Sr report on strategic management concepts for lucky cement

pg. 1strategic management report (2014-15)
STRATEGIC
MANAGEMENTREPORT
Submitted by : MADIHA RAZZAQ (19)
AMEERA JAHANGIR (02)
HUMERA.M.HANIF (14)

ACKNOWLEDGEMENT
First and foremost We are grateful to almighty Allah who gave
us strength,knowledge to complete this comprehensive
assignment.
We are deeply indebted to “MR.SHAMEEL AHMED ZUBEIRI”
our mentor who taught us each and every concept related to
strategic management which enabled us to see how
every thing taught in class is being practiced by organization
in corporateworld.
We also want to express our deepest gratitude towards
“MR.Taufiq yousuf (CFO) and “Mr. Faisal jaffer (asst HR manager ) “
lucky cement who shared valueable information with us ,essential
for the creation of this report .

THANK YOU SIR
We just want to take some time to express how much we enjoyed being in your class this
semester
Thank you so much sir for your support and encouragement
through this semester We can’t think of a teacher who could have made this subject and
semester any more special than you did
You truly are a standout teacher because of your sheer dedication to your students.
Being able to count on you for extra help and clarification was really special to us and
shows how much you care about the success of your students. This assignment proved
to be a tremendous learning for us. This subject was never taught to us in the manner
you taught
We especially loved the way you always related the lessons to real-life examples that
allowed lecture to make more logical sense to students and always give us something to
relate the lessons to. It made it so much easier to recall the lecture we needed it for
research assignment.
Sincerely,
Humera M Hanif
MadihaRazzaq
Ameera Jahangir
CONTENTS PAGE NO
6
EXECUTIVE SUMMARY

BRANDS OF LUCKY CEMENT 7
8
STRENGTHS +WEAKNESSESS +OPPORTUNITIES +THREATS 9
IFE, EFE, CPM MODELS 10----12
SWOT matrix + SPACE matrix 13 ----16
QSPM 17
VISION + MISSION + STRATEGIES 18-----20
CONCLUSION + BIBLIOGRAPHY 21 -----22
VISION AND MISSION STATEMENT
INFORMATION GATEHERED
INPUT STAGE
MACHING STAGE
DECISION STAGE
ANALYSIS
INTRODUCTION
RECOMMENDATIONS

Executive SUMMARY:-
The purpose of this report is to analyze the strategic management practices at organization
along with in depth understanding of applying recommended strategic management
processes.in this regard we have chosen LUCKY CEMENT LTD a leading cement manufacturing
company based in Pakistan. It is also listed in all the major stock exchanges of Pakistan
After surveying and observing the management particularly strategicprocedures,p practices,
and policies at Lucky Cement we have conducted a detailed analysis of internal as well as
external environment of organization
We developed IFE matrix and calculated a weighted score of 3.00 which shows company is
effectively utilizing its strengths and overcoming its weaknesses we also developed EFE
matrix and calculated a weighted score of 2.55 which shows company’s strategies effectively
taking advantage of existing opportunities and threats in the industry
SPACE matrix shows that company is on aggressive strategy. BCG model shows company is in
STAR quadrant.QSPM matrix Shows Company is working on two different strategies I.e.
MARKET DEVELOP MENT and MARKET PENETRATION. All other relevant matrices are also
developed
On the basis of above information we have arrived on specific recommendations from
strategic management point of view. We have supported our suggestions on the basis of
strategic management theories, metrics and exhibits presented in the report
INTRODUCTION:-

