NORTH SOUTH UNIVERSITY

MKT460
SECTION: 1
Assignment 1

OLIVE TREE FOODS LIMITED

Submitted To: Sherina Idrish (Seh)

Department of Marketing and International Business

Submitted By:

1.Tanzila Tazin Raka- 1320577030

2.Ahmed Redwanul Islam- 1330420630
3.Prottay Moin- 1421100030
4.Hamid Al Jawad Anad- 1620970030
5. Aquib Ajwad Bhuiyan- 1421867030
6.Sandip Saha-1611886630
1. Table a SWOT TOWS analysis to find the GAPs in the market.

Ans:
STRENGTHS ( S ) WEAKNESS ( W )

1.The 28 years of respect and 1. Distribution

well renowned in the financial channel is weak in
THE ORGANISATON market has earned a smooth restaurant and café
crowd sourcing opportunity industry.
for the label 2. Limited exposure
2. Special Positioning and only through FB
POD in relevant fields compared to its
3. Coldstone beneficial with 43 competitors
percent market share in 3. Lack of other
economies of scale. direct or support
4. Expertise in relevant fields media for
with differentiation in its advertising
operations and service. comparing to
5. Favorable market share others.
and brand equity 4. Shortage of
6. Manage a value chain with talented human
its local food growers and resource with
grocers. industry specific
7.OTFL have master franchise skills in F&B
with great reputation in all sector with highest
over the world. employee turnover
rates
OPPORTUNITIES ( O ) SO Strategies WO Strategies
1. Creates a market  S2S3O1 using strong
gap due to no reputation from financial W1W3O1 by creating
reputed restaurant market and positioning strong distribution and
chain in and POD in relevant improving exposure OFTL
Bangladesh. field can use it for can become reputed
2. Industry going becoming successful in restaurant chain in
through an restaurant chain. Bangladesh.
exponential
growth recently.  S506O7 with favorable W40607 by differentiating
3. As women join market share and brand themselves from the
workforce equity in the industry competitors OFTL can tap
dependency on OFTL can further tap the the street food industry with
home food is street food industry with heathy street food label for
declining. healthy street food labels the health and label
4. Middle income has for the health and label conscious people.
increased spending conscious consumers
on food around  S2s4O5 with unique W4O3O7 we will
 200 taka everyday positioning,expertise and introduced skilled people
5. Increase in food differentiation in for better quality to meet
culture hype relevant fields OTFL can the quality demand
among middle to increase their presence
upper class urban by target consumers
and sub urban among middle to upper
markets due to class urban and
lack of other suburban markets
entertainment  S2O8 with unique
facilities positioning OTFL can
6. OTFL might tap set strong mind setup.
the street food
industry with
healthy street food
labels.
7. In terms of food
quality and calorie
counts people are
becoming more
label and health
conscious.
8. Food industry is
growing hastily
because of
unavailability of
their
entertainment
alternatives.

THREATS ( T ) ST Strategies WT Strategies

1. Market entry is  S5S4T2 by favorable
relatively easier market share and brand
2. Price sensitive equity with skilled W1W3T3 by improving its
consumers employee, we should try distribution strategy and
3. Stern competition to keep low cost for our media presence OFTL will
from the direct and price sensitive make it difficult for its
indirect rivals. consumers. rivals to compete.
4. New in market so no
economies of scale in  S2s3T3 with unique
the industry positioning and POD we
try to be different from
5. Government our competitors.
regulation increasing
6. Shortage of fresh  S7T9 by keeping
ingredients is always a standard quality in
big issue due to the comparatively lower
 logistic and prices we try to keep our
infrastructure sales on..
facilities.  S6T6 by maintaining
value chain with its
7. Flooring policy growers and suppliers
pulling down scarcity of fresh
restaurant surplus. ingredients can be
8. Notable number of avoided.
competitors with
dominating the
market
9. 25% tax on all
imported coffee and
dairy products same
as 2016
10. Other brands
managed a value
chain with their local
food growers and
grocers before 4 years
in this sector

2. A. Table a PESTLE analysis for OTFL showing the strength/impact of the factors.

Source Description Implication Certain Impact

Political
Economic 1) Bangladeshi 1) More people 1) 3 1) 3 (Positive) –
economy will will enter the Currently
grow by 6.8%. middle class Bangladeshi
social strata, F&B industry is
they will spend oversupplied,
their money in new customers
F&B Industry. will offset that
and expand
target customer
base of OTFL.
Social 1) Gradual 1) Employed 1) 4 1) 4 (Positive) –
 Decline on the people are These social
dependency of ordering food changes has
homemade food from restaurants created strong
and people are for meal instead demand in the
hanging out at of having Bangladeshi
restaurants to homemade food F&B Industry.
spend quality because of
time. convenience
and increasing
number of
women entrance
rate in the
workplace.
People are
spending time
with friends and
relatives in
restaurants.
Technological
Legal 1) Government 1) These 1) 5 1. 5 (Negative)
will impose policies will – Bangladeshi
15% VAT on significantly F&B market is
restaurants and raise operating price sensitive,
25% export cost of OTFL. OTFL has to
duty on raise the prices
imported coffee of foods it
and dairy delivers to live
products. up to increased
operating cost
thus there will
be a negative
impact on sales.
2) 5
2) New policy 2) That policy 2. 5 (Positive) –
of labelling the will force That regulation
food players in the is favourable to
information on F&B industry to quality food
packed food. publish the brands like
ingredients they OTFL as
use. customers will
be aware of
ingredients
which they are
consuming and
health
conscious
 customer will
choose OTFL
by not
sacrificing on
price.
Environmental 1) 2) This 1) 5 5. (Negative) –
Government’s regulation will OTFL will hike
raising carbon increase the the prices of its
tax by 3% and operating cost food to match
lowered the of OTFL up to the
limits of operating cost
emersion by 2% which will
negatively
impact sales.

