a cost

disadvantage. Moreover, new entrants in the pasteurized milk business may encounter

scale related barriers not just in the production, but in the advertising marketing,

distribution, financing, and raw milk purchasing as well, haleeb achieved its breakeven in

1993.

2. BARGAINING POWER OF SUPPLIERS:

The suppliers of food might not pose a big threat, because of the reasons;

Number of suppliers

Raw milk is standard commodity and is available in the open market from a large number

of milkmen. If anyone refuses to sell its product then company can buy it from others

who are already willing to sell to company.

Importance of volume to supplier

Suppliers also have less leverage to bargain over price because the company is

purchasing the large volume of their milk and suppliers dont have much option to sell

milk to others.

3. BARGAINING POWER OF BUYERS:

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The individual doesn't pose much of a threat to the food industry. Large clients have a lot

more bargaining power with food companies. Large corporate clients like airlines and

retailers pay millions of dollars a year. There are large numbers of distributors, who are

buying and distributing the product, so their bargaining power is low and company have

leverage to dictate implement its terms and conditions to distributors.

Backward integration

Another reason of low bargaining power is that no buyer/distributor has the resources to

start involve in backward integration.

4. AVAILABILITY OF SUBSTITUTES :

This one is pretty straight forward, for there are plenty of substitutes in the food industry.

Most large food companies offer similar suites of services. Companies focusing on niche

areas usually have a competitive advantage, but this advantage depends entirely on the

size of the niche and on whether there are any barriers preventing other firms from

entering.

5. COMPETITIVE RIVALRY :

The food industry is becoming highly competitive. The difference between one Food

Company and another is usually not that great. As a result, food industry has become

more like a commodity - an area in which the food company with the low cost structure,

greater efficiency and better customer service will beat out competitors. Food companies

also use higher investment returns and a variety of food investment products to try to lure

in customers. In the long run, we're likely to see more consolidation in the food industry.

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Larger companies prefer to take over or merge with other companies rather than spend

the money to market and advertise to people.

Not only local but attempts by cross border competitors or companies to gain stronger

foot hold in each others domestic market boosts the intensity of rivalry, especially when

the foreign rivals have lower cost or very attractive products. In case of haleeb so far

nestle is the only diverse rival and another player that has just joined the UHT Milk

sector is Olpers, no doubt the competition between nestle and haleeb is quite intense both

are engaged in consistent homework just to break and attract the customer towards each

other but Engro is adding to the competition between the sector.

iii. BCG Matrix

BOSTON CONSULTING GOUP MATRIX

STARS

Dairy

STARS

Dairy

QUESTION MARK

Desserts

QUESTION MARK

Desserts

CASH COW

Bev erages

CASH COW

Bev erages

DOG

Chilled Dairy

DOG

Chilled Dairy

H

I

G

H

H

I

G

H

L

O

W

L

O

W

HIGHHIGH LOWLOW

GR

O

W

T

H

R

AT

E

G

R

O

W

T

H

R

A

T

E

RELATIVE MARKET SHARERELATIVE MARKET SHARE

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The above figure shows the BCG matrix. It is the simplest way to show a companys

portfolio of investment. The different product lines of the company are plotted on the

matrix according to the growth rate of the industry and its relative market share.

As per the market share HFL is the second largest company operating in Pakistan in the

dairy food sector. It lies in the maturity stage of the product lifecycle. It has the largest

production of not only dairy products but also fruits and agricultural products in the

country. It has a well equipped production plant delivering quality products to its

consumers. As far as the BCG matrix is concerned Haleeb is a Star as it has a high market

share and the Industry growth is high as there is a lot of opportunity in this sector and a

lot of companies are coming in the dairy industry.

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iv. SWOT Analysis

Strengths

1) Haleeb has a strong brand image, as it is in the market from such a long period of

time (1986).

2) A company with growing sales and profits over the years

3) Major share holder in the food industry of Pakistan

4) A vast distribution network for Urban as well as Rural areas that make sure that

the product is easily available everywhere.

5) The nature of the products is good, i.e. Quality products, standardized and the

thickest milk in the market.

6) Haleeb has a high capacity to produce 80,000 liters of milk per day.

7) Haleeb Foods has an innovative and a constantly growing product line.

8) Haleeb Foods is a Customer Oriented and social responsible Company.

9) Haleeb have Qualified Work force.

10) Their focus on Research and Development in packaging solutions and periodic

research to judge market trend gives them an edge.

11) First dairy company in Pakistan to get ISO 9002 certification12) Haleeb have a business without interest.

13) Haleeb is not selling its products only in Pakistan but they are exporting their

products to other countries like America, East Asia, Afghanistan, Bangladesh and

Europe.

Weaknesses:

1) Haleeb Foods is comparatively a local company in comparison to its rivals like

Nestle. So, Competing with such giants is a bit difficult.

2) Haleeb have a centralized decision making system.

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3) Low or almost no sales on credit, where as all the other companies in this sector

do this.

4) As UHT treated milk is a highly value added product so the costs also increase

accordingly, so the overall costs are high. As a result the overall price also

increases.

5) Uncertain economic and political conditions of the country effects them as the

product is sensitive.

6) The demand of the market is less then the actual capacity of the production plant

which is also a reason for high prices of the end product.

7) Haleeb foods has comparatively striker terms and conditions.

8) Haleeb was out of the promotional scene from 5-6 months when Olpers was

launched.

Opportunities:

1) Pakistan is the fifth largest milk producing country of the world, where the raw

material is easily available and in abundance so they can increase their production

and sales also by promoting their product in a better way.

2) The general public is currently using the open gawala milk and only 9% is using

the UHT milk so still there is a lot of market available for the company to

capitalize.

3) Haleeb can go for related diversification by providing flavored yogurt, ice cream

and milk products like kheer and firni.

