“General Tyre and Rubber Company”

Company’s Background and History:

The General Tyre and Rubber Company of Pakistan Limited (GTR) is a renowned name in Pakistan in the
business of manufacturing and supplying tyres. The General Tyre and Rubber Company of Pakistan
Limited (GTR) came into existence in 1963, at Landhi Karachi on a 25 acre plot and commenced its
production in 1964.
The company went into expansion in 1985 with a capacity to manufacture 600,000 tyres annually, raising
capacity in subsequent years to 2.5 million tyres today. The company now caters to one third of the country's
tyre demand and caters to tyres of different sizes and quality ranging from tyres for passenger cars to light
trucks, trucks and buses, tractor front and rear tyres and rickshaw tyres. Recently the company has also
indulged into the motorcycle as well with a capacity of one million tyres annually.
The Company was then established by General Tire International Corporation (GTIC) of USA, with a total
capacity of only 120,000 tyres per annum.
GTIC sold 90% of their shares to the present owners M/s Bibojee Services Ltd. in 1977 and retained 10% of
the ownership. In 1985, the Company completed a major expansion, which took the capacity to 600,000
tyres annually.
Continental AG, Germany’s number one tyre manufacturer purchased GTIC in 1987 and thus became 10%
owners in GTR. Continental provides Technical Assistance to GTR under a program, which includes
training of our people, formulations, recipe, and selection of equipment and approved suppliers. GTR under
this agreement with Continental is bound to follow all rules and regulations provided by Continental
including the given quality standards. The brand name “GENERAL” used by GTR also belongs to
Continental AG. Now this brand name is synonymous with quality and experience in the art of making tyres
since being in this market for more than 50 years.
The name ‘GENERAL’ carries the highest top of the mind brand name recall in Pakistan when it comes to
tyres. The capacity of the Company stands at 2.5 million tyres approximately meeting one third of the
country’s demand. General is producing tyre sizes and patterns that cover almost 85% of the sizes in demand
in Pakistan. GTR is the first & largest automotive tyre manufacturer in the country producing tyres for cars,
light commercial vehicles, trucks/buses, tractors, CNG
Rickshaw and motorcycle tyre plant has been added with the capacity of one million tyres per annum.
The company has almost all auto makers as its clientele from Indus Motors, Honda and Pakistan Suzuki to
HinoPak Motors, Al-Ghazi tractors, Millat Tractors, Masters Motors, Sigma motors, Afzal Motors,
Karakoram Motors, Dewan Motors and the Ghandhara group.

Public Listed Company:

Being a Public Listed Company, the current main sponsors of the Company are: (i) Bibojee Services
(Private) Ltd. and (ii) Pak Kuwait Investment Company (PKIC) and the remaining shares are held by the
general public and several institutional investors.
GTR has four market segments to cater to. These are:
 The Original Equipment Manufacturers – Vehicle assemblers
 The Replacement or the After market
 Government Departments/Institutions
 The Export Market
GTR Sells:
GTR sells its tyres in replacement market through more than 150 nationwide authorized dealers/distributors
most of whom have been working with GTR for more than three generations setting a milestone on
customer loyalty and satisfaction. It has offices / warehouses in four major cities of Pakistan and intends to
add another new office soon. All automotive tyres produced by us are covered with warranty.

Products: Passenger Car Tyre, Light truck tyre, Truck and Bus Tyre, Tractor.

Snapshot Details:
Company Name: General Tyres
Nature: Manufacturing Concern
Founded: 1963
Headquarter: Landhi, Karachi, Pakistan
Key People: Ali Kuli Khan Khattak
Industry: Automotive
Product: Tyres
Revenue: 8.38 billion PKR
Owner: Bibojee Group
 Company’s Vision and Mission Statement:

Vision:

“To be the leader in tyre technology by building the company’s image through
quality improvement, competitive prices, customer’s satisfaction and meeting social
obligations.”

