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Name of the Subject: Individual Written Assignment
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Number of words: 4000

Table of Contents
Introduction to the company......................................................................................................1
Business Opportunity.................................................................................................................3
Marketing Strategy.....................................................................................................................5
Brand logo..............................................................................................................................5
Brand Promise........................................................................................................................6
Differentiation factor..............................................................................................................6
Internal, Interactive and External Marketing..........................................................................6
Product mix........................................................................................................................6
Packaging...........................................................................................................................7
Price mix............................................................................................................................7
Place Mix...........................................................................................................................7
Promotion Mix...................................................................................................................7
People.................................................................................................................................8
Process................................................................................................................................8
Established market share and sales projections (Sales projections for the next five) years)
(from 2016 2020).................................................................................................................9
Business Operations.................................................................................................................10
Transportation of vegetables, fruits, etc...............................................................................10
Supply Chain Management..................................................................................................10
Operating Cycle....................................................................................................................11
Daily Operations...............................................................................................................11
Manufacturing Plan..........................................................................................................11
Facilities & Equipment.....................................................................................................11
IT Requirements...................................................................................................................12
HR strategy...............................................................................................................................13
Organisation Chart................................................................................................................13
Key Personnel.......................................................................................................................13
Procurement and operations manager (One officer)........................................................13
Sales and marketing manager (At the center of all the outlets).......................................14
Sales assistants (Three per outlet, and nine in total for the first three outlets)................14
Cashiers (Two per outlet, i.e. six cashiers in total)..........................................................15
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Accountant (One officer).................................................................................................15


Compensation Plans.............................................................................................................16
Finances....................................................................................................................................18
Financial Forecast Analysis..................................................................................................18
Balance sheet........................................................................................................................19
Working Capital Needs.........................................................................................................20
References................................................................................................................................21
Web References........................................................................................................................23

Introduction to the company


Cargills (Ceylon) PLC is a Sri Lankan Retail, FMCG, Banking and Restaurant company
which is listed on the Colombo Stock Exchange which was founded in 1844 by William
Miller and David Sime Cargill. The company carries a strong foundation of values and ethics
which is guided by the strong leadership it has possessed so far and it has been able to
spearhead the sustainable development of the food industry in Sri Lanka. With the continuous
investment it has done so far, Cargills retail network which is Cargills Food City became the
largest retailer in food, and grocery products in Sri Lanka in all the categories. In the effort
they took to pursue innovation and food safety led to the industrial growth in products such as
Cargills Supremo and Cargills Finest (processed meats) Cargills Kist (processed fruits and
vegetables) and Cargills Magic (ice cream and dairy products).
Cargills began sourcing fruits and vegetables directly from farmers in 1999 when it
established its first collection centre in Hanguranketha. In 2002 it invested in a dairy
processing plant and thereby expanded its outgrower network to include dairy farmers.
Cargills Magic ice cream was the outcome of this endeavor. In the same year Cargills
diversified into agri-processing with Cargills Kist which created further market opportunities
for farmers.
Along with that they have also invested money in the largest international restaurant chain in
Sri Lanka which is KFC franchise. From their marketing and distribution network which is
spread across the country Cargills distributes its manufactured brands as well as
internationally renowned food and non-food brands. The Cargills agribusiness model has
gained global recognition for linking farmers and entrepreneurs to the market through a
sustainable and inclusive value creation process. Following are the subsidiary companies of
Cargills:

Cargills Agrifoods Ltd


Cargills Distributors (Pvt) Ltd
Cargills Food Processors (Pvt) Ltd
Cargills Food Services (Pvt) Ltd
Cargills Quality Dairies (Pvt) Ltd
Cargills Quality Foods (Pvt) Ltd
Cargills Retail (Pvt) Ltd
C P C Lanka Limited
Diana Biscuits Manufac. (Pvt) Ltd
Kotmale Holdings PLC
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Kotmale Kiri (Pvt) Ltd


Kotmale Marketing (Pvt) Ltd
Kotmale Milk Products Ltd
Kotmale Products Ltd
Milife Foods Ltd
Millers Limited
Swiss Cheese Co. (Pvt) Ltd

In 2011 they were able to obtain the license to operate a bank in Sri Lanka, and with the
license they are able to operate domestic and off Shore banking business. And the recent
restaurant chain T.G.I. Fridays Sri Lanka opened giving the focus on the young generation
in Sri Lanka and working customers to provide them a service on evenings.

