Table of Contents

1.0 Introduction.......................................................................................................................... 3
1.1 Definitions of strategy.......................................................................................................4
1.2 Importance of Strategy......................................................................................................5
1.3 Strategic Analysis............................................................................................................. 6
1.4 Internal and External Environmental Analysis................................................................. 7
1.5 PESTLE Analysis............................................................................................................. 8
1.5.1 Pros and cons of PESTLE.................................................................................................11
1.6 Porter’s Five forces......................................................................................................... 12
1.6.1 Validity of porters five forces........................................................................................... 15
1.7 Core competencies...............................................................................................................15
2.0 Strategic analysis of Cargills food city Sri Lanka................................................................... 17
2.1 Overview of the organisation...............................................................................................17
2.2 Strategic Analysis of Cargill’s food city (Ceylon) PLC...................................................... 18
2.2.1 PESTLE Analysis............................................................................................................. 18
2.2.2 Porters 5 Forces................................................................................................................ 22
2.2.3 Core competencies............................................................................................................25
3.0 Recommendation..................................................................................................................... 26
4.0 Reference................................................................................................................................. 28

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1.0 Introduction
Strategy is the process of enduring thinking of higher management of the organization, about the
position of the company and the way of achieving it (Robert,20018). It is important to review
organisational strategy continually because the environment is always changing (Campbell,
Edgar &, George, 2011). Purpose of this report is to analyse and reflect the strategic position of
Cargill’s Food city which operates under retail industry of Sri Lanka. further author will discuss
how Cargill’s can gain strategic position by formulating implementing and executing goals
loyalty.

The overview of this report is to define and discuss the importance of the strategy and describe
strategical analysis using micro and macro environment. Moreover, strategic tools such as
PESTLE, porters five forces and Ansoff Metrix will be define, evaluate and applied for the
chosen company. In the final analysis the findings will be evaluated, and recommendations will
be suggested to improve the competitive position of the organization.

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 1.1 Definitions of strategy

Strategy means fulfilling expectations of the stakeholders using long term opportunities and
allocations of resources and configuration of skills (Johnson, Scholes and Whittington, 2008).
Similarly, Mintzberg, Ashlstrand and, Lampel (2013) stated achieving organizations vision and
Mission according to a plan is known as strategy. Adding to that Kaudi (2009) states
organization can gain more profits by directing the decisions, selections and arrangements. Porter
(1996:1998) spoke about competitive position of the company, which means being unique in the
market, by adding value to the activities compared to competitors do (Nickols,2016). In contest
chandler (1962) suggest strategy as adapting to business long term objectives, causes of actions
and resource allocations(Nicholus,2011). When taking to account, porters and Mintzberg strategy
theories Minzberg are much more persuasive. Porter has a view that being in a competitive
stance and “using different set of activities to deliver a unique mix of value. Whereas
Mintzberg's approach to strategy takes the form of a model and he further solidifies the saying;
that strategy is a combination that involves a Plan, a Ploy, a Pattern, a Position and a Perspective.
This gives a more holistic view to strategy while beholding strategy in multiple viewpoints. In
conclusion it can be simply defined as a tactic that can be used to achieve company goals by
taking precise decisions at right times.

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 1.2 Importance of Strategy
Solid strategic tools to run an organization is more important (Porter,2008). Having effective
strategy led a company to responsibility, competitive focus, valuation, external interaction and
internal management (Taylor & Miroiu; 2002). Thompson, Strickland and Gamble (2007) stated
that operative strategic tool can improve the efficiency of the workforce and pervade the
company vision to the company personnel. Further (Tapera,2014) says this can be done through
imprinting the organizations strategic vision in employees’ mind and convert it to hard objectives
and strategies.
on the other hand, Dyson (2007) elaborate strategy embrace management processes where it
informs, support and figure the decision which can challenge an organization.

But Minzburg (2001) argues that strategy is not only provide direction to the company, but also
analyses external environment to understand the present position of the company and do the
implementation beyond internal analysis in order to take strategic panning formulation and
taking decision.

