Market Structure of Akij Foods and Bebar

Market Structure
of
Akij Food & Beverage Ltd.
Group 9
Department of Finance,
Jagannath University,
Dhaka
6/29/2014
Market Structure of Akij Foods &Beverage Ltd
Microeconomics
Report
On
Akij Food & Beverage Ltd.
Submitted to
Roushanara Islam
Lecturer
Department of Finance
Jagannath University.
Submitted by
Group-9
SL NO. NAME ID NO.
01 MD. MONOAR HOSSAIN B-120203005
02 SABIHA JHUMUR B-120203010
03 MD. SAIDUL ISLAM B-120203060
04 SUNJIDA PARVEN B-120203069
05 MD. SHAKHAWAT HOSSAIN B-120203080
06 MD. RAJU AHAMED B-120203091
07 EMDAD MUNSHI B-120203092
08 AYASHA SIDDIQUA MOUE B-120203099
09 MALEKA AKTER B-120203106
10 MILON SAHA B-120203108
Date of Submission: 25 June, 2014
Department of Finance Jagannath University 2|Page

Declaration
We hereby proclaim that, this report contains no objects which has

been approved for the prize of any other degree or diploma at any
university or correspondent institutions and that to the best of our
understanding and belief, this report contains no bits and pieces
previously available or written by another person, except where due
reference is made in the content of the report.
Group- 9

Letter of Transmittal
25 June, 2014
Roushanara Islam
Lecturer
Jagannath University.
Sub: Submission of the Report.
Dear Madam,
With due respect, we would like to inform you that, we are the student
of Department of Finance. It is our great pleasure to inform you that we
have got a chance to submit a report on “Market Structure in
manufacturing companies of Bangladesh- A Study on “Akij Food &
Beverage Ltd.” as a requirement for course named Microeconomics,
course no: 2104.
We therefore pray and hope that you would be kind enough to accept
this report and bless us heartily.
Sincerely yours
Group-9
B.B.A. 7th Batch
2nd Year 1stSemesters
Jagannath University, Dhaka.

Acknowledgement
All praises are due to Almighty Allah, the ultimate authority of this
universe who has enabled us to submit the report in time for the course
named Microeconomics.
We express our pleasant sense of appreciation, thanks, true gratitude

and intense regards to our honorable supervisor Roushanara Islam,
Lecturer, Department of Finance, Jagannath University, Dhaka for his
scholastic way, pleasant support, regular encouragement, valuable
guidance, overall management and continuous importance throughout
the thesis work.
It’s a great delight to us to express reflective gratitude and warm

admiration to our dearly loved parents, well wishers and friends for
their ever ending wish, affections, support, sacrifice, inspiration,
encouragement and continuous endorse in the long process of creating
our academic career which can never be repaid.
Group-9

Executive Summary
Beverages and soft drinks sector is one of the fast growing sectors in
Bangladesh. Akij Food & Beverage Ltd is one of the local
manufacturers of soft drinks in FMCG sectors. In the age of
globalization and free trade, it is very tough to compete in this
beverage and the competition style of this sector changing very
frequently. The Akij Food & Beverage Ltd continuously managing
itself with changing environment of competition.
Our research report initially provides a nominal idea of the beverage
industry in our country. Then the overview of market structure of
manufacturing company in Bangladesh and also The Akij Food &
Beverage, which is a unit of Akij Group, is presented. After the
company profile, its product and competitor are described. Then
SWOT Analysis, Marketing Mix and Financial Analysis are also given
in this report.

