PROJECT OF STRATEGIC MANAGEMENT ON “SITARA CHEMICAL

INDUSTRY”

Contents

Introduction & history Vision & mission SWOT Formulation (stage #1) Input stage EFE IFE CPM Matching stage SWOT IE MATRIX SPACE MATRIX BCG MATRIX GRAND MATRIX

Decision stage QSPM Implementation (stage # 2) Evaluation stage (stage # 3)

INTRODUCTION

Strategic management is all about Formulation Implementation & evaluation of strategies So our project will revolve on these

critical parameters.

Strategic Management

Strategy Formulation Input /action stage Matching stage Decision stage

Strategy Implementation Strategy evaluation

STAGE # 1INTRODUCTION

Introduction of Sitara Chemical

Sitara Chemical Industries Limited (Sitara Chemical) is a chemical product manufacturing company. The company operates through its two core divisions namely chemical division and textile division. These two divisions include Chlor Alkali plants and yarn spinning units. The company is engaged in manufacturing Caustic Soda and Allied Products as well as yarn. Its product line includes caustic soda solid, sodium hypochlorite, caustic soda liquid, hydrochloric acid, liquid chlorine, caustic soda flakes, Specialty Chemicals, Fertilizers, Polyester Cotton (PC) and Polyester Viscose (PV). The company is headquartered in Faisalabad, Pakistan and employs 343 people.

We present strategic analysis of Sitara Chemical Industries Limited. The report provides a comprehensive insight into the company, including business mission, vision and key competitors. The company’s strengths and weaknesses and areas of development or decline are analyzed as well. The hallmark of the report is the detailed strategic analysis on the company

VISION & MISSION

Vision statement "Strive to develop and employ innovative

technological solutions to add value to business with progressive and proactive

approach". Mission Statement

“Continuing growth & diversification for the bottom line result with risks well

contained”

SWOT ANALYSISStrengths Weaknesses

Opportunities Threats

Largest manufacture(caustic soda)

Largest Shareholder

Advance Technology

Plant Infrastructure

Strong Management

Strong Brand name

Financially Sound

Need Sizable Market to Sustain

Lack of Operations in Abroad

Relying on Permanent Customers

Increase Production Capacity

Increase Product Line

Taking Advantage of Geographic position

Provide Online Customer Service & Ordering System

Competitors

Economic Environment

Energy Crises

Threat of Stakeholders

Unstable Law & Order Situation

STAGE # 2 INPUT STAGE

IFE (INTERNAL FACTOR EVALUATION MATRIX)

Key Internal factors Weight Rating Weighted Score

Strengths

Largest manufacturer(caustic soda)Largest shareholderAdvance technologyPlant infrastructureStrong managementStrong brand nameFinancially strong

0.120.110.130.100.090.100.10

4343443

0.480.330.520.300.360.400.30

Weaknesses

Need sizeable market to sustainLack of operations in abroadRelying on permanent customer

0.100.080.07

122

0.100.160.14

Total 1.00 3.09

EFE (EXTERNAL FACTOR EVALUATION

MATRIX)

Key External factors Weight Rating Weighted Score

Opportunity

Increase production capacityIncrease product lineTaking advantage of geographic positionProvide online customer service and ordering system

0.110.080.130.09

3243

0.330.160.520.27

Threat

CompetitorsEconomic environmentEnergy crisisThreat of stakeholdersUnstable law and order condition

0.120.100.150.120.10

33433

0.360.300.600.360.30

Total 1.00 3.20

CPM(COMPETITIVE PROFILE MATRIX)

Critical success factorweight

SITARA chemicals

ENGRO chemicals

ITTEHAD Chemicals

Rating Score

Rating Score Rating Score

Product quality 0.11 3 0.33 4 0.44 2 0.22Management 0.08 3 0.24 2 0.16 4 0.32Global expansion 0.10 3 0.30 2 0.20 4 0.40Financial Position 0.10 4 0.40 2 0.20 3 0.30Market share 0.11 4 0.44 2 0.22 3 0.33Advance technology 0.12 3 0.36 4 0.48 2 0.24Brand name 0.10 4 0.40 2 0.20 3 0.30Production capacity 0.10 3 0.30 4 0.40 2 0.20Organization structure 0.08 3 0.24 2 0.16 4 0.32Customer loyalty 0.10 3 0.30 4 0.40 2 0.20Total 1.00 3.31 2.86 2.83

STAGE # 3MATCHING STAGE

TOWS MATRIX

TOWSMATRIX

Strengths - S

1. Largest manufacture(caustic soda)

2. Largest Shareholder

3. Advance Technology

4. Plant Infrastructure

5. Strong Management

6. Strong Brand name

7. Financially Sound

Weakness – W

1. Need Sizable Market to Sustain

2. Lack of Operations in Abroad

3. Relying on Permanent Customers

Opportunities – O

1. Increase Production Capacity

2. Increase Product Line

3. Taking Advantage of Geographic position

4. Provide Online Customer Service & Ordering System

SO - strategies (S4, S5,S7,O1,O2)(Add new product line )& purchase land to build new plant) (S1,S2,S6,O3)(Enter in new market)

WO – strategies (W2,W3,O3) (Geographic expansion ) (W1,O1,O2)(Need to improve infrastructure)

Threats - T

1. Competitors

2. Economic Environment

3. Energy Crises

4. Threat of Stakeholders

5. Unstable Law & Order

ST – strategies(S1, S5,S6, T1,T4) (stable environment & Compete competitors by taking advantage of management & brand name )(S3,T3)(Install & update new technology)

WT – strategies

(W2,T1)(Launch products in other

geographical areas)

INTERPRETATION

Critical Region:“WO”

