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1 1.1 1.2 2.1 2.2 2.3 2.4 2.5 3 3.1 3.2 3.4 4.0 4.1 4,2 4.3 5.0 5.0.1 INTRODUCTION Nishat Group Company vision Major competitors Industry evolution Strategy followed Human Resources and Corporation culture Strategies formulated Industry structure Corporate strategy Strategies adopted for Marketing Human resource and Finance Strategy implementation Organizational structure Matching manager to strategy Quality Control EVALUATION AND CONTROL Design control Swot Analysis & Pest Analysis Porter Five forces model for Nishat mills ltd Conclusion Recommendation References
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1.
Introduction
The Textile Industry: Over the years, Pakistan is said to be the single crop economy i.e. cotton and textile that claims the lion's share in terms of the contribution in the national economy of Pakistan. Despite efforts to bring in diversification in country's overall economic get-up the textile sector continues to be the most important segment of the national economy. Its share in the economy, in terms of GDP, exports, employment, foreign exchange earnings, investment and revenue generation altogether placed the textile industry as the single largest determinant of the economic growth of the country. Despite harsh and hard international economic conditions, Pakistan's textile industry has weathered the storm by coming out of the international crisis in a very positive manner. During the year exports were controlled from falling and significant investment was made in value-added expansion and in Balancing-Modernization- Replacement (BMR). Besides fall out of the events of September 11, the implementation of WTO's agreement, various bilateral agreements have been signed and implemented. As a result global scenario has changed. Government and the corporate textile sector adjusted their policies to achieve maximum benefits of free trade. So, Nishat Mills Limited
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local structure of the corporate culture, investment pattern and fiscal and monetary policies were significantly changed.
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 2-textile division: 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.
2.1
Vision
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 sustain able basis in the economy of Pakistan. To transform the company into a modern and dynamic power generating company with highly professionals and fully equipped to play a meaningful role on sustainable basis in the economy of Pakistan.
Mission 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 and equitable growth and prosperity of the company. Quality Policy
We work together as a team for implementation and continual improvement of total quality system in order to achieve satisfaction of our internal and external customers
2.2
Major competitors
Nishat competitors are Crescent Chenab Arzoo Alkarms Sitara Kohinoor Amtex But main competitors of Nishat Mill are Crescent Textile Mills Chenab Textile Nishat Textile Limited has seven spinning units situated in Faisalabad. These units are equipped with the latest machines in all of their departments. In the spinning Nishat Mills Limited
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units the fiber is converted into yarn, and as this the quality of yarn is very important in the textile sector so spinning units have a lot of importance. Spinning Weaving Grey Room PROCESSING Singeing Desizing Scouring Bleaching Printing Dyeing Finishing Folding
2.3
Industry Evolution
The Industry in which Nishat mill is operating is an consolidated industry which is dominated by few large firms as mentioned above . Strategic groups Its a set of business unit or firms that pursue similar strategies with similar resources. Categorizing firms in any one industry into a set of strategic group is very useful as a way to better understanding the competitive environment. So in textile industry the Nishat mill and chenab textile is a strategic group because they, to some extent pursue the same strategies for marketing, and act as a prospectors due to broad product line and they focus on product innovation and market opportunities. Competitive intelligence Its a formal program of gathering information about the competitors. However the situation is changing so the fastest growing 10 Nishat Mills Limited
intelligence system is necessary for every firm. The intelligence system of Nishat mills is the reverse engineering process, Industrial espionage. Forecasting Technique The forecasting technique used by firm are Brain storming in which the people sits and share knowledge about what is happening in the industry. Expert opinion is another technique used in which the experts are called from other firms or they may be the ex-managers of the same company and their opinion is taken about coming trends in industry.
2.4Strategy Followed
The strategy followed currently is Differentiation Strategy A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. The value added by the uniqueness of the product may allow the firm to charge a premium price for it. The firm hopes that the higher price will more than cover the extra costs incurred in offering the unique product. Because of the product's unique attributes, if suppliers increase their prices the firm may be able to pass along the costs to its customers who cannot find substitute products easily. The benefit of this strategy for Nishat mills are Nishat Mills Limited
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Access to leading scientific research. Highly skilled and creative product development team. Strong sales team with the ability to successfully communicate the perceived strengths of the product. Corporate reputation for quality and innovation.
