trading organization

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ASSIGNMENT # 2

FINANCIAL ACCOUNTING (8501)

MBA (BANKING & FINANCE)

SEMESTER : AUTUMN 2011

SUBMITTED BY

ASIF IQBAL

Roll no. AM 572794

Department of Business Administration

Allama Iqbal Open University Islamabad


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EXECUTIVE S UMMERY

Pakistan Accumulators (Pvt) Limited (PAL) has more than 18 years experience in the

battery industry. PAL is an ISO 9001 & ISO 14001 certified company that concentrates

in various types of batteries, UPS and battery related products with the brand name of

"VOLTA "&" OSAKA".

The primary purpose of this study is to fulfillment of the requirements for the Assignment

of MBA .For this connection each student of this particular course is required to

undertake research based assignment in a relevant organization selected by university,

for a preparation.

Pakistan Accumulators (Pvt.) Ltd. aims at continuous improvement through skills and

modernization of its products to the entire satisfaction of its customers requirements

and expectations. The production capacity of this industry is approximately 2.70 lacs per

month.

Pal has an excellent goodwill in the market and in stock exchange.

A market share of 58%-60% proves to be a demanding strength of the pakistan

accumulators (pvt) limited

There are 150 battery dealers in multan region, which is a good strength of thecompany


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Table of Contents

CHAPTER 1

1.0 Introduction of Pakistan Accumlators (pvt) Limited

1.1 Introduction

1.2 Vision statement

1.3 Core values

1.4 Tag line

1.5 Goals

CHAPTER 22.0 Business Operations

2.1 Organization Structure chart of PAL

2.2 Trading production of PAL

2.2.1 Goods

2.2.2 Stock

2.2.3 purchases

2.2.4 Carriage inwards

2.2.5 Sales

2.3 chart of Comparison of steps involved in calculating

Profit & loss of service companies and the trading companies

2.4 The purchase function2.4.1 The purchase function of PAL

2.4.2 Accounting for purchases

2.4.2.1 Periodic method


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2.4.2.2 Perpetual method

2.4.3 Credit terms

2.4.4 Cash discount

2.4.5 Trade discount

2.4.6 Carriage costs

2.4.7 Return outwards

2.4.8 Net method

2.5 Accounting for stock of cost of goods sold

2.6 Perpetual method2.6.1 Accounting for sales

2.6.2 Treatement of discount received and discount allowed

2.6.3 Worksheet

CHAPTER 3

3.0 Departmental Accounts of PAL

3.1 Departmental trading & Profit & loss Account

3.2 Marketing Strategy

3.2.1 Marketing mix

3.2.2 MF batteries

3.2.3 Local products3.2.4 Export products

3.2.5 Price

3.2.6 Place


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3.2.7 Promotion

3.3 Competitive Strategy

3.3.1 Market share

CHAPTER 4

4.0 SWOT Analysis

4.1 Strength

4.1.1 Goodwill

4.1.2 Market share4.1.3 Delivery through dealer

4.1.4 After sale services

4.1.5 Availability of products

4.1.6 Network of dealers

4.1.7 Diversification

4.2 Weakness

4.2.1 Job strategicness

4.2.2 Long claim period

4.2.3 Non specialized people at front desks

4.3 Opportunities

4.3.1 E-commerce4.4 Threats

4.4.1 Political instability

4.4.2 Strong local competition


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4.5 Recommendations

4.6 References


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Chapter 1:

INTRODUCTION OF

PAKISTAN

ACCUMULATORS

(PVT

) L

IMITED

1.1- INTRODUCTION

Pakistan Accumulators (Pvt) Limited (PAL) has more than 18 years experience in the battery

industry. PAL is an ISO 9001 & ISO 14001 certified company that concentrates in various types

of batteries, UPS and battery related products with the brand name of "VOLTA "&" OSAKA".

Initially it was manufactured under Technical support of Chloride Industrial Batteries Limited, a

subsidiary of Hawker Batteries UK. Hawker Batteries is a world leader in battery manufacturing

having numerous factories all over the world.

