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Published by Bilal Yasir
ECS Shoes report Ehsan Chappal Store, Lahore Pakistan
ECS Shoes report Ehsan Chappal Store, Lahore Pakistan

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Published by: Bilal Yasir on Jan 19, 2012
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Ehsan Chappal Store

Table of Contents Contents Historical Perspective Start-up Vision Statement Mission Statement Changes in Mission and Vision of the Organization Financing Capital Structure Hierarchy Branches Marketing Tools Marketing Issue Related to Stiff Competition SOPS if any HRM Policies HR Issues and How the Company Resolved Those Issues SWOT Analysis PEST Analysis Porters’ Five Forces Tax Issues or any other Government Related Issues Product Lines Cultural Issues if ever faced Brand Recognition Diversification Forecasting Page #

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Distribution Channels Advertisement Quality Control System Growth Trends Management Information System (MIS) Corporate Social Responsibility if fulfilled

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History

First outlet opened in 1954 in Anarkali and soon became a raging success for its excellent quality and designing. Since then we have been expanding operations in the fields of manufacturing, importing, exporting and retailing. The expansion has been continuous and in tandem with the market growth. Now third generation of the founder Mr. Fazal Rab Saddiqui
is in the business yet the core values of business remain the same. Startup

Ehsan Chappal Store (Pvt) ltd. Owns multiple brands of ladies and girls’ footwear, bags and accessories including ECS, elements, effects and e-circles. All these brands are exclusively available at ECS stores located at most convenient locations in most major cities of Pakistan. ECS stores display largest variety of ladies footwear and accessories available at any single outlet. ECS is undoubtedly the most famous ladies footwear brand in the country with a history of over 50 years. Unsurpassed quality and contemporary designing are the hallmarks of all Ehsan chappal Store brands. A large family-owned chain of ladies footwear and accessories retail outlets. ‘For latest in ladies footwear’ is their slogan. The Company is involved in imports of raw materials, shoes and bags, manufacturing, retailing, wholesale, and exports. Imports and exports are relatively new vistas and now the management is paying much attention to improve both. For this, new contacts are being made and visits to potential buyers and suppliers are being undertaken systematically. All the products are sold under the brand name of ECS. This brand, its logo, and the name Ehsan Chappal Store are the property of Ehsan Chappal Store (Pvt.) Ltd.

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Hierarchy The company is managed by Mr.Ehsan Rab Siddiqui (Chairman) and his three sons, Mr. Imran Siddiqui (Director), Mr. Salman Siddiqui (Director) and Mr. UsmanSiddiqui (Director). Mr. Imran looks after the production and procurement While Mr. Salman is responsible for marketing. Mr.Usman lends his personality to sales. All three directors have a degree in either business management or commerce. With the help of well trained staff the company is run through the principles of delegation and solidarity.

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Branches of ECS are as follows:
Anarkali, Lahore 27 Bano Bazar, Anarkali, Lahore Ph.042 37314 357-58 Liberty Market, Lahore 23 Commercial Zone, liberty Market, Gulberg, Lahore Ph. 042 35756723-24 Defence Lahore 177 Y Block, DHA Lahore Ph. 042 35897267-68 Township, Lahore 53 B Peco Road, township, Lahore Ph. 042 35125621-22 Saddar, Rawalpindi 26 Zarkon plaza, Murree Road, Saddar, Rawalpindi Ph. 051 5111880-81 F 10 Markaz,Islamabad Pak plaza, double road, near umer farooq masjid, Islamabad Ph. 051 2215827-28 F7 Markaz, Islamabad AnB centre, 13-v behind PSO pump, Jinnah super market, F7 Markaz Islamabad. Ph. 051-2651882-83 Peoples Colony, Faisalabad 336 B, Peoples Colony I,Satyana Road, Ph. 041 8716038-39 Sussan Road, Faisalabad s-9(Adj. bank islami) block no. 1, Madina Town, sussan Road Faisalabad Ph. 041-8716058-59 Satellite Town, Gujranwala 755B, Rex Cinema road, Satellite Town Market, Gujranwala Ph. 055 3730721

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Since ECS biggest competitor is Stylo and ECS has emerged as most following brand by ladies. According to reviews from customers of Stylo and ECS, people perceive both of them as equally good.

logo

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Financing
Since ECS started long time ago in Anarkali as the single store for shoes, at that time the capital that was required was not huge but as the setup was increasing from day it all began then certainly there was need for finance for further production. ECS made all financing from its retained earnings and then it went for all other branches to setup. So Capital at beginning that was belonged to owners.

