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GROUP MEMBERSAMEERA JAHANGIR

HUMERA M HANIF

MADIHA RAZZAQUE 2

CEMENT INDUSTRY OF PAKISTAN All Pakistan Cement Manufacturer Association (APCMA) is a governing body for cement industry.

APCMA plays a significant role in protecting the cement industry to the governmentinrespect of formulation of governmentpoliciesfor the cement industry.

INTRODUCTIONLucky cement was founded in 1994 by Mr. Abdul Razzaq Tabba. Lucky cement has been sponsored by one of the largest business group in Pakistan the Younus brothers (YB) group. Fulfills Customer Social Responsibility (CSR) by offering scholarships to students Donations for social welfare programsBRANDS OF LUCKY CEMENT

VISION We envision being the leader of the cement industry in Pakistan, identifying and capitalizing on new opportunities in the global market, contributing towards industrial progress and sustainable future, while being responsible corporate citizen

MISSION Our mission is to be a premium cement manufacturer by building a professional organization, having state-of-the-art technology, identifying new prospects to reach globally and maintain service and quality standards to cater to the international construction needs with an environment-friendly approach.

EVALUATION OF MISSION Statement S.NO COMPONENTS AVAILABILITY1.Customer Yes 2.Product/service Yes 3. Market yes4. Technology Yes 5.Concern for survival growth, profitability yes6.Philosophy No 7.Self-concept yes8.Concern for public image yes9.Concern for employees No PROPOSED VISION STATEMENT To transform lucky cement into a model cement manufacturing company engaged in nation building through most efficient utilization of resources and optimally benefiting all stakeholders while enjoying public sector and goodwill in local and international market.

Proposed Mission:-Our mission is to be perceived by our customers by providing highest quality of cement using state of the art technology and retaining

personnel of exceptional ability while maintaining its leading position aims to build up on its present state of profitability with a view to maximize shareholders wealth and care for global environment.

INFORMATION GATHEREDOPPORTUNITIES Upcoming national building projectsIncreasing demand for cement in gulf region Market development and penetration Infrastructure development Population increase causing increase in real state Increase production to reduce cost and achieve economies of scale Global expansionUndiscovered markets of northern regions of Pakistan THREATSGovernmental regulations Fluctuation in currency ratesPrice competition Alliance oppositionFluctuation in demandPolitical instability Increase production cost

STRENGTHSFinancially strongHigh product qualityInfrastructure near ports Highest export share High pay scale Large dealer network Employee development

WEAKNESSESHigh transportation cost Low advertising and exposure Increasing general and admin expense Capital intensive industry Increased production cost Highly Localized and regionalized markets Low gratuity and PF funds

THE STRATEGY-FORMULATION ANALYTICAL FRAME-WORK

input stage Stage 1 summarizes the basic input information needed to formulate strategies.

The information derived form IFE matrix , EFE matrix & CPM a provides basic input information for matching & decision stage.

Good intuitive judgment is always needed in determining appropriate weights & ratings.

EXTERNAL FACTOR EVALUATION MATRIX (EFE) OPPORTUNITIES WEIGHTSRATINGSWEIGHTED SCOREIncrease in infrastructure development0.2030.60Unexploited markets in North Pakistan0.0530.15Increase in population causing growth in housing sector0.1040.40Global expansion0.1540.60Increase production to reduce cost and achieve economies of scale0.0730.21THREATSGovernment regulations0.1520.30Fluctuation in market demand0.0810.08Price competition0.1030.30Political Instability0.0330.09Rising input costs0.0720.14TOTAL1.00 2.872.87EXTERNAL FACTOR EVALUATION MATRIX (EFE) The most important factor to being successful in Lucky cement is the global expansion indicated by the 0.15 weight.

The company has a great opportunity to increase the infrastructure development.

Unfortortunatly, the company is facing its major threat in government regulation .

The price competition is also the second major threat that the company is tackling with in the present situation.

