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STRATEGIC MANAGEMENT
AT
GUL AHMED
TEXTILES MILLS
Prepared by: Group # 5
Submitted to:
Dr. Fazal Khalidi
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LETTER OF TRANSMITTAL
December 21, 2014
Dr. Fazal Khalidi
Faculty: Strategic Management
IoBM, Karachi
Respected Sir,
In compliance with the fulfillment of the requirement of the subject MAN405: Strategic
Management, I would like to present report entitled Strategic Management & Its Key
practices at Gul Ahmed Textile Mills in accordance with your instructions.
Gul Ahmed Textile Mills that is leading manufacturer of different Textile substrates including
Yarn, Fabric, Home Textiles, Apparels, Accessories etc.
We have learned many things from this topic. There were some obstacles which we have
faced at the time of collecting data about this topic. But we have tried our best to cover this
topic.
Sincerely,
Group # 5
Fall 2014MAN 405Strategic Managements Class.
MBA (IM), IoBM
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ACKNOWLEDGEMENT
First of all we would like to thank the Almighty ALLAH for giving us the strength, and
the aptitude to complete this report within due time. I am deeply indebted to my course
teacher, mentor, and counselor: Dr. Fazal Khalidi for assigning us such an interesting topic
named in accordance with our course
Strategic Management & Its Key practices at Gul Ahmed Textile Mills
We also express the depth of my appreciation to our honorable course teacher for his
suggestion and guidelines, which helped us in understanding this subject &completion of
this report.
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Blue Ocean Strategy ................................................................................................................. 20
Conclusion ................................................................................................................................ 21
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COMPANY PROFILE - HISTORY
The story of textiles in the subcontinent is the story of Gul Ahmed. The group began
trading in textiles in the early 1900s. With all its know-how and experience, the group
decided to enter the field of manufacturing and Gul Ahmed Textile Mills Ltd. was
incorporated as a private limited company, in the year 1953. In 1972 it was subsequently
listed on the Karachi Stock Exchange. Since then the company has been making rapid
progress and is one of the best composite textile houses in the world. The mill is presently a
composite unit with an installed capacity of 103,000 spindles, 220 wide width air jet looms,90 Sulzers, 297 conventional looms and a state of the art processing and finishing unit.
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Gul Ahmed Textiles
The products and services of Gul Ahmed Textile Mills can be divided into two broad
categories according to their markets
Gul Ahmeds local Market
Gul Ahmeds export Market
The products in Gul Ahmeds local market category are
Lawn
Pret line (women category)
Mens stitched wear
Mens unstitched
Home textile
Foot wear
Perfumes
Accessories
The products in Gul Ahmeds export market category are
Lawn
Pret line (women category) Mens stitched wear
Mens unstitched
Home textile
What make Gul Ahmed stay?
First ETP (Effluent Treatment Plant) in textile sector
First yarn mercerizing facility
Metal free safety packing zones in all sewing units First textile mill to register carbon credits
First rotary machine in Pakistan
First to install caustic recovery unit in Pakistans textile sector
First compact spinner in Pakistan
Using CAD/CAM machines to apply latest design techniques
Largest embroidery facility dedicated to home textiles
An extensive chain of retail outlets all over Pakistan
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Operations Management at GulAhmed
FABRIC FINISHEDSTOCKACCESSORIES
SAFETY STOCK LEVEL AS PER CUSTOMER`S COMMITMENT
1. MERCHANDISING
(DECISION SUPPORT / CUSTOMER HANDLING)
2. MATERIAL MANAGEMENT 3.1 INDUSTRIAL ENGINEERING
(SUPPLIER MANAGEMENT) (IMPROVING PRODUCTION EFFIENCY)
4. COMMERCIAL 3. PRODUCTION
(VESSEL PLAN NINGS) (MEETING THE TARGET DATES)
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Buyers / Customers
International customers are;
DHL
Boyd Cooper
NHS
Royal Mail
Skydda
Mascot
Juba
Regular Suppliers
Carrington
Dong Jin
HonFeng
Lucky Textiles
Sapphire
Sarena Thai Taffeta
WERNERFELT
3M
A&E Threads
Avery Dennison
HUAMEI Threads
YKK
Zhejiang Weixing
JP Coats
China Star
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Vision & Misson Statement of Company
Vision Statement
Setting trends globally in the textile industry, responsibly delivering productsand services to our partners.