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 1.3 Strategic Analysis

strategic analysis is the turning point of management process (Barney,1991). Nocera (2000)
came up with an idea having a clear understanding of organisations environment and its
interaction to increase the efficiency and effectiveness of the organization by increasing the
capacity of the company to allocate recourses wisely is known as strategic analysis. Further Price
(2003) says strategy analysis can be described as the study of strengthening the business
standards where it can be divided into two major categories; such as internal and external factors.
These factors may influence to raise the company position and the competitive backgrounds.
Strategic analysis is important to identify the root cause and understand in and out of the
situation of the organization to realize the reasons for changes in the environment (David,2013).
Similarly, it will help to study their impact by uncovering problems to identify the underlying
factors (Sternberg, 2009). This can be concluded as strategic analysis may help to take right
decision when implementing strategies within the organisations by understand internal and
external environment.

Figure 01: Layers of business environment (Johnson, Whittington, Scholes, Angwin & Regnery,
2016)

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 1.4 Internal and External Environmental Analysis
strategic analysis can be comprehended under two steps: Internal environment analysis and
external environment analysis (Morden,1993; Evans et al., 2003; Pearce and Robinson, 2011);
internal and external environment is the landscape of the surrounding where an organisation
function.( Kew and Stredwick,2005). Internal environment contains element within the
organisation such as employees, management (houghton,2016) physical assets, capabilities,
competencies and culture which is hold by the organisation (Thomson & Strickland, 2010) where
it named as resource-based view. Craig and Campbell (2011) argues that external environment is
influences to the internal environmental in order to analyse organization requirements and
environmental changes.

As per the view of Chuck(2001) all business events external to the company which has ability to
influence the organisation is known as external environment. further these events have
considerable effect on organisations growth and existence (Pakkanen,2012). Lynch(2006)
explain external environment consist of different factors such as political, sociological,
demographical, global and technological factors and customer preference relevant to the
industry. adding to that Pearce and Robinson (2013) concluded where external environment can
be categorised as remote environment, industrial environment and operating environment. Then
again Rufaidah(2012) explains external environment consist of micro and macro environment.
Being alert on external environment is important because decision makers can have a better
empathetic of the competitive positioning of the organisation and act according to the global
economy (Hoskisson and Hitt,2011); it improves the competitive position, operating efficiency
of the company, and can achieve a good place in global economy (Hunger,2012)

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Table 01: Comparison of internal environment and externa/l environment (Author develop,2018)

External environment Internal Environment

Known as Macro environment which refers to Known as Micro environment which directly
the general environment which influence the dealing with the organization and day today
decision making, performance-…etc activities of the company
Consist of political and legal environment, Consist of competitors, suppliers, employees,
economic, technological, ecological and shareholders, customers.
physical environment.
General nature of elements Specific nature of elements
Influence directly and indirectly Influence directly and regularly

1.5 PESTLE Analysis

PESTLE environment is referring to the general environment of the organisation (Modern,2007);
this is a common approach when considering business surrounding (Gupta2013) which is an
analysing tool that can have an overall image of the environment which industry operates (Fahey
& King,1977). Further,(Miller,vandome,Mc Brewster,2011) point out that analysing PESTLE is
react to the changes of external environment of the organisation which means having a strong
bong between capabilities and external environment in order to react to changes.

PESTEL is refers to Political, Economical, Social, Technological, Ecological and Legal

(Rapid,2007). Analysing PESTEL factors is more important because it assumes the realities of
the business environment and company can become successful in their operations (Kotler,
Armstron,2004). Moreover, this helps to take right decision for reasons beyond their control
(Rees,2004).

Figure 01: Adapted from Porter’s Five Forces model. Porter, M.E (1980) Competitive Strategy:
Techniques for analysing Industries and Competitors. New York: The Free Press. pp.4

