Course Title: Strategic Planning

Final Project
Course Instructor: Sir Waqas Zaki

Program: BS Accounting & Finance

Section: C

Project Date: 09-06-2020

Submission Date: 28-06-2020

Submitted By:
Mian Shahroz Babar (L1F17BSAF0047)
Rooha Tahir (L1F17BSAF0078)
Sheheryar Hamayun (L1F17BSAF0068)

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FINAL PROJECT

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TABLE OF CONTENTS

...................................................................................................... 6
1.1 Board of Directors: ...................................................................................................................... 6
1.2 Audit Committee: ........................................................................................................................ 6
1.3 Bankers: ....................................................................................................................................... 6
1.4 HR & Remuneration Committee: ............................................................................................... 7
1.5 Company REG. No ...................................................................................................................... 7
1.6 National Tax. No .......................................................................................................................... 7
1.7 Status of the Company ................................................................................................................. 7
1.8 Share Registrar: ........................................................................................................................... 7
1.9 Registered Office: ........................................................................................................................ 7
.......................................................................................................................................... 8
............................................................................................................................. 8
.............................................................................................................................................. 8
........................................................................................................................................... 8
........................................................................................................................... 9
6.1 APPLIANCE DIVISION:............................................................................................................ 9
6.2 POWER DIVISION:.................................................................................................................... 9
..................................................................................................................... 10
................................................................................................................................. 10
8.1 Increase of Advertising Budget: ................................................................................................ 10
8.2 Seasonal Schemes & Gift Vouchers: ......................................................................................... 10
8.3 Revolutionary Changes in Advertising Themes:....................................................................... 10
................................................................................................................... 10
9.1 Product:...................................................................................................................................... 10
9.2 Price............................................................................................................................................ 10
9.3 Place ........................................................................................................................................... 11
9.4 Promotion................................................................................................................................... 11
........................................................................................ 12
10.1 Low Bargaining Power of Suppliers: ...................................................................................... 12
10.2 High Bargaining Power of buyer:............................................................................................ 12

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10.3 Low Threat of New Entrant: ................................................................................................... 12
10.4 High rivalry among industry rivals: ........................................................................................ 12
10.5 Low Threat of Substitute Product: .......................................................................................... 13
.......................................................................................................................... 13
11.1 Political environment: .............................................................................................................. 13
11.2 Economical environment: ........................................................................................................ 13
11.3 Social environment: ................................................................................................................. 13
11.4 Technological environment: .................................................................................................... 13
........................................................................................................................ 14
12.1 Strengths .................................................................................................................................. 14
12.2 Weaknesses............................................................................................................................... 15
12.3 Opportunities ........................................................................................................................... 15
12.4 Threats ..................................................................................................................................... 15
............................................................................................... 16
............................................................................................................................ 17
.................................................................................................. 17
.................................................................................................... 18
................................................................................................................................. 19
17.1 STRENGTHS: ......................................................................................................................... 19
17.1.1 Strong brand image:............................................................................................................ 19
17.1.2 Strong dealer network: ........................................................................................................ 19
17.1.4 Free customer services: ....................................................................................................... 20
17.1.5 One of the largest manufacturer: ......................................................................................... 20
17.1.6 Strong R&D department:..................................................................................................... 20
17.1.7 Strong after sales services: .................................................................................................. 20
17.1.8 Strong management: ........................................................................................................... 20
17.2 WEAKNESS: ........................................................................................................................... 20
17.2.1 Financial problem:.............................................................................................................. 20
17.2.2 Lack of product range: ........................................................................................................ 20
17.2.3 High prices: ........................................................................................................................ 20
17.2.4 System variation:................................................................................................................. 20
................................................................................................................................ 21