 CementIndustry ofPakistan:-
All Pakistan Cement Manufacturer Association (APCMA) is a governing body for
cement industry. APCMA plays a significant role in protecting the cement industry
to the government in respect of formulation of government policies for the cement
industry.
As per records of APCMA (2013-2014)
 Installed production is capacity was 44.7 million tons
 33.4 million tons cement produced in FY 2013-2014
 Main export markets are Afghanistan, srilanka Africa
 In 2013-2014 capacity utilization was 75% whereas consumption was 175 kg.
 History of lucky cement :-
Lucky cement was founded in 1994 by Mr. Abdul RazzaqTabba. The company initially
started factories in pezu district of KPK (Khyberpukhtunikwah).it now also owns a
factory in Karachi
Lucky cement has been sponsored by one of the largest business group in Pakistan the
younus brothers (YB) group. The YB group is engaged in diversified manufacturing
activities including textiles, weaving, spinning, and power generation. Currently lucky
cement has the capacity of producing “25000 tons” per day of dry cement processes
BRANDS OF LUCKYCEMENT:-
The company currently is producing five brands of cement
 Lucky cement
 Lucky star
 Lucky sulphate resistant cement (SRC
 Lucky slag cement (OC)
 Ordinary Portland cement (OPC)

VISION:-
We envision being the leader of the cement industry in Pakistan, identifying and capitalizing
on new opportunities in the global market, contributing towards industrial progress and
sustainable future, while being responsible corporate citizen
MISSION:-
Our mission is to be a premium cement manufacturer by building a professional organization,
having state-of-the-art technology, identifying new prospects to reach globally and maintain
service and quality standards to cater to the international construction needs with an
environment-friendly approach.
INFORMATION GATHERED:
Strengths:

1) Financially strong
2) High product quality
3) Infrastructure near ports
4) Highest export share
5) High pay scale
6) Large dealer network
7) Employee development
Weaknesses:-
1) High transportation cost
2) Low advertising and exposure
3) Increasing general and admin expense
4) Capital intensive industry
5) Increased production cost
6) Highly Localized and regionalized markets
7) Low gratuity and PF funds
Opportunities
1) Upcoming national building projects
2) Increasing demand for cement in gulf region
3) Market development and penetration
4) Infrastructure development
5) Population increase causing increase in real state
6) Increase production to reduce cost and achieve economies of scale
7) Global expansion
8) Undiscovered markets of northern regions of Pakistan
Threats: -
1) Governmental regulations 7) Fluctuation in currency rates
2) Price competition
3) Alliance opposition
4) Fluctuation in demand
5) Political instability
6) Increase production cost
INPUT STAGE:-

INTERNAL FACTOR EVALUATION (IFE) MATRIX
The above IFE matrix lists the top 12 key factorsof lucky cement .lucky cement is doing best
on “export share” and “high product quality “ whereas lucky cement is having major
problems with its “regionalized and localized market” and “transportation” .
EXTERNAL FACTOR EVALUATION (EFE) MATRIX
STRENGTHS WEIGHT RATING WEIGHTED
SCORE
Revenues increased 0.09 4 0.36
High product quality 0.12 4 0.48
High pay scale 0.10 3 0.30
Highest export share 0.20 3 0.60
Inventory turnoverup 3.58 to
4.00
0.05 3 0.15
Larger dealer network 0.08 4 0.32
Employee development 0.06 4 0.24
WEAKNESSES
Low advertising 0.05 2 0.20
Increase in cost of production 0.10 1 0.10
High transportation cost 0.07 1 0.07
Highly regionalized and localized
market.
0.08 1 0.08
TOTAL 1.00 2.90

OPPORTUNITIES WEIGHTS RATINGS WEIGHTED SCORE
Increase in infrastructure development 0.20 3 0.60
UnexploitedmarketsinNorth Pakistan 0.05 3 0.15
Increase in populationcausing growth in
housingsector
0.10 4 0.40
Global expansion 0.15 4 0.60
Increase production to reduce cost and
achieve economiesofscale
0.07 3 0.21
THREATS
Government regulations 0.15 2 0.30
Fluctuation in market demand 0.08 1 0.08
Price competition 0.10 3 0.30
Political Instability 0.03 3 0.09
Risinginput costs 0.07 2 0.14
TOTAL 1.00 2.87
From the above EFE matrix the most important factor to being successful in lucky cement is
government regulations as indicated by the 0.15 weight. .also the lucky cement is doing
excellent in “global expansion” indicated by the weight “ 0.15”
The total weighted score of “2.87” is quite above than average score of 2.5
COMPETITIVE PROFILE MATRIX (CPM)
2.87
222r
wr22
2.222
.872.
87

