EFE Matrix

The External Factor Evaluation (EFE) Matrix serves as a strategic management

tool, evaluating and summarizing a company's external opportunities and
threats. Employed after thorough external analysis, it quantifies key factors to
assist in strategy formulation. The EFE Matrix provides a numerical basis for
understanding and responding to the external environment, helping
organizations leverage opportunities and mitigate threats effectively.

EFE matrix of Sapphire Textile Mills is given on next page.

Interpretation of Result
Total EFE Score: 2.78 (Out of a Possible 4)

The total EFE score of 2.78 (above average) indicates that the company faces
environment with more opportunities and lesser threats.

While there are favorable conditions such as the Textile Apparel Policy, Surge
in the cotton arrival in FY2024, growth in E-Commerce and a growing youth
population, company should capitalized on these opportunities to gain and
sustain competitive advantage.

Moreover, challenges like declining textile exports and energy price

fluctuations, threats due to political instability, upsurging raw material prices,
and economic recession need strategic attention. The company address
threats proactively for sustained growth and competitiveness.

15
 External Factor Evaluation (EFE)
Weighted
Key External Factors Weights Rates
Score
Pakistan’s cotton arrival surges 71% in marketing year 2024
0.06 3 0.18
witnessed by a significant increase of 13.3%
The global demand for clothing and textile products is expected to
0.05 3 0.15
grow at a staggering 8% CAGR from 2022-2026
Technical textile gaining importance globally, global textile market
size projected to reach USD 195.36 billion by 2026, exhibiting CAGR 0.02 1 0.02
of 2.7% during forecasted period.
Pakistan Stock Exchange break records in its upward trajectory. PSX
has managed to cross the 50,000 point mark in the KSE-100 index, 0.07 3 0.21
the first time in its history.
Opportunities

A shift in government has led to a transformation in the investor

profile for investments and loans, and this is notably influenced by 0.03 2 0.06
the current policy rate of 22%.
Textile Apparel Policy 2020-2025, launched by Ministry of
commerce, promises to boost value-added exports and make 0.07 4 0.28
Pakistan a major player in textile supply chain.
In the E-commerce market, with 72.9 million active social media
users in Pakistan and 4.3% year-on-year growth, the textile industry
0.06 2 0.12
has substantial opportunity to enhance online presence and drive
growth.
The market for digital textile printing in Pakistan is increasing by
0.05 3 0.15
annual growth rate CAGR 39%
The annual population growth rate is growing by 2% 0.02 1 0.02
63% of Pakistan's population consists of youth, among whom 32%
have a median age of 20.6 years and actively follow the latest 0.08 2 0.16
fashion trends.
Pakistan sees 9.95% decline in textile export in Q1 FY24 0.06 2 0.12
Government has enhanced sales tax on electronically integrated
0.04 2 0.08
textile retailers from 12% to 15% under the finance bill 2023.
Energy prices fluctuation (RLNG & electricity can escalate
0.07 4 0.28
operational expenses for textile manufacturers)
Pakistan’s overall global market share in textile and garment
industry is dropping from last 2 years. It has dropped from 2.25% to 0.04 3 0.12
1.75%.
Changing government policies and tax structures due to political
0.05 3 0.15
Threats

instability
Economic survey 2022-2023 showed negative growth of 16.03% 0.05 2 0.1
Inflation rate in Pakistan has increased to 29.20% and is expected to
0.04 3 0.12
be 30.80% by the end of FY.
Rising raw material costs jeopardize textile firms, squeezing profits,
0.07 4 0.28
eroding competitiveness, and causing financial strain.
The rising number of global competitors in the international
0.03 2 0.06
market intensifying competition.
Economic downturn in Pakistan reducing consumer spending,
Pakistan Private Consumption Expenditure was reported at 287.481
0.04 3 0.12
USD bn in Dec 2023. This records a decrease from the previous
number of 321.905 USD bn for Dec 2022.
Total 1.00 2.78

16
 IFE Matrix
The Internal Factor Evaluation (IFE) Matrix is a strategic management tool used
to assess and summarize the internal strengths and weaknesses of an
organization. This matrix is often employed after conducting an internal
analysis of an organization's resources, capabilities, and performance. It aims
to provide a quantitative basis for evaluating the internal aspects of an
organization, assisting in strategy formulation by leveraging strengths & address
weaknesses.

