GROUP NAME: STRATEGIC

DEVELOPERS

Group Members:

Munesh Kumar
Muhammad Usama
Abdul Basit
Amanullah
FINAL TERM Course: Strategic Management

REPORT Date: 06/12/2018

Submitted to: Mr. Khurram Khan

 Table of Contents

1. INTRODUCTION……………………………………………………………………......8-10
1.1.Background………………………………………………………………………….…..….....8
1.2.Vision…………………………………………………………………………………….……9
1.3.Mission………………………………………………………………………………………..9
1.4.Values……………………………………………………………………………………...….9
1.5.A Spectrum of Products…………………………………………………………………..….10
2. INTERNAL ANALYSIS……………………………………………………….………..11-19
2.1.Value Chain………………………….…………………………………………………..12-14
2.1.1. Firm Infrastructure……………………………………………………………………….12
2.1.2. Human Resource Management…………………………………………………………..12
2.1.3. Technology………………………………………………………………………………12
2.1.4. Procurement…………………………………………………………………….……….13
2.1.5. Inbound Logistics………………………………………………………………………...13
2.1.6. Operations………………………………………………………………………………..13
2.1.7. Outbound Logistics………………………………………………………………………13
2.1.8. Marketing and Sales……………………………………………………………………...14
2.1.9. Service…………………………………………………………………….……………...14
2.2.Core Competency Of Alkaram…………………………………………………………...15-17
2.2.1. Home Textiles Products and Fashion Garments…………………………………………16
2.2.2. Yard Dyed Home Textiles……………………………………………..………………...17
2.2.3. Branded Customers………………………………………………………………………17
2.2.4. One Floor Operations…………………………………………………………………….17
2.2.5. More than 8,000 labor force……………………………………………………………...17
2.2.6. Oracle ERP Business Suite V-10………………………………………………………...18
2.2.7. IFE (Internal Factor Evalution………………………………………………………..18-19
2.3.BCG Matrix………………………………………………………………………………….19

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3. MICRO ANALYSIS……………………………………………………………….…….20-27
3.1.Michael Porter’s Five Forces Model………………………………………………..……21-23
3.1.1. Threat of New Entrants…………………………………………………………..………21
3.1.2. Bargaining Power of Customers…………………………………………………………21
3.1.3. Threat of Substitute………………………………………………………………...…….22
3.1.4. Bargaining Power of Suppliers……………………………………………………..……22
3.1.5. Industry Rivalry………………………………………………………………………….23
3.1.6. Government Regulations………………………………………………………………...23
3.2.EFE (External Factor Evaluation) Matrix………………………………………………..24-25
3.3.CPM Matrix………………………………………………………………………………26-27
4. MACRO ANALYSIS…………………………………………………………………….28-35
4.1.Extended SWOT Analysis (TOWS) ……………………………………………………..29-30
4.2.Internal External Matrix…………………………………………………………………..….31
4.3.Space Matrix……………………………………………………………………………...32-33
4.4.QSPM…………………………………………………………………………………….34-35
5. Recommendation………………………………………………………………………….....36
6. Learning……………………………………………………………………………………...37
7. Conclusion…………………………………………………………………………………...38

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 ACKNOWLEGEMENT

“We owe our profound thanks and deepest gratitude to almighty Allah, most merciful, who blessed us
with determination, strength, ability and divine help to complete this piece of work”.

Firstly, we would like to thank our course instructor Mr. Khurram Khan for giving us opportunity to
know more about the organizations strategically, We would also like to thank Mr. Raheel ur Rehman
the Assistant manager Human Resource at AL-KARAM TEXTILE MILLS (PVT) (LTD) who has
provided us with valuable information regarding their Organization, and helped us in gaining
constructive information regarding our strategic management course.

Regards,
All group members.

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 LETTER OF TRANSMITTAL

December 6, 2018

Mr. Khurram Khan

Instructor, Strategic Management
Mohammad Ali Jinnah University, Karachi.

Dear Sir,

This is the term report on “Strategic Management at Alkaram textiles (Pvt.) Ltd Pakistan”. This
report consists of the Internal Analysis (VG-CAVES & MAPPERS), Micro Environment Analysis
(GP-COSMIC), Macro Environment Analysis (GDL-STEEP), Recommendations & Conclusion.

This report has not only words but its consists of a lot of research, hard work and passion to learn
more about strategic management.

Thanking you.

Sincerely,

Muinesh Kumar
Muhammad Usama
Abdul Basit
Amanullah

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 PURPOSE OF REPORT

The Purpose of this report is to

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 EXECUTIVE SUMMARY

Alkaram textile private limited is a progressive textile company provide the high quality and
standards and doing manufacturing and marketing of garment wear as well as home furnishing
Products. It also runs its own retail outlets to sell its product directly to consumers market.

