PRODUCT Name: SILK® Soymilk

Mission Statement

Leo Burnett and Seed Strategy won Silk Soymilk in the U.S. following a review. The
brand, marketed by Dean Foods' White Wave Foods, had most recently been at Berlin...
Last year Silk spent slightly more than $30 million in domestic measured media.
The Silk campaign from Burnett and Seed is expected to debut this quarter.

"The combined team of Leo Burnett and Seed Strategy is a smart and passionate one,"
said Silk vp Craig Shiesley in a statement. "The depth of consumer insight and creativity
from Leo Burnett is impressive and further strengthened by Seed Strategy's proven track
record in proposition development and innovation.

Seed is an independent branding and product development shop in Florence, Ky.

Launched in 2002, the firm also works with clients such as Kellogg, Wrigley, Kimberly-
Clark and Hill's Pet Nutrition. Other review contenders for Silk could not immediately be
determined.

Berlin Cameron hasn't worked for Silk since April 2008, when it produced a TV and print
pitch inviting consumers to "Take a sip forward." That campaign featured women
describing the first time they tried Silk and how it helped them achieve a healthier
lifestyle.

Product History:

Soya milk (called soymilk in America) is made from Soya beans. it is produced
by soaking dry soybeans, and grinding them with water. Essentially, it is an aqueous
extract that is prepared by grinding Soya beans.
 The process of making Soya milk was discovered in China where Soya beans
were originally cultivated and consumed. It was mainly used in the process of making
bean curd. By 1931, calcium-fortified soymilk was being produced in Tennessee
America.

Traditional way of generating milk from Soya beans?

In America and China People used to make soymilk since centuries from Soya beans by
the following procedure

• Take dry Soya beans and soak them in water for about 8 hours.

• Remove the hulls to make the process of extracting the milk easier.

• Grind the soaked beans along with a small quantity of water in a grinder.

• Add about a liter of water to the resulting paste and blend.

• Strain this liquid through a cloth and collect the milk.

• Boil the milk for about 5 to 10 minutes.

• After cooling, either drinks it as it is, or uses it as a substitute for milk.

The present inventors, therefore, have made a further earnest study on the
complete deactivation of the enzymes before grinding, and consequently, have discovered
that the enzymes are substantially able to be deactivated and the thermal denaturation of
the protein is able to be prevented to the utmost by crushing the soy beans in an aqueous
hot medium and then maintaining the crushed soy beans as they are in a hot water at high
temperatures.

Company History
Along the way, we’ve hit some major milestones that we’re proud of. Here are a few of
our highlights.

Year Event

1977 Steve Demos, a young entrepreneur, borrows $500 to start White Wave
Foods as a sole proprietorship. Company sold tofu out of our small store in
downtown Boulder, where we will eventually introduce Silk Soymilk.

1978 The first version of our soy milk is sold in three delicious varieties – Plain,
Honey-sweetened and Carob-maple. Not yet called Silk, soy milk is sold
out of bulk dispensers in our store.

1979 An early variety of soy ice cream, called Polar Bear, is introduced.
Although successful, the Polar Bear Soy ice cream brand eventually goes
away.

1981 Tasty tofu products sell quickly in King Soopers grocery stores throughout
the mountain west.

1983- Company enthusiastically sold delicious soy products around the country in
84 Chicago, Detroit, Dallas, Phoenix and Salt Lake City.

1985- Company grew in size and sales as soy products become more popular.
96

1996 Silk – the first fresh, refrigerated, organic soy milk – hits the grocery aisles
and becomes an instant hit.

Responding to the popularity of Original Silk Soymilk, we introduce 3

delicious new flavors: Vanilla, Plain and Chocolate Soymilk.

1996- Silk became primary product due to its huge popularity.

99

1999 FDA announces the heart-health benefits of soy, as if you needed another
reason to love Silk Soymilk.

2000 Fruity Silk Live!™ Soy Yogurt is introduced.

Due to popular demand, Silk becomes available in Canada.

2002 Silk Aseptic (shelf-stable container) is introduced, which conveniently

doesn’t need refrigeration until opened.
2003 Silk on-the-go Single Serve packaging is introduced.

Silk teams up with Starbucks® as the soy milk brand of choice in 4,000
Starbucks locations.

2003 Silk is awarded its first Green Power Leadership Award for offsetting
100% of electricity used in creating Silk and named one of the
Environmental Protection Agency’s (EPA) Top 25 Partners.

