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Introduction

The beverage industry of Bangladesh is an old, steady yet neglected industry. For manyyears, the only product of the industry was Carbonated Beverage or Carbonated SoftDrink CSD! and the number of players was limited to only a handful. Today, the industry

has flourished considerably with a bunch of new enterprises and through the introductionof newer and more diverse products.

1.2 Objective

The ma"or purpose of this report is to focus light on one of the oldest and key player ofthe beverage industry of Bangladesh, #bdul $onem %td. abbreviated as #$%!. Theunderlying ob"ectives of the report are &' To know about the inception of the enterprise, as a whole and of its beverage unit aswell.' To know the operations and the management structure of #$%.' (ut light on the production, distribution and promotion of the beverage products of

#$%.' To review the strategic moves and plans of #$% as a Strategic Business )nit to gainmarket share, make good profit and achieve sustainable growth.' *ecommend relevant strategic moves to achieve even better result.' Conduct a sample survey and interpret the results to visuali+e whether the strategies of#$% are working well for the enterprise.

1.3 Methodology

The mode of methodology selected for this research is known as $ultimethodology.#lso known as $i-ed $ethods *esearch, $ultimethodology is an approach toprofessional research that combines the collection and analysis of both uantitative and

ualitative data.

/ualitative #nalysisThe sample data gathered in ualitative research are analy+ed and categori+ed intopatterns as the primary basis for organi+ing and drawing results for the report. /ualitativeresearch for this report involved three methods for gathering information&

' Direct observation' in depth interviews and' analysis of documents and materials.

The key methods to be used for data collection are the 0ey 1nformant 1nterview 011! andDepth 1nterview.

Quantitative Analysis

The ob"ective of uantitative research is to develop and employ mathematical models,theories and2or hypotheses pertaining to natural phenomena. The /uantitative *esearchtechniues applied for this report are &' Collection of sample data

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' $odeling and analysis of data' 3valuation of results

1.4 Conceptual ra!e"or#

1.$ %copeDue to several unavoidable situation and reality, the e-tent of this report has beencompromised up to certain limit. The boundaries of this report are thus &' This report focuses only on the beverage production units and facilities of #$%, theother business fronts of #$% are not covered in this report.' This report will focus on the value chain activity of the beverage production unit of#$%, from production to promotion, and the key strategic factors affecting thoseactivities.' The report will also focus on the ethical and CS* activities of #$% as a whole, i.e. forevery business unit of the enterprise.

1.& 'i!itationsThe e-tent and limit of the report were constricted due to some of the followingconsiderations&' The time allocated for the report was limited which constricted the e-tent of this report.' The beverage industry of Bangladesh is not well documented, so no strict facts andfigures were found from the enterprise respondants or any other secondary sources.

Chapter 2

An Overvie" o( Abdul Mone! 'td.

2.1 Introduction

#bdul $onem %td. #$%! is the only official bottler of Coca Cola, Sprite, Fanta 4rangeand Fanta %emon in Bangladesh authori+ed by the Coca Cola 1nternational headuarterlocated in #tlanta, )S#. Through three bottling plants located in Dhaka, Comilla andChittagong and with a devoted distribution channel spread all around the country, #$%has well established its strong and dominant presence in beverage industry ofBangladesh.

5.5 1nception and 3-pansion#$% started its operation back in 6789 as a construction firm and was engaged in ma"orgovernment construction work. :ithin a few decades, the organi+ation diversified itsoperation in other industries, especially in food and beverage industry. #$% started its

1ce Cream (lant in Chittagong in 679; with a brand name 1 =8.? million dollar or BDT 9billion. The group of business of #$% are consist of &' Construction Contractors for the road @ highways, bridges, buildings @ floodembankment' Bottler and Distributor of Coca Cola, Fanta @ Sprite' $anufacturer of 1

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' #bdul $onem Sugar *efinery %td.' #$ (harma %td.' $anufacturer of #mo$ilk %iuid (asteuri+ed $ilk' $anufacture of 1

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The vision statement of #$% is focused and obtainable. The vision guides its personnelto a definite direction and provides an idea about its utili+ation of its potentials.

