Presented to Mr. Zafar Mannan

Presented By M. Faizan KhalidManagerial Policy (A)

10th November 2010

Introduction

• Tea was discovered by Chinese Emperor Shah-Nung in 2727 B.C.

• By the end of the 19th century, China still supplied the bulk of the world’s tea.

• Tea was first cultivated in China.

HISTORY OF TAPAL TEA

• Tapal Company was founded by Adam Ali Tapal.

• First retail outlet was in Jodia Bazaar.

• Today Tapal Tea is managed by the founder's grandson, Aftab F. Tapal.

• Celebrated its 63rd Anniversary in 2010.

• 100% Pakistani owned Tea Company in the country.

• Modern tea blending and packaging fact.

VISION STATEMENT

• To provide value and quality to our consumers, our aim is constantly to provide world class service for our customers, deliver value for our products and make Tapal a great place to work for our employees. We aim to have a reputation for innovative thinking in the areas that matter to our customers. To become a global brand.

MISSION STATEMENT

• To provide a value added service to our customers with quality, reliable, and world-class service. Customer satisfaction is our number one priority.

SHARED VALUES

• Trust in Each Other.

• Outstanding Quality.

• Passion for Creativity.

• Leadership.

• Together, Everyone Achieves More.

Strengths

• Continuous innovation.

• First to introduce soft pack in the country.

• Strong R&D team.

• Strong distribution network.

• Total quality management.

• An anti oxidant drink.

• Loyal customer base.

• Variation in products.

Weaknesses• Most of the sales are on cash, problem for the distributor then they can switch to

competitors.

• It is a major hurdle for Tapal to position its tea abroad in the minds of the consumers and encourage them to indulge in brand switching.

• Low allocation of budget to Tapal Ice tea.

• Tight quality control procedures lead to higher costs and its time consuming.

• Less promotion effort of Ice tea.

• Relying excessively On Sindh sales.

• So much product lines but still not able to knock out loose tea.

• Imports resulting in increased cost.

Opportunities• In the long run there is going to be a lucrative market for Ice-Tea and flavored tea.

• Customers are more attracted towards strong taste and quality of tea offered by tea providers.

• There are markets in Punjab, N.W.F.P and Balochistan, which are not explored yet.

• Increase in population.

• Some people leave the tea in summer but Ice Tea will attach them with TAPAL family.

• Decrease in imports by cultivating on their own land.

• Maintenance of website may be useful to provide basic information about tea and to provide subscription to inform the customer about new products and sharing of ideas.

Threats• One of the major threats to Tapal Ice tea is low awareness about this product.

• Strong marketing campaigns of Unilever makes it extremely difficult for Tapal to counter-attack because of low budgets.

• Unilever as a more established brand name than Tapal worldwide.

• High import duties.

• The unstable rules and regulation of the government obstructs the tea companies.

• Unbranded or substandard loose tea.

• Very elastic demand, almost pure competition.

• Competitors (such as Unilever) are global leaders, they have an advance technology.

Internal Factor Evaluation (IFE)Key Internal factors Weight Rating 1-4 Weighted score

 

Strengths

1.Continuous Innovation 0.05 3 0.15

2. First to Introduce Soft Pack in the Country.

0.03 3 0.09

3. Strong R & D Team 0.07 4 0.28

4. Strong Distribution Network 0.06 4 0.24

5.Total Quality Management 0.09 4 0.36

6. An Anti Oxidant rink 0.03 3 0.09

7. Loyal Customer Base 0.09 4 0.36

8. Variation in Products 0.08           4 0.32

Weaknesses

1. Most of the Sales are on Cash, Problem for the Distributor then they can Switch to Competitors.

0.04 2 0.08

2. It is a Major Obstacle for Tapal to Position its Tea Abroad in the Minds of the Consumers and Encourage them to Indulge in Brand Switching.

