Topic: Nishat Mills ltd,Subject: Strategic Management

NCBA&E   

Subject: Strategic Management

Topic:

Nishat Mills ltd

Submitted to:  Sir Muhammad Ishtiaq Ishaq

Submitted by:

 Khurram Shahzad

Muhammad Ijaz

Sohaib Dilawr

Mansab Iqbal

Najeeb Ullah

E.mail: mohammadkhurram468@gmail.com

Ijazmeo86@gmail.com

Nishat Mills ltd

Table of Contents

Topic	Page No.
Executive Summary	03
Introduction of Organization	08
Mission & Vision Statement	10
Organizational Structure	13
Strategic Analysis	14
Corporate Level Strategies	14
Business Level Strategies	14
Functional Level Strategies	14
SWOT Analysis	19
EFE Matrix	19
IFI Matrix	20
BCG Matrix	23
TOWS Matrix	25
Quantitative Strategic Planning Matrix	28
Porter’s Five Forces Model	30
Chart of Strategic Business Unit(s) of this Organization	32
Issues in Current Strategies	33
Proposed Recommendations	34
Conclusions	35

EXECUTIVE SUMMARY

Nishat has grown from a cotton export house into the premier business group of Pakistan with 5 listed companies, concentrating on 4 core businesses; Textiles, Cement, Banking and Power Generation. Today, Nishat is considered to be at part with multinationals operating locally in terms of its quality products and management skills.

I have recently done my internship in Nishat textile Mills Limited, in which I got training from each of its department. The internship basically revolved around the product knowledge training. The system, the style of working & the commitment of the employees in NML is really exemplary. The difference between the success & failure is doing things right and doing things nearly right, & NML has always tried for success & that is why it is known to be one of the leading organizations in Pakistan. Irrespective of all these positive points of Nishat Mills Limited, I have noticed a few areas where the improvement can really increase the efficiency of NML.

In this report I have given a very brief review of what I have seen during our internship I have mentioned all these as I have made an internship as according to the schedule. I also mentioned about the Textile industry in Pakistan. Then I give the introduction of organization. Then I have discussed about my learning in the whole internship that is all about the Textile Terminologies and process of different departments. Then I have done Financial, SWOT and PEST analysis. I have made it possible to write each and every thing that I have learnt there. I have all my practical efforts in the form of this manuscript that’s the asset for my future career.

HISTORY OF PAKISTAN TEXTILE INDUSTRY

Increase in the cotton production and expansion of textile industry has been impressive in Pakistan since 1947. Cotton – bales increase from 1.1 million bales in 1947 to ten million bales by 2000. Number of mills increased from 3 to 600 and spindles from about 177,000 to 805 million similarly looms and finishing units increased but not in the same proportion. It employs 50% of industrial labour force and earns 65% foreign exchange of total exports. Pakistan’s textile industry experts feel that Pakistan has fairly large size textile industry and 60-70% of machines need replacement for the economic and quality production of products for a highly competitive market. But unfortunately it does not have any facility for manufacturing of textile machinery of balancing modernization and replacement (BMR) in the textile mills which need to think about joint ventures for the production of complete spinning units with china, Italy and production of shuttle less looms (Projectile) with Korea, Taiwan and Italy.

Cotton textile industry has been premier industry in Pakistan and a major source of export earning and employment. It also helps in value addition to the manufacturing sector of the economy. During the six years between 1993 and 1998, production of yarn (in quantity terms) registered a steady annual growth rate of 302% in Bangladesh and 405% in India. On the contrary, Pakistan registered a growth rate of 101% per annum in yarn production although it ranked third after China and India in the global yarn production during the same six years. In exports, while Taiwan, India and the republic of Korea registered an annual increase of 18.1%, 27.7% and 5.4% respectively during 1993-1998, Pakistan registered a negative growth of 4.8% one important development was that till 1997, Pakistan was the world’s largest exporter yarn followed by India. However, in 1998, India gained the NO 1 position, leaving Pakistan at NO 2 In the case of cotton cloth production, a number of Asian countries have been emerging in the international market to compete with Pakistan. These countries are Bangladesh, India, Taiwan, Indonesia, Thailand, Turkey, Sri Lanka and Iran. The latest available date on overall export performance of The above-mentioned presentation in the context of international scenario highlights the adverse position of Pakistan’s textile industry. when is  likely to  continue  further following the full implementation of WTO agreement from 2005 onwards when an era of free

trade will start globally. Notwithstanding the above fact, current stagnation in the local textile industry can be overcome through efforts, consistent with charges occurring in the international market. It must be appreciated that all successive governments since the birth of cotton textile industry in Pakistan have been encouraging the textile exporters to penetrate into new market and also to broaden the base of exportable commodities by including value added textile goods so that reliance on exports of cotton, cotton yarn and coarse fabrics gradually become minimal.

Reflecting on the state of affairs, Abid Chinoy, Pakistan cloth merchants Association (PCMA) Chairman, Appreciated government’s efforts to encourage new exports and finding new markets, which need aggressive export marketing. The steps taken on the monetary front, such as the frequent devaluation of Pak rupee in terms of dollar could not improve the cost competitiveness of exportable products due to increase in prices of the local and imported inputs of the local textile industry, and also due to inelastic demand for the Pakistan’s exports. It has been rightly mentioned in the latest state bank of Pakistan’s annual report (FY01) that, “Over the years Pakistan’s exports receipts have been vulnerable on account of the narrow base of exportable items, concentrated markets and low value addition ‘this indicated that the growth in the country’s overall exports, including textile products which contributed more then 60% of total export receipts each year, could to be related some cosmetic and ad hoc measure like devaluation of Pak rupee and concession export credits. The first textile commission, which was constituted by the first material law government in 1960 had, inter-alia, recommended that an economic size textile unit should preferably have 25,000 spindles and 500 looms. No new mill with only 12,500 spindles and without looms should be sanctioned. However, no need was paid to the advice by the sanctioning authorities with the result that an excess capacity had tented to build up in the spinning sector.

During the period 1973 to December 1992, some 71 spinning units with 1,136, 835 spindles, 6,600 rotors ands 7,329 looms were closed down. In 1992, a foreign consultant form was hired by the government to look into the stagnating conditions in the local textile industry. One of the observations of the foreign consultant was “Pakistan has failed to make real progress in the international market and is being over taken by many of the neighboring competitor

Countries. The spinning sector, traditionally the core of the industry, is already in the crisis with many spindles lying idle and mills being forced to close. Worse still, this sector will be hit by the projected decline of its major markets in Japan and Hong Kong in the coming years.” Another important strategic recommendation given by the foreign consultant very much relevant to the current.