Marketing Analysis
Customers (Target Market/Segmentation) Through our surveys, as a mode of primary research, we found that almost 99% of ECS customers are female. An ECS manager told that they segment their customers on the income basis; they choose to open outlets in those areas of any city where they hope to encounter maximum customers from only upper-middle and upper class females. And most of them belong to the upper-middle and upper class families of the city. And due to ECS’s trendy and fashionable products, customers are usually of age between 16 to 40 years. Competitors As such the only competitor against ECS in the market right now is Stylo. Stylo started its operations later than ECS but got immense success in a shorter period of time. It has more outlet branches in the country than ECS. Currently, ECS has 11 branches countrywide whereas Stylo has more than 20 branches; almost much more than ECS. This has been a major reason for throwing such a hard competition to ECS. The ECS manager told us the estimated current market shares of these two companies, which are as follows:

Marketing Mix

Product:

ECS products include all sort of ladies footwear. Sandals, slippers, heels, thongs, flip-flops, moccasins, dress shoes, bridals and now also kid’s shoes and ladies purses. Most of the shoes are made in their local factory by their own skilled craftsmen. The rest are either sourced from Karachi or imported from Thailand. In addition to shoes they now proudly display an extensive range of ladies handbags and shoulder bags. They sell their exclusive designers footwear under the following brands:
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• •

ECS elements Children shoes brand e-Circles Ladies handbags under the brand ECS effects

Still there is chance of more brands to come.

Place Distribution Channels
The first outlet was opened in the then newly-constructed BanoBazaar in Lahore’s famous market Anarkali in 1953. The idea was to give the customers good value for money. Soon it became famous for its wide range of comfortable and durable ladies chappals (sandals and slippers). The success followed slowly but surely. In a few years, the name Ehsan Chappal Store (ECS) became a synonym for fairly-priced comfortable and durable ladies sandals. Not only chappals but every kind of ladies footwear is on its display. For over five decades, it has been a bustling place ever-crowded with the ladies of Lahore trying to find the best match for their feet from a wide range of designs. In 1997 a new branch was opened in Liberty Market, Gulberg to cater the needs of the growing city of Lahore. Liberty Market is now the largest and most posh market in the city and Ehsan Chappal Store was an instant success there. Afterwards ECS entered the markets of Y-Block Defence, Peco Road Township and the Mall Road Lahore. An extraordinary branch was opened in2001 in Defense. It is a four story standalone building, unrivalled by any other shoe store in the entire country. This store is a milestone in the retailing history of Pakistan. This fact has been acknowledged by both the shoe industry gurus and the national newspapers. And then it turned its focus on to the national market. In 2001 ECS opened its biggest outlet in Rawalpindi, and shortly after that, it entered the markets of Islamabad. Its success did not slow down there. It opened its outlets in Faisalabad and Gujranwala in 2003 and the response was same from everywhere; magnificent success. Right now, the management of ECS is planning to expand the business in many other cities and into the international market as well. The business was incorporated in the year 2000. Below are the branches of ECS and the reason for selecting these places depend upon target market instant access:
Anarkali, Lahore 27 Bano Bazar, Anarkali, Lahore Ph.042 37314 357-58 Liberty Market, Lahore 23 Commercial Zone, liberty Market, Gulberg, Lahore Ph. 042 35756723-24 Defence Lahore 8|Page

Ehsan Chappal Store 177 Y Block, DHA Lahore Ph. 042 35897267-68 Township, Lahore 53 B Peco Road, township, Lahore Ph. 042 35125621-22 Saddar, Rawalpindi 26 Zarkon plaza, Murree Road, Saddar, Rawalpindi Ph. 051 5111880-81 F 10 Markaz,Islamabad Pak plaza, double road, near umer farooq masjid, Islamabad Ph. 051 2215827-28 F7 Markaz, Islamabad AnB centre, 13-v behind PSO pump, Jinnah super market, F7 Markaz Islamabad. Ph. 051-2651882-83 Peoples Colony, Faisalabad 336 B, Peoples Colony I,Satyana Road, Ph. 041 8716038-39 Sussan Road, Faisalabad s-9(Adj. bank islami) block no. 1, Madina Town, sussan Road Faisalabad Ph. 041-8716058-59 Satellite Town, Gujranwala 755B, Rex Cinema road, Satellite Town Market, Gujranwala Ph. 055 3730721

