STRATEGIC MANAGEMENT

Report on

AKIJ GROUP

Group- 10
10th Batch (Section-B)
Department of Management Studies
Jagannath University, Dhaka
Report on AKIJ GROUP
Course title: Strategic Management
Course Title: 4237

Submitted by,
Group- 10
10th Batch (Section- B)
Department of Management Studies
Jagannath University

Group list

Serial No Name ID Remarks

1 Kazi Shah Poran Shovon B130202098
2 Md. Naimul Islam B130202107
3 Md. Kamran Hasan B130202117
4 Md. Naimur Rahman B130202128
5 Md. Aminul Islam B130202129
6 Md. Tanjil Hossain B130202137
7 Jahid Hasan B130202153
8 Md. Ruhul Amin B130202159
9 Md. Mobarok Hossain B130202166
10 Md. Sirajul Islam B130202174
11 Tamanna Akter B120202030

Supervisor:
Dr. Liza Khanam
Associate Professor
Department of Management Studies
Jagannath University

Date of submission: 14 October, 2018

 Executive Summary
The main intension of this report is about the practical analysis and representation of theoretical
topics of the course Strategic Management. The topic of this report is to implement several
theories of the book and relate them with a real organization of our country. So, we have chosen
one of the biggest group of companies of our country AKIJ Group. This is one of the biggest
conglomerate group of companies of our country. They have enormous business sectors and
captures a huge portion of the market share of Bangladesh.
In this report we focused on some specific theoretical aspects of Strategic Management. At first,
we have included the introduction and history of AKIJ Group. We have mentioned the key
people of AKIJ group who has great contribution to bring this Group of companies int6o this
position. Thereafter we have analyzed the SWOT of AKIJ Group, Porters’ five forces analysis
and generic studies. We have also mentioned the industry diversification among the companies
of this group.
We tried to focus on the basic information available in the official website of AKIJ group and
Wikipedia. We have also collected some information from some others dependable sources. We
try our best to put necessary information in the report about the AKIJ group of the specific topics
within a short period of time. So, there must be lacking of data and information as we didn’t visit
or talked any officials of the group. We ended up this report with the references of the name of
website we have visited so far to make this report.
 TABLE OF CONTENT
CHAPTER PARTICULAR PAGE
1. Introduction 5
2. Company Information 6
3. Profile of AKIJ Group 8
4. Some Main Companies of AKIJ 9
Group in Brief

5. SWOT Analysis of AFBL 19

6. Analysis of Porter’s Five Forces 21
Model
7. Diversity among the companies 23
of AKIJ Group
8. Business Level Strategy of AKIJ 23
Group
1.0 Introduction:
Origin of the Report
This report is prepared with respect to the course of Strategic Management (MGT-4237). We are
assigned to prepare a term paper by our honorable course instructor Dr. Liza Khanam. Our task
is to make a report on AKIJ Group and complete a study that covers all important factors
regarding the dawn of their business and their various accomplishments and hurdles along the
way.

Objective of the report

General Objective
The general objective of our report is to discuss the about the company of AKIJ Group as a whole. We
have focused on different sectors of their business.

Specific Objective
 To define the enacted environment of the AKIJ Group
 To explore different terms of management
 Analyze recruitment and selection process of AKIJ Group
 To find out how AKIJ Group have operated their endeavors
 To describe the sectors they have

Scope of the report

This report is created on the details of AKIJ Group. This report will help people understand the
process of making and operating a company.

Limitations
 The company had followed some privacy policy. For that reason they did not tell us
everything we needed but we managed to find most of the necessary data.
 Because of some unfortunate reasons, not all the employees were helpful in giving
information nor were they very much acquainted with the concept of preparing a report
like this.
2.0 Company Information
Background
A sister concern of Akij Group, Akij Corporation Limited is the most organized distribution company in
the country. Akij Group is country’s one of the leading business conglomerates. Initially Akij Corporation
Limited was known as Amin Enterprise and started its operation in 1992. In June 1997 Amin Enterprise
was renamed as Aminuddin Enterprise Limited and in 2001 Aminuddin Enterprise Limited was again
renamed as Akij Corporation Limited. Akij Corporation Limited is responsible for the marketing and
distribution of three industries of Akij Group namely Dhaka Tobacco Industries, Akij Match Factory
Limited and Akij Zarda (chewing tobacco) Factory.

