Value chain analysis:

Our selected brand is Shezan juices, to analyze the specific activities through which firms can

create a competitive advantage; it is useful to model the firm as a chain of value creating

activities. Michael porter identified a set of interrelated generic activities common to a wide

range of firms. The resulting model is known as the value chain and is depicted below.

Primary activities

Inbound logistics :

Major raw materials of Shezan juices are different pulps of fruits. The company is being getting

there raw material from local market in the Pakistan. All the ingredients used in while making

the juices such as fresh fruit nectar of mango, apple, pineapple, orange, included their fresh

juices are all purchased from the local market. The Shezan has the advantage of the factory

location. Because most of the fruits are cultivated in surroundings areas of the factory that the

company has the easy excess of raw materials and it also reduces the cost. Not all the raw

material but most of the material is purchased from the same surrounding.

Operation:

PRODUCTION PROCESS

Fruit juice production procedures involved in fruit juice manufacturing depending on

What type of the juice the unit is going to make. For example that its going to make syrups,

juices or the pulps nectars.

Inbound logistics

Operation Outbound logistics

Marketing Service

Fruit Juice - Production Process Flow

Production of fruit juices is a standardized process and initial preparatory processes for all fruits

will be similar .The preparation process of juices involves the following steps:-

Boiling of fruit

Storage in Tank

Ingredients mixing

Syrup Storage in Tank

Juice Preparation

Juice Storage Tank

Filling and Packaging

Cooling and Storage

Packing and labeling then storage:

After performing the up given operations the juices be then packed in the quantities demanded

by the market. Consumer packs as like 200ml and 1000ml tetra pack and then label the juices.

After the packaging the product is set on the pallets of different sizes and then its stores in cool

and dry store.

Out bound logistic:

Shezan company establish their sale and distributive offices in big cities like Karachi, Lahore,

Islamabad, Faisal bad, Gujranwala etc. and also hire suitable distributors on agreed profit

margins.

Services:

The company has given its contact details as a help line number over the internet as well as on

the package which means that if customers feel any problem then they can contact them.

Marketing and sale :

Nestle company launch their sale promotion scheme after six months and their last sale

promotion was “ ‘’. This was for a retail shop who put the nestle juices billboard on

their shop or sale reception table then they can win attractive prizes. By this operation they can

save all the advertisement expenses which they have to pay to the retailer or owner of the

shop.

Nestle company use advertisement channels when company have to launch new brand or

improvement in previous brand. So company prefer to use Jeo, ARY one world, PTV home, I

vision and news papers. They contract with the advertisement channels for 1 to 2 months and

repeat 2 or 3 time in a day.

They hire suitable distributors in a country at agreed profit margins who bought juices in bulk

form from the distributive channels and then sell to the retailer who final sale to the end

consumers.

Nestle company has efficient market management who’s main objectives for marketing their

product are

Strong customer relationship

Identify need of customer like new taste new fruit item

Maintain market leadership by maintaining the pure quality

Provide juices which are fit for human body

Stop brand selling don’t reduce quality

Quality is our grantee.

PEST analysis:

Political forces

The government is imposing mare and heavy taxes on the industry not only on the industry and

the on everything so it is now effecting the company growth. The taxes impose is from

government side and it varies from industry to industry. Juices have no tax except sales tax. L

Government announces that the minimum salary of the labor should be 7000.and the company

is following that laws and directions of the company.

Political instability

The government stability also plays a great role for any industry. In Pakistan government face

lot of difficulty from the side of terrorism and also its activity that badly effect environment of

the country which is totally very upset. Recently in Punjab instability of government creates lot

of problem for the industry like shortage of electricity that badly affects the industry

operational process. Nestle juices have not much affect this condition but in future it may be

face some difficulty for operating.

Economic force:

The going stage of the country economy there is down strom in the economy.Now in the going

stages of the company the inflation rate is increasing so that the rates are increases of the

product in the near past due to the inflation

Social factor

Today people are more health conscious so identifying this need of the people they are also

producing health conscious juices with more vitamins.

Technological forces

The company is equipped with the latest and the unique technologies .and the quality standards of the companies are up to the satndads.this is the evidence that company launces the varites in their juices product line this is all due to the new technological development in the company.

