1

Assessment of Selected Topic about
Textile Ìndustry
M. Tauqeer ÷
Strategic Management

ÌNTRODUCTÌON
The current scenario posses challenges to our core
industry which going to be declining from 56% of the
national exports share to 35 - 40% due to
Decrease its market share by both volume & unit values
Ìnaccessibility of peaceful & economical environment
Ìnstitution support.
Quality improvement in the terms of market tie-up image
change in business philosophy can be improved with new
strategy plan by Govt. and Ìndustrial support (Both).
This requires up gradation in R & D ,technical innovation,
product development etc.
3
VÌSÌON & MÌSSÌON
VÌSÌON
Setting trends globally in the textile industry,
responsibly delivering products and services to its
partners.
MÌSSÌON
%o deliver ;alue to its partners through inno;ation
technology and teamwork. FulIilling its social and
en;ironmental responsibilities.
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EXTERNAL FORCES
1. Economic forces
. Social, Cultural, demographic & environmental
forces
3. Political, government & legal forces
4. Technological forces
5. Competitive forces
5
EXTERNAL FORCES
After evaluation of current position about Textile & Apparel Ìndustry i determine below opportunity & threats
External factors,
THREATS,
The Quota leverage phase-out from Textile/Apparel Ìndustry.
Ìnterest rate move up ward.
Liquidity issues from the institutions with restrictions e.g. payback period etc.
Price computation Globally.
Yarn Price & quality issues.
Ìncrease the cost of workforce & O/H due to high inflation rate.
Technology Ìnfrastructure about E. Commerce / E. Business e.g. . E.BAY" US based E Business Co. earned
$8.46billion in the year ended 008 with the workforce approx 15500 empIoyees, so we are loosing a mass
opportunity from this side.
Peaceful environment is the core element of any industry but unfortunately our current environmental position by
political / Govt. instability in law & order situation discourage to investors
Social & Ethical restrictions by USA e.g. WRAP, ÌSO etc. for T & Apparel industry.
Cultural changes effected by the enhancement of technology and electronic media, e.g.
· Soil Release / repellent treated fabric / Goods,
· Stain Release / repellent treated fabric / Finish goods,
· Flame Resistant , Lead resistant etc. upon fabric and fashion goods,
· Pima cotton / Egyptian /Giza Cotton / Gute fiber/ synthatic fiber and many more value added fashion
treatment.
Ìncrease 15% power cost to effected on product price and boost up overhead that unable to meet the global
price competition.
Terminate R & D and 6% Rebate to T & A sector whilst China increased Rabat from 7% to 15% so this industry
facing strict computation by global market.
Gas & Water shortage to improper supply which boosted the industry cost.
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EXTERNAL FORCES
A lot of Threats which showing us that this sector face a lot of
threads and struggling too hard for survive ness in global market
but still there is some Opportunity which mentioned below,
pportunity,
We are the biggest yarn producer so we have a facility to
arrange the yarn with different qualities in the terms of cost or
quantity.
Pakistan is at number four positions in world's cotton yarn
production with 8% share.
Cheep labors available with flexible mood due to increased
unemployment (social evil).
New emerging or developing market in EU.
Good Fabric especially Denim, cotton & polycotton knitted
(fleece) fabric provider.
EFE Matrix
escription Weight
Rating
(Score)
TotaI
Weighted
Score
pportunities
Cotton Crop Country 0.09 4 0.36
Cheep labour available with flexible mood 0.08 4 0.3
Mass production capacity available in Pakistan. 0.06 3 0.18
New emerging or developing market in EU 0.07 3 0.1
Good Fabric especially Denim & cotton provider
0.06 4 0.4
Threats
Global Competition after Quota phase-out 0.07 4 0.8
Political and ethical threats 0.09 4 0.36
R & D & Rebate phase-out by GOVT. 0.07 4 0.8
Technology Competition 0.06 3 0.18
Power Energy Ìssue increased 10% total cost 0.08 4 0.3
Ìmproper water supply increased Fabric Dyeing cost which is 45% of Garment price
0.04 4 0.16
High Ìntrest Rate & Payback period Ìssue 0.07 3 0.1
Profit Margin decrease due to increased the costo O/H.
0.09 4 0.36
Complince & Regulation Ìssues by US & EU 0.07 0.14
Skilled & Technical Education scarcity 0.06 3 0.18
TTAL 1 3.10
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ÌNTERNAL FORCES
Assessment about All Functional areas,
Management
Planning
Organizing
Motivating
Staffing
Controlling
Marketing
Finance/Accounting
Production/Operations
Process
Capacity
Ìnventory
Work force
Quality
Research and development
Computer Ìnformation Systems (MÌS)
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ÌNTERNAL FORCES
For significant analyzing we can choose the
required strategy from 1
th
strategies in priority
wise But it would be different upon industry /
Business variation.
