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STRATEGIC MANAGEMENT MITCHELL’S FRUIT FARMS LTD.

INTRODUCTION OF MITCHELL'S FRUIT FARMS


Mitchell’s is playing a vital role in the Pakistan’s economy. For the last two years,
the company is receiving The Top 25 Companies Award. Mitchell’s has been in
the market long before independence and still enjoys a good repute. This is the
evidence of the company’s dedication, trust and commitment to provide the best
quality products in the market. Despite all the odds, Mitchell’s is still the Market
Leader in Squashes, Preserves, Sauces and Countlines.
Many Multi-National and National Companies have entered the competition.
Therefore, the quantity-wise difference between the Mitchell’s and its close
competitor has squeezed.
Mitchell’s growing and processing facilities are situated in Renala Khurd, Distt.
Okara. The head office of the company is situated in Lahore for ensuring the
effective distribution and marketing..

DEPARTMENTS OF MITCHELL’S FRUIT FARMS


LIMITED
Human Resource Department
Commercial Department
System Department
Finance Department
Production Department
Planning and Stores Department
Technical Services Department
Quality Control Department
Marketing Department

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BUSINESS UNITS OF MITCHELL'S


The business operations of the Mitchell's can be divided into following strategic
business units:

MAJOR BUSINESSES

GROCERIES BUSINESS

CONFECTIONERIES BUSINESS

CHOCOLATES BUSINESS

GROCERIES BUSINESS
We choose the groceries business of Mitchell's fruit farms limited for further study
and analysis..

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PRODUCTS OF GROCERIES BUSINESS


In groceries business, the Mitchell's has many product lines and offering depths to
its customers. The brand names of the product are given in the table along with
their respective weights and prices.

PRODUCT LINE Weight BRANDS Prices Rs.

730 ml Lemon Squash Rs. 58

730 ml Lemon Barley Rs.58

730 ml Mango Squash Rs.58

730 ml Orange Squash Rs 58

730 ml Mix Fruit Squash Rs. 58

730 ml Guava Squash Rs. 58


SQUASHES

730 ml Lime Cordial Rs.70

730 ml Rose’s Lime Juice Cordial Rs.70

260 ml Lemon Juice Rs.40

730 ml Banana Syrup Rs.65

730 ml Pineapple Syrup Rs.65

730 ml Pomegranate Syrup Rs.65

730 ml Sandal Syrup Rs.65

730 ml Dilruba Syrup Rs.65

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450 gm Apricot Jam Rs.48

450 gm Golden Apple Jam Rs.48

450 gm Mango Jam Rs.48


JAMS

450 gm Mixed Fruit Jam Rs.48

450 gm Plum Jam Rs.48

450 gm Blackcurrant Jam Rs.65

450 gm Strawberry Jam Rs.65

450 gm Apple Jelly Rs.48

450 gm Guava Jelly Rs.48


JELLIES

450 gm Pineapple Jelly Rs.48

450 gm Strawberry Jelly Rs.48

450 gm Raspberry Jelly Rs.48

450 gm Blackcurrant Jelly Rs.48

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MARMALADES
450 gm Golden Mist Marmalade Rs.48

450 gm Rose’s Lime Marmalade Rs.48

450 gm Olde English Marmalade Rs.48

450 gm Diet Golden Apple Jam Rs.65


PRESERVES

450 gm Deit Golden Mist Marmalade Rs.65


DIET

450 gm Diet Mixed Fruit Jam Rs.65

450 gm Diet Strawberry Jam Rs.65


VINEGARS

260 ml Fruit Vinegar Rs.18

710 ml Fruit Vinegar Rs.37

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300 gm Tomato Ketchup Rs.32

825 gm Tomato Kethup Rs.63

300 gm Chili Garlic Sauce Rs.35

825 gm Chili Garlic Sauce Rs.69


SAUCES

300 gm Chili Ginger Sauce Rs.35

300 gm Chili Sauce Rs.33

300 gm Imlee Sauce Rs.35

825 gm Imlee Sauce Rs.69

370 gm Mexican Salsa Rs.29

450 gm Mango Chutney Rs.38

370 gm Cooking Paste Rs.42

340 gm Mango Kasaundi Rs.42

340 gm Mango Pickle Rs.35

340 gm Mixed Pickle Rs.35


PICKLES

340 gm Chili & Lime Pickle Rs.35

340 gm Lime Pickle Rs.35

340 gm Garlic Pickle Rs.45

340 gm Tomato Kasaundi Rs.30

1 kg Mango Pickle Rs.75

1 kg Mixed Pickle Rs.75

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STRATEGIC MANAGEMENT MITCHELL’S FRUIT FARMS LTD.

STRATEGIC INTENTION
VISION
“To be competitive in the growing market as the quality managed company”.

MISSION
1. To be a Leader in the markets we serve by providing quality products and
efficient services to our consumers while learning from their feedback to set
even higher standards for our products.
2. To be a Company that continuously enhances its superior technological
competence to provide innovative solutions and superior products as per
requirement of the market place.
3. To be a Company that attracts and retains outstanding people by creating a
culture that fosters openness and innovation, promotes individual growth, and
rewards initiative and performance.
4. To be a Company which combines its people, technology, management
systems, and market opportunities to achieve profitable growth while providing
fair returns to its investors.
5. To be a Company that endeavors to set the highest standards in corporate
ethics in serving society.

CORPORATE PHILOSOPHY
The success of Mitchell’s brands is the result of the corporate emphasis laid upon
Quality Control reinforced by Research & Development. The R & D section
prepares new recipes and formulations whereas the QC section ensures selection

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of the finest fruits and error free processing and packaging, thus ensuring that all
products live up to the consumers’ high expectations.
Human Resource is also of the pivotal importance for the Management and
employee skills are constantly being updated through training courses and study
tours both at home and abroad.

QUALITY POLICY
“We, at MITCHELL’S Fruit Farms Limited, are committed to produce best
quality products meeting our customers’ requirements at competitive prices,
strengthening our position as a Quality Managed Company. To meet this
obligation, the company will continue:
ü Updating of employee skills by training.
ü Acquisition of new technology.
ü Re-evaluation of its quality control and quality assurance systems.”

