Strategic Planning

Final Project

Submitted To:
Sr. Amjad Ali

Submitted By:

Shaista Bano l1f17bsaf0112

Zunaira Riaz l1f17bsaf0045
Summaya Sher l1f19bsaf0134
Zarish Qintar l1f17bsaf0104
Javaria sadique l1f19bsaf0182
Shaikh immad l1f15bsaa0024

Section: B
Group: 6
Nishat Mills Limited
Vision statement
To transform the Company into a modern and dynamic yarn, cloth and processed cloth and
finished product manufacturing Company that is fully equipped to play a meaningful role on
sustainable basis in the economy of Pakistan. To transform the Company into a modern and
dynamic power generating Company that is fully equipped to play a meaningful role on
sustainable basis in the economy of Pakistan.

Mission Statement
To provide quality products to customers and explore new markets to promote/expand sales of
the Company through good governance and foster a sound and dynamic team, so as to achieve
optimum prices of products of the Company for sustainable and equitable growth and prosperity
of the Company.

Components
1. Customers to customers
2. Products or services To provide quality products
3. Markets and explore new markets
4. Technology
5. Concern for survival, growth, and to promote/expand sales of the Company
profitability for sustainable and equitable growth and
prosperity of the Company
6. Philosophy so as to achieve optimum prices of products
of the Company
7. Self-concept
8. Concern for public image
9. Concern for employees through good governance and foster a
sound and dynamic team

In this mission statement three components are missing. It does not include
 technology,
 self-concept
 and concern for public image
 Revised Mission Statement
To provide quality products (2) to customers (1) and explore new markets (3) to promote/expand
sales for sustainable and equitable growth and prosperity of the Company (5) through good
governance and foster a sound and dynamic team (9) and citizenship (8), so as to achieve
optimum prices of products of the Company (6) with appropriate use of resources (7) and best
available technology (4)

Environmental scanning

Factors Trends Opportunities Treats

1. People Pakistan has a very unique mixed
follow basic culture in which the various cultures
cultural from different provinces combines
together of ethics, values, norms and
traditions
beliefs which forms a very charming
and attractive national culture of
Pakistan.
The people of Pakistan should stick
to their own Pakistan culture. So
there is an opportunity for textile to
get benefit by promoting cultural,
norms and values.
Sociocultural
2. Changes in The change in the lifestyle of the
life style people give benefits for increasing
the growing demand of the Nishat
Mill Ltd products. The change in the
lifestyle and needs in different
demographics also change the
demand of the customers. Due to all
these changes Nishat Mills Ltd is
performing excellent for fulfilling
needs for the customer.
As the life style of people changes
their needs change, so Nishat Mills
Ltd is there to fulfill their
requirements regarding clothing
The first threat they can face
is that if they do not value the
cultural norms and values then
their sales are going to
decrease relatively because in
Pakistan public is also really
concerned about their dress
code.
Nishat has always been very
careful about their code of
ethics. They doesn’t perform
such activities which are not
favorable for them but if they
would ever be careless about
this factor then this is going to
create a bad reputation of their
organization and people will
not trust them . This will result
in decrease of sales and that
will affect the whole company
 admirably. Its products are available
for different age groups and gender.

1. Rise in There is an opportunity for Nishat Increase in Export duties:

Fabric Textile Mills that they claim that
Economical exports textile products such as yarn, cloth, This is a great threat
for Nishat Chunian. All
fabrics and bed linen have a major over the world export
share in our overall textile exports. duties has increased
because increase the rate
They claim that the leading textile of dollar. On export level:
producers and the exporters of the it’s very expensive for
world like China, Germany, Nishat textiles mills.
Bangladesh, and Sri Lanka import
these products from Pakistan and
convert them into high fashion items
and export the world.
2. Increasing
Demand for
Natural The abundance of natural fibers,
Fibers especially cotton, in China, India,
and the United States, is Value- Added Garments:
contributing significantly to the China and India being
growth of the global textile market. considered as countries for
The increasing consumption of high value added garments.
natural fibers, such as cotton, silk,
Nishat textiles mills step-by-
wool, and jute, will drive the global
textile market during the forecast step increase the innovation.
period.

3. Shifting
Focus There is an opportunity for Nishat Price Pressures:
toward Non- Textile Mills to provide the cotton,
woven silk, wool, in different countries and Low prices ranges in the
Fabrics earn revenue. sectors and local producers
cause great price pressure on
industry.

