RAHIMAFROOZ Market Driven Strategy

IntroductionThe Rahimafrooz journey dates back to the early fifties when Late Mr. A C Abdur Rahim founded a small trading company and paved the way for making of one of today s leading Bangladeshi business conglomerates. Over the decades, Rahimafrooz has grown in size, scale and diversity. Rahimafrooz Group works in three different broad industries automotive market, power and energy, and retail with annual revenue of over USD 150 million (2008-09). The group comprises of seven Operating Companies (SBUs), three other business ventures and a not-for- profit enterprise. The group currently employs more than two thousand people directly and deals with further twenty thousand indirectly as suppliers, contractors, dealers and retailers.

Rahimafrooz Batteries Limited (RBL)

Rahimafrooz Batteries Limited (RBL) is the largest lead-acid battery manufacturer in Bangladesh and offers an extensive range of automotive & customized industrial battery. It is one of the respected and reputed business houses in Bangladesh. It manufactures over 300 different types of automotive and industrial batteries. Its plant is ISO 9001 & ISO 14001 certified. RBL has also extended its product line to secure power solution with UPS, Rectifier and VRLA Batteries with collaboration of Enersys-USA, Eltek-Norway, AEES-France. RBL has a successful story of installing solar power in the remote rural areas of Bangladesh. It has successfully installed more than 10,000 home solar systems in the remote rural areas of Bangladesh.

The company has been serving this market for the past fifty years by introducing innovative products. Rahimafrooz Batteries Limited (RBL) is one of the key players in South Asia in its field and one of the largest battery manufacturers in the SAARC region; With undisputed market leadership at home, exports batteries in more than 35 countries in Asia, Middle East, Africa & South America. The Company has embarked upon an aggressive growth plan that includes becoming a significant global player in the international battery market.

Vision 2010:To be one of the top two storage power companies in SAARC by the year 2010

Brands

Lucas Optus Rahimafrooz Spark Volta

Plant Capacity:Rahimafrooz has state of the art manufacturing plant. It is equipped with all latest technologies with complete air treatment and lead-recycling management. RBL produces different types of batteries to meet the local and international market. Its capacity in Automotive Battery is 660,000 (N50) units per annum and Industrial Battery is 41 million AH/annum. By the end of 2008 production capacity of Industrial Battery will be increase to 120 Million AH. All the products are manufactured under strict quality control and ensured by international certifications.Collaboration AgreementsIt has different technical collaboration agreements with Lucas Battery Company, U.K, Technical support Group (TSG), Hawker Batteries, UK, Invensys, UK, Hawker Batteries, UK, Eltek – Norway, AEES – France to ensure the quality of battery.

SBU's Contribution to Group Sales

Term Paper on Strategic Marketing Management

http://www.hotfrog.in/Companies/Rahimafrooz-Batteries_746601

27%

40%

18%

6%9%

Rahimafrooz Batteries Rahimafrooz Distribution

Rahimafrooz Superstores Rahimafrooz Energy Services

Other Units

Battery Production

Battery Production

85%

4%

9%

2%

Automotive Industrial Solar Appliance

Sales of Battery

Sales of Battery

45%

55%

Export Sales Local Sales


Battery Contribution

Market Overview


The competitive nature of the automobile industry has prompted the companies to take up new and innovative marketing strategies to thwart the competition. As consumers demand ever more sophisticated and feature-loaded vehicles, the global automotive industry faces growing challenges to balance these expectations with space constraints and weight concerns. Every component receives scrutiny to determine if it can be made smaller and lighter to promote fuel efficiency and performance and help fit more content into the available space. In addition, vehicle manufacturers and suppliers must increasingly consider environmental concerns such as recyclability, as well as overall performance. Electrical loads in vehicles today are growing every year resulting in consequent increases in cable harness, power distribution box, relay, and switch ratings, as well as costs.

In the context of saturated local market, hunger for growth and creating new avenues RBL entered into the phase of export as the pioneer in 1992. Since then it has been expanding its export market with an export volume growth of 80% annually. So far RBL has exported more than one million units. RBL’s first importer was Chloride, Singapore. In 1994 RBL started exporting to Pakistan and at the same time provided technical assistance to set up a battery factory in Pakistan. The export continued till the factory became operational in 1997. In 1997 RBL started exporting to India. Within very short period it had organized an extensive marketing network covering the entire country having 8 distributors and 450 dealers. By 1997 it covered all the SAARC countries except Maldives. RBL is exporting to 18 countries among which India, Sirlanka, Singapore, Nepal, Bhutan, Thailand, UAE, Kuwait, Lebanon, Afghanistan, Madagascar are regular importing countries.

