Rahimafrooz-Management-Porters Five forces -
Transcript of Rahimafrooz-Management-Porters Five forces -
Presentation on Managerial Strategy of Rahimafrooz Group 7Submitted to Mohammed Monjarul Islam Chowdhury (MHW)
Team Members
• Tausif Akib Khan 1510316030 • Tanvir Chowdury 1510866030 • Md. Toukiul Alam Khan 1520645633 • Susmita Sengupta 1512156030 • Shahriar Hossain 1430906630 • Sharif Uddin Fahim 1512153030
Introduction
• Rahimafrooz is one of the respected and reputed business houses in Bangladesh. Rahimafrooz has endured turbulences of the last 62 years and has been able to transform itself from a small trading company into a leading diversified business house.
• Rahimafrooz operates in four broad segments. Storage Power, Automotive & Electronics, Energy and Retail
Mission & Vision Rahimafrooz has become one of the largest groups in Bangladesh. Being an enterprising Group of Taka 2000 corer by the year 2017 with a diversified business portfolio focused on dynamic growth, excellence, innovation, customer delight in enriching the world.
To be the most admired and trusted organization through excelling in everything Rahimafrooz is tend to do, following ethical business practices and adding value to stakeholders.
Objectives
• Rahimafrooz is committed to ensuring the best in quality standards and living the Group’s five core values – Integrity, Excellence, Customer Delight, Innovation and Inspiring People.
• They are also committed to play a leading role in driving growth, prosperity, ethical values and social responsibility.
• It continues to serve the customers through unparalleled quality excellence and service superiority, taking the initiative with new programs that serve as models for the industry.
SWOT ANALYSIS
Strength • Rahimafrooz has strong brand image and brand recognition
• Strong local distribution network that ensures the proper supply
• Wide range of product to satisfy a large number of consumers range
• Efficient workforce to ensure the best quality
• Production capacity is very high
• It is ISO 9001 & 14001 certified company.
• Its local market leadership with 54% SOM
• It has own set up in India & Nepal
• Competitive price throughout the international arena.
Weakness • Lack of own brand image in export markets • Lack promotional activities
• Product outlook is not up to the mark
• Lack of control over primary raw material (lead)
• Absence of a global brand and Inconsistent product quality
• Reduced battery life: ignore consumer preferences
• Inappropriate warranty management for local and Indian market
Opportunity • Rahimafrooz battery fame is spreading rapidly throughout the Global Market
• The Battery market is growing by 10%
• Duty Free access in countries like Thailand, China, Australia, Canada
• In Dubai Rahimafrooz has got the facility to set up a sales office and also re-export
• Expanded there business in Japan
• It can arrange treaty between two or more countries to establish a free trade area
• Rahimafrooz can merge or acquiesce with other companies overseas for production facilities
Threat • Customers have great concerns about products quality, which
emphasize the cost.
• Having Competitors in the market; Such as Navana BTL, Hamko BTL
• The uplift of foreign currency is another problem for Rahimafrooz
• The currency uplifts the prices of the raw materials increases
• Some legal Procedures while purchasing raw materials
Porters Five Forces Analysis
Threats of New Entrants
•It means the ease or difficulty with which new competitors can enter an industry. This force depends on two factors
- Initial Investment Requirement - Growth Rate of Industry
Factor: Initial Investment Requirement
•The initial cost of entering into this industry is $1,000,000-10,000,000. It varies according to the production capabilities
•Also it requires Skilled Man Power, Technical Support Team, Space for manufacturing, Legal procedures and Government Policies.
1999 2005 2010 20150
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Initial Investment
Initial Investment
Factor: Growth Rate of Industry
•the growth rate is much higher in this sector.
• Annually about 2.8 million pieces of batteries are used by different sectors in the country with its current growth rate of 10 percent.
2000 2005 2010 20150123456789
10
Growth Rate %
Growth Rate %
Force Conclusion
Factors of Force Impact of Factors
Initial Investment Requirement
High
Growth Rate of Industry High
• Therefore, the Threat of New Entrants – High + High = Low
Bargaining Power of Buyers
•The bargaining power of customers determines how much customers can impose pressure on margins and volumes. This force depends on two factors.
- Number of buyers - Number of Sellers
Factor: Number of Buyers
● Annually 420,000 pieces battery are used by motor vehicles, 411,000 pieces by IPS and UPS users, 150,000 pieces by heavy equipment of the industries, 1,050,000 pieces by electric vehicles and electric-rickshaw, and 700,000 pieces by the solar system
● About 2.8 million batteries are used by huge number of people. So the number of buyers is high.
