project of sitara chemical
TRANSCRIPT
PROJECT OF STRATEGIC MANAGEMENT ON “SITARA CHEMICAL
INDUSTRY”
Contents
Introduction & history Vision & mission SWOT Formulation (stage #1) Input stage EFE IFE CPM Matching stage SWOT IE MATRIX SPACE MATRIX BCG MATRIX GRAND MATRIX
Decision stage QSPM Implementation (stage # 2) Evaluation stage (stage # 3)
INTRODUCTION
Strategic management is all about Formulation Implementation & evaluation of strategies So our project will revolve on these
critical parameters.
Strategic Management
Strategy Formulation Input /action stage Matching stage Decision stage
Strategy Implementation Strategy evaluation
STAGE # 1INTRODUCTION
Introduction of Sitara Chemical
Sitara Chemical Industries Limited (Sitara Chemical) is a chemical product manufacturing company. The company operates through its two core divisions namely chemical division and textile division. These two divisions include Chlor Alkali plants and yarn spinning units. The company is engaged in manufacturing Caustic Soda and Allied Products as well as yarn. Its product line includes caustic soda solid, sodium hypochlorite, caustic soda liquid, hydrochloric acid, liquid chlorine, caustic soda flakes, Specialty Chemicals, Fertilizers, Polyester Cotton (PC) and Polyester Viscose (PV). The company is headquartered in Faisalabad, Pakistan and employs 343 people.
We present strategic analysis of Sitara Chemical Industries Limited. The report provides a comprehensive insight into the company, including business mission, vision and key competitors. The company’s strengths and weaknesses and areas of development or decline are analyzed as well. The hallmark of the report is the detailed strategic analysis on the company
VISION & MISSION
Vision statement "Strive to develop and employ innovative
technological solutions to add value to business with progressive and proactive
approach". Mission Statement
“Continuing growth & diversification for the bottom line result with risks well
contained”
SWOT ANALYSISStrengths Weaknesses
Opportunities Threats
Largest manufacture(caustic soda)
Largest Shareholder
Advance Technology
Plant Infrastructure
Strong Management
Strong Brand name
Financially Sound
Need Sizable Market to Sustain
Lack of Operations in Abroad
Relying on Permanent Customers
Increase Production Capacity
Increase Product Line
Taking Advantage of Geographic position
Provide Online Customer Service & Ordering System
Competitors
Economic Environment
Energy Crises
Threat of Stakeholders
Unstable Law & Order Situation
STAGE # 2 INPUT STAGE
IFE (INTERNAL FACTOR EVALUATION MATRIX)
Key Internal factors Weight Rating Weighted Score
Strengths
Largest manufacturer(caustic soda)Largest shareholderAdvance technologyPlant infrastructureStrong managementStrong brand nameFinancially strong
0.120.110.130.100.090.100.10
4343443
0.480.330.520.300.360.400.30
Weaknesses
Need sizeable market to sustainLack of operations in abroadRelying on permanent customer
0.100.080.07
122
0.100.160.14
Total 1.00 3.09
EFE (EXTERNAL FACTOR EVALUATION
MATRIX)
Key External factors Weight Rating Weighted Score
Opportunity
Increase production capacityIncrease product lineTaking advantage of geographic positionProvide online customer service and ordering system
0.110.080.130.09
3243
0.330.160.520.27
Threat
CompetitorsEconomic environmentEnergy crisisThreat of stakeholdersUnstable law and order condition
0.120.100.150.120.10
33433
0.360.300.600.360.30
Total 1.00 3.20
CPM(COMPETITIVE PROFILE MATRIX)
Critical success factorweight
SITARA chemicals
ENGRO chemicals
ITTEHAD Chemicals
Rating Score
Rating Score Rating Score
Product quality 0.11 3 0.33 4 0.44 2 0.22Management 0.08 3 0.24 2 0.16 4 0.32Global expansion 0.10 3 0.30 2 0.20 4 0.40Financial Position 0.10 4 0.40 2 0.20 3 0.30Market share 0.11 4 0.44 2 0.22 3 0.33Advance technology 0.12 3 0.36 4 0.48 2 0.24Brand name 0.10 4 0.40 2 0.20 3 0.30Production capacity 0.10 3 0.30 4 0.40 2 0.20Organization structure 0.08 3 0.24 2 0.16 4 0.32Customer loyalty 0.10 3 0.30 4 0.40 2 0.20Total 1.00 3.31 2.86 2.83
STAGE # 3MATCHING STAGE
TOWS MATRIX
TOWSMATRIX
Strengths - S
1. Largest manufacture(caustic soda)
2. Largest Shareholder
3. Advance Technology
4. Plant Infrastructure
5. Strong Management
6. Strong Brand name
7. Financially Sound
Weakness – W
1. Need Sizable Market to Sustain
2. Lack of Operations in Abroad
3. Relying on Permanent Customers
Opportunities – O
1. Increase Production Capacity
2. Increase Product Line
3. Taking Advantage of Geographic position
4. Provide Online Customer Service & Ordering System
SO - strategies (S4, S5,S7,O1,O2)(Add new product line )& purchase land to build new plant) (S1,S2,S6,O3)(Enter in new market)
WO – strategies (W2,W3,O3) (Geographic expansion ) (W1,O1,O2)(Need to improve infrastructure)
Threats - T
1. Competitors
2. Economic Environment
3. Energy Crises
4. Threat of Stakeholders
5. Unstable Law & Order
ST – strategies(S1, S5,S6, T1,T4) (stable environment & Compete competitors by taking advantage of management & brand name )(S3,T3)(Install & update new technology)
WT – strategies
(W2,T1)(Launch products in other
geographical areas)
INTERPRETATION
Critical Region:“WO”
Managerial Decision:“Market development
