Strengths:

Trending Business: SF&B mainly distributes processed foods and tea. The tea consumption
and the demand for processed food are on the increase. For a start- up company to engage
in a trending business is a sheer blessing. Because it does neither have to put money and
efforts in informing the consumers about the specifications of the products nor creating the
demand of the products they will market or distribute. They just have to establish their
brand with products the demand of which is already on the rise in the market and win
reliability of customers. So, they can save time in this field and spend more time in other
aspects of a start- up business, like product differentiation, producing better quality
products and market segmentation.

Location Flexibilities: As SF&B is a start- up business, it has a scope to research the current
market and set up the distribution centers in the areas from where they can distribute
products with low transportation costs. This cost saving can help them in the long run to
expand the company and put lot more resources into its marketing drive to establish their
new brand. The reputed food and tea distribution companies don’t have this flexibility.
SF&B has also flexibilities to place their distribution centers where there is no other center
like this. As a result, they can win that portion of market with low price considering their
transportation costs are much lower than their competitors and also with quick delivery.
As the demand for tea is comparatively higher in rural areas, they can set up more tea
distribution centers outside Dhaka.

Mixture of Age with Beauty: The CEO of SF&B has 15 years’ experience in the food and
beverage industries. The dept. head of Accounting & Finance, Marketing & Sales and HR
Division are also experienced in this business sector. Apart from that, most of the
employees are fresh graduates or post- graduates from the universities. Even the owners
are almost freshers. So, SF&B has a perfect blend of relevant experience with impulsive
youth. Recently graduated freshers, backed up by some experienced mentors who have a
proven track record of service in food and beverages industry, are prepared to take the
challenge of popularizing an unknown brand in a competitive industry. While the
spontaneous freshers will think of many impromptu ideas to make the operations and
marketing drives successful, their experienced department heads will select the
appropriate ones among these and will help the freshers execute the selected plans.

Tech- savvy Employees: We are living in a world of 24/7 connectivity. We can connect with
anyone or access any information just by looking at a screen, and we like it that way. In fact,
most of us can’t imagine life without that screen. The question is no longer who is looking
at the screen (we all are), it’s about what screen are we looking at. The first screen –
television – allows companies to send information directly into consumers’ homes. The
second screen – the personal computer – allows immediate customer feedback and the
ability for companies to interact with their customers even more. The third screen – the
mobile device – changes everything. So, living in this 21st century, companies have to be
tech- savvy to even survive, let alone being successful in a mountain climbing task like
popularizing an unknown brand. As SF&B’s most of the employees are fresh graduates or
post- graduates, most of them, especially the BBA or MBA degree holders in Marketing are
well informed about digital marketing and can help the company immensely by running
quality digital marketing campaigns to win more and more consumers and establish the
brand in the long run with the mixture of advertisements and blogs in the social medias
and internet highlighting the quality and unique features of their products. With the help of
modern technology, they can also launch an app by which their consumers can order
different food and tea products.

Business Acumen of Owners: It is not money but brilliant Idea what matters in becoming
an entrepreneur. The young entrepreneurs of SF&B have proved that once more. They
don’t have practical experience but they do have sound knowledge on Strategic Plan,
Operational Plan, Business Plan and other subjects taught in their MBA. Especially they
learnt quite well in the ‘Strategic Planning’ course to emerge as successful entrepreneurs.
They are capable to set a quite clear mission and vision statement and also the appropriate
core operating values for conducting, monitoring and controlling the company’s activities
in the long run. The learnings of the ‘Strategic Planning’ and ‘Marketing Management’
course will also help the novice entrepreneurs to analyze the food and beverages industry
perfectly and to set brand positioning. They hired a very capable person for CEO position
who has 15 years’ experience in the food and beverage industries. And that CEO hired a few
other experienced professionals to head Accounting & Finance, Marketing & Sales and HR
Division. So, the company’s management is in good hands. The entrepreneurs have also
ensured that they don’t spend too much behind experience by giving opportunities to a lot
of promising freshers. Visibly, it has given recently graduated or post- graduated job
seekers opportunities to prove themselves. In the hindsight, it has reduced company’s cost,
as demanded salary of freshers is much less than that of the experienced professionals, and
also helped the company to run quality digital marketing campaigns by the tech- savvy
freshers.