LUCKY CEMENT DG KHAN CEMENT PIONEER CEMENT
CRITICAL SUCCESS
FACTORS
WEIGHT RATING SCORE RATING SCORE RATING SCORE
Advertising 0.10 3 0.30 4 0.40 2 0.20
Product quality 0.20 4 0.80 3 0.60 3 0.60
Price
competitiveness
0.15 4 0.60 4 0.60 4 0.60
Management 0.15 4 0.60 3 0.45 4 0.60
Financial position 0.15 4 0.60 2 0.30 2 0.30
Customerloyalty 0.10 3 0.30 2 0.20 3 0.30
Global expansion 0.10 2 0.20 1 0.10 1 0.10
Market share 0.05 3 0.15 2 0.10 2 0.10
TOTAL 1.00 3.5 2.75 2.80
The most important factor being successful in the cement industry “product quality “as
indicated by weight of 0.20
From this table “lucky cement “is strongest in “product quality, managementand financial
position” indicated by rating of “4”
DG khan cement is strongest in advertising (rating of 4)
Over all “lucky cement “isstrongest asindicatedby the total weighted average score of “3.5”
MATCHING STAGE:
SWOT ANALYSIS:-
2.80

The concept of determining strengths,weaknesses,opportunities,threats is the fundamental
concept behind SWOT model.topresent the model in a more understandable way scholars
came up with SWOT matrix.it is only a graphical representation of SWOT framework.
STRENGTHS
1. Financially
strong
2. High product
quality
3. Highest export
share
4. High pay scale
“SO “strategies “wo ” strategies
 SETUP NEW
FACTORIES IN
NORTHERN
REGIONS OF
PAKISTAN
(S1 , O1 )
 INCREASED
EXPORTS TO
GULFREGIONS
( S1 ,S2,O2)
 BUILD UP
EXPOSURE AND
BETTER BRAND
IMAGETHROUGH
RIGHT
PROMOTIONAL
MIX
( W1 , O1 ,O2 )
 DIVERSIFY IN
GULFREGION
((w1,o22 )
WEAKNESSES
1. Low
advertising
and exposure
2. Low gratuity
and PF funds
3. Increasing
general and
administrative
expenses
OPPORTUNITIES
OPPORTUNITIE
S
1. Upcoming
national
projects
2. Demand for
cement in gulf
region
3. Expansion in
cement
industry
“ST “ strategies “WT “ strategies
 OVERCOMING
COMPETITOR’S
PRESSURE
THROUGH
MORE QUALITY
(S2,T2)
 RESOLVE
ALLIANCE
OPPOSITION
THROUGH TOP
MANAGEMENT
INVOLVEMENT
(S1,T3)
 REDUCE GENERAL
& ADMIN
EXPENSES TO
COPE WITH
NARROW
COMPETITION
(W3,T2)
 CONSIDER
EMPLOYEE’S
PERKS TO AVOID
HASSELS OF
LABOUR UNIONS
(W2,T3)
THREATS
1. Govt
regulation on
slots
2. Price
competition
3. Opposition
alliance

SPACE MATRIX (STRATEGIC POSITIONAND ACTIONMATRIX)
Increase in net sales revenue 4
Continuous increase in stock value (Rs 130/=) 6
Increased Earning price share-EPS (Rs 2.1 per share) 5
Total: 15
Industrial Strengths:Rating