Mission Statement
To deliver value to our partners through innovative technology and
teamwork, fulfilling our social and environmental responsibilities.
Values
Integrity
Passion
Creativity
Teamwork
Analysis of Mission Statement
To be done by Owais
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THE
STRATEGY-FORMULATION
ANALYTICAL
PROCESS
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STAGE: 1st----------- INPUT STAGE
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A- Competitive Profile Matrix (C.P.M)
Competitive Profile Matrix
Industry:Vertically Integrated Textile MillsCompany:Gul Ahmed Textiles
Competitive
profile Matrix Gul Ahmed Chenab Group Al-Karam
IDEAS ChenOne IDENTITY
Critical Success Factors Weight Rating Score Rating Score Rating Score
R & D 0.20 4 0.8 3 0.6 2 0.4
Product Quality 0.10 4 0.4 4 0.4 3 0.3
Price competitiveness 0.10 3 0.3 3 0.3 3 0.3
Management 0.15 3 0.45 4 0.6 2 0.3
Financial Position 0.10 4 0.4 3 0.3 3 0.3
Customer Loyalty 0.10 3 0.3 4 0.4 2 0.2
Global Expansion 0.20 3 0.6 2 0.4 3 0.6
Market Share 0.05 4 0.2 2 0.1 3 0.15
Total 3.45 3.1 2.55
INTERPRETATIONS:
Gul Ahmed Textiles is dominating in the industry as compared to local players. There are
several competitors like Agzard 9, Kohinoor textile mills, etc, but above taken competitors
are the major ones.
CPM scores for GTM (Gul Ahmed Textiles) showing aggressiveness as compared to the
crescent and Chenab textile mills.
GTM is number one company within the local environment; it is basically leading the
industry in the following aspects:
Product Quality & design.
Research & development.
Persistence in product quality.
Global Expansion.
Moreover, Chenab Group is resides at the second number and leading industry in effective
management style. Finally AL Karam textile comes at number 3rd
with leading position in
persistence in quality and market segmentation.
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B- External Factor Evaluation Matrix (E.F.E)
Key External Factors Weight Rate
Weighted
score
Opportunities
Growth in target market audience 0.05 4 0.2
Increasing Fashion Awareness 0.08 4 0.32
Online shopping 0.08 3 0.24
Social Network Marketing 0.07 3 0.21
Brand Consciousness 0.09 3 0.27
Increasing expenditure on shopping 0.06 3 0.18
Fashion Weeks in Major cities 0.04 3 0.12
Threats
Counterfeiting and intellectual property rights violations 0.12 3 0.36
Inflation 0.06 2 0.12
Exchange rate fluctuations 0.06 3 0.18
Law and order situation 0.08 2 0.16
Terrorism 0.05 1 0.05
Increase in interest Rates 0.08 2 0.16
Cotton Yarn and other Raw material Prices 0.08 3 0.24
TOTAL 1 2.81
INTERPRETATIONS:
EFE score of 2.84 indicating that the GTM is taking the external opportunities and avoiding
external threats quite well, however there is room for improvement is well.
This score suggest GTM to be aggressive but the degree of aggressiveness needs to be little
moderate, it should not go for diversification, rather it should go for penetration in theexisting market, further developing local or foreign market or it may design a new product.