Conditions: “It is vital that companies play very positive role in the markets, which each one having its own marketing activity, whose job is to understand the need of the customers and the ever changing competitive dynamics of the markets. In order to improve exports, Pakistan’s Readymade Garments Manufacturers and Exporters Association (PRGMEA) has urged the commerce minister Abdul Razzak Dawood to set up an Apparel Board for the promotion of export of woven and kit garments which fetch US$ 2.5 billion foreign exchange for the country. The industry experts are of the opinion that in the order to have a strong industrial base, Pakistan economy need investment upswing. Pakistan’s economic growth performance during recent years has been dismal: as against the average growth rate of 6.1% in the 1980s, the half and 4.0% in the 2nd half of the 1990s. The major micro-economic instability factors like high inflation rate, budgetary deficit, continuous depreciation of rupee, economic sanctions, etc. could not help the investment process. Such an environment cannot be conducive to investment and growth. Exporters of textile products have found the target of US$ 10.4 billion set by the government for the year 2002-2003, as achievable and termed it a realistic approach. The textile sector which constituted 69% of total export during 2001-2002, believes that enhanced quota by the European Union and Turkey would make this possible to fetch another US$1 billion this year.

The rise in export of value-added products from Pakistan was another point of encouragement for the textile sector. “The export of value-added products rose to 57.4% from 53.9% last year-a clear sign that we are moving in the right direction, “said the Chairman of all Pakistan textile mills association. The trade policy is considered an acceptable paper, but in the industry does not fine anything that could lead to a high level exports achievement and remove trade imbalance. Pakistan’s textile sector earned US$5.77 billion during the outgoing year, compared with US$5.577 BILLION OF 2000-2001 indicating a growth of 0.69%. “Textile

vision 2005” has identified the present status and opportunities to make in roads in conventional and hew markets and has developed sect oral recommendations, hence the sect oral committees set up by the Federal Textile Board (FTB) would play an important role be ensuring the availability of quality raw materials on competitive prices and improvement in designing, and would adopt quality standards and increase productivity levels. It would attract foreign brands and promote Pakistani brands with world-class standers. With such a positive trend, Pakistan’s textile sector is getting rid of old impediments and gearing itself up for the new opportunities in the new trade regime.

TEXTILE USES

Textiles have an assortment of uses, the most common of which are for clothing and containers such as bags and baskets. In the household, they are used in carpeting, upholstered furnishings, window shades, towels, covering for tables, beds, and other flat surfaces, and in art. In the workplace, they are used in industrial and scientific processes such as filtering. Miscellaneous uses include flags, backpacks, tents, nets, cleaning devices, such as handkerchiefs; transportation devices such as balloons, kites, sails, and parachutes; strengthening in composite materials such as fiber glass and industrial geo textiles, and smaller cloths are used in washing by "soaping up" the cloth and washing with it rather than using just soap.

Textiles used for industrial purposes, and chosen for characteristics other than their appearance, are commonly referred to as technical textiles. Technical textiles include textile structures for automotive applications, medical textiles (e.g. implants), geo textiles (reinforcement of embankments), agro textiles (textiles for crop protection), protective clothing (e.g. against heat and radiation for fire fighter clothing, against molten metals for welders, stab

protection, and bullet proof vests. In all these applications stringent performance requirements must be met. Woven of threads coated with zinc oxide nanowires, laboratory fabric has been shown capable of "self-powering nanosystems" using vibrations created by everyday actions like wind or body movements.

TEXTILE VALUE CHAIN

                                                               

                                                         

                                               

INTRODUCTION OF ORGANIZATION

NISHAT GROUP

Mian Muhammad Mansha Yayha is the captain of this splendid ship having around 30 companies on board. Mansha, who owns the Muslim Commercial Bank as well, is now setting up a billion rupee ($ 17 m) paper sack project too. He is one of the richest Pakistanis around. Nishat Group was country's 15th richest family in 1970, 6th in 1990 and Number 1 in 1997. Mansha is on the board of nearly 50 companies. Chinioti by clan, Mansha is married to Yousaf Saigol's daughter.

He is deemed to have made investments in many bourses, currency and metal exchanges both within and outside Pakistan. He has had his share of luck on many occasions in life and has recently been awarded Pakistan's highest civil award by President Musharraf. He could have bought the United Bank too, but then who doesn't have adversaries. Nishat Group of comprises of textiles, cement, leasing, insurance and management companies. If Mansha was bitten by Bhutto's nationalization stint of 1970, his friends think he was compensated by Nawaz Sharif's denationalization programme to a very good effect. There is no stopping Mansha and he is still on the move!

                The history of Nishat Group dates back to 1951, when Mian Muhammad Yahya founded Nishat Mills Limited. This man of vision, courage and integrity, Mian Mohammad Yahya was born in 1918 in Chiniot. In 1947 when he was running leather business in Calcutta, he witnessed by the momentous changes that swept the Indo-Pak subcontinent. This is story of success through sheer hard work and an undaunted spirit of enterprise. Beginning with a cotton export house, he soon branched out in to ginning, cotton and jute textiles, chemicals and insurance. He was elected Chairman of all Pakistan Textile Mills Association. He died in 1969  at the age of 51 having achieved so much in so short time. After almost half a century of

Undaunted success, Nishat group is among the leading business houses of the country and ranks among the top 5 groups in terms of assets and sales revenue.

The group has its roots firmly planted into four core business namely.

• Textiles
• Power Generation
• Banking
• Cement

TEXTILES

                The textile business is further subdivided into 3-textile division:

• Nishat Lahore
• Nishat Faislabad
• Nishat Chunian

                The textile capacity of the group is the largest in the country. An addition of 20,000 new spindles, 100 new air jet looms and new dyeing plants has increased the existing capacity of 242,000 spindles, 740 looms and dyeing and finishing capacity of 5 million meters. The largest exporters of textile products from Pakistan, for more then decade!

POWER GENERATION

            Nishat group has also been a pioneer in power generation in the private sector of the country. Nishat setup the first power generation unit in the private sector in 1995.

CEMENT

                In 1992, Nishat Group acquired D.G Khan Cement Company Limited (DGKCC) from the second largest project of the group and is ideally located in the heart of the country, with easy access to transportation all over Pakistan. DGKCC unit No. 1 has a capacity of 2,200 tons

per day. A new unit heaving the capacity of 3,300 tons was setup in 1997. International Finance Corporation and common Wealth Development Corporation have financed this unit. With the addition of unit No.2, DGKCC has become the largest manufacturer of cement in Pakistan.

BANK

In 1991, Nishat Group ventured into the financial sector through the acquisition of Muslim commercial Bank. MCB has grown ever since and is now the largest bank in the private sector. MCB has a network of over 1200 branches employing over 12,000 people.

THE COMPANY

Nishat Mills Limited (“Nishat”) is a public company incorporated in Pakistan under the Companies Act, 1913(Now Companies Ordinance, 1984) and listed on all three Pakistani stock exchanges. The Company is engaged in the business of textile manufacturing and of spinning, combing, weaving, bleaching, dyeing printing, stitching, buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic fiber and cloth, and to generate, accumulate, distribute and supply electricity. Company is providing quality products to its customers within the Pakistan and outside the Pakistan. Presently company is exporting its all kinds if apparel products.