4) Haleeb still have an opportunity to explore more countries for export their

products.

5) Haleeb bottle another opportunity for them to capitalize.

6) Credit policy can be adopted to increase sales of the products.7) Haleeb Foods can go for joint venture with other companies to attract the market

share.

8) A trusted name in products for all age consumers can also go for baby cereals as a

number of people are still brand loyal to them.

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Threats:

1) Competition with Nestle, Engro Foods and the new entrants.

2) Effect of the changing in seasons affects the level of production and

consumptions.

3) Haleeb is currently facing are increase in Sales Tax.

4) Dependency on contractors for the supply of milk.

5) The economic condition keeps on changing rapidly, which result in rupee

devaluation and as the raw materials for packaging are imported which can result

in the end product price fluctuations.

6) Price sensitive people.

7) Milkman providing open milk and even delivering it to the door step.

8) The target market is still small in numbers where as a number of companies have

recently joined the dairy sector in the past 3 years.

SWOT Analysis of Dairy Industry

Strength

Endowed with the very good breed of buffalos and cows

Highest per capita consumption of milk in Asia

Regular culling of less productive/unproductive animals

A high ratio of agricultural land to agricultural ratio

An emergence of commercial dairy farms on a large scale

Weaknesses

Small and scattered animal holding

Prevalence of traditional raw milk marketing system

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Poor quality of milk; lack of remunerative producer price for milk

Milk processing predominantly dependant on obsolete UHT technology

Mushrooming growth of cattle colonies in suburban areas; High cost of milk

Production; a long chain of middle men

Inadequate infrastructure and institutional facilities and support

Low utilization of installed capacity of dairy plants

Poor quality of animal health care and breeding services; lack of professional

management

Opportunities

Huge unsatisfied demand of milk and milk products.

Substantial scope for increasing milk production through improvement in the

marketing system by ensuring a year round remunerative price to milk producers

Increase consumer awareness of healthy eating

Threats

Unregulated imports of dairy products at cheap prices

Inadequate public and private investment in modernization of the sector

Vested interests in perpetuating the dependence on imports of dairy commodities

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SWOT Matrix

SUPER SWOT

Strengths

Haleeb has a strong brand image,

as it is in the market from such along period of time (1986).

A company with growing sales

and profits over the years

Major share holder in the food

industry of Pakistan like Nestleetc.

A vast distribution network for

Urban as well as Rural areas thatmake sure that the product iseasily available everywhere.

The nature of the products is

good, i.e. Quality products,

standardized and the thickestmilk in the market.

Haleeb has a high capacity to

produce 80,000 liters of milk perday.

Haleeb Foods has an innovative

and a constantly growing productline.

Haleeb Foods is a Customer

Oriented and social responsibleCompany.

Haleeb have Qualified Work

force.

Their focus on Research and

Development in packagingsolutions and periodic research to

judge market trend gives them anedge.

First dairy company in Pakistan

to get ISO 9002 certification

Haleeb have a business without

interest.

Haleeb is not selling its products

only in Pakistan but they areexporting their products to othercountries like America, East Asia,

Afghanistan, Bangladesh andEurope.

Weaknesses

Haleeb Foods is comparatively

a local company in comparisonto its rivals like Nestle. So,Competing with such giants is a

bit difficult.

Haleeb have a centralized

decision making system.

Low or almost no sales on

credit, where as all the other

companies in this sector do this. As UHT treated milk is a highly

value added product so the costsalso increase accordingly, so the

overall costs are high. As a resultthe overall price also increases.

The income level of the people

is not that high or the favorableincome level group is still small.

Uncertain economic and

political conditions of thecountry effects them as the

product is sensitive.

The demand of the market is less

then the actual capacity of theproduction plant which is also a

reason for high prices of the endproduct.

Haleeb foods has comparatively

striker terms and conditions.

Haleeb was out of the

promotional scene from 5-6months when Olpers waslaunched.

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Opportunities

Huge unsatisfied demand of milk and

milk products.

Substantial scope for increasing milk production through improvement in

the marketing system by ensuring ayear round remunerative price to milk

producers

Increase consumer awareness ofhealthy eating

SO

Increase production of quality milk to

cater the unsatisfied demand.

Through effective marketingstrategies increase the awareness of

the benefits of UHT milk

They should go in the product line ofpowdered milk.

They should start the range of

powdered milk for infants andchildren below 12.

They should increase their exports.

They should cater the wide range ofunsatisfied demand by improvingtheir distribution networks

WO

As per the increase demand of the

milk they should start doing sales oncredit.

They should make a strong

distribution system to cater to availthe full benefit of the growingmarket.

They should adopt affectivemarketing strategies for the

promotion of their product.

ThreatsUnregulated imports of dairy

products at cheap prices.

Inadequate public and privateinvestment in modernization of the

sector.

Vested interests in perpetuating thedependence on imports of dairy

commodities

STInvest more on the dairy product line

as there is still a large chunk of themarket which require modernization

Introduce new technology for quality

assurance and better productivity.

Increase the Plant Capacity

WTThe co-ordination between different

departments of HFL should beimproved it will lessen the

bureaucratic cost and increase the

efficiency of the company.