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Table 02:PESTEL Analysis, Author developed (2008)
Factor Description
'Political environment is the company’s home countries in which business are
important external influences on management" said by (Moden,2007).Consisting
Political of Laws, government, agencies, (Kotler,2004) while it controls the government
intervention to the organization in areas like Taxation, labor and trade laws.
Meantime government stabilities, government policy on current economy, market
ethics and trading agree of government also included (Adema & Rohel, 2010).
There is a enormous influence from the political environment to the business
regulation and sustain consumers( Elenkov,1997); other business whereas
marketing decision affect the company’s political and Legal environment (okumus
,2004) and political decision is impact on workforce education, employee health
and safety and infrastructure quality of the company (Zhang,Majid,Foo,2010)
Economic Economic factors consist with interest rates, Taxation changes, Economic growth,
inflation and exchange rates which influence to the import and export rate of
goods, company cost capital and day today activities.(Jobber,2007).
Social social factors focus on factors such as career attitude, consumer attitude towards
local goods and services, Language impact, population growth (Kotler,2004) age
distribution, employee safety , skilled labour (Morrison,2002).
These factors impact on the demand for the products, availability and consumers
interest of buying goods. (Sridhar, Megeswaran, Ramesh,2016). Further Schneider
& Barsoux (2003) explain social factors affect company’s operations in both micro
and macro level.
Technology Technological factors mainly focus to Automation, Technology incentives R & D
activity which can improve the daily of the product and lead to innovation This is
benefit for both customers and organization and influence in outsourcing decision,
production efficient, cost, quality and innovation.
Legal Company needs to set up laws in order to operate the business well. distribution
laws, health laws, employment laws..etc can be included as legal factors. This is
influence to the cost and demand of the company and need be eye open to the risk
involved in legal environment.

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 1.5.1 Pros and cons of PESTLE
Having a clear idea if market and non-market aspects along with PESTEL analysis is more
important to an organisation (Johnson, Scholes, &, Whittington, 2016). have a clear idea if
market and non market aspects along with PESTEL analysis is more important to an organisation
(Johnson, Scholes, &, Whittington, 2016)
Further having a regular PESTEL analysis can avoid having uncontrol external risk towards the
company. moreover this can anticipate future threats and take actions to avoid or minimize them.
On the Bus environment to changing day by day. therefore tool need to be update accordingly
and it is difficult to anticipate development. further data uses for this analysis are assumptions.

1.6 Porter’s Five forces

Having a clear idea of competitive forces in the operation environment is one of a common need
of an organisation (Hill & Jones,2009). Porter (1980,1985) introduce a strategic theory to analyse
the market place of the organisation and achieve competitive advantage by competing on the
basis of cost differentiation or focus. Further he explain about a value chain in order to achieve a
completive advantage. (Lindros and Lohivesi,2006) This Theories is important to determine
attractiveness and the potential to earn above average returns. (Hitt et al,2007) reflect the idea as
unattractive fields have a chance to achieve competitive positioning by considering low entry
barrios, buyers and bargaining power of suppliers. Further this model is explaining the low
profitability and variable entries to the firm when comparing with other external analysis tools
(Hills & Jones,2007).

Figure 03: Porter’s Five Forces model. Porter, M.E (1980) Competitive Strategy: Techniques for
analysing Industries and Competitors. New York: The Free Press. pp.4

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Table 03:Porters’5 Forces (Author devoloped,2018)
Force Factors affect Discerption
Competitive Competitor competition for market share among the organisations
Rivalry Balance
within the industry is known Internal Rivalry. This is
Industry growth
Rate based on price and non-price dimensions where high price
High fixed costs gain profitability and low price concentrating on high
High exit barrios
Low market share. Can be gain through price discounting,
Differentiation innovation of new products, high quality service and
advertising campaigns. (Porter 2008).
Threat of Scale and Porter (2008) argues there of new entry is directly
entry experience
pointing to the barrier for the relevant firm whereas it is
Access to supply
Expected not actual barrio unless it became threat to the industry
Retaliation profits and drive towards the competition (Anand,2012).
Government action
Differentiation
Threat of The price/ if the substitute is performing with same or similar by
substitutes performers
different means the threat become high and it provide cost
Extra-industry
effects effective and trade off when comparing to original
product (Porter,2008)
Bargaining Concentrated Buyers can impact to the industry by imposing prices or
Power Buyers
negotiating high quality and services, competing with
Low switching
cost competitor which can lead to low profits(Alkhafaji,2003).
Buyer competition buyer group is depending on the attributes of market
threat
situation and most facilitated group within the industry.
Power of Concentrated Suppliers are impact towards the industry by changing
suppliers
suppliers price rates and quality of products. (Dagmar,2001).
High switching suppliers may help to increase the bargaining power.
cost
Supplier power can increase through raise price without
Supplier
competition threat affecting demand, reduce amount supplied, availability of
few substitute and potential to participate
downstream(Management e book,2013)