Major competitors Nishat competitors are

• Crescent
• Chenab
• Arzoo
• Alkarms
• Sitara
• Kohinoor
• Amtex

VISION STATEMENT

To transform the Company into a modern and dynamic yarn, cloth and processed cloth and finished product manufacturing Company with highly professionals and fully equipped to play a meaningful role on sustainable basis in the economy of Pakistan.

To transform the Company into a modern an dynamic power generating Company with highly professionals and full equipped to play a meaningful role on sustainable basis in the economy of Pakistan.

MISSION STATEMENT

To provide quality products to customers and explore new markets to promote/expand sales of The Company through good governance and foster a sound and dynamic team, so as to achieve Optimum prices of products of the Company for sustainable an equitable growth and prosperity Of  the Company.

COMPANY PROFILE

CHIEF EXECUTIVE

• Mrs. Naz Mansha

BOARD OF DIRECTOR

• Mrs. Naz Mansha
• Mian Raza Mansha
• Mian Hassan Mansha
• Mr. Muhammad Nawaz Tishna (NIT)
• Mr. Faisal Ehsan Ellahi
• Mr. Khalid Qadeer Qureshi (Chief Financial Officer)
• Mr. Muhammad Azam
• Mr. Rana Muhammad Mushtaq

FINANCE DEPARTMENT

• Mr.Shehzad Malik (G.M)
• Mr.Usman Bajwa
• Mr.Badar Rauf
• Mr.Ashraf Ali Raza
• Mr.Inam
• Mr.Mudassar
• Mr.Asad Iqbal
• Mr.Masood Akhtar
• Mr.Nawaz
• Mr.Zulufiqar

AUDIT COMMITTEE

• Mr.waseem ul Haque Osmani Chairman
• Mian Hussan Mansha Member
• Mr. Aftab Ahmed Khan Member

HEAD OF INTERNAL AUDIT

• Mr.Khalid Kabeer

CORPORATE DEPARTMENT

• Mr. Muhammad Azam
• Mr.Khalid Mahmood Chohan

AUDITORS

• Riaz Ahmed & Company

Chartered Accountants

LEGAL ADVISOR

• Mr. M. Aurangzeb Khan, Advocate,

Chamber No. 6, District Court,

Faisalabad.

BANKERS TO THE COMPANY

• ABN AMRO Bank
• Allied Bank of Pakistan Limited
• American Express Bank Limited
• Askari Commercial Bank Limited
• Credit Agricole Indosuez
• Citibank N.A
• Deutsche Bank
• Faysal Bank Limited
• Habib Bank Limited
• Habib Bank A.G. Zurich
• Mashreq Bank P.S.C
• Meezan Bank Limited
• National Bank of Pakistan
• Standard Chartered Bank Grindlays
• The Hong Kong & Shangai
• Banking Corporation Limited
• Union Bank Limited
• United Bank Limited

MILLS

·        Niashatabad, Faisalabad (Spinning, Weaving, Processing, Stitching units & Power                      Plant)12 K.M. Faisalabad Road, Shiekhupura (Weaving units & Power Plant)

• 21 K.M Ferozepur Road, Lahore. (Stitching unit)
• 5 K.M. Nishat Avenue off 22 K.M Ferozepur Road, Lahore (Dyeing & Finishing Unit                                                                                                                                                                       and Power Plant)
• 20 K.M. Shiekhupura Faisalabad Road, Froze Watwan (Spinning Unit)

