Solved Case Studies

Ahmed Foods Case Study | Solved in 2020

Ahmed Foods Case Study | Solved

Ahmed Foods Case Study

Brief History:

One of the pioneers of the food industry in Pakistan Ahmed foods started their business way back in the ’50s on a small scale. They were manufacturers of traditional sweets (Mithai). They owned a manufacturing unit in the SITE area – Karachi and initially, that was their selling outlet as well.

The owner Syed Zamiruddin Ahmed who hailed from Delhi realized there was a good market for traditional sweets provided it was packed and presented nicely. He took the initiative and Ahmed foods marketed tin packed Habshi Halwa, Sohan Halwa & Karachi Halwa along with other variety of traditional sub-continental sweets. The launching of tin packed sweets proved a great success and by the start of the ’60s, Ahmed foods had become a fairly renowned name throughout the country.

The only competitor they had in tin packed sweets was Fresh Well Sweets.
Encouraged by the initial success Ahmed foods decided to diversify the product range. They introduced Ahmed Jams, Jellies, Ketchup, Squashes & Achar. There were already two well-established companies (Shezan and Mitchells) who were manufacturing and marketing almost the same range of products.

The management of Ahmed foods emphasized quality and within a short span of time Ahmed foods had become a force to reckon with and they were giving a very tough time to Shezan and Mitchells. Ahmed foods further diversified their product range when they decided to compete with the best selling local brand in the red syrup category Roohafza by introducing Naurus. The marketing campaign of Naurus was really impressive especially the TV commercial with a catchy jingle (bhoolnajanaphir papa Naurus le kargharaana) which was very popular and on everyone’s lips. Naurus was making its presence felt in the market.

Ahmed Foods Case Study | Solved

By the end of the ’70s, Ahmed foods were not only confined within the local boundaries, they were into the Middle East as well as England. One of their major competitorsShezan were passing through a lean phase in the consumer market due to an issue pertaining to religion but their export & institutional business was good.

The emergence of National Foods – The year 1970 witnessed the emergence of National foods owned by Mr. Waqar Hassan, who happens to be a former test cricketer of Pakistan in its pioneering years. National foods started out very systematically and were destined to become market leaders in the future. However, Ahmed foods despite increasing competition were still a force to reckon with. Their exports as well as local businesses were thriving.

Ahmed Foods Case Study Answers 1
Ahmed Foods Case Study | Solved

Beginning of the Fall:

The slump in their business started when its founder Zamiruddin Ahmed passed away in 1988. He was the mastermind behind all their successes. He had controlled the organization in a very autocratic and centralized manner. He was one and the only authority.

From production and finance to selling and marketing his word was taken as law. Since Ahmed was a family concern his sons (Zafar and Zia) took charge of the organization. But they were far behind their father in business acumen and administrative skills. Zamiruddin Ahmed had resisted the pressure of the workers and never allowed a labor union in Ahmed foods. But his sons couldn’t stand the pressure of the workers and succumbed to their demands.

For the first time since its inception, a labor union was formed in Ahmed foods in the early ’90s. From that point onwards the management became weaker and employees gained power.

The Cold War & The Split:

To make the matters worse a cold war started between the two brothers. Both of whom wanted complete autonomy and dominance over the other. Due to internal rifts business began to shrink. Differences between the two brothers developed to an extent that ultimately they parted ways. Zafar took charge of Ahmed foods inclusive of full product range except for Naurus which was taken over by Zia.

Ahmed Foods today is a mere shadow of their glorious past. They have lost the footing and the image they had held over such a long period in the local market. Employees are unable to put in their best because of a lack of interest from the management. There are so many surplus employees unwilling and unable to work. Also, there is a lack of motivation among the workers since there is no visible career growth. The employee turnover ratio has become high and the highly skilled workers have left the organization and joined Shan, National, Shangrilla, and other companies.

Ahmed Foods Case Study | Solved

There are no proper marketing efforts and last but not least, Ahmed foods forget the basic principle that quality is the key to success. Quality, which was once their hallmark deteriorated, and owing to that they have lost their once solid footing in the local as well as an export market. All this has happened at a time when nearly all of their competitors are thriving not only locally but many of them have expanded their businesses globally.