5.9 4b"ectives & The Balanced Scorecard #pproach

#$% strives to set up well defined and obtainable strategic and financial ob"ectives whilekeeping in mind the long range and short range goals. To maintain an organi+ationalprofile that is trustworthy to all its stakeholders, #$% gives more priority to provide auniform balance on all ob"ective fronts.

Financial 4b"ective#bdul $onem %imited aims at generating appropriate financial results throughsustainable growth and constant renewal of balanced business structure.

Strategic 4b"ective#bdul $onem %imited is open and trustworthy to all its business partners and consumers.

Through devoted business activities, it wish to make worthwhile contribution to theprogress of the country.

Short Term

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highest authority for the operation of Coca Cola all over the work, the (resident of Boardof Director of Coca Cola at #tlanta, )S#.

%ocal $anagement for Beverage 4perationThe strategies and operations of the beverage unit of #$% are maintained under the

control of the

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5. #$% currently can distribute its beverages only in Chittagong, 0hulna, Sylhet andBarishal Division. The acuisition of the distributorship of the whole Bangladesh will bea great opportunity for #$%.

Threats

6. The ever rising number of new entrants in the business.

5. Harrow band of beverage product line compared to the competitors.

G. Dominance of substitute beverage products like fruit "uice.

5.= $a"or *ivals

The rivals for the beverage unit of #$% range from the rivals producing other carbonatedbeverages as well as from the producers of other beverages such as Fruit Iuices, Flavored

$ilk, Synthetic Drinks and (ure Drinking :ater. Hotably, the ma"or rivals of #$% are&

*ival Carbonated Beverage (roducers' Transcom Beverage (epsi Cola, ?up, $irinda!' (erte-

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#$% and its beverage products, i.e. Coca Cola, Sprite, Fanta 4range and Fanta %emonare well known for providing best value to its clients for the cost they pay for it. #$%only have four products in its beverage line, so clearly they are not going for BroadDifferentiation. Though the competition in the industry is tense than ever, still the priceset by #$% is in the top region, so they are not eyeing to be the %ow Cost (rovider

either. They produce no products for any niche group or for any special price facilitatedgroups. Thus, strategically #$% can be classified as he Best Cost (rovider.

G.5 Complementary Strategy

G.5.6 Strategic #lliances or Collaborative (artnershipFrom the very beginning of its beverage operation, #$% has been the market leader by agreat distance. They never felt any necessity to make collaboration with any rivals.owever, since #$% is authori+ed for distributing its products only in half of the regionsof the country, they made a strategic alliance with the enterprise, Tabani Beverage, thatdistributes on the other half of the country. #ccording to this alliance, #$% will provide

and supply Tabani Beverage with all the products they need and Tabani Beverage is onlyauthori+ed to distribute those to its own territory. Due to this alliance, though #$% lostthe authority for the distributorship all over the country, they made sure to utili+e theirtotal capacity of production by producing beverage products for the whole nation.

G.5.5 $erger and #cuisitionThough no record for merger was found in the history of #$%, the entrance of #$% inbeverage industry was the result of a huge acuisition of cotemporary scenario. Till 67=5,the authori+ed bottler of Coca Cola for Bangladesh was entitled to 0. *ahman @Company. #$% took over its bottling operation by acuiring the plant of the 0. *ahman@ Company in Chittagong in 67=5. 1t has set up two more bottling plants, one in Dhaka

and other in Comilla, till then.

G.5.G Aalue Chain and Aertical 1ntegration#s a group of company, #$% en"oys the privilege of vertical integration through bothforward and backward linkage operations. 1t has its own plants for producing rawmaterials and own diverse and well euipped distribution channel for distributing thefinished product.

The Aalue Chain starts from acuiring the main ingredient of the beverage, called theF4*$)%#. The F4*$)%# is a chemical compound that works as the heart of thebeverage and due to business secret, no one e-cept for the original Coca Cola Companycan produce it. #fter receiving the concentrated F4*$)%#, it is diluted and processedby adding other components like drinking water, sugar, Carbon Dio-ide and so on. Thesugar used in this process demand high uality, so #$% established its own sugar plant,1

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# flow chart for the complete Aalue Chain process is given below &

G.5.; 4utsourcingThe only outsourced item in the total value chain process of #$% in producing, bottlingand distributing Coca Cola is the making of the bottle itself. For the case of glass bottles,the regional headuarter of Coca Cola, Coca Cola 1ndia CC1! supplies #$% the bottlethey reuire to ensure the uality of the bottle regarding shape, strength and safety. Forthe (3T bottles, #$% has outsourced them through making special orders to the outsideproducers of (3T bottles.

