1. FINAL PROJECT BUSINESS STRATEGY NISHAT MILLS SUBMITTED BY: FATIMA KAUSER 0006 SIDRA ZAKA 0009 NEELAM 0010 BENISH 0011

2. 1 MISSION STATEMENT To provide quality products to customers and explore new markets to promote/expand sales of the Company(1,2,3,5) through good governance and foster a sound and dynamic team(9), so as to achieve optimum prices of products of the Company(6) for sustainable and equitable growth and prosperity of the Company(5). PROBLEM Although the mission statement is good but it does not include technology and concern for public image which are most important component of mission statement. REVISED MISSION STATEMENT To provide quality products to customers and explore new markets to promote/expand sales of the Company(1,2,3,5) through good governance and foster a sound and dynamic team and citizenship(8,9), so as to achieve optimum prices of products of the Company(6) with the use of best available technology(4). PEST ANALYSIS POLITICAL FACTOR The largest problem that the industry faces today is political factor .Political (Legal) Aspects Industry will not be able to gain success, good reputation and trust if it will not consider legal and political sector as part of their strategy. Political and legal sectors include the needs of the company to follow the given policies and regulations of the government in order to be considered as legal. In this manner, industry should be able to consider political and legal aspects so as to show that they value the policies and regulations of the government in any of the business operations. - Tax policy - Employment laws - Political stability - Environmental regulations - Trade and tariff restrictions. Political Instability effect the textile industry and risk level increase in this situation and policies are change and cost of production high because overall industry faces troubles due to political instability and its a tough time because political instability in country Govt. Policies its also effect the Nishat textile Law & Order govt. and political parties insure this now Nawaz Sharif promote the business or industrial sector in country but the Asif Zardari dont focus to promote this sector so law and order change according to the political parties and leaders Positive Relations its play a vital role to promote 3. 2 this industry if political stability in our country so our export increases and business opportunities increases day by day and govt. revenues increase and unemployment low and develop country give different business opportunities Terrorism & Corruption its increases day by day in our country .In Karachi and Rawalpindi cities faces very hard and sewer condition due to terrorism so the business condition is very bad day by day and business shutdown and crises level high and poorly level increase due to these factors .In this people purchasing power low and textile faces a lot of problems Political Situation its not satisfactory due to rapid changes in the govt. and every govt. set its own trade policies ,rules and laws and different tax policies so in this govt. should apply sustainable policies for the beneficial of the exporter as well as invertors Effect On International Market its also effect the international Nishat textile buyers e.g. UK, Japan etc. Govt. Sanctions if relations are not positive to other country so its also effect on Nishat textile export products e.g. India and Pakistan relations etc. ECONOMIC FACTORS Economic Stability Growth has immensely contributed towards economic stability of the country .Moreover, when the finished goods are domestically available, it helps keep prices down and fluctuations due to international market influences are less likely to strike populace. Improvement in Balance of Payments Textile industry has brought structural changes in the pattern of foreign trade of the country. Today, the Textile sector account for about US$ 10.2 billion export of the country. On one hand, this sector helps reduce import bills of textile products and on the other hand, it contributes in earning foreign exchange thereby helping towards keeping balance of payment in control. Following table presents a comparison of years 2008-09 and 2009-10 with respect to exports of different textile products. Greater Employment Nishat provides more employment opportunities to the unemployed people. It is a source of providing employment opportunities. Collateral Industrial Development of one industry leads to the development and expansion of other industries. A number of industries and work opportunities are directly or indirectly related with Textile Sector. For example, colors and dies, plastics, printing, machinery etc are equally affected by booms or busts in Textile sector. Enhanced Government Revenues Any industrial development is bound to increase government 4. 