History of AKIJ Group

History of AKIJ Group stretches back to later part of the forties. In its infancy, the Group started in
humble way with jute trading which was known as the golden fiber of the country, earning highest
amount of foreign exchange.

AKIJ Group's ceaseless efforts with dynamic management and support from their numerous clients have
led their Group in diversifying its business activities. In the second phase, the Group went into
manufacturing handmade cigarettes popularly known as bidis. This sector gave a real boost to the revenue
earning of the Group as well as making a substantial contribution to government exchequer. With the
passage of time, the Group undertook new ventures and presently there are 15 units of industries under its
umbrella like cigarettes, handmade cigarettes, printing & packaging, textiles, hand board, pharmaceutical,
leather processing and real-estate business are in operation, catering jobs for more that 32,000 people in
various categories.

The Group has plans for setting up more projects. The projects are already in pipeline. Foreign investors
have shown keen interest in joining with us for joint ventures. The matter is under our active
consideration and will hopefully soon mature. This will also help the nation's economy growth and will
create job opportunities to various professionals.
AKIJ Group is also involved in socio-cultural activities. The Group has been operating a sizeable
orphanage free of charge in district town. The Group has also acquired a modern mother & children
hospital previously owned by Save the Children (UK). The hospital is being operated as a non-profitable
concern by Ad-Din Welfare Trust.

Contract address:

AKIJ Chamber
73, Dilkusha Commercial Area
Dhaka - 1000, Bangladesh
Phone: (+880-2)9563008-9, 7169017-8
Fax: (+880-2)9564519
e-mail: info@AKIJ.net

Mission and vision of AKIJ Group of industries:

In this era of mass production, as it is very hard to stand out with one product, AKIJ Group focuses on
making the best in all sectors.

Any company’s vision is actually the dream to which the company always strives to reach where it may
become possible or not. AKIJ Group is not something different. Expanding the business in the abroad and
becoming one of the market leaders internationally are the visions of AKIJ Group.

The mission of AKIJ Group is to be the market leader through their best effort, suitable and competitive
marketing strategy and the consumers support. Now they are in the position of challenger and their vision
focuses on those missions, goals and objectives which will make them able to be the leader from the
challenger to the leader in the market.
Owners and Board of Directors:

Owner of AKIJ Group

Founder Chairman: Sheikh AKIJ Uddin

Current Chairman: Mr. Sk. Nasir Uddin

Board of Directors

Chairman:

Mr. Sk. Nasir Uddin

Managing Director:

Mr. Sk. Bashir Uddin

Corporate Director:

Sk. Jamil Uddin

Sk. Shamim Uddin

Sk. Jashim Uddin

3.0 Profile of AKIJ Group:

Enterprises under AKIJ Group

 Business Enterprises:
 AKIJ Bidi Factory Ltd.
 AKIJ Cement Company Ltd.
 AKIJ Computer Ltd.
  AKIJ Corporation Ltd.
 AKIJ Food & Beverage Ltd.
 AKIJ Institute of Technology.
 AKIJ Jute Mills Ltd.
 AKIJ Match Factory Ltd.
 AKIJ Online Ltd.
 AKIJ Particle & Hard Board Mills Ltd.
 AKIJ Pharmaceuticals Ltd.
 AKIJ Printing & Packaging Ltd.
 AKIJ Real Estate Ltd.
 AKIJ Textile Mills Ltd.
 AKIJ Zarda Factory Ltd.
 Ad-Din Hospital (Philanthropic).
 Dhaka Tobacco Industries (Cigarettes).
 Dhaka Tobacco Industries (Leaf).
 Navaron Printing and Packages Ltd.
 S.A.F Industries Ltd.

4. Some Main Companies of AKIJ Group in Brief

AKIJ JUTE MILLS LTD.

AKIJ JUTE MILLS LTD. a unit of AKIJ Group is a 100% export-oriented Jute yarn Industry catering to
the need to carpet manufacturers and other end users of jute yarn all over the world. Apart from being a
member of a leading industrial group of Bangladesh, the mill is running by a team of qualified and highly
experienced professionals whose principle objective is customer satisfaction.
In respect of production the mill is one of the largest in Bangladesh producing about 20,000 Metric Tons
of Jute yarn annually. The mill is creating jobs to over 3,000 people most of them are destitute females of
the locality.