Mission Statement:
 To offer quality products at competitive prices to our customers.
 To endeavor to be the market leader by enhancing market share, consistently improving efficiency
and the quality of our products.
 To improve performance in all operating areas, so that profitability increases thereby ensuring
growth for the company and increasing return to the stakeholders.
 To create a conducive working environment leading to enhanced productivity, job satisfaction and
personal development of our employees.
 To discharge its obligation to society and environment by contributing to social welfare and adopting
environmental friendly practices and processes.
 Company’s Core Values:

 We are a Company of dedicated people who enjoy working as a team and with our customers in an
enterprise committed to quality.

 We will continually strive to bring improvements in our products, services & quality management
system to meet or exceed our customers’ needs and expectations.

 We will work within the framework of legal and regulatory requirements.

Financial Performance

Statement of Profit or Loss and other Comprehansive Income Rupees in '000

YEAR 2018 2017 2016 2015 2014 2013

Net Sales 11,785,457 9,645,367 9,479,045 9,491,652 8,606,649 8,167,086

Cost Of Sales 9,699,779 7,589,305 7,157,029 7,553,193 7,011,584 6,838,301
Gross Profit 2,085,678 2,056,062 2,322,016 1,938,459 1,595,065 1,328,785
Profit from Operations 1,190,067 1,303,184 1,627,751 1,354,939 1,073,391 867,999
Other Income 74,141 63,675 65,177 65,567 118,304 68,357
Finance Cost 256,782 124,064 136,159 258,301 326,251 289,217
Profit Before Taxation 940,045 1,184,222 1,494,743 1,097,035 748,216 579,975
Taxation 224,494 302,825 462,456 364,180 234,475 184,374
Profit After Taxation 715,551 881,397 1,032,287 732,855 513,741 395,601
EBITDA 1,557,216 1,559,384 1,808,370 1,525,175 1,236,583 1,020,507

Statement of Financial Position Rupees in '000

YEAR 2018 2017 2016 2015 2014 2013

Cash and Bank Balances 91,120 99,572 116,851 241,769 220,159 187,680
Stocks 3,324,857 2,074,728 1,570,594 1,456,593 1,999,156 1,788,330
Trade Debts 1,027,027 879,333 1,024,670 851,269 1,390,553 1,186,976
Current Assets 6,350,173 4,824,967 3,558,021 3,362,778 4,603,229 4,035,930
Operating Fixed Assets Cost 6,735,011 6,285,069 4,759,440 4,196,775 4,002,644 3,893,997
Investments in an Associated Company 15,363 10,114 6,019 3,321 2,924 1,848
Non Current Assets 4,335,922 3,777,919 3,254,488 1,985,287 1,959,935 1,969,812
Total Assets 10,686,095 8,602,886 6,812,509 5,348,065 6,563,164 6,005,742
Trade and other Payables 1,928,381 1,348,074 1,293,036 1,183,356 838,429 1,282,552
Current Liability 5,214,722 3,139,047 2,424,213 2,145,566 3,981,312 3,553,581
Long term Finances 1,247,285 1,018,583 920,276 383,334 100,000 166,667
Non Current Liability 1,900,177 1,667,453 1,438,774 844,352 550,862 658,651
Total Liabilities 7,114,899 4,806,500 3,862,987 2,989,918 4,532,174 4,212,232
Paid Up Capital 597,713 597,713 597,713 597,713 597,713 597,713
Reserve for Capital Expenditure 1,000,000 1,000,000 - - - -
Unappropriated Profit 1,973,483 2,198,673 2,351,809 1,760,434 1,433,277 1,195,797
Total Equity 3,571,196 3,796,386 2,949,522 2,358,147 2,030,990 1,793,510

Statement of Cash Flow Rupees in '000

YEAR 2018 2017 2016 2015 2014 2013

Cash Flow from Operating Activities 89,969 (31,532) 1,069,950 2,402,875 (326,815) 182,843
Cash Flow from Investing Activities (916,934) (774,138) (1,437,288) (187,291) (132,006) (341,790)
Cash Flow from Financing Activities 158,827 326,531 287,789 (680,233) (490,261) 178,948
 General Tyre
Har safar ka humsafar
Financial Performance of last 5 years
Ratios 2014 2015 2016 2017 2018

