Ceylon Biscuits Limited is a well establishing Company in Sri Lanka. Presently CBL have more than 50 food products and organization management is planning to enter the international market. As a consultant for cultural changes of CBL the following report has been analyzed to introduce the Lanka Soy Brand to international market while expecting to analyze internal and external markets of the organization with some analyzed data about India depending on its social behavior patterns and cultural impacts. Finally conclusion and recommendations are included with respect to this analysis.
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2.0 Company Introduction
Lanka soy is a brand owned by one of the best companies in Sri Lanka, Ceylon Biscuits Limited (CBL). CBL started its operations in Sri Lanka since the biscuit manufacturing in 1968. The purpose is to “unlimited expansion of management-driven approach with a conscience.” In 2000, it entered to manufacture of soybean through the introduction of new brands in Lanka soy flavored meat products, to the domestic market and now CBL is currently became the market leader in the field of TVP soy products in Sri Lanka. Directed mainly Lanka soy and positioning of products in people from urban and rural areas through the establishment of a reasonable price with the products of the highest quality. Success story of CBL is a dedication to high standards of quality, innovation, continuous production line (package of bread), aggressive marketing, and a strong focus on research and development. Today, the group has expanded its production to United Kingdom, and enjoys a global presence with distribution channels in more than 32 countries, spread across almost every continent.
2.1 Internal Environment
To capture the international market first the company needs to identify what are their strengths and weaknesses.
Sri Lankan Market leader
No proper brand ambassador for Lanka
World recognition mother company
Ex- SLIM People’s Youth Food Brand of the Year, People’s FMCG Brand of the Year, etc
Not much offers for customers. Products.
The quality standards of their products.
Ex – SLS, ISO 9000:2008, ISO 14000 and ISO 22000.
Lack of media advertisements for company soya products.
Strong local and international (CBL other products) distribution network, plants and the sales force.
Lack of awareness for company soya flavors.
Own soya bean plantations work force (Famers).
Not much local flavors are available.
Strong suppliers chain in the country.
Strong charity work.
Ex – Pannipitiya nana madura
Company’s raw materials are agro based and hence subject to volatility in the national and in international commodity markets.
Strong marketing campaigns
Ex – CBL T20 cricket tournament.
Well skilled employee
Ex – Mr. Nandana Wickramage one of the best marketing manager in the country.
Table 01: CBL Internal Environment Analysis
3.0 Competitive Analysis for Ceylon Biscuit Limited
3.1 Competition in Sri Lanka (Home Country)
Sri Lanka presently produces over 40,000 tones a year of soya products wroth around Rs: 17 billion in value. Today there are many known TVP soya brands in Sri Lanka, including Lanka soy (CBL’s), Delemage, Cargills, Harvest, Topaz, Ruhunu etc. Lanka soy is the leading brand in Sri Lankan soy market by holding 35% market share and respectively Raigam 25%, Delmage 7% and Prime soy 5%.
From Ceylon Biscuit Limited financials of fiscal year 2010, the Sri Lanka market is quite important to Ceylon Biscuit Limited and represents over 55% of its total retail revenues and almost 60% of its total net revenues. Already CBL Company has captured the Sri Lankan soya market and to maintain its growth, they need to enter into new international markets.
3.2 Competition in India (Host Country)
India is one of the major exports of soy beans to the Asian countries. Thailand, Japan some of major countries. There are four major competitors in India that affects CBL, namely Ruchi Soy Mahyco Soya, Dewas Soya, Adani Wilmar Soya.
Couple with a more liberates government and more heartening foreign investments and tax incentives, it opens an opportunity for CBL to consider its entry into India.
By using a framework for remedy industry structure, the Porter’s Five Forces Model, we can have a better understanding of the industry context in which Ceylon Biscuit Limited may operate and have an analysis on the competitive position of its potential Soy business start up in India.
Reasons for selecting India have been further discussed in Appendix A.
Porter’s five forces for CBL in Sri Lankan market have been further discussed in Appendix B.
4.0 Segmentation, Targeting and Positioning
4.1 Market Segmentation
The reason for market segment is to make sure that the various element of marketing mix such price, place, demand and supply and promotional activities meet the needs of different customer needs. Here alternative market development technique which is market for markets where there are few competitors selling some soya meat products. As CBL knows that; they are trying to understand customers and satisfy their needs better than the competition. It is for sure that, different customers have different needs and so it is hardly ever to satisfy all the customers. But as vegetarian products CBL soy can be distributed to the total Indian population (1,189,172,906 – total Indian population). Therefore there will be no special market segmentation for CBL’s soya products.
4.2 Target Market Analysis
India has a population of 1,189,172,906 and per capita GDP of US $ 62,100. Total Vegetarian population is 47%. Population in India is comparatively richer and is more explored to Sri Lankan culture and business contact with tourist and foreign investment.