AKIJ MATCH FACTORY LTD

AKIJ Match Factory Ltd. has been established in the year 1992 at a beautiful site near Muktarpur Ghat on
the bank of river Sitalakshaya. It is a fully automatic match factory which produces 100% Carburized
high quality safety matches.

Dolphin is the brand name of the matches produced from this factory. Immediately after the introduction
of the brand it became very popular among its consumer because of the high quality and intensive
distribution in every nook and corner of the country.

Most of the raw material comes from various parts of Bangladesh by river. The river Shityalakhkha flows
next to the factory and facilitates transportation greatly. Some of the wood used to make match sticks
comes from Pakistan.

A cutter with a circular saw cuts the logs into 15” portions. The bark is taken off the portions and these
are then put through the peeling machine which peels layers of wood off the log. These layers are
chopped into the rough shape and size of match sticks. As these sticks are usually quite moist, they are
dried. Carburization and treatment with other chemicals such as Boric acid occurs at this point. This is to
ensure that the match sticks don’t break when ignited and that their quality is preserved even in highly
humid conditions. The chemically treated sticks are polished in two stages to give them uniform
proportions.

AKIJ CEMENT COMPANY LTD.

AKIJ Cement has established a foot hole in the cement market. It was established in 1995.
Encouraged by consumer’s response and confidence AKIJ Cement is in the process of expanding
its capacity by many folds.
From unloading the raw materials at the jetty to loading the finished product onto boats, all the
stages are to be automated and computer controlled. Two fix swing cranes will unload the clinker
and gypsum and put them on a belt conveyer to be put into storage. These are then loaded into
the ‘bins’ and measured by two belt scales before entry to the ball mill grinder. This allows the
ratio of clinker and gypsum to be controlled. From there the ground cement goes to the vortex
separators by the means of a bucket elevator and chain conveyer. The vortex separator separates
coarse and fine cement by using high pressure. The fine cement is the finished product whereas
the coarse cement needs to be ground again. The fine cement is stored in silos and intricately
controlled conditions. This cement goes to the packing machine by a screw conveyer and from
there to the jetty by a belt conveyer.

The factory is equipped with air filters in order to minimize pollution and recycle any cement
that is suspended in the air. The entire production process is computer controlled and there are
sensors to monitor various factors at regular intervals. The level of automation reduces
dependence on staff and risk of human error. The software controlling the machines allows
engineers to view progress on a computer stimulated model of the factory. It also reports
problems and permits fine control of every stage.
The laboratory is not only involved in quality control but also on improving the cement to being
the best brand available. As well as equipment to determine chemical properties of the product,
there is apparatus to measure physical factors both before and after the cement has set.

DHAKA TOBACCO INDUSTRIES

Dhaka Tobacco Industries came under control of AKIJ Group during the late seventies after the
government decided to disinvest and handover the factory, which was up till then state-run, to
private sector.

The Factory is located at Morkun near Tongi and lot of investment into MEN & Machineries has
turned the Factory in to a Modern cigarette producing unit. It employs about 1,200 people who
work in a congenial atmosphere to deliver right quality to satisfy the millions of Smokers’ taste
and needs.

Currently, Dhaka Tobacco industries produce eight brands of cigarettes. These are Navy, Legend
White, Five Star, Red & White, K2, Surma and Diamond. Approximately one billion cigarettes
are produced per month by the company’s factory in Tongi, Gazipur. One hundred million of the
Navy brand are exported quality and are sold in Dubai.

In storage, the tobacco is kept in air-conditioned and moisture-controlled rooms where its
perfection can be maintained for up to two years.

The bales of processed tobacco are sliced in uniform sizes and ground. This is stored in the
blending silos in specific ratios. The tobacco (lamina) is moistened, cut and dried. Some of the
excess stem produced in National Leaf is also used. It is fed into a conditioner using auto feed.
Then, it is cooled and stored in silos to be processed further when necessary. A steam roller is
used to flatten the stem so that it is ready to be cut first by the cutter and then by a millicutter. It
is moistened using steam in low pressure and dried to attain the desired level of humidity. At this
point the lamina and stem come together in the mixing cylinder where chemicals are added.
There are different silos for each blend and the cut tobacco is stored in these. Four Rotary feeders
are involved in transporting this to the secondary manufacturing department.