ORGANIZATIONAL STRUCTURE

Strategic Analysis Corporate level strategies  Nishat stands up to its social responsibilities both in terms of environment and Welfare. The company covers housing and medical expenses for its employees and also provides schooling for their children. A high school has been opened for the children of the employees and general public of the area. A hospital has been constructed in the vicinity of the plant. The company also provides recreational and sports facilities for the resident employees at the production premises. NCL has also established a school and hospital under the Mian Mohammad Yahya Trust, at a cost of around US$ 700,000. The trust is sponsored by NCL and members of the sponsors family. The high school opened in 2000 for the children of the employees and general public of the area; has a staff of around 40 teachers and offers education to 400 students. The hospital has also been constructed in the vicinity of the plant; enabling local population to get immediate medical attention instead of traveling to the nearest city. Around 80 patients are treated daily in the hospital by a staff of 30 people which includes 6 qualified doctors Business Strategy Aggressive marketing has been the major factor in our consistent profitability over the past years. Our strategy is to remain at the cutting edge in terms of exploring new markets and new products. The focus is on niche marketing with specialized products. We have differentiated our business through consistent quality, reliable delivery and proactive handling of customer's needs. Investment in state of the art technology and top quality human resources has been key element of our business strategy. The organizational structure is lean with very little hierarchy and bureaucracy compared to other organizations of similar size. This gives us the flexibility to respond quickly to the changes in the market situation. Functional Level Strategies: 1. FUNCTIONAL LEVEL STRATEGIES All organizations irrespective of the size, nature and scope of business must perform the functions like Marketing Finance Production & Operations Human Resource Management Research & Development etc. Careful planning, execution and coordination of these functions are highly essential for effective strategic planning, implementation and control 2. FUNCTIONAL LEVEL STRATEGIES Marketing Strategies • These strategies involves analysis, development and implementation of activities • Marketing strategies can be studied under the following areas Product and Service strategies Pricing Strategies Place / Distribution Strategies Promotion Strategies 3. FUNCTIONAL LEVEL STRATEGIES Marketing Strategies - Product and Service strategies Pricing Strategies The above has been covered in Marketing II (First Year) 4. FUNCTIONAL LEVEL STRATEGIES Place / Channel of Distribution Strategies • This strategy depends upon whether the company wants to sell directly or outsource its distribution function • Most of the companies still prefer to distribute their products through market intermediaries • Hence channel differentiation can be a distinctive competitive advantage Egg. BSNL’s success is due to location of pay phones/STD outlets even in corners of small towns and villages throughout India by appointing agents 5. FUNCTIONAL LEVEL STRATEGIES Promotion Strategies • This strategy includes advertising, personal selling and sales promotion • Companies should have large advertising budgets during product introduction stage in order to create customer acceptance • The companies whose brand is enjoying a high market share can have a low advertising budget • Companies however spend more on advertising in a highly competitive environment 6. FUNCTIONAL LEVEL STRATEGIES Pricing Strategies Please study the pricing strategies from any Marketing Text Book Ramaswamy & Namakumari, Arun Kumar & N Meenakshi etc 7. FUNCTIONAL LEVEL STRATEGIES Financial Strategies • Finance is a fundamental resource for starting and conducting of a business • Financial strategies are centered around acquiring capital, reducing cost capital etc. • Also making complex investment decisions through capital budgeting financing and dividend decisions capital structure working capital strategies in terms of accounts receivables, inventories, cash flow management etc. 8. FUNCTIONAL LEVEL STRATEGIES Acquiring Capital • Capital can be equity capital and loan capital / debt capital • Equity capital provides security and free from paying interest and financial risk • Debt capital although requires the payment of fixed interest regularly, it provides huge surplus during business boom • Companies thus decide to have both equity and debt capital 9. FUNCTIONAL LEVEL STRATEGIES Capital Structure Strategy • Capital structure is a mix of equity capital, preference capital, retained earnings and debt capital • Companies formulate optimum capital structure strategy in order to balance the advantages and disadvantages/ risks • Optimum capital structure possesses the following features 10. FUNCTIONAL LEVEL STRATEGIES Features of Optimum Capital Structure • Generation of maximum rate of return on capital employed for the purpose of maximization of wealth of equity shareholders • Excessive debt capital results in risk of solvency of the company hence they should limit the debt capital at a point where the risk begins • Companies should adopt a flexible structure in order to adapt the structure to the economic situations • The amount of debt capital should be within the capacity of the company to generate future cash flows • Capital structure of the company should result in control of risk in debt capital 11. FUNCTIONAL LEVEL STRATEGIES Dividend Strategy • This is to decide the amount of profits to be distributed to he shareholders after retaining certain amount of profits as a surplus • This is for the future investment of the company and earning benefit to the shareholder • In turn this enables the company ton generate the capital for future investment purpose which involves the least cost of capital as well as risks • Dividend strategy is to maximize the shareholders return in the long run by maximizing the value of investment • Thus dividend strategy balances the current returns and capital gains 12. FUNCTIONAL LEVEL STRATEGIES Human Resource Strategies • This is the critical, dynamic and living resource of an organ. Unlike other resources • HRM strategies percolate into other functional strategies and integrates all of them towards corporate and business level strategies • HRM is managing the functions of employing, developing, compensating and utilizing human resources • This results in development of human and industrial relations which would shape the future policies and practices of human resource management • This is with a view to contribute proportionately to the organizational, individual and social goals 13. FUNCTIONAL LEVEL STRATEGIES Objectives of Human Resource Management • To create and utilize an able and motivated workforce and to accomplish the basic organizational goals • To establish and maintain sound organizational structure and desirable working relationships among all members of the organization • To secure the integration of an individual and groups within the organization by co-ordination of the individual and group goals with those of the organization • To create facilities and opportunities for an individual or group development so as to match it with the growth of the organization 14. FUNCTIONAL LEVEL STRATEGIES Objectives of Human Resource Management • To create and utilize an able and motivated workforce and to accomplish the basic organizational goals • To establish and maintain sound organizational structure and desirable working relationships among all members of the organization • To secure the integration of an individual and groups within the organization by co-ordination of the individual and group goals with those of the organization • To create facilities and opportunities for an individual or group development so as to match it with the growth of the organization • To satisfy individual and group needs by providing adequate and equitable wages, incentives, employee benefits and social security 15. FUNCTIONAL LEVEL STRATEGIES Organization Structure and HRM Strategies • Recent development in the organizational structure is the virtual structure • Virtual organizations is a social network in which all the horizontal and vertical boundaries are removed • It consists of individuals working out from physically dispersed workplaces or individuals working from mobile devices and not confined to any particular workplace • It is a coordinated intense structure consisting primarily of patterns and relationships, and this form needs the communication and information technology to function 16. FUNCTIONAL LEVEL STRATEGIES Organization Structure and HRM Strategies • Limited number of employees coordinate the function and activities of various outsourced agencies • Combine human skills, financial resources, marketing /customer needs, advertising agencies, innovations etc. • This is done with the help of communication and information technology • A network of relationships coordinates the manufacturing, financing, human resourcing, marketing and other activities • There are partial and virtual organizations • They physically perform some activities and outsource the remaining activities • BATA physically markets its products and outsources the manufacturing activities 17. FUNCTIONAL LEVEL STRATEGIES Characteristics of Virtual Organizations Flexi-work, Flexi-time and Flexi-work place Part-time work Job sharing Home based working Dependency on Information Technology like e-mail integration, mobile phone network, computer-telephony integration etc. Loose organization boundaries De-jobbing Multi-skilling Flexibility in power work Goal directed Customer centered 18. FUNCTIONAL LEVEL STRATEGIES Human Resource Trends in Virtual Organizations • Organization’s human resources are the loose web of people • Knowledgeable people are hired for short term projects • Autonomy of work but accountable to the targets, performance etc. • Employees can work from home or from any other place • Social and work environment do not draw much attention of the HR manager • Career planning and development are based on projects • Selection of employees is based not only on technical skills but also on their ability to work in teams or independently • Emotional and attitudinal quotient (EAQ) is the prime factor in employee selection rather than intelligent quotient(IQ) 19. FUNCTIONAL LEVEL STRATEGIES Strategic Management and Performance Appraisal • Just like HRM practices Performance Appraisal practices also depends upon the strategy adopted by the company • Traditional techniques of performance appraisal are appropriate for the stability and sustainable growth strategies • Appraisal by the superior is appropriate for these strategies • Modern performance appraisal techniques are suitable for growth strategies like expansion, diversification, joint ventures, mergers and acquisitions • Performance appraisal by the customers, subordinates and peers in addition to the superiors help employees to have a feedback from multiple directions • This helps in identifying deficiencies and acquire competencies through training and development • This along with the 360 degree performance appraisal enhance employee creativity that contributes to achievements like new product development, low cost leadership and differentiation strategies 20. FUNCTIONAL LEVEL STRATEGIES Strategic Management and Performance Appraisal Team Training • Organizations mostly rely on team work and team management to achieve goals • This is more prevalent in activities like production, marketing, customer relationship, supply chain and finance • Teamwork results in synergy and produces greater efficiency for organizational success 21. FUNCTIONAL LEVEL STRATEGIES Strategic Management and Performance Appraisal Diversity Training • Number of employees from varying ethnic groups as well as diverse background has been increasing • This brings varied knowledge that helps the organization in making accurate and efficient decisions • Organizations need to provide diversity training in order to get the advantage of diversity 22. FUNCTIONAL LEVEL STRATEGIES Strategic Management and Performance Appraisal Retention Management • Employers prefer to retain more talented employees while they retrench less talented employees • Employers modify the existing HR strategies and craft new strategies in order to pay more salaries, provide more benefits and create high quality of work life to retain the best employees 23. FUNCTIONAL LEVEL STRATEGIES Strategic Management and Performance Appraisal Total Quality Human Resources • Total Quality is defined as: “ A people focused management system that aims at continual increase in customer satisfaction at continually lower cost. Total Quality is a total system approach and an integral part of high level strategy It works horizontally across functions and departments involving all employees top to bottom and extends backwards and forwards to include the supply chain and customer chain” 24. FUNCTIONAL LEVEL STRATEGIES Strategic Management and Performance Appraisal Total Quality Management • It is a continuous process of improvement for individuals, groups of people and total organization • Unlike other methods TQM is concentrated focus on continuous improvement • It is about changing ways things are done within the organizations lifetime • People must know what to do, how to do it and have the right methods to do it • People should be able to measure the improvement of the process and the current level of achievement in order to improve the process Swot  Analysis SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plans. SWOT (sometimes referred to as TOWS) stands for Strengths, Weaknesses, Opportunities, and Threats .A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as Strengths (S)Weaknesses (W), And those external to the firm can be classified as Opportunities (O) Threats (T).  Such an analysis of the strategic environment is referred to as a SWOT analysis .The outcome from a SWOT Analysis enables organizations to focus on strengths, minimizeweaknesses, address threats, and take the greatest possible advantage of opportunitiesavailable. The SWOT Matrix A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm'sstrengths and upcoming opportunities. In some cases, the firm can overcome a weakness inorder to prepare itself to pursue a compelling opportunity. To develop strategies that take into account the SWOT profile, a matrix of these factors can deconstructed. The SWOT matrix (also known as a TOWS Matrix) is shown below

