Business analysis on Akij

Food & Bevarage

An Assessment of managerial practices of the organization
and the organizational goal

Submitted to:
Shaila Jahan Mona
Course Instructor
MGT210
Section 14

Submitted By:
1.

Shaily Barua

1510915030

2.

Yasin Arafat

1511471030

3.

A.R.M. Nafiz Ul Islam Sarkar

1511511030

4.

Rifah Sanjeeda

1430084030

23, 03, 2016

Letter of Transmittal

Shaila Jahan Mona

Lecturer
School of Business
North South University.
Sub: Submission of the Report.
Dear Madam,
With due respect, we would like to inform you that, we are the student of
Management. It is our great pleasure to inform you that we have got a chance to
submit a report on Business analysis on Akij Food and Beverage Ltd.. as a
requirement for course named MGT210.
We therefore pray and hope that you would be kind enough to accept this report
and bless us heartily.
Sincerely yours,
Shaily Barua
Yasin Arafat
A.R.M. Nafiz Ul Islam Sarkar
Rifah Sanjeeda

Table of Content

No.

Name

1.0

Introduction

01

1.1

History of the Company

01

1.2

Products, Projects and Organogram of Akij Group

03

1.3

Mission & Vision of Akij Group

04

SWOT analysis:

05

Situational Analysis

07

4.

Analysis of Porters Five Force Model

08

5.

Pestel Analysis

10

6.

Strategic Application

14

7.

Conclusion

14

8.

Reference

16

Page No.

Executive summary:
The Food and beverage sector of Bangladesh is rapidly growing. Many multinational company
and local company is currently serving the food & beverage market. Akij Food and beverage is
one of the leading companies which is in the market for 10 years. This is a unit of Akij Group.
This report is prepared to analyze the current situation of AFBL.
At the very beginning of the report SWOT analysis has been performed to find out the AFBLs
strength, weakness, opportunities and threats. It shows that Akij food& beverage has good
quality Products. They use modernize and high quality machineries but Akij food & beverage
has less experience in beverage market in terms of understanding in timely proper customer
need. On the side, AFBL has vast profitability scope 10 beverage market of Bangladesh because
a sustainable growth but AFBL faced unethical custom by the competitors, such as tax violation,
to minimize the price of the product. On the next phase of this report the situational analysis has
been prepared. After that Porters five force model analysis has been performed to find out how
AFBL is performing within the market which help us to define Porters five force which are
Competitive Rivalry, Threat of new entrants, Bargaining power of Suppliers, threat of
Substitutes, Bargaining power of Customers. On the next Phase of the report Pestel Analysis has
been performed as we target the Sri-lankas market to launch the product of AFBL. AFBL is
currently performing well but we like to recommend differentiation strategy to gain some
competitive advantage.

1. Introduction:
Bangladesh is a developing country and the large population of Bangladesh is congenial for Food
and Beverage Business. Food and Beverage industry is a rapidly growing sector in Bangladesh
which has a very bright future. Currently our Food and Beverage industry is dominating by some
famous companies and Akij Food and Beverage is one of them at a leading position. The
company is not only doing business in Bangladesh but also have a significant contribution to our
economic development.
1.1 History of the Company:
Name of the Company

Akij Goup

Founder & Chairman

Late Mr. Sheikh Akij Uddin

Weight of Fund

$70 million USD

Founded in

1950

No of Employees

32,000

Akij Food and beverage Ltd.

Founded in 2006

Address (Head office)

Akij Chamber
73, Dilkusha Commercial Area
Dhaka - 1000, Bangladesh
Phone:(+880-2)9563008-9,7169017-8
e-mail:info@akij.net

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History of Akij Group stretches back to later part of the forties. It was more than fifty years ago
Akij Group emerged into the market, and it was as small-time jute traders. Entrepreneur,
Founder and life time Chairman Late Mr. Sheikh Akij Uddin then initiated the business in 1950s
with a single product of cigarette naming Akij Biri. This brand is one of the biggest and well
known unit of Akij Group and it is considered to be one of the oldest and most well known
product across the country and in the few international market as well. Akij food and beverage
ltd. (AFBL) is a unit of Akij group started itz operation in the year 2006. AFBL manufactures a
wide range of snacks and beverage for both national and international market alike. AFBL is a
project worth $70 million USD and is funded by the parental company Akij Group.