RBL is continuing its journey of export with excellence through stringent Quality Control, Quality Management & Environment Management System. All the companies as a part of their marketing strategy offers a range of vehicles in all the segment to make sure that the customer is driving one of their vehicles only.

Market Size The total Indian battery market is estimated at close to Tk. 170 crores. Out of this the industrial battery market is estimated at around Tk. 60 crores which includes the VRLA (valve regulated lead acid) battery market, which is estimated at around Tk. 50crores in the current year. The power and UPS industries are other key user segments. The automotive battery business is estimated at around Tk. 100 crores. Conclusive industry data on SARRC is not available. To best estimate, the market share of the SAARC is about 35% for automobile batteries and around 25% for industrial batteries.

Product Overview

Rahimafrooz markets three major brands of automotive batteries: LUCAS, VOLTA and SPARK. All the batteries are produced under strict quality controlled plant of the Rahimafrooz Batteries Ltd. It has introduced new brand SPARK for the taxi cab. This specially designed to take the load and frequency of the taxi cab.

Lucas Automotive Dry Charge Battery:

12 Volt Battery German Drive Range Heavy Duty Range 6 Volt Batteries Lucas PCM


Rahimafrooz manufactures specialized Industrial Batteries. The plant is equipped with modern production machineries and testing facilities including those for tubular plates. It conforms to international standard ISO 9001 & ISO 14001and to JIS, DIN, BS and IEC specification. It produces a wide range of lead-acid industrial batteries with capacities from 20AH to 2500AH. The batteries are used for applications in telecommunication, power station, railway system, electric vehicle, forklift, ship, buoy lighting and solar power system. Industrial Batteries

Deep Cycle Electric Car Battery IPB Battery Standby Stationary Traction

Specific features of our industrial battery are:

Long life Minimum maintenance Low internal resistance High rate of discharge performance High resistance to adverse mechanical and electrical condition Tolerance to extremes of temperature

Special Features:

Excellent cycling ability provides high reliability and exceptionally long life Large electrolyte reservoir means high tolerance to water loss and minimal maintenance. High charging efficiency Low self discharge, dry pre-charged plates Robust, clear case and rugged construction ensures mechanical durability

The quality, dependability, reliability and long service life of thicker Flat Plate deep cycle batteries are the result of balanced design of the plates, separators and incorporation of latest technical developments in lead acid battery technology.

Strategic Targeting

The target market is a group of customers to whom the company aims its marketing effort. The target market of the RBL is automobile users and industries like telecommunication, power station, railway system, electric vehicle, forklift, ship, buoy lighting and solar power system and household for IPS and UPS battery. Targeting broad groups of buyers within a specific product/market, such as automobiles. Consider, for example, the global market for automobiles. In 2003 the sales of the Chevrolet Impala model were 1.5 million units; in 2005 Carolla best-selling model had sales of about 300,000 units. y considering auto mobile markets, RBL segmented their market and develop products like Locus. The fragmentation of needs and wants in markets is creating subgroups of buyers within the total market, each displaying different customer satisfaction requirements. Such differentiation provides an opportunity for businesses to design product offerings to meet the needs of customers in different market segments.

Targeting all people and also organizations in a market is not a typical strategy for RBL. Instead, many target one or more segments within the total market. Deciding what people (or organizations) to target is a critically important strategic decision. Rahimafrooz Batteries Limited introduced a latest technology battery ‘Volta Maintenance Free Battery’ manufactured at the company’s own plant by using lead and calcium in the expanded metal technology. The products range are ––


http://www.rahimafrooz.com/rahimafrooz_battery_products/traction_ind-products.asp

http://www.rahimafrooz.com/rahimafrooz_battery_products/standby_stationary_ind-products.asp

http://www.rahimafrooz.com/rahimafrooz_battery_products/ipb_battery_ind-products.asp

http://www.rahimafrooz.com/rahimafrooz_battery_products/electric_car_battery_ind-products.asp

http://www.rahimafrooz.com/rahimafrooz_battery_products/deep_cycle_battery_ind-products.asp

NS40ZL for 1300 to 1500 CC vehicles, NS60L for 1500 to 2000 CC vehicles, N50Z for 2000 to 2500 CC vehicles, NS70 for 2500 to 3000 CC vehicles and NX 120-7 for 3000 to 3500 CC vehicles. The price ranges between Tk 3769.71 and Tk 7109.06, depending on the type of the battery. The customers need not wait for acid addition while purchasing this battery. This high quality products and services are important influences on customer satisfaction of RBL. Continuous improvement of existing products and the introduction of new products facilitate RBL to gaining sustainable competitive advantage in the market. The market place will demand customized products and immediate delivery. These force managers to make swift product design and marketing decisions.