GOALS OF MITCHELL'S FRUIT FARMS LIMITED


1. To provide such human resources that will helpful for run the operations of
the company in effective and efficient manner, and look after the benefits
and interests of personnel of the company so that they can become more
productive for the company.
2. Objective of the System Department of the company is to computerize the
business operations of the MITCHELL’S Fruit Farms Limited.

3. The objective of the Finance Department is to arrange the finance for the
business operations from various sources, control the activities that are
related with the finance, maintain and update the company’s accounts.
4. The objective of the Production Department is to produce quality goods at
minimum cost by utilizing the company’s resources in an efficient manner.

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5. To ensure hygiene, and arrangements of all materials in stores and


successful execution of orders.
6. To ensure that all the products, make by MITCHELL’S Fruit Farms
Limited are of standard quality by inspection and testing of incoming
material, in-process and outgoing products.
7. The Marketing Department is responsible for planning and developing
products and executing their sales at an affordable price through
promotional activities.

PROBLEM STATEMENT
Apart from the macro, there are few microenvironment problems. These include:
1. Lack of long-term & short term planning.
2. Determination of future goals.
3. Product availability.
There is not formal planning for the schedules of productions and for achieving
the objectives of the Mitchell's. Whenever any specific raw material is needed, the
suppliers of the company are bound to provide desired raw material within
specified time. Sometimes, the production operation has to stop because of
unavailability of raw material. But this happens rarely. In the most cases, the
suppliers who give much value to Mitchell's provide the raw materials in time. But
commercial department has to face many problems and confusions just because of
this careless attitude of the production, planning & stores department. They give
very less time to suppliers and commercial department for procurement purpose.
The same time of problem is facing in the determination of future goals and
objectives. This is the resultant of above mentioned problem. Because this
problem is not only restricted to production, planning & stores department, this is
occupying the whole corporation.

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When we compare Mitchell's with its competitors, the product availability is very
poor in case of groceries products. Retailers have fewer profit margins in the
Mitchell's. The promotional activities of Mitchell's are also poor than competitors.
So availability of products is a dilemma for the company.

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SITUATION ANALYSIS
PEST ANALYSIS
PEST analysis is used to assess what environmental factors are affecting the
organization, which of them are most important and how they will effect in next
years. It is an indicator of political, economical, social and technological
influences on organization. The analysis of Mitchell’s is as under:

POLITICAL AND LEGAL FACTORS


INDUSTRIAL LAWS
Industrial laws regarding unions have no impact upon the Mitchell’s because there
is already an independent labor union and officers association in the organization.
The company considers these laws in their decision making concerning wage
rates, bonuses, and benefits of the employees.

FOREIGN TRADE
This factor is very much important for the Mitchell's fruit farms limited. It is
because the Mitchell’s is importing many raw material items from different
countries of the world. These items include cocoa powder, cocoa butter, lecithin,
tin, aluminum foil, pectin, metal caps, lemon concentrate, hydrogenated palm
kernels and pineapple concentrate. The major importing countries are Philippine,
Germany, china, Indonesia and Malaysia. Most of the foreign suppliers are
working with Mitchell's from last many years. And there are collaborative
relationships between Mitchell's and foreign suppliers.
The Government doesn’t provide any support to import these raw materials and
any relaxation in import duty upon the imported raw materials. So if Government
bring any change in its foreign policy, then it will be very much important to cope
with that.

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ENVIRONMENTAL PROTECTION LAWS


Although the laws regarding environment are not very sophisticated in Pakistan
but even if they become so, they will not be hampering for Mitchell's fruit farms
limited, because in Mitchell's, there is very sophisticated system for the drainage
of the wastes. In the wastes, there is not any such item that may be harmful for
the environment.

TAXATION POLICY
The Mitchell's fruit farms is a public limited company. The company is paying all
sorts of taxes that are due to the Mitchell's. As the honesty is the dominant value
of the company, all the payments to government are made fairly and honestly.

EMPLOYMENT AND GOVERNMENT STABILITY


Employment is not a matter of high concern for the organization because it is
already following all the labor laws. But recently the Government increases the
wages of the employees but Mitchell's has not affected by that, because the
minimum wage limit in Mitchell's is Rs. 3000 that is high from the minimum wage
limit of the government of Pakistan..

ECONOMIC FACTORS
Among the many of economic factors some are more important for Mitchell’s; the
detail of these factors is in following:

INTEREST RATES
Interest rates increase and decrease has significant impact upon the financial
performance of the Mitchell's, because the company has take loans from the banks.
It is also noticeable that the company takes the long term loans from the banks on
the regular basis. So, if in the future the interest rates increase, it will be
unfavorable for the Mitchell's. But such increase is not expected in near future.

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INFLATION
In the short run, the effects of inflation are minimal on the performance of the
Mitchell's. But if we take it in longer perspective the inflation in the country will
increase the cost of production, which will increase the sale price. And at high
sale price the product will become in-competitive in the international market as the
company is involved in the export. So the pan of export will be adversely affected
by the inflation.

DISPOSABLE INCOME
Within the country the demand will be affected if the disposable income will be
reduced. There are lot many substitutes of the groceries products of the company.
But other than its direct use, these are also used in bakery and confectionery items
and so many other foods whose demand is dependent on disposable. So any
decrease in disposable income of the consumers will also be affecting Mitchell's
fruit farms negatively.

SOCIO-CULTURAL FACTORS
Socio cultural factors like demographics; income distribution, life style etc. can
also affect the company in different ways. Let’s see which of them are more
concerned to Mitchell's fruit farms limited.

LIFE STYLE CHANGES


The consumption of jams, jellies, marmalades, squashes, sauces, pickles and
squashes is very much related with the life styles of people. Now people, all
around the world, are becoming more and more health conscious. They are well
aware that a high consumption of heavy foods will increase the cholesterol, which
leads to heart disease. That is why, a significant change in the consumption of
foods is being observed in last many months. As the growth rate of fast food
industry is spectacular in the country. That is most favorable for the Mitchell's. it

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is because more consumption of fast foods will increase the demand of Mitchell's
products.

