Al-Noor MDF

SWOT Analysis

Strengths

Al Noor offers high quality product i.e. MDF, which gives it a competitive edge both in prices and range over other local and international producers

It offers wide color range with its current infrastructure, which helps maintain a perfect producer client relationship and also secure new ones

Al Noor has perfect distributions networks all over Pakistan and 50% of its market share houses in Afghanistan, this helps reduce barriers to transit in Pakistan and deliver products in bulk on time.

Intermediaries are catered to by offering free samples which helps track large number of buyers over time and maintain market share, since it enhances sales.

Pricing Strategy

SWOT Analysis

Opportunities

Weaknesses

SWOT Analysis

Threats

The current political unrest in Pakistan has led to breakdown in Al -Noor’s transit system

Current production might also end up in warehouses leading to high storage costs for the organization

The 2009 global recession lead to a significant rise in manufacturing costs

Keeping in mind the political hardship it is facing in its current operations, the organization could consider expanding internationally seeking new markets and diversifying risk and increasing success rates.

Overhead costs can be further reduced by investing in high tech infrastructure and systems such as JIT and LEAN productions methods

Al Noor faces a competitive threat due to lower prices offered by ZRK, which forces clients to purchase cheap products.

80% on lamination shares in Afghanistan markets

Direct affect by the international price war in 2009

Since then Al-Noor has tried to retain it's market leadership

Local competition also regulates Al-Noor’s pricing policies over time

What kind of pricing structure does the company design?

How does the company manage prices along with product life cycle?

Supplies high quality construction fibers to a vast consumer base

Has managed to maintain a sustainable brand image

The company operates at a competitive pricing strategy

Does not reduce prices for products within its key offerings

Overtime, they drop prices for products that become inferior

Then they’re discontinued and replaced by new offerings

Khyber board and Cielwood launched their premium quality board on very low rates

very soon they launched their lamination @1450/- USD in Peshawar on credit bases.

Malaysia and Thailand - boards @190 USD per cubic meter.

Price war → losing key clients →change in policy

Rates were decreased in open market → retain customers

Introduction

Established in 1987 Al-Noor MDF is now one of the leading medium density fiber producing companies in Pakistan

Main products:

• (MDF) medium density fiber
• Particle board
• Hard board
• Ply wood

The company was able to attain Local Market growth rates of 25% and 110% in export

Managerial Objectives

High quality products at competitive strategies

Achieve sustainable market growth

Constant innovation

Market development -> market penetration -> product diversification

Payment Method

The payment process that Al Noor MDF uses is transfer telegraph (TT)

• Step one being the Performa invoice which compromises of details like;

• Buyer's information
• Product details e.g. thickness= 16mm laminated high gloss
• Number of containers to be dispatched
• $ amount
• Pkr amount
• Entails the terms of payment e.g. insurance from outside factory onwards are buyer’s responsibility.
• Account title of the company, following account #
• Where are the goods being dispatched from? E.g. Moro, the route it follows up?
• Expiry date of the Performa
• Assures the other party has the import license permit

The next step involves the buyer’s bank, which makes the transfer of money as quoted on the Performa invoice.

Payment Method (cont)

The amount is transferred to the correspondent bank in New York, which acts as an intermediary

Which is followed up by transfer of amount to Al Noor’s bank in Pakistan

The production department produces the exact amount and the type listed in the Performa invoice, and the products are ready by the date of delivery.

Hashaam Sohail

Mavra Ahmed

Muhammad Zakria

Omer Baig

Sameen Qasim

Tamkinat Tariq

Wasel Raza

Introduction to Company’s Industrial Aspects

Under what category does the company see itself?

Al Noor MDF is the main parent company and falls under the category of }Original Equipment Manufacturer"

Produces:

• Medium Density Fiber (MDF)
• Ply wood
• Hard Board

Supplies to:

Consumer markets middle east, mainly Iran and Afghanistan.

The group is considering expanding its export market to Uzbekistan, UK and Tajikistan.

What kinds of products does the company supply or buy?

The main product line consists of:

• Medium density fiber (MDF)
• Particle Board (chip Board)
• Hard wood
• Plywood.

After the fiber is extracted there are certain sub categories of which are:

• High density Fiber (HDF),
• Low density Fiber (LDF)

What kind of environment does the company face?

Market share of 43% with production capacity of over 52000 units.

In Pakistan 80% of the market share of Peshawar region is being served by Ceil Wood.

Ceil wood is Al Noor’s most effective competitor when it comes to low cost pricing as the competitors are trying to capture and increase their market share by supplying low quality and low cost product which has nevertheless impacted the consumer perception about quality and branding.

How Does Al Noor Distribute its Products?

Relies on 4 transporters, three for local and one for export markets

Freight system is operational in cities (mainly Karachi, Hyderabad and Lahore)

Cost of transportation is paid by buyers in the local market while export freight is paid by Al Noor

Al Noor facilitates all four provinces and caters large markets of Karachi, Quetta and Lahore

Main distributors of Al Noor’s products in Quetta are:

Hameed Hardware

Gul an company

Zakir Hussain

Quetta Market

Price conscious, prefers price over quality and main point of sales are Mekangi and Mission road

Al Noor MDF carries projects on a large scale and the following parties are involved

The company market share is 50% due to market trends consistent on the reliance for lowest possible prices, main competitors are ZRK and seal Wood

Al Noor also exports its products to Afghanistan and KSA

Channel of Distribution

Marketing

Market / product orientation

Intermediaries:

• Carpenters
• Interior Designers
• Architects

Strategies –

• Market Penetration
• Product / Market Diversification

Market Penetration

Push Strategy – discounts offered as incentive

Pull Strategy – attracting customers, USP

Samples to Retailers

Expansion – maintain quality - frequent visits