Naurus Foods have fared better as compared to Ahmed. To begin with they had only one product (Naurus Red Syrup). When Naurus separated from Ahmed they only had Roohafza in competition. But in 1995 Qarshi launched their red syrup Jam-e-Shirin in the market with a bang. Jam-e-Shirin incurred heavily on promotion and their TV commercial was aired at a prime time slot of PTV 9 PM news daily as there were no private TV channels till than in Pakistan. The Jam-e-Shirin ad featured the most prominent celebrities of that era the legendary film star Nadeem & TV star Atiqa Odho, and their promotional efforts paid off. Since then Jam-e Shirin has captured a big slice of the market

Realizing it won’t be possible to survive in the market on the basis of just one product Naurus foods expanded their brand portfolio by introducing Jams, Jellies, Ketchup, Squashes & Achar, etc and have opened a fair price shop in SITE industrial area as well. The competition is quite intense but the management & staff of Naurus foods is determined to compete and excel. Quite recently Ahmed foods have made some efforts to make their presence felt in the supermarkets but how to regain lost glory remains an enigma for the management.

Ahmed Foods Case Study Solved
Ahmed Foods Case Study Solved

Ahmed Foods Case Study Solved

Question No. 1: If you are assigned with the responsibilities of CEO of Ahmed Foods highlight 3 steps that you would take to streamline the things. Support your answer with solid reasoning and arguments.

Answer: The successful era that Ahmed Foods has been into was the time when Zamiruddin was the CEO of the Ahmed Industries, taking guidance from his attitudes I would take these 3 steps as a CEO.

1. Centralizing the Authority: Things get really nasty when the workers got the authority of Ahmed Foods, the time when the top management loses full control over their workers. So my first priority will be to get the power back to top management so that they can make the decisions that are more growth-oriented for Ahmed Foods as well as for the workers.

The best way for this to narrow down the span of control so that every manager can easily handle the pressure of given workers, as well as only centralized decisions, will be implemented on the whole organization. Ahmed Foods is a daily consumed utility manufacturing organization that doesn’t require much creativity by its workers, so the centralization of the decision won’t make any impact on the outcomes of productions or the quality of the product.

2. Motivating the Workers: One of the main reasons for the downfall of Ahmed Foods was the demotivation of their workers which was resulting in an increasing turnover rate, the downfall of production and quality as well as the emergence of labor unions because of lower loyalty with the organization.

So being a CEO, my main concern would be to motivate the workers and for that Ahmed Food as a whole can offer better compensation plans to the workers which might degrade their turnover intentions, but compensation only can’t bring loyalty for the organization, so for that Ahmed Foods can offer better health facilities for the workers at the workplace additionally they can also provide medical benefits for the workers and their families, furthermore complaints department can be handy as well for the workers so that they can complain about any mistreatment at the workplace by the managers directly to the top management, it will make them feel that organization cares about them.

3. Emphasize on Quality Standards: Regain the quality levels that Ahmed Foods were famous for in the past will be another main priority for the CEO, due to high competition in the market a firm can either win through lower pricing or better quality, as Ahmed Foods aim is to grow big then emphasizing on the quality will be the key for that. So for achieving the quality standards, Ahmed Foods can perform some R&D on the general targeted audience to find what quality consumers are looking for, having this information can help Ahmed Foods to set the standards of quality for their products which will, later on, can be accomplished.

Ahmed Foods Case Study | Solved

Question No. 2: If Ahmed Foods and Naurus merge once again into a single unit would it enable them to regain their past glory? What are the merits and demerits of merging?

Answer: Every action has the possibility of both positive and negative outcomes, so does the case with Ahmed Foods, merging with Naurus can be beneficial for the firm in some aspects but at the same time can be bit hazardous in other aspects.

Merits:

  • Ahmed Foods will have better financial power to deal with better marketing campaigns to strive against competitors.
  • Merging of Ahmed Foods and Naurus will increase their market share which will create more revenue for the firm which can be utilized for the employee growth plans to motivate them as well as in the growth of the organization with the quality concerns.
  • The past culture can easily be indulging again in the organization if all brands come together because right now Ahmed Foods will definitely be suffering from the loss of Naurus Red Syrup.

Demerits:

  • Conflict of interest may arise again between the brothers regarding the power and authority of the organization, this conflict has already been arising in the past so the possibility of this happening again is much higher until resolved.
  • Production problems might arise as well because Ahmed Foods and Naurus are currently offering almost the same range of products so having that in place, the merging might get itchy on determining which product to go on with and what to drop.

Ahmed Foods Case Study | Solved

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Muhammad Abbas

A Graduate of IQRA University, Pursuing Masters Program from IQRA University as well, Work as an Assistant Manager - Finance in Unilever Pakistan, Having Couple of Published Articles in Internationally Recognized Journals, Aim to Help the Students in Every Possible Manner to make them Achieve their Desire Goals!!! :) :) :) Keep Learning!!!

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