According to Porter’s 5 forces in the textile Industry, the threat of new entrant is moderately low
because barriers to entry being high. Moreover, the bargaining power of buyers is quite high; among
many reasons contributing to this one of them is the large number of buyers with relatively small
purchases as well as many players in the industry offering the product though being differentiated but
resulting increasing the available brands for the buyer to choose from without incurring any significant
switching cost. The threat of substitutes is low as the potential customers are already caged in brand
equity trap and are not willing to replace it with unbranded clothing. In addition to that, supplier has
low bargaining power also being in large numbers with holding standard material. The rivalry among
the competitors is intense. All of this, in addition to the macro environment factors contributes to the
industry being convincingly attractive in the industrial analysis.

Alkaram’s core competencies are the fact that they provide price competitive products which are
significantly below from other players operating within the textile industry and also, they have the
most widely distributed retail networks with continuous supply of stock, thus through these they have
captured large chunk of consumer market, not only locally but also in export business. Moreover,
Alkaram textile mills have very good SCM system which provides all knowledge about what is going
on with its suppliers and have effective and timely deliveries of raw material. Furthermore, it has also
introduced a new concept of having its own retail outlets all over the major cities and started
ecommerce for convenience international consumer market along with creating e-catalogue for on-site
promotion.

Currently Alkaram is only focusing on consumer market which has lots of competitors such as Gul
Ahmed, Nishat, Lucky, Karma etc, which relatively highest market share. Thus when we analyzed the
strategies by doing different matrixes such as CPM, TOWS, IE, we chose two strategies that they can

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adapt: one of them being product development by introducing either menswear or ready to wear
garments through strategic partnership with well-known designers and the other being a strategy
related to the penetration of existing markets in through making more effort in promotion of e-
commerce to gain more market in export business.

The implementation of the strategy is explained through the balanced business score card.
Furthermore; Alkaram has a conservative management style following seth culture, which would
have to be changed to implement the strategy. Their employees and leader should be prepared to
face a few years of loses, as lots of products will have to be cut down. Moreover, a lot of employees
will have to be let go, to implement this strategy.

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 1. INTRODUCTION
AlKaram textile mill found in 1986 as straight combined complex mill. Alkaram textile is every day
when it is come style materials. The company made everything every kind of men and women
products. The company capability to generate advancing thoughtful results that giving to clients for
competitive benefit. The main services they provide are
 Fiber Work
 Spinning
 Knitting
 Weaving
 Designing
 Dyeing
 Printing
 Cutting & Stitching

The company-built capacity of over 1 million Sq feet. The company have space to achieve Small,
Medium and Large scale. Contribution of a diversified variety of products. Our clients be able to mix
and match from wide range of printing, (Yarn Dyed, Solids, Dobby & Jacquard). Similarly, contract
(Sateen, Basket Weave, Percale & Knitted to Woven Fabric.

1.1.Background
The cluster has its heritages within the initial decade once it started the occupation of ounces and
lubricant within the landmass. Risk-taking skills and acumen have perpetually been the thrust
overdue the achievement of the cluster. based mostly in Karachi, the Alkaram cluster has unrolled its
dream of evolution and well-known its varied issues wide and overseas. Following opportunities
within the fresh created state of Islamic Republic of Pakistan, the cluster nourished within the fields
of textiles, F & B, salt mining, cordial reception, mercantilism and delivery.
A melting pot of adept workers and progressive technology, Alkaram has been achieve success
employing a easy formula; brief lines of statement were unbroken, together with systematically fast
nonetheless well thought-out selections by directors that are a part of the Alkaram combine since the
beginning. In exploitation this straightforward philosophy, they need ensured that the identity of
Alkaram has not been lost on the means which the ladder of success they need been rise has been

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leaning against the correct wall. presently the cluster became the most important business family of
the country by making the foremost fashionable textile units that went on to become social unit
names of the country.
Amna Industries: utterly integrated Spinning & Finishing mill specialized in fabric. 2) Islamic
Republic of Pakistan Synthetics Producer of FTO Fibre underneath technology from Teijin japan,
manufacturing eighty Tons per day feeding into the Textile Spinning Sector of Islamic Republic of
Pakistan. PSL Caps makes a specialty of manufacturing plastic and crown caps for the nutrient
business, PSL caps is proud to own the foremost fashionable and advanced high-speed machines. 3)
Dhabeji Salt Producer of salt for Chemical Industries and common salt. 4) Satter Ltd native
mercantilism House.
The Retail Arm of the Group: Realizing the expansion in retail, the Group's vision is to become the
most important electronic equipment retail merchant by providing middle to higher markets brands
to satisfy client desires. With client desires at the forefront, we've got created personal brands and
have franchised international specialty brands to bring the simplest retail expertise and price for our
customers.
Vision
To reach customer satisfaction by providing nothing but the greatest, by mean of utilizing and the
premier quality of resources and world class system. Our vision is serving our clients with loyalty
and offer specializing services and global quality promise.

1.2.Mission
The company pursues a high-level standard performance and aim for long term leadership position
in textile sector in which it competes. Striving hard to get high level of client’s satisfaction through
the timely distributions and enhance quality and value of our products.