Haleeb has to change its perception

of milk for tea only, as it is not takenas a milk for general consumption, so

it looses a large chunk of consumersin the packaged milk market

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INTERNAL FACTOR ANALYSISKey Strategic Factors Weight Rating Weighted Score

STRENGTHSBrand Image 0.08 4 0.32

Growing Sales 0.03 3 0.09

Market Share 0.05 3 0.15

Distribution Channel 0.08 4 0.32

Product Quality 0.07 3 0.21

Capacity 0.08 4 0.32

Innovation 0.04 3 0.12

Customer Oriented 0.02 3 0.06

Qualified Work force 0.01 3 0.03R & D 0.05 4 0.2

Business without Interest 0.02 3 0.06

Exporting 0.06 4 0.24

WEAKNESSESLocal Company 0.05 1 0.05

Centralized Decisions 0.09 2 0.18

No Sales on Credit 0.06 2 0.12

High Price 0.05 2 0.1

Uncertain Economic &

Political Conditions0.03 1 0.03

Market Demand 0.05 2 0.1

Striker Terms And

Conditions0.03 1 0.03

Promotion 0.05 2 0.1

Total 1 2.83

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v. Competitive Profile Matrix (CPM)

EXTERNAL FACTOR ANALYSISKey Strategic Factors Weight Rating Weighted Score

OPPORTUNITIES

Raw Material

Availability0.1 4 0.4

Market Capitalization 0.08 3 0.24

Diversification 0.07 2 0.14

Exports 0.07 3 0.21

Haleeb Bottle 0.04 1 0.04

Credit Policy 0.06 2 0.12

Joint Ventures 0.06 3 0.18

THREATSNew Entrants 0.08 3 0.24

Changing Season 0.05 2 0.1Sales Tax 0.06 3 0.18

Suppliers 0.07 3 0.21

Economic Conditions 0.05 2 0.1

Price Sensitive People 0.06 2 0.12

Gawala Milk 0.1 4 0.4

Small Target Market 0.05 2 0.1

Total 1 2.78

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REASONS

The IFE matrix for HFL is given above. Note that the strength for the company isResearch and Development, Pakistan based and having a highest production capacity so

got 4 rating. The major weaknesses are Price competitiveness customer service and

planning for the future state of the HFL. The total weighted score of 2.98 indicates this

large milk Production Company is above average in its overall internal strength. But its

Critical Success Factors Weight

HALEEB NESTLE OLPERS

Rating Score Rating Score Rating Score

1 Research & Development 0.08 4 0.32 3 0.24 3 0.24

2 Advertisement 0.09 3 0.27 4 0.36 3 0.24

3 Financial Position 0.09 3 0.27 3 0.27 3 0.27

4 Market Share 0.07 3 0.21 4 0.28 2 0.14

5 Product Quality 0.08 3 0.24 3 0.24 3 0.24

6 Price Competitiveness 0.11 2 0.22 3 0.33 3 0.33

7 Management 0.10 3 0.30 4 0.40 3 0.30

8 Global Expansion 0.08 3 0.24 4 0.32 3 0.24

9 Customer service 0.06 2 0.12 3 0.18 3 0.18

10 Sales And Distribution

Network 0.09 3 0.27 4 0.36 3 0.27

11 Production Capacity 0.07 4 0.28 3 0.21 2 0.14

12 Alliances 0.08 3 0.24 4 0.32 3 0.24

Total

1.0 2.98 3.51 2.76

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very close to average limit as well. So it really needs to improve its weaknesses and build

its strength.

4. CORE COMPETENCIES & KEY SUCCESS FACTORS:

There are several core competencies of Haleeb, given below;

Haleeb foods Pvt. Ltd has been able to build a good brand name in a number of

years. There are several consumers who are loyal to the brand and do not shift to

other brands. Building a good brand name is not easy. It takes years to build a

brand image by providing the best quality to its consumers which Haleeb Foods

have done. They have consistently delivered which provides a competitive

advantage to the company of having a good name in the market.

Haleeb Foods Pvt. Ltd. Is only the recognizable food company which is doing

business without interest, which means that they do not take loan or take

advantage of the interest income which they can easily do? If they want loan and

they cannot find anyway out they go for Islamic Financing like mudarba and

musharka. It is their strength as majority of the people in Pakistan are Muslims

and Muslims are advised to remain away from interest income.

Haleeb has one of the most modern plants which has the latest technology and has

a high production capacity. They produce 80,000 liters of milk in a day which is

not a small amount of milk. They have an advantage of higher production as

people are demanding more and more packed milk so they can meet the

increasing demand easily.

Haleeb is not selling its products only in Pakistan but they are exporting their

products to other countries like America, East Asia, Afghanistan, Bangladesh and

Europe. Exporting has opened up new markets for them and it is a source of

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revenue generation for such a company. It is difficult to grow tremendously only

in Pakistan because of the number of players in the industry but exporting does

not limits their sales spectrum but also give them a potential to enter many other

emerging markets.

Haleeb has one of the most extensive distribution networks across the nation. It

has one of the best distributions if we compare it with other major players like

nestle and all because Haleeb has over 600 distributors across Pakistan which

enables them to deliver their products into far of small towns as well as villages. It

is their major strength which is driving their revenues very quickly.

Different ISO certifications about the quality control and environmental

management that Haleeb holds. These certificates prove that Haleeb has been

taking keen interest in keeping its environment clean and healthy and in

producing quality products.

KEY SUCCESS FACTORS:

Research & Development

Financial Position

Market Share

Product Quality

Price Competitiveness

Management

Global Expansion

Customer service

Network Sales And Distribution

Production Capacity

Alliances

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5. strategies under taken at :

Strategies undertaken at:

1. Corporate level

2. Business unit level

3. Functional or departmental level

Corporate Level:

The corporate level is more concerned with the big picture than other levels of

management. It decides the overall strategy of the organization, works closely with the

various stakeholders, relates to banks and stock, raises capital, makes major acquisitions,

divestitures, joint ventures, licenses, etc, deals with the media, provides internal auditors

and deals with the external auditors, provides training programs and makes major human

resource decisions such as the compensation of senior executives.

At Haleeb Foods they are using Umbrella branding strategy so they had managers brand

wise. The senior management for Haleeb UHT Milk included Mr. Iqbal Jutt as the Senior

Brand Manager, Mr. Hassan Wajahat Assistant Brand Manager, and Mr. Ahmer Shahzad.