Our products are sold worldwide for a broad range of electronic and industrial applications,

where cost effective battery power is required. Major export countries are India, Bangladesh,

Afghanistan, Saudi Arabia, Lebanon, Kuwait, Singapore, Dubai, Sudan, Madagascar, Nepal,

Mauritius, Jordan and other West African Countries. Our access is global because of our

potential to produce customized products for export to valuable customers in foreign countries.Today PAL s brand have established a reputation for high performance in power and durability

in domestic as well as international market.

Our product range includes 12 volts JIS (Japan International Standard) batteries ranging from 32

AH to 200AH and DIN (European Standard) batteries from 44AH to 92 AH.

It is the largest battery-manufacturing unit in Pakistan with more than 700 employees. We haveHead Office in Islamabad and Regional Offices across the country to fulfill the genuine needs of

ultimate customers.


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We are constantly developing new products to keep pace with industrys rapidly changing

needs. The continuous improvement of our engineering processes allows us to develop

products with better value and performance. The capability to provide our customers with

reliable and economical products is the cornerstone of our business.

Pakistan Accumulators (Pvt) Limited (PAL) takes pride in introducing new and improved range

of products and product applications. Our Factory is situated on 6-Acre land in industrial Estate

Hatter District Haripur (N.W.F.P). It was established in 1993 with the prime object of producing

quality batteries with the help of latest manufacturing techniques available in the international

battery market.

Our technical department is staffed by well trained and qualified professionals, who are

available for technical advice and troubleshooting all the times. Helping you select the right

battery for your particular application is of great concern to us. Our plan and machinery has

been imported from world renowned companies i.e Wirtz-USA, Sovema Italy, Jungfer Austria,

Mac USA Accurate Product Denmark, Jih Hsing Taiwan, Kawaguchi Japan, Bitrode USA, AGA

Sweden, Digatron Germany, Beardsley & Piper USA, Chentech Taiwan and Zamil Steal Saudi

Arabia.

We feel pleasure to introduce ourselves as the leading manufacturer & exporter of Automotive

and UPS Batteries in Pakistan.

Due to our superior quality, competitive prices & minimum delivery period we are able to cater

markets of different countries like Afghanistan, Nepal, Sri Lanka, Mauritius, Madagascar, Sudan,

Lebanon, Jordan, Kuwait, Dubai, Saudi Arabia, India, Iraq & Libya.

We are awarded three times Export Merit Trophy by the Federation of Pakistan Chambers of

Commerce & Industry (FPCCI) for the year 2004-05 (Exports value $3.20 Million US Dollars)


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2005-06 (Exports value $4.20 Million US Dollars) & 2006-07 (Exports value $5.40 Million US

Dollars). In the year 2007-08 exports worth $ 9.35 Million US Dollars.

Pakistan Accumulators Pvt Ltd (PAL) is the leading manufacturer and exporter in Pakistan for

Automotive and Inverter Dry Charged Batteries. PAL established since 1989 (in Islamabad) and

the factory was setup in 1993 (Hattar, NWFP). We have 08 regional offices throughout the

country and staff of around 600 employees. PAL is engaged in the manufacturing of batteries

under JIS standards ranging from 34AH to 200AH and DIN standards ranges from 44AH to 92AH.

We are quality conscious and provide best performance batteries; we know if our product

satisfies you, we will receive repeat orders & more business from your side. It is due this policy

we are receiving repeat orders from our International Buyers.

PAL has the most sophisticated laboratory equipped with the latest instruments and devices to

test raw materials and the manufacturing process at each stage up to the finished form to

ensure high quality.

We like to extend our business relations with you & will highly appreciate to have businessopportunity to fulfill your requirement satisfactorily.

We shall be glad to respond to your inquiry & assure you of our fullest support and best

attention.

1.2- VISION STATEMENT

To be largest manufacture of quality products with advanced technology to ensure

adequate return to stake holder

1.3- CORE VALUES


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Integrity

Honesty

Commitment

Determination

Accountability

Environment friendly

1.4- T AG LINE

CUSTOMERS TRUST IS OUR FAITH

1.5- GOALS

Establish dealers network all over Pakistan to ensure the availability of their products.