Business Opportunity
Vegetable is an important part of every meal that we take every day and in recent time
Organic Food has become a frequent aspect people are looking into when they are to select
vegetables for their daily meals. The trend has occurred mainly with the changes to the
human lifecycle happened and the need for a healthy diet and therefore the demand for
organic food is showing an increasing trend. When it comes to Sri Lanka, ability to grow
vegetables around the country has been a real positive side for the industry of it and the
resources such as water, soil saturated with good compost and other factors have been the
reason behind the success of vegetable industry of Sri Lanka (Kothari, 2009).
Even though the vegetable industry is a strong one, lack of suppliers to provide organic
vegetables has been a real cause of concern for the customers who are keen on a healthy
diet. Therefore, the business opportunity lies in this area and the market gap available can be
taken by implementing a supply chain source and outlets to sell only proven organic
vegetables which is targeting only this specific audience. Also the opportunity to enter the
industry is more important due to the growth rate of the market is at a promising high of 20%.
Market opportunity (Jackson, 2013)

Figure 1: Perceptual map of Sri Lankan organic vegetable market

In order to go ahead with this opportunity, it is important to identify the environment in this
business and the depth of the opportunity prevailing in this. And in this customer perception
is another important factor on the products and the neediness of them to go for organic
vegetables will be critical to understand. In order to get a better understanding on the market
opportunity perceptual mapping model was used and finding could be shown as follow
(Kumar, 2006).
The perceptual map will provide a better idea regarding the way consumers think about their
food habits and choosing patterns. With this relationship, the decision to open up a retail
outlet only for organic vegetables can be justified by Cargills. It is important to keep this as a
separate outlet from their Cargills Food City chain as selling organic vegetables along with
number of consumer goods is not justifiable and not marketable. Also with recent studies it
was revealed that people tend to have a healthy lifestyle and healthy meal and to have that
they have selected local organic food as the main preference (Olson, 2003).

Marketing Strategy
Overall Marketing Strategy for market penetration and market development for the above
mentioned opportunity needs to be mainly focused on the aspect that the need of people to go
for organic vegetables and build the strategy around that perception. In reaching different
customers segments identified there are number of perspectives to give the attention to such
as brand name, logos, strategic marketing aspects to attract customers, etc.
Brand logo
In todays business world having a strong brand name and a product line is not merely a
characteristic for a company but rather that is considered as the strongest competitive
advantage a company can have compared to their competitors which shows the power they
have among the other products and the trust gained by them (Kotler et al, 1999). As
mentioned earlier, for the newest retail outlet network to sell organic vegetables the name that
will be used is Urban Organics targeting mainly the city population at the first step and it
clearly differentiate them from the conventional vegetable retailers. Following is the logo
chosen for the company:

Figure 2: Log for New Organic vegetable outlets

In selecting the above mentioned brand name following factors were taken in to
consideration.
The above logo clearly provides the message that the outlet wants to provide organic
vegetables and colors of the logo clearly indicates it.
Easy to remember and pronounce
Clear and well-sounded name

Brand Promise
As for the brand promise of Urban Organics they can use Healthy Food for a Healthy Life
and this will provide the message of healthy living of consumer which can be gained from the
organic vegetables which are made free from different pesticides and artificial fertilizers.
Differentiation factor
The differentiation solely relies on the fact that this outlet selling only organic vegetables
which are gained from suppliers who grow vegetables in special farms without using any of
pesticides or fertilizers. Therefore, it is important for the company to emphasize on the fact
that they can rely on the quality of the vegetables they buy and therefore trust the brand
name. And in that context company should also focus on obtaining the certificate from one of
the international Organic Certifying bodies operating in Sri Lanka, Control union. Followings
are the main marketing summery for Urban Organics products.
Internal and External Marketing aspects
When it comes people living in Sri Lanka, Urban Organics can be the main provide of
organic vegetables, fruits and related content which provides the promise to a healthy life as
yet there is no certified supplier in the Sri Lankan market. In that following marketing mix
would be used in order to create growth and drive sales in the market (Linzer and Linzer,
2008).
Product mix
The main features of products of Urban Organics are:

Cleanliness
Longer shelf life
High nutritive value
Better taste

In selecting Organic products, the customers would mainly look at before purchasing the
produce will be the mentioned features of the products. And in that product mix of Urban
Organics they can present a product portfolio with diverse products and that product
portfolio can include:

Fresh and organic fruits and vegetables


Juices made up form fruits and certain vegetables
Home deliveries
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Different types of processed food from organic vegetables and fruits (jams,
chutneys)

Packaging
As the Urban Organics is aligning their work with a healthy and an environment friendly
concept the way they package their products should carry out the same kind of concept.
Therefore, for the packaging purposes of Urban Organics the idea would be to use bio
degradable cellophane which is 100% environment friendly. In terms of the design of the
package they are going to use, they can embed the logo of Urban Organic and also other
certification they have obtained (Nykil, 2007).
Price mix
When it come to the pricing of products of Urban Organics idea would be to charge a 40% on
their organic vegetables and fruits. The reason for the such profit margin is that:
Uniqueness of product compared to other retail products
Differentiation of the products done by Urban Organics, Cargills.
Pay back to the very little number of farmers who are carrying out organic farming
where the effort they have to take to produce these vegetables and fruits is extremely
high
Place Mix
One of the most critical aspect under the marketing mix is the distribution channel. As the
product will be delivered through outlets the common idea would be to use the existing retail
channel which would save costs for the main company Cargills. But when it comes special
product such as organic vegetables and as Cargills already selling vegetables the optimum
idea would be to use a separate retail channel (Chary, 2004). As for a start location to start
initially would be Bambalapitiya, Borella and Nugegoda. Main reasons for these are:
Heavy vehicle traffic
Heavy foot traffic
Major cities which includes number of corporate offices
Promotion Mix
In terms of marketing mix, Urban Organics will have to give a better focus to this as
alongside the marketing of their products regarding the value can be obtained from organic
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products to their customers they will be able to gain a bigger market share. The brand
promise mentioned earlier will led the promotion strategy of Urban Organics and it will
mainly try to create awareness among customers on:
Concept of Organic food?
Why Organic food is important?
How Organic foods will contribute to a better healthy life?
The marketing aspects considered in this promotion mix of Urban Organics would be,

Brochures
Email
Social media
SMS marketing
Billboards

The idea behind the above mentioned methods for Urban Organics are,
The target marketable segment looking for will be middle to high end income earning
consumers and it is important provide them with as much as information possible to
read and learn.
Those are the most common and cheaper ways of getting into customers minds
People
The first impression people get on Urban Organics would be critical and in order to make
sure the customers will come back again to outlets it is important to make them feel they are
part of the family. In this employees will be provided with a specific training plan and
specific uniforms to help consumers (Refer HR Strategy section), thereby creating a
perception of professionalism which Urban Organics would surely possess (Kotler et al,
1999).
Process
The process Urban Organics carry out to deliver their services will be the key to success and
it is important to ensure to the highest levels that quality will be provided by streamlining
their value chain and adding value to their consumers in every way possible. In this more of a
transparent process will be carried out to show how Urban Organics collect and sell
vegetables and other organic products (Nykil, 2007).

Projection of market share and sales for the next five) years (from 2016 2020)

Figure 3: Market share and sales projection

Business Operations
As per Scarlett (2009), the success of the whole business will largely depend the kind of
value Urban Organics add to the end product and consumers. The main objective here is to
obtain a competitive advantage in the limited market Urban Organics operate and become the
largest player in that segment to operate with a certification as well as the biggest supply
chain network which would be hard to match by any other player. High priority in the
company will be given to the freshness of the products and the service that will be offered at
the end point of sale.
Transportation of vegetables, fruits, etc.
As the freshness of the products are given a high priority in transportation of products until
Urban Organics sell through their outlets will be done with the use of freezer trucks to ensure
the freshness of products where the vegetables and fruits will be kept at the best temperature
to keep them at a better level. And it is important to create a market that will run on the
demand where the level of wastage and the time products will be freezers will be low. Plant
to the plate strategy needs to be used in this (Kumar, 2006).
Supply Chain Management
The way supply chain can be built to fit the business model of Urban Organics is given
below:

In selecting suppliers, it is important to look at the methods they use to grow these vegetables
and fruits and it is important look at different certification they have to ensure they are
dealing with the right partners. The Procurement manager along with the supply chain
management team will be the responsible party in Urban Organics which include activities
such as getting supplies and other equipment on time while ensuring the quality of suppliers
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they are dealing with and they will analyse and check every aspect of the supply chain
(Jackson, 2013).

