Kohinoor Chemicals Company(Bangladesh) Limited

Background of the company

Kohinoor Chemicals Company (Bangladesh) Limited is established in 1956 with the business of Manufacturing & Marketing. They have the products of Soap, Cosmetics & Toiletries. The management of KCCL subsequently completed am arduous BMRE program with the technical collaboration of a reputed industrial conglomerate of Europe. This enable the enterprise to become a repositioned cosmetics & toiletries manufacturing company of Bangladesh with the most advanced technology. It is a public company listed with both bourses of Bangladesh, the Dhaka Stock Exchange and the Chittagong Stock Exchange. When they started their authorized capital was 500000000 and the paid up capital is 50000000. Most of the products of KCCL is known by the with its leading brand name Tibet. A number of its other brand such as Sandelina, Genstar, Bactrol, Ice cool, Fair & Care, Xpert, Heel Guard, & Clean Master are equally famous in Bangladesh. They are manufacturing products for the mass people. They have rearranged the distribution system to deliver quality products throughout the country as well as regional and overseas market. At the same time they revamped the R&D department and Quality Control department to attain greater degrees of excellence for all products.

Mission:
Their mission is to giving preference to the Time which has rewarded them with the rank of leadership and well remember always what it means for us to be the leader in the market. Well always try to explore beyond the boundaries of possibilities. Consumer needs and the consumer needs alone will be our guiding philosophy in manufacturing and marketing the products that beautify people and satisfy their souls.

Vision:
To attain our avowed mission of assuming the above duty & responsibility. We envisages for more beautiful tomorrow for the country, for the region, and for the whole world.

Goals:
Their goal is to achieve success and to keep success on-going KCCL has devoted itself to update its HRD resources and maintaining standard batch by batch, even price by price. Objectives:

Broad Objective To analyze the current level of competition of detergent Powder (Tibet Detergent Powder) for establishing strategies in order to increase the market share Specific Objectives To analyze the different aspects (product features, pricing factors, distribution system) of the detergent Powder as an Washing powder for identifying the competitive position in the market To identify the factors regarding the marketing mix of detergent Powder with a view to enhancing the attraction of the potential doctors toward this product To analyze the prescription sharing about the detergent Powder (Tibet Detergent Powder) among competitors in the different hospitals. To make strategies on the basis of analysis and to give some recommendations for increasing the market share and for designing an appropriate marketing mix of detergent Powder. To know the substitute products of the detergent Powder (Tibet Detergent Powder

Strategic Capabilities:
They have constantly conducting prolong programs of BMRE with full foreign collaboration to ensure quality and efficiency amongst its 1500 plus workforce including technical and management executives with various welfare measures.

Strategies : There are some strategies they followed to enter into the market.
At every stage of the production, stringent control mechanism involving raw material testing, in-process quality control, packaging, labeling, finished product testing as well as stability monitoring and documentation is maintained to ensure the highest quality product consistently, From its very inception, KCCL has always emphasized the need for uncompromising quality. KCCL commitment to quality is clear from its progressive use of state of the art manufacturing technology. BPLs priority is to build a healthier tomorrow for the nation. And most important thing is they used advanced technology for manufacturing their cosmetics & toiletries which ensure the quality products.

Business Model:
KCCLs success is also for their network. They have setting up their a number of nationwide marketing network in addition to commitment to its quality. Kohinoor Chemical Division has been brought under exclusive computer network. The MIS and Planning Dept. have two operational units: (1) Management Information System and (2) planning. The primary objective of MIS is to ensure availability of all types of data throughout the Chemical Division. It collects sales data from points of sales, renewed physicians inand-out data and processes market research data and disperse to respective departments. It manages employee profile including personal details and presence.

Control:
At every stage of the production, stringent control mechanism involving raw material testing, in-process quality control, packaging, labeling, finished product testing as well as stability monitoring and documentation is maintained to ensure the highest quality product consistently. The Central Product Management Department is the heart of marketing of Kohinoor Chemical Co. (BD) Ltd. This dept. controls all promotional activities of BPL products. It is headed by Produce Promotion Manager. One of its every important function is sales Forecasting. Sales forecasting is done monthly in association with the Sales Management Dept. During sales forecasting, previous sales trend and seasonal variations are taken into active consideration. Product life-cycle is also considered carefully.

