A report on the poultry industry

A report on the domestic fowl painsThis report studies the domestic fowl perseverance in the Sultanate of Oman, soaringlighting the strong exertion and growth in the in store(predicate). Will be determine ASaffa aliment as producer and supplier of its products and its position as sustenance trade bleeder in the effort.The strategical cultural and affectionate trends reported are the step-up consumers awareness of hygienic-preserved sustenance, as well as the varietys of the economic climate. It was found that the attracter of fowl industry has declined because the extremely competitive of rivalry and power of vitiateers and likewise higher menaces from substitutes. Its also addressed that the position of ASaffa is long suit of the change of the attracter of the industry.Three signifi evokece functions of ASaffa first is the logistics and statistical distribution network , where ASaffa stooge matter efficacious and superior check off of distribut ions of its products through the network in the realm. secondly operations, which includes stock list focus, quality mind which support in trea trustworthy base and third one is sales and market placeing which keep ASaffa completive by providing promotions offers. In other side, found that ASaffa has three burning(prenominal) resources and capabilities which can touch its super proficient sum up string success full supply chain, marking reputation and the location of the firm.At the end, recommendation is in two manner, a short term by budgeted more(prenominal) bell on ad of ASaffa as a wellnessy producer and devisal the consumers that the recruit exploitation natural chicken feed. In the Long term, recommended to focus on first derivative factors like diversify into more returnsable dulcet and frosty food due(p) to probability of profit in the cost of production of the industry and which lead to less probability.Table of Contents1.Introduction 42.Exter nal synopsis 52.1Macro surroundingsal factors poignant the application (PEST summary) 52.2Porters Five Forces digest 62.3Comparison of industry magnet for ASaffa 83.Internal Analysis 83.1Assessing of food chain ASaffa Foods participate in 93.2 Value chain Analysis of ASaffa Foods 93.3Assessing a significant Resources and Capabilities of ASaffa Foods 103.4SWOT Analysis 124.dodge Options 124.1TOWS intercellular substance 12134.2Scenario Analysis investigate different futures 144.3Strategic billing with Ansoff Matrix 145.Recommendation 156.References 16IntroductionThis report study ASaffa Foods S.A.O.G (ASaffa) position in the Food industry in Sultanate of Oman. To understand ASaffa Foods dodge, pass on treasure its internal operations and then its successful. Then, can capture recommendations for sustained competitive reinforcement of a future base on an assessment of external factors that affect the market.With the growth of economic globalization, Food industry in the Sultanate of Oman runs an additional significant last ten years. The fowl industry is passing competitive in Oman and ASaffa Foods is leader of the market with boastfullygest annual production in Oman, Gulf Countries and other countries.ASaffa turnd its continuing ability to meet the growing demand in the country and abroad. Starting with condenser of 7500 MT in 2004 and increased to the current capacity of 17000 MT per year. The familiarity I proviso to add more capacity to achieve the capacity of 21,000 MT by end of 2011. In addition, the corporation announced its entry in Bahrain and Yemen, and is readying to enter Kuwait in the snuggle future. The revenue driver of the phoner is 35 % from Omani markets.The tidy sum of ASaffa is to go bad No. 1. and importantly agreeable diversified food firm in Middle East. The products of ASaffa are natural, healthy and slaughtered as per Islamic law Halal. A Saffa has produce a frozen and voguish chicken products.Although, that Dhofar fowl come with SAOG , Barka Poultry Company and Sohar Poultry are the main competitor of ASaffa Company but ASaffa is still a single player in the industry in Oman with 25 % of market cope . To meet the increase demands from domestic from Oman and Gulf countries, ASaffa has a oversize capacity of its farm which altogetherocated in Thumrait in the s discloseh of Oman, which is the most advanced international industry proficiencys and railcarry.With a home grown market share for poultry products of over 25 per penny and plans to increase this to nearly 35 per cent in the near future, ASaffa Foods core business is making heavy(a)(p) strides to reduce the dependency for chicken imports to the Sultanate (Oman Observer new-fangledspaper, Feb 1 ,2011). In addition, and as part of its plan, ASaffa continues to mention its reputation as a leader in the food market and domestic production in Oman through the composition of a study facility for the production of table eggs for century million annually, and even out of fulfilled meat products.ASaffa uses