(With Reference to National Foods)
The food and its allied products industry is considered Pakistan’s largest industry, and is believed to account for 27 percent of its value-added production. Trade sources estimate the sector's total value of production is over Rs.46 billion. Pakistan’s food industry produces cooking oils, hydrogenated vegetable oils, sugar, flour, dairy products such as milk, butter, yogurt, cheese and ice-cream, biscuits, breads and confectionery, fruit juices and fruit juice drinks, carbonated beverages, snack foods based on rice, potatoes, corn and pulses, processed chicken, jams, jellies, squashes, sauces, pickles masala, and some cereals, canned fruits. The fish, meat, fruit and vegetable sectors are underdeveloped partly for lack of adequate infrastructure, including storage and transportation facilities. Government policies and plans are expected to greatly increase the development of seafood industry. Masala sector in Pakistan is a thriving business with huge potential for development. With an annual growth of 25%, it offers great opportunities for local and international investors. Masala is an important ingredient of food in Pakistan; almost every household uses Masala in its food to make it delicious. The raw material for manufacturing the Masala is easily available locally so the transportation cost is comparatively manageable. Surprisingly, there are just few companies that are doing business in Pakistani market whereas there is immense capacity in the Masala market of Pakistan.
National Foods is the largest producer and manufacturer of Masala in Pakistan with an estimated 47% of market share. With a significant market share, it is the leader in producing and distribution of Masala throughout the country with a huge number of loyal customers. There are few other companies like Shan Masala, Habib Masala and some unorganized groups, selling Masala in local market. Shan Masala is considered a very close contender of National Masala with an estimated 37% market share.
National Masala has built strong reputation in the Pakistani households with its exceptional taste and ubiquitous distribution network. National Masala has a highly efficient management and hard working team of personnel. It has strong financial support. It is listed at KSE and enjoys an excellent relationship with stake holders.
The food industry in general and masala in particular is at an expanding position in Pakistani market so it is necessary to analyze its strategic position and also assess its future options.
The foods industry is classified as one of the most rapidly growing industries, which depends on the food loving nature of the people of this country. The main products of this industry are various but our focus is the masala sector. The marketing and manufacturing of products in this sector are mostly carried out through the ubiquitous channels to reach every shop and retail outlet of the country. The dominant traits can be summarized as follows:
• The Pakistani market comprises approximately 6 billion customers which is considered as a large market. Scope of competitive rivalry:
• Moderate local and minimal global competition
• Market Growth rate is at 20% to 25% per annum
• Shan Masala is the main rival along with house of Habib and few unorganized companies Distribution Channel:
• The industry is dominated by sales through the entire marketing channel Capital Requirement:
• Modest capital requirement.
National Foods has a market share of 47% and Shan Masala has 37% market share. So Shan Masala is a major competitor and poses real threat to the company.
Shan Masala started its operations in 1980 and launched it products in Karachi. In 1994...