IFE matrix of Sapphire Textile Mills is given on next page.

Interpretation of Result
Total IFE Score: 2.71 (Out of a Possible 4)
The total IFE score of 2.71(above average) suggests that the organization has
more strengths than weaknesses, but there are areas that require attention
and improvement. It indicates a generally positive internal environment, but
strategic actions should be taken to address the identified weaknesses and
further enhance the organization's strengths.

The major weaknesses on which company should draw attention are

dependency on limited number of suppliers, limited number of outlets as
compared to competitors, and financial instability

However company is improving well in term of Innovation and Technology,

Product Quality, and ensuring consistency while incorporating latest fashion
trends.

17
 Internal Factor Evaluation (IFE)
Weighted
Key Internal Factors Weights Rates
Score
4
Usage of latest technology and textile machinery. 0.10 0.4
Impactful online presence due to responsive and user friendly
0.06 3 0.18
website
Adopt latest fashion trends according to customer preference 0.08 4 0.32

Produce premium quality fabric as per standard in the market 0.05 4 0.2
Strengths

Adopt sustainable practices such as recycling raw material and fabric

0.04 3 0.12
waste
Consistency, ensures on time delivery 0.09 4 0.36

Established positive brand image 0.04 3 0.12

Maintains low turnover of employees that indicates positive work
0.02 3 0.06
environment
Turnover is increased from Rs.43.102B 2022 to Rs.52.80B in 2023 0.03 3 0.09

One of the largest vertically integrated textile manufacturer 0.04 4 0.16

Dependency on limited number of suppliers for raw material 0.08 1 0.08

EBIT has decreased from Rs.5.67B to Rs.3.95B in 2023 0.05 2 0.10

Limited number of retail outlets as compared to competitors. 0.03 1 0.03

Gross profit as percentage of sales has decreased to 14.50% in 2023
0.04 2 0.08
from 21.56% in 2022
Weaknesses

EPS is reduced from Rs.237.65 in 2022 to Rs.141.68 in 2023 0.05 2 0.10

Ineffective marketing strategies 0.03 2 0.06

Increase in finance cost 0.07 1 0.07

Lack of workforce training 0.05 2 0.10

High production cost 0.03 2 0.06

Poor financial management 0.02 1 0.02

Total 1.00 2.71

18
 CPM Matrix
The Competitive Profile Matrix (CPM) is a strategic management tool that
facilitates the comparison of a company against those of its key competitors.
CPM assigns numerical ratings to critical success factors to gauge relative
competitive positions. This matrix aids in identifying areas where a company
excels and where improvement is needed, guiding strategic decisions to
enhance competitiveness in the marketplace.

Matrix

Interpretation of Result
The CPM scores provided for Sapphire, Gul Ahmad, and Nishat offer insights
into their relative performance. With a CPM score of 2.74, Sapphire appears to
hold a moderate position. In comparison, Gul Ahmad's slightly lower score of
2.37 could indicate potential cost efficiency or effective management. On the
other hand, Nishat stands out with the highest CPM score at 3.26

Sapphire have certain areas where it can improve to enhance its competitive
position such as management, financial performance and power generation.
While Gul Ahmed score is 2.37 which is the lowest among all.

19
 BCG Matrix
The Boston Consulting Group (BCG) Matrix is a strategic management tool that
categorizes a company's business units based on two factors: relative market
share and market growth rate. This matrix classifies business units into four
categories: Stars, Cash Cows, Question Marks, and Dogs.