Overall the weighted score is 2.87 which shows the company is above the industrial average.COMPETITIVE PROFILE MATRIX (CPM)LUCKY CEMENTDG KHAN CEMENTPIONEER CEMENTCRITICAL SUCCESS FACTORSWEIGHTRATINGSCORERATINGSCORERATINGSCOREAdvertising0.1030.3040.4020.20Product quality0.2040.8030.6030.60Price competitiveness0.1540.6040.6040.60Management0.1540.6030.4540.60Financial position0.1540.6020.3020.30Customer loyalty0.1030.3020.2030.30Global expansion0.1020.2010.1010.10Market share0.0530.1520.102 0.10 TOTAL1.003.52.75 2.80COMPETITIVE PROFILE MATRIX (CPM) The most critical success factor enjoying DG Khan is in advertising. Whereas, Lucky cement is weaker in advertising to its competitors. The most import factors for being successful in the organization are the product quality & the major strength lies in its financial position.

.However the market share of the company is far better to its competitors.

Overall the company is strongest as indicated the total weighted score of 3.5 .

INTERNAL FACTOR EVALUATION MATRIX (IFE)STRENGTHSWEIGHTRATINGWEIGHTED SCORERevenues increased0.0940.36High product quality0.1240.48High pay scale0.1030.30Highest export share0.2030.60Inventory turnover up 3.58 to 4.000.0530.15Larger dealer network0.0840.32Employee development0.0640.24WEAKNESSESLow advertising0.0520.20Increase in cost of production0.1010.10High transportation cost0.0710.07Highly regionalized and localized market.0.0810.08

TOTAL1.002.90 INTERNAL FACTOR EVALUATION MATRIX (IFE) The 12 key factors mentioned in the IFE Model shows the most attractive is its export share 7 its high product quality.

The major weakness of the company is high transportation cost & regionalized and localized market.

There is a room for improvement in the inventory turn-over.

Overall the weighted score is 2.90 which above than the average showing needs improvement in its internal policies & procedures.

PROJECTS - NEW & ONGOING

ANNOUNCEMENTs The financial document for cement plant in DR Congo have been signed with multilaterals and International institutions in London on the 27th Nov 2014 & financial goals have been achieved.

The DR Congo Cement Plant is expected to be start commissioning from June 2016.It will open new door for growth & to implement the company future expansion plant outside Pakistan.

Pakistan leading & larger provider of quality cement organized Employee Volunteer Activity in collaboration with WWF Pakistan under the aim of social cause.

Matching stage For the purpose of matching stage we made:

SWOT (Strength,weaknesses,opportunities,Threats) matrix

SPACE ( strategic position and action matrix) matrix

swot matrix The concept of determining strengths, weaknesses, opportunities, threats is the fundamental concept behind SWOT model To present the model in a more understandable way scholars came up with SWOT matrix

STRENGTHS Financially strong High product qualityHighest export shareHigh pay scale SO strategiesWO strategies SETUP NEW FACTORIES IN NORTHERN REGIONS OF PAKISTAN (S1 , O1 )INCREASED EXPORTS TO GULF REGIONS ( S1 ,S2,O2)BUILD UP EXPOSURE AND BETTER BRAND IMAGE THROUGH RIGHT PROMOTIONAL MIX ( W1 , O1 ,O2 )DIVERSIFY IN GULF REGION (W1,O2 )WEAKNESSES Low advertising and exposure Low gratuity and PF funds Increasing general and administrative expenses OPPORTUNITIES Upcoming national projects Demand for cement in gulf regionExpansion in cement industry ST strategies WT strategiesOVERCOMING COMPETITORS PRESSURE THROUGH MORE QUALITY (S2,T2)RESOLVE ALLIANCE OPPOSITION THROUGH TOP MANAGEMENT INVOLVEMENT (S1,T3)REDUCE GENERAL & ADMIN EXPENSES TO COPE WITH NARROW COMPETITION (W3,T2)CONSIDER EMPLOYEES PERKS TO AVOID HASSELS OF LABOUR UNIONS (W2,T3) THREATS Govt regulation on slotsPrice competition Opposition alliance COMPETITIVE POSITION :- rates Strong distribution network. -2 High quality products. -3 High export share. -4 Market development in Gulf -2 Govt. Project as DGP Army. -3 Total:- 14 SPACE MATRIX FINANCIAL POSITION :- RATING Increase in net sales revenue 4 Continuous increase in stock value (PRs 130/=) 6 Increased Earning price share-EPS (PRs 2.1 per 5share) 5 Total: 15 INDUSTRIAL POSITION : Increasing competition in construction sector 4 Increasing domestic demand for cement i.e. 92% 5 Enhancement in the budget for Annual 5 Development Plan Increasing growth rate 3 Total: 17 STABILITY POSITION :- Allowance of subsidized cement imports & lesser rebates -4 Cut throat competition has created instability. -3 Currency rate difference has given much loss. -3 Increasing rate of inflation. -4 Rapid technological Change. -3 Total: -17 DIRECTIONAL VECTOR COORDINATES X axis: (CA + IS) = -2.80 + 4.25= 1.45

