Pak Elektron Limited.

Group Members
Strategic Management Umer Shahzad 17
Muhammad Usman 20
Hafiz Farhan Saleem 28
Umer Farooq 45
Sajjad Zafar Pirzada 52
Muhammad Umar Farooqi 145
 Introduction
By Muhammad Usman Roll # 20
PEL is a flag bearer of Saigol Group

SECTORS COMPANY TURNOVER EMPLOYEES

MUSD (Nos.)

Kohinoor Industries 1,678

TEXTILES Azam Textile Mills 31 500
Saritow Spinning 569

Pak Elektron
ENGINEERING 232 7,036
Ltd.

Kohinoor Power 98
FUEL & ENERGY Kohinoor Energy
86
137

TOTAL 349 10,018

 PEL
Introduction

• Pioneer manufacturer of electrical goods in Pakistan

• One of the oldest and amongst the leading Home Appliances
Manufacturer and Distributor in Pakistan.
• The company has an annual turn over of Rs 20.3 billion.
• It was established in 1956 in technical collaboration with M/s AEG of
• Germany.
• In October 1978, the company was taken over by Saigol Group of
• Companies.
• Since its inception, the company has always been contributing
towards the advancement and development of the engineering
sector in Pakistan.

Pak Elektron Limited.

Historical Overview

Pak Elektron Limited.

 COMPANY
OPERATIONS

Company’s operations are divided into two divisions:

1) Power Division 2) Appliances Division

Pak Elektron Limited.

PEL Product Line

Pak Elektron Limited.

 PEL Product Line

DISTRIBUTION TRANSFORMER

DRY TYPE TRANSFORMER

POWER TRANSFORMER

SWITCHGEAR

EPC CONTRACTING
PMT TRANSFORMER

Pak Elektron Limited.

CERTIFICATION

Source: www.pel.com.pk

Pak Elektron Limited.

 Sales & Marketing

PEL HEIRARCHI Power Division Manufacturing

EPC Contracting

Sales & Marketing

Appliances
Director Division
Operations
Manufacturing
Chairman
Managing
Director Finance /
Accounts
Finance
Supply
Management
QA&QC

HRD / IR&A

Internal Audit

Pak Elektron Limited.

Management Level s
at PEL

Pak Elektron Limited.

 MISSION
VISION

VISION

“To excel in providing engineering goods and services through continuous

improvement.”

MISSION STATEMENT

To provide quality products & services to the complete satisfaction of our

customers and maximize returns for all stakeholders through optimal use of
resources.
To focus on personal development of our Human Resource to meet future
challenges.
To promote good governance, corporate values and a safe working environment
with a strong sense of social responsibility

Pak Elektron Limited.

 Mission Statement Analysis

Mission Components Included Not included Description

Customers ● Customers

Products and Services ● To provide quality products

Markets ●

Technology ● use of resources

Concern for Survival Growth and Profits ● maximize returns for all stakeholders

Philosophy ● Quality , customer care, good

governance, corporate values
Self-Concept ● complete satisfaction of our customers

Concern for Public Image ● strong sense of social responsibility

Concern for Employees ● safe working environment with -

Pak Elektron Limited.

 Mission Statement Evaluation

Key Variables Case Facts Evaluation

quality products & services,
Broad in Scope complete satisfaction of our Acceptable
customers

Length (Less than 250 words) - Acceptable

Inspiring - -

Identify the utility of the firm’s products - Mentioned

strong sense of social

Reveal that the firm is socially responsible Mentioned
responsibility

Reveal that the firm is environmentally responsible safe working environment Mentioned

Include Nine Component 9 out of 9 Acceptable

Reconciliatory - Unspecified

Enduring - Unspecified

Pak Elektron Limited.

 PEL Major Customers

Utility: WAPDA, PEPCO, KESC & AJK-ED.

TRANSCO: NTDC.

DISCOs:
TESCO, PESCO, IESCO, LESCO, FESCO
, GEPCO, MEPCO, SEPCO, HESCO &
QESCO.

GENCOs.

IPPs & RPPs.

Private customers.