LEVEL OF EDUCATION
Level of education is directly related with awareness and health consciousness. In
countries where education rate is high the people more like the nutritious products.
In Pakistan, as well as in foreign markets the rate of literary is increasing which
will effect the organization positively. High level of literacy will lead to high
level of nutritious products consumption and people started switch towards the
products that are more favorable for their health and fitness.

TECHNOLOGICAL FACTORS
Technology in food industry is very important for the maximum output, product
standardization and hygienic process of production. The technological factors,
which are more concerned with Mitchell’s, are as under:

GOVERNMENT SPENDING ON RESEARCH


Usually in order to support some industry and improve economy, government
allocates some fund to R & D. Unfortunately our government doesn’t have any
money for R & D. Due to this non-serious behavior of government this sector
along with others, is suffering very much. There is more need of R&D work in
this industry in Pakistan than any other industry. It is because of the sensitivity and
importance of this industry in our lives. It is a fact that our food industry is very
poor in the field of technological advancement. Mitchell's is well aware of this
fact, the company has the best and most advance technology in the respective
industry. Mitchell’s continuously upgrading it on annual basis. The 15% of total
net profit invest on the automation of the technology every year.

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NEW DISCOVERIES AND DEVELOPMENTS


It has already mentioned that Mitchell's has the best technology for the operations
of the business. Mitchell's is competing the market with its qualitative and
innovative products. All these are possible as the result of intense R&D, new
product developments and new recipes for the fulfilling the changing needs and
wants of the market.

STRUCTURAL ANALYSIS
The PEST analysis concerned with broad aspects of the environment while there is
always a set of external influences, which are more immediate, and directly
affecting the organization. The structural analysis draws on Five Forces approach
prepared by Porter. It is a structured mean of assessing the competitive
environment.

THREAT OF NEW ENTRANCE


Threat of entry depends upon the extent to which there are barriers to entry. A
food company requires a big manufacturing unit which requires a huge capital
investment; like Mitchell’s has more than 800 crore paid up capital. So we can say
that groceries-manufacturing unit is highly capital intensive and because of high
capital investment it has high risk for new to enter into production.

SUPPLIERS’ POWER
All organizations have to obtain resources and provide goods or services. The
suppliers can affects on strategic freedom of an organization and can influence the
margins of that organization. In Mitchell's fruit farms; there are two types of
suppliers. One is a local supplier, and others are foreign suppliers. We can
evaluate the power of suppliers with the help of following important points that
cannot be ignored:
a) As well as the foreign suppliers are concerned they have power of bargain
because the material is not available locally and the buyer don’t have any

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option other than import, so the supplier charge the high prices and transaction
is done through banks by opening letter of credit and buyer also has to bear
high transportation cost and import duties.
b) As well as the local suppliers are concerned they have small fruit farms. Food
companies are highly capital intensive so they don’t have any power because
they can’t do forward integration.
c) There are large numbers of fruit, vegetables, sugar and other raw material
suppliers so the buyer checks the quality of suppliers’ products and make
contract with any one which meet their requirements regarding quality as well
as price.
d) Another reason of no influence of the suppliers over the Mitchell's is that the
company itself producing large amount of fruit, vegetables, milk and butter.
The in this way, backward integration reduces the power and influence of
suppliers of the raw material.
e) Mitchell's has very good repute in the market since from the 1933. another fact
is that Mitchell's is the market giant in its industry, so every supplier want to
work with the Mitchell's.

BUYERS’ POWER
The buyers don’t have any power, because the prices of the products are fix, but
high competition among food companies leads the company to face problems in
the price competitiveness.

COMPETITIVE RIVALRY
Organizations will also be concerned with the extent of rivalry between
themselves and competitors. The extent of competitive rivalry depends upon the
nature of four forces described earlier. It could be concluded from previous
discussion that the food market is highly competitive. And the degree of
competition in the industry is increasing day by day.

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VALUE CHAIN ANALYSIS


Value chain analysis is widely used to determine where cost improvements could
be made or value creation improved. This process involves the analysis of all the
activities starting from the raw material provisions to the distribution of final
product. That is why it is necessary to understand the complete procedure of
production and distribution.

ORGANIZATION VALUE CHAIN


All these activities are broadly categorized into two main heads, which are
Primary activities and Support activities.

PRIMARY ACTIVITIES
The primary activities of the organization are grouped into five main areas:
inbound logistics, operations, outbound logistics, marketing and sales & services.

INBOUND LOGISTICS
Fruit, vegetables, sugar, packing material and other raw material items like
chemicals, salts milk and butter perform the inbound activity in Mitchell's. This
activity should be efficient in order to increase recovery rate by obtaining good
quality raw material. So in order to ensure the high quality of raw material,
following measures are taken by the Mitchell's.
1. The company has its own orchards, animal farms for the acquisition of high
quality fruit, vegetables, milk and butter.
2. There is a well-equipped lab for testing the quality of raw material, packing
materials and other chemicals that are used in the production process.
Before storing the raw material, the approval of quality control department
is essential.
3. In case of 30% of damaged fruit and vegetables, the quality control
department of Mitchell's disapproved the material and the commercial
department refused to accept the raw material.

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4. There is an approved list of suppliers from the quality control department.


The commercial department is bound to procure the raw material from only
the listed suppliers of the company. This list is made after assessing and
evaluation of many factors of the suppliers like their market repute,
capacity of production, quality of raw material and their past performance
in the market.
5. Frequent visits are also made to the production facilities of the suppliers by
the executives of commercial and quality control department for the
inspection of the quality and other related considerations.

OPERATIONS
The operations are the production process of groceries where the major value
addition is made. For ensuring the production process of the products according to
the international quality standards, the Mitchell's take the following steps.
1. All the production process from transferring the juices and raw material to
production hall from juice stores to the packing of the products is
completely automatic. The Mitchell's invest huge amounts of profits for
serving this purpose every year.
2. The Mitchell's was the first company who achieve such high level of
automation in its relevant industry. The company is serving the industry as
the trend setter.
3. During the production process, the well trained lab technicians inspect the
production process and its quality before the packaging of the final
products.
4. Even after the packaging, the few items of the lot bring into the quality
control department for further inspection of quality in the labs of the
department.