SWOT ANALYSIS OF RBL

Strengths:

Excellent cycling ability high reliability and exceptionally long life Large electrolyte reservoir high tolerance to water loss and minimal maintenance High charging efficiency Low self discharge, dry pre-charged plates High rate of discharge performance High resistance to adverse mechanical and electrical condition

Weaknesses:

Expensive than other competitors’ brand Low self discharge

Opportunities:

Evolution into a "Plug-in Hybrid" with higher capacity batteries and a drive train designed to operate for extended periods in electric-only mode.

spread into other market sectors Increasing awareness of environmental issues likely to keep demand high. licensing of technology to other manufacturers

Threats:

Increasing Global Competition Low price batteries offered by China Increasing raw materials price Anti-dumping Pressures of environment groups

Competitor AnalysisRBL is market leadership in automotive batteries in Bangladesh. Present RBL owes 73% market share in batteries market. Their most profitable product’s is Locus and Volta. Besides RBL, there are 10 other competitors who are serving same markets and only capturing a minimum market share in Bangladesh.


Strategic Policies

Innovative: RBL always find creative means to achieve their desired results, while building on the experiences of others.

Leaders: RBL aggressively in the forefront of economic development for their target markets; others will use their success to measure own.

Renewals and Growth: RBL focus our efforts and incorporate values into actions that contribute to a positive, effective and sustainable economic transformation in the Region.

Enterprising People: RBL find, embrace and support the efforts of customers, suppliers and employees who are motivated to undertake new or risky paths that result in personal and company growth.

Enterprising Businesses: RBL attract and engage companies willing to change and take risk to achieve sustainable growth, thereby providing increased employment and wealth to the Region.

The Region: RBL will serve the broad geographic area rather than Bangladesh.

Market Driven: RBL listens carefully to customers, suppliers, end users and employees in order to ensure superior quality products in the market.

Action Oriented: RBL will always have a sense of urgency in addressing important matters.

Commitment to Quality: RBL e will remain steadfast in the pursuit of excellence in all facets of the company.

Results Focused: RBL allocates resources on the basis of expected Mission impact.

Learn and Grow: RBL ensure that cross-functional teams and dedicated employee provide superior customer and maintenance services along with their core products like battery which help them to continuous growth of the company and close to customers to learn their needs


Battery Market Share (%)

74%

4%

3%

7%2% 3% 1%1% 5%

Rahimaafrooz Batteries Limited Aftab Automobiles Ltd.

Eastern Batteries Ltd. Hamko

Haque Brothers (Carbide) Ltd. Olympic Industry Ltd.

Power Distribution (Troken) Quasem Drycell Ltd.

Reliance Electronics

Achieve: RBL set realistic expectations that can be accomplished both individually and by the team, and hold ourselves accountable for our results. We will recognize and celebrate our success and regard failures as learning opportunities.

“Open Communication”: RBL keep people informed listen to them carefully and encourage everyone else to do the same.

Customers: RBL is vigilant in their efforts to advance the best interest of the people who seek their products and services and delivers outstanding services with high quality products

“Integrity”: We will be reliable, honest and honorable; people we deal with may count on our word being good and our commitments being met.

Strategies

1. Build a support system that will enable the successful execution of resources to innovate superior products.

2. Develop production process based on the strategic plan implementation requirements;

3. Develop cross-functional team to support implementation of the strategic plan.

4. Develop a performance measures tool

5. Ensure their employee have the training, experience and tools to carry out their responsibilities; fine tune the organizational structure to be sure it fits strategy at all times; outline clear reporting relationships; develop clear internal job descriptions including performance expectations.

6. Develop a process for continual feedback on progress from the market and periodic assessment and revision of their marketing strategy and plans.