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18.1 OPPORTUNITIES: ................................................................................................................. 21
18.1.1 Expansion of Energy Sector: ............................................................................................... 21
18.1.2 Increase in population:........................................................................................................ 22
18.1.3 Large product range: .......................................................................................................... 22
18.1.4 Joint ventures, merger, acquisition or take over: ................................................................. 22
18.2 THREATS:............................................................................................................................... 22
18.2.1 Strong Competition: ............................................................................................................ 22
18.2.2 Chinese products: ............................................................................................................... 22
18.2.3 Rapid changes in government policies: ................................................................................ 23
............................................................................................................. 23
19.1 Dawlance .................................................................................................................................. 23
19.2 Orient ....................................................................................................................................... 24
.............................................................................................................................. 24
................................................................................................................................... 26
....................................................................................................................................... 28
............................................... 29
.......................................................................................................................... 30
...................................................................................... 31
25.1 Net Profit Margin / Net profit to sales: .................................................................................... 31
25.2 Asset Turnover: ....................................................................................................................... 31
25.3 Financial Leverage:.................................................................................................................. 32
25.4 Return on Equity: .................................................................................................................... 32
25.5 Earnings per Share: ................................................................................................................. 33
25.6 Current Ratio:.......................................................................................................................... 33
25.7 Quick/Acid Test Ratio: ............................................................................................................ 34
25.8 Sales in Inventory: ................................................................................................................... 34
25.9 Inventory Turnover: ................................................................................................................ 35
25.10 Revenue: ................................................................................................................................. 35
............................................................................................................... 36
.............................................................................................................................. 36

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1.1 Board of Directors:
o Mr. M. Naseem Saigol
o Mr. M. Murad Saigol
(DTP)
o Mr. M. Zeid Yousuf Saigol
o Syed Manzar Hassan
o Sheikh Muhammad Shakeel
o Syed Haroon Rashid
o Mr. Asad Ullah Khawaja
o Mr. Usman Shahid
Executive
o Mr. Jamal Baquar
Executive
o Ms. Azra Shoaib
Executive
Director/Chairman - Non Executive
Director/Chief Executive Officer - Executive/Certifed
Director - Executive/Certifed (DTP)
Director - Executive/Certifed (DTP)
Director - Non Executive/Certifed (DTP)
Director - Non Executive/Certited (DTP)
Director - NIT Nominee/Independent
Director - NBP Nominee U/S 182 of the Ordinance/ Non
Director - NBP Nominee U/S 182 of the Ordinance/ Non
Director - NBP Nominee U/S 182 of the Ordinance/ Non

1.2 Audit Committee:

o Mr. Asad Ullah Khawaja Chairman/Member
o Mr. Usman Shahid Member
o Sheikh Muhammad Shakeel Member
o Syed Haroon Rashid Member

1.3 Bankers:
o Al Baraka Bank (Pakistan) Limited
o Askari Bank Limited
o Bank Alfalah Limited
o The Bank of Khyber
o The Bank of Punjab
o Sindh Bank Limited
o Faysal Bank Limited
o Bank Islami (Pakistan) Limited
o MCB Bank Limited
o National Bank of Pakistan
o Pak Brunei Investment Company Limited
o Pak Libya Holding Company (Private) Limited
o Pak Oman Investment Company Limited
o Samba Bank Limited
o Silk Bank Limited
o Soneri Bank Limited
o Standard Chartered Bank (Pakistan) Limited
o Summit Bank Limited

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 o Saudi Pak Industrial and Agriculture
o Investment Company Limited
o United Bank Limited
1.4 HR & Remuneration Committee:
o Mr. Asad Ullah Khawaja Chairman/Member
o Mr. Usman Shahid Member
o Syed Manzar Hassan Member
o Syed Haroon Rashid Member

1.5 Company REG. No

0000802

1.6 National Tax. No

2011386-2

1.7 Status of the Company

Public Interest Company (PIC)

1.8 Share Registrar:

Corplink (Pvt.) Limited Wings Arcade,
1-K Commercial Model Town, Lahore.
Tel: 042-35916714, 35839182,

Fax: 042-35869037
E-Mail: shares@corplink.com.pk

1.9 Registered Office:

17- Aziz Avenue, Canal Bank,
Gulberg-V, Lahore
Tel: 042-35718274-6,
Fax: 042-35762707
E-Mail: shares@saigols.com

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Pak electron limited (PEL) is pioneer manufacturer of electrical goods in Pakistan. it was
established in 1956 in technical collaboration with AEG Germany. In October 1978 the company
has taken over by Siagol Group of Companies. Company has always been contributing toward
achievement and development of engineering sector in Pakistan by introducing quality of electrical
equipment and home appliance by producing hundreds engineer and skill workers, technician
through its apprenticeship scheme and training program.