To completely satisfy the customers

Ensure customer satisfaction by providing quality products at competitive priceswith the warranty coverage and ensuring after sale service.

Constantly endeavor to be market leader in terms of market share and

technology pace-setters in area of operations and to continuously improveefficiency and competitive strength.

By continuously improving performance, aim to generate earnings sufficient

to ensure a secure future for the company and to produce and increase

market share.

To enhance creativity and job satisfaction, provide employees opportunity for

personal development


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CHAPTER NO. 2 BUSINESS OPREATION

2.1- Organizational structure

OF P AKISTAN ACCUMULATOR PVT . LIMITED

2.2 TRADING PRODUCTS OF PAKISTAN ACCUMULATORS PVT LTD (PAL)

Claim Officer ManagerAccounts

RSM

DRMAssistant ManagerAccounts

AccountsExecutive

ASM

Chief Executive officer

General ManagerFactory

Chief FinanceOfficer

General Manager

Sales &marketing

Audit Manager

Audit OfficerDGM Sales&marketing

DGMFDGM Claim

GM HR

Manager

HR

Accounts

Officer

ASI


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The Pakistan Accumulators Pvt Ltd (PAL) form a significant part of any economy of Pakistan. Thetwo other main forms of economic activities in any economy are trading and manufacturing activities. Inthe development economies, manufacturing organizations are the major contributors towards GNP. Indeveloping countries, however, agriculture and trading makes the major part of economic activity.

Pakistan Accumulators Pvt Ltd (PAL) sells goods substantially in the same physical form in which itacquires them. The basic accounting principles explained for PAL remain applicable to the tradingorganizations. It, however, requires certain additional accounts and procedures to record purchase andsale of goods. It further requires calculating the cost of the unsold stock, which involves certainconceptual issues. The cost of unsold stock differs under different assumptions. The issue basically arisesdue to price fluctuations. Before getting to the accounting procedures, the following terms used in theaccounting of trading organizations need to be understood:

2.2.1 GOODS

It means the trading commodity, i. e. the items purchased for resale .For example, for a cloth merchant,cloth is goods; for a general store, grocery is goods.

2.2.2 STOCK

The goods held for sale at any particular point of time are called stock as at that time. The stock at thebeginning of the year is called opening stock and the unsold stock at the year-end is called closing stock.

2.2.3 PURCHASES

When goods are purchased, an accounting head purchases is debited. If some assetother than goods is purchased it is not termed as purchases; rather, a separate accounting head for that

asset is opened . For example, if furniture is purchased for use, furniture & fixture account will bedebited.

2.2.4 CARRIAGE-INWARDS

The cost of purchases includes all essential expenses to bring an item to a saleableposition. The transportation cost is the most significant expense and is the part of the cost of purchases.However, a separate account is opened for transportation cost called carriage-inwards. While calculatingcost of goods sold it is added to the purchase price.

2.2.5 SALES

When goods are sold an accounting head sales is credited. If an asset other than goods is sold, it is nottermed as sales

2.3 Comparison of steps involved in calculating profit & loss of service companies and thetrading companies


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SERVICE ORGANIZATION TRADING ORGANIZATION

S

(MINUS)

(MINUS)

TRADING (EQUALS)

(EQUALS) ACCOUNT

(MINUS) P&L (MINUS)

A/C

(EQUALS) (EQUALS)

P&L (MINUS)

A/C

(EQUALS)

SERVICE REVENUE SALES REVENUE

COST OF GOODS SOLDEXPENSES

GROSS PROFITPROFIT BEFORE TAX

OPERATING EXPENSESTAX

NET PROFITPROFIT BEFORE TAX

TAX

NET PROFIT


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2.4 THE PURCHASE FUCTION

The purchase can be made on cash or credit. Accounting to the accounting principle,purchases are to be recorded when the title of ownership is transferred from the seller to the purchaser.Like any transaction, the purchases should be supported by a document. If purchases are on cash, theymay be supported by an evidence of paid cheque , a cash receipt from the supplier or a cash paymentsupplier . In fact, the supplier sends a sales invoice which acts as purchase document for purchases. InPakistan Accumulators (Pvt) Limited (PAL) there is a separate purchase department. Each purchase isinitiated on the demand of the sales department or the stores department. When the stock on the shelf touches a certain minimum level, a requisition is sent by the stores department to purchasedepartment. The purchase department places an order with the supplier who supplies the goodsaccording to the specifications of the purchase order.