Operating Cycle
In the business of Urban Organics, the source of the supply will be farmers and other
suppliers who are producing organic vegetables and fruits to the international market who are
mostly certified for such producing products. And along the time Urban Organics will need to
look at continuous improvements and continuous quality check will need to be done. Apart
from this as an initiative vegetable farmer will be provided with scientific method of work to
do farming without certain fertilizers and pesticides. In the long term Urban Organics is
planning to play a supportive role to those farmers by also advising them on how to protect
the quality of the products and also create a proper demand for them (Rosario, 2006).
Daily Operations
The business hours of Urban organics retail outlets will be from 8.30 a.m. to 9.00 p.m. where
employees with different shifts will be working from time to time and it is expected to keep
open the outlets all the day in a calendar year. Employees are trained to carry out followings
during the time at the work place:
Clean the premises and arrange the premises.
Arrange vegetables, fruits, etc. to display
Check the working conditions of freezers and other equipment
After 9.00 p.m. another 30 minutes will be allocated to do the following activities:
Remove the left over or the waste at the end of the day
Ensure the proper working condition of freezers.
Clean and keep the premises to work properly the next day.
Manufacturing Plan
In the usual vegetable retailing industry, the waste is expected to be around 40% - 50% but in
Urban Organics outlets it is expected keep at level of 5% - 20% with the use proper
mechanisms to protect products of them.

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Facilities & Equipment


The vegetables, fruits and other products will be stored in preset freezers and a proper
location will be allocated for different products and should make it easy to find for customers.
A generator will be kept in place to ensure the proper functioning of freezers at any given
time:

Figure 4: Floor plan

IT Requirements
Unlike earlier days most of the activities are not paper based and it has become important to
have IT functions integrated. And therefore a commercial website integration with the main
business will be important Urban Organics in this along with a new IT infrastructure where
they have the chance to use what is Cargills already using (Flick, 2009). As the plan is to
open more outlets in the near future which lead Urban Organics in to different areas such as
online order processing system, deliveries as per requests, company owned organic farms and
restaurants, also be a supplier to other organic food requirements at large scale, etc.

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HR strategy
In the attempt to build a newest retail chain for organic food to the community, Urban
Organic needs to ensure they understand the and value the role of them in the society and it is
important ensure employees will be well aware of what they have to do in this. An image of a
good employer, with a really good friendly nature in the workplace can help to build a
company that can help to realise mentioned goals. In that Urban Organic needs to believe and
treat their employees as valuable resources which would also encourage them to be
proactive in the workplace (Lawler, 2012).
Organisation Chart

Figure 5: Organisational chart for Urban Organics

Key Personnel
Procurement Manager (Operational excellence)
Requirements
Having skills to manage the relationships with Urban Organics suppliers and other
relevant parties where he/she should have prior experience in the retail environment
A good understand regarding farming, selling organic products, requirements for
transport, and quality aspects of products.
Duties

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Active engagement with main suppliers in different locations around the country to
make sure proper supply of quality goods.
Provide needed transport requirements.
Take care of the process of grading, sorting and waste collection as a central unit of all
the outlets
Coordination with all the outlets
Sales and marketing manager (At the center of all the outlets)
Requirements
A person with a creative and a dynamic personality with willingness to accept any
challenge that comes in the way and with the ability to go beyond the limits to help
the company
Must be a team player
Duties
Coordinating, training and guiding sales assistants and the training would be focusing
on sales team in outlets and the training would include
o Organic food (A certified institute will provide the training for this)
o Customer service (A manager from the head office will provide the training
regarding this)
Proper communication with the procurement manager to obtain goods for the outlets.
Carry out preparation of daily transaction figures and provide them to the accountant
in order to understand the business activities.
Carrying out the main and on-going marketing activities to create build awareness.
Sales assistants
Requirements
Ability to think and understand customers to help them
Prior experience in the retail environment.
Duties
Serving customers with due consideration provided to them and help them to get what
they need and gain trust from them to build a loyal consumer network
Arranging products in an eye-catching way.
Be the force to drive the brand forward