The Strategic Planning Process

Set the planning horizon RBL established a five year time frame for the plan.

Survey the environment RBL identified the major and minor political, economic, technological and social factors which can influence our success.

Evaluate the competition RBL identified the important competitors and assessed their strengths, weaknesses and game plans.

Evaluate ourselves RBL took a good look at our own strengths, weaknesses, culture and values. We outlined the expectations of our employers, and owners also.

Define the mission Considering the environment and the competition, RBL own limitation and capabilities, we developed a mission statement which defines what kind of organization we want to be, and how we want to achieve our target

Set strategic policies RBL established policies and decision rules which further define and delineate our mission, and which provide guidelines for always operating in harmony with our mission.

Establish objectives We set specific objectives, the accomplishment of which will support our mission.

Develop Strategies RBL devised general courses of action to accomplish our objectives in a timely manner.


Prepare action plans RBL developed a number of specific and detailed action plans with timelines and accountability in order to enable us to carry out our strategies and meet our objectives.

How RBL Become Market Leader?

To become leader and customer oriented organization, Rahimafrooz Batteries Limited (RBL) if following the philosophy:

1. LIVES THE VALUES

Integrity Honest, fair and impartial to all. – e. g. Delivering on promises to external and internal customers.

Excellence Self discipline, personal responsibility, overall commitment e.g. (a) Taking personal responsibility for delivering the results as planned. e.g. (b) Finding and implementing new or improved solution.

Total Customer satisfactionThis applies to both internal and external customers, and must fully satisfy both. This means those understanding their expectations, and matching to our resources/capabilities.

Taking new initiatives Finding and implementing new ways of solving or improving issues

2. RESULT ORIENTEDAchieving targets, taking corrective action, giving feedback.

3. TEAM BUILDEREmpathic, Compassionate. e.g. (a) Receptive to ideas, complaints, feedback of others and adding positive suggestions (b) Actively coaching team members for their development.

4. RECEPTIVE TO CHANGEE.g. deriving maximum benefit from the new style of supportive training programs rather than the previous directive style of training.

5. VISIONARYRecognizing the qualities & skills required to aspire to the company’s vision e.g. Constantly benchmarking themselves to fulfill aspirations.

6. ENTREPRENEURIALProactive, risk-taking, Self-starter, innovative, confident e.g. Constantly strive to improve knowledge of company & work area, using this to make good, innovative and proactive decisions.

MARKET ORIENTATION AND RBL: Market orientation plays a pivotal role in determining the success of organizational performance. In context market orientation, RBL consider the following things:


1) RBL’s business objectives are driven by customer satisfaction.2) RBL monitor their level of commitment and orientation to serve customers’ needs.3) Their strategy for competitive advantage is based on understanding of customer needs.4) RBL measure customer satisfaction systematically and frequently.5) RBL responds to competitive actions that threaten them.6) RBL target customers and customer groups where they have, or can develop a competitive

advantage.7) The top management of RBL regularly discusses competitors’ strengths and strategies.8) They communicate information about their successful and unsuccessful customer

experiences across all business functions.9) All of RBL business functions are integrated in serving the needs of their target markets.10) All of their managers understand how everyone in the company can contribute to creating

customer value.

Rahimafrooz Batteries Limited (RBL) pursues a model which drives them to the market orientation. This model is illustrted below:

Rahimafrooz Batteries Limited (RBL) put organization-wide intelligence management and responsiveness to it at the heat of the construct and form of specific culture which includes distinctive management practices, organizational infrastructure, systems, human resources and technology support as organizational entities (leverages) enabling implementation.

Market orientation is specifically often understood as the all-encompassing strategic orientation that raises the probability of market performance of RBL which encompass customer, competitor, intra-functional, profit, distributor and environmental orientation. We understand customer focus as a focus on customer needs; providing and continuously improving perceived value, quality and satisfaction within a long-term time horizon with a view to achieving superior market performance.


Customer focus

Strategic deployment

Internal integration

Knowledge management

Organizational infrastructure

Customer interface

Organizational culture

Market Orientation

RBL follows a model consists of six dimensions representing key organizational leverages - through which customer focus is implemented. Market (customer) orientation is therefore not a separate dimension, but is reflected in all organizational leverages. The first dimension of the model is strategic deployment. Discrete strategic leverage is important organization-wide orientation of RBL because it concerns top management factors (barriers), the strategy building process and necessary resources. RBL considers strategic deployment as a first leverage. Through this leverage, market orientation should be manifested as a visible senior management commitment, as the presence of it in the RBL’s mission, as alignment with business strategy and as provision of adequate resources.

