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Introduction:-
The word gourmet is from the French term, defined
as "refined and uncontrolled love of good food". Gourmet is an
industry classification for high-quality premium foods in the United
States. Gourmet may describe a class of restaurant, cuisine, meal or
ingredient of high quality, of special presentation, or high
sophistication. Gourmet food is characterized by high quality,
accurate preparation, and artistic presentation. This name “gourmet”
was suggested by his daughter who is living in America.
“Gourmet Bakers and Sweets” is the largest food retail chain of
Lahore. It is based in Lahore, the second largest city of Pakistan
known for its traditional foods and passion for eating. It was started
with a single outlet in Ichra in 1987 by Mr. Muhammad Nawaz
Chathha, in the begging they did not get good response which
resulted in shut down. He again started in 1992 at different place at
Muslim town, and Gourmet did not look back since then. Now with its
5 production units, 2 restaurants and 88 sales outlets, gourmet
outreaches to a huge population for their food needs. Mr. Chathha the
founder of Gourmet stared his business with 20 million rupees. He is
holding the position of Managing Director of the company. He was
serving in Shezan Bakers as a General Manager and later on he
decided to make his own bakery. He started his business through
getting employees from Shehzan bakers in the beginning.
Gourmet produces a wide variety of bakery items, sweets and
dairy products and offers high quality services in their restaurants.
Gourmet has introduced many new items in bakery products
categories which were previously not in the market of Lahore.
Gourmet stresses hard on quality and taste of their products and
making them affordable for their customers at the best prices in the
market.
The company has shown an explosive annual growth of more than
25% till 2006 in its business since this unique business was started in
1992. Recently gourmet shows 65% of annual growth in its business
from 2006 to 2009. With his commitment and strenuous effort to
provide the consumers with best quality food products in a convenient
and unmatched displaying manner, Gourmet has become a success
story of business growth in Pakistan. At the moment Gourmet has
more than 4500 employees working in the organization.
Mission statement:-
“Our mission is to provide quality products at lowest
prices”
Vision:-
“Leader of quality juice providers in the region by offering products
enjoyed in every home. This will be achieved from the dedication of
each employee in conjunction with supportive participation from
management at all levels.”
Gourmet Dairies is another step forward to
provide its consumer with wholesome milk
and milk products. This is also a sort of backward integration for the
provision of dairy raw materials for bakery.
Branch Supervisor
Assistant Branch Supervisor
Complaint Manager/ Auditor Purchase Manager
Assistant Branch Supervisor
Director
G.M Production
G.M Market
Assistant General Manager
Area Managers
ORGANIZATIONAL/ HIERARCHY CHART OF GOURMET:
Store Supervisor
Sales Man
Industry analysis: -
The food items industry has been rising constantly at a considerable
rate and the eating habits of people are changing over time with the
changing life styles.
With the growing trend of having light snacks with tea in the
afternoon and other readymade snacks for a meal instead of the
traditional meals of curry n bread, the demand and consumption for
the products of this industry is growing rapidly.
Apart from that as more people and youngsters are working especially
the women, their daily lives are becoming very fast and they don’t
have time to cook at home. Due to this reason more people are now
seeking convenience goods, which act as a alternative to the
traditional meals. Although people are becoming more aware and
more health conscious thus they demand high standards of quality
and hygiene along with a balanced nutrition.
Purchaser
Along with that the trend of celebrating events and having a get-
together in the West is now sweeping our culture as well and more
people are now celebrating many different events such as birthdays,
ceremonies, anniversaries, New Year, Valentine’s Day, Mother’s Day
etc as compared to the few events celebrated earlier such as Eid-ul-
Adha, Ramadan, Eid-ul-Fitr, weddings, birthdays and get to gether.
These events boost the sales of this industry as people opt to buy
things from outside instead of cooking themselves.
The trends of dining out have also grown rapidly over the past few
years and that’s the reason why many new companies like Gourmet
are entering the Restaurants market.
The acceptance and need for such products are growing every passing
day and it
is expected to grow at a higher rate in the future as well which is a
very healthy sign for companies like Gourmet to invest smartly and be
in front.
PEST analysis:-
1) Political change = from one party (change of government) to
another
Political analysis:-
Political scenario in Pakistan has seen many important changes in
recent years. The political environment directly influences all the
industries working in the country. Similarly the production
distribution and use of Gourmet’s products are subject to some
federal laws, such as the Food and Drug Act. The businesses are
subject to the Government stability in the countries as the businesses
are directly subjected to the taxation policy of the country they are
operating. They also have to comply with federal, state and local
environmental laws and regulations.
According to the Global Competitiveness Report 2010-2011, Pakistan
ranks poorly in terms of domestic commerce measures: business
sophistication, goods market efficiency as well as property rights
protection. Pakistan ranks lowest when compared to other Asian
countries including India, Indonesia, Thailand, Malaysia and China. As
shown in Table 1, Pakistan ranks 46 out of 139 countries in terms of
business cluster development compared with India at 29 and China at
17.
Table 1: Business Sophistication9
Countries Cluster
Developm
ent.
Local
Supplier
Quantity
Local
Supplier
Quality
Pakistan 46 87 95
India 29 7 60
Indonesia 24 43 61
Thailand 34 26 43
Malaysia 15 29 37
China 17 19 54
According to the prices above, a small office space of 12 x 38 square
feet is rented out for between PKR 29,640 (minimum) to PKR 91,200
(maximum) in Islamabad. The productivity of a city and employment
generation needs more entertainment, hotels, shopping areas and
offices in large complexes, but no space has been provided for large
complexes to develop. Trading policies are the long run hurdles that
cannot be resolved in near future.
