1.

5) MARKET GROWTH: Market growth means an increase in the demand for a particular product or servic e over time [12]. Market growth depends on various things, especially on sales a nd consumers. If sales can be increased over time and potential customers are at tracted by the product, market growth increases rapidly. Increasing market growt h depends on tactful strategies. Almost all the sectors have to be successful un der high market growth. Although GDFL runs its business as social business, it s hould also keep in mind that without making profit and an increased market share , social business cannot generate necessary capital for further expansion. Growth strategies: Developing proper marketing strategies is crucial to an organ ization to adapt to changing market conditions based on organizations capabilitie s. It also helps organization to increase market share and revenue by reaching n ew customer segments and new market. It could be using current product to penetr ate market in other countries, or develop unrelated product to increase profit m argin when attempt to new market share. There are few strategies highly recommen ded such as Intensive, integration and diversification strategy which are useful and workable for organization to apply. For GDFL, some of the strategies of intensive growth and integrative growth have been used. Intensive strategy: It is used by organizations to improve market share and reve nue through market expansion and product improvement. It is a strategy of aggreg ation or expansion under which growth is achieved by expanding the scale of oper ation. This strategy involves expansion of firms product range and market. Three alternative strategies in this regard are as follows: Figure: [1] GDFL used market penetration, product development and market development strateg ies. Integration strategies: These allow a firm to gain control over distributors, su ppliers, and/or competitor. There are three types of integration strategies: for ward, backward and horizontal. It also used for organization which improve relat ionship and information flow with distribution and supplier. There are 3 types: 1. Forward integration 2. Backward integration 3. Horizontal integration GDFL used backward and forward integration. They also can use the strategy of ho rizontal integration when the market growth will be higher. Profitability of business: Cost Structure In line with its social mission, Grameen Danone aims to provide nu trition at a price that is affordable by low-income consumers. In order to keep the initial price point low, the yoghurt business is trying to minimize costs wh erever possible. Up to now, Grameen Danones cost structure has been characterized by a high proportion of indirect costs (34% in 2008 and 36% in 2009). According to the Deputy Managing Director (MD), a proportion of 25% (comprising 10% of co mmercial fixed costs, 10% marketing spend, and some royalty fees) would be a pro per benchmark. Among the direct costs, milk and packaging material have been the companys most expensive key resources in the past, but high distribution costs a dd to the companys direct costs [16] Revenue Streams Grameen Danones yoghurt business is confined to so-called transact ion revenues. For each cup, customers pay a fixed price. The quantity of yoghurt s a customer purchases has no price impact. Reflecting its different customer se gments and channels, Grameen Danone has lately generated revenues from the produ ct portfolio. Since September 2010, the portfolio has been extended by a new pou ch product priced at 5 Taka for 40 gram. The companys Advisor to the Board expect s that Grameen Danone could realize a positive gross margin of 25% in the long r un. Keeping indirect costs low, this might allow for a net margin of 2-3%. In co mparison it is noticed that a conventional Danone business strives for an averag e gross margin of 40% and a net margin of 15%. [16]

Previous Performance: After having incurred operating losses of 16.4 million Taka in 2007 (US$ 223,896) and 22.8 million Taka in 2008 (US$ 311,270), the companys operating loss in 2009 was 32.5 million Taka (US$ 443,696). By March 2011 Grameen and Danone have inve sted around 175 million Taka (i.e., more than US$ 2.3 million), covering initial construction costs as well as previous losses. According to the Head of Danone Communities, this amount does not account for Danone resources invested in R&D o r direct subsidies amounting to more than 1.9 million Euros (i.e., almost US$ 2. 7 million). Around 70% of Grameen Danones authorized share capital (i.e., 250 mil lion Taka or about US$ 3.4 million) have been spent so far. Given the companys pr evious losses and additional investments (e.g., for the construction of its seco nd plant), neither Grameen nor Danone executives currently have the heart to for ecast when exactly their company might have generated enough surplus to pay back the initial investment. The Head of Danone Communities is acting on the assumpt ion that Grameen Danone will require at least one more plant up and running befo re thinking of any repayment. The overall trend is however positive. Monthly sales grew in the course of 2009, and in February 2010 the company surpassed the magic production figure of 100 to ns per month (i.e., around 85% of the plants total production capacity or rather 1 .5 million cups). Coming close to the level needed to meet all operational costs and generate a surplus to cover fixed costs was an important milestone for Gram een Danone. According to the companys Advisor to the Board, this positive trend w as corroborated by a first positive gross margin in a higher one-digit range in th e fourth quarter of 2010. Two new fermentation tanks just increased the companys production capacity from 100 to 200 tons per month, and the board decided to sta rt production in a second factory near Dhaka in the course of 2011. While furthe r fine-tuning its business model, Grameen Danones management expects to break eve n in 2012 or 2013 (i.e., reaching the moment in which revenues will cover the co mpanys expenses) [7] After some distressful period, when Shokti doi revised its marketing strategy, d istribution channel and value delivery process and thus new use of product incre ased and this strategy falls under market penetration strategy in intensive grow th. They can also increase the portion of sales by stating that now Shokti+ is more d elicious and nutritious, you can have nutrition with verities of taste so in Eid festival or other ceremonies more customers can be attracted in existing market.