1. Government Political and legal sectors include the Political instability:

implements needs of the company to follow the
its own trade given policies and regulations of the Political instability can effect
government in order to be considered Nishat because of the quota
 policies as legal.
In this manner, industry should be
able to consider political and legal
Political/ aspects so as to show that they value
Legal the policies and regulations of the
government in any of the business
operations. - Tax policy -
Employment laws - Political stability
– Environmental regulations
2. Government Nishat can enter and invest western
apply clothing line which will provide
sustainable them with an advantage over their
policies for opponents. Publish their own
the catalogues for bed linens and fabric
beneficial of and put them at different booklet
the exporters stores so that customers have quick
as well as access with their designs.
the
investors.
1. Adapting Advanced machinery provides
advanced opportunities to textile to increase
Technological machinery productivity levels and to change the
and
way that employees work.
Computer-
aided Computer-aided equipment
equipment provides functions in design,
patternmaking and cutting. This
equipment makes work easier to do
and less time-consuming. New
innovations have also provided
employees with technological
training, which gives them an edge in
their careers. Computerized
equipment and the use of robots to
move textiles within the plants.
Reduction of direct human labor
system the company can be
restrict by the government to
export
Change in government
policy:
Government policy changes
day by day so it is the thread
of the nishat to survive in such
as changeable situation
Increased taxes:
Taxes is the major threads to
the organization rising on
daily bases in the world can
create many problem for the
company and any firm.
Technology often leads to
fewer blue-collar jobs because
machines and automated
procedures are able to replace
employees at a fraction of the
cost.
Security threats: As the
automatic systems lack
intelligence, it is common to
encounter errors when there is
an unexpected change from
the normal operation or
deviation from the immediate
scope.
High cost of initial
installation, research and
 costs and overheads: Advanced development, and
technologies helps to achieve maintenance.
increased productivity and
efficiency. Automation also helps to
perform the task of multiple
operators.

2. Increasing In many ways, there is an

trend of opportunity for textile business to
online enter its products on online
purchasing
purchasing web sites also
using online
web innovations will be good for the
purchasing textile and apparel. Not only will
sites and they make shopping more fun; they
other mobile will also increase production, sale,
technologies. efficiency and lower costs. Major
brands will eventually be able to
respond more quickly to consumer
tastes while keeping inventories low
and limiting the production of excess
clothing. There is an opportunity to
turn to open an electric outlet in an
area where in fact the market has a
lot of potential and people have the
purchasing vitality as well.

3. Digital dye- Digital dye-sublimation and direct-

sublimation to-garment technologies, make
and direct-
design and alterations as quick and
to-garment
technologies easy as the click of a mouse.
Designers and product engineers can
make color selections digitally and
hone in on the finer details of any
given project. Digital printers are a
time-saving, low-cost solution,
resulting in richer and more vibrant
imaging.
 1. The strategy Organization can expand product
to expand lines. Currently the Nishat not
Competitors into the dealing in knitwear they can expand
their product line by producing knit
smaller cities
wear. They have plants and the extra
of Pakistan.  cost for the production will be
benefit for Nishat. And they also
have better market repute.
Organization can reduce the cost by
proper utilization of resources. And
can get competitive advantage over
others.
2. More
responsive to
the future
Company is providing quality
needs of the products to its customers within the
customers Pakistan and outside the Pakistan.
Presently company is exporting its
all kinds if apparel products.
NL brings you colors of east spiced
up with style and elegance;
transforming fashion and
incorporating cultural values into the
designs and ideas.
. Nishat deals in stitched and
unstitched clothing line, so you may
choose what suits you refine grace
the best.
Current Marketing
Situation
In Pakistani textile market the
concept of a one-stop shop is
not new as there are many
stores like Ideas, ChenOne
and Habitt which are striving
hard to provide their
customers with the ease and
comfort of one-stop it. These
stores are strong with their
brand names and recognition
where they provide their
customers with high quality
and design variations so as to
make the element of
uniqueness distinct in the
consumer’s mind. As a result
strong competition has
surfaced among these textile
giants which are fighting hard
and fast to retain and grown
their customer share in the
market
Fabric designs of their
competitors are available at
other retail stores as well
where as their fabrics are
available at their outlets only.
Most of their bed linens is
exported therefore the local
market tend to suffer where as
their competitors like ideas
and ChenOne are more
focused on the local market
gaining competitive
 advantage.

