How Kohinoor Chemicals Indusries Ltd. Maintain Its Old Lagacy Facing Intense Competiton in the Market

7/26/2019 How Kohinoor Chemicals Indusries Ltd. Maintain Its Old Lagacy Facing Intense Competiton in the Market

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INDUSTY OVERVIEW:

Local cosmetics and toiletries industry continues to dominate the domestic market radually !ith

the sector "ostin a dou#le diit ro!th o$er one and a hal% decades& 'resently( the localmanu%acturers hold around )* "er cent share in the domestic cosmetics and toiletries market

com"ared to only +* "er cent in the late nineties& The ro#ust ro!th o% the sector o$er the last ,-

years has turned it into one o% the $ital money s"innin areas !ith an annual turno$er o%

a""ro.imately Tk& ,-* #illion& Industry insiders ha$e attri#uted such a sini%icant ro!th to

di$ersi%ication o% "roducts alon !ith su""lyin /uality oods at com"etiti$e "rices& They also

said massi$e consumeri0ation cou"led !ith a risin "urchasin ca"acity o% the middle income

eneration has #een hel"in it to #ecome a mammoth cosmetics industry&

1"art %rom ensurin /uality( e."enditure in ad$ertisement( in most cases( emeres as the %ate

decidin %actor o% a ne!er "roduct& Data o% 2anladesh 3osmetics and Toiletries 4anu%acturers

1ssociation 523T416 sho!ed that the industry has em"loyed *&- million "eo"le and its annual

turno$er reached Tk& ,-* #illion in 7*,+ o% !hich local "layers includin national and

multinational com"anies contri#ute Tk& 8* #illion& 1 lare num#er o% "roducts !hich are mostly

used #y the hiher middle and u""er class o% "eo"le are still #ein im"orted&

'resident o% 23T41 4d Re0aul 9arim said the industry has #een a#le to maintain an a$erae

,* "er cent ro!th year on year #asis %or last one and a hal% decades %ollo!in an increasin

demand& ;e said the sector de"ended on im"ort %or more than )* "er cent o% its "roducts #e%ore

7*** #ut the %iure has no! #een re$erse larely thanks to local "roducers& 4ore than rou"( 4oushumi

Industries( Delta >rou" and 1romatic 51romatic soa" is no! ac/uired #y 9ollol >rou"6 hold

more than 8- "er cent o% the market share o% local "roducts&

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The 22S sur$ey #ased on sale o% soa"( deterent( "ersonal care "roducts re$ealed that Unile$er

holds +- "er cent !hile 9ohinoor 7*( S/uare ,? and 9eya ,< "er cent annual market share& 2ut(

takin into consideration only the !inter season( locally o!ned S/uare !as the market leader

!ith +* "er cent o% o$erall sale( the 22S data re$ealed& 9ohinoor and 9eya also en@oy hih sales

as their market share rose to 7- "er cent durin the cold season( accordin to 22S sur$ey&

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3O4'1NY OVERVIEW:

9ohinoor 3hemical 3om"any 52D6 Limited !as o$ernment o!ned com"any u" to 4ay *-(

,8?? and it trans%ormed into a 'u#lic Limited 3om"any %rom 4ay *-( ,8??& 933L has ,,

#randAicons 5ty"es o% #rand6& 1mon the #rand icons( Ti#et is the %lashi" #rand names& In our

country( there are some com"anies those are national and multinational industries& 4ainly

Unile$er is the multinational com"any that is "roducin deterent and cosmetics "roducts and in

ma.imum o% the cases( Unile$er is the market leader and some o% the cases( 933L is the market

leader&

3om"any secretary o% 9ohinoor 3hemical 3o 4d& Berdo!s Caman said in the annual stockholder

meetin The oldest cosmetic com"any in the country has no!