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1.6.1 Validity of porters five forces
Porters five forces is a valid to analysis external environment because this is still enduring with
the same strength even after 20 years from the introduction. Kare (1997) pointed out the reason
for this as this model is easy to use and provide comprehensible technique of market force
analysis. As per the view of Downes (1997) this theory explains all the activities from resource
suppliers through organisation to the customer where suppliers and consumers are most
important parties. Further, this has the ability to find key issues of the company such as demine
market attractiveness, provide factors to improve competitive positioning like differentiating and
strategic partnership and can indicate the trends within the organisations with combination of
PESTEL analysis(Recklies,2001). Moreover (Olivia,2002) stated this is a systematic approach to
define current situation of the business and plan strategy.
Besides from the advantages there are some criticism regarding this model. Grant(2002) says
that industry structure will not remain unchanged in the dynamic process of competition hence
there is a limitations due to static character of the model. similarly Faulker and Campbell
(2003,P.249) criticise as industrial environment is continuously changing because of the
competition between companies and strategies they used to overcome within the industry. As a
result, Porter (2008) says this model is made to overcome common drawbacks of mistaking
visible attributes of an industry for its underlying structure. In conclusion this model is not an
invalid for present industries. what need to be done is apply it having a knowledge of its
restrictions and use it as a management tool and technique.

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1.7 Core competencies.
Core competence can be defined as the ability of an organisation on understanding how to
coordinate among technology and skills with in the firm to deliver a better service (Prahalad
&Hamel,1990). As per Yang(2015) effective combination of knowledge, technology, resource,
techniques, employee skills and management is described as Core competencies. However
Ljungquist(2007) argues that core competencies are the most difficult thing to achieve within the
firm and they are at the peak of all values that company has. companies might execute better
performances when they conduct better core competencies when compared to their rivals. (hitt et
al, 2009). There are 4 core competencies which leads to the competitive advantage such as,
competences should be rare, value for the customer, difficult to manipulate or imitate and
non-substitutable. sharing core competetencies of a company is a risk and might be a danger to
the existence of the industy(Haas,2007).

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Table 04: Strengths and weakness of core competencies (Author Devolped,2018)
Advantages Disadvantage
guide to choose the stratergic management if a company tag a a wrong product or service
patern ,company culture and values while as a strength it troubleshoot the company
strngthing the company management since it (Rishrosh, no date).
has unique resource.(Prahalad & Hamel,1990)
ability to discover new products, services by Target only the internal factors without
determining core competency as an clear considering external factors. As Prahalad and
strength where it provide opportunity to Hammel(1990) argues development of an
respond quickly for emerging technologies, organisation is depend on experience and
innovations, capabilities of competitors knowledge than external environmental.
(shieh,2011) However company have to fail and leftover
competitive advantage if the external
environment does not taken in to the
consideration.
since this tool reflect the needs and value of over trusting and excessive diversification
customer needs, its automatically improve the make pathway to loss core competencies
efficiency and service quality of products
along with cost reduction while increase the
competitive advantage of the
industry.(Hunger,2012)

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2.0 Strategic analysis of Cargills food city Sri Lanka

2.1 Overview of the organisation

Cargills (Ceylon) PLC was originated in 1844 and in 1983 Cargills establish first supermarket
which is an one of the largest and best modern retailers in Sri Lankan market
Today(Inrarathna,2003). Their vision is to be global cooperate role model in community-friendly
national development while having a mission of serve the rural community, customers and
stakeholders through co-business considering three principles; reduce cost of living, enhance
youth skills and bridging regional disparity by enhancing local and global market(Perera,2009).
Moreover, Dissanayake (2016) states that Cargills Food City rated as one of the most valuable
brands in Sri Lanka. Further he states that it has 297 stores across the island and command for
50% of market share Cargills Food City owns the highest number of stores among modern
retailers of Sri Lanka.