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5. few items are preserved even after the approval of its quality, to check its
shelf life and use as reference in case of any complaint from distributors or
customers.
6. After ensuring all sorts of considerations, a written permission is given to
stores & planning department from quality control department to float the
products in the market.

OUTBOUND LOGISTICS
The management subcontracts the outbound activity, and the distribution is
through dealers. The products of the Mitchell's directly supply to the distributors
of the company. But the supply of production is also take place by the regional
sales offices of the Mitchell's. They also serve as the warehouse of the company.

MARKETING & SALES


As far as marketing and sales is concern, there is an export and marketing
department, who control and monitors the activities of regional sales offices of the
company that are situated in Lahore, Islamabad and Karachi. These regional sales
offices are responsible for effective distribution of the products of the company.
The marketing department is responsible for the marketing and promotion of new
and existing products of the company.

SERVICES
The nature of the products not requires any significant level of services for the
customers. However, there is a formal system for taking corrective actions upon
the complaints of the customers. Proper feedback is given to the customers who
have any complaint regarding the quality of the Mitchell's products.

SUPPORT ACTIVITIES
The support activities can be divided into four groups, which are procurement,
technology development, human resource management and infrastructure.

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PROCUREMENT
As the prime inputs of fruit, vegetables, sugar are available locally and some
material has to import from abroad. So procurement for long time is not possible
in case of raw material, which is locally available. Where as the material that has
to be import the company has a lead-time of 2-3 months. So the planning and
stores department is sufficiently performing the activity of procurement with the
collaboration of commercial department.

TECHNOLOGY DEVELOPMENT
R&D and Process development researches are very important in food groceries
industry in Pakistan. So in the company value chain, this thing should be
emphasized much, rather it has a big contribution in total value addition. The
Mitchell's working on the technology development on continuous basis. The most
advance and automation of the plant and machinery is the top priority of the
Mitchell's fruit farms limited.

HUMAN RESOURCES MANAGEMENT


Human resource management involves the training and development of workers
and employees in order to increase their productivity and efficiency. For this
purpose company make their employees to work with the senior worker to get the
experience, apart from this on-the job training, they have separate training
program for new employees. The company has good planning, quality control
systems and future orientation, which although does contribute directly in value
addition and increase the effectiveness of whole process.

INFRASTRUCTURE
The company has a strong distribution system in the Pakistan. The Mitchell's has
more than 270 distributors in the country for ensuring the product availability and
supportive promotion activities. Apart from the strong distribution system, the
entire necessary infrastructure is available to the Mitchell's. Mitchell's is the only

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one food processing company in the Pakistan who has all the production facilities
at single location. This include from orchards to the warehouses of the finished
products.

ANALYSIS
All the value creation does not happen in the organization itself rather much of it
can be occur in the supply and distribution chains. So the whole process needs to
be analyzed. For this purpose we can divide it into three areas: suppliers,
organization and channel members.

SUPPLIERS
Suppliers play a very vital role in total value creation. The whole of the
profitability depends upon the quality of raw material; if supplier does not provide
the good quality of raw material, then the desired level of quality of products
cannot be achieved. The price structure of the country de-motivates the grower to
produce better quality of fruit, vegetables, sugar cane and other raw material
items. But good relationship with the suppliers, fair and prompt payment can
enforce the grower to cultivate better variety. It is exercising by the Mitchell's
already.

ORGANIZATION
Within the organization the value addition activity is focused on groceries
production, which is their core competence. In order to provide the superior
quality of groceries to customers, total quality management system is practicing by
the Mitchell's. Although in the production of the products, Mitchell's role is
spectacular in its industry. But when we talk about the market development and
marketing and promotional activities of the Mitchell’s, we will come to know that
this particular area is lacking behind the other market players. Without the
marketing support Mitchell's cannot achieve its goals and objectives successfully.

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CHANNEL MEMBERS
Mitchell's fruit farms limited has strong footing in the market because of its
quality products and good repute. The company is full aware about this strong
point, and the people of Mitchell’s are getting benefits from this strength. The
customers of the Mitchell's are loyal with the company and make purchase of such
products that are labeled Mitchell's. There is strong distribution channel in the
country that is the strength of the company. The company also directly deals with
the large customers like PIA, KFC, PIZZA HUT, MCDONALD’S, HOLIDAY
INN, and many other prestigious institutions of the country. Apart from these
institutions, Mitchell's deals with the large retailers itself like PACE, HKB stores,
UTILITY STORES, CANTEEN DEPARTMENTAL STORES, SHEZAN
BAKERS and so on. So in this way we can say that company targeting its
customers not only by the distributors but also go directly to retailers and other
institutions for creating value for the business operations of the Mitchell's.

DISTRIBUTION NETWORK
Factory

Distributors

Retailers

Final Consumers

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SWOT ANALYSIS
STRENGTHS
1. Mitchell’s fruit farms limited is the oldest food processing company of
Pakistan. The company was incorporated in 1933. This is a distinctive
feature of the company because all other food-processing companies start
their operations at least after the independence of Pakistan.
2. In 1998, Mitchell’s achieve another destination: ISO 9001 certification, and
at no better time than the successful completion of sixty-five years of
bringing quality products to the consumers. It is a matter of human pride
that the Mitchell’s has become the first food company in Pakistan to
achieve this prestigious distinction.
3. Today, in Pakistan, Mitchell’s is the only major company with fully-
integrated operations having its own growing and processing facilities at
one location. Modern, high-volume industrial equipment, professional
management and a trained workforce ensure that Mitchell’s maintained its
lead.
4. In 1983, Mitchell’s golden jubilee was celebrated with great funfair. A
chocolate bar, appropriately named jubilee, was launched to commemorate
the event. Mitchell’s is the pioneer in Pakistan for chocolate production.
5. Molded chocolate (praline) is very popular in all over the world but till
2001 no national company was producing molded chocolate in the country.
So Mitchell’s launched molded chocolate with the successful
commissioning of a molded line in 2001.
6. The process of toffee making was automated in 2000 with PLC-based
machines/systems, to ensure uniform quality of products. Mitchell’s is the
first national company that takes this step. Thus, the modernization of
operation has always been top priority with Mitchell’s.
7. Mitchell’s is the single national company that has so large product mix.