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C- Internal Factor Evaluation Matrix (I.F.E)
KEY INTERNAL FACTORS Weight Rating
Weighted
Score
STRENGTHS
Highest Market share 0.15 4 0.6
Creative designers 0.1 4 0.4
Fully vertically integrated from fiber to fashion 0.05 4 0.2
Latest technology engaged 0.15 4 0.6
99.99% design quality assurance 0.05 4 0.2
Strong brand image 0.03 4 0.12
An extensive chain of retail outlets all over Pakistan 0.03 4 0.12
WEAKNESSES
Debt to equity ratio is high .81 0.1 1 0.1
EBITDA Margin to sales decreased from 12.49 to 11.92 0.15 1 0.15
Demand is higher than production capacity 0.05 2 0.1
Supply Chain Issues 0.04 2 0.08
Online shop not fully functional 0.05 2 0.1
Small share in export market as compare to other local players 0.05 2 0.1TOTAL 1 2.87
INTERPRETATIONS:
IFE score of 2.87 indicating that the GTM is an internally strong organization, it
represent that it is excellent in its overall internal strategies when it come to explore
strengths and weaknesses.
Overall the main strength is Latest Technology owned by GTM.
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A-SWOT MATRIX
STRENGTHS WEAKNESSES
1.
ISO 9001 certified &IKO-TEX 100
Certified.
2. Biggest composite
unit in Pakistan
3. Highest credit
rating by PACRA
4. Self owned power
plant
5. Largest dyeing
facility in south east
Asia
1. Relying on
international market
only
2. High cost of
production
3. High employees
turnover
4. Transit time is more
as compare to foreign
competitor
OPPORTUNITIES S-O STRATEGIES W-O STRATEGIES
1. WTO regime
implementation
2. Cost reduction
technology by using
modern and advancedtechnology
3. Local market
development
4. Diversification in
energy sector (Subject
to Government
permission)
1. provide electricity to
residential areas ( S4, O4)
2. capture local market by
providing facility of
outsourcing and
introducing company
products through its retail
outlets (S2, S5, O3)
1. Import modern technology
(W1, W2, O2)
2. Company can enter in new
market through retail outlets
(W1, W4, O3)
THREATS S-T STRATEGIES W-T STRATEGIES
1.
Export of raw cottonand yarn
2. WTO regime
implementation
3. Exchange rate
fluctuations
4. Instable political and
economical conditions
5. Government policies
1. Penetration in foreign
market (S1, T2)
2. Make future contracts to
avoid currency fluctuations
(S3, T3)
1. Focus on local market (W1,
W2, W4, T2, T3)
2. Import modern technology,
and do agreements with
suppliers to secure your supply
of raw material (W2, T1)
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INTERPRETATIONS:
To be done by Ghazanfar
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B- Boston Consulting Group (B.C.G) Matrix
STARS
PRET LINE
QUESTION MARK
MENS STITCHED WEAR
ACCESSORIES
CASH COWS
LAWN
MENS UNSTITCHED
HOME TEXTILE
DOGS
FOOT WEAR
PERFUMES
INTERPRETATIONS:
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C- Balance Scorecard
OBJECTIVES MEASUREMENT TARGETS STRATEGIC
INITIATIVES
CUSTOMERS
Target Market:
LSM : 8 & above
SEC: A+ & A
B2B customers
Attract new
customers
Retain customers
Design Accuracy
Quality
Market share
Customer retention
Customersatisfaction level
70 % market share
100% customer
retention ratio
95% customer
satisfaction level
Market development
Customer loyalty
programs
On time delivery foronline buyers
Product availability
Product quality
leadership
INTERNAL PROCESS
Superior R&D
Finest Designers
Engraving for Color
Differentiation
Laboratory Color
Testing
Color Development
Printing Quality
Superior Production
Facility
New product
development cycle
Design quality
Color matching and
quality
Nominal wastages
Product delivery
Technology
Asset utilization
CO2 emission
new seasonal
collections twice a
year
99.9% design
matching
99.9% color
matching
1% wastages
Fulfill 100% online
orders
Cover up lost sales
Following global
trends in fashion and
setting benchmark in
local markets
Investment in new
technology to
maintain edge on
design and color
quality
Reduction in scrap
sale
Continuous
improvement in
plant efficiency in
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Supply chain
Environmental
Friendly
Socially Responsible
Community building
and empowerment
of women and
disadvantaged
by increasing sales
growth by 20%
1000 women in work
force at variouspositions
order to reduce
wastages, carbon
emission and
increase energy
efficiency.