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Pricing
Amir Mehmood, ECS manager told in his interview that ECS being confident of its strategies and its product do not fall into competitive pricing. No doubt ECS keep on announcing different discount and cuts in prices to attract more customers. But it sets price level using cost as bases. Price = cost + margin. Different types of price cuts that are offered to members of ECS are discussed in promotion activities.

Promotion
ECS has always spent vigorously in such campaigns. They have designed their own transport trucks with very attractive banners of their brand to serve as an advertising agent. In girl’s colleges, they advertise a lot by pasting permanent stickers of their logos and colors on the benches and roofs. Furthermore, they also hold stalls in girl’s colleges of their latest shoe variety to promote their products into the population. They also promote ECS through different activities in Kinnaird College and Home Economics College. They advertise in fashion magazines as well, like FAQ, etc. They get a good response from many fashion institutes who see this brand in fashion magazines. Over the period of time, they have changed their logo so many times. Just like Pepsi Co., who in 1996 spent USD500 million just to change the color of its logo. This was for education. Coke would never reach its stage right now if they were not educating the customer about their product. Pepsi Co., were willing to spent that huge sum just to ensure that their customer was not swept away by Coca-Cola, where the latter was hosting the Olympics Games at the home-town of Coke in Atlanta, Georgia, USA. The mass logo color change by Pepsi is a way of educating the customer that Pepsi is still around and was not out of sight. In the same way, ECS also keeps its way to better and improved features in all aspects. They have experimented and maintained a lot of logos and got different results every time; like readability problem, etc. Change of logo also comes with great financial charges to change that logo on every pad, every show, every bag, every outlet, etc. However, now ECS thinks that they have come-up with a stable brand logo this time. On the opening of new outlets, special invitation cards, flyers and offers are sent to thousands of existing customers.

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Advertisement
ECS offers membership card which is made free-of-cost to any customer. It has been ranked as the most popular rewards programming the retail industry. XSECS card allows its customers to take advantage of the best in-house deals for ECS at all of its outlets. The benefits of being a card holder continuously keep on coming your way. ECS has and is providing its customers with gift and discount certificates of their affiliate businesses in different cities. These Vouchers can be picked from any of ECS outlets upon the presentation of your XSECS card at the counter. It is the rewarding experience that the company evolved for its customers - as their valued customer; after all, the company has been satisfying its customer’s needs above any known standard for the past fifty years. XSECS rewards program was created as way for ECS to bring extra (excess) value to their very best customers. In their eyes, it’s a way of saying thank you for using the card and shopping at ECS. The XSECS customers get many benefits including; early invitations to sales just for their registered customers, exclusive promotions such as discount vouchers, news and promotions from your favorite shoe and accessory store, big savings on all products and services of our affiliates, valuable gifts, etc. Currently, ECS has around 25,000+ XSECS members in total, who are enjoying its unlimited benefits. It works like this – for instance, if you are a XSECS member, and shop at NIRALA sweets for Rs. 500and at the same time shop at ECS for shopping of worth Rs. 1000, you get a free gift of worth Rs. 500. Members also get amazing discounts at various places, such as, at dupilex beauty clinic, XSECS members get 15% discount, at New look they get 20% discount, ataroshi embroidered classics, they get 10% discount, at Jamin Java, members get a free tea or an ice-cream or simply a discount on their products. A lady using Mobilink Jazz Ladies First Package also gets 5% discount and a free dust bag on every shop. Furthermore, members also get 10% discount on every shop exceeding Rs. 3000 or if the customers accumulate receipts of worth Rs. 3000. A sample XSECS card is attached at the end. This was much about the functioning of XSCES.Q-Mart in Sargodha and The Shoe Planet in Lahore and Karachi are also in the list of collaborator of ECS. Shoe Planet is the flagship, mega store of Serves, one of Pakistan's leading footwear manufacturing and marketing organizations. It is a new concept that offers an exciting range of the world's best brands - Nike, CAT, Puma, Clarks, Diesel and many more, under one roof. They have successfully maintained stock of ECS at their displays and the demand for more stock is always recorded increased.
Some fashion magazines also, like FAQ, they also collaborate with ECS; they offer ECS free advertising in their mass selling fashion magazine, free-of-cost, on the condition if they provide them with pretty shoes and sandals for their super-models. This has also been proved a good way of advertising. The impact of all these collaborators has always been recorded very positive.

