1

Research Report Refers To: Sir. Muzamil Aftab Qureshi

From: Sadia Rizwan Baig Roll # 01 Department: BBA HONS Fall (02)

ACKNOWLEDGEMNT
When I start writing, I stop for while and think what to write? How to write? I have no words to express my feelings. But I have to write to offer my humblebees sense to ALL MIGHTY ALLAH The most beneficial, gracious and merciful who enable me to perceive higher ideas of life and helped me throughout my life especially in writing this report and all blessing to His favorite PROPHET MUHAMMAD (PBUH) who is the greatest personality of this universe. After God I owe my heartiest gratitude to my parents and my family whose prayers encouraged me to complete my task. I am also extremely thankful to my teacher Sir Muzamil Aftab Iftikhar Qureshi for his sympathetic treatment, reward less help, precious suggestions, constant encouragement and personal interest and kind guideline that enable to write my report.

SADIA RIZWAN BBA HONS

TOPIC:

APPLIED ECONOMICS ON SMALL BUINESS IN PAKISTAN

SMALL BUSINESS
INTRODUCTION
Def: A small business is a business that is privately owned and operated with a small number of employees and relatively low volume of sales Small businesses are normally privately owned corporations .Small businesses are common in many countries depending upon the economic system in operation .Typically examples include: convenience stores, guest houses, restaurants etc

ADVANTAGES OF SMALL BUSINESS

A small business can be started at a very cost and on a part time basis .Independence is another advantage of owning a small business.Fredom to operate independently is a reward for small business owners. In addition many people desire to make their own decisions, take their own risks and reap the reward of their efforts. Small business owners have the satisfaction of making their decisions within the constraints imposed by economic and other environmental factors. However, entrepreneurs have to work very long hours and understand that have ultimately their customers are their bosses.

PROBLEMS FACED BY SMALL BUSINES.

Small business often faced a variety of problems related to their size .A frequent cause of bankruptcy is undercapitalization. This is often a result of poor planning rather than economic conditions .It is the common rule of thumb that the entrepreneur should have access to a sum of money at least equal to the projected revenue for the first year of the business in addition to his anticipated expenses. In addition to ensuring that the business has enough capital, the small business owners must also be mindful of contribution margin (Sales- variable cost).To breakeven the business must be able to read the level of sales where the contribution margin equals fixed cost s.When they start out, many small business owners under price their products to a point where even at their maximum capacity it would be impossible to breakeven. Cost controls or price often resolve this problem. Another problem for many businesses is the capacity of much larger business to influence or sometimes determine their chances for success

SMALL BUSINESS BANKRUPTCY

When small business fails, the owner may file bankruptcy. In most cases this can be handled through a personal bankruptcy .Corporation can file bankruptcy, but if it is out of business and valuable corporate assets are likely to be repossessed by secure creditors, there is a little advantage to going to the expense of a corporate bankruptcy.

MARKETING THE SMALL BUSINESS

Finding the new customers is the major challenge for small business owners. Small businesses typically find themselves strapped for the time but in order to create a new stream of business, they must work on marketing their business every day. Common marketing techniques for a small business include network, word of mouth, yellow pages directories, radio, and internet. Creating a business website has become increasingly affordable with many do it yourself programs now available for beginners. A website can provide significant marketing exposure for small business when marketed through the internet and other channels.

SOURCES OF FUNDING
Small businesses use several sources available for startup capital. Self financing by the owner through cash, equity loan on his or her home, and or other assets Loans from friends or relatives Grants from private foundations Personal savings Private stock issue Forming partner ship Angel investors Banks

INTRODUCTION PRINTING
Printing is a process of reproducing text and images typically with on paper using a printing press. Following are the are major printing presses in Pakistan .in which we discuss their major services and have a look on the printing industry of Pakistan.

Danish & Co, Graphic Machinery Dealers, started to operate as Sole Agents for Solna Offset AB, Sweden in 1989.