3 revenues. Though textile sector is still zero rated for the purposes of sales tax on exports yet the tax on domestic supply and income tax contribute greatly to government revenues. Diversification of Economy Development in textile sector has helped in diversifying economy by reducing dependence on mere production and export of raw material. It also instilled diversification by stimulating collateral industrial development. It is also a source of Foreign exchange earnings. SOCIAL, CULTURE, DEMOGRAPHIS & ENVIRONMENTAL FORCES Nishat Mills Ltd. is a large organization and according to its claims of social responsibility it provides its employees with good attitude to work and leisure and a safe work environment. Now what this organization is doingundercorporatesocial responsibilityis alsovenerable.Changesinsocial trends canhaveimpact ondemand for a firm's products and the availability, attitudes to work, income distribution and willingness of individuals to work.Insocialfactorsdemographicshavealotofimportance. Pakistan Culture is generally considered to be the basic identity of Pakistan nation as their trends, History, Silent Features, rituals and way of life forms their culture of living, and this culture becomes their distinctiveness. Pakistan has a very unique mixed culture in which the various cultures from different provinces combines together to form an amalgamation of ethics, values, norms and beliefs which forms a very charming and attractive national culture of Pakistan. The people of Pakistan should stick to their own Pakistan culture and should always promote it by being its brand ambassador so that the entire world show know and praise them due to their exquisite culture of Pakistan. Demographics include age structure of the population; gender; family size and composition; changing nature of occupationsetc.SomeimportantsocialfactorsthataffectNishatMillsLimitedareas: Healthconsciousness Populationgrowthrate Agedistribution Careerattitudes Emphasisonsafety 5. 4 Pakistan is facing all the problems mentioned above. The government has been unable to provide the manufacturing sector with what it needs to flourish. International buyers are reluctant to do business in Pakistan as orders placed in Pakistan are often delayed due to unavoidable circumstances such as electricity shortages, gas shortages, and petroleum levy and sudden increase in its prices. The high cost of doing business is because of intensive increase in the rate of interest which has increased the problems of the industry. The change in the lifestyle of the people affects the growing demand of the Nishat Mill Ltd products. The change in the lifestyle and needs in different demographics also affect the demand of the customers. Due to all these changes Nishat Mills Ltd is performing excellent for the excellence organization as well as for the customer. As thelifestyleofpeoplechangestheirneedschange, soNishatMillsLtdis theretofulfilltheir requirements regardingclothingadmirably. Its products areavailablefor differentagegroupsandgender. Environmental factors include the weather and climate change. Changes in temperature can impact on many industriesincludingfarming,tourismandinsurance.Withmajorclimatechangesoccurringduetoglobalwarming and withgreaterenvironmental awarenessthis external factor is becomingasignificant issue forfirms to consider. Thegrowingdesiretoprotecttheenvironmentishavinganimpactonmanyindustries andNishatMillsLtdisone ofthemthatareconsciousaboutwhatisgoodfortheenvironment. General moves towards more environmental friendly products and processes are affecting demand patterns and creatingbusinessopportunities.Pakistanisbeautifulcountrywhereallfourweatherseasonsemerge.SoNishathas launched seasonal varieties to fit according to the weather. On the other side to save the environment from being pollutedittakesprecautionarymeasureslikeithassetupawatertreatmentplant. Better Living Standards Textile sector development helped in increasing the value of output per worker. The income of the labor, due to higher productivity increased resulting in better living standards of growing middle class. Growth in textile sector enhanced social welfare in a multitude of ways. Better and greater employment opportunities, meeting domestic needs, generating revenue and thereby positively affecting public social spending etc. all lead to social welfare. Growth in textile sector enhanced social welfare in a multitude of ways. Better and greater 6. 