Weaknesses:

Poor Financial Foundation: Two novice entrepreneurs start up a business in the

competitive food and beverages industry with only 500,000 Tk. In this 21 st century, this
amount of money is not actually enough to guarantee a smoot running business, despite all
the brilliant ideas behind it. They have hired some experienced professionals including the
CEO whose salaries are quite high. And they have to spend a lot of money behind the
marketing drive for brand positioning of a completely new and unknown brand. Although
they have secured some loan from a bank with the help of their ‘Strategic Planning’ Course
instructor, they have to pay monthly interests to repay this loan. Compared to other
developed nations, Bangladesh has a significantly higher interest rate. The average interest
rate on loans is between 10–12%. Besides, in first few months, there will be very low
amount of profit, whereas most of the time and money will be spent in researching the
market, segmenting the market, placing the distribution centers and running the marketing
campaigns. So, the financial foundation of ‘Star Food and Beverages Ltd.’ Is not that
promising and remains vulnerable to the market leaders or other companies in this
industry.

Lack of Experienced Professionals: The CEO of SF&B has 15 years’ experience in the food
and beverage industries. The dept. head of Accounting & Finance, Marketing & Sales and
HR Division are also experienced in this business sector. But apart from that, most of the
employees are fresh graduates or post- graduates from the universities. Even the owners
are almost freshers and they don’t have any practical experience in business. So, this lack of
experience can create some foot holes in their thorny climb to be one of the well- known
brands in the food & beverage industry and their competitors, who are well- established by
now, can take advantage of this lacking. Although their fresher employees are promising to
uphold the status of SF&B, they may face harsh challenges to cope up with the experienced
professionals working for other brands in the food and beverages industry.

Lack of Practical Experience of Owners: Although the young entrepreneurs of SF&B have
sound knowledge on Strategic Plan, Operational Plan, Business Plan and other subjects
taught in their MBA, they don’t have any practical experience in business, let alone
expertise in Food and beverages industry. Because there is a clear difference between
academic business learnings and businesses in reality, the lack of experience in the
business arena may create troubles for them in setting appropriate missions, visions and
core operating values for the company. Some of their competitors may have fewer
academic qualifications than these two novice entrepreneurs but they do have a sixth sense
about market and consumers and know exactly what strategy to employ, when to employ
to capture a good portion of the market and keep their competitors at bay. So, their lack of
experience in business arena is a major foot hole in the path of SFB’s success.

An Unknown Brand: SF&B have to launch and market a completely new brand that people
have never heard about. The market is quite captured by well- established brands launched
by Transcom Beverages Ltd. (TBL), Square Food & Beverage Ltd. (SFBL), Akij Food and
Beverage Ltd. (AFBL), PRAN Foods Ltd., IFAD Multi Products Ltd. and Fu-Wang Foods Ltd.
So, establishing a new private brand is quite challenging in this industry. It will cost time
and money, both, to research the target audience and the competitors. Actually, Branding
consists of a set of complex branding decisions. Major brand strategy decisions involve
brand positioning, brand name selection, brand sponsorship and brand development. So,
SF&B has to go a long way to establish their brand in a well- established industry.

Conflict between Novice Entrepreneurs and Experienced Staffs: The founders of SF&B
hired a CEO who has 15 years’ experience in the food and beverage industries. The dept.
head of Accounting & Finance, Marketing & Sales and HR Division are also experienced in
this business sector. But the owners are not experienced business professionals. So, the
academic knowledge or expertise of the novice entrepreneurs may clash with the business
expertise and calculated approach, cultivated by years of experience, of their employees.
Although both parties are pursuing the same goal which is establishing a new business in a
competitive industry and their clashes may be a pathfinder to unprecedented and effective
solutions in the business arena, if by any chance, these clashes go an extra yards and makes
the both parties stand in each other’s way, it will lead to indecisions for which their
business might have to suffer repercussions.