Company began sponsoring Farm Aid.

2004 Five tasty new Silk Soymilk options are introduced:

Enhanced, Unsweetened, Very Vanilla and Plain & Vanilla twin-packs.

Delicious Silk Live! Soy Smoothies are introduced in four irresistible

flavors:
Mango, Strawberry, Raspberry and Peach.

Silk becomes a presenting sponsor for Farm Aid. The Green Power Partner
of the Year award and are again named an EPA Top 25 partner.

2005 Healthy and tasty Silk Light is introduced in Light Plain, Light Vanilla and
Light Chocolate.

Silk is chosen by the Smithsonian Institution to build a soy exhibit at the

Folk life Festival on the National Mall and demonstrate how soymilk is
made to over 1 million intrigued visitors.

Again a presenting sponsor for Farm Aid.

Silk receives the Green Power Partner of the Year award and is once more
named an EPA Top 25 partner.

2006 Silk is featured in Chef Akasha Richmond’s book Hollywood Dish that
contains over 50 recipes using soy milk.

Silk continues to offset 100% of its energy usage with renewable wind
energy.

Summary Of Silk® Soya Milk:

Silk® Soymilk was introduced in 1996. Silky-smooth and delicious, Silk quickly
began taking over refrigerators and breakfast tables. Maybe it's the flavor. Maybe it's the
creamy-rich smoothness. Maybe it’s the unbeatable nutrition. Either way, Silk is now the
best-selling soy milk in the country.

SWOT analysis

Strengths

• It contains very little saturated fat

• It contains less antibiotics, fat, cholesterol and hormones
• Contains photochemical which help in cancer prevention
• It can control the level of blood sugar and hence beneficial for diabetes patients
• It does not contain casein
• Jewish people are kosher and may consume it because it is pareve
• It is safe for people who are allergic to cow’s milk or have lactose intolerance.
Weaknesses

• It contains a lot of phytic acid

• It contains hemagglutinin which causes the red blood cells to clump together.
However, it is believed to be harmless unless soy milk is taken intravenously
• The genetic modification involved in the process of preparing soy milk may
cause lysinoalanine or even nitrosamines
• It contains aluminum
• It contains trypsin inhibitors

Opportunities

• Under its current cost saving programmed, Dean Foods believes that silk soy milk
is on track to deliver USD 14 million in cost savings in 2009 alone.

• Besides the encouraging financial background for its soy beverage operations,
Dean Foods is very optimistic about the strategic opportunities in this business.

Threats
Though soy milk has yet to achieve significant household penetration in regions other
than Asia-Pacific and North America, sales have shown rapid progress in Western
Europe. Likewise the explosive growth predicted over the forecast period in Africa and
the Middle East is not surprising given negligible current levels of consumption, and in
volume terms the market will remain small.
In the long-term, however, lies a threat to continued expansion of the soy milk sector,
namely rising consumer concerns over genetically-modified foods. Although soy milk
positions itself as a health food, it will be increasingly difficult to ensure that soy
products are free from genetically modified crops. There is a risk of a consumer backlash
against soy products - already in September 2003, a furore arose in New Zealand over the
inclusion of GM soy in infant soy milk formula.
 COMPETITOR ANALYSIS

The 2009 Farm Aid concert is biggest competitor of silk soy milk and it is sponsored by
Horizon Organic, DIRECTV, Organic Valley Family of Farms, Silk, and EternaGreen.
Farm Aid has specific requirements for food sponsors.

Horizon corporate farm is also competitor of silk soy milk. Idaho dairy farm is most
depressing and contradicts the Horizon label that promises cows “make milk the natural
way, with access to plenty of fresh air, clean water and exercise.” OCA describes one
Horizon corporate farm.

Suitable Trade Theory for SILK Soya Milk

After looking the history of Silk soymilk. We can observe the following:

• They product is growing day by day.

• The product is popular all over the world.
• People from all over the world want to taste this sweet product.
• The best soybeans are being cultivated in China (So company can have a big
investment in this part of the world).
• Company is growing day by day so it is possible that they will have to keep an
eye on their economies of scale in near future.

So these points surely lead us towards the investment of Silk Soya milk in South
Asian region. Hence we can say that The Company can easily invest in Pakistan
due to following reasons.
 • They will be in middle of Asia.
• Raw product will be easily available.
• People in this region are more eager to try such products.
• They will surely have “First mover advantage”.