4.2.1 Target Market in India
CBL’s Lanka Soy and Chico Soy target those who most likely to buy soy meat. Potential target customers are;
- Non Vegetarian
4.3 Market Positioning
In Sri Lanka CBL’s Lanka Soy is the market leader captures the total market of 35%. Sri Lankan people are applying quality food for their meals. Already CBL is supplying quality food for a reasonable price to the Sri Lankan consumers. CBL’s Soya meat satisfies these customers’ requirements also. Soya Meat Consumers in Sri Lanka more likely to buy Lanka Soy products than other. Out of them most of consumers is buying Lanka soy referring the brand name to the retail shops and super markets. Families are looking affordable, fresh foods. And consumers are looking for healthy, security food from CBL’s products. At the present CBL’s proof it by procure the quality food. CBL’s providing different flavored product rage of soya meat. Therefore competitors and new market entrants can’t compete with CBL’s Soya Meat. CBL’s have strategic resources, attractive market opportunities and executing well time campaigns to drive revenue.
5.0 Different Social Group Behavior Patterns
India, a well developing country in percent, is located in Southern Asia, bordering the Arabian Sea and the Bay of Bengal, between Burma & Pakistan. In such a richly diverse and complex country as India it is difficult to impart generic conclusions that can be used to do business there. Regionalism, religion, language and caste are all factors that need to be taken into account when doing business in India. Behavior, etiquette and approach are all modified depending on whom the company is addressing and the context in which they are being addressed. However, most of those doing business in India will do so in cities such as Delhi, Mumbai, and Bangalore with a particular socio-economic class. So the company will also target these above mentioned cities in order to startup business in India. On the other hand, Sri Lanka received many waves of migrants as revealed by prehistoric burial places and, at least, one megalithic structure and twenty-five centuries of history. No other country of comparable size has a culture so ancient in antiquity and development, so diverse in character, and so rich in variety of creativity. History of Sri Lanka begins with the arrival of the Indo-Aryans originally from the Northwestern region of the Indian subcontinent, followed by migrations from other regions of Northern India.
Detailed overview about major cities in India have been further discussed in Appendix C.
Language – Different states in India each have different official languages. Central government only recognizes Hindi as the official language of India. However, when doing business in India, English is the language of international commerce. But in Sri Lanka Sinhala is the mother tongue of the Sinhalese ethnic group which is the largest in Sri Lanka. It is one of the constitutionally-recognized official languages of Sri Lanka, along with Tamil. Tamil is a classical language and the oldest of the Dravidian language family and spoken by the Tamil population of Sri Lanka.
Religion – The main religions of Sri Lanka are Buddhism and Hinduism which both have large influences on political, cultural, and social life. In India Hindu’s are the most powerful religion accounting for 81.3% out of the total population while Muslims only represent 12%.
Hierarchy – Of all the cultural influences that most impact Indian business culture, hierarchy plays a key role. With its roots in Hinduism and the caste system, Indian society operates within a framework of strict hierarchy that defines people’s roles, status and social order. Same as in India the influences of Buddhism and Hinduism as well as the caste system have created a culture that operated within a hierarchical system. Sri Lankans are conscious of social order and status with all relationships, whether in family life or at the office, to some extent involve hierarchies.
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Doing Business (Meeting and Greeting) – When doing business in India, meeting etiquette requires a handshake. However, Indians themselves use the namaste. This is where the palms are brought together at chest level with a slight bow of the head. Using the namaste is a sign of understanding of Indian etiquette. Sri Lankan business etiquette can be rather formal. Shaking hands is the most common form of greeting, while the traditional greeting as same gestures in India while saying “Ayubowan”. When addressing an Indian or a Sri Lanakn, it is better to always use the appropriate formal title, whether Professor, Doctor, Mr, Mrs or if they are unknown then Sir or Madam will suffice. Doing business in both countries involves building relationships. They only deal favorably with those they know and trust – even at the expense of lucrative deals. It is vital that a good working relationship is founded with any prospective partner.
Business Negotiating – Indians are non-confrontational. It is rare for them to overtly disagree, although this is beginning to change in the managerial ranks. In both countries decisions are reached by the person with the most authority so it is important to meet the person face-to-face. Being respectful of other people’s time is not a value in both countries, nor do people expect their partner to be very respectful of their time. It is just not important like it is [in the US]. Flexibility is paramount. Family responsibilities take precedence over business so last minute cancellations are possible when doing business.
6.0 Cultural Effects on Decision Making
One of the most remarkable features of India, any foreign traveler must consider is the size and diversity in this country. Due to the breadth and diversity, there is only one way to understand India. In fact, observers noted once again that “India as a state exists only in the minds of the population.” Many travelers find India unpredictable and confusing because it can not understand this point. It should be noted that although India has a secular political structure, religion plays an important role in people’s personal lives, and often affects relationships and business dealings.
