Business Strategy FPM

BUSINESSBUSINESS
STRATEGYSTRATEGY
Faruki Pulp
Mills
1

SWOT ANALYSISSWOT ANALYSIS
Faruki Pulp
Mills
2

A Journey Towards Professionalism 3
StrengthStrength
 Strategic Alliances
 Resource Owner ( Eucalyptus, Power Plant )
 Product Differentiation
 Suitable / Viable Import Substitute
 Professional Culture & Approach
 Ethical Practices
 Motivated & Dedicated Team

WeaknessWeakness
 Loan from Banks
 No bargaining power in some raw materials
 Higher Price compared with other competitors

OpportunityOpportunity
 High growth rates in expanding education and
publication industries
 Advantage of cash flow
 Lack of quality focused competition
 Industries dependent upon imports for quality
both in finished product form as well as in raw
material form
 Big Domestic & Huge Export Markets

ThreatThreat
 Imports – Competition from abroad
 International Pulp & Paper Prices
 Exchange Rate Fluctuation
 High Turnover of People

PEST ANALYSISPEST ANALYSIS
Faruki Pulp
Mills
7

Political FactorsPolitical Factors
 Prevailing Law & Order condition
 Taxation Policies
 Monetary Policies
 Legislations

Economic FactorsEconomic Factors
 High Inflation
 International Recession
 Unemployment
 Energy Crisis
 Deficit Financing
 Circular Debts

Socio Cultural FactorsSocio Cultural Factors
 Income Distribution
 Literacy Rate
 Consumerism
 Demographics
 Ethnic Factors

Technological FactorsTechnological Factors
 Internet
 Speed of Technology Transfer
 Rate of Obsolescence
 Information Technology

FIVE FORCESFIVE FORCES
ANALYSISANALYSIS
Faruki Pulp
Mills
12

Five Forces AnalysisFive Forces Analysis
Suppliers Power
 Eucalyptus Plantation on a Commercial Scale
 Contract Farming
Buyers Power
 B2B
 B2C

Threat from New Entrants
 Capital Intensive Industry
 High Technological Costs
Threat from Substitutes
 Synthetic Pulp
 Other Pulps like wheat Straw, cotton, sugar
cane etc

Threat from Competition
 Price Competitiveness in domestic market
 International Pulp Prices

BUSINESSBUSINESS
LANDSCAPELANDSCAPE
Faruki Pulp
Mills
16

DomesticDomestic
 An aware updated Customer / Consumer
 Reduced Buying Power of Consumer
 Intensive & Extensive Competition
 Idle Capacities
 Continuous Pressure on Margins
 Escalating Raw Material Prices
 Liquidity Crunch Prevailing in the Market

InternationalInternational
 International Paper Pulp Prices
 Volatile Oil Prices
 Competitive Pricing
 Shorter Lead Times
 Reduction in Inventory Levels
 Focusing on JIT & VMI Concepts

MISSIONMISSION
STATEMENT &STATEMENT &
OBJECTIVESOBJECTIVES
Faruki Pulp
Mills
19

Mission StatementMission Statement
“ To Provide our Customers with Product
and Services that continually fulfill their
expectations. This is achieved by all
employees optimizing the quality of each
action that takes place in the business of
buying, producing, selling and servicing
our products – all within a safe work
environment that encourages personal
development and satisfaction”

Company ObjectivesCompany Objectives
 To be the leading Player in domestic and
international market of Pulp Suppliers
 To be the Preferred Choice of Customers
 To serve Customers with the latest, modern
and Updated Technology
 To recruit, train and groom Team of
Professionally Dedicated People
 To have strong and long standing
relationship with Customers and Suppliers

Strategic ObjectivesStrategic Objectives
 To guarantee eucalyptus supply to ensure
long term growth
 Development of Planted Eucalyptus areas
 Logistics of Eucalyptus Transportation
 Skilled, Technically Proficient Labor
Force
 Politically, Socially, Environmentally
clean work atmosphere
 Full compliance with Government Laws

MARKETINGMARKETING
OBJECTIVES,OBJECTIVES,
FUNCTIONS &FUNCTIONS &
STRATEGYSTRATEGY
Faruki Pulp
Mills
23

Marketing ObjectivesMarketing Objectives
 To be the leading Player in the domestic
market of Pulp Suppliers
 To supply to Selected Internationally
renowned and reputed Companies
 To be recognized as a Quality Supplier
 To grow faster than the Market and the
existing base of Customers
 To have strong and long standing
relationship with Customer