G.5.8 Strategic $oves

For decades, the beverage industry of Bangladesh has been a monopolistic market withCoca Cola the only market leader. Thus, undertaking any strategic moves, offensive ordefensive, was unnecessary. owever, as the competition grew, being offensive ordefensive through adopting new strategic moves became more and more crucial.

1n 67=? the Company made an aggressive move to e-pand the market by installing a new@0 bottling line with an installed capacity of ;8 Bottles (er $inute B($! bottlingcapacity at Comilla. :ith this move, the Company immediately gained the market

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leadership position from the (epsi which was the leader for more than 5? years. %ongterm planning and aggressive marketing approach rewarded the Company with themarket leadership position for the brands that remains till date.

#$% also takes defensive moves time to time by sending messages of retaliation to its

rivals by occasional price cut and offering frills. Such moves have become more andmore common especially during the festive seasons like 3id.

G.G Functional #rea Strategy

Functional #rea Strategies are mostly monitored and supervised by the Board ofDirectors. This is due to the necessity to keep balance between different lines of businessthat the enterprise pursues. :hile the Technological support and *esearch andDevelopment activities are mostly provided by Coca Cola 1nternational, #$% isresponsible for the production, bottling, marketing and sales and distribution of CocaCola in Bangladesh. :hile the accounts and finance division is separate for the beverage

unit of #$%, the uman *esource Department works for the whole enterprise as awhole.

G.; Timing of Strategy#s a player of a monopolistic market, the timing of strategy was never been a problemfor #$% as a bottler and distributor of Coca Cola in Bangladesh. #lmost all thetechnology and approaches in the beverage industry of Bangladesh are one way oranother introduced by Coca Cola and #$%. 1n this regard, #$% and Coca Cola hasalways been the First $over in the beverage industry of Bangladesh.

G.8 Business 3thics and Social *esponsibility

Business 3thics for the beverage industry mainly comes from the health perspective. #llthe ingredients used in the production of Coca Cola under #$% are strictly monitored bythe Coca Cola Company, )S#. #ny violation from the reuired standard would result ina cancellation of the license.

#s for the social responsibility, #$% runs one madrasa, one college and one 3timkhanafor the poor people of the village Bri"esswar in Brahmanbaria under the financing of#$% Foundation. #$% Foundation is also engaged in providing micro finance to thepoor of the village. 4ther than that, #$% runs relief works and provides pure drinkingwater in any case of natural disaster.

Chapter ;Findings @ *ecommendations

;.6 Findings

' The carbonated beverage industry of Bangladesh is visibly a matured and decliningindustry.

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' The e-isting market of carbonated beverage is seriously threatened by the emergence ofother substitute beverage products.' Due to the narrow product line, #$% and its beverage unit is having a hard time tomaintain its share in the market.' 4ver the last decade, numerous number of new enterprises has entered the industry and

eventually have swamped the industry for its volume.' The policy and technology determined by the Coca Cola Company, )S# are not alwayssuitable for the case of Bangladesh.

;.5 *ecommendations

' To introduce other well anticipated products of Coca Cola Company in local market.'

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G.6 Competitive Strategy

#$% and its beverage products, i.e. Coca Cola, Sprite, Fanta 4range and Fanta %emonare well known for providing best value to its clients for the cost they pay for it. #$%only have four products in its beverage line, so clearly they are not going for Broad

Differentiation. Though the competition in the industry is tense than ever, still the priceset by #$% is in the top region, so they are not eyeing to be the %ow Cost (rovidereither. They produce no products for any niche group or for any special price facilitatedgroups. Thus, strategically #$% can be classified as he Best Cost (rovider.

G.5 Complementary Strategy

G.5.6 Strategic #lliances or Collaborative (artnershipFrom the very beginning of its beverage operation, #$% has been the market leader by agreat distance. They never felt any necessity to make collaboration with any rivals.owever, since #$% is authori+ed for distributing its products only in half of the regions

of the country, they made a strategic alliance with the enterprise, Tabani Beverage, thatdistributes on the other half of the country. #ccording to this alliance, #$% will provideand supply Tabani Beverage with all the products they need and Tabani Beverage is onlyauthori+ed to distribute those to its own territory. Due to this alliance, though #$% lostthe authority for the distributorship all over the country, they made sure to utili+e theirtotal capacity of production by producing beverage products for the whole nation.