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THE CHRONICLES – the ECS catalog ECS plans to launch its own Brand catalog in the coming year. Plans are being worked out. But few hurdles are still in the way that needs to be managed. As ECS is growing day by day and reaching the position where it can entertain its customers the most, it is looking forward to establish its own catalog by the name of “Chronicles”. It will be issued on seasonal basis and will include the description of new bags and shoes formal and informal ones. This includes comparison of product features, advising related products and alternative products and services. Catalog printing is a popular way to market a company’s offerings. An attractive, well-designed catalog can sell products or services for any business. Businesses of all sizes often use catalogs in their marketing plans. Distributing catalogs is a highly effective way to boost sales. A range of products and services can be effectively and attractively showcased with well designed, informative catalogs. To reap the maximum benefit, careful planning should go into catalog printing and time should be spent on creating the best possible marketing tool.
This catalog known as “Chronicles” is 100% for the benefit of users, as it will make the decision making process very easy, enable their customers to choose among their present designs while sitting homes. It will not only help users to buy easily but also let them know what to choose? What new designs are present in the market? And will give more decision making time. On stores, while shopping sometimes it becomes quite difficult for people to decide or because of shortage of time or mismatches of timings the decision making process is quite difficult, but ECS as it always put its customers first have solved this problem, although it is a time consuming process and capital will be invested where returns at first will not be high but customers will be entertained at high level. When you weigh the advantages and disadvantages of catalog printing for your particular business, never forget major drawbacks of such catalog. It will help competitors to know about the updates coming from ECS and copying that design will become very easy. It will also be very costly to print and distribute them because they are planning to charge nothing for Chronicle. The development of online catalogues and open catalogues with multimedia capabilities, have opened complete new horizons. In the end, the point is that Chronicles is a very brave step which we will see after few months. And ECS will be the first in this business launching its own catalog. There are some advantages and disadvantages of Chronicle but as ECS say customer convenience first, they surely are proving it.

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SWOT Analysis This SWOT analysis is done on the basis of primary and secondary data. Strength • ECS Brand-Image in the eyes of customers, it is top of all brands present in the market. When questioned that what brand comes to your mind when it comes to buy shoes; majority of them replied, ECS. Excellent Range in Product Lines – a well-structured product line and range. Quality Promotional Offers - XS ECS – this is playing a vital role in their business these days. As there is no membership fee and everyone is invited to join this circle, more and more members are joining this, affecting sales of the company in quite a positive manner. Large number of Collaborators – there is a considerable big number of collaborators who are motivating the sales of ECS by one way or another. Effective Advertising Campaigns – campaigns in girl’s colleges have always brought fruitful results for the company. Competitive Pricing Motivated Workforce, staff is highly motivated. They are regularly appraised and are rewarded often on their performance. They work on commission base system.


• •


Weaknesses
• •

No clearly defined marketing strategy – though they are working successfully in the market but still there is any clearly defined or preplanned marketing strategy for ECS. Lesser number of Outlets – as compared to its main competitor Stylo, they are operating through lesser number of outlets. Lack of managerial staff

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Opportunities •

New developing Local societies & Cities Internationally-held Fashion Shows – ECS has participated in few internationally-held fashion shows and have gained honor in them. The company got many orders from these shows. Launch of the Chronicles, this shoe-catalog would be a totally different idea in the country’s market in this business. Therefore after thoughtful planning, launch of it could bring fruits for the company. Economic Environment – steady and encouraging rate of inflation in the country, population growth trend in urban areas and increase in per capita income; brings more and more customers in the ECS’s segment, this of course is good for the company.

Threats

Emergence of Cheap China Products, this could be a threat to ECS, since China is wellknown for its similar but low priced products worldwide. Therefore if it enters the market, customers of ECS could switch towards it. Stylo’s innovative marketing and promotional activities.