Akij Group's ceaseless efforts with dynamic management and support from numerous clients
have led the Group in diversifying its business activities. In the second phase, the Group went
into manufacturing handmade cigarettes popularly known as bidis. This sector gave a real boost
to the revenue earning of the Group as well as making a substantial contribution to government
exchequer. With the passage of time, the Group undertook new ventures and presently there are
15 units of industries under its umbrella like cigarettes, handmade cigarettes, food & beverage,
printing & packaging, textiles, hand board, pharmaceutical, leather processing and real-estate
business are in operation, creating jobs for more than 32,000 people in various categories.

The Group has plans for setting up more projects. The projects are already in pipeline. Foreign
investors have shown keen interest in joining with us for joint ventures. The matter is under our
active consideration and will hopefully soon mature. This will also help the nation's economy
growth and will create job opportunities to various professionals.

Source: http://www.akij.net/index.php
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1.2 Products, Projects and Organogram of Akij Group:

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1.3 Mission & Vision of Akij Group:

Mission:
The mission of AFBL is To earn a respected position in food & beverage sector. Discovering
and understanding the desire and need of the community, whiles working in harmony with
customers, employees and business partners.
AFBL is committed to provide the best product quality to their targeted consumers and this
commitment enhance them to accomplish their goal. Consumer satisfaction from their quality
products is one of their major goals and thus sustainable product quality is the key concern of
this company.
Vision:
To be the leading food & Beverage brands excelling in product quality, social, technical
& marketing creativity; and service to our customers through the skills and cordial
commitment of our employees.
According to Late Mr. Sheikh Akij Uddin regarding AKIJ Food and Beverage Limited (AFBL),
We will manufacture and introduce those high quality products in the market that we ourselves
and our family will always use; we will not just produce products for the consumers in the
market and let our family consume other foreign products.
Source: http://www.akijfood.com/Default.aspx?Page=Mission_Vision&MenuId=3003

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2. SWOT analysis:
SWOT Analysis is the useful technique for understanding companies Strengths and Weaknesses,
and for identifying both the Opportunities and the Threats. Akij food & beverage is operating its
business about 10 years. So both internally and externally the company have some strengths,
weaknesses, opportunities and threats. The SWOT analysis of AFBL is as follows;
Strength:
Akij food& beverage has good quality Products. They use modernize and high quality
machineries. Their product is available around the country and they have very strong
distribution channel. Akij has some unique Promotional activities. Color combination and
design is attractive in terms of packaging. They can establish their brands very quickly for
instance, Frutika, Mojo, Speed. They have comprehensive knowledge of the market and
consumer. Akij has introduced portable size 150ml and 250ml bottle and can. They also have
strong local presence around the country.
Weakness:
Akij food & beverage has less experience in beverage market in terms of understanding in
timely proper customer need. Being new in the market AFBL considers a weakness in the
entire supply-chain management. They have lack of consistency in Promotional Activities.
Opportunity:
AFBL has vast profitability scope 10 beverage market of Bangladesh because a sustainable
growth of 6% prevails in the market. There is a scope for the local companies to achieving
maximum market share for the refreshing flavored CSD drink. The vantage for AFBL