Their major duties are the planning and image building efforts that they can do for their

brand. The training of the personnel is done in house at Haleeb institute of Leadership

which is done by the HR people and the people from related departments.

Business Unit Level:

A strategic business unit may be any profit center that can be planned independently from

the other business units of ones corporation. At the business unit level, the strategic

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issues are about both practical coordination of operating units and about developing and

sustaining a competitive advantage for the products and services that are produced.

It is the entity that concentrates on a specific business. They do not need to develop plans

for areas outside of their own specific missions. Typically, the business level is concerned

with the total of applicable individual functions that make the business operate. It is at

this level that identifying the right individual products and the right market niches is most

critical.

In Haleeb there are countless departments and SBUs and they have their own hierarchy.

Like business unit for milk and bottle water is separate, ice-cream, yogurts have also

separate SBUs. So they gave idea for developing a product, do segmentation and define

the target market.

Functional Level:

As we are living in the dynamic world and in this rapidly changing environment,

customer taste is also, so right decision at the right time is always needed in order to

perform effectively and keep organization top of their desire. Output of one department

will be the input of other, so every department should timely in order to keep the

costumer long with their company offering otherwise the costumer will switch or move to

competitor products.

The functional efficiency is monitored through the sales reports and different survey

sessions that are conducted by the company when they feel need of.

Quality Assurance Department

Quality assurance department play a very important role in any production concern

organization because organization are depended on them, no other department can do

anything if the product is not made according to customer demand or the standards which

the organization maintain.

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Research And Development

Research and development also play a very major role in an organization. This

department is directed by the marketing department which gives directions for

conducting tests if any product is having some problem pointed out by the customers.

Production Department

Production is the functional area responsible for tuning inputs into outputs through a

series of production processes, and the production manager is responsible for making

sure that raw material are provided and made into finished goods effectively.

Marketing Department

Marketing department of any production concern works like the heart of human body.The marketing department is the unit of organization, traditionally charged with carrying

out specific tasks that are deemed to be marketing (such as advertising, market

research).

6. MANAGEMENT STRATEGIES

Marketing Strategy

Haleeb has been working since 1984 and in the number of years haleeb has shifted its

strategy a number of times. Haleebs best days were when haleeb was focusing on their

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premier product which was Haleeb milk. They used to keep a focus on this product and

very well marketing research was done and a strategy was formulated which worked out

very well for Haleeb. This strategy was to focus on their premier brand while introduction

of new products was also being done. Haleeb gained a market share of 46% by using this

strategy.

Current Strategy:

According to porters generic strategy Haleeb is following product development and

related diversification strategy. The companies following differentiation strategy try to

achieve class leadership by providing unique characteristics to the product/service. In

other words the aim is to create a highly differentiated product and marketing programme

like design or brand image, customer service or dealer network. If a firm has strengths in

R&D, design, Quality control and marketing, this could be one of the strategic approach

routes.

Haleeb is doing the same it is continuously doing product development. Just recently

haleeb launched a new product line which is of deserts and haleeb started of their business with dairy but then later on it introduced beverages as well so Haleeb is

following the differentiating strategy.

i. Human Resource Department

The ultimate success of a company lies in HR. to cater the issue of HR; HFL has a very

extensive HR department which dictated HR policies, having a well documented

pertinent material.

Human Resource Management at Haleeb strives to achieve organizational goals and goals

of the employees through effective personnel programs, policies and procedures.

This department is mainly responsible for:

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Recruitment and Selection of Employees

Available position is advertised in newspaper

Department Coordinator receives C.V. and other documentation.

Short listed candidates interviewed by department manager.

Final candidates interviewed by a panel of:

HR Director

Two Relevant Managers

Formulating Training and Development Programs

Most training is on the job training

Every department has its own training program.

Workshops

Step by step job instruction training.

Job Description

The nature of their work and their working hours.

Salaries

Conducting Performance Appraisal

They have claimed that in this Performa, the target achieving tendency of the employee

and his/her behavioral traits such as follows are measured:

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o Communication skills o Leadership qualities

o Work organization o Development orientation

o Result orientation o Strategic vision

o Team player o Business knowledge

o Self-confidence o Critical reasoning

Besides that there are some grey areas which need to be under consideration like there is

a lack of co-ordination with other departments for recruitment schedule. HR is not

playing a substantial role in motivating their employees. Although they had claimed that,

they are having a strong motivational system but they are some what lacking in giving the

sense of achievement to their employees

ii. Administration

Haleeb has a very extensive admin department. The responsibility of this department is to

take care of myriad issues ranging from buying new vehicles plus to arrange some sport

events for their employees. All purchases except for raw materials are done by the admin

like disbursement of stationery and office equipment. For the purchases of the new item

the concerned people has to approve CAPEX from the Admin

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iii. Quality Assurance

Quality assurance department also has a very vital role in an organization. Quality

assurance department is involved in developing systems to ensureproducts or services

are designed and produced to meet or exceed customer requirements. These systems are

often developed by using a cross-functional approach. Many organizations are dependant

on this department.

Quality is synonymous with Haleeb. Haleeb has a separate department for QA and they

are following strict control policies. Every product made by Haleeb guarantees the use of

quality materials and processing. This is all due to the strict Quality Control standards,

observed at every stage of the production, from raw materials to dispatch Department.

The Research Development and Control Department makes stringent requirements on

quality control, which help in working consistently towards attaining better results for

customers. The incoming raw materials and end products leaving the factory are

constantly checked to make sure the items produced meet the expected standards. To

ensure constant quality and improvement this department managed by qualified

scientists.

