SUBMITTED BY:

FATIMA KAUSER
0006
SIDRA ZAKA
0009
NEELAM

FINAL PROJECT
BUSINESS STRATEGY
NISHAT MILLS

MISSION STATEMENT
To provide quality products to customers and explore new markets to promote/expand sales of
the Company(1,2,3,5) through good governance and foster a sound and dynamic team(9), so as
to achieve optimum prices of products of the Company(6) for sustainable and equitable growth
and prosperity of the Company(5).

PROBLEM
Although the mission statement is good but it does not include technology and concern for public
image which are most important component of mission statement.

REVISED MISSION STATEMENT

To provide quality products to customers and explore new markets to promote/expand sales of
the Company(1,2,3,5) through good governance and foster a sound and dynamic team and
citizenship(8,9), so as to achieve optimum prices of products of the Company(6) with the use of
best available technology(4).

PEST ANALYSIS
POLITICAL FACTOR
The largest problem that the industry faces today is political factor .Political (Legal) Aspects
Industry will not be able to gain success, good reputation and trust if it will not consider legal
and political sector as part of their strategy. Political and legal sectors include the needs of the
company to follow the given policies and regulations of the government in order to be
considered as legal. In this manner, industry should be able to consider political and legal aspects
so as to show that they value the policies and regulations of the government in any of the
business operations. - Tax policy - Employment laws - Political stability - Environmental
regulations - Trade and tariff restrictions. Political Instability effect the textile industry and risk
level increase in this situation and policies are change and cost of production high because
overall industry faces troubles due to political instability and its a tough time because political
instability in country Govt. Policies its also effect the Nishat textile Law & Order govt. and
political parties insure this now Nawaz Sharif promote the business or industrial sector in
country but the Asif Zardari dont focus to promote this sector so law and order change
according to the political parties and leaders Positive Relations its play a vital role to promote

this industry if political stability in our country so our export increases and business
opportunities increases day by day and govt. revenues increase and unemployment low and
develop country give different business opportunities Terrorism & Corruption its increases day
by day in our country .In Karachi and Rawalpindi cities faces very hard and sewer condition due
to terrorism so the business condition is very bad day by day and business shutdown and crises
level high and poorly level increase due to these factors .In this people purchasing power low
and textile faces a lot of problems Political Situation its not satisfactory due to rapid changes in
the govt. and every govt. set its own trade policies ,rules and laws and different tax policies so in
this govt. should apply sustainable policies for the beneficial of the exporter as well as invertors
Effect On International Market its also effect the international Nishat textile buyers e.g. UK,
Japan etc. Govt. Sanctions if relations are not positive to other country so its also effect on
Nishat textile export products e.g. India and Pakistan relations etc.

ECONOMIC FACTORS
Economic Stability Growth has immensely contributed towards economic stability of the
country .Moreover, when the finished goods are domestically available, it helps keep prices
down and fluctuations due to international market influences are less likely to strike populace.
Improvement in Balance of Payments Textile industry has brought structural changes in the
pattern of foreign trade of the country. Today, the Textile sector account for about US$ 10.2
billion export of the country. On one hand, this sector helps reduce import bills of textile
products and on the other hand, it contributes in earning foreign exchange thereby helping
towards keeping balance of payment in control. Following table presents a comparison of years
2008-09 and 2009-10 with respect to exports of different textile products.
Greater Employment Nishat provides more employment opportunities to the unemployed
people. It is a source of providing employment opportunities.
Collateral Industrial Development of one industry leads to the development and expansion of
other industries. A number of industries and work opportunities are directly or indirectly related
with Textile Sector. For example, colors and dies, plastics, printing, machinery etc are equally
affected by booms or busts in Textile sector.