The second dimension of the model is internal integration leverage. RBL focus focus on internal environment and intra-functional coordination. Under this dimension, RBL coordinated utilization of company (capital and human) resources and full departmental alignment and balancing internal orientation with external. Internal integration leverage is implemented in RBL through activities leading to efficient and satisfied employees such as training, internal communications, empowering, motivating, rewarding, but also through internal quality management and efficient inter-departmental cooperation.

The third dimension of the model is market knowledge management. RBL emphasis on information handling (analysis, generating, disseminating) and additional activities like interpretation and use of marketing knowledge. RBL more focused on learning as a form of information generating where all important information for marketing decisionsand also balanced metrics of market performance.

As the fourth dimension of the model, an organizational infrastructur. In RBL, different organizational elements and systems such as organizational structure, centralization, information technology and communication systemsm play important factors of market orientation.

The fifth distinctive dimension of the model is customer interface design. AS a market oriented organization, RBL always close contacts with customers.They believes that the importance of the interaction with the customers also lies in the fact that a customer’s value is largely produced during their interaction with employees, other customers and organizational systems. Therefore, frontline communication and interaction points with customers should be managed as a coherent whole. As market orientation is concerned with sources of customer value, customer interface design should therefore be one of its key leverages. Customer interface is a relatively independent organizational entity and it requires distinctive management emphasis and operationalized as the extent of customization, fulfilment of expectations, management of emotional, social, technological and environmental elements of interaction, but also through long term, relationship impacting activities.Finally, organizational culture is the sixth dimension of the success of RBL. Organizational culture is an important factor of driving RBL as an market oriented organization in this field which encompasses tangible elements such as behaviours and artefacts, and intangible elements, such as values, beliefs and norms. Customer orientation as a set of beliefs which puts customer interests first. RBL focuses greatly on customer needs information which are more deeply rooted values and beliefs that are likely to support customer focus and permeate the RBL.


CUSTOMER FOCUSRBL are focusing on customers. Getting closer to the customer, Rahimafrooz associates directly with distributors, retailers and also buyers to know what drives customer satisfaction, identify customer needs, and use those needs to target markets where the business can achieve a sustainable and significant competitive advantage in this field. RBL understands customers’ preferences and requirement and offering superior value products.

RBL develops a centralized Customer Feedback & Query (CFQ) CELL. “Total commitment to customer satisfaction” is one of their values. Listening to what customers say in a continual systematic way is a key tool to comprehend their needs and requirements and to satisfy them achieving excellence in their products and services accordingly.

All individuals of Rahimafrooz Group interact with customers and members of the public everyday and do hear, receive, or learn about their comments, complaints, views, etc on the products, services, and dealings of the company.

A systematic and organized way of managing these feedbacks and queries will surely strengthen their total commitment to customer satisfaction.

Customer Satisfaction and RBL

Rahimafrooz Batteries Limited is customer-driven firms who are constantly monitoring and analyzing customer satisfaction. A key objective is identifying the product/service attributes that influence customer satisfaction. Rahimafrooz Batteries Limited successfully competed with others global competitors in Asia by designing durable and quality batteries to meet specific users' requirements. Rahimafrooz targets specific customer groups. The company is very service oriented and quick to respond to customer needs.Understanding customer satisfaction Rahimafrooz engage in accurate tracking of the needs and wants of all participants in the entire distribution chain, including suppliers, manufacturers, middlemen, and end users. All members of the Rahimafrooz’s distribution network is striving to satisfy the individual or organization that ultimately consumes the product or service. Teamwork is playing the significant in Rahimafrooz to meeting buyers' needs. For this, RBL is measuring of customer satisfaction regularly to know buyer needs or preferences and identifying whether changing or not. An important part of the monitoring task is identifying buyers' future needs. Within the organization, marketing professionals of Rahimafrooz are evaluating the changing requirements of end users and channel members. For these they involve all personnel in contact with customers to evaluate activities. And also for improving customer satisfaction include the


product/service delivery system, performance of the product/service, the image of the company/product/brand, customers' perceived price-value relationship of the product/service, employees' level of performance, and study of competitors' advantages and weaknesses.

