CUSTOMER LANDSCAPE AND
MARKET POSITIONING
The Company’s competitive landscape and market positioning is described below:
THREAT OF NEW COMPETITION
The cement sector in Pakistan is heavily dependent
upon the nature and state of the economy of the
nation where production capacity and ultimate
dispatch is pegged towards demand and current
PSDP’s allocation by the government. Given the
external circumstances, the industry has shifted
towards the mature phase of its product life cycle in
which competition is high, demand is stagnant and
key players are firmly established.
Furthermore, the cement sector by its natural design
has high barriers to entry where having economies of
scale is paramount. Capital investment requirements
and business set up costs remain exorbitant and
access to key distribution channels and raw material
is essential to success.
Cumulating all above factors, it is highly unlikely for
new players to enter the market.
THREAT FROM SUBSTITUTE PRODUCTS
To say that cement has shaped the world of today
won’t be an overstatement. Infrastructure, may it be
housing, roads, towering skyscrapers, bridges, dams,
or even the Wonders of the World, wouldn’t have
been possible without cement.
From a commercial perspective there is no direct
substitute of cement.
BARGAINING POWER OF CUSTOMERS
Generally, cement in Pakistan is not directly sold to
end consumers. The manufacturing company sells
the product to registered distributors, dealers and
retailers who further the supply to the end consumers.
MLCFL endeavours to add more dealers to its
customer base with whom the Company enjoys a
healthy, mutually beneficial relationship based on trust
and honouring of business terms.
The Company has established a 24/7 call center to
stay in touch with all its stakeholders. All the queries,
order inquiries and grievances (if any) are addressed
on real-time basis. Furthermore, the Company has
employed a marketing and branding team which
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organizes events and makes real time visits to its
dealers to further strengthen the bond of loyalty and
inspire unity.
BARGAINING POWER OF SUPPLIERS
It is common practice for large manufacturing
concerns to enjoy a wide supplier base who are keen
to do business with it, MLCFL being no exception.
The Company has been doing business with a large
list of approved vendors on its panel, having a history
of professional business ethics, to maintain a healthy
competition. Thus, the Company enjoys a privileged
bargaining power while keeping the business norms
intact. The Company has an extensive vendor
selection process in place which is supervised by
the Audit Department to ensure transparency and
fairness.
Raw material is obtained through long term lease
contracts with Mines and Mineral Department,
Government of the Punjab. Sufficient letter of credit
lines are available to facilitate ease of business with
foreign suppliers. Whereas, fuel and other input
materials are purchased after extensive market
research and negotiation to protect the Company’s
interests.
INTENSITY OF COMPETITIVE RIVALRY
Competitive forces are fairly strong in the cement
sector which consists of rival companies aggressively
competing with one another on price and market
share. The cement companies are geographically
situated all over in Pakistan that results in intensified
competition as far as market share and price are
concerned. MLCFL has continuously been working
hard to maintain its brand loyalty, market share
expansion, efficient supply chain and superior quality
products.
MLCFL has always been the first priority of cement
consumers due to its superior quality products giving
an edge to the Company in the intensive competitive
environment.