Battery Users
motor vehicles usersIPS and UPS users Heavy Equpiment users Electric Rikshaw and vehicles users Solar Panel users
Factor: Number of Sellers • In this battery industry of Bangladesh the sellers are,
• Rahimafrooz Battery LTD • Panna battery LTD • General battery company LTD • Haque and Company dry cell LTD• Navan Battery LTD• Hamko Battery Company LTD
Though Rahimafrooz is holding 75 percent of Battery market share. Comparing to the buyers, the number of sellers in this industry is comparatively low.
Market Share
RahimafroozNavaa HamkoRest of Them
Force Conclusion
Factors of Force Impact of Factors
Number of Buyers HighNumber of Suppliers Low
• Therefore, the Bargaining Power of Buyers – High + Low = Low
Bargaing Power of Suppliers
•The bargaining power of suppliers determines the intensity of competition in an industry. This force depends on two factors:
- Number of buyers -Number of Sellers
Factor: Number of Buyers • In the battery industry here the buyers are,
- Rahimafrooz Battery LTD - Panna battery LTD - General battery company LTD - Haque and Company dry cell LTD- Navan Battery LTD- Hamko Battery Company LTD
They buy the raw materials and equipment from various suppliers. Comparing the buyers to the suppliers the number of buyers are low.
Factor: Number of Suppliers • To manufacture batteries the companies need raw
materials like led, acid and many other equipment. Generally they buy this from either local or foreign suppliers.
• The suppliers are high in number these requirements are produced in a large number by many firms as these elements are easily accessible.
• Rahimafrooz buy the raw materials from Australian companies.
Force Conclusion
Therefore, the Bargaining Power of Suppliers – Low+High = Low
Factors of Force Impact of Factors
Number of Buyers Low
Number of Suppliers High
Threat of Substitutes
• The existence of substitute product offers customers different choices and allows them options within the industry and beyond it to products that may fulfill a similar need. This force depends on two factors:
- Switching Cost - Brand Loyalty
Factor: Swithching Cost
•Rahimafroz has a competitive advantage against his competitors because of its low price. So the Swithching Cost will be high.
•On the other hand the substitute product for this sector will be motor generator, manual motors which run on oil and gases.
•So the switching cost will be much higher.
Factor: Brand Loyalty
•Rahimafrooz is in the Battery market for more than 50 years. And they have gained a large number of market share.
•They’re providing products to the customers from a long period of time, thus they’ve made good bond with their customers.
•That’s why the brand loyalty is much higher.
Force Conclusion
Factors of Force Impact of Factors
Switching Cost High
Brand Loyalty High
Therefore, the Threat of Substitutes – High+High = Low
Competitive Rivalry • It means the competition between the similar
companies or firms. It basically show how competitive the industry is and how competitors compete with each other. This force depends two factors.
- Number of Competitors - Growth Rate
Factor: Number of Competitors
• In the battery industry of Bangladesh, apart from Rahimafrooz the competitors are,
- Navana Battery LTD - Hamko Battery LTD - Panna Battery LTD - General battery company LTD - Haque and Company dry cell LTD
Though Rahimafrooz holds 75 percent of the market share these are the major competitors in this industry.
Factor: Growth Rate
•Rahimafrooz is holding the maximum number of market share in the battery industry of Bangladesh. Though it had a steady growth from 1999 to 2010. Currently the market growth rate is 10%.
•Which is higher than its competitors.
Pann
a BTL
Navan
a BTL
Hamko
BTL
Rahim
afroo
z BTL
0123456789
10
Growth Rate
Growth Rate
Force Conclusion
Factors of Force Impact of Factors
Number of Competitors Low
Growth Rate High
• Therefore, the Competitive Rivalry – Low + High = High
Forces Factors Factors Comments
Factors Impact on forces
ForceConclusion
Summary
Threat of new entrants
Initial investment requirement
Growth Rate
High
High
Low
HighLow
Bargaining power of buyers
Number of buyers
Number of sellers
High
Low
Low
Low Low
Bargaining power of suppliers
Number of buyers
Number of sellers
Low
High
Low
Low Low
Four of the forces are low and one of them is High. So, we can conclude by saying that investment in battery sector is lucrative
Threat of substitutes
Switching Cost
Brand Loyalty
High
High
Low
LowLow
Competitive Rivalry
Number of Competitors
Growth Rate
Low
High
High
HighHigh
Conclusion
So this is it from us, Hope you’ve enjoyed our presentation.
Thank You
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