INFORMATION ACQUISITIONWe consider RBL as a market-oriented company because it completely understands its markets and the people buy its products or services. Gaining these-

RBL is gathering proactive information and analysis and they have a wealth of information is available in company records, information systems, and employees.

A key part of information acquisition, RBL is learning from experience where they encourage open-minded inquiry, widespread information dissemination, and the use of mutually informed managers’ visions about the current market and how it is likely to change in the future.

Rahimafrooz has commissioned a third party research firm to survey Rahimafrooz customers of all SBUs, and products and services, to provide them key learning on how to further strengthen their customer service. They make a GITC team who are working tirelessly to put in place a Customer Relationship Management (CRM) system to help them get closer to their customers for both acquisition and retention programs.

COMPETITOR INTELLIGENCEA market-oriented organization RBL recognizes the importance of understanding its competition as well as the customer.

The key questions of RBL management are which competitors, and what technologies, and whether target customers perceive them as alternate satisfiers.

RBL believe superior value requires that the seller identify and understand the principal competitors’ short-term strengths and weaknesses and long term capabilities and strategies which make the RBL market leader in the market.

CROSS-FUNCTIONAL COORDINATION

RBL is getting all business functions effectively to work together to provide superior customer value. They are successful in removing the walls between business functions—marketing talks with manufacturing and finance.

RBL build a Cross-functional teamwork guides the entire organization toward providing superior customer value. RBL are focusing on improving internal efficiencies.

RBL has set in motion the process of assessing their current business processes using an "Integrated Business Planning" model called MRPII. This is expected to coordinate and bring continuous improvement and alignment between sales, marketing, manufacturing, business planning, forecasting, financial planning, and HR planning.

RBL pursues an approach named THE DEEP DIVING APPROACH which continually swimming around looking for new clients, customers, solutions, best practices, they could work within the group and gradually built it up.

RBL can choose to build up a Rahimafrooz Group wide community of like-minded marketing individuals. By continually benchmarking and evaluating themselves, RBL create a group of intensely committed and steadfast marketers.The objectives are:

Exchange Knowledge of Best practices Complement the Strategic Planning Process


Cultivating the Group wide Marketers' community Having the Common purpose, aligned goal Create an identity and sense of bonding Interact Online and offline

SHARED DIAGNOSIS AND ACTION

As becoming market oriented, RBL is deciding what actions to take to provide superior customer value. This involves shared discussions among company personnel and an analysis of trade-offs in meeting customer needs.

RBL makes an effective cross-functional team which help the management to take decision and also making facilitates diagnosis and coordinated action.

To introduce a new battery all business functions of RBL work together toward a common purpose. For this, RBL is making major changes in the culture, processes, and structure of the traditional pyramid-type organization. For example, RBL has been strengthened with a new management team, and new outlet planning is underway.

One strategic policy of RBL is Open Communication where RBL keep people informed listen to them carefully and encourage everyone else to do the same.

RBL are focusing on people development. RBL introduced the Balanced Scorecard (BSc), a strategic management tool developed by Kaplan & Norton to adapt this model to sustain their future growth. It is a tool to monitor and measure Strategic Initiative implementation encompassing four essential perspectives:-

Financial, Customer, Internal Process, and People.

RBL already have identified their Strategies, Objectives and Measures consistent with Vision 2010. At the same time they developed an appropriate BSc Dashboard software in-house.

A number of senior level promotions have been approved. A group-wide and SBU specific training and development plan has been finalized for the next 6 months. A group-wide salary and benefits review is being done, and the Board Compensation Committee review that in the coming months which give an important competitive advantage in providing superior customer value and achieving superior performance.

Core CompetenceCore competencies are the most significant value-creating skills within the corporation and key areas of expertise which are distinctive to the company and critical to the company's long term growth. RBL's core competencies are they are offering better quality and durable batteries than competitors in the Bangladesh and also other countries like India.

Sustainable Competitive AdvantageSustainable competitive advantage allows the maintenance and improvement of the enterprise's competitive position in the market. It is an advantage that enables business to survive against its competition over a long period of time. The opportunity for Rahimafrooz to sustain its competitive advantage is determined by its capabilities of two kinds – distinctive capabilities and reproducible capabilities - and their unique combination to create superior customer value. They are focusing on strengthening our core business. New investments in core businesses include RBL's expansion of capacity. RBL is investing in expansion of its nationwide distribution network. To make UBC


http://www.1000ventures.com/business_guide/crosscuttings/customer_value_creation.html

(used battery collection) a success, greater teamwork is working among the concerned SBUs and the dealers/distributors which give a competitive advantage. RBL are focusing on improving financial management. For this, they introduced the Balanced Scorecard to measure financial performace and ascertain optimal mechanisms for a group procurement policy, potentially leading to centralized procurement. The Rahimafrooz Financial Leadership Team (FLT) is attempting to cut operating costs by 20% against budget with the same top line target by eliminating unnecessary expenses.