5 employment opportunities, meeting domestic needs, generating revenue and there by positively affecting public social spending etc. all lead to social welfare. TECHNOLOGICAL FACTORS In this era of advancement technology can help to touch the sky of success. Technology creates new products and processes. It can also reduce the cost, improve quality and lead to innovation. These developments can benefit the consumers as well as the organization. Nishat is taking care of technological factors to be successful in todays tough competition. Nishat has a very well developed research and development department and facility members who are working very hard to develop new and improved methods to reduce the production time. Nishat has made extension in its present setup by installation of well advanced technology imported from Japan, China and France. Mostly processes are automated. Modern cost and energy effective machines are taking place of workers and ultimately reducing the cost of company. Internet development helps Nishat to reduce its advertisement cost and get quick feedback from its customers. GLOBLE CHALLANGES FOR NISHAT MILLS LTD The industry is facing competition from other developing countries like Bangladesh, India and China in its major export markets i.e. the EU and the USA. Also the current recession in the West has resulted in a slowdown in demand for textile products. Due to all the other problems faced by the Textile Industry, its production capacity and quality is getting low. So Pakistan is lagging behind its competitors in the sphere of this international and regional competition. This is a huge threat to the Textile Industry of Pakistan. Global recession has badly affected the textile sector of Pakistan. This recession caused a very high rate of inflation, which, in 2010, had increased to a whopping 25% as compared to a 7.9% of 2008. What occurred afterwards is what we call the domino effect. The value of the Rupee crashed. The above all situation of the economy badly affected the textile industry. The demand for textile product cut down locally & internationally as well. The export order reduced due to unpredictable conditions of Pakistan & political instability. The cut down in the production of 7. 6 textile cause further unemployment level which decrease the living standard of peoples. CHALLENGE: To get maximum benefit from quota free regime, all out efforts are needed to boost textile exports and increase access to the international markets. To boost the exports, the State Bank of Pakistan has introduced three facilitating schemes for the exporters namely, Foreign Currency Export Financing Scheme (FCEFS), Political Risk Guarantee Scheme (PRGS) and the Export Guarantee Scheme (EGS). The bank would provide 210 days credit facility to exporters for South America as compared to 120 days credit facility to other market. The textile industry of Pakistan plays an important role in earning foreign exchange, providing employment to the country. But with the ending of quota system in world, Pakistan textile loses share in world trade of textile products. Nishat textile products will have a big potential to capture big share of world trade but there are lots of reasons which forces to step back from using the full capacity of textile machinery to earn more and more foreign exchange for the country. In Upcoming year, Pakistan textile exports Are 10-11 billion US dollars approximately. Government of Pakistan is not serious in Resolving problems like shortage of electricity and gas which forces the textile exporters Not to take orders because not fulfil the orders on time. With these reasons import of Textile machinery declined year on year basis. With all these reasons Nishat textile Owners use latest machinery which is more efficient and up to the mark with the Competing countries. Although Nishat has very strong image in the market nationwide financially and product wise but it has small market share in the global textile industry due to the sound competitors likes china, and Bangladesh etc. COMPETITVE FORCES OF NISHAT MILLS LTD Nishat Mills Limited ("Nishat") is a public company incorporated in Pakistan and listed on all three Pakistani stock exchanges. Nishat is engaged in textile manufacturing. Which involves spinning, combing, weaving, bleaching, dyeing, and printing, stitching, buying, and selling of textiles? They deal with yarn, linen, cloth and other goods including fabrics made from raw cotton, synthetic fiber and cloth. The Company is engaged in the business of textile manufacturing and of spinning, combing, 8. 