Bs Entrepreneurship

BUSINESS
POLICY
DEVELOPMENT

Marium Mazoor Bhutto

Ayisha Khalid and Sitwat Arshad

 Earth Care – Business Policy Development

EXECUTIVE SUMMARY.................................................................................................................................. 1
INITIAL ASSESSMENT.................................................................................................................................... 2
SITUATIONAL ANALYSIS COMPONENTS.........................................................................................................................3
COMPETITORS.......................................................................................................................................................4
NEW ENTRANTS....................................................................................................................................................4
COMPETITIVE MATRIX............................................................................................................................................5
PLEST ANALYSIS...................................................................................................................................................6
STRATEGY FORMULATION............................................................................................................................ 7
CORPORATE LEVEL STRATEGY...................................................................................................................................7
NEEDS AND  DEMANDS...........................................................................................................................................8
REVENUE ATTRACTIVENESS......................................................................................................................................8
BUSINESS LEVEL STRATEGY...................................................................................................................................... 9
FUNCTIONAL LEVEL STRATEGY...................................................................................................................... 9
MARKETING DEPARTMENT...................................................................................................................................... 9
R&D.................................................................................................................................................................. 9
FINANCE..............................................................................................................................................................9
PROCUREMENT.....................................................................................................................................................9
POST PRODUCTION..............................................................................................................................................10

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 Earth Care – Business Policy Development

Executive Summary
Earth Care-from waste to bricks- is a solution to reduce the carbon footprint of construction industry
by using the plastic as the main source of raw material to reduce 50% less CO2 per bricks than regular
cement bricks to form eco-friendly bricks.

The analysis in the report would further help EarthCare to create a win-win strategy for the
organisation. 

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 Earth Care – Business Policy Development

Strategic management process is a method by which managers conceive of and implement a strategy
that could lead to a sustainable competitive advantage. 

Initial Assessment
Vision:
To mitigate massive environmental costs that the world is paying in terms of climate change. 

Mission:

To provide a sustainable substitute for construction material to the people. 

Objectives:
1. Minimization of negative environmental impact at each stage of the business activity.
2. Use of recycled resources where possible. 
3. Sustainable use of natural resources, for instance, Earth Care has minimised the use of water
consumption in its curing process through its material combination. 
4. To capture 0.1% of the construction industry market share by 2023.
5. To upscale the production process and recruit unskilled women to support standard of living. 

Goals:
 Goals refers to the intermediate results to be achieved by a certain time as part of the bigger plan. It
provides a basis for measuring companies performance and the process it is making towards the
vision. 

Earth Care has both financial goals and strategic goals. Each type of goal is discussed below:

Financial goals:
Financial goals involve achieving a certain level of financial performance in terms of number of
orders, revenue, market share and repetitive customers. 

Earth Care’s financial goals:

1- Retained earnings to be invested in Research and Development (R&D) of product development. 

2- The percentage of revenue must increase by 2% every year till 10% stability.

3- Employee retirement plan must be undertaken for job security. Therefore, 5% of the salary will be
added to the Employee Trust Fund.

Strategic goals: such goals focus on achieving strategic or competitive advantage within the industry
such as Innovation etc. 

Earth Care’s Strategic goals:

1- Increase the number of orders through PR and marketing. Earth Care sales team is specifically
assigned for networking and growing the company's customers. 

2- Earth Care strategically plans to grow through expanding its product portfolio through benches and
minor projects such as pet houses. 

3- Earth Care aims to secure international contracts and become the supplier to European countries
such as the Netherlands and France. 

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 Earth Care – Business Policy Development

Situational Analysis Components

 Analysis of Earth Care’s strengths and weaknesses

Strengths Weaknesses

1- Strong R&D team 1- Lack of demand for the product in the market.

2- Cost efficient product 2- Capital intensive business activities.

3- Reduced carbon emissions 3- Lack of awareness about eco-friendly products in

the construction industry.

4- Blue ocean market for the product in 4- If Earth Care goes for international expansion
Pakistan. then the market is competitive. 

5- First-mover advantage

6- Characteristics of cement block and Earth

Care’s block matches.

Competitors:
The competitors of Earth Care directly are no-one. However, in Lahore, Eco-Salvation operates
similarly to what we plan. Other competitors are any local manufacturer that produces fly ash bricks -
as Fly Ash is waste material. 
Eco salvation’s competitive advantage as of yet is they convert PET bottles into concrete bricks. The
segment they cater to the Non-profit Organisations. 