Pak Elektron Limited.

External Factors By Umar Farooq

Pak Elektron Limited.

 External Forces

• Economic Forces:
– Devaluation of Currency
– Interest Rate
– Uncertain Economic Situation
– Dumping Pricing.
– Competition inside; China & Korea.
– Competition outside; China, Korea, India & Turkey.
– GST: 17%
– Price Preference: 30% to the importing country.

Pak Elektron Limited.

 External Forces

• Political, Legal & Govt. Forces:

– Frequently Changes in tax laws
– Unstable Political Environment
– Energy Crisis
– Local Rules: PPRA Rules.
– International Rules: World Bank, ADB & JICA Rules.
– “Lowest most responsive”.
– No negotiations.
– Bank Guarantee; 10% of Bid value.
– Performance Guarantee; 10% of Purchase Order value.
– Bound to Contractual agreements.

Pak Elektron Limited.

 External Forces

• Technological Forces:
– New Products.
– Extended Services.
– New Emerging Markets.
– New Marketing methods.
– Supply Chain Management.
– Manufacturing Process & Techniques.

Pak Elektron Limited.

 External Forces

• Social, Cultural, Demographic &

Environmental Forces are not effective.

• Competitive Forces:
– More than 50 competitors.
– New Entrants.
– Low pricing.

Pak Elektron Limited.

 PORTER’S MODEL

Substitute Products (Medium)

Bargaining Power Rivalry amongst Bargaining Power

of Suppliers (Medium) Competitors (High) Of Consumers (High)

Potential Entry of new

Competitors (Low)

Pak Elektron Limited.

 PORTER’S MODEL

Rivalry amongst competitors:

Modestly High

Potential New Entrants:

1 to 2 new competitors every year.

Suppliers Bargaining Power:

Medium; Depends upon
economy, source, time, demand, supply, transportation
mode and availability of raw material.

Pak Elektron Limited.

 PORTER’S MODEL

Substitute Products:
A lot of registered companies having the product of
same specification or standard.

Buyers Bargaining Power:

Tender advertised in daily news paper.
Lowest most responsive bidder.
Bound to contractual agreements.

Pak Elektron Limited.

 SWOT ANALYSIS

OPPORTUNITIES

Expansion of Energy Sector

Increase in Population
Large Product Range
Globalization
Joint ventures, merger, acquisition or take over

Pak Elektron Limited.

 SWOT ANALYSIS

THREATS

Strong Competition
Chinese Products
Grey Market
Devaluation of Currency
Obsoletion of Technology
Rapid Changes in Government Policies
New Entrants

Pak Elektron Limited.

 EFE Matrix

Key External Factors Weight Rating Weighted Score

Opportunities
Expansion of Energy Sector 0.10 3 0.30
Increase in Population 0.05 2 0.10
Large Product Range 0.10 3 0.30
Globalization 0.04 3 0.12
Joint ventures, merger, acquisition or take over 0.05 2 0.10

Threats
Strong Competition 0.16 4 0.64
Chinese Products 0.10 3 0.30
Grey Market 0.04 1 0.04
Devaluation of Currency 0.10 3 0.30
Obsoletion of Technology 0.06 2 0.12

Rapid Changes in Government Policies 0.10 2 0.20

New Entrants 0.10 3 0.30

Totals 1.00 2.82

Pak Elektron Limited.

 Internal Factors
By Farhan Saleem Roll # 28

Pak Elektron Limited.

Pak Elektron Limited.
 Internal Factors

• Management
• Marketing
• Finance and Accounting
• Production Operation
• R&D
• MIS

Pak Elektron Limited.

 Management Function
Performed at PEL

Planning
Defining goals, establishing strategies to achieve goals, developing
plans to integrate and coordinate activities.

Organizing
Team formation of each dept with the help of team leader
Arranging and structuring work to accomplish organizational goals

Leading
 Proper vision and direction of team leader
Working with and through people to accomplish goals.

Controlling
Monitoring, comparing, and correcting work

Pak Elektron Limited.