G.5.5 $erger and #cuisitionThough no record for merger was found in the history of #$%, the entrance of #$% inbeverage industry was the result of a huge acuisition of cotemporary scenario. Till 67=5,the authori+ed bottler of Coca Cola for Bangladesh was entitled to 0. *ahman @

Company. #$% took over its bottling operation by acuiring the plant of the 0. *ahman@ Company in Chittagong in 67=5. 1t has set up two more bottling plants, one in Dhakaand other in Comilla, till then.

G.5.G Aalue Chain and Aertical 1ntegration#s a group of company, #$% en"oys the privilege of vertical integration through bothforward and backward linkage operations. 1t has its own plants for producing rawmaterials and own diverse and well euipped distribution channel for distributing thefinished product.

The Aalue Chain starts from acuiring the main ingredient of the beverage, called the

F4*$)%#. The F4*$)%# is a chemical compound that works as the heart of thebeverage and due to business secret, no one e-cept for the original Coca Cola Companycan produce it. #fter receiving the concentrated F4*$)%#, it is diluted and processedby adding other components like drinking water, sugar, Carbon Dio-ide and so on. Thesugar used in this process demand high uality, so #$% established its own sugar plant,1

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The finished beverage is then bottled and sent to the ma"or regional distributors whomake it available in the shops for the customers through local dealers.

# flow chart for the complete Aalue Chain process is given in the following page.

G.5.; 4utsourcingThe only outsourced item in the total value chain process of #$% in producing, bottlingand distributing Coca Cola is the making of the bottle itself. For the case of glass bottles,the regional headuarter of Coca Cola, Coca Cola 1ndia CC1! supplies #$% the bottlethey reuire to ensure the uality of the bottle regarding shape, strength and safety. Forthe (3T bottles, #$% has outsourced them through making special orders to the outsideproducers of (3T bottles.

G.5.8 Strategic $ovesFor decades, the beverage industry of Bangladesh has been a monopolistic market withCoca Cola the only market leader. Thus, undertaking any strategic moves, offensive or

defensive, was unnecessary. owever, as the competition grew, being offensive ordefensive through adopting new strategic moves became more and more crucial.

1n 67=? the Company made an aggressive move to e-pand the market by installing a new@0 bottling line with an installed capacity of ;8 Bottles (er $inute B($! bottlingcapacity at Comilla. :ith this move, the Company immediately gained the marketleadership position from the (epsi which was the leader for more than 5? years. %ongterm planning and aggressive marketing approach rewarded the Company with themarket leadership position for the brands that remains till date.

#$% also takes defensive moves time to time by sending messages of retaliation to its

rivals by occasional price cut and offering frills. Such moves have become more andmore common especially during the festive seasons like 3id.

Aalue Chain #ctivities of the Beverage )nit of #bdul $onem %imited

G.G Functional #rea Strategy

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Functional #rea Strategies are mostly monitored and supervised by the Board ofDirectors. This is due to the necessity to keep balance between different lines of businessthat the enterprise pursues. :hile the Technological support and *esearch andDevelopment activities are mostly provided by Coca Cola 1nternational, #$% isresponsible for the production, bottling, marketing and sales and distribution of Coca

Cola in Bangladesh. :hile the accounts and finance division is separate for the beverageunit of #$%, the uman *esource Department works for the whole enterprise as awhole.

G.; Timing of Strategy#s a player of a monopolistic market, the timing of strategy was never been a problemfor #$% as a bottler and distributor of Coca Cola in Bangladesh. #lmost all thetechnology and approaches in the beverage industry of Bangladesh are one way oranother introduced by Coca Cola and #$%. 1n this regard, #$% and Coca Cola hasalways been the First $over in the beverage industry of Bangladesh.

G.8 Business 3thics and Social *esponsibility

Business 3thics for the beverage industry mainly comes from the health perspective. #llthe ingredients used in the production of Coca Cola under #$% are strictly monitored bythe Coca Cola Company, )S#. #ny violation from the reuired standard would result ina cancellation of the license.