Eco-Salvation’s SWOT analysis is discussed below:

                                      Direct Competitor: Eco Salvation

Strengths Weaknesses

1- Owns a recycling plant 1- Lack of sustainable raw material stream

2- Currently operational  2- Lack of proper marketing

3- Awareness among the market 3- Lack of product line innovation

4- Operating for more than 5 years

Opportunities Threats

1- Growing construction industry of 1- uncertain political situation and policy

Pakistan change.

2- Established business could expand further

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 Earth Care – Business Policy Development

New Entrants:
Currently and according to the market trends, new entrants does come in the construction industry,
however,  they are small scale to large scale brick construction in the industry. The SWOT is made by
a small scale manufacturer as their production capacity will be the same as Earth Care’s production
capacity.

                                              Small scale manufacturers

Strengths Weaknesses

1- Established in the market. 1- Lack of product innovation and design.

2- Captured market share . 2- Lower profit margins.

3- Production capacity 3600. 3- Lack of technological advancement due to lack of

understanding of new machinery.

4- Cheap labour- lower skills required. 4- Not willing to take risks.

5- Cheap and easily accessible raw 5- Lack of online and offline marketing.
material.

Opportunities Threats

1- Take advantage of interest free loans 1- government regulation to control the carbon
due to Pandemic by the government to up- emission at any point in time will drastically impact
scale production. their profitability and operations.

Competitive Matrix:

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 Earth Care – Business Policy Development

Substitute products:
Earth Care is created to become a substitute for cement blocks. There are several products that could
be a substitute for Earth Care products, however, they lack targeting the usage of the product
correctly. Any bricks created from other raw materials that meet or exceed the specifications of a
cement block in terms of strength and heat absorption capacity is a substitute of Earth Care product. 

Currently, customers are happy with the cement blocks as they are unaware of other bricks used in the
construction industry in Pakistan. In Pakistan, customers need either lower price or either higher
quality depending on the target audience. Through proper marketing of Earth Care customers will
switch to our product. 

As Earth Care products are made from different materials, there are 4 possible different suppliers and
each supplier would have dominance in their respective industry they deal in. A key component of
Earth Care brick is PET flakes, the key players in this industry that recycles PET plastic are Alico
Waste Management and Shazil Pakistan. Similarly, the other materials such as sludge lime, fly ash,
gypsum and sands are cheaply available from local suppliers. Big industries sell out these materials to
these local suppliers who sell these materials. 

The greatest impact on our business could be the consumers and the government. The consumers
might not be convinced by our product as it is new, even though many prototypes have been made but
it has never been commercialised. When there will be no demand from the consumer, there will be no
business. 

 Similarly, the federal government could have a positive or negative impact on our business.
Governments could make flexible policies to regulate the construction or they could make rigid
policies that could make construction pricier and difficult. 
Currently, the situation is in the favour of Earth Care as the construction industry is boosting. The
government has created laws such as, Disclosure of source of investment is not required in case of
construction of new residential/commercial building or first purchase of a newly constructed project,
eligible Developers and Builders will be exempted from Withholding tax on purchase of building
material, reduction in Federal Excise Duty on cement from Rs 2/kg to Rs 1 .75/kg etc. is contributing
to the ease of doing business in the construction industry. 

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 Earth Care – Business Policy Development

PLEST Analysis
The PLEST analysis could be performed to know about the design constraint of the EarthCare
products. 

Political: 
In Pakistan, there has been an increasing awareness of environmental control and policies have been
created by the current government. However, the lack of understanding, and proper awareness
campaigns makes it harder to implement it. The Government's project of “Billion Tree Tsunami” and
development of “Urban Forests” provides insight that the government has been taking steps to work
towards the betterment of community and environment overall. Many regulatory policies have also
been implemented such as , ban on plastic bags etc. From a political perspective, EarthCar’s product
will be encouraged and supported. 

Legal: 
according to Pakistan's Environmental Protection Law 1997; it covers the aspects of damage to human
health, safety, pollution (air, land and water), waste (municipal, non-municipal and agricultural
waste). According to Pakistan Environmental Protection Act (PEPA) 1997, sub-section 9, the carbon
emission must be emitted according to the set standard by the federal government or provincial
government. EarthCare does not face any legal constraint as its main aim is to reduce carbon emission
from construction of bricks and provide a substitute for the cement led construction blocks. 

Economical: 
After the outbreak of COVID-19, Pakistan’s economy slowed down; inflation rose, per capita income
decreased, businesses shut down, employment reduced and overall standard of living dropped down.
However, with cost comes an opportunity. As the trade routes closed down, in-house production
started of many products that were once not produced in Pakistan. Where most of the raw material
used in EarthCare bricks was exported, such as PET flakes, is now being locally produced and used in
different forms of products, such as brooms, packaging etc. The cost of raw material is low for
EarthCare because they are locally available.Hence, economical factor is not constraint for
EarthCare.   

