Submitted TO

Sir Jahangir

The University Of Lahore

Rehan Tasaddaq

Presented By

NAME

Auto Mobile Industry

PRODUCT

LOGO

Pak Suzuki

Competitive

“Drive for Better World”

SLOGAN

Vision

. 

 

Our vision is to be the country's best company for all our customers, shareholders, employees and the society.

Our vision is to offer the best product and services to our customers. To always exceed customer expectations resulting in customer delight.

Mission

• Our mission is to delight our customers, employees and shareholders relentlessly delivering the best product and services.

 

• Our mission is to provide high quality products that combine value for money and performance while establishing a successful relationship with customer and supplier.

 

• Our mission is to consistently try to meet or exceed customer expectations on pricing, services and choice.

In Pakistan almost everyone wants to have a car but because of financial problems they could not afford it, if someone buys it then they face a lot of problems during its use like high petrol prices, non availability of CNG. On the other hand many types of cars in Pakistan are the big cause of pollution specially the cars on CNG put a lot of pollution in the air.

As I mention in my vision that I select this business because I want to lunch economical and environmental friendly car (which is affordable and reduce the pollution as well).

Background

Under the provisions of the Companies Ordinance, 1984 a company is a body corporate with separate legal entity and a perpetual succession and a company may be formed by persons associating for any lawful purpose by subscribing their names to the Memorandum of Association and complying with other requirements for registration of a company under the provisions of the Ordinance.

Law in Pakistan

Machinery

S.No

Item Detail Quantity

Unit Price ($)

Total Price ($)

1 Lathe Machine 5 10,000 50,000 2 Forge Machine 2 120,000 240,000 3 Press Machine 3 100,000 300,000 4 Welder Plant 10 10,000 100,000 5 Grinder Machine 2 120,000 240,000 6 Boring Machine 4 22,000 88,000 7 Print Shop 3 24,000 72,000 8 Assembling machine 5 28000 140,000

1:http://www.alibaba.com/product-detail/Used-machine-tools-of-all-varieties_163596381.html

2:http://www.alibaba.com/product-detail/forging-press-machine-used-for-auto_1494068203.html

3:http://www.alibaba.com/product-detail/Y81F-2000-hydraulic-scrap-car-press_1625026324.html

4:http://www.alibaba.com/product-detail/Q35Y-Series-universal-us-shearing-machine_642164632.html

5:http://www.alibaba.com/product-detail/High-Speed-Reciprocating-Precision-Grinder-grinding_139638650.html

6:http://www.alibaba.com/product-detail/2014-Newly-better-quality-core-used_1685762468.html

7:http://www.alibaba.com/product-detail/RD456II-Japanese-Used-Four-Color-Offset_1303216540.html

8:http://www.alibaba.com/product-detail/H-beam-Automation-assembly-machine_558216118.html?s=p 

 

Corporate Strategy:

• Achieving profitable and sustainable sales operations

•Product and value chain enhancement

•Strong local manufacturing profitability

• Implementing workplace reform

 

Strategy

H/R Strategy:

•Health Facilities to employees

•Training and development program

•Send the right candidate for next round

Marketing Strategy:

•Create & capture new demand

•Serving several distinct market

Operational Strategy:•Minimize the cost

•Maximize the shareholder

wealth

•Provision of better quality

•Availability of product almost everywhere

PESTAL Analysis 

POLITICAL FACTORS:

• Aimed at promoting an integrated growth of the Pakistan's automotive industry.

• Instability

• Assist development of vehicles which work by alternate energy sources

• Income Tax:

Law concerning taxation of income in Pakistan is stated in the Income Tax Ordinance, 2001 (the Ordinance).The Ordinance is a Central statute and is, therefore, applicable to the whole of Pakistan .Under section 4 of the Ordinance, income tax is imposed for each tax year at specified rates on every person who has taxable income for the year.

Economic Factor:• Lack of transportation

infrastructure

• Wide Financing

• Mature Market

• Interest Rate (10%)

• Inflation Rate (8.04%)

• Exchange Rate (1UAD=99.65)

Social Factor:• upward migration in income levels.

• Small cars.

• Growth in urbanization.

• Population size (186,703,573) & growth rate is (1.94%)

• Seasonal change in life style

• Age Distribution: 0-14 years: 34% (male 33,774,720/female 31,967,787) 

• 15-24 years: 21.6% (male 21,560,699/female 20,223,691) 

• 25-54 years: 35.1% (male 35,272,193/female 32,587,417) 55-64 years: 5% (male 4,767,260/female 4,832,047) 

• 65 years and over: 4.3% (male 3,877,418/female 4,375,636) (2013 est.)