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PEST Analysis
Political factors: The political arena affects the industries of any country. If the political environment is stable then it is beneficial for any industry because stable political environment follows the regularity of the policies for any industry. Unfortunately in Pakistan, political environment was not sustainable which causes a bad effect on almost all the industries. ECS has established a reputable image in the eyes of the country and government, so they do not face any special political pressures. Government of Pakistan exempted special taxes of 10% - 15% on leather shoes imported that was a promoting action for shoes industry in preceding years. Raw materials used in ECS shoes are mostly leather, artificial leather, synthetic, and textile canvas, PVC, Hawaiiand EVA. The import duty on all these raw materials is 15 %. There are some environmental issues regarding shoes industry that is ban on import of raw material toluene. The chemical toluene is addictive. Due to this reason, the sticking chemicals like Lee-tax, Diamond and MEK are mostly being imported and if it is manufactured in Pakistan, then toluene is smuggled. WTO affects this industry too much. WTO has opened trade with china which has also affected this industry negatively. China penetrates not in Pakistani shoes market but all over the world due to low manufacturing cost. Investors in shoe manufacturing are afraid due to these types of agreements to invest in shoes industry. We can promote shoes industry if Government imposes trade restriction on imports of shoes from china. Economic Environment: Most considerable point for any industry is the economic condition of the country. If a country is economically strong then there are chances of growth in each sector. Pakistan is a developing country and progressing continuously. The economic condition is much better now as compare to the previous years. In the past foreign companies were afraid to invest in Pakistan but now the situation is totally change. Economic environment tend to change according to government policies and regulation. There is no such strong effect of economic environment on ECS considering the fact that government is incapable to impose stabilization in Pakistan. Social Environment Social trends and the demographics are the key elements that are taken in consideration to do business in any country. Each country has different culture and trend basing on their norms and values. In Fashion Shoes industry trends are changing day by day rapidly and if you don’t keep up your pace with this rapid transition you will lack behind. Now a day’s people are becoming more stylish, fashion oriented and status conscious so they prefer and demand for shoes which fulfill their personality needs. People today want good quality products in return of the money that they spend. People like to socialize. As imported and internationally renowned brands are assumed to be prestige to use, people are more likely to go for some best known products. In the
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ladies fashion shoe industry, there is an increased trend of females to buy shoes that matches their outfits. Some years back, very neutral colors like black, brown, white and fawn were used for ladies shoes and were considered as a match for outfits of all colors. But this trend is by gone now and ladies are more prone to buy matching shoes. Because of this demand from the ladies, almost all firms are manufacturing shoes of a11 variety of colors. Now, shoes are being manufactured in various shades of one color like different shades of blue, green, pink and other colors are easily found. Another increased trend is of providing shoes according to various occasions like valentines, basant; weddings etc. for example on valentines, shoes in various shades of red are provided and displayed. In the same way, in wedding season golden, copper, silver and reds are provided because of their huge demand. As weather in Pakistan remains warm in most of country’s region and it continues approximately 7 to 8 months, so in such weather you need more stylish chappals. Strong media support towards brands is influencing people decisions about shoes. Technological Environments Technology is the best weapon to win the war of competition in these days. Those who have outdated technology are out of the competition. In shoes industry majority of companies are manufacturing handmade shoes for competitive edge. In Pakistani shoes industry usage of technology is very low because people prefer to buy handmade shoes. The budget allocation for research and development in shoe industry of Pakistan is maximum 5%. Due to low usage of technology in this industry technological change rate is 0%. A big reason for not involving technology is that in ladies fashion shoes industry, the designs change rapidly and with this fast pace, machines cannot be changed. But technology plays a great role in sole cutting and pressing. ECS has already these types of machines for processing. Machines are used in Pakistan as well as abroad for sole cutting and pressing. Earlier sole cutting and pressing was manually done but now machines are available on which mass sole cutting and pressing is done. As far as the uppers of shoes are concerned, they are embellished and sequenced by labor. ECS also focus on technological aspect to make its production fast and accurate.