Social: 
The social issues in Pakistan have been trending nationally as well as internationally. From women’s
day to Earth Day, from development of the first eco-friendly aircraft engine by a Pakistani scientist to
the implementation of waste management mechanisms. Pakistan has been progressing towards a
greater society. However, due to lack of quality education, it would take a few years to understand the
environmental impact of day-to-day activities of people i.e. carelessness regarding the carbon
emission from vehicles, and the importance of waste segregation etc. 

EarthCare product and marketing strategy aims to counter the lack of awareness among the people.
Karachi, the hub of pollution 

Technological:
The technology used to create EarthCare bricks is traditional and easily available, however, the raw
material combination is unique, which completely changes the strengths and weights of the brick. 

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 Earth Care – Business Policy Development

Strategy Formulation
Corporate level strategy: to gain market share
Earth Care aims to create a blue ocean market in the red ocean market. Construction industry in
Pakistan has become saturated with monopolies controlling the industry. No large corporation is
interested in investing in alternate materials that would actually bring an impact on the environment as
well as make them money. These large corporations has been existing for approximately 50 years in
the market, they have established a strong brand recognition for themselves. In such a monopolistic
market, Earth Care aims to capture the educated minds who understand the concept of climate change
due to carbon emissions. A strategy needs to be in place. Therefore, Earth Care has identified and
studies thoroughly its market segment.

Market Segmentation:

Earth Care is still undecided on which market to cater in order to capture a 0.1% of the market share
in the construction industry, however, there are two options being narrowed down with equally
attractive opportunities from each segment. The segments and strategies are discussed below in
diagrams. 

Needs and  demands:

As mentioned earlier, there is no demand for recyclable bricks in the construction industry in
Pakistan. The need will be created as Earth Care wants to provide a substitute for cement blocks and
due to its cost-effectiveness, the need and demand will be generated through the right target audience,
and marketing. 

According to recent reports, the construction industry in Pakistan will face a boom as the
government’s housing scheme “Mera Pakistan Mera Ghar” encourages banks to provide loans to the
people at lower interest rates and ease the process of housing loans. Such schemes will encourage
people to build more houses and the demand for Earth Care products will be created due to the
product’s benefits. 

Reference link: https://www.meezanbank.com/mera-pakistan-mera-ghar/

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 Earth Care – Business Policy Development

Switching cost:
As products similar to Earth Care bricks are available in the market such as Fly Ash bricks, however,
there has been no proper marketing and product innovation. This biggest competitor is any local or
large manufacturer who produces cement blocks. Therefore, by providing competitive pricing and
greater benefits, the switching cost for Earth Care will be highly inelastic. Earth Care promises to
provide stronger, and cost-effective bricks.

Revenue Attractiveness:
There are two cases for Earth Care. If Earth Care opts to go for the target audience (NGO) the price of
the product will be lower, it means lower profit margins but greater societal change for the bottom of
the pyramid. Whereas, if Earth Care opts for the target audience (Media influencers, political
background) the prices would be higher, greater profit margin and higher chances for growth in a
short period of time. Earth Care’s product line initially has 1 type of product, which would create
leads and then customers. 

Bricks from lowest to highest quality cost approximately Rs12 to Rs50 respectively. However,
residential construction is dependent on people’s lives, the material we use will provide strength of
the highest quality brick with the same or higher prices depending on the target audience we choose. 

Strategy: Earth Care choses both target audience. Case 1 is used to create awareness among the
masses to bring the people of case 2.

Business level strategy

 to increase awareness by allocating 30% of revenue to marketing 

Lack of awareness and lack of demand for eco friendly products are the same peas of a pod. 
The demand does not come due to lack of awareness from the consumers i.e., third party vendors,
architects, construction companies and the general public intending to build houses. Similarly, the
lack of awareness among the consumers and the upcoming need for such products leads to lack of
demand for such products. Therefore, Earth Care has created a solid 6 months marketing strategy to
not only make people aware about the problem but also what could be done to solve that problem to a
certain extent. Earth Care needs a good marketing team to carry out this task strategically. 

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 Earth Care – Business Policy Development

Functional level strategy

Marketing department:
Earth Care’s marketing strategy is to be more inclined towards digital marketing and Personal
Relations (PR) with the clients. Since the founder of Earth Care is well connected with the
construction industry leaders, it is important to maintain relationships with them, inform them of the
importance of alternative material used internationally  and convince them to try the material by
providing test results of the pilot project. 

Earth Care would also hire the graphic designer to make attractive looking pictures to run the ads on
social media pages and its own website. 