Strategic position:
The Environment Analysis: In strategic position, KCCL has analyzed the Bangladesh market through various analysis like PESTEL framework, porters five forces, AAA mappings etc. Resource and Competences: Introducing automatic machinery and constant inflow of state-of-the-art raw materials from the worlds best possible sources, KCCL has built high standard in manufacturing quality cosmetics, toiletries, soap, perfume and glycerin etc. By now, TIBET the corporate brand logo of KCCL has, in some sectors, risen as market leader. The strategic capabilities shows their BMRE programs with full foreign

collaboration to maintain the quality. Their target was mass people-rural people even can use their products and they maintain their cost efficiency with introducing the different sizes of product like Tibet-it has 40gm,200gm,500gm,1kg etc. They have also the capabilities for sustainable competitive market because they came first and they are continuously changing their product and their target is not for specific group. Expectations and purposes: They have listed with the both bourses of Bangladesh, the Dhaka stock exchange and the Chittagong stock exchange. KCCL is highly concerned about environmental safety. They are continuously striving to minimize the environmental impact through their operational excellence. KCCL is committed to an eco-friendly environment and its facilities are carefully designed and operated to prevent all forms of pollution. One of the primary concerns of the company is to contribute in keeping the earth clean. BPL is aware of its responsibility of caring for the environment and the importance of reducing the environmental effects of manufacturing activities to a practical minimum. In the cultural context, they communicating for organizational purposes like Monthly national conferences of Regional Sales Controllers and Field Supervisors are held in the marketing office which is conducted by Product Officers. Monthly regional conferences of Field Supervisors and Sales Representatives are conducted by Product Officers.

Strategic Choices:
Business level strategy: Actually KCCL has created some business level strategy. At first, they have the new advanced technology used in their production as well as they arrange raw materials from the worlds best possible sources targeting their mission. For sustaining in the competitive market, they are continuously updating their products with new technology, generating new ideas, create efficient workforce by giving training by the managers of BPL and also by the BMPR program. Corporate level and International Strategy: At KCCL, a well planned and structural designed in-house training activity involving sales, marketing, manufacturing, QC, QA etc. is conducted throughout the calendar year. These training programs are conducted by in-house resources persons on a regular basis and as per schedule. Now, they are expanding their products in abroad by achieving their global image. They are the first Chemical company in Bangladesh to receive NATIONAL EXPORT TROPHY. Kohinoor Chemical is one of the first companies to have an extensively computerized and automated work environment. Directions and methods of developments: They had a planning that theyll enrich the HRD that the working people will be more skilled. KCCL is planning to increase the market share of Tibet Detergent Powder (Detergent Washing Powder) as a washing product for the different types of people. It already exists in the market.

In KCCL, information technology is used as a decision support system and coordination tool to facilitate human and machine performance and fast communication. Their success criteria is that they changed their distribution system and delivers quality products throughout the country and their R&D department is very active.

Strategy into Action: Strategy into action follows three things. These are:
Organization for success: The KCCLs structural type actually is it is a manufacturing company and they focus on marketing side specifically. They followed a systematic process while they are entering into the market i.e. they focus on the quality theyll provide and in each steps they used advanced technology which is in a process. They have a good relationship with the supplier because they use best raw materials of the world and also with the stockholders. The other configurations are very specific because they focus mass, specially middle class and rural people in Bangladesh at first and now they export their products as well. Enabling success: For the success, KCCL try to manage people which includes workers/ employees, executives, and off course the target customers. For this, they have arranged BMRE program to ensure quality and efficiency among the 1500 plus workforce including technical management executives with various welfare measures like subsidized canteen, free uniform, Medicare facilities, welfare center etc. ready to respond to any consumer need and program of action. They manage information by monitoring the units and also managing technology, they regularly updating their financial statement, their market condition . Managing strategic change: their R&D sector always check out the market condition and do research in a regular basis. They diagnosing their steps/process thats why they find out the problem in distribution system. developing new formulations ,simplifying manufacturing processes bringing cost efficiency. The new management took a challenge to diversify the brand positioning and introduce new range of products. Soon KCCL re-assumed its market status and glory of public endorsement of its traditional consumer response. And they also analyze the pitfalls regarding their sales volume. KCCL always concentrates its efforts in introducing new products with 15 presentation forms and strengths, which has already gained significant brand equity in the market.