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products to be exported in the overseas Asian market. Ever they are thriving food industry.
As a local company it will get preference from the Bangladeshi people. AFBL is one of the
experts in acquiring various firms and organizations. In Bangladesh, it can also diversify
quickly by acquiring various local established brands and increase its total operation within
Bangladesh rapidly.
Threat:
AFBL faced unethical custom by the competitors, such as tax violation, to minimize the price
of the product. Many others Companies like Coca-Cola and Pepsi to be functioned as MNCs
like Unilever rather than the licensing possessed by the local Bangladeshi company. If any
novel company inaugurating unique smacked refreshing drinks and having huge financial
capabilities. They have more adversary FMCG sector. And to sustain the products qualities
is very stiff. The low compensation survives of the employees from mid level to lower level
position threats the employee motivation. As a result, good quality employees leave the
organization and its effects the organization as a whole. AFBL should continuously improve
its customer service strategies and the overall service quality needs to win the customer
satisfaction undoubtedly
Source: http://www.assignmentpoint.com/business/marketing-business/internship-report-on-akijfood-and-beverage-limited.html

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3. Situational Analysis:
Internal Business Environment:
The internal business environment and its influence is that which is to some extent within the business control. The
main attributes in the internal environment include efficiency in the production process, through management skills
and effective communication channels. To effectively control and monitor the internal business
environment, Akij Beverage Limited must conduct continual appraisals of the business
operations and readily act upon any factors, which cause inefficiencies in any phase of the production and
consumer process.
External Business Environment:
The External business environment and its influences are usually powerful forces that can affect a
whole industry and, in fact, a whole economy. Changes in the external environment will create opportunities
or threats in the market place Akij Beverage Limited must be aware off .Fluctuations in the economy,
changing customer attitudes and values, and demographic patterns heavily influence the success of Akij
Beverage Limited products on the market and there reception theyreceive from the consumers.
Source: https://www.scribd.com/doc/54257142/AKIJ-group-Marketing

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4. Analysis of Porters Five Force Model:

The market of Food and beverage in Bangladesh is very competitive. The market is dominating
by both multinational companies and some local companies. Famous MNC like Coca-Cola,
Pepsi, Lays, Mr. Potato,

have their products like Coca-cola, Pepsi, Fanta, Mountain dew,

Mirinda, Lays chips, Mr. Potato chips etc and many local companies like Pran, Tiger, BoombaySweets, Sajeeb etc. also have their local products in the market. Besides many strong
international brand and new local companies are trying to enter into the market which make the
AFBL to be more strategic. The target market of AFBL is mainly the young people whom are
likely to try new products. So this is always challenging to build a strong brand image in the
consumer mind. The Multinational Companys product price is higher than the local products
for a very small portion. Almost all the soft drinks and Juice prices are almost same. As there are
enough competitors in the market so the suppliers have many alternatives in the criteria of
choosing right companies. In case of product selection of customers, there are many products in
the market with almost similar quality and their prices are almost same. So the customers have
many substitute products and many customers choose the right companies for strong brand
image. By considering all the situations we develop the porters five force model. The model is
given below;

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Threat of new entrants

(Moderate)
> only established player can
try out new things
>this business is tempting to
enter

Bargaining powe of
Customers
( Moderate)
>the terget consumers
are young whom are like
to try new products
> Brand loyalty need
time to develop

Competitive Rivalry
(High)
> quality of the
products and prices
are almost same

Bargaining power of Suppliers

(high)
> Many international and local
companies are operating the
business in the market

Threat of Substitutes
(High)
> new products are entering into the
market
> the prices of the products are more
or less same

Porters Five Force Model

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5. Pestel Analysis :
We want to launch our product in Sri Lanka. So we need to do a pestle analysis. Pestle
analysis talk about 6 issues. They are: political, Economic, Social, Technological, Legal and
Environmental.

Political:
Politics of Sri Lanka takes place in a framework of a semi-presidential representative
democratic republic, whereby the President of Sri Lanka is both head of state and head of
government, and of a multi-party system. Executive power is exercised by the government.
Legislative power is vested in both the government and parliament. For decades, the party
system has been dominated by the socialist Sri Lanka Freedom Party and the conservative
United National Party. The Judiciary is independent of the executive and the legislature. The
Politics of Sri Lanka reflect the historical and political differences between the three main
ethnic groups, the majority Sinhala and the minorities Tamils and Muslims, who are
concentrated in the north and east of the island.