Table of Content
Name of Content Page No.
Acknowledgement 5
Executive Summary 6
1.1 Introduction 8
1.2 Scope of the study 8
1.3 Background of the study 9
Part - I
1.4 Objective of the report 9
1.5 Methodology of the study 9
1.6 Limitation of the study 10
2.1 Market Structure 10
2.2 Types of Market 11
2.3 Perfectly Competitive Market 11
2.4 Imperfectly Competitive Market 11
Part - II
2.4.1 Monopolistic Competitive Market 11
2.4.2 Oligopoly Competitive Market 12
2.5 Perfect vs. Imperfect Competition 12
2.6 Oligopoly vs. Monopolistic Competitive Market 12
3.1 Company Profile 13
3.2Literature review 14
3.3 AFBL In Perfectly Competitive Market 16
3.4 Main Product of Akij Food and Beverage Ltd. 16
Part -III 3.5 Competitor of Akij Food and Beverage ltd 17
3.6 SWOT Analysis of AFBL 18
3.7 Marketing Mix of AFBL 20
3.8 The Current Situation of AFBL 24
3.9 Financial Analysis 25
Conclusion 26
Part-IV
Bibliography 27

PART - I
1.1 Introduction
Market structure is defined by economists as the characteristics of the
market. It can be organizational characteristics or competitive
characteristics or any other features that can best describe a goods and
services market. The major characteristics that economist have focused
on in describing the market structures are the nature of competition
and the mode of pricing in that market. Market structures can also be
described as the number of firms in the market that produce identical
goods and services.
The different types of market structure are; the monopolistic

competition also referred to as the competitive market. The oligopoly
market (called a duopoly when only two firms exist in the market), a
monopsony (there exist only one buyer), the monopoly structure and
the perfect competitive market. The types of market structures can be
grouped into the perfectly competitive structure and the imperfectly
competitive market structure. The imperfectly competitive market
structures are the oligopoly, duopoly, monopoly and the monopolistic
competition.
In Bangladesh, manufacturing sector
1.2 Scope of the Study

There were huge scopes to work in the arena of the case. Considering
the dead line, the scope and exposure of the paper has been wide-
ranging. The study behind “Market Structure in Manufacturing Sector
of Bangladesh”- A Study on “Akij Food &Beverage Ltd” has covered

overall analysis by Which we can know about the Marketing Condition

followed by “Akij Food &Beverage Ltd”.
1.3 Background of the Study
The following report was assigned by the course teacher of

Microeconomics, Roushanara Islam, as an academic requirement.
This course is approved by University Governing Council (UGC),

authorized and organized by Jagannath University, Dhaka-1100, and
Faculty of Business Administration (B.B.A).
1.4 Objective of the Study
This report is about “Marketing Structure of Manufacturing Sector in

Bangladesh”. The purpose of the study is to help us to understand
market condition, market policy and market strategy of a
manufacturing company which helps them to survive in today’s
competitive market. It’s also enabling us to gain knowledge about real
world market structure and its operation.
1.5 Methodology of the Study

 Microeconomics (4th Edition) by Dominick Salvatore
 Principles of Marketing (13th Edition) by Philip Kotler& Gary
Armstrong
Sources of Data
 Web sites
 Books
 Different Business Publication & Notes
1.6 Limitations of the Study
We collected our information through secondary sources, so we

have not been able to collect more information which could
give us more clear knowledge about the signaling theory. While
conducting the report on “Market Structure in Manufacturing
Sector of Bangladesh- a Study on “Akij Food &Beverage Ltd”.
Some limitations were yet present there:
 Lack of time shortage many related part cannot be paying

attention in depth.
 Current data and information on different activities was
unavailable.
 As a report analysis, it has been prepared shortly
PART- II
2.1 Marketing Structure
Market structure is defined by economists as the characteristics of the

market. It can be organizational characteristics or competitive
characteristics or any other features that can best describe a goods and
services market. The major characteristics that economist have focused
on in describing the market structures are the nature of competition
and the mode of pricing in that market. Market structures can also be
described as the number of firms in the market that produce identical
goods and services.
Department of Finance Jagannath University 10 | P a g e

2.2 Types of Market
2.3PerfectlyCompetitive Market
Perfect competition describes a market structure where competition is
at its greatest possible level. To make it more clear, a market which
exhibits the following characteristics in its structure is said to show
perfect competition
2.4 Imperfectly Competitive Market

