Assignment

1. QUESTION
Your task is to undertake strategic planning for your own organization or for an organization you
are familiar with in your country or region. Locate the vision statement, mission statement,
statement of values and formal objectives of your chosen organization. Not all organizations have
a statement of values; if that is the case, you can do without the statement of values. Not all
organizations have formal objectives; if that is the case, you will be required to develop some
appropriate objectives as part of the assignment. Write a report in which you:
 Briefly describe the organization and its industry.
 Identify the vision statement, mission statement and statement of values; explain their
appropriateness for the organization; suggest potential improvements.
 Identify the objectives; analyze their appropriateness for the organization; suggest potential
improvements, or develop some appropriate objectives and discuss why they are applicable.
Undertake an internal analysis of the organization and an analysis of its external environment
using appropriate strategic management tools.
 Develop an appropriate strategy for the organization. Make sure you explain why the strategy
is relevant and how it relates to vision/mission/objectives. Clearly justify your argument.
You do not need to develop implementation processes, but you should mention the critical
importance of implementation, execution, and evaluation of the strategies you come up with for
this assignment.
ASSIGNMENT COVER SHEET
AIB student ID number: A001646577
Student name: W.Dimithri Sadeepa Jayamali
Course name: Master of Business Administration
Subject name: Strategic Management
Subject facilitator: Mr. Samitha Perera
Teaching Centre: Oxford College of Business
No. of pages: 15
Word count: 2053

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Strategic plan for Cargills (Ceylon) PLC
Executive Summary
This document provides an analysis of the strategic plan of Cargills Ceylon plc which is one of the
leading company in Sri Lanka. Basic introduction provides the overview of company and the
market background whilst describing its vision, mission, objectives and the values which provides
the company a future direction. The critical analysis shows the importance of each concept and
the suggestions to make them perfect as theoretically explained. In order to build up correct
strategy for the business development, there should be a good understanding of the company
environment in both internal and external perspectives. Moreover, the tools for separate
analysis, the importance of them and how they can be used to analyze the Cargills Ceylon plc are
described to understand the environment. Taking them into the consideration it has been
suggested an appropriate strategy for the organization relating to the vision mission and
objectives of the company.

3. 3
Table of contents
Executive Summary......................................................................................................................... 2
Table of contents ............................................................................................................................ 3
1. Organization and the background........................................................................................... 4
2. Vision, mission, objectives and statement of values............................................................... 5
Vision........................................................................................................................................... 5
Mission........................................................................................................................................ 5
Objectives.................................................................................................................................... 5
Values.......................................................................................................................................... 7
3. Internal environment analysis................................................................................................. 7
a. SWOT.................................................................................................................................... 7
b. VRIN ..................................................................................................................................... 9
4. External environment analysis .............................................................................................. 10
a. PESTEL................................................................................................................................ 10
b. Five forces model............................................................................................................... 11
5. Appropriate strategy ............................................................................................................. 12
Conclusion..................................................................................................................................... 14
References .................................................................................................................................... 15

4. 4
1. Organization and the background
Cargills Ceylon plc is one of the main FMCG company enlisted in the Colombo stock exchange.
The beginning of the Cargills name runs in to 1844 when William Miller and David Sime Cargill
commenced a general warehouse, import and wholesale business in Colombo, Fort naming the
establishment as the 'House of Cargills'. Sir Chittampalam A. Gardiner brought the House of
Cargills forward as a Public Limited Liability Company on 1 March 1946. After In 1981 Ceylon
Theatres acquired controlling interest of the Company, under the new management, Cargills
explored the potential of innovating on its trading legacy. As a result, in 1983 Cargills established
the first supermarket chain in Sri Lanka with the opening of its first outlet at Staple Street
(cargillsceylon, 2017).
Cargills has segregated its retail stores as Cargills Food City™, Cargills Express™, Cargills Book
City™, and Cargills BIG CITY™. Also, Cargills maintains 15 KFC™ franchise restaurants, 10 its own
vegetable and perishable food processing units, Cargills Magic™, Fresh milk and Ice-cream
factories, Cargills Suprimo™ meat factory, Cargills KIST™ factory and more than hundreds of
product lines and its own household brands such as Cargills Home™ cleaners, detergents, Milca™
milk powder, Cargills spices™ , beverages etc. Specially with lots of developments, Cargills has
become a successful supermarket chain in Sri Lanka specially owning their own dairy farms and
crops screening the use of backward integration in their value chain. Another step is acquiring
of Millers Limited consolidating its marketing and distribution operation with forward
integration. Today the Cargills retail operation is spread across the island in two formats as
‘Cargills Food City’ supermarkets and ‘Cargills Food City Express’ convenience stores.
When considering the current industry, the supermarket industry in Sri Lanka is set out for an
explosive growth in the recent years this is with the western lifestyle of modern Sri Lankans
where convenience is a key benefit sought (Perera, 2004). Cargills Food City, Kings Supercity,
Sentra, Keells Super, EH Super Pola, Sunup are some of the supermarket chains that have
expanded operations. In addition other operators such as park n' Shop, Arpico Super Centers,
Crystal and Sathosa chain witness a dramatic growth in the modern trade, which is taking center
stage over the traditional trade. Cargills Food city footprint has reached 297 stores covering all
24 districts of Sri Lanka.