Pak Elektron was setup in 1956 as a Public Limited Company with the object of initially producing
transformers, switchgears, and electric motors.
The company floated its shares to the general public and was listed on Karachi Stock Exchange
(KSE) and Lahore Stock Exchange (LSE)
In 1980, Appliances Division was established
In 1981 it started the production of Window Type Air Conditioners with the technical
collaboration of General Corporation of Japan.

To excel in providing engineering goods and services through continuous improvement.

 To provide quality products & services to the complete satisfaction of our customers and
maximize returns for all stakeholders through optimal use of resources.

 To focus on personal development of our employees to meet future challenges.

 To promote good governance, corporate values and a safe working environment with a
strong sense of social responsibility.

 Our philosophy is to give people energy efficient and reliable products in home
appliances.

 Our all across distribution network make us dominant over our competitors.

 By using latest technology and providing innovative features in our Product.

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  The main objective of firm to give customer’s satisfaction with high
customer satisfaction.

 The PEL use grow and build strategy

Change your life.

The company comprises of two divisions:

 Appliance division
 Power division

6.1 APPLIANCE DIVISION:

This division of PEL comprises of appliance manufacturing.
Appliance product includes:
o Refrigerator
o Air conditioner
o Microwave oven
o Water dispenser
o Deep freezer

6.2 POWER DIVISION:

Power division is the manufacturing of electrical good like energy meters and transformers. PEL
is one of the major supplier of water and power development authority (WAPDA) and Karachi
electrical supply co-operation (KESC) which is largest utilities in Pakistan.
Power division made products including:
o Distribution transformer
o Dry type transformer
o Power transformer
o Energy meter
o Switch gear

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  Excellence in all we do.
 Ethical and moral conduct at all times and in all our relationships.
 Innovations in all areas of our Designs as a mean of attaining.
 Pursuit of relevant knowledge.

8.1 Increase of Advertising Budget:

PEL more focus should be on electronic media to get competitive advantage over the competitors.
They have to increase their advertising budget more.

8.2 Seasonal Schemes & Gift Vouchers:

Introduction of seasonal schemes can help to boost sales like Wedding Packages, free gift vouchers
in Eid, etc.

8.3 Revolutionary Changes in Advertising Themes:

The company should change the advertising theme periodically and if necessary they could also
change slogan to attract and for the attention of customers. They should show some creativity in
all promotional activities by introducing some catchy Slogans and interactive media campaigns to
address public opinion

9.1 Product:
Product is a thing that satisfies customer demands. PEL Company is very much conscious to make
the products which satisfy the customer needs. company makes the product: according to the needs
of the customer. What kind of size and model they want? What kind of features and functions they
want? What kind of packaging they want.

9.2 Price
Price is very much important because its attracts the customer in first look. PEL company is very
much conscious about price. Company sets the prices of the products by analyzing the market
situation. Actual cost of the product. Marketing expenses of the product. Profit margin of the
company. Comparison to other home appliances. Setting deal with dealers.

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9.3 Place
Place plays a very important role for any company’s product. If the product is not rightly placed,

company will suffer from loss. Company gives product to dealers and then places its product:

o According to the requirement of customer and market.

o In more populated area of the city.

o Against competitor’s products.

o More convenient to the customers.

9.4 Promotion
Once company makes the product, it needs promotion for the awareness of the customers. Unless

a company will not arrange for promotion; a product can’t succeed.

PEL Company promotes its product through:

o Bill boards

o Internet

o News paper

o Broshers

o Television

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 Low
bargainin
g power
of
suppliers

Low Low
High Rivalry
threats of threats of
amongst industry
new substitute
rivals
entrants s

High
bargainin
g power
of buyers

10.1 Low Bargaining Power of Suppliers:

Bargaining power of PEL Company’s suppliers is comparatively low due to the large number of
supplier such as Abdullah and hearts, Pals Codes system etc.