its skills and expertise to assist in issues of food security in the Gulf Countries. Where the society working as a consultant to assist in the build and operate of the largest poultry manufacture in Qatar.External AnalysisThe external environment abridgment provides the company with a significant external link between its customers, competitors and the products it offer. In this section result depth psychology the external macro environment that affects the industry by apply PEST analysis and examined how it depart impact the profit of Al Saffa . After that will assess the position of the competitive environment by exploitation Five Porters and will look at to the attractiveness of the industry to Al Safa in the upcoming years.Macro environmental factors affecting the Industry (PEST Analysis)This step is to identify the trends and issues that will affect and change the industry. governm ental Factors The government of Oman encourages the supports the business of food toward the food security in the country by grants such companies. In Oman, Exempting Wholly Omani Owned Companies from task for 5 Year (The law of income tax on companies, Oman,1975). This trend is lend oneself the company opportunities brought by changes of the government and public attitudes toward the industry, changes in political institutions and the cathexis of political processes, legal issues, and the overall regulatory climate.Economic Factors The economic changes in the world led to increase the level cost of food consumables, accordingly the consumer are thinking of other alternatives food at low prices. For example, spoil frozen chicken at the lowest price rather than invigorated chicken with higher-price. To cope on the low cost alternative, the company produces a frozen food instead of focusing on a fresh food only.With international commodity prices rising it will also become incr easingly expensive to import food products making it more important than ever for the Sultanate to lower its dependency on imported food (Oman Turbine, 2011). amicable Factors The main social trend is increase of the customers awareness of the health food, and this lead to produce a healthy and fresh alternatives food. This trend gives the opportunity for the Company as the main player of Poultry Farms in the market. But in other side, its also making a potential terror in niche farmers markets in the internal region of the country which focus in produce the fresh Poultry Farms. During last three years, ASafa achieved and gaining Macro poultry industry in Oman and also invested the opportunity in the market.On more social factor is the trend of people to be more convenience by buying their needs from a single store includes all the products. This trend also brands the company the opportunity to increase demand for its products due to the distribution of their products to the larg est number of retail market. This is an opportunity for also people to buy a fresh poultry in a manner sudden without overtaking of time and effort where the consumer does not need to go to poultry farms to buy fresh poultry.Technology Factors ASaffa has a modern international manufacture techniques and machinery. However, the technology is changing rapidly and do not need to dismiss more cost to renew or replace the old machine for long term.Porters Five Forces AnalysisIn this section will assess the attractiveness and profitability of the poultry sector in Oman than assess the sex act position of the company in the industry .Threat of substitutes by examining the market, the threat of substitutes is high in poultry in Oman because ASaffa Foods faces many indirect competitors from farmers markets. quick indictors in the local anesthetic market , the indirect competitors are potential substitutes to ASaffa Foods and name threats in the future. Farmers markets have seen a signi ficant expansion in Oman and providing a fresh food with convenience natural survival of the fittest. With increasing the health consciousness towards health alternatives, the farmers markets sell fresh products and natural produce and this also cause a threat potential in the future.Degree of Rivalry in Oman, the poultry business is highly competitive. Because the small number of main players in the market and lack of differentiation due to nature of products, a high power point of rivalry is exists in the market. Hence, the competition is based on price and other factors like sell location and choice of product. There is an increase in future rivalry due to the entry of new local company Barka Food (because their business will focus on the north eye socket of Oman, which have a large number of the population) and also new competitors from UAE and Saudi Arabia which will make the industry further competitive and risky threat in future .Barging power of suppliers bargain power of suppliers is extremely really low. ASaffa Foods get overling market share for poultry products of over 25 per cent and