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Forecasting
The context in which ECS is operating also seems to be supportive, in future as well. There come many religious and traditional festivals and ceremonies throughout the year, also with every change in the season, preferences and tastes of the consumers also changes, and every time they want something new. So these factors keep the company’s sales steady and constant throughout the year. It has also been observed that population statistics act as one of the primary reasons which affects the sales in positive manner; as the population is increasing every year, the number of customers of ECS is also increasing. So, the planning management at ECS also keeps this issue in mind, while predicting future flows. Some population statistics are given below that shows the relation between the growing progress of ECS and the role of population increase in it. So, In order to meet with the upcoming demand the production capacity and other resources are increased for future settlement as mentioned above that every year ECS sales are increasing.

Corporate Social Responsibility
Code of business Principles ECS feels its responsibility towards maintaining proper business principles and business ethics. It has documented procedures explaining business principles which are based on trust, honest and best practices. It inculcates a culture where each employee feels its responsibility to follow these business principles which are laid down in the best interest of the employees, the organization and the environment.

Diversification
ECS success factor is its niche as being among one to serve only ladies with particular fashionable shoes. In so many years ECS has been successful in maintaining its brand value and now this is the perfect time to go for diversification as they have introduced quality handbags and leather shoes. This diversification is important for ECS and they are even going ahead to launch some other apparel for ladies. Management Information System Management information system is very important as this era is for information system. ECS normally conduct customer feedback online and thus has many trends and sales forecast is made with all information gathered of customers. Almost with the pessage of time ECS is focusing on Management Information System.
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Growth trends in the industry:
The special subsidized rates for Pakistan’s worldwide footwear trade have helped increase the exports to the extent of 250 per cent in the last couple of years. Export of shoes has shown an increase of 13 per cent in the previous fiscal year till Apr against the corresponding period of last year. Footwear industry is changing rapidly. Industry is moving towards high competition because of overcapacity interims of supply and manufactures are offering similar kind of product to almost same target market. Because of local manufactures and imports of footwear’s from china. Since the increasing trends for demand of shoes especially from ladies side has made footwear industry in profit. ECS profit is increasing because of the increasing demand.

Brand Recognition
We use print media to advertise in different areas for creating brand awareness. It has increased the awareness through repetitive exposure of its brand name in different places like roadside advertisements, newspapers and magazines. Its awareness level is measured in terms of • • • • • Brand recognition Brand recall Market share Feedback of the customer General survey (news paper, fashion magazine)

As being the niche like for serving ladies with proving best footwear and even trendier shoes is ECS Brand recognition that is covered with mostly showing glamorous women and style in different ads in TV and print media. Our own marketing department survey Researcher will attract a large number of buyers and win a larger market share by keeping their prices comparatively low.

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Quality Management • • • An important choice Different varieties of shoes to chose from. A very personal service Their professional specialized staff is there to help you make the best choice Product presentation All the items are clearly marked with the price, size and description of the materials used to make the product, thus saving you time and making your choice easier. Your purchase is guaranteed You have the guarantee to replace the purchased item if it is still intact and accompanied by the till receipt.

Process and Capacity Design (SOP) Their process consists of three parts. • Manufacturing In manufacturing are, all the raw materials are brought together and the raw material is cut into the shapes of the required products. All the pieces are cut here for the specific products. Stitching The cut pieces of raw material are stitched here together to give the shape of the shoe. The sole is also attached to the upper portion of the shoe and all the pieces are joined together to give it the shape of shoe. Finishing The product is then moved to finishing department where the rough look of shoe is converted in to a finished product. The shoe is polished, cleaned and all the unwanted materials are removed from it to give it a proper shape. The color and shine of the shoes are finalized and the product coming out of this department is ready for use.

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Human Resource Management Policies for ECS
Since ECS is not a large organization like corporate company but it still keeps in view the importance of HR. ECS manages the human resource of the organization that is responsible to systematically reviewing human resource requirements to ensure that required number of employees, with the required skills is available when needed. They prefer the internal employees for the recruitment over the external recruitment and a forecast for the supply of HR within the organization They use skills inventory for middle management and they use replacement charts for operational level employees Functions of HR department:
– – – –

