Edita Food Industries Strategic Management Project

Edita Food Industries
Strategic Management Project
0
S.A.E
Strategic Management Final Project
Presented to Professor Dr. Ashraf Labib
Prepared By:
Nevert Abdel Ghani 19122058
Mohamed Adel 19121811
Mohamed Hamdy 18221553
Mohamed Al-Moatassem 19121840
Michael Kamal 19121088
2020
MBA –S3 – Group F
12/28/2020

Table of Contents
1 Generic Strategy, Mission and Vision ...................................................................................................................1
1.1 Overview & Current Situation.......................................................................................................................1
1.2 Generic Strategies.........................................................................................................................................2
1.2.1 Cost leadership strategy .......................................................................................................................2
1.2.2 Differentiation strategy ........................................................................................................................4
1.2.3 Focus strategy.......................................................................................................................................5
1.3 Mission..........................................................................................................................................................5
1.4 Vision ............................................................................................................................................................5
1.5 Corporate Governance .................................................................................................................................5
1.5.1 EDITA’s Core Values.....................................................................................................................................5
1.5.2 EDITA’s Strategy...........................................................................................................................................6
1.6 EDITA’S Board of Directors ...........................................................................................................................6
1.7 EDITA’s Top Management ..................................................................................................................................8
2 External Environment Analysis ..................................................................................................................................9
2.1 Factors affecting the company (PESTEL ANALYSIS) ............................................................................................9
2.1.1 Political Factors............................................................................................................................................9
2.1.2 Economic Factors.......................................................................................................................................10
2.1.3 Social Factors .............................................................................................................................................11
2.1.4 Technological Factors ................................................................................................................................12
2.1.5 Ecological Factors.......................................................................................................................................12
2.1.6 Legal Factors ..............................................................................................................................................12
2.2 Task Environment (Porter's five forces model..................................................................................................13
2.3 Strategic Group Map.........................................................................................................................................14
2.4 Strategic Type ...................................................................................................................................................16
2.5 Value discipline Triad........................................................................................................................................17
2.6 BCG Matrix........................................................................................................................................................19
2.7 Industry Attractiveness.....................................................................................................................................21
2.8 Industry Matrix .................................................................................................................................................22
2.9 Issue Priority Matrix..........................................................................................................................................23
2.10 Industry Matrix ...............................................................................................................................................24
2.10.1 Opportunities...........................................................................................................................................24
2.10.2 Threats.....................................................................................................................................................24
2.11 EFAS Matrix.....................................................................................................................................................24
3 Internal Environment Analysis.................................................................................................................................25

3.1 Value Chain Analysis.........................................................................................................................................25
3.1.1 Primary Activities.......................................................................................................................................25
3.1.2 Secondary Activities...................................................................................................................................26
3.2 Value Rareness Imitability Organization Matrix (VRIO)....................................................................................28
3.2 Situational Analysis...........................................................................................................................................30
3.2.1 Strengths....................................................................................................................................................30
3.2.2 Weaknesses ...............................................................................................................................................30
3.3 Financial Ratios .................................................................................................................................................31
3.4 IFAS Matrix........................................................................................................................................................35
4 Strategic Factor Analysis..........................................................................................................................................35
4.1 SFAS Matrix.......................................................................................................................................................35
4.2 TOWS Analysis ..................................................................................................................................................36
4.3 SPACE Matrix ....................................................................................................................................................38
4.4 Grand Strategies ...............................................................................................................................................39
5- Quantitative Strategic Planning..............................................................................................................................39
5.1 QSPM Matrix.....................................................................................................................................................39
6- Implementation & Control .....................................................................................................................................41
6.1- Balanced Score Card........................................................................................................................................41

1
MBA – S3 – Group F
1 Generic Strategy, Mission and Vision
1.1Overview & Current Situation
Edita Food Industries was established in 1996 by the Berzi family and Chipita International (through Exoder
Limited) and holds a leading market share in each of its six segments that span the Egyptian snack food market,
including the cake, croissants, rusks (baked wheat), wafers, and candy segments. Today, Edita is one of the leading
Fast-Moving Consumer Goods (FMCG) companies in Egypt and the Middle East with c.5,700 employees and 146
stock-keeping units (SKUs). The company is well known for its consistently high-quality products and strong brands
including Molto, TODO, Bake Rolz, Bake Stix, Mimix, HoHo’s, Freska, Twinkies, Tiger Tail and Oniro. Edita acts also
as the sole regional distributor of several brands of imported sweeteners, olive oils, and pasta. Edita brands are a
part of everyday life in Egypt and 16 other countries across the Middle East & North Africa.
Edita’s reputation for quality and affordable pricing strategy has led to the company holding positions in all five of
its market segments: ranking first at its cakes, bakery, and candy segments, second at the rusk segment and third
at the wafer segment. As such, Edita has become a leader in the Egyptian snack food market and its brands are
some of the most recognized by consumers in Egypt – Edita’s core cake and croissant brands have close to 100%
brand awareness.
Edita boasts five state-of-the-art production facilities, encompassing 31 production lines. Each facility is managed
by a plant manager who is fully responsible for meeting production plans while maintaining Edita’s high standards.
Products sold overseas averaged 8.5% of the company’s total sales in FY2018. Key export markets include Libya
and Iraq which together constituted 51.0% of total exports in FY2019. The company relies on local distributors for
its export business and deals with them on a cash-in-advance basis given the high-risk profile of many of its key
export destinations.
Product
Segment
Croissant Rusks Cake Candy Wafer
Brands
YTD Aug
2020
Market
Share &
Rank
62.5%
#1
44.4%
#2
46.2%
#1
8.1%
#1
10.2%
#3

In Egypt, Edita’s extensive, streamlined and effective sales & distribution platform offers Edita an unmatched reach
in the domestic market and includes a highly qualified, empowered and dedicated sales force of 1,273 employees
including 573 sales representatives. The company delivers products from its 23 distribution centers spread across
27 governorates to more than 55,000 wholesale and retail customers via its 829 vehicles. Notably, high demand
for Edita’s products allow to maintain a cash-based policy for 97% of its domestic sales despite the Egyptian market
being predominately credit-based for the snacks industry.
1.2Generic Strategies
1.2.1 Cost leadership strategy
Cost leadership occurs when a company is the category leader for low pricing. To successfully achieve this without
drastically cutting revenue, a business must reduce costs in all other areas of the business, such as marketing,
distribution and packaging. A cost leadership strategy is a company’s plan to become a cost leader in its category
or market.
Benefits of being a cost leader
 Cost leaders can charge the lowest amount for a product while remaining profitable. Other companies
may have to sell their products at a loss to compete with a cost leader’s prices.
 Cost leaders can also withstand recessions better than competitors because they are experienced in
appealing to consumers with budgets in mind. A company with very low operational costs could go longer
without achieving sales goals than a company with high costs.
 Also, cost leaders can be more flexible. Since their costs are low, they can discount prices more often or
potentially try out other product offerings that other companies might not be able to. Companies with
flexibility are likely to attract a larger customer base.
Difference between cost leadership and price leadership
Sometimes people use the terms cost leadership and price leadership interchangeably, but these words do not
refer to the same principle. Cost leadership means having the lowest operational cost in an industry and market.
Price leadership means having the lowest price. Very frequently, a company that is a cost leader is also the price
leader.
Sometimes, a price-leading company chooses to have the lowest prices at all costs and may be less profitable as a
result. For example, large online companies sometimes sell items at a loss or a small profit margin to maintain the
lowest prices on some of its products and gain a larger market share. These companies would be price leaders but
not cost leaders.
Other companies could have lower operational costs and choose to sell products for higher margins to make more
of a profit. These companies would be considered cost leaders but not price leaders. However, it is very common
for price leadership and cost leadership to overlap in a company that manufactures for the lowest cost and offers
the lowest category price.
Ways to become a cost leader:
1. Increasing production scale
Scaling a business can have a significant impact on its ability to become a cost leader. Scaling occurs when a
company reduces costs by increasing the volume of materials. For instance, if a company purchases a large amount
of fabric instead of only the amount it requires, the company can reduce the cost of goods with a lower per-yard

price. Scaling the business helps to secure larger orders of raw materials and supplies, which can further reduce
the cost of goods. It also gives a company more power over suppliers, since the company’s orders will make a
larger share of the supplier’s business operations.
Scaling a business also insulates it against the competition. Cost leaders that scale tend to have more negotiating
power, more flexibility with pricing and the ability to withstand competition more effectively. If a company is in an
industry with intense competition, scaling gives it the ability to offer prices that competitors cannot. That company
also gains the ability to offer inventory on a much larger scale, so it can capture a bigger segment of the market
without worrying about running out of inventory.
2. Implementing advanced technology
Creating or investing in innovative technology can help companies become cost leaders. Sometimes, a company
can lower costs by creating a technology that can manufacture more products per hour, limit the number of
employees needed for production or provide some other benefit to the process’s efficiency. Patenting a unique
technology will also ensure that other companies, including competitors, can’t use it for their own benefit. A
company could also sell its patented technology later on to generate more revenue.
Sometimes, already existing software programs can benefit companies by saving time or reducing costs. If the
program can reduce the number of employees a company needs in the operational process or the number of
errors in the production process, it might be worth the investment. As companies grow, it is only natural to try to
find ways to streamline processes along the way.
3. Sourcing raw materials
Buying raw materials for the manufacturing process can be expensive because the supplier also marks up their
prices to make a profit. If possible, sourcing raw materials and reducing the reliance on third-party products can
lower operational costs.
Sourcing materials directly also gives a company the ability to supply other companies. If a business’s raw material
supply greatly exceeds its needs, it can resell it to other manufacturers at a market price as another source of
income.
4. Improving efficiency
Increased efficiency can often translate into operational cost savings for companies. One example of this is to use
software to reduce the number of people required to work on the process, which would reduce salary payments.
However, reducing employees is not the only way to improve efficiency and reduce costs. Quicker manufacturing
times for custom orders means that a company might be able to charge more for speedy service even though a
company doesn’t have to pay as much for the electricity and related expenses for making a product. Better
efficiency can help companies without custom products, too.
5. Limiting products and services
One strategy to become a cost leader is for a company to limit its products and services. By having fewer products
to manufacture and sell, that company can focus more of its efforts on a few highly profitable products or services.
This makes it easier and more likely that that company will be able to scale its operations and get the lowest costs
on raw materials and other supplies

Disadvantages of Cost Leadership:
Focusing on price can make the company lose sight of evolving customer tastes and preferences. Once a company
introduces a process that saves the business money, other companies can quickly copy that technique and lower
their prices. New technology can make research and development that takes years to complete obsolete almost
immediately. For instance, people rarely pay for long-distance phone charges because cell phone technology
makes landlines irrelevant for many consumers.
EDITA follows a cost leadership strategy. Edita’s reputation for quality and affordable pricing strategy has led the
company to hold positions in all five of its market segments. As such, Edita has become a leader in the Egyptian
snack food market and its brands are some of the most recognized by consumers in Egypt.
1.2.2 Differentiation strategy
A differentiation strategy is an approach business develop by providing customers with something unique,
different and distinct from items their competitors may offer in the marketplace. The main objective of
implementing a differentiation strategy is to increase competitive advantage. A business will usually accomplish
this by analyzing its strengths and weaknesses, the needs of its customers and the overall value they can provide.
Benefits of creating a differentiation strategy:
1. Reduced price competition
Differentiation strategy allows a company to compete in the market with something other than lower prices. For
example, a candy company may differentiate their candy by improving the taste or using healthier ingredients.
Although its competitors have cheaper candy, they can’t provide the taste that consumers may want from that
specific candy company.
2. Unique products
This benefit of a differentiation strategy is that it builds on the unique qualities of a product. Your company may
create a list of characteristics its products contain that your competitors lack. Those characteristics will differentiate
your product, and you may communicate this through effective marketing and advertising.
3. Better profit margins
When products are differentiated and turned into higher-quality products, it offers more opportunity for larger
profit margins. For example, if your target market is willing to pay a higher price for top quality or better value, you
may generate more revenue with fewer sales.
4. Consumer brand loyalty
Effective differentiation may create brand loyalty in customers if a business maintains the perceived quality of your
products. For example, if you have a brand that is marketed by a sports figure, it will likely increase brand loyalty
because it enhances the value of your brand.
5. No perceived substitutes
A strategy that successfully differentiates may present the idea that there is no other product available on the
market to substitute it with. A business may gain an advantage in the market even when there are similar products
available because customers will not be willing to replace your product with another one. Companies try to
differentiate themselves by providing consumers with unique products that are frequently revolutionized.

1.2.3 Focus strategy
The idea behind focus strategy is developing, marketing and selling products or services to a niche market, such as
a particular type of consumer, a specific product line or a targeted geographical area. The goal of the focus strategy
is to become the leader in the determined niche by serving the designated group better than anyone else out
there. The objective in focus strategy is to be the go-to brand or product for the group you're trying to reach.
The focus strategy has two variants:
1. Cost focus
In cost focus a firm seeks a cost advantage in its target segment. Cost focus exploits differences in cost behavior in
some segments.
2. Differentiation focus
In differentiation focus a firm seeks differentiation in its target segment. It exploits the special needs of buyers in
certain segments.
Therefore, the firm achieves either differentiation from better meeting the needs of the particular target, or lower
costs in serving this target, or both. Both variants of the focus strategy rest on differences between a focuser's
target segments and other segments in the industry.
If a firm can achieve sustainable cost leadership (cost focus) or differentiation (differentiation focus) in its segment
and the segment is structurally attractive, then focuser will be an above-average performer in its industry.
1.3Mission
Together, spreading joy through trusted brands.
1.4Vision
Setting the benchmark of snacking with our high quality, innovative products.
1.5Corporate Governance
1.5.1 EDITA’s Core Values
 Trust: We believe in Mutual Trust, we trust in our people; our biggest asset, and believe in their
contribution to the growth of our organization and they in turn trust in our company to develop and nurture
their potential to achieve their career goals.
 Responsibility: Responsibility towards our stakeholders and community as well as commitment to quality
are pivotal to our strategy and operations.
 Innovation: Innovation is what defines and leads us as a company.
 Teamwork: Teamwork is core, we believe that the power of “We” is key to achieve our goals.

1.5.2 EDITA’s Strategy
 Increase penetration of the Egyptian snack food market and expand customer base while diversifying revenue
streams
 Improve sales mix between wholesale and retail customers
 Expand production capabilities and capacity to meet growing demand
 Introduce new and innovative products aligned with changing consumer trends
 Enhance profitability by improving product mix and driving manufacturing efficiencies
 Grow operations regionally.
1.6EDITA’S Board of Directors
 ENG. HANI NABIH AZIZ BERZI
Chairman and Managing Director, Representing Quantum Invest BV
Mr. Berzi has 34 years of experience in the food and beverage industry. Mr. Berzi became a member of the
Board of Edita Food Industries in 1996 and became the Managing Director and Chairman of the Board in 2006.
Mr. Berzi is also a member of the Board of the Chamber of Food Industries and the Egyptian Centre for Economic
Studies and is the Chairman of the Egyptian-Greek Business Council (Egyptian side) and is the Chairman of the
Food Export Council. Previously, he was a member of the Boards of a number of companies in the food and
beverage industry, including Technopack in 1987, Rotopak in 1989 and Egypt Sack in 1997, and has also served
as a Board Member of the Federation of Egyptian Industries. He graduated from Ain Shams University with a
BSc in Computer and Control Engineering.
 MR. SAMIR NABIH AZIZ BERZI
Vice Chairman, Representing Quantum Invest BV
Mr. Berzi has 37 years of experience in the food and beverage industry. In 1986, Mr. Berzi founded Berzi
Confectionary, which was later acquired by Tasty Foods Egypt. He subsequently held the position of Industrial
Operation Vice President at Tasty Foods Egypt after a sale of a part of its shares to PepsiCo. Mr. Berzi has also
established a number of companies including Digma Trading, a fast-moving consumer goods distribution
company and Edita Food Industries. Mr. Berzi became a member of the Board of Edita Food Industries in 1996.
He is also the Chairman of Digma Trading and Edita Confectionary Industries, a member of the American
Chamber of Commerce, a member of the Board and shareholder of Le Pacha 1901, a shareholder of Mirage
Hotels, which owns the JW Marriott at Mirage City, and a shareholder of Sakkara Tourism Investment, which
owns the Mirage City compound in New Cairo. He graduated from Cairo University (Cairo, Egypt) in 1982 with
a BA in Commerce.
 MS. FATMA LOTFY
Board Member, Representing Quantum Invest BV
Ms. Lotfy has been a member of Edita’s Board of Directors since 2015, with over 33 years of commercial and
investment banking experience under her belt. Since she began her career in the late 1980s, Ms. Lotfy has held
senior and key executive positions in a number of renowned international and local banks and sits on the boards
of several largescale financial institutions. Ms. Lotfy is also highly engaged in her role as an active corporate
citizen through her activities as a member of the Egyptian European Council, the Young Presidents Organization
(YPO), the Egyptian British Chamber of Commerce, and the Egyptian American Chamber of Commerce, in
addition to being an active member of the Economic Committee of the Women’s National Congress.

 MR. HUSSEIN CHOUCRI
Independent Board Member
Mr. Choukri is among the pioneers of Egypt’s investment banking sector. In 1996, he established HC Securities
& Investment, which currently is one of the leading investment banks in the Middle East and North Africa. Mr.
Choukri is a board member of a number of associations and reputable companies, including Holding Company
for Tourism, Hotels and Cinema and The Egyptian British Business Council (EBBC). Mr. Choukri joined Edita as a
Board Member in January 2015. Mr. Choukri is the head of Edita’s Remuneration Committee and is also a
member of the Audit Committee. He graduated from Ain Shams University and the American University in Cairo
with a degree in Commerce and Management, respectively.
 MRS. SAHAR EL SALLAB
Ms. El Sallab worked and trained at Citibank Cairo and Athens before spending 25 years working at Commercial
International Bank, where she assumed the roles of Vice Chairman and Managing Director. She was also the
Chairperson of Commercial International Capital Holding Company (CI Capital) and is currently chairperson of
HitekNOFAL Company and a board member at the National Bank of Egypt. After significant private sector
experience, she became the Deputy Minister of Trade and Industry for Development and Investment in Internal
Trade in Egypt. Ms. El Sallab is also the head of Edita’s Audit Committee. She graduated from the American
University in Beirut and from the Harvard Kennedy School for Management.
 MR. MOUNIR FAKHRY ABDEL NOUR
Mr. Mounir is a veteran banker, industrialist and public servant. Mr. Abdel Nour first entered government
service in 2011 as Minister of Tourism, a post he held until 2012. He rejoined cabinet as Minister of Trade and
Industry in July 2013 and went on to serve as Minister of Trade, Industry and Investment and as Minister of
Trade, Industry and SMEs until he left office in September 2015. Prior to entering government, Mr. Abdel Nour
was a banker with Banque de l’Union Européenne and American Express. He founded Vitrac, a leading Egyptian
maker of jams, juices and syrups, in the 1980s and grew the company into a category-defining player with a
dominant market share in Egypt and strong export network. He is currently a board member of GB Auto, Domty
and Beltone Financial. Mr. Abdel Nour holds a BSc in statistics from Cairo University’s School of Economics and
Political Science and an MA in economics from the American University in Cairo.
 MR. HANNY Y. ELMESSIRY
Hanny Elmessiry has over 18 years of experience in the food and beverages industry. From 2012 to 2015 he
served as Chief Executive Officer for IFFCO Egypt, North Africa’s largest edible oil and fats refining and
processing company. Currently, Elmessiry is a Partner at Global Equity Ventures. He also serves on the board of
several for-profit companies. Previously, Elmessiry also acted as Chairman and Chief Executive Officer of
Orascom Housing Communities. He also served as Governor of Alexandria, Egypt’s second largest city.
 MR. TAMIR SAEED
Board Member, Representing Kingsway
Mr. Tamir Saeed has 15 years of experience in the finance industry. Currently, Mr. Saeed is a Managing Partner
at Kingsway Capital Advisors LLP, a leading U.K. based investment manager, managing institutional capital with
a long-term investment horizon and a focus on high-quality consumer franchises in frontier and emerging
markets. Aside from Edita, Mr. Saeed is a board member of a number of reputable companies in Egypt and the
broader region. He graduated from the University of Cambridge (United Kingdom) with an MA in Economics,
and is a CFA Charter holder.

1.7 EDITA’s Top Management
 ENG. HANI NABIH AZIZ BERZI
Chairman and Managing Director “mentioned above”
 MR. SAMIR NABIH AZIZ BERZI
Vice Chairman, Representing Quantum Invest BV “mentioned above”
 MR. SAMEH NAGUIB
Vice President (Finance) and Chief Financial Officer
Sameh Naguib joined Edita following his most recent stint as Chief Financial Officer and a member of the Board
of Directors of the ASEC Company for Mining, an EGX-listed company better known as ASCOM, which he joined
in late 2011. Naguib’s earlier professional track record includes a more than 10-year run with Heineken
International, where he held a series of increasingly senior positions in Egypt, Algeria and the Netherlands.
Naguib worked as an assistant to the Minister of Economy and Foreign Trade in 2000 before joining Al Ahram
Beverages Co. in 2001 as a financial analyst prior to that company’s acquisition by Heineken.
 MR. ALFRED YOUNAN
Vice President Sales and International Markets
Mr. Younan has 28 years of experience in the FMCG industry and joined Edita Food Industries as National Sales
Manager in 2005 before assuming his role as Vice President— Sales and International Business in 2007. He
graduated from Alexandria University (Alexandria, Egypt) in 1992 with a BA in Commerce, and completed the
International Marketing Program at INSEAD (Fontainebleau, France) in 1998 and the Executive Development
Program at Kellogg School of Management (Chicago, USA) in 2009.
 ENG. MOHAMED EL BAHEY
Vice President Supply Chain & Industrial Operations
Mr. El Bahey has 24 years of experience in the FMCG industry and joined Edita Food Industries as Vice
President—Supply Chain in 2012 and later assumed responsibility for Industrial Operations. He graduated from
Ain Shams University in 1995 with a BSc in Engineering (Mechanical Power Section).
 MR. MAGED TADROS
Vice President Human Resources & Administration
Mr. Tadros has over 30 years of experience in human resources and joined Edita as Vice President—HR and
Administration in 2010. Mr. Tadros is certified as a Human Resources Assessor and Franklin Covey Trainer. He
graduated from Helwan University (Cairo, Egypt) in 1986 with a BA in Hotel Management.
 MR. AHMED SAMY
Vice President Marketing
Mr. Ahmed Samy has over 17 years of experience in marketing and brand management and currently serves as
Edita’s Vice President — Marketing. Mr. Samy joined the company in 2014 as Marketing Manager for the cakes
& bakes categories before getting promoted to Group Marketing Director responsible for the entire brand
portfolio and finally his current position. He holds a BSc in Mechanical Engineering from The American
University in Cairo with a double specialization in Design & Industrial Engineering.

 MR. SHERIF SHAKER
Internal Audit Senior Director
Mr. Shaker has 35 years of experience in finance and auditing and joined Edita Food Industries as Financial
Manager in 1997 and is now the company’s Senior Internal Audit and Corporate Governance Director. Mr.
Shaker is a Certified Director of the Egyptian Institute of Directors (EIoD). He graduated from Ain Shams
University with a BA in Commerce in 1983 and obtained his MBA from the Arab Academy Graduate School of
Business (Alexandria, Egypt) in 2009, specializing in Finance, Investment and Banking.
 MS. MENNA SHAMS EL DIN
Investor Relations and Business Development Senior Director
Ms. Shams El Din has over 16 years of experience in corporate strategy, economics and finance and currently
serves as Senior Director of Investor Relations & Business Development at Edita. She holds a BA in economics
and a minor in psychology from The American University in Cairo.
 MR. PANAGIOTIS PAPADODIMAS
Research and Development Director
Mr. Papadodimas has 19 years of experience in research and development and joined Edita as Research and
Development Director in 2014. He graduated from the University of Surrey (Guildford, United Kingdom) in 1998
with a BA in Chemistry and from the University of Reading (Reading, United Kingdom) in 1999 with a MSc in
Food Science and Technology. He obtained his MBA from Alba Graduate Business School (Athens, Greece) in
2010.
2 External Environment Analysis
2.1 Factors affecting the company (PESTEL ANALYSIS)
2.1.1 Political Factors
The first two milestones of the political roadmap adopted in July 2013 – the ratification of the new Constitution in
January 2014 and presidential elections in May 2014 – have been completed. This has returned Egypt to political
stability, providing the government with the right opportunity to tackle a new country’s economic constraints and
to launch far-reaching structural reforms. The government has lost no time in making the most of the opportunity
with vigor and a fresh sense of purpose – indeed, it has been very active during its short tenor in office to date in
working across multiple policy fronts to strengthen the fundamental underpinnings of the economy and to improve
the future prospects of the country’s young and aspiring population.
Among the boldest moves so far has been the government’s decision to slash wasteful energy subsidies by 30% in
July 2014, signaling its political will to confront even the most difficult issues – including longstanding taboos – in
its quest to reinvigorate the economy. Other decisive steps have included measures to improve tax buoyancy and
widen the tax base, to reform the foreign exchange market dynamics, and to begin the process of liberalizing
generation, transmission and distribution activities in the power sector and eventually restricting the role of the
state to that of regulator and supervisor.
In effect, the government is reengineering the Egyptian economy through a comprehensive set of coherent policies,
programs and projects. The macroeconomic policy framework and structural reform program rest on three
fundamental principles:

 First, prudent macroeconomic policies will progress alongside long-term economically viable
developmental projects with high labor intensity and concrete efforts to improve the quality and
accessibility of services offered to the public.
 Second, the growth model will be based on a constructive partnership between the government and the
private sector. The government is committed to pursuing a prudent macroeconomic policy framework,
reforming its legal apparatus, and investing in basic infrastructure in order to create a stable and
predictable business environment, while the private sector is being increasingly empowered and
encouraged to resume its leading role in driving economic growth. This may take time as confidence
continues to rebuild, but early signs of the return of confidence are promising.
 Third, the approach will strike a balance between fiscal consolidation and social justice objectives. The
government will ensure that growth is inclusive as well as sustainable, with the savings generated by
austerity measures being partially redistributed to fund social protection programs and to invest in Egypt’s
abundant and young human capital.
There are External affairs like:
 Egypt has a challenge with the threat of terrorism parties in the north of Sinai.
 Egypt, KSA, Bahrain & UAE have an issue with Qatar claiming that Qatar supporting terrorism in their
countries.
 Egypt has a debate with Ethiopia over the Ethiopian Dam on the Nile.
2.1.2 Economic Factors
 Economic growth in Egypt, estimated at 5.6% for 2019, is forecast to strengthen to 5.8% in 2020 and 6%
in 2021, supported by broad-based economic reform programs since 2016. Other factors supporting
growth include the recalibration of government’s social inclusion programs away from general subsidies
on energy products to targeted transfers and improvements in the business environment. Tourism,
construction, and oil and gas were driving growth. On the demand side, consumption remained subdued
as exports and investments were more robust.
 A broad-based consolidation plan introduced a new value-added tax and a gradual reduction in energy
subsidies, putting the fiscal deficit on a downward trend from 12.5% of GDP in fiscal 2016 to 8.7% in fiscal
2019. Primary balances registered a surplus over the past two years. Debt growth has been contained as
the debt-to-GDP ratio fell from 103% in 2017 to 89.5% in 2019, partly a result of fast-growing nominal
GDP. The current account deficit narrowed to 2.3% in 2019, and foreign exchange reserves reached an all-
time high at $44.96 billion in August 2019. Inflation pressures are also easing, standing at 8.7% year-on-
year in July 2019, the lowest in the past four years.
 The 2020 fiscal budget assumes an optimistic yet attainable 6% growth rate. In the first quarter of 2019,
the unemployment rate dropped to 8.1%, its lowest in 20 years.
 Egypt’s prospects are favorable. Real GDP growth is projected to maintain momentum driven by high
domestic demand and export growth. Egypt is now a gas exporter, following the discovery of the Zohr
field. With growth becoming increasingly inclusive, unemployment declining, pensions improving, and civil
servant wages increasing, consumer spending should pick up. The government is advancing Egypt’s
integration with the rest of Africa, which should boost exports.
 Egypt climbed six ranks to 114 of 190 countries in the latest edition of the World Bank’s Doing Business.
The improving business environment should boost domestic investment and further attract foreign direct
investment. The decline in inflation is expected to continue. As a result, monetary policy is becoming less
restrictive. Cuts in central bank rates would also ease the repayment burden of the government’s large
short term debt.

 The 2016 currency depreciation triggered a sharp increase in the cost of living. Despite government social
inclusion policies and the positive economic results of the reforms, poverty rose from 27.8% in 2016 to
32.5% in 2019. This increase could further influence government social protection programs. In particular,
the main cash transfer programs, Takaful and Karama (Solidarity and Dignity), have been significantly
expanded since their introduction in 2016, from 200,000 households to 2.3 million households in 2019.
Yet, they only benefit a third of the poor, around 10 million people.
 The agricultural and manufacturing sectors, accounting for around 13% and 15% of GDP, remained flat.
Private investment, concentrated in real estate and energy, still does not exceed 9% of GDP. And private
credit remains subdued, going from 36.2% of total credit in 2011 to 22.7% in 2019. Although net exports
became the largest contributor to GDP growth in 2019, nonoil exports remain modest, showing the weak
pass-through of currency depreciation. And 60% of debt still carries a maturity of one year or less. While
unemployment has been trending down, it is still high among youth (26%) and women (38%).
2.1.3 Social Factors
Cultural aspects,
 Parents are used to give their children’s needs more priority as a part of Care and tenderness
 Children in Egypt consider the candy Cause of happiness
 Candy is considered as a kind of entertainment for youth
 The most preferable products for Egyptians is the cheapest with average level of quality
 Recently, Egypt has seen an increase in health awareness so customers became more selective in
choosing their children food
Life Style
 Egyptians’ life is very congested, dynamic, and full of noise specially youth they are not committed to
meals time so they used to take some candies during the day
 They are very sociable and used to exchange different kinds of candies as a way of showing friendship
 Candy is considered the breakfast meal for children during the school day and the dessert after lunch
Age distribution
Years Percentage Male Female
0-14 33.62% 18,112,550 16,889,155
15-24 18.01% 9,684,437 9,071,163
25-54 37.85% 20,032,310 19,376,847
55-64 6.08% 3,160,438 3,172,544
65 and over 4.44% 2,213,539 2,411,457

2.1.4 Technological Factors
 Emerging information and communication technology is setting the pace for a changing, competitive and
dynamic global marketplace and representing an enabling platform for business and socioeconomic
development in the 21st century.
 New technology helps in economizing the scale of production; this means that new technology helps in
increasing the level of production, & reducing the costs of inputs, & maximizing the level of profits
 Also leads to discoveries & innovations & further improvements in technology so as to improve perfections
in the production process.
 Egypt among other nations strived to develop its national information and communication infrastructure
(NICI) plans strategies and policies that articulate long-term policy, infrastructure, content and application
as an integral part of overall national development.
 A number of policies have been implemented to attract foreign investment in IT outsourcing, including
local employment subsidies, lower corporate taxes and deductions for training costs.
2.1.5 Ecological Factors
Edita will get benefits from The world’s largest beet sugar factory is under construction in Egypt, where It aims to
guarantee feedstock of sugar beet at double the current yield of Egyptian agriculture average, and at 2% higher
sugar content (Yields are already achieved in neighboring farms under same conditions). In the Egyptian desert,
southwest of the city of Minya, a truly extraordinary agro-industrial complex is taking shape: a huge area of about
76,000 ha for the cultivation of sugar beet, wheat and maize is irrigated with ground water from wells as deep as
200 m.
2.1.6 Legal Factors
 New Investment law to be announced.
 Edita’s identity is heavily intertwined with efficient and ethical corporate governance that guards the
company against irregular practices. Continuous improvements are evident when looking at the
company’s complete compliance with Egypt’s legal and disclosure requirements, and its separation of

ownership and management, with management being handed to Edita’s Board of Directors. Additionally,
an Audit Committee has been established to assist the board in reviewing financial and administrative
procedures, and a Remuneration Committee now develops all company pay and benefits policies.
 As a company incorporated in Egypt, all of Edita’s corporate affairs are governed by the Egyptian
Companies Law, Egyptian Capital Market Law, the Egyptian Stock Exchange’s (EGX) listing rules, and all
other laws applicable to Egyptian companies. Additionally, Edita is subject to Egyptian disclosure
requirements.
 Legal regulation and sound business practices, reviewing operations to ensure they are executed in a way
that is consistent with pre-established objectives. Through its exhaustive reports which are issued to the
Audit Committee, Edita’s CEO, and VPs, the department acts as an advisor to senior management,
recommending improvements across all company departments and sectors. It is also tasked with
investigating any reported instances of fraud, embezzlement, theft, waste, or any wrongdoings.
2.2 Task Environment (Porter's five forces model)

2.3 Strategic Group Map
The following is the Strategic Group Map for EDITA and their Competitor, to display the competitive positions of
the competitors and also EDITA occupy in Food industries. EDITA can identify again the direct competitors,
opportunities and strategic problems.
Croissant
Company Edita Domty
Al
Faysal Monginis Ole bakeries Faragello Other
Product Molto Sandwich Branch Monginis Ole Faragello Other
Price (EGP) 3 4 3 4.25 3 2.5 2.5
Distribution 864 722 654 200 150 100 50
So EDITA Can Consider Group A as a Direct Competitor and Group B as a indirect Competitor. Although EDITA has a
great Market Share at Croissant which reach 59% but for the sustainability EDITA should Consider Domty and Al
Faysal as a direct competitor.
Company Edita Ocean Foods El Shamadan Pepsico Nestle Bisco Misr Corona Ulker Loaker Faragello
Product Freska Lambada Katakito Samba Kit-Kat Wafers Bimbo
MILLE
FEUILLE Navy cover Nino
Price (EGP) 3 2 6 2.5 8 2.25 3 2 8 2
Market Share (%) 9 25 12 3 14 13 5 4 12 3
Wafer

Reference To Wafer, EDITA Direct Competitor are Group B which are Ocean Food, Pepsico, Bisco Misr, Corona, Ulker
and Faragello.
So EDITA Should revise it’s Strategic plan Towards the Wafer ‘Freska’, EDITA need to revise the the Segment and
Target Market, also revise the Geographical Market due to distribution , Quality of choclate may be the taste and
price.
As clarified Lambada (Ocean Food) is the highest market share, so EDITA need to focus and proceed in a strategic
and Marketing plan to Enhance the Wafer product to be able to face the huge competion from all Products at Group
B and specially Lambada.
Reference to Rusks or Salt Snacks EDITA is Rank#1 with Bake Rolz ,EDITA have an excellent position , from the above
mentioned Strategic Map EDITA has a direct Competitor such as SunBites Egypt and Egypt Foods ( Rusky Bakes )
Group C, and indirect Competitor at Group A as clarified in Pretzo and Pretzels (Kemetfood and M.Pretzels), and
also indirect Competitor at Group B at Fitness from Nestle and Patisseries from Bakeries.
Company Edita Sunbites Egypt Egypt Foods NESTLE KemetFood Mr.Pretzels Bakery products
Product Bake Rolz Sunbites Rusky bakes Fitness Pretzo Pretzels Patisserie
Market Share (%) 40 25 9 8 6 6 6
Price (EGP) 3 2.5 2 5 8 9 4
Rusks/ Salt Snacks

2.4 Strategic Type
Edita Strategic Type
Prospector: identification of new market opportunities through release new products and design a strong Market
campaigns for each product.
Growth Strategy
Vertical integration
Forward – Organization becomes its own distributor through establishing a trade company to sell its product and
distribute it into market where it opens outlets in different areas in Egypt, Middle East and North Africa.
Horizontal integration
Growth achieved by expanding product lines into other geographic location by opening outlets in different places
to cover a wide areas in Egypt like Cairo, Giza , Damiat .. etc and in Middle East like Palestine, Libya and in north
Africa, and by building new factories in different areas .

Expanding product range into existing markets through releasing different flavors from the same product or
different products in the same category like TODO, HOHOS, Freska etc.
By buying the rights of the brands from the own company and selling it in different places and that's what happened
Edita owns the Hohos, twinkies and tiger tail brands in Egypt , Libya , Jordan and Palestine after buying the rights.
Related Diversification (Concentric)
Refers to diversification into a related industry to achieve strategic fit through establishing a sister company with
different products to gain a market share.
2.5 Value discipline Triad
EDITA Value Discipline Triad will Show the competitive Position at three different area which are Operating
Excellence; Product Leadership; and Customer Intimacy.
EDITA should be at a front Position from these different pillars, we will discuss Value Discipline triad for EDITA at
Croissant, Wafer and Rusks.
Regarding the Croissant, EDITA has an excellent position at Product leadership and Operational Excellence and
Customer Intimacy, and from the above mentioned Strategic Map it is cleared that EDITA has a very strong
Competitive advantage at Croissant.

Regarding the Wafer, EDITA has a good position at Operational Excellence, but not good position at Product
leadership and Customer Intimacy, and from the above mentioned Strategic Map it is cleared that EDITA need to
work more and more in the strategic and marketing plan Towards the Wafer.

Regarding the Rusks, EDITA has an excellent position at Product leadership and Customer Intimacy but has a good
(Not excellent) position at Operational Excellence, and from the above mentioned Strategic Map it is cleared that
EDITA has a very strong Competitive advantage at Rusks.
2.6 BCG Matrix
BCG matrix is a tool used in corporate strategy to analyze product lines based on two variables: relative market
share and the market growth rate.
The main purpose of the BCG Matrix is therefore to make investment decisions on a corporate level.
Instructions
 Define the market to better understand firm’s portfolio position.
 Calculate relative market share by dividing our product’s market share or (revenues) by the market share
(or revenues) of the largest competitor and the cut-off point here is 1.0.
 Find out market growth rate and the cut-off point in general is usually chosen around 10 percent per
annum.
 Distribution of products to each box in the matrix according to the following :
o Question Marks Products with low market share in a high growth market. They have the potential
to gain market share and become Stars (market leaders) eventually. If managed well, or they might
degenerate into Dogs when market growth declines after years of cash consumption (Rusks -
Wafer).
o Stars Products with a high market share in a fast-growing industry. Stars generate large amounts
of cash due to their high relative market share but also require large investments to fight
competitors (Cake – Croissants).
o Cash cow Products with a large relative market share in a low market growth rate, profits and cash
flows are expected to be high.

o Dogs Products in a slow-growth and declining market with a small relative market share are
considered Dogs. These products are therefore not so interesting for investors (Candy).
Edita’s Product Portfolio
College Revenues
share
Edita market
share
Largest
competitor
M share
Relative
market
share
Market
growth rate
Market
position
46.4% 48.5% 35% 1.4 16.59% #1
28.3% 61.9% 30% 2.06 15.07% #1
11% 41% 51.5% 0.8 15.07% #2
9.9% 10.5% 20.8% 0.50 16.59% #3
4.4% 9.5% 10.5% 0.90 9.65% #3
Market
Growth
Stars
Cake – Croissants
Dogs
Wafer
Question Mark
Rusks
High
LOW
Relative Market Share
High Low
Cash Caws
Candy

2.7 Industry Attractiveness
Instructions
 Identifying factors to measuring industry attractiveness.
 Assign weights. Weights indicate how important a factor is to industry’s attractiveness. A number from 0.01
(not important) to 1.0 (very important) should be assigned to each factor. The sum of all weights should
equal to 1.
 Rating the factors for each product. Choosing the values between ‘1-5’, where ‘1’ indicates the low industry
attractiveness and ‘5’ high industry attractiveness.
 Calculating the total scores which is the sum of all weighted scores for each business unit. Weighted scores
are calculated by multiplying weights and ratings. Total scores allow comparing industry attractiveness for
each business unit.
Industry Attractiveness (1/2)
Factor Weight Cake Molto Freska
Rating Weighted
Score
Rating Weighted
Score
Rating Weighted
Score
Industry growth rate 0.25 4 1 4 1 4 1
Industry size 0.22 4 0.88 3 0.66 3 0.66
Industry profitability 0.18 5 0.9 3 0.54 3 0.54
Industry structure 0.17 4 0.68 4 0.68 3 0.51
Trend of prices 0.09 4 0.36 3 0.27 2 0.18
Market segmentation 0.09 3 0.27 3 0.27 3 0.27
Total score 1 4.09 3.42 3.16
Industry Attractiveness (2/2)
Factor Weight Rusks Candy
Rating Weighted Score Rating Weighted Score
Industry growth rate 0.25 3 0.75 4 1
Industry size 0.22 4 0.88 2 0.44
Industry profitability 0.18 3 0.54 3 0.54
Industry structure 0.17 3 0.51 4 0.68
Trend of prices 0.09 3 0.27 3 0.27
Market segmentation 0.09 3 0.27 3 0.27
Total score 1 3.22 3.20

2.8 Industry Matrix
Instructions
 Identifying factors that collectively define the competition level.
 Assign weights. The sum of all weights should equal to 1.
 Rating the factors for each product. Choosing the values between ‘1-5’.
 Calculating the total scores which is the sum of all weighted scores for each product. Weighted scores are
calculated by multiplying weights and ratings.
 Calculating the total scores for Edita and their competitors.
 Weighted score below 3 indicate week performance and close to 3 is acceptable situation and
close to 4 or 5 is merit situation.
Competitive Strength (1/2)
Factor Weight Cake Molto Freska
Rating Weighted
Score
Rating Weighted
Score
Rating Weighted
Score
Relative Market share 0.25 5 1.25 5 1.25 3 0.75
Market growth rate 0.25 4 1 4 1 3 0.75
Company’s profitability 0.20 5 1 5 1 3 0.60
New technologies 0.16 2 0.32 2 0.32 2 0.32
Brand value 0.14 4 0.56 4 0.56 4 0..68
Total score 1 4.13 4.13 3.10
Competitive Strength (2/2)
Factor Weight Rusks Candy
Rating Weighted Score Rating Weighted Score
Relative Market share 0.25 3 0.75 2 0.50
Market growth rate 0.25 3 0.75 2 0.50
Company’s profitability 0.23 3 0.60 2 0.46
New technologies 0.16 2 0.32 2 0.32
Brand value 0.14 4 0.68 3 0.42
Total score 1 3.10 2.20

2.9 Issue Priority Matrix
A priority matrix is a tool used to prioritize work categorically and inform decision-making & time management. It’s
a useful tool because the simple framework can be applied to all types of work, whether it be business processes,
project-based or operational. Priority matrices start in a simple format but can be customized depending on your
needs. Most organizations prioritize by impact (low, medium, high), level of effort, and urgency.
A priority matrix is a management tool for people who need a little more than a basic to-do list, and it can be
valuable for project management and project prioritization. The 2x2 matrix is designed to help you determine
what tasks are critical so you can first focus on the most urgent needs.
A variety of factors might influence the urgency or importance of a task on your list. For example, if you must
complete a task that directly affects customer satisfaction, that task is probably high urgency and high priority.
However, if you must complete a task that could make your customers happier in the future, that task is probably
low urgency but high priority.
Issue Priority Matrix
Probability impact on
corporation
Opportunity High Medium Low
1 High demand on our product in both urban and rural areas.
Probability
of
occurrence
High 1 2 5
2 Large target segment in middle east (kids & youth).
3
Egyptian current population growth combined with extensive
distribution Medium 3 4
4 New technology helps economising the scale of production
5 High spending on consumer goods.
Low 6
6 Lower price and smaller packs are also likely to drive.
Threats High Medium Low
1 Increase in labor costs
Probability
of
occurrence
High 1 2 5
2 Tax and regulatory structure
3 The emergence of competitors with the same quality and price
Medium 3 4 7
4 Competition from unbranded and local products
5 Technological problems
Low 6
6
Removal of import restrictions resulting in replacing of domestic
brands.
7 Increasing rates of interest

2.10 Industry Matrix
2.10.1 Opportunities
1. High demand on our product in both urban and rural areas.
2. Large target segment in Middle East (kids & youth).
3. Egyptian current population growth combined with extensive distribution & low unit price will lead to
remaining popular.
4. New technology helps economizing the scale of production
5. High spending on consumer goods.
6. Lower price and smaller packs are also likely to drive.
2.10.2 Threats
1- Increase in labor costs.
2- Taxes and regulatory structure.
3- The emergence of competitors with the same quality and price.
4- Competition from unbranded and local products.
5- Technological problems.
6- Removal of import restrictions resulting in replacing of domestic brands.
7- Increasing rates of interest.
2.11 EFAS Matrix
Instructions
 List opportunities and threats that your firm faces (5 for each one) in the external factors columns.
 Assign weights. The sum of all weights should equal to 1.
 Rating the factors for each product. Choosing the values between ‘1-5’.
 Calculating the total scores which is the sum of all weighted scores for each product. Weighted scores are
calculated by multiplying weights and ratings.
 Calculating the total scores for Edita and their competitors.
 Evaluation as following:
o If the total weighted score are less than 3, it means that the organization is unable to take advantage
of opportunities or overcome threats.
o If the total is 3, it indicates an acceptable situation.
o The more the total is 3 and close to 5, it indicates that the system is able to exploit opportunities or
effectively overcome threats.

EFAS Factors Weight Rating
Weighted
score
Opportunities
1 High demand on our product in both urban and rural areas. 0.1 5 0.5
2 Large target segment in middle east (kids & youth). 0.1 4 0.4
3 High spending on consumer goods. 0.09 3 0.27
4 Lower price and smaller packs are also likely to drive. 0.07 3 0.21
5 New technology helps economising the scale of production 0.08 4 0.32
6 Egyptian current population growth combined with extensive distribution 0.08 5 0.4
Sub Total 0.52 2.1
Threats
1 Tax and regulatory structure 0.08 3 0.24
2 The emergence of competitors with the same quality and price 0.07 3 0.21
3 Competition from unbranded and local products 0.07 3 0.21
4 Removal of import restrictions resulting in replacing of domestic brands . 0.05 2 0.1
5 Increase in labor costs 0.06 2 0.12
6 Technological problems 0.07 3 0.21
7 Increasing rates of interest 0.08 4 0.32
Sub Total 0.48 1.41
Total 1 3.51
3 Internal Environment Analysis
3.1 Value Chain Analysis
Value chain analysis is a strategy tool used to analyze internal firm activities. Its goal is to recognize, which activities
are the most valuable (i.e. are the source of cost or differentiation advantage) to the firm and which ones could be
improved to provide competitive advantage. In other words, by looking into internal activities, the analysis reveals
where a firm’s competitive advantages or disadvantages are. The firm that competes through differentiation
advantage will try to perform its activities better than competitors would do. If it competes through cost advantage,
it will try to perform internal activities at lower costs than competitors would do. When a company is capable of
producing goods at lower costs than the market price or to provide superior products, it earns profits.
3.1.1 Primary Activities
The primary value chain activities of Edita are directly involved in producing and selling the product to targeted
customers. Analysis of primary value chain activities can improve the performance of Edita as explained below.
Inbound Logistics
It is important to develop strong relationships with suppliers as their support is necessary to receive, store and
distribute the product. Without analyzing the in-bound logistics, Edita can face various challenges in product
development phases. Analysis of in-bound logistics requires a company to focus on every aspect of transformation
from raw material to finished product. Some examples of inbound logistics are retrieving raw material, storing the
inputs and internally distributing the raw material and components to start production.

Operations
The importance of analysing operational activities raises when raw material arrives, and Edita is ready to process
the raw material into the end product and launch it in the market. Some examples of operational activities are
machining, packing, assembling and testing. Equipment repair and maintenance also falls into this category.
It includes both- manufacturing and service operations. Analysis of operational activities is important for
improving productivity, maximizing the efficiency and ensuring the competitive success of Edita. The increased
productivity can help Edita to achieve consistent economic growth, increase profitability and set a powerful basis
for competitive advantage.
Outbound Logistics
Outbound logistics include the activities that deliver the product to the customer by passing through different
intermediaries. Some outbound logistics activities are material handling, warehousing, scheduling, and order
processing, transporting and delivering to the destination. Edita can analyze and optimize the outbound logistics
to explore competitive advantage sources and achieve its business growth objectives.
Because, when outbound activities are timely managed with optimal costs and product delivery processes put a
minimum negative effect on the quality, it maximizes the customer satisfaction and increases growth
opportunities for the firm. Edita should pay specific importance to its outbound value chain activities when it’s
offered products are perishable and require quick delivery to the end customer.
Marketing and Sales
At this stage, Edita will highlight the benefits and differentiation points of offered products to persuade the
customers that its offering is better than competitors. Only producing a high quality product at affordable costs
and distinctive features cannot create value until Edita invests on the marketing and sales activities. The sales
agents and marketers play an important role here.
Some examples of Edita’s marketing and sales activities are- sales force, advertising, promotional activities,
pricing, channel selection, quoting and building relations with channel members. The company can use the
marketing funnel approach to structure its marketing and sales activities. The marketing strategies can either be
push or pull in nature, depending on the Edita’s business objectives, brand image, competitive dynamics and
current standing in the market.
Effective and wisely integrated marketing activities can develop the brand equity of Edita and help it stand out
from the competition. However, Edita must avoid making false commitments about product features that cannot
be fulfilled by the production department. It indicates the need to ensure coordination between different value
chain activities.
Services
The pre-sale and post-sale services offered by the Edita will play an important role in developing customer loyalty.
The modern customers consider post-sale services as important as marketing and promotional activities. The
power of negative e-WOM due to poor support service cannot be undermined in the current technologically
advanced era. The company must analyze its support activities to avoid damaging brand reputation, and instead
use it as a tool to spread positive word of mouth due to quick, timely and efficient support services.
3.1.2 Secondary Activities
The support activities play an important role in coordinating and facilitating the primary value chain activities.
Edita can also benefit from analysis of its support activities as explained below.

Firm infrastructure
The firm infrastructure denotes a range of activities, such as- quality management, legal matters handling,
accounting, financing, planning and strategic management. Effective infrastructure management can allow Edita
to optimize the value of the whole value chain. Edita can control the infrastructure activities (or commonly called
overhead costs) to strengthen the competitive positioning in the market.
Human resource management
Edita can analyze human resource management by evaluating different HR aspects, including- recruiting,
selecting, training, rewarding, performance management and other personnel management activities. The
effective HR management can allow Edita to reduce competitive pressure based on motivation, commitment and
skills of its workforce. The company can also achieve its cost minimization objectives by analysing hiring and
training costs with their relative return. The heavy dependence of Edita on employees' talent will increase the
importance of this value chain support activity.
Technology development
In a modern, technological advanced era, almost all value chain activities depend on technological support. The
technological integration in production, distribution, marketing and human resource activities requires Edita to
realize the importance of technology development. It can be divided into product and process technological
development activities. Some examples are- automation software, technology-supported customer service,
product design research and data analytics. The research and development department of Edita is classified in this
category.
Procurement
The procurement in value chain denotes the processes involved in purchasing the inputs that may range from
equipment, machinery, raw material, supplies, raw material and other items necessary for producing the finished
product. Due to its linkage with multiple value chain activities, Edita should carefully consider its procurement
activities to optimize the inbound, operational and outbound value chain.
As mentioned above, the application of Porter Value Chain model depends on understanding the importance of
all activities. After understanding the relative importance of identified value chain activities, Edita should highlight
areas where value can be added, cost efficiency can be achieved, differentiation basis can be set, or processes can
be optimized.
Firm infrastructure
Procurement
Inbound Logistics
 Relationships with
suppliers
 Raw Materials
 Quality Reception
Operations
 Manufacturing and
service operations
 Increase productivity
 Process the raw
material
Outbound Logistics
 Order Processing
 Full delivery trucks
 Warehousing
 Distribution
Marketing and Sales
 Pricing
 Communication
 Promotion
 channel selection
Service
 Pre-sale service
 Post sale services
 Customer service

Cost Advantage of Edita
Cost advantage through Value Chain Analysis of Edita
Edita can avail the cost advantages by reducing the costs associated with the value chain activities. However, it
requires the company to firstly map the activities and then associate costs to make necessary adjustments. The
connection between the value chain and cost leadership strategy reflects a parallel focus on the low cost
operational activities. If Edita aims to obtain cost advantage, it needs to identify each element within the value
chain can be optimized to get the whole effect
A Value Chain Analysis Example for Edita is that it can use the analysis as a tool to negotiate the best prices and
maximize the in-bound and out-bound transportation processes.
Another Value Chain Analysis Example is using the value chain information to make modest advertising budget
that can reduce marketing costs and offer the product at an affordable cost.
If Edita aims for the low-cost, the Value Chain Analysis can optimize the profitability. If product differentiation is
the aim of Edita, Value Chain Analysis will help the company in maximizing the efficiency and enhancing the
product quality by improving processes.
3.2 Value Rareness Imitability Organization Matrix (VRIO)
VRIO Analysis is an analytical technique briliant for the evaluation of company’s resources and thus the
competitive advantage. VRIO is an acronym from the initials of the names of the evaluation dimensions: Value,
Rareness, Imitability, Organization.
Is perfect for evaluation of the company’s resources. One you know your resources you can better understand
your competitive advantages or weaknesses. The VRIO considers for each type of the resource the following
questions (called evaluation dimension) both for your company and for your competitors. The dimensions of VRIO
are:
 Value - How expensive is the resource and how easy is it to obtain on the market (purchase, lease, rent..)?
 Rareness - How rare or limited is the resource?
 Imitability - How difficult is it to imitate the resource?
 Organization - respectively arrangement - Is the resource supported by any existing arrangements and can
the organisation use it properly?
VRIO analysis is a complement to a PESTLE analysis (which assesses macro-environment). VRIO is used to assess
the situation inside the organization (enterprise) - its resources, their competitive implication and possible
potential for improvement in the given area or for a given resource. Such an assessment is then used for example
in the strategic management of development in various areas or for decision making about the advantage of an
external or internal process and the securing service (e.g. outsourcing decision).
 If the resource is not valuable it should be outsourced because it brings no value to us
 If the resource is valuable but not rare the company is in competitive conformity. It means we are not
worse than our competition,
 If the resource is valuable and rare but it is not expensive to imitate it, we have a temporary competitive
advantage. Other companies will try to imitate it in the near future, then we lost our competitive
advantage.
 If the resource is valuable, rare and is expensive to imitate it but we are not able to organizate our
company, the resource become expensive for us (unused incurred costs)

 if we can manage the advantage and we are able to organize our company and temporary competitive
advantage, it becomes as permanent competitive advantage
Activities
VRIO
Value Rareness Imitability Organization
Inbound Logistics
Relationships with suppliers ✔ ✘ ✘ ✔
Raw Materials ✔ ✘ ✘ ✔
Quality Reception ✔ ✘ ✔ ✔
Operations
Manufacturing and service operations ✔ ✘ ✘ ✔
Increase productivity ✔ ✘ ✘ ✔
Taste and product quality ✔ ✔ ✔ ✔
Process the raw material ✔ ✘ ✔ ✔
Outbound Logistics
Order Processing ✔ ✘ ✘ ✔
Full delivery trucks ✔ ✘ ✘ ✔
FG Warehousing ✔ ✘ ✘ ✔
Distribution ✔ ✘ ✘ ✔
Marketing & Sales
Pricing ✔ ✘ ✘ ✔
Communication ✔ ✘ ✘ ✔
Promotion ✔ ✔ ✔ ✔
channel selection ✔ ✘ ✘ ✔
Services
Pre-sale service ✔ ✘ ✘ ✔
Post sale services ✘ ✘ ✘ ✘
Customer service ✔ ✘ ✘ ✘
Firm infrastructure
Quality management ✔ ✘ ✔ ✔
Legal matters handling ✔ ✘ ✘ ✔
Accounting ✔ ✘ ✘ ✔
Financing ✔ ✘ ✘ ✔
Planning and strategic management ✔ ✔ ✘ ✔
Recruiting ✔ ✘ ✘ ✔
Selecting ✔ ✘ ✘ ✔
Training ✔ ✘ ✘ ✔
Rewarding ✔ ✘ ✘ ✔
Performance Management ✔ ✘ ✘ ✔
The technological integration ✔ ✘ ✔ ✔
ERP System ✔ ✘ ✘ ✔
Procurement
Purchasing the inputs ✔ ✔ ✘ ✔
Supplier audit & development ✔ ✔ ✔ ✔

No. Description Comment Strength/Weakness
1 Taste and product quality Edita has a privilege of product taste and
ingredients quality.
Strength
2
Marketing Promotion
Through an efficient marketing team creating a
high perceived value.
Strength
3
Supplier audit & development
Strong supplier assignment module and weekly
follow up of the development plan.
Strength
4
Post sale services
Edita didn’t invest to acquire the right tools that
facilitate providing this service.
Weakness
3.2 Situational Analysis
Situation analysis is defined as an analysis of the internal and external factors of a business. It clearly identifies a
business's capabilities, customers, potential customers and business environment, and their impact on the
company.
3.2.1 Strengths
1. Low operational costs
2. Can control the production volume
3. High ROE
4. Large Market Share
5. Low prices that satisfy customer needs.
6. Long distribution coverage among Egypt and the Middle East
7. Presence in more than 17 countries in Middle East & North Africa
8. Launching new products adding to the company and increasing brand awareness.
9. Strong Marketing companies
10. High Inventory turnover ratio
3.2.2 Weaknesses
1. Low exports levels due to the nature of product
2. Future debt rating (due to the large number of shareholders)
3. Inability to invest in research and development (Due to the exist of large number of competitors)
4. Low salary for labors
5. Highly turnover rate
6. Lack of competitive salary structure
7. Working conditions
8. Technological problems due to old software & old servers

3.3 Financial Ratios
Financial ratios are created with the use of numerical values taken from financial statements to gain meaningful
information about a company. These numbers are used to perform quantitative analysis and assess a company’s
liquidity, leverage, growth, margins, profitability, rates of return, valuation, and more.
Financial ratios can be broken into six key areas of analysis: liquidity, profitability, debt, operating performance,
cash flow and investment valuation.
Analysis of financial ratios serves two main purposes:
1. Track company performance
2. Make comparative judgments regarding company performance
Companies large and small use ratios to evaluate internal trends in the company and define growth over time.
While a publicly traded company may have much larger numbers, every business owner can use the same data to
strategically plan for the next company fiscal cycle.
Financial ratios are grouped into the following categories:
 Liquidity Ratios
Liquidity ratios are financial ratios that measure a company’s ability to repay both short- and long-term
obligations. They measure the amount of liquidity (cash and easily converted assets) that you have to
cover your debts, and provide a broad overview of your financial health. Common liquidity ratios include:
 Leverage / Debt Financial Ratios
Leverage ratios measure the amount of capital that comes from debt. In other words, leverage financial
ratios are used to evaluate a company’s debt levels. These ratios provide an indication of the long-term
solvency of a company and to what extent it is using long-term debt to support its business. Common
leverage ratios include:
 Efficiency / Activity Ratios
Efficiency ratios, also known as activity financial ratios, are used to measure how well a company is
utilizing its assets and resources. Often measured over a 3- to 5-year period, they give additional insight
into areas of your business such as collections, cash flow and operational results. Common efficiency
ratios include
 Profitability Ratios
Profitability ratios measure a company’s ability to generate income relative to revenue, balance sheet
assets, operating costs, and equity. These ratios are used not only to evaluate the financial viability of a
business, but are essential in comparing a business to others in the same industry.
 Market Value Ratios
Market value ratios are used to evaluate the share price of a company’s stock.

Analysing Financial Ratios of
EDITA FOOD INDUSTRIES S.A.E.
2017 - 2018 - 2019
1- Liquidity Ratios
 Current ratio = Current assets / Current liabilities
2017 = 609.45 / 666 = 0.92 %
2018 = 770.77 / 693.58 = 1.11 %
2019 = 1201.42 / 892.71 = 1.34 %
 Quick / Acid-test ratio = Current assets – Inventories / Current liabilities
2017 = 0.47 %
2018 = 0.69 %
2019 = 1.01 %
 Cash ratio = Cash and Cash equivalents / Current Liabilities
2017 = 0.054 %
2018 = 0.091 %
2019 = 0.172 %
Comment on Liquidity Ratios:
Liquidity ratios increased from 2017 & 2018 to 2019 which indicates an increase in the company’s ability to
pay its short-term debts when they become due.
2- Leverage / Debt Financial Ratios
 Debt ratio = Total liabilities / Total assets
2017 = 0.54 %
2018 = 0.49 %
2019 = 0.51 %
 Time Interest Earned ratio = Operating income (EBIT) / Interest expenses
2017 = 5.2
2018 = 6.3
2019 = 6.07
Comment: This high increase in the number of times interest earned can be explained by the very high
amount of interest expenses paid in 2018 (84.02 M) and 2017 (72.7) compared to the low amount of interest
expenses paid in 2019 (8.99 M).
3- Efficiency / Activity Ratios
 Total Asset turnover ratio = Net sales / Total assets
2017 = 1.12
2018 = 1.33
2019 = 1.2

 Inventory turnover ratio = Cost of goods sold / Average inventory
2017 = 7.04 times
2018 = 8.74 times
2019 = 8.84 times
Comment: the increase in inventory turnover can be explained by the tendency of the firm for more credit
sales which can explained by the increasing figure of the trade A/R among the 3 years from (15.84 m to 45.42
m and to 52.23 m) which seems to have an impact on the inventory turnover.
 Days sales in inventory ratio = 365 days / Inventory turnover ratio
2017 = 50.8 days
2018 = 41.7 days
2019 = 42 days
Comment: the increase of days sales in inventory ratio can be explained by the increase in inventory turnover
in the previous step.
 Average Collection Period ACP = Accounts Receivable / (Sales/365)
2017 = 1.9 times
2018 = 4.4 times
2019 = 4.7 times
Comment: Average collection period has increased slightly from 2018 to 2019 which means a decrease in
the efficiency of the collection staff, while the low figure of the average collection period in 2017 can be
explained by the small amount of A/R in 2017 which is amounted to (15.84 m) compared to the bigger figures
in 2018 and 2019 (45.42 & 52.23 millions) and that indicates less credit sales on 2017 than 2018 & 2019.
4- Profitability Ratios
 Gross Profit Margin ratio = Gross profit / Net sales
2017 = 0.31 %
2018 = 0.32 %
2019 = 0.36 %
 Operating Profit Margin ratio = Operating income / Net sales
2017 = 0.123 %
2018 = 0.139 %
2019 = 0.136 %
Comment: the increase in Gross Profit ratio while the Operating profit margin ratio has decreased shows an
increase in the operating expenses in 2019.
 Net Profit Margin ratio = Net Profit / Net Sales
2017 = 0.080 %
2018 = 0.117 %
2019 = 0.134 %

Comment: Net profit margin ratio has increased in 2019 as a result from the high interest expenses that was
paid in 2018 and 2017.
 Return on Assets ratio = Net income / Total assets
2017 = 0.11
2018 = 0.15
2019 = 0.16
 Return on Equity ratio = Net income / Total Shareholder’s equity
2017 = 0.24
2018 = 0.30
2019 = 0.33
5- Market Value Ratios
 Price-earnings ratio P/R = Share price / Earnings per share
2017 = 51.27
2018 = 30.25
2019 = 26.42
Comment: A decrease in the P/R ratio can be explained by the increase in the market price per share and
a stability in earnings per share.
 Market Book ratio M/B = Price per share / Book Value per share
2017 = 70
2018 = 70
2019 = 75
 Book value per share ratio = Shareholder’s equity / Total shares outstanding
2017 = 0.2
2018 = 0.2
2019 = 0.2
Comment: Book value per share has not changed as the company hasn’t issued any new shares or
performed a share split between 2017, 2018 & 2019.
 Earnings per share ratio EPS = Net earnings / Total shares outstanding
2017 = 0.326
2018 = 0.463
2019 = 0.567
Comment: it has increased in 2019 as a result of the increase in net profit with unchanged number of
outstanding shares.

3.4 IFAS Matrix
4 Strategic Factor Analysis
4.1 SFAS Matrix
SPACE Matrix stands for Strategic Position & Action Evaluation matrix. The SPACE matrix is a strategic tool that can
be used to analyze organizations. The aim is to identify most appropriate strategy that should be undertaken.
SPACE matrix consists of four quadrants namely; Aggressive, Conservative, Defensive and Competitive. The SPACE
matrix is based mainly on two parts of analysis namely Internal strategic dimensions (Financial strength (FS),
Competitive advantage (CA)); and External strategic dimensions (Environmental stability (ES), Industry strength
(IS)).
IFAS Factors Weight Rating
Weighted
score
Strengths
1 Low operational costs 0.06 3 0.18
2 Can control the production volume 0.03 3 0.09
3 High ROE 0.08 5 0.4
4 Large market share 0.10 5 0.5
5 Low prices that satisfy customer needs 0.09 4 0.36
6 Distribution Coverage all over Egypt governorates 0.10 4 0.4
7 Presence in more than 17 countries in Middle East & North Africa 0.03 4 0.12
8
Launching new products adding to the company and increasing brand
awareness
0.05 4 0.2
9 Strong marketing campaigns 0.08 5 0.4
10 High Inventory turnover ratio 0.10 5 0.5
Sub Total 0.72 3.15
Weaknesses
1 Low exports due to product nature 0.02 3 0.06
2 Seen as unhealthy Product. 0.03 2 0.06
3 Low spent on R & D 0.05 2 0.1
4 High turnover rate 0.03 2 0.06
5 Lack of competitive salary structure 0.02 1 0.02
6 Low labour salary 0.04 1 0.04
7 Labor Working conditions 0.04 3 0.12
8 Technological problems due to old SW & old servers 0.05 3 0.15
Sub Total 0.28 0.61
Total 1 3.76

SFAS Factors Weight Rating
Weighted
score
Strengths
1 Large market share 0.07 5 0.35
2 High Inventory turnover ratio 0.07 5 0.35
3 High ROE 0.05 5 0.25
4 Distribution Coverage all over Egypt governorates 0.07 4 0.28
5 Strong marketing campaigns 0.05 5 0.25
Weaknesses
1 Technological problems due to old SW & old servers 0.05 3 0.15
2 Labor Working conditions 0.04 3 0.12
3 Low spent on R & D 0.05 2 0.1
4 Low exports due to product nature 0.03 2 0.06
5 Seen as unhealthy Product. 0.03 2 0.06
Opportunities
1 High demand on our product in both urban and rural areas. 0.07 5 0.35
2 Large target segment in middle east (kids & youth). 0.07 4 0.28
3
Egyptian current population growth combined with extensive
distribution
0.05 5 0.25
4 New technology helps economising the scale of production 0.05 4 0.2
5 High spending on consumer goods. 0.06 3 0.18
Threats
1 Increasing rates of interest 0.05 4 0.2
2 Tax and regulatory structure 0.05 3 0.15
3 The emergence of competitors with the same quality and price 0.03 3 0.09
4 Competition from unbranded and local products 0.03 3 0.09
5 Technological problems 0.03 3 0.09
Total 1 3.85
The number of the weighted rate is higher than 3, which mean that the business is doing well.
4.2 TOWS Analysis
A TOWS Analysis is an extension of the SWOT Analysis framework that identifies your Strengths, Weaknesses,
Opportunities and Threats but then goes further in looking to match up the Strengths with Opportunities and the
Threats with Weaknesses. It’s a great next step after completing your SWOT and allows for you to take action from
the analysis.
Adding the relationship between the internal and external factors makes TOWS a much more useful matrix than
a standalone SWOT and an obvious next step. The main purpose of a TOWS Analysis is to:
 Reduce threats
 Take advantage of opportunities
 Exploit strengths
 Remove weaknesses

A well thought out TOWS can not only provide you with detail of your SWOT, but also some data to make a decision
about your overall direction.
Edita TOWS Matrix
Strengths Weaknesses
1 Large market share 1 Technological problems due to old
SW & old servers
2 High Inventory turnover ratio 2 Labor Working conditions
3 High ROE 3 Low spent on R & D
4 Distribution Coverage all over Egypt
governorates
4 Low exports due to product nature
5 Strong marketing campaigns 5 Seen as unhealthy Product.
Opportunities SO Strategies WO Strategies
1 High demand on our product
in both urban and rural
areas.
Increase marketing activities and
offering discounts to attract consumers
to spend and increase sales volumes
(O5, S1,S5)
1 Offering healthy products Due to
the increasing demand of healthier
products in the market, Edita has
the capability to penetrate a new
segment as it is a market
leader.(W5,O2)
2 Large target segment in
middle east (kids & youth).
3 Egyptian current population
growth combined with
extensive distribution
2 Penetrate the export market will
increase Edita revenues due to the
large target segment in middle
east.(W4,O1)
4 New technology helps
economising the scale of
production
5 High spending on consumer
goods.
Threats ST Strategies WT Strategies
1 Increasing rates of interest
Use a strong distribution network to
reach out to customers and fight off new
entrants into the market (S4, T3).
1 Increase spending on research and
development to enable Nestle to
better compete with competition
(W3, T3).
2 Tax and regulatory structure
3 The emergence of
competitors with the same
quality and price
2 Producing healthy products will
create a new competitive advantage
for Edita that will help to penetrate
a new market. (W5,T3,T4)
4 Competition from unbranded
and local products
5 Technological problems

4.3 SPACE Matrix
SPACE Matrix
Rate Competitive advantage Rate Industry strength
-5 Large market share 3
The emergence of competitors with the
same quality and price
-4 Distribution Coverage all over Egypt governorates 3
Competition from unbranded and local
products
-5 Strong marketing campaigns 5
High demand on our product in both
urban and rural areas.
-3 Technological problems due to old SW & old servers 4
Large target segment in middle east (kids
& youth).
-3 Labor Working conditions 4
New technology helps economising the
scale of production
-2 Low spent on R & D 3 High spending on consumer goods.
-2 Low exports due to product nature
-2 Seen as unhealthy Product.
Average = -3.25 Average = 3.67
Total X Score 0.42
Rate Environmental stability Rate Financial strength
-4 Increasing rates of interest 5 High Inventory turnover ratio
-3 Tax and regulatory structure 5 High ROE
-3 Technological problems
-5
Egyptian current population growth combined with
extensive distribution
Average = -3.75 Average = 5
Total Y Score 1.25
Financial Strength
Industry
Strength
Competitive
Strategy
Environmental Stability
Aggressive
✔✔
Conservative
Defensive Competitive

4.4 Grand Strategies
Market Penetration
Market penetration is the process of increasing its customer base in the existing market by winning over the
customer base of its competitors for further growth by means of achievements, promotion, price cutting, and
differentiation and seeking new segments. Edita will apply the market penetration strategy through penetrating
the African market in 6 countries.
Product Development
Product development involves the development of new product ranges for an already existing market for further
growth .one way of product development is replacing the old product with a newer version. Another means of
achieving this is to expand its product line thereby providing more choices to the customers. Edita will apply the
product development to add new production lines for producing healthy snacks.
5- Quantitative Strategic Planning
5.1 QSPM Matrix
Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic management approach for evaluating
possible strategies. Quantitative Strategic Planning Matrix or a QSPM provides an analytical method for comparing
feasible alternative actions. The QSPM method falls within so-called stage 3 of the strategy formulation analytical
framework.

According to the QSPM Matrix, the strategic objectives priority will be as following:
1- Penetrate the Export Market (3.8)
2- Increase Marketing Activities (3.62)
3- Offering Healthy Products (3.37)
4- Increase Spending on R&D (2.41)
5- Fight off new entrants (1.74)

6- Implementation & Control
6.1- Balanced Score Card
Penetrate the export market in Africa
Target: Increase Export volume from 14% from total revenue to 20% in 3 years.
Knowing that Edita already exist in North Africa and Middle East countries. It is more profitable to penetrate the
African market rather than increase the sales volume in countries which already exist.
Offering healthy products
Target: Achieve 25% of healthy snacks market share in 3 years.

Edita Food Industries Strategic Management Project

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