External Factor Evaluation Matrix (EFE Matrix)

Key external factors Weight Rating Weighted

Opportunities score
Consumer Spending in Pakistan increased to 11101050 0.07 3 0.21
PKR Million in 2019 from 10659937 PKR Million in
2018.
About 85% of consumers have now switched to 0.09 4 0.36
branded readymade garments, demand for
readymade clothes has risen 81% in the last decade
Textile and clothing exports grew by 4.68 percent during 0.05 3 0.15
the first five months (July to November) of the current of
2019-20.
The current population of Pakistan in 2020 0.05 3 0.15
is 220,892,340, a 2% increase from 2019.
Nishat can introduce its garments in the local market by 0.03 2 0.06
using the same stitching unit.
Nishat can expand product lines. 0.04 2 0.08
Reduce the cost by proper utilization of resources. 0.03 3 0.09
The e-commerce business is likely to hit the market size 0.06 4 0.24
by $1 billion by the year 2020.
Threats
Fashion life cycle. 0.03 3 0.09
Stiff competition from developing countries like china, 0.04 2 0.08
India, and other countries
Pricing pressure. 0.07 1 0.07
Location disadvantage. 0.02 1 0.02
International labor and environmental laws. 0.06 2 0.12
There is no consistency in the government policies 0.09 3 0.27
regarding textile sector
Increasing rate of electricity and resent increase is 4.90 0.05 2 0.1
per unit in 2020
Currency fluctuations and Rs 3.40 increase in exchange 0.04 2 0.08
rates
GST are also big threats. GST also increased to 17%. 0.06 1 0.06
More and more competitors (National and International) 0.12 4 0.48
are entering in the same markets and offering attractive
prices to the customers.
Total 1 2.71

Note:

 Weight from 0 to 1 ranges from 0.0 (not important) to 1.0 (very important).
 Rating is assigned between 1 and 4 to each key external factor
 Where 4 = the response is superior, 3 = the response is above average, 2 = the response is
average, and 1 = the response is poor.
 The result for EFE matrix is 2.71 that is good because it is more than 2.5. That is showing
they can effectively take advantage of existing opportunities and can minimize the
adverse effect of external threats

Competitive profile matrix

 Alkarm Gull Ahmad Firdous
CPM

Critical success Weight Rating Score Rating Score Rating Score

factor
Advertising 0.10 3 0.3 3 0.3 3 0.3

Product Quality 0.15 3 0.45 4 0.6 3 0.45

Price 0.05 4 0.2 3 0.15 4 0.2

Competitiveness
Management 0.02 2 0.04 2 0.04 2 0.04
Financial Position 0.15 3 0.45 3 0.45 2 0.3
Customer Loyalty 0.10 3 0.3 4 0.4 3 0.3
Global Expansion 0.12 2 0.24 1 0.12 2 0.24
Market Share 0.18 3 0.54 4 0.72 1 0.18
Technology 0.10 4 0.4 3 0.3 2 0.2
R&D 0.03 1 0.03 2 0.06 1 0.03
1 2.95 3.14 2.24

Note:
 Rate 4 refers to most important and rate 1 refers to less important.
 Weight from 0 to 1 ranges from 0.0 (not important) to 1.0 (very important).
 According to CPM Gull Ahmad is strongest competitor than others as indicated by its
value 3.14
Functional areas of business

There are six functional areas.

1. Management
2. Marketing
3. Finance and accounting
4. Production and operation
5. Research and development
6. Management information system
Every department have strengths and weaknesses. Those strengths and weaknesses of all the
department are explained below.

Management

Audit checklist Strengths weaknesses

Does the firm use This is the strengths of the nishat is using the
strategic management Strategic management concept, building
concepts? capabilities that allow a firm to create value
for customers, shareholders, and society
while operating in competitive markets ). It
entails the analysis of internal and external
environments of firms to maximize the use
of resources in relation to objectives .As firm
using the techniques of Strategic
management by this increasing the size of an
organization productivity to change the
organization’s business environment.
Are company strategic  It is an ongoing process of
management objectives communication between a supervisor and
and goals measurable an employee that occurs throughout the
and well year, in support of accomplishing the
communicated? strategic objectives of the organization.
 While the Board provides strategic
insight, management of the Company is
assigned with the task of sustainable
growth and profitability by creating and
protecting value through efficient
resource management by taking in
account internal and external factors.
 Therefore, like previous year, cost
minimization and production efficiency
will remain the main objective of the
management because global economic
conditions are expected to remain
difficult.
 During last year, the management
successfully created optimal structures in
all business segments of the Company by
introducing lean manufacturing practices,
by acquiring and applying new
technologies in production processes and
by implementing concepts of energy
preservation.