 PEL
SWOT ANALYSIS

STRENGTHS
ERP Based Company
Strong Brand Image
Strong Dealer Network
Numerous Super Brand Award
State of the art plant
One of the largest manufacturer
Strong R&D Department
Strong After Sales Service
Compliance of International Standards

New Transformer Factory

Pak Elektron Limited.

 PEL
SWOT ANALYSIS

WEAKNESSES
Financial Problem
Large overheads
High Prices
System Variation

Pak Elektron Limited.

 IFE Matrix

Key Internal Factors Weight Rating Weighted Score

Strengths
Strong Brand Image 0.15 4 0.60
Strong Dealer Network 0.15 4 0.60
Numerous Super Brand Award 0.05 2 0.10
State of the art plant 0.10 3 0.30
One of the largest manufacturer 0.05 3 0.15
Strong R&D Department 0.05 3 0.15
Strong After Sales Service 0.05 3 0.15
Compliance of International Standards 0.10 3 0.30
Weaknesses
Financial Problem 0.10 2 0.20
Large overheads 0.05 3 0.15
High Prices 0.10 2 0.20
System Variation 0.05 2 0.10

Totals 1.00 3.00

Pak Elektron Limited.

 Market Analysis
By Umar Shahzad Roll # 17

Pak Elektron Limited.

Major Competitors of Appliances Products

1-Dawlance

2-Haire

3-Orient

4-Waves

Pak Elektron Limited.

 Major Competitors of Power Products

1-Transformer:

2-Energy Meters:

3-Switchgear:

4-Power
Transformer:

5-EPC Project

substation, Rawalpindi DHA substation Isld Substations, in Nigeria

Pak Elektron Limited.

 Market Analysis

Others
25% PEL
29%

PEL
Siemens
Elmetec
Transfopower
Others

Siemens
15%
Transfopower
21%
Elmetec
10%

Pak Elektron Limited.

 BCG MATRIX

Question Mark
Distribution Transformers Instrument Transformer
Power Transformers Water Dispenser
High

Refrigerator Floor Standing

Market Growth

Cash Cow Dog

Energy Meters
Generators
Low

Switchgear Panel
Washing Machine
Split AC

High Low
Market Share
Export Marketing-PEL Pak Elektron Limited.
 PRODUCT LIFE CYCLE

PEL Company PEL Transformers

Sales and Sales and

Profits Profits

Development Introduction Growth Maturity Decline Time Development Introduction Growth Maturity Decline Time

Export Marketing-PEL
Pak Elektron Limited.
 Financial Analysis
By Sajjad Zafar Pirzada Roll # 52

Pak Elektron Limited.

 FINANCIALS

Gross Sales
• Gross Sales: Rs. 20.3 Billion.
11%
• Net Sales: Rs. 17.7 Billion. Power
Division
• Gross Profit: Rs. 3.60 Billion. Applianc
es
• Net Profit: Rs. 0.12 Billion. Division
89%

Pak Elektron Limited.

FINANCIALS

Pak Elektron Limited.

FINANCIALS

Pak Elektron Limited.

FINANCIALS

Pak Elektron Limited.

FINANCIALS

Pak Elektron Limited.

 FINANCIAL ANALYSIS

Summary of the Liquidity Ratio Comparisons

Ratio PEL Industry

Current 1.32 1.26

Acid-Test 0.82 0.88

> Strong current ratrionand weak acid test ration

indicates a potential problemin inventories account.

> Note that PEL has a relatively high level of inventories.

Pak Elektron Limited.

 FINANCIAL ANALYSIS

Summary of the Liquidity Trend Comparisons

> The current ration for PEL has been declining & slowly rising

at the same time acid test ratio first declining and slowing rising.

> The current ration for Industry has been declining & slowly rising

at the same time acid test ratio first declining and slowing rising.

> This indicates inventories are a problem for PEL

Pak Elektron Limited.

 FINANCIAL ANALYSIS

Summary of the Profitability Ratio Comparisons

Ratio PEL Industry

Gross Profit Margin 22.8% 16.9%
Net Profit Margin 1.8% 2.8%
Return on Investment 1.5% 3.5%
Return on Equity 6.8% 13.7%
> PEL profitability ratios have ALL been falling since 2007.
Each except Gross Profit Margin below the industry average
for the past three years.
> This indicates that COGS and administrative costs may
both be too high and a potential problem for PEL.
> Note, this result is consistent with the low interest
coverage ratio.