For instance as the milk comes in HFL production plant, their first job is to take sample

of the raw milk and check the suitability of milk either the milk is able to proceed further

or not. If the sample passes, they start measuring those standards they are following till

the end they again test the products for the suitability to shipment

Quality Policy:

We are committed to

1. Build branded food business to improve quality of life by offering tasty, sage,

hygienically processed, and affordable, highly nutritional food products through

environment friendly processes to our customers while maximizing stake holders'

value.

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2. Meet the requirement of all relevant legislation and regulation related to consumer

satisfaction & safety, environment and other applicable laws etc.

3. To prevent pollution through controlling levels of harmful emission, effluents and

other wastes.

4. Contribute to safe and healthy environment for our country.

5. Promote mutual trust with customers, suppliers, employees, shareholders and

community.

6. Provide all the necessary resources for the continual improvement in quality,

safety of our products, processes and environment

iv. Marketing Department

We are living in an age of Marketing. Marketing Department is of paramount importance,

because it plays a link between the consumer and the manufacturer. The function of the

Marketing Department is to ensure that consumers receive what they need. If marketing

department works effectively and efficiently, the whole organization is on a smooth run.

It also plays a key role in the operations of the organization. Haleeb has a vibrant

marketing department too. This department is responsible to take charge by reviewing the

sales report and if any deal is going on regarding packaging, distribution or any other

concern, it contacts with the representative persons. Current market demand is estimated

through the distributors. They also carry out market surveys for new as well as existing

products.

v. Finance

Finance is also an important issue. Haleeb also has a well equipped finance department

with the resource but at times there are issues with delay in work from their side main

problem which we have observed is in the costing of some new items.

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vi. Decision Making System

Haleeb is using Centralized Decision making system. Although they have claimed that

they empower their employees to become more participative and more committed

towards their organizational goals. But in reality its a nightmare.

vii. Motivation and Incentive Techniques

Haleeb claims that they are using the best practices to motivate their employees like

recognizing the efforts of employees, giving them rewards and incentive, occasional

bonuses, giving commission on achieving targets etc. But in reality they are some what

lacking in that.

7. MARKET ANALYSIS

The market coverage strategy that Haleeb has opted is Product Specialization and the

competitive positioning strategy that they have adopted is product development .They are

now the market challengers and using frontal attack strategy.

According to the current situation what they currently do is that they opt for Market

Penetration. The main things that can be done here are:

Maintain or increase the market share of current products

Secure dominance of growth markets

Restructure a mature market by driving out competitors; this would require a

much more aggressive promotional campaign, supported by a pricing strategy

designed to make the market unattractive for competitors

Increase usage by existing customers

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1. SEGMENTATION

The Segmentation technique that Haleeb foods have adopted is very simple and straight.

They have just divided the market into segments which are class wise i.e. A, B, C, D.

The Haleeb brick Pack is targeted for class A and B, where as for the classes B and C

they have made their product Haleeb Dairy Queen, where as for B, C, D they have

designed Haleeb Reshami pack that is produced or packed only in the their Raheem Yar

Khan plant and is targeted for the mentioned above segment.

2. TARGETING

The targeting strategy that Haleeb Foods use for the Haleeb brick pack is

Undifferentiated for all the market that is they have a same marketing mix for the

complete market and they take the whole market that includes all the people with

different usage of the product. In such a targeting decision a basic product would be

offered to the whole market that includes almost all age groups and different life styles.

3. 4 Ps AUDIT

PRODUCT ANALYSIS

i. Variety

Haleeb as a whole has a large variety of dairy products that they produce in house and

they keep on going for related diversification whenever they get a chance of doing so. At

Haleeb they have a big variety of milk which comes in brick pack, fino packaging and at

the same time their recently introduced Haleeb Reshami pack, all are the different variety

of ways in which they present their product.

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ii. Design


novel packaging formats, Tetra Brick Aseptic (TBA) which is very safe if we analyze it

from health point of view. The color of the packaging is Blue with a traditional white

flower on it, which has become the symbol or icon of the firm.

iii. Features

Haleeb is pasteurized, homogenized, and standardized pure UHT milk of the highest

standard. The features of the product are vast in such a way, that the products usage is

positive in many ways as its a must for someone who is looking for a healthy life style

plus its also got a good place in the religion that milk is preferred on many other things,

other than that the UHT treated milk is valued among the public as they are getting more

awareness day by day to how to adopt a healthy life styles and in such a way the product

features are more and more for the customer.

iv. Brand Name

The brand name Haleeb itself has become a trusted name, as they have been in market

from many years and they have been striking the consumer mind from 21 years that is

quite a long period of time if we compare it to the industry total time period. Haleeb

Foods was established in 1986 and its first product was Haleeb milk. Since then, it hascontinued to provide quality products to its consumers with product and packaging

innovations.

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v. Packaging


novel packaging formats, Tetra Brick Aspetic (TBA) and Tetra Fino Aseptic (TFA).

Packed in easy to open, 6-layered Tetra Pak Brick Aseptic packaging, it comes with a 3

months shelf life. It is Haleeb Foods premier brand, and the choice of quality-conscious

consumers who only go for the best.

vi. Packing Details:

1000 ml: 12 packs/carton

500 ml: 12 Pack/shrink-wrapped tray

250 ml: 27 Pack/shrink-wrapped tray

PRICE

The current pricing method being used at Haleeb Foods for Haleeb Brick Pack is Going-

Rate Pricing in which a company sets prices based on what the competitors are charging.According to the person we met at Haleeb Foods they said, Haleeb Foods and Nestle

Milk Pack sit together and come up with the final retail price that they will charge. Rest

of the companies then start charging according to that price.

i. List Price

This is the price that is charged by the retailer to the end consumer for the product andthis is the same all over the market that is, it is same in all provinces and other

geographical locations.