Productivity improvement through automation

Automation don’t matter a lot but to some extent it contribute towards productivity and

improvement. Imported pulp is filled in machines for processing after the final form of juice it is

packed in 250 and 1 liter packing.

Market analysis

Currently in Pakistan, there are 24 fruit juice/pulp processing units and a number of small units in the informal sector are working. The present installed capacity is estimated around 400,000 metric tons per annum with a demand for juices growing at a combined annual growth rate of 27%. The fruit juice industry reported sales of 8.526 billion Rupees in year 2008.

The market of juices is growing because the consumption of juices increases every year

and expected it increase continually due people change the life style and more health

conscious. They prefer juices on other soft drink.

The market share of the nestle juices is 35%. Which mean 900,000 litters in a month and

30,000 litters in a day.

Shezan juices name is TWIST and ALL PURE so the name shows that the purity is

gurrentee.now the consumer has many option while choosing the product or the brand.

So if they lose their quality then they lose their sale because these don’t operate on the

given image.

And increase in rates of energy suuplies due to which increase in the price of raw

material and per piece cost so it also influence the level of demand. It is also due to

increase in cost the sale price also increase and due to price war in a market of Pakistan

demand level is effected.

increase in tax there will be increased cost price which also effect in decreased in

demand. Increase in inflation rate in Pakistan then this also effect in decrease in demand

level.

Shezan juices is over all are at growing stage of product life cycle.but the All PURE of the

Shezan is in introductory satge.

The above all shows that the market is growing day by day by increasing the awearness

level of the consumer.as sated earlier the consumers are noe more health conscious.

Competitors’ analysis:

In order to evaluate the competitive position we have to take a look on the competitors of

“Shezan juices” in JUICE CATEGORY.

Competitors in market

Nestle

Haleeb

Nurpur

Country

Fraz

Nestle is the main competitor of “Shezan juices”.

Nestle:

History of Nestle juices

A well-known brand, FROST was introduced in 1986 and has the largest share of the

countrywide market. Positioned as a cold drink and alternate to cola drinks, its strength lies in

the convenience attached to its usage.

NESTLE JUICES

Encouraged by the consumer response to NESTLE ORANGE JUICE that was launched in 1996,

the category of NESTLE juices was expanded with the introduction of Mango-Orange and

Mango flavors in the year 2000. This has further strengthened the position of Nestle as leader

in the value added/premium drinks market. Consumer response to these new flavors has been

very upbeat and is expected to gain further. Now nestle company have launch following juice

brand in Pakistan.

Swot analysis of nestle:

SWOT analysis of Shezan: Strengths:

1. Shezan has its own fruit forms.due to which the raw material cost is reduced as compare to

the other competitors.

2. Shezan juices operate in market earlier than nestle juices.

3. Better knowing the culture of country.

4. Shezan juices have best distribution channel in all over the Pakistan.

5. Offer good quality products especially nectars juices in market.

6. Shezan juices have good positioning in customer mind.

Weakness

1. Less product awareness in customer mind.

2. Rising manufacture cost

3. Inadequate human resource

Opportunities

1. Shezan juices have great perception value in minds of customers while as Pakistan

organization.

2. Increase juices market very fast.

3. The concentric diversification in different juices products.

4. Backward integration can use in juice products of Company.

5. Decreasing economy condition.

Threats

1. There is strong competition in juices market.

2. Different strategies adopted by competitors Nestle in juices products

3. New product advancement by different competitors.

4. Increase inflation rate (23.3% 2008)

5. Rising labors coast.

Porter five forces model

Michael Potter's five forces framework can be used to determine whether the industry is

attractive enough to sustain a small or medium size enterprise. The five forces of Entry, Rivalry,

Substitutes, Buyers and Suppliers jointly determine the intensity of competition and profit

potential for a small and medium size firm in a given industry or market sector. In analyzing

each market force, the question is whether it is sufficiently strong to reduce or eliminate

industry profits. The focus at this stage is at the industry level because industry dynamics and

profits of necessity dictate profits of other firms that enter the industry. (by Google search)

Threat of new entry:

The threat of new entrance means when any other company that is not operate in that product

category but operate in the other product market. Here is the great threat of new company in

the market and the new entery will raise the threat of competition. In juices market there is

great threat of new entry because in last few years many new juices enter in market. There is

no major barrier for local juices to enter in market. So many local juices enter in market like

FRAZ, COUNTRY. There is some barrier for stop the new entrance

Economies of Scale

Product Differentiation

Capital Requirements

Switching Costs

Access to Distribution Channels

Cost Disadvantages Independent of Scale

Government Policy

If there is a appropriate government policy regarding this company and there will be

appropriates channels of distribution and capital requirements for the business is high then no

company want to enter in that market because they know there is no any opportunity for it.