The Pakistan Pure Food Laws (PFL) of 1963 is the basis of the existing
trade-related food quality and safety legislative framework. These
laws cover 104 food items falling under nine broad categories: milk
and milk products, edible oils and fat products, beverages, food grains
and cereals, starchy food, spices and condiments, sweetening agents,
fruits and vegetables and miscellaneous food products. The
regulations address purity issues in raw food and as well as additives,
food preservatives, food and synthetic colors, antioxidants, and heavy
metals. All these improvements will help Gourmet baker to enter in
new markets which are conscious about traditional food items and
also with security measures such as Sharjah, Dubai and other Middle
East countries.
TAX MEASURES 2010-11
Existing system of General Sales Tax would be reformed to eliminate
multiple tax rates and replace it with a single lower rate of 15%.
The reformed GST will not apply on health, education and food items
consumed by the poor. The GST will not apply to turnover less than
Rs. 7.5 million per year whereas the current threshold is Rs 5 million
per year and would be automated thus reducing possibilities of
corruption and refund delay.
Above situation analysis of taxation structure for 2010-11 shows some
mixed trends for the future prospectus of gourmet baker of Pakistan.
Increase in exemptions for income tax will increase the buying
potential of gourmet customer and will stabilize the employee the
gourmet baker by strengthen there economical conditions. In the
mean while increase in GST and Surcharges on electricity
consumption will lower down the sales volume of gourmet products
due highly cost of production resulting in high product prices.
Home market lobbying/pressure groups
In Pakistan sugar industry is operated almost in all by some political
families and in food industry sugar is a major raw material. For the
sake of fetching good profits these groups put a strong pressure and
prove themselves a strong lobbying group. Employee union is also an
other lobbing group that pushes the gourmet baker for higher wages
that will result in high cost of productions. Strong transport unions
may also create some logistic problems for Gourmet baker
distribution channel.
International pressure groups
India is a leading manufacturer of sweet and bakery items. Low labor
costs in India has enable Indians to get more share in international
markets. In the mean while Indian lobby is strong enough as compare
to Pakistan to reach in foreign markets. Gourmet and many other
entrepreneurial needs strong government assistance and coloration to
enter in international markets
Wars, conflict & Terrorism
Recent wave of war against terrorism has created a sense of in
security in general public in Pakistan. Shopping trends are decreasing
due to suicidal attacks and people are not willing to come at bazaar as
they were in past. This situation has adversely affected the sales of
gourmet baker and sweets.
2) Economic change = For example a recession creating increased
activity at the lower ends of product price ranges. Rate of interest
raises depressing business and causing redundancies and lower
spending levels as well as energy crisis too.
Economic analysis
Despite inhospitable domestic and international environment
resulting from the either the global recession or due to the terrorism
acts, Pakistan’s economy grew by 2 percent in the financial year 2008-
09 according to Economic survey 2008-09. Reports have shown
increase in GDP, increase in per capita income and increase in IT
development as well which are positive signs for the industry but
there are some negativities as well. Like all the other companies are
subject to the harvest of the raw material that they use in their soft
drink and juice, like corn, oranges, grapefruit, vegetables etc. –
Gourmet also relies heavily on trucks to move and distribute many of
their products, fuel is a very important subject, so they are subject to
the fuel prices. Moreover, there has been a crisis in the production of
sugar in Pakistan, with prices sky rocketing. Another crisis that
Pakistan is dealing is the shortage of electricity. Such economic
factors have resounding impact on such industries and increase the
cost of goods.
3) Socio-cultural change =Involves changing attitudes and
lifestyles. The increasing number of women going out to work, for
example, led to the need for time-saving products for the home.
Socio-culture analysis
The population of Pakistan is on the rise where as the health
consciousness among the people is also a lot more than it has been in
the past. The age distribution of Pakistan is also very balanced, major
portion of its population consists of youth. Gourmet bakery products,
dairy products as well as beverages and moreover Juices and ice
creams are subject to the lifestyle changes as the awareness of health
consciousness is rising in the people now. This has affected the
industry in the positive manner and many new companies are being
entered in the food market, the usage of the food products in the
households has increased a lot. The need for hygienic products and
healthy products are in important in the average day-to-day life.
Consumers from the ages 37 to 55 are also increasingly concerned
with nutrition. There is a large population of the age range known as
the baby boomers. Gourmet has to pay a special attention on the
lifestyle changes. Further Income of people is increasing more trends
towards FMCG. Further a major social trend in the rural areas of
Pakistan has been a shift from presenting guests with drinks and
bakery products such as lassi towards such beverages and bakery
products. People use bakery products on different events new born
babies, Basant, Shabraat, Eid milad-un-Nabi (s.a.w), Eid-ul-
Fiter, Eid-ul-adha, Weddings, Engagement parties, birthdays,
Father`s day, mother`s day, valentine`s day and get together.
All these situations are calling for new and new opportunities and
investors.
4) Technological change =creates opportunities for new products
and product improvements and of course new marketing
techniques- the internet, e-commerce.