Suitable Theory for Investing the product in Pakistan:

A number of theories can satisfy our aim to invest in Pakistan and each theory has its
own importance so we will discuss most suitable theories according to our priority.

Absolute Advantage

White Wave Foods Company has the absolute advantage of production of Soymilk. The
raw material i.e. Soya is widely available in USA. The second absolute advantage is on
technology basis. The processing technology of producing milk from plant on industrial
basis is just available in USA.

Factor Endowments Theory

White Wave Foods Company has resource of Capital and Technology in abundant. These
two resources are very cheap and easily available in USA rather than any other country of
the world. The capital market of the USA is very strong. Bulk capital amount is easily
available in USA to build up a plant in country. They have the technology to extract milk
from Soya on large scale on very cost effective basis.

Product life Cycle theory

The product of White Wave Foods Company, Soymilk is currently widely used in USA.
It is on initial stage, that’s why its production is based in USA where its potential
customers are in a significant numbers. However it is being exported to some other
countries like UAE.

Country Size Theory

The market size of USA is quite significant. Product is widely accepted by the people of
USA because they are more health conscious. Moreover the neighboring countries of
USA i.e. Canada and Mexico have the same culture. In those countries people have the
same life style that is of Americans. So product has great chance to grow while being
manufactured in USA.

As the people of Pakistan are adopting same life style that of USA and are getting more
conscious about the Health and hygienic foods so Pakistan can be the region for
expanding our business.
Competitive Advantage Theory

According to Porter there are two basic types of competitive advantage: cost advantage
and differentiation advantage

Silk is an Innovative product and as history shows we can provide better customer
services and satisfaction to create differentiation advantage. On the other hand Silk Soya
Milk is being produced by Soy and other natural plants so its cost is much lesser than
natural Cow Milk; hence we have a cost leadership advantage.

Porter’s Diamond Theory

Porter’s diamond Theory has four parts:

• Factor endowments: Soya beans which are the main components of our product
silk Soya Milk are cultivated at a large scale in USA, So White wave company is
well endowed with the Factors of Production, like skilled labor and capital for
Silk Soymilk.
• Demand Conditions: With increase in population the demand for such no fat
milk is growing day by day, moreover people are getting conscious about health
and hygienic products.
• Relating and Supporting Industries: USA is most advanced country in
Technology and industrial sector. So the relating and supporting industries for
canned and preserved food are most advanced in USA.
• Firm Strategy, Structure, and Rivalry: It’s true that rivalry encourages firms to
produce more and increase their growth. But still White wave co. is not facing
that much of rivalry in Silk Soymilk but still firm will have to keep an eye at
future.

Theories which are not applicable:

New Trade Theory:

Milk is such a product which is every day need and when people will start using
this they will demand more and more. While new trade theory negates this
statement.
 Comparative Advantage Theory:

As White wave Foods Company is producing Dairy Milk. Yogurt, Fat Free Milk
(Soya Milk). All the above products except Soya Milk are easily available in
Pakistan currently. So our company has no comparative advantage in this regard.

Silk Soymilk has been produced in USA and now we want to take an insight of
Pakistan’s External Environment so to observe our mode of entry and see how we can
grab the opportunity to succeed in Pakistan.

Main Factors of External Environment

The main factors that can affect the business are:

Cultural environment:

As a Muslim country, the culture of the Pakistan is normally based on the true Islamic
beliefs and norms. People believe to eat hygienic and HALAL food items. Moreover as
the education level has changed our culture, people are becoming more health conscious.
They want low price food items which are health friendly. Most of the people in our
culture is focusing on quality, but not the quantity so people are more specific about the
quality of products. So our culture is quite suitable for the new product Soymilk.

Social Factors

Social factors are those in which we observe how consumers, households and
communities behave and their beliefs. For instance, changes in attitude towards our
product.
Many spices that are also associated with other countries of South Asia, yogurt is a
common ingredient. Pakistanis drink a great deal of hot tea (chai), and lassi (a type of
yogurt drink), sherbet, and lemonade are popular.

Pakistanis are very fond of sweets so there is a lot of usage of Milk in daily life of
Pakistan. Moreover, in everyday life usage of Milk in breakfast is common. Most of the
people in educated parts of Pakistan keep themselves aware of health and safety, low fat
milk and something that they can use n store for longer period of time. That’s why our
Product Silk Soymilk will be hopefully appreciated in this Part of the World.

