Strategic Comparison of PEL and Singer Pakistan

Submitted To
Mam Tahira Azam

Submitted By
M.Ali Naqvi [L1F11MCOM0164] (Group Leader)
Arslan Nawaz [L1F11MCOM2165] (D.M.D) Fatimah Haroon [L1F11MCOM2220] Maaz-ul-Hassan [L1F11MCOM0162] Aqsa Muzaffar [L1F11MCOM2169] Zainab Abbas [L1F11MCOM0029] Own Haider [L1F11MCOM2126]

Table of Contents
Companies Introduction .......................................................................................... 5 Introduction of PEL .............................................................................................. 6 Vision and Mission Statement of PEL .................................................................. 6 About PEL ............................................................................................................ 7 PEL Product Line .................................................................................................. 8 Introduction of Singer Plus .................................................................................. 9 Vision and Mission of Singer Plus ........................................................................ 9 About Singer Plus .............................................................................................. 10 Singer Product Line ........................................................................................... 10 SWOT Analysis of PEL and Singer ........................................................................... 12 SWOT Analysis of PEL ......................................................................................... 12 SWOT Analysis of Singer Pakistan ....................................................................... 14 Application 9 Strategic Tools on PEL ...................................................................... 15 Input Stage ............................................................................................................ 16 Internal Factor Evaluation (IFE) ......................................................................... 17 IFE of PEL .......................................................................................................... 17 IFE of Singer Pakistan ........................................................................................ 18 External Factor Evaluation (EFE) ........................................................................ 19 EFE of PEL.......................................................................................................... 19 EFE of Singer Pakistan ....................................................................................... 20 Competitive Profile Matrix (CPM) ...................................................................... 21 Matching Stage ..................................................................................................... 22 BCG Matrix ........................................................................................................ 23 IE Matrix ............................................................................................................ 24 Space Matrix ...................................................................................................... 25 SWOT Matrix ..................................................................................................... 26

GSM .................................................................................................................. 27 Decision Stage ....................................................................................................... 28 QSPM ................................................................................................................ 29 Recommendations ................................................................................................. 30 Conclusion ............................................................................................................. 30

Companies Introduction

IN THIS SECTION:
Introduction of PEL Introduction of Singer SWOT Analysis of PEL and Singer

Companies Introduction

Introdu cti on o f PEL

Vision and Mission S tatemen t of PEL

Vision Statement
To Excel in providing engineering goods and services through continuous improvement.

Mission Statement
To provide quality products and services to the complete satisfaction of our customers and maximize returns for all stake holders through optimal use of resources. To promote good governance, corporate values, and safe working environment with strong sense of social responsibility.

Abou t PEL

Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in Pakistan. It was established in 1956 in technical collaboration with AEG of Germany and the Malik family. In October 1978, the Saigol Group of Companies1 purchased major shares of Pak Elektron Limited. At that juncture, the company was only manufacturing transformers and switchgears. With the Saigols in management, PEL started expanding its product range by entering into Air Conditioner manufacturing. Currently the company comprises of two divisions: Appliances Division Power Division Appliances Division PELs Appliances Division is the flag carrier of the Saigol Group. This Division of PEL consists of home appliances manufacturing. In 1981, PEL window type air conditioners were introduced in technical collaboration with General Corporation of Japan. In 1986-87, the company started manufacturing of refrigerators in technical collaboration with M/s IAR-SILTAL of Italy. In 1987, PEL deep freezers were also introduced in technical collaboration with M/s Ariston of Italy. In 2006, the Company has started manufacturing of split type air conditioners of various capacities as the customer choice has shifted from window type to split type air conditioners. The product has received good response from the market, which encourages the company to multiply its production in the coming years. Today, PEL has become a household name. Its products are not only in great demand in the local market but the Company has also started exporting its appliances to foreign markets. Power Division PEL Power Division is one of the major electrical equipment suppliers to WAPDA & KESC. Since 1956 the company manufactures transformers, energy meters,
1

The Saigol Group is a group of companies owned by one of Pakistan's wealthiest families, the Saigols. The family and its companies are based in Lahore, Pakistan. The Saigols originally hail from Chakwal. The group is managed by three Saigol brothers: Tariq, Nasim and Taufeeq. Amin Saigol was the founder of the Saigol dynasty where he started a Calcutta shoe shop; the shop eventually led the Bihar Rubber Works in 1938. Amin had a son called Yusuf who is the father of this business Trio. In 1948, the Saigols migrated from Calcutta and initiated their business in Faisalabad, the textile city of Pakistan, under the banner of Kohinoor Industries Limited. Tariq Saigol is the eldest brother; he is head of Kohinoor-Maple group, which owns the Kohinoor textile mills and Maple-Leaf Cement. He is known to be openly critical of the Pakistani governments lack of interest in the textile sector. Nasim Saigol heads PEL and Kohinoor industries.