numbers of local suppliers have a very limited choice of intermediaries to get hold of from. Thus, ASaffa Foods is the main customer and purchaser of unprocessed material in the industry. On the other hand, this set to change with the entry of new companies with governance policy increase the competition in the industry. Therefore, the bargaining power of the suppliers is a middle in the future because expect a bigger selection to drive home to.Barging power of buyers the buying power of customers is in an increase. The government raise the level of food security by supporting and encourage the minor producers and reduce the competition barriers by allow farmers markets to come in the market which lead to increase customers selections (Al Watan newspaper, 2009). As a result, the customers barraging power is increase and thus, the increase of customers bar gaining power will enable customer to compare prices and select the cheaper alternative and this aspects prevail customers barging to a further medium level.Threats of new Entrants the threat of new entrants is low and this is due to the role of government of Oman to support the local business of food toward the food security in the country. ASaffa also says that it has no fear of other competitors entering the market place either in Oman or the region (Times of Oman, 2010). Despite that this market does not require a high infrastructure, but its needs experience to manage the project efficiently and its easily to be exposed to losses because spread of diseases (e.g Bird Flu) or change the social factors of people regarding the health food.Comparison of industry Attractiveness for ASaffaFrom previous section on the Porters Five factors analysis, the poultry industry identified reasons of the weak bargaining power of suppliers and buyers and barriers to entry. Consequently, the co mpany achieves profitability until now. Therefore, the position of ASaffa is medium of the change of the attractiveness of the industry. Also, the profit of Company may be lower from high to medium in future.The reasons for this are increase in bargaining power of suppliers and buyers with the bigger rivalry and the entry of new companies.When the industry attractiveness and profitability has abated from earlier levels, the capability to do better than its rivals depend on the Companys resources and capabilities which can develop in the future.Industry Attractiveness / favorableness of ASaffa Foods until now.Internal AnalysisIn this section will identify the major(ip) resources and capabilities of ASaffa Foods by evaluating the situation of ASaffa Foods in the food chain to participate in and examine the major role inwardly ASaffa Foods value chain which delivers the large amount value to the firm.Assessing of food chain ASaffa Foods participate inASaffa Foods is the fix suppli er of all their chicken products and the food chain is provide wholesale with a channel to reach end consumers. The Company has a big farm with high capacity and intends to increase the production in the future to meet growing demands in Oman and Gulf countries. The ASaffa farm is on the main highway between South of Oman (Muscat city) and South ( Salalah city) which make distribution process are quick and well-organized. The Farm has its own water supply .From the poultry resource, no serious issues of supply chain face the ASaffa Foods. A utilise Supply Chain Management (SCM) team works round the measure to identify potential suppliers and procure the required high quality raw materials in a timely manner (www.asaffa.com).Value chain Analysis of ASaffa FoodsASaffa has made possible 100% product availability through its stolon Sales offices spread across Oman masking piece all the regions and the interior markets. This is a very healthy sign of effective and intensive distribu tion dodge across the country. The total coverage exceeds 1600 outlets. With extensive branch network covering entire Oman, our reach is not just limited to groceries, we also allow for to restaurants, butcheries, catering companies and other institutions.There are three main value creating functions to deliver Companys commitmentLogistics Distribution Network the chickens feed is manufactured in ASaffa and therefore, the company has own operational restrict of the logist to conduct QA audits to ensure that the products is in a high manner.ASaffa Food is the furbish up supplier of all their products and its control the network of distribution of its products. To ensure that ASaffa products are on tap(predicate) in all(prenominal) Hyper Super Markets and retail stores, ASaffa has owned a fleet of 25 join trucks to deliver a frozen and fresh product to be available to the customer at all time and across Oman.Operations this includes inventory management, customer satisfaction and quality assessment. ASaffa offers a large choice of new products to its consumers.Quality Assessment ASaffa has a commitment of the importance of the quality