Technological Factor:•With the entry of global companies into the Pakistan market, advanced technologies, both in product and production processes have developed.

•Evolution of alternate fuels.

Environmental Factor:• Pakistan have different

weather and climate in a years. Change in temperature can impact on cars engine difficult to start when weather is cold and engine easy to overheat when weather is hot. Therefore I am going to develop specific engine in country due to weather and climate problem.

•Water pollution from raw sewage, industrial wastes, and agricultural runoff, limited natural fresh water resources, a majority of the population does not have access to potable water, deforestation, soil erosion.

Legal Factor:• Due to employment laws in Pakistan, employee

working hours and the wages. Working hours in Pak standard are 8 hours per day and minimum wages are RS. 10,000 to 12,000 per month. Due to this situation, company could be affected because of high wages in a company.

• Pakistan's government has proposed all the company workplace must be as safe as is reasonably practical. They cover issues such as training, reporting accidents and the appropriate of safety equipment to make sure employee are in safety situation.

• Employment Law: If you are working 8 hours/day, you are eligible for one-day holiday in a week. It can be either day in a week and can also be the day when your establishment is closed. But you need to remember that if you are made to work on your holiday; you can’t be made to work consecutively for 10 days without being given a compensatory holiday for full one day. Your weekly holidays are paid and your employer can’t deduct money for these holidays.

 

Portal Fire Force Analysis

Threat of new Entrants:

Pakistan's incredible growth forecasts, infrastructure progress (especially new and better roads), and ever-expanding financing options to rural residents, the market is attractive. As such, we expect the threat of new entrants to be high.

The bargaining power of buyers:

Buyers in Pakistan have a wide variety of choice. There are more than 20 foreign manufacturers selling in Pakistan. Of course bargaining power of customer will be high.

The threat of substitute products:

Pakistan is famous for its two-wheelers (bikes) and three wheelers. These are very real and obvious threats to auto manufacturers.

The amount of bargaining power suppliers:

It is likely that the suppliers to the manufacturers have considerable bargaining power. They are not held influence by one single manufacturer as they can market their products to any of the others in Pakistan.

The amount of rivalry among competitors: Is high. The industry is not yet in its shake-out phase and is still struggling to find the up-and-coming stars and possibly topple the leaders.

Organizational Iceberg:

Employer contract: (upper layer)

•work to fulfill organization task.

• Insert all of their abilities.

•Only have organizational interest.

•Work to maximize the profit margin of organization.

•Managing people and building working community.

• Influence the operating environment and managing change.

• Improving and monitoring efficiency and quality.

•Achieving results and steering the organization.

•Work within the rules and regulation

Employer Behavior: (Down Layer)

• After 3 months when actual attitude, communication pattern are studied then found that some serious conflicts.

•Required production are not found.

•Not reached at targeted sale.

• Profit margin is very low.

• Lack of Efficiency.

• Lack of quality.

As the owner of organization I want to found all of causes of the failure. After some inspection and via making comparison of upper and bottom layers organization I came to know that the employer do not work as the contracted (Conflict in bottom and upper layer), found the reasons that some of them want the failure of upper management to get dominating position in org. They externally show full concentration but internally have something different.

Decision:

After watch out all the matter I decide to fire all of those employers who involves to mislead the organization and appoint some other efficient and honest employers.

MINTZBERG ORG STRUCTURE 

Strategic Apex: BOD of my company decide to adopt

best material, labor and also decided to use electronic media for advertisement. Because this is the start of business that's way do not think to earn to much profit, concentration should be on best quality products on reasonable prices, aware the public about your product via best way of advertisement, public dealing should be best. This is the sensitive stage of business that's way don not try to take any sort of risky step which cause bad perception in the mind of people.

Middle Line: Middle line work as communication

medium b/w strategic apex and operating core.

The strategic staff communicate to middle line managers that in production department best quality material should be use with all of labor expertise, sale department should be enough efficient to timely availability of product in all referred markets.

If Sale department face any sort of problem to approach any specific market the problem are communicate to upper management via middle line.

Operational Core: Processing stage of all of the planning

made by upper stage. Need to produce the car with best use of material and expertise, adopt the best way for distribution as communication made by middle line.

If any problem faced by any of department relate to upper staff then it is the duty of related manager or supervisor to share with middle line to approach upper management.

Support Staff:I also want to hair some of staff as

support staff to make my organization self contained in some of field like legal counsel, industrial relation, cafeteria etc.