switchgears, kiosks, compact stations and shunt capacitor banks. PEL also has had the privilege of getting its equipment approved and certified from well-reputed international consultants such as: Preece, Cardew and Rider, England Harza Engineering Company, USA Snam Progeti, Italy Societe Dumezm, France Miner & Miner International Inc. USA Ensa, France

PEL Product Line

PEL Appliances Division Product Line

Refrigerator

Air Conditioner (Split + Floor Standing)

Water Dispenser

Washing Machine

Microwave Oven

PEL Power Division Product Line

Transformer

Energy Meters

Switchgear

I nt roduct ion of Singer Plus

Vis ion an d M iss ion of Singer Plus

Vision Statement
To be the leading retailer of home appliances in Pakistan.

Mission Statement
To improve the standard of life of our customers by offering high-quality products and services at affordable prices.

About Singer Plus

Singer has been operating in Pakistan since 1877, when the first Singer sewing machines went on sale in shops. Today, Singer Pakistan Limited is a large, diversified company with a presence throughout Pakistan. Singer has the largest retail network in South Asia with over 750 stores. Beginning with the sewing machine, Singers product portfolio has diversif ied to encompass a highly successful multi-brand strategy combining products of top world marquees with the companys own products across a range of household and industrial categories. Singer (Pakistan) B.V. holds 70.28% of the issued share capital of Singer Pakistan Limited. Singer Pakistan Limited was listed on Karachi and Lahore Stock Exchanges in 1985. The foremost Home Appliance Retailer in Pakistan, offering various renowned brand choices to its consumers, with a loyal customer base spread across the country from North to South and East to West, catered to by a strong network of retail showrooms and dealers and backed by the strongest of after sales service.

Singer Product Line

T.V

Refrigerator

A.C.

Deep freezer

Cooking Range

Water Heaters

Washing Machines

Sewing machine

Food processor

Toaster

Electric Kettles

Iron

SWOT Analysis of PEL and Singer

SWOT Analysis of PEL

S Strengths
Around 54.60% of Capital is Equity. PEL major shareholders are from Saigol Family which makes PEL family owned business due to which there is a high level of control, trust and desire to gain profits. Online portal system for employees. Customer care offices in +21 cities of Pakistan. Area sale offices in 19 cities of Pakistan. Strong distribution network in +50 cities of Pakistan with +3000 Distributors. Parts & Accessories of PEL products are available in all over Pakistan. PEL is one of the major electrical equipment suppliers to Water and Power Development Authority (WAPDA) and Karachi Electrical Supply Corporation (KESC), which are the largest power utilities in Pakistan. International Awards and certificates like ISO 9002 certified by SGS Switzerland, nual Environment Excellence Award, 2010 for best Health, Safety and Environmental performance etc. Engineering Procurement and Construction division delivers custom designed and built HV and EHV grid stations, electrification of housing projects, industrial parks and optimum solutions for power utilization to all kinds of industries and commercial customers. Attracting foreign investment around 0.03%. Brand image is strong.

W
Poor marketing department Less stylish home appliance Financial Problems High price Poor R&D

Weaknesses

Opportunities

Increase in product range like T.V, vacuum cleaners etc Geographical expansion. Joint venture with other companies. Partnership with other companies like Orient have partnership with Samsung etc.

Threats

Family business High influenced of distributors. Big advertising budget of other companies. Energy crisis. Alternative energy resource products such as solar A.C. etc Chinese brands are available in market in less cost. New competitors

SWOT Analysis of Singer Pakistan

S
Different Products Brands collaboration Nationwide service network

Strengths

W
Low market share Low economies of scale Availability of costlier funds Poor Marketing department Poor R&D Obsolete technology

Weaknesses

O
Development and improved product mix Delivery of enhanced production efficiencies Up gradation of product portfolio Lowering operational costs New products New geographical area Acquire new technology Improvement in brand image

Opportunities

T
Riskiness of firm May face shortage of funds Questionable financial health Liquidation

Threats

Application 9 Strategic Tools on PEL

Application 9 Strategic Tools on PEL

IN THIS SECTION:
Input Stage Matching Stage Decision Stage

Input Stage

IN THIS SECTION:
IFE
EFE CPM

Input Stage

Internal Factor Evaluation (IFE)

IFE of PEL

PEL Internal Factor Evaluation

Strengths
Owner Equity Family Business Portal System for employees Area sale office Customer care offices Distribution network Availability of Parts & Accessories of PEL products Power Division International Awards and certificates Engineering Procurement and Construction division Brand image