10.2 High Bargaining Power of buyer:

PEL Company have high bargaining power as compare to suppliers due to presence of many
suppliers.

10.3 Low Threat of New Entrant:

There is always a threat of new entrant. PEL Company is facing a threat from foreign a local
company.

10.4 High rivalry among industry rivals:

PEL Competitors like Dawlance, Waves and LG can reduce its appliances products prices.

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10.5 Low Threat of Substitute Product:
Dawlance, Waves, LG can produce substitute products at low rates which is threat for the
company.

11.1 Political environment:

o Pakistan is one of the most vulnerable countries in the world
o Very few incentives to manufacturer by the government.
o The government also increased the minimum wage rate.

11.2 Economical environment:

o Environment
o Economy is facing financial crisis.
o Strong black economy in Pakistan.
o Unemployment rate has increased from 5.6% to 7.4%.
o A negative 3.3% growth rate in manufacturing.
o PCI has increased from $1042 to $106

11.3 Social environment:

o In Pakistan air conditioners are used by upper and middle class.
o People are more price conscious now a day due to financial crisis.
o Customers have started considering split air conditioners as a status symbol.
o More demand of split AC due energy saving.

11.4 Technological environment:

o Technology is rapidly changing.
o Companies are in competition to introduce latest technology in its products.
o The use of CFC gasses has abolished in refrigerant products.

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The strengths, weaknesses, opportunities and threats of PEL are discussed below:

12.1 Strengths
PEL has the following strengths and is in more competitive position in these areas than its
competitors. Following are the main strong points of PEL:

 Strong brand image

 Strong dealer network

 Strong quality, sale and service

 Strong grip in home appliances

 Strong Management

 Strong research and development department

 Free customer service

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12.2 Weaknesses
Like other companies PEL has some weaknesses in operating the business. If PEL overcomes on
these weaknesses, then it can become a market leader in the home appliance. PEL lose some
competitive edge in the following points:

 Lack of Product range

 Less Utilization of capacity

12.3 Opportunities
For the PEL there are more opportunities for expansion the business. If PEL realize that
opportunities, then it will be more fruitful and profitable for the company. Even if company does
not take advantage of these opportunities then it will lose its competitive position and high profit.
Its competitors will give PEL tough time to pursuing the opportunities that are adopted by them.
Following are the opportunities for the PEL.

 Exploration of market in Pakistan

 Increase in product range

 Export opportunity

 Increase in production capacity

12.4 Threats

PEL Company in such a competitive era has many threats as well. These threats are for the present
situations and future. Company should make its policies and strategies according to these threats.
So following are the main threats for the PEL:

 Strong competition

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 China’s product introduction in the market

 Price war

Raw Material
Store

Dispatch and
Purchase Production
Raw Material

Orders Finished
Recieve Goods Store

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 Manufacturer

Retailers

Consumers

Top
Level
Management

Middle Level
Management

Lower Level
Management

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 Sales and Marketing

Power
Manufacturing
Division

EPC Contracting

Sales and Marketing

Director Appliances
Operations Division
Manufacturing
Chairman
Managing
Directors Finance/Accounts
Finance
Supply Management

QA&QC

HRD/IR&A

Internal Audit

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Key Internal Factors Weight Rating Weighted
Score
STRENGTHS
Strong brand image 0.15 4 0.60
Strong dealer network 0.15 4 0.60
Numerous super brand award 0.05 2 0.10
Free customer services 0.10 3 0.30
One of the largest manufacturer 0.05 3 0.15
Strong R&D department 0.05 3 0.15
Strong after sales service 0.05 3 0.15
Strong management 0.10 3 0.30
WEAKNESS
Financial problem 0.10 2 0.20
Large of product range 0.05 3 0.15
High prices 0.10 2 0.20
System variation 0.05 2 0.10
TOTALS 1.00 3.00

17.1 STRENGTHS:
17.1.1 Strong brand image:
The Company represent a good brand image in market. Pel products quality is best other than
companies. The educated class and individual who belong to upper class societies trust in this
company. The list also comprises of people who are brand conscious and quality conscious. They
use Pel so that’s why this company’s customers are numerous.