Following table shows the working for the calculations of RMS (relative market
share) and IGR (Industry growth rate). We have selected three Yarn, Fabric and
Home Textile. Calculations are based on Revenue figures and all the amounts
are Rs in ’000. Yellow highlighted figures indicates the sales of market leader in
respective division while RMS and IGR are calculated through following
formulas:

RMS= Own share/Market leader’s share

IGR= ((current year sales-previous year sales)/previous year sales)*100

Yarn
Rupees in '000
2023 2022 RMS 1.00
Sapphire Textile Mills Limited 34376164 31440530
Nishat Mills Limited 30392486 29872172 IGR 22.34
Indus D&M Company Limited 20203066 6836304
Mahmood Textile Mills 32858045 28163889
Total 117829761 96312895
Fabric
2023 2022
Sapphire Textile Mills Limited 28138957 21897586 RMS 0.81
Nishat Mills Limited 34641246 27724569
Gul Ahmad 12399533 10766937 IGR 24.10
Mahmood Textile Mills 17597187 14371529
Total 92776923 74760621
Home Textile
2023 2022
Sapphire Textile Mills Limited 11767299 10892562 RMS 0.17
Nishat Mills Limited 7558848 5922775
Gul Ahmad 71239156 59972430 IGR 17.60
Kohinoor Mills Limited 2108744 2017320
Total 92674047 78805087

20
 Percent Percent
Division Revenue Profit RMS IGR
Revenue Profit
Yarn 34376164 46 21313222 51 1.00 22.34
Fabric 28138957 38 13506699 32 0.81 24.10
Home Textile 11767299 16 7060379 17 0.17 17.60
Total 74282420 100 41880300 100

Matrix

Interpretation of Result
Yarn falls in the category of market leader indicating its dominance.

The second division is fabric. It lies in market challenger category with

moderate market share but operates in a high-growth market.

Third division is home textile and it lies in market follower category showing that
it has low relative market share.

The circle size indicates the sales of each division. Fabric has the highest
number of sales and has the bigger circle plotting. The yarn has the second
highest sales and represents the medium size of the circle. Home textiles have
the lowest number of sales as compared to other divisions and has
smallest circle size.

21
 IE Matrix
The Internal-External (IE) Matrix is a strategic management tool that combines
both internal and external factors to assess the overall position of divisions. It
involves plotting internal and external scores on a matrix to determine the
position and possible strategies.

The IE Matrix is divided into nine cells, each suggesting different strategies
based on the intersection of internal and external scores. These cells are
categorized as Grow and Build, Hold and Maintain and Harvest or Divest.

Following tables shows the IFE and EFE score for selected three divisions Yarn,
Fabric and Home Textile. Scores are computed from tables given on next
pages and all the values are in Rs’000.

Percent Percent
Division Revenue Profit IFE Score EFE Score
Revenue Profit
Yarn 34376164 46 21313222 51 4.00 3.20
Fabric 28138957 38 13506699 32 3.41 3.64
Home Textile 11767299 16 7060379 17 1.48 3.06
Total 74282420 100 41880300 100

Matrix

22
Interpretation of Result
Market development is suggested for Yarn Division involves expanding into
new markets or geographical areas to reach a broader customer base. If
market development involves international expansion, the Yarn Division can
establish a global presence, positioning itself as a player in the international
yarn market.

Market penetration is suggested for Fabric division for this sapphire should
Strengthen existing customer relationships and expand market share by
increasing sales of current fabric products to the existing customer base.
Sapphire can enhance market share by intensifying marketing efforts and
promotional activities to solidify the division's position as a market leader.

Product development is recommended for home textile division by creating

new or improved products to meet changing consumer preferences and need
and continuously improve home textile products based on customer feedback
for sustained innovation and success.

26
 SPACE Matrix
The Strategic Position and Action Evaluation (SPACE) Matrix is a concise
strategic management tool that assesses an organization's position by plotting
internal and external factors. It categorizes companies into four quadrants—
Aggressive, Conservative, Defensive, and Competitive—guiding strategic
choices.

It considers financial position, competitive position, stability, and industry

position, helping businesses tailor strategies for growth, stability, or recovery
based on their unique circumstances. The SPACE Matrix is an efficient tool for
quick strategic assessments, aiding companies in aligning their resources with
market conditions for effective decision-making.