Imperfect competition is a competitive market situation where there
are many sellers, but they are selling heterogeneous (dissimilar) goods
as opposed to the perfect competitive market scenario. As the name
suggests, competitive markets that are imperfect in nature.
2.4.1 Monopolistic Competitive Market
A situation in which a single company owns all or nearly all of the

market for a given type of product or service. This would happen in the
case that there is a barrier to entry into the industry that allows the
single company to operate without competition (for example, vast
economies of scale, barriers to entry, or governmental regulation). In
such an industry structure, the producer will often produce a volume
that is less than the amount which would maximize social welfare.
2.4.2 Oligopoly Competitive Market

A situation in which a particular market is controlled by a small group of
firms.
An oligopoly is much like a monopoly, in which only one company

exerts control over most of a market. In an oligopoly, there are at least
two firms controlling the market.
2.5 Perfect vs. Imperfect Competition

Perfect and Imperfectly competitive markets are very different to one
another in terms of the different market conditions that need to be
satisfied. The main difference is that, in a perfectly competitive market
place, the competitive conditions are much less intense, than any other
form of imperfect competition. Furthermore, a perfectly competitive
market structure is healthier as buyers have enough options to select
from and aren’t, therefore, pressured to purchase one / few products
and sellers are able to enter/exit as they please, which is opposite to
most market conditions within an imperfectly competitive market
place.
2.6 Oligopoly vs. Monopolistic Competitive Market:

Both Oligopoly and Monopolistic Competition have imperfect

competition. This means that firms in both market structures can
charge their own prices, without losing their consumers.
However, there are many differences in Oligopoly and monopolistic

Competition Market structures.
Oligopoly contains a small number of large firms while Monopolistic

Competition has a large number of small firms.
Oligopoly:
 Small number of Large Firms

 Have significant entry barriers of other firms.
 Location-wise – Smaller towns
Monopolistic Competition:
 Large number of small firms

 Free entry and exit
 Location-wise – Large cities
PART - III
3.1 Company Profile
Akij Food and Beverage Ltd, a concern of Akij Group. Akij Food &
Beverage Ltd. has been established at a beautiful site Krishnapura,
Dhamrai of Dhaka. It has come with the best food & beverage in
Bangladesh.
There are various types of drink. Mojo is the brand name of cola, Lemu
is the brand name of Lemon and Speed is the brand name of energy
drink. 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.
Checky Monkey is the brand name of banana chips produced from this
factory. It also is becoming popular chips in Bangladesh.
Most of our Raw materials come from various foreign countries. The
quality is very strictly controlled. At every stage, non standard products
are rejected.
Head Office
73, Dilkusha, Commercial Area,

Dhaka-1000, Bangladesh.
Phone : (+880-2)9563008-9, 7169017-8
Fax : (+880-2)9564519
E-mail : info@akij.net
3.2Literature review
Vision
Any company’s vision is actually the dream to which the company

always strives to
Reach where it may become possible or not. Here it is also not apart
for Akij Group. Expanding the business in the abroad fully and
becoming one of the market leaders internationally- this company
thinks in this way as a part of their vision.
Mission
The mission of Akij Group is to be the market leader by 2009

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.
Goal
The company’s goal is to maximizing the market share in their every

categorized business including Akij Food & Beverage Ltd, Akij Cement
Company Ltd, Dhaka Industries, Akij and Akij Particle Board Mills Ltd.
Objective
“The main objective of the company is to increase the market share

in related diversified
Products in Bangladesh and to assure the potential customers of the

quality and durability of the products.”
Strategy
The company always believes in pull strategy rather than push
strategy. They first of all find out the customers demand about how,
when, where, and what type of product ad services they want. Then
according to that they provide their services at the right place and in
the right time.
The Organization Structure

AKIJ FOOD & BEVERAGE LTD. maintains a flat organization structure.
The company has many separate divisions for the smooth operations

in Bangladesh. Among them some divisions are related with business

and some are supporting divisions.
3.3 Akij Food and Beverage Ltd in Perfectly Competitive