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WEAKNESSES
1. The management style that has adopted by the company is bureaucratic.
Degree of formalization and centralization is high.
2. The promotion mix of the company and advertisement programs is not
very good. It is justifiable to say that company is not so much serious in
promoting its brands. The company only enjoying the good repute of
the brand name Mitchell’s.
3. There is lack of short term and long-term decision-making regarding
production schedules, purchasing decisions and marketing programs.
4. As we know that there is severe competition in the food industry, but
still the availability of Mitchell’s products is very poor.
5. Company is offering fewer discounts as compare to other relevant
industry’s companies like Shezan, National, Rafhan, Salman’s and
Ahmed to retailers and distributors.

OPPORTUNITIES
1. Increasing proportion of working women, school going children and office
going men increase the size of target market of the food industry. These
factors cause growing demand of jams, jellies, marmalades, sugar free
products and caned vegetables and juices open a wide window of
opportunities for MITCHELL’S Fruit Farms Limited.
2. As the rural populations of the country tend to migrate to cities for multiple
purposes, for this trend enhanced the market size for the food processing
companies. It is also an opportunity for the MITCHELL’S Fruit Farms
Limited to avail this opportunity and get benefits from this growing market.
3. Now people are much conscious about their health and fitness as before the
past. They have tendency to use the foods that are nutritious and best for
their health. So this market trend is also creating new horizons for the food
processing companies.

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4. It is fact that the market size of fast foods and snacks remarkably. As the
many products are the complimentary for these kinds of fast food and
snacks item. This thing is growing the demand of tomato ketchup, sauces
and preserves.
5. There is an opportunity for the company to increase the depths of its
existing products categories. For example, company may introduce the
squashes, sauces and tomato ketchup in more packaging like in buckets as
this strategy has adopted by other competitors of the company. The
company may introduce the pet bottle of 1.50 ml like Jam-E-Sheren and
Rooh Afza. It will expand the target market of MITCHELL’S Fruit Farms
Limited.
6. Other very open opportunity for the company is that the company may
invest in new product categories like mineral water, cheese, snakes and
other dairy products.

THREATS
1. The competition in the food processing industry is much severe than the
past. Now the many national companies are joining hands with multi-
national corporations for additional support in terms of marketing activities,
production expertise and financial resources.

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FINANCIAL ANALYSIS

ANALYSIS OF FINANCIAL STATEMENTS


While assessing the financial position of any organization’s (in evaluating the
internal resources) one should be very careful about the figures because mostly the
organization based on its financial structure and the right effective and efficient
allocation of money to different needs. Best technique in this regard is of ratio
analysis, which without many complexities provides as an increase look of the
company. For the assessment of the financial resources of the Mitchell's we also
use the ratio analysis in order to get a clear vision with simple interpretation. For
this purpose we can analysis the financial statements following ways:
1. ANALYZING LIQUIDITY
2. ANALYZING DEBT
3. ANALYZING ACTIVITY
4. ANALYZING PROFITABILITY

ANALYZING LIQUIDITY
The liquidity of a business firm is measured by its ability to satisfy its short-term
obligations as they came due. Liquidity refers to the solvency of the firm’s overall
financial position__ the ease with which it can pay its bills. The three basic
measures of liquidity are (1) net working capital, (2) the current ratio, and (3)
quick ratio.

NET WORKING CAPITAL


Net working capital, although not actually a ratio, is commonly used to measure a
firm’s overall liquidity. This requirement is intended to force the firm to maintain
sufficient operating liquidity and helps to protect the creditor. Mitchell's show a
sufficient amount of working capital that is Rs. 77,322,892

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CURRE NT RAT I O
A current ratio of 2.0 is occasionally cited as acceptable, but a value’s
acceptability depends on the industry in which the firm operates. A current ratio of
1.0 would be considered acceptable for a utility but might be unacceptable for a
manufacturing firm. The more predictable a firm’s cash flows, the lower the
acceptable current ratio. Mitchell's current ratio is 1.69 that is quite acceptable.

QUICK RATIO
The quick ratio is similar to the current ratio except that it excludes inventory,
which is generally the least liquid current asset. Quick ratio is an extended version
of current ratio in which only very quick assets (which can be quickly liquidated)
are considered. A rule of thumb is that figure of 1.00 or more is good and indicates
a good financial position of the company. The Mitchell's has its quick ratio is 0.54.

ANALYZING ACTIVITY
Activity ratios are used to measure the speed with which various accounts are
converted into sales or cash. With regard to current accounts, measures of liquidity
are generally inadequate. The three basic measures of activity are (1) Inventory
turnover, (2) fixed assets turnover, and (3) total asset turnover.

INVENTORY TURNOVER
Inventory turnover commonly measure the activity, or liquidity, of a firm’s
inventory. An inventory turnover of 20.0 would not be unusual for a grocery store,
whereas a common inventory turnover for a manufacturer would be 4.0. Mitchell's
inventory turnover is 5.46, this figure is excellent for a manufacturer firms.

FIXED ASSET TURNOVER


The fixed asset turnover measures the efficiency, with which the firm has been
using its fixed, or earning, assets to generate sales. Generally, higher fixed asset
turnovers are preferred, because they reflect greater efficiency of fixed asset

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utilization. Mitchell's fixed assets turnover is 6.60; this means the company turns
over its net fixed assets 6.60 times a year.

TOTAL ASSETS TURNOVER


Total assets turnover indicates the efficiency with which the firm uses all its assets
to generate sales. Generally, the higher a firm’s total asset turnover, the more
efficiently its assets have been used. This measure is probably of greatest interest
to management, because it indicates whether the firm’s operations have been
financially efficient. Mitchell's turns its asset over is 2.30 in a year.

ANALYZING DEBT
The debt position of a firm indicates the amount of other people’s money being
used in attempting to generate profits. In general, the financial analyst is most
concerned with long-term benefits, because these commit the firm to paying
interest over the long rum as well as eventually repaying the principally borrowed.
Because the creditors claims must be satisfied before, the distribution of earnings
to share holders. The two basic measures of debt are (1) Debt ratio, and (2) debt-
equity ratio

DE B T RAT I O
The debt ratio measures the proportion of total assets financed by the firm’s
creditors. The higher this ratio, the greater the amount of other people’s money
being used in an attempt to generate profits. Mitchell’s debt ratio is 0.39.