A Molin’s Plug making machine makes filters. The filter making machine is capable of making
plugs of different length and dia. There are cigarette making machines of various brands and
speeds. Recently, the company has invested in Molmac Mark 9 machines. They are equipped
with a system to remove ferrous material and stems from the tobacco supplied to the machine. In
addition, there is an automatic system of weight and density control to maintain uniformity.

Focke Hinge Lid Packers are used for packing cigarettes. Quality Test Module is used to test the
circumference of cigarettes and filters using a laser mike head, the total ventilation with closed
ventilation zone and the pressure drop in cigarettes is a completely encapsulated condition. The
percentage of moisture, nicotine and sugar in various blends is found using the Infra lab TM
Gauge. A Tobacco Oven determines the total oven volatile content of tobacco and stems. There
are a variety of other installations to measure both physical and chemical properties, with the
most impressive being a latest smoking machine.

The machines run around the clock except on Friday when most of the maintenance work is
done. The well-disciplined environment and efficiency of this factory has caused man
multinational companies to offer us deal to manufacture their product in order to supply the
subcontinent.

Dhaka Tobacco Industries has been contributing considerable amount of revenue to the
government exchequer and also providing employment since its inception. In the financial year
2005-2006, the Company contributed Tk. 1002.58 crore to the government exchequer as duty
and VAT. During the financial year (2006-2007) DTI’s contribution to the government
exchequer will be to the tune of Tk. 1050.00 crore.

Products of Dhaka Tobacco Industries (DTI):

High Segment:
a) Castle Full Flavor
b) Castle Lights
Presently DTI enjoys more than 10% market share in this segment.

Medium Segment:
a) Navy
Presently DTI are contributing 48% market share in this segment.

Lower Medium Segment:

a) Sheikh
b) Real
Presently DTI are enjoying more than 80% market share in this segment.
Low Segment:
a) Five Star
b) K-2
c) Surma &
d) Read & White
DTI’s market share in this segment is about 50%.

Currently, Dhaka Tobacco industries produces eight brands of cigarettes. They are -- Navy,
Legend White, Five Star, Red & White, K2, Surma and Diamond. The factory produces
approximately one billion cigarettes per month. About a hundred million of Navy brand are
exported to Dubai monthly.

The company recently invested in Molmac Mark 9 machines. They are equipped with a system
to remove ferrous material and stems from the tobacco supplied to the machine.

AKIJ PARTICLE BOARD MILLS LTD.

AKIJ Particle & Hard Board Mills Ltd. has come with the best particle board in Bangladesh. It
started business in the year 2001 & already it has created a place in the market for improved
quality. The factory is situated at Torraghat in Manikgonj District on the bank of the river
Kaliganga. There are about 1001-5000 employees in this factory.

AKIJ Particle Board is a Timber substitute three-layer board made of wood chips. The objective
is to produce and supply international standard Particle board to meet the demand of Architect,
Interior Designers & Furniture Manufacturers in the country. With the guidance of Honorable
M.D. Sheikh AKIJ Uddin, AKIJ Particle & Hard Board Mills Ltd. will maintain quality and
better service to satisfy its valued customers and users.
Due to the high levels of humidity in Bangladesh, wood is not a long-lasting building material
unless it is of the best quality and is excellently treated. However, good quality wood is very
expensive and often acquired through the illegal eradication of forests which has led to many
species becoming scarce. The rate at which objects made of wood need to be replaced is greater
than the rate at which most trees grow. Particle boards are longer lasting, less expensive and
greener alternative of wood. A lot of the scrap wood produced by various factories in the group
is recycled to be particle boards.
The wood is put into the Kolckaner drum chipper to be made into small pieces and then into the
Maier flaker. By this time, the wood is reduced to very small chips. A hammer-mill is used to
crush these chips and then a pair of coupled driers dries them. A refiner is used to make the chips
even finer and a screener separates the various sizes of chips. Coarse and fine chips are put into
separate silos. These are separately weighed by two batch-weighs and put into the glue blender
where they are mixed with glue, paraffin wax and hardener. Each is blended separately and the
fine and coarse chips receive different amounts of the chemicals. These blended chips then go to
the former and come out of its three outlets. The first and third one is for the fine chips and the
second for coarse chips. As a result a three layered, reinforced particle board is produced with
fine particles on the external layers and a layer of coarse chips inside. There is an online moisture
meter in the forming machine. An automatic weighing scale is involved in the quality control of
the boards which are 4feet x 12feet.The thickness currently in production are 19mm and 12 mm.
From the forming machine, the boards go to the Diffenbachger autopress and then to edge
trimming, sanding and master sanding. Some of the boards are also veneered with woods such as
teak.