Market
AFBL operate their business in perfectly competitive market. Because

its market has following characteristics:
 AFBL market consists of buyers and sellers who are price takers.
 Each firm in the market produces undifferentiated and
homogenous products.
 Buyers and sellers have perfect information about the price
prevailing in the mark! About the availability of commodities at
any given point of time.
 Any firms can enter or exit the market liberally.
3.4Main Product of Akij Food and Beverage Ltd
 Mojo
 Clemon
 Frutika
 Speed Energy Drink
 Farm Fresh Milk
 Cheese Puffs
 Spam Mineral Water

3.5Competitor of Akij Food and Beverage ltd
Brand Name: MOJO

International Giants
 Coca-Cola
 Pepsi
Local Brands
 Royal Crown Cola(Partex Beverage)

 Pran Cola(Pran Foods)
Brand Name: Spa Mineral Water

International Brand
 Aquafina
Local Brand
 Jibon
 Mum
 Fresh
Brand Name: Clemon

Local Brand
 RC Lemon
 Pran Up
International Brand
 Sprite
 7 Up
Brand Name: Frutika

International Brand
 Slice
Local Brand
 Pran Fruto
 Shezan Mango Juice
Brand Name: Speed Enrage Drinks

Competitor Name
 Dark Horse
 Shark
 Tiger
3.6SWOT Analysis of AFBL

A scan of the internal & external environment is an important part of
the strategic planning process. Environment factors internal to the firm
usually can be classified as strengths(s) or weaknesses (w) & these
external to the firm can be classified as opportunities (o) or threats (t)
such as analysis of these strategies environment is referred to as a
SWOT analysis.
The SWOT analysis provides information that is helpful in matching the

firs resources & capabilities to the competitive environment in which it
operates. As such it is instrument in strategy formulation & selection.
The following diagram shows how a SWOT analysis fits into an
environment scan.
STRENGTH
A firm’s strength is its resources and capabilities that can be used as a

basis for developing a competitive advantage.
 Patents
 Strong brand name
 Good reputation among customer
 Cost advantage from proprietary know how
 Exclusive access to high grade natural resources
 Favorable access to distribution networks
WEAKNESSES
The absence of creation strength may be viewed as a weakness. For

example each of the following may be considered weaknesses
 Lack of patent protection

 A weak band name
 Poor reputation among customer
 High cost structure
 .lack of access to the best natural resource
 Lack of access to key distribution channel
Opportunities
The external environment analysis may reveal certain new

opportunities for profit & growth some examples of such opportunities
include
 An unfulfilled customer need

 Arrival of new technology
 Loosening of regulation
 Removal of international trade barriers.

Threats
Changes in the external environment also may present threats to the

firm. Some examples of such threats include
 Shifts in customer tastes away from the firm products.

 Emergence of substitute products.
 New regulations.
 Increased trade barriers
3.7 Marketing Mix (4P’s) of AFBL

The Marketing Mix model can be used by marketers as a tool to assist
in defining the marketing strategy. Marketing managers use this
method to attempt to generate the optimal response in the target
market by blending 4 variables in an optimal way.
All products 4p’s analysis is difficult to showing so we

showering an example of one product Akij Food and Beverage
Ltd. introduced lemon flavored carbonated beverage clear
drink “Clemon” in its existing product line on October 2007.
Analysis of 4P
Product
 Lemon flavored CSD.
 Clemon
 Clear Lemon Drink in existing product line of AFBL.
 Strictly maintains product’s high quality.
 Underwater world scenario is used. Bottle and cap color Green &
White (respectively)
 Can printed (150ml and 250 ml); Shrink Label (except- 2000ml).