Following are the workings for SPACE Matrix of Sapphire Textile Mills Limited

Internal Analysis External Analysis:

Financial Position (FP) Stability Position (SP)
Current Ratio 5 Rate of Inflation -3
Debt to Equity 3 Technological Changes -3
Net Income 4 Price Elasticity of Demand -2
Revenue 5 Competitive Pressure -2
Inventory Turnover 5 Barriers to Entry into Market -3
Financial Position (FP) Average 4.4 Stability Position (SP) Average -2.6

Internal Analysis: External Analysis:

Competitive Position (CP) Industry Position (IP)
Market Share -3 Growth Potential 5
Product Quality -2 Financial Stability 4
Customer Loyalty -4 Ease of Entry into Market 4
Variety of Products Offered -2 Resource Utilization 3
Control over Suppliers & Distributors -4 Profit Potential 5
Competitive Position (CP) Average -3 Industry Position (IP) Average 4.2

X Axis (CP+IP) 1.2

Y Axis (FP+SP) 1.8

27
Matrix

Interpretation of Result
The Space Matrix is a strategic management tool that combines internal and
external factors to assess a company's strategic position.

With a Sapphire directional vector in the aggressive quadrant and X-axis value
of 1.2 and Y-axis value of 1.8, it indicates that the company has a strong
competitive advantage or is in an attractive industry (Y-axis).

Sapphire being in aggressive quadrant should adopt market penetration

strategies such as adding more retail stores in Pakistan

28
 The SWOT Matrix
The SWOT Matrix is a strategic management tool that helps organizations
identify and analyze their internal strengths and weaknesses, as well as external
opportunities and threats. SWOT stands for Strengths, Weaknesses,
Opportunities, and Threats. The SWOT Matrix is an important matching tool that
helps managers develop four types of strategies: SO strategies, WO strategies,
ST strategies, and WT strategies.

 SO strategies use a firm’s internal strengths to take advantage of external

opportunities.

 WO strategies aim at improving internal weaknesses by taking advantage

of external opportunities.

 ST strategies use a firm’s strengths to avoid or reduce the impact of external

threats.

 WT strategies are defensive tactics directed at reducing internal weakness

and avoiding external threats.

SWOT Matrix is composed of nine cells. There are four key factor cells (labeled
S, W, O, and T), four strategy cells (labeled SO, WO, ST, and WT), and one cell
that is always left blank (the upper-left cell).

SWOT matrix of Sapphire Textile Mills is given on next page.

For SWOT Matrix we have taken 3 opportunities, threats, strengths and

weaknesses each and interpreted SO, WO, ST, WT strategies for Sapphire Textile
Mills Limited.