AKIJ FOOD AND BEVERAGE LTD.

“Brings Quality in Life”

AKIJ Food & Beverage Ltd (AFBL) a big name in Food processing & marketing sectors started
their journey officially on 2006 with three products but within these six years company able to
add lot of products on its rosters. AKIJ Food & Beverage Ltd sectors are a result of visionary
concept of Mr. Sk. AKIJ Uddi and its owner is Mr. SK. Shamimuddin. AFBL is a manufacturing
type of business and its main products are CSD, Soft Drinks, Energy Drinks, Juices, Dairy
Products, Snacks, Chips, Drinking Water. AFBL manufactures a wide range of Snacks and
Beverage for both National & International market like Southeast Asia, Eastern Asia, Middle
East And Africa.. AFBL is a project worth $ 70 million & is funded by the parental company
AKIJ Group. Its total annual sales volume is US $ 5 Million –US $ 10 Million. Its export
percentage is 21%-30%.
AFBL factory is located 50 kilometers outside from capital Dhaka in Krishanapura, Dhamrai.
The factory is above 100,000 square meters. The total numbers of employees are about 1200
people. And among them the number of R&D staff are above 50 people and number of QC staff
are 21-30 people. To bring the vision of this visionary entrepreneur into reality AFBL has been
built with most modern operating facilities of European origin for processing & packing
including aseptic filling line which is lone example in the entire subcontinent. AFBL started its
production at 400 bph in the carbonated soft drinks line and 300 bph in the juice line. In a span
of one and a half years they have increased their capacity to 1800 bph. At present their capacity
is at the ground-breaking rate of 1900 bph. During this same period most of their brands became
either number one or are almost on the verge of becoming number one in their respective
categories. Most of their machineries have been imported from world famous brands as Krones,
Tetra Pak, Alfalaval, Sipa, Husky to achieve the best quality. Most of their Raw materials come
from various foreign countries. The quality is very strictly controlled. At every stage, non-
standard products are rejected.As quality was the main object of the founder Mr. Sk, AKIJ Uddin
that is why his saying is "Uncompromising quality even in adverse situation" the main force
behind the success of AKIJ Food & Beverage Ltd.

Business Philosophy

AKIJ Group diversified their business in Food & Beverage industry because in Bangladesh there
are 14 corers people. It is large market size to serve and food is required continually for the
population. AKIJ food & beverage want to serve quality food for their target market.
In chips industry, there are many local & foreign companies. AKIJ want to be local unique chips
producer with the same quality of foreign company. For this purpose AFBL produces chips for
young target group who like to live stylish life. Main slogan of AFBL is “Brings Quality in
Life”. AKIJ Food & Beverage Ltd’s mission is to earn a respected position in food & beverage
sector. While working in harmony with their consumers, employees and business partners they
try to discover and understand the desires & needs of the community. And its vision is to be the
market leader in Food & Beverage sector excelling in product quality, social, technical &
marketing creativity & service to their consumers through skill and cordial commitment of their
employees.

