Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
TEXTILE CAPACITY
Production process consists of spinning, weaving, processing, and finishing. The processing includes
dyeing, engraving. The textile capacity of the group is the largest in the country. An addition of 20000
new spindles, 100 new air jets looms and new dyeing plant has increased the existing capacity of 24000
spindles, 740 looms and dyeing and finishing capacity of 5 million meters. The group is the largest
exporter of textile products from Pakistan for more than a decade.
COMPANY INFORMATION
BOARD OF DIRECTORS:
MILLS:
Nishatabad, Faisalabad (Spinning units and Power Plant)
12 K.M. Faisalabad Road, (Weaving units & Power Plant)
Sheikhupura. 21 K.M. Ferozepur Road, Lahore. (Stitching unit)
5 K.M. Nishat Avenue (Weaving, Dyeing & Finishing unit,
Off 22 K.M. Ferozepur Road, Lahore. Processing unit, Stitching unit and
Power Plant)
20 K.M. Sheikhupura Faisalabad (Spinning unit)
Road, Feroze Watwan
PLANT LOCATION
Plant location is one of the main long-term strategic decisions normally taken by top management. Nishat
mills limited is ideally located in, Niashatabad Faisalabad.
Main factory is located at Niashatabad. It is a composite unit. Composite unit means all the process i.e.
from spinning to stitching takes place under one roof. Product process includes spinning, weaving,
processing, finishing and stitching units.
MISSION STATEMENT
To provide quality products to customers and explore new markets to promote/expand sales of the
Company through good governance and foster a sound and dynamic team, so as to achieve optimum
prices of products of the Company for sustainable and equitable growth and prosperity of the Company.
No
No
No
No
No
No
Yes
Yes
Yes
INPUT STAGE
WEIGHT
RATING
WEIGHTED
SCORE
OPPORTUNITIES
1) Organization can expand Product
0.10
0.3
line
2) Cost reduction by modern
0.06
0.24
0.09
0.27
0.08
0.16
0.09
0.27
0.08
0.07
4
4
0.32
0.28
0.08
0.05
3
2
0.24
0.1
0.04
0.05
0.06
0.07
0.08
1
2
3
4
3
4
0.08
0.15
0.24
0.21
0.32
3.18
Technology.
3) Capture new market segments
around the world.
4) Hire more well-educated and
experienced persons.
5) Organization can reduce the Cost by
THREATS
1) Export of raw cotton.
2) Exchange Rate Fluctuations.
3) Political instability.
4)
5)
6)
7)
Opportunities:
Product Expansion: Currently the Nishat is not dealing in knitwear they can expand
their product line by producing knitwear. They have plants and the extra cost for the
production will be low for Nishat. And they also have better market repute.
Cost Reduction: If the cost of different matters which is not utilizing properly is
controlled by the Nishat management they can produce more in a few costs. It has to
the company and any uncertainty in the world like 9/11 may affect also the overall export.
Energy Crisis: energy crisis prevailing in the last five years is also creating a pathetic
situation even for the big giant like Nishat to survive.
WEIGHT
RATING
WEIGHTED
SCORE
STRENGTHS
1) Latest mechanized machinery.
2) Adequate financial resources.
3) Competitive advantage.
4 Equipped with MIS system
0.08
0.09
0.10
3
4
4
0.24
0.36
0.4
0.07
0.21
0.08
0.06
0.08
4
4
3
0.32
0.24
0.24
0.06
0.07
4
2
0.24
0.14
0.08
0.09
0.04
0.06
0.04
1
3
3
2
3
4
0.24
0.27
0.08
0.18
0.16
3.32
WEAKNESS
1) Centralized Decision making.
2) Weak image in International
market.
3) Lack of benefits & reward to
4)
5)
6)
7)
employees.
High employee turnover.
High production cost.
Small international market share
Less promotional activities.
Total
INTERPRETATIONS:
Strengths:
ISO Certification: Nishat textile is certified under ISO9001-2000 and so it meets the
requirement of international standard and has a value in the mind of concern people.
THREATS:
Centralized Decision Making: The decisions are made by the upper management which
is weakness of the Nishat because they have no proper idea about the situation and their
Weak Reward system: Some facilities that other providing to their employees like
Transport and medical fee etc. Nishat not providing to their employees because of which
the productivity of the employees decrease.
