Strategic Management

PROJECT OF
STRATEGIC MANAGEMENT
ON
"SITARA CHEMICAL INDUSTRY"

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ACKNOWLEDGMENT

All acclamation to Allah who has empowered and enabled us to accomplish the task successfully. First of
all we would like to thank our ALLAH Almighty who really helps us in every problem during the
project. We would like to express our sincere and humble gratitude to Almighty who’s Blessings, help
and guidance has been a real source of all our achievements in life.

We would like to admit that we completed this project due to parents who pray for our success. We also
wish to express our appreciation to our supervisor “Sir SHAHID TUFAIL” who giving us valuable
suggestions and support to prepare this report

Last but not the least I would like to thank all the management team of Sitara Chemical for their
cooperation in providing us the information.

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RESEARCH METHODOLOGY
The research techniques that are adopted for the purpose of this study are as follows:

 Primary Data Collection

 Formal Interview
The formal interview include people from management in Sitara Chemical and their name are

 Ubaid A. Khan DGM (Marketing)

 Tariq Mahmood (Manager HR)

 Questionnaire
That is formally filled by Managers

 Secondary data collection

www.sitara.com.pk

 Limitation

One of the major limitations while carrying out this research was the lack of cooperation on the
part of the management in providing the data regarding the company and its policies.

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Contents
• Introduction & History (stage # 1)

• Vision & Mission

• SWOT

• Formulation Stage

 Input Stage (stage #2)

 EFE

 IFE

 CPM

 Matching Stage (stage#3)

 SWOT

 IE MATRIX

 SPACE MATRIX

 BCG MATRIX

 GRAND MATRIX

 Decision Stage (stage #4)

 QSPM

• Implementation

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INTRODUCTION
Strategic management is all about

 Formulation

 Implementation

 & evaluation of strategies

So our project will revolve on these critical parameters.

 Strategy Formulation

– Input /action stage

– Matching stage

– Decision stage

 Strategy Implementation

 Strategy evaluation

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STAGE # 1
INTRODUCTION

Introduction of Sitara Chemical

Sitara Chemical Industries Limited (Sitara Chemical) is a chemical product manufacturing
company. The company operates through its two core divisions namely chemical division and
textile division. These two divisions include Chlor Alkali plants and yarn spinning units. The
company is engaged in manufacturing Caustic Soda and Allied Products as well as yarn. Its
product line includes caustic soda solid, sodium hypochlorite, caustic soda liquid, hydrochloric
acid, liquid chlorine, caustic soda flakes, Specialty Chemicals, Fertilizers, Polyester Cotton (PC)
and Polyester Viscose (PV). The company is headquartered in Faisalabad, Pakistan and employs
343 people.

SCIL was incorporated in 1981 and began producing caustic soda in 1985, initially at a rate of 30
metric tons Caustic a day. The plant’s capacity was gradually increased over years to current
level of 545 metric tons a day. In addition, various by-product facilities have been added and
expanded from time to time to cope with growing demand. Company entered into Textile
Spinning Business in 1995. Its specialty chemicals and export division was established in 2001
and agri chemicals division in 2003.

We present strategic analysis of Sitara Chemical Industries Limited. The report provides a
comprehensive insight into the company, including business mission, vision and key
competitors. The company’s strengths and weaknesses and areas of development or decline are
analyzed as well. The hallmark of the report is the detailed strategic analysis on the company

VISION & MISSION

• Vision Statement

"Strive to develop and employ innovative technological solutions to add value to business with
progressive and proactive approach."