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ii. Discounts

Discounts are usually related to the distributors and the retailers which are confidential

and vary. Discounts can be given to retailers as well but that would be same for all.

Different discounts can be given to the wholesalers and distributors on the factors like

how much quantity they pick from the company and the same goes for the retailers. Other

than that it is also depends on different factors like payment terms, that is credit or cash

and how quickly do they pay off if they are doing so on credit basis like the rates would

be different if the days of credit taken are longer. Seasonal discounts are also given like in

winters the supply from the milk farms is high and the company also has to get rid off the

production as well so they are a bit relaxed with the term and conditions.

iii. Payment Period and Credit Terms

Haleeb Foods does not offer its products on credit terms; they do it mostly on cash but in

only some cases if they do it, they merely do for a maximum two or three day credit only.

This is also an important factor on which they seriously need to think on as their

competitors are doing this quiet frequently.

PLACE

i. Channels

It is the mechanism through which goods are moved from the manufacturer to the user. At

Haleeb foods it is very simple, the finished products move from them to the wholesalers

and they make sure that they deliver it to each and every retailer.

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ii. Coverage

With their large number of distributors they make sure that the product is available almost

everywhere and to make sure about such issues they have divided areas among

distributors who are responsible for the product availability and on time delivery.

iii. Locations

Haleeb brick pack is a frequently used item and can be termed as a product that fulfillsthe basic needs of the consumers, so it is made sure that it is available at almost every

grocery store and convenience stores and as Haleeb is such a brand that is in the market

from many years the retailers also are happy to keep it.

iv. Transportation

The products are delivered through the distributor vans in case of Haleeb brick pack.

PROMOTION

Haleeb Foods have been using both the Push and Pull Strategy in order to do the

promotion of their product. The budget that they have recently allocated is all you-can-

afford budgets. After staying quiet static over the last semi-year or so in terms of its

promotional activities Haleeb Foods came up with some extremely heavy advertising

campaign through its TVCs and other Print media tools starring some industries mostexpensive models and some exquisite and eye catching sets which really attracted the

consumers attention. The campaign through the print media was also exclusive and was

very heavy and could be seen at every single retail outlet in Lahore which is their most

valuable market area wise that they are catering to. Their advertising campaign was not

only targeted for the consumers but that campaign was also especially designed for the

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retailers as well in which they were not only given certain posters to place on their shops

and walls outside their shops but other than that the retailers were given different hand

outs in which the company, Haleeb Foods asked the retailers to give assured attention to

their product and also explained about the heavy advertisement campaign that they had

launched for their product. In that hand out they had asked the retailers to give some

special shelf space to their product as a certain pull would be created after all that

campaigns on TV and through the print media. Other then this all the staff which goes

into the market is an ambassador of the company and portrays the image of the product

and Haleeb foods also realizes this fact and plays special attention on such small aspects

and has been taking steps to keep on monitoring the performance of such employees and

has certain instructions that are to be followed by the distributors while they do their

work. In their current marketing campaigns they have been extremely focused about

clearly getting their message that is Garha Doodh i.e. Haleeb is the thickest milk as

compared to other milk, as they are required to portray their product as Unique from the

other ones in such a market. As they have a leader like Nestle Milk Pak to challenge so it

becomes more difficult and challenging for them to challenge such a giant in this ever

dynamic environment. In addition to this as their product which is of daily usage and

involves low Buyer involvement they strictly need to keep on focusing intensely on this

part of the marketing mix which from the last couple of weeks they have been trying to

do so. During the Eid days they had shown immense TVCs of Haleeb and that seemed to

be a re-launch of their product i.e. Haleeb Brick Pack. The methods of promotion used by

Haleeb Foods for the Haleeb brick Pack in their recent advertising campaigns are as

follows:

Affiliate Program, Banner Advertising, Billboards, Flyers, Magazines, Radio,

Sponsorship of Related Events, Television Commercials etc.

4. Market Share

Haleeb has a 28% of the total market share. They are the market challengers. The market

leader is of Nestls with 36% of market share.

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5. USPs

The key to effective selling in this situation is what advertising and marketing

professionals call a "unique selling proposition" (USP). Unless you can pinpoint what

makes your business unique in a world of homogeneous competitors, you cannot target

your sales efforts successfully.

Pinpointing your USP requires some hard soul-searching and creativity. One way to start

is to analyze how other companys use their USPs to their advantage. This requires

careful analysis of other companies' ads and marketing messages.Haleeb have certain USPs.

1. They have thickest milk available in the market. And it is milk best use for

making tea and coffee.

According to their slogans:

Chai banae khoob Haleeb--- Sub se garha doodh Haleeb

2. They have recently launched Creamy Custard, it is a unique concept introduce

by Haleeb and according to their slogan

Haleeb Custard----Its Creamy!!

3. The premium cream processed hygienically from pure fresh milk, Extra cream is

added in Haleeb Cream to make its taste luxuriously rich and have extra

nutritional value.

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6. COMPETITIVE ANALYSIS

Nestle Pakistan

The strategic priorities of Nestle Pakistan are claimed to be focused on delivering

shareholder value through the achievement of sustainable, capital efficient and profitable

long-term growth. Improvements in profitability would be achieved with due respect to

quality and safety standards at all times.

In line with the above objective, Nestle Pakistan aims at growing into a number one food

company in Pakistan in the shortest possible time with the unique ability to meet the

needs of consumers of every age group - from infancy to old age, for nutrition and

pleasure, through development of a large variety of food categories of products with

highest quality.

Nestle Pakistan envisions that the company should develop an extremely motivated and

professionally trained work force, which would drive growth through innovation and

renovation. Special training programs have been designed for employees at each level to

keep up with and develop this vision.