Sri Lankas main religion is Buddhist. So Many people are not like to kill a Animal so we are
very aware of this condition.

We also aware about these issues ecological/environmental issues ,Current legislation home
market ,Future legislation ,International legislation ,Regulatory bodies and processes
,Government policies ,Government term and change ,Trading policies ,Funding, Grants and
initiatives ,Home market lobbying/pressure groups ,International pressure groups ,Wars and
conflicts

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Economic:
Sri Lanka has met the Millennium Development Goal (MDG) target of halving extreme poverty
and is on track to meet most of the other MDGs, outperforming other South Asian countries. Sri
Lanka experienced a big decline in poverty between 2002 and 2009 from 23 percent to 9
percent of the population. Despite this pockets of poverty continue to exist. An estimated 9
percent of Sri Lankans who are no longer classified as poor live within 20 percent of the poverty
line and are, thus, vulnerable to shocks which could cause them to fall back into poverty.
When we launch our product in Sri Lanka we must aware of these situations Home economy
situation ,Home economy trends ,Overseas economies and trends ,General taxation issues
,Taxation specific to product/services ,Seasonality/weather issues ,Market and trade cycles
,Specific industry factors ,Market routes and distribution trends ,Customer/end-user drivers
,Interest

and

exchange

rates

,International

trade/monetary

issues

Social:
Much like other South Asian countries Sri Lanka has a complex caste system and as a result
extensive caste discrimination; even though its constitution states that all men and women are
equal. The history of the caste system in Sri Lanka is unclear since there is very little historical
evidence and many research carried out into the subject have been criticized as been biased. The
Sinhalese and Tamil people who make up majority of the population have their own distinctive
caste system and veneration of these also exist based on geographical lines.

We also aware of these issues Lifestyle trends , Demographics , Consumer attitudes and
opinions, Media views, Law changes affecting social factors, Brand, Company, technology

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image , Consumer buying patterns ,Fashion and role models ,Major events and influences,
Buying access and trends , Ethnic/religious factors , Advertising and publicity , Ethical issues.

Technological:
The Information and Communication Technology Agency of Sri Lanka (Private) Limited
(ICTA) is a company owned by the Government of Sri Lanka. ICTA was established to develop
the economy of Sri Lanka through information and communication technologies (ICT). To this
end, it works to improve both the technological capacity of the country, such as building
infrastructure, and the readiness of its people, through education and human resources. It is also
active in developing regulations around the use of technology and disseminating information
worldwide about Sri Lankan ICT. On 28 July 2015, Information and Communication
Technology Agency (ICTA) signed an agreement with Google Vice President and Project Leader
on Google Project Loon, to launch the technology on a mass scale. As a result, Sri Lanka will be
the second country in the world to get full coverage of internet using LTE island-wide with WiFi
receptions. We also aware of this issues Competing technology development ,Research funding ,
Associated/dependent technologies ,Replacement technology/solutions ,Maturity of technology ,
Manufacturing maturity and capacity ,Information and communications ,Consumer buying
mechanisms/technology, Technology legislation, Innovation potential, Technology access,
Licensing, patents ,Intellectual property issues, Global communications .

Legal:
Employment law, Consumer protection, Industry-specific regulations, Competitive regulations,
Current legislation home market, Future legislation.