Swot strategies pursue opportunities that are a good fit to the company's strengths.Swot strategies overcome weaknesses to pursue opportunities.S-T strategies identify ways that the firm can use its strengths to reduce its vulnerabilityto external threats. strategies establish a defensive plan to prevent the firm's weaknesses from making ithighly susceptible to external threats.

SWOT ANALYSIS OF NISHAT Strengths

 NCL’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Nishat Group is the largest group in Pakistan in terms of sales, which wereapproximately Rs.16 billion (US$ 400 million equivalent) last year. NCL is in businesses namely power generation and textile.Our textile division, Nishat Chunian has a spinning capacity of 144,803 spindleslocated in 5 units.Due to having setups at difference locations, we have a benefit of utilizinginfrastructure like roads, electricity load, BMR etc The product range is 100% cotton yarn, ranging from 6/1 to 30/1 in carded yarns and from 12/1 to 100/1 in combed yarns. In addition to the above we are also in core spun stretch yarns of 2 and 3 ply yarns and slab yarns. The total capacity is 59 million of slab yarn per annum. The weaving capacity is 293 air jet looms wider width. The fabric is being exported to various companies in Hong Kong, Japan, Korea, USA, South Africa, India and Europe .The company believes in product innovation and has successfully leveraged its strength in yarn manufacturing to make a variety of fabrics.

EFE Matrix (External Factor Evaluation)

External Factor Evaluation (EFE) matrix method is a strategic-management tool often used for assessment of current business conditions. The EFE matrix is a good tool to visualize and prioritize the opportunities and threats that a business is facing.

The EFE matrix is very similar to the IFE matrix. The major difference between the EFE matrix and the IFE matrix is the type of factors that are included in the model. While the IFE matrix deals with internal factors, the EFE matrix is concerned solely with external factors.

External factors assessed in the EFE matrix are the ones that are subjected to the will of social, economic, political, legal, and other external forces

How do I create the EFE matrix?

Developing an EFE matrix is an intuitive process which works conceptually very much the same way like creating the IFE matrix. The EFE matrix process uses the same five steps as the IFE matrix.

List factors:

The first step is to gather a list of external factors. Divide factors into two groups: opportunities and threats.

Assign weights

Assign a weight to each factor. The value of each weight should be between 0 and 1 (or alternatively between 10 and 100 if you use the 10 to 100 scale). Zero means the factor is not important. One or hundred means that the factor is the most influential and critical one.  The total value of all weights together should equal 1 or 100.

Rate factors

Assign a rating to each factor. Rating should be between 1 and 4. Rating indicates how effective the firm’s current strategies respond to the factor. 1 = the response is poor. 2 = the response is below average. 3 = above average. 4 = superior. Weights are industry-specific. Ratings are company-specific.

Multiply weights by ratings

Multiply each factor weight with its rating. This will calculate the weighted score for each factor.

Total all weighted scores:

 Add all weighted scores for each factor. This will calculate the total weighted score for the company.

You can find more details about this approach as well as about possible values that the EFE matrix can take on the IFE matrix page.

EFE matrix example

What should I include in the EFE matrix?

Now that we know how to construct or create the EFE matrix, let's focus on factors. External factors can be grouped into the following groups:

Social, cultural, demographic, and environmental variables:

Economic variables

Political, government, business trends, and legal variables

Below you can find examples of some factors that capture aspects external to your business. These factors may not all apply to your business, but you can use this listing as a starting point.

Social, cultural, demographic, and environmental factors

- Aging population
- Percentage or one race to other races
- Per-capita income
- Number and type of special interest groups
- Widening gap between rich & poor
- Number of marriages and/or divorces
- Ethnic or racial minorities
- Education
- Trends in housing, shopping, careers, business
- Number of births and/or deaths
- Immigration & emigration rates

Economic factors

- Growth of the economy
- Level of savings, investments, and capital spending
- Inflation
- Foreign exchange rates
- Stock market trends
- Level of disposable income
- Import and export factors and barriers
- Product life cycle (see the Product life cycle page)
- Government spending
- Industry properties
- Economies of scale
- Barriers to market entry
- Product differentiation
- Level of competitiveness (see the Michael Porter's Five Forces model)

Political, government, business trends & legal factors...

- Globalization trends
- Government regulations and policies
- Worldwide trend toward similar consumption patterns
- Internet and communication technologies (e-commerce)
- Protection of rights (patents, trade marks, antitrust legislation)
- Level of government subsidies
- International trade regulations
- Taxation
- Terrorism
- Elections and political situation home and abroad

International Financial Institutions (IFI) Matrix

Why are international financial institutions important?

The International Financial Institutions (IFIs) include the World Bank, the regional development banks, and the International Monetary Fund (IMF). They are the largest source of development finance in the world, typically lending between US$30-$40 billion to low and middle-income countries each year.

The IFIs, and in particular the World Bank, are a primary source of development knowledge, publishing research that frames the debate on development issues. Other donor institutions often take their lead from the World Bank and the IMF, thus amplifying the impact of those institutions’ lending approaches and decisions.

IFI loans to finance investment projects and policy reforms in developing countries are intended to reduce poverty and encourage economic development. However, ill-conceived IFI loans have often caused widespread environmental and social damage including irreversible impacts on natural habitats, displaced communities, and indigenous peoples.

IFI activities are often carried out without the informed participation of affected people, non-governmental organizations (NGOs), and-in many cases-even the legislatures of the Banks’ borrowing countries. Moreover, despite some progress the IFIs still do not release comprehensive information in a timely manner during project design and implementation. Finally, as publicly financed institutions, the IFIs should be held accountable for the consequences of the funds they loan to developing countries.