17.1.2 Strong dealer network:

Pel has been interacting with the dealers directly and gained a good repute. This company created
a good bonding in between. They directly communicate with the dealers and listen to their opinions
as well as their problems. It helps to create a long term relationship with the dealers from whom
they receive the refrigerators. It is an advantage for the company as there will be no shortage in
the supply.
17.1.3 Numerous super brand award:

This Company participate in hum awards and any other awards by investing and sponsor for the
purpose of advertisement. Pel won the 5th hum awards in April, 2017.

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17.1.4 Free customer services:
Customer always buy Pel products due to its free service. In this way, they become trust worthy
customers for Pel. Pel provide services to their customers for repairing refrigerators or other items.

17.1.5 One of the largest manufacturer:

Pel product quality is best and this company rapidly variation in the products and people purchase
it more.

17.1.6 Strong R&D department:

Every company research before innovation. At the first has to do some research to know the
perception of people towards a specific product type. And to analyze the need of customers. After
the collection of research data, the company does something innovative and creative in order to
compete with its competitors and grab customers by adapting to the needs and requirements of
customers.

17.1.7 Strong after sales services:

Pel has strong customer services. They provide services beyond their customer’s expectations and
provide good quality in sale items. Customer’s loyalty enhances the good services of this company.

17.1.8 Strong management:

Pel has strong management its workers are skilled and knowledgeable they always meet the goals
of a company t by top management.

17.2 WEAKNESS:
17.2.1 Financial problem:
Its material is not available in market due to the condition of the country so company’s account is
going in deficit. It gains less profit than its competitors.
17.2.2 Lack of product range:
Pel lacks of product range its needs to develop new items like washing machine, vacuum cleaners
etc.

17.2.3 High prices:

High cost always result in higher prices because the quoted price is dependent on the cost of
production. Consumers then shift towards substitutes or alternatives because of the price difference
to fulfill their requirements.

17.2.4 System variation:

Pel is making innovation in its same products but not producing in any new product. It’s important
for company to innovate the products but new items must be produce.

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 Key External Factors Weight Rating Weighted Score
OPPORTUNITIES
Expansion of Energy Sector 0.10 3 0.30
Increase in Population 0.05 2 0.10
Large Product Range 0.10 3 0.30
Globalization 0.04 3 0.12
Joint ventures, merger, acquisition or take over 0.05 2 0.10
THREATS
Strong Competition 0.16 4 0.64
Chinese Products 0.10 3 0.30
Grey Market 0.04 1 0.04
Devaluation of Currency 0.10 3 0.30
Obsoletion of Technology 0.06 2 0.12

Rapid Changes in Government Policies 0.10 2 0.20

New Entrants 0.10 3 0.30
TOTALS 1.00 2.82

18.1 OPPORTUNITIES:
18.1.1 Expansion of Energy Sector:
PEL contributes in your lives every day, by providing you not just appliances for a better lifestyle,
but with Power products like transformers, switch gears and energy meters. They are the pioneers
of electrical manufacturing in Pakistan. It is one of the biggest opportunity for PEL that the
company is operating in two different divisions. PEL is mostly known as the home appliances
company but the company has expanded its operation in power sector as well. They are also a
manufacturer of Generators, Transformers, Heavy Industry Electric Panels, Electric Meters and
they also get opportunity to be the vendor of Government (WAPDA) and they contract with the
Government for the manufacturing and supplying of generators and transformers.

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18.1.2 Increase in population:
The other great opportunity for PEL is the increasing population of the country. As, they have
direct sale concern with the increase in population. Increase in the population means increase in
the demand. As, PEL is superior in making home appliances so it has a better opportunity to
compete with its competitor and meet the increasing demand.