Opportunities:

An Online Application: Simply put, marketing a new business like the one of SF&B’s is a
massive challenge due to limited resources, money and time. Thus, irrespective of any
business idea and how well planned it is, entrepreneurs have to be sure of every effort they
put into developing marketing strategies for their startup. Today's buyers are used to
having detailed data on everything from product availability and pricing to their
order's precise location en route. Anything less is quickly becoming dissatisfactory. If SF&B
wants to prevail in this digital era, they will need more than great service- they will need to
make life easy for your customer. People no longer have the time or desire to hear a sales
call or flip through a dense paper catalog. Instead, people are leaning towards
performing their own research, inquiries, and purchases online and at their own
convenience. Hence, e-commerce's a rapid success. One of the most important things a
mobile app will offer to consumers is awareness of and communication with SFB’s brand.
And through that regular interaction with the target markets, it will be fostering trust.

Food Manufacturing Factories: Food processing is the transformation of agricultural

products into food, or of one form of food into other forms. Food processing includes many
forms of processing foods, from grinding grain to make raw flour to home cooking to
complex industrial methods used to make convenience foods. SF&B has a good scope of
establishing new food processing factories if they are successful to establish their business
in near future. Both the sound economic condition of the country and the business- friendly
political situation are in their favor. The demand for processed food is also on the increase.
So, if SF&B can earn a good amount of revenue taking advantage of all the positive factors,
they will be able to build a food processing factory of their own.

Tea Processing Plants: Tea processing is the method in which the leaves from the tea plant are
transformed into the dried leaves for brewing tea. SF&B aspires to build a tea processing plant
of their own and they can do so by taking advantage of the positive factors mentioned in
the above paragraph.

R&D Department: After building the manufacturing plants, SF&B can set up a robust R&D
department with high- skilled food engineers for food processing. Because, R&D
breakthroughs lead to opportunities for marketers to position and promote products
using health claims backed by science. Further, clean label viability is a huge advantage for
food and beverages in the age of the hyper-educated consumer. Equally important to
consumers, however, is maintaining appealing textures, flavors and other factors that
impact satiety, without any additives. Many companies with established product lines are
developing new formulas to decrease additives and preservatives, thereby increasing
freshness and consumer friendliness. While consumer preferences for healthy food and
beverage choices and their corresponding purchases are driving the corporate decisions,
what’s giving manufacturers traction in the marketplace is the broader research and
development (R&D) that goes on behind the scenes.

Consideration of Sustainability and Environment Issues: Consumers are looking for

products that support sustainability initiatives and have minimal environmental impacts.
Some plant-based foods that have gained popularity in recent years are coming under
greater scrutiny, however. An example is the surge in almond milk consumption, forcing
farmers to increase yields to the deadly detriment of honey bee populations and to the
scourge of consumers. Using ingredients that can combine sustainability, reduce waste and
maintain clean labels and transparency may help SF&B’s weather shifting consumers
preferences over time.

Use of Whey Protein: SF&B can consider the use of whey protein concentrate in
formulations. There are many whey ingredients to serve different application needs and,
unlike the next fad ingredient that may not resonate with consumers once a product finally
hits the shelves, whey protein has proven staying power and numerous health benefits. It’s
a recognized and trusted ingredient that is shelf stable and a less costly alternative to its
fresh counterparts, including butter, milk, cream, yogurt, eggs, oil and more. Most
importantly, however, is that whey protein maintains or enhances a product’s flavor,
texture and mouthfeel.

Internet of Things (IoT): The incorporation of technology into R&D laboratories can make
processes more efficient and improve food safety. The Internet of Things (IoT) allows
unprecedented accuracy in data collection, workflows and experimentation that R&D
engineers can capture, repeat and build upon to improve results. Of concern to some
corporations, the technology leveraged by R&D departments may be disruptive to the way
things have always been done. Companies and their CEOs need to look past potential
disruptions and recognize the benefits that many technologies can bring in order to fuel
long-term growth, and support R&D spending in this area.

Threats:

Increased competition: This can be a major threat to SF&B’s success. This threat often
arises from the failure of establishing a strong brand. Credibility often starts with a great
website, a focused online marketing strategy, and media coverage. Just as important, SF&B
has to make sure they are clearly communicating why they are in business- not just what
they do.

Sluggish Demand: SF&B needs to spend some time in improving their online marketing.
Strategies such as blogging, social media outreach, and search engine optimization are all
great and inexpensive ways to increase marketing efforts, especially because these provide
an opportunity to the business entities to track their success easily. Worldwide, thirty-
seven percent of entrepreneurs identified sluggish demand as the biggest threat to their
start-ups. It doesn't matter how many positive signs economists think they see, without
customers, businesses can't grow.