7 weaving, bleaching, dyeing printing, stitching, buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic fiber and cloth, and to generate, accumulate, distribute and supply electricity. Company is providing quality products to its customers within the Pakistan and outside the Pakistan. Presently company is exporting its all kinds if apparel products. MAJOR COMPETITORS Nishat competitors are Crescen Chenab Arzoo Alkarm Sitara Firdous Kohinoor Amtex But main competitors of Nishat Mill are Crescent Textile Mills Chenab Textile THREATS AND OPPERTUNITIES: THREATS New competitors Nishat competitors are Crescen,t Chenab Arzoo, Alkarms, Sitara, Kohinoor, Amtex but main competitors of Nishat Mill are" Crescent Textile Mills and" Chenab Textile" Though we cannot avoid competition but we can always stay ahead of them by reforming our strategies and educating our entrepreneurs so as to move one step forward in every aspect. Fashion life cycle Fashion changes day by day these days. Media has so much penetrated in our daily lives 9. 8 that we easily adapt ourselves as it wants us to. This has resulted in shortening the fashion lifecycle thus increasing the fashion risk. Now the buyer does not want to wait long for his consignment because he is insecure that by the time it will reach to him he will lost its demand due to change in fashion. Therefore, they prefer to buy from neighboring countries even at higher cost to get their products instantly rather than to wait weeks or months for their consignments to reach them. Stiff competition from developing countries especially China and India. Pricing pressure Location disadvantage International labor and environmental laws. OPPERTUNITIES: Organization can expand product lines. Currently the Nishat not dealing in knitwear they can expand their product line by producing knitwear. They have plants and the extra cost for the production will be low for Nishat. And they also have better market repute. Organization can reduce the cost by proper utilization of resources. If the cost of different matters which is not utilizing properly is controlled by the Nishat management they can produce more in a few costs. It has to develop a further systematic process for controlling and managing resources. Organization can hire more well-educated and experienced person. They can take advantages by hiring more skilled people and they should hire young, fresh and energetic staff for their betterment. Shift in domestic market to branded readymade garments. Increased disposable income. Emerging mall culture and retail expansion. 10. 9 PORTERS 5 FORCES ANALYSIS OF NISHAT MILLS LTD Michael porter an authority on competitive advantage contends that a corporation is most concerned with the intensity of competition within its industry. Bargaining power of suppliers Bargaining power of customers Rivalry among existing firms Threat of new Entrants Threat of substitute products BARGAINING POWER OF SUPPLIERS The bargaining power of suppliers in an industry tries to evaluate the scene of the supply market of the textile and clothing industry. The main raw material of textile and clothing industry is cotton. The textile industry in Pakistan achieves cost advantage in the segment of apparel as well as home textiles with the help of unending supply of local staple cotton which have been domestically produced. Further, Government and other policy makers have taken definitive steps for improving the amount and quality of cotton yield for making sure that higher productivity can be achieved. 11. 10 BARGAINING POWER OF CUSTOMERS The bargaining power of customers is also a threat for a firm operating in industry. The buyers affect the profitability in such a way that he wants discounts and other services which might lower the margin of profit for the company. The demand forces inside the industry can be evaluated with the help of bargaining power which the buyers of the industry possess. RIVALRY AMONG EXISTING FIRMS The amount of rivalry within the competitors who already exist in the industry is highly dependent on the following factors: the structure of competition, the structure of industry costs, strategic objectives, and degree of differentiation, entry and exit barriers, and switching costs .Another threat for Nishat mills is the hyper competition in industry. The firms currently in the industry are also the threat for Nishat mills because their actions affect the profitability of the Nishat mills .Suppose if one competitor reduces the prices so Nishat will also have to reduce which in result will affect the profitability of company. THREAT OF NEW ENTRANTS This factor that is threat of new entrants helps in increasing the competitive nature inside the industry to a greater level. On the other hand the threat is also instrumental in bringing increased amount of capacity in the market. Threat of new Entrants For Nishat mills there has been a threat of entering new firms, So to defend themselves from this threat they gain economies of scale And the other barriers which Nishat mills create for entrants are; Product differentiation & Switching cost. THREAT OF SUBSTITUTE PRODUCTS The factor of threat of substitutes is dependent upon several different factors. These factors are the relative price and performance of substitutes, consumers interest in the substitute products and the cost the consumers have to bear for switching to other substitutes The substitute product means any product which satisfies the same needs. So substitute products in market are also a major threat for Nishat mills. 