Enhanced Government Revenues Any industrial development is bound to increase government

revenues. Though textile sector is still zero rated for the purposes of sales tax on exports yet the
tax on domestic supply and income tax contribute greatly to government revenues.
Diversification of Economy Development in textile sector has helped in diversifying economy
by reducing dependence on mere production and export of raw material. It also instilled
diversification by stimulating collateral industrial development.
It is also a source of Foreign exchange earnings.

SOCIAL, CULTURE, DEMOGRAPHIS & ENVIRONMENTAL FORCES

Nishat Mills Ltd. is a large organization and according to its claims of social responsibility it provides its
employees with good attitude to work and leisure and a safe work environment. Now what this organization is
doing under corporate social responsibility is also venerable. Changes in social trends can have impact on demand
for a firm's products and the availability, attitudes to work, income distribution and willingness of individuals to
work. In social factors demographics have a lot of importance.
Pakistan Culture is generally considered to be the basic identity of Pakistan nation as their
trends, History, Silent Features, rituals and way of life forms their culture of living, and this
culture becomes their distinctiveness. Pakistan has a very unique mixed culture in which the
various cultures from different provinces combines together to form an amalgamation of ethics,
values, norms and beliefs which forms a very charming and attractive national culture of
Pakistan.
The people of Pakistan should stick to their own Pakistan culture and should always promote it
by being its brand ambassador so that the entire world show know and praise them due to their
exquisite culture of Pakistan.
Demographics include age structure of the population; gender; family size and composition; changing nature of
occupations etc. Some important social factors that affect Nishat Mills Limited are as:

Health consciousness
Population growth rate
Age distribution
Career attitudes
Emphasis on safety

Pakistan is facing all the problems mentioned above. The government has been unable to provide
the manufacturing sector with what it needs to flourish. International buyers are reluctant to do
business in Pakistan as orders placed in Pakistan are often delayed due to unavoidable
circumstances such as electricity shortages, gas shortages, and petroleum levy and sudden
increase in its prices. The high cost of doing business is because of intensive increase in the rate
of interest which has increased the problems of the industry.
The change in the lifestyle of the people affects the growing demand of the Nishat Mill Ltd
products. The change in the lifestyle and needs in different demographics also affect the demand
of the customers. Due to all these changes Nishat Mills Ltd is performing excellent for the
excellence organization as well as for the customer. As the lifestyle of people changes their needs change,
so Nishat Mills Ltd is there to fulfill their requirements regarding clothing admirably. Its products are available for
different age groups and gender.
Environmental factors include the weather and climate change. Changes in temperature can impact on many
industries including farming, tourism and insurance. With major climate changes occurring due to global warming
and with greater environmental awareness this external factor is becoming a significant issue for firms to consider.
The growing desire to protect the environment is having an impact on many industries and Nishat Mills Ltd is one
of them that are conscious about what is good for the environment.
General moves towards more environmental friendly products and processes are affecting demand patterns and
creating business opportunities. Pakistan is beautiful country where all four weather seasons emerge. So Nishat has
launched seasonal varieties to fit according to the weather. On the other side to save the environment from being
polluted it takes precautionary measures like it has set up a water treatment plant.
Better Living Standards Textile sector development helped in increasing the value of output per
worker. The income of the labor, due to higher productivity increased resulting in better living
standards of growing middle class.
Growth in textile sector enhanced social welfare in a multitude of ways. Better and greater
employment opportunities, meeting domestic needs, generating revenue and thereby positively
affecting public social spending etc. all lead to social welfare.

Growth in textile sector enhanced social welfare in a multitude of ways. Better and greater
employment opportunities, meeting domestic needs, generating revenue and there by positively
affecting public social spending etc. all lead to social welfare.

