Read the following case study carefully and give your analysis on the stated questions.

AHMED FOODS - A CASE OF STRATEGIC RESTRUCTURING

Brief history -

One of the pioneers of food industry in Pakistan Ahmed foods started their business way back in the 50's 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 60's Ahmed foods had become a fairly renowned name throughout the country. The only competitor they had in tin packed sweets was FRESHWELL SWEETS.

Encouraged by the initial success Ahmed foods decided to diversify the product range. They introduced Ahmed JAMS, JELLIES, KETCHUP, and 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 on 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 (bhoo lna jana phir papa Naurus le ka rghar aana) which was very popular and on every one's lips. Naurus was making its presence felt in the market.

By the end of the 70's Ahmed foods were not only confined within the local boundaries, they were into the Middle East as well as England. One of their major competitors Shezan 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 HASAN, 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 the market leaders in future. However Ahmed foods despite increasing competition were still a force to reckon with. Their exports as well as local businesses were thriving.

Beginning of the fall -

The slump in their business started when its founder Zamiruddin Ahmed passed away in 1988. He was the master mind 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 & 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 with 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 90's. 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 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 NAURUS which was taken over by Zia.

AHMED FOODS today are 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 lack of interest from the management. There are so many surplus employees unwilling and unable to work. Also there is 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. There are no proper marketing efforts and last but not the 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 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 QARHI 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 prime time slot of 9PM news daily at PTV (There were no private channels till then except STN). Their ad featured the most prominent celebrities of that era Pakistan's legendary film star NADEEM & TV star/model ATIQA ODHO. Their promotional efforts paid off. Since then Jam-e Shirin has captured a big slice of the market. They are a close runner up to ROOH AFZA a position previously held by NAURUS

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, KETCHUPS, ACHARS and SQUASHES 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.

QUESTIONS FROM CASE STUDY -

A- If you are assigned with the responsibility of Ahmed foods CEO, recommend at least 3 strategic steps that you would take in order to restructure and streamline the things? Justify your decision making with solid reasoning and arguments.

B- Critically evaluate the possibility that ifAhmed & Naurus merge once again into a single unit, will it allow them to regain their past glory? Critically assess the advantages that can be gained from merging and what problems are likely to emerge?

C- Evaluate the possibility of finding a vacant niche in the market that would help Ahmed Foods to survive in the market?