Rehbar Majeed Textiles

Strategic Management
ASSIGNMENT: 1

Supervisor
Dr. Gulfam Haider
Assistant Professor at FAST NUCES CFD Campus

Date
13-September-2023

Submitted By

Fatima Azeem 20F-0019

Hassan Rehbar 20F-0016

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 Rehbar Majeed Textile Consulting Report

INTRODUCTION

Rehbar Majeed Textiles, a family-owned private limited company, has established itself as a key
player in the textile industry since its inception in 2015. The company's specialization in
producing hospital, hotel, and baby textiles is recognized both in Europe and America.
However, several challenges hinder the company's growth and potential.

PRODUCTS

 Hotel Textiles (like bedsheet and Towel)

 Hospital and healthcare Textiles (like blankets and Patient gown)
 Baby Textiles Products (like Onesies and Sleep bags).

OPPORTUNITIES

1. Creation of Special economic zone by the Government has allowed RMT to Acquire land in
lower prices and after setting up its Processing Unit it will get benefit of Tax Incentives like Tax-
free Import of Machinery and Raw-Material moreover at the SEZ Area govt also provide good
infrastructure which includes good transport and, power and water supply and skilled
Workforce will also be easily available in addition to that Raw-material.

2. Supportive Government policies for Export-based Textile industry: These policies often include
incentives such as reduced taxes, duty-free imports of raw materials and machinery,
streamlined regulations, and export promotion initiatives Moreover, the government's focus on
skill development and workforce training can help RMT to maintain a skilled labor force. Overall,
a supportive government can create an enabling environment that enhances the growth,
profitability, and global competitiveness of RMT.

3. Availability of cheap labor: With a lower cost of labor, RMT can reduce their production
expenses, making their products more price-competitive in international markets. This cost-
efficiency allows them to offer competitive pricing to their customers, potentially increasing
their market share and export volumes. Additionally, it can lead to higher profit margins,
reinvestment opportunities, and potential for business expansion.

4. Weakening Pakistani rupee against Dollar and Euro: it makes RMT products more competitively
priced in international markets, potentially increasing demand for RMT Products Secondly, when

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 they earn foreign currency from exports, the exchange rate benefits lead to higher revenues
when converted back to PKR. This can result in improved profit margins for these firms.
Furthermore, it encourages foreign buyers to place larger orders due to the cost advantage,
boosting export volumes.

5. Duty free Export to US and EU: it provides substantial advantages to Pakistani firms in
competition with firms like in China. While Chinese firms may face tariffs or taxes, Pakistani
firms enjoy cost advantages, making their products more attractive to buyers in these markets.
Duty-free access allows them to offer competitive pricing, potentially gaining a larger share of
the US and EU market in addition to that RMT can import from these firms located in countries
without duty free export and then export to US and EU by taking its profit Margin.

6. AI is being implemented in many firms around the world: AI-powered machines can
significantly enhance production efficiency by optimizing stitching patterns, reducing material
wastage, and improving quality control through real-time monitoring and defect detection.
Additionally, predictive maintenance algorithms can minimize downtime and extend equipment
lifespan. AI-driven data analysis also aids in demand forecasting, inventory management, and
customization, enabling firms to respond more effectively to market trends and customer
preferences.

7. Customers are becoming more sensitive to sustainability: As global awareness of

environmental and ethical concerns continues to rise, RMT can acquire sustainable practices,
such as eco-friendly materials, reduced water and energy consumption, and fair labor practices,
which are in higher demand. Exporting such products can open up new markets and
opportunities for RMT, So sustainability can be a key selling point in international trade.

8. Free government-funded skill enhancement training programs can significantly benefit to as by

equipping its workforce with advanced skills and knowledge. RMT programs can focus on
improving technical expertise, quality control, and design innovation, thereby enhancing the
overall competitiveness of the RMT. By nurturing a highly skilled workforce, these programs can
enable RMT to produce higher-quality products, meet international standards, and adapt to
evolving market demands.

9. Numerous blended fabrics have been developed to reduce the cost of RMT products. Blends
like cotton-polyester, polyester-viscose, and cotton-linen offer cost-effective alternatives to pure
fabrics by combining the desirable properties of each material. These blends often result in
improved durability, reduced wrinkle formation, and enhanced moisture-wicking capabilities, all
of which contribute to lower production costs, increased product longevity, and improved
overall performance for textile firms.

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 10. Increased automation in RMT can benefit its stitching and knitting unit by boosting productivity
and efficiency. Advanced automated machinery, such as computerized knitting machines and
robotic stitching systems, can perform tasks with precision and speed, reducing labor costs and
human errors. These technologies also enable quicker production turnaround times, allowing
firms to meet tight deadlines and customer demands more effectively.

THREATS

1. Increasing Petrol Prices - Increase in Transport Cost: Rising petrol prices can directly affect the
textile industry by increasing transportation costs. Textile companies heavily rely on the
transportation of raw materials and finished products, and higher fuel costs can squeeze profit
margins.