Ìnternal audit evaluated upon organization
performance by all functional areas such as
MARKETÌNG, FÌNANCE /ACCOUNTÌNG. PRODUCTÌON
/OPERATÌONS, R&D,& MÌS, OPERATÌONS etc. to indicate
the strength or weakness of that area,
Some weaknesses & strength of my selected
company are given below for our example,
ÌNTERNAL FORCES
Weaknesses,
Skilled labor with trust worthy
liquidity ratio less then last fiscal year
Profit ratio is not effective & sufficient.
Production tracking system from start to finish good.
Need to be updated software about all operations to
get exact information on a quick way.
Need to be vertical unit contain all external process
e.g. Printing/Embellishments etc.
Politics involved from top to bottom.
11
ÌNTERNAL FORCES
Strength,
Power infrastructure established for our all internal branches
and functional areas and trying to increase this strength to
export.
A huge cotton storage area to store for whole year inventory
Computerized Auto looms which provided best quality with fast
production.
Ìnternal water refurnishing plant to decrease the cost effectively.
A large numbers of product line & product mix which provide to
maintain the level of profit margin and survives in the market
upon situation.
A large production facility of multiple products with quality
management.
ERP system deployed which support us the manage our internal
inventory & procurements system efficiently , also helpful for
decision making.
ÌFE Matrix
escription Weight
Rating
(Score)
TotaI
Weighted
Score
Weakness
Profit margin going to be Decrease. 0.09 4 0.36
Community strength (preferd to Community Member)
0.05 0.1
Spent 40% Extra cost to depend upon external Units.
0.05 0.1
Factory Over Head also going to be increased. 0.07 3 0.1
Need to be Updated Technology to tracke easy each product process & quality.
0.08 4 0.3
Labour Ìssue (Lose their Prod. Avg. 10~0% p.a.) 0.09 4 0.36
Strength
Ìnternal Power Genration Plant 0.09 4 0.36
Recycled Water treatment plant 0.09 4 0.36
Recycled Yarn Spinning save 30% selling price 0.09 4 0.36
High Qulified & Skilled workforce 0.06 3 0.18
Cotton Storage capacity save the rental cost & price stability to whole the year
0.08 4 0.3
A mass production capacity e.g. 50K meter output/day from grey to finish fabric.
0.07 3 0.1
Gul Ahmed is a big group contains another industries like My Bank , Polyester Ìnd, Swistex Chemical etc. which
supported to fluxgate the profit and market shares.
0.09 4 0.36
TTAL 1 3.60
ÌE Matrix
nternaI - ExternaI (E) Matrix for GuI Ahmed (AppareI)
Strong Average Weak
4.0
high
grow and build
' ' ' medium
hold and maintain
' ' low
harvest or divest
1.0
ÌFE Score
4.0
E
1.0
EFE
Score
3.60
3.10
EE
The nternaI-
ExternaI (E)
matrix is another
strategic
management
tool used for
analyze working
conditions and
strategic position
of a business.
The Internal
External Matrix
or short E
matrix is based
on an analysis of
internal and
external
business factors
which are
combined into
one suggestive
model.
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Strategy in Action (Ìntegration Strategies)
Ìntegration Strategies :
Forward Ìntegration :
· Control over our reputed distributor such as Whole sale
depots for fabric (Men's/Women's) and chain stores e.g.
Ìdeas by gulahmed & discounted stores to increase the
customer satisfaction as well as market share on profitable
way.
Backward Ìntegration :
· Control over our best suppliers which they provide us
semifinal or final products or materials , e.g. Accessories
(Label/Zip/Cord/Polyfil/Cartons etc.) , Dyes & Chemical
suppliers, Cotton suppliers etc.
Horizontal Ìntegration :
· We are not consider this strategy.
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Strategy in Action (Ìntensive Strategies)
Market Penetration,
We need to be enhance our market share with the
help of this strategy through price & promotion
technique by market management.
Market Development,
Focus & search new markets by geographically &
demographically which will be supported to move
upward the market share as well as profit margin.
Product Development,
Add new features and benefits in executing product
after a deep study of our compotators product
strategy.
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Space Matrix
The SPACE
matrix is a
management
tooI used to
analyze a
company. Ìt used
to determine
what type of
strategy should
undertake by
strategic
analysis. The
SPACE matrix is
abbreviation of
"Strategic
Position & Actio
n EvaIuation
matrix".
worst, best) worst, best)
-2 Product quality 2 Barriers to entry
-5 Market share 2 Growth potential
-2 Brand & image 2 Access to financing
-3 Product life cycle 4 Consolidation
worst, best) worst, best)
5 ROA -4 Ìnflation
2 Levarage -4 Technology
1 Liquidity -2 Demand elasticity
2 Cash flow -3 Taxation
nternaI Strategix Position ExternaI Strategix Position
Compatitiive (CA) ndustry (S)
inanciaI (S) EnvironmentaI (ES)
A
x
i
s
-

A
x
i
s
-
Y
TotaI axis scores : -0.5
TotaI axis Y scores : -0.75
Avg -3.0 Avg +.5
Avg +.5 Avg -3.5
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Space Matrix
ºTc×iilc & Apparcl Indusiry"
· Ìnternal strategic
dimensions:
· Financial strength
(S)
Competitive
advantage (CA)
· External strategic
dimensions:
· Environmental
stability (ES)
Ìndustry strength
(S)
· By definition, the CA
and ÌS values in the
SPACE matrix are
plotted on the X
axis.