Technological analysis
Pakistan is considered as developing country. Although it is a nuclear
power yet it lacks behind in other technologies. Technology plays a
secondary role in this industry, as it is not heavily dependent on
technological advancements like the consumer electronics industry, or
the software industry. Because bakery and beverages products are
non-tech based in nature, technology in this industry is therefore
limited to function as a catalyst to improve production capacities,
speed of product manufacturing cycles, inventory management. It has
to pay attention to the new distribution techniques as well. Even
though one have to take into account that specialized factors involve a
heavy and sustained investment, but also at the same time if one is
able to achieve them, he could generate competitive advantage. The
new technology of internet and television which use special affects for
advertising through media. They make products look attractive and
this help in selling of the products. Due to affective transport facility
the company has achieved great success in distributing its products to
all over the country.
SWOT Analysis:
SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
Internal factors, the strengths and weaknesses and external factors,
the opportunities and threats.
The analysis shows Gourmet Baker Pakistan's Strengths, Weaknesses,
Opportunities and Threats. The SWOT analysis will give you a clear
picture of the business environment Gourmet Baker Pakistan is
operating in at the present time.
SWOT Analysis of Gourmet
Strengths:
Research and Development Center:
By having a strong R&D center Gourmet is offering a quality product
to their customers. Gourmet is offering a product to their customer in
different packing and according to different occasions.
Well Organized Structure:
Gourmet has a well organized structure. All the departments perform
their work according to the organizational structure. 100% of
production at Gourmet is carried out at automated plants.
Computerized Database System:
Gourmet has an organized database; all the activities are recorded in
the database. Computerized database provides error free center. It is
updated on the regular basis.
Team Work:
All the departments are working as a team such as Quality assurance,
Marketing, MIS, HR and Administration etc. Working as a team
increases the efficiency of the Gourmet.
Low cost:
Keeping costs lower than their competitors and keeping the cost
advantages helps Gourmet Baker Pakistan pass on some of the
benefits to consumers.
Supplier relationship:
Supplier relationships are strong at Gourmet Baker Pakistan, which
can only be seen as strength in their overall performance.
Quality:
By applying the various strengths Gourmet offers the product to the
customer. Gourmet never compromise on quality that is why they are
able to capture a huge market share. Sweet and other bakery
products are prepared with immense care using traditional and
authentic recipes to give unforgettable taste.
Customer Retention:
As Gourmet is offering complete range of sweets, dairy, and bakery
products to their customers with the best quality and taste. Gourmet
is able to retain the customers because of its brand name and worth of
the brand. As retaining the customer is better rather than switching
towards the new customers.
Weakness:
Less Financial resources for advertisement:
Gourmet is using less financial resources for advertisement. By using
the appropriate resources they can advertise their product by
different tools of advertisement.
Latest Machinery required increasing the Production Rate:
Latest machinery is the key strength of any organization, but Gourmet
lacks in this point. By using the latest machinery Gourmet can
increase the production rate.
No broadcast media is used:
The term broadcast media covers a wide spectrum of different
communication methods such as TV, radio, newspaper, magazines and
many other materials supplied by the media and press, so more focus
should be on broadcast media.
Opportunities:
Gourmet Baker Pakistan could benefit from expanding their
online presence and making more money from online
shoppers/internet users.
The changes in the way consumers spend and what they buy
provides a big opportunity for Gourmet Baker Pakistan to
explore.
Gourmet Baker Pakistan is in good financial position, which is
an opportunity for them to explore in terms of investment in
new projects.
Grasping the opportunity to expand the customer base is
something Gourmet Baker Pakistan can aim for, either
geographically or through new products.
Expanding the product/service lines by Gourmet Baker Pakistan
could help them raise sales and increase their product portfolio.
Gourmet Baker Pakistan has a number of highly skilled staff,
which is an opportunity for them to explore as expertise of their
staff can help Gourmet Baker Pakistan to bring the business
forward.
Many cities to capture:
One of the most important opportunities is that Gourmet can increase
their target market by capturing other cities which consist of the
potential customers.
Brand Worth:
Gourmet is the well recognized brand nationwide and it is also
operating internationally which means the worth of the brand is good
in the mind of the customers. Because of the brand worth Gourmet
can come up with the different market of bakery products.
New market to explore nationwide and internationally:
It is the great opportunity for Gourmet to expand their business and
market by exploring the new markets nationwide and internationally.
Threats:
Consumer lifestyle changes could lead to less of a demand for
Gourmet Baker Pakistan products/services.
Tax increases placing additional financial burdens on Gourmet
Baker Pakistan could be a threat.
Change in demographics could threaten Gourmet Baker
Pakistan.
The financial burden of increasing interest rates could be a
threat to Gourmet Baker Pakistan.
Increased competition from overseas is another threat to
Gourmet Baker Pakistan as it could lead to lack of interest in
their products/services.
Extra competition and new competitors entering the market
could unsteady Gourmet Baker Pakistan and be a threat.
The actions of a competitor could be a major threat against
Gourmet Baker Pakistan, for instance, if they bring in new
technology or increase their workforce to meet demand.
Price wars between competitors, price cuts and so on could
damage profits for Gourmet Baker Pakistan.
A slow economy or financial slowdown could have a major
impact on Gourmet Baker Pakistan business and profits.
The rise and/or fall of the foreign exchange rate could threaten
Gourmet Baker Pakistan with regard to importing and
exporting.
Rising costs could be a major downfall for Gourmet Baker
Pakistan as it would eat into profit.