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Lowest Employee Turnover. Seeks to fulfill the highest practical degree in administering its welfare and compensation program. Apprenticeship and other training schemes at all levels. It is our company policy to adopt measures to achieve the following objectives: To obtain, manage, develop, motivate and gain the commitment of company's key resource- the people who work in and for it. To develop a positive corporate culture to promote commitment to excellence and quality through out the company. To identify training needs and provide required training to all categories of employees. To make best use of the skills and abilities of all those employed in the organization. To ensure that the company meets its social and legal responsibilities towards its employees, with particular Nishat Mills Limited
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regard to the conditions of employment, quality of working life provided for them and the need to promote environment, occupational health and safety. To ensure industrial peace and harmony through excellent employee relations to achieve optimum level of employee, productivity and to contribute towards company's aimed quality standards.
Their resources has been identified and classified in terms of strength and weaknesses.
Their corporate capabilities are much more but those which gives it a competitive advantage over competitor are High quality product and Latest mechanized machinery.
The strategy they are using is differentiation and product development strategy by taking full advantage of its key resources
3. Strategies Formulated
The strategy formulated by Nishat mills are focus strategy ,First they were focusing on a narrow segment of cotton only but now they are not only focusing but also looking to broader segment and pursuing a differentiation strategy to differentiate their selves from other competitors.
3.1Industry structure
The industry in which nishatll mills is operating is consolidated industry in which there are few giants companies like sitara ,Chenab etcc. The tactic they use as an offensive tactic is Frontal Assault which mean head to head with its competitors because they have superior resources and willingness to persevere.
Vertical integration Horizontal integration Backward integration In growth strategies the have been growing Backward by moving on value chain and becoming supplier their selves. Horizontal integration by Nishat mills is in such a way that they are expanding their product line and as well as distributing to more geographical locations. Being involved in a forward integration they are their selves the distributor of their goods manufactured. Mostly they are involved in Taper integration which the firm produces less then half of its own requirement and buys the rest from outside suppliers
In recession times the strategies followed by Nishat mills were: 3.3Stability Strategies
The strategy in which the company stops growing and concentrates or waits for any change in environment.
Pause/proceed with caution A company initiate a change only if there is a change in the external environment of company or industry. So nishat mills follows this stratregy in sense that they innovate there offering only if their competitor intend to do so. Nishat Mills Limited
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No change strategy A company doesnt change its strategy because of the following reason. The company is either in ok position. They dont have many resources. There is no hyper competition. The strategy they are following is profitable. Profit strategy This strategy is followed by Nishat mills when there firm sale is not normal or you can say declining so what they do is that they try to minimize there cost like advertisingcost,Expenses,R&Dexpenses,But mostly they reduce there expenses for shorter period of time because in long run they may suffer losses.
send his requi4eddesigns are very complex and involved different color shades. Then export manager prepares strike off program and issues it to the different departments. Rotary sampling machine (Austrian made j-zimmer) which can provide12 meters fresh strike offs according to the requirements is used .This strike off is carefully examined before sending it the customer for approval.
professionals and have a young , energetic and dedicated team of professionals who have a lot of knowledge to their credit. Managers are responsible for the task assigned to them in their departments and also have to match whether their respective department is achieving the desired efficiency level or not. There are at least three basic requirements for a successful company and the managers of Nishat Mill Limited are made to think on these lines: 1. It must provide a product (good or service) that suits best to the companys capabilities and for which there is a sufficient market.
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2.
level that appeals to intended customers and satisfy their needs. 3. It must provide a product at a cost that always an adequate profit and a reasonable sale price
3.4.1Training Programs
Training programs should be there to upgrade the skills of employees.On the job training programs should be provided so that workers get knowledge about work Financial overview OVERVIEW (December 22 2009): Nishat Mills Limited (NML) is the largest textile composite unit of Pakistan. It is engaged in the business of textile manufacturing, spinning, combing, weaving, bleaching, dyeing, printing, stitching, buying, selling and dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic fibre and cloth, and to generate, accumulate, distribute and supply electricity. Its shares are listed on all the three stock exchanges of the country. Its manufacturing facilities are located at five different locations in three districts of Punjab. From the foregoing it can be seen that it is a gigantic and wider diversified unit and its textile processing functions are fully integrated with information technology as business processing is dependent on timely providing information and data. At NML, the management has built comprehensive Nishat Mills Limited
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information systems for all the locations of the company providing relevant information accurately to ensure thoroughness in decisionmaking and managing company s resources. For reliable and cheaper power, Nishat has installed its power generation plants. These are cutting-edge technology, highly efficient reciprocating engines and gas turbine generators, which besides generating power are supplying steam and air conditioning, being produced using socalled waste heat to the production units. In fact, Nishat Mills is the trendsetter in this type of power generation in the country. On the marketing side it has entrenched customer bases in Hong Kong and Europe and during the past few years, it set its goal to achieve greater market share in Central American, Spanish, French and Portuguese markets which it managed to achieve
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4.0Strategy Implementation
In implementing a strategy the willingness of people and structure of organization must be in accordance to implementation of a new strategy. So talking in context of Nishat mills the implementation of strategy depend almost on structure of organization because the structure follows strategy
4.1Organizational Structure
The structure of Nishat mills is Divisional structure managing diverse product lines in numerous industries. It decentralizes decision making authority. This organization grow more by diversifying their product line and expanding to cover wider geographical areas.
