III.

Identification and analysis of company’s External Environment

a. Industry analysis

I. Industry identification

Olympic industries limited are dealing in the biscuits production industry. Olympic industries
limited are the market leader with 33 types of biscuits for different segments in the market.
According to The Daily Star, this particular industry grows 15% per year. Due to automation
Bangladeshi industries right now are able to meet up with the domestic demand along with
fulfilling some foreign demands as well.

II. Porter’s five forces model

Threat of substitute

 There are many top class companies like Cocola food products limited, Haque group of
industries, Nabisco biscuits & bread factory limited etc. that produces biscuits. Some of
the biscuits like Mr. Cookie, Glucose biscuits are famous in around the country.
 Also higher end biscuits like Oreo produced by Mondelēz international products are
available in our country.
 In same product category threat of substitute is medium to high and in terms of preference
it is safe to say that threat of substitute is medium.

Threat of new entrants

 Entry barrier for the market is medium to high.

 Biscuits are FMCG. In order to survive in the market with good share it needs high amount
of production. For bulk production with minimum level of efficiency it needs automation
and skilled labor force.
 For startup biscuit factory it needs land, equipment, skilled workers. The estimated cost for
the startup is 3,00,00,000 BDT.
Competitive rivalry

 Though Olympic is the market leader, the rivalry is high because people can easily switch
to any other biscuits for any simple or rigid reasons.
 Now a day’s people are more health conscious than before. So, for them considering
biscuits as a good snack is not a suitable option at all. That is why in that segment of market
Olympic biscuits are not sellable.

Bargaining power of suppliers

 Basic ingredients for makings biscuits are processed butter, sugar, flour, room temperature
eggs, baking powder milk, flavor extracts. These are available in the market. So, for
Olympic industries limited it is easy to find the suppliers and take advantage of bulk
purchase.
 Since it has been 40 years this industry is dealing with their suppliers for really long time.
Mr. Shahriar Shafiq, assistant manager, HR. said their suppliers have been serving them
for 6 to 10 years. That means they have a good business to business relationship with proper
understanding of business. Hence the bargaining power of suppliers is medium.
 However due other factors like domestic demand, natural disastrous causes may shift this
power from high to low.

Bargaining power of buyers

 Since Olympic industries limited has products of all price ranges that is why for an
individual buyer the bargaining power is low.
 However for bulk buyers like retailers, convenience store, departmental stores, super
stores, hyper stores have some power over buying the products since the level of preference
and loyalty for Olympic products are not much visible in the market to end users.
 If Olympic industries limited refuse to give benefits to bulk buyers, they can simply switch
it to other companies to fill their shelves.

III. Industry life cycle analysis

Olympic industries limited are the leading manufacturer of biscuits in Bangladesh with earnings
per share of 8.22. Stability of the market is normal for a long time and they are facing a lot of
co0mpetition. So, by definition they are in a maturity stage.

b. External analysis of Olympic industries limited

Technological

As Olympic industries limited is leading the industry with highest market share they need to
welcome the technological advancements with open arms. Population is increasing day by day in
Bangladesh and with this the demand is also increasing. Automation in this industry is a must. By
2010 Olympic industries has achieved the highest level of technological advancements in biscuits
production industry within Bangladesh.

Social

Biscuits are generic products all around the world. It is normal to see people from all ages consume
biscuits but in a world where being conscious of what an individual is consuming, the importance
of quality control and maintenance is crucial part to enhance the sustainability of the company. In
April 10, 2014 Olympic industries achieved ISO 22000 certification for standardization. With
feature that says they can trace all the products from start to end and can also do it backwards.

IV. SWOT analysis of Olympic Industries:

Strengths

 Olympic industry has a good number of expert and experienced labor who are working for
the company for the longest period of time. After recruitment of employees, Olympic
industries giving employees training before they can become productive. All their workers
are trained to adopt Good Manufacturing Practices (GMP), which includes all forms of
safety.
  Olympics’ products are synonymous with quality. They have high quality product which
give them extra benefit to charge comparatively higher price than other companies are
charging. Quality is their first priority. From raw materials to finished goods, Olympic
industries conduct tests at all stages for quality and safety.
 They are the largest manufacturer and distributor in the country which helps them to
produce in large amount and distribute them all over the country. Due to their large
networks each year they target a bigger plan and try to accomplish accordingly which
ultimately put them in a stronger position in the market and creates a stronger brand value.
 Olympic industries limited have both human and technological resources. They use their
resources effectively to produce a sufficient level of product within a cost.
 They already created a strong brand value in the market. It’s a big strength of Olympic
industries. That help them to charge higher price than competitor. It also helps their
audience to understand about their product also helps them to build trust with many
different stakeholders.
 Market Leader in biscuit industry: Olympic Industries Limited (OIL) is a major player in
the Bangladeshi market with leadership position in BISCUIT category and has a market
share of ~ 22%-23%in the industry. Olympic Industries offers both delightfully indulgent
and healthy choices in biscuits that include Sugar free biscuit.

Weaknesses

 They depend on their supply chain retailer and super shop. It is known that they do not
have the high level of loyalty of their end consumers which put them in an awkward
position. That is why they have to do push marketing meaning promoting products through
their retailers.
 Different brands got commoditized over time. Brands like Cocola Food Products Ltd got
commoditized over time such as in case of “Haque Group of industries” Haque Group of
industries also introduced “Chocolate Digestive” biscuits. Brand name when utilized like
 this by different organizations, makes confusion in the brain of the buyers resulting about
loss of sale.

Opportunities

 Amazing Packaging – Olympic is appreciated for its packaging. It is easy to carry.

Standard Pack

 Number of Packs Per Carton 24

 Weight Per Packets 80 gm
 Weight Per Carton 1.9 kg
 Packing Material MCPP & BOPP
Tikki Pack
 Weight Per Packet 14 gm
 Number of Packs Per Carton 100
 Weight Per Carton 1.4 kg,
Olympic biscuits are the first ones to be distributed because of their small packaging and
easy distribution advantage and because of their glucose content.
 Olympic already established company. It can expanding its business to overseas market
that can help the company to emerge as a global player in the food products also can help
company to earn extra profit from it and can take other advantage as well.
 Changing way of life and interest for healthier food is increasing because improvement in
education rate, health conscious, changing lifestyle & increase in disposal income are
forming the interest for healthier food.

Threats

 Competition in the market is higher because increasing number of players (local players –
Gold Mark, Ifad Haque & different national players also entering Bangladesh), it’s
becoming very hard for Olympic company to differentiate themselves from others. There
is likewise risk from fake items destroying its image picture in the market.
  Cost of raw material Increasing cost of commodities will bring about further increase in
the cost of the finished good. Additionally increase in cost will bring about reduction in
profitability or decreased utilization.
 Increasing of buyer power with profoundly broadened consumer products market where
there are lots of brands claiming diverse sorts of advantages, it's extremely difficult for
buyers to adhere to a specific brand and subsequently comes about into brand switching
where customer inspire capacity to choose a brand in based on a few components like
availability, reference group, preference and price.

https://www.dhakatribune.com/uncategorized/2014/04/20/olympic-biscuit-gets-iso-22000-certificate-2

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