The study concludes that Nestle has a significantly high growth rate (36%) and has grown

and developed at a high pace in short span of time. On the other hand Haleeb has a

market share of 28%. The major contributor toward this growth and development are

human resource, marketing and sales departments. The major contributor is its

appropriate strategy particularly its relationship with the social and environmental

sectors. Perhaps this is the reason that it in spite of being a multi-national has been well

accepted in Pakistani culture. There are ample chances of its survival in future.

Keeping new players such as Olpers, and the old ones like Haleeb, Nestle focused

more on advertising.

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Nestle have been experiencing a constant increase in cost with raw material

contributing the larger part of this increase. Haleeb having their own suppliers so the

raw material cost is bit low.

Nestle maintained its value of gross profit margin around or above 30% to ensure

that it has a strong control over its costs, and the efficiency of production. But on the

other hand, Haleeb faced a bit of down fall when Olpers introduced their campaign.

7. POSITIONING

Haleeb foods have been positioning its product by its attribute and by usage or with

respect to its application. Positioning is the place where Haleeb has not been able to

convey its message in an effective way as their slogans have tend to show the target

public is bored of their slogans, according to their slogans Chai banae khoob Haleeb

They have portrayed their product with a limited usage i.e. it is only good for making tea,

where as it could have been positioned as for drinking purpose as well and other then that

it could also have been positioned for usage in the Kitchen i.e. for cooking and for

making sweet dishes as well. Positioning is the only way through which a company can

increase the functionality of its product and can portray it as a more useful product. In

their recent campaign their tag line was:

Aik Garha rishta umer bher k liye, which did not sound that much touchy to us.

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8. FINANCIAL RATIO ANALYSIS

1) Liquidity Ratios

LIQUIDITY RATIOS

Current Ratio=Current Assets/

Current Liabilities

Quick Ratio= Current AssetsInventory/

Current Liabilities

Remarks:

YEAR CURRENT

RATIOQUICK RATIO

20060.88

0.45

2007 0.94 0.46

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This ratio indicates to what extent cash on hand and disposable assets are enough

to pay off short term liabilities. A current ratio of assets to liabilities of 2:1 is

usually considered to be acceptable. Acceptable current ratios vary from industry

to industry. If a company's current assets are in this range, then it is generally

considered to have good short-term financial strength.

If current liabilities exceed current assets (the current ratio is below 1), then the

company may have problems meeting its short-term obligations. If the current

ratio is too high, then the company may not be efficiently using its current assets.

In the case of Haleebs current ratio has increase from year 2006 to 2007 which

indicates that it has improved to pay short term obligations as compared to the last

year.

2) Leverage Ratios

LEVERAGE RATIOS

Debt to total asset RatioTotal Debt/

Total Assets

Debt to Equity RatioTotal Debt. /

Total Stockholders Equity

Long-Term Debt to equity RatioLong-Term Debt/ . Total

stockholders Equity

Year

Debt to Total

Asset Ratio

Debt to Equity

Ratio

Long-Term

Debt to Equity

Ratio

2006 0.80 4.1 2.04

2007 0.74 2.85 1.40

Remarks:

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The Debt to Asset Ratio takes into account all debts of all maturities to all

creditors. A value of less than 1 in this ratio means that the company could not

cover all of its debt by selling all of its assets. HALEEBS assets are mainly

financed by outsiders or debts. This ratio measures the percentage of total funds

provided by creditors versus by owner.

Look for a debt to equity ratio in the range of 1:1 to 4:1. Debt-Equity ratio

indicates that capital structure of HALEEB is mainly based on debt financing.

This ratio for HALEEB is showing that out of total funds available for long term,

major portion is equity. As compared to the last year the companys position is

improved as they have made more investments.

3. Activity Ratios

ACTIVITY RATIOS

Inventory Turnover

Sales

Inventory of finished goods

Fixed Asset TurnoverSales

Fixed Assets

Total Asset Turnover SalesTotal Assets

Account Receivables Turnover

Annual credit Sales

Accounts Receivables

Average collection Period

Account Receivable

Total credit sales/365 Days

Year

Inventory

Turnover

Fixed Asset

Turnover

Total Asset

Turnover

Account

Receivables

Turnover

2006 9.8 2.65 1.70 6.3

2007 9.9 2.76 1.78 7.5

Remarks:

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It shows that in how many days company sold the entire inventory. The higher the ratio

the more is inventory being managed efficiently. Because inventories are the least liquid

form of asset, a high ratio is generally positive. This ratio measures how productively the

firm is managing its fixed assets to generate sales.

For every Dollar in Assets how much sale we have generated. Higher the ratio greater

will be the resource utilizations. It indicates that how effectively HALEEB is utilizing its

resources. This gives indication of how fast we can sell product. So we will see how fast

we collect on those sales. HALEEBS receivable turnover is improving. Therefore on

average HALEEB collection period is decreasing, so its recovery performance is

improving day by day.

4) Profitability Ratios

PROFITABILITY RATIOS

Gross Profit Margin Revenue-cost of sales/revenue

Return on Assets (ROA(Net Income/

Total Assets

Return on Stockholders Equity Net Income. /Total Stockholders Equity

Earning per shares

Net Income/

Number Of Shares Of Common StockOutstanding

Price earning RatioMarket price per share/

Earning per shares

Year

Gross

Profit

Margin

Return on

Assets

(ROA(

Return on

Stockholders

Equity

Earning

per

shares

2006 28% 10% 53% 30.06

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2007 28% 11% 44% 39.81

Remarks:

This ratio indicates the amount of income that the company earns on each RS of

sales. The gross profit margin is related to the net profit margin, which assesses

the profitability of an organization after including fixed costsThe trend in this

ratio from month to month can show how well the company is managing their

operating or overhead costs. The margin has not changed in the current year

which shows that the companys operations are stable. This shows the amount

available to stockholders or owner of the company, so higher the ratio there will

be higher earning and dividend for stockholders. ROA measures profit per rupees of assets. We can compare this rate to the interest

rate that the company pays to borrow funds. If the return on assets is above the

borrowing rate, the company is profitable.