TECHNOLOGICAL FACTORS
In this era of advancement technology can help to touch the sky of success. Technology creates
new products and processes. It can also reduce the cost, improve quality and lead to innovation.
These developments can benefit the consumers as well as the organization.
Nishat is taking care of technological factors to be successful in todays tough competition.
Nishat has a very well developed research and development department and facility members
who are working very hard to develop new and improved methods to reduce the production time.
Nishat has made extension in its present setup by installation of well advanced technology
imported from Japan, China and France. Mostly processes are automated. Modern cost and
energy effective machines are taking place of workers and ultimately reducing the cost of
company. Internet development helps Nishat to reduce its advertisement cost and get quick
feedback from its customers.

GLOBLE CHALLANGES FOR NISHAT MILLS LTD

The industry is facing competition from other developing countries like Bangladesh, India and
China in its major export markets i.e. the EU and the USA. Also the current recession in the West
has resulted in a slowdown in demand for textile products. Due to all the other problems faced by
the Textile Industry, its production capacity and quality is getting low. So Pakistan is lagging
behind its competitors in the sphere of this international and regional competition. This is a huge
threat to the Textile Industry of Pakistan.
Global recession has badly affected the textile sector of Pakistan. This recession caused a very
high rate of inflation, which, in 2010, had increased to a whopping 25% as compared to a 7.9%
of 2008. What occurred afterwards is what we call the domino effect. The value of the Rupee
crashed.
The above all situation of the economy badly affected the textile industry. The demand for textile
product cut down locally & internationally as well. The export order reduced due to

unpredictable conditions of Pakistan & political instability. The cut down in the production of
textile cause further unemployment level which decrease the living standard of peoples.

CHALLENGE:
To get maximum benefit from quota free regime, all out efforts are needed to boost textile
exports and increase access to the international markets. To boost the exports, the State Bank of
Pakistan has introduced three facilitating schemes for the exporters namely, Foreign Currency
Export Financing Scheme (FCEFS), Political Risk Guarantee Scheme (PRGS) and the Export
Guarantee Scheme (EGS). The bank would provide 210 days credit facility to exporters for
South America as compared to 120 days credit facility to other market.
The textile industry of Pakistan plays an important role in earning foreign exchange, providing
employment to the country. But with the ending of quota system in world, Pakistan textile loses
share in world trade of textile products. Nishat textile products will have a big potential to
capture big share of world trade but there are lots of reasons which forces to step back from
using the full capacity of textile machinery to earn more and more foreign exchange for the
country. In Upcoming year, Pakistan textile exports Are 10-11 billion US dollars approximately.
Government of Pakistan is not serious in Resolving problems like shortage of electricity and gas
which forces the textile exporters Not to take orders because not fulfil the orders on time. With
these reasons import of Textile machinery declined year on year basis. With all these reasons
Nishat textile Owners use latest machinery which is more efficient and up to the mark with the
Competing countries. Although Nishat has very strong image in the market nationwide
financially and product wise but it has small market share in the global textile industry due to the
sound competitors likes china, and Bangladesh etc.

COMPETITVE FORCES OF NISHAT MILLS LTD

Nishat Mills Limited ("Nishat") is a public company incorporated in Pakistan and listed on all
three Pakistani stock exchanges. Nishat is engaged in textile manufacturing. Which involves
spinning, combing, weaving, bleaching, dyeing, and printing, stitching, buying, and selling of
textiles? They deal with yarn, linen, cloth and other goods including fabrics made from raw
cotton, synthetic fiber and cloth.
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

Crescen

Chenab

Arzoo

Alkarm

Sitara

Firdous

Kohinoor

Amtex
But main competitors of Nishat Mill are

Crescent Textile Mills

Chenab Textile

THREATS AND OPPERTUNITIES:

THREATS

New competitors
Nishat competitors are Crescen,t Chenab Arzoo, Alkarms, Sitara, Kohinoor, Amtex but
main competitors of Nishat Mill are" Crescent Textile Mills and" Chenab Textile"
Though we cannot avoid competition but we can always stay ahead of them by reforming
our strategies and educating our entrepreneurs so as to move one step forward in every

aspect.
Fashion life cycle
Fashion changes day by day these days. Media has so much penetrated in our daily lives
that we easily adapt ourselves as it wants us to. This has resulted in shortening the fashion
lifecycle thus increasing the fashion risk.
Now the buyer does not want to wait long for his consignment because he is insecure that
by the time it will reach to him he will lost its demand due to change in fashion.
Therefore, they prefer to buy from neighboring countries even at higher cost to get their
products instantly rather than to wait weeks or months for their consignments to reach

them.
Stiff competition from developing countries especially China and India.
Pricing pressure
Location disadvantage
International labor and environmental laws.