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4.3
Quality control
As the productions starts, the duties of the
merchandisers increase. They not only have to visit the designing department to ensure that the work is being done on the designs, the design are made according to the requirement of the customer, screens are sent to the printing department on time etc.They also see that fabrics are being bleached according to the requirement of the dying and printing. If the fabric goes for dyeing they should be very careful about color matching in the printing department. They have to mange the printing on time. They also have to give the guidelines to the production department employees. They have to remain in close contact with the quality control department in each and Nishat Mills Limited
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every stage. The merchandiser also ensures that the fabric has been reached in the finishing department on the time and that the finishing is done according to the customer specification (e.g. water repellent, oil repellent, and fire retardant).
5.
Evaluation and control of procedures designs and finance is being held by an internal employee ,some of the control procedure are as follow. 5.1 DESIGN CONTROL
Design and Development Planning For designing of products, there should be specific arrangements. Department of design planning should be established, if the enterprise want to achieve quality certificate like ISO 9001 and ISO 9002. Design review
Design should be reviewed once made by the firms. This design should have some characteristics that should be in accordance with the business practices. Verify Validity Of Design Once design is complete, the competent authority should verify it. Nishat Mills Limited
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Customer Data Control It is the perquisite for ISO 9001 that proper customer data should be there. This is to provide customers list if required by the top management.
Control of Customer Supply Product There should be proper control over customers products. Product Identification and Traceability Product should be clearly identified and traceable. It should that have it some from characteristics distinguish
others. It should not be similar with other products in terms of its name, logo etc. Inspection There should be proper inspection of stores so that every thing functions according to manners prescribed by certificates. Corrective and Preventing Measures There should be check and balances. If the mistakes are made, there should be proper systems so that they are identified and corrected. Preventing methods should be there. Nishat Mills Limited Internal Audit There should be strong internal audit. So all discrepancies should be Nishat Mills Limited
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disclosed. In order to get ISO 9001 there should be separate internal audit department. Training Programs Training programs should be there to upgrade the skills of employees. On the job training programs should be provided so that workers get knowledge about work. Statistical Techniques Various statistical tools are required to better controls the affairs of organization. They should be available to achieve quality awards. Uses of information technology, automation of factory, Internet and computer technology are prominent features in achieving ISO 9001 and ISO 900
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SWOT Analysis
Strengths:
The major strength of Nishat is its location. The plant is which is renowned in the world for situated in Faisalabad textile production. Nishat is using the best machinery available in the market in its all the Nishat Mills Limited
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Department, which helps Nishat to produce the world class products to meet the needs of the customers. As Nishat is a part of large industrial group, so it has no raw materials from the market need to search out the high quality yarn. Nishat management provides an excellent working environment to its Employees, which motivate them to work more effectively and efficiently. Nishat has strength to produce the quality products at Nishat is an ISO certified company, which produce a the lowest possible prices as compare to their competitors. sense of satisfaction to its customers.Nishat also follow the ISO Standards. Quality control department equipped with most modern machines is also a big Strength of Nishat, which ensures the quality at every stage of production. As a result the wastage is very minimal as compare to competitors. Adequate financial resources are also strength of worth about us4.5$ Billion. and competent Nishat has highly educated Nishat. Nishat has the assets of
even during the peak season. For example, they can produce
management and skilled labour which contributed to the success of Nishat. Nishat focuses on the chain stores and other big rather than focusing Nishat Mills Limited on the small
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customers
customers.Nishat also focus on the long lasting relations with the customers. For these reasons its customers are very loyal. Nishat has a good reputation and image in the local as well as in the International market, which is also a major strength of Nishat.