Do managers at all  Nishat group is a leading group within a

hierarchical levels plan
effectively?
 Manager have good organizing staffing
Do managers delegate
authority well?
Pakistan and highly skilled and capable
work team. Management hierarchy
turnover is stable. Productivity and
advancement in job culture. Quality
assurance guaranteed did not cannibalize
in function areas.
and leading or controlling skills.
Communication is upward to down word
and vice versa some time horizontal.
Chairman have a big margin of capital
invested portfolio. Growth of the
employees as sufficient.
No the manager don’t delegate the
authority well because unity of
command is missing.
 Lack of absoluteness of
responsibility
  Fear of outcome yields
 Fear of losing control
 Fear of being exposed
Are job description and No the job description or
job specification clear? specification is not clear, because
personal/career development is
neglected
Performance field back is not clear
Suitable training is missing
Work planning is not specified
Are organizational  Nishat Mills Limited is about people.
reward system  This approach has roots in our culture
effective? and enables our sustainable progress. We
trust that the success of any business
depends on the quality of manpower and
therefore development of people is our
priority.
 We invest fair number of hours in
training and will enhance this in future.
 In order to develop future leadership in
different functions we have instituted
management trainee scheme and expect
that the young talent will take the
organization to greater heights.
 In order to ensure performance based
reward and preparing high caliber people
for future succession, a system of
performance management is practiced in
the Company.
 Company also believes in providing
good health, safety, work-life balance
and market commensurate compensation
package including employment benefit
plan. The Company maintains a
Recognized Provident Fund (the Fund)
under Income Tax Ordinance, 2001, and
both the Company and employee make
equal contribution towards the Fund.
 Fair value of investments made by the
Fund was Rs. 3,794 million as on 30
June 2016 which is an increase of Rs.
100 million over the fair value of
organization.
Is employee morale Nishat Mills Limited employees are highly
high? qualified professionals and have a young,
 energetic and dedicated team of
professionals who have a lot of knowledge to
their credit.
Recognize special events in employee lives
Encourage new ideas and communication
• Provide rewards for outstanding work
• Make the workplace comfortable and
pleasant
• Smile often Build trust Develop employee
appreciation
• Build fun in to the workday

Marketing

Audit checklist Strengths weaknesses

Are markets segmented
effectively?
Market segmentation is explained
as "the subdivision of market into
discrete subsets of customers".
NTM segmented market
effectively into the following
points.
 Customers
 Products
 Challengers
 Brand
All these points are further
categories into parts. Like if they
focus customers than it is further
segmented into parts:
 Status

Has the firm’s market share been
increasing?
Are present channels of
distribution reliable and cost
effective?
Are product quality and customer
service good?
 profile
 Psychographic
 Social criteria
 Married, one etc.
 behavior
 position
 Loyalty
 Rate of use the products
 Common users
 Highly trusted brands
 Depends on the merchandise
which sector of NTM it is from
Now at present time, current
market share is RS. 74.08 firm’s
market share is fluctuating
continuously. But most of the time
it falls downs. So, market share is
not being increasing.
Present channel of distribution is
reliable and cost effective for
company. NT export more than 90
% or its product. So, they are
using two types of distribution
channels in export.
• Direct Channel
• Indirect Channel
NT is also dealing directly with
the customers. The buyers direct
contact with the NT. So the export
department fulfill their orders by
the transformers.
Another way is NT to agent & to
customer. NT mostly receives
orders through agents. NT pays
commission to them.
As most of the product of Nishat
textiles are exported. So, they use
different modes of transportation
to transfer the product
• Trucking
• Shipping
• Air Lines
The company is committed to
produce and achieve excellence in
high quality products. The