REQUISITION

SHIPMENT OF GOODS

SALES

INVOICE

RECEIPT

SLIP

2.4.1 THE PURCHASE FUNCTION OF PAKISTAN ACCUMULATORS (Pvt) LIMITED (PAL)

STORES/SALES

DEPARTMENT

PURCHASES

DEPARTMENT

SUPPLIER


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The Pakistan Accumulators (Pvt) Limited (PAL) store receives the goods and issues a certificateof receipt. The entire purchase process involves time and requires a continuous vigilance on the part of the sales department and the stores department. Just imagine that how many items would be there inthe stock of trading department. A minimum stock of each part is to be kept and order placed with thesupplier in time so that the department is never out of stock for any item. Large departmental stores like

the utility stores have a very efficient stock management system. A delayed purchase results in anopportunity cost of lost sales.

In the developed countries, the task of indicating the level of stock on the shelf and placing theorder with the supplier has been taken over by the computers. When a sale is entered in the computerat the sales counter it automatically updates the stock record.

2.4.2 ACCOUNTING FOR PURCHASES

There are two methods for accounting of purchases and stock:

i. The periodic methodii. Perpetual method

When goods are purchased, purchases account is debited and the mode of paymentcredited under periodic method which is commonly used. The act of purchase involvesnegotiation of price, credit tend shipping terms. An explanation of following terms isessential for understanding accounting for purchase:

2.4.1 CREDIT TERMS:When the goods are purchased or sold on credit the credit terms are to be specified.

The credit terms specify the cash discount rate, discount period and maximum creditperiod if discount is not availed. The term e.g, 2/10 has two components; the numeratordescribes the discount rate and the denominator is the discount period. If payment ismade within 10 days the purchaser will be entitled to 2% discount. The term n/30,means that net amount is to be paid in maximum of 30 days.

2.4.2 CASH DISCOUNTA discount is allowed to customers to encourage them to pay their

accounts earlier than the normal credit period. It is a deduction from the invoice price of goods if payment is made in the specified discount period. The delayed payments by the

customers may require the business to get loan from the bank on which interest is to bepaid. The finance manager has to make a comparison between the cost of funds neededand the discount to be allowed or received.

If trading organization makes payment within the discount period, following is the entryto record the payment:


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Creditors a/c xxxDiscount received xxxBank a/c xxx

If it was decided not to avail the discount, the payment will be made on 30 th day, theentry would be as follows:

Creditors a/c xxx Bank a/c xxx

2.4.3 TRADE DISCOUNT:The trade discount is part of price negotiation and is not reflected anywhere in theaccounts. The purchases are recorded at net of trade discount amount. The tradediscount is generally allowed to regular customers in the same trade. Bulk discount isprovided if a customer purchases large quantity at a time. This discount is also notreflected in the accounts.

2.4.4 CARRIAGE COSTS:The purchase or sale agreements specify as to who is going to bear the transportationcosts. The freight or carriage terms are expres sed as FOBterms.FOB stand for free onboard and it determines when the legal title of that the responsibility of seller is onlyup to delivering the goods to the careeier, i.e., airport, seaport,truvkstand ,etc. Oncedelivered at shipping point, the title of destination means that the seller has to deliverthe goods at the shipping point. The entry would be as follows:

Carriage inward xxxCash a/c xxx

2.4.5 RETURN OUTWARDSSometimes a part of the goods supplied are not according to the specifications of thepurchase order. They may be damaged or substandard. Such goods are returned to thesupplier or a reduction in price negotiated. I both cases, the liability, i.e. amountspayable to the creditor, is decreased. Return outwards are also purchase returns andallowances. For return outwards, the creditors account is debited and return outwardsaccount is credited. The journal entry for return outwards is:

Credit ors a/c xxx Return outwards a/c xxx


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2.4.6 NET METHOD:There is an alternate method to record purchases, which is called net

method. The method assumes that purchases may be recorded at cash price, i.e. net of

discount. The emphasis is that cash discount may be availed in all cases. Therefore,instead of discount received, discount lost is reported.If the payment is made with on discount period the entry will be as follows:

Capital a/c xxxBank a/c xxx

The discount lost is reported as a financial expense along with the interest or as anadministrative expense.