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2.2 Strategic Analysis of Cargill’s food city (Ceylon) PLC

2.2.1 PESTLE Analysis

Table 05: PESTEL Analysis for Cargills Food city(Author devoloped,2018)
Factor Cause Impact
Political political taxes have raised up This is a negative impact for cargills
approximately to 12.5% which whereas the profit of the company went
is an high value when down from 45.6% (nearly 1/2) because
comparing to 2016. Inland of cost of finance rise with the VAT
revenue department (2017). implementation. (Businesstimes,2017).
VAT liability was revised by This has affected to the items like
the government for retail vegetables, sea food, and rice and this
industry from 50 million has been affected to the profits of
rupees per annum. Cargills food city. (Sirimanna,2017)
after the war srilankan Further this affect to business and trade
companies can expand their agreement to which cause a threat to the
business in north and east industry.
province of the country Opportunity to open new supermarket
outlets an expand the business.
Economical food inflation has increased in According to the (Annual report
a slower rate 3.1 when .2016/2017) high inflation rate has been
compared to 2015 which is 5.2. impact negatively to the customer buying
(NCPI,2017).Foreign exchange power where it reduces the basket value
gain has decreased 2.06Mn of the average customer.
which was resulted due to the
economic crisis of the rupee.
Social population growth has arised According to population growth is
and rate is 0.93% in 2015 impact on high demand for appropriate
(Trading economics,2017) goods (Tandon,Landes and
Woolverton,2011)

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Technological There is a high demand for This will impact on Cargills food cities
online shopping (Lanka current strategies and grant an
Business,2014) Cargills is opportunity to retail industry.
planning to launch the method provide more value-added service to their
of pay phone and paging customers and strengthen the IT
projects. (Dissanayka,2016). Backbone which can be consider as an
strength to an organisation.
Legal Group is fully compliant with Having rules and regulations in an
mandatory provisions of the organisation increase the quality of the
company Act No 7 of 2007 brand(Indraratne,2003); consumer trust
listing where Colombo stock will be build up(Truitt,2004).Hence this
exchange(CSE) in order to is an opportunity to prove to the
have best practices on customers about the quality of the
cooperate governance(Annual service.
report,2007).
Environmental usage of pesticides in This is a threat to the production of
unregulated way in cultivation Cargills(like fruits, vegetable, dairy and
make harm to the nature. fish) as well as whole retail production
Knipe(2016) Srilankan because less quality products will be gain
government has introduce from one harvest(Sunday leader,2007)
environmental protection laws
like Act No 47OF 1980 in
order to prevent from
environmental
pollution(Minstry of Mahavali
devolpment,2012)
.

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It is common that fluctuations of government rules and regulations impact on external
environment. In 2016 with the impose of taxation in a considerable amount, increase of the unit
prices resulted in a remarkable negative impact to the retail industry.The Sri Lankan economy
grew at 4.4% in the year 2016 supported by the industrial and services sector while the
agriculture sector contracted by 4.2% compared to a growth of 4.8% recorded in 2015.In 2016,
Sri Lankan economy had a significant growth of 4.4% reinforced by the industrial sector whilst
the agricultural sector had a drastically drop of 4.2% when compared to 2015 which is 4.8%.
Due to the inflation existed in 2016, common price level of the agricultural products were
impacted hence the Cargills also had to increase their price levels which again resulted in drop of
the sales.

Population growth rate in 2015 was 0.93% which again resulted in the increase of the aggregate
demand while leading the company to earn high profits. When compared to rivals, Cargills has
kept the standards in obtaining ISO 9000 (environment management and quality management)
where they have thrived in obtaining the trust of the customers which might again strengthen the
confidence level of the loyal customers(Sirimanna,2016). Cargills is maintaining high standards
and effective marketing strategies, however requires advance technology background which is
convenient for the customers and fulfil their daily needs in a single
click(Abegoonawardhana,2015). The adverse weather conditions that prevailed throughout the
year as well as fragile demand for export commodities led to a decline in the agriculture sector
which has became a threat to the retail industry(Annual report,2017)

When considering above finding it can be clear seen there are opportunities as well as threats
toward the Cargills. However (Rao & Sivaramakrishna, 2008) argues that future will not remain
same as present therefore getting prepared to overcome challengers by prediction the future may
affect in a positive manner to the organisation.