DEBT EQUITY RATIO


The debt-equity ratio indicates the relationship between the long-term funds
provided by creditors and those provided by the firm’s owners. It is commonly
used to measure the degree of financial leverage of the firm. Mitchell’s debt equity
ratio is 0.12.

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ANALYZING PROFITABILITY
There are many measures of profitability. Each related the return of the firm to its
sales, assets, equity, or share value. As a group, these measures allow the analyst
to evaluate the firm’s earnings with respect to a given level of sales a certain level
of assets, the owners’ investment, or share value. With out profit, a firm could not
attract outside capital. The three basic measures of profitability are (1) gross profit
margin, (2) operating profit margin, (3) net profit margin, (4) return on investment,
(5) return on equity, and (6) earning per share.

GROSS PROFIT MARGIN


The gross profit margin measures the percentage of each sales dollar remaining
after the firm has paid for its goods. The higher the gross profit margin, the better
and the lower the relative cost of merchandise sold. Mitchell's gross profit margin
is 18.7%.

OPERATING PROFIT MARGIN


The operating profit margin measures the percentage of each sales dollar
remaining after all costs and expenses other than interest and taxes are deducted. It
represents the pure profits earned on each sales dollar. A high operating profit
margin is preferred. Mitchell's operating profit margin is 8.5%.

NET PROFIT MARGIN


The net profit margin measures the percentage of each sales dollar remaining after
all costs and expenses, including interest and taxes, have been deducted. The
higher the firm’s net profit margin, the better. The net profit margin is commonly
cited measure of the firm’s success with respect to earnings. Mitchell's net profit
margin is 4.64 %.

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RETURN ON INVESTMENT
Return on investment (ROI) measures the overall effectiveness of management in
generating profits with its available assets. The higher the firm’s return on
investment, the better. Mitchell's ROI is10.6% that is good in the industry.

RETURN ON EQUITY
The return on equity (ROE) measures the return earned on the owners’ (both
preferred and common stockholders’) investment in the firm. Generally, the higher
this return, the better off is the owner. Mitchell's ROE is 17%.

EARNING PER SHARE


The firm’s earnings per share (EPS) are generally of interest to present or
prospective stockholders and management. The earnings per share represent the
number of dollars earned on behalf of each outstanding share of common stock.
They are closely watched by the investing public and considered am important
indicator of corporate success. The EPS of Mitchell's is Rs. 7.52.

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EXISTING STRATEGIES
CORPORATE LEVEL STRATEGIES
Corporate level strategy focuses on strategies for corporation consisting of more
than one business. Mitchell's fruit farms limited, for instance, comprise several
businesses, including groceries, confectioneries and chocolates business.
Mitchell’s involve more than one business is said to be diversified.

FOREIGN LICENSEES
In recognition of its dedication to quality and technical expertise, Mitchell’s was
also given proprietary rights by L. Rose and Company Ltd. of England in 1946 to
become the sole manufacturer and distributor of their world famous Rose’s brand
of Lime Juice Cordial and Lime Marmalade in Pakistan and Afghanistan.
CONCENTRIC DIVERSIFICATION
“Adding new, but related products or services”.
Mitchell’s involved in concentric diversification because it has three related
businesses that are groceries, confectioneries and chocolates. The raw material,
production process, required expertises are very much same. Further more the
product lines like squashes, syrups, pickles, jams, jellies, marmalades, sauces, diet
preserves, vinegars, candies and chocolates are the product lines that are closely
related in context of many business aspects. So we can say that Mitchell's is
exercising the concentric diversification.

BACKWARD INTEGRATION
“Seeking ownership or increased control of a firm’s suppliers”.
Mitchell's fruit farms limited is acting on the concept of backward integration.
Mitchell's has its own orchards and dairy farms for the smooth flow of raw
material that is used in the production of Mitchell's products. 450 acres of land is
used for cultivation of raw material.

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Following fruits requirements are being fulfilled by Mitchell’s own agriculture


land.
Lemon 100%
Grape Fruit 100%
Sevlik Orange 100%
Tomato 30%
Garlic 30%
Apart from the Mitchell's own orchards, Mitchell's has sound control over its
suppliers. For example, the raw material that is used in the Mitchell's is of two
types. First is the raw material that is used in the production process and the
second is the raw material that is used for the packaging of the products. Package
(Pvt) limited is the sole supplier of the packaging material of the Mitchell's.
Mitchell's and packages (Pvt) limited have the same directorships, so in this way
we can say that Mitchell's has good enough influence over the management of the
packages (Pvt) limited.

BUSINESS LEVEL STRATEGY


Firms compete directly with one another at what is called the business level of
strategic management, so we will focus on crafting successful competitive
strategies. Because competition takes place at the business level, strategic
management at this level is crucial to the overall success of the corporation.

DIFFERENTIATION
If we closely look at the operations of Mitchell's fruit farms limited, we will come
to know that the corporation is practicing the differentiation strategy. Mitchell's
has more than fifteen product lines and a large product mix of more than 90
products. The product mix of Mitchell's is the largest one in its respective industry.
This fact reveals that Mitchell's is exercising the strategy of product mix
differentiation. Mitchell's is charging 7 to 8 percent higher prices of their

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products as compare to their competitors. Because they consider their products


superior as compare to remaining ones.

CUSTOMER FOCUS
Apart from product differentiation Mitchell's is also implementing customer focus
strategy. The continuous process of research and development, product
differentiation, marketing research and technological innovation make this
possible for Mitchell’s to introduce more than four products in a year. This is a
clearer indicator of customer focus that is being implemented by the corporation.
The Mitchell's customer is loyal to the company and he wants to purchase the
brand MITCHELL'S. So it is necessary for the company to introduce not only
innovative products but also gives quick response to its customers.

OPERATION LEVEL STRATEGY


Operation level strategy focuses at how to develop capabilities in process
execution that will yield competitive advantages for a firm. This involves applying
strategic management concepts to what is known as the operations level, the level
at which work inside the organization actually takes place. We focus on how
organizations go about improving their process capabilities, including both total
quality management and core process reengineering.

