UPLOAD LIBRARY

BooksAudiobooksComicsSheet Music
P. 5
munchee
munchee
(0 ratings)
|Views: 2,627|Likes: 3
Published by Hashanthi Dangalle
See more
Chocolate Slab market share of Ritzbury for year 2010 (Source: AC Neilson
retailaudit)When it comes to explain resources availability of CBL group, over 2000
work force isemployed by thegroup in their, Pannipitiya, Ranala, Minuwangoda,
Ratmalana andKandy factories. Land area of Pannipitiya plant was fully filled with
plant buildings andno further building expansion is possible there.In Ranala plant,
which is nearly a 13 acrefacility, only small land area is available for future
expansion. Interm of land areaavailability, situation of premises such as Kandy,
Minuwangoda and Ratmalana arealsomore or less same as above. Therefore the
group has invested in SeethawakaIndustrialPark andwhere group is going to set up
their new production facility solely for exports.As company vision says,CBL is
targeting vast market opportunities in the subcontinental Indian region, the group
has alreadybought land in Bangladesh for its firstoverseas manufacturing facility.So
far the group has beenoperating as a privet limited company which is nowalmost
12billon Rupees Company, is in the process of considering to become a
publiclimited company as company has grown too big already and also
hugeinvestments are indemand in order to make sizable presence in the
Indian/Bangladesh markets.When the organizational culture in the group is
considered, within the group hierarchicalrelationshipsare supposed to be maintained
during decision making as well as dailyoperations. There is presence of trade union
(Inter Company trade union) in CBLPannipitiya of which employees are enjoying
highbargaining power than other factoriesof the group where there is no unionized
environment available.4

Part 2 Business environment and strategic orientation of the organizationCeylon

Biscuits Limited wasonce a small manufacturing firm engaged in
contractmanufacturing in the beginning of 1970s and now ithas become the largest
biscuits, cakeand chocolate manufacturer in Sri Lanka while exporting itsproducts
over 60 countries inthe world. Throughout the journey of CBL from a small
biscuitsmanufacturer to adiversified leading business group in the country, one of
major remarkable majorstrengthcan be observed. That is strong corporate
leadership of the chairman and the director board.Under the farsighted corporate
leadership of the company, the company hasaggressively expanded itsoperation,
has achieved dominant market shares in its all major product categories and also
hasinvested heavily in new plants, factories, technologies inorder to sustain and
improve current level of aggressive market performance of thecompany.During the
recent history CBL, the group has wonseveral awards givingtestimony to excellence
performance of the company. Some of which can bementionedas follows. Food
Award of Excellence in ConfectionaryProduct Brand of the Year for
fourconsecutive yearsBrand of the Year for two consecutive years (Awarded by
Sri Lanka Institute of Marketing)Winner of Gold for Innovative Brand of the Year
(Awarded by Sri Lanka Instituteof Marketing)Innovative Brand of the Year
(Awarded by Sri Lanka Institute of Marketing)Winner of Goldfor Industrial
Excellence in the Extra Large category at theAnnual National Chamber of
IndustriesAchievers (CNCI) AwardsGold Award in the Extra Large Category