Current Ratio 1.16 1.57 1.47 1.53 1.21

Quick Ratio 0.65 0.89 0.82 0.88 0.65

Profit margin 5.97 7.72 10.89 9.14 6.07

Cash operating 88.55 39.90 36.79 48.28 73.13

cycle days

Inventory 4.31 6.52 6.04 3.27 2.99

Turnover

Receivables 6.61 7.47 5.78 5.75 5.93

Turnover

Asset turnover 1.31 1.77 1.39 1.12 1.10

Days sale in 84.78 56.01 60.48 78.51 76.97

Inventory

Days in 55.21 48.85 63.15 61.65 62.65

receivables

Gross margin ratio 18.53 20.42 24.50 21.32 17.70

Return on Equity 25.30 31.08 35 23.22 20.04

Earnings per share 8.60 12.26 17.27 14.75 11.97

Cash ratio 0.04 0.07 0.03 0.02 0.01

Dividend payout 65% 70% 0% 150% 60%
ratio

Debt to equity 223% 127% 131% 199% 127%

EBIT margin 12.47 14.28 17.17 13.51 10.10

Account payable 6.61 7.47 5.78 5.75 5.92

turnover times

Account payale 55.21 48.85 63.15 63.51 63.65

turnover days

Fixed assets ratio 4.39 4.78 2.91 2.55 2.72

Pretax margin 8.69 11.56 15.77 12.28 7.98

Equity ratio 0.30 0.44 0.43 0.44 0.33

Debt ratio 0.69 0.55 0.56 0.55 0.66

Current Ratio
The current ratio is a liquidity and efficiency ratio that measures a firm’s ability to pay off its
short-term liabilities with its current assets
Current ratio=current assets/current liabilities
Quick Ratio
The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a company to
pay its current liabilities when they come due with only quick assets.
Quick ratio=Current assets-inventory/current liabilities
Profit margin
The profit margin ratio, also called the return on sales ratio or gross profit ratio, is a
profitability ratio that measures the amount of net income earned with each dollar of sales
generated by comparing the net income and net sales of a company.

Profit margin= Net income/net sales

Inventory Turnover
The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is
managed by comparing cost of goods sold with average inventory for a period. This
measures how many times average inventory is “turned” or sold during a period.
Inventory turnover=costs of goods sold/average inventory
Days sales in inventory
The days sales in inventory calculation, also called days inventory outstanding or simply
days in inventory, measures the number of days it will take a company to sell all of its
inventory.
Days sales in inventory= 365/inventory turnover
Cash conversion cycle
The cash conversion cycle (CCC) is a metric that expresses the time (measured in days) it
takes for a company to convert its investments in inventory and other resources into cash
flows from sales. Also called the Net Operating Cycle or simply Cash Cycle, CCC attempts
to measure how long each net input dollar is tied up in the production and sales process
before it gets converted into cash received.

CCC=DIO+DSO−DPO
Accounts receivable turnover
Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many
times a business can turn its accounts receivable into cash during a period.
Accounts receivable turnover= net sales /average accounts receivable
Days in receivables
The days in receivables calculation measures the number of days it will take a company to
receivables its accounts receivables.
365/receivable turnover