RBL are focusing on improving internal efficiencies. They have set in motion the process of assessing their current business processes using an "Integrated Business Planning" model called MRPII. This is expected to coordinate and bring continuous improvement and alignment between sales, marketing, manufacturing, business planning, forecasting, financial planning, and HR planning. Recently, RBL kicked off the group-wide QMS process to build process focus both at RBL and at all SBUs. Various IT system enhancements are being planned by GITC.

DISTINCTIVE CAPABILITIES

The ‘resource-based view of the firm’ has seen an increased emphasis on competing on ‘capabilities’, both tangible and intangible. ‘Capabilities’ have been defined as: complex bundles of skills and collective learning, exercised through organizational processes that ensure superior coordination of functional activities. Distinctive capabilities are the basis of company’s competitive advantage. According to the new resource-based view of the company, sustainable competitive advantage is achieved by continuously developing existing and creating new resources and capabilities in response to rapidly changing market conditions. Among these resources and capabilities, knowledge represents the most important value-creating asset. Distinctive capabilities of RBL are:

Distinctive Capabilities of RBL

Technical Capabilities It has different technical collaboration agreements with Lucas Battery Company, U.K, Technical support Group (TSG), Hawker Batteries, UK, Invensys, UK, Hawker Batteries, UK, Eltek – Norway, AEES – France to ensure the quality of battery which make them market leader in Bangladesh and also doing business in more than 24 countries. It also completed acquisition of plant and technology for industrial battery manufacturing from Electrona, Switzerland

Strong BrandsRahimafrooz is a strong brand in our business arena. They are also able to establish separate brands for products like Lucas. Under Rahimafrooz corporate umbrella, they already establish some other SBU’s successful like Rahimafrooz CNG Ltd.


Recourses

Capabilities

Core Competenci

es

Sustainable Competitive Advantages

Superior Value

Creation

Financial CapabilitiesRBL are focusing on improving financial management. The Rahimafrooz Financial Leadership Team (FLT) is attempting to cut operating costs by 20% against budget with the same top line target by eliminating unnecessary expenses. They have financial resources by which they are entering new markets, expanding their business and acquiring new technologies. Rahimafrooz Group achieves and sustains continuous growth for more than 6 years - at a "natural" rate of 26% per annum.

Marketing CapabilitiesRahimafrooz has own distribution networks named Rahimafrooz Distribution Limited (RDL) involves in the marketing and distribution of a wide range of products through its nation-wide distribution network. RDL markets three major brands of automotive batteries: LUCAS, VOLTA, VOLTA MF (Maintenance Free) and SPARK in Bangladesh. The strong distribution networks make the RBL market leader in this market.

Teamwork Business Process:RBL makes an effective cross-functional team which help the management to take decision and also making facilitates diagnosis and coordinated action. They make a GITC team who are working tirelessly to put in place a Customer Relationship Management (CRM) system to help them get closer to their customers for both acquisition and retention programs.

Organizational Culture: RBL is emphasizing on improving their corporate governance to sustain our Group's continued focus on group health and group growth. For this, they separate Management from Ownership. All individuals of Rahimafrooz Group interact with customers and members of the public everyday and do hear, receive, or learn about their comments, complaints, views, etc on the products, services, and dealings of the company and they discuss within the company and managing these feedbacks and queries surely strengthen their total commitment to customer satisfaction. Now with a combination of leadership at various levels, employees drive and dynamism, managing change successfully, good corporate governance and with Vision 2010 focus they achieve growth at the higher rate of 40% plus this year.

SUPERIOR CUSTOMER VALUE

We know customer value is the trade-off of benefits against the costs involved in acquiring a product. The benefits RBL offers includes-

the product (batteries),

the supporting services (free maintenance services),

the personnel who are offering the products and providing service and

Image of the product (Rahimaafrooz and also its product’s brand like Volta

Costs include the price of the battery, the time etc.