THE SPACE matrix :-
Increasing competition in construction sector 4
Increasing domestic demand for cemente i.e. 92% 5
Enhancement in the budget for Annual Development Plan 5
Increasing growth rate 3
Total: 17
Environmental Stability:Rating
Allowance of subsidized cement imports & lesser rebates -4
Cut throat competition has created instability. -3
Currency rate difference has given much loss. -3
Increasing rate of inflation. -4
Rapid technological Change. -3
Total: -17
Competitive Advantage: Rating
Strong distribution network. -2
High quality products. -3
High export share. -4
Market development in Gulf countries. -2
Govt. Project as DGP Army. -3
Total: -14

Since the lucky cement lies in the “aggressive quadrant” it means it is excellent position to
use its internal strengths to take advantage of external opportunities and overcome internal
weaknesses and avoid external threats .therefore market penetration ,market development
,product development,backward,forward,horizontal integration or diversification can be the
most feasible .
DECISION STAGE:-
QSPM (quantitative strategic planning matrix)
STRATEGIC ALTERNATIVES
Global
expansion
Exposure and brand image by right
promotional mix
KEY FACTORS WEIGHTS AS TAS AS TAS
Opportunities
Upcomingnational
buildingprojects
0.15 1 0.15 4 0.60

Demand for cementin
Gulfregion
0.20 4 0.80 1 0.20
Expansionin cement
industry due to house
buildingloansby banks
0.10 1 0.20 4 0.40
Threats
Governmentregulations 0.15 4 0.60 3 0.45
Price competition 0.10 2 0.20 3 0.30
Alliance opposition 0.15 2 0.30 3 0.45
Fluctuatingcurrency
rates
0.10 4 0.40 2 0.20
1.00
Strengths
Strong financial position 0.15 3 0.45 4 0.60
High product quality 0.12 3 0.36 4 0.48
Highestexport share 0.20 4 0.80 3 0.60
High pay scale 0.10 3 0.30 4 0.40
Larger dealernetwork 0.08 2 0.16 3 0.24
Weaknesses
Low advertising 0.10 1 0.10 3 0.30
IncreasingGeneral &
Administration
expenses
0.05 - - - -
Low gratuity & PF funds 0.10 1 0.10 3 0.30
Increasedproduction
cost
0.10 1 0.10 4 0.40
1.00 5.2 5.92
The Sum Total Attractiveness Score is 5.2 for strategy ” GLOBAL EXPANSION” and 5.92 for
strategy “ BUILD UP EXPOSURE & BRAND IMAGE BY RIGHT PROMOTIONAL MIX”.
Opportunities are highly attractive in building brand image by right promotional mix. Threats
show more concerns with global expansion. Government regulations, price competition and
currency rates are most attractive threats to be reduced. Financial position, product quality
and pay scales are attractive to build up brand image whereas export share shows highly
attractive to capitalize the strengths. Advertising, gratuity funds and production costs are
highly attractive to improve the weaknesses.
5.92

ANALYSIS:-
Evaluation matrix of mission statement:-
ProposedVision:-
“To transform lucky cement into a model cement manufacturing company engaged in nation
building through most efficient utilization of resources and optimally benefiting all
stakeholders while enjoying public sector and goodwill in local and international market.”
ProposedMission:-
“Our mission is to be perceived by our customers by providing highest quality of cement
using state of the art technology and retaining personnel of exceptional ability while
maintaining its leading position aims to build up on its present state of profitability with a
view to maximize shareholders wealth and care for global environment.
analysis :-
S.NO COMPONENTS AVAILABILITY
1. Customer Yes
2. Product/service Yes
3. Market yes
4. Technology Yes
5. Concern for survival growth,
profitability
yes
6. Philosophy
7. Self-concept yes
8. Concern for public image yes
9. Concern for employees No