Asset turnover
The asset turnover ratio is an efficiency ratio that measures a company’s ability to generate
sales from its assets by comparing net sales with average total assets.
Asset turnover=net sales/average total asset
Debt ratio
Debt ratio is a solvency ratio that measures a firm’s total liabilities as a percentage of its total
assets. In a sense, the debt ratio shows a company’s ability to pay off its liabilities with its
assets.
Debt ratio=total liabilities/total assets
EBIT Margin
The EBIT margin is a financial ratio that measures the profitability of a company calculated
without taking into account the effect of interest and taxes. It is calculated by dividing EBIT
(earnings before interest and taxes) by sales or net income.
EBIT margin = EBIT (Net profit + Tax + Interest) / Net income
Equity ratio
The equity ratio is an investment leverage or solvency ratio that measures the amount of
assets that are financed by owners’ investments by comparing the total equity in the
company to the total assets.
Equity ratio= Total equity/total assets
Earnings per share
Earnings per share (EPS), also called net income per share, is a market prospect ratio that
measures the amount of net income earned per share of stock outstanding
Earnings per share=net income/shares outstanding
Cash ratio
The cash ratio or cash coverage ratio is a liquidity ratio that measures a firm’s ability to pay
off its current liabilities with only cash and cash equivalents
Cash ratio=cash +cash equivalents/current liabilities
Accounts payable turnover times:
Accounts payable turnover is a ratio that measures the speed with which a company pays
its suppliers. If the turnover ratio declines from one period to the next, this indicates that
the company is paying its suppliers more slowly, and may be an indicator of worsening
financial condition.
Accounts payable turnover (Times) = Cost of goods sold ÷ Average accounts payable
Accounts payable turnover = Purchases ÷ Average accounts payable
Accounts payable turnover days:
The accounts payable days’ formula measures the number of days that a company takes
to pay its suppliers. If the number of days increases from one period to the next, this
indicates that the company is paying its suppliers more slowly, and may be an indicator
of worsening financial condition.
Payable turnover in days = 365 / Payable turnover ratio
Pretax margin
A higher pretax margin ratio indicates a company with a high degree of operational
profitability. A lower ratio indicates poorer operational profitability. This means that the
company is more dependent on a low-tax environment to ensure profitability.
Pretax Margin (%) = (Income Before Taxes / Revenues) x 100
Dividend payout ratio
The dividend payout ratio measures the percentage of net income that is distributed to
shareholders in the form of dividends during the year.
Dividend payout =total dividend/net income
Debt to equity ratio
The debt to equity ratio is a financial, liquidity ratio that compares a company’s total debt to
total equity. The debt to equity ratio shows the percentage of company financing that comes
from creditors and investors. A higher debt to equity ratio indicates that more creditor
financing (bank loans) is used than investor financing (shareholders)
Debt to equity=total liabilities/total equity
Fixed assets ratio
Fixed Assets ratio is a type of solvency ratio (long-term solvency) which is found by
dividing total fixed assets (net) of a company with its long-term funds. It shows the amount
of fixed assets being financed by each unit of long-term funds.
Fixed asset ratio/net fixed assets/long term funds
Gross profit margin
Gross margin ratio is a profitability ratio that compares the gross margin of a business to the
net sales. This ratio measures how profitable a company sells its inventory or merchandise.
In other words, the gross profit ratio is essentially the percentage markup on merchandise
from its cost.
Gross profit margin=gross margin/net sales