Training program for
disadvantaged and
special people
Separate unit for
women
Child care facility for
women
LEARNING &
GROWTH
Cultivate culture of
learning, creativity,
target orientation
and adopting
positive values
Attract and develop
high caliber human
resource
New designs, ideas
and concepts
Low employee
turnover
lead position in
terms of new
designs
reduce employee
turnover by 5% year
on year basis
Continuous
investment for
learning and
development of
employees to
maintain an edge
Confidentiality policy
to ensure business
secrets are not
leaked
FINANCIALS
Profitability
Increase in gross
margin
Sales growth by
segment
Customer and
product line
profitability
20% sales growth
targets
Cost reduction by 5%
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D- Internal External Matrix (I.E. Matrix)
B-THE INTERNAL-EXTERNAL (IE) MATRIX
C- IFE TOTAL SCORE
D-
E- Strong Moderate Low
F-
G-
H-
I-
J-
K-
L-
M-
N-
O-
P-
Q-
R-
S-
T-
U-
V-
W-
X-
Y-
I
Grow and Build
II
Grow and Build
III
Hold and Maintain
IV
Grow and Build
V
Hold and Maintain
VI
Harvest
VII
Hold and Maintain
VIII
Harvest
IX
Divest
EFE
TOTAL
SCORE
High
Mediu
Low
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INTERPRETATIONS:
IFE Total Score (As per IFE Matrix) = 2.87
EFE Total Score (As per EFE Matrix) = 2.81
Z-
It implies that Gul Ahmed Textiles is in a much strong position. But, comparatively it is
stronger internally as compare to its external position.
As per IE Matrix, GTM Textiles lies in fourth cell, which implies that it should go for
aggressive strategies that is grow and build strategies. The possible strategies for GTM
Textiles may be the integrations, intensive, and diversifications.
GTM Textiles has the opportunity to go for Market penetration to capture more share in the
existing market by using new technology, and increasing promotional activities. It also has atremendous option of local market development.
Other feasible strategies may be the backward integration to secure the supplies in order to
tackle with the threat of exporting of local raw material to foreign markets. Also GTM
Textiles goes for forward integration to minimize its weakness of transit time of goods and
services to its customers.
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Blue Ocean Strategy
Blue Ocean Strategy on which Gul Ahmed is working are
A dedicated Gul Ahmed Fashion magazine to promote their new collection twice
a year
First one to launch online shop in Pakistanwww.gulahmedshop.com, currently
no other player in the industry has online shop
http://www.gulahmedshop.com/http://www.gulahmedshop.com/http://www.gulahmedshop.com/http://www.gulahmedshop.com/8/10/2019 SM (Term Report, MDX-13437)
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Conclusion
Gul Ahmed has launched its online shop www.gulahmedshop.comfor online shopping but
the problem is not all of their products are currently available one internet.
Mostly it happens on the first day of launch of their new collection, which is done twice a
year (one in winter and other in summer), the customers (mostly ladies) rush into ideas and
Gul Ahmed shop and start purchasing whole lot of a design and as a result that design get
short in the market. And customers who come become frustrated when they cant find a
print.
Gul Ahmed is facing serious supply chain issue in this area, they cant meet the demand.
One thing that can be done in this is the use of online shop to make sure availability of alltheir hot designs for a sustainable period of time. This will be a one good strategy to retain
their customers.
Gul Ahmed can also use nontraditional communication channels like facebook and twitter to
interact with their customers and to get feedback. This online medium is one very effective
way of analyzing consumer choices. Google analytics and facebook page analyzer can
provide very useful information about user preferences. For instance it can tell you which
are the most favorite design liked by the audience, based on that information Gul Ahmed
can start producing more of that particular design and meet that customer demand.
http://www.gulahmedshop.com/http://www.gulahmedshop.com/http://www.gulahmedshop.com/