0.07 1 0.07

3. Low Allocation of Budget to Tapal Ice Tea. 0.04 2 0.08

4. Tight Quality Control Procedures Leads to Higher Costs and Time Consuming.

0.08 1 0.08

5. Less Promotion Effort of Ice Tea 0.04 2 0.08

6. Relying Excessively on Sindh Sales 0.09 2 0.18

7. Many Product Lines but still not Able to Knock Out Loose Tea.

0.06 1 0.06

8. Imports Resulting in Increased Cost 0.08 2 0.16

       

TOTAL 1.00 2.68

External Factor Evaluation (EFE)Key external factors Weight Rating 1-4 Weighted score

 

Opportunities

1. In Long Run, More Flavors in Tea can be Offered. 0.03 2 0.06

2. Strong Taste and More Improved Quality may Attract More Customers.

0.06 4 0.24

3. There are Markets in Punjab, N.W.F.P and Balochistan, which are not Explored yet.

0.05 4 0.20

4. Increase in Population 0.08 4 0.32

5. Some People Leave the Tea in Summer but Ice Tea will Attach them with Tapal Family.

0.04 2 0.08

6. Decrease in Imports by Cultivating on their Own Land. 0.09 4 0.36

7. Maintenance of Website may be Useful to Provide Basic Information about Tea and to Provide Subscription to Inform the Customer about New Products and Sharing of Ideas.

0.06 3 0.18

Threats

1. One of the Major Threats to Tapal Ice Tea is Low Awareness about this Product.

0.06 1 0.06

2. Strong Marketing campaigns of Unilever, Difficult for Tapal to Counter-Attack because of Low Budgets.

0.07 3 0.21

3. Unilever as a More Established Brand Name than Tapal Worldwide.

0.09 4 0.36

4. High Import Duties. 0.09 3 0.27

5. The Unstable Rules and Regulation of the Government obstruct the tea Companies.

0.06 2 0.12

6. Unbranded or Substandard Loose Tea. 0.04 2 0.08

7. Very Elastic Demand, almost Pure Competition. 0.10 4 0.40

8. Competitors (such as Unilever) are Global Leaders, they have an Advance Technology.

0.08 3 0.24

TOTAL 1.00 3.18

Competitive Profile Matrix [ CPM ]

S.NO Success Factor Weight

TAPAL UNILEVER

Rating1-4 Score Rating

1-4 Score

1 Market Share 0.20 3 0.60 4 0.8

2 Product Quality 0.15 3 0.45 3 0.45

3 Customer Loyalty 0.17 2 0.34 4 0.68

4 Customer Service 0.25 3 0.75 4 1

5 Price Competitive 0.13 3 0.39 4 0.52

6 Advertisement 0.10 4 0.40 3 0.30

             

Total 1.00 2.93 3.75

SWOT MATRIX STRATEGIES

SO Strategies

• New flavors in Ice Tea and some flavors (Elaichi) in hot tea can be introduced (S1,O1).

• Using its R&D team, they can research on unexplored markets in terms of feasibility (S3, O3).

• The strategy of marketing research can be used to explore more about the behavior and preferences of people and those who are not having a tea (S3, O2, O4).

WO Strategies

• Using the Internet technology, awareness program regarding the Tapal products can be executed to capture the market abroad (W2, O7).

• Increase in the budget for the promotion of Ice Tea in summer may increase its sales (W3, W5, O5).

• Increasing cost due to Import can be reduced by cultivating tea domestically (W8, O6).

• Depending on Sindh sales may be insufficient, they can explore Punjab, N.W.F.P and Balochistan for diversification (W6, O3)

ST Strategies

• Customer loyalty can be increased by customizing their products according to the requirements of the customer. If the customer is loyal then the change in price will not affect it (S3, S7, T7).