Financial Performance overview

 As compared to last five year current ratio has slightly decline which means the
company increases its liabilities.
 Quick ratio has also declined increase which is the result of increase in stocks as
compared to other assets.
 The gross profit margin of the company is declining year by year which may create
hinders for the company in paying their operating expenses.
 The company doesn’t has enough cash to pay his current liabilities so it may faced
 Inventory turnover ratio has also declined which means the company is selling lower
than the previous year this may arise question on the management of selling of
inventories.
 Accounts receivable turnover ratio is increasing as compared to previous year which
show that the company is maintaining their receivables in a better way.
 Days sales in inventory has increased meaning company requires more days to sell
inventory.
 Inventory turnover of days is also decreasing which showed that the company is
receiving their receivable in a short time of period.
 Earnings per share start decreasing after 2016 which indicates that company is not
gaining sufficient net income.
 Dividend payout ratio was half as it was in 2017 which show that company’s decline
in the net income
 Debt ratio of general tyres indicate that the company is in better position to liquidate
because its debt ratio is increasing day by day so it has a better power to to pay its debt
with their assets.
 Equity ratio is in the declining position which indicates that the owners of the
company prefers debt financing rather than equity financing.
 Accounts payable turnover times indicates that the company is paying its debt by
availing the facilities of the debt.
 Accounts payable turnover days shows that the company has increased their time
period as compared to previous five year which is a positive sign for the company the
company is availing the time period if the company pay it off early then it shows that
the supplier is demanding for early payback.
 Fixed assets ratio is in declining stage the company is not in suitable position to
liquidate because fixed asset ratio show the liquidation of the company how its fixed
assets pay the long term fund of the company.
 Pretax margin is also at in the stage of declining which means that company has to
dependent on a low-tax environment to ensure profitability.
 EBIT margin of the company was started declining from 2016 which show the
declining of financial position of the company.
 Cash conversion cycle indicates that company was taking lesser days as compared to
other year which means that company was selling its product and manages the product
effectively.
 Strength and Weakness Analysis of General Tyres
STRENGTH
Liquidity After seeing the Current Ratios of
Ratios 2017 and 2018 which are 1.53 and
1.21 in respective years. So, we can
say that company is solvent because in
both years company have stable ratio
which is more than 1 because In order
to stay solvent, the firm must have a
current ratio of at least 1 which means
it can exactly met its current debt
obligations. So, this firm is solvent.
Activity The Inventory turnover of the
Ratios company in 2018 is 3.27 and in 2017
it was 2.99 which mean there is
effectiveness in company inventory
management that company is selling it
goods three times.
Profitability An increase in Net profit margin
Ratios means a growth in performance and
profitability levels
Solvency It was seen that the Debt to equity
Ratios ratio declined in year 2018 in respect
to 2017 which means that the
company started using its own
financial sources which means that the
company has generated enough cash
to satisfy its debt obligations but at the
same time the company is not taking
advantage of the increased profit that
the financial leverage may bring.
WEAKNESS
The respective Quick Ratios are 0.88
in 2017 and 0.65 in 2018.This means
that the firm cannot meet its current
(short-term) debt obligations without
selling inventory because the quick
ratio is less than 1 in both years. In
order to stay solvent and pay its short-
term debt without selling inventory,
the quick ratio must be at least 1.0 X,
which it is not.
The Duration time period in which
the company is paying to its creditor is
also becoming lower in 2018 which
mean that the company are not
utilizing its credit facility or may be
possible that the company is availing
discount offers by paying back to its
creditors.
Gross profit margin of general Tyres
in 2018 is less than 2017 which is 17%
and 21% respectively which indicates
that in 2018 there is lower product
rising and higher product cost and it
has lower percentage of revenue
available to cover its operating
expenditure in 2018.
The Financial Leverage ratio in 2018
is 2.618 and in 2017 the ratio is 2.285.
It mean the company’s finance its asset
more on debt in 2018 rather than 2017
which ultimately can make a problem
for company about financial struggle
in the future.
Financial Ratio Analysis:
1. Current Ratio:
As we know that this ratio indicates the ability of the firm to meet its short term liabilities.
After seeing the ratios of 2017 and 2018 which are 1.53 and 1.21 in respective years. So,
we can say that company is solvent because in both years company have stable ratio
which is more than 1 because In order to stay solvent, the firm must have a current ratio
of at least 1 which means it can exactly met its current debt obligations. So, this firm is
solvent.

2. Quick Ratio:

By eliminating inventory from current assets it provides whether the Company has sufficient
liquid resources (receivables and cash) to settle its liabilities. The respective ratios are 0.36 in
2017 and 0.44 in 2018.This means that the firm cannot meet its current (short-term) debt
obligations without selling inventory because the quick ratio is less than 1 in both years. In
order to stay solvent and pay its short-term debt without selling inventory, the quick ratio
must be at least 1.0 X, which it is not.

3. Profit Margin:
Net profit margin of the company in 2018 shows that the company has
increased is over all expense in 2018 that’s why the company net profit
decreases in 2018 which is 6% and in 2017 is 9%.

4. Asset Turnover Ratio:

The total assets turnover shows that how the company is utilizing is all
assets to generate the revenue the company efficiency is slightly increase in
2018 as compared to 2017.
5. Days Sales In Inventory:
The inventory turnover of the company in 2018 is 3.27 and in 2017 it was
2.99 which mean there is a effectiveness in company inventory management
that company is selling it goods three time and the inventory which company
sold within 111.62days in 2018 which means that inventory turnover is
higher and DOH is low in 2018 as compared to 2017 the company are not
carrying adequate inventory which may be harmful for their company as it
may cause shortage of inventory which affect the revenue of the company.

6. Days In Receivable:

The DSO show how the company is collecting cash from its receivables, the
receivables turnover of the company is higher in 2018 as compared to 2017 and
its days of sales outstanding goes down in 2018 which means that the company
is make strict rules in collection of its receivables which shows the efficiency of
the company.

7. Cash Operating Cycle:

Decreasing trend from 88.55 to 48.28 as compared to industry average which

is 38.5 is quite large which means which means general tyres is not able to
convert in cash as industry

8. Inventory Turnover :

Increasing trend from 4.31 to 13.54 but as compared to industry average it

which is 4.74 is quite large which means general tyre is not more efficient
that its industry.