12. 11 LIST OF THREATS AND OPPERTUNITIES: OPPERTUNITIES: 1. Organization can expand product lines. 2. Organization can reduce the cost by proper utilization of resources. 3. Organization can hire more well-educated and experienced person. 4. Shift in domestic market to branded readymade garments. 5. Increased disposable income. 6. Emerging mall culture and retail expansion. 7. There would be a great opportunity of increase in exports if NML follow the international standards and provide high quality products to the customers at competitive prices. 8. NML should try to implement the latest ISO standards including ISO14000series, which will improve their image and customer satisfaction in the local market as well as in international market. 9. NML can explore the new markets for exports by giving the different incentives to its employees in the export department, which will improve its profitability. 10. Nishat can introduce its garments in the local market by using the same stitching unit. This is also a great opportunity. THREATS: 1. Fashion life cycle. 2. Stiff competition from developing countries especially China and India. 3. Pricing pressure. 4. Location disadvantage. 5. International labor and environmental laws. 6. There is no consistency in the government policies regarding textile sector. 7. Incidents like September 11, 2001 attacks would also be a major threat. 8. Political conditions of the country affect both NML and its customers as well hesitate before signing new contacts. 9. Increasing rate of electricity and GST are also big threats. 13. 12 10. Currency fluctuations and exchange rates can also create problems for NML. 11. Government is focusing on the industrialization and is giving different incentives to the investors. It is also a big threat because the number of competitors will increase. 12. More and more competitors (National and International) are entering in the same markets and offering attractive prices to the customers. EXTERNAL FACTOR EVALUATION MATRIX (EFE MATRIX) KEY EXTERNAL FACTORS OPPORTUNITIES Weight Rating Weighted score Expansion of product line .15 3 0.45 Implementation of ISO standards .10 3 0.3 Exploration of new markets .10 2 0.2 Concern for employees .15 4 0.6 Proper utilization of resources .10 4 0.4 Shift to branded readymade garments .05 2 0.1 THREATS International labor and environmental laws. .05 3 0.15 Currency fluctuations and exchange rates .08 4 0.32 Inconsistency of governmental polices .08 3 0.24 Political condition of country .05 3 0.15 competitors .05 3 0.15 Increasing rate of electricity and GST .04 2 0.08 Total 1.00 3.14 14. 13 COMPETITIVE PROFILE MATRIX (CPM) CPM NISHAT MILL GULL AHMAD FIRDOUS Critical success factor Weight Rating Score Rating Score Rating Score Advertisement 0.15 4 0.6 3 0.45 3 0.45 Product quality 0.10 3 0.3 3 0.3 2 0.2 Price competition 0.10 2 0.2 3 0.3 4 0.4 Management 0.10 4 0.4 3 0.3 2 0.2 Financial position 0.10 4 0.4 3 0.3 2 0.2 Customer loyalty 0.15 4 0.6 4 0.6 2 0.3 Technology 0.15 3 0.45 3 0.45 2 0.3 Global expansion 0.05 2 0.1 1 0.05 1 0.05 Market share 0.05 3 0.15 3 0.15 1 0.05 Goodwill 0.05 3 0.15 3 0.15 1 0.05 Total 1.00 3.35 3.05 2.2 Note: Rate 4 refers to most important and rate 1 refers to less important. 15. 14 RESOURCE BASE VIEW Its an internal analysis of Nishat textile its show the resources, competences, core competences, competitive advantage of Nishat textile, and sustain position. Resources of Nishat textile huge amount of investment in business, assets machinery, brand name, employees, infrastructure, and better quality of material. Competences of Nishat textile is the use of resources in appropriate and better way so they are not wasted. Core competences of Nishat textile is advance machineries and technology, well-educated employees ,well management system , better coordination with employees and management, feedback system, better MIS system. Competitive advantage of Nishat textile is high quality and standard products, strong security system, highly motivated workforce, customer loyalty with brand, ISO 9001-2000 implementation, well discipline culture and environment that enables Nishat textile to compete with other competitors and achieve the competitive advantage. Sustain competitive advantage of Nishat textile is its product according to the trends and fashion to win its customer.