Key Internal Weight Rating Weighted Score

Factors
Strengths:
Solid financial position 0.05 4 0.20
State of the art 0.15 4 0.60
production facilities
Fertilizer products are 0.07 4 0.28
high in demand by
agriculture sector
Development of new 0.05 3 0.15
and eco-friendly
formulations
Competent & 0.05 4 0.20
committed human
resource
Well diversified 0.05 4 0.20
investment portfolio
Brand preference
Well established 0.03 3 0.09
distribution network
Technical Competence.
Having highest market 0.04 3 0.12
share of 49% in
fertilizer industry
Weakness:
Mature industry with 0.05 2 0.10
clogged overall market
share
Reliance on depleting 0.15 1 0.15
natural resource
Fixed customer base 0.04 2 0.08
Narrow product line 0.03 2 0.06
The large size of the 0.02 1 0.02
company produces
administrative
problems
Lengthy organisational 0.02 1 0.02
hierarchy
high transportation 0.05 1 0.05
costs to ensure sales in
distant areas
0.15 1 0.15
1.00 2.87
Key External Factors Weight Score Weighted
Score
Opportunities
Horizontal as well as vertical diversification 0.06 4 0.24
Increase in product line covering Macro 0.09 2 0.18
and Micro nutrients
Less potential for new entrants in the 0.07 4 0.28
industry
Absence of substitute products 0.06 3 0.18
Opportunity to export fertilizer 0.07 4 0.14
Growing Domestic demand of fertilizer 0.08 4 0.24
Strong Financial Position can support new 0.05 3 0.15
product line
Threats
Inconsistent Government policies for 0.09 4 0.36
fertilizer industry
Depleting natural gas reserves & gas 0.06 3 0.18
curtailment
Excessive fertilizer imports by the Govt. 0.04 3 0.12
and marketing at subsidized rates
Continuous increase in raw material/fuel 0.06 2 0.12
prices and levies
Shortages of natural gas in the country can 0.05 3 0.15
limit the opportunities for the company in
future
New competitors in the industry can 0.06 3 0.18
reduce the market share of FFCL
Declining international fertilizer prices 0.12 3 0.36
0.04 3 0.12
2.8
 Fauji Fertilizer Engro Fertilizer Fatima Fertilizer
Company ltd.
Critical Weight Rating Score Rating Score Rating Score
Success
Factors
Advertisement 0.15
Management 0.10
Financial 0.20
Position
Market Share 0.15
Exports 0.10
Production 0.20
Capacity
Product 0.10
Quality
 Strength Weakness
1. Solid financial position 1. Mature industry with
2. State of the art clogged overall market
production facilities share
3. Fertilizer products are 2. Reliance on depleting
high in demand by natural resource
agriculture sector 3. Fixed customer base
4. Development of new 4. Narrow product line
and eco-friendly 5. The large size of the
formulations company produces
5. Competent & administrative
committed human problems
resource 6. Lengthy organisational
6. Well diversified hierarchy
investment portfolio 7. high transportation
Brand preference costs to ensure sales in
7. Well established distant areas
distribution network
Technical
Competence.
8. Having highest market
share of 49% in
fertilizer industry

Opportunities WO Strategies WT Strategies

1. Horizontal as well as 1. Open new distribution 1. Try to generate
vertical diversification centres in far flung alternative production
2. Increase in product areas to ensure processes (W2, T2)
line covering Macro presence there (W7, 2. Open new distribution
and Micro nutrients O6) centres in far flung
3. Less potential for new 2. Add new micro areas to ensure
entrants in the fertilizer product line presence there (W7,
industry (W4, O2) T4)
4. Absence of substitute
products
5. Opportunity to export
fertilizer
6. Growing Domestic
demand of fertilizer
7. Strong Financial
Position can support
new product line
Threats SO Strategies ST Strategies
1. Inconsistent 1. Add new micro 1. Do lobbying with other
Government policies fertilizer product line companies to prevent
for fertilizer industry (S2, O4) government from
2. Depleting natural gas 2. Install new plan in import (S8, T3)
reserves & gas country to acquire 2. Try to generate
curtailment more market share alternative production
3. Excessive fertilizer (S1, O6) processes (S1, T2)
imports by the Govt.
 and marketing at
subsidized rates
4. Continuous increase in
raw material/fuel
prices and levies
(GIDC)
5. Declining international
fertilizer prices
6. Shortages of natural
gas in the country can
limit the opportunities
for the company in
future
7. New competitors in
the industry can
reduce the market
share of FFCL
Key Internal Factors Weight AS TAS AS TAS AS TAS
Strengths 0.07 4 0.28 3 1
Solid financial position 0.06 2 .012 1 3
State of the art production facilities 0.08 1 0.08 2 3
Fertilizer products are high in demand 0.06 2 0.12 1 4
by agriculture sector
Development of new and eco-friendly 0.07 3 0.07 4 1
formulations
Competent & committed human 0.06 2 0.12 3 1
resource
Well diversified investment portfolio 0.06 2 0.12 3 4
Brand preference
Well established distribution network 0.07 1 0.07 2 3
Technical Competence.
Having highest market share of 49% in 0.06 4 0.24 2 1
fertilizer industry