1.3.Values
 Honesty
 Simplicity
 Teamwork
 Passion

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  Leadership
 Positive attitude
 Humbleness

Values and honesty and human dignity also ethical approach in commitment to all associated
Stakeholders, Customers, Suppliers and Employees and others close to our hearts resulting our hard
earned believed and success.

1.4. A Spectrum of Products

Alkaram boasts a large vary of merchandise. Our spectrum is numerous, from materials like Yarn
artificial , to finished merchandise like shower curtains.

Yarn Home Health Care

All Kind of cotton yarn. Shower Curtains Patient Gowns (Such as ICU,
X-Ray, IV Gowns etc).

All kind of polyester blend Kitchen linen Scrub Suits (Top & Bottom)
yarn.

All kind of Knitted yarn. Pyjama suits Doctors and Nurses Uniforms

All kind of twisted yarn & Bed in a bad Lab Coats

Special yarn.

Fashion apparel Woven & Knitted Bedlinens

Curtains

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 Internal Analysis
(VG-CAVES & MAPPERS)

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2. INTERNAL ANALYSIS
2.1.Value Chain

2.1.1. Firm Infrastructure

Al-Karam is constructed space of over a million sq. feet; Al-Karam has the capability to meet little,
medium and large-scale orders. It has warehouses for 10 different categories (including dyes
warehouse, chemical warehouse, stitching warehouse, lubricants warehouse). Al-Karam ensures
safety for its workers and provides employees with safe and healthy work in compliance with all
applicable laws and rules, ensuring fire safety, adequate lighting and ventilation. For ensuring fire
safety, Al-Karam has fully equipped firefighting department with fire alarms and extinguishers
installed in every single room. There’s also an extension in processing unit in order to raise the
efficiency of processing department.

2.1.2. Human Resource Management

Al-Karam ensures to pay workers compensation required by law and provides all legally mandated
benefits to encourage worker creativity and productivity. Al-Karam beliefs in: Respect to Human,
transparency and teamwork. At al-Karam, there’s highly experienced, qualified and professional
staff (which includes FCAs, CAs). The head of the department also appoints a mentor for the new
hires who gives orientation and class room training to the new ones.

2.1.3. Technology
Al-Karam invests plenty in technology that permits Al-karam to systematically turn out extremely
differentiated merchandise. Alkaram inventive center is provided with progressive planning and
sampling instrumentation. The management of Al-Karam follows the policy of re-investing in
technology. it's increasing its state-of-the-are production method unit. Al-Karam Textiles have
foreign the most recent equipment from Europe. Their equipment includes of apparatus utilized in
whirling and knitting. They practice the most recent kind of appear, referred to as the shuttle-fewer
appears in their processes that is that the newest technology, and which might turn out a awfully high
yarn count amount, within the vary of a hundred threads per sq in. (the traditional is 30-40).
Therefore, their merchandise is skilled of assembly global canons of knitting, coloring and printing,

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for instance mistreatment dyes that don't irritate the skin. this can be being done to induce a
competitive edge over rival corporations so once the WTO promulgates free economy within the
whole world, Al-Karam can don't have any drawback in competitive with international competitors.
Al-Karam encompasses a policy of endlessly upgrading its machines to stay among the foremost
trendy and economical textile mills within the country.

2.1.4. Procurement
As Al-Karam is an ISO Certified company so it relies on the best and high-quality raw materials in
order to meet the expectations of its buyers (including Walmart, IKEA & Target) and to maintain its
standard. Al-Karam also emphasizes on purchasing high quality replacement parts for its state-of-
the-art machinery.

2.1.5. Inbound Logistics

Al-Karam has alliances with best suppliers of raw materials in order to maintain the standard and
quality of its products. Al-Karam has preservation system for the handling of raw materials in order
to minimize the damage and for maintaining the quality of the products.

2.1.6. Operations
Al-Karam ensures that its product ne'er keep off from its goal. From the primary step of operations,
the creation of fibers via spinning, right down to the last, of sewing the finished cloth, product are
perpetually checked to make sure they find yourself precisely however Al-Karam’s customers wish
them. every step is rigorously planned. Al-Karam incorporates a absolutely integrated services
facility that uses the newest technology across all components of the products' voyage. Al-Karam
permits its customers to induce the product in step with their demand.
2.1.7. Outbound Logistics

Al-Karam has responsive order processing procedures. It ensures deliveries of products to its
customers on time and rapidly. It has warehouses for 10 different categories (including dyes
warehouse, chemical warehouse, stitching warehouse, lubricants warehouse). Al-Karam has its own
different retail outlets namely Alkaram studio, Baby shop. It has outlets in different cities of

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Pakistan. There are 2 outlets in Islamabad, 5 in Lahore, Karachi has 3 outlets and in Faisalabad, they
are planning to open an outlet very soon.