Gourmet Baker Pakistan could be threatened by the growing
power customers have to set the price of their
products/services.
Gourmet Baker Pakistan could be threatened by the growing
power their suppliers have to set their prices.
Gourmet could be a big threat because it is also offering a sweet
Nirala’s taste and quality could be the restrictive force for other to
penetrate.
Change in the consumer preference:
Changing of consumer preferences is a major threat of any
organization. As if we talk about Gourmet now people prefer
international brand over local brand which have become a major
threat.
BCG Matrix
The BCG matrix method is based on the product life cycle theory that
can be used to determine what priorities should be given in the
product portfolio of a business unit. To ensure long-term value
creation, a company should have a portfolio of products that contains
both high-growth products in need of cash inputs and low-growth
products that generate a lot of cash. It has two dimensions:
Market share
Market growth
The basic idea behind it is that the bigger the market share a product
has or the faster the product's market grows the better it is for the
company.
Placing products in the BCG matrix results in 6 categories in a
portfolio of a company:
1. Stars (=high growth, high market share)
Stars generate large amounts of cash because of their strong relative
market share, but also consume large amounts of cash because of
their high growth rate; therefore the cash in each direction
approximately nets out. If a star can maintain its large market share,
it will become a cash cow when the market growth rate declines. The
portfolio of a diversified company always should have stars that will
become the next cash cows and ensure future cash generation.
2. Cash Cows (=low growth, high market share)
As leaders in a mature market, cash cows exhibit a return on assets
that is greater than the market growth rate, and thus generate more
cash than they consume. Such business units should be "milked",
extracting the profits and investing as little cash as possible. Cash
cows provide the cash required to turn question marks into market
leaders, to cover the administrative costs of the company, to fund
research and development, to service the corporate debt, and to pay
dividends to shareholders. Because the cash cow generates a
relatively stable cash flow, its value can be determined with
reasonable accuracy by calculating the present value of its cash
stream using a discounted cash flow analysis.
3. Dogs (=low growth, low market share)
Dogs have low market share and a low growth rate and thus neither
generate nor consume a large amount of cash. However, dogs are
cash traps because of the money tied up in a business that has little
potential. Such businesses are candidates for divestiture.
4. Question Marks (= high growth, low market share)
Question marks are growing rapidly and thus consume large amounts
of cash, but because they have low market shares they do not
generate much cash. The result is large net cash consumption. A
question mark (also known as a "problem child") has the potential to
gain market share and become a star, and eventually a cash cow when
the market growth slows. If the question mark does not succeed in
becoming the market leader, then after perhaps years of cash
consumption it will degenerate into a dog when the market growth
declines. Question marks must be analyzed carefully in order to
determine whether they are worth the investment required to grow
market share.
5. War Horses
They have high market share, but the market has negative growth;
the problem for management is to decide whether the product is in an
irreversible decline, or whether it can be revived, perhaps by
repositioning into another market.
6. Dodos
They have a low share of a negative growth market, and are probably
best discontinued.
DATA
FAZAL SWEETS:
Avg. per day sale of Fazal sweets in 2010= 75000
Avg. per month sale of Fazal sweets= 2250,000
Estimated sale of 2010= 27000,000
Avg. per day sale of Fazal sweets in 2009= 68,000
Avg. per month sale of Fazal sweets= 2040,000
Estimated sale of 2009= 24480,000
Avg. per day sale of Fazal sweets in 2008= 63,000
Avg. per month sale of Fazal sweets= 1890,000
Estimated sale of 2008= 22680,000
NIRALA SWEETS:
Avg. per day sale of Nirala Sweets in 2010= 60000
Avg. per month sale of Nirala Sweets = 1800,000
Estimated sale of 2010= 21600,000
Avg. per day sale of Nirala Sweets in 2009= 40,000
Avg. per month sale of Nirala Sweets = 1200,000
Estimated sale of 2009= 14400,000
Avg. per day sale Nirala Sweets in 2008= 20,000
Avg. per month sale of Nirala Sweets = 600,000
Estimated sale of 2008= 7200,000
GOURMET SWEETS:
Avg. per day sale of Gourmet Sweets in 2010= 85,000
Avg. per month sale of Gourmet Sweets = 25550,000
Estimated sale of 2010= 30600,000
Avg. per day sale of Gourmet Sweets in 2009= 70,000
Avg. per month sale of Gourmet Sweets = 2100,000
Estimated sale of 2009= 25200,000
Avg. per day sale Gourmet Sweets in 2008= 50,000
Avg. per month sale of Gourmet Sweets = 1500,000
Estimated sale of 2008= 18000,000
SALES
Companies 2008 2009 2010 Total
Fazal
sweets
2268 2448 2700 7416
Nirala 720 1440 2160 4320
Gourmet 1800 2520 3060 7380
Total 4788 6408 7920
RELATIVE MARKET SHARE-(RMS)
Companies 2008-09 2009-10
Fazal
sweets
1.26 0.97
Nirala 0.31 0.57
Gourmet 0.79 1.02
Total 2.36/3=0.78 2.56/3=0.85
MARKET GROWTH
Company Growth
of Each year
2008 to 2009 2009 to 2010
Fazal sweets (2448-2268)/
2268*100=7.94%
(2700-2448)/
2448*100=10.29%
Nirala Sweets (1440-720)/720*100=100% (2160-1440)/1440*100=50%
Gourmet Sweets (2520-1800)/1800*100=40% (3060-2520)/
2520*100=21.45%
INTERPRETATION:
In the BCG matrix, Relative market share is given at the x-axis with a
median point of 0.8 and market growth is given at y-axis with a
median point of 38.83% and with positive growth upward and
negative growth downward. Positive growth upward and negative
growth downward.