29

OPPORTUNITIES
O1- The global demand for
clothing and textile products is
expected to grow at a
staggering 8% CAGR from
2022-2026.
O2- In the e-commerce market,
with 72.9million active social
media users & 4.3% year on
year growth, the textile industry
has substantial opportunity to
enhance online presence and
drive growth.
O3- The annual population
growth rate is growing by 2%,
among whom 32% have a
median age of 20.6 years and
actively follow the latest
fashion trends.
THREATS
T1- Government has enhanced
sales tax on textile retailors
from 12% to 15% under finance
bill 2023.
T2- Energy prices fluctuation
(RLNG & electricity can
escalate operational expenses
for textile manufacturers)
T3- The rising number of
competitors domestically and
globally.
STRENGTHS
S1- Usage of latest technology
and textile machinery.
S2- One of the largest
vertically integrated textile
manufacturer
S3- Established positive brand
image.
SO strategies
Enhance Online Presence by
creating high-quality visual
content for online platforms,
and capitalizing on the
growing e-commerce market
and active social media user
base.
(S1,S3,O2)
Increase presence all over
Pakistan by opening new retail
stores and form strategic
alliances or partnerships with
other domestic retailers to
expand the market share.
(O3,S2,S3)
Capitalize on the positive
brand image to take advantage
of growing global demand and
expand global market share by
using effective promotions and
advertising strategies on
international level.
(O1,S2,S3)
ST strategies
Capitalize on the positive
brand image and expand
global market share by using
greater marketing efforts,
effective promotions and
advertising strategies on
international level. (T3,S3)
Leverage the vertical
integration and investing in
energy-efficient machinery,
mitigating the impact of
energy price fluctuations and
reducing operational expenses.
(T2,S1,S2)
WEAKNESSES
W1- Dependency on limited
number of suppliers for raw
material
W2- Limited number of retail
outlets as compared to
competitors.
W3- High production cost.
WO strategies
Diversify Supplier Base by
Establishing relationships with
additional suppliers ensuring a
stable and diverse raw material
supply chain. (O1,W1)
Increase presence all over
Pakistan by opening new retail
stores and form strategic
alliances or partnerships with
other domestic retailers
compensating for the limited
number of retail outlets.
(O3,W2)
Mitigate the impact of limited
retail outlets by strategically
investing in e-commerce
platforms, capitalizing on the
growing trend of online
shopping and the active social
media user base. (O2,O3,W2)
WT strategies
Leverage the vertical
integration and investing in
energy-efficient machinery,
mitigating the impact of energy
price fluctuations and reducing
production expenses. (T2,W3)
Increase presence all over
Pakistan by opening new retail
stores and form strategic
alliances with other domestic
retailers compensating for the
limited number of retail
outlets.
(T3,W2)
30
 SWOT Summary
Increase presence all over Pakistan by opening new retail stores and form strategic alliances 3
or partnerships with other domestic retailers to expand the market share.
Enhance Online Presence by creating high-quality visual content for online platforms, and 2
capitalizing on the growing e-commerce market and active social media user base.
Capitalize on the positive brand image to take advantage of growing global demand and 2
expand global market share by using effective promotions and advertising strategies on
international level.
Leverage the vertical integration and investing in energy-efficient machinery, mitigating the 2
impact of energy price fluctuations and reducing operational expenses.
Diversify Supplier Base by 1
Establishing relationships with additional suppliers ensuring a stable and diverse raw
material supply chain.

Interpretation of Result
Sapphire Textile Mills should strategically prioritize domestic expansion, as
evidenced by the frequent mention of opening new retail stores and forming
alliances within Pakistan. The moderate recurrence of strategies focusing on
increasing online presence and leveraging the positive brand image for
global markets indicates the company's awareness of digital trends and
international opportunities. Furthermore, the company should place
importance on operational efficiency, specifically by emphasizing energy-
efficient machinery. Despite a lower occurrence, the emphasis on diversifying
the supplier base underscores a commitment to maintaining a stable and
diverse raw material supply chain. Implementing these strategies will
contribute to the company's overall growth and competitiveness in the textile
industry.

31
 The GRAND Matrix
The Grand Matrix is a strategic management tool that combines two key
dimensions:

 the Market Growth Rate (representing the attractiveness of the industry)

 the Competitive Position (indicating the strength of the company's
competitive advantage)

It provides a visual representation of a company's strategic position in its

industry and helps in making decisions regarding strategic alternatives. The
matrix is divided into four quadrants, each representing a different
combination of industry growth and competitive position:

 Quadrant I (Rapid Growth / Strong Competitive Position)

 Quadrant II (Slow Growth / Strong Competitive Position)
 Quadrant III (Rapid Growth / Weak Competitive Position)
 Quadrant IV (Slow Growth / Weak Competitive Position)

For Sapphire Textile industry growth rate is 4.12% (which is less than 5 therefore
will be considered as slow market growth) and a competitive position is -3
(which means strong competitive position).

X-axis -3; y-axis 4.12 therefore sapphire textile lies in IV Quadrant

32
 QSPM Matrix
The Quantitative Strategic Planning Matrix (QSPM), which comprises Stage 3 of
the strategy-formulation analytical framework, objectively indicates which
alternative strategies are best. The QSPM uses input from Stage 1 analyses and
matching results from Stage 2 analyses to decide objectively among
alternative strategies.