18.1.3 Large product range:

Company kept on improving product features, introduce aesthetics and increase product range that
led to strengthening the customer's confidence. PEL has a large and beautiful product range of
home appliances for its value able customers. Including refrigerators, air conditioners, microwave
oven, fans etc. This can be a good opportunity for the company to diversify its product range.

18.1.4 Joint ventures, merger, acquisition or take over:

Kohinoor Industries Limited is PEL’s associated company by virtue of investment in ordinary
shares by PEL and common directorship.

Red Communication Arts (Private) Limited is PEL’s associated company by virtue of common
directorship.

Saritow Spinning Mills Limited is PEL’s associated company by virtue of common directorship.

WAPDA is the sole customer of KEL. Kohinoor Energy Limited is PEL’s associated company by
virtue of common directorship.

18.2 THREATS:
18.2.1 Strong Competition:
PEL holds a considerable market share and has continued focus on sustaining and maintaining its
market share through offering new and improved products and Risk Source Likelihood /
Magnitude Capital affected Mitigation strategy effective marketing strategies.

18.2.2 Chinese products:

In this era, china has totally captured the global market. It is one of the biggest threat to the
existing market that china is manufacturing the substitute product of existing products in every
market with the same quality and less selling price.

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18.2.3 Rapid changes in government policies:
Laws and regulations, and other factors controlled by the Government affect PEL and its
activities. Sudden changes in taxes and policies by the government.

o Dawlance
o Orient

19.1 Dawlance

o Dawlance is a Pakistani home appliances brand which is a subsidiary of Turkish

company Arçelik. It is based in Karachi. Founded in 1980, it was acquired by Istanbul-
based Arçelik in 2016.
o Dawlance has three factories, two sites in Karachi and one in Hyderabad, with a total of
4,000 employees. It manufacture's washing machines, freezers, split air conditioner and
microwave ovens.
o In 2015, Dawlance had revenues of $220.6 million selling product's in Pakistan and
Middle East. Similarly, its EBITDA earnings amounted to $45 million. It has 37 branches
in addition to 750-plus franchises across the country

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 o It was acquired by Arçelik in November 2016 for $258m, and since then function's a
wholly owned brand for Arçelik.

19.2 Orient:

o Orient is a consumer goods company who over the past decade has evolved as a
brand by completely revolutionizing the lifestyles of thousands of people across the
country. Being one of the fastest growing enterprises, they have emerged as a symbol
of innovation in Pakistan.
o By maintaining the brand’s true innovative essence in terms of technology, research,
& development, they address pain points of consumers by working on ideas and
concepts that have the aptitude of bringing a positive change. Understanding the
dynamics of the digital space, Orient strives to achieve success in this ecosystem by
delivering innovation along with service excellence.

Success Factors Weight PEL Dawlance Orient

Rate Score Rate Score Rate Score

Advertisement 0.8 4 .32 3 .24 4 .32

Market Share 0.7 3 .21 4 .28 4 .28
Financial position 0.8 3 .24 3 .24 4 .32
Price competitiveness 0.9 4 .36 3 .27 3 .27
Management 0.8 4 .32 4 .32 2 .16
Global Expansion 0.8 4 .32 3 .24 3 .24
Certifications 0.5 3 .15 2 1 3 .15
Product quality 0.7 3 .21 3 .21 3 .21
Customer services 0.7 4 .28 4 .28 4 .28
Sales and distribution 0.6 3 .18 2 .12 4 .24
Alliance 0.6 3 .18 3 .18 2 .12
Diversification 0.5 3 .15 3 .15 3 .15

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Advertisement:

To achieve the sales objectives to increase recall to restore the message in the customer mind
PEL has different Advertising messages for different products.

In the electronic media, there are many entertainments, business channels where PEL Company
do advertisement. Some of the channels are

• PTV

• ARY

• Geo TV

• STN

• PTV World

Out-Door Media

• Normal Boarding

• Neo-sign

Market Share:

The Company has been able to maintain its market shares despite tough competition and has
nation-wide sales, service center and dealer network. Parallel to product development initiatives,
continuous marketing campaigns and tireless sales activities lead to maintain the market share.