2.1.8. Marketing and Sales

Al-Karam takes part in international exhibitions where Al-Karam places its stall to attract customers
from different countries. e.g. Heimtex is a very famous international exhibition for textiles. This
exhibition took place every year and Al-Karam sent a representative or marketing managers and
some other personnel to manage their stall in the exhibitions and show the products properly. It is a
culture in export marketing/sales department of Al-Karam that every salesperson or merchandiser
must dress up formally. Because they do meetings with managers from other organizations (for
example Supplier, buyer, middle-men etc). So, the dressing of sales person gives impression about
the company especially in B2B selling. In case of home textile exports of Al-Karam, the sales person
uses target market techniques for different buyers. For example, IKEA and WAL-MART are its two
big customers; they present different products according to the needs of each of them. If a specific
buyer demands development of new product and gives specifications and design for the product, the
sales person communicates it to the company and then the procedure of development for the new
product is followed. The marketing/sales department of Al-Karam is working with merchandisers
who perform the sales function. The company has its own sales force that is involved in the selling
function. The company didn’t outsource its selling function. Al-Karam textiles have divided the
export marketing department into different markets as per countries or buyers to which it caters. The
number of senior and junior merchandisers is assigned to each market according to the size of
market. And the sales team in each market will use strategies according to the needs of its specific
customers.

2.1.9. Service

Al-Karam is committed to provide a safe and healthy environment for its employees, customers and
visitors. Al-Karam invests in educating rural and urban communities.

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2.2.CORE COMPETENCY OF ALKARAM
A core competency is that the results of a selected distinctive set of skills or production techniques
that deliver price to the client. Such competencies empower a corporation to access a good style of
markets. Executives ought to estimate the longer term challenges and opportunities of the business
so as to remain on prime of the sport in varied things. . A core competency ought to be
"competitively unique".

Home Textiles Products and Fashion Garments

Home Textiles products market is very vast, and it has lot of players in it. Al-Karam mainly exports
all of its home textile products to different countries. As the exports of home textiles is flourishing
from past few years. So, the company is gaining advantage by acquiring new customers from
different markets and the main players of home textiles in Karachi are YTM, Al-ABID etc. Al-
Karam is making following home textile articles:
• Kitchen wear
• Windows
• Bed linen
• Jersey Knits for home textiles
• Bed in a bag
• Room in a bag
The annual sale of Home Textiles (exports) by A-Karam is about $100 million. And the following
table shows the share of different markets of Al-Karam:

COUNTRIES TURNOVER (%)

Spain 2
Germany 4
U.K 2
France 8
U.S.A 35
Sweden 40
Others 9

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2.2.1. Yard Dyed Home Textiles

Al-Karam Textile Mills is the largest yarn dyed manufacturer in Pakistan. There are only few
manufacturers of yarn dyed in Pakistan. Al-Karam Textile Mills export high quality yarn dyed home
textiles like curtains, kitchen linen.
Yarn Dyeing Capabilities:
- Capacity of 18 tons per day.
- All machines are air-packed.
- One-time dyeing capacity ranges from 2 lbs - 4000 lbs

2.2.2. Branded Customers

Al-Karam Textile Mills’ sales are largely based on exports. Its sales accounted for 85%-90% of
exports. Al-Karam Textile Mills have got branded customers namely IKEA, Wal-Mart, Tommy
Hilfiger, Calvin Klein, Ralph Lauren etc. Al-Karam additionally provides its customers with
complete in-house style solutions. Al-Karam’s inventive center is supplied with progressive planning
and sampling instrumentation and competent textile artists.
2.2.3. One Floor Operations

Al-Karam Textile Mills has got one floor operations. Its operation process includes from spinning,
weaving, yarn dyeing, wet processing/finishing, cutting and stitching to retail and distribution. The
cotton enters the mill as raw material and it gets out of the mill as a product like bed linen, fashion
apparel etc.

2.2.4. More than 8,000 labor force

Al-Karam Textiles employs regarding eight,800 employees, WHO add 3 shifts of eight hours every
throughout the day. they're terribly intended as a result of they're paid higher than folks in textile
mills, which they solely just like the atmosphere of working at Al-Karam. there is a brotherhood in
Alkaram Textiles, but relationships between the union and so the management is desirable and not

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resentful . the foremost effective indication of the desirable relationship is that that there has been
not one strike at Al-Karma Textiles since its origin.

2.2.5. Oracle ERP Business Suite V-10

Al-Karam Textile Mills has updated its ERP system. Al-Karam Textile Mills have adopted Oracle
10.0 Version and they call it V-10. This required extensive off shoring to their key users. It is an
integrated system at some levels in which everything is incorporated from top to bottom. This is the
most sophisticated and latest system and it is perfect for manufacturing companies

2.3.IFE Matrix
WEIGHT RATING WT.
SCORE
STRENGTHS
State-of-the-art equipment 0.15 4 0.6
Strong brand awareness in target market 0.10 4 0.4
Diversified product portfolio with Home textile products 0.10 4 0.4
and fashion garments
Self-owned power generation system 0.05 3 0.15
Branded customers like IKEA, Wal-Mart 75% sales comes 0.10 4 0.4
from export
One floor operation (when cotton enters as raw materials 0.05 3 0.15
and it exits from the mill as bed linen, fashion apparel etc)
WEAKNESSES
Weak R&D facilities 0.10 2 0.2
Lack of HR training & development 0.05 2 0.1
Weak Information Systems 0.10 1 0.1
‘Seth’ culture resulting in discouraging of the mere 0.08 1 0.08
accountability in compensation processes.