Nishat
Textiles
Kohinoor
Textile Mill
Weight
Rating
Scores
Rating
Scores
0.30
0.9
1.2
Global Expansion
0.05
0.15
0.2
Market Share
0.05
0.10
0.15
Pricing
0.10
0.4
0.3
Conformance to
standard
0.30
1.2
0.9
0.10
0.30
0.2
0.05
0.20
0.15
0.05
0.15
0.2
Customer
Satisfaction
Promotional
Activities
Persuasion
Organizational
involvement of
employees
Total
1.00
3.4
3.3
EVALUATION
As we know that competitive profile matrix identifies firms major competitors and its
particular strengths and weaknesses in relation to a sample firms strategic position.
Comparisons been made on the basis of the strengths and weaknesses encountered by
careful in depth analysis of competing firms. We have grouped the strengths and weaknesses
of existing firm Nishat mills in order to compare the ratings and weighted scores with its
rivalry potential firm Kohinoor textile mills. This comparative analysis provides important
of 3.
Overall Nishat is strongest as indicated by the total weighted score of 3.4
MATCHING STAGE
OPPURTUNITIES____O
Organization
can
expand its product
line
Cost reduction
Cotton cloth export
also export also
increased to $1.13
billion during this
period as compared
to $1.03 billion in
2000-01. The future
in the UAE markets
appears promising
Capture new market
segments
around
the world
Local
market
development
Organization
can
hire
more
experienced
trainers and skillful
employees
Government could
Latest mechanized
machinery
adequate financial
resources
Competitive
advantage
own power
generation plant
ISO 900 and IKO
certified
Biggest composite
unit
Equipped with MIS
system
SO STRATEGIES
Technical filtration with the
help of Nishat's mechanized
machinery can help the
company achieve expansion
i-e through expanding its
current product line.
(S1, O1)
Nishat can gain competitive
edge through cost cutting by
the proper utilization of
financial resources.
(S2,O2)
Using the company's
competitive advantage over
other firms Nishat can focus
on local market development
as well as capture new
market segments around the
world. (S3,O5,O4)
WEAKNESS____W
Centralized decision
making
Weak image in
international market
Lack of benefits and
rewards to
employees
High employee
turnover
Small international
market share
Less promotional
activities
High production
cost
WO STRATEGIES
Competitively capturing new
market segments will result
in strong market image
internationally
(W2,O4)
Organization can reduce
operating cost by considering
employees suggestions and
providing both financial and
non-financial benefits hence
boosting up the morale
which in turn increase
employees motivation
(W3,O2)
apply
sustainable
policies
for
the
interest of exporters
and investors
THREATS___T
Buyers need change
Political instability
Global economic instability
Export of raw cotton
Energy crises
Entry of new competitors
Exchange rate fluctuation
ST STRATEGIES
By capitalizing on the
latest mechanized
machinery Nishat can
effectively meet the
changing needs of its
buyers
(S1,T1)
Keeping in mind Nishats
competitive advantage and
reputation in the textile
industry new entrants
would find it a big risk and
will be hesitant before
entering the industry so
sustainable competitive
advantage would be best
policy here
(S3,T6)
Keeping in view the energy
crises Nishat set up an
independent power plant
which allows automation
and uptime flexible
production of products
(S4,T5)
Nishat is a trendsetter with
adequate financial
resources which facilitates
it to introduce innovative
strategies that can meet the
changing demands of the
customers
(S2,T1)
WT STRATEGIES
By focusing on strong brand
endorsement by international
and national models to gain
customer loyalty in order to
minimize the risk of new
entrants
(W6,T6)
Government should develop
conducive policies and
appropriate measures should
be taken such as TQM
programmers and, to ensure
that standardized products
are being produced
(W2,T2)
Employees should be
appreciated by the
organization and supervisors.
Employee recognition
programs should be
introduced in the
organization. Such plans can
motivate employees not to
just work for the sake of
money but also for their
learning experience.So the
employees will be
encouraged to work which in
turn decrease turnover rate.
(W4, T3)
Return on Investment.