2.5ACCOUNTING FOR STOCK AND COST OF GOODS SOLD

In trading organizations, the revenue through sale of goods. The revenue is thenmatched with the cost of goods sold. The difference is gross profit. The unsold goods atthe end of the period are called closing stock and reported as current asset in thebalance sheet. The cost of goods sold can be calculated under two different methods:I. Periodic systemII. Perpetual system

2.6 PERPETUAL SYSTEM

The Pakistan Accumulators (Pvt) Limited (PAL) dealing in items of high unit cost and selling a limitednumber of units may like to maintain a continuous record of stock sold and on-hand. Under this system,the goods purchased are recorded in the stock account. The return inwards are accompanied by areversing entry for cost of goods sold. The cost of goods sold is recorded at the time of sale.

2.6.1 THE ACCOUNTING FOR SALES


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Pakistan Accumulators (Pvt) Limited (PAL) may sell on credit or cash or use both modes. Sales revenue,in accordance with recognition principle, is earned when the title of ownership of goods is transferredfrom the seller to the buyer. Every sales transaction should be supported by sales invoice. The entry torecord the transaction is:

Company abc a/c xxx

SALES A/ C XXX

Return Inwards A customer may return goods if these are defective ornot according to the specification order by him. Sometimes the goods may not be returned rather adiscount in price known as sales allowance may be asked for. Once the returned goods or allowance isagreed upon, a credit memorandum like debit memorandum is issued to the customer. The entry isshown below:

Return inwards a/c xxx

Company abc a/c xxx

( company returned defective goods for the sale)

2.6.2 TREATMENT OF DISCOUNT RECEIVED & DISCOUNT ALLOWED

Discount received and discount allowed may be treated as contra to purchases and sales respectively.In such case, discount received is subtracted from purchases and discount allowed from sales. Thepurchase discount and the sales discount are treated as reduction in purchase cost and salesrespectively. The net of discounts is taken in profit and loss account. In this case discounts are treated aspart of financial activity rather than trading activity.

2.6.3 WORKSHEET

The worksheet of a merchandising organization differs from that of a service organization only initems of trading account. The basic steps remain the same. The year-end adjustments are made in thesame way. However, care should be taken in case adjustments required for opening & closing stock. Thestock figures can be transferred to trading account through adjusting or closing entries. The treatmentof stock may be noted in the worksheet. The opening stock is taken to the debit of trading a/c while the

closing stock is taken in the credit side of the account. The closing stock is also taken on the debit side of the balance sheet columns. Further note that the opening stock, carriage-in and purchases are in debitcolumn whereas closing stock and return outwards are in credit columns. It conforms to the formula of cost of goods sold, i.e;

[Opening stock + (purchases + carriage in return out)- closing stock ]


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The formula can be rearranged as:

(Opening stock + purchases + carriage in)- (return out + closing stock)

CHAPTER NO. 3

DEPARTMENTAL ACCOUNTS

3.1 DEPARTMENTAL ACCOUNTS OF Pakistan Accumulators (Pvt) Limited (PAL)

The Pakistan Accumulators (Pvt) Limited (PAL), trading business generally has more than onedepartment. In order to evaluate the performance of different departments separately, they prepareseparate trading and profit and loss account for each department.

Departmental accounts provide information about the contribution that eachdepartment makes to the overall profit of a business. On the basis of this information themanagement makes decision as to which department needs improvement and if needed mayface closure.