 150ml can; 250ml pet bottle and can; 500ml, 1000ml, 2000ml pet
bottle.
 Dealer’s get damage returns warranty from the company.
Promotion
 Advertisement: Television, billboards, posters, Print media.
 Sales Promotion: Different promotional activities has been
performed, e.g. a seminar in BUET introducing SCM from
Department of IPE. The official drink of the event was ‘Clemon’.
 Public Relations: Clemon Beach Carnival yearly. Sponsors Clemon-
Activate Bangladesh Sports Development Pilot Project under
Active Bangladesh Foundation (ABF).
 Direct Marketing: All the promotional activities for customer as
direct marketing and greetings are given to the traders.
Place
 Channel:
Manufacturer
Dealer
Retailer
Customer
 Coverage: Around 90% of Bangladesh

 Location: Metros, Semi-urban & Rural areas.

 Inventory: Currently no specific amount of inventory is

maintained for backup.
 Transport: The transportation is upon the choice of the
distributors. They may use their own transport or else the
company has arrangement for transporting the goods.
Price
List Price:
Decided as competitive price. The prices of various sizes are:
 250ml = Tk.16;
 500ml = Tk.30;
 1000ml = Tk.55;
 2000ml = Tk.85
Allowances:
Dealers enjoy allowances depending on their total purchase.
The crate sizes of Clemon delivered to the dealers are:
 250ml (can & pet) = 24pcs./crate

 500ml(pet) = 20pcs./crate
 1000ml.(pet) = 12pcs./crate
 2000ml.(pet) = 6pcs./crate
Credit terms:
With all the dealers dealing is done in credit. Only the dealers of high
business volume enjoys credit term allowance for clearing due
payments at an early date.

Analysis of 4C
Customer Solution
As a product Clemon has been designed to provide customers a

clear lemon carbonated beverage as per demanded sizes for self
and family/group consumption at a close similar quality
comparing to similar products in the market.
Customer Cost
The component “Price” of the marketing mix determined by

keeping an eye on customer’s willingness to spend for a beverage
product comparing to similar products of other brands. The other
pricing factors regarding allowances and credit terms are also
justified according to reasonability.
Conveniences
Clemon is available at local grocery stores, fast food shops and

super markets to ensure customers convenience
Communications
Clemon is being advertised using almost all the Medias which

communicate better with the targeted group.
Within the target group the media which communicates with

them the most is Television Advertisements and radio and
billboards communicate in a smaller scale.
The company of Akij Food and Beverage has a product line of

almost all the types of drink and snacks. “Clemon” fulfilled the line
of carbonated beverage by adding the lemon flavored carbonated
beverage.

3.8 The Current Situation of AFBL
Porters 5 forces model

Criteria High Moderate Low Reason
Bargaining power There are enough
of Suppliers competitors in the
market for bargaining
Bargaining power There are some
of customers established company in
the market
Treat of new There are so many local
entrants company and big
company in the market
Treat of The price of the product
substitutes is more or less same
Competitive Quality of the product

Rivalry Between and the price are almost
existing players same
Identifying the problem

 Low quality product
 Low variety of products
 Poor band image
 Poor marketing strategy and
 Service according to their service segment are very poor though
having a strong distribution channel

Explaining what success it will bring

 Increase products quality
 Diversified products
 Strong brand image
 Strong Marketing state
3.9 Financial Analysis

Liquidity Analysis
2009 2010 2011 2012 2013
5.62 4.47 4.30 4.23 5.48
Liquidity Analysis
6
5
4
3
Liquidity Analysis
2
1
0
2009 2010 2011 2012 2013
Acid Test Ratio

2009 2010 2011 2012 2013
4.99 3.91 3.97 4.10 4.45
Acid Test Ratio
6
5
4
3
Acid Test Ratio
2
1
0
2009 2010 2011 2012 2013

