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SPONSOR | EVOLUTION OF A BUSINESS
BEYOND NUMBERS!
Presented | LSE Third ANNUAL BUSINESS RESEARCH CONFERENCE ON MANAGING BUSINESS IN PAKISTAN | Apr15
Who Is Sponsor?
ONE WHO HAS THE FINAL SAY!
Why Sponsor Is Important?
Sustainability [Competitive Standing]
Longevity [Beyond Generations]
WHENEVER A BUSINESS RUNS OUT OF SPONSOR, CHANCES OF SURVIVAL DIMINISHES!
Fate of Businesses – Classic Example The 22 FAMILIES OF PAKISTAN [1968]
Winners
Dawood
Ali
Habib
Nishat
Gul Ahmed
Survivors
Saigol
Adamjee
Colony
Crescent
Gandhara
Rest in Peace Jalil
Fancy
Valika
Bawany
Ispahani
Khyber
Beco
Arag
Hafiz
Milwala
Karim
Dada
Sustainability How to bring it to a business?
Sponsor of a Sustainable Business
Reward Risk
• Consistent revenue generation • ABILITY Reward
• Staying afloat in times of financial distress
• ADEQUACY Risk
ADEQUACY OF ABILITY
CREATES A BALANCE
Business acumen
Knowledge & Understanding
Experience (related & unrelated)
• Control
• Competitiveness
• Control
• Competitiveness
• Governance
• Alignment
• Governance
• Alignment
• Money
• Ownership
• Money
• Ownership
• Right Opportunity
• Risk & Reward
• Right Opportunity
• Risk & Reward
Identify Incubate
Operate Monitor
Sustainability Cycle
Longevity How to bring it to a business?
Sustainability
Sponsor | Typical Lifecycle
• Willingness What we loose along this lifecycle?
Management
Investor
Strategy
Management
Ownership
Strategy
Ownership Ownership
Strategy
Management
Entrepreneur Strategic Shareholder
The Correct Approach
Longevity Matrix IT IS POSSIBLE TO HAVE SAME SPONSOR STRENGTH
WHILE MOVING ALONG THE LIFE CYCLE
Let’s put our ownership in a STRUCTURE
Succession planning
Corporatize Sponsorship
Business Management
Now Sponsor is a LEGAL person
Cha
lleng
es
Longevity | Pakistan Story
House of Habib [Habib Family]
Engro Corporation [Dawood Group]
Shirazi Investments [Atlas Group]
Key Businesses Indus Motor [Toyota]
Habib Metropolitan Bank Metro Cash & Carry
Key Businesses Honda Atlas [Cars]
Atlas Honda [Motorcycles] Atlas Asset Management
Key Businesses Engro Fertilizer
Engro Foods Dawood Hercules
150+ years 100+ years 50+ years
Sustainability
Longevity
Another Dimension
Impact of Sponsor
4 6 10 9 8 10 11
15 19 20
24
05
1015202530
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
PKR
bln
UBL | Profitability Trends Sponsor | Bestway Group | Since 2002
6 10 13 10 11 13
17 22 23 23
32
0
10
20
30
40
20042005200620072008200920102011201220132014
PKR
bln
HBL | Profitability Trends Sponsor | Agha Khan Group | Since 2004
4 4 4 7 8
10 12
15 15
0
5
10
15
20
2006 2007 2008 2009 2010 2011 2012 2013 2014
ABL | Profitability Trend Key Sponsor | Mukhtar Family | Since
2002
-12 -16 -16 -15
-9
3 7
13
-20-15-10-505
1015
2007 2008 2009 2010 2011 2012 2013 2014PKR
bln
K-Electric | Profitability Trend Key Sponsor | Abraaj Group | Since 2008
5.5 times
3.5 times
6 times
The turnaround
Contact
Muhammad Shahzad Saleem [email protected]
Samiya Mukhtar [email protected]
Nayab Shafique [email protected]
Contact Number: +92 42 3586 9504
DISCLAIMER PACRA has used due care in preparation of this document. Our information has been obtained from sources we consider to be reliable but its accuracy or completeness is not guaranteed. The information in this document may be copied or otherwise reproