bsc--bsp6000--20208577.pptx

STRATEGIC MANAGEMENT
Module No: BSP6000

TEAM MEMBERS
Student Name Cardiff University
Student No
ICBT University
Student No
Iresha Sanduni 20208577 CL/CBABM/26/46
Imasha Dhananji 20272720 CL/CBABM/26/45
Sherine Roshella 20272727 CL/CBABM/26/47
Yasotharan Kishoshanth 20272753 CL/CBABM/26/44

CONTRIBUTION
• Task 01 Critically analyze the macro-environmental changes that affect the company using two (02)
relevant framework – Sherine Roshella
• Task 02 Critically analyze the meso (industry) environmental changes that affect the company using three
(03) relevant frameworks – Iresha Sanduni
• Task 03 Critically analyze the internal environment of the organization using two (02) relevant
frameworks- Yasotharan Kishoshanth
• Task 04 Summarize the key findings of the analysis using an appropriate framework and develop a scenario
plan for key drivers identified based on the analysis – Imasha Dhananji
• Task 05 Based on the analysis, identify main growth options available for the company using an
appropriate framework and recommend one growth option with adequate justifications – Iresha Sanduni

TABLE OF CONTENT
• Introduction to Dilmah
• PESTEL Analysis
• Scenario Planning Framework
• Key Success Factor Analysis
• Competitor Analysis
• Porter’s Five Force Analysis
• 7S Model
• Value Chain Analysis
• SWOT Analysis
• Growth Options for Dilmah
• Conclusion
• References

INTRODUCTION TO DILMAH
• Dilmah is the first producer-owned tea brand.
• The only completely vertically integrated tea firm, with ownership in some of Sri Lanka's finest tea
estates, factories, printing and packaging facilities.
• First introduced the idea of single origin tea in 1988.
• The company offered tea that was "picked, refined, and packaged" just where it was grown,
allowing Sri Lankan tea producers and customers worldwide more control.

PESTELANALYSIS
• PESTEL analysis is a framework that use in order to identify the
macro environmental factors that have an impact to the organization.
(Bush, 2016)

Variable Factors Impac
t
Political Due to current high inflation and taxation, production cost has increased -3
Export policies have been changed and loan facilities has been increased +2
‘Sri Lankan Government has imposed taxes on companies exporting tea as at 31st march, as a result
Dilmah’s exporting cost will increase’ (keshara, 2019)
-3
Economical Due to the current economic situation, Inflation is Sky Rocketing. Which in return puts the consumers
in a difficult situation to buy products
-2
Currency devaluation is affecting the export trade and importing of goods -2
‘The 3% of the national export volume which Dilmah represents is exported at an average FOB value
in excess of three times the national average. +2
Dilmah is the exclusive serving brand in some of the best international airlines and in the most
prestigious hotels around the world’ (Sri Lanka export development board , n.d.) +3

Variable Factors Impact
Social Dilmah is the Third Largest Tea exporter in Sri Lanka +2
Its famous for its rich heritage and Local flavours +2
9 out of 13 people drink tea instead of other caffeine +2
‘Dilmah strive to combine tradition and innovation to create a healthier, happier and better world
by bringing the best from bush to cup. ’(Dilmah)
+3
Technology Dilmah is one of the fast moving tea brand in online shopping websites +2
Has a separate page for online orders and for the brand name +2
Environment Consumer accept eco-friendly products and company focusing about consumer expectation +2
Legal Government provides strict rules and regulations for tea and other beverages industry -2
-3= High Negative Effect -2= Medium Negative Effect -1= Low Negative Effect 0= Neutral
+3= High Positive Effect +2= Medium Positive Effect +1= Low Positive Effect

OBSERVATION
• Company is well-positioned to capitalize on the growing
demand for sustainable and ethically sourced products.
Due to current financial crisis, both B2B and B2C sectors
are highly price sensitive and Dilmah have to adopt
different price initiatives. Technology has a positive
impact on Dilmah sales and increasing the efficiency.
Production of tea has fallen by 18% due to shortage of
fertilizer and fuel in 2021.

SCENARIO PLANNING FRAMEWORK
If both trade rules and political
instability increases at the same time
firm’s income decrease by decreasing
in export of goods and decrease in
disposable income of consumers due to
high inflation rates. (Scenario 1)
If strict trade rules continue to
increase the opportunity to export
goods globally and to partner up
with other global brand
ambassadors will not happen.
(Scenario 2)
If political instability increases in the
economy the inflation rate also increase.
As a result unemployment and decrease in
disposable income will increase.
Production cost will be increased because
this high inflation rates. (Scenario 3)
With decrease in political
instability and minimal trade
rules, this might be the most
favourable situation for the
business. (Scenario 4)
Strict Trade Rules
Minimal trade rules
Decrease in political
instability
Increase in
political instability

KEY SUCCESS FACTOR ANALYSIS
•
Human Resource Quality products
Investment in employee development (Rs.1.9Mn
investment in 2021)
1SO 9001:2015 quality management
system
There are 634 employees FSSC 22000 food and safety management
system
NVQ certified nationally recognized skill
development program for the engineering team on
automation.
BRC global food safety standards
Dilmah recognized at UNV 50 country awards in
2021 for the voluntary efforts taken by members of
the Dilmah family. (DILMAH CEYLON TEA
COMPANY PLC, 2020)
SEDEX members ethical trade audit
42,438 total training hours during 2021 ISO:17025 chemical and microbiological
laboratory accreditation
Employee performance management system
(EPMS)

Brand Recognition Innovation
A vertically integrated tea brand(
From tea plant to tea cup)
Company expand its product
range through exciting and
innovative product proposition.
(Dilmah introduced 304 new
products within last 6 years
Market diversified exporter
(Presidential Export Awards
2021)
R&D projects conducted to
identify sustainable packaging
options.
Trusted brand (Tea category)-
Asia 2021 voted by the
customers
Investment in R&D efforts (Rs.
11.7Mn in 2021)
Voted “Product of the year 2022”
for Dilmah brand organic
selection winner tea category of
a survey of 5,000 people by
Neilson, in Australia.

COMPETITOR ANALYSIS
Dilmah AKBAR Brothers JafferJee Brothers Mabroc Teas
Company
profile
A Sri Lankan brand of Ceylon
tea, sold internationally which
was founded in 1988 by
Merill J.Fernando
Leading exporter of the finest
Ceylon tea which was founded
in 1972 by AKBAR brothers
Leading Sri Lankan family
owned business
conglomerate engaged in
diverse range of activities
which was founded in 1944
Sri lankan brand which
supplying the finest pure
Ceylon tea to the world started
as a dream by a small group of
Sri Lankan tea lovers back in
1988
No. of
employees
634(DILMAH CEYLON TEA
COMPANY PLC, 2020)
252 115 195
Export
countries
Above 100 countries Above 90 countries Above 30 countries Above 50 countries
Positioning Dilmah is the only fully
vertically integrated tea
company in Sri Lanka
Sri Lanka’s foremost exporters
of tea and which is diversified
into range of sectors
One of the largest tea
exporters both in terms of
quality and in value-
addition
One of the largest tea
manufacturers which produce
premium Ceylon tea
Reputation Globally renowned Sri
Lankan family tea company
which produce authentic,
natural and ethical tea of the
finest quality.
Internationally renowned as
one of Sri Lanka’s foremost
exporters of teas.
Internationally renowned
for superb quality and
exceptional taste.
The first Sri Lankan company
to produce “ethical” Ceylon
teas jointly branded with the
United Nations Global
compact.

Force Factor Impact
Threat of substitute-
High
Various categories such as coffee, water,
aerated drinks, energy drinks can be identified
as substitute products.
Negative
Buyer propensity to substitute is high because
it needs many other components to prepare a
cup of tea but there are many beverages that are
ready to drink. (Dilmah produce ice-tea in
order to cater this threat)
Positive
Relative price performance of substitute is high
because there are many cheaper beverages in
the market.
Negative
PORTER’S FIVE FORCE ANALYSIS
Porter’s five force analysis were developed in 1979 by Michael Porter as a simple framework of assessing and
evaluating the competitive strength and position of a business. (Hole, et al., 2019)

Force Factor Impact
Threat of new
entry - Medium
Capital requirement is high in tea industry, thereby
new firms are reluctant to come to the industry.
Positive
Absolute cost advantage is high because Dilmah is a
vertically integrated company. (DILMAH CEYLON
TEA COMPANY PLC, 2019)
Positive
Government policies are favorable as “The Ceylon
Tea Road Map” initiative with Ministry of
plantation industries would ensure the effective
progress of the industry to produce 350 million tea
kilos over next 10 years.
Positive

Force Factor Impact
Bargaining power of
suppliers- Low
Dilmah has its’s own tea estates (Bearwell
estate, Clarendon estate, Dessford and etc.)
(DILMAH CEYLON TEA COMPANY
PLC, 2019)
Positive
Printcare is the packaging supplier for
Dilmah and PCL solution is the supplier for
machinery
Positive
Degree of differentiation of inputs is low
thereby, the bargaining power of supplier is
low.
Positive

Force Factors Impact
Bargaining power of
customers- High
Buyer volume- Bargaining power of large buyers
(supermarkets and hotel chain) is high, but it is
low in retail customers.
Negative
Availability of existing substitute products is high,
thereby bargaining power is high
Negative
Threat of rivalry-
High
Number of competitors is high and Dilmah faces
intense competition from brands such as Lipton,
Tetley, Akbar brothers and etc.
Negative
Rate of industry growth is moderate as revenue in
the tea segment amounts to US$620.40Mn in 2022
and the market is grow annually by 0.89%.
(Central Bank of Sri Lanka, 2022)
Positive

OBSERVATION
• The beverage industry is highly competitive, with a
large number of players vying for market share.
While the industry faces challenges such as high
taxation and rising raw material costs, there are
significant opportunities for companies to expand
their product offerings, diversify and cater to the
growing demand for healthier and functional
beverages.

7S MODEL
Factor Application
Strategy
Dilmah Ceylon Tea Company has a clear strategy that focuses on producing high-quality tea products that are
ethically sourced and sustainably produced.
Structure
Company has a flat organizational structure that enables it to be agile and responsive to changing market
conditions..
Systems
It has invested in state-of-the-art technology and information systems to ensure that its operations are efficient and
effective.
Skills
Company employs highly skilled and knowledgeable staff, including tea tasters, marketers, and customer service
professionals.
Staff
It has a diverse and inclusive workforce, with employees from a range of backgrounds and cultures.
Style
Dilmah has a collaborative and customer-focused culture that emphasizes innovation, quality, and social
responsibility.
Shared
Value
Has a strong set of shared values which include a commitment to ethical and sustainable business practices, a focus
on quality and innovation, and a dedication to promoting social responsibility.

VALUE CHAIN ANALYSIS
• Value chain analysis is a
strategic analytical and decision-
support tool that highlights the
bases where businesses can
create value for their customers.
This concept was introduced by
Michael Porter in 1985.
(Zamora, 2016)

VALUE CHAIN ANALYSIS
Primary activities
Inbound logistics: It has its own tea gardens in Sri Lanka and also sources tea
leaves from small tea growers in the region. Warehousing facilities are more than
70,000sqft.
Examples :Mattekelle Estate, Radella Estate, Park Green Tea Factory,
Bearwell Estate etc.
Operations: Dilmah has state-of-the-art production facilities that use modern
technology and traditional methods to produce high-quality tea products.
Company has more than 300,000sqft production facility.
Gross Profit Margin in 2020, 2021 and 2022 are 47%, 41%
and 43% respectively.

Outbound logistics: The company has a global distribution network that ensures its tea products are
available to customers worldwide.
Example : Products are sold in over 100 countries supported by an extensive global distribution
network.
Marketing and sales: It has a strong brand reputation for producing high-quality and ethically
sourced tea products.
Example : Products advertised by many TV commercials locally and internationally. Magazines,
newspapers and directories
Service: Dilmah places a strong emphasis on customer service, with a dedicated team of professionals
who provide support and assistance to customers
Example : Various scientific researches have shown antioxidants contained in tea good for the many
degenerative diseases and Dilmah is extensively promoting these findings.

Secondary Activities
Procurement: Dilmah invested Rs. 3513Mn during 2021 for purchasing
equipment. All machineries are with artificial intelligence robotic processes and
trailblazing.
Technology development: The company invests in state-of-the-art technology
and innovation to improve its production processes and develop new tea products
that meet the changing needs and preferences of its customers.
Example : Dilmah has varied product range including a premium selection, a
Gourmet Tea selection, Special Green Teas and Exotic Teas etc. Dilmah is
available in different sizes, different flavors (spicy, mint, sweet. etc.).

Human resource management: Dilmah places a strong emphasis on developing
and retaining its employees. The company offers various training and development
programs to its employees and promotes a culture of continuous learning and
development.
Firm infrastructure: It has a strong corporate governance structure and a clear
strategy for growth and sustainability. The company also places a strong emphasis on
social responsibility, with a commitment to promoting sustainable agriculture and
supporting local communities.
Example: Dilmah maintains its quality and often exceeds customer expectations by
using freshly picked tea leaf and other natural flavors promoting the authenticity of
Ceylon Tea.

OBSERVATION
• Dilmah use sustainable production techniques to cater the
financial crisis and use state-of-art production facilities to
produce quality tea. Dilmah invests Rs.11.7Mn to
improve innovation to develop new tea products to meet
changing needs of customers. Over 25,000 publications
aimed at raising awareness on exciting themes such as
Tea Gastronomy, Tea Mixology and Food-service.

SWOT ANALYSIS
SWOT analysis is a strategic planning and
strategic management technique used to help
the organization identify Strengths,
Weaknesses, Opportunities, and Threats related
to business competition or project planning.
(Benzaghta, 2021)

SWOT ANALYSIS
• Strengths
• Dilmah has been able to establish a well-recognized brand in over 90
countries worldwide.
• Dilmah is the only fully vertically integrated tea company in Sri Lanka.
• They are considered to be tea specialists, since they are a brand with
over 35 years of experience in the tea industry.
• Employing a highly skilled and knowledgeable staff.
• Online marketing via online purchase of products and direct orders.
• Dilmah has its’s own tea estates. (Bearwell estate, Clarendon estate,
Dessford and etc.)
• Dilmah is very responsive to the market trends, because they offer their
customers with different types of tea and further improving their
experience.
• They offer their tea lovers with a wide range of products and flavors to
serve new and existing markets.
• Figures in the annual reports of Dilmah prove that they are financial
stable. (PLC, 2021)
• Dilmah is currently ranked among the world's top 10 tea brands and is
the third largest exporter of tea in Sri Lanka.
• Weaknesses
• Dilmah doesn’t have their own companies in other
countries so therefore rely on their international
distributors.
• To account for the costs of importing Dilmah tea
from Sri Lanka all the way to Canada, Dilmah tea is
sold in Canada at a slightly higher price than its
competitors.
• Dilmah does not provide coffee or hot chocolate
therefore consumers in those markets are not
attracted to Dilmah.
• Although Dilmah is a Sri Lanka brand, they have less
market share in Sri Lanka compared to other local tea
brands.
• Due to the climate changes in Sri Lanka, tea growing
regions may be harmed therefore prices may increase
thus affecting Dilmah.
• High cost in tea export.

• Opportunities
• 2nd largest tea importer in the world. (PLC, 2023)
• Using high technical machines for packaging.
• There is an increasing in tea export.
• Global market is shifting to the healthcare side. It is a
great opportunity to a natural origin tea.
• Using market trends to develop the product. Such as using
different flavors, cordial teas etc. to satisfy customer.
• But if the political instability decreases, the company can
get support and government incentives will be given for
the development of the company more than before.
(Opportunity)
• Threats
• Dilmah got less market share in Sri Lanka local sales.
• Number of competitors is high and Dilmah faces intense
competition from brands.
• If stricter rules increase further, business will face future
uncertainties and trading volatility. The opportunity to
export goods globally and partner with other global brand
ambassadors will not happen if strict trade rules are further
increased. (threat)
• Rising demand of soft drinks.
• Current high inflation and political instability, production
cost has increased.
• If political instability in the economy increases, inflation
will also increase. As a result, unemployment will rise and
disposable income will decline.

ANSOFF MATRIX
• Ansoff Matrix is a strategic planning framework to
help businesses develop and decide upon strategies
for their growth.
• It’s designed to effectively provide four strategic
options and highlight the levels of risk associated to
those for the business. (Hussain, et al., 2013)

PRODUCT DEVELOPMENT
2 in 1 Tea
• Dilmah company can introduce a new
product as 2 in 1 Tea to increase
market share. It Contains sugar for the
convenience of consumers.
Consumers can dissolve 2 tablespoons
of this tea powder in hot water to
make a delicious tea drink.
Suitability Acceptability Feasibility
• Suit for Sri Lankan
economy as price of
sugar also high
(opportunity)
• There is a risk of having
insects attack within
stores.
• Customers will benefit
as they can reduce the
cost for sugar and
supplies also can get a
new opportunity to
supply sugar.
• The people are
consuming the sugarless
products as there is
increase in diabetes
penitents in Sri
Lanka.(27.5%)
• The people will purchase
this product as the cost
of food increase by
90.90%
• Dilmah has 554
employees and 848
supplies and 3944
million property plant
equipment.
• Dilmah has committed
S10 million in research
& development.
• Dilmah’s total income
was 1.75 billion.

MARKET DEVELOPMENT
• Pregnant women may be
resistant to by it because it
is a new product. (Threat)
• There is a risk for allergies
associated with changes in
components contain in
it.(Threat)
• There is no any other tea
in the market that provides
necessary amounts of
nutrients for pregnant
women. (opportunity)
• Community always look for items &
services that will keep them safe.
• Reduces the cost that government has
incurred to increase the nutrition
level of pregnant mothers.
• There is a possibility that the item
will not be purchased as the birth rate
decreases from 2018 to 2020 in Sri
Lanka.
• Product is unlikely to be returned due
to the decrease in demand for non-
essential products as a result of
inflation
• It will not function in
practice as “ Alfaalfa” Plant
is difficult to get from
United States due to import
barriers.
• Unable to find this strategy
due to current economic
crisis.
• Dilmah has a high retention
rate.
Tea for pregnant women
• Tea for pregnant women to
increase market share. This
product is a blend of
raspberry, nettle leaves and
alfalfa helpful to tone the
uterus and prepare the
womb for childbirth.

MARKET PENETRATION
• Psychological affect that
numbers have on human
brain can use to shape
price patriation.
(Opportunity)
• If harms brand perfection
since customers buy this
product based on price
rather than the product
itself. (threat)
• Both high- & low-income
earners can afford this
product.
• Community expects the
products with affordable
prices.
• Some customers will not
feel that they are not
getting a bargaining price.
• Due to psychological
barriers the customer will
feel that they are gaining
bargain price compared to
the normal price.
• Odd pricing is a famous
pricing strategy in the
market.
• Young & energetic sales
force (All are between 20-
40 years)
Odd Pricing
• Dilmah can use odd pricing
strategy to increase customer
base. Odd pricing is a pricing
method that aims to
maximize profits by making
micro-adjustments to the
pricing structure.
• For example, Dilmah can
price an $12 product at
$11.99 to make customers
think it's $11 and buy it.