Y axis: (ES + FS) = -3.40 + 5.00 = 1.60

FPSPDECISION STAGEKEY FACTORSGLOBAL EXPANSION RIGHT PROMOTIONAL MIXOPPORTUNITIES:-WEIGHTSASTASASTASUpcoming national projects0.1510.1540.60Demand for cement in Gulf 0.2040.8010.20Expansion in industry due to house building loans by banks0.1010.2040.40TTHREATS :-Government regulations0.1540.6030.45Price competition0.1020.2030.30Alliance opposition0.1520.3030.45Fluctuating currency rates0.1040.4020.201.00STRENGTHS:-Strong financial position0.1530.4540.60High product quality0.1230.3640.48Highest export share0.2040.8030.60High pay scale0.1030.3040.40Larger dealer network0.0820.1630.24WEAKNESSES :-Low advertising0.1010.1030.30Increasing Gen & Admi expenses0.05----Low gratuity & PF funds0.1010.1030.30Increased production cost0.1010.1040.40 1.005.925.92 5.2

QSPM -QUANTITATIVE STRARTGIC PLANNING MATRIXThis technique basically tells which strategy is the best for the company.The two alternative strategies considered are GLOBAL EXPANSION & EXPOSURE THROUGH BRAND IMAGE & PROMOTIONAL MIX.The demand for cement in gulf areas are high in gulf areas as compare to domestic market.The opportunity of expansion of cement industry due to house building loan is more attractive with market penetraton strategy.The major threat of governmental regulations ,price competition & currency rate are associated withdraw both alternative strategies .The strong financial position , high product quality & pay scale are attractive to brand image whereas market share of 19% is highly attractive to capitalize the strengths.Advertising, gratuity fund & production cost should be reduced and convert in to the strength.

Recommendations MARKET PENETRATION :- Because of number of construction projects have been initiated by the Government and the rising trend of house financing through banks and investment in real estate and property.

MARKET DEVELOPMENT :-The demand for cement has drastically increased in Gulf region. In order to cater to the increasing demand and to develop new markets, Lucky Cement should increase its exports towards Gulf region and also in other countries, hence developing a market in a new geographical segment.

INCREASE PAY SCALE OF ITS EMPLOYESS :- In comparison with its competing organizations still the turnover rate is very high. The reason being low gratuities and benefits after retirement due to which most of the employees quit. To retain its valuable Human Resource, Lucky Cement should pay attention towards this area.

GENERAL RECOMMENDATIONS IMPLEMENT CONTINGENCY PLANNING :-Lucky cement need to implement contingency planning to cope with the future constraints

Cost leadership through best value strategyConclusionLucky cement like any other responsible organization is redefining its business operations in a fundamental wayIt is working to promote sustainable development and integrating its endeavors of profitable growth with the initiative of environment all protection &uplifting the quality of life of the present &the future generationThe company is moving towards its growth mode and can aggressively employ the strategies of market development market penetration product development backward and forward integration as per need of demand of the org.

THANK YOU