Rahimafrooz-Management-Porters Five forces -

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Transcript of Rahimafrooz-Management-Porters Five forces -

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Presentation on Managerial Strategy of Rahimafrooz Group 7Submitted to Mohammed Monjarul Islam Chowdhury (MHW)

Team Members

Tausif Akib Khan 1510316030 Tanvir Chowdury 1510866030 Md. Toukiul Alam Khan 1520645633 Susmita Sengupta 1512156030 Shahriar Hossain 1430906630 Sharif Uddin Fahim 1512153030

Introduction Rahimafrooz is one of the respected and reputed business houses in Bangladesh. Rahimafrooz has endured turbulences of the last 62 years and has been able to transform itself from a small trading company into a leading diversified business house.

Rahimafrooz operates in four broad segments. Storage Power, Automotive & Electronics, Energy and Retail

Mission & Vision Rahimafrooz has become one of the largest groups in Bangladesh. Being an enterprising Group of Taka 2000 corer by the year 2017 with a diversified business portfolio focused on dynamic growth, excellence, innovation, customer delight in enriching the world.

To be the most admired and trusted organization through excelling in everything Rahimafrooz is tend to do, following ethical business practices and adding value to stakeholders.

Objectives Rahimafrooz is committed to ensuring the best in quality standards and living the Groups five core values Integrity, Excellence, Customer Delight, Innovation and Inspiring People.

They are also committed to play a leading role in driving growth, prosperity, ethical values and social responsibility.

It continues to serve the customers through unparalleled quality excellence and service superiority, taking the initiative with new programs that serve as models for the industry.

SWOT ANALYSIS

Strength Rahimafrooz has strong brand image and brand recognition

Strong local distribution network that ensures the proper supply

Wide range of product to satisfy a large number of consumers range

Efficient workforce to ensure the best quality

Production capacity is very high

It is ISO 9001 & 14001 certified company.

Its local market leadership with 54% SOM

It has own set up in India & Nepal

Competitive price throughout the international arena.

Weakness Lack of own brand image in export markets Lack promotional activities

Product outlook is not up to the mark

Lack of control over primary raw material (lead)

Absence of a global brand and Inconsistent product quality

Reduced battery life: ignore consumer preferences

Inappropriate warranty management for local and Indian market

Opportunity Rahimafrooz battery fame is spreading rapidly throughout the Global Market

The Battery market is growing by 10%

Duty Free access in countries like Thailand, China, Australia, Canada

In Dubai Rahimafrooz has got the facility to set up a sales office and also re-export

Expanded there business in Japan

It can arrange treaty between two or more countries to establish a free trade area

Rahimafrooz can merge or acquiesce with other companies overseas for production facilities

Threat Customers have great concerns about products quality, which emphasize the cost.

Having Competitors in the market; Such as Navana BTL, Hamko BTL

The uplift of foreign currency is another problem for Rahimafrooz

The currency uplifts the prices of the raw materials increases

Some legal Procedures while purchasing raw materials

Porters Five Forces Analysis

Threats of New Entrants It means the ease or difficulty with which new competitors can enter an industry. This force depends on two factors

Initial Investment Requirement Growth Rate of Industry

Factor: Initial Investment Requirement The initial cost of entering into this industry is $1,000,000-10,000,000. It varies according to the production capabilities

Also it requires Skilled Man Power, Technical Support Team, Space for manufacturing, Legal procedures and Government Policies.

Factor: Growth Rate of Industry the growth rate is much higher in this sector.

Annually about 2.8 million pieces of batteries are used by different sectors in the country with its current growth rate of 10 percent.

Force Conclusion Factors of Force Impact of Factors Initial Investment RequirementHighGrowth Rate of IndustryHigh

Therefore, the Threat of New Entrants High + High = Low

Bargaining Power of Buyers The bargaining power of customers determines how much customers can impose pressure on margins and volumes. This force depends on two factors.

- Number of buyers - Number of Sellers

Factor: Number of Buyers Annually 420,000 pieces battery are used by motor vehicles, 411,000 pieces by IPS and UPS users, 150,000 pieces by heavy equipment of the industries, 1,050,000 pieces by electric vehicles and electric-rickshaw, and 700,000 pieces by the solar system

About 2.8 million batteries are used by huge number of people. So the number of buyers is high.