OPPERTUNITIES:

Organization can expand product lines. Currently the Nishat not dealing in knitwear they
can expand their product line by producing knitwear. They have plants and the extra cost

for the production will be low for Nishat. And they also have better market repute.
Organization can reduce the cost by proper utilization of resources. If the cost of different
matters which is not utilizing properly is controlled by the Nishat management they can
produce more in a few costs. It has to develop a further systematic process for controlling

and managing resources.

Organization can hire more well-educated and experienced person. They can take
advantages by hiring more skilled people and they should hire young, fresh and energetic

staff for their betterment.

Shift in domestic market to branded readymade garments.
Increased disposable income.
Emerging mall culture and retail expansion.

PORTERS 5 FORCES ANALYSIS OF NISHAT MILLS LTD

Michael porter an authority on competitive advantage contends that a
corporation is most concerned with the intensity of competition within its industry.

Bargaining power of suppliers

Bargaining power of customers
Rivalry among existing firms
Threat of new Entrants
Threat of substitute products

BARGAINING POWER OF SUPPLIERS

The bargaining power of suppliers in an industry tries to evaluate the scene of the supply market
of the textile and clothing industry. The main raw material of textile and clothing industry is
cotton. The textile industry in Pakistan achieves cost advantage in the segment of apparel as well
as home textiles with the help of unending supply of local staple cotton which have been
domestically produced. Further, Government and other policy makers have taken definitive steps
for improving the amount and quality of cotton yield for making sure that higher productivity
can

be

achieved.
BARGAINING POWER OF CUSTOMERS
The bargaining power of customers is also a threat for a firm operating in industry. The buyers affect

the profitability in such a way that he wants discounts and other services which might lower the margin
of profit for the company. The demand forces inside the industry can be evaluated with the help of

bargaining power which the buyers of the industry possess.

RIVALRY AMONG EXISTING FIRMS
The amount of rivalry within the competitors who already exist in the industry is highly
dependent on the following factors: the structure of competition, the structure of industry costs,
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strategic objectives, and degree of differentiation, entry and exit barriers, and switching
costs .Another threat for Nishat mills is the hyper competition i n industry. The firms currently in the
industry are also the threat for Nishat mills because their actions affect the profitability of the
Nishat mills .Suppose if one competitor reduces the prices so Nishat will also have to reduce
which in result will affect the profitability of company.
THREAT OF NEW ENTRANTS
This factor that is threat of new entrants helps in increasing the competitive nature inside the
industry to a greater level. On the other hand the threat is also instrumental in bringing increased
amount of capacity in the market. Threat of new Entrants For Nishat mills there has been a threat
of entering new firms, So to defend themselves from this threat they gain economies of scale
And the other barriers which Nishat mills create for entrants are; Product differentiation &
Switching cost.
THREAT OF SUBSTITUTE PRODUCTS
The factor of threat of substitutes is dependent upon several different factors. These factors are
the relative price and performance of substitutes, consumers interest in the substitute products
and the cost the consumers have to bear for switching to other substitutes The substitute product
means any product which satisfies the same needs. So substitute products in market are also a
major threat for Nishat mills.

LIST OF THREATS AND OPPERTUNITIES:

OPPERTUNITIES:
1.
2.
3.
4.
5.
6.
7.

Organization can expand product lines.