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 Transit time is much more as compared to foreign 0.07 1 0.07
competitor
High reliance on international market for profitability 0.05 2 0.1

TOTAL 1 2.75

We have victimization weighted classification system for the development of Internal issue analysis
Matrix. a number of vital steps concerned within the construction internal issue analysis Matrix are
given below:
In the initial Column, we've list down twelve Strength and weakness of Alkaram textile
In the Second Column, we've assigned weight to every issue starting from (0.0 not vital one most
important).
We rated every factor from 1 to 4, 4 represents major strength ,3 represents minor strengths, 2
represents minor weakness & 1 represents major weakness. After that we have multiplied weights
with rating of every factor and sum every factor multiplied total.
The IFE score of Alkaram is 2.75 which show that company is stable, but it needs to hold and
maintain it, company should focus on its weaknesses and reduce it to grow more. Company should
focus on the Market penetration and Product development.

2.4.BCG Matrix

Question
Star
Mark

Cash
Dogs
Cows

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Micro Analysis

(GP-COSMIC)

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3. Micro Analysis
3.1.Michael Porter’s Five Forces Model

3.1.1. Threat of New Entrants

The threat of recent entrants is incredibly low, since the barriers of entry are high. the key reasons
for the threat of entry to be low are as a result of there's a large quantity of capital required to enter
into the trade, because of the necessity of updated style technology and information to line up the
companies and also the issue in accessing these for the textile trade. Moreover, the big firms
existing within the trade will get vast value advantage which might be tough for brand spanking new
entrants to get. together with that there's an oversized quantity of value to get the license that isn't
reasonable for brand spanking new firms. Also, there's a desire of lots of research to stay updated
with customers ever-changing trends and life vogue, that is dear for the corporations. Not solely the
price of capital and R&D, there's lots of competition among the prevailing corporations that
build it tough to enter the trade, particularly Nishat, Gul Ahmed, lucky textiles etc. These well-
established corporations build it robust for corporations to enter into the trade, thanks to the sturdy
whole image that these corporations have within the market. it's hard to win over customers to vary
the businesses they already house. thus new entrants can face terribly serious resistance from the
already well-established wholes who not solely have terribly high brand equity, however
additionally with their expertise they will lower down their costs while not appreciable harm to their
brands to force the new entrant out of business. Thus, this low threat of recent entrants makes it a
good trade.

3.1.2. Bargaining Power of Customers

There is a high buying power in this industry. There are vast numbers of purchasers in business
associated to the companies that previously occur but each of this these many diversified customers
only purchase in small amounts. Even though there is little cost related with clients transferring
contractors, however, theres is a massive amount of data that regulars need about the goods plus they
are attentive of the need of further info. Moreover, the customers cannot take the firm’s functions in-
house and the customers have profitable businesses. Since the product is quite differentiated and has
strong brand identity, the customers are therefore not so sensitive to pricing; however, there is vast

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number of firms producing the same product in the industry, so this provides many choices to choose
from hence increasing customer’s power over the industry. Thus, with this analysis, we can conclude
that this industry is unattractive, since the bargaining power of buyers is quite high.

3.1.3. Threat of Substitute

There is a low risk of alternatives in this industry, there is very small chance that the likely regulars
will substitute the firm’s goods mostly for of the low quality and sub-standard designs of the product
and due to the strong influence of elite oriented society where buying the firm’s product is
considered as status quo. Moreover, the substitutes which are available, they do not meet the
performance of the firm’s products and therefore are not able to compete even with the lowered
prices. Also, potential customer is seemingly falling in the brand equity trap which makes it even
more possible of customers to remain with the firm’s product. Another important point is that since
firm’s products closest substitutes are locally sold unbranded clothing, so in the contemporary sense
there is no real substitute for these branded products available in the market, which eventually makes
the threat of substitutes very low. Thus, there is a low threat of substitutes, therefore making the
industry favorable and attractive.

3.1.4. Bargaining Power of Suppliers

Bargaining power of suppliers being quite low. The supplier for the textile industry mainly consists
of wool and cotton thread suppliers, as well as the dyes of the different colors and the design stamps
/prototype molders to give finished clothes a unique and appealing pattern. These suppliers are
mainly local. The industry has a lot of such suppliers to choose from which gives the industry an
edge over the suppliers. The trade will switch suppliers quickly and these suppliers can realize it
troublesome to enter the trade, together with this the business is very important for the suppliers.
However, the inputs required are in the main standardized and haven't any individualism or
differentiation; so, these inputs will simply get replaced and substituted. there's no sizable addition to
total prices thanks to the prices of purchases. Thus, on top of analysis shows that the negotiation
power of the suppliers is low, creating the trade fairly engaging.