Mature industry with clogged overall 0.06 3 0.18 4 2

market share
Reliance on depleting natural resource 0.07 2 0.14 1 3
Fixed customer base 0.06 3 0.18 2 1
Narrow product line 0.07 4 0.28 3 2
The large size of the company produces 0.06 1 0.06 3 2
administrative problems
Lengthy organisational hierarchy 0.04 2 0.08 1 3
high transportation costs to ensure 0.05 1 0.05 2 4
sales in distant areas
Opportunities: 1
Horizontal as well as vertical 0.04 3 0.12 2 4
diversification
Increase in product line covering Macro 0.05 3 0.15 2 1
and Micro nutrients
Less potential for new entrants in the 0.06 4 0.24 1 2
industry
Absence of substitute products 0.06 1 0.06 2 4
Opportunity to export fertilizer 0.06 2 0.12 3 4
Growing Domestic demand of fertilizer 0.07 3 0.21 2 1
Strong Financial Position can support 0.06 1 0.06 3 2
new product line
Export of urea fertilizer 0.07 2 0.14 1 3

Inconsistent Government policies for 0.06 2 0.12 3 1

fertilizer industry
Depleting natural gas reserves & gas 0.07 3 0.21 4 2
curtailment
 Excessive fertilizer imports by the Govt. 0.06 1 0.06 2 3
and marketing at subsidized rates
Continuous increase in raw 0.08 3 0.24 1 4
material/fuel prices and levies
Shortages of natural gas in the country 0.06 4 0.24 2 3
can limit the opportunities for the
company in future
New competitors in the industry can 0.07 2 0.14 1 3
reduce the market share of FFCL
Declining international fertilizer prices 0.06 1 0.06 3 4
Provision of gas to competitors at 0.08 2 0.18 4 3
concessionary rates
 Sr. No. Financial Position(FP) Rating Sr. No. Stability Position(SP) Rating
1 Earnings per share (EPS) 5 1 Ease of Exit from Market -2
increased to Rs0.92 from
0.60
2 company’s share price 3 2 Risk involved in Business -2
dropped 2.63%
3 Strong Leverage position 5 3 Price range of competing -3
products
4 Return on equity up 6 4 Barriers to entry in market -5
22.6%
5 Liquidity ration up by 4 5 Taxation -3
13%
6 Solid financial position 5 6 Technology -3

Total 28 Total -18

Sr. No. Competitive Rating Sr. No. Industry Postion (IP) Rating
Position(CP)
1 Having highest market -1 1 High Profit potential 6
share of 49% in fertilizer
industry
2 Having state of the art -2 2 Resource utilization 4
production facility

3 Customer Loyalty -2 3 Growth Potential 4

4 Strong Brand Image -2 4 Financial Stability 5
5 Have much control over -3 5 Production Capacity 4
supplies
Total -10 Total 23

SP Average is: -18/6 = -3

IP Average is: 23/5 = 4.6

CP Average is: -10/5 = -2

FP Average is: 28/6 = 4.6

X-Axis : CP + IP

= -2 + 4.6

= 2.6
Y- Axis : SP + FP

= -3 + 4.6

= 1.6

Conservative FP Aggressive
5

2
Suggested strategy type

1
CP IP
0
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
-1

-2

-3

-4

-5

Defensive SP Competitive
-6