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2. Vision, mission, objectives and statement of values
Vision, mission and objectives lays out the future direction, performance targets and strategy.
Specially the direction is provided through the vision describing managements’ aspiration for the
future in long term. The mission describes the current business and purpose specifying the
company’s approach to satisfy customer needs. Below are the vision and mission of Cargills
Ceylon plc.
Vision
To be a global corporate role model in community – friendly national development.
Mission
Serve the rural community, our customers and all other stakeholders, through our core business
– food with love – and other related businesses, based on the three main principles of
• reducing the cost of living
• enhancing youth skills
• bridging regional disparity by enhancing local and global markets
When considering the above vision it gives a wide picture of the future expectation of the
company operation but it does focus on the way how the company become the role model. And
it says the community friendly national development which a company alone cannot build up the
status of national development.
The mission of Cargills Ceylon plc has identified that the rural community is very important which
all the corps are bought from. Compared to the vision, the mission has widely described how the
company current status is and what they do to enhance the long term strategies.
Objectives
The objectives display the performance targets of the company. The Cargills has showed the
below statement as the objective in the annual report.

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“Our work to advance environmental sustainability in terms of minimizing our environmental
footprint and working towards a more sustainable use of natural resources, support for rural
economic empowerment, and offering healthier food choices for our customers are further
demonstrated by our commitment to report our actions and results. We continue to look for
more ways to lead and have an even greater impact on the communities that we serve. The
performance of the year concluded is indicative of the future course of the Cargills Group. On the
strength of the positive business environment Cargills would continue to invest in value chains
across the Group, focused on regional community development as the building block of growth
while looking to exceeded consumer and shareholder expectation” (Cargillsceylon, 2016).
Also, they are looking in to opening around 100 outlets in every district in the island in the next
three years. They are also more in to enhancing youth skills and bridging regional disparity.
The purpose of objectives is to convert vision and mission into specific, measurable, timely
performance targets. The objectives have to be SMART as below definitions. According to Cargills
they have stated specific objectives which are achievable in the near future. It would be more
ideal if the time period was given.
 S -Specific
 M -Measurable
 A -Achievable
 R -Realistic
 T -Timely

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Values
The values are the behavior patterns expected from employees when conducting company’s
business.
 Diversity and Opportunity
 Employee Volunteerism
 Non-discrimination
 Freedom of association and
collective bargaining
 Human Rights and Child Labor
 Forced and compulsory labor
 Anti-Corruption
 Insider Trading
 Governing Laws
Cargills Ceylon plc has developed a multinational work environment by making connections
across business units, at every location in every district across the island. Also, Cargills
supports employees to build exciting and stable communities where the employees live and
work. The company does not tolerate any discrimination or corruption. No child labor is used
and labor compensations are provided with applicable provinces.
3. Internal environment analysis
Company’s internal environment is evaluated to see how well the firms present strategy working.
The tools used for internal environment analysis are SWOT, VRIN and the Strategy map as below.
a. SWOT
SWOT identifies the strengths, weaknesses, opportunities and the threats of a company.
Strengths and weaknesses ae connected with the internal environment while the opportunities
and threats towards external environment.

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Strengths Opportunities
 High reputation and goodwill
 Large outlets network
 Developed technology in use
 Strong logistics
 Assets and financial stability
 Strong relationships with suppliers
 Strong brands in relation.
 Expanding outlets in north and east
provinces
 Growth in modern technology in
trade
 The Albert A Page Institute of Food
Retailing builds a base of well-trained
employees for the future.(the 1st and
food processing diploma in the
country)
Weaknesses Threats
 Lack of labor in maintenance and
store during operation
 High staff turnover
 Storage issues at outlets
 Lack of focus on other retail formats
 Delays in payments to small suppliers.
 Parking issues at some outlets
 Global economic down time and
increasing inflation rates
 Government policies and price
standards
 State officials with lack of knowledge
of modern trade
 Growth of other competitive food city
chains and store standalone
companies

9. 9
b. VRIN
The company resources are described in detail under; V (Valuable) ,R(Rare), I(inimitable),
N(Non-substitutable).
Valuable Rare Inimitable
Non-
substitutable
Core-
competency
that
provides
sustained
CA
Huge outlet
network
Yes Yes Mostly Yes
Yes-
Long term
CA
High
technology
Yes Yes Yes Yes
Yes-
Long term
CA
Strong
logistics
Yes Yes Yes Yes
Yes-
Long term
CA
Advanced
technology
Yes No Yes No
Yes-
Temporarily
CA
Strong
brands in
relation
Yes Yes No Yes
Yes-
Long term
CA