The QSPM is a tool that allows strategists to evaluate alternative strategies

objectively, based on previously identified external and internal key success
factors. QSPM requires assignment of ratings (called attractiveness scores), but
making “small” rating decisions enables strategists to make effective “big”
decisions, such as which country to spend a billion dollars in to sell a product.
The left column of a QSPM consists of key external and internal factors (from
Stage 1), and the top row consists of feasible alternative strategies (from Stage
2).

For QSPM Matrix of Sapphire Textile mills we have taken 3 alternation strategies
which are given below:

Strategy 1 Increasing Presence in Pakistan

Increase presence all over Pakistan by opening new retail stores and form
strategic alliances or partnerships with other domestic retailers to expand the
market share.

Strategy 2 Enhancing Online Presence

Enhance Online Presence by creating high-quality visual content for online

platforms, and capitalizing on the growing e-commerce market and active
social media user base.

Strategy 3 Global Expansion

Capitalize on the positive brand image to take advantage of growing global

demand and expand global market share by using effective promotions and
advertising strategies on international level.

QSPM matrix of Sapphire Textile Mills is given on next page.

33
 Strategy Strategy Strategy
1 2 3
Key Factors Weights AS TAS AS TAS AS TAS
Pakistan’s cotton arrival surges 71% in marketing year
2024 witnessed by a significant increase of 13.3% 0.06 2 0.12 1 0.06 4 0.24
The global demand for clothing and textile products is
expected to grow at a staggering 8% CAGR from 2022-
2026 0.05 1 0.05 2 0.1 4 0.2
Technical textile gaining importance globally, global
textile market size projected to reach USD 195.36 billion
by 2026, exhibiting CAGR of 2.7% during forecasted
period. 0.02 - - - - - -
Pakistan Stock Exchange break records in its upward
trajectory. PSX has managed to cross the 50,000 point
mark in the KSE-100 index, the first time in its history. 0.07 - - - - - -
Opportunities

A shift in government has led to a transformation in the

investor profile for investments and loans, and this is
notably influenced by the current policy rate of 22%. 0.03 - - - - - -
Textile Apparel Policy 2020-2025, launched by Ministry of
commerce, promises to boost value-added exports and
make Pakistan a major player in textile supply chain. 0.07 1 0.07 2 0.14 4 0.28
In the E-commerce market, with 72.9 million active social
media users in Pakistan and 4.3% year-on-year growth,
the textile industry has substantial opportunity to
enhance online presence and drive growth. 0.06 2 0.12 4 0.24 1 0.06
The market for digital textile printing in Pakistan is
increasing by annual growth rate CAGR 39% 0.05 - - - - - -
The annual population growth rate is growing by 2% 0.02 3 0.06 2 0.04 4 0.08
63% of Pakistan's population consists of youth, among
whom 32% have a median age of 20.6 years and actively
follow the latest fashion trends. 0.08 2 0.16 4 0.32 1 0.08
Pakistan sees 9.95% decline in textile export in Q1 FY24 0.06 2 0.12 1 0.06 4 0.24
Government has enhanced sales tax on electronically
integrated textile retailers from 12% to 15% under the
finance bill 2023. 0.04 - - - - - -
Energy prices fluctuation (RLNG & electricity can escalate
operational expenses for textile manufacturers) 0.07 - - - - - -
Threats

Pakistan’s overall global market share in textile and

garment industry is dropping from last 2 years. It has
dropped from 2.25% to 1.75%. 0.04 2 0.08 1 0.04 4 0.16
Changing government policies and tax structures due to
political instability 0.05 - - - - - -
Economic survey 2022-2023 showed negative growth of
16.03% 0.05 - - - - - -
Inflation rate in Pakistan has increased to 29.20% and is
expected to be 30.80% by the end of FY. 0.04 1 0.04 2 0.08 3 0.12