Product of AFBL:

The products which are offering now by the company are given below:

Product Category Brand Name Size

150ml can, 250ml pet and can,
Cola MOJO
500ml pet, 1 liter pet, 2 liter pet.
150ml can, 250ml pet and can,
Cloudy Lemon Lemu
500ml pet, 1 liter pet, 2 liter pet.
250ml pet and can 500ml pet, 1 liter
Clear Lemon Clemon
pet, and 2 liter pet.
Energy Drink Speed 250ml pet and can
Drinking water Spa 500ml pet, 1 liter pet, 2 liter pet
Frutika
Juice (Mango,Red grape, Red 250ml pet, 1 liter.
orange)
Milk Farm Fresh UHT milk ½ liter tetra pack.
Malt Beverage Wild Brew 250ml can.
Cheese Flavored Snacks
Cheese Puffs 22 gm/pack.
(Crackers)
Real Potato Chips O’ Potato Spicy Cocktail 22 gm/pack
Growth time line of AKIJ food & beverage ltd:

14th April 2006 7th April 2007 7th September 2007

Speed, Mojo, Lemu Spa Farm Fresh UHT Milk

7th October November 2008

Clemon Wild Brew

AFBL has its own marketing & sales department in AKIJ chamber. The functions of this
department are very wide and dynamic. Main functions performed by this department are:
› Product development
› Raw material sourcing
› Find out or create market for its product
› Price set up
› Packaging development
› Developing communication strategy
› Preparing sales forecast
› Maintain sales management in the field
› Keeping record of sales and stock
› Collection & analysis of competitors information

Besides these, it performs a number of activities to conduct their day-to-day business. Under
marketing & sales department, a Brand team performs the key role of real marketing.

In AFBL Marketing and sales department a number of employees work under Sr. G.M
(Marketing & sales). Numbers of employees are working in different positions in the 4th floor of
AKIJ chamber.
  Senior General Manager
 General Manager
 National Sales Manager
 Brand Manager
 Purchase executive
 Research executive
 Brand executives
 Brand officers
 Event management officers.

5. SWOT Analysis of AFBL

SWOT stands for Strengths Weakness Opportunities Threats. SWOT analysis is a technique
much used in much general management as well as marketing scenarios. SWOT consists of
examining the current activities of the organization- its Strengths and Weakness- and then using
this and external research data to set out the Opportunities and Threats that exist.

Strengths:
AKIJ Beverage Limited has been a complex part of world culture for a very long time. The
product's image is loaded with over-romanticizing, and this is an image many people have taken
deeply to heart. The AKIJ Beverage Limited image is displayed on T-shirts, hats, and collectible
memorabilia. This extremely recognizable branding is one of AKIJ Beverage Limited greatest
strengths. "Enjoyed more than 685 thousand times a day around Bangladesh AKIJ Beverage
Limited stands as a simple, yet powerful symbol of quality and enjoyment". Additionally, AKIJ
Beverage Limited bottling system is one of their greatest strengths. It allows them to conduct
business on a global scale while at the same time maintain a local approach. The bottling
companies are locally owned and operated by independent business people who are authorized to
sell products of the AKIJ Beverage Limited Company. Because Coke does not have outright
ownership of its bottling network, its main source of revenue is the sale of concentrate to its
bottlers.

Weaknesses:
Weaknesses for any business need to be both minimized and monitored in order to effectively
achieve productivity and efficiency in their business’s activities, AKIJ Beverage Limited is no
exception. Although domestic business as well as many international markets are thriving, AKIJ
Beverage Limited has recently reported some "declines in unit case volumes in Indonesia and
Thailand due to reduced consumer purchasing power." According to an article in Fortune
magazine, "In Japan, unit case sales fell 3% in the second quarter [of 2010]...scary because while
Japan generates around 5% of worldwide volume, it contributes three times as much to profits.
Latin America, Southeast Asia, and Japan account for about 35% of Coke's volume and none of
these markets are performing to expectation.
Coca-Cola on the other side has effects on the teeth which is an issue for health care. It also has
got sugar by which continuous drinking of Coca-Cola may cause health problems. Being
addicted to Coca-Cola also is a health problem, because drinking of Coca-Cola daily has an
effect on your body after few years.