#s for the social responsibility, #$% runs one madrasa, one college and one 3timkhanafor the poor people of the village Bri"esswar in Brahmanbaria under the financing of#$% Foundation. #$% Foundation is also engaged in providing micro finance to thepoor of the village. 4ther than that, #$% runs relief works and provides pure drinking

water in any case of natural disaster.

Chapter 4

indings - eco!!endations

4.1 /valuating the %trategies o( Abdul Mone! 'td.

The last and the most important of all phases of Strategy $aking (rocess or Strategy3-ecuting (rocess is the 3valuation. #n evaluation of the effectiveness of e-istingstrategies enables the managementto review, correct and ad"usts any flaw in the system.3valuation also dictates the effectiveness of the employees who employ the strategies as

well as the effectiveness of the management itself.

For the beverage industry of Bangladesh, at the present scenario, the ma"or ob"ective ofall the players are to grab the ma-imum of the potential market share. This is due to thefollowing reasons&

' The market si+e is limited and the possibility of e-pansion of new market is very low.' The industry is overcrowded with huge number of players that the market can

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withstand.' Hew players are emerging all the time.' The products are seriously competed against the rival substitute products.' The industry, as a matured or even declining industry, is loosing its consumer base dayby day.

' 1ntroduction of new product or new technology is apparently absent.

;.6.6 $ethod of the SurveyTo identify the market share of the beverage products of #bdul $onem %td. in thebeverage product market in Bangladesh, a uestionnaire survey was conducted. Due tothe time constraints, the survey was conducted in only three retail stores located in threema"or locations of Dhaka city. 1t is to be noted that as the number of sample is less thanthirty in this case, the results of this survey cannot be considered for any statisticalanalysis. owever, the result should give a ualitative view of the relative position of#bdul $onem %td. among the other competitors in the beverage market of Bangladesh.

;.6.5 Detail of the SurveyThe survey was conducted in three prominent retail stores located in three primelocations of Dhaka cityJ Bikrampur

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For the (3T bottled beverage industry, #bdul $onem %td. is facing a serious challengefrom its rival. #lmost all of the rivals have diversified their (3T bottled line of beverageto suit the volume difference of the clients, whereas #bdul $onem %td. has a very limitednumber of diversified (3T bottle series. This narrow band of diversification has cost

them to lose valuable market share in the industry.

#lso in the canned beverage market, #bdul $omen %td. lost its ma"or market share to thenew comers for the lack of its marketing priorities. #bdul $omen %td. considersmarketing its glass bottled and (3T bottled products as top priority and provides less thanadeuate attention to its Canned beverage item. The rivals took the advantage of thisopportunity and gained ma"or market share over #bdul $onem %td. at this segment ofthe market.

owever, the distribution network, availability and consumer response seems to havealways been in favor for #bdul $onem %td. and Coca Cola. The retailers are more than

happy with the efficient distribution channel run by #bdul $onem %td. compared to thatof other vendors. The availability of the product is also very good throughout the yearand the consumers also value the beverage products of #bdul $onem %td. as best value,mainly due to the brand image of Coca Cola and shear uality control.

;.6.; Findings from the survey

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' #bdul $onem %td. is still the market leader for the glass bottledbeverage marketinBangladesh, mainly due to the fact that most of the rivals do not produce glass bottledbeverages.' 1ts market share in (3T bottled and Canned beverage market has seriously declined andon a serious threat under the aggression of the rivals in this segment.

' owever, the establishment and infrastructure of #bdul $onem %td. to distribute theproduct to the footstep of the consumer remained best of all

;.5 0ey Findings

' The carbonated beverage industry of Bangladesh is visibly a matured and decliningindustry.' The e-isting market of carbonated beverage is seriously threatened by the emergence ofother substitute beverage products.' Due to the narrow product line, #$% and its beverage unit is having a hard time tomaintain its share in the market.

' 4ver the last decade, numerous number of new enterprises has entered the industry andeventually have swamped the industry for its volume.' The policy and technology determined by the Coca Cola Company, )S# are not alwayssuitable for the case of Bangladesh.

;.G *ecommendations

' To introduce other well anticipated products of Coca Cola Company in local market.'