Profitability Performance
Net Profit Margin
2009 2010 2011 2012 2013
1.15 2.23 2.56 2.21 3.17
Net Profit Margin
3.5
3
2.5
2
1.5 Net Profit Margin
1
0.5
0
2009 2010 2011 2012 201
Cash Efficiency
Cash cycle
2009 2010 2011 2012 2013
34days 39 days 31 days 45 days 41 days
PART - IV
Conclusion
As the Akij Food and Beverage Ltd of Akij Group is a well known
company in Bangladesh. But there are some foods and beverage of Akij
Group Which consumer did not know about them. Lack of awareness
and proper advertisement make the process is complex. So they have

to consider on improving Akij foods and beverages weakness and try to

capture its opportunity and utilize its market through proper operation.
Bibliography
BOOKS
 Microeconomics (4th Edition) by Dominick Salvatore
 Principles of Marketing (13th Edition) by Philip Kotler& Gary
Armstrong
Website
 http://www.preservearticles.com/201104115243/what-are-the-
characteristics-of-a-perfectly-competitive-market.html
 http://www.whatiseconomics.org/microeconomics/market-
structures
 http://economictimes.indiatimes.com/definition/perfect-
competition
 http://economictimes.indiatimes.com/definition/imperfect-
competition
 http://www.investopedia.com/terms/m/monopoly.asp
 http://www.investopedia.com/terms/o/oligopoly.asp
 http://www.differencebetween.com/difference-between-perfect-
and-vs-imperfect-competition/
 www.akijgroup.com/akij-food-beverage-ltd/

 http://www.assignmentpoint.com/business/entrepreneurship-
development-business/portfolio-of-akij-food-and-beverage-
limited.html
 http://en.wikipedia.org/wiki/Akij

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Market Structure

Date of Submission: 25 June, 2014

Department of Finance Jagannath University 2|Page

We hereby proclaim that, this report contains no objects which has

Department of Finance Jagannath University 3|Page

Sub: Submission of the Report.

Department of Finance Jagannath University 4|Page

We express our pleasant sense of appreciation, thanks, true gratitude

It’s a great delight to us to express reflective gratitude and warm

Department of Finance Jagannath University 5|Page

Department of Finance Jagannath University 6|Page

Department of Finance Jagannath University 7|Page

The different types of market structure are; the monopolistic

In Bangladesh, manufacturing sector

1.2 Scope of the Study

Department of Finance Jagannath University 8|Page

overall analysis by Which we can know about the Marketing Condition

1.3 Background of the Study

The following report was assigned by the course teacher of

This course is approved by University Governing Council (UGC),

1.4 Objective of the Study

This report is about “Marketing Structure of Manufacturing Sector in

1.5 Methodology of the Study

1.6 Limitations of the Study

We collected our information through secondary sources, so we

 Lack of time shortage many related part cannot be paying

2.1 Marketing Structure

Market structure is defined by economists as the characteristics of the

Department of Finance Jagannath University 10 | P a g e

2.2 Types of Market

2.4 Imperfectly Competitive Market

2.4.1 Monopolistic Competitive Market

A situation in which a single company owns all or nearly all of the

2.4.2 Oligopoly Competitive Market

An oligopoly is much like a monopoly, in which only one company

2.5 Perfect vs. Imperfect Competition

2.6 Oligopoly vs. Monopolistic Competitive Market:

Department of Finance Jagannath University 12 | P a g e

Both Oligopoly and Monopolistic Competition have imperfect

However, there are many differences in Oligopoly and monopolistic

Oligopoly contains a small number of large firms while Monopolistic

 Small number of Large Firms

 Large number of small firms

Department of Finance Jagannath University 13 | P a g e

73, Dilkusha, Commercial Area,

Any company’s vision is actually the dream to which the company

The mission of Akij Group is to be the market leader by 2009

The company’s goal is to maximizing the market share in their every

“The main objective of the company is to increase the market share

Products in Bangladesh and to assure the potential customers of the

The Organization Structure

Department of Finance Jagannath University 15 | P a g e

in Bangladesh. Among them some divisions are related with business

3.3 Akij Food and Beverage Ltd in Perfectly Competitive

AFBL operate their business in perfectly competitive market. Because

3.4Main Product of Akij Food and Beverage Ltd

Department of Finance Jagannath University 16 | P a g e

3.5Competitor of Akij Food and Beverage ltd

Brand Name: MOJO