6
An efficient team of experienced professionals was formed under the guidance of Mr.Shahid Tabassum and assertive sales efforts made it possible that Solna 25 machines, in different configurations, became the work horse of most of the Printing Presses of the country. Solna machines soon became the most popular and so the most populous machines in Pakistan. This was possible due to dedicated after sales service rendered by Danish & Co., and all round good quality produced by the machines. It is a point of satisfaction that, afore said situation prevails till today. With changing geo-political scenario and fluctuating economic aspects of the region, imports budgets shrank drastically and sales of new machine tended to decline. Timely diversification was adopted and a facility for first class repair and rebuilding of old machines was developed in shape of an Engineering Workshop equipped with modern machinery tools and equipment. Today Danish & Co with a sizeable squad of professionals in Sales and service departments, together with work shop facility, serve the Printing and Graphic Arts Industry with same zeal and interest as at the time of starting the business. Service to the industry, in advisory capacity, has also been started as a regular wing of the company and further development in this area is on its way. .

Maintenance & Installation of Machinery & Equipment Supplied Company provides complete maintenance and installation of the supplied machinery and Equipment. Maintenance & Overhauling Workshop Workshop with excellent facility available for mechanical quality jobs. the machinery meets the standard requirements of the industry. Some of the machines are as follow CNC Lallus Surface Grinders Shaft Grinders Copying Machine Milling Machines Robbing Machine Shapes Drills Hovering Equipment etc.

A team of expert and experienced engineers and mechanics is also an asset.

7 The major clients of Danish& co are under as follows: Federal Bureau of statistics Pakistan MILITRY Academy (Kakole) Feroz Sons Private Ltd National Book Foundation

History Sigma Press started its journey from 1944 when it was operating as a small unit with the name of Al-Hilal Press. Stepping towards progress day by day, finally in 1965 Sigma Press was incepted in Urdu Bazaar, Rawalpindi. Right in its teething phase, Sigma Press developed its specialty in designing and printing of qualityWedding Cards. Now every eight out of ten marriages are being invited by wedding cards of Sigma Press in the twin cities of Rawalpindi & Islamabad. Quality printing is another jewel in the crown of Sigma Press. We have state of the art printing machines at our process houses. A large variety of binding and stitching equipment also aid automation and quality of work. Sigma Press has now three fully functional branches at different places in the heart of twin cities.

Products
Wedding cards Book Publishing Printing

Clientage Some of their valued clients are:

Ad group Advertising. Allama Iqbal Open University. Beacon house School Systems. Evernew Concepts Advertising. Ministry of Health. Mobilink Islamabad. National Bank of Pakistan.

Introduction of Company

HEDALI PRINTERS
HOW THEY OPERATE THEIR BUSINESS IN PERFECT MARKET COMPETITON? The owner of theHedali

Printer network is MR. Zubair, who starts this business in

1997.Their business operations are expended in the area of Rawalpindi district, Sialkot, Smuggle, Lahore and Islamabad. Their main customers are universities, schools, PIA, Shahaeen Air port Services, Royal Airport services, Pakistan Air Force, Air Eagle and PAFWA.They also take contracts from other private companies .Here under lets discussed some tools of economics which are necessary to start a business of every size and Mr. Zubair did not study economics but we see here how these tools and techniques are related with the business of Mr. Zubair.

HISTORY
Mr. .Zubair works in Pakistan Air Force for about 21 years as a store man then he resigns from Air Force and starts the business of printing and copying. At start he has two options to use the capital which was in amount of 23, 00,000 the two options are Go abroad (England) and earn for his family. Use the capital and start the business of Printing &Copying Now we start to calculate his opportunity cost (Implicit +Explicit cost)

Opportunity cost.
The cost of any activity measured in terms of values of the next best alternative foregone. (That is not chosen).It is the sacrifice related to second best choice available to someone. Opportunity cost is the key concept in economics and has been described as expressing as the basic relationship between scarcity and choice. The notation of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently. Thus, opportunity cost is not restricted to monetary cost or financial cost: the real cost of output foregone, lost time should also be considered as opportunity cost. MR. Zubair opportunity cost was not to go abroad.

IMPLICIT COST. Def: It is the hidden cost .In economics the implicit cost is also called Imputed cost or
notational cost is the opportunity cost equal to what a firm must give up in order to use factors which it neither purchases nor hires .It is the opposite of explicit cost. In other words implicit cost is the cost that results from using an asset instead of renting, selling or lending it. The term also implies the foregone income for choosing not to work

10

MR. Zubair explicit cost is the amount which he paid for acquiring the resources to start the business

EXPLICIT COST
The cost which is paid for acquiring resources. It is a direct payment made to others in course of running a business such as wage, rent and materials as opposed to implicit cost. Which are those where actual payments are not made?