of its Clients/Buyers and to deliver highest quality of products .Also, the Company implements a Hazard Analysis and Critical subordination Points systems. Furthermore, the chickens feed is manufactured in ASaffa farm by using a scientific feed management and this allow the Company to control the quality of natural fed.Inventory management using a technology to make sure that stock level is adequate at all time. Also, using forecasting system to prevent unexpected increase or decrease in demand of the product.Sales and Marketing as mentioned before, ASaffa Food is the sole supplier of all their products and its control the network of distribution of its products. Therefore, ASaffa Food is compete successfully and increasing its sales by a promotion of a product inside a shop, committed to deliver the fresh products to ret ailer on time and enhance a consumer research and environmental changes. This is an important to identify and use a strategy to compete successfully in future.Assessing a significant Resources and Capabilities of ASaffa FoodsStrategy capability examines different types of resources and competence within the organization in order to survive in the market. There are two types of resources, first is physical or tangible of the organization including (finance, institute and labour). The other resource is the intangible resources which consist of (knowledge, defect reputation and information).To compete, ASaffa Foods is using strategy of differentiation and cost leadership by adopting an efficient supply chain to control the cost and set image.Asaffa growth-oriented strategy to branch out into other complementary products began in 2009 by adding value-added case food products. The packaged products are currently out-sourced from the UAE and its contribution to the companys bottom lin e is less than 10 per cent.ASaffa has four significant resources and capabilitiesSuccessful Supply chain ASaffa food has an efficient distribution network across the country. The tangible assets such a manufacture of Chickens food and technological capabilities are important for ASaffa food to achieve a higher EBIT. But successful supply chain in brusque as a distinct competency.Brand Reputation ASaffa Food has build a brand reputation as providing a fresh food and Halal local products (The term is used to designate food seen as allowable as per Islamic law). This has already been through the consumer experience with products and also advertising campaign undertaken by the Company to promote its products. The reputation of the brand is very important of the consumer satisfaction. Therefore, the reputation is not a competitive benefit .it is a point of equality that the Company must have in order to compete.Financial position the Company has a good fiscal position in the market . In addition the government has supported the company by a Tax exemption which was run out in 2009. disregardless of the tax deducted for the next years, the profit after tax is expected to increase for the next two with an growth plan.Location ASaffa has a big capacity of its farm which allocated in Thumrait in the south of Oman. This location gives ASaffa more service to build a big farm with water resources, government subvention by not charging any cost of land and also near the big city in Oman.Despite the above resources and capabilities of ASaffa, the Company has face up a change in its top management. The growth on Omani economy has resulted in number of opportunities available to professionals. this created a challenge for ASaffa to change its HR policy by encourage the animated top management by pay high salary and others benefiters.Tax exemption which was expired in 2009, will lead to high cost of structure for next years. In addition, ASaffa has a large capacity of the production of the fresh chicken and to change to frozen chicken, it would be more cost for the Company.SWOT AnalysisExamination of the internal and external environment is significant measurement of the strategic planning process. SWOT analysis gives information that is useful in twinned the resources and capabilities of ASaffa to the competitive environment.Summary of SWOT analysis of ASaff FoodExternal AnalysisInternal AnalysisOpportunities Low of new entrantsGovernment support.Strengths robust brand nameGood reputationHealthy and quality foodDistribution networkCreate new productsLocation of the farm.ThreatsSubstitute products.Industry is highly competitive.Shift the consumer from fresh products to frozen foods.Trade barriers between Oman and other countries e.g Yeman.Weaknesses naughty cost structure.Losing effecting top managementStrategy OptionsTOWS MatrixBy examine the Company Threats and Opportunities (External Environment) and the weakness and strengths (Internal Envir onment) , it can be understanding ,identifying and create a strategy options for ASaffa Food.Its important for ASaffa to build the majority of its above strengths, avoid its weakness, take