WT Strategies

• Tapal should start exporting tea to become multinational

company and to capture Foreign markets (W2, T3)

Strategic Position & Action Evaluation Matrix [SPACE]

Internal Strategic Position External Strategic Position

Financial Strength: Environmental Stability:

Working Capital. 3 Rate of Inflation. -2

Inventory Turnover. 5 Competitive Pressure. -3

Return on Investment. 4 Technological Changes. -4

Liquidity. 3 Barriers to Enter into Market. -2

Average: 3.75 Average: -2.75

Competitive Advantage: Industry Strength:

Control over Supplier and Distributor. -3 Growth Potential. 5

Product Quality. -3 Financial Stability. 4

Products Life Cycle. -3 Technological Know How. 3

Average: -3 Average: 4

Y-AXIS = FS + ES = 3.75 + (-2.75) = 1

X-AXIS = CA + IS = -3 + 4 = 1

Boston Consulting Group Matrix [ BCG ]

Internal-External Matrix [ IE ]

Grand Strategy Matrix

Quantitative Strategic Planning Matrix [ QSPM ]

  STRATEGIC ALTERNATIVES

 

ENTER INTONEW MARKET

LAUNCH NEW /INNOVATIVEPRODUCTS IN

EXISTINGMARKET

Key factors Weight AS1-4 TAS AS

1-4 TAS

           

Opportunities

1. In Long Run, More Flavors in Tea can be Offered. 0.03 2 0.06 4 0.12

2. Strong Taste and More Improved Quality may Attract More Customers.

0.06 3 0.18 4 0.24

3. There are Markets in Punjab, N.W.F.P and Balochistan, which are not Explored yet.

0.05 4 0.20 1 0.05

4. Increase in Population. 0.08 4 0.32 3 0.24

5. Some People Leave the Tea in Summer but Ice Tea will Attach them with Tapal Family.

0.04 - - - -

6. Decrease in Imports by Cultivating on their Own Land. 0.09 - - - -

7. Maintenance of Website may be Useful to Provide Basic Information about Tea and to Provide Subscription to Inform the Customer about New Products and Sharing of Ideas.

0.06 3 0.18 4 0.24

Threats

1. One of the Major Threats to Tapal Ice tea is Low Awareness about this Product.

0.06 3 0.18 1 0.06

2. Strong Marketing Campaigns of Unilever, Difficult for Tapal to Counter-Attack because of Low Budgets.

0.07 - - - -

3. Unilever as a More Established Brand Name than Tapal Worldwide.

0.09 - - - -

4. High Import Duties. 0.09 - - - -

5. The Unstable Rules and Regulation of the Government Obstruct the Tea Companies.

0.06 4 0.24 1 0.06

6. Unbranded or Substandard Loose tea. 0.04 3 0.12 4 0.16

7. Very Elastic Demand, almost Pure Competition.

0.10 2 0.20 4 0.40

8. Competitors (such as Unilever) are Global Leaders, they have an Advance Technology.

0.08 - - - -

Strengths

1.Continuous Innovation. 0.05 3 0.15 4 0.20

2. Introduced Soft Pack in the Country. 0.03 - - - -

3. Strong R & D Team. 0.07 3 0.21 4 0.28

4. Strong Distribution Network. 0.06 2 0.12 4 0.24

5.Total Quality Management. 0.09 4 0.36 3 0.27

6. An Anti Oxidant Drink. 0.03 - - - -

7. Loyal Customer Base. 0.09 3 0.27 4 0.36

8. Variation in Products. 0.08 4 0.32 3 0.24

Weaknesses

1. Most of the Sales are on cash, Problem for the Distributor then they can Switch to Competitors.

0.04 - - - -

2 .Major Problem is to Position its Tea Abroad in Consumers Mind and Encourage them to Indulge in Brand Switching.

0.07 - - - -

3. Low Allocation of Budget to Tapal Ice Tea. 0.04 3 0.12 4 0.16

4. Tight Quality Control Procedures Lead to Higher Costs and Time Consuming.

0.08 - - - -

5. Less Promotion Effort of Ice Tea. 0.04 3 0.12 4 0.16

6. Relying Excessively on Sindh Sales. 0.09 - - - -

7. Many Product Lines but still not Able to Knock Out Loose Tea.

0.06 - - - -

8. Imports Resulting in Increased Cost. 0.08 - - - -

TOTAL 1.00 3.35 3.48