Liquidity.
Leverage.
Working capital.
Resources utilization.
Growth potential.
Financial stability.
Profit potential.
3
4
4
2
13
4
3
4
5
16
Product quality.
Market share.
Technological knowhow.
Product lifecycle.
-3
-1
-4
-4
-12
CONCLUSIONS
SP average is
-10/4 = -2.5
IP average is
+16/4 = 4
CP average is
-12/4 = -3
FP average is
+13/4 = 3.25
Directional Vector Coordinates:
x-axis: -3 + (+4) = 1
y-axis: -2.5 + (+3.25) = 0.75
CONSERVATIVE
Market penetration
Product development
Market development
Related diversification
-6 -5
DEFENSIVE
Retrenchment
Divestiture
Liquidation
-4
-3
-2
AGGRESSIVE
5
Backward, forward, horizontal integration
4
Market penetration
3
Market development
2Product development
1
Diversification (related or unrelated)
0
-1
0
1 2
3
4
5
6
-1
-2
COMPETITIVE
-3
Backward, forward, horizontal integration
-4
Market penetration
-5
Market development
-6
Product development
This graph shows that Nishat textile is in the third quadrant which is aggressive strategy
quadrant.
AGGRESSIVE STRATEGY
Nishat textile directional vector is located in the aggressive quadrant (upper-right quadrant) of
the SPACE matrix, Nishat is in an excellent position to use its internal strengths to
(1) Take advantage of external opportunities,
(2) Overcome internal weaknesses, and
(3) Avoid external threats.
Therefore, market penetration, market development, product development, backward integration,
forward integration, horizontal integration, or diversification can be feasible.
No of
division
Description
Revenues
%Revenues
Profits
%pr
ofits
Marke
t share
Relative
market
share
Growth
rate
Nishat
textile
Rs.48565
62.2
4844
43%
80.2
0.8%
53.99%
DGKCC
Rs.18577
23.8
171
1.5%
40.3
0.4%
14%
Power
plant
Rs.10902
13.9
6295
56.4
5
70.1
0.7%
-88%
Rs.78,044
100
Rs.11156
100
Total
Market Share
High
Low
Stars
Question Mark
Cash Cow
Dogs
High
Industrial
Growth
Low
INTERPRETATIONS:
Nishat Textiles is a composite textile unit of Nishat Group. Total number of players in the
industry is 60, and Nishat Textiles is the market leader. It captures 12% market share as a whole.
In 2011, the industrial overall growth rate is 11%, but that of Nishat Textiles is 24% as compare
to the sales of 2008.
Source: KSE (Karachi stock exchange) data for 2011, and 2012.
The industrial growth is high and Nishat Textiles has high market growth as well. So, it lies in
the first quadrant (Stars) of the BCG matrix. It implies that, company has the opportunity to go
for Market penetration to capture more shares in the existing market by using new technology,
and increasing promotional activities. It also has a tremendous option of local market
development.
Other feasible strategies may be the backward integration to secure the supplies in order to tackle
with the threat of exporting of local raw material to foreign markets. Also Nishat Textiles goes
for forward integration to minimize its weakness of transit time of goods and services to its
customers.
High
EF3.0-4.0
GHIJMedium
EFE
TOTAL
2.0-2.99
SCORE
Strong 3.0-4.0
II
III
IV
Grow and Build
V
Hold and Maintain
VI
Harvest
VII
VIII
IX
Harvest
Divest
KLMNOPQRSTULow
V-
1.0-1.99
INTERPRETATIONS:
IFE Total Score (As per IFE Matrix) = 3.18
EFE Total Score (As per EFE Matrix) = 3.32
WAs per IE Matrix, Nishat Textiles lies in first cell, which implies that it should go for aggressive
strategies that are grow and build strategies. The possible strategies for Nishat Textiles may be
the integrations, intensive, and diversifications.
Nishat Textiles has the opportunity to go for intensive strategies to capture more shares in the
existing market by market penetration, market development and product development.
Other feasible strategies may be the backward integration to secure the supplies in order to tackle
with the threat of exporting of local raw material to foreign markets. Also Nishat Textiles goes
for forward integration to minimize its weakness of transit time of goods and services to its
customers.