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2.2.2 Porters 5 Forces
Table 07: Porters 5 forces for Cargills food city (Author devoloprd,2018)
Force Level of Impact
threats
Bargaining Moderate to Demanding force because they have 2000 suppliers who suppliers
Power of low 20000 products (Annuak report ,2017). Cargills acquired “Millers
suppliers limited” who was the main supplier to Cargills in 2008 and use it
as distribution channel in an optimum manner. similarly, they
Acquisition KIST (CPC Lanka) who is the largest manufacture in
Jam. cordial, source and beverages and this lead to sustain more
market shares while putting pressure on their
competitors(Bhanuka,2010).
Bargaining Moderate to Reduce the price where gross margin of average item is 2.5% in
power of High Cargills. when buyers power gets reduce company has to seek for
customers new volume of sales to have better profit. New arrivals of
promotions and communication channels of competitors enhance
the bargaining powers (Ekanayake & Pamokya, 2016).
Rival of Moderate to supermarket chains such as keels,Laughfs and arpico leds the
substitutes low customer to put more pressure. however, quality of those products
is low comparing to Cargills and challenge is not enough to do a
change (Saaraketha, 2017)
Rival of low Cargills has retained for as market leadership through competitive
new entry advantage with low cost and high CSR over past 26 years and it is
difficult for new comer to compete retail sector in sri Lanka
(Perera,2009).Capital requirement to start a retail outlet is
moderate because weekend infrastructure has been changed with
the civil war and that open doors for retailers (Euromonitor
International, 2014). However exist barriers are low for retailers
since owner has the possibility of selling it to a new investor
(Perera,2009)

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Intensity High Though size and the number of competitors is considered as the
of rivalry external factors in the environmental analysis, Cargills also might
have to depend on the rivals, where they must be keen on the
advertising campaigns, inventing and introducing new products
and services to the market, price changes, promotion
campaigns(Perera,2009) Cargills use the famous celebrities like
Sanath Jayasooriya for their branding. This kind of advertising
campaigns might lead the customers to trust on their goods and
services purchased.

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Figure 04: Porters competitive Forces Model for Cargills(Adapted from Bhanuks,G,2010,
Critical Evaluation of Cargills Ceylon PLC’s, Lowest Prize and
highest sales at mass market customization) strategy.

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2.2.3 Core competencies of cargills
Table 08: core competencies for Cargills food city(Author devolped,2018)
Core competencies Cause
Ethical Behavior Cargills has maintaining reputation for business ethics by adhering to
the government rules as well as internal rules. (Annual report
2016/2017)
Adding to that Cargills follow up zero based tolerance policy for illegal
activities, bribery and corruption. (Annual report 2015/2016).
Strong cooperation Cargills has develop a concept as "farm to shell" where directly collect
with Farmers organic food from rural farmers to produce fresh items to consumers.
Adding to that Cargills has an ongoing project as "Sarubima programme
where 50 cents for every unit of purchasing is given back to community
of farmers to empower the them. (Annual report,2016/2017)
Attractive Cargills use real feelings and emotions of farmers and attractive colors
advertising in their commercials and advertisement attract customer hearts
Moreover, they have shortlisted in world retail advertising award
programme under traditional media selection for its Real value
campaign (Cargills Ceylon PLC: Cargills Food City, 2017).
Selling healthy Cargills launched programmed 2015 with small and medium dairy
items to customers farmers to enhance the quality by maximizing the hygiene of animal
health and hygiene.(Annual report 2017). Further they acted to enhance
the public health and nutrition standards of its products through
adhering to all approved food and regulation. Moreover Cargills has
started partnership with ministry of agriculture and department of
agriculture in 2014 with the intention of minimize the usage of fertilizer
and chemicals to make sure the consumer health (Annual report,2015)
Environmental to avoid high percentage of wastage Cargills using sacks in
Friendly behaviors transportation of vegetables and fruits rather than using crates.
Meantime they have showed 35% as their waste percentage which is a
minor amount. (The island,2003)

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As a summery it can be say that Cargills has tangible and intangible resources which can
differentiate among competitors.

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Recommendation
Competition within the retail industry has become increased today and rivals are competitive in
terms of price product range, quality and service to sustain the market share and
leadership(Sunday leader,2017). To overcome from this threats Cargiles can price products
competitively while maintaining the market leadership position by ensuring margins to control
input cost. Further to maintain high service quality Cargills can recruit, train and coach
employees with right calibre. furthermore, clear strategies can be transplant in terms of pricing
product range. quality and service according to the target market and competitive environment
while benchmarking customer satisfaction and perception against competitors.