Organization can reduce the cost by proper utilization of resources.
Organization can hire more well-educated and experienced person.
Shift in domestic market to branded readymade garments.
Increased disposable income.
Emerging mall culture and retail expansion.
There would be a great opportunity of increase in exports if NML follow the international
standards and provide high quality products to the customers at competitive prices.

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8. NML should try to implement the latest ISO standards including ISO14000series, which
will improve their image and customer satisfaction in the local market as well as in
international market.
9. NML can explore the new markets for exports by giving the different incentives to its
employees in the export department, which will improve its profitability.
10. Nishat can introduce its garments in the local market by using the same stitching unit.
This is also a great opportunity.
THREATS:
1.
2.
3.
4.
5.
6.
7.
8.

Fashion life cycle.

Stiff competition from developing countries especially China and India.
Pricing pressure.
Location disadvantage.
International labor and environmental laws.
There is no consistency in the government policies regarding textile sector.
Incidents like September 11, 2001 attacks would also be a major threat.
Political conditions of the country affect both NML and its customers as well hesitate

before signing new contacts.

9. Increasing rate of electricity and GST are also big threats.
10. Currency fluctuations and exchange rates can also create problems for NML.
11. Government is focusing on the industrialization and is giving different incentives to the
investors. It is also a big threat because the number of competitors will increase.
12. More and more competitors (National and International) are entering in the same markets
and offering attractive prices to the customers.

EXTERNAL FACTOR EVALUATION MATRIX (EFE MATRIX)

KEY EXTERNAL FACTORS
OPPORTUNITIES

Weight

Rating

Weighted
score

Expansion of product line

.15

0.45

Implementation of ISO standards

.10

0.3

Exploration of new markets

.10

0.2

Concern for employees

.15

0.6

Proper utilization of resources

.10

0.4

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Shift to branded readymade garments

.05

0.1

International labor and environmental laws.

.05

0.15

Currency fluctuations and exchange rates

.08

0.32

Inconsistency of governmental polices

.08

0.24

Political condition of country

.05

0.15

competitors

.05

0.15

Increasing rate of electricity and GST

.04

0.08

Total

1.00

THREATS

3.14

COMPETITIVE PROFILE MATRIX (CPM)

CPM

NISHAT
MILL

GULL
AHMAD

FIRDOUS

Critical success factor

Weight

Rating

Score

Rating

Score

Rating

Advertisement

0.15

0.6

0.45

0.45

Product quality

0.10

0.3

0.3

0.2

Price competition

0.10

0.2

0.3

0.4

Management

0.10

0.4

0.3

0.2

Financial position

0.10

0.4

0.3

0.2

Customer loyalty

0.15

0.6

0.6

0.3

Technology

0.15

0.45

0.45

0.3

Global expansion

0.05

0.1

0.05

0.05

Market share

0.05

0.15

0.15

0.05

Goodwill

0.05

0.15

0.15

0.05

Total

1.00

3.35

13

3.05

Score

2.2

Note:
Rate 4 refers to most important and rate 1 refers to less important.

RESOURCE BASE VIEW

Its an internal analysis of Nishat textile its show the resources, competences, core competences,
competitive advantage of Nishat textile, and sustain position.
Resources of Nishat textile huge amount of investment in business, assets machinery, brand
name, employees, infrastructure, and better quality of material. Competences of Nishat textile
is the use of resources in appropriate and better way so they are not wasted. Core competences
of Nishat textile is advance machineries and technology, well-educated employees ,well
management system , better coordination with employees and management, feedback system,
better MIS system. Competitive advantage of Nishat textile is high quality and standard
products, strong security system, highly motivated workforce, customer loyalty with brand, ISO
9001-2000 implementation, well discipline culture and environment that enables Nishat textile to
compete with other competitors and achieve the competitive advantage. Sustain competitive
advantage of Nishat textile is its product according to the trends and fashion to win its
customer.

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