Shifts in Consumer Tastes: Though the economic condition of the country is quite good, the
political situation is business friendly and tea consumption is increasing, all on a sudden
the import of coffee has increased significantly. It has been found that some people in
urban areas are preferring coffee to tea in recent times. This has been a major concern for
the tea manufacturing and distribution companies. Because, coffee is a clear substitute of
tea. So, tea consumption is expected to fall gradually in the urban areas. As far as it is
concerned with tea, it is going to be tough for SF&B to establish a strong brand with falling
demand of its product in the urban areas.

Coronavirus Pandemic: Due to Coronavirus breakout, consumers’ disposable income is

decreasing and demand is going down as well. Most of the people are just trying to
consume the essential goods only. Though necessity includes some of the food products, it
is going to be tough for a new brand to survive these uncertain days, let alone their triumph
to glory.

Industry Analysis:

An industry is the collection of competitors in the business of similar products or services.

In addition to five competitive forces analysis, SF&B needs to consider the industry’s
economic characteristics. Such as- industry size, growth, market size etc.

Competitive Threat of Threat of Suppliers' Buyer's

Rivalry New Entrants Substitutes Bragaining Bragaining
High High Moderate Power Power
Moderate High

Figure: Porter’s Five Forces Model for SF&B

Competitive Rivalry: This focuses the number and strength of the competitors. When
rivalry is minimal, the business has huge strength and high profits. On the contrary if
rivalry is intense, other companies may draw customers through price cuts and suppliers
and buyers may switch if they find a better deal elsewhere.
SF&B is entering into an industry that is well- established and the market share of Food &
Beverages industry is mostly captured by giant food brands. So, competitive rivalry of
SF&B is high.

Suppliers’ Bargaining Power: Suppliers’ bargaining power is determined by the ease of

raising the price for the suppliers. If there are more suppliers to choose from then it is
easier to choose the cheaper option. But if there are few suppliers then suppliers charge a
lot.

Since Food and Beverages Industry is huge and there are lots of suppliers available but
considering that SF&B is a new business entity, the bargaining power of SB&B’s suppliers is
moderate.

Buyers’ Bargaining Power: It is determined by the ease with which buyers can lessen the
price. When there are only a few savvy customers, they have more power. But the power of
business increases when there are plenty of customers.

SF&B is a new business entity in a well- established industry. Most of their customers are
either unaware or just informed of the brand of SF&B. And to create a potential customer
base, SF&B might have to sell products at a cheaper price. So, bargaining power of SF&B’s
buyers is high.

Threat of New Entrants: A barrier to entry is a high cost or other type of barrier that

prevents a business startup from entering a market and competing with other
businesses. Barriers to entry can include government regulations, the need for licenses, and
having to compete with a large corporation as a small business startup. If there are high
entry barriers, existing competitors can definitely preserve a favorable position.

Owing to the brand value and quality products of the giant competitors of Food &
Beverages Industry in Bangladesh, there is high entry barriers in this industry for new
entrants. It is to be noted that SF&B faced the same complexities entering into this industry.

Threat of Substitutes: It is the availability of other products that a customer can purchase
from outside an industry. When there are substitute products available, the competitive
structure of the industry is threatened.

As import of coffee is increasing suddenly and SF&B is yet to launch its brand, then as far as
it is concerned with tea, threat of substitutes for SF&B is high. But overall, considering the
promising business professionals engaged with SF&B in establishing its brand image, the
threat of substitutes is moderate.
References:
https://futurestartup.com/2017/10/20/future-demand-food-delivery-bangladesh-interview-zubair-siddiky-co-
founder-md-foodpanda-bangladesh/?fbclid=IwAR3SmJ_UALHkvfffI9mwCR1qN1ScTP4Wo2_ezmBnTIX74FQod-
WbSivODew

https://www.lightcastlebd.com/insights/2018/05/01/entrepreneurship-challenges-in-bangladesh?
fbclid=IwAR395g04QZM7m6Y8BbUm9lbVqFWr-kGbQSULy3NGHkU4byI1_wB-A5jczDo

https://www.grandecig.com/blog/rd-innovations-in-food-and-beverage-manufacturing

https://www.weidert.com/blog/industrial-distribution-wholesale-vs-ecommerce

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