Why are international financial institutions important?

The International Financial Institutions (IFIs) include the World Bank, the regional development banks, and the International Monetary Fund (IMF). They are the largest source of development finance in the world, typically lending between US$30-$40 billion to low and middle-income countries each year.

The IFIs, and in particular the World Bank, are a primary source of development knowledge, publishing research that frames the debate on development issues.

IFI loans to finance investment projects and policy reforms in developing countries are intended to reduce poverty and encourage economic development. However, ill-conceived IFI loans have often caused widespread environmental and social damage including irreversible impacts on natural habitats, displaced communities, and indigenous peoples.

IFI activities are often carried out without the informed participation of affected people, non-governmental organizations (NGOs), and-in many cases-even the legislatures of the Banks’ borrowing countries. Moreover, despite some progress the IFIs still do not release comprehensive information in a timely manner during project design and implementation. Finally, as publicly financed institutions, the IFIs should be held accountable for the consequences of the funds they loan to developing countries.

BCG Matrix

Any business knows that, to survive, it has to have products that bring in money now and products that will bring in money in the future, and identify which products are a drain on resources without potential to come back. While it's easy to identify the profitable products, determining how the rest of your portfolio fits into the growth scheme can be harder. The BCG matrix was designed as an analysis tool to help you determine the role of products on your future profit margin so you can decide where to invest.

Creating your matrix

First, you'll need data on the market share and growth rate of your products or services. When examining market growth, you need to objectively compare yourself to your largest competitor and think in terms of growth over the next three years. If your market is extremely fragmented, however, you can use absolute market share instead, according to the Strategic Thinker blog.

Next, you can either draw a matrix or find a BCG chart program online. (There are several that are free, available for subscription or part of another charting program.) In this four-quadrant chart, market share is shown on the horizontal line (low left, high right) and growth rate along the vertical line (low bottom, high top). The four quadrants are designated "stars" (upper left), "question marks" (upper right), "cash cows" (lower left) and "dogs" (lower right).

Place each of your products into the appropriate box based on where they rank in market share and growth. Where you choose to set the dividing line between each quadrant depends in part on how your company compares to the competition. Here is a breakdown of each quadrant:

Stars: The business units or products that have the best market share and generate the most cash are considered stars. Monopolies and first-to-market products are frequently termed stars. However, because of their high growth rate, stars also consume large amounts of cash. This generally results in the same amount of money coming in that is going out. Stars can eventually become cash cows if they sustain their success until a time when the market growth rate declines. Companies are advised to invest in stars.

Cash cows: Cash cows are the leaders in the marketplace and generate more cash than they consume. These are business units or products that have a high market share but low growth prospects. According to Net MBA, cash cows provide the cash required to turn question marks into market leaders, cover the administrative costs of the company, fund research and development, service the corporate debt, and pay dividends to shareholders. Companies are advised to invest in cash cows to maintain the current level of productivity, or to "milk" the gains passively.

Dogs: Also known as pets, dogs are units or products that have both a low market share and a low growth rate. They frequently break even, neither earning nor consuming a great deal of cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they are bringing back basically nothing in return. These business units are prime candidates for divestiture.

Question marks: These parts of a business have high growth prospects but a low market share. They consume a lot of cash but bring little in return. In the end, question marks, also known as problem children, lose money. However, since these business units are growing rapidly, they do have the potential to turn into stars. Companies are advised to invest in question marks if the product has potential for growth, or to sell if it does not.

TOWS Matrix

TOWS Matrix Definition

The TOWS matrix analysis (Threats-Opportunities-Weaknesses-Strengths) also known as SWOT Analysis. We may also call the TOWS matrix, TOWS Analysis. It is the abbreviation of threats, opportunities, strengths & weaknesses involved in a business venture, project or any other situation that needs a decision, are evaluated with the help of strategic planning tool of TOWS matrix analysis.

    How to work effectively with the company’s strengths?
-    How to overcome the weaknesses?
-    Embrace some advantage of the opportunities?
-    How to handle the threats?

The TOWS MATRIX does not only provide a list of strengths ,weaknesses ,threats and opportunities but works as a matching tool that helps to make a pair of internal and external factors to bring out better solutions in the current scenario of a company. The marketers/managers do not only evaluate the four strategies but strives how to match together all the external and internal factors to execute them in a best possible way.

According to Michael Watkins of Harvard Business Review , by focusing on the external factors i.e. the threats and opportunities at first can lead to a more productive outcome that elucidate what’s happening in the external settings rather to lay emphasis on the internal capabilities of a company.

THE TOWS MATRIX can be explained as the following:

1-    STRENGTHS:

Those attributes that makes the company stronger against its competitors and can be effective to achieve the desired objective. For example, a company who has the highest market share or produce the highest quality of a product against its rivals.

2-    WEAKNESSES:

Those internal factors that can be risky for the company to achieve success in the future. For example: A company who possess an outdated technology and lacks innovation in products.

3-    OPPORTUNITIES:

Those external conditions that can be helpful towards the attainment of the objective.  For example: the new economic growth or the social changes in the environment might be an advantage for a company.

4-    THREATS:

Those external settings that could be risky and harmful towards achieving the objective. For example: Changes in the consumer buying patterns or the competitor may come up with a product which has been more in demand.

The TOWS MATRIX helps to identify the strategic alternatives for a company that  works as a matching tool by constructing four types of strategies such as:

-    THE SO STRATEGY:

This is also known as Maxi –Maxi Strategy where a firm utilizes most of its internal strengths in order to grab the right external opportunities. For instance: A firm whose financial position is quite strong and posses low market share is able to introduce many innovative products in the market by making investment in the Research & development Department of the firm.

Mercedes Benz takes advantage of the external demand of their lavish vehicles and makes right use of the technical skills and quality of their products.

-    THE WO STRATEGY:

The WO STRATEGY is also known as Mini- Maxi Strategy that can be used to overcome the weaknesses of a company by taking advantage of the opportunities, For instance: A firm who lacks skilled workers can utilize the opportunity by updating new technology in order to increase production. The internal weaknesses of any firm can also be improved by recruiting and training employees through learning additional technical skills.

A company who faces a decline in the financial sector can avail the opportunity of merging with a multinational company.

-    THE ST STRATEGY:

The ST Strategy / Maxi-Mini Strategy is where a company through its strengths can avoid any kind of external threats. Any organization can refrain from external threats by avoiding any copied ideas, innovation in products of another organization. In a case with an organization that possess good quality of products but is facing threats against competitors who offers low priced products can adopt ST strategy by mass production of the products, therefore it will reduce the unit cost of production.

