SWOT Analysis:

Opportunities: Pakistan is the 7th largest producer of milk. Capitalize on its superior quality milk. Now a days consumers have become health-conscious. Therefore it is an important opportunity for Milkpak to come up with variety of health-based products. Nestle Milkpaks focus extensive milk collection system and agriculture extension ensures that the milk you get is of the finest quality. Nestle Milkpak is using the latest technology in its production units. Joint venture with a foreign company Overall climate for private investment was favourable Milkpak competitors were few and week Increasing interest of people More people are coming toward processed milk because loose milk is dangerous for health due to lot of containment Growth of processed milk increasing Government provided safeguard against nationalization and sought to ensure the safety of investment

Threats: Effects of seasonality upon sales Decreasing the purchasing power of people Raw materials which are imported Introduce the consumer the idea of long life milk. Uncertainty of economic conditions

EFE Matrix for Milkpak Limited Key External Factors Opportunities Pakistan is the 7th largest producer of milk. Weight Rating Score

Latest technology Health based products Focus on extensive milk collection and agriculture extension Joint venture with foreign company Few and weak competitors Threats Effects of seasonality upon sales

0.1 0.06 0.05 0.05 0.07 0.08

4 3 3 3 3 3

0.4 0.18 0.15 0.15 0.21 0.24

Decreasing the purchasing power of people Raw materials which are imported Uncertainty of economic conditions Challenge to introduce the consumer the idea of long life milk Total Strengths:

0.14 0.1 0.13 0.12 0.1 1

2 2 2 2 1

0.28 0.2 0.26 0.24 0.1 2.41

Milkpak has a longer shelf life. It is a pure dairy product and so stays fresh even without refrigeration for days. Milkpak is considered safe and hygienic because of the brand name of Nestle backing it. One of Milkpaks major strengths is its distribution network. It is more widely available than any other milk and extensively covers all the important areas. It therefore provides a lot of convenience to loyal users.

Commitment to high quality products. Solid financial position Milkpak was positioned as pure dairy products, processed as scientific, hygienic way and consistent in quality. Expanded from UHT to fruit juices and other dairy products

Weakness: Customers perceive that packaged milk contain many chemicals for their preservation. This is a negative association for Milk Pak. Weak advertising of Milkpak Another weakness of Milkpak Ltd. is that its total packaging depends upon Packages (Pvt.) limited. Problems of transporting and distribution resulting in shortages in major centres milkpak target market. Poor management The target market of MilkPak is only the upper and middle class. As poor class cannot afford to buy UHT milk because of its premium price Poor dairy infrastructure in rural areas Lack of education among the farmers is making it difficult to change farm and dairy management system Increasing demand for imported products.

IFE Matrix for Milkpak Limited Key External Factors Strengths Longer shelf life Safe and hygienic Commitment to high quality products Solid financial position Strong Distribution Network Weaknesses Increasing demand for importing products Target market is only upper and middle class Weak advertising of Milkpak Dependence on packages limited Total Weight 0.08 0.15 0.15 0.08 0.06 Rating Weighted Score 3 4 4 4 4 0.24 0.6 0.6 0.32 0.24

0.16 0.08 0.17 0.07 1

2 1 2 2

0.32 0.08 0.34 0.14 2.88

Internal-External (IE) matrix

The Internal-External (IE) matrix is strategic management tool used to analyze working conditions and strategic position of a business. The Internal External Matrix is based on an analysis of internal and external business factors which are combined into one suggestive model. Basically it is combination of the EFE matrix and IFE matrix. The IE matrix is based on the following two criteria: Score from the EFE matrix -- this score is plotted on the y-axis Score from the IFE matrix -- plotted on the x-axis

The IE matrix works in a way that you plot the total weighted score from the EFE matrix on the y axis and draw a horizontal line across the plane. Then you take the score calculated in the IFE matrix, plot it on the x axis, and draw a vertical line across the plane. The point where your horizontal line meets your vertical line is the determinant of your strategy. This point shows the strategy that your company should follow. On the x axis of the IE Matrix, an IFE total weighted score of 1.0 to 1.99 represents a weak internal position. A score of 2.0 to 2.99 is considered average. A score of 3.0 to 4.0 is strong.

On the y axis, an EFE total weighted score of 1.0 to 1.99 is considered low. A score of 2.0 to 2.99 is medium. A score of 3.0 to 4.0 is high.

So the total weighted score which we calculated in IFE matrix is 2.88 which points at a company with an average internal strength. We also calculated the EFE matrix. The total weighted score calculated for the EFE matrix is 2.41 which suggest a company has average ability to respond to external factors.

IE Matrix The IFE Total Weighted Score Strong 3.0 to 4.0 Grow I Hold IV Average 2.0 to 2.99 And II And V Weak 1.0 to 1.99 Build III Maintain VI Divest IX

IE

The EFE Total Weighted Score

High 3.0 to 4.0 Medium 2.0 to 2.99 Low 1.0 to 1.99

Harvest VII

And VIII

This IE matrix tells us that the Milkpak should hold and maintain its position. The company should pursue strategies focused on increasing market penetration and product development.

BCG Matrix: The BCG model is a well-known portfolio management tool used in product life cycle theory. BCG matrix is often used to prioritize which products within company product mix get more funding and attention. Placing products in the BCG matrix results in 4 categories in a portfolio of a company:

BCG STARS (high growth, high market share) BCG QUESTION MARKS (high growth, low market share) BCG CASH COWS (low growth, high market share) BCG DOGS (low growth, low market share)

MILKPAK POSITION ON THE BCG MATRIX: CASH COW

MILKPAK is a low-growth business with a relatively high market share. It is a mature, successful business with relatively little need for investment (Advertising etc). Milkpak needs to be managed for continued profit - so that it continues to generate the strong cash flows that the company needs for its Stars

Grand Strategy Matrix:

This is also an important matrix of strategy formulation frame work. Grand strategy matrix it is popular tool for formulating alternative strategies. In this matrix all organization divides into four quadrants. . It is based two major dimensions i.e. Market growth and Competitive position and all quadrants contain all possible strategies.

Rapid Market Growth

Quadrant II

Quadrant 1 Milkpak Limited

Weak Competitive Position Quadrant III Quadrant IV

Strong Competitive Position

Slow Market Growth

As it lies in first quadrant so we should go for following set of strategies.

Market development Market penetration Product development Forward integration Backward integration Horizontal integration

Related diversification

Reasons: It lies in 1st quadrant because of some reasons that are: Excellent strategic position Concentration on current market /products Take risk aggressively when necessary