Level of strategy:
KCCL maintain Corporate level strategy because they tried to create value to the such as HR unit-they create value for their own workers by giving training on various new technology they use or in HR unit-they they are very active for their workers as well as customers. Basically, KCCL has creating values on Quality of the products, reliability and strong distribution these are the core values on which basis they are doing their

business. They usually followed Business Level Strategy in which they compete successfully in the market. They have the SBU in different parts like Africa, Myanmar, Pakistan and in Kenya, they have started supplying to MEDS- the largest institution and Kenyatta market- the largest market in Kenya. And also they are now expanding their market in broad, so they have used Operational Strategy. They are providing quality products all over the world and whatever they decide they dont compromise with quality because they have a good relationship with dealers of raw materials, distribution channel recently they reformed that people can get their product easily. Because they are entering to the abroad market, they are creating mediums through which they can connect. And as well as they are maintaining the connectivity with the corporate, business units efficiently.

The Strategy Lenses:

Design Lens: Kohinoor Chemicals are following Design Lens that they are using their analytical tools i.e. they surveyed at their target level & found a good response from them and they then sure to continuing their business. In other side their concept is very clear i.e. they are creating products for mass people. So, their target is mass people which they focused. They are continuously conducting research and they found that they need to change their distribution channel otherwise their mission will not be fulfilled at all. And also planning system is good because they at first focus on middle, lower class people at mass level. When their target reached up to the mark, now they are focusing in expanding their market throughout the county as well as in abroad. Ideas Lens: KCCL has following the ideas lens that they following the multinational company Unilever and get the ideas from them. As a Bangladeshi company, KCCL is doing well by following the strategies of Unilever. They are continuously trying to innovate as they do.

How to Develop Strategies:

KCCL can develop their strategic planning system or HR Unit by improving HRIS system, maintaining proper manpower, doing succession planning externally so that the employees can understand the their company following succession planning. Or can create workshop, group project etc. They can change the HR other requirements such as the old employees who do not understand the new changes or modern technology they can replace them by other skillful people. They can make a schedule of resource allocation. They are try to following strictly just-in-time method / TQM method which is in their vision & mission but they can also use six sigma as well. They can develop their organization as learning organization that by implementing more and more challenging strategies they can learn something and in complex situation, they have to make strategies for that time and for future. And of course, managing the strategy development process is very important because without managing properly the strategy will not be effective and this is the first strategy to develop the business.

Analyzing strategic capabilities: Strategic capabilities: KCCL has strategic capabilities that the state-of-the art machineries and raw materials they arranged from worlds best possible sources which had benched mark high quality standard in manufacturing quality products. And they have the competences like they are using machines for manufacturing of their products not using their hands. Competencies: KCCL has the its own competences like their competence is their best quality of raw materials and they use machines to manufacturing their products which utilize the resources. Threshold capabilities: The KCCLs threshold capabilities are which are essential for an organization, information technology they have for understanding consumer behavior, they have ageold goodwill of Tibet was nationalized and included under BCIC, update HRD, they have setting marketing networks in addition to its commitment to its quality. Unique resources: Their unique resource is therefore, KCCL is constantly conducting prolong program of BMRE with full foreign collaboration to ensure quality and efficiency amongst its 1500 plus workforce including technical and management executives with various welfare measures like subsidized canteen, free uniform, Medicare facilities, welfare center etc. ready to respond to any consumer need and program of action. The unit has been successful in attaining one of the high-rated productivity in the country. Core competencies: Their core competency here is the Tibet is popular in middle class and rural areas people and it has ventured out in the export market as well. Products of KCCL are now exported to various parts of the world. KCCL has opened new frontiers to be conquered by the leading Toiletries and Cosmetics Company of Bangladesh.

