Keells FOODS PLC is presently Sri Lanka's market leader in the prepared beef industry and loves a market share of around 70%. A subsidiary company of John Keells Holdings, KFP PLC started its businesses in the year 1983, and today takes the pleasure being solely sensible in producing the Sri Lankan Processed Meats industry to its current heights.
KFP PLC have held up to date with the industry through strategic investments in state-of-the-art food finalizing technology, quality control systems, an hostile company huge R&D orientation and cutting edge marketing leadership in the meals industry of Sri Lanka.
Keells Food Products PLC, together with its subsidiaries, partcipates in the production and deal of processed meat and crumbed products, as well as the sale of raw meat generally in Sri Lanka. The business offers sausages, meatballs, and chilly reductions under the brand of Keells; and Chinese rolls, formed meats, french fries, nuggets, burgers, seafood fingers, and kieves under the Halal (Krest) brand name. They offer flavor, nutrition and a top quality product to meet today's demanding lifestyles of consumers all over the world.
Beverages carbonated carbonated drinks range include Elephant House Ginger Ale, better known as EGB which has natural ginger, Cream Soda the favorite vanilla flavored youngsters drink, raspberry flavored Necto, orange flavored Orange Crush and Orange Barley, Lemonade, Soda, Apple Soda, Dry up Ginger Ale and Tonic. Levels of caffeine based Outdoors Elephant (energy drinks) and Blue Fountain bottled normal water under the brand of Elephant House. (http://www. keells. com/beverages. html) As well as give you a unique make of Snow cream which is the leading iced confectionery brand both in Sri Lanka and Maldives, where many other international brands are available but humbled.
It exports its products to India, the United Arab Emirates, and Maldives.
KFP PLC brands enjoy incredible equity in the Sri Lankan market, as established of core principles of convenience and quality. KFP PLC serves certain markets in India, United Arab Emirates & Maldives and happens to be in the process of conditioning their existence in these local marketplaces. (KFP PLC Annual Report 2009/2010 available on http://www. keellsfoods. com/images/inside_pages/annual/KeellsFood-AR-2009-2010. pdf).
Vision and Values of Group
Building businesses that are innovator in the region
Changing constantly, reinventing and evolving
Striving to get things right the first time
Doing right things always
Constantly increasing the bar
Fostering a great place to work
Building strong connections based on openness and trust
http://www. keells. com/vision-and-values. html
Points for PEST Analysis of Keels
The comprehensive success of the Sri Lankan armed forces in liberating the North and East of the country and developments since then, with presidential and parliamentary elections and the recent local council elections shows steadiness now behind keels.
The Company success was significantly impacted in last year by the upsurge in the country Building Tax (NBT) which was initially created as 1% point of turnover and subsequently increased to 3% points. The total impact scheduled to NBT amounted to Rs. 40 million which the Company had not been able to pass on due to suppressed consumer demand due to reduced purchasing electricity.
The imported hen beef cost too was impacted by high fees and levies producing a significant cost disadvantage to the Company (Annual Statement KFP Plc 2009/2010).
The Sri Lankan market saw GDP expansion of 3. 5 percent in 2009 2009. This is lower than the 6 percent observed in 2008 but a good performance given the global environment. Inflation and interest rates declined significantly through the entire year, while the local currency appreciated, reflecting the building up economic basic principles post battle. The Sri Lankan Rupee as at 31st March 2010 was Rs. 114 to the US dollar compared to Rs. 115. 53 by 31st March 2009 (Total annual Report KFP Plc 2009/2010).
Prediction associated with an economic growth in the next years, however sales of keels has dramatically been increased in the past 3 years. Sausages prolonged to account for the biggest portion amounting to almost 50% of their total market volumes in the Keells range of products. Overall sales of keel's sausages grew by 1%, in a very static market (Annual Survey KFP Plc 2009/2010).
French fries, which accounts for a small segment of sales in the Krest Range encountered stiff competition. However scheduled to stock pressure and distribution strengths the merchandise grew rapidly adding 36% expansion. It is presumed further marketing support and changes in the marketing blend will further grow this category (Annual Report KFP Plc 2009/2010).
Points for SWOT analysis of keels
High Quality Conscious
Keels products are the only processed meat in Sri Lanka that comply with the SLS (Sri Lanka Benchmarks) certification, whilst the procedures that are completed are aligned to incorporate ISO 22000 benchmarks. Additionally at an organizational level our entire operations conform to ISO 9000 standards
Also having food quality benchmarks, such as ISO 9001 certificate, HACCP license for food basic safety management tool and SLS certificates
Having MODERN TOOLS and qualifies works through the procedure and upgraded machineries and equipments. They incorporates some of the most modern semi automated equipment conforming to international expectations for hygiene and safeness, such as sausage linking machine ( to automate the portioning and clinging process, at high speed) peeler machine, slicer machine and a thermoform packaging machine. in their keells range factory.
Keels using high Tec MC3000 Motorola mobile pcs system working on a Wi-Fi network, across 30 supermarket stores for inventory variant.
Having the best Laboratory among in asia and Modern storage space facilities.