Are the firm’s products and
services priced appropriately?
Audit checklist
Where is the firm
financially strong and
weak as indicated by
financial ratio analyses?
products range is extensive and
include all sort of curtains, kid’s
bedding, fashion bedding,
traditional bedding, and basic
bedding and kitchen articles.
As a fully integrated textile
manufactures, the company’s
products range is extensive. It
includes various types of
fabrications and blends, such as
100% cotton, cotton lycra, cotton
polyester, cotton silk, etc.
The focus is to make differentiated
products by using different types
of fabrics, such as solids, dobbies
jacquards, etc., and creative
styling in the make-up to give high
value for money.
Pricing is an important element in
the marketing process for any
company. The price policy of
company must be in such a way
that it should produce a reasonable
profit, for the company and should
satisfy the customer.
Strengths weaknesses
Nishat textile mills financially
growing every year and
financially strong as well.
Company’s revenue increased by
18.18% during the current year as
compared to the corresponding
last year. The gross profit
increased by 37.95%.
Another proof of exceptional
financial performance is increase
in EBITDA by 2.03%. Profit after
tax of the Company increased by
Rs. 1.762 billion which is the
highest during the last three years.
Earnings per share, increased by
43% from Rs. 11.65 per share to
 Rs 16.66 per share which is a
remarkable increase.
Can the firm raise needed
long-term capital through
debt and/or equity?
Does the firm have The Company’s liquidity and
sufficient working capital? short-term financial position
remained steady in line with trend
during the last five years. It is a
clear evidence of prudent working
capital management despite the
financing requirements of huge
sales volume in this year.
Are dividend payout
policies reasonable?
The Company maintains low
leveraged capital structure.
We monitor the capital
structure on the basis of the
gearing ratio. Company’s
strategy is to keep the gearing
ratio at the maximum of 40%
equity and 60% debt.
The gearing ratio of the
Company increased from
20.77% to 27.31% mainly due
to the unrealized loss of Rs.
13.573 billion on equity
investments.
Management of the Company
believes share value of these
Investments will improve as
soon as economic indicators
of the country improve.
A company's dividend payout
ratio decreases when it
announces a reduction in
annual dividend payments. 
However, markets generally
tend to punish companies that
announce dividend
reductions.
Investors expect dividend-
paying companies to continue
or grow their regular cash
distributions 
Nishat textile mill’s dividend
payout ratio decreases 24.01%
and continuously from last
three years it mean dividend
 is not paid to investors. So
company’s dividend payout
policies are not reasonable for
investors.
Are the firm’s financial Financial managers are well
managers experienced and trained and well educated and
well trained? experienced. However, well-
educated employees ,well-
management system, better
coordination with employees and
management, feedback system,
are included in the Core
competences of Nishat textile
mill.
Does the firm have good Nishat textile mills not only have
relations with its investors good relationships with
and stockholders? employees but shareholders and
stockholders also treated well.
Investors and stockholders invest
in the company they are the
owner so firm build good
relationships with them.

Finance and accounting

Production/operation
 Audit checklist Strengths weaknesses

Are supplies of raw material, Nishat textile mill used high

parts, and subassemblies, reliable, quality of production factors.
and reasonable? Nishat textile mills is a part of
nishat groups that provides
opportunity to produce own raw
material provide financial
assistance and good management
that result confidence of
customers, efficient, working of
nishat textile mill and cheaper
products.
Are facilities, equipment, They are using modern looms
machinery and offices in good which they have purchased .and by
condition? using that latest machinery the
productivity of the employees are
very high.

Are inventory-control, policies and Net realizable value of inventories

procedures effective?
Are quality- control policies and Nishat is more conscious about
procedures effective?
Does the firm have technological Firm
competencies?
is determined with reference to
currently prevailing selling prices
less estimated expenditure to make
sales.
quality of the products. Mainly its
quality control policies are also
effective which helps to maintain
quality and produce quality
products. Moreover, its quality
control policies are effective so
that Nishat textile get Competitive
advantage related high quality and
standard Products.
have technological
competencies. Core competences
of Nishat textile is advance
machineries and technology, and
taking care of technological
factors in today’s tough
competition.
Nishat has made extension in its
present setup by installation of
well advanced technology
 imported from Japan, China and
France. Mostly processes are
automated.

Research and development

Audit checklist Strengths weaknesses

Does the firm have R&D
facilities?
Are the organization’s R&D
personnel well qualified?
Are R&D resources allocated
effectively?
Nishat has a very well developed
research and development
department and facility members
who are working very hard to
develop new and improved
methods to reduce the production
time.
All employees who are working in
the organization are well-educated
and experienced. So it’s a strength
for company that they hire
qualified employees.
Its research and development
department is working to use cost
and energy efficient machines to
produce best product for its
customers. Mostly processes are
automated. All the resources
allocated effectively to the
department.
 Management information system
Audit checklist
Do all managers in the firm use
the information system to make
decisions?
Are data in the information system
updated regularly?
Are there effective passwords for
entry into the firm’s information
system?
Is there a chief information officer
or director of information systems
position in the firm?
Strengths weaknesses
They have a management
information system all managers
in the firm use it by which all the
departments and employees are
connect with each other and they
have a data ware house by which
they can share their resources
easily and also share information
making decisions.
Nishat Mills deploys Oracle based
Enterprise Resource Planning
(ERP) system that provides
comprehensive MIS reporting.
And information system is also
updated regularly.
An employee is responsible for
ensuring the security of the
Company’s computers and
information system by complying
with the company's information
technology policy. Although
information systems are password
protected but It is the
responsibility of an employee that
he/she Doesn’t share passwords or
other access. Use only approved,
authorized, and properly licensed
software.
There is position of chief
executive officer (CEO) of IT at
Nishat textile mills. They control
overall information system as a
result it provides decision support
ability to the company.
Internal Factor Evaluation Matrix (IFE Matrix)