In order to improve the performance a departmental manger may be provided incentive inthe form of commission based upon the profit he earns. If the commission is calculated as apercentage of the profit after charging the commission, the calculation is as follows:

Profit before commission X percentage of commission

100 + percentage of commission

3.2 DEPARTMENTAL TRADING & PROFIT & LOSS ACCOUNT

Each department has to keep separate record for its sales, purchases and expenses.Unless this is done, it is not possible to prepare separate accounts. Separate books may be keptfor each department in the central account section or in each department. Some of theexpenses are direct, i.e. they can be traced and assigned to a particular department, e.g. thesalaries and depreciation. However, most of the expenses are common and needs to be


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apportioned between departments on some appropriate basis. Such expenses include rent,insurance, maintenance, etc.

Examples of bases of apportionment are:

Department wages, salaries Actual payroll costs for each department obtainedby

analysis of the payroll.

Administrative salaries On the basis of number of employees in eachdepartment or on

respective sales volume, i.e. turnover.

Rent, rates, heating, lighting, on relative floor areas of the departments.

property insurance

Depreciation On cost of fixed assets employed by each department. Insurance of fixed assets other on replacement values of assets in each department

than property

3.3 - MARKETING S TRATEGY

3 .3.1- MARKETING MIX

3.3.1.1- MF Batteries

Pakistan Accumulators (Pvt) Limited (PAL) proudly presents maintenance free batteries

for our clients. Based on international standards these batteries have no hassle of

charging or water. Our professionals are well trained and qualified for technical advice

and troubleshooting at any time.

3.3.1.2- Local products

The Pakistan Accumulators Pvt. Limited produces 12 volt batteries in different size and

plates. Local products contain so many types which should be used in different vehicles

and our product range includes 12 volts JIS (Japan International Standard) batteries

ranging from 32 AH to 200AH and DIN (European Standard) batteries from 44AH to 92

AH.and also produce ups, MF batteries. The size of plates includes 9 to 31 plates so it

is the huge manufacturing company.


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3.3.1.3- Export Products

The Pakistan Accumulators Pvt. Limited also exports its product. Our products are sold

worldwide for a broad range of electronic and industrial applications, where cost

effective battery power is required. Major export countries are India, Bangladesh,

Afghanistan, Saudi Arabia, Lebanon, Kuwait, Singapore, Dubai, Sudan, Madagascar,

Nepal, Mauritius, Jordan and other West African Countries.

3.3.1.4- Price

The term pricing refers to:

The key to pricing is to Build value into the product and price it accordingly.

Pakistan Accumulators (Pvt) Limited has to face the ever-increasing competition in the

battery industry. As the number of competitors are increasing day by day but still

Pakistan Accumulators (Pvt) Limited enjoys a reasonable market share with the facts of

providing excellent services amongst the competitors.

PAL provides different products and services to its customers, which have been

discussed in previous section. Pricing of product is set through cost and profit

3.3.1.5- Place

Pricing refers to the following methodologies taken by an organization:

Various activities the company undertakes to make the product accessible and

available to the target customers

Also,

Its can be viewed as set of interdependent organization involved in the process

of making a product or service available for use or consumption

Place refers to the means by which our customer acquires your product. This includes

the actual place it is purchased (the shop, the telephone, the web page, the warehouse)

as well as the actual route of distribution. Simply place refers how you will sell your

product to your customers.


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The objective of Pakistan Accumulators Pvt. Ltd. has always been to expand its regional

offices network to meet clients needs.

Company is well positioned and geographically poised, to cater for increased business

demands, from its existing potential customers Pakistan Accumulators (Pvt) Limitedhas 08 Regional Offices, spread all over Pakistan covering major business centers and

principle cities.

Head Office of Pakistan Accumulators (Pvt) Limited is located in Islamabad

Volta House, House # 2, Street # 63, Sector F-8/4, Islamabad, Pakistan.

3.3.1.6- Promotion

Promotion is a term that refers to the following statement:

Steps taken by the company to enhance its sales by focusing the target

markets

Thus we can say that promotion can be categorized into different categories based on

the above mentioned marketing perspective definition of promotion. So advertisement,

sales force, billboards etc are major sources through which the promotion scheme can

be implemented.

