rahimafrooz-management-porters five forces -

Presentation on Managerial Strategy of Rahimafrooz Group 7Submitted to Mohammed Monjarul Islam Chowdhury (MHW)

Team Members

• Tausif Akib Khan 1510316030 • Tanvir Chowdury 1510866030 • Md. Toukiul Alam Khan 1520645633 • Susmita Sengupta 1512156030 • Shahriar Hossain 1430906630 • Sharif Uddin Fahim 1512153030

Introduction

• Rahimafrooz is one of the respected and reputed business houses in Bangladesh. Rahimafrooz has endured turbulences of the last 62 years and has been able to transform itself from a small trading company into a leading diversified business house.

• Rahimafrooz operates in four broad segments. Storage Power, Automotive & Electronics, Energy and Retail

Mission & Vision Rahimafrooz has become one of the largest groups in Bangladesh. Being an enterprising Group of Taka 2000 corer by the year 2017 with a diversified business portfolio focused on dynamic growth, excellence, innovation, customer delight in enriching the world.

To be the most admired and trusted organization through excelling in everything Rahimafrooz is tend to do, following ethical business practices and adding value to stakeholders.

Objectives

• Rahimafrooz is committed to ensuring the best in quality standards and living the Group’s five core values – Integrity, Excellence, Customer Delight, Innovation and Inspiring People.

• They are also committed to play a leading role in driving growth, prosperity, ethical values and social responsibility.

• It continues to serve the customers through unparalleled quality excellence and service superiority, taking the initiative with new programs that serve as models for the industry.

SWOT ANALYSIS

Strength • Rahimafrooz has strong brand image and brand recognition

• Strong local distribution network that ensures the proper supply

• Wide range of product to satisfy a large number of consumers range

• Efficient workforce to ensure the best quality

• Production capacity is very high

• It is ISO 9001 & 14001 certified company.

• Its local market leadership with 54% SOM

• It has own set up in India & Nepal

• Competitive price throughout the international arena.

Weakness • Lack of own brand image in export markets • Lack promotional activities

• Product outlook is not up to the mark

• Lack of control over primary raw material (lead)

• Absence of a global brand and Inconsistent product quality

• Reduced battery life: ignore consumer preferences

• Inappropriate warranty management for local and Indian market

Opportunity • Rahimafrooz battery fame is spreading rapidly throughout the Global Market

• The Battery market is growing by 10%

• Duty Free access in countries like Thailand, China, Australia, Canada

• In Dubai Rahimafrooz has got the facility to set up a sales office and also re-export

• Expanded there business in Japan

• It can arrange treaty between two or more countries to establish a free trade area

• Rahimafrooz can merge or acquiesce with other companies overseas for production facilities

Threat • Customers have great concerns about products quality, which

emphasize the cost.

• Having Competitors in the market; Such as Navana BTL, Hamko BTL

• The uplift of foreign currency is another problem for Rahimafrooz

• The currency uplifts the prices of the raw materials increases

• Some legal Procedures while purchasing raw materials

Porters Five Forces Analysis

Threats of New Entrants

•It means the ease or difficulty with which new competitors can enter an industry. This force depends on two factors

- Initial Investment Requirement - Growth Rate of Industry

Factor: Initial Investment Requirement

•The initial cost of entering into this industry is $1,000,000-10,000,000. It varies according to the production capabilities

•Also it requires Skilled Man Power, Technical Support Team, Space for manufacturing, Legal procedures and Government Policies.

1999 2005 2010 20150

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Initial Investment

Initial Investment

Factor: Growth Rate of Industry

•the growth rate is much higher in this sector.

• Annually about 2.8 million pieces of batteries are used by different sectors in the country with its current growth rate of 10 percent.

2000 2005 2010 20150123456789

10

Growth Rate %

Growth Rate %

Force Conclusion

Factors of Force Impact of Factors

Initial Investment Requirement

High

Growth Rate of Industry High

• Therefore, the Threat of New Entrants – High + High = Low

Bargaining Power of Buyers

•The bargaining power of customers determines how much customers can impose pressure on margins and volumes. This force depends on two factors.

- Number of buyers - Number of Sellers

Factor: Number of Buyers

● Annually 420,000 pieces battery are used by motor vehicles, 411,000 pieces by IPS and UPS users, 150,000 pieces by heavy equipment of the industries, 1,050,000 pieces by electric vehicles and electric-rickshaw, and 700,000 pieces by the solar system

● About 2.8 million batteries are used by huge number of people. So the number of buyers is high.