2. Recession in European Union - Reduction in Sales Turnover: The European Union is a major
export market for Pakistani textiles. During a recession, consumer spending decreases, leading
to reduced demand for textiles, which can lead to a decline in sales turnover for Pakistani textile
exporters.

3. Power Shortage - Disruption in Work: Frequent power shortages and outages can disrupt textile
manufacturing processes. These interruptions can lead to delays, increased production costs,
and decreased productivity, affecting the industry's overall efficiency.

4. Increasing Raw Material Prices - Increase in Cost of Production: Fluctuations in raw material
prices, such as cotton, directly impact the cost of production in the textile industry. When these
prices rise, it becomes more expensive to manufacture textiles, potentially eroding profit
margins.

5. Political Instability: Political instability in Pakistan can create an uncertain business

environment. Instability may lead to disruptions in supply chains, increased risks for investors,
and difficulties in long-term planning for textile businesses.

6. Increasing Global Competition: As global trade barriers decrease, Pakistani textile

manufacturers face stiff competition from other countries with lower production costs and
advanced technologies. This competition can affect market share and pricing power.

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7. Poor Pakistan Infrastructure: Inadequate infrastructure, such as road networks, ports, and
utilities, can hinder the efficient movement of goods and increase transportation costs. It can
also lead to delays in shipments and negatively impact the industry's competitiveness.

8. Import Restrictions - Difficulty Importing Machinery: Restrictions on importing machinery can

hinder technological advancements and modernization in the textile industry. Outdated
machinery may lead to inefficiencies and increased production costs.

9. Increasing Rate of Interest: High-interest rates can make it expensive for textile companies to
access capital for expansion or modernization. It can also increase the cost of servicing existing
debt, which may limit growth opportunities.

10. Climate Change: Climate change can affect the availability and quality of raw materials, such as
cotton, due to changing weather patterns. It can also lead to increased environmental
regulations, potentially requiring costly upgrades to manufacturing processes.

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EFE Matrix

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 Opportunities Weight Rating Weighted Score

1 Creation of Special economic zone by the Government 0.10 4 0.4

2 Supportive Government policies for textile industry of Pakistan 0.07 3 0.21

3 Cheaper labor 0.03 2 0.06

4 Weakening Pakistani rupee against Dollar and Euro 0.04 2 0.08

5 Duty free Export to US and EU 0.06 3 0.18

6 AI is being implemented in many firms around the world 0.01 2 0.02

7 Customers are becoming more sensitive to sustainability 0.15 3 0.45

8 Free government funded skill enhancement training Programes 0.02 1 0.02

9 Many Blended fabrics are develop that can reduce cost 0.02 2 0.04

10 More automation is being done in textile industeries 0.04 2 0.08

Threats Weight Rating Weighted Score

1 Increasing Petrol Prices-increase transport cost 0.08 4 0.32

2 Recession in European union-Cause a reduction in sales turnover 0.20 4 0.80

3 Power shortage-distruption in work 0.01 2 0.02

4 Increaseing Raw-material Prices such as cotton prices-increase cost of

0.02 2 0.04
Production

5 Political instability 0.01 2 0.02

6 Increasing globel competition 0.07 3 0.21

7 Poor Pakistan Infrastructure 0.03 1 0.03

8 Import Restriction-made import of Machinery difficult 0.02 2 0.04

9 Increaseing Rate of Interest 0.01 1 0.01

10 Climate change 0.01 1 0.01

Total EFE Score 1.00 3.04

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 CPM Matrix

Rehbar Majeed
Ashartex Mian Ghous Bux
Textiles

Critical Success Factors Weight Rating Score Rating Score Rating Score

International Offices in USA,EU

0.06 2 0.12 4 0.24 3 0.18
and UK

Variety of Products 0.10 4 0.40 3 0.30 1 0.10

Presence in local Market 0.06 1 0.06 3 0.18 2 0.12

International Sales 0.12 3 0.36 2 0.24 4 0.48

Product Quality 0.10 3 0.30 2 0.20 3 0.30

Employee Dedication 0.09 3 0.27 1 0.09 2 0.18

Financial Profit 0.06 2 0.12 1 0.06 3 0.18

Customer Loyalty 0.10 4 0.40 1 0.10 3 0.30

Market Share 0.10 2 0.20 2 0.20 4 0.40

Product Quality 0.08 4 0.32 2 0.16 3 0.24

Top Management 0.05 3 0.15 4 0.20 2 0.10

Price Competitiveness 0.08 3 0.24 2 0.16 4 0.32

Totals 1.00 2.94 2.13 2.90

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Bibliography

http://www.rehbartex.com/

https://www.theguardian.com/global-development/2023/feb/01/pakistan-textile-industry-crisis-women

https://www.fibre2fashion.com/industry-article/7391/textile-industry-of-pakistan-current-challenges-
and-opportunities

https://textilelearner.net/textile-industry-in-pakistan-an-overview/