JMD OILS: DECIDING ON A GROWTH

STRATEGY

Question 1. Use SWOT analysis

Answer –
Strength
1. Top line CAGR of 17% and bottom line CAGR of
12% in last three years (Exhibit 1)
2. Cost advantage in production and supply chain in
exiting market
3. Huge client base which includes institutional
consumers, modern trade organizations, 325000
retail outlets, 3000 distributors
4. Increase in health consciousness among Indians
5. Target market urban consumers (25-44 years old
educated, married woman), aspiring middle class
6. Main advantage of the JMD is that it is having its
own transportation named Delhi Super Road Ways.
And also there are many transportation or logistics
companies which are provided their better services
to their customer in the suitable rate/price.
7. JMD paid very low taxes to the government because
JMD is located in underdeveloped area (KUTCH)
which is charged by very low tax rate compare to
developed area.
 8. JMD OIL has great waste management so the waste
of the oil is useful for other purpose and also they
have another market to sell their wastage.
9. Outsourcing production which reduce their overall
cost
10. Strong distribution network
11. Lesser risk of loss in expanding territories to
East and South India

Weakness
1. Limited company resources
2. Volatile nature of edible oil market
3. Logistics cost is major component of the pricing of
the edible oils
4. Increase in cost of production while getting raw
materials by contract
5. Agent cost (Rs 400 per metric tonne)
6. Weak brand recognition
7. JMD OIL has large market in the northern regions
but in the domestic market and other state has not
much demand
8. JMD OIL has large market in the northern regions
but in the domestic market and other state has not
much demand
Opportunities
1. India is second number in the population behind the
china. By seeing the increase in total demand of
edible oil in India and total imports. It is a great
opportunity for the company to fulfil the demand of
the country by increasing its production. If the
capacity will be increased, it will fulfil the demand.
2. Company have well established brand in the north
region so with the help of this company can
increased demand by covering nearest city and state.
3. Company has great experience in the field of the oil
industry so company have benefit to go another
similar industry
4. JMD OILS has wide area so company have option
to start new line of product or make a one plant for
the other row material that are needed for the
existing product

Threats
1. Oil industries is growing very fast due to increasing
in the population so many companies will try to
enter in this field. So it is very difficult to sustain and
retain of new customers.
2. Import of raw material from the different country. If
our government policy and regulation change it will
create some difficulty for the company.
 3. Customer is a king of the market and they have
option to buy the product but many companies just
because of the advertisement change the customer
decision.

Question 2. Suggest which of the generic strategies

should Dhingra should follow and why?
Answer –
 Strategy is a coordinated and integrated set of
commitments and actions designed to exploit core
competencies and gain a competitive advantage.
 Firms basically use two type of strategies to help
them form their vision and mission.
 The firms should choose I/O model as the external
environment has more influence on the choice of
strategies than internal environments. The above
average return is earned when firm locates an
attractive industry.

The firm should use their unique resources,

capabilities and core competencies as the foundation
for one or more strategies that will allow them to
compete in industries they understand.
The components of I/O model
1. Study the external environment, especially the
industry environment
2. Locate the industry with high potential for above
average returns
3. Identify the strategies called for by the attractive
industry to earn above average industry.
4. Develop assets and skills needed to implement the
strategy
5. Use the firm’s strength or acquired assets and skills
to implement the strategy.

Conclusion
JMD OILS PVT.LTD has great market demand in the
northern region and now they should start promotional
activities in the domestic market and other cities.
Logistics are strength of the company because the very
good staff and location. Here the staff cooperation at all
the level is high. They should follow the best way to
control the cost as well as making its customers satisfy.