Exporter Agriculture ValueAddedProducts (Awarded by National Chamber of

Exporters)National Award for Export Excellence(Awarded by Ministry of Trade
andCommerce)With those awards together with excellent marketing efforts of the
company, Muncheethe flagshipbrand of the CBL group has become the strongest
food brand currently in SriLanka. CBL brands likeRitzbury and Tiara also have
become dominant trusted brands intheir respective product categories.Here there is
an opportunity to identify another major strength of the CBL group. That is strong
brandimages of CBL products. The groupname CBL itself is becoming a trusted
brand for quality in the SriLankan marketproviding definite strength for the group to
achieve its crowning success.Wellestablished sales and distribution network of
CBL also can be considered asstrength of the company. CBLdistributes its products
through 60 agencies and 400dealers located island wide and products areavailable
in over 80000 sales outlets islandwide. Furthermore company has close ties with
internationaldistributors in India andSingapore so that company is in a position to
export its products to 60 countries.Duringrecent past CBL group has been able to
widen market share of its product portfolio year afteryear and efficient and well
organized sales and distribution network of the group canbe observed as amajor
contributor of recent success of the company.For some of products like Samaposha,
Nutriline RicePops, Nutriline Serial Bars,Cecil Fruit Drinks, company purchased raw
materials such as grams, greengrams, crown,rice, peanuts etclocally. In order to
source these agricultural raw materials inrequiredquality and quantity, company
has set up farmers network in Ampara and Wellawayaarea. Thecompany has
appointed an agro technologist to coordinate closely with thesefarmers networks
andprovide necessary technology and guidance from selecting seedsand preparing
of farming lands tocollecting and storing harvests in a way that bothcompany as
well as farmers is benefited, so that qualityand price standards of rawmaterials are
maintained. This farmer network also can be considered asstrength of
theCBLgroup.In early days of the company, most of production machineries
werereconditionedmachineries imported from the Europe. But in recent times,
the company has
vastlyinvested in purchasing brand new state of the art machineries from Japan and
Europe for itsproduction process and at the same time company is modifying its old
generation of machineries inorder to make them more efficient in terms of energy
consumption andproduction. This modernizationof machinery and equipments and
technologicalinnovation are also can be observed as strengths of theCBL group.The
company has established well organized product and process qualitymanagement
systemfor which company has received ISO 9001 certification. And further CBL
Pannipitiya factory has met ISO14000 environmental quality standards and alsoCBL
Ranala factory is also working towards obtaining ISO14000 environmental
qualitymanagement system. Cecil, Samaposha and Lanka Soy factories are
alsohaving ISO9001 certified quality management systems and also their products
come withSLScertification. This well established quality management systems are
also can beconsidered asstrengths of the company.CBL group is highly engaged in
research and development activities relatedtobiscuits and chocolate manufacturing.
CBL is in a process of offering local low cost andsame qualityequivalents of
international market products coming under brand namessuch as Cadbury and
Nestle etc.Some of international products formulas are protectedunder patents and
high royalties are to be madefor getting them for local use. So CBL isinvesting in
R&D related to developing those product formulaslocally and these R&Dactivities

can be mentioned as strengths of the company.As a summary, followingthings can

be observed as strengths of CBL group. Strong corporate leadership Well
established salesand distribution network Strong brand images and excellent
sales force Well organized farmersnetworks Technological innovations Well
established quality/environmental management systemsR&D capabilities
Setting up of a management information systemAlthough CBL group is performing
well in the Sri Lankan market in its all most allproduct categories, stillthere are
observable weaknesses in internal environment of thecompany.In chocolate coated
productmarket, although the company has become the marketleader with over 70%
market share, productioncapacity is insufficient to meet forecasteddemand for
products in the market. In recent times, attemptsfor increasing chocolatecoated
product production are being made with new investments formachineries and
stillthere are available sales losses due to this insufficient production capacity. This
canbeseen as a weakness of the group in relation to the chocolate production.Due
to a court order of Indiantrade court, two biscuits plants were operating inCBL
Ranala factory, have to be sent back to India andnow dismantling of plants arebeing
done. Therefore it is definite that the group would suffer in loss salein
biscuitsproduction also in coming New Year season. So it is another weakness of
thecompany.Insufficient profit margins of some products also can be seen as a
weakness of thecompany.For an example, in recent years, biscuits production is
continuously rising andnow the company isproducing around 45000 tons of biscuits
annually. Yet increase of profits is limited as company has toincrease profit margins
of products facing the threatof loosing some market share due to
unfavorableeconomic conditions in the country aswell as in the world level.
Furthermore the company is dependingon single wheat flour supplier and this can
be considered as a weakness of the company.Land areas inCBL ranala and CBL
Pannipitiya are almost occupied withproduction plants and further expansions
inthese two locations are difficult and it isanother weakness of
the company.Attention for efficient energyconsumption and cost saving is low as in
the presentcontext the company is continuously operatingprofitably. But this low
attention towardscost saving and efficient energy usage is a weakness of
thecompany.
As a summary following weaknesses can be mentioned. Dependence on single
suppliers for criticalraw material (eg: wheat flour) Insufficient production capacity
of some product ranges. Dismantlingand sending back two biscuits plants to
India. Low profit margins of some products. Limited landavailability in Ranala
and Pannipitiya plants Unavailability of cost saving approaches Unavailability
of energy saving approaches.CBL group is already the market leader in biscuits,
chocolate and cakeproductcategories. With the end of terrorism in north and east of
the island, new market isopening upfor the company. So there is an opportunity to
widen dealer network of thecompany to north and eastof the country and make use
of market opportunities for further production expansion. Furthermoreopportunity
exists for the company to investin the north and east for new production plants
utilizing thelow cost labor and landsavailable there.Indo Lanka free trade agreement
also can be considered as anopportunity for theCBL group. As the company vision
says what CBL long term plan is to becomethelargest confectionary manufacturer in
the South Asian region. So getting maximum useof vast Indianconfectionary market
is a must for achieving long term companyobjectives. In current context CBL is notin
position to compete with Indianmanufacturers in low price category. Already CBL