This is an age of competition. Numerous organizations are providing batteries to the

customer. These days every one is facing pressure of competitors. In this world of

growing competition, the only way to survive and grow, for an organization, in the

market place is the proper marketing and promotion of its products. Same is the case

with Battery Industry. There is large number of foreign and local industries working in

the country and it has been noticed that they are emphasizing much on their marketing

strategies. In this scenario, the key for a Pakistan Accumulators (Pvt) Limited tosucceed and attract its customers is adequate promotion of its products &services.

Sales Promotion

Advertisement

Direct Marketing


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Public Relations

The most prominent and important way to attract a large number of customers is the

advertisement of company and its products/services. Pakistan Accumulators (Pvt)

Limited has adopted different approaches for the accomplishment of this purpose. For

example, formation of Maintenance Free Battery is a major step taken by PAL. It not

only provides a source of recreation to the people but it serves as a major source of

marketing for the Organization.

However, one drawback or shortcoming is that, Pakistan Accumulators (Pvt) Limited

has formalized a lot of Battery Types for its customers, even more than other other

competitor, but any advertisement on electronic media has not been seen.

Along with the advertisement, the company is providing personal services to its clientswith maximum security as other competitor provide. PAL also encourages the public

relation policy of marketing.

Some brochures and promotional material has been printed but it is distributed mainly

through the Dealers who visit the Regional Office for their day-to-day business or

through the customers who come to get information about new schemes launched by

the company.

3.4- COMPETITIVE STRATEGY

Pakistan Accumulators (Pvt) Limited offer to the consumers both in terms of quality and

price according to competition. They are different as compare to their competitors by

using a different competitive strategy. It can be described in a few steps as following

Pakistan Accumulators (Pvt) Limited have its own growing and processing

facilities. Pakistan Accumulators (Pvt) limited also produces the brands of Volta

/Osaka from its production department.

Pakistan Accumulators (Pvt) Limited tried to adopt innovative policy, for last few

years the Company introduces Maintenance Free Battery with the tag line

CUSTOMERS TRUST IS OUR FAITH


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Pakistan Accumulators (Pvt) Limited management never compromise on the

quality. Even if the company got any complaint, then immediately replace it. For

the testing of products quality the l ab has been introduced. Lab of Quality

Control Department includes:

Main Lab

All tests of incoming products are carried out in this lab e.g. Moisture analysis, viscosity,

determination. Particle size, boiler waters test, condensed oil checking of canned &

R&D procedure.

Line Control Lab

Temperatures, Acidity of the products are tested in this lab. This is the main lab ofPakistan Accumulators pvt. Limited. If this lab not working properly than the whole

organization will suffer.

3.4.1- Market Share

Pakistan Accumulators (Pvt) Limited has the following market shares as compare to itscompetitors.

Pakistan Accumulators (Pvt) Limited 30%Exide 40%

AGS 20%

Others 10%

CHAPTER NO. 4

SWOT ANALYSIS


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4.1- SWOT ANALYSIS The SWOT analysis consists of analyzing the organizational strength and weaknesses,

and its opportunities and threats which are related to external environment. It helps toidentify a strategic niche that the organization might exploit. Here is a swot analysis of

Pakistan Accumulators (pvt) limited

4.1- Strength

Pakistan accumulators (pvt) limited is strong organization as for as its competitor is

concerned. Basically the activities the firm does well or the resources it has or it controls

are referred to as its strength.

Following are the strengths of pal

4 . 1 . 1 - G o o d W i l l / We l l E s t a b l i s h e d I m a g e

Pal has an excellent goodwill in the market and in stock exchange. It image is verypositive as compared to its competitors. It gave the maximum value to their customers.

4.1. 2 - M a r k e t S h a r e

A market share of 58%-60% proves to be a demanding strength of the Pakistan

accumulators (pvt) limited. This high market share shows its better performance and

also shows the PLC in growth stage.

4.1. 3 - D e l i v e r y t h r o u g h D e a l e r s

Pal has strength over their competitors. It delivers batteries through dealers. The

dealers should increase its sale using many ways although these are positive or

negative for attaining their targets.

4.1. 4 - A f t e r S a l e S e r v i c e s


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A good package of after sales service by Pakistan accumulators (pvt) limited is another

strength on its competitor and provide the customer satisfaction. And also the company

introduce after sale service department that is a good step of company.