Technostructure: I also hair some members

who's duty to aware the org with latest technology, also specify the job of middle line and operating core. They analyze the budget and also give expert opinion.

SPAN OF CONTROL

Tall or Flat Business: Now my start of

business that's way I decided to adopt flat business (Business B) because my business is not to wide and I also want to get aware from day to day matters with no interval.

SWOT ANALYSIS 

Strengths Low cast and cheap labor. Rise in working and

middle class income Increasing demand for

European quality Expert skill in producing

small cars Large pool of engineers

Weaknesses Low quality as compare to

another automotive countries

Low labor productivity High interest rate and

overhead level Production cost are

generally higher as compare to other Asian states, such as China

Local demand is still towards low cost vehicles due to low income level

Opportunities Growing population in

country Focus from the

government in improving the road infrastructure

Better car technology is demanded

Rising rural demand The car is a status symbol

Threats Less skilled labor Lack of technologies for Pakistani

company Increasing in import tariff and

technology cost Increased congestion in the

urban areas External changes (government,

politics, taxes, etc.)

• BCG matrix has two dimensions market share and market growth.The basic idea behind it is if a product has biggest market share, or if the products market grows faster. It is better of the company.

• The four segment of BCG matrix: -

STAR, high growth and high market

Share.

CASH COW, low growth and high

Market share

DOG, low growth and low market share

QUESTION MARK, high growth

And low market share.

BCG MATRIX

STAR:No investment or very lowLow expensesHigh sale volumeProduct self advertise

QUESTION MARK:High investmentAdvertisementWhat is the productGeneration is revenue is starts

CASH COW:No marketing activityMaturity stage of productReshape the product or shut down

DOG:Distribution of product in every marketAdvertisement is not hereMarket growth is lowExpenses highRevenue low

4Ps

Product:A new model car with verity of colors.

 

Price: Price is varying in order to vehicle color and grade. The price of all cars fall near between RS: 0.8 million to 1 million.

 

Promotion: My high concentration on electronic media for promotion but I also decide to adopt printed and social media.

 

Place: Firstly I decide to launch the car in big cities (Islamabad, Karachi, Lahore, Peshawar, Quetta).

 

Risk: I decided to launch 50 cars each of every color in particular cities. It is a risk for me to launch such a huge quantity but it is necessary to create good impression in minds and timely availability to interested people.

RISK MANAGEMENT

Managementidentify:

Heavy delivery may cause the difference b/w demand and supply which my results decease in price.

Assess:

Low demand may harm my product badly that's way need to take some steps to get aware from all of the benefits of my product.

Treat/Avoid:

Now I aware from the risk and its reactions. After taking views from advisors I decided to treat (launch the decided quantity) the risk.

Review:

I have a lot of other threats which force me to review my decision like terrorism, downward movement in income level, brand oriented society etc but I do not like to review because risk is a one step further towards success.

 

 Elastic or inelastic demand:

ELASTICITY

Benefits or Threats:Firms can be at a disadvantage if they do not know if

their demand is elastic or inelastic.  If demand is inelastic, a firm should raise prices.  If it is elastic, the firm should lower prices.  If the firm does not know which thing to do, it can lose money.  Thus, a poor understanding of price elasticity of demand (and not the concept itself) can be a disadvantage to companies.

 

Assessment:I assess that the demand of cars is inelastic because car

is a luxury item and the people who can buy car conscious about prices but not too much.

Performance Management & Working Capital

Ratio Name Target ReasonCurrent ratio

2:1

Generally 2:1 is ideal for most of businesses, In my business 2:1 is also prefect because the stock (inventory) of my company is not easily convertible into cash that’s way I enough resources to meet my obligations in time which is possible with 2:1 current ratio.

Quick ratio 1:1 If I consider 2:1 current ratio prefect for me the because of the reason (inventory of my org is not easily convertible in to cash )then 1:1 quick ratio is prefect for me because I think in current assets of my org except inventory have enough potential to get rid from debts in time.

Receivable ratio 12 Times 12 times; debt payment period of 30 days is considered ideal.

Very less creditors’ turnover ratio or a high debt payment period may indicate the firm’s inability in meeting its obligation in time.

 payable ratio 10 times The average collection period represents the average

number of days for which a firm has to wait before its receivables are converted into cash, 10 times is prefect for me.

 Leverage ratio(Debt+ Equity)

40-50%

To low or to high leverage are both not beneficial for org

For manufacturing org 40 to 50% are prefect.

ANY QUESTION