Key internal factors Weight Rating Weighted

Strengths score

Biggest textile composite unit in Pakistan with an

array of custom made machinery capacity to produce 0.07 3 0.21
3 million meter of fabrics per month.
Self-owned power plant which will produce 6 mw of 0.08 3 0.24
electricity and 65 tons/hour of steam, mix up to70
percent of bio mass and 30 percent of coals.
Highly qualified and skilled management 0.06 2 0.12
Nishat is to provide only quality products to their
customers. That’s why they achieved quality 0.10 4 0.4
certification. Nishat is effectively using its resources
and thus has achieved ISO 9001 and ISO 9002.
Spinning production capacity for both cotton and 0.05 3 0.15
blended yarns in 130 tons per day.
Latest mechanized machinery is involved in almost 0.04 2 0.08
the divisions replacing the old ones.
Largest dyeing facilities in south east Asia, almost 75 0.06 2 0.12
percent dyes and chemicals that are of European
origin.
Highly motivate workforce. 0.07 3 0.21
Dividend of 5.11% is sustainable 0.06 2 0.12
Revenue is meaningful (PKR99B) 0.05 2 0.10
Earnings are forecast to grow by an average of 6.5% 0.09 3 0.27
per year for the next 3 years

Weaknesses
Highly volatile share price (PKRs.74.08)over past 3 0.08 3 0.24
months
NML (PKR78.24) is trading above our estimate of 0.03 1 0.03
fair value (PKR37.36)
NML's current net profit margins (7.1%) are lower 0.04 2 0.08
than last year (8.9%).
NML's Return on Equity (9%) is considered low. 0.05 2 0.10
Lack of benefits and rewards for the employees. 0.06 3 0.18
Non availability of 100 % polyester processing 0.06 2 0.12
Bureaucratic environment within the organization as 0.05 3 0.15
well as centralized decision making.
Total 1.0 2.92

Note:
 Weight from 0 to 1 ranges from 0.0 (not important) to 1.0 (very important).
 Rating is assigned between 1 and 4 to each key external factor
 Where 4 = the response is superior, 3 = the response is above average, 2 = the response is
average, and 1 = the response is poor.
 The weighted score of Nishat mills is 2.92 which shows that nishat is performing above
average 2.50.
 Thus the company compared to the industry is strong but it needs to overcome its
weaknesses so that make them its strength in order to excel more.

Different types of the strategies followed by the organization

Introduction
At present, there are 1,221 ginning units, 442 spinning units, 124 large spinning units and 425
small units which produce textile. Total 464 Textile mills are working in Pakistan.  Major Players
in this industry are Nishat textile mills, Chenab Ltd, Al-Karam Textile, Gul Ahmad Textile Mills
Ltd, Hussein Industries Ltd, Kohinoor Textile Mills Ltd, and Nishat Linen. NML got the edge of
having their own power plant due to that they are not suffering from industrial power crisis. And
sustaining their position in Market.

As the market growth is high, and Nishat Textiles has strong comparative position in the market.
So, the possible strategies for Nishat Textiles may be Market Development, Market Penetration,
Backward and Forward Integrations. And Nishat is also implementing these strategies by
developing their market in a combination with forward integrations. And implying with quality
sustainability to cope up with ISO standards.

Possible strategies for Nishat Textiles

 Backward Integration
 Forward integration
 Horizontal integration
 Market penetration
 Market development
 Product development
 Diversification (related or unrelated)

All these strategies are corporate level strategies. Senior management design these strategies and
then implement on the firm. Nishat mills use the Market Development, Market Penetration,
Backward and Forward Integrations strategies.
Forward integration

It is the form of vertical integration in which a company become its own seller and having a
more control of the direct distribution of its products to have a competitive advantage. Previously
Nishat mills produces Cloths and now Nishat mills open its own outlets and sell directly to
clients. This type of integration
called as the forward
integration.

Nishat Mills Limited was established in 1951. It produces cloths and sell through distribution
channel but a time ago they realize to go into forward integration and now nishat mills have its
own outlets with the name of Nishat Linen and sell their products directly to customers.

Backward Integration

It is the form of vertical integration in which a company becomes its own supplier and having a
more control of the supply of raw material of its products to have a competitive advantage. It is
attempt of reducing supplier power and thus reducing input costs and lower its dependability on
suppliers.
Nishat mills purchase its raw material from different suppliers but recently they grow its own
cotton and become its own suppliers. Cotton production which is also a competitive edge as they
are controlling the whole supply chain.
Horizontal integration

Horizontal integration refers to addition of same kind of business in the existing business in
order to increase production, market share and to reduce competition. It is generally done by
acquisition of competitors, merger with existing firms or by setting up new plants.
May be considered first. Nishat mills may acquire a smaller producer like Integrated Textile
which is also catering to outsourcing needs of global partners in Pakistan. The company has the
resources to manage an expanded organization and will gain an edge over its competitors.
However, the fate of other Pakistani home textile producers does seem to be much different. And
the acquisition will not deliver any monopolistic characteristics. In fact, the cost of acquisition
may reduce the differential competitive advantage gained from the added economies of scale.