Customer Services:

PEL state of the art service centers are spread across the country to assist you with products.
Success and performance depends upon the loyalty of customers with the PEL brand and
effective supply chain management.

Management:

The Company is committed to provide every opportunity to every employee for re-dress of any
valid grievances arising from work related matters. The management does not discriminate

25 | P a g e
against any employee who elects to use the grievance procedure. The purpose of this policy is to
encourage healthy relationship between employees in order to ensure smooth running of the
business.

Refrigerator Water Dispense

HIGH Washing Machine

Market Microwave Oven

Growth
Rate
Energy Meters Deer Freezers
Split Air Conditioners Generators

LOW

HIGH Market Share LOW

Star Products:
o Refrigerators
o Microwave oven

Cash Cows:
o Energy meters
o Split air conditioners

Dogs:
o Deep freezers
o Generators

26 | P a g e
Question Marks:
o Water dispensers
o Washing machines

STAR:
Star is a business unit that has large market share in fast growing industry. Such unit requires
more investment to generate more cash. If due to more investment, it will become successful and
become cash cow and it will reach at maturity stage. For star product the strategy is called
harvest
o Refrigerator of PEL is the product having high market share and high annual growth rate.

Cash Cow:
It is the business unit sometimes known as problem child. It has a large market share and low
annual growth. Each cash cow requires little investment and it generates more cash that can be
used for investment purpose in other business units. For cash cow the strategy is called HOLD,
you must preserve market
o Split air conditioners is the product of PEL having high market share and low annual
growth rate.

Question Mark:
It is the business unit that has a low market share and high annual growth. These business unit
requires resources to grow market share but if they succeeded that will become STAR. For
question mark the strategy is called BUILD, you try to make up the market share.
o Washing machine and microwave oven are the products of PEL having low market share
but high annual growth

Dog:
Dog is the business unit that has small market share as well as low annual market growth rate. A
company normally would be unwise to invest substantial funds in SBUs in this category.
Marketing strategies for dogs are intended to maximize any potential profits by minimizing
expenditures or to promote a differential advantage to build market share and the company can
divert or liquidate the dog product
o Deep freezer is the product of PEL having low market share plus low annual growth
share.

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Dawlance lies in Quadrant V which means that they fall in the “Average” range in the IE Matrix.
The strategies associated with this quadrant are “hold and maintain”. The company has no need to
develop a new strategy neither an amendment is required. The major concern is to focus on the
current strategy and maintain existing stability.
o Market penetration: Focus on the current target market.
o Product development: Focus on the existing product to enhance its sales.
Orient lies in quadrant VIII which means that they fall in the “Average” range in the IE Matrix.
The strategies associated with this quadrant are “Harvest and Divest”. Harvest the expenditures on
the product if the product is outdated and divest the assets that don’t contribute to welfare.
o Retrenchment: Increase this product is not progressing, discontinue the sales.
o Divestiture: Outsource the sales and of the product for better performance and growth.

28 | P a g e
Strengths Weights Attractive Total Attractive Total
score attractive score attractive
score score

Product quality 0.15 4 0.6 2 0.3

Strong brand 0.13 3 0.39 2 0.26

name

Strong brand 0.19 2 0.38 3 0.57

image

Weaknesses

Financial 0.06 2 0.12 3 0.18

problem

Lack of 0.04 1 0.04 1 0.04

advertisement

Less utilize of 0.05 2 0.10 2 0.1

capacity

Opportunities

Explore market 0.18 3 0.54 3 0.54

Increase product 0.15 4 0.6 3 0.45

range

Threats

Tough 0.02 2 0.04 1 0.02

competition

Slow growth 0.03 2 0.06 2 0.06

1 2.87 2.52

Marketing Development Marketing penetration

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It is concluded from the above analysis that TAS for the strategy “Marketing Development” is
higher (2.87) than the TAS for the strategy “Marketing Penetration” i.e. (2.52). So, as a result the
strategy with the greater TAS will be preferred.

