NAME: Sagar kumar

Reg #:1856117

Q1)

a. Basic Factor: By investing in Engo Foods, dutch company FrieslandCampina got the access
over Central Aisa dairy market, the maintenance cost of dairy farms in Pakistan is quite lower as
compared to other countries. The cost of labor is also the key factor for FrieslandCampina to
acquire Engro Foods.
Advance Factor: As Engro foods was acquired in 2016 and was functional from 2005, during this
period Engro foods was able to create its goodwill and got the access of almost every
demographics within Pakistan. The dutch company got the advance factor of well-established
goodwill and operations in Pakistan. FrieslandCampina will invest more on research and
technology and will try to increase the quality standards that were followed in dutch market.
Recently FrieslandCampina has introduced milk powder in Pakistani market.

Q2. Amazon’s Lauch in Pakistan

Threats to
new
entrant

Bargainig Bargaining
Competitive
power of power of
Rivalry
supplier Buyer

Threat of
Subsitutues
NAME: Sagar kumar
Reg #:1856117

Competitive Rivalry:

There are many online store that offer variety of product and services but as far as Amazon is
concerned, Daraz can be the only leading competitor of Amazon in Pakistan. There are many
other online platform which can be included in rivals but their credibility is still at doubt, even
the market giant in Pakistan, Daraz’s credibility is also a big question mark. Amazon has a well-
established name and no one in Pakistan will be able to compete them.

Threat of New Entrant:

Threat of New Entrant is very low because Amazon is known as the market giant of e-
commerce industry. Everything is available on Amazon, just a click away. E-Commerce industry
in Pakistan is rising and now more people choose to shop online instead of going to shops
physically. Amazon is well known and people will not hesitate to purchase anything from their
website.
Threat of Substitute:

The only threat of Substitute for Amazon in Pakistan is Daraz but still people have bad
experience of shopping from Daraz. Their credibility is very low and people are reluctant to
purchase from Daraz. However, Amazon has a very good reputation and people will not
hesitate to purchase anything from Amazon.
Bargaining of Buyer:

Amazon provides product at relatively low or best price. Most of the time people get best
discount and offers from Amazon. Bargaining power of buyer in relatively low because people
who shop online are always searching for the site which is credible and offers best prices and
Amazon is well known for it.
Bargaining Power of Suppliers:

Bargaining power of supplier for Amazon in Pakistan is low because Amazon is known as E-
commerce giant and suppliers in Pakistan would be willing to work with Amazon because of its
reputation.
NAME: Sagar kumar
Reg #:1856117

Q3.(A) Ratio Analysis:

Profitability Ratio:

If we compare the profitability ratios from year 2014 to 2016, we can analyze that the
company’s profitability has increased. If we compare year 2014 and 2015, we can see that our
profitability has decreased because of the lower sales.
Liquidity Ratios:

Current Ratio shows that the company is enough current assets to pay off their current
liabilities. Quick ratio shows that the company was able to sell off its inventory in less period of
time. Cash ratio shows that the company has less cash to pay off their current liabilities.
Efficiency Ratio:

Debtor’s turnover ratio shows the company is receiving amount from debtors in relatively long
period whereas, the company is paying off its credits in less days. Asset turnover ratio shows
that the company is able to utilize its assets efficiently.

Q3. B)

Strategy for Profitability Ratios:

Overall profitability ratio shows good perfume of the company but company should focus on
increasing their sales as their sales dropped in the year 2015.

Strategy for Liquidity Ratios:

As the company is paying its credit in less period of time and because of that company cash
ratio is low but it can be improved if company choose to pay their creditor in one month of time
period. Inventories hold the major portion in current ratio and the business is not able to pay
their short term liabilities because of fast inventory turnover.

Strategy for Efficiency Ratio:

Company should try to get the amount from its debtor within less day’s i.e. 30 days. The
company is paying off its creditors within short period so they should also try to receive amount
from their debtors in less period of time. The company should consider getting discount from its
creditors as they are paying off in less period of time. If they are not getting any discount then
should think on paying a little late so that they can utilize this amount on their operations.