Steeple Analysis

STEEPLE Analysis No organization exists in a vacuum; the environment within which
the firm has to operate will affect the way that strategy is both planned and carried
out and changes in the environment is also the most likely reason for making
changes in the strategy. Changes in the environment are also the most likely cause
of failure of strategic plans. The most carefully calculated strategy would be able to
drive the market in the favor of the organization and will maneuver the external
environment in the best possible way. Engro Foods like all the organizations they
also have to face such kind of environment which is very dynamic. Being in the
market as a challenger they have to face all the external factors and have to cope
up with them accordingly
S - Social Factors Engro food has helped to bring about a change in life style of the
Pakistani People by introducing UHT Milk, as the literacy rate is improving and it is
resulting in a better awareness of the olpers and Tarang UHT treated milk and is
helping them improve their sales and Milk with its basic benefits has helped
improve the image and more usage has been seen in the past years. Special
awareness Campaigns can also be launched and can help portray a better image of
the product in front of the customers. The attitudes of the people are also changing
with the passage of time so as a result the usage of open gawala milk is changing
and people are opting out the usage of standardized packed milk
T - Technological Factor The type of the technology available within the industry
states the competitive environment because creative use of new technology is what
often gives firm there competitive advantage. This environment does not change
that much quickly but the changes that come are strong enough that can change
the way the industry is currently running. Haleeb production process uses UHT
(Ultra High Treatment) technology. Engro food administrators claim that their plant
adopted the latest technology for milk processing and thus it had an edge over
other around twenty plants in competition including Haleeb, Milkpak as all other
plants were based on obsolete European technology. The idea behind UHT
investment was to provide consumers with the best quality of packaged dairy and
food products that no other company can produce.
E - Economical Factor Engro Foods is strongly affected by both the Economic and
the Demographic environment around and have to keep on taking different steps to
respond accordingly. There is no sales tax on the milk. Hence it is a real plus point.
Material supply and shortages are faced by the company for both Packaging and for
the product it, as milks production is seasonal and keeps fluctuating and adequate
steps are required to be taken in order to keep it working smoothly. Haleeb also
dont charge interest on its products which also makes a huge difference
economically
E - Environmental Factor As, the environment always effect the way strategies are
being carried out and implemented. Engro Foods like all the organizations they also
have to face such kind of environment which is very dynamic. Being in the market
as a challenger they have to face all the external factors and have to cope up with
them accordingly. Haleeb have the strategies to positively engage the staff in work
and boost up their moral. Engro food has a friendly environmental culture within the
organization to make their employees comfortable and to deal with the external
problems. There are few seasons in which the availability of milk reduces that effect
the production of milk and left Engro food with fluctuated sales.
P - Political Factor Engro food also abides by the rules formed by the Government
and set their strategies that are according to the laws and legislations of the
Government they are working under. Tetra Pack (brick pack), that was for the first
time that milk came in that form soon followed by the Nestls Milk Pak which as a
multinational rocked the UHT Milk industry of Pakistan. They are not actually bound
under any sort of trade agreements. As far as the employment laws are concerned
Engro food abides to laws set by the government for trade policies, government
policies and completes its responsibilities in a better manner.
L - Legal Factor Engro foods always stand by the rules and legal conditions imposed
by the Government and set their strategies that are according to the employment
laws and legislations of the Government they are working under. Engro food always
keeps its department updated about what is happening in the sector or milk
industry, and that will help them to make their strategies accordingly. Engro foods
have the legal laws like, Minimum wage, working time, Food stuffs, Engro foods
dont believe in Under 18 working, Occupational/ industrial Training, Environmental
regulations, Consumer protection Industry-specific regulations etc.
E - Ethical Factor Engro foods are well renowned company operating in the milk
industry since 2002. And the reason for this is importantly their ethical values. They
dont sale on credit or on interest because they consider it unethical and not
according to the law of our religion
i. PORTERS FIVE FORCES MODEL
Bargaining power of suppliers: Raw milk is a standard commodity and it can be

available easily. There is large number of milkmen and if one refuses to supply,
then the company can buy it from others. Also, the bargaining power of suppliers
is low because the company buys in large quantity and so supplier are not left
with option of bargaining.
Availability of substitutes: This is quite straight forward and simple as there are
large number of substitutes in the food industry. Almost every company is almost
producing the same or similar products like the biggest example is NESTLE.
Competitive rivalry: The food industry is highly competitive. There are large
numbers of competitors with almost the similar products. The companies with
best customer service, greater efficiency and quality will win out in this game as
the best players. At this point in time NESTLE is the biggest competitor but
another player that is GOODMILK has entered in the game. In the long run I
suppose more conglomerations between companies rather than spending or
investing on advertisement in the initial stages.
Threat of new entrants: Entering in food industry requires large amount of

investment therefore companies like Engro are fearful of being squeezed out.
But still competition is fearful from good milk and Nesvita. Competing in new
industries require large investment and especially in packaged food business
large amount of financial, human, technical and marketing resources will be
needed. Also, the new entrants may have a barrier of entering with economies of
scale or either to have a cost disadvantage.
Bargaining power of buyers: The individuals have some power because of

competition by Haleeb and Goodmilk. Also large clients of Engro like airlines and
retailers they have much bargaining power. But Engro has made its place by its
backward integration and superior customer services and quality

Steeple Analysis

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STEEPLE Analysis No organization exists in a vacuum; the environment within which

i. PORTERS FIVE FORCES MODEL

Bargaining power of suppliers: Raw milk is a standard commodity and it can be

Threat of new entrants: Entering in food industry requires large amount of

Bargaining power of buyers: The individuals have some power because of

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