-    THE WT STRATEGY:

The WT Strategy Or Mini- Mini Strategy are adopted by firms who needs to reduce the level of weaknesses and avoids any external threats at the same time This can be considered as a defensive technique in a situation where a company whose financial position is at the critical stage and the demand of its product getting reduced, the only possible chance to sustain itself in the market is to adopt a retrenchment strategy or decides for merger with an another company.

However, The WT Strategy is difficult to implement in a situation with a company whose distribution channel tends to be weak, if it gets improved by chance, in that case it will be able to remove many external threats easily.

Following are the steps to construct a TOWS Matrix:

1-    You need to identify and make a list of all the existing strengths of the organization.

2-    Identify and list down the most important weaknesses of the organization.

3-    List down all the external threats that are faced by the organization.

4-    Similarly, make a list of all the opportunities that can be advantageous for the organization.

5-    Now, to implement the SO strategy in the SO cell, you need to match the appropriate internal strengths with external opportunities.

6-    In the same way, match the right internal weaknesses with external opportunities and type the correct WO strategy in the WO cell.

7-    Similarly, make a match of internal strengths with external threats to type the right ST Strategy in the respective ST cell.

8-    Match all internal weaknesses with external threats to construct the appropriate WT strategy.

Quantitative Strategic Planning Matrix

Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic management approach for evaluating possible strategies. Quantitative Strategic Planning Matrix or a QSPM provides an analytical method for comparing feasible alternative actions. The QSPM method falls within so-called stage 3 of the strategy formulation analytical framework.

The Quantitative Strategic Planning Matrix is a strategic tool which is used to evaluate alternative set of strategies. The QSPM incorporate earlier stage details in an organize way to calculate the score of multiple strategies in order to find the best match strategy for the organization.

The Quantitative Strategic Planning Matrix (QSPM)

Step 1

Make a list of the firm’s key external opportunities/threats and internal strengths/weaknesses in the left column of the QSPM. This information should be taken directly from the EFE Matrix and IFE Matrix. A minimum of 10 external critical success factors and 10 internal critical success factors should be included in the QSPM.

Step 2

Assign weights to each key external and internal factor. These weights are identical to those in the EFE Matrix and the IFE Matrix. The weights are presented in a straight column just to the right of the external and internal critical success factors.

Step 3

Examine the Stage 2 (matching) matrices and identify alternative strategies that the organization should consider implementing. Record these strategies in the top row of the QSPM. Group the strategies into mutually exclusive sets if possible.

Step 4   

Determine the Attractiveness Scores (AS), defined as numerical values that indicate the relative attractiveness of each strategy in a given set of alternatives. Attractiveness Scores are determined by examining each key external or internal factor, one at a time, and asking the question, “Does this factor affect the choice of strategies being made?” If the answer to this question is yes, then the strategies should be compared relative to that key factor. Specifically, Attractiveness Scores should be assigned to each strategy to indicate the relative attractiveness of one strategy over others, considering the particular factor. The range for Attractiveness Scores is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive. If the answer to the above question is no, indicating that the respective key factor has no effect upon the specific choice being made, then do not assign Attractiveness Scores to the strategies in that set. Use a dash to indicate that the key factor does not affect the choice being made. Note: If you assign an AS score to one strategy, then assign AS score(s) to the other. In other words, if one strategy receives a dash, then all others must receive a dash in a given row.

Step 5

Compute the Total Attractiveness Scores. Total Attractiveness Scores are defined as the product of multiplying the weights (Step 2) by the Attractiveness Scores (Step 4) in each row. The Total Attractiveness Scores indicate the relative attractiveness of each alternative strategy, considering only the impact of the adjacent external or internal critical success factor. The higher the Total Attractiveness Score, the more attractive the strategic alternative (considering only the adjacent critical success factor).

Step 6

Compute the Sum Total Attractiveness Score. Add Total Attractiveness Scores in each strategy column of the QSPM. The Sum Total Attractiveness Scores reveal which strategy is most attractive in each set of alternatives. Higher scores indicate more attractive strategies, considering all the relevant external and internal factors that could affect the strategic decisions. The magnitude of the difference between the Sum Total Attractiveness Scores in a given set of strategic alternatives indicates the relative desirability of one strategy over another.

Porter’s  five forces Model

The five forces model is the framework for analyzing determinants of industry profitability. It is used to identify the threats and opportunities confronting a company that is thinking of entering into a particular industry. The model focuses on five particular forces that Porter says shape the competition that is in each particular industry. Rivalry among established firms is the central focus that is surrounded by the threat of potential entrants and substitute technologies, as well as bargaining power of buyers and suppliers. The first of Porter's five forces is the extent of rivalry among established firms in the industry. If there is strong rivalry in the industry, then competition will be fierce and profits will be limited. This will also limit other potential firms from entering the market. The second of the forces listed is the threat of potential entrants into the industry. These are the companies that are not currently in the industry but have the resources to enter the industry at any time. This is a threat because it is another company that can potentially take away market share. The third force that Porter mentions is the threat of substitute technologies. These are substitute products that can serve the industry as a replacement to the current technology. This is a threat because if a firm.

It is every strategist’s job to evaluate company’s competitive position in the industry and to identify what strengths or weakness can be exploited to strengthen that position. The tool is very useful in formulating firm’s strategy as it reveals how powerful each of the five key forces is in a particular industry.

Threat of new entrants. This force determines how easy (or not) it is to enter a particular industry. If an industry is profitable and there are few barriers to enter, rivalry soon intensifies. When more organizations compete for the same market share, profits start to fall. It is essential for existing organizations to create high barriers to enter to deter new entrants. Threat of new entrants is high when:

Low amount of capital is required to enter a market;

Existing companies can do little to retaliate;

Existing firms do not possess patents, trademarks or do not have established brand reputation;

There is no government regulation;

Customer switching costs are low (it doesn’t cost a lot of money for a firm to switch to other industries);

There is low customer loyalty;

Products are nearly identical;

Economies of scale can be easily achieved.

Bargaining  power of suppliers. Strong bargaining power allows suppliers to sell higher priced or low quality raw materials to their buyers. This directly affects the buying firms’ profits because it has to pay more for materials. Suppliers have strong bargaining power when:

There are few suppliers but many buyers;

Suppliers are large and threaten to forward integrate;

Few substitute raw materials exist;

Suppliers hold scarce resources;

Cost of switching raw materials is especially high.

Bargaining  power of buyers. Buyers have the power to demand lower price or higher product quality from industry producers when their bargaining power is strong. Lower price means lower revenues for the producer, while higher quality products usually raise production costs. Both scenarios result in lower profits for producers. Buyers exert strong bargaining power when:

Buying in large quantities or control many access points to the final customer;

Only few buyers exist;

Switching costs to other supplier are low;

They threaten to backward integrate;

There are many substitutes;

Buyers are price sensitive.

Threat of  substitutes. This force is especially threatening when buyers can easily find substitute products with attractive prices or better quality and when buyers can switch from one product or service to another with little cost. For example, to switch from coffee to tea doesn’t cost anything, unlike switching from car to bicycle.