PRODUCT DEVELOPMENT
“Seeking increased sales by improving or modifying present products or services”.
The company is focusing on product development not on market development. It
may be considered as strength or weakness. Strength in this way that company is
giving full priority to satisfy the wants of existing customers. But it might also be
termed as weakness of the company because it is keeping the large market
remained untouched.

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RECOMMENDED STRATEGIES AND


IMPLIMENTATION

We can say that the food processing industry of Pakistan is one of the most rapidly
growing industry of Pakistan. Many new markets players have entered to acquire
their share in the market. Although the economic conditions of the country are
poorer but the quality of life is towards improvement. This improvement also
leaves favorable impact on the tastes of people. Once there was a time when only
Mitchell's was running its business in the Pakistan in its relevant industry. Now
Mitchell's is facing competition from many national and multinational food
companies in the country. Many national companies are joining hands with
multinationals for strong footing, financial support and other required professional
expertise. Mitchell’s now is facing many problems in today’s world of business.
So for avoiding swerve consequences we recommend following strategies to
Mitchell's.

FORWARD INTEGRATION
“Gaining ownership or increased control over distributors or retailers”.

In forward integration we not suggest to Mitchell's to gain ownership of


distribution system but it is need of the hour to increase control over distributors as
well as retailers. The major de-motivator for retailer and distributor is fewer profit
margins to them. Mitchell's is the company that is offering minimum profit
margin to its distributors and retailers. It converts the interests and priorities of
distribution channel member to other market players. When the prices of products
are high comparatively to competitors it will be necessary for the producer to give
attractive margin to distributors and sellers and retailers so that they promote

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company’s products effectively. The increase in trade promotion will also enhance
the control of company over its distributors and retailers.

CUSTOMER FOCUS
The company is not offering its products in the various packages. For example the
competitors of Mitchell's like Shezan, Rafhan, Qurshi, Humdard and Galaxy are
offering their products like preserves, ketchups and sauces in buckets but this area
is ignoring by the Mitchell's. It will be good for the company to offer its products
in more different weightings. It will not only increase the sales of the company but
also helpful for market development.
• It is suggested that company should introduce more flavors of squashes like
plum and peach.
• The squashes and syrups must also be introduced in 1.5 litre and 500 ml
packages like Rooh Afza and Jame Shereen.
• It is also recommended by us to Mitchell's that to be competitive in the
market, the company should also preserves like jams, jellies, marmalades
and ketchups, sauces in more economy packs for the customers.

MARKET DEVELOPMENT
“Introducing present products or services into new geographic areas”.
At this time, the Mitchell's fruit farms limited is utilizing its 70 % of total capacity.
So there is need to market development. More markets will help company to
utilize its full capacity but also increase the profitability and competitiveness of
company.
Mitchell's can explore new markets not only in the country but also in the abroad.
ü Although the company exporting its products to Middle East, Canada,
Gulf, Saudi Arabia, U.S.A and European countries. But in these
countries, still need of market development is exist.
ü Still there are many cities in the country, where the product availability
of the Mitchell's is very much poor, even in big cities there are many

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areas in which the company distributors have not access. The company
should ensure and improve its products’ availability.

RELATED DIVERSIFICATIN
Mitchell's can diversify its businesses in other related areas of operations. The
main reason of going to such diversification is that the company has good repute
and vast experience of food processing industry. The customers of the company
have brand loyalty and ask for Mitchell's products to retailers. Such kind of
diversification will facilitate the company to remain prominent in the market and
milk its reputation.
ü We recommend that Mitchell's must go for the business of butter, cheese,
mineral water and snacks etc. this will be related diversification for the
company.

ADVERTISEMENT
From last few months, the Mitchell's is not advertising its products on the
electronic media. It is affecting the sales of the company very severely. The main
area of focus is trade promotion that is not enough in tough market conditions and
competition.
ü More consumer and trade promotion
ü Advertisement on T.V for hammering the minds of Mitchell's consumers.
ü More outdoor advertisement like its main competitors. Significant increase
in the number of sign boards, MMT boards and banners on the public
places will increase the product awareness and interest of the customers.

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MITCHELL'S CORPOPRATE LANGUAGE


All the documentation and written communication of Mitchell's is in English
language. However, verbal communication may be in Urdu, particularly the
executives of the company speak Urdu or Punjabi with the workers as per
workers’ convenience. But it is the restriction of the company to deal external
people in the Urdu and in case of foreign people; mode of communication
should be English. The management executives are trained by the Mitchell's to
negotiate with foreigners in the English language.

IN-HOUSE SLOGANS OF MITCHELL'S


There are three in-house slogans that are permanent in nature. Apart from these
slogans, one slogan is called the slogan of the month.
Three permanent slogans are as following:

1. love with customer… love with company


2. Customer happy, company prospers.
3. Customers help us grow.

THE SLOGAN FOR THE TARGET MARKET


The slogan for the target market of the Mitchell's is as under:
Giving the New Generations a Fresh Start...
From Our Orchards to Your Table

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CORPORATE VALUES OF MITCHELL’S

EMPLOYEES AS COMPANY’S ASSET


The professional management and skilled labor force is considered as the asset
of the company; so MITCHELL’S Fruit Farms Limited take it very serious for
the betterment of employees skills and expertise. The company sent the
management people in the foreign countries for attending various seminars,
workshop and refresher courses.
The company in different hotels for updating also holds the seminars on
different topics the professionalism of the executives. Apart from these
seminars, the executives also take part in the different course that are offered in
all over the country on various informative topics like information technology,
quality control systems and new production methods and techniques.

RECRUITMENT CRITERIA
Recruitment practice is done after particular period of time in the
MITCHELL’S Fruit Farms Limited. But if we practically see the recruitment
process in the company, we will come to know that the top priority is given to
those candidates who have the experience in relevant job and strong internal
references.

PROMOTIONS
The Mitchell's fruit farms limited provide an attractive career path to their
employees. The promotions of the employees are base on their performance as
well as experience. Both are considered by the human resource department.
The Mitchell's take care of their employees and serve their career goals in a
marvelous manner.