Mr. Zubair implicit cost is not going to abroad. The market Actually he refuses the option of going abroad but He tolerates the income of England. The income which in real he did not earn but this As Income is his forgone income of choosing not to go England.

RIVALRY
rivalry exists in perfect competition is of two types: Producer Producer Producer Consumer MR. Zubair has competition with the other producers of same business, he compete his competitors in attempt locate more and more

to consumers or buyers.

11 He also has completion of Producer-Consumer in which he tries to charge the high price from consumers, and consumer tries to locate lowest price in the market.

RESEARCH METHODOLOGY
2.1

QUALITATIVE ELEMENT

I had a focused meeting with two subjects of this report and had a brief conservation about the financial position, sales, and H.R of their business. 2.2

QUANTITATIVE ELEMENT

Quantitative element of the report is based on the questionnaires. The objective of the questionnaire is to measure the financial position and the contribution of small business towards our economy. 2.2.1

SECONDARY DATA

The secondary data is taken from two research papers and from the Wikipedia. 2.2.3

PRIMARY DATA

I got the primary data from different sources like questionnaires and interview, observational and situational analysis as well.

12

2.3 SAMPLE DESIGN 2.3.1 TARGET POPULATION

The target population includes the customers, owners of the business and employees.

2.3.2 SAMPLE SELECTION

Due to shortage of time and lack of resources the non probability convinces sampling is used in this report.

2.3.4 SAMPLE SIZE

To ensure the reliability of data a sample size of 30 respondents is selected.

2.4 RESEARCH INSRUMENT

2.4.1 RESEARCH INSTRUMENT CONSTRUCTION
A blend of qualitative and quantitative question has been used.

2.4.2 INSTRUMENT VALIDITY AND RELIABILITY

The instrument is reliable in that situation it contains specific questions for the required objectives of open-ended questionnaire provided with the specific categorical options .The validity of the questionnaire is judged by the fact that it is given to the potential respondents.

2.5 PROCEDURES
2.5.1 Data has been collected through questionnaires and research paper etc.

2.6 SUMMARY
In order to achieve the study objective, a painstaking effort has been made to construct a questionnaire in which every question has corresponds to the objective. The questionnaire contains both open ended and close ended question.

PURPOSE OF STUDY:
The purpose of doing such type of study is to understand the problems, risks, economic techniques to start a business in a perfect market competition and in Pakistan.

13 After studying and analyzing the economic tools and techniques that are after related with the business of Mr. Zubair I come to know that he works in the perfect market and do a business of a Printing and copying. Every year he generates more and more revenue and the demand of printing is increases year by year so from 2004 to till today he jumps in profit.

Organizational plan
Form of business
Zubair press is a sole proprietor ship business in which a single person owns the business and contributing towards the capital
Starting capital NAME CAPITAL INVESTED

Mr.Zubair
Decision criteria

Rs.1400000 LAC

A decision criterion there is a centralized approach in decision making Mr. .zubair is free to take decision. He is free to take decision about the whole firm .He independently take decision about the firm like big investments or spreading of network.
PROCESS OF PROVIDING SERVICE DESIGN

14

The service of printing is given in following steps Order and sample is taken from the party or general customer Order is copied on printing plate Wait till the plate is dry Set the plate in printing machine and print the materiel according to the requirement
DELIVERING THE SERVICE

The printing material is sends to the second party mostly by TCS or given in their hand and keep a receipt on which the sign of taker, name. Cell no; stamp of the both parties is marked. In addition he also takes prove on delivery challan.

MANAGEMENT AND PERSONNAL

In the company network there are about 80-88 employees of all management levels. Top level Entrepreneur (Mr.Zubair) Middle level Accounts manager (2) Human Resource manager (2) Operation manager (3) Accountant (2) Consultant (1) Supply chain manager Service delivery manager (2) Lower level Machine operator Proof reader Computer operator Binders Packers Machine helpers

15 Office boys Salary maintainer

1:

PRODUCT MIX
Def: Product mix is the combination of products manufactured or traded by the same business.