Product development”
SPACE (STRATEGIC POSITION & ACTION
EVALUATION MATRIX)
Internal Strategic Position External Strategic position
Financial Strengths (FS) Environmental Stability (ES)
Return on InvestmentleverageWorking CapitalLiquidityCash flowPrice earning ratio
TotalAverage
+4+5+5 +4 +5 +4
+274.5
Technological changesRate of InflationPrice range of Competing productsCompetitive pressureRisk involved in businessDemand variability
TotalAverage
-2-4-3-2-3-5
-19-3.16
Competitive Advantage (CA) Industry Strength (IS)
Market ShareProduct QualityCustomer LoyaltyTechnological know-howControl over suppliers and distributors
TotalAverage
-1-2-3-2-3
-11-2.2
Growth PotentialProfit PotentialFinancial StabilityResource UtilizationCapacity utilizationTechnological know-how
TotalAverage
+5+5+4+5+4+5
+28+4.67
-6 -5 -4 -3 -2 -1 +1 +2 +3 +5 +6
+6
+5
+4
+3
+2
+1
-1
-2
-3
-4
-5
-6
AggressiveConservative
CompetitiveDefensive
ISCA
X-axis =CA + IS
= -2.2+(4.67)
= 2.47
Y-axis = FS + ES
= 4.5+(-3.16)
=1.34
FS
ES
INTERPRETATION
According to the space matrix score SITARA CHEMICAL falls in the “AGGRESSIVE quadrant” . Their strategies should be one of the following:
Vertical and horizontal integration Market penetration Market development Product development Diversification
IE (INTERNAL-EXTERNAL
MATRIX)
ISitara
Chemicals
ii iii
iv V Vi
vii viii ix
Strong 3.0 – 4.0
Average 2.0 – 2.99
Weak 1.0 – 1.992.03.04.0
IFE Total Weighted Score 3.09
1.0
2.0
3.0
Low
1.0 – 1.99
Medium
2.0 – 2.99
High
3.0 – 4.0
EFE T
OTA
L W
EIG
HTED
SC
OR
E
3.2
INTERPRETATION
Sitara Chemical falls in first region of IE matrix and there main focus will be on “GROW AND BUILD” and they will mainly focus on strategies which are:
Market Development Product Development
GRAND STRATEGY MATRIX
Quadrant II Quadrant I
Sitara Chemical
Quadrant III
Quadrant IV
Slow market growth
Rapid market growth
Str
on
g com
peti
tive
posit
ion
Weak c
om
peti
tive
posit
ion
INTERPRETATION
Sitara Chemical has rapid market growth and strong competitive position so it falls in first quadrant and the most suitable strategies for Sitara Chemical are:
Market Development Product Development
STAGE # 4DECISION STAGE
QSPM(QUANTITATIVE STRATEGIC
PLANNING MATRIX)
Key Internal Factors PRODUCT DEVELOPMENT
MARKET DEVELOPEMNT
Strengths Weight AS TAS AS TAS
Largets manufacture 0.12 3 0.36 4 0.48
Largest shareholder 0.11 3 0.33 4 0.44
Advance technology 0.13 4 0.52 3 0.39
Plant infrastructure 0.1 -- -- -- --
Strong management 0.09 2 0.18 3 0.27
Strong brand name 0.1 2 0.20 3 0.30
Financially sound 0.1 3 0.30 4 0.40
Weaknesses
Need sizeable market to sustain 0.1 2 0.20 3 0.30
Lack of operations in abroad 0.08 2 0.16 3 0.24
Relying on permanent customers 0.07 1 0.07 2 0.14
Total weight 1.00
Key External Factors PRODUCT DEVELOMENT
MARKET DEVELOMENT
Opportunities weight AS TAS AS TAS
Increase production capacity 0.11 3 0.33 4 0.44
Increase product line 0.08 2 0.16 1 0.08
Taking advantage of geographic position 0.13 2 0.26 3 0.39
Provide online customer service & ordering system 0.09 -- -- -- --
Threats
Competitors 0.12 3 0.36 4 0.48
Economic environment 0.1 1 0.10 2 0.20
Energy crises 0.15 3 0.45 2 0.30
Threat of stakeholders 0.12 3 0.36 2 0.24
Unstable law & order situation 0.1 -- -- -- --
Total weight 1.00
Sum Total Attractive Score 4.34 5.09
INTERPRETATION
According to the total attractive score of QSPM Sitara Chemical should go for
“MARKET DEVELOPMENT”
RECOMMENDATION
We did not found much discrepancies in the Strategy Analysis of Sitara Chemical industry they are performing pretty well and have strong strategic direction
According to our recommendation we suggest them that they could go for “Market Development” because there is opportunity for them to export their product in new markets
The reason behind the selection of this strategy is that they have strong management team including Human Resource, Finance, Marketing, Production & R & D Departments.
HRM plays very important role in all activities so Sitara Chemical industry focuses on its function and scope for the betterment in present and future.
There is another opportunity for Sitara Chemical industry that they have to make segment in their website through which they can provide online customer services in which customer can place order and provide Feedback as well this will help them to capture more customers throughout the world.
Cont. . . .
They can also increase their production capacity because they have proper infrastructure , advance technology & strong financial position and these all enable them to take advantage to increase the production capacity.
CONCLUSION
We have learnt a lot from this project because this project provides a real picture that how an organization performs Strategy Analysis and what are the factors that they considering most important while performing the analysis.
According to the current position of Sitara Chemical they have strong strategic direction, growing day by day and they have largest market share in industry so they should go for Market Development.
They continue to strive towards its goal of being the leader in a manufacturing of caustic soda & their presence in industry is a big threat for competitors.