Family Structure – In India joint family plays an important role in Indian culture. For generations, it has been India’s traditions prevailing in the extended family. It is a system whereby members of the extended family: parents, children, couples and their young children, and so on – to live together. Is usually the oldest member of the male is the leader in the family system in India, a joint, with that most of the important and day-today decisions are being taken by that member. Although it was the same in Sri Lanka decades ago, mostly nowadays the Sri Lankan parents are separating themselves from their children after they got married. The reason for this is because parents think that the child should be given their own freedom rather than staying under one roof with parents and under their rules. Whether in Sri Lanka or India the family comes first and when it comes to taking decisions with relate to a person it should be taken by also considering the emotional facts. From the organizations point of view it might be a disadvantage for them, but it will not be difficult to do so, because it is already practiced in Sri Lanka.
Festivals – India, being a multicultural society, they are celebrating holidays and festivals of various religions. There are four national holidays celebrated by Indians namely the independence day festival, festival of the Republic, Gandhi Jayanti, and May day filled with excitement and enthusiasm all over India. In addition, many states and territories of India celebrate local festivals in minority demographics, depending on religious and linguistic. In Sri Lanka there are also many festivals including Independence Day, Sinhala and Hindu New Year festival, Poya days, and other religious festivals. All these festival days are been mentioned as holidays by the governments and in India it is strictly prohibited for the employer to force his/her employees to work on holidays. While taking decisions the top management should undergo all the possible festivals (national or regional) which affect the operations of the company. It is for sure that rather than in Sri Lanka, India will have more holidays with relate to their festivals which will be a disadvantage for the organization.
Clothing – Traditional clothing in India varies greatly in different regions of the country, and affected by local culture, geography, and climate in urban areas and rural. Popular styles of clothing draped dress like sari for women and dhoti or Lungi for men. In public places, religious and indigenous dress label inhibits the exposure of the skin and the use of transparent or tight clothing. Although this is also practiced in Sri Lanka, in most public places it can be seen wearing transparent or tight clothes. When taking decision about creating a uniform for the employees it should be taken in to consideration.
Sports – Cricket is the most popular sport in India. The India national cricket team won the 1983 Cricket World Cup, the 2011 Cricket World Cup and the 2007 ICC World Twenty20, and shared the2002 ICC Champions Trophy with Sri Lanka. When there is cricket match it is so much difficult to make employees work, because rather than working for a salary, Indian employees think that entertaining themselves by watching a cricket match is far more important. Although cricket is the most popular sport in Sri Lanka, employees tend to watch matches after finishing their work. So when doing business with Indians this kind of culture might affect the organization badly.
CBL is a well known company nationally and internationally. CBL’s large food production range has made them the market leader in several production range categories, including Soya meat products. To develop the Asian regional coverage CBL plans to enter the Indian market with relate to their Lanka Soya meat product. While identifying the strengths and weaknesses of the organization they identified that there are many known TVP soya brands in Sri Lanka, including Delemage, Cargills, Harvest, Topaz, Ruhunu etc. to compete with them domestically. The potential Indian competitors that will affect the success of CBL includes, four major competitors, namely Ruchi Soy Mahyco Soya, Dewas Soya, Adani Wilmar Soya. Through a market research CBL has identified as vegetarian products Lanka soy can be distributed to the total Indian population (1,189,172,906 – total Indian population). Therefore there will be no special market segmentation for CBL’s soya products. CBL’s Lanka Soy is the market leader captures the total market of 35% while supplying quality food for a reasonable price to the Sri Lankan consumers. In such a richly diverse and complex country as India it is difficult to impart generic conclusions that can be used to do business there. CBL has understood that it is better to analyse about Indian languages, religions, hierarchy, doing Business (Meeting and Greeting), and business negotiating. Through that the organization identified different states in India each have different official languages, Hindu’s are the most powerful religion accounting for 81.3% out of the total population, Indian society operates within a framework of strict hierarchy that defines people’s roles, status and social order and Indians are non-confrontational. It is rare for them to overtly disagree, although this is beginning to change in the managerial ranks. One of the most remarkable features of India, any foreign traveler must consider is the size and diversity in this country. It has been identified that although India has a secular political structure, religion plays an important role in people’s personal lives, and often affects relationships and business dealings.
To enter the Indian market CBL must also consider about the followings.
Getting more language knowledge, understandings about religions, festivals and family structures is vital for CBL to do better business with India. For that it is better to use a well-experienced Indian consultant to make it easy.
Decisions should not only to be taken depending on the organizations perspective, but the emotional factors must also need to be taken in to consideration, while it plays a major role in decision making.
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