Space Matrix
Ratings
Financial Positions (FP)
Return on investment 4
High working capital 5
Profitability 4/3
4.25
Industry Positions (IP)
Growth rate 5
Increase in demand 5/2
5
Stability Positions (SP)
Unemployment -2
Advance Technology -5/2
-3.5
Competitive Positions (CP)
Quality Product -4
Market share 30% -3/2
-3.5

X= CP + IP 5 + (-3.5) = 1.5
Y= FP + SP 4.25 + (-3.5) = 0.75

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25.1 Net Profit Margin / Net profit to sales:
2014 2015 2016 2017 2018
Company 10.92 11.46 13.68 10.67 4.82
Industry 4.28 5.49 13.19 8.93 4.64

25.2 Asset Turnover:

2014 2015 2016 2017 2018
Company 0.72 0.77 0.75 0.81 0.77
Industry 0.69 0.73 0.7 0.74 0.59
Asset Turnover
Company Industry

1.5

0.5

0
2014 2015 2016 2017 2018

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25.3 Financial Leverage:
2014 2015 2016 2017 2018
Company 2.23 1.93 1.68 1.6 1.68
Industry 2.55 2.25 1.96 1.81 1.85
Financial Leverage
Company Industry

6
5
4
3
2
1
0
2014 2015 2016 2017 2018

25.4 Return on Equity:

2014 2015 2016 2017 2018
Company 16.76 16.18 16.13 12.6 4.79
Industry 7.5 9.5 19.38 13.02 6.64
Return on Equity
Company Industry

40
35
30
25
20
15
10
5
0
2014 2015 2016 2017 2018

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25.5 Earnings per Share:
2014 2015 2016 2017 2018
Company 5.06 6.5 6.76 6.1 2.53
Industry 3.12 4.42 9.47 8.06 4.05
Earnings per Share
Company Industry

18
16
14
12
10
8
6
4
2
0
2014 2015 2016 2017 2018

25.6 Current Ratio:

2014 2015 2016 2017 2018
Company 2.44 2.52 2.84 2.4 1.77
Industry 2.71 3.34 2.17 2.21 2.34
Current Ratios
Company Industry

7
6
5
4
3
2
1
0
2014 2015 2016 2017 2018

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25.7 Quick/Acid Test Ratio:
2014 2015 2016 2017 2018
Company 1.49 1.61 1.73 1.55 1.04
Industry 2.71 2.89 3.12 2.21 2.43
Quick/Acid Test Ratio
Company Industry

0
2014 2015 2016 2017 2018

25.8 Sales in Inventory:

2014 2015 2016 2017 2018
Company 20,518,030 25,122,267 26,834,317 31,000,042 28,445,311
Industry 39,462,069 43,507,701 45,947,339 57,807,772 66,186,615
Sales in Inventory
Company Industry

100,000,000
90,000,000
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
2014 2015 2016 2017 2018

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25.9 Inventory Turnover:
2014 2015 2016 2017 2018
Company 2.79 2.83 2.64 2.74 2.27
Industry 2.91 2.08 3.52 3.24 2.79
Inventory Turnover
Company Industry

7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
2014 2015 2016 2017 2018

25.10 Revenue:
2014 2015 2016 2017 2018
Company 27.94 21.54 16.37 24.10 7.93
Industry 29.89 24.80 19.89 25.03 11.67
Revenue
Company Industry

70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
2014 2015 2016 2017 2018

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o Adopt a true decentralized organization setup which gives all employee to take part in
decision making.
o The company should have a strong marketing information system to make proper
forecasts.
o The company should announce two holidays in week.
o Make sure proper function of HR department.
o More allocate budget to its marketing department
o More focus on the pull strategy in its promotion mix
o Shorten its cash conversion cycle.
o Should also focus on direct selling of it product to its customers.
o Should constantly add technology in its products and system.
o Should speed up its delivery process by establishing expand its stores in areas of high
demand.

o PEL has great strengths and opportunity.

o Should take risk and go to other markets.
o Management philosophy I the hurdle in the progress of the company.
o Take advantage of today media power to capture market.
o Future of PEL is very bright as it is grabbing opportunities and has the potential to
compete with challenges.

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