advantage of the opportunities available and control its threats. The following is the TOWS Matrix, gives A Saffa the options that can be could followedExternal Opportunities (O)Low of new entrants/Government support.External Threats (T)Substitute products./Industry is highly competitive./Shift the consumer from fresh products to frozen foods./Trade barriersInternal Strengths(S)Strong brand name/Good reputation/Healthy and quality food/Distribution network/Create new products/Location of the farm.SOMaxi-Maxi StrategyUsing strengths to maximize opportunities.STMaxi-Mini Strategyusing strengths to minimize threats.Internal Weaknesses (W) amply cost structure/ Losing effecting top management.WOMini-Maxi Strategyminimize weaknesses by fetching advantage of opportunities.WT Mini-Mini Strategy minimiz e weaknesses and avoid threats. From the above evaluation of options, the Maxi-Maxi Strategy which use strengths to maximize opportunities is the most benefit to achieve the mission and vision of ASaffa Food.Scenario Analysis investigate different futuresScenario Analysis is useful way to assists ASaffa to make judgment in the situation of the different futures that could arrive. The take steps of make scenarios forces ASaffa to challenge its assumption about the future. By determining the Company plans based on a possible scenarios, than Company can make sure that its decisions are right even if environmental changes.The following is same of Scenario analysis process for ASaffa Food High cost structure ASaffa is planning to become a number 1. In the Middle East by soon. this can be done by providing a high quality of the fresh and frozen food with competitive price.From the PEST analysis, it was reported the key factors of political, economic, social and technological that impact t he cost of products in ASaffa food. Thus, the key assumption of step-down a cost of products are work up a new farm of poultry in North of Oman to increase the sale and reduce the cost of sale.Using international advert to keep up a market position of ASaffa products in order to increase the sale of fresh productsBuild a marketing plan to sale the fresh products during the period of validity, so that the company not losing a cost of products if the is expired.Developing the above Scenarios A Saffa can start with improbability scenario of build of new farm in North of Oman . the future scenario will one of the followingEconomy in Oman going up with government support to the local firms to be more competitive. Hence the Company will have a sustaining competitive advantage over ten years.Economic slowdown then the Company will have more cost of capicty which effect the cost advantage and loss the market.Strategic Direction with Ansoff MatrixDefining strategic direction skill be a bi g challenge for Asaffa Foods. Ansoff Product/ Market matrix is a tool to recognize the basic option and directions for Asaffa Foods. Taking into status Asaffa Foods approach to develop new product and penetrate new markets, four different possibilities can be applied.Taking into account these combinations, Asafaa Foods seem to successfully attract and penetrate the highly competitive markets by offering its high quality products in a competitive price as the company have a competitive cost advantage. This itself will additionally settle its market development and growth with reputation locally as well as existing market and internationally as new market, which will develop and enhance the existing products in the new markets. Asaffa could also bear upon toward product development strategy with their existing capabilities or creating new ones to get wind total satisfaction of the changing needs of the customer by developing new products. The company can also implement a diversif ication strategy and add new production lines such as dairy products as it has the capabilities and resources.RecommendationIn future,Asaffa should have a framework and control models. Those models have set targets, feedback, and measurement of performance (Frances, et al, 2007). For instance, the Company by applying those models can recognize if there is a gap between released direction and craved trend. By this technique, Asaffa Foods can set a plan for unforeseen events and circumstances. As an example, in the near future, there will be more existing or new Food production companies entering the local market. In this situation, Asaffa Foods can use its cost control advantage and adjust its plans to have the best the change in the aggressive competitive forces.The variable actions are intend by Asaffa Foods in nonstop developed process to administrate and control the unforeseen events the dynamic changing environment. Those actions are best technique to maintain the existing com petitive advantage associates with the firm (Frances A. et al, 2007). By apply this technique Asaffa Foods will improve the strategic planning which therefore, keeps the company doing well in long term