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SERVIS SHOES PAKISTAN

Starting its journey as a single retail footwear outlet, the brand today has a 400+stores presence in Pakistan, 2000+ dealer-base, and a growing internationalfootprint in Europe, Middle East, and many other regions of the world.

At the heart of all our endeavors lies the spirit of our countrymen. Servis and itsroots are grounded firmly in Pakistan and its people. We understand their needs,their lives and their dreams. Sharing in their moments both big and small, Servis

has been their companion in happiness for over 50 years. And with our

commitment to constant innovation and uncompromising quality, we endeavor todelight our customers with the very best products and services.

Three generations connected through the thread that is happiness; the journeycontinues on the road to feel good.

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The story of Servis begins with a group of friends - young, energetic, fresh from college whoestablished Service Industries more than 50 years ago..

These young men, named Ch. Nazar Muhammad (Late), Ch. Muhammad Hussain (Late) both fromGujrat district and Ch. Muhammad Saeed (Late) from Gujranwala District, started business in 1941 ata small scale in Lahore. At that time, they were only manufacturing handbags and some other sports

goods. Within years their business flourished remarkably and they were supplying their products toevery corner of India at the time of Partition.

In 1954, they installed a shoe manufacturing plant at industrial area Gulberg, Lahore. This startedproduction in the same year. The industry started manufacturing various types of shoes. Later

management shifted the factory from Lahore to Gujrat. Service Sales Corporation (Pvt.) Ltd. theGroups marketing company was established in 1959. Humility, fairness, and respect were the values

close to the heart of these founders and it were these values that led to phenomenal success of theGroup over the years.

Today, the production side of the company has flourished into Service Industries Limited (SIL) whichhas world-class shoes, tyres, tubes, and rubber production facilities in Gujrat and Muridke. SIL is also

the leading exporter of footwear. Service Sales Corporation (Pvt.) Ltd. (SSC) is today Pakistansleading footwear retailer which is also diversifying into other businesses.

A humble venture of friends has grown into a Group that makes a difference in lives of millions ofpeople every day today.

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Founder

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Servis Group is one of the most respected corporatecitizens of the country and has a rich heritage spanning

over half a century.

Today the Group is Pakistan's largest footwearmanufacturer and exporter with interests in wholesale and

retail sectors. With a growing portfolio of brands and anationwide network that touches millions of lives

everyday, Servis is one of the foremost brands in the

country.

Setup in 1958, the Group is the largest footwearmanufacturer, retailer, and exporter operating in the

country and has overall sales of more than PKR 12 billion.

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Service Industries Limited (SIL) is a public limitedcompany listed on the stock exchanges of Pakistan. It hasannual revenues of about PKR 6 billion and is the largest

manufacturer of footwear, tyres & tubes for two-wheelers,and has been the largest footwear exporter of the country

for the last 10 years.

The company employs more than 6,000 people in itsfacilities located in Gujrat and Muridke and exports its

products primarily to Germany, Italy, France and the UK.With a strong emphasis on product quality and innovation,SIL has built both domestic and international recognition

of companys products.

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The visionary leadership and hardworkingmanagement team has led SIL to hold this topposition in the business arena. The board comprises:

Mr. Arif Saeed, Chairman Mr. Shahid Hussain, Chief Executive Mr. M. Ijaz Butt, Director Mr. Muhammad Akram, Director

Mr. Hassan Javed, Director Mr. Shahid Hafeez Kardar, Director Mr. Riaz Ahmed, Director Mr. Zahid Hussain, (Rep. of NIT) Mr. Anis Wahab Zuberi, (Rep. of NIT)

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Don CarlosCheeta

Liza

CalzaSkooz

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Quality construction withnew, stylish and uniquedesigns will put you in thespotlight everywhere you go.

Now with the all new DonCarlos range and its family ofbrands you can explore newflavors of your personality.

So this time we invite you tostep into a brand new

experience with Don Carloswhere: Style meets comfort Contemporary meets

timelessness Fashion meets grace

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CHEETAH

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When it comes to everydayliving for the modernwoman, LIZA is the ladiesshoe that stands apart fromthe rest. Featuring trendydesigns and go-anywherecomfort, every step is a steptowards life with LIZA.Easy to maintain leatherupperDirect attach PU outsole fordurability and flexibilityBlend of fashion with

comfortStay smart stay stylish

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The unique style and amazing comfort of CALZA have made it Pakistansmost favorite slipper. Designed to keep you light and carefree whereveryou go, CALZA is perfect all-day casual footwear and ensures comfort ineach and every step.