Cargills have low retention and capability rate of employees within last 3 years. This is
generating a risk to the company where company fail to attract, retain and develop employees
with right capabilities which can influenced to towards the long-term growth potential of the
company. this can be mitigated through proper HR planning and recruitment process which can
minimize the staff shortage. Further recruit employees who are living near to outlets and train
them on various disciplines may help to increase the retention rate.

Business strategies of Cargills they have failed to implement strategies effectively where there is
high negative impact towards business performance. As remedy they can prioritise the
formulation of strategic plan for each business sector with the assistance of cooperate office.
Also implements strategies should clearly communicate to staffs to get high benefits the same
time outcomes can be reviewed against the objectives to assess its effectiveness.

Natural disasters like flood, drain, storms, infections and other factors beyond the control can
adversely impact to the business. To overcome insurance covers can be obtained against all
identified risks and natural disasters which can affect operation. same time trained employees to
reduce harmful effect to business as well as human life.

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Table 09: Recommendations to improve competitive advantage(Author devolped,2018)
Recommendation Resource Cost Feasibility Impact
Needed
Issue Lack of using Technology Knowled High Moderate Increase of
Counter Adapted new technology such ge profits and
measure as pay on Id for online Money customer base.
shopping. Market them
targeting the people who are .
work in offices.
Issue Lack of trained employees and Training Low High Increase the
poor leadership and efficiency of
Counter Provide good package, give developm the employees
measure rewards and recognition for ent and increase the
their service. Organise sessions. service qulity.
Management trainee
programmed and extract the
young spirit who has the
capability of becoming a leader
while adding strong leadership
qualities to their heads.
Issue Reduction of service level and Knowled mode High Can reach to a
erosion of customer base ge rate high service
Counter fulfill the customer expectation Time quality an
measure by offering quality products and soft protect the
services and communicate with wears customer base
their consumers to obtain their
feedbacks and views, concerns.

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Issue poor inventory management Profficion High High Reduce stock
increase obsolete inventory al out
risk, stock adjustment and stock vendors Fulfill customer
holding cost Quality requirements
Counter company must choose effective suppliers without failure
measure vendors and evaluate process in Transport
place, built and maintain string
relationship with suppliers
through long term contract,
maintain stable buying products
and early booking should done.
Issue Adverse impact of foreign Knowled High Moderate Mitigate Facing
exchange rate towards row ge to unnecessary
material prices. workers risks
Counter monitor the exchange rate daily Systems
measure and taken necessary steps to Time
minimise adverse impact reduce
the usage of imported
row-materials

Enthought there are issues in Cargills, they are providing funds for CSR (Cooperate social
responsibility) projects. "Sarubima" is an ongoing project which provides scholarships for needy
children, provide resource for learning and advancement and provide farmer insurance to meet
community infrastructure needs. Also, Cargills launched a programme with AAPI of food
business providers to train and develop young and rural people as a groups CSR Initiative.

Cargills believe that success depend on their strong foundation of values and ethics and they are
maintain a reputation for ethical business conduct. Cargills complies with governing laws and
regulations every employee of their team is adhere to the law of land and internal rules and

26 | Page
regulations. further company has a zero tolerance towards discrimination based on gender, age,
ethnicity, religion or any other social or cultural difference.
company has given permission to employees to engage in trade unions and management is
committed to discuss and negotiate with unionized employees. Also, they encouraged the
open-door policy. Cargills does not engage in child labour where this is ingrained to the policies
and procedures of the company.

4.0 Conclusion

this report helps to understand the concept of strategy, which means setup a clear cut objectives
to achieve along term goal of planning to overcome future challengers. significance of strategy is
highlighted since it makes unique organisation in the firm. Author has present PESTEL and
Porter's 5 forces as external environmental tool to identify the impact of external environment
towards Cargill’s food city. Core competency has analysed internal environmental factors that
helps to make or break the company. In the final stage author presents recommendations to
improve competitive advantage of the company while discussing CSR projects and Company
ethics.

27 | Page
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