BCG MATRIX- GOURMET SWEETS
STARS QUESTION MARK N1 N2
Gourmet (2008-2009)
100%
38.83%
Market
Growth
0
Relative Market Share
INDUSTRY AND MARKET DESCRIPTION
Sweets are in our culture for centuries. It is our cultural heritage;
people of our region have different taste in sweets as compared to
west. The western people eat chocolate as sweets but in our region
CASH COWS
Gourmet (2009-2010) F1 F2
DOGS
1.5 1.4 1.3 1.2 1.1 1.0 .9 .8 WAR HORSES
.7 .6 .5 .4 .3 .2 .1 .0
DODOS
sweets are mithai. So in every town every city of Pakistan these
sweets shops are seen. Lahore and the people of Lahore are known
for their tastes and eating habits so there are many small scale sweet
shops in almost every area. Gourmet has also started as a small shop
in Lahore but with changing market conditions with increase in
purchasing power of customer and their every day changing taste
buds gourmet has also improved. Although the tastes of customers in
many other dishes are changing people now a days are eating fast
foods and liking Chinese and western dishes rather than our typical
eastern or Pakistani dishes, like we have seen many western dishes in
our wedding occasions which shows the changing consumer needs.
But this trend is not in sweets industry the habit of eating sweets is
very much in like centuries before. It is the most essential component
of wedding no wedding, no ceremony or other occasion of celebration
is complete without sweets. With the ever increasing purchasing
power people are purchasing sweets in bulk form. Although the
industry of sweets is century old but it is not fading with the time it is
getting rich day by day.
CUSTOMER CHARACTERISTICS
How selective is your customers in terms of buying your product
How much customer switch from your product to another
product
POSITIONING AND BRANDING
Gourmet carries its image in a positive manner. In consumer’s
perception Gourmet is producing hygienic products with high quality.
Its packaging is perfectly according to the occasions. For the best
quality and impressive representation of the events people prefer
gourmet.
1. Brand Positioning:
Gourmet Position their product in the mind of the consumers by
offering:
Superior in Price and Taste
Quality
Freshness
Superior Quality Brand Name
2. Brand Image/Personality:
Superior in Price and Taste
Status Conscious (consumer’s perception)
Strong Commitment
No Compromise on Taste & Quality
Positioning:
Product Analysis:
The main product because of which Gourmet was able to make a
name for it and has been continuing to go on and on is mithai and
they are famous for it but their bakery products and beverages also
give value to their customers. The product includes:
1. Product Attributes/Features:
The products being sold at Gourmet carry the following attributes
which are:
• Quality:
Gourmet has been very careful and has been following a very strong
standard for maintaining its quality so that customer is not
complaining about its products. Since they are dealing in food
products where quality plays a very vital role so they believe in quality
good and healthy product to the customer.
• Purity:
It’s another attribute which has been taken care of. In products such
as mithai where people like that they get pure things specially in milk
and better where there are chances that the customers don’t get pure
products. Gourmet has made sure that they use pure materials in
making of the product so that when the customer gets it they don’t
feel that it’s not pure.
• Freshness:
Food products all over the world are loved for their freshness and if
we talk about products which Gourmet is selling they should be fresh
otherwise customer won’t purchase it. Gourmet promises to give fresh
products to their customers by giving them those products which they
feel are good and healthy to eat and if any product they feel is not
fresh enough they won’t give it to the customer.
• Good Taste:
Taste is because of which a customer would love to purchase a
product again if he likes the taste of your product. For so many years,
Gourmet has been way ahead in the market and leading it on the basis
of its taste and it promises to give good taste to their customer so that
they enjoy it.
2. Benefits:
• Same taste:
This is one of the biggest benefits of coming to Gourmet that the
consumer will get the same taste whenever he purchases products
from Gourmet it’s not that at one time the products will taste different
and other time they would be different.
• Uniqueness:
One of the strong aspects of Gourmet is that its sweet (mithai) has a
unique and at the same time very nice taste which no other player in
the market is providing.
• Large Variety:
The customers can benefit from a large range and variety which
Gourmet is providing them not only in its major products which is
sweet (mithai) but lot of other products such as dairy products etc.
Cleanliness:
At each and every outlet of Gourmet, special emphasis is laid on
cleanliness so that consumer feels that he is standing at a nice place
and doesn’t get irritated.
Owner Point of View:
• Social Class:
From Gourmet point of view they are benefiting from segment they
are targeting which is the upper middle and upper class as they enjoy
a large amount of profit by charging handsome amount and are
enjoying huge amount of financial reward.
• Brand Name and branding
Gourmet is one of the strongest brand name and market leaders in its
field which enables them to get more benefit out of it. Since they are
one of the biggest as well as the oldest in this field they have
established a name in the market and consumers are automatically
attracted towards Gourmet.
SEGMENTATION AND TARGETING
There prices of Gourmet products are higher as compared to their
main competitors and secondly their shops and stores are mainly
located costly areas of cities. Keeping these factors in view we can say
that there target market is upper middle to upper class.
