Operational Strategy Analysis and Improvement for Ceylon Cold Stores

This report analyzes the operational strategy of Ceylon Cold Stores (Elephant House), a consumer products company in Sri Lanka. The report aims to identify three major operational areas that do not align with the company's strategy. It examines the company's vision, mission, market, value streams, corporate and business strategies, and current operational strategies, including capacity, supply chain, and quality management. The analysis reveals critical areas for improvement, such as capacity constraints limiting product accessibility, dependence on suppliers, and the need for updated process technology to stay competitive with global brands like Pepsi and Coca-Cola. The report then proposes a new operational strategy, considering cost, quality, time, and flexibility, to enhance brand loyalty, streamline supply chain management, and leverage efficient technologies. The report also provides a detailed stakeholder engagement process and competitive priorities. The conclusion provides recommendations for improving the overall operational efficiency of Ceylon Cold Stores.

Running head: MANAGING OPERATIONAL IMPROVEMENT
Managing operational improvement
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Abstract:
The aim or purpose of the report is to analyze the operational strategy of Ceylon Cold
Stores and to identify three major operational areas that do not align with the operational strategy
of Ceylon Cold Stores.
The company has attempted to make its products accessible in all the districts of Sri
Lanka but the capacity of the company does not align appropriately with the organizational
strategy of the company as there are several areas in Sri Lanka, which do not have access to the
products of the company. The company is highly dependent upon its suppliers due to the
convenience, quality and cost advantage. Any issues with the suppliers can have a severely
adverse impact upon the production process of the company. The supply chain management of
the company does not align appropriately with the organizational strategy of the company. The
process technology used by the company does not align appropriately with the organizational
strategy of the company and must be updated in order to remain ahead of the competitors.
Further the report includes the new proposed operational strategy for Ceylon Cold Stores
keeping into consideration the cost, quality, time and flexibility of the organizational activities.
The Company is currently facing tough competition from the rival organizations such as Pepsi
and Coca- Cola, which are globally known brand. Therefore, it is required to improve the
operational strategies in order to remain ahead of the competitors.
The company must aim at maintaining and increasing the brand loyalty. The company
must establish a more efficient supply chain management system in order to reduce the idle time
and wastages occurring in the entire process from procurement of raw materials to distribution of

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the products in the market. The company must also ensure use of latest and efficient technologies
in order to remain ahead of the competitors.

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Table of Contents
1. Introduction:.............................................................................................................................5
a. Aim:......................................................................................................................................5
b. Organization:........................................................................................................................5
c. Steps:.....................................................................................................................................5
2. Current strategy:.......................................................................................................................6
a. Vision, mission and value:....................................................................................................6
b. Market, value streams:..........................................................................................................6
c. Corporate and business strategies:........................................................................................7
d. Current operational strategies:............................................................................................10
e. Existing performance measures:.........................................................................................13
3. Evaluation of the current strategy:.........................................................................................15
a. Current operational strategy:..............................................................................................15
b. Current capacity strategy:...................................................................................................15
c. Supply chain strategy:.........................................................................................................16
d. Current quality management strategy:................................................................................17
e. Evaluation of alignment of the strategies with operational efficiency:..............................18
4. Key operational areas:............................................................................................................18
a. Capacity..............................................................................................................................18
b. Supply network...................................................................................................................19

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c. Process technology.............................................................................................................19
d. Organization and development...........................................................................................20
5. Proposed strategy:..................................................................................................................20
a. Cost.....................................................................................................................................20
b. Quality................................................................................................................................21
c. Time....................................................................................................................................21
d. Flexibility............................................................................................................................21
6. Conclusion and recommendation:..........................................................................................22
References......................................................................................................................................24