DIGITAL PRINING7%

Product Mix

BINDING 19% PRINT ON DEMAND 40% BOOK PUBLISHING 34%

Digital printing Binding Book publishing Print on Demand

16

At start MR.ZUBAIR give only the service of printing from 1997 to 2000 (July) but after seeing the huge profit margin he also starts giving the service of Photostat to only universities and Pakistan International Airlines. The customers of Mr. Zubair as you know are the major air lines and universities so the service given by Mr. Zubair they use it for academic and admin purposes making quotations, printing of letter pads admin register and formats of managements.

1.2 KEY RESOURCES USED IN PRINTING

The key resources to operate this business is the machinery regarding to printing .Here under is mention a difference between the resources used at the start of business( in 1997) and now in to 2012.

1.3 SOURCES OF MATERIALS

The sources of materials especially ink, various qualities of papers and different sizes are bought from the whole sale market and a major provider of printing plates is wholesaler from the college road Rawalpindi.

1.4 PLANS TO UPGRADE THE SERVICE

After seeing a remarkable increase in revenues Mr. Zubair plan to upgrade his services, now he starts his business partially at credit, billing. After increase in demand from the major customers he also gives the service of color printing and the most important he opens two branches in Lahore and Islamabad respectively.

2: INTENDED MARKET ENVIRONMENT 2.1: TARGET MARKET

PROMOTIO N

PLACE

TARGET MARKET

PRODUC T

PRICE

17

Target market is a group of customers that the has decided to aim its marketing efforts and ultimately its merchandise towards. Target market for Mr. Zubair business is the place where he operates his business so for this the major targeted area of Mr. Zubair is the Rawalpindi/Islamabad. He also sets different pries menus for different services but he has no control over the market .Because he works in perfect market so he set the prices of service according to the market equilibrium.

.2.3 PROJECTED DEMAND IN 2010, 2012, 2014

PROJECTED DEMAND FOR 2010,2012,2014

8670

11346

2010

2012

2014

2.4 COMPARISON BETWEEN PROJECTED AND ACTUAL DEMAND

YEAR PROJECTED DEMAND ACTUAL DEMAND

18 2010 2012 8000 12000 8670 11346

2.5 FOR BUSINESS TO BUSINESS MARKETS, INCLUDE

The target markets defined by MR. Zubair business operations are that they are choosing to compete in the small, medium and large size business segmentation which they define as 10 to 1500 employees with the salaries ranging from Rs 10,000 Rs. 3, 50,000 and printing expenditures Rs.60, 000- Rs.1,50,000 per month. Industries include construction, airlines, and property management, health care, universities, retail chain stores. Key players in the printing business in area of Islamabad/Rawalpindi are 1. 2. 3. 4. SIGMA PRESS PRINTERS. AHMAD PRINTING SERVICES KAMRAN PRINTERS ISLAMABAD AGHA JEE PRINTERS ISLAMABAD

2.6 FOR BUSINESS TO CONSUMER MARKET

Demographic factors
The major factor for the business of Mr.Zubair is income level, which influence their business very much. INCOME LEVEL Zubair press target the rich consumers and large companies providing with luxury services. He also focus on the usual or general service that appeal directly to consumers on low incomes.

19

MARKET SIZE
The estimated market size in the coming years is written as follow.
Years 2012 2013 2014 2015 Estimated market size 13000 15000 17000 20000

ESTIMATED MARKET SHARE

The estimated market share in the market of Rawalpindi/Islamabad is 40to 43%in 2012 and the estimated market share in 2015 in the region of Rawalpindi /Islamabad is increase up to 50% by increasing their business share.

SEGMENTATION
Zubair press target segments are all the universities of Islamabad and majorly defense organization and people which includes upper middle class, middle class, and lower middle class .Along with this Zubair press has segmented its target in to

Geographical Segment
Zubair press is a start up business their fore it has a geographically segmented its target market .These geographical region are a Islamabad .Sialkot & Lahore

Psychological segmentation
Psychologically targeting Zubair press is concentrating its focus on private companies, and large businesses

20

COMPETITION
The direct competition in printing business of Mr.Zubair is the other printing companies who offer same services of printing with equal quality and price. The indirect competitors are those who provide the substitute for the product or service. In the business of Mr. Zubair those companies are their indirect competitors who provide Alcohol free printing, Lithographic free printing and the most important is GREEN PRINTING which is the substitute for their inks, printers, electricity and to the paper itself. The result of green printing is better than usual printing and it is cheap. KEY BARRIERS TO ENTRY CAPITAL According to the owner of business the highest barrier to start the business in market is the capital .He needs land, building, equipment and the effective wholesaler for the raw materials INELASTIC DEMAND One strategy to entre in market is to lower the price for sensitive consumers such as students, small firm etc but the other barrier was if he lowers the price to penetrate in the market is not effective for price insensitive consumers such as large firms and orders on booking.