• Mission Statement
“Continuing growth & diversification for the bottom line result with risks well contained”

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SWOT ANALYSIS

(Internal-External Factor Evaluation)

Competitors
Economic Environment
Energy Crises
Threat of Stakeholders
Unstable Law & Order Situation

STAGE # 2
INPUT STAGE

IFE
(INTERNAL FACTOR EVALUATION MATRIX)

Key Internal factors Weight Rating Weighted

Score

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Strengths

Largest manufacturer(caustic soda) 0.12 4 0.48

Largest shareholder 0.11 3 0.33

Advance technology 0.13 4 0.52

Plant infrastructure 0.10 3 0.30

Strong management 0.09 4 0.36

Strong brand name 0.10 4 0.40

Financially strong 0.10 3 0.30

Weaknesses

Need sizeable market to sustain 0.10 1 0.10

Lack of operations in abroad 0.08 2 0.16

Relying on permanent customer 0.07 2 0.14

Total 1.00 3.09

EFE
(EXTERNAL FACTOR EVALUATION MATRIX)

Key External factors Weight Rating Weighted

Score

Opportunity

Increase production capacity 0.11 3 0.33

Increase product line 0.08 2 0.16

Taking advantage of geographic position 0.13 4 0.52

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Provide online customer service and ordering 0.09 3 0.27

system

Threat

Competitors 0.12 3 0.36

Economic environment 0.10 3 0.30

Energy crisis 0.15 4 0.60

Threat of stakeholders 0.12 3 0.36

Unstable law and order condition 0.10 3 0.30

Total 1.00 3.20

CPM
(COMPETITIVE PROFILE MATRIX)

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STAGE # 3
MATCHING STAGE

TOWS MATRIX

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TOWS Strengths - S Weakness – W

1. Largest 1. Need Sizable Market to
MATRIX manufacture(caustic soda) Sustain
2. Largest Shareholder 2. Lack of Operations in
3. Advance Technology Abroad
4. Plant Infrastructure 3. Relying on Permanent
5. Strong Management Customers
6. Strong Brand name
7. Financially Sound

Opportunities – O SO - strategies WO – strategies

1. Increase Production  (S4, S5,S7,O1,O2)  (W2,W3,O3)
Capacity
(Add new product line ) (Geographic expansion )
2. Increase Product Line
& purchase land to build new  (W1,O1,O2)
3. Taking Advantage of
Geographic position plant) (Need to improve
4. Provide Online  (S1,S2,S6,O3) infrastructure)
Customer Service & (Enter in new market by taking
Ordering System advantage of largest
manufacture in industry)

Threats - T ST – strategies WT – strategies

1. Competitors  (S1, S5,S6, T1,T4)  (W2,T1)
2. Economic (stable environment & (Launch products in other
Environment Compete competitors by
3. Energy Crises geographical areas)
taking advantage of
4. Threat of Stakeholders management & brand name )
5. Unstable law & order  (S3,T3)
situation
(Install & update new
technology)

INTERPRETATION

Critical Region:
“WO”

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(Weakness, Opportunity)

Managerial Decision:

"Market Development"

"Product Development"

SPACE
(STRATEGIC POSITION & ACTION EVALUATION MATRIX)

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Internal Strategic Position External Strategic position

Financial Strengths (FS) Environmental Stability (ES)
Return on Investment +4 Technological changes -2
leverage +5 Rate of Inflation -4
Working Capital +5 Price range of Competing products -3
Liquidity +4 Competitive pressure -2
Cash flow +5 Risk involved in business -3
Price earnings ratio +4 Demand variability -5
Total +27 Total -19
Average 4.5 Average -3.16

Competitive Advantage (CA) Industry Strength (IS)

Market Share -1 Growth Potential +5
Product Quality -2 Profit Potential +5
Customer Loyalty -3 Financial Stability +4
Technological know-how -2 Resource Utilization +5
Control over suppliers and -3 Capacity utilization +4
distributors Technological know-how +5
-11 Total +28
Total -2.2 Average +4.6
Average 7

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ES

INTERPRETATION
According to the space matrix score SITARA CHEMICAL falls in the “AGGRESSIVE
Quadrant”. Their strategies should be one of the following:

• Vertical and horizontal integration

• Market penetration

• Market development

• Product development

• Diversification

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IE
(INTERNAL-EXTERNAL MATRIX)

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EFE TOTAL WEIGHTED SCORE 3.2

INTERPRETATION
Sitara Chemical falls in first region of IE matrix according to this the strategy will be “GROW
AND BUILD” and they have to focus on strategies which are:

• Market Development

• Product Development

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GRAND STRATEGY MATRIX

Weak competitive position

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INTERPRETATION
Sitara Chemical has rapid market growth and strong competitive position so it falls in first
quadrant and the most suitable strategies for Sitara Chemical over here are:

• Market Development

• Product Development

STAGE # 4
DECISION STAGE

QSPM
(QUANTITATIVE STRATEGIC PLANNING MATRIX)

Key Internal Factors PRODUCT MARKET

DEVELOPMEN DEVELOPEMN
T T

Strengths Weigh AS TAS AS TAS

t

Largest manufacture 0.12 3 0.36 4 0.48

Largest shareholder 0.11 3 0.33 4 0.44

Advance technology 0.13 4 0.52 3 0.39

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Plant infrastructure 0.1 -- -- -- --

Strong management 0.09 2 0.18 3 0.27

Strong brand name 0.1 2 0.20 3 0.30

Financially sound 0.1 3 0.30 4 0.40

Weaknesses

Need sizeable market to sustain 0.1 2 0.20 3 0.30

Lack of operations in abroad 0.08 2 0.16 3 0.24

Relying on permanent customers 0.07 1 0.07 2 0.14

Total weight 1.00

Key External Factors PRODUCT MARKET

DEVELOMEN DEVELOMEN
T T
Opportunities weigh AS TAS AS TAS
t
Increase production capacity 0.11 3 0.33 4 0.44
Increase product line 0.08 2 0.16 1 0.08
Taking advantage of geographic 0.13 2 0.26 3 0.39
position

Provide online customer service & 0.09 -- -- -- --

ordering system

Threats

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Competitors 0.12 3 0.36 4 0.48

Economic environment 0.1 1 0.10 2 0.20
Energy crises 0.15 3 0.45 2 0.30
Threat of stakeholders 0.12 3 0.36 2 0.24
Unstable law & order situation 0.1 -- -- -- --
Total weight 1.00

Sum Total Attractive Score 4.34 5.09

INTERPRETATION
According to the Total Attractive Score of QSPM Sitara Chemical should go for

“MARKET DEVELOPMENT”

Because the TAS of Market Development is more than TAS of product development

RECOMMENDATIONS
• We could not found much discrepancies in the Strategy Analysis of Sitara Chemical industry
they are performing pretty well and have strong strategic direction

• According to our recommendation we suggest them that they could go for “Market
Development” because there is opportunity for them to export their product in new markets

• The reason behind the selection of this strategy is that they have strong management team
including Human Resource, Finance, Marketing, Production & R & D Departments. And
HRM plays very important role in all activities so Sitara Chemical industry focuses on its
function and scope for the betterment in present and future.

• They have stong financial position, Brand name & they are largets manufacture in industry
so they could take advantage of all these stenghts to capitalize opportunities and avoid
threats.

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• There is another opportunity for Sitara Chemical industry that they have to make segment in
their website through which they can provide online customer services in which customer
can place order and colud provide Feedback as well, this will help them to capture more
customers throughout the world.

• They can also increase their production capacity because they have proper infrastructure ,
advance technology & strong financial position and these all enable them to take advantage
to increase the production capacity.

CONCLUSION
We have learnt a lot from this project because this project provides a real picture that how an
organization performs Strategy Analysis and what are the factors that they considering most
important while performing the analysis. According to the current position of Sitara Chemical
they have strong strategic direction, growing day by day and they have largest market share in
industry so they should go for Market Development. They continue to strive towards its goal of
being the leader in a manufacturing of caustic soda & their presence in industry is a big threat for
competitors.

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