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1. Introduction:
a. Aim:
The aim or purpose of the report is to analyze the operational strategy of Ceylon Cold Stores
and to identify three major operational areas that do not align with the operational strategy of
Ceylon Cold Stores.
b. Organization:
Ceylon Cold Stores is a public limited company in Sri Lanka, which was established in the
year 1866 as a consumer products company (Elephanthouse.lk, 2017). Ceylon Cold Stores is
traded as Elephant House in Sri Lanka and it produces carbonated drinks, processed meat
products and ice- creams. The company has continuously evolved its products and processes
over a period of 150 years. Despite facing strong competitions, Elephant Soft Drinks has been a
market leader in Sri Lanka. This is so because the company has been constantly engrossed in the
process of innovation. The report shall analyze the operational strategy of Ceylon Cold Stores.
c. Steps:
The report shall identify three major operational areas that do not align with the operational
strategy of Ceylon Cold Stores. Further the report shall include the new proposed operational
strategy for Ceylon Cold Stores keeping into consideration the cost, quality, time and flexibility
of the organizational activities.

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2. Current strategy:
a. Vision, mission and value:
The vision of the company is to “deliver pleasure and nutrition throughout people’s lives,
through exciting and superior products, whenever and wherever they choose to eat and drink”.
The company aims at achieving greater business in order to benefit both the organization and the
stakeholders. The company aims at maximizing its potential.
b. Market, value streams:
The major strengths of the company lies in its diversified product portfolio, extensive market
reach and ability to respond to emerging customer needs. These strengths have allowed the
company’s brand to develop into much-loved and preferred household names (Hettiarachchi and
Illeperuma 2015).

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Figure 1: Current strategy of Ceylon Cold Stores
(Source: Elephanthouse.lk, 2017)
c. Corporate and business strategies:
The following are the current operational strategies of Ceylon Cold Stores:
 Corporate strategy: Corporate strategy refers to the viewing the organization as a
combination of interconnected parts. It is necessary for the organizations to ensure that
the core strategies of the company support its corporate strategy. The value creation
model of the company ensures stakeholder engagement and sustainable development of
the organization. The profits generated by the company are converted into dividends,
which in turn increases the share prices. The company emphasizes upon stakeholder
engagement in order to identify the issues that are important for the stakeholders. The
company aims at integrating sustainability in its routine activities or daily business
operations (Herath 2017). The company engages those stakeholders, who are largely
affected by the business operations of the organization. The company nurtures its
relationship with the stakeholders and understands the rights and expectations of the
stakeholders in order to ensure alignment of the operational strategies of the organization
with its strategic agendas. The company also emphasizes upon the employee value
proposition wherein, it engages, develops and rewards the employees. The organization
comprises of more than 4000 employees, who strive to improve the customer experience.
Therefore, the organization provides proper opportunities to the employees to develop in
a dynamic work environment. The company uplifts the communities through as a part of
their corporate social responsibility wherein, the organization creates job opportunities
for the local communities and minimizes the environmental impacts of its activities. The
following is the stakeholder engagement process of Ceylon Cold Stores:

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Identification of stakeholder groups
Prioritizing stakeholders and determining the
methods of engaging the stakeholders
Conducting engagement
Evaluation of findings
Formulation of policies and action plans that
address the issues
Figure 2: Stakeholder engagement process of Ceylon Cold Stores
(Source: Elephanthouse.lk, 2017)
The major shareholders of Ceylon Cold Stores are Keels Holding PLC and JKH
Group of companies. The organization strives to provide timely, appropriate and
complete information to the shareholders in order to ensure effective decision- making
process. The engagement methods of Ceylon Cold Stores involves conducting annual
general meeting, issuing interim financial statements, updating the corporate website
regularly, press releases and one- to- one engagement whenever necessary. The company
has more than 2200 suppliers and the company focuses upon establishing mutual
beneficial relationships with them (Elephanthouse.lk, 2017). This is done by initiating
programs and encouraging them. The company engages in a constructive communication
with the regulators and the government in order to ensure a proper environment. The