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VISION( 4ISSION( >O1LS 1ND V1LUES OB 933L:

Vision:

933L ha$e a $ision to attain their a$o!ed mission o% assumin the a#o$e duty and

res"onsi#ility& 933L en$isae %or a more #eauti%ul tomorro! %or the country( %or the reion

and %or the !hole !orld&

Mission:

Time has re!arded 933L !ith the rank o% leadershi"& 2ut 933L !ill al!ays remem#er !hat it

means to #e the leader in the market& 933L !ill al!ays try to e."lore #eyond the #oundaries o%

"ossi#ilities& 3ustomer need and the customer need alone !ill #e 933LFs uidin "hiloso"hy in

manu%acturin and marketin o% "roducts that enhance #eauty o% the "eo"le and satis%y their

souls&

Goal:

Their oal is to achie$e success and to kee" success onAoin 933L has de$oted itsel% to u"date

its ;RD resources and maintainin standard #atch #y #atch( e$en "rice #y "rice&

Values and Popular Brands of the Organization

Guality o% the "roducts( relia#ility( and stron distri#ution channel are the core $alues o% the

orani0ation and are the #asis on !hich they do #usiness& 933LFs "roducts can #e classi%ied

into %our #road cateories&

3osmetics

Toiletries

Soa" and

Deterent

Some 'o"ular 2rand o% 933L are:

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STR1TE>IES BOLLOWED 2Y 933L:

O#@ecti$e o% this re"ort is to #rie%ly analy0e the strateic a""roach o% 9ohinoor 3hemical 3o&

Ltd 5933L6 and hihlihts the ste"s taken #y 933L !hich makes them more and more

success%ul day #y day& 1n immense o#ser$ation !ill #e done on their stratey "olicy to e.tract

their success story in 2anladesh&

Functional Level Strategy:

This kind o% stratey is concerned !ith makin im"ro$ements to #usiness %unctions that su""ort

#usiness and cor"orate stratey& Bunctional stratey include IT stratey( marketin stratey( IT

stratey( human resources stratey( and o"erations& BunctionalAle$el stratey is the %oundation

that su""orts #oth cor"orateAle$el stratey and #usiness stratey& 4any strateic initiati$es are

sim"ly the im"lementation o% %unctional strateies( #ut o%ten a strateic initiati$e straddles

numerous %unctions and #usinesses& The main aim o% a %unctional le$el stratey is to im"ro$e a

%irmFs e%%iciency( /uality( inno$ation and customer res"onsi$eness&

- Quality:

933L is committed to cater to the health and home care needs o% the nation& This commitment

demands immense socials res"onsi#ility o% ensurin /uality in terms o% /uantity( "urity( sta#ility(

sa%ety( e%%iciency and "resentation o% the "roduct& 1t e$ery stae o% the "roduction( strinent

control mechanism in$ol$in ra! material testin( inA"rocess /uality control( "ackain(

la#elin( %inished "roduct testin as !ell as sta#ility monitorin and documentation is maintained

to ensure the hihest /uality "roduct consistently& Standard O"eratin 'rocedures 5SO's6

de$elo"ed accordin to the c>4' uidelines o% W;O and EU are #ein strictly %ollo!ed in

e$ery ste"s to ensure %ull com"liance !ith the "rocess "arameters& Well e/ui""ed !ith most

modern and so"histicated e/ui"ment like ;ih 'er%ormance Li/uid 3hromatora"hy 5;'L36(

>as 3hromatora"hy 5>36( In%rared 5IR6 S"ectro"hotometer& 933L commitment to /uality is

clear %rom its "roressi$e use o% state o% the art manu%acturin technoloy&

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- nnovation:

933L em"loys a sini%icant "art o% its resources in its RHD !ith a $ie! to retainin its

leadershi" "osition in the 2anladesh B43> market throuh introduction o% inno$ati$e

"roducts& The RHD team com"rises o% academically sound and "ro%essionally com"etent

di$ersi%ied "ro%essionals !ho ha$e %irm commitment to ne! "roduct de$elo"ment& RHD team o%

9ohinoor 3hemical 3o& 52D6 Ltd& is consistently stri$in to!ards

de$elo"in ne! %ormulations

sim"li%yin manu%acturin "rocesses

#rinin cost e%%iciency

The untirin e%%ort o% the RHD team has ena#led the com"any to introduce %i$e ne! "roducts

!ith ,- "resentation %orms and strenths in 7*,*A,-( !hile a ood num#er o% "roducts are in the

"i"eline&

- Securing the future:

To kee" "ace !ith the e$erAchanin local market scenario and to cater to the unmet healthcare

needs o% the nation( 933L al!ays concentrates its e%%orts in introducin ne! "roducts &Some o%

e.am"les are :

2actrol: Bamily health care soa" 2actrol !as introduced #y 933L in 7**-& E.tensi$e

consumer "romotion( in addition to "romotion to the healthcare "ro$iders( #uilt a solid

#ase to meet the chanin social needs&

Sandalina Soa": Sandalina Soa" is a %irstAtimeAinA2anladesh "roduct desined to

ca"itali0e a niche marketAthe B43> market&

- !fficiency :

The e$erAchanin market "lace has %uelled to undertake in%rastructural de$elo"ment to #uild

com"etiti$e ad$antae in order to retain its "osition as a leadin B43> com"any& 933L is

committed to de$elo"in indi$idual human( technical and conce"tual skills throuh $arious

educational and a !ide rane o% internal and e.ternal human resource de$elo"ment and @o#

related trainin "rorams each and e$ery year&

- "entral Product Manage#ent $ept% &"PM$':

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The 3entral 'roduct 4anaement De"artment is the heart o% marketin o% 9ohinoor 3hemical

3o& 52D6 Ltd& This de"t& controls all "romotional acti$ities o% "roducts& It is headed #y 'roduce

'romotion 4anaer& The 34' "re"ares the "roduct "lans& It determines ho! many "roducts !ill

et e."osure in each month& The annual "lannin "rocedure is started in Culy and continues to

Canuary& Usually( ,- 7* "roducts et e."osure e$ery month& Thus each "roduct ets a#out


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This kind o% stratey is concerned !ith succeedin in chosen markets& 9ohinoor 3hemicals

%ollo! the Focused "ost Leadership stratey reardin almost all o% its #rands& It chares

relati$ely less %or its entire "roduct ranin %rom soa"s to tooth"astes( com"ared to its closest

ri$als& Its %lashi" Ti#et #rand o% cosmetics( toiletries and household "roducts has #een $ery

"o"ular amon the middle income and rural "eo"le 5!ho are amonst the hihest "ortion o% the

"o"ulation6 o% the country %or aes #ecause o% its uni/ue e%%icacy and sa%ety "ro%ile in %ace and

skin& It is one o% the larest toiletries #rand in 2anladesh and com"etes neck in neck !ith the

multination #rands( like Lu. and Sunsilk #oth o% !hich are o!ned #y Unile$er&

"orporate Level Strategy

1 cor"orateAle$el stratey s"eci%ies actions a %irm takes to ain a com"etiti$e ad$antae #y

selectin and manain a rou" o% di%%erent #usinesses com"etin in di%%erent "roduct markets&

933L carries out the %ollo!in cor"orate le$el strateies:

9ohinoor 3hemicals %ollo! a related linked di$ersi%ication model& They com"ete in

se$en di%%erent industries !ith $arious "roducts %rom home care and "ersonal care& They

ha$e economies o% sco"e as most o% the "roducts can share the same manu%acturin

%acilities( in"uts and s"ecially the distri#ution channels&

933L is a currently o!ned #y Orion >rou"( so it is "art o% a >rou" o% 3om"anies& O$er

the years( under the leadershi" o% Orion >rou"( 933L had not only reained its lost

lory( #ut also had #een a#le to "enetrate into the hori0on o% e."ort markets and %ound

ne! locations %or #usiness&

B"G Matri+ of ,ohinoor "he#icals

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1 key resource o% strateic "lannin is the a#ility o% the manaement to en$ision its current

"roduct #ase( !ith res"ect to "roduct li%e cycle 5'L36( cash %lo!s( and the e.tent o% %inancial and

nonA%inancial su""ort re/uired and @usti%ied #y each "roduct& 3oncordantly( the 23> matri. is an

e%%ecti$e strateic tool that can hel" the manaement decide on !hich "roducts to #uild on(

!hich "roducts to su""ort( !hich ones re/uire corrections( and !hich #rands should #e let o

o%%& The %ollo!in %iure illustrates the current "ositionin o% 933Ls main #read earners !ith

res"ect to their market share( and market ro!th&

Biure No& ,: 23> 4atri. %or 933L

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IDENTIBYIN> STREN>T;S( WE19NESSES( O''ORTUNITIES(

1ND T;RE1TS BOR 933L :