Continuous Learning about the Market:
Gourmet is different from others because they have been continuously
upgrading themselves over the years. They started their business
from the inner city congested
Locality as traditional sweet shop mostly found in cities doing small
scale business and selling only mithai related products or dairy
products.
But Gourmet has learned a lot from the changing tastes of their
customers and their preferences. They changed their stores outlook
made them more modern and updated and introduced more updated
functions in stores operation. They have been successfully able to shift
their small scale business to a company level business. Their initial
area of business was their hometown Lahore, but they successfully
expanded their business to other big cities of Pakistan.
Secondly they continuously keep working on their products and for
over the years been able to launch different successful products in
market. Their major focus is on quality of their products so to
maintain strict laws of quality they have separate quality control
department.
The other example of their continuous learning about the market is
their successful launch of snacks product category and their dairy
products. They launched Gourmet milk in the market a few years back
although their milk was not the big success as it has to compete
industry giants like nestle, haleeb etc. but their snacks category is
successful and been able to capture a large portion of the market.
These snacks and beverages are not only available at gourmet stores
but at some other stores also.
Target Market Analysis:
Demographics:
Mithai is a product well-known among all age group people.
People of all:
Age
Gender
Generation
Family Size
People belong from all ages generally love sweets and our core
products so there is no exception likewise teenagers like it whereas
old people don’t like it, but in one sense gourmet is targeting more
towards people belong from age group approx 10 to 50 years
I.e. including teenagers, youngsters, mature people however age
group exceeding 50 years i.e. old usually suffers from different sugar
prohibit diseases. So this sector is a low consumer of their traditional
product.
New generation is more concern about new taste and looks,
gourmet’s seems quite conscious about this factor. It is continuously
modifying its products according to the changing needs of the new
generation i.e. virtual placement in order to facilitate the customers
worldwide.
Being a server of eastern society like Pakistan where family size is
usually large which means strong concern about events and
occasions. Gourmet as one of the largest sweet dealers was always be
there to facilitate them i.e. whether it’s a joyful moment like
marriages or a moment of sorrow.
Geographic:
Gourmet is targeting mostly the urban areas all over Pakistan
Lahore, Karachi, Islamabad, Rawalpindi, Faisalabad, Sialkot, Kasur, Multan, Gujranwala
Psychographic:
Marriages, cultural occasions and personal events are the events from
which no social class can be excluded. However being a sole marketer
of high quality which ultimately leads to higher price, Gourmet’s focus
is more towards society’s middle and upper class.
Media Graphics
Hoardings, Banners, Leaflets, Magazines, Newspaper, Advertisement
on public transport
Porter 5 Forces
Threats of New Entrants:
Capital Requirements:
High capital cost is required for acquiring good places for the outlets
if anyone wants to jump in the market.
Government Policy:
In our country the government has no policies for this industry.
Own Distribution System:
It’s very difficult for newcomer to own a distribution channel because
it needs huge investment. Gourmet has its own distribution systems.
Brand Identity:
To identify a brand in the market is more difficult for any new
entrants, because gourmet already has introduced such type of taste
& quality in this industry that it is very hard to compete.
Threat of Substitute Products:
The substitute products may be;
Bakery makes cakes, chocolates, ice-cream etc
Local area manufacturers
Bargaining Power of Buyers:
The bargaining powers of buyers are high because;
Convince Product
Low Involvement of Buyers
Buying Behavior – Price sensitivity
Brand Loyalty Status is low
Bargaining Power of Suppliers:
The bargaining powers of suppliers are low because;
Large number of suppliers in the market.
It is an honor to become a supplier for Gourmet.
Now Gourmet has become its own supplier.
ORGANIZATION PROCESS AND CULTURE
Culture and environment inside the Gourmet is very much attractive
people serving customers are always available for service. The person
at desk always is in a happy mood to treat the customers.
Well Organized Structure:
Gourmet has a well organized structure. All the departments perform
their work according to the organizational structure. More than 20%
of Mithai production at Gourmet sweets is carried out at automated
plants.
Computerized Database System:
Gourmet has an organized database; all the activities are recorded in
the database. Computerized database provides error free center. It is
updated on the regular basis.
Team Work:
All the departments are working as a team such as Quality assurance,
Marketing, MIS, HR and Administration etc. Working as a team
increases the efficiency of the Gourmet sweets.
Quality:
By applying the various strengths gourmet offers the product to the
customer. Gourmet never compromise on quality that is why they are
able to capture a huge market share. Sweet is prepared with immense
care using traditional and authentic recipes to give unforgettable
taste.
Product Life Cycle:
The stages that product go through from development to withdrawal
from the market.
Each product – different
Determines revenue earned
Helps
-identify when a product needs support, redesign, withdrawal
etc.
-in new product development
-in forecasting and managing cash flow.
The stages of the product life cycle:
Development
Introduction
Growth
Maturity
Decline
Gourmet sweet & bakers
Gourmet bakers
Gourmet deals in multi products and it possess:
A distinct mission
Own managers
Identifiable customer segments
Specific competitors
Ability to plan independently
BCG Strategies
Question marks- products with low market share in industries
with high growth potential- Covert to star, or Exit market.
Stars- products with high market share in industries with high
growth potential- make heavy investment because of sales/profit
potential.
Cash cows- products with high market share in industries with
low market growth potential-maintain status as long as possible-
products produce strong positive cash flows.
Cash cows support Gourmet because of good will and market share.