34
 Rising raw material costs jeopardize textile firms,
squeezing profits, eroding competitiveness, and causing
financial strain. 0.07 1 0.07 2 0.14 1 0.07
The rising number of global competitors in the
international market intensifying competition. 0.03 1 0.03 2 0.06 4 0.12
Economic downturn in Pakistan reducing consumer
spending, Pakistan Private Consumption Expenditure was
reported at 287.481 USD bn in Dec 2023. This records a
decrease from the previous number of 321.905 USD bn
for Dec 2022. 0.04 1 0.04 2 0.08 3 0.12
Total 1
Usage of latest technology and textile machinery. 0.1 1 0.1 4 0.4 3 0.3
Impactful online presence due to responsive and user
friendly website 0.06 1 0.06 4 0.24 3 0.18
Adopt latest fashion trends according to customer
preference 0.08 3 0.24 4 0.32 1 0.08
Produce premium quality fabric as per standard in the
market 0.05 1 0.05 2 0.1 4 0.2
Strengths

Adopt sustainable practices such as recycling raw

material and fabric waste 0.04 - - - - - -
Consistency, ensures on time delivery 0.09 1 0.09 3 0.27 2 0.18
Established positive brand image 0.04 4 0.16 3 0.12 2 0.08
Maintains low turnover of employees that indicates
positive work environment 0.02 - - - - - -
Turnover is increased from Rs.43.102B 2022 to Rs.52.80B
in 2023 0.03 4 0.12 2 0.06 3 0.09
One of the largest vertically integrated textile
manufacturer 0.04 4 0.16 2 0.08 3 0.12
Dependency on limited number of suppliers for raw
material 0.08 - - - - - -
EBIT has decreased from Rs.5.67B to Rs.3.95B in 2023 0.05 - - - - - -
Limited number of retail outlets as compared to
competitors. 0.03 4 0.12 3 0.09 1 0.03
Weaknesses

Gross profit as percentage of sales has decreased to

14.50% in 2023 from 21.56% in 2022 0.04 1 0.04 3 0.12 2 0.08
EPS is reduced from Rs.237.65 in 2022 to Rs.141.68 in
2023 0.05 - - - - - -
Ineffective marketing strategies 0.03 1 0.03 2 0.06 4 0.12
Increase in finance cost 0.07 - - - - - -
Lack of workforce training 0.05 - - - - - -
High production cost 0.03 1 0.03 2 0.06 3 0.09
Poor financial management 0.02 - - - - - -
Total 1 2.16 3.28 3.32

35
Interpretation of Result
QSPM determines the relative attractiveness of various strategies based on the
extent that key external and internal factors are capitalized on or improved.

 Strategy 3 (Expanding Globally) has the highest relative score, indicating

that it is the most attractive option according to the provided data.

 Strategy 2 (Enhancing Online Presence) follows closely behind,

suggesting that it is also a strong and competitive strategy.

 Strategy 1 (Increasing Presence in Pakistan) has a lower score compared

to the other two, indicating that it may be a less compelling option at
this point.

The interpretation suggests that Sapphire Textile Mills may find the most
significant growth opportunities by capitalizing on its positive brand image and
expanding its global market share through Capitalize on the positive brand
image to take advantage of growing global demand and expand global
market share by using effective promotions and advertising strategies on
international level.

36
Endnote
In this strategic analysis, various management tools were employed to
comprehensively assess Sapphire Textile Mills. The External Factor Evaluation
(EFE) Matrix and Internal Factor Evaluation (IFE) Matrix provided insights into the
company's external opportunities and threats, as well as internal strengths and
weaknesses. The Competitive Profile Matrix (CPM) facilitated a comparative
evaluation against key competitors, while the Boston Consulting Group (BCG)
Matrix categorized business units based on market share and growth rate.

The Internal-External (IE) Matrix and Strategic Position and Action Evaluation
(SPACE) Matrix determined the company's overall position and potential
strategies. The SWOT Matrix identified internal strengths, weaknesses, external
opportunities, and threats, leading to the formulation of strategic alternatives.
The Grand Matrix categorized Sapphire Textile Mills within its industry, and the
Quantitative Strategic Planning Matrix (QSPM) objectively evaluated
alternative strategies.

This comprehensive suite of tools assists Sapphire Textile Mills in strategic

decision-making, emphasizing areas of improvement, competitive
advantage, and growth opportunities. The synthesis of these analyses guides
the company toward effective strategies for sustained growth and
competitiveness in the dynamic textile industry.

37