Easy to maintain leather upperDirect attach PU outsole for durability and flexibilityBalance of traditional and modern styling

Stay smart enjoy your day

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Strengths

Brand Image

Reasonable quality at low or reasonableprice

Diversity with ranges in running, training,court, basketball, football and Outdoor

Footwear for the entire family

Financially Strong

Conveniently accessible outlets in variousparts of the country

Targeting all income segments

Provide training for managers andemployees

Nationwide retail network

Weaknesses

No continuity of leadership

In 2001, 5% decrease in net sales

No proper planning regardingAdvertisement

No variety in Fashionable shoes

Opportunities

E-Commerce

Acquired, Partnership with small players

Entering new segments of Markets

Capturing Market where no other potentialcompetitor exists

Innovative Products

New mediums for advertisements

Threats

Customer Dissatisfaction

Price wars with competitors

Lower priced Chinese shoes

Local competitors

Political Instability

Economic Threat

Changes in consumer preferences.

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Low range of products

Small Market Share (Cheetah vs. Power)

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Servis doesnt carry a wide variety as there is

with BATA or EBH for that matter.

Shoes only no other leather products e.g.Belts, Jackets, Wallets etc available at EBH.

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With the evolving market and changing marketdynamics Servis is being given a tough time by

its local competitors and other footwear being

imported from China and a strong secondarymarket for used shoes Landa Bazar.

Promotion relies more on Shahid Afridi as

opposed to the shoe itself. Shahid Afridi is way

too common and endorses too many products.

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Cheetah Brand

Shahid Afridi stands outmuch more than the tagline or the shoe variety.

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Focuses on Shahid Afridi When watching television spot ads:

Shahid Afridi endorses: Samama Housing City

Mobilink

Pepsi

End of it all customer thinks Shahid Afridicomes in too many ads as opposed tothinking Servis Cheetah Live throughsport

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Emphasize on Cheetah as a Sports Brand

Spin-off Don Carlos into a leather/executive

specialty

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The proposed strategy is a focus strategy.

Focus on two segments to boost growth

Spin-off Don Carlos as an executive store Emphasize Cheetah as a sports brand reposition

This would work better because:

Servis is vertically integrated

No threat of supplier bargaining power

Market is ripe for such an opportunity

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FOCUS MORE ON CHEETAH AS A SPORTS

Have Cheetah sponsor Pakistani sportsteams.

Cheetah logo should featureprominently in programs on Geo Super

e.g. small time badminton

championships etc.

Exposure in the mind of the consumer

Present positioning would have to beshifted slightly slowly.

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Separate Don Carlos Stores:

Takes up on the executive/premium mafiosi image

that Don Carlos denotes Leather Goods (Belts, Wallets, Office Products)

Executive Appeal

Leather Jackets are an easy bit to go into andwould work well with the Don Carlos look

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Servis is a vertically integrated unit

They can easily start with Leather Products

They have their own tanneries No bargaining power of suppliers

Left-over leather pieces may be used elsewhere

E.g. Don Carlos products (Key-chains etc.)

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They have an existing efficient network

Don Carlos stores could be located close totheir existing stores as it is Servis, Bata and

EBH stores are often in close proximity

A fourth similar store wouldnt make muchdifference in terms of distribution costs

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In terms of financialaspects in order to

have better returns

ensured for theshareholders,

leveraging the use of

brands.

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The customer value proposition will also besubstantial as Servis would now be offering

value for money along with the trust which its

customers would have because of theestablished Servis brand.

In terms of access, functionality and selection

options it would again be fulfilling its promisesof being a complete shoe store!

The Don Carlos would provide another brand

that would enhance prestige for the customer.

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There is no real change needed here.

The new strategy can go through with the

existing processes in place.

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It may take into account its partnerships with

the international brands to bring in

something that would match internationalstandards.

Discarded Nike Models

Licenses Hush Puppies Technology

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Company Brief

Problem

Proposed Strategy

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Started journey a retail footwear outlet

Today has a 400+ stores presence in Pakistan

2000+ dealer-base A growing international footprint

Europe

Middle East

Africa

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Low variety in the product range

Possible threat from Bata

May bring in its international range of associated leathergoods such as belts and wallets and jackets

EBH

Low market share in the sports segment

Bata Power is marketed more aggressively

Cheetah isnt marketed as singly-focused

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Cheetah to be re-positioned

Slowly wean off Shahid Afridi

Bring more focus on living through sport

Don Carlos brand to be spun-off entirely into

a new executive leather products store

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