Dogs-products with low market share in industries with low
market growth potential-minimize position-withdrawal.
HIGH LOW
HIGH
LOW
Model Use and Applicability
The BCG identified four major strategic thrusts in terms of
market share.
Once the products have been plotted, the planner then has to
decide on a strategy for that product. There are 4 major
strategies that can be followed.
Build
Hold
Harvest
Divest
Build
The product or SBU’s market share needs to be increased to
strengthen its position. Invest in one or more SBUs to build a
share .This strategy are suited to Question Marks.
Stars Question?
Cash cows(hold) Dogs
DodosWar Horses
Hold
Gourmet objective is to maintain the current share position
and it lies in cash cows and this strategy is often used for Cash Cows
so that they continue to generate large amounts of cash.
Gourmet invests just enough to maintain a share in the
market.
Harvest
Here management tries to increase short-term cash flows as far
as possible (e.g. price increase, cutting costs).
It is a strategy suited to weak Cash Cows or Cash Cows that
are in a market with a limited future.
Harvesting is also used for Question Marks where there is no
possibility of turning them into Stars, and for Dogs.
Divest
The objective of this strategy is to rid the organization of the
products or SBUs that are drain on profits and to utilize these
resources elsewhere in the business where they will be of greater
benefit.
This strategy is typically used for Question Marks that will not
become Stars and for Dogs.
Gourmet lies in Cash cows and these are cash generators and
require an invest or hold strategy while maximizing cash flow.
Gourmet aim is to achieve a balanced portfolio, sustaining or
holding the Cash Cows.
Cash Positions of Gourmet VS Competitors
Business Type Cash Source Cash
Use
Net cash Balance
Cash
Cows(Gourmet)
More Less Funds available
Star More More Build Competitive
position and grow
Dog
(Fazal Sweets)
Less Less Divest and redeploy
proceeds
Question
mark(Nirala
Sweets)
Less More Funds needed to
invest
Market Attractiveness/Business Strength Matrix
Or
GE Matrix
It includes:
Market Attractiveness
Organizations strength
Gourmet Attractiveness is determined by factors such as:
Market Growth Rate
Market Size
Demand Variability
Industry Profitability
Industry Rivalry
Global Opportunities
Macro Environmental Factors (PEST)
Gourmet Strength can be determined by following factors:
Market Share
Growth in market share
Brand Equity
Distribution Channel Access
Production Capacity
Profit margin relative to competitors
Technological or other innovation
Customer Loyalty
GE Matrix
(Gourmet sweets & bakers)
Gourmet sweets & bakers
Gourmet lies in YELLOW ZONE ; a position in the yellow zone
is viewed as having medium attractiveness. Management must
therefore exercise caution when making additional investments
in this product/service.
The suggested strategy is to seek to maintain share rather
than growing or reducing share.
Best Strategy: INVEST FOR EARNINGS
The GREEN ZONE consists of the three cells in the upper left
corner. If your enterprise falls in this zone you are in a favorable
position with relatively attractive growth opportunities. This
indicates a "green light" to invest in this product/service.
Best Strategy: INVEST FOR GROWTH
The RED ZONE consists of the three cells in the lower right
corner. A position in the red zone is not attractive. The
suggested strategy is that management should begin to make
plans to exit the industry.
Best Strategy: HARVEST or DIVEST.
High Attractiveness
LEADER
Strong Competitive Position
Strategies:
provide maximum
investment
diversify
your position to focus your
resources
accept moderate near-term
profits to build share
High Attractiveness
GROWTH
Average Competitive
Position
Strategies:
build selectively on
strength
define the implications of
challenging for market
leadership
fill weaknesses to avoid
vulnerability
High Attractiveness
IMPROVE/QUIT
Weak Competitive Position
Strategies
ride with the market growth
seek niches or specialization
seek an opportunity to
increase
strength through acquisition
Medium Attractiveness
TRY HARDER
Strong Competitive Position
Strategies:
invest heavily in selected
segments
establish a ceiling for the
market share you wish to
achieve
seek attractive new segments
to apply strengths
Medium Attractiveness
Average Competitive
Position
Strategies:
segment the market to find
a more attractive position
make contingency plans to
protect your vulnerable
position
PROCEED WITH CARE
Medium Attractiveness
PH. WDL
Weak Competitive Position
Strategies:
act to preserve or boost cash
flow as you exit the business
seek an opportunistic sale
seek a way to increase your
strength
Low Attractiveness
CASH GENERATION
Strong Competitive Position
Strategies:
defend strengths
shift resources to attractive
segments
examine ways to revitalize
the industry
time your exit by monitoring
for harvest or divestment
timing
Low Attractiveness
PH. WDL
Average Competitive
Position
Strategies:
make only essential
commitments
prepare to divest
shift resources to a more
attractive segment
Low Attractiveness
WITHDRAWAL
Weak Competitive Position
Strategies:
exit the market
prune the product line
STRATEGIES
BUSINESS STRENGTH (Gourmet)
Strong Medium
Weak
PROTECT POSITION
• Invest to grow at
maximum digestible
rate.
