ASSIGNMENT

OF
STRATEGIC BUSINESS
MANAGEMENT

SWOT ANALYSIS OF UTILITY STORES

CORPORATION OF PAKISTAN

Submitted by:

MAHMOOD UR RAHMAN KAZI

MS (Management Sciences)
2nd Semester

Submitted to:
MR. FAKHR –E-ALAM

ABASYN UNIVERSITY, PESHAWAR

 UTILITY STORES CORPORATION OF
PAKISTAN

Utility Stores Corporation of Pakistan (USCP) is a government owned organisation under

Ministry of Industries and Production. The purpose of establishing this organization was to
provide basic food and non food items to the poor on prices lower than that prevailing in the
market.

Brief History:
In order to provide economic relief to the poor class of the society, the Government of Pakistan
established the Utility Stores Corporation of Pakistan in July 1971 and placed it under the control
of Ministry of Industries and Production.

USCP started its operations by taking over 20 stores from the Staff Welfare Organisation of
Establishment Division. It gradually increased the number of stores and now it has
approximately 6000 stores all over the country (divided into 62 regions).

Mission:
The USC is committed to provide clean, graded, hygienically fit, unadulterated genuine food and
non-food items to the public and especially to the poorer segments of the society, at
comparatively cheaper rates than the market and to offer them a pleasant environment of mutual
confidence while making their purchases. It is also committed towards its obligation to provide
economic relief to the public by playing its role as a price moderator and deterrent to
profiteering, hoarding and black-marketing.

Objectives:
The basic objective of the USC is to provide essential and other items of daily use to the public,
specially the poorer segments of the society, at prices comparatively lower than the market. It is,
therefore, required to act as a price moderator and deterrent to profiteering, hoarding and black
marketing, thereby to provide economic relief to the public.

Functions:
Major functions of the USC are to provide variety of goods to consumer on lower prices. Bulk /
centralized purchases from TCP and other suppliers. Provision of essential food items to the
needy people at reduce price at the time of crises through subsidized sales. Execute government
relief package e.g. Ramzan Package.

PROVINCE WISE NO. OF STORES

(As on 20.09.2008)

S.No. Name of Province Number of Stores

1. Punjab 3207
2. Sind 907
3. N.W.F.P. 1126
4. Balochistan 267
5. Azad Kashmir 108
6. Gilgat Baltistan 96
Total 5711

SWOT Analysis of Utility Stores Corporation of Pakistan.

STRENGTHS:
The Utility Stores Corporation enjoys following strengths.

1. Social Image:-
Unlike the other stores of its kind, the sole purpose of the
establishment / existence of Utility Stores Corporation is not profit earning, rather, its aim is to
provide basic / essential commodities to the poor people of Pakistan on low price as compare to
open market. It works as deterrent to profiteering.

2. Highest Number of Stores:-

Utility Stores Corporation is the only chain of stores
having branches all over the country. It has almost 6000 stores across the country.

3. Large Range of Commodities:-

It has a large range of commodities, Flour, Rice,
Pulses, Beans, Sugar, Detergents, Soap, Edible Oil / Ghee are to mention a few.

4. Difference of prices with open market:-

As it has been established with an
aim to serve the people and not to earn profit, therefore, there is a great difference between the
prices of different commodities at Utility Stores and open market. This difference ranges from 1
% to above 25 %.

5. Economy of Scales:-
Utility Stores Corporation is practicing economy of scales.
The turnover of different products is so high that it can earn reasonable profit even if the per unit
profit is very low.

6. Proper Distribution Channels:-

 Utility Stores Corporation has established a
proper distribution channels. The goods are purchased directly by headquarter. These goods are
then transported to the regional warehouses via company owned trucks. In this way, it can
provide basic commodities to the people well in time.

7. Relief to the Poor:-

Utility Stores provide all essential commodities on
comparatively low price and in this way provide relief to the poor people.

8. Role in Crises:-
It plays an important role in crises. Whenever, there is a shortage
of any commodity, it intervenes and provides that commodity on subsidised rates. In this way, it
eases out the situation.

9. Special Packages:-
It often offers special packages (e.g. Ramzan Package, Eid
Package etc.). In this way it provides special relief to the poor and needy people of society.

WEAKNESSES:-
Besides the above mentioned strengths, it has following weaknesses.

1. Bureaucratic Channels:-
Being a government organisation, it is a victim of bureaucratic
channels. The decision making process is very lengthy and often couldn’t provide the relief to
the people well in time.

2. Malpractices:-
 Like other government organisations, there are many black sheep
in Utility Stores Corporation. We often hear about awarding the tender to the apple of one’s eyes
at higher prices.

3. Lack of Enthusiasm:-
As it is a government organisation, its staff members are
government employees. They often lack enthusiasm, interest and dedication to work.

4. Poor Cleanliness:-
As the staff does not take interest in their job, therefore, the
condition of cleanliness in and around majority of its stores is not satisfactory.

5. Improper Storage:-
The warehouses are unhygienic and cleanliness condition
of these warehouses is not very good.

6. Low Quality of Products:-

Majority products being offered are of poor quality
as strategy of the Utility Stores Corporation is the attract customers by low pricing. In the wake
of low price it often compromise on quality of the products.

7. Covering Small Segment of Society:-

It has about only 6000 stores in the
country. Many rural areas do not have this facility and the people of remote areas are compelled
to purchase their required commodities from the open market as there is no utility stores outlet
available in the vicinity.

8. Improper Placement:-
 Majority of the staff is not trained. This has affected their
performance and the placement of different commodities is not good. Some basic commodities
were placed above or below the direct eye level. Instead such items should be placed at par with
eye level.

9. Quantity Restricted Purchase:-

In crises situation, it deals in quantity
restricted purchase. For example in recent sugar crises, one person was allowed to purchase 2.5
kg sugar only and was not allowed to purchase more.

10. Forced Purchase:-

In crises situation, it forces the buyers to purchase the items
which they might not need. For example in recent sugar crises, the buyer was forced to purchase
certain amount of pulses or soap if he/she wants to purchase sugar.

OPPORTUNITIES:-
Exploring the following opportunities can help the Utility Stores
Corporation to increase its market share and increase profit as a result.

1. Exploring New Locations:-

It has the opportunity to explore new locations. The
number of outlets in rural areas is very low. It should establish new outlets in rural / far flung
area of the country. It has already started working on this idea by opening franchises, but this
operation needs to be enhanced.

2. Start Dealing in Non Food Items:-

It has the opportunity to start dealing in non-
food items. This field has been ignored by the organisation. Exploring this field will increase
the profit.
THREATS:
 Following are the threats being faced by the Utility Stores Corporation.

1. Security Hazard:-
In the present hazardous security situation in the country, the
Utility Stores faces the security threats. Nowadays, we can see the hundreds of people standing
outside the Utility Stores outlet with a hope of getting scare goods at subsidised rates.

2. Sudden Change in Policies:-

A sudden change in policies pertaining to Utility
Stores Corporation by the government is a continuous threat to the utility stores corporation.
Few days back the government made it necessary to produce ID card for purchase of sugar from
Utility Store. This type of sudden change in policies shatters the customers’ impression and they
hesitate from purchasing required commodities from Utility Stores.