Battery Users

motor vehicles usersIPS and UPS users Heavy Equpiment users Electric Rikshaw and vehicles users Solar Panel users

Factor: Number of Sellers • In this battery industry of Bangladesh the sellers are,

• Rahimafrooz Battery LTD • Panna battery LTD • General battery company LTD • Haque and Company dry cell LTD• Navan Battery LTD• Hamko Battery Company LTD

Though Rahimafrooz is holding 75 percent of Battery market share. Comparing to the buyers, the number of sellers in this industry is comparatively low.

Market Share

RahimafroozNavaa HamkoRest of Them

Force Conclusion

Factors of Force Impact of Factors

Number of Buyers HighNumber of Suppliers Low

• Therefore, the Bargaining Power of Buyers – High + Low = Low

Bargaing Power of Suppliers

•The bargaining power of suppliers determines the intensity of competition in an industry. This force depends on two factors:

- Number of buyers -Number of Sellers

Factor: Number of Buyers • In the battery industry here the buyers are,

- Rahimafrooz Battery LTD - Panna battery LTD - General battery company LTD - Haque and Company dry cell LTD- Navan Battery LTD- Hamko Battery Company LTD

They buy the raw materials and equipment from various suppliers. Comparing the buyers to the suppliers the number of buyers are low.

Factor: Number of Suppliers • To manufacture batteries the companies need raw

materials like led, acid and many other equipment. Generally they buy this from either local or foreign suppliers.

• The suppliers are high in number these requirements are produced in a large number by many firms as these elements are easily accessible.

• Rahimafrooz buy the raw materials from Australian companies.

Force Conclusion

Therefore, the Bargaining Power of Suppliers – Low+High = Low

Factors of Force Impact of Factors

Number of Buyers Low

Number of Suppliers High

Threat of Substitutes

• The existence of substitute product offers customers different choices and allows them options within the industry and beyond it to products that may fulfill a similar need. This force depends on two factors:

- Switching Cost - Brand Loyalty  

Factor: Swithching Cost

•Rahimafroz has a competitive advantage against his competitors because of its low price. So the Swithching Cost will be high.

•On the other hand the substitute product for this sector will be motor generator, manual motors which run on oil and gases.

•So the switching cost will be much higher.

Factor: Brand Loyalty

•Rahimafrooz is in the Battery market for more than 50 years. And they have gained a large number of market share.

•They’re providing products to the customers from a long period of time, thus they’ve made good bond with their customers.

•That’s why the brand loyalty is much higher.

Force Conclusion

Factors of Force Impact of Factors

Switching Cost High

Brand Loyalty High

Therefore, the Threat of Substitutes – High+High = Low

Competitive Rivalry • It means the competition between the similar

companies or firms. It basically show how competitive the industry is and how competitors compete with each other. This force depends two factors.

- Number of Competitors - Growth Rate

Factor: Number of Competitors

• In the battery industry of Bangladesh, apart from Rahimafrooz the competitors are,

- Navana Battery LTD - Hamko Battery LTD - Panna Battery LTD - General battery company LTD - Haque and Company dry cell LTD

Though Rahimafrooz holds 75 percent of the market share these are the major competitors in this industry.

Factor: Growth Rate

•Rahimafrooz is holding the maximum number of market share in the battery industry of Bangladesh. Though it had a steady growth from 1999 to 2010. Currently the market growth rate is 10%.

•Which is higher than its competitors.

Pann

a BTL

Navan

a BTL

Hamko

BTL

Rahim

afroo

z BTL

0123456789

10

Growth Rate

Growth Rate

Force Conclusion

Factors of Force Impact of Factors

Number of Competitors Low

Growth Rate High

• Therefore, the Competitive Rivalry – Low + High = High

Forces Factors Factors Comments

Factors Impact on forces

ForceConclusion

Summary

Threat of new entrants

Initial investment requirement

Growth Rate

High

High

Low

HighLow

Bargaining power of buyers

Number of buyers

Number of sellers

High

Low

Low

Low Low

Bargaining power of suppliers

Number of buyers

Number of sellers

Low

High

Low

Low Low

Four of the forces are low and one of them is High. So, we can conclude by saying that investment in battery sector is lucrative

Threat of substitutes

Switching Cost

Brand Loyalty

High

High

Low

LowLow

Competitive Rivalry

Number of Competitors

Growth Rate

Low

High

High

HighHigh

Conclusion

So this is it from us, Hope you’ve enjoyed our presentation.

Thank You

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