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3.1.5. Industry Rivalry
There is high rivalry existing in the textile industry. This industry in Pakistan has substantial
competitive enmities, there is a rapid growth in the industry, the industry is not cyclical and there are
notable product differentiations and brand identities. There are high fixed costs relatively to the total
costs of the business. Also it's challenging to exit the business since there are long commitments and
specialized required. There are variable price variations that the purchasers would incur in change to
competitors, betting on that rival it's going for. Moreover, all the most important competitors are
nearly the identical size. Thus, this analysis shows that the contention among existing competitors
within the business is sort of high, that build the business somewhat unattractive.

Government Regulations
There is medium threat of government regulation to textile sector due to the Government policy
changes and changes in the Tax, Import and export taxes.

S 5+1 Forces Overall Industry Rating

1 Threat of new entrants Low
2 Bargaining power of Customers High
3 Threat of substitutes Low
4 Bargaining power of supplier Low
5 Industry Rivalry High
6 Government Regulations Medium

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3.2.EFE (External Factor Evaluation) Matrix

WEIGHT RATING WEIGHTED

SCORE
OPPORTUNITIES
Customers are great opportunity due to different 0.07 3 0.21
target market we have.
Al karam is leading organization and more chances to 0.05 3 0.15
grow more.
Suppliers are good opportunity due to the low 0.15 4 0.60
bargaining power of suppliers.
Cheap labor and domestic raw material available 0.10 4 0.40
Growing popularity of knitting industry in all over 0.06 3 0.18
the world
More participation in international clothing 0.15 4 0.60
exhibitions like Hetrimax etc.
THREATS
Production cost of textile mills has risen due to the 0.02 2 0.04
increasing interest rate
Low R&D in the cotton sector resulted in low quality 0.07 2 0.14
of cotton in comparison to rest of Asia
Tough competition from India, China in value-added 0.13 1 0.13
textiles & garments products especially in export
market.
Due to load-shedding, textile production capacity of 0.08 1 0.08
various sub-sectors has been reduced by more than
30% annually.
Intense seasonal demand variability in the market 0.12 1 0.12
with changing customer preferences
TOTAL 1 2.65

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We have victimization weighted classification system for the development of External issue analysis
Matrix. several necessary steps concerned within the construction External issue analysis Matrix are
given below:
In the 1st Column, we've got list down eleven chance and Threat of Textile sector.
In the Second Column, we've got appointed weight to every issue starting from (0.0 not necessary 1
most important) and therefore the add of all weight should equal than one.
We rated every factor from 1 to 4, 4 represents major strength ,3 represents minor strengths, 2
represents minor weakness & 1 represents major weakness. After that we have multiplied weights
with rating of every factor and sum every factor multiplied total.

The EFE score is 2.65 that may be a very little higher than average score, indicates that Alkaram
isn’t winning full edged benefit of its opportunities associated not minimalizing the intimidations in
an economical way. it's simply doing it in a median approach. However, Alkaram will improve its
sales by grabbing different opportunities and reduce the risk of threats. It will make the most of the
rising market share, rising population, will obtain native firms and dynamic enlargement into
alternative areas. On the opposite hand, it will diminish the pressures like the forging of medicines
and might increase its profits.

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3.3.CPM Matrix

Critical Weig Ratin Weighte Rati Weight Rati Weight Rati Weight
Success ht g d ng ed ng ed ng ed
Factors Score Score Score Score
Advertising 0.10 3 0.30 2 0.20 4 0.40 1 0.10
R&D 0.03 1 0.03 2 0.06 2 0.06 3 0.09
Product 0.15 3 0.45 3 0.45 3 0.45 2 0.30
Quality
Price 0.05 4 0.20 2 0.10 2 0.10 2 0.10
Competitive
ness
Management 0.02 2 0.04 2 0.04 1 0.02 2 0.04
Financial 0.15 3 0.45 3 0.45 3 0.45 4 0.60
Position
Customer 0.10 3 0.30 4 0.40 2 0.20 2 0.20
Loyalty
Global 0.12 2 0.24 1 0.12 2 0.24 3 0.36
Expansion
Market 0.20 3 0.60 4 0.80 2 0.40 1 0.20
Share
E-Commerce 0.08 4 0.32 2 0.16 3 0.24 1 0.08
1 2.93 3.14 2.56 2.88

Analysis
Alkaram textile is dominating in industry over many local competitors including Nishat textile
limited and lucky textile mills, however followed by Gul Ahmed in the textile industry in terms of

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overall rating indicated by the competitive matrix, by securing 2.93 weighted score. Thus, CPM
score shows aggressiveness of Alkaram in this industry over most of its competitors.

Moreover, Alkaram has highest price competitiveness over all its rivals along with good promotional
tactics. Also, its online commerce is also its best feature all over the industry, supported by
convincing customer loyalty and compelling market share capturing.

Furthermore, Alkaram has also pretty strong standing in the financial position in the textile industry
along with fine product quality giving an edge over its competitors. However, the main factors
where it lacks to gain competitive perimeter includes: low investment in research and development
as well as technological up gradation, little less efforts in global expansion and also disgruntled
management system because of undeniably influencing Seth culture with the unit.