Cost Efficiency:
Cost efficiency is determined by the number of cost drivers. How KCCL has managed its cost efficiently is given below:

Economies of scale Cost Efficiency

Experience

Supply cost

Product/ process design

Economies of scale:
The KCCL has gained economies of scale by expansion their products for mass people and also they are trying to export their products to abroad as well. While they are producing their products in a large quantity and average cost per unit will be reduced. It is a long run concept which reduces the unit cost as the size of facility and the usage levels of other unit increases. They purchase raw materials in a bulk size for long term. They increase managerial skill through providing more than 2000 skilled workers, staff and management executives to meet consumers need to take Tibet products from the plant to the consumer doorsteps. Their marketing is so that the cost of advertising is spread over a greater range of output in media markets. And KCCL are used highly automated and sophisticated machines. They also follow standard quality control procedure that helps to produce quality products. The company follows the technological innovation. It import hi-tech machine from foreign country.

Supply cost:
Supply cost are basically act as intermediaries. KCCL has producing their products for mass people of rural and middle class people so they have to supply their products all over in Bangladesh. Like Tibet, they spread out the product to mass people through the distributors/ supplier. They divide it into many wholesaler or retailer otherwise the cost will be risen.

Experience:

KCCL has started its journey in 1956. so, till now they have gained lots of experience which will help to go further like Sandelina Sandle Soap. At first, they strated with Tibet soap then lots more cosmetics they add but response not as much as Tibet. But even then they again come with a new one Sandelina soap with the concept of multinational company. And its for upper and upper middle class people. So, this is from the experience and from that they are trying to entering to the external markets.

Product/ Process/ Service design:

KCCL has developed their products/ process design in a way that they ensure the maximum utilization of materials because they are using highly automated and sophisticated machines. They also follow standard quality control procedure that helps to produce quality products. The company follows the technological innovation. It import hi-tech machine from foreign country. Overall their labor productivity is full because they employed skilled employees that they can understand the new technology.

Benchmarking:
Benchmarking is basically is comparing ones business process and performance with other industries. There are three types of benchmarking- Historical, Industry/sector and beat-in class benchmarking. Here, KCCL is completely following Industry/sector benchmarking. They are following Unilever. Diagnosing Strategic Capability: 1. The value chain: Value chain is basically the activities within and around an organization. KCCL has also depends on two types of activities. In primary activities, they at first, collect raw materials from supplier called inbound logistics. Then the raw materials put into machines for process i.e. operations, then distribute these products to retailers or wholesalers which is outbound logistics. Then do marketing and sales to the customers through various shops and lastly after sale service they are giving. Support activities like procurement that they collect all materials from different places for producing a product. They also have advanced technology to develop their products, they have HRM department which always doing their job efficiently etc. 2. Value network: Value network is links of inter -organization like in KCCL the production dept. is related to marketing dept., this is related to finance dept. If one department is not work another dept. may be affected. So, these are interlinked to each other. 3. Activity mapping: This shows how different activities of KCCL are linked together like, R&D team they searched that they have facing problems in delivering their products. Itll affect the sales department. Another activity they

took is that they are conducting BMRE program with full foreign collaboration to ensure quality and efficiency- itll motivate the workers and develop their work which is related to production department. So, the activates are taken which surely linked with each other.

Managing Strategic Capabilities:

Stretching and adding capabilities: KCCL can extending their best practices by providing BMRE and other training. They can add and changing activities by giving more training on advanced technology so that the employer can understand and itll be easier for new workers. They can find out their weakness like they find out their distribution is not right, they changed it. External capability they have to develop like they can create facebook or twitter networking so people can know about their products. They can sponsor any show. And again they have to make and maintain relationship with supplier and distributors etc.