9. Receivable Turnover:

Decreasing trend from 6.61 to 5.93 but as compared to industry average

which is 7.6 is quite large which means general tyre is not efficient more than
its industry to get receivables.
10.Gross Margin:

Increasing trend from 18.53 to 21.32 but as compared to industry average which
is 22.7 is quite large which means industry makes more profit than general
tyres.

11.Return on Equity:

Increasing trend from 25.30 to 35 but as compared to industry average which is

8.3 which is quite small which means general tyres make more return than its
industry.

12.Earning per Share:

Increasing trend from 8.6 to 17.27 but as compared to industry average which is
163.72 which is quite large indicates general tyres is not attracting the investors.

13.EBIT Margin:

Decreasing trend from 12.47 to 10.10 industry average 18.36indicates general

tyres may have problem with profitability as well as its cash flow.

14.Accounts Payable Turnover (Times):

Decreasing trend from 6.61 to 5.92 but as compare to industry average 4.61
which is quite small indicates general tyre paying its creditors too quickly than
its industry.

15.Accounts Payable Turnover (Days):

Increasing trend from 55.21 to 63.65 as compared to industry average which is

101.93 is quite large means general tyres pay off its bills very quickly.

16.Equity Ratio:

Increasing trend from 0.30 to 0.44 but as compared to industry average which is
1.02 is quite large indicates general tryes depend very small on equity.
17.Debt Ratio:
Decreasing trend from0.69 to 0.55 as compared to industry average which is
0.53 which is quite small indicates general tyres depend on debt more than its
industry.

18.Pretax Margin:

Increasing trend from 08.69 to 11.56 but as compared to industry average which
is 18.36 indicates general tyres have little pretax profit than its industry.

19.Cash Ratio:

Decreasing trend from 0.04 to 0.01 but as compared to industry average0.47

which is quite large which means general tyres is not more able to pay off its
liabilities than its industry.

20.Dividend Payout Ratio:

Increasing trend 65% to 150% but as compared to industry average which is

20% is quite small that indicates general tyres can attract more investors.

21.Debt To Equity:

Decreasing trend from 223% to 199% but as compared to industry average

which is 114% which is quite small indicates general tyres depend more on debt
than in its industry.
 STEEPLE ANALYSIS
SOCIAL FACTOR:
Society’s culture and way of doing things impact the culture of an organization in an
environment. Shared beliefs and attitudes of the population play a great role in how
marketers at The General Tyre Company will understand the customers of a given market
and how they design the marketing message for Rubber industry consumers. Social factors
that leadership of The General Tyre Company should analyze for STEEPLE analysis are:
• Emphasis on safety
• Health consciousness
• Average disposable income level
• Attitudes toward imported products and services
• Attitude towards customer service and product quality

TECHNOLOGICAL FACTOR:
Technology is fast disrupting various industries across the board. Transportation
industry is a good case to illustrate this point. Over the last 5 years the industry has been
transforming really fast, not even giving chance to the established players to cope with the
changes. Taxi industry is now dominated by players like Uber and Lyft. Car industry is fast
moving toward automation led by technology firm such as Google & manufacturing is
disrupted by Tesla, which has stated an electronic car revolution.
A firm should not only do technological analysis of the industry but also the speed at which
technology disrupts that industry. Slow speed will give more time while fast speed of
technological disruption may give a firm little time to cope and be profitable. Technology
analysis involves understanding the following impacts –
• Recent technological developments by The General Tyre Company competitors.
• Impact on cost structure in Rubber industry.
• Rapid development of fast communication networks.
• Global reach of information about company and competitors
• New machinery and services
• Equipment
• Research and development software
• Environmentally friendly technologies(less energy consumption and less waste),
• Automation, robotization
ENVIRONMENTAL FACTOR:
Different markets have different norms or environmental standards which can impact the
profitability of an organization in those markets. Even within a country often states can have
different environmental laws and liability laws. Before entering new markets or starting a
new business in existing market the firm should carefully evaluate the environmental
standards that are required to operate in those markets. Some of the environmental factors
that a firm should consider beforehand are –

