ASSIGNMENT

Name: Hafsa Qureshi

Masooma Shahid

Javeria Nisar

Tooba Hanif

Class: BS Final Year

Subject: Risk Management

Submitted To: Sir Atif

Date: 1st-july-2019
 TABLE OF CONTENT

Acknowledgement…………………………………………………………………… 01

Synopsis……………………………………………………………………………… 02

Governance and culture…………………………………………………………….. 03

Introduction to olpers milk……………………………………………………………

Vision of engro foods…………………………………………………………………
Mission statement of engro foods…………………………………………………….
Core values……………………………………………………………………………

Strategy and objective setting……………………………………………………... 04

Risk appetite………………………………………………………………………….
Alternative strategies………………………………………………………………….

Performance…………………………………………………………………………. 05
Identify and assessing risk……………………………………………………………

Managing and control risk…………………………………………………………. 06

Effects on company’s department due to development of new product…………… 07

Finance and accounts department………………………………………………………

Human resource department……………………………………………………………
Marketing department……………………………………………………………………

Information communicate and reporting……………………………………………. 08

01
 ACKNOWLEDGEMENT

Firstly, we would thank Allah for giving us the opportunity and the resources to be able to do
something productive with our lives. Without His blessings we would not have to come as far
as we have. Then our sincere thanks to Sir ATIF for helping us throughout this report. His
guidelines have been very useful for us in preparing this report. He helped us find new ways of
being innovative and creative. This report would not have been possible without his cooperation
and continuous direction.

02
 SYNOPSIS

Engro food limited is one of the leading FMCG Company of Pakistan, best-selling brand including
olper’s, omore, dairy omang and tarang, we believe sustainable dairy is the way to the future. That
is why we opt for an integral sustainability approach in our purpose, in our operations and around
our brands.

Introduced in 2006, Olper’s Milk, our flagship brand, is the leading UHT processed milk brand.
Olper’s has gained leadership position within a span of eleven years through the promise of
wholesome nutrition and through commitment to innovation, safety & convenience. The brand
philosophy resonates well with mothers who are constantly in the process of seeking superior
nutrition for their children.

In this report we discuss if Olper’s introduced flavored milk, then what are some unique challenges
and risk that a new product development would have to face, What are their strategies for future
to minimize the risk and challenges and make the product successful and also discuss the changes
in companies major department for e.g.: Finance department, Production department, HR
department, Marketing department.

03
 GOVERNANCE AND CULTURE

Introduction to OLPERS MILK:

Olper’s milk introduced in 2006, flagship brand, is the leading UHT processed milk brand. Olper’s
has gained leadership position within a span of eleven years through the promise of wholesome
nutrition and through commitment to innovation, safety & convenience. The brand philosophy
resonates well with mothers who are constantly in the process of seeking superior nutrition for
their children. It is available in easy to open 6-layered Tetra Pak Brick Aseptic red packaging and
comes with thee months shelf line.

Vision of ENGRO Foods

"Our vision is to become a fast expanding mega foods company. To achieve our vision, the
company will initially focus on dairy by investing a substantial amount in plant, milk collection
capability and marketing. We are making concrete efforts to expand in and beyond Pakistan;
through strategic international alliances, to eventually become global."

Mission Statement of ENGRO foods:

Our mission is twofold, to help farmers maximize their farm produce by providing quality plant
nutrients and technical services upon which they can depend. To create wealth by building new
businesses based on company and country strengths in petrochemicals, information technology,
infrastructure, food and other agriculture sectors.”

Core values:

1. Leadership
2. . Ethics and integrity
3. Health, safety and environment
4. Innovation and risk-taking
5. Our people.
6. Community and society.
7. Diversity and international focus 8. Quality and continuous improvement.

04
 STRATEGY AND OBJECTIVE SETTING

RISK APPETITE:

 FACING COMPETITORS:

Competition is very severe in the milking sector. Although there are only a few major
competitors in this sector but the competition is increasing very rapidly. The major competitors
of olper’s flavored milk in the marketer are Pakola flavored milk and Day Fresh flavored milk.
They both have grasped enough experience in this field and have acquired many brand loyal
customers.

 MARKET DISTRIBUTION:

Another risk appetite is Market distribution. Distribution is one of the important mix among
marketing mixes. Delivery of satisfaction, standard of living, value addition, communication,
employment, efficiency and finance are the major role and importance of distribution.

 REQUIREMENT FOR THE PRODUCT SUSTAINABILITY IN THE MARKET:

For the sustainability of product in the market we have to focus on quality, environmental,
social and economic benefits while protecting public health and environment over their whole
life cycle.