Probability
0.03 0.02 0.02 0.05 0.07 0.09 0.07 0.1 0.05 0.12 0.04

Rank
2 1 2 3 4 4 4 4 3 4 3

Weight
0.06 0.02 0.04 0.15 0.28 0.36 0.28 0.4 0.15 0.48 0.12

Weakness
Poor marketing department Less stylish home appliance Financial Problems High price Poor R&D

Probability
0.09 0.03 0.1 0.04 0.08

Rank
4 2 4 3 4

Weight
0.36 0.06 0.4 0.12 0.32

Total

3.6

IFE

of Singer Pakistan

Singer Pakistan Internal Factor Evaluation

Strenghts
Different products Brands Collaboration Nationwide service network

Probability
0.11 0.1 0.09

Rank
4 2 3

Weight
0.44 0.2 0.27

Weakness
Low market share Low economics of scale Availability of costlier funds Poor marketing department Poor Research & Development Obsolete technology Poor Brand Image

Probability
0.1 0.07 0.1 0.1 0.09 0.15 0.09

Rank
4 2 3 4 3 3 3

Weight
0.4 0.14 0.3 0.4 0.27 0.45 0.27

Total

3.14

External Factor Evaluation (EFE)

EFE of PEL

PEL External Factor Evaluation

Opportunities
Increase in product range Geographical expansion Joint venture Partnership with other companies

Probability Rank
0.14 0.11 0.07 0.06 4 3 3 3

Weight
0.56 0.33 0.21 0.18

Threats
Family business High influenced of distributors. Big advertising budget of Other companies. Energy crisis. Alternative energy resource products such as solar A.C. etc. Chinese brands are available in market in less cost. Decline in industry growth New competitors

Probability Rank
0.03 0.14 0.1 0.09 0.08 0.07 0.05 0.06 2 3 4 4 3 2 1 3

Weight
0.06 0.42 0.4 0.36 0.24 0.14 0.05 0.18

Total

3.13

EFE of Singer Pakistan

Singer Pakistan External Factor Evaluation

Opportunities
Developed & improved product mix Delivery of enhanced production efficiencies Up gradation of product portfolio Lowering operational costs New geographical area Acquire new technology Improvement in brand image

Probility
0.07 0.1 0.1 0.08 0.08 0.1 0.15

Rank
1 3 2 2 4 3 4

Weight
0.07 0.3 0.2 0.16 0.32 0.3 0.6

Threats
Riskiness of firm Shortage of funds Questionable financial health Liquidation

Probility
0.07 0.1 0.05 0.1

Rank
3 2 2 3

Weight
0.21 0.2 0.1 0.3

Total

2.76

Competitive Profile Matrix (CPM)

CSFs

Competitive Profile Matrix (CPM) PEL Singer Pakistan Probability Rank Weight Rank Weight
0.05 3 0.15 1 0.05

Better and effective communication system with employees plus customers Better customer sale services Efficient distribution networks Improvement in Brand image Increase market share New product development Geographical expansion Joint venture Acquire new technology High tech and efficient R&D department Removal of financial problems Efficient marketing department

0.06 0.08 0.09 0.1 0.11 0.12 0.04 0.13 0.08 0.07 0.07

4 3 3 4 4 3 2 3 3 4 3

0.24 0.24 0.27 0.4 0.44 0.36 0.08 0.39 0.24 0.28 0.21

3 2 4 4 4 4 3 4 4 4 4

0.18 0.16 0.36 0.4 0.44 0.48 0.12 0.52 0.32 0.28 0.28

Total

3.3

3.59

Matching Stage

IN THIS SECTION:
BCG Matching Stage IE Matrix Space Matrix

SWOT Matrix
GSM

BCG Matrix

IE Matrix

Space Matrix

SWOT Matrix

GSM

Decision Stage

IN THIS SECTION:
QSPM Decision Stage

QSPM

Click on word to open a file QSPM.xlsx

Recommendations
Adopt a true decentralized organization setup which gives all employees to take part in decision making. The company should have a strong marketing information system to make proper forecasts. Make sure proper functioning of HR department. More allocation of budget to the marketing department. More focus on the pull strategy in its promotion mix. Shorten its cash conversion cycle. Should also focus on direct selling of its products to its customers. Should constantly add technology in its products & systems. Should speed up its delivery process by expanding its stores in areas of high demand.

Conclusion
Pel has a great strength & opportunities. PEL Should take risk and go to other markets. PEL Management philosophy is the hurdle in the progress of the company. PEL should take advantage of todays media power to capture market. Future of PEL is very bright as it is grabbing opportunities & has the potential to compete with challenges.