Marketing FunctionsMarketing Functions
 Achieve Sales Targets
 Timely Recovery of Payments
 Maximizing Return on Stakeholders
Investment
 Optimum Utilization of Capacities
 Providing Top Class Service to Customers
through Customer Relations Management
and Key Account Management

Marketing FunctionsMarketing Functions (cont.)(cont.)
 Gathering / Updating Market and
Competition Data
 Business Development and identification
of new Markets and Opportunities
 Preparing feasibilities for Expansion
 Sales Forecasting & Budgeting
 Gathering and Communicating Customer
Feedbacks for future improvement and
direction

Marketing StrategiesMarketing Strategies
 Diversification of Customer Base both
Nationally and Internationally
 Selection of Customers on long term
Business and Relationship Basis
 Targeting High End Market and Products
for attaining Higher Profitability
 Prioritizing Customers giving Maximum
Returns and Margins and appreciating
Quality and Services

Marketing StrategiesMarketing Strategies (cont.)(cont.)
 Targeting Growth Oriented Companies and
Customers
 MENA(Middle East North Africa) Region
Customers to be Targeted for Export
Business
 Avoiding doing 100% business with any
party so as to maintain control over
business both in terms of Customers
insolvency and indifferent attitude on
account of business share and control

 The most fruitful business opportunity area
would be to increase product usage within
the existing product market, where assets
and competencies are in place and only
need to be leveraged. However in today’s
business scenario, wisdom would be to
focus on international market to avoid
recession and liquidity crunch.

 A second opportunity route, market
development would involve expanding the
market either geographically or by
targeting new market segments
 A key consideration of a market strategy is
to achieve synergy by leveraging current
assets and competencies

 Export marketing would be another
opportunity expanding with existing
products to new markets outside country.
Export marketing can help to escape a
growth deadlock in existing local markets
and unlock new customer segments in less
price-sensitive markets

Sales Growth StrategiesSales Growth Strategies
 Market Penetration: selling more of the
same products in existing markets, either
by way of increasing market share or
product usage.
 Market Development: selling more of the
same products to markets locally or
abroad. When aiming for new markets,
focus is on untapped segments in existing
markets, or on new markets.

Sales Growth StrategiesSales Growth Strategies (cont.)(cont.)
 Product Development: selling new
products to existing markets. This entails
developing new products or refining /
upgrading existing products.
 Product Diversification – selling new
products to new markets, by setting up a
new business or taking stake in an existing
business

Sales Growth StratagiesSales Growth Stratagies (cont.)(cont.)
 Differentiation: Expanding sales by
distinguishing one’s offer clearly from
competing substitutes, e.g., branding
product to give it some special features
that make it unique in the eyes of the
customers.
 Focus: Expanding sales by (re)
positioning one’s offer in a particular
market segment thought of as highly
attractive, e.g., entering a high potential
export market with existing product.

Sales Growth StrategiesSales Growth Strategies (cont.)(cont.)
 Cost Advantage: Expanding sales by
undercutting prices of competitors. The
option requires to have a cost advantage.
 Competitive Advantage – Expanding
Sales through efforts and products which
gives the organisation advantage over its
rivals similar to product diversification

STRATEGYSTRATEGY
EVALUATIONEVALUATION
Faruki Pulp
Mills
36

STRATEGY EVALUATIONSTRATEGY EVALUATION
After SPOTTING TRENDS externally,
REVIEW the organization internally (the
policy , the tactics, the action plan) then
APPLY TACTICS. EVALUATE which
things, which strategies or which tactics
give the GREATEST YIELD and discard
wasteful tactics that are not giving the
greatest yield.

STRATEGY EVALUATIONSTRATEGY EVALUATION

CONTINGENCY PLANCONTINGENCY PLAN
 Presence / Availability/ Development of
Businesses (Alternate Businesses) in case
first choice businesses fail to materialize or
do not provide desired results
 Excellent Relationship to be maintained
with Alternate Businesses
 Alternate Businesses should exist in both
Local and International Markets

CONTINGENCY PLANCONTINGENCY PLAN
 Quality and Specifications of Pulp to be
mutually pre agreed with the Alternate
Businesses
 Small Quantities of Pulp to be supplied on
regular quarterly basis to Alternate
Businesses to keep abreast with
happenings and staying in close contact

Business Strategy FPM

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