Rivalry among   existing competitors. This force is the major determinant on how competitive and profitable an industry is. In competitive industry, firms have to compete aggressively for a market share, which results in low profits. Rivalry among competitors is intense when:

There are many competitors;

Exit barriers are high;

Industry of growth is slow or negative;

Products are not differentiated and can be easily substituted;

Competitors are of equal size;

Low customer loyalty.

Although, Porter originally introduced five forces affecting an industry, scholars have suggested including the sixth force: complements. Complements increase the demand of the primary product with which they are used, thus, increasing firm’s and industry’s profit potential. For example, iTunes was created to complement iPod and added value for both products. As a result, both iTunes and iPod sales increased, increasing Apple’s profits.

Chart of strategic business unit

Strategic Business Unit (SBU) implies an independently managed division of a large company, having its own vision, mission and objectives, whose planning is done separately from other businesses of the company. The vision, mission and objectives of the division are both distinct from the parent enterprise and elemental to the long-term performance of the enterprise.

Simply put, an SBU is a cluster of associated businesses which are responsible for its combined planning treatment, i.e. the company engaged in a diversified range of businesses, categorises its multitude of businesses into a few separate divisions, in a scientific way. The task may include analysis and bifurcation of a variety of businesses.

It can be a business division, a product line of the division or even a specific product/brand, targeting a particular group of customers or a geographical location.

Characteristics of Strategic Business Unit

Separate business or a grouping of similar businesses, offering scope for autonomous planning.

Own set of competitors.

A manager who is accountable for strategic planning, profitability and performance of the division.

A strategic business unit is specially formed to target a particular market segment, which requires expertise in production or management, not present in the parent company.

Strategic Business Unit Structure

The structure of SBU consist of operating units; wherein the units serve as an autonomous business. The top corporate officer assigns the responsibility of the business to the managers, for the regular operations and business unit strategy. So, the corporate officer is accountable for the formulation and implementation of the comprehensive strategy and administers the SBU by way of strategic and financial controls.

In this way, the structure combines related divisions of business into the strategic business unit and the senior executive is empowered for taking decisions for each unit. The senior executive works under the supervision of a chief executive officer.

There are three levels in a strategic business unit, wherein the corporate headquarters remain at the top, SBU’s in the middle and divisions clustered by similarity, within each SBU, remain at the bottom. Hence, the divisions within the SBU are associated with each other, and the SBU groups are independent of each other. From the strategic viewpoint, each SBU is an independent business.

A single strategic business unit is considered as a profit centre and governed by the corporate officers. It stresses over strategic planning instead of operational control so that the separate divisions of the SBU can respond as fast as they can, to the changing business environment.

Issues in current strategies

The Key focus directed to any organization is geared by issues in the economic view of the trending world's economy. The organizations need to address specific industry related trends in the strategic management. 

Maintaining a focus on the global outlook of the firm's growth strategies and an extensive focus on the technological needs of the firm and trends within the industry.

Main concern is addressing challenges faced within the firms operations such as low-income segments. Some issues to address 

Corporate Strategy - The Core Concepts 

Succeeding in highly competitive sectors

Balancing a social focus in a commercial setting

Evolving products and delivery channels

Reaching new business segments

Competitive Dynamics

Putting it All Together

Corporate Philosophy and Culture

General Principles of Organization Design

Knowledge management and Data analysis of various data sets.

Quality control and Assurance 

Risk management arising within the organization and those that arise other than organizational risks.

Addressing this issues its paramount that firms will be able to improve their service delivery as well as revolutionalize the industry. 

Proposed Recommendations

I would suggest or recommend to NML the following things, which they should be implemented at NML.

• At NML, such bonus facilities are given only to production department. In my point of view, they should provide these such bonus facilities other departments as well, this act will increase the loyalty of their officers and employees towards NML and it also can be motivating factor as well for them.
• Most important in my point of view that NML has policy of not to give any stipend to the internees. I think they should give some stipend to the trainees, this will encourage new trainees to come here and this will also boost up their energies and they will work with more interest.
• At NML, salary packages are not so good, that’s why employee turnover rate is slightly higher. I suggest them that they should provide good salary packages to their officers and employees for retaining them for the longer period.
• Favoritism should be eliminated and the recruitment should be done on purely merit basis.
• Decentralization of authority should be there. With the active participation of all the management, level employees in the decision-making will be fruitful for NML.
• Proper training at each level should be given to the employees.
• Special bonuses and incentives such as on Eid days should give to the employees.
• NML should hire trained and highly qualified young professionals.
• NML should try to reduce their financial expenses.
• The suppliers should be encouraged to supply NML manufactured items to consumers.
• The bargaining power of the buyers or customers, their traditions, income and living standard should examine.
• The company should keep a close watch on costs in areas such as research and development, sales and services.  The company may try to have low cost structure compared with that of it’s competitors.
• Promotion in lower and middle level is usually based on age not on performance. Rate of promotion is also slow. So the employees feel dissatisfaction.
• Every one at NML should be agree to follow three fundamental principles; respect individuals, strive for excellence, and provide the best service.
• Upper management should encourage the existing employees to go for further training and special education; in near future it will be beneficial for the company.

Conclusions:

It was a wonderful and learning experience for us while  working on this project .Took us the various phases of project development and give us real insight into the world of Cotton industry ,The joy of working and thrill while tackling the various problems and challenges gave us a feel of cotton  industry  .

It was due to this project  we came to know how cotton industry in working nationally and internationally .

We enjoyed etch and every bit of work we had put into this project .The project further extendable.

REFERENCES

• Mr. Rizwan Aslam Manager Export Marketing

RIZWANASLAM@NISHATPAK.COM

• Mr. Faizan, Marketing officer

FAIZAN@NISHATPAK.COM

• Mr. Muneer, Accounts Manager

MUNEER@NISHATMILLS.COM

http://www.nishatmillsltd.com/nishat/company-profile.htm

www.Google.com

  http://www.businessnewsdaily.com/5693-bcg-matrix.html

http://www.mba-tutorials.com/strategy/1738-tows-matrix.html

https://i0.wp.com/www.business-to-you.com/wp-content/uploads/2017/02/TOWS-Matrix.png

https://image.slidesharecdn.com/amazonpresentation-130117223502-phpapp01/95/amazon-strategic-management-7-638.jpg?cb=1358462282

http://www.soopertutorials.com/business/strategic-management/1568-quantitative-strategic-planning-matrix-qspm.html

 http://businessjargons.com/strategic-business-unit.html#ixzz4qCIOp8Mz

https://www.strategicmanagementinsight.com/tools/porters-five-forces.html

(http://ec.europa.eu/justice/discrimination/diversity/charters/index_en.htm)

https://www.projectsmart.co.uk/img/swot-analysis.png