INDUSTRYANALYSIS
Mr.Zubair operates in the Printing and press industry of Pakistan. Printing industry is one of the developed industries in Pakistan .Historically printing industry of Pakistan was relying only on the European origin plants equipments because of good quality, reliability, and metallurgy. But now Days a trend changes an owners move towards the Middle East origin equipments and adopt the technology of European countries.

21 4.1 GROWTH RATE OF PRINTING INDUSTRY Imports of printing machinery & Equipments No. of Offset Printing Presses US$ 26.437 million Over 20,000 estimated

ECONOMIC ANALYSIS OF INDUSTRY

The economic position of Pakistan as well as the people allows the industry to flourished grow. A quick view on main glimpse on economic position is as follows Real GDP Consumer price index Pak per capita income (in terms of purchasing power) 4% 13.85 (August 2011) $3,135.00

As per rules & regulations of the Gov of Pak, there is not any restriction on establishing such a business and work

Overall Market Analysis

Market for different printing is wide spread in Pakistan is mostly operated in local environment. There are no big players in the market of this industry. Most of the operators in the industry are running their business as Sole proprietor ship or partnership. About 70%players in the market are sole proprietor. Due to advancement in the technology & rapid adaptability of internet, this industry is being promoted online

Specific Market Analysis

As mentioned earlier Printing industry is operated in local environment so Zubair press also targeted to small local segment of market ISB/RWP Economic condition of people & companies established in ISB is a good signal for business Per capita income of people in Islamabad is RS.85000-90000 which indicates high order giving and high purchasing such economic conditions supports the SKIMMING pricing strategy of Zubair press

22

PRICE
Customer decision to purchase a service is greatly influenced by the varieties of different services. Zubair press has assigned fixed and reasonable prices of its services which may realize the customers and other companies that they select the right printing company.

PRICNG OBJECTIVES
Zubair press wants to have a high growth rate hence it has to those prices for its services which gives maximum profits in past and present. His pricing objectives follow following goals 1 Max long and short run profits. 2 Increase market share 3 Maintain price, leadership 4 Match competitors price 5 Survivals WHAT A PRICE SHOULD DO FOR ZUBAIR PRESS Achieve the financial goals of company(profitability) Fit the realities of the market place(Will customer buy at that price)

PRICING STRATEGIES OF ZUBAIR PRESS

Penetration Pricing.
When they introduce a new service or innovation in old service to cover up the cost of generating that service and penetrate in the market they set a relatively low entry price often lower than the eventual market price to attract the new customer. The strategy

23

works on the expectation that customer will switch to the new service because of the lower prices.

Value Based Strategy

For the pricing of services, Zubair press is following the value based strategy .In order to cover up the cost and to gain maximum possible profits. Zubair press has d3ecided to take 25% mark up on cost of each service.

PRICING STRUCTURE
Name of service Screen printing Electro printing Letter press Price 550-700 600-700 300-400 Markup 25% 25% 25%

DISTRIBUTION CHANNELS
Initially Zubair press was operating from one branch so it doesnt have complicated distribution channel right now. Zubair press is using the following approaches for distribution.

1. DIRECT SELLING
Zubair press directly sells its services to companies and order givers. First it take the raw material from the supplier and then raw material is sent to all branches .Using this raw material variety of services according to the customers demand are made and then sold. In direct selling following model is used by Zubair press.

24

Zubair press Supplier branch

end user

2. COURIER SERVICES
Zubair press will also conduct business online. Due to advancement in technology and rapid adaptability of internet it has been crucial for it to expand its business activities over internet. Online orders in response of effective electronic advancement will be received and shipment of these orders will be made through courier companies .Zubair press has following model for online trading.