Pak Elektron Limited.

 FINANCIAL ANALYSIS

Summary of the Financial Leverage Ratio Comparisons

Ratio PEL Industry

Debt to Equity 2.07 2.29

Debt to Assets 0.44 0.58

Total Capitalization 1.09 1.77

> PEL debt utilization and assets supports to debt relative

to industry is low.

> PEL long term debts also less than industry.

> That shows PEL debts utilization possition is very low

as compare to industry.

Pak Elektron Limited.

 FINANCIAL ANALYSIS

Summary of the Financial Leverage Trend Comparisons

> PEL debt utilization tred stuck down as compare to

industry and than slowly rise.

> PEL assets support to debt financing is slowly down but

much down as compare to industry.

> PEL long term debt utilization trend also down.

Pak Elektron Limited.

 FINANCIAL ANALYSIS

SUMMARY OF RATIO ANALYSIS

1. Inventories are too

hihg.
2. A burden of financial
charges.
3. May be paying off creditors too
soon.
4. Selling , general and administrative costs may be
too high.
5. Less adminstrion performance.

6. Very poor profitability rates.

Pak Elektron Limited.

 Strategies/Objectives
By Muhammad Umar Farooqi Roll # 145

Pak Elektron Limited.

Pak Elektron Limited.
 Defined
Goals at PEL

Financial Goals
Target of reducing financial cost from 13%

Strategic Goals
Increase profitability and sales turnover
Increasing the product line

Pak Elektron Limited.

 Plan at PEL

Strategic Plans
 Capture 10% more market share within next 2 years.
 To become the leading manufacturer of electrical goods in
Pakistan.

Operational Plans
 Introduce a wide range of Products.
 To achieve the desired targets with cost cutting
techniques.
 Efficient utilization of resources to maximize output.

Pak Elektron Limited.

 Contemporary Issues
in Planning at PEL

Criticisms of Planning
 Main flaw in today's planning lies with the energy crisis
prevailing in the country.
 Due to its dynamic nature the changes in plans are very
frequent.

Effective Planning in Dynamic Environments

 Different plans including sales and production plans need to
be changed very often and is an ongoing process.
 Need to cater to market trends while planning and therefore
being static or fixed is of no use.

Pak Elektron Limited.

 Objective

Strategic:

Increase our Export

Increase in production plant capacity
Retain local market share.
Lower production cost, not effecting the
quality.
Change in internal design.
Superior on time delivery
Superior customer services.

Pak Elektron Limited.

 Objective

Financial:

Lower factory overheads.

Minimize liquidated damages on late
delivery.
Maximize profits.

Pak Elektron Limited.

 Recommendations

1. They should retire their expensive loans.

2.They should carefully study their competitors.
3.As mentioned earlier company’s liquidity position is dismal. So they need to
pay off their short term loans.
4.Their operating cost is very high so they should control their operating
expenses.
5.There should be a continuous monitoring of performance. When performance
deviates from plans one does not have to wait for the next periodic review to
correct it. The supervisor and subordinate should discuss the situation
immediately so the corrective actions can be taken at once in order to avoid the
major disasters.
6.Whether performance appraisal discussions are held monthly, quarterly,
annually appraise should be clear about what he/she is doing right and wrong
,and how he/she can overcome there deficiencies for the future appraisal.
7. Performance appraisal should be conducted in a way that employee should
not perceive it as a fatigue or threat for there job but it should take it as an
opportunity to add or contribute more value in work of there organization

Pak Elektron Limited.

Distribution Transformer Plant

Pak Elektron Limited.

Pak Elektron Limited.
Pak Elektron Limited.
Question and Answer

Pak Elektron Limited.

 References

• www.pel.com.pk
• www.wikipedia.com
• www.slideshare.com
• https://www.google.com.pk

Pak Elektron Limited.