The 933L en@oys a re"utation in the country& The strenth( !eakness( o""ortunity and threat o%933L are as %ollo!sA

Strengths

933L has ood /uality and hyienic "roducts&

It has ad$anced technoloy&

It has ood #rand name Ti#et&

'ioneer in manu%acturin hih /uality #eauty and "ersonal care "roducts in this

su#continent&

Stron and /uali%ied manaement&

3ommitment to #e directed to!ards to /uality ser$ice&

3om"etiti$e "riceJcommission&

Trained sales"eo"le and committed em"loyees to customer&

Orani0ational culture to $alue the customers most&

'roduct reconition already e.ists in customer mind&

-ea.nesses

Di%%icult to manae lare em"loyees&

;ih cost %or the trainin o% the sales"eo"le&

Less attracti$e "ackain in case o% some laundry sho"&

1#sence o% team!ork #et!een #ranches&

;ea$ily de"ends on head o%%ice %or decision makin&

Lack o% incenti$es and re!ards %rom the manaement section&

Sometimes Lack o% 4oti$ation o% !orkers&

Opportunities

E."and market internationally

It can Increase the demand in the customer mind throuh most $isi#le ad$ertisin&

Throuh hue In$estment in "otential country( achie$e ma.imum market share& To relate the 4anaement "ro"erly&

/hreats

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Some other com"any 5like 9eya( Unili$er( S/uare6&

3ountryFs strict rules and reulations&

3ustomer a!areness o% "ricin and ser$ice&

'olitical sta#ility #reakdo!n the outcome result

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B13IN> 3;1LLEN>ES IN T;E BIELD

Ta#le No&,: 4arket share and >ro!th o% 933L com"are to its 3om"etitor 57*,,6

B*01$ "OMP012 V0L3! &B$/' G*O-/) &4' M0*,!/ S)0*! &4'

Lu+ Unile$er 2D ,,,(?,7()+* - 7-

/i5et 933L ?(+,


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1e6 Product $evelop#ent

I% 933L !ishes to sur$i$e lon term in the market( must in$est in ne! "roduct de$elo"ment&

1l!ays( all "roducts e$entually reach the decline stae& Without ne! $ariety o% !hite deterent(

sales !ill e$entually #ecome nonA e.istent and customers !ill seek com"etitorsF "roducts&

1dditionally( #y introducin ne! and inno$ati$e $ariety o% Toilet Soa"s to the market "lace %irst(

933L may enerate customer loyalty and maintain its market share as the market ro!s&

Branding

2randin is a ma@or issue in o$erall "roduct stratey& 2randin is used to i$e "roducts uni/ue

identities and hel"s the marketer to di%%erentiate their "roduct %rom com"etitors& The #rand !hite

deterent should #e i$en "riority in such a !ay so that consumers are lo$ed to #uy this "roduct&

Pro#otion Policies

'romotion is more than @ust ad$ertisin& It includes almost all %orm o% communication that a

com"any has !ith its customers& Indeed( it includes communication !ith stakeholders( su""liers(

intermediaries and the eneral "u#lic& The rane o% "arties that a com"any "romotes to is kno!n

as the taret rou"& 933L can ado"t "ush and "ull strateies to "romote #rands in the market&

Price Policies

933L should %ocus more on the "rice as !orld!ide ra! material "rice is dro""in due to lo!

"rice o% oil& They should ca"ture the o""ortunity and try to i$e #est $alue %or money to the

consumer& In the industries !here 933L o"erates Unile$er 2anladesh is the "rice taker& 933L

should ste" out o% the com%ort 0one and attem"t to "lay in the market o%%ensi$ely&

REBEREN3E:

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,& ;ill( 3harles W& L&K Cones( >areth R& 5?th Edition6 Theory of Strategic Management with

Cases& SouthAWestern 3enae Learin&

7& Thomson et al& Crafting and Executing Strategy

Documents

How Kohinoor Chemicals Indusries Ltd. Maintain Its Old Lagacy Facing Intense Competiton in the Market