Bargaining power of supplier

The company needs raw material, labors, component and other supplies. These requirement

leads to buyers-suppliers relationships between industry and the suppliers. Suppliers, if

powerful can exert an influence on the producing industry, such as selling raw materials at high

price to capture some of the industry profits. Suppliers have great bargaining power if the

company can not produces its raw materials or other ingredients. But yhe shezan has this

edged that they are there suppliers itself.

Buyer Power

Bargaining power of customer is one of the important forces in the porter five forces. In the

field of juices customer has a low bargaining power because they purchase a single unit and

have not in that situation that they can negotiate with seller on price matter. But the bargaining

power of those buyers whose buy in bulk have great and they want to set the price on their

concern.

Some how the bying power is increases and some how it is decreasing.the rich becoming more

richers and pooer becoming more poor this thing will affect much on the companies.

Threats of substitutes

Here are many competitors are in the market and there is looking no subsititues of the

juices.here is some how the threats of the substitutes like cola drinks and energy drinks but the

prices are much higher then the juices.so here is a little bil threart of the substitutes.

Competitive Rivalry

The big factor determining the strength of rivalry is how actively and aggressively are

competitors employing the various weapons of competition in their field. In the market rival

create a great threat. Many companies introduce juices in market and increase threat. Many

local company enter in market, there is also great threat for establish company. Some

carbonated company introduces juices in market, it also create threat for the company.

Analyze buyer behavior

Initiate buying behavior

There are two stimuli that insist the consumer to purchase the product that is

1) Consumer internal stimuli

2) Consumer external stimuli

Customer external stimuli

There are following types of people group include in the internal stimuli

FamilyReference group

So children, Individual and member in a group are the person who may initiate the buying

process. Usually young generation and families initiate the buying process.

Customer internal stimuli

A person also insist itself to drink juices due to its internal desire to drink the juice. It is called

internal stimuli

Sometimes if there is group of same age people like young generation friends group then any of

one or more then two person can insist to drink juices.

Factors in initiates the purchase.

There are the following factors that insist the person to buy the juices. These are

Thirst

Taste & Flavor

Fit for body

Most persons drink the juices due to taste and different fruity flavors. Some people like co2

water but some people like without co2 juices. So many people like to drink soft juices like

nestle fruit juices due to natural taste and flavor

Similarly now a days people are more health conscious so due to fruity mixture they desired to

full fill their esteem needs and so they drink that juices.

Evaluate the alternative product

Customer evaluates the product by considering the brand company and their ingredients and

packing. They also check the taste, flavor and quality. If the flavor and ingredients are satisfied

for the customer and better then the competitor then customer can insist itself to buy that

juice, otherwise customer may can choose the competitor’s juices.

Who take final decision

Usually family main members take the final decision to purchase juices. But a single person also

can take that decision according to his or her desire.

Mostly when it is purchased in the bulk then the family main members make the final decisions

and the whole family uses the product.generally of the small amount of juic.the individual

makes the final decisions.

Marketing Segmentation

We are going to segment juice market on the basis of need. There are following need which we

came to know that people like to drink during the following stages:

For Travelling and occasional

Usually People like to drink during travelling. Because they have to carry single or small packing

and juices are the best for that. Juice provide them suitable taste and flavour.

For domestic use

Nestle distributes that volume of juice for large family use which may be used in any events and

occasions like use with breakfast and dinner etc or serving the guests etc.

Targeting

200ml For Travelling and occasional

1000ml For domestic use

Nestle is first company who launch the these two packing in juices who provide the satisfaction

more as compare to competitors but now competitors also move this segment and according to

that we are going to launch segment of food energy drink.

Identifying new segments

In Pakistan our segmentation strategy are so strong and the result all the established areas

have availability of our juices and our target goals achieve easily but according to the

competitors are moving our segmentation we will launch new segment of food energy drink for

the sportsmen and professional working people.