• Weather
• Climate change
• Laws regulating environment pollution
• Air and water pollution regulations in Rubber & Plastics industry
• Recycling.
• Quality of water used for production
• Health problems in polluted places, healthy environment improve mental and physical
health.
• Ecosystem services used in business processes

ECONOMICAL FACTOR:
The Macro environment factors such as – inflation rate, savings rate, interest rate, foreign
exchange rate and economic cycle determine the aggregate demand and aggregate
investment in an economy. While micro environment factors such as competition norms
impact the competitive advantage of the firm. The General Tyre can use country’s economic
factor such as growth rate, inflation & industry’s economic indicators such as Rubber &
Plastics industry growth rate, consumer spending etc. to forecast the growth trajectory of not
only –sector name-- sector but also that of the organization. Economic factors that the
Genera Tyre should consider while conducting STEEPLE analysis are –
• Type of economic system in countries of operation – what type of economic system
there is and how stable it is.
• Government intervention in the free market and related Consumer Goods
• Exchange rates & stability of host country currency.
• Efficiency of financial markets – Does The Goodyear Tire & Rubber Company needs
to raise capital in local market?
• Infrastructure quality in Rubber & Plastics industry
• Comparative advantages of host country and Consumer Goods sector in the particular
country.
• Skill level of workforce in Rubber & Plastics industry.
• Education level in the economy
• Labor costs and productivity in the economy
• Inflation rate and interest rate
• Level of spending
• Optimism of consumer
• Purchasing power of potential consumer.

POLITICAL FACTOR:
Political factors play a significant role in determining the factors that can impact the Genral
Tyre Company's long term profitability in a certain country or market. The General Tyre
operate in different cities and expose itself to different types of political environment and
political system risks. The achieve success in such a dynamic rubber industry across various
countries is to diversify the systematic risks of political environment. The general tyre
Company can closely analyze the following factors before entering or investing in a certain
market-
• Political stability and importance of Rubber & Plastics sector in the country's
economy.
• Risk of military invasion
• Level of corruption - especially levels of regulation in Consumer Goods sector.
• Bureaucracy and interference in Rubber & Plastics industry by government.
• Legal framework for contract enforcement
• Intellectual property protection
• Trade regulations & tariffs related to Consumer Goods
• Favored trading partners
• Anti-trust laws related to Rubber & Plastics
• Pricing regulations – Are there any pricing regulatory mechanism for Consumer
Goods.
• Taxation - tax rates and incentives
• Wage legislation - minimum wage and overtime
• Work week regulations in Rubber & Plastics
• Mandatory employee benefits
• Industrial safety regulations in the Consumer Goods sector.
• Product labeling and other requirements in Rubber & Plastics

LEGAL FACTOR:
In number of countries, the legal framework and institutions are not robust enough to protect
the intellectual property rights of an organization. A firm should carefully evaluate before
entering such markets as it can lead to theft of organization’s secret sauce thus the overall
competitive edge. Some of the legal factors that the General Tyre Company leadership
should consider while entering a new market are -
• Export and import restriction
• Monetary policy
• Anti-discrimination laws
• Consumer protection and e-commerce
• Employment law
• Health and safety law
• Data Protection
• Retirement law
• Fair and minimal wage regulation
• Mandatory health and social insurance requirements
• Laws involving employment of foreign workers and managers
• Mandatory health care law and insurance
• Product description laws

ETHICAL FACTOR:
The General Tyre and Rubber Company of Pakistan Limited (the “Company”) is committed
to conduct its affairs ethically and lawfully. This Code of Conduct establishes policies and
procedures that are intended to guide employees, officers, and directors in the performance
of their duties and responsibilities and ensure compliance with the Company’s commitment
to ethical these factors include:
• Proper marketing techniques, telling truth about product
• Informing customer, employees and partner about company's mission statement and
goals.
• Respecting religious and social values of employees, customer and partner
• Insider trading, hiding information about mergerrd, investment etc
• Regulation on discrimination hiring and promoting
• Eliminating unsafe working conditions
• Producing product safe for customer
• Waste product utilization and recycling
• Create healthy working conditions for employees
• Implementing and enforcing code of ethical practice within company