The search for new areas of customer value underpins the RBL into a profitable $ 20 million business operating 420 outlets in Bangladesh and SAARC Region by creating a new batteries for users as why they can able to charge high prices for its batteries. The company has created and dominated a new area of customer value. Achieving superior customer value requires superior understanding of what creates value for customers.

CUSTOMER VALUE PROPOSITION


Value proposition is a description of the customer problem, the solution that addresses the problem, and the value of this solution from the customer's perspective. Deliver a particular customer value proposition to a definable market in order to exist. RBL is delivering value proposition contains the essential elements of Features in the battery, Advantage like igh tolerance to water loss and minimal maintenance ,Benefit like maintenance supports, Brand Image and Offering include competitive price, communication, distribution outlets etc. This is a reference to a specific important feature of the offer, the advantage as compared to the competition, and the benefit to the customer. The Rahimafrooz corporate brand images and product brand image like Locus convey feeling, and typically depict a lifestyle to customers.

Innovation Must Span the OrganizationRahimafrooz is analyzing the need and ends with customer satisfaction. Importantly, the process is continuous since needs change, products are modified, and new products are introduced. Moving this array of activities and functions toward the common goal of customer satisfaction, RBL is continuously understanding the product and service characteristics that customers want and need.

RAHIMAFROOZ: A MARKET-DRIVEN ORGANIZATIONProducing and marketing for international markets are established activities for many companies. This also considered by Rahimafrooz because they are doing business in foreign countries. However, both the changing scope and composition of international markets and the emergence of new organizational forms are creating pressures for evaluating strategies for existing markets and entering new markets. The global is a new concept for competing in world markets. Rahimafrooz considers the whole world as their competitive arena. It keeps in touch with technology and market trends all around the world. For this, Rahimafrooz is making collaborative agreement with key players like collaboration agreement with LUCAS, UK for setting up manufacturing and distribution system of Lead-Acid automotive batteries and also acquiring of some competitors like Yussa Bangladesh Limited which turn them to market leader and become as market driven organization in business arena. The key challenge is learning how to design and implement strategies in a rapidly changing business arena. For this, RBL develops effective management systems for coping with the dramatically changing world. Strategic capabilities enhanced by:

1. Scanning and understanding customer, suppliers, demographic, and technological trends;

2. Setting a vision that forms a direction for their organization;

3. Establishing more adaptive and flexible organization practices; and

4. Encouraging a strategic unity between the organization and its external stakeholders by involving customers and suppliers in organization practices.


CONCLUSIONAchieving successful implementation is a continuing challenge to the executives responsible for executing strategies and to the scholars seeking to understand implementation processes. The changing characteristics of the market-driven era will undoubtedly affect strategy formulation and its execution. To achieve the sustainable competitive advantage and market oriented, Rahimafrooz has enterprised into the first ever fibre optical commercial networking backbone in Bangladesh in the form of Metronet Bangladesh Ltd. (MBL). To sustain in home country Bangladesh and also international market, market orientation is necessary for Rahimafrooz to make a competitive posion in the market, build brand and also satisfying customers by delivering superior value.

So from the study we can tell that Rahimafrooz Batteries Limited is practising market driven strategies which make the RBL market-oriented organization and achieve a sustainable competitve advantage through acquiring distinctive capabilities in this business arena. Rahimafrooz began its operation as a trading company in 1954. Today Rahimafrooz has diversified in many areas from storage power solution to automotive aftermarket to retailing. By deliveing superior value according to cutomer requirements and preference, RBL is now the market leader and making profit and arrived as reputed business house not only in Bangladesh but also in South Asia region. They achieved todays position through long experience and learning. RBL monitor their level of commitment and orientation to serve customers’ needs and their strategy for competitive advantage is based on understanding of customer needs. RBL target customers and customer groups where they have, or can develop a competitive advantage. The top management of RBL regularly discusses competitors’ strengths and strategies. They communicate information about their successful and unsuccessful customer experiences across all business functions. All of RBL business functions are integrated in serving the needs of their target markets. All of their managers understand how everyone in the company can contribute to creating customer value. Finall it is articulted that RBL is becoiming market oriented and following some market driven strategies to gather sustainable competitive advantage in automutive after market.


RAHIMAFROOZ Market Driven Strategy

Documents

Transcript of RAHIMAFROOZ Market Driven Strategy