25

FINANACIAL PLAN
In past Zubair press needs high capital investment to recover its expenses like salaries along with the cost of production thus Mr.Zubair is investing PKR 14 lac as its initial capital investment.

Sources of funding
Mr. Zubair is the only person and investor in the business who fulfills the requirements of capital to meet their start up cost. Capital structure of Zubair press only includes equity. No debt is included to raise funds because it has an extra burden of expenses like interest, which results in lower profits.

EQUITY STRUCTURE
Name Mr.Zubair Capital investment 14 lac

Per order/unit cost

Cost of orders made No. Of orders made = 63, 20,466 4334
=

= RS. 1460
BREAKEVEN ANALYSIS
Fixed Costs: Variable Cost (per unit): Selling Price (per unit): Time Period:
1400000 1460 1600 yearly

26

The breakeven point for Mr.Zubair business was came in year 2003 July.

PRIMARY DATA ANALYSIS

MANAGEMENT TURNOVER
Q1 For how long do you work for your company? a) 46% works between 1-2yrs b) 30% works between 3-5 yrs c) 24% works for more 5 yrs Q2 How was the initial training in your company? a) 37% says below expectations b) 49% says meet expectations c) 14 % says above expectations

Q3

Job market competitiveness of your salary? a) 78% remains neutral b) 6% are satisfied

27
c) 16% are dissatisfied

Q4

The Job itself----? a) 63% says reasonable b) 37%says challenging

Q5 The two training areas most important to your development over the next years would be? a) 81%says task management b) 19% says time management Q6

two

Overall, how satisfied are you with the quality of the client services provided by your department? a) 95% are satisfied b) 5% are dissatisfied

QUESTIONNAIRE
What are the most significant challenges your business is likely to face in the next five years? ------Shortage of paper, and poor economic conditions--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Are there any specific problems affecting small businesses in your sector? ------Cost of labor in high day by day and adversely affected by electric breakdown-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Has your business adversely affected by changes in the tax system? ---------Tax on stationary ie GST tax is remove but it does not affect us very much -------------------------------------------------------------------------------------------------------------------------------------------------------

28 -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------When starting up a business/taking control of the business, from where did you seek out advice or information? Informal advice only(friends, family relationships) Legal advice Market scanning Un willing to answer Ans: Informal and also Market scanning How do you aim to achieve your longer term growth plans? Is it by-------? Increased turnover by increased market share in existing market Increased turnover by exploiting new markets Increase the skills of workforce.

Ans: Increased turn over by increased market share in existing market. Do you expect to fund your business growth using? Internal finance External finance Both

Ans:

Internal finance

Overall which is the biggest obstacle in the success of business? The economy Obtaining finances Cash flow Keeping up with new technology Competition in market Taxation, business rates

Ans: The economy Does your business get any benefits from increased globalization? Yes No Yes a little bit

29 Ans: Yes How much do you feel the govt takes in to account the concerns of small business? Very much Quite a lot A little Not at all

Ans: A little

Do you draw income, either in part or in full in the form of dividends from your business? Ans Yes No Yes but not whole almost 45% after every 2 months for the salaries, and indirect utilities

Potters Five Forces Analysis

Potters five forces analysis is a frame work for industry analysis and business strategy development formed by Michael.E.Poter.of Harvard business school in 1979. Potter referred to those forces close to a company that effect its ability to serve its customers and make profits. While discussing the competitive position of Zubair press following factors can have great influence:

30

THREAT OF NEW ENTRANT BARGAINING POWER OF BUYER RIVALRY AMONG COMPETITIORS SUBSTITUTABILITY BARGAINING POWER OF SUPPLIER

Threat of new entrants (high).

Threat of new entrants for zubair press is high. Start up cost is low which shows low entry barriers .This attracts the new entrants to get enter into business .This threat can be lowered by maintaining a sustainable competitive advantage of providing a quality services with innovation.

Rivalry among competitors (high)

Rivalry among competitors is high for zubair press as there are more than 250 printing Presses in the region of Islamabad/Rawalpindi. In target market the main three competitors exist so zubair press put their whole efforts to compare them, and capture maximum share.

31

Bargaining power of buyer (low)

Bargaining power of buyer is low for Zubair press because of the availability of a lot of substitutes

Substitutability (High)
Threat of duplicate service or substitute for service is very high .There are a lot of substitute available in the market for the services of zubair press.