• Can increase company's
product range.
• Perfect pairing with
Dilmah tea.
• Company can sold
through its existing
distribution channels.
• There is a risk of having
insect attacks within
stores.
• Many tea drinkers enjoy
having a snack with their
tea, and a biscuit could be
a convenient and taste
option.
• The product is unlikely to
be returned due to the
taste preferences of
customers.
• Product is unlikely to be
returned due to the
decrease in demand for
non-essential products as
a result of inflation.
• It will not function in
practice as the
company needs to
purchase machineries.
• The existing
employees haven't the
knowledge of
preparing biscuits.
RELATED DIVERSIFICATION
Dilmah Tea Biscuit
• Dilmah can produce a tea
contain biscuit to increase
the customer base

• There is a growing
market for handmade
home goods. (Global
Craft Sector, $984)
• Reduces the cost that
government has
incurred to import
home goods.
• The product is
unlikely to be
returned as there is no
any experience in that
field.
• It will not function as
the company need to
purchase machineries,
raw materials, skilled
labor.
UNRELATED DIVERSIFICATION
Teapots, Teacups and
Saucers
• Dilmah can
produce handmade
home goods to the
increase the
customer base.

Strategy Suitability Acceptability Feasibility
Two in one Tea × √ √
Tea for pregnant women × × ×
Odd pricing √ √ √
Tea contain biscuit √ √ ×
Home Goods √ × ×
EVALUATION OF ABOVE STRATEGIES

CONCLUSION
• Companies operate in a dynamic environment that presents both challenges and opportunities.
• With the right strategic approach, companies can capitalize on the opportunities and overcome
the challenges to achieve sustainable growth and success.
• Success relies on gaining understanding acceptance and support by people within the company.
• The strategies must accomplish its objectives by providing direct or indirect value to customers.
• It’s important to ensure that’s the strategies align with the company objectives.

REFERENCES
1. Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). SWOT analysis
applications: An integrative literature review. Journal of Global Business Insights, 6(1), 55-73.
https://www.doi.org/ 10.5038/2640-6489.6.1.1148
2. Central Bank of Sri Lanka, 2021. Annual Report, s.l.: Central Bank of Sri Lanka.
3. DILMAH CEYLON TEA COMPANY PLC, 2019. A CUP OF KINDNESS- Annual Report, s.l.: DILMAH
CEYLON TEA COMPANY PLC.
4. DILMAH CEYLON TEA COMPANY PLC, 2020. People Power- Annual Report, s.l.: DILMAH
CEYLON TEA COMPANY PLC.
5. Hussain, S., Khattak, J., Rizwan, A. & Latif, A., 2013. ANSOFF Matrix, Environment, and Growth- An
Interactive Triangle. Management and Administrative Sciences Review , 2(2), pp. 196-206.

6.Peterdy, K., 2022. Corporate Finance Institute. [Online]
Available at: https://corporatefinanceinstitute.com/resources/knowledge/strategy/ansoff-matrix/
[Accessed 24 September 2022].
7. PLC, D. C. T. C., 2021. Dilmah Ceylon Tea Company Annual Report 2020/2021, s.l.: s.n.
8. PLC, D. C. T. c., 2023. Dilmah Ceylon Tea company Sustainability Report 2022, s.l.: s.n.
9. WAINAINA, N. & OLOKO, M., 2015. Market Penetration Strategies and Organizational Growth: A Case
of Soft Drink. International Journal of Management and Commerce Innovations, 3(2), pp. 219-227.
10.Bush, T., 2016. PESTLE Analysis. [Online]
Available at: https://pestleanalysis.com/technological-factors-affecting-business/
[Accessed 12 6 2021].
11. Hole, Y., Pawar, S. & Bashkar, M., 2019. Porter's Five Forces Model: Gives You A Competitive
Advantage. International Journal of Physics, 11(4), pp. 1436-1448.

12. Hussain, S., Khattak, J., Rizwan, A. & Latif, A., 2013. ANSOFF Matrix, Environment, and Growth- An
Interactive Triangle. Management and Administrative Sciences Review , 2(2), pp. 196-206.
13. Zamora, E. A., 2016. Value Chain Analysis: Brief Review. Asian Journal of Innovation and Policy, 5(2), pp.
116-128.

bsc--bsp6000--20208577.pptx

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to bsc--bsp6000--20208577.pptx

Similar to bsc--bsp6000--20208577.pptx (20)

Recently uploaded

Recently uploaded (10)

bsc--bsp6000--20208577.pptx