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LEARNING ORGANIZATION
Mitchell's is a learning organization. The company tries to utilize the
capabilities, skills and knowledge of its people at maximum. For this purpose,
employees work in the form of teams for the completion of various projects.
Top management encourages risk-taking among the employees. In return, there
is an attitude of tolerance on mistakes in the Mitchell's management.

INNOVATION
The mission of the Mitchell's is to provide the innovative products to the
markets where the company serves. So innovation in product mix has much
importance in the company. It is required by the top management to introduce
three or four new products every year. For this purpose, R&D work continues
throughout the year. Ideas are collected from the Mitchell's people, then after
initial screening, these ideas are referred to product design panel, who work on
these ideas for producing final products.

TECHNOLOGICAL ADVANCEMENT
The company positions itself at top and consider best in the technology. For
remain best in technology, the company following the strategy that Mitchell's
will invest 15% of its profits on the advancement of technology. This amount
is more than Rs. 200 million every year. This advancement is done for
achieving more product standardization, maximum output and hygienic
process of production.

IMPLIMENTATION OF TQM
Mitchell's was the first company in the respective industry that get ISO 9001
certification in 1998. Mitchell's is the trend setter in its industry. Mitchell's
believes on quality. The company implements the quality notion from product
design to provide the products in the hand of ultimate consumers. During all
the processes quality is managed as the top priority. Mitchell's makes its image

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as the quality managed company. All the measures regarding TQM that are
possible in the present environment of the country are possible has been taken
by the Mitchell’s.

BE HONEST
The most important value that is promoted within the company is honesty. It is
required from the employees of the Mitchell's that they not only deal with their
colleagues with honesty but also deal with suppliers and customers of the
company honestly. One classic example of the Mitchell's commitment to
honesty is their products. According to the rules of the government, there
should be atleast 35% pulp in jams, jellies, marmalades, ketchups and sauces.
But the food companies not careful about this restriction except Mitchell’s.

BENEFITS & SERVICES


Salaries and incentive packages of the company is very attractive. All head of
departments are given automobiles and mobile phones by the company at its
expenses. The salary package of the head of departments is also not less than
sixty thousand. The executives of the company have the medical facilities and
accommodation facilities .The salaries of clerical staff are also not merely less
than six thousand. The entire management and staff member have the T.A and
D.A facility. All the staff members and workers are also awarded with the
overtime benefits. The minimum wage rate is Rs. 3000 in Mitchell’s. The
workers and executives enjoy at least two bonuses in a year. The number of
bonuses depends on the company’s profit at the end of its financial year on the
end of September. For many times, employees are awarded five or even six
bonuses in a year. Gratuity and pension is also awarded to the retired
employees.

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IMPRESSIONS ABOUT MITCHELL'S CULTURE


1. The people at Mitchell's are quite satisfied in the company. They
considered their job challenging and attractive for theirself.
2. The company is promoting the values like punctuality, hardworking,
participation and honesty. All these values have strong support from the top
management of Mitchell's. Even the top executives like chairman,
managing director and executive director of Mitchell's come in office in
time even before time, they follow the rules and regulations of the
Mitchell's like there is restriction on the employees of the company to
attach their company’s identity card at the front of their dress. So this rule
is for all even for the owners and director of the Mitchell's.
3. It is the matter of immense pleasure for the employees to be the part of
Mitchell’s. They feel proud to be the part of oldest and best food company
of the country.
4. They are committed to their jobs and enjoying sound monetary and non-
monetary benefits from the Mitchell's. The turnover rate in the Mitchell's is
near about nil. This shows the employees loyalty that they have with
Mitchell's.
5. So, my viewpoint about the Mitchell's culture is that they have very
different culture that I observed in other national companies. They have
strong culture that provide supportive working environment to their
employees, take care of their participants and all the employees working in
the relation-bond culture.
6. All the employees have written duties and responsibilities. However,
sometimes for the sake of job rotation, they have to work on some
additional assignments but in the form of teams not on the individual level.
7. Authority has defined broadly in the Mitchell's. Mission statement, quality
policy, goals, objectives and short term planning is demonstrated and

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communicated among the employees to all over the company. Apart from
these facts, the past performance of the company is also demonstrated with
the help of various instruments at many times in the Mitchell's.

EMPLOYEES FORMAL IMPRESSIONS


1. According to employees, they are happy with the Mitchell's fruit farms and
they are enjoying collaborative relationships with the management of the
Mitchell's.
2. Their jobs are challenging to them and not feel any sort of job boredom.
3. There are good working environment in the Mitchell's and they are free to
participate in the matters of the company. The employees work without any
pressure and fear.
4. They have formal as well as informal relationships with their colleagues.
5. The behavior of management is friendly with the employees of the
company.

EMPLOYEES GRAPEVINE IMPRESSIONS


1. The employees are unhappy about the strict control of the Mitchell's
management upon them. According to the employees of the company, with
the passage of time, they have to work harder and now there is more
accountability of the actions of the employees that was not in the past.
2. The employees also claim that the management of the company is
exercising the discrimination among the employees without any legitimate
or performance related reason.
3. Apart from these negative impressions, the employees have same informal
impressions as they have formal. The employees are happy and satisfy with
Mitchell's policies and managerial practices. They consider their company

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prestigious in the country and have strong sense of belongingness with the
Mitchell's.

MANAGEMENT STYLE OF MITCHELL'S


One can elaborate the management style of any organization on the following
grounds.

1. Planning
2. Organizing
3. Staffing
4. Leading
5. Controlling

Now we see the management style of Mitchell's on the basis of above mentioned
points.

P L ANNI NG
Goals are set with a few deal of participation.
Decision making is transferring to decentralization from centralization.

ORGANIZING
Authority is shared.
Authority is broadly defined in the Mitchell's.

STAFFING
People are selected on the basis of performance criteria. But sometimes, internal
references are also used for recruitment.
Training is in few functional areas.

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STRATEGIC MANAGEMENT MITCHELL’S FRUIT FARMS LTD.

L E ADI NG
Managers practice participative leadership, but not much extent.
Communication flow is top-down and bottom-up.

CONTROLLING
Individuals exercise some deal of self-control in the Mitchell's.
Focus on multiple criteria.

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