SWOT is the acronym for the internal strengths and weaknesses of a firm and the environmental opportunities and threats facing the firm. SWOT analysis is a technique that is easy to use for managers to get a quick overview of a business’s strategic position. (Cathy H.C. Hsu, 2001)
The PEST analysis is a framework that is used to scan the external environment in which a company operates. PEST is an acronym of the following:
Technological factors (www.valuebasedmanagement.net)
Company history and profile
FFCL was a joint venture between Fauji Foundation and Haldor Topsoe A/S of Denmark. The company was incorporated in 1978 as a private limited company. The company’s key activities are to produce, purchase and market fertilisers and to invest in other fertiliser and chemical manufacturing operations. (www.wrightreports.ecnext.com).
FFCL started production of urea on a commercial basis in 1982, with annual capacity of 570,000 metric tons. The production capacity of the existing plant increased to 695,000 metric tons through De-Bottle Necking program. Production capacity was further enhanced in 1993 by establishing a second plant with an annual capacity of 635,000 metric tons of urea. (www.ffc.com.pk)
FFCL is a growth-oriented leading fertiliser company in Pakistan with highest market share and its focus is to deliver performance through excellence in the fertiliser industry by utilising its strengths. By using them wisely the company wants to maximise returns to its shareholders and provide optimum value to all stakeholders. There are some weaknesses, like lengthy hierarchy, that can create administrative problems. Through exploring the opportunities, the company is trying to sustain production through the application of innovative technology to obtain maximum productivity in the presence of curtailment of gas by the government for longer periods. However, FFCL also takes measures to mitigate the threats that it faces. However, due to a shortage of gas in the country and new urea plants, further expansion and growth opportunities for the company are limited in the production of urea.
After analysing the political, economic, social and technological factors it can be concluded that the external environment of the country is highly compatible with growth in the fertiliser sector. There are some fears but the strong performance of FFCL along with other companies in the fertiliser sector is expected to continue in view of rising DAP and urea prices, along with substantially higher demand for fertilisers from the agricultural sector. By providing good quality fertilisers and services to its customers and by having the passion to excel, take on new challenges, set fresh goals and take initiatives for development of profitable business ventures, FFCL is committed to play its vital role in industrial and agricultural advancement in Pakistan.
Anon.(n.d)‘Profitability’ [Online] Retrieved 7-05-2010
Anon. (n.d.) ‘Cash flows’, [Online] Retrieved 7-05-2010
Anon.(n.d.)‘Coverages’ [Online] Retrieved 8-05-2010
Anon. (n.d.) ‘Company profile’, [Online] Retrieved 06-05-2010
ACCA Rulebook (2009) ‘Rules of ethics’, section 3.2, UK.
Anon. (n.d.) ‘Ratios’ [Online] Retrieved 8-05-2010
Anon.(n.d.) ‘Limitations of ratios’ [Online] Retrieved 8-05-2010
Anon.(n.d.)‘PEST’ [Online] Retrieved 09-05-2010
http://www.valuebasedmanagement.net/methods_PEST_analysis.html 29th March 2010
Anon. (n.d.) ‘FFCL ‘s business description’, [Online] Retrieved 7-05-2010
Ahmad, N. (1999) Fertilizer scenario in Pakistan: policies and development. In: Proc. Conference on Agriculture and Fertilizer Use by 2010. NFDC Publication 2/99. Islamabad.
Annual reports of FFCL for FY09, 08 and 07.
Annual reports of ENGRO for FY09.
BPP (2008), ACCA Study text, Financial Reporting (Paper F 7), BPP publishing, London.
Business Recorder (25th March 2010) ‘Business news: Company news’ Karachi: Business Recorder.
Campsey, Bigham, Gilroy, Hutchinson. (1998) “Introduction to financial management” Harcourt Brace.
Cathy H.C. Hsu (2001), Marketing Hospitality, 2nd edition, Chapter 6, Page 132, John Wiley and Sons, New York, USA
Claude Elwood Shannon & Warren Weaver (1949) The mathematical theory of communication. Urbana: University of Illinois Press
Casein WE. (1995) ‘Answering and Asking Questions’. IDEA Paper No 31. Manhattan, KS: Centre for Faculty Evaluation and Development in Higher Education.
David Elliott (03 Feb 2001) Corporate decline: Diploma in Financial Management, Paper D4, UK: Student Accountant, ACCA.
FAO. (2010) ‘Fertlizer sector [Online] Retrieved 10-05-2010
Federal Board of Revenue (2009) [Online] Retrieved 9-05-2010
Geo TV (11 June 2008) ‘Budget speech’, Geo News Special coverage National Assembly.
George Keiffer. (1988), The Strategy of Meetings, Warner Books Inc., USA.
Johnson, G. and Scholes, K. (1993) Exploring Corporate Strategy – Text and Cases, Hemel Hempstead: Prentice-Hall.
John A. Pearce, Richard B. Robinson, Amita Mital (2007), Strategic management,10th Edition, pg 176, Special Indian edition, Tata McGraw Hill, India.
Kotter, J. and Schlesinger, L. (1991) Choosing strategies for change, Harvard Business Review, pp.24-29.
Karachi stock exchange: www.kse.com.pk [Online] Retrieved 10-05-2010
Ministry of Food and Agriculture, Federal Bureau of Statistics, Economic survey of Pakistan 2008-09.
MikeMoffatt.(n.d.)‘Liquidity’ [Online] Retrieved 6-05-2010
Pakistan assistance strategy report (14th December 2009) [Online] Retrieved 08-05-2010
Stephen E Lucas, (Year 2004), “The Art of Public speaking”, 8th edition, McGraw Hill.
Shane Johnson, (June 2005), How not to RAP? UK: Student Accountant, ACCA.
Shayan Hassan Jafry. (October 2007) ‘Pakistan fertilizer sector review: industry update’, IGI Securities.
Tanveer Ahmed. (5th Nov 2009) ‘Fertilizer sector profit down 13%’, Karachi: Daily Times, Pg 5.
The Nation Karachi (2nd February 2009) “Urea demand rises 18% in CY09”, Karachi: The Nation.
The Financial Daily (May 11, 2010) ‘Business news: Analyst briefings’, Karachi: The Financial Daily.
The Nation (7th July 2009) ‘Business news’, Karachi: The Nation.
Yousaf Nazar. (2007) ‘Monetary policy: rising inflation and difficult choices’, The Dawn, January 22, 2007 Monday.
Zee News (18th February 2010) ‘Cabinet to decide on fertilizer subsidy today’. ZEE News.