Legal Factors:

As the product line is general food and Beverage item so the company has to satisfy the
Government legal authorities that product is made by “HALAL” contents. Silk Soymilk
is pure and is made from natural resources.

Economic Factors:

According to WTO policy review on January 2008 of Pakistan “Pakistan’s economy has
witnessed an impressive revival over the past few years. Sound macroeconomic
management and wide-ranging structural reforms have contributed to high real GDP
growth, a reduction in the debt-burden and an improved business climate.”2

A brief from the IMF issued on the 17th of December 2007 says that ‘Pakistan has
experienced a remarkable turnaround in its economic performance’.2

According to the review of Pakistan the Stock exchange of Pakistan is one of the best
progressive in last 6years in Asia and also the Currency was stable with respect to US $
Dollar Moreover, the GDP is going high and unemployment rate is going down. This
economic stability positively affected the per capita income of Pakistan as the income of
the people increase so they want to upgrade their living pattern and willing to spend more
money on hygienic products. So it’s the best time for company to bring the new hygienic,
health friendly product Soymilk in Pakistan.

Political Factors

Political Stability: It is an important factor to attract investment as it builds confidence of

investors. Lack of political stability remained an important feature of Pakistan’s politics
during the last two decades (1988-2008). Such frequent changes in government along
with immediate changes in policies are hardly cordial for investors.3
Government Bureaucracy: This is perhaps the biggest hurdle regarding investment in
Pakistan. Corruption at all levels in the bureaucracy is widespread, and is taken into
account by investors considering business in Pakistan. The administrative harass factor
remains high in Pakistan.3

But the Government is successful to provide safety to the business man of all kinds to do
business in Pakistan. So our company can easily launch its new product in Pakistan.

Demographic environment:

According to the estimation of 2008 the 15-64 age range people are 54.9% of total
population. And literacy rate is 54% (wikipedia) . This information reflects that company
can easily launch a health conscious product to target this segment. This combination of
people will help the company to start a profitable business in Pakistan.

Competitive environment:

Currently in Pakistan hygienic milk is available in lots of brand names. But these are
gotten from Cows that has animal fat in it. But in Soymilk the milk is generated by a
plant named Soya. So it is free from fat. There is not any company offering this kind of
product in Pakistan so there is not any competitor in country. Company can start a
profitable business over here.
Mode of Entry

Pakistan is such a country which has large consumer market with different tastes and
preferences. Now first we will have to observe that what would be our target market and
how we can manage to grab the customer attention for our product. Then we will see
which one will be the best way of entering in Pakistan. As we are well aware that we will
be the first movers in Pakistan so we must see the advantages and disadvantages of First
mover’s
i. Advantages
a. We can preempt rivals, establishing a strong brand name quickly
b. We can build sales volume
 c. We can create switching costs
ii. Disadvantages
a. Pioneering costs - costs only an early entrant has to bear
b. Possibility that regulations may change
Silk soymilk is such a product which should be available at a very large scale and it must
be marketed according to the needs of consumers. We want to create a position in the
minds of costumers. Hence first we must analyze all the entry modes and then pick out
the best one.
Best way of Entry in Pakistan

After looking at the resources and Sales potential of our Company we have choose
Imports as best mode of entering the Pakistan. The conditions are favorable because we
have limited sales potential in host country, little product adoption required. Moreover if
we start producing in Pakistan the production cost will be very high. Liberal import
policies are favorable and in the end we know that we have high political risk in Pakistan.
The advantages will be
• Minimizes risk and Investment
• Speed of Entry
• Maximizes scale uses existing facilities
Now let’s have a look at the negative part of it and techniques to minimize those.

• Trade barriers & Tariffs add to costs

• Transport Cost
• Limits access to local information
• Company viewed as outsider

After keeping in mind all these matters we can solve them by making sure that trade
barriers are not so challenging for us as we have studied the external environment of
Pakistan. Transportation cost is also not that big problem for us, and also there is no harm
if our company is viewed as outsider as most of the companies in Pakistan are outsiders.
 Conditions
Mode Favoring this Advantages Disadvantages
Mode

• Limited sales
potential in host
country, little • Trade barriers &
product adoption Tariffs add to costs
required • Minimizes risk
and Investment
• Distribution
channels close to • Transport Cost
plants • Speed of Entry
Exporting
• High host • Limits access to
country production local information
• Maximizes
cost
scale uses existing
• Liberal import facilities
• Company
policies
viewed as outsider
• High political
risk