All the strengths, weaknesses, opportunities and threats were indicated by respondent (CFO)
along with ratings as well. However weighs were given by us on the bases of industry.
Of the information obtained we sorted out different strengths, weaknesses, threats and
opportunities for the purpose of developing models.
In “IFE “matrix lucky cement has received a total of 2.90 indicates a greater score compared
to the average weighted score of 2.5. It also depicts that lucky cement is above average in
its overall strengths. However there still remains a room for improvement toachieve the
highest score of “4”
In “EFE matrix” lucky cement has scored a total of 2.87 which shows that company is pretty
well performing by taking advantage of external opportunities and avoiding the threats facing
the firm. Lucky cement must capitalize on “unexploited markets of northern regions of
Pakistan “and increase production to reduce cost” and increase in infrastructure
opportunities and the “fluctuation in market “Threat
In competitive profile matrix (CPM) lucky cement has got the highest score of “ 3.5” but it’s
close competitor “DG cement” has got the highest score in “advertisement” therefore lucky
cement should go for more and more advertisement in orderto give exposure to consumers
and creating effective brand loyalty
The matrix shows that lucky by being financially strong and with the opportunity of upcoming
national projects leads to setup factories in northern regions of Pakistan. Being financially
strong & high product quality, Lucky cement should devise a strategy to diversify in gulf
region as having demand for cement thereCompany can minimize the price competition and
maintain its product quality by overcoming competitor's pressure through more quality.
The company have the ability to consider employee's perk to avoid Hassel's of labor by
disengaging the opposition alliance and by minimizing the low gratuity & provident funds.
We also found that lucky cement lies in first right quadrant of SPACE matrix.it implies that C
COMPANY is staying at close is their basic competencies. The industry is growing and
company is financially stable with profound competitive advantage. Lucky cement is in
“market penetration “through aggressive selling and market development (new factories
being set and exports to gulf region).
The QSPM analysis indicates lucky cement should build up better brand image by
promotional mix.

RECOMMENDATIONS
RECOMMENDED STRATEGIES:
After conducting thorough research study and keeping in view the external and internal
environment of the company, we suggest Lucky Cement Pvt Ltd togo for these strategies:

1. Market Penetration: Currently construction and cement industry is at top. After
natural disasters, number of construction projects have been initiated by the
Government. Moreover keeping in view the rising trend of house financing through
banks and investment in estate and property, we recommend Lucky Cement to go for
market penetration.
2. Market Development: During recent years, the demand for cement has drastically
increased in Gulf region. In order to cater to the increasing demand and to develop
new markets, Lucky Cement should increase its exports towards Gulf region and also
in other countries, hence developing a market in a new geographical segment.
GENERAL RECOMMENDATIONS:
1. Lucky Cement despite of being the industry leader, still has not captured the brand
image as its other competitors. The reason is the lack of publicity and advertisement.
Lucky Cement should concentrate on the consumer market through better
promotional mix programs.
2. Although the pay scale of employees currently working with Lucky Cement is quite
high, in comparison with its competing cement manufacturing organizations, still the
turnout rate is very high. The reason being low gratuities and benefits after retirement
due to which most of the employees quit. In order to retain its valuable Human
Resource, Lucky Cement should pay attention towards this area.
3. Lucky cement need to implement contingency planning to cope with the future
constraints.
CONCLUSION:-
Lucky cement like any other responsible organization is redefining its business operations in a
fundamental way. It is working to promote sustainable development and integrating its
endeavors of profitable growth with the initiative of environment all protection &uplifting
the quality of life of the present &the future generations .The company have undertaken
projects that will enable them to meet the need for global sustainable development while
enhancing share holder value.

The org is moving towards its growth mode and can aggressively employ the strategies of
market development market penetration product development backward and forward
integration as per need of demand of the org.
BIBLIOGRAPHY: _-
Strategic management (concepts and cases) by Fred.R.David ( thirteen edition )
Annual report 2013-2014 – lucky cement Ltd
All Pakistan cement manufacturing association manual 2014
www.Lucky-cement.com
www.pakistaneconomist.com
www.dgcement.com

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