B. Draw a Scenario Analysis Graph based on your PESTLE analysis.

Ans: PESTEL Scenario Analysis are given below:

3. A. Draw the model, list down the factors and assign points (-3 to3 scale) under the dimensions of
Porter’s Five Forces Model mentioned in this case.

1) Threat of New Entrants

Considering the case above, we can analyze that the F&B market is a potentially growing market
in Bangladesh. Because of their high street fine dine facility, the threat of new entrants is
comparatively high. Barriers for the new entrants in the both fine dine business and the branded
high quality ice cream industry is quite high because of its high capital management, quality
maintenance & limited choices of store locations. So threats of new entrants in this market is in
favorable situation for me. The scale is 2

2) Threat of Substitutes
In comparison of the fine-dine restaurants, our main substitutes would be the fast-food chains,
both multinational and domestic. On the other hand, dessert items such as chocolates, pastries,
different milkshakes could be a tight substitute for the ice cream venture. So all these substitute
products are quiet alarming for the OTFL. Hence it creates an unfavorable situation for the
company. The scale is - 2

3) The Bargaining Power of Buyers

The bargaining power of the buyers plays a vital role for Olive Tree Foods. In the market
situations of Fine Dine restaurant, keeping in mind that buyers have very few alternative choices
for dining, for which the bargaining power of our buyers are comparatively low. We provide
premium quality food with high quality service which helps us to differentiate ourselves from
other competitors. This is the reason why bargaining power of buyers are low in such market
segment. This is favorable situation for them. The scale is 2

4) The Bargaining Power of Suppliers

For OTFL, the bargaining power of supplier is to either charge a premium prices of the raw
material or to reduce their supply as well as their quality. But in this case Cold Stone Creamery
Bangladesh imports most of their raw materials from their mother company. The raw materials
required for Watercress Restaurant are more or less available in our local market, if not found
there then they are imported. Hence their bargaining power of suppliers is comparatively low.
This is an unfavorable situation for them. The scale is -1

5) Rivalry Determinants
As mentioned in the case Olive Tree Foods Limited believes that Cold Stone Creamery could be
the catalyst for creating a new dimension in the food and beverage industry of Bangladesh by
introducing the "fun factor" in addition to serving a very high-quality product which will help
create a buzz in the market. But entry of new competitions can become common as already some
of the strong rivals already exists in the market such as Move n Pick, NZealand Dairy. This is
highly unfavorable situation for the company .The scale is -3
3B. Table these factors based on their strength (High. Mid and Low) with regards to OTFL
with justification.

Foods and Beverages Industry, Bangladesh

Forces High Medium Low

Entry Barrier


Bargaining Power of
Suppliers 

Bargaining Power of
Buyers 

Threat of Substitute
Products 
 Intensity of Rivalry


Bargaining Power of Suppliers: Suppliers or the growers of the food industry has very low
bargaining power. Switching to a new supplier is not going to have that much negative impact for
the restaurants buying in bulk. Although according to the new Government’s price flooring
policy restaurant is gradually losing this advantage.

Entry Barrier: The food and beverages industry of Bangladesh over the recent years has been
booming. Many entrepreneurs and organizations introduced themselves in this industry and since
been in competition. According to Esquire Group’s OLIVE TREE FOODS LIMITED (OTFL),
the sector of restaurant/dinning that they want to delve in is fairly easy to enter than any other
industry. Due to the growth, increase in people’s demand and food being a very basic necessity
entry barrier in this industry is low.

Threat of Substitute Product: Due to the exponential growth in this industry the market has
become saturated with exact or close substitute products. For OTFL owning Watercress which
serves a fine dining experience to their customer competitions like Steak House, Thai Emerald,
Izumi is a definite threat. Although the threats are giving a fine dining experience but they are
carrying different ethnic menus. Cold Stone another OTFL owned brand needs to compete with
Movenpick then there are other cafés like North End Cafe, Tabaq, George Café which carries
similar products as Orange and Half Café. So the threat of substitute products can be defined as
medium.

Bargaining Power of Buyers: Switching restaurants for the majority of the buyers is not that
much of an inconvenience as there are many other options available for them. Most customers
are now price sensitive and always want the value worth their money so slightest of increase in
price or decline in quality may lead to the restaurant losing business. Few loyal customers will
not find preferable changing or going for an alternative but that is going to be a handful of
people. Thus the bargaining power of the buyers is high.

Intensity of Rivalry: There is an immense competition in this industry. Every restaurant is

trying to outdo their competitors. Price war is the most common trend in this industry and every
brand under OTFL face a huge number of competition. So intensity of rivalry is high.