Keels hold a higher web technology which is speed, quick download, easy navigation bars, customer friendly and corporate colour because of their web strategies
French fries, which makes up about a small portion of sales in the Krest Range experienced stiff competition from cheaper variants introduced into the market by our rivals. However anticipated to stock pressure and syndication strengths the merchandise grew swiftly adding 36% growth. It is thought further marketing support and changes in the marketing combine will further develop this category.
Porter's five makes Analysis
First of all, competition within the meals and beverage industry appears to be large as well as diversified. McDonalds, KFC, Tea firms, Coffee firms, Cargill's, etc. which have a tremendous range of resources at their removal. Although bakeries and smaller sellers (outlets).
Poter's five forces model is based on the simple truth that all industry and market is influenced by several competitive causes namely threat of new access, bargaining power of suppliers and customers, competitive rivalry and threat of substitutes. The strength of completion and therefore an industry elegance and profitability will mostly depend on these exterior factors.
Awareness of the five makes can help a corporation understand the framework of its industry and stake out a position that is more profitable and less susceptible to attack and protecting against the competitive makes and shaping them in a company's favour are crucial to strategy.
(Harvard Business Review January 2008).
The strongest competitive pressure or causes determine the profitability of an industry and become the main to strategy formulation. (Harvard Business Review January 2008).
Poter's five forces of Keels
Bargaining power of Threat of new entrants low
Bargaining ability of
Threat of substitutes
Threat of New Entrance
The risk of new entrants is suprisingly low in the meals and beverages industry. The industry is very older and it has successfully reached economies of scale. In order to be competitive in this industry a retailer must have the ability to achieve economies of range.
Supply part of keels: high economics of range, because high level of own production, thus it will reduce the cost per device as they can spread set cost over more items, employ better technology, or control better stipulations from suppliers. So these deter admittance by forcing the hopefuling entrant either to enter into the industry on a big scale or to accept a cost disadvantage.
Demand side: discourage the access by limiting the determination of customers to obtain a newcomer and by minimizing the price the newcomer can command until it accumulates a large bottom of customers.
Another hurdle to entry is the fact that it takes an incredible amount of capital requirements scientific cost. It takes an extreme amount of capital not only to be able to manufacture and sell the merchandise but also to maintain with the study and development that is necessary for the technology requirements. High preliminary investment will be required for building or renting new stores, manufacturing plants, storages, and also to lengthen customer credit, build inventories, and finance start-up deficits. Thus the hurdle is specially great if the administrative centre is required for unrecoverable and for that reason harder to financing expenses, such as advertising or research and development. Access to distribution channels is another high barrier to entry. An organization must find a shop to sell their products or have their own retails.
Finally, strong brand devotion of customers also contributes to entry obstacles. But as turning cost for clients are low, the risk of new entrants could be characterized as moderate.
Bargaining Electric power of Suppliers
The bargaining electric power of suppliers is suprisingly low in this industry. There are so many suppliers to keels, they may have wide rage of different suppliers, thus can certainly switch to some other supplier if it's necessary. Suppliers are business companions of keels, so that the bargaining power of them is relatively low; however, suppliers will protect them through reasonable pricing.
Though the local supply of fowl meat could not meet the demand this past year. Even though agreement with key suppliers, keels encountered shortages during the year. They were import the shortfall from their overseas suppliers from European countries and Australia.
Bargaining Power of Buyer
The group of keel's buyers is made by specific customers, Pizza Hut, McDonalds and Hotels. The bargaining power of the customers is reasonably high. There is a high volume of purchasers and large merchants dominate in the food and beverages market. The buyers also are a significant part of the industries earnings. If they can not keep their potential buyers happy then they risk burning off them with their competitors. The buyers have low switching cost if they're not happy. The reasons why the power is not completely high is that the buyers do have the ability to integrate backwards in to the industry.
Threat of substitutes
There are extensive Products for product replacement in the industry and the buyer's cost of transitioning to the replacement is low. The threat of product to product substitutes is high thus, its affect profitability of the company. So that they should keep distance itself from substitutes through product performance, marketing etc. In addition, it effects the growth of the company and the bonanza of industry that they enjoy in memories. A number of the substitutes are bakeries, non-carbonated substitutes for beverages such as juices, milk, fruit beverages, and coffee and tea are keeping a solid foothold in the market. And the entry of low priced sausages and in some instances unbranded sausages bought from loose form, poses difficult to the industry in preserving the integrity of the products.
Intensity of Rivalry among Competitive
Rivalry on the list of competitors is quite strong in this industry. The major competitors are so carefully balanced that it increases the rivalry. To be able to gain market show in the food and drink must gain market talk about by firmly taking it off their competitors. One of the other known reasons for high rivalry is insufficient differentiation opportunities. Opponents make similar products for example sausages, snow cream etc. The competition are compared to each other constantly, their price, quality, packing, and in a great many other aspects. Also competition among the marketplace competitors, including price, price discounting, new product introductions, advertising wars, promotions etc are extremely high. Thus, it limits the success of the business.
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