Bargaining power of supplier (low)

Bargaining power of supplier is low .Because of availability of large number of suppliers in the market .Zubair press is in better position to defend its interest

COMPETITIVE GRID
Competitive Forces Threat of new entrants Bargaining power of buyer Rivalry among competitors Substitutability Bargaining power of supplier Threat to industry Profitability LOW MEDIUM

HIGH

BCG MATRIX
Also called Growth Share Matrix (BCG).It provides a useful way of a looking at the opportunities and helps to analyze which segments of the business are in good position and which one arent .That way, one can decide on the most appropriate investment strategy for the business in the future and where best allocate resources. The higher the market share, the proportion of the market can control .The Boston Matrix assumes that if one enjoys a high market share they will normally be making money.

32

BCG MATRIX OF Zubair press

Star Print on demand Book Publishing

Question mark Digital Printing

33 High

Market growth

Low

High Market Share

Low

SWOT ANALYSIS
For the business of Mr. Zubair following are their main strengths:

STRENGHTS
High degree of market coverage

34 Service and flexibility Service can be easily recycled Economies of scale High profit margin Customer oriented Experience of massive production of orders Not necessary to rely on bank for startup finance Supply can creates its own demand

WEAKENESSES
Direct competitor in Isb/Rwp. Low profits in the early stages. Uncertainty about business.

OPPORTUNITIES
Easy availability of supplier providing raw material Technological advancement Serving the un serve market

THREATS
Decreased purchasing power of people Possibility of new entrants due to low entry barriers Massive operations of competitor may reduce the market share Unstable economic conditions

CRITICAL RISK FACTORS

Risk management
The objective of risk management is to reduce different risks related to business. It may refer to different types of threats caused by numerous environmental, technological, human, organization, and politics.

CRITICAL RISK ANALYSIS

35 The risks which are analyzed by Zubair press are as follows Management Risks Operational Risks Financial Risks

Management Risks In this risk Zubair press realize that there may be any dispute in management team
due to any unforeseen reasons which may results to terminate any of the members.
Remedy:

In this case when any of the members of the management teams leaves the firm he is not entitled to use the name of firm .He cannot start the same business with any other name.

Operational risks
The risk which can disturb the operation of business such as production. There may be load shedding, or over demand or any flaw in plant or machine. Remedy: For minimizing this risk Zubair press have adopted proactive measures like by having firms own D.C power and back up machines and printing plates.

Financial Risks
Zubair press realizes that in case of shortage of capital which is reserved for every department differentially which causes the business to suffer. Remedy: To avoid this risk Zubair press made certain clauses that they made a back up from the help of retained earnings which is now in amount of approx RS.23, 68,000 to use this capital when necessary.

36

EXIT STRATEGY
Following are the two exit strategies in case God for bids he wants to leave this perfect market so he also prepares two options which he chooses a better one in that situation.

Sale of Business
One of the Strategies of exit from the market wills the selling of business to another party or a persons which at least give money which covers the capital of Mr. Zubair. He is willing to sell his business after the valuation of business at the cost of valuating business.

37

MERGER
The other exit strategy will to merger the business with the other company of same business this is done when heavy losses are incurred in business and business will not able to recover the variable cost.

CONCLUSION
Zubair press have not enough machines and in case of high demand on printing ,book publishing season the human resource works in the shifts .The over usage of machines can decrease their life. Digital printing is a question mark for their business because it has industry growth but generates low revenue .Zubair press does not done effective promotion of their company to increase or capture more and more market share.

RECOMMENDATIONS
Implement new machinery which is of advanced technology. Give free delivery of orders to those areas which are came under the range 30KM to 40 KM so as this will built up the consumer confidence and hence the DOP will rises. Profit generated by the digital printing is less then cost so with in coming six months should effective steps about digital printing service of the company.

38

Effective marketing should be started to increase awareness in public about their company Printing press is a business in which we see a high profit margin and zubair press is going in profits so they must extend their branches to other cities. Discount should be offered to the universities and students.

References
www.einfopedia.com/per-capita-income-of-pakistan.php www.quickmba.com/strategy/porter.shtml www.businessballs.com business/selling