• Import and
Investment Barriers
• Legal protection
possible in Target
environment • Lack of Control
• Minimizes risk
over use of Assets
and Investment
• Licensee may
• Low sales • Speed of Entry
become competitor
Licensing potential in Target • Able to
country • Knowledge
circumvent trade
Spillovers
• Large cultural barriers
distance • License period is
limited
• Licensee lacks
ability to become
competitor

Joint ventures • Import barriers • Overcomes • Difficult to

ownership manage
• Large Cultural
restrictions and
 Distance
• Assets cannot be
fairly priced
cultural distance • Difficult to
• High sales
• Combines control
potential
resources for two • Greater risk than
• Some political companies importing and
risk
• Potential for licensing
• Government learning • Knowledge
restrictions on
• Viewed as Spillovers
foreign ownership
insider • Partner may
• Local company
• Less Investment become a
can provide skills,
required competitor
resources,
distribution
network, and brand
name. etc

• Import barriers • Greater

• Higher risk than
Knowledge of local
• Small cultural other modes
Market
distance • Requires more
• Can better apply
• Assets cannot be resources and
specialized skills
Direct Investment fairly priced commitment
• Minimizes
• High sales • May be difficult
knowledge
potential to manage the local
spillover
resources
• Low political • Can be viewed as
risk an insider

Analysis of Different modes of entry according to our product: -

Exporting, Licensing, Franchising and Direct Investment are some of the main entry
modes that we can adopt. But everyone has its own advantages and flaws. We will have
to see which one has more advantages and less disadvantages.
• Exporting is suitable for the where company wants to have low sales potential; Host
country has high production cost and the host country have high political risk.
• Licensing is suitable for the company when, Import and Investment Barriers, Legal
protection possible in Target environment, Low sales potential in Target country, Large
cultural distance, Licensee lacks ability to become competitor.
• Joint venture we can see that, Import barriers, Large Cultural Distance, Assets cannot
be fairly priced, High sales potential, Some political risk, Government restrictions on
foreign ownership, Local company can provide skills, resources, distribution network,
brand name. etc.
• Direct Investment is one which will be suitable when company will face Import
barriers, Small cultural distance, Assets cannot be fairly priced, High sales potential, Low
political risk.
Now after comparing all of these and keeping in view the Resources of our company we
have concluded following results.
Silk Soy milk has following features:
i. It has limited resources as the company is just selling its products in America and
Canada.
ii. Company wants to capture the major market in Pakistan with best available
resources
iii. Company has potential to increase its sales with the time.
iv. Cultural difference is very high between Pakistan and America

LOCATION

Location:
Karachi is the most industrial, advanced business city in Pakistan. In the last decade there
has been a vast change in the city's traditional reputation. It is 24 hour city, Karachi is the
most populated city in Pakistan and has become more lively with a lot of international
Company’s Investment here.

• 47 Shah rah-e-Faisal Karachi will be the distribution centre of Silk Soymilk in

Pakistan.
 Marketing

Market Segmentation can be done on different basis. But our product is for following
segments.

Health Conscious:

Our product is mainly manufactured for the health conscious people. So we have a large
market segment of health conscious people.

Age Limit:

Other segment will be old age and of middle age people who are health conscious.
Moreover, our product is not suitable for children because it is FAT Free and they need
fats in their Growth stage.

Target market:
We are targeting middle class because of their large no. in Pakistani population and they
are willing and able to buy our products because the Dairy milk is getting expensive day
by day.

PROMOTION
We will try to capture the a
• Newspapers
• Departmental Stores
• Bill boards
Moreover we will adopt push marketing strategy for our product. So that to encourage
people to try our product.

HUMAN RESOURCE POLICY

As we are adopting Imports as the mode of entry in Pakistan so Human Resource policy
will not be an issue for us.

Expansion Plan

As we have chosen Karachi as our first location in Pakistan so we will further try to
expand our business to Lahore and Islamabad but this will only be done with the increase
in Sales of our product.

References
• www.google/images.com
• www.google/silk soy.com
• www.google.com
 ‘Silk Soy Milk’

GROUP MEMBERS:-

Syed Ali Shehanshah (MBA-sp09-165)

Waseem Taj (MBA-sp09-211)

Waqas Ilyas (MBA-sp09-196)

Syed Fasahat Ali (MBA-sp09-167)

Zia-ud-Din (MBA-sp09-202)

SUBMITTED TO:-
MR. Muhammad Irfan

Dated: 05-01-2010