ALTERNATIVE STRATEGIES:

 Our strategy is to provide good quality product along with the child attractive packaging and
hire good and fast distribution channel.
 Our strategy is to focus on sells promotion policies and sales representatives.
 We have to focus on strategies relation product marketing and promotions (advertisement, bill
boards etc.)

05
 PERFORMANCE

IDENTIFY AND ASSESSING RISK:

We identify the following risk related to our product.

 PRICE RISK: Price risks such as a new product that sparks a price war with a competitor.
A price war is intense price competition between two or more competitors in a market. It
is characterized by retaliatory price cuts that may escalate until prices fall below costs for
our product. The cost of production, as well as the costs of marketing the product, may not
be covered by the selling price. It is the potential for the decline in the price of an asset or
security relative to the rest of the market.

 DEMAND RISK: Demand risk is the potential for a loss due to a gap between forecast and
actual demand. It is common for capital investments, marketing, sales and supply chain
decisions to be based on demand forecasts. When these forecasts are inaccurate it can result
in losses or suboptimal performance.

 BRAND RISK: A product that reflects poorly on your brand. This can occur due to
customer experience and quality issues. Alternatively, it can be a product that simply
doesn't appeal to your customers such that it impacts your brand image.

 OPERATIONAL RISK: The business is developing an entirely new product that will
provide new and better benefits to customers. It is probable that there will be technical
processes that will have to be performed. The product development process may involve
technical hurdles and operational risks that must be overcome.

06
MANAGING AND CONTROL RISK:

 PRICE RISK:

Employ strategies to reduce production costs for the new product, such as: Find ways to simplify
the manufacturing process. If the assembly process is too complex, look for ways to work around
it and make it simple, without sacrificing quality. One way to do this is to consider subcontracting
part of the work, or buy parts that have already been partially assembled, cutting down a couple or
more phases in the production process that you will have to perform.

Look for other sources that offer these components at a lower price. Do not stick to just one
potential supplier; shop around and compare prices.

 DEMAND RISK:

Collaboration between customers and suppliers to improve the accuracy of the forecast. Quicker
response to demand changes to reduce the cost of forecast error.

 BRAND IMAGE:

WE should focus on customer insights so that we can easily focus on product development and
can fulfill the need of our target customers.

 OPERATIONAL RISK:

Choose the right people to be in the product development team. The people tasked with developing
the new product must have all the relevant skills and knowledge, especially regarding all those
important aspects that will be required in developing the product. It is often advised that the team
be composed of all areas or departments of the business, from production to marketing and finance.

07
 EFFECTS ON COMPANYS DEPATMENT DUE TO DEVELOPMENT OF
NEW PRODUCT

Staying competitive in the world of business is vital to every company, especially if it hopes to
grow and expand, instead of just earning a decent profit from period to period. To achieve
competitiveness, a business must always stay ahead of the game in various aspects,, product
development is an area where businesses, particularly those engaged in manufacturing, should
focus on if they want to make sure that they stay ahead of the competition and will always have
something new and fresh to offer to their market. Product development is not limited to the design
and creation of the products alone. It also effects the overall department of the company.

 FINANCE AND ACCOUNTS DEPARTMENT:

Finance department is responsible for the new product development. We need more finance to
purchase new plants.

 HUMAN RESOURSE DEPARTMENT:

The Human Resource department Limited spearheads the recruitment process to ensure that the
finest human resource is taken for a NEW PRODUCT. Resumes of candidates are carefully filed
and documented for current or future reference. The department, besides carrying out succession
planning, maintains and implements HR policies pertaining to employment, retention and
superannuation. Assessing training needs of employees and ensuring adequate training is also
some time needed.

08

MARKETING DEPARTMENT
Marketing department play a vital role in product development, marketing department has to
identifying the target markets, effectively communicating to them and building the image of the
brand

PRODUCTION DEPARTMENT:

Production department need new machinery to continue the company new operations. Modern
technology is the part and parcel of production department

Supply and Distribution

This department ensures timely and effective distribution of the new products to different shops
and stores spread all across Pakistan.

INFORMATION COMMUNICATE AND REPORTING:

All of the risk management skills and techniques required to implement Enterprise Risk
Management can easily be learned and applied. From senior managers to risk practitioners, Master
classes, training, coaching and process definition can be used to support rollout of ERM.
Create a practical Enterprise Risk Structure, set clear responsibilities and hold people accountable.
Define a simple risk map and provide localized working practices to match perspectives on risk.
Be seen to make decisions based on good risk management information.