4.1. 5 - Av a i l a b i l i t y o f P r o d u c t s

Pakistan accumulators (pvt) limited products are readily available all over Pakistan that

is another strength. In season only the Volta / Osaka products are available in the

market and they capture many customers of its competitor.

4.1. 6 - N e t w o r k o f D e a l e r s

There are 150 battery dealers in Multan region, which is a good strength of the

company and due to the good performance of our dealers we become able to sell 8000batteries per month in Multan region.

4 . 1 . 7 - D i v e r s i f i c a t i o n

Pakistan accumulators (pvt) limited has diversified its business by producing

generators, ups and batteries and now working on the automobiles business as well.

4.2- Weaknesses

Weakness are the activities the firm does not do well or the resources it does not fullyutilized or the resources it needs but does not have. Though pakistan accumulators

(pvt) limited in a successful organization but it has following weaknesses.

4 . 2 . 1 - J o b S t a t i c n e s s

There is lack of job rotation in pal which has created the staticness and reduces the

productivity and efficiency of the employees. But the other companies give job

staticness to their employee like AGS and EXIDE are two major competitors in Pakistan

give job security to their employees.

4 . 2 . 2 - L o n g C l a i m P e r i o d


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As compare to its competitors c l a i m time period of batteries delivery is long. They

take only short period of claim but Pakistan accumulators take long claim period that is

negative attitude towards attracting customers.

4 . 2 . 3 - N o n S p e c i a l i z e d P e o p l e a t F r o n t D e s k s

The marketing department has good workers but they are not good at public dealing

and less interaction with the customers. The management is also not specialized in its

work they take a long period for decision making but in current situation it is not suitable

for success of business.

4.3- Opportunities

Opportunities are positive external environmental factors. They have following

opportunities for Pakistan accumulators (pvt) limited. Due to changing needs of country,

pal has the opportunity to make power machine and diversifying its business.

4.3. 1 - E - c o m m e r c e

Pal can established b2b e-commerce application with its dealers. This will help them to

make true management information system If the crop yield is high and the farmers

are going to get good price for it so this wills increase the demand of the batteries.

4.4- Threats

Threats are negative external environmental factors. The external factors, which can be

prove negative for Pakistan accumulators (pvt) limited are as following:

4.4. 1 - P o l i t i c a l i n s t a b i l i t y

The major threat which is faced by pal is the instable political environment. A policy

being carried out by one government is changed by next coming up government. Every

government shows biasness and make policies by considering their favorites.

4.4. 2 - S t r o n g l o c a l c o m p e t i t i o n


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Pal has faced a very strong competition not only in batteries but in agriculture

implements as well. In batteries the major competitor is Exide, ags, phoenix, millet

batteries limited.

4.5 Recommendations

Production department should inform the Supervisor about the weekly production

program.Then supervisor should tell the workers about this program. I have

analyzed that supervisor told the workers about the production program on the spot.

It can affect the production process and also employees efficiency. For example, if

raw material were not available then production cannot start but, if supervisor was

informed some day ago the supervisor can make all the necessary arrangement for

the production process.

In the finished goods store the company should store the products types wise.

Due to types the loaders can easily load the products in the vehicles. It can save the

workers time and normal or abnormal loss of goods Recommendations

Planning & Store Department should told about their planning program to the

Production Department. I have analyzed there is lack of co-ordination between

these departments. Planning Department told about their program on the spot.

Sometimes workers or supervisors were not present.

4.6 REFERENCES

Factory

1.Plot # 20, 21, 22 Phases III, Industrial Estate, Hattar, Distt Haripur N.W.F.P, Pakistan

2.http://www.batterycouncil.org/LeadAcidBatteries/HowaBatteryisMade/tabid/107/

Default.aspx

3, Head Office

Volta House, House # 2,

Street # 63, Sector F-8/4, Islamabad, Pakistan.

4. http://www.volta.com.pk/product.php?hdnTypeID=1


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HRM Department

Talk with AM HR, and different People during internship

http://www.ibwc.state.gov/Organization/Administration/Acquisitions.html

http://www.ibwc.state.gov/Organization/Administration/budget.html

trading organization

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