Business strategy

Batch: 51E
Assignment 2: internal environment analysis
Roll :RQ 46
Jannat
For a strategy to succeed, it should be based on a realistic assessment of the firms internal resources and
capabilities. An internal analysis provides the means to identify the strengths to build on and the
weaknesses to overcome when formulating strategies. The internal analysis process considers the firms
resources; the business the firm is in; its objectives, policies, and plans; and how well they were achieved.
Internal analysis is the process of identifying and evaluating an organizations specific characteristics,
including its:

Resources

Capabilities

Core competencies
While formulating business strategy the resources, capability and goal need to be kept in mind and a
strategy should be aligned with resources. Few crucial questions to ask whilst deciding on the strategy are
as follows

What is the core competency?

What is the distinctive competency?
Is the resource valuable, rare, immitigable, substitutable and sustainable?
Is the company ready to seize the opportunity?
Are the cost structure and value proposition competitive?
Is the company comparatively stronger or weaker in comparison to its rivals?
What strategic issues are front burners for managerial decision making?

Overview of the organization

For internal analysis Linde Bangladesh limited has been chosen as the subject company. With a modest
appearance, afterwards, at the beginning, Linde Bangladesh's products are now part and parcel of all the
industrial and economic activities of the country. Today, the turnover of the company has exceeded BDT
3.19 billion.
Linde Bangladesh Limited is a member of the Linde Group that has been present in Bangladesh for over
50 years with continuous expansion in operations and business.
As a pioneer multinational company in the gases business, Linde Bangladesh has 3 major locations /
installations at Tejgaon, Rupganj and Shitalpur. Besides, it has 18 sales centers spread throughout the
country serving a customer base of over 35,000. The company is currently capable of producing 80 tons
of liquid ASU gases per day and 23,100 MT of Welding Electrodes per year. Its product folio and services
include liquid and gaseous Oxygen and Nitrogen, Argon, Acetylene, Carbon Dioxide, Dry Ice, Refrigerant
Gases, Lamp gas and other gas mixtures, Medical Oxygen, Nitrous Oxide, Entonox, medical equipment
and accessories, Welding Electrodes, gas and arc welding equipments and accessories, welding training
and services. Linde Bangladesh Limited is committed to quality of its product & services. The motto is to
ensure optimum conditions in health, safety and the environment for its employees, customers and
stakeholders.

Business strategy
Batch: 51E
Assignment 2: internal environment analysis
Roll :RQ 46
Jannat

Linde Bangladesh Limited,on 26th November 2015 announced an investment of BDT 1.2 billion (EUR
14.6 million) in Rupganj to build an air separation unit (ASU) producing approximately 100 tons per day
of liquefied gases, making it the largest liquid producing ASU in Bangladesh. Lindes new ASU, due to
come on stream by 2017, will provide liquefied gases supply and related solutions to Bangladeshs
growing healthcare, food and beverage, fabrication, pharmaceutical, shipbuilding and ship recycling
industries.
At present Linde Bangladesh has got three ASU plants with 80 TPD production capacities, two plants in
Chittagong and one plant in Rupganj. However these plants are very old and hardly produce 40 TPD. But
the market for industrial and medical gases is expanding day by day along with fast pacing
industrialization and development of healthcare sector of the country. The current market demand for
industrial and medical gases is almost 150TPD. Since Linde cant meet all customers demand, shortage
of product has invited several competitions in the market. Though Linde is the topmost player in the
market shortage of product has been turned into an unavoidable threat to its sustainability. Hence Lind
was trying to cover the shortage by importing liquefied gases from Linde India, which eventually affects
the bottom line of the market because of huge duty and trunking cost. Though this investment decision
was needed 10 years back, however Linde expects to strengthen to its position in the market and ensure
sustainability in the long run.
An internal analysis is comprised of looking at the following elements:

Organizations current vision

Mission

Strategic objectives

Strategies
Overall Linde describes its corporate vision like this We shall be recognized as the
leader in all the business sectors in which we compete in Bangladesh. Our success
will be built on our absolute dedication to the satisfaction of our customers, through
constant innovation, operational efficiency, cost effectiveness and the talents of our
people. We shall always apply high standards of safety, integrity and responsibility
in our activities.
Linde has got two major business segments: gases and hard goods. The gases division includes industrial
and medical gases. On the other hand hard goods division includes welding electrodes. Though
worldwide Linde is reputed for its gases business, in Bangladesh the 75% revenue is generated from its
hard goods segment. As mentioned in this report Linde has made a major strategic move by deciding on
investing BDT1.2 billion on a new ASU (air separation unit) plant installation to strengthen it gases
segment. In both business segments Linde is the market leader with more than 70% market share in the
both business categories.