Managerial Decision:“Market development

Product development”

SPACE (STRATEGIC POSITION & ACTION

EVALUATION MATRIX)

Internal Strategic Position External Strategic position

Financial Strengths (FS) Environmental Stability (ES)

Return on InvestmentleverageWorking CapitalLiquidityCash flowPrice earning ratio

TotalAverage

+4+5+5 +4 +5 +4

+274.5

Technological changesRate of InflationPrice range of Competing productsCompetitive pressureRisk involved in businessDemand variability

TotalAverage

-2-4-3-2-3-5

-19-3.16

Competitive Advantage (CA) Industry Strength (IS)

Market ShareProduct QualityCustomer LoyaltyTechnological know-howControl over suppliers and distributors

TotalAverage

-1-2-3-2-3

-11-2.2

Growth PotentialProfit PotentialFinancial StabilityResource UtilizationCapacity utilizationTechnological know-how

TotalAverage

+5+5+4+5+4+5

+28+4.67

-6 -5 -4 -3 -2 -1 +1 +2 +3 +5 +6

+6

+5

+4

+3

+2

+1

-1

-2

-3

-4

-5

-6

AggressiveConservative

CompetitiveDefensive

ISCA

X-axis =CA + IS

= -2.2+(4.67)

= 2.47

Y-axis = FS + ES

= 4.5+(-3.16)

=1.34

FS

ES

INTERPRETATION

According to the space matrix score SITARA CHEMICAL falls in the “AGGRESSIVE quadrant” . Their strategies should be one of the following:

Vertical and horizontal integration Market penetration Market development Product development Diversification

IE (INTERNAL-EXTERNAL

MATRIX)

ISitara

Chemicals

ii iii

iv V Vi

vii viii ix

Strong 3.0 – 4.0

Average 2.0 – 2.99

Weak 1.0 – 1.992.03.04.0

IFE Total Weighted Score 3.09

1.0

2.0

3.0

Low

1.0 – 1.99

Medium

2.0 – 2.99

High

3.0 – 4.0

EFE T

OTA

L W

EIG

HTED

SC

OR

E

3.2

INTERPRETATION

Sitara Chemical falls in first region of IE matrix and there main focus will be on “GROW AND BUILD” and they will mainly focus on strategies which are:

Market Development Product Development

GRAND STRATEGY MATRIX

Quadrant II Quadrant I

Sitara Chemical

Quadrant III

Quadrant IV

Slow market growth

Rapid market growth

Str

on

g com

peti

tive

posit

ion

Weak c

om

peti

tive

posit

ion

INTERPRETATION

Sitara Chemical has rapid market growth and strong competitive position so it falls in first quadrant and the most suitable strategies for Sitara Chemical are:

Market Development Product Development

STAGE # 4DECISION STAGE

QSPM(QUANTITATIVE STRATEGIC

PLANNING MATRIX)

Key Internal Factors PRODUCT DEVELOPMENT

MARKET DEVELOPEMNT

Strengths Weight AS TAS AS TAS

Largets manufacture 0.12 3 0.36 4 0.48

Largest shareholder 0.11 3 0.33 4 0.44

Advance technology 0.13 4 0.52 3 0.39

Plant infrastructure 0.1 -- -- -- --

Strong management 0.09 2 0.18 3 0.27

Strong brand name 0.1 2 0.20 3 0.30

Financially sound 0.1 3 0.30 4 0.40

Weaknesses

Need sizeable market to sustain 0.1 2 0.20 3 0.30

Lack of operations in abroad 0.08 2 0.16 3 0.24

Relying on permanent customers 0.07 1 0.07 2 0.14

Total weight 1.00

Key External Factors PRODUCT DEVELOMENT

MARKET DEVELOMENT

Opportunities weight AS TAS AS TAS

Increase production capacity 0.11 3 0.33 4 0.44

Increase product line 0.08 2 0.16 1 0.08

Taking advantage of geographic position 0.13 2 0.26 3 0.39

Provide online customer service & ordering system 0.09 -- -- -- --

Threats

Competitors 0.12 3 0.36 4 0.48

Economic environment 0.1 1 0.10 2 0.20

Energy crises 0.15 3 0.45 2 0.30

Threat of stakeholders 0.12 3 0.36 2 0.24

Unstable law & order situation 0.1 -- -- -- --

Total weight 1.00

Sum Total Attractive Score 4.34 5.09

INTERPRETATION

According to the total attractive score of QSPM Sitara Chemical should go for

“MARKET DEVELOPMENT”

RECOMMENDATION

We did not found much discrepancies in the Strategy Analysis of Sitara Chemical industry they are performing pretty well and have strong strategic direction

According to our recommendation we suggest them that they could go for “Market Development” because there is opportunity for them to export their product in new markets

The reason behind the selection of this strategy is that they have strong management team including Human Resource, Finance, Marketing, Production & R & D Departments.

HRM plays very important role in all activities so Sitara Chemical industry focuses on its function and scope for the betterment in present and future.

There is another opportunity for Sitara Chemical industry that they have to make segment in their website through which they can provide online customer services in which customer can place order and provide Feedback as well this will help them to capture more customers throughout the world.

Cont. . . .

They can also increase their production capacity because they have proper infrastructure , advance technology & strong financial position and these all enable them to take advantage to increase the production capacity.

CONCLUSION

We have learnt a lot from this project because this project provides a real picture that how an organization performs Strategy Analysis and what are the factors that they considering most important while performing the analysis.

According to the current position of Sitara Chemical they have strong strategic direction, growing day by day and they have largest market share in industry so they should go for Market Development.

They continue to strive towards its goal of being the leader in a manufacturing of caustic soda & their presence in industry is a big threat for competitors.