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Cashiers
Requirements
Basic knowledge in computer environment and knowledge to operate a machine such
as EPOS
Ability to carry mathematical functions in a quick time
Duties
Recording all the sales activities and make sure everything is properly entered and
records are well maintained
Make sure that the balance at the end of the day is correct and accurate
Management and finance Accountant
Requirements
Professional qualifications in accounting along with prior experience.
Experience in using accounting software.
Duties
Recording daily turnover, income and costs.
Providing weekly reports to the general manager.
Preparing monthly and annual budgets along with the other relevant parties.
Apart from what has mentioned above, a janitorial staff would be needed to hire in all the
outlets to handle cleaning aspects of each outlet after working time. And along with that
grading employees would be needed to carry out selection processes of vegetables, fruits and
other goods. Overall Cargills head company will carry out strategic choices making and
higher level aspects regarding Urban Organics. All the employees will be provided with a
training as to understand the nature of the business and value of Cargills main business
(Scarlett, 2009).
Training
Training would be provided to employees regarding the following aspects:
Organic food (A certified institute will provide the training for this)
Customer service (A manager from the head office will provide the training regarding
this)
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Remunerations to employees
Salaries given to employees need to reflect their contribution to the company and also should
be par with industry levels and annual increments must be provided to address the level of
commitment and increase in their performances and also should reflect the living cost
increasing in Sri Lanka.
At the beginning monthly salaries will be as follows:
Sales assistants
: Rs. 22,000
Cashiers
: Rs. 29,000
Cleaning and grading employees: Rs. 14,000
All the employees work Urban Organics who work overtime on given fays should be entitles
to one and a half days off per week. Overtime premium is calculated as 30% of the normal
hourly pay.
Termination of employment
Employees who are unable to perform to the given level will be informed and late if the
conditions prevail then necessary actions will be taken to terminate the employment. Frauds
will result in immediate termination while making sure the company is well adopted to the
laws and regulations.
Compensation Plans
As per Millmore (2007), compensation plan is about processes which are created as
incentives for employees of the company who are working towards to fulfil the goals of the
company. As the company nature should be in such way that it has to be a win-win one where
while company getting their wealth maximized employees should also get a good return back.
The plans which are formed required proper analyzations in order to ensure that those will
reflect the following mentioned attributes:
Individual accomplishments
Team work
Success for the company
These aspects can be measured through number of aspects such as:
Quality improvements to products
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Improvements to productivity of outlets


Improvements in customer satisfaction which can be identified with the comments
from customers.
Improvements to profit, sales, etc.
A balance of all the measures mentioned should be carefully analysed and then provide
employees with further incentives after understanding who have actually worked towards
achieving these goals. Urban Organics compensation plans need to be well developed and
effective where continuous supplement of rewards to the employees should help to increase
the performance in overall terms for the company and it is important to provide rewards on
regular basis (Lawler, 2012).

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Finances
Financial Forecast Analysis
Projecting finance requirements is a critical aspect for a company considering the dynamic
environment Urban Organics get to work within (Lunt, 2006).

Figure 6: Financial Forecast

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Balance sheet

Figure 6: Balance Sheet

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Working Capital Needs


As the company that operates in the vegetables and fruit industry where the comparative
product life cycle is much lesser it is important to set the working capital figure targets after
carefully analysing (Robertson, 2009). The figures set would be as follows:
Inventory days have to be 3 days or lesser
As there are no sales on credit receivable days has to set on 0 days
As the suppliers are farmers who are mainly rely on the income from what they sell
company needs to try as much as possible to take payable days closer 0 and keep at a
maximum level 5.

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Robertson, L. (2009) Financial Management, Burlington: Elsevier


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Web References
Central Bank Annual Report - agricultural production and export statistics of Sri Lanka,
(2014/2015), (Online), [accessed on: 17-01-2016]
Cargills

food

city

History

(Online),

Link:

http://www.cargillsceylon.com/AboutUs/OurHistory.aspx, [Accessed on: 17-01-2016]

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