Business strategy
Batch: 51E
Assignment 2: internal environment analysis
Roll :RQ 46
Jannat
Resources are the assets that an organization has for carrying out whatever work activities and processes
relative to its business definition, business mission, and goals and objectives. Organizational resources
must be processed or used in some way to get value out of them. The various resources are the inputs for
organizational capabilities. Organizational capabilities are the complex and coordinated network of
organizational routines and processes that determine how efficiently and effectively the organization
transforms its inputs (resources) into outputs (products and/or services).
Commonly, these resources are as follows:

Financial resources: Lind Bangladesh is a cash rich company. It has no short term or long term
loan or any. Moreover it is financing its new ASU project internally without any funding facilities
from any financial institutions.
Physical assets: Linde BD has got installations in 3 locations: Tejagaon, Rupganj and Chittagong.
All these properties plant equipment including the land in these locations are owned by Linde. It
has got a well-equipped distribution fleet to make the product available at the different sales point.
Human resources: Recently Linde BD has streamlined it human resource on the basis of expertise
and competency. So the current human resource is well prepared and competent enough to combat
the ensuing challenge in the market place.
Intangible resources: Linde is using ERP system SAP to standardize its day to day activities
across the world. It also enjoys the advantage of shared knowledge and expertise through its
centralized shared services in all its business functions.
Structural-cultural resources: this organization has developed a remarkable culture of safety in the
workplace. Since the gases the company is dealing with is hazardous, it puts utmost priority on the
the safety aspects of the employees and environment.

Now if we discuss the crucial question as mentioned earlier in this report, we can have the impressions as
following:

What is the core competency? Linde has got the state of the art ASU plants to produces different
types of industrial gases and medical gases with lowest possible cost with highest quality.
What is the distinctive competency? Ensuring the highest quality of the product as it can extract
the gases from the atmosphere in a liquid form. Since all the gases used for industrial and medical
purposes requires the highest level of purity, and Linde is the only player in the market who can
ensure it.
Is the resource valuable, rare, immitigable, substitutable and sustainable? The resource for which
Linde is having distinctive competency is in fact valuable and rare at this moment in the market
as this set up requires a huge investment with well established distribution channel and even some
infrastructural requirement in customers premises. However this is imitable with extensive
technological support and large scale investment. These features are not substitutable considering

Business strategy
Batch: 51E
Assignment 2: internal environment analysis
Roll :RQ 46
Jannat

the process and quality of the output. For these reasons the distinctive features of the assets are
sustainable.
Is the company ready to seize the opportunity? The current market demand for
industrial and medical gases is almost 150TPD.But Linde Bangladesh has got
three ASU plants with 80 TPD production capacities, two plants in Chittagong
and one plant in Rupganj. However these plants are very old and hardly
produce 40 TPD. But the market for industrial and medical gases is expanding
day by day along with fast pacing industrialization and development of
healthcare sector of the country. To meet this increasing demand Linde is
setting up a new ASU plant as discussed earlier. However this decision was
essential 10 years back considering the market growth rate.
Are the cost structure and value proposition competitive? Considering the current market scenario
and delivered value the cost structure and value proposition is more or less competitive. Linde is
the only company to deliver this high value and super quality product. However Linde is the
leader in terms of the pricing also. Linde sells its product for the highest price compared to its
competitors justified by the superior quality of the product.
Is the company comparatively stronger or weaker in comparison to its rivals? Linde BD is
comparatively far stronger than its rival. With the state of the art technological support from its
mother company Linde enjoys the advantage of maintaining the global standard in all of the
business process and operations.
What strategic issues are front burners for managerial decision making? At present Linde cant
meet the current market demand. It has to import Liquid gas from Linde India. So current
challenge it to retain the customers through this import process till the commissioning of the new
ASU plant. Linde has also taken intuitive to strengthen its distribution to make the product
available to the customers when they need it.

Sustainable competitive advantage is the prolonged maintenance of competitive advantage. Capabilities

that lead to a competitive advantage today may not continue to do so as market conditions and
competitors change. Dynamic (flexible) capabilities are an organizations ability to build, integrate, and
reconfigure capabilities to address rapidly environmental changes (shifts). In case of Linde Bangladesh
Limited, the company has been successfully enjoying its competitive advantage with its dynamic strategy
and continuous support from its parent company.