R&D:
Research and Development (R&D) at Earth Care currently is only a team of two. However, the
Research and Development department at Earth Care relies only on secondary data available and
primary research on the product is carried out though trying out different material reactions, which
involves wastage of money, resources and time. In August, Earth Care will be pitching for the seed
funding round. Earth Care has strategized to allocate 30% of its seed funding (if succeeded to raise
money) to the R&D department. This department is a crucial element to not only make Earth Care
successful but also assist in maintaining the competitive advantage. 

Finance:
The finances department at Earth Care is maintained through its accountant, however, uptil now, there
is no revenue generation, only costs have been incurred. The financial statements would help Earth
Care in raising funds for the venture. 

Procurement: 
After thorough research and using analysis tools. Earth Care’s procurement department needs to be
more efficient since the suppliers for the raw material such as sand, and crush are in abundance. There
are less price controls in the industry for such raw materials. However, the strategy needs to be
carefully created to ensure a smooth supply chain, which entails collection of main raw material i.e.,
polythene bags. 

The major challenge that Earth Care has to face is not only collection of polythene bags but also the
cleaning process. In Pakistan, the concept of segregation of waste at household level is rare.
Therefore, people pack all sorts of stuff in polythene bags and throw them away. Earth Care has to
segregate and clean them, which not only increases the time but also the costs, since more people need
to be hired to complete the task on time. 

Therefore, Earth Care has made the strategy to hire scavengers for collection of polythene bags. These
scavengers are already familiar with the protocol for the collection of such items. They will be hired
on wages. Earth Care would not have to make their own team for this task, it would save a great deal
of money and that money could be allocated for the enhancement of the product or the venture itself. 

Post production:
The post production of Earth Care is one of the crucial stages of the operations. Earth Care ensures
that the product is consistent and according to the client’s needs. Currently, Earth Care creates
benches out of its material. Earth Care does not provide a drop off service for the delivery of the
benches, which sometimes irritates the customers, however, in order to overcome this issue, Earth

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 Earth Care – Business Policy Development

Care’s strategy is to provide after-sales service, which entails the repainting of the bench or to fix any
damage that has been done. This after sales service is valid till 6 months. 

This strategy has helped Earth Care a great deal since after studying the competitors and their
practices, Earth Care used to incur higher delivery costs to satisfy its customer because rental trucks
are expensive. 

Strategy Implementation

Organizational structure of Earth Care

Strategy implementation will be done department wise. The responsibility of the department head is to
communicate the objectives and goals to the lower management to get the desired results. Since, the
organization is a startup, not many people are employed on salary. Each department head has a
manger that oversees the tasks. At this stage, the department heads are also involved and working for
the organization actively as the managers.

The focus of overall organization is to get hold of the market share and convert themselves into the
revenue generating venture. Since, the team is small, it is easier to communicate and discuss ideas as
this stage.

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 Earth Care – Business Policy Development

Strategy Monitoring
Earth Care will use balance scorecard method to monitor its implementation results.
Balance scorecard is the ideal fit for monitoring Earth Care’s progress as the four
components of balance scorecard is the focus of Earth Care at this stage.

Balance scorecard components

Financial:
1. ROI: return on investment will be monitored carefully as the venture starts to
generate revenue.

2. Cash Flow: cash flow has been in record keeping by the finance department as cash
inflow is greater than cash inflow.

3. Financial Results: since the organization is not generating any revenue, the financial
results are in loss.

Internal processes:
1. Day-to-day activities: the internal processes will be monitored by the
manager/supervisor of the operations department. Since the people who work to
build benches are hired on wages, therefore, sometimes the number of people is
more, sometimes they are less. However, once the organization starts to make
revenue, they will workers on contractual basis.

2. Process alignment: the processes needs to be aligned carefully in order to ensure

smooth operations. Each worker must know its task to be contributed in the process
for quick and error free outcome.

Customer relationship:
1. Customer satisfaction rate: customer satisfaction will be calculated on the basis of
number of orders completed, and customer feedback provided. A person will be
assigned a task from the marketing department to call the customers and get their
feedback. Earth Care will use credit score chart to assess the feedback and monitor
the results.
2. Quality performance: quality performance will be assessed on the basis of customer
feedback in terms of product design accuracy and the number of days a specific
order was completed.

Education and growth

1. Job satisfaction: earth care will provide its employees a retirement plan and yearly
bonuses based on performance to keep them motivated as well as secure their
future after retirement.
2. Employee turnover: employee turnover would be a crucial component for the
organization. The venture will aim to keep the turnover as low as possible by

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 Earth Care – Business Policy Development

motivating its employees through different strategies i.e., bonuses, training

programs etc.
3. Training opportunities: Earth Care will provide its employees with training
opportunities and skills enhancement to not only keep them motivated but also to
be able to better perform and generate revenue for the organization.

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