Managing people for capability development: For managing people they can target employers who need training and they can arrange training for them. Some HR policies they should took like employ skilled people because they are using new and advance technology. And they have to develop people awareness by giving more and more advertisement in TV, newspaper etc. Building dynamic capabilities : Socialization is necessary like facebook or twitter they can linked with people. Or social work they can do by themselves so that people can aware of their company.

Bases of competitive advantage:

According to Porter there are three strategies to achieve competitive advantage. KCCL has also follow this when they are producing the products. These are:

1. Cost leadership: Creating value for money which the KCCL has done for Tibet products. What they charged for Tibet soap, they also provide the quality to the customer that the customer also be satisfied. Tibet is favorite for mass people because people are satisfy that what they are getting. Their money is not wastes. On the other hand, Sandelina soap when KCCL offering, this is the first Bangladeshi product doing niche marketing. The price of this soap is Tk. And this is for a particular group. People are buying it because they deliver quality product. 2. Product/ service feature differentiation : KCCL has bring differentiation in product features in Sandelina soap like Lux. Differentiation in packaging and also in flavor. 3. Focus: KCCL has focused at first for Tibet products in rural and middle class people. And when they produce Sandelina soap, they focus upper class people. And also in advertising focus on women. Thats why also use in their ad women.

The Strategy Clock: Competitive strategy options:

When they started with Tibet soap, they followed some strategies for different products. Based on their target customer or their policy they choose different routes. For example, Sandelina Sandle Soap- when they think to produce the soap they think of the route i.e. route-4( differentiation strategy). Here they tried to differentiate their product that they targeted upper class and middle upper class people those who will use the soap. They are well known for Tibet products but that was introduced for the root level or middle class people. Here, their packaging, advertising is such which reflects the richness/ aristocratic( abhijatto). Even the color of the soap is they tried to differentiate like Lux gold. Here they perfectly identified strategic customers. Rightly identified competitors group those are serving in the market with similar products i.e. Unilever. Analyzing strategic gap of existing product or service features i.e. here they clearly identify the gap is there is no other Bangladeshi company those are trying to followed as multinational companies are doing and the other different product or service features etc. Thats why they choose this strategy. For this soap, why they didnt focused on other strategies now well discuss below: Route-1(No-frills strategy): Here basic thing is low price, low perceived product/ service or focused on price sensitive group. But this soap they are introduced for doing niche marketing i.e. for upper class and upper class people will not think about price if the quality of the product is well enough or attractive to them. And as always they followed their mission i.e. maintain quality products. So, this strategy will not go with their thinking. Route-2( Low price strategy):

This strategy seeks to achieve of lower price than competitors and trying to maintain similar product/service benefits. So, this strategy also not goes because they set the high price thinking of the upper level which is not less than the competitor. They tried to maintain similar price not less than the competitor and obviously, they tried to give best quality product. Route-3(Hybrid strategy): This strategy seeks simultaneously to achieve differentiation and a price lower than the competitors which is totally wrong. They highly focused on upper class and price is high compare to competitor or compare to the other products of them. And here this strategy is for those who are new in the market. But Kohinoor is not new at all. Route-5(Focused differentiation): This is not as lavish as Camay or Imperial Leather soap. Because if they offer such highly focused customer the number of these type of customer is very low. Or ultimately they are not focus to produce for such lavish customers. So, this is also rejected. Route-6,7,&8( Failure strategy): This strategy is one that does not provide perceived value-for-money in terms of product features, price or both. Route -6 is increasing price without increasing benefits to customers. Here for this soap, it is not true. Yes, they charge for the soap but giving quality products. Route-7 says, reduction in benefits increasing relative price. Which is also false. Route-7 says, reduction in benefits, maintaining price which is dangerous. That they didnt follow. Because they charge high from the other soaps they are providing. So, if they maintain same price for it therell be a big loss for them. So, this is not appropriate for Sandelina Sandle Soap. So, thats the reason they choose the differentiate strategy for this particular soap.