Weaknesses
NML is purely following the centralized management management has a burden of style, due to which
decisions, which ultimately takes too much time. As most of the machinery is imported from other few spare parts are not countries therefore sometimes
available in the market which creates problems. Although NML pays very high salaries to the top attractive salaries to the moral management, it is not offering of the employees is decreasing. Due to low salaries the rate of turnout is very high the organization. NML is paying at the normal always The rate of overtime payment to the employees is not which hinders the growth of comparable with market. high in all the organizations.
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Due to centralized management there is n o delegation which also hinder motivation of the
OPPORTUNITIES:
When the WTO will be implemented, there would be a increase in exports if NMLl follow the great opportunity of
international standards and provide high quality products to the customers at competitive prices NML should try to implement the latest ISOstandardsincludingISO14000 well as in international market. NML can explore the new markets for exports by giving to its employees in the export the different incentives series, which will improve
department, which will improve its profitability. There is a lot of potential in the local market for NiCads products because people believe that Nishat products are always of high quality. So NML should also focus on local market. Nishat can introduce its garments in the local market by using the same Stitching unit. This is also a great opportunity. Nishat Mills Limited
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Threats:
WTO implementation is a good opportunity but it is also a big threat at the same time it STI fails to provide good quality and competitive prices to its customers.
There is no consistency in the government policies textile major sector. threat. Incidents like September 11, 2001 attacks would also be Political conditions of the country affect both NML and
regarding
On other hand its customers also hesitate before signing new contacts. Increasing rate of electricity and GST are also big Currency fluctuations and exchange rates can also problems for NML. threats. create
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giving different Incentives to the investors. It is also a big threat because the number of Competitors will increase. More and more competitors (National and International) are entering in the same markets and offering attractive pric4es to the customer
PEST Analysis
Political Instability. The political situation of Pakistan is not satisfactory. Due to the rapid change in the Government every government sets its own new trade policies. Govt. should apply sustainable policies for the beneficial of the exporters as well as the investors. Economic situation:
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The economic condition of Pakistan can also affect the foreign investors increasing inflation rate make the cost of production high and thus reduce the profit margin of the investor. Social situation: The change in the lifestyle of the people affects the growing demand of the NTM products. The change in the lifestyle and needs in different demographics also affect the demand of the customers. Due to all these changes NTM is performing excellent for the excellence organization as well as for the customer.
Technological factor: Technological advancement in all the sectors of the country has changed the entire socio-economic environment. Especially in the textile sector there is a lot of technological development. NTM Excellent computerized machines and devices are installed in the NTM \has made extension in its present setup by installation of well advanced technology imported from Japan China and France.
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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 Rivalry among existing firms Another threat for nishat mills is the hyper competition in 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 reduce the prices so nishat will also have to reduce whuch in result will effect the profitability of company.
Bargaining power of suppliers The bargaining power of supplier also effect Nishat mills profitability in such a way that if supplier increase their prices of raw material so definitely the cost will go up as well . Bargaining power of Buyers The bargaining power of buyers is also a threat for a firm operating in industry. The buyer effect the profitability ion such away that he wants discounts and other services which might lower the margin of profit for the company. Threat of substitute products Nishat Mills Limited
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The substitute product means any product which satisfies the same needs. So substitute products in market are also a major threat for Nishat mills.
Conclusion Nishat Mills Limited is one of the leading groups in Pakistan. The
system, the management style, the policies & decentralized decision making environment is really remarkable. This report is basically an attempt to identify the areas which need to be improved. In this era of technology, the Information is the key to success in the business. This means that the successful businessman will be who will have the right information at the right time. This comment leads to the conclusion that the Information Sharing Process should really be improved.
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The overall analysis is indicating that the companys progress has mainly attained through dedication of employees. The effectiveness of its management, their willingness to take advantage of opportunities and face challenges of changing economic picture, this all contributes to the very much improved and sound position of company. This is really appreciable for the devotion and hard work of all the employees of the company
Recommendations Recommendations for Improvements are: At present facility of bonus is given only to production staff but such incentives should also be given to Head office Staff. Special incentives should also be given to Head on Eid and on other special days should be given to the workers. Medical facilities are given in mill but such facilities should also be given to management. Different training courses should be arranged for the up lifting and improving the quality of work for employees Nishat Mills Limited
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They provide transportation facility to only female employees I think male should also be provided with conveyance convenience. This will create the easiness for workers and reduce the wastage of time. There is also a problem of work overload for the employees and it should be control properly so that the employees are motivated. Employees should be paid extra for the work which they done after working hours.
References
Book: Strategic management and policy Author: Thomas L.Wheelen/ J. David Hunger Strategic management by Fred R.David
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