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Environmental:
Sri Lanka was once part of the southern supercontinent Gondwana, which also included South
America, Africa, India and Antarctica. Gondwana began to break up 140 million years ago. The
tectonic plate on which Sri Lanka was located, the Indian plate, collided with the Eurasian plate
creating the Himalayas. Sri Lanka was originally part of the Deccan land mass, contiguous with
Madagascar. The island was connected, off and on at least 17 times in the past 700,000 years, to
India. The Loris, found only in Sri Lanka and South India, is related to the Lemurs of
Madagascar. The connection to India led to a commonality of species, e.g. freshwater fish, the
now extinct Sri Lankan Gaur (Bibos sinhaleyus) and Lion (Panthera Leo sinhaleyus).[1]Sri
Lanka's forests are amongst the most beautiful rich in Asia and for some faunal groups, it has the
highest density of species diversity in the world. The southwest portion of the island, where the
influence of the moisture-bearing southwest monsoon is strongest, is home to the Sri Lanka
lowland rain forests. At higher elevations they make the transition to the Sri Lanka mountain rain
forests. Both these tropical moist forest eco-regions bear strong affinities to those of India's
Western Ghats. The northern and eastern portions of the island are considerably drier, lying in
the rain shadow of the central highlands. The Sri Lanka dry-zone dry evergreen forests are a
tropical dry broadleaf forest eco-region, which, like the neighboring East Deccan dry evergreen
forests of India's Coromandel Coast, is characterized by evergreen trees, rather than the dryseason deciduous trees that predominate in most other tropical dry broadleaf forests.

We also aware about these issues Ecological, Environmental issues, International, National,
Stakeholder, staff attitudes, Management style, Environmental regulations, Customer values,
Market value.

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6. Strategic Application:
By performing the SWOT analysis and Porters five force model it seems the AFBLs internal
and external situation is quite good. As the market of Food & Beverage is highly competitive we
would like to recommend AFBL to follow differentiation strategy as many local and
international companies have similar kinds of products and besides their prices are more or less
same so AFBL can gain some competitive advantage by its products differentiation. The firm
should aims to develop and market unique products for different customer segments. The firm
can also prepare an effective advertising campaign.

7. Conclusion

After conducting this assignment successfully we found that AFBL of Bangladesh is able to
create a significant position to our economy and try to boost up the economy of Bangladesh. In
conclusion we can strongly predict that AFBL contains a great future ahead of it, this product is
really enclose optimum quality and want to deliver quality also towards its consumers. Its a
matter of time that AFBL will become the number one choice of the consumers of Bangladesh.

We have some recommendation for Akij Food & beverage Ltd. which may help the company to
gain competitive advantages. The recommendation is followings;

Among the fast moving consumer goods company AFBL is one of the prominent native
company which has several product line and many more come in future .Having analyzed the
problems of the company and the opinions of the users and potential consumer of food &
beverage, we are able to come up with the following recommendation to recover the problems

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of unpopularity of the product among the consumers who are aware and also those who are not
aware of their product.

Ensure consistent marketing strategy: While marketing their products AFBL should focus on
delivering one single theme about the product to its target market. Therefore with an integrated
marketing communication AFBL can build better brand awareness.

AFBL should try to persuade government to remove tax on imported raw materials so that as a
local company they can get a competitive advantages (both in price & quality)to compete with
the competitors. Since the market of Food & beverage is highly competitive, they should try to
make their brand reliable and credible to the consumers, providing them with as much
information as possible.

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8. References:
http://www.akijfood.com/News_Letter_Akij_Group_January_16.pdf
http://www.akijfood.com/Default.aspx?Page=History&MenuId=1005
http://www.akij.net/index.php?page=afbl.php
https://en.wikipedia.org/wiki/Akij
https://en.wikipedia.org/wiki/Food_industry_in_Bangladesh
http://www.businesshabit.com/2014/12/top-10-beverage-company-in-bangladesh.html
https://www.scribd.com/doc/54257142/AKIJ-group-Marketing
https://www.academia.edu/7538223/Market_Structure_of_Akij_Foods_and_Bebarage_ltd
https://en.wikipedia.org/w/index.php?search=akij+group&title=Special%3ASearch&go=Go
https://ankurkuri.wordpress.com/2013/10/21/a-primary-and-secondary-report-on-akij-group-inbangladesh/

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