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Macro Analysis
(GDL-STEEP)

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4. Macro Analysis
4.1.Extended SWOT Analysis (TOWS)
STRENGTHS (S) WEAKNESSES (W)
1. State-of-the-art equipment 1. Weak R&D facilities
2. Strong brand awareness in target market 2. Lack of HR training & development
3. Diversified product portfolio with low 3. Weak Information Systems
competitive prices than rivals 4. ‘‘Seth’ culture resulting in discouraging of
4. Young, highly motivated and energetic work the mere accountability in compensation
force plus efficient designers processes.
5. ISO certification for products & processes 5. Transit time is more as compared to
6. Self-owned power generation system foreign competitor
7. Strategic partnership with well-known 6. High reliance on international market for
designers to bring seasonal garments within profitability
its existing women product line
8. Branded customers like IKEA, Wal-Mart
85%-90% sales come from export market
9. One floor operation

OPPORTUNITIES (O) THREATS (T)

1. Pak has 16.98 million population with a 1. Production cost of textile mills has risen
growth rate of 2.69% including more than 65% due to increasing interest rate
women 2. Low R&D in cotton sector resulted in low
2. Implementation of the textile education and quality of cotton than rest of Asia
fruitful policies by government over the last 3. Tough competition from India, China in
decade. value-added textiles and garments
3. Prospect of export of readymade garment and products especially in export market.
menswear segment being it untapped. 4. Due to high load-shedding, textile
4. Cheap labor and domestically available raw production capacity of various sub-sectors
material resources has been reduced by more than 30%
annually.

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5. Growing popularity of knitting industry all 5. Intense seasonal demand variability in the
over the world market with changing customer
6. More participation in international clothing preferences
exhibitions like Hetrimax etc to bring in
customer awareness abroad.

S-O STRATEGIES W-0 STRATEGIES

1. Leverage the opportunity existing due to 1. More investment in R&D leading to new
increasing population by adding the & differentiated design patterns, not
category for men’s wear (S3, S5, O1) already existing in market, to gain
2. Promotional activities to attract more competitive advantage over competitors
branded customers in export market in order in response to continuously changing
to increase market share of e-commerce customer preferences (W1, O1, O2)
through participation in international 2. To step into more constructive &
clothing exhibitions held worldwide. (S8, participative culture to gain advantage
O6) of cheap and abundant supply of
3. Introduce ready to wear garment for the Pakistani labor by turning Seth
existing potential female clientele base management system into organized &
through strategic partnership with well equitable environment resulting in
know designers. (S5, S7, O1, O3) increased employee productivity. (W4,
O4)

S-T STRATEGIES W-T STRATEGIES

 There is projected decline in profitability
due to low price set than competitors for
similar products, coupled with inclining
production cost as result of inflation &
operation cost ad-ones. (S3, T1,T4)


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4.2.Internal External Matrix

IFE total weighted score = 2.75

EFE total weighted score = 2.65

Analysis

Alkaram falls under quadrant 5, keeping in mind total weighted scores of both IFE and EFE
matrices, which indicates Hold and Maintain Strategies to be followed in the best interest of its
future growth. Thus, under this following approach is best for alkaram to pursue;

Market Penetration: It can improve on its consumer market share by reaching consumers moreover
through e-commerce by providing online catalogue marketing to its targeted customers; and also
improving on their existing exporting services through more product awareness at international
scale.
Product Development: It can develop menswear product segment such as men’s seasonal clothing
etc. to capture their untapped market.

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4.3.SPACE MATRIX

INTERNAL STRATEGIC POSITION EXTERNAL STRATEGIC POSITION

Financial Strength Environmental Stability

Return on Investment 3 Rate of inflation -4

Leverage 2 Demand variability -6
Liquidity 2 Barriers to entry -4
Cash flow 4 Competitive pressures -5
Inventory turnover 4 Ease of exit from Market -3
Gross profit 5 Price range of competing products -3
Price elasticity of demand -1

Average Score 3.33 Average Score -3.71

Competitive Advantage Industry Strength

Market share -2 Growth potential 6

Product quality -1 Profit potential 4
Customer loyalty -2 Financial stability 5
Product life cycle -2 Resource utilization 3
Control over suppliers -1 Ease of entry into market 2

Average Score -1.6 Average Score 4.0

Y - Axis: X - Axis:
Financial Strength 3.33 Competitive Advantage -1.6
Environmental Stability -3.71 Industry Strength 4.02
TOTAL -0.38 TOTAL 2.40

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Analysis:
Alkaram falls at (+2.4,-0.8) points in the above template which indicates that it has pretty good
competitive advantages in a moderately growing industry. Thus, following are the strategies to be
pursued by Alkaram textiles;

Backward Integration: Alkaram textiles mills may acquire cotton crop farms to have its own high
quality cotton buds production and picking. Moreover it may have its thread/yarn manufacturing
houses.