Weak
Competitive
Advantage
Quadrant III
Quadrant I
Quadrant IV
Strong
Competitive
Advantege
INTERPRETATIONS:
Total number of players in the industry is 60, and Nishat Textiles is the market leader. It captures
12% market share as a whole. In 2011, the industrial overall growth rate is 9%, but that of Nishat
Textiles is 24% as compare to the sales of 2008.NML got the edge of having their own power
plant due to that they are not suffering from industrial power crisis. And sustaining their position
in Market.
As the market growth is high, and Nishat Textiles has strong comparative position in the market.
So, it lies in the first quadrant of Grand strategy matrix, which implies that it should go for
aggressive strategies. The possible strategies for Nishat Textiles may be Market Development,
Market Penetration, Backward and Forward Integrations. And Nishat is also implementing these
strategies by developing their market in a combination with forward integrations by opening
their retail stores named Nishat Linen. They are also going in cotton production which is also a
competitive edge as they are controlling the whole supply chain. And implying with quality
sustainability to cope up with ISO standards.
DECESION STAGE
Capturi
ng new
market
segme
nts
around
the
world
Develop
a shoe
line for
women
Key factors
OPPORTUNITIES
1) Organization can expand Product line
2) Cost reduction by modern Technology
3) Capture new market segments around the
world
4) Hire more well-educated and experienced
persons:
5) Organization can reduce the Cost by
proper utilization of Resources:
6) Local market development:
7) People spend on quality fabric
THREATS
1) Export of raw cotton.
2) Exchange Rate Fluctuations
3) Political instability
4) Globally economic instability
5) Energy crises
6) New entry of competitors
7) Buyer needs changes
TOTAL
STRENGTHS
Weight
AS
TAS
AS
TAS
0.10
0.06
0.09
4
1
0.4
1
4
0.10
0.08
0.09
0.08
0.07
3
1
0.08
0.05
0.04
0.05
0.06
0.07
0.08
2
2
3
1.00
0.09
0.24
0.07
2
3
0.08
0.1
2
2
2
0.24
0.36
0.16
0.21
0.08
0.1
0.16
1)
2)
3)
4)
5)
6)
7)
WEAKNESSES
1) Centralized Decision making
2) Weak image in International market
3) Lack of benefits & reward to employees
4) High employee turnover
5) High production cost
6) Small international market share
7) Less promotional activities
TOTAL
Sum Total Attractive Score
0.08
0.09
0.10
0.07
0.08
0.06
0.08
2
4
3
-
0.06
0.07
0.08
0.09
0.04
0.06
0.04
1.00
1
3
1
-
0.16
0.36
0.3
0.07
0.12
0.06
2.29
2
4
3
4
3
4
-
0.16
0.36
0.3
0.28
0.12
0.24
2.63
INTERPRETATION:
The two strategies that are considered by Nishat are achieving expansion through expanding
product line and Capturing new market segments around the world. According to Sum of Total
Attractive Score the company should go for capturing new market segment around the world as
its STAS is 2.63.
The attractive score are given on the basis of how much these factors affect the strategy. the more
they effect the higher the score is given. the highest score given is 4 mean the factor is highly
attractive to the strategy.
Nishat can expand product line by developing a shoe line for women so it is highly effective
strategy so it has been given a score of 4. But by entering into international market Nishat is not
expanding the product line so a score of 1 is given. By entering into international market Nishat
will be able to capture international market therefore has been given a score of 4.
The strengths and threats almost effect both the strategy equally as both requires financial
resources and machinery to be implemented. These both strategies if successfully implemented
can lead to competitive advantage but of course only these two strategies cannot gain
competitive advantage but they can help in gaining competitive advantage that is why they have
been given the score of 3. Financial resources is needed to develop new product line and is also
needed to enter into international market that is why it has been given a score of 4. Threats of
political instability, global economic instability somewhat effect the both strategy equally and
buyers need change effect the strategy of developing a new product line so has been given a
score of 3.
Weak image in international market and small international market share are affected by the
strategy of entering into international market that is why they have been given a score of 4 and
4.The strategy of entering into international market is a attractive strategy for Nishat to pursue.