• Concentrate effort on
maintaining strength
INVEST TO BUILD
• Challenge for
leadership
• Build selectivity on
strengths
• Reinforce vulnerable
areas
BUILD SELECTIVITY
• Specialize around ltd
strengths
• Seek ways to
overcome
weaknesses
• Withdraw if
indications of
sustainable growth are
lacking
BUILD SELECTIVITY
• Invest heavily in most
attractive segments
• Build up ability to
counter
competition’
• Emphasize profitability
by
• raising productivity
Hold SELECTIVITY/
MANAGE
FOR EARNINGS
• Protect existing
program
• Concentrate
investments
in segments where profit-
ability is good and risks
are relatively low.
LIMITED EXPANSION OR
HARVEST
• Look for ways to
expand
without high risks else
minimize investment
PROTECT AND REFOCUS
• Manage for current
earnings
• Concentrate on
attractive
segments
• Defend strengths
MANAGE FOR
EARNINGS
• Protect position in
most
profitable segments
• Upgrade product
line
• Minimize investment
DIVEST
• Sell at time that will
maximize
cash value
• Cut fixed costs and
avoid
investments meanwhile
SCORPIO TECHNIQUE
This technique is used to justify the strategies that we have
selected while doing the analyses of BCG Matrix. Scorpio technique
is a continuous process of every company and each and every
company have own time frame to review the technique may be in 0ne
year or one month ,may be in one week or other .
Industry or Market
Industry or technology thinking
1. Example:- online complaint centre, e-commerce, research & development.
CUSTOMER:-
1. Middle class, upper middle class, upper class.
2. Cakes, pastries, beverages and dairy products, because large number of branches are there for their easy access.
3. Soft drinks charges are less then coca cola and Pepsi etc, online complaint desk, as people are more concerning about health.
4. Increase number of branches, Alternate Distribution Channel.
5. Inflation rate, high prices of sugar, energy crisis, etc
6. Reliability, loyalty, customer relation, customer retention.
7. Branches, website under construction (updating reason), online complaint desk.
SEGMENTATION AND TARGETING
1. Differentiated, each and in every branch give response to the customer same and fair interaction.
2. To increase customers by targeting all the level of social classes now.
3. Upper middle class, upper class.
4. To develop Durability, to targeting the customer according to the need and demand, built a positive relations to customer , to increase loyalty and to do research and survey on customer preferences.
5. No priority because same treatment to all the customer
6. Now they are trying to target all the segments as their beverages are available on other local retail shops.
7. By delivering new offerings e.g. catering in parties on different occasions.
POSITIONING AND BRANDING
1. Differentiation marketing.
2. high quality and good position
3. more and more improvement in quality of the product and position to built relation to customer to improve brand loyalty
4. To innovate different product and services and built a positive image in the mind of the customer.
5. Establishment a complete bakery of first choice to facilitate the customer.
6. Customer trust increases
7. Increase promotional activities like advertising on different channels, pamphlets, concerts etc.
Retention Strategies
1. Holding current customers to attract new customers, and giving more value to customer through more advertisement.
2. Listen and Respond to complaint
3. No, it can also increase the customers
4. No.
5. Good
6. To get satisfaction of the customers
7. Offering new items.
ORGANIZATION: PROCESSES AND CULTURE
1. Both internal & external include employees ,customers
2. Providing better hygienic and healthy food.
3. Strictly followed
4. Yes
5. BCG Matrix
OFFERINGS
1. Superior values and services with attractive and hygienic and healthy products.
2. Different products, beverages, cakes, pastries.
3. Provide banking facility that influence the customers, provide value, improved brand image, introduced new innovative products.
4. Sugar free ice creams.
5. Providing more healthy products to satisfy each and every type of customers
6. Yes we are managing the life cycle.7. Through Advertisement, print media, number of branches
increase.
Analysis and recommendations
The whole report shows that the Gourmet bakers and sweets are
striving to get a competitive advantage against its customers but
there are some problems too on which the company should
concentrate because they serve many other factors respectively
1. Gourmet should offers incentives and benefits to its old employees
to reduce its turnover rate.
2. And secondly they should reduce the employee work hours so that
they better deals the customers.
3. The Gourmet hasn’t advertised themselves through media; they
should have adopted some other source of advertisement to cater the
market. Well they are well known in the market but they should use
TV media for their advertisement, they could also advertise
themselves on the cable in the areas in which they are having their
chains.
4. The Gourmet should plan for the loyalty of its customers. They
should give discounts to its regular customers in this way the
customer’s sincerity with the company will grow.
5. The Parking area of the Gourmet bakers should be enhanced if
their customers face problems in parking .then the customer would
prefer to go on some other store to find convenience rather than
buying for the Gourmet.
7. The Gourmet should increase the quality of the new products as it
has offered (milk and ice-cream) and it should also concentrate on the
advertisement of the new product seriously.
8. The Gourmet should take feedback from the customers by
personally survey and should concentrate on the requirement of the
customers.
9. As the people is weight and diet conscious today so the Gourmet
bakers should introduce sugar free sweets and cakes for those people
too.
10. They should be concentrating on the quality of their products so that the customers wouldn’t be returning the goods back and thus the image of the Gourmet wouldn’t be lost in the eyes of the customers.
11. By adopting reduce price strategy they can make more and permanent customers. Not only more customers will come there will be increase in the number of loyal customers as well.
12. They have to acquire new technology for production if they don’t move towards acquiring new technology then they won’t be able to meet the needs of customers.
13. Sales promotions like prizes, lucky draw schemes should be introduced to attract more customers and involve kids and children to increase sales.
14. Must capture some special events like local sports series, convocations & charities shows by sponsoring these shows as would give a good image about the company to the consumer.