Opportunities:
Brand recognition is the significant factor affecting Coke's competitive position. Coca-Cola's
brand name is known well throughout 94% of the world today. The primary concern over the
past few years has been to get this name brand to be even better known. Packaging changes have
also affected sales and industry positioning, but in general, the public has tended not to be
affected by new products. Coca-Cola's bottling system also allows the company to take
advantage of infinite growth opportunities around the world. This strategy gives Coke the
opportunity to service a large geographic, diverse area.
Threats:
Currently, the threat of new viable competitors in the carbonated soft drink industry is not very
substantial. The threat of substitutes, however, is a very real threat. The soft drink industry is
very strong, but consumers are not necessarily married to it. Possible substitutes that
continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot
chocolate. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market,
the changing health-consciousness of the market could have a serious affect. Of course, both
Coke and Pepsi have already diversified into these markets, allowing them to have further
significant market shares and offset any losses incurred due to fluctuations in the market.
Consumer buying power also represents a key threat in the industry. The rivalry between Pepsi
and Coke has produce a very slowmoving industry in which management must continuously
respond to the changing attitudes and demands of their consumers or face losing market share to
the competition. Furthermore, consumers can easily switch to other beverages with little cost or
consequence.

6. Analysis of Porter’s Five Forces Model

The market of Food and beverage in Bangladesh is very competitive. The market is dominating
by both multinational companies and some local companies. Famous MNC like Coca-Cola,
Pepsi, Lays, Mr. Potato, have their products like Coca-cola, Pepsi, Fanta, Mountain dew,
Mirinda, Lays chips, Mr. Potato chips etc and many local companies like Pran, Tiger,
BoombaySweets, Sajeeb etc. also have their local products in the market. Besides many strong
international brand and new local companies are trying to enter into the market which make the
AFBL to be more strategic. The target market of AFBL is mainly the young people whom are
likely to try new products. So this is always challenging to build a strong brand image in the
consumer mind. The Multinational Company’s product price is higher than the local products for
a very small portion. Almost all the soft drinks and Juice prices are almost same. As there are
enough competitors in the market so the suppliers have many alternatives in the criteria of
choosing right companies. In case of product selection of customers, there are many products in
the market with almost similar quality and their prices are almost same. So the customers have
many substitute products and many customers choose the right companies for strong brand
image. By considering all the situations we develop the porters five force model. The model is
given below

Threat of New Entrants

1. Only stablished players can try out new things.

2. This business is tempting to enter.

Bargaining Power of Suppliers

1. Many international and local companies are operating the business in the market

Bargaining Power of Buyers

1. The target consumers are young whom are like to try new products.
2. Brand loyalty need time to develop

Threats of Substitute Products

1. New products are entering into the market > the prices of the products are more or less
same

Rivalry among the existing competitors

1. Quality of the products and prices are almost same.

7. Diversity among the companies of AKIJ
Group:
The company has both Related and Unrelated diversification among different sectors of
the AKIJ group. As the companies are large in terms of market share and size and the
revenue earning condition does not relate on any sector over another. So, the sector wise
diversity is very low but interrelations among the firms of similar sector is very high. As
per example in AFBL they use technology, distribution channels, products and other
logistics services are used by every similar companies but other sectors like practice
board or ceramics division don’t use the same logistic services. So here Unrelated
diversification works among the different sectors of AKIJ group. But the companies of
same sector use the logistics and other materials of one another. They relate on one
another on different aspects of market and business activities. So here the Related
diversification works among the companies of same sector.

8. Business Level Strategy of AKIJ Group:

Business level strategy mainly focused on a specific product market. As AKIJ group combines a
bunch of business sectors so they have different business level strategy for every single business
entity. We already know that AKIJ is one of the biggest conglomerates of our country. They
running their businesses for quite a long time in Bangladesh also have a huge reputation and
popularity over the mind of Bangladeshi people. They try to provide quality products at an
acceptable cost to the consumer and try to differentiate their products from other small
businesses. So, for most of the products of their companies they use Differentiation strategy.
Because they are one of the leading brands of our country and naturally people have an
expectation to get some special feature on their products. That’s why most of the cases they use
the Differentiation strategy on their products.
References:
1. https://www.akij.net/
2. https://www.akij.net/about-us/
3. https://en.wikipedia.org/wiki/Akij_Group
4. Strategic Management- Competitiveness and globalization by Michael A. Hitt, R.
Duane Ireland, Robert E. Hoskisson, 12th edition, South Asian Perspective
5. https://www.youtube.com/watch?v=cmIl3c3zlqo