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4. External environment analysis
Analysis of macro environment is equally important for a company as it includes strategically
relevant important components which the company has no direct control. The external
environment analysis can be done with the tools o PESTEL and Porters five forces model as below.
a. PESTEL
PESTEL analysis describes a framework of macro environmental factors used in the
environmental scanning component of strategic management (The institute of chartered
accountants Sri Lanka, 2013).
Political
Government regulations on goods transportation
High transportation cost to deliver vegetables, fruits from central province
Fluctuating VAT
Economical
Unsteady pricing system for goods
High import export tax expenses
Economical condition of consumers due to high inflation
Economic condition of suppliers
Social
Consumer interest towards organic fresh products
Social media advertising campaigns for products
Technological
Developed technological equipment, ERP and MIS s to handle the operation
Home delivery businesses
online markets
Environmental
Environment friendly business process
Increment in consuming natural food
Weather and climate changes
Legal
Food safety acts
Quality certifications
Consumer law

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b. Five forces model
Cargills is having low bargaining power of suppliers from around 2000 suppliers who produce
more than 20000 products. Earlier Cargills main supplier was Millers and in 2008 Cargills could
acquire Millers through backward integration and therefore Cargills could use millers limited s’
sophisticated distribution channel in an optimum manner for the business. Also Cargills get their
products using own concept call “farm to shelf”. With this concept Cargills collects vegetables,
fruits, milk, eggs, meat, fish, spices, rice, and lot of other food products directly collected from
rural farmers. Acquisition of Kist which is the second largest manufacturer of Jam, cordial, souse
and beverages in Sri Lanka retained more market share compared to other rivals. To reduce the
impact of bargaining power of customers Cargills reduces price. They constantly commencing
promotions and rapidly developing communication channels with millions of budget on adverting
too. Since the substitutes have low quality and accessibility the threat is considerably low. Also
being the market leader for past 26 years they have gained market leadership through low cost
and a new entrant cannot easily survive or come up to that level very easily. Rivalry among
competitors is considerably high but Cargills is developing strategies to maintain their market
leadership.
Rivalry among
existing firms -
High
Threat of
new
entrants -
Low
Threat of
substitues -
Low
Customers'
Bargaining
power -
High
Suppliers'
bargaining
power -
Low

12. 12
Major competitors of Cargills Ceylon plc
5. Appropriate strategy
Company’s strategy helps to achieve the competitive advantage for a company to deliver the
value to the customer. It’s based on,
 the market size whether it’s broad or narrow and
 the way competitive advantage is persuaded via low cost or differentiation.
Accordingly, there are five generic competitive strategies as
 Low cost provider
 Broad differentiation
 Focused low cost
 Focused differentiation and
 Best cost provider
Large
Small
Cost Differentiation
VFM

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According to the company vision its target is to become a global corporate model and therefore
the low-cost strategy would help a lot as it helps to attract more sales and increase the market
share. For that the total costs in the overall value chain has to be lower than the rivals.
Cargills have already taken steps to reduce their costs at level best in order to get the use of
company resources and capabilities.
They have already bypassed the value chain activities by forward and backward integration. Also,
the value chain activities have to be performed quickly, cost effectively and accurately. Also, the
operation has to be streamlined by removing additional and unnecessary steps. Moreover, it has
to reduce the handling costs and delivery costs in order to become successful with low cost
strategy (Thompson, 2016). In order to strengthen the strategy, the Cargills Ceylon plc can be
engaged much more in enhancing the scope like it has already followed up few concepts of
integration. Growing the business, it can take up the existing businesses and expand the portfolio
too. It can outsource 3rd party IT facilities and develop virtual markets in the near future where
the customer can log in and order goods to be delivered to their home. The market trends are
moving so fast and in order to cope up the business it has to be updated with new technology
and move forward with best strategies to deliver the best value to the customers.

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Conclusion
Based on the above information the company is following a great vision mission and objectives
with company values and it needs to become success in achieving low-cost edge over the above-
mentioned rivals. Also the environment analysis is utmost important with correct tools to get
through the correct future direction.
Aligning with correct analysis of the environment, it has to identify the correct needs of the
company and proceed with the actions to drive costs out of the business. Not only that it has to
have correct estimations for new investments prior spending money on them. Not only that it is
more important to keep us the extreme quality by reviewing cost saving resources to develop
the business in strategic manner.

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References
Cargillsceylon. (2016). Annual report 2015-2016. Retrieved 02 11, 2017, from
https://cdn.cse.lk/cmt/upload_report_file/457_1465472557985.pdf
cargillsceylon. (2017). OurHistory. Retrieved 02 11, 2017, from www.cargillsceylon.com:
http://www.cargillsceylon.com/AboutUs/OurHistory.aspx
Perera, P. (2004). Bus19. Retrieved 02 11, 2017, from dailynews.lk:
http://archives.dailynews.lk/2004/01/06/bus19.html
The institute of chartered accountants Sri Lanka. (2013, 11 26). System and strategy. Retrieved
02 13, 2017, from
https://www.casrilanka.com/casl/images/pdf/businessschool/2%20project.pdf
Thompson, P. G. (2016). Crafting & Executing Strategy (Vol. 20). McGawHill. Retrieved 02 13,
2017