Recruitment Selection Retention Firing

Recruitment

ECS is a traditional organization and it has got very inflexible culture and it does not believe in outsourcing its recruitment process. Moreover it does not use either the electronic media or the print media advertise its vacancies. However exceptions and they sometimes recruit peoples from educational institutions and other experienced places. And exceptionally they use university recruiting as for their external recruitment. They are following the internal recruitment method and for this purpose they do job posting Selection They select people on the basis of their qualification and skills in order to meet the outcome of goals. They also strictly follow the EEO. Steps involved in selection process are: – Receiving the CVs They only accept in person CVs, they do not entertain e-mails or via post CVs. – Background investigations Like every other organization ECS also wishes to ensure that it hires respectable and reputable employees for this reason it investigates the past record of each and every employee before the final selection.
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Retention For retaining the employees they have introduced certain bonuses and incentives. Such that they have provided some employee cards and their issues are resolved as soon they incurred. Retrenchment (Firing) As we know that ECS is an emerging firm around us and they hire the person who have the skills and ability to do work for a long time .They mainly fire people on the serious reach of agreement, misconduct, punctuality and upon not achieving their given targets and once the management has decided to fire a person they give one month prior notice to the respective employee and once the employee is fired can never be hired again.

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Porter Five Forces Bargaining power of suppliers – Low • Too many suppliers The suppliers have mushroomed specifically in the city of Lahore and Karachi. Other t h a n t h e s e c i t i e s s u p p l i e r s c a n b e f o u n d i n S a n g l a h i l l , S h i e k h u p u r a a n d K a s u r . T h e suppliers are quite large in number as compared to the buyers who order them. This large ratio of suppliers leaves the choice on buyers. The buyers have the complete power to work with as many suppliers as they want and to reject the suppliers when their orders are made.

Customers/Buyers

Products are homogenous. Shoes in ladies fashion industry are not much different in terms of design and quality as almost all the firms have same vendors and if a firm signs an agreement with vendors in order to protect their designs from being copied, the vendors will offer the same design with a slight difference to some other firm. So, products are homogenous in ladies fashion shoe industry. Buyers are very strong as they have too many options available without a n y switching cost involved. If they face any issues regarding price, quality etc. they would easily switch to other brands as they can find the same designs with a slight difference (or at times same design) at any other shop at their acceptable price or quality parameters. Fashion trends are changing at a faster pace, buyers in this industry are not brand loyal rather they seek for better designs and apparent quality parameters defined by them. Comparable prices & quality: As mentioned earlier products are homogenous with little or no difference, buyers have advantage of switching a brand if they are not satisfied with the price or quality being offered by a particular brand. Switching cost is low, as mentioned earlier, that products are almost same so consumers do not face any major costs in switching a brand from one to another.


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Threat of New Entrants
• •

Entry barriers are low as existing firms are all outsourcing which makes the total investment relatively low for new entrants. Entrants do not have to spend heavily to overcome existing customer loyalties instead location of retail outlets, designs and to some extent quality are areas where entrants will have to focus. Established / growing market as companies across the industry exhibit solid earnings and revenue figures which means industry is showing signs that it is in its growth stage. The only determinant for cost advantage is favorable location in this industry There are no government policies to limit the competition. Other than that if there is import duty then it is only on some raw materials which does n’t directly affect our industry. Existing industry doesn’t have any history of retaliating as industry is growing at a fast pace which is not a threat to the sales of new entrants.


• •

Threat of Substitutes • • Machine made shoes are substitute products as handmade shoes are being produced currently in the market. Life of fashion shoes is very short i.e. fashion trends change at a fast pace which makes it difficult for the substitutes to follow rapid changes, so threat of substitute is pretty low.

Rivalry • • • • Too many competitors Rivalry is intense as competitors prone to fight each other because almost all of them have similar resources, have similar strategies and also same target market Fixed costs are not high thus there is no pressures for firms to fill capacity which can at the end lead to price cutting when excess capacity is present. As mentioned earlier, target market is almost same for all competitors that results in almost same strategies so, competitors in this industry do not face hard time reading each other’s (competitors) intentions accurately Low Exit Barriers i. No specialized assets are involved as this is a labor intensive industry. ii. There are no Government policies for any firm that wants to leave the industry.

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Ehsan Chappal Store

Overall Analysis After analyzing the dynamics of the industry, it is evident that entry and exit barriers are low in this industry because of which there are an influx of suppliers and manufacturers and retailers. The supplier power is also low as there are number of suppliers in the market. A single firm might have more than 80 to 90 suppliers. As far as rivalry is concerned it is intense as a large number of rivals are competing. Threat of substitute is also not significant. But the most powerful force among these buyers, as buyers are involved in this industry is generic buyers.

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