Market Penetration: It can improve on its consumer market share by reaching consumers moreover
through e-commerce by providing online catalogue marketing to its targeted customers; and also
improving on their existing exporting services through more product awareness at international
scale.

Market Development: They can target new local markets in the menswear segment since there’s less
competition and foreseen projected incline in demand in this segment. It may also reach to
unexploited international consumer markets like Far East & Europe areas in order to increase their
market share.

Product Development: It can develop menswear product segment such as men’s seasonal clothing
etc. to capture their untapped market.

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4.4.QSPM

STRATEGIC ALTERNATIVES
WEIGHT Market Product
Penetration Development
STRENGTHS AS TAS AS TAS
State-of-the-art equipment 0.08 ---- ---- ---- ----
Strong brand awareness in target market 0.15 4 0.60 3 0.45
Diversified product portfolio with Home textile 0.10 3 0.30 4 0.40
products and fashion garments
More than 8,000 labor force of young & 0.07 2 0.14 2 0.14
energetic work force plus efficient designers
ISO certification for products & processes 0.10 2 0.20 3 0.30
Self-owned power generation system 0.03 1 2
Strategic partnership with designers like Umer 0.05 3 0.15 4 0.20
Saeed to bring ready to wear garments segment
within the existing women lawn portfolio
Yarn dyed home textiles 0.05 ---- ---- ---- ----
One floor operation 0.03 ---- ---- ---- ----
Branded customers like IKEA, Wal-Mart & 0.10 3 0.30 2 0.20
Target 75% sales comes from export market

WEAKNESSES
Weak R&D facilities 0.10 2 0.20 4 0.40
Lack of HR training & development 0.05 ---- ---- ---- ----
Weak Information Systems 0.03 ---- ---- ---- ----
‘Seth’ culture resulting in discouraging of the 0.05 ---- ---- ---- ----
mere accountability in compensation processes.
Transit time more than foreign competitor 0.08 2 0.16 3 0.24
High reliance on international market profit 0.07 3 0.21 2 0.14
SUBTOTAL 1.00 2.26 2.47

WEIGHT Market Product

Penetration Development
OPPORTUNITIES AS TAS AS TAS
Pak has 16.98 million population with a growth 0.07 4 0.28 4 0.28
rate of 2.69% including more than 65% women
Implementation of the textile education & fruitful 0.05 ---- ---- ---- ----
policies by government over the last decade.

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 Prospect of export of readymade garment and 0.15 2 0.30 4 0.60
menswear segment being it untapped.
Cheap labor & domestic raw material available 0.10 ---- ---- ---- ----
Growing popularity of knitting industry 0.06 ---- ---- ---- ----
More participation in international clothing 0.15 3 0.45 1 0.15
exhibitions like Hetrimax etc.

THREATS
Production cost of textile mills has risen due to 0.02 ---- ---- ---- ----
the increasing interest rate
Low R&D in the cotton sector resulted in low 0.07 1 0.07 2 0.14
quality of cotton in comparison to rest of Asia
Tough competition from India, China in value- 0.13 3 0.39 3 0.39
added textiles and garments products especially in
export market.
Due to load-shedding, textile production capacity 0.08 ---- ---- ---- ----
of various sub-sectors has been reduced by more
than 30% annually.
Intense seasonal demand variability in the market 0.12 ---- ---- ---- ----
with changing customer preferences

SUB TOTAL 1.00 1.49 1.56

TOTAL SCORES 3.75 4.03

Analysis:
Strategy 1 - market penetration (Targeting export markets through using e-commerce, by promotion
of e-catalogue locally as well as internationally)

Strategy 2 - product development (alkaram may have strategic partnership with well known
designers to step into ready to wear garments)

Hence, the two strategies i.e. Market Penetration and Product Development are evaluated through
QSPM matrix. The total attractiveness scores of Market Penetration and Product Development are
4.95 and 4.55 respectively. Since 3.75<4.03 therefore, product development would be the most
suitable strategy for Alkaram.

Thus, with strong finances and equity Alkaram can acquire local companies, and with strong R&D
& qualified designers and professionals it can do product development. This strategy is already been
started by creating strategic partnership with Umer Saeed a well known designer and Alkaram is
now going to introduce ready to wear garment from coming summer for the existing potential female
clientele base.

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5. Recommendations

 Alkaram needs to look around for and define new markets that have potential gaps to enter,
grow and earn profits. When doing so they cannot they cannot dissatisfy their current customer
market, so they have to trade them along by keeping view of the benefits that keep them stick
to alkaram. AlKaram also required to continuously improve against the potential competitors
 Alkaram has to keep a broader picture in mind and analyze thoroughly what is best for them.
They should first analyze the structural conditions in which its operating, its resources and
capabilities and its strategic mindset.
 Alkaram should be well assured before implementing blue oceans that it should lead it to higher
demand and better profits.
 Get the strategic sequence right: implement steps efficiently
 It should solve all its internal issues first
 Alkaram needs to formulate strategy which aligns with its competencies and capabilities.

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6. Learning from project

7. Learning from course

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8. Conclusion

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9. References

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Project Expenses

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