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company has also ensured a cordial relationship with the communities through
community engagement initiatives, public events and social media interactions.
 Customer driven strategy: Ceylon Cold Stores identifies the changes in the needs and
preferences of the customers and responds to these changes. The company also identifies
the changes in the industry and market trends, which enables it to satisfy the needs of the
customers appropriately. The company is involved in coming up with innovative products
in order to delight the customers and providing them pleasure. The supermarket chain of
the organization aims at delivering exemplary quality and convenience to the customers.
The company has more than 164 distributors and more than 110,000 retailers in Sri
Lanka, who ensure that the products of the company are easily available to the customers.
The company has developed partnership with the distributors and retailers in order to
enhance their relationships with them. The company has ensured that the products of the
organization are available in all the districts of Sri Lanka (Anojan 2014). The retail
outlets of the organization ensure that the products are easily available to the customers.
The company also strives to offer innovative product range to the customers along with
superior services and convenience to the customers. The retailer and distributor
engagement methods involve appropriate distributor management system, distributor
conventions, audit and site visits, trade monitoring surveys and sales team engagement.
On the other hand, the customer engagement methods involve conducting customer
satisfaction surveys, one- to- one engagement, customer hotline, website, social media
interactions and marketing communications.

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d. Current operational strategies:
 Developing core competencies: The company aims at delivering nutrition and pleasure
to the people by providing them easily available good quality food and beverages. The
company aims at enhancing the quality of life of the population of Sri Lanka by offering
them good quality products at affordable prices. The integrated strategy of the
organization is designed in a manner that it helps the organization is achieving
sustainable development. The company integrates the stakeholder management process
and the value creation model in order to take advantage of the market opportunities and
minimizing the risks involved. The organization is based upon five pillars of strategic
agenda, which enables the organization to satisfy the needs of the various stakeholders.
The five pillars involve sustainable growth, fulfilling the customer promises, empowering
the team, development of supply chain and community and preserving the nature. The
company achieves sustainable growth through market leadership, market reach and
financial performance (Frasch 2014). The company takes into consideration the health
and safety of the customers, experience of the customers, innovation and responsible
labeling while fulfilling the customer promise. In order to create a empowered team, the
organization attracts the right talent, develops them through training, considers the health
and safety of the employees and emphasizes upon maintaining employee relationships.
The organization helps the distributors and suppliers to build their capacity and
scalability and involves them in the community engagement in order to develop the
supply chain and the community. The organization lays proper emphasis upon the
management of the inputs and outputs, environmental compliance and engages the

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customers in the process of environmental preservation in order to preserve the nature
and the planet.
 Competitive priorities: The organization identifies the changes in the needs and
preferences of the customers and takes appropriate actions so as to continue satisfying the
needs and wants of the customers. The company also keeps a continuous check on the
changes in the market conditions so as to remain ahead of the competitors. The changes
in the market trends and customer preferences help the company in determining their
strategies and delivering sustainable solutions to the customers. There has been a drastic
change in the customer’s tastes and preferences with the popularity of health and
wellness trends (Niroshan 2016). The people have become more health conscious and
prefer consuming healthy foods and drinks. The customers prefer food and beverages
with low amount of calories in them. The governments have also begun to initiate several
health and nutritional programs in order to make the people aware about the healthy and
unhealthy food and beverages and the outcomes of consuming them. The Government of
Sri Lanka aims at developing a healthier country in order to help the citizens reduce their
expenditures on health care services. The company faces competition from several
globally known brands such as Pepsi and Coca- cola. Therefore, the company keeps itself
engaged in intensive market research in order to identify the changes in the market trends
and the changes in the products and services offered by the competitors. In order to
satisfy the demands of the customers and to remain ahead of the customers, the company
has come up with several innovative products such as non- carbonated drinks and sugar-
free beverages. The company has also diversified its product range and has come up with
healthier alternatives (Piyarathna 2016). The new product line involves fruit juice range,