ROE measures profit per rupees of equity. This ratio indicates what return the

company is generating on the dollars invested by its owners. High values for this

ratio indicate that the company is less likely to require debt or additional equity

investments. HALEEBs return on equity is declining.

This ratio shows the amount of earning per share and a company with earning per

share. This ratio indicates that the company with high earning per share will be in

a position to declare the high dividend. This ratio has improved this year.

8. OTHER STRATEGIES

i. R&D

To keep up with new demands Haleeb has a Research & Development Department. This

Department is considered as one of the most important department. The Research &

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Development Department works in close collaboration with the Production Department.

It helps the Production Department to maintain a standard of the products being

produced. All the new materials are tested according to the certain specifications. It also

has a lot of interaction with the Marketing Department, because marketing department is

responsible to inform them, regarding the sale of particular product either it is good or

not. Hence that department is responsible for conducting research and go for certain tests

in order to sort out that particular issue. In addition to that they also provide support to

the production department by coming up with new ways of improving quality and also

increase the efficiency.

ii. Procurement

Procurement is basically the acquisiton of goods or services at the best possible total cost

of ownership, in the right quantity and quality, at the right time, in the right place, and

from the right source for the direct benefit or use of corporations, or individuals.

Haleeb also has a very strong procurement system. Haleeb also having their own farms,

the main function of this department at haleeb is to procure the acquired goods and

services. Procurement activities at haleeb are split into two distinct categories.

direct, production-related procurement

Indirect production-related procurement.

Direct Production-Related Procurement

The main responsibilty of this department is to encompass all items that are part of

finished products, such as raw material, components and parts. Direct procurement,

which is the focus in supply chain management, directly affects the production process of

manufacturing firms. Under the supply chain all the products after packaging are trasnfer

to the ware house from there they are loaded to the vehicle and transported to the desired

destiny.

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Stock report generated on a daily basis

Then order sheets are made according to the stock report

After doing that they made arrangements to load that particular order

In the end the order is dispatched and the whole process is completed.

Indirect Procurement Activities Concern

Haleeb also doing indirect procurement activities.In contrast with direct procurement,

indirect procurement activities concern operating resources that a company purchases

to enable its operations. It comprises a wide variety of goods and services, from

standardised low value items like office supplies and machine lubricants to complex and

costly products and services like heavy equipment.

iii. Production Department

Planning and Production are the most important department. Production department is

responsible for turning input into output through a series of production process. It also

controls all the operations under the factory. The production department looks after all the

production functions and checks out that the production is going on according to the

given schedule. They are also responsible for any delay in production process. Plus the

production manager is responsible for making sure that raw material are available and

then turned out into finished goods efficiently. The role of the manager is to make sure

that the work is carried out smoothly.

The first shift in charge take his control and then he review the ongoing production, how

much it done and how much it needed in order to meet the order, so they keep the process

going on till the order gets completed. They continually communicate with the employees

of other departments like for quality assurance section regarding the goods which are

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produced are meeting up the quality assurance standard or not otherwise they opt for

certain test.

And if they get any order from the representative production manager from other

department the employees of the production department go for to check the availability of

the raw material which they need in order to fulfill the order and then they proceed the

order to subordinate after the order get done. They handle the stock to ware house and get

a slip in return as a proof and then dispatch.

10.CONTROL PROCEDURES

1. Marketing Control:

There is no planning without control. Marketing control is the process of monitoring the

proposed plans as they proceed and adjusting where necessary. If an objective states

where you want to be and theplan sets out a road map to your destination, then control

tells you if you are on the right route or if you have arrived at your destination.

Marketing information Systems are used at Haleeb Foods in the form of a separate

department that works with the name of IS dept. They are responsible to generate reports

for any department if required. Marketing planning systemwas not working efficiently as

according to the distributors they were at times not able to get their demanded products in

the specifications that they wanted to have for example quarter pack is in high demand in

summers. Etc. Marketing Control System is monitored by the brand manager and they

continuously keep a check and balance of their results and their desired status. NPD at

Haleeb Foods is done by a separate individual who is in touch with all the related brand

managers and keep on giving ideas and then select the one that can be implemented.

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2. Production Control:

Production control usually involves a specialized staff to manage batch scheduling. This

work might involve daily and weekly backups running at particular points within a

complex sequence of application suites.

Production control is not that much effective at Haleeb Foods as they have a large

portfolio of products which makes it more difficult to distribute the scarce resources

among all brands. They are not doing proper analysis as some of their products is not that

much successful in local market and still they are continuing them. But on the other hand,

they are exporting them out side, so they are earning more revenues.

3. Quality Control:

The Haleeb Foods Limited (HFL) is taking care of quality of production by using

acceptance sampling procedures.

Company officials reported that they were very strict about the quality and employed

state of the art technology to ensure quality of the milk procured from various channels.

Also, told that quality and regular supply were the sole criterion for selecting suppliers.

VMCC agents ensured quality on the behalf of company and again the milk procured by

each VMCC had to pass quality checks at PHE.

To check the validity of sampling plan adopted by HFL, 30 sampling plans are compared

with respect to AQL, AOQL, ATI and LTPD. The results and conclusions show that

quality is always towards an improvement trend. The technology is no more the

superiority as it is accessible to every one. Investigation and reduction in variations is akey to process improvement. For HFL a single sampling plan with N=2700, n=30 and

c=1 is suggested, for better quality products.

4. HR Control:

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All organizations are made up of people, so organi

Documents

Introduction: Historical Background