- CA values can
range from -1 to -6.
+ S values can take
+1 to +6.
· - The FS and ES
dimensions of the
model are plotted on
the Y axis.
- ES values can be
between -1 and -6.
+ S values range
from +1 to +6.
Conservative Y Aggressive
+6.00
S
+1.00
CA S
-6.00 -1.00 +1.00 +6.00
ES
-6.00
efensive Y Competitive
Key Factors Weight
Attractivene
ss Score
Total
Att/Score Weight
Attractivene
ss Score
Total
Att/Score
Ìnternal Power Genration Plant 0.09 4 0.36 0.08 4 0.3
Recycled Water treatment plant 0.09 4 0.36 0.07 3 0.1
Recycled Yarn Spinning save 30% selling price 0.09 4 0.36 0.07 3 0.1
High Qulif ied & Skilled workf orce 0.06 3 0.18 0.09 4 0.36
Cotton Storage capacity save the rental cost & price stability
to whole the year
0.08 4 0.3
0.09
4 0.36
A mass production capacity e.g. 50K meter output/day f rom
grey to f inish f abric.
0.07 3 0.1
0.09
0.18
Gul Ahmed is a big group contains another industries like My
Bank , Polyester Ìnd, Swistex Chemical etc. which supported
to f luxgate the prof it and market shares.
0.09 4 0.36 0.06 0.1
Profit margin going to be Decrease. 0.09 4 0.36 0.08 3 0.4
Community strength (pref erd to Community Member) 0.05 0.1 0.07 0.14
Spent 40% Extra cost to depend upon external Units. 0.05 0.1 0.08 3 0.4
Factory Over Head also going to be increased. 0.07 3 0.1 0.09 4 0.36
Need to be Updated Technology to tracke easy each product
process & quality.
0.08 4 0.3
0.09
4 0.36
Labour Ìssue (Lose their Prod. Avg. 10~0% p.a.) 0.09 4 0.36 0.05 3 0.15
TTAL
Cotton Crop Country 0.09 4 0.36 0.07 3 0.1
Cheep labour available with flexible mood 0.08 4 0.3 0.09 4 0.36
Mass production capacity available in Pakistan. 0.06 3 0.18 0.05 3 0.15
New emerging or developing market in EU 0.07 3 0.1 0.06 0.1
Good Fabric especially Denim & cotton provider 0.06 4 0.4 0.08 3 0.4
Global Competition after Quota phase-out 0.07 4 0.8 0.09 4 0.36
Political and ethical threats 0.09 4 0.36 0.08 3 0.4
R & D & Rebate phase-out by GOVT. 0.07 4 0.8 0.06 3 0.18
Technology Competition 0.06 3 0.18 0.08 4 0.3
Power Energy Ìssue increased 10% total cost 0.08 4 0.3 0.09 4 0.36
Ìmproper water supply increased Fabric Dyeing cost which is
45% of Garment price
0.04 4 0.16 0.05 3 0.15
High Ìntrest Rate & Payback period Ìssue 0.07 3 0.1 0.05 0.1
Profit Margin decrease due to increased the cost of O/H. 0.09 4 0.36 0.07 3 0.1
Complince & Regulation Ìssues by US & EU 0.07 0.14 0.05 0.1
Skilled & Technical Education scarcity 0.06 3 0.18 0.03 1 0.03
TTAL
"QSPM" (
"uaniiiaiivc Siraicgic Planning Mairi×
) Ior T & AppareI
Strengths
Weaknesses
pportunities
Threats
AIternative- 1
Acquired Competitor)
AIternative- 2
Expend internally)
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Some figures about Textile Performance.
40,306
$109,957
55,100
37,307
117,084
62,658
45,065
$49,016
$47,671
$68,151
$50,6
46,38
$1,087.00
$1,77.80
$889.58
$939.13
$1,114.00
1,149.41
0
0,000
40,000
60,000
80,000
100,000
10,000
140,000
Jul-Jun 0-03 Jul-Jun 03-04 Jul-Jun 04-05 Jul-Jun 05-06 Jul-Jun 06-07 Mar-Feb 07-08
$0.00
$00.00
$400.00
$600.00
$800.00
$1,000.00
$1,00.00
$1,400.00
Quantity (000) MT Value ('000') AUP (MT)
0
Conclusion & Recommendation
After a detail evaluation of Textile & Apparel industry we
can say that Ìndustry has potential to perform better but
there is need to be realize about upcoming competitive
challenging globally and internal stability (environmentally
& politically) must be required for better performance.
Still our export position bit better if we compare with
other stuff but both authorities must be fully integrated to
quality of product would be the major aspect for
customer satisfaction beside of price and after sales
services.
Ìnvestment in knowledge of markets, training of
workers, improvement in labor productivity and product
development (R & D) would be immediate areas for each
to concentrate.
1
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