Market penetration
Market penetration refers to the successful selling of a product or service in a specific market. It
is measured by the amount of sales volume of an existing good or service compared to the total
target market for that product or service.
Market penetration as an option may be deliberated. The current local market is still unsaturated
and there is still potential to increase the usage rate of present local customers significantly. But
Nishat mills is a premium producer while the buying power of consumers is eroding with no
relief being provided in subsequent budgets.
Thus, relying heavily on the local market to make up for its lost international sales may not be
advisable. Market penetration is appropriate when shares of major competitors are declining
while the total industry sales are increasing. This is not the case with Pakistani home textile
sector.

Market development
Market development is a growth strategy that identifies and develops new market segments for
current products. A market development strategy targets non-buying customers in currently
targeted segments. It also targets new customers in new segments.

Nishat marketing strategy based on market expansion and product development.

Currently their target segment is exclusive and formal wear for formal now they target
professional females including stylish and convenient outfit having a variety of designs but
superior quality. Bed linen also needs to be emphasized more regarding variations in styles and
designs
Aggressive marketing has been the major factor in nishat consistent profitability over the past
years. Their strategy is to remain in terms of exploring new markets and new products. The focus
is on niche marketing with specialized products. They have differentiate their Business through
consistent quality, reliable delivery and proactive handling of customer’s needs.
Investment in state of the art technology and top quality human resources has been key element
of their Business strategy. Nishat is also exploring business opportunities in Spain and France
where it has very little Business at the moment. North America is the star market fir nishat
The main objective of nishat is to expand their business in USA, Europeans union, India UAE
and further countries where there is a need it cater the textile sector, they are planning to form
partnership with local incorporated cloth companies in other countries, still develop products,
services, and marketing campaigns designed to appeal to customers in other countries.

Product development

Product development seeks to increased sales by improving or modifying present products or

services. Product expansion strategy used in product development the very important opportunity
for the nishat mill is that it should expand its products in the form of knitwear. As NTM has
plants, good market position and strong financial back so it should avail this opportunity by
dealing in knitwear.
Diversification (related or unrelated)

Related Diversification occurs when the company adds to or expands its existing line of
production or markets. In these cases, the company starts manufacturing a new product or
penetrates a new market related to its business activity.
Unrelated Diversification is a form of diversification when the business adds new
or unrelated product lines and penetrates new markets. Nishat diversified into different segments
which are not directly relate to textile business like it enter into cement business, bank, and have
insurance companies as well. So it’s a kind of unrelated diversification.
Nishat’s product line is highly diversified where it sells bed linen to kitchen coordinates,
upholstery to apparel providing it significant positioning and penetration in the market to cater to
the customers who want a one-stop shop experience
Nishat’s complete product line is as follows:
 Nishat – Clothing Line for women
 Nishat– Clothing Line for men
 Bed & Kitchen Linen and Accessories
 Bed sheets
 Quilts
 Bed spreads (regular/ bridal sets)
 Kitchen (table linen, mats, table runners, bread boxes, aprons)
 Cushions ((Zari, 6 piece sets, matched with bed sheets)
 Fillings
 Jai Namaz
 Fashion Accessories
 Laces
 Bangles
 Shawls & Stoles
 Handbags
 Clutches
The strategic position and action evaluation (SPACE) matrix.

SPACE Matrix of Nishat Textile

FINANCIAL POSITION (FP) INDUSTRY POSITION (IP)

Return on Investment. 3 Resources utilization. 4

Liquidity. 4 Growth potential. 3
Leverage. 4 Financial stability. 4
Working capital. 2 Profit potential. 5
13
16

STABILITY POSITION (SP) COMPETITVE POSITION (CP)

Rate of inflation. -3 Product quality. -3

Barriers to entry into market. -2 Market share. -1
Technological changes. -2 Technological knowhow. -4
Price range of competing products. -3 Product lifecycle. -4
-10 -12
CONCLUSIONS

 SP average is
-10/4 = -2.5

 IP average is
+16/4 = 4

 CP average is
-12/4 = -3

 FP average is
+13/4 = 3.25

Directional Vector Coordinates:

X-axis: -3 + (+4) = 1

Y-axis: -2.5 + (+3.25) = 0.75

 THE SPACE MATRIX

CONSERVATIVE 6 AGGRESSIVE
Market penetration 5 Backward, forward, horizontal integration
Product development 4 Market penetration
Market development 3 Market development
Related diversification 2 Product development
1 Diversification (related or unrelated)
0
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
-1
DEFENSIVE -2 COMPETITIVE
Retrenchment -3 Backward, forward, horizontal integration
Divestiture -4 Market penetration
Liquidation -5 Market development
-6 Product development

This graph shows that Nishat textile is in the third quadrant which is aggressive strategy
quadrant.
AGGRESSIVE STRATEGY

Nishat textile directional vector is located in the aggressive quadrant (upper-right quadrant) of
the SPACE matrix, Nishat is in an excellent position to use its internal strengths to
(1) Take advantage of external opportunities,
(2) Overcome internal weaknesses, and
(3) Avoid external threats.
Therefore, market penetration, market development, product development, backward integration,
forward integration, horizontal integration, or diversification can be feasible.
SWOT Matrix of Nishat Textile

STRENGTHS____S WEAKNESS____W
 Centralized decision
 Latest mechanized making
machinery  Weak image in
 adequate financial international market
resources  Lack of benefits and
 Competitive rewards to employees
advantage  High employee
 own power generation turnover
plant  Small international
 ISO 900 and IKO market share
 certified  Less promotional
 Biggest composite activities
unit  High production cost
 Equipped with MIS
system

OPPURTUNITIES____O SO -STRATEGIES WO -STRATEGIES

 Organization can  Technical filtration with  Competitively capturing
expand its product line the help of Nishat's new market segments will
 Cost reduction mechanized machinery result in strong market
 Cotton cloth export can help the company image internationally
also export also achieve expansion i-e (W2,O4)
increased to $1.13 through expanding its  Organization can reduce
billion during this current product line. operating cost by
period as compared to (S1, O1) considering employees
$1.03 billion. The  Nishat can gain suggestions and providing
future in the UAE competitive edge through both financial and non-
markets appears cost cutting by the proper financial benefits hence
promising utilization of financial boosting up the morale
 Capture new market resources. which in turn increase
segments around the (S2,O2) employees motivation
world  Using the company's (W3,O2)
 Local market competitive advantage
development over other firms Nishat
 Organization can hire can focus on local market
more experienced development as well as
trainers and skillful capture new market
employees segments around the
 Government could world. (S3,O5,O4)
apply sustainable
policies for the interest
of exporters and
investors

THREATS___T
 Buyers need change
 Political instability
 Global economic
instability
 Export of raw cotton
 Energy crises
 Entry of new competitors
 Exchange rate fluctuation
ST- STRATEGIES
 By capitalizing on the
latest mechanized
machinery Nishat can
effectively meet the
changing needs of its
buyers
(S1,T1)
 Keeping in mind
Nishat’s competitive
advantage and
reputation in the textile
industry new entrants
would find it a big risk
and will be hesitant
before entering the
industry so sustainable
competitive advantage
would be best policy
here
(S3,T6)
 Keeping in view the
energy crises Nishat set
up an independent
power plant which
allows automation and
uptime flexible
production of products
(S4,T5)
 Nishat is a trendsetter
with adequate financial
resources which
facilitates it to introduce
innovative strategies
that can meet the
changing demands of
the customers
(S2,T1)
WT- STRATEGIES
 By focusing on strong
brand endorsement by
international and national
models to gain customer
loyalty in order to
minimize the risk of new
entrants
(W6,T6)
 Government should
develop conducive
policies and appropriate
measures should be taken
such as TQM
programmers and, to
ensure that standardized
products are being
produced
(W2,T2)
 Employees should be
appreciated by the
organization and
supervisors. Employee
recognition programs
should be introduced in
the organization. Such
plans can motivate
employees not to just
work for the sake of
money but also for their
learning experience. So
the employees will be
encouraged to work
which in turn decrease
turnover rate. (W4, T3)
Conclusion

Nishat Mills Limited is one of the leading groups in Pakistan. The system, the management style,
the policies & decentralized decision making environment is really remarkable. In this era of
technology, the “Information” is the key to success in the business. This means that the
successful businessman will be who will have the right information at the right time. This
comment leads to the conclusion that the Information Sharing Process should really be improved.

The overall analysis is indicating that the company’s progress has mainly attained through
dedication of employees. The effectiveness of its management, their willingness to take
advantage of opportunities and face challenges of changing economic picture, this all contributes
to the very much improved and sound position of company. This is really appreciable for the
devotion and hard work of all the employees of the company.