Factor: Number of Sellers In this battery industry of Bangladesh the sellers are,

Rahimafrooz Battery LTD Panna battery LTD General battery company LTD Haque and Company dry cell LTDNavan Battery LTDHamko Battery Company LTD

Though Rahimafrooz is holding 75 percent of Battery market share. Comparing to the buyers, the number of sellers in this industry is comparatively low.

Force Conclusion Factors of Force Impact of Factors Number of BuyersHighNumber of Suppliers Low

Therefore, the Bargaining Power of Buyers High + Low = Low

Bargaing Power of SuppliersThe bargaining power of suppliers determines the intensity of competition in an industry. This force depends on two factors:

- Number of buyers Number of Sellers

Factor: Number of Buyers In the battery industry here the buyers are,

- Rahimafrooz Battery LTD - Panna battery LTD - General battery company LTD - Haque and Company dry cell LTD- Navan Battery LTD- Hamko Battery Company LTD

They buy the raw materials and equipment from various suppliers. Comparing the buyers to the suppliers the number of buyers are low.

Factor: Number of Suppliers To manufacture batteries the companies need raw materials like led, acid and many other equipment. Generally they buy this from either local or foreign suppliers.

The suppliers are high in number these requirements are produced in a large number by many firms as these elements are easily accessible.

Rahimafrooz buy the raw materials from Australian companies.

Force ConclusionTherefore, the Bargaining Power of Suppliers Low+High = Low

Factors of Force Impact of Factors Number of BuyersLowNumber of Suppliers High

Threat of SubstitutesThe existence of substitute product offers customers different choices and allows them options within the industry and beyond it to products that may fulfill a similar need. This force depends on two factors:

- Switching Cost - Brand Loyalty

Factor: Swithching CostRahimafroz has a competitive advantage against his competitors because of its low price. So the Swithching Cost will be high.

On the other hand the substitute product for this sector will be motor generator, manual motors which run on oil and gases.

So the switching cost will be much higher.

Factor: Brand LoyaltyRahimafrooz is in the Battery market for more than 50 years. And they have gained a large number of market share.

Theyre providing products to the customers from a long period of time, thus theyve made good bond with their customers.

Thats why the brand loyalty is much higher.

Force ConclusionFactors of Force Impact of Factors Switching CostHighBrand LoyaltyHigh

Therefore, the Threat of Substitutes High+High = Low

Competitive Rivalry It means the competition between the similar companies or firms. It basically show how competitive the industry is and how competitors compete with each other. This force depends two factors.

- Number of Competitors - Growth Rate

Factor: Number of Competitors In the battery industry of Bangladesh, apart from Rahimafrooz the competitors are,

- Navana Battery LTD - Hamko Battery LTD - Panna Battery LTD - General battery company LTD - Haque and Company dry cell LTD

Though Rahimafrooz holds 75 percent of the market share these are the major competitors in this industry.

Factor: Growth Rate Rahimafrooz is holding the maximum number of market share in the battery industry of Bangladesh. Though it had a steady growth from 1999 to 2010. Currently the market growth rate is 10%.

Which is higher than its competitors.

Force Conclusion Factors of Force Impact of Factors Number of CompetitorsLow Growth RateHigh

Therefore, the Competitive Rivalry Low + High = High

Forces Factors Factors CommentsFactors Impact on forcesForceConclusionSummaryThreat of new entrantsInitial investment requirement

Growth Rate High

HighLow

HighLowBargaining power of buyersNumber of buyers

Number of sellers High

LowLow

Low Low Bargaining power of suppliers Number of buyers

Number of sellers Low

High Low

Low Low Four of the forces are low and one of them is High. So, we can conclude by saying that investment in battery sector is lucrativeThreat of substitutesSwitching Cost

Brand LoyaltyHigh

HighLow

LowLowCompetitive Rivalry Number of Competitors

Growth Rate

Low

HighHigh

HighHigh

Conclusion

So this is it from us, Hope youve enjoyed our presentation.

Thank You

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