products are having20% to 30%higher price than Indian products in the Indian
market. Yet in terms of product qualityCBLproducts are much better than
competitive Indian products. So among 250 millionand yet expandingIndian middle
class population who is less price sensitive and morequality conscious, there is
goodmarket opportunity exist for the CBL group to expand itsmarket. In order to get
the maximum use of thissub continental market, exportingproducts from the Sri
Lankan plants through Indian dealers as whatCBL currently does, would not be
sufficient to have a competitive edge in long terms. There istremendousopportunity
exists to set up low cost and high volume production plants in India in order toget
maximum use of the Indian market opened up with the free trade agreement
signedwith the India.In recent past prior to the FTA signing, Munchee tried to start
its firstoverseas manufacturing plant byacquisitioning an Indian biscuits
manufacturingcompany and attempt was failed due to unfavorableIndian
regulations regarding FDI inIndia at that time. Now with the FTA these regulatory
hassles arerelaxed so theopportunity can be utilized.When CBL Natural Foods (Cecil)
is considered, it is a companymainly engagedin production of bottled fruit drinks
mainly for the Sri Lankan market. Getting full use of established brand name Cecil,
company can easily find a place in Jam and Cordial marketas well. Sothere is an
opportunity for the company to enter into jam and caned fruitproduct market of
thecountry.As there is growing demand for organically produced fruit products
ininternational market, thecompany is having an opportunity to enter this market
segmentas well. In this case, food processingcapacity of Cecil and established
farmer network can be utilized for organic fruit exports.As a summary,following can
be seen as opportunities existing for the company. Opening of north and east
marketafter the war Free Trade Agreement with India. Relaxing of Indian
regulation related to direct foreigninvestments. Growth in Sri Lankan economy
Unexplored market opportunities in Jam and cordialmarkets in the country.
Growing demand for organic fruit products in international market.When it comes to
consider threats facing the CBL group, major threat is coming withIndian free
tradeagreement. With this FTA, there is a threat of entering of Indian bigbiscuits
manufactures into the SriLankan market. Actually this threat is substantial as
SriLankan per capita biscuits consumption is as highas 2.5kg, one of the highest in
Asianregion. One recent attempt was made by strong Indian biscuitsbrand Britania
and wasfailed.For some product categories like wafer biscuits, chocolate slabs,
company
hasengaged in a price competition with competitors in the Sri Lankan market. So in
despitewith the factthat production volume of those categories continuously rising,
it can not beobserved that significantgrowth in profits. Therefore this price
competition can beobserved as another threat.CBL group ismainly focusing on a
demographic segment which is young crowdunder age 35. CBL marketing
andadvertising is paying their major attention in thisparticular segment. So there is
a possibility for anothercompany to come to market as anew entrant focusing on
another market segment where CBL is notpaying muchattention currently. So it is
another threat existing in current context.Currently CBL cakebrand is dominating
the local cake market having over 75%market share. This share has been
achieveddue to superior hygienic condition, 6 monthlong product expiry date and
importantly efficient sales anddistribution which make sureavailability of the
product everywhere in the country. But the taste of theproduct madeaccording to an
Italian formula is not matching with the local customer taste. As there isnoother

equivalent alternative the CBL cake is dominating the market. So there

isopportunity for newentrant offering equivalent quality together with a local taste
for entering to the cake market. So it isanother threat appearing in the path of
CBL.Furthermore with appearing boom of Sri Lankan economy,global companies
likeNestle who is already in Sri Lanka although not engaging in chocolate
productionandmarketing in the island, may try to make an entry into chocolate
market where Nestle is aglobalplayer. It would be a threat for CBL s chocolate
barnd Ritzbury.As a summary CBL is facing following threats. Free Trade
Agreement with India. (possibility of Indianbig players entering to thelocal
market) Price competition for some product categories in the localmarket.
Space for new entrants to invade market focusing particular market segments.
Taste of Tiaracake is not going well with the local taste. Big global players like
Nestle currently in the country mayventure into chocolatemarket.Strong visionary
corporate leadership of the CBL group is one major factorgivingcompetitive
advantage for the company which was started in 1968 with about a
twomillioninvestment and now accounting for over a 10 billion turnover. Selection of
strategies, makinginvestment wisely and building up of the efficient sales
anddistribution network, island wide by thecorporate management are definite
causes for achieving competitive advantage by the company.Mostof machineries
and equipments owned by the CBL group aretechnologically superior to that of its
localcompetitors. With the dawn of newmillennium CBL started its drive towards,
technological upgrade of its plant andmachineries and in the context of Sri Lanka,
now the company is having more efficientandmodern machineries than its rivals
reducing its production costs thus givingimportant competitiveadvantage for the
CBL to enjoy over industry average profitmargins.Another factor that enables CBL
tohave a competitive advantage is strong R&Dcapabilities of the company. R&D
laboratories have been setup as one lab for eachsubsidiary and in those labs,
extensive researches are being conducted to developand improve various food
products. Specially developing formulas locally, for productsavailable ininternational
market are done in CBL laboratories.Strong marketing team referring internally
asexcellent force, which has beenable to build the strongest brand name in Sri
Lanka for four consecutiveyears, is another strength that gives competitive
advantage for the company. And also the strongbrandnames they built are strengths
giving the company a competitive advantage.Furthermore CBL ishaving very
efficient distribution network covering mostparts of the island and now expanding
into
Similar to munchee

Strategic Management Practices at Munchee

munchee

Munchee History

MC Planning

Assignment on Marketing Management - FMCG Product

Assignment on Marketing Management

Maliban Smart Cream Cracker

PEST Analusis and Macro Environment

59596108-SLT-Assignment-1-1

Factors influencing customer buying motives with special reference to Sri Lanka Telecom Broadband at
micro level

Assignment - Pcm II 2012

PESTEL Analysis of Sri Lanka

Download and print this document

Read and print without ads

Download to keep your version

Edit, email or read offline

Choose a format:
.DOCX

.PDF

DOWNLOAD
Recommended

Strategic Management Practices at Munchee

thilangac
strategic management practices at munchee

munchee
Iroshan Priyantha
This is an evaluation of the Sri Lankan Best Biscuit brand Munchee on their s...

Munchee History
Dinesh Jayasooriya

MC Planning
rizardsaji
Previous|NextPage 1 of 3
.DOCX

.PDF

DOWNLOAD
ABOUT

Browse books

Browse documents

About Scribd

Meet the team

Our blog

Join our team!

Contact Us

SUPPORT

Help

FAQ

Press

Purchase help

AdChoices

PARTNERS

Publishers

Developers / API

LEGAL
o

Terms

Privacy

Copyright

MEMBERSHIPS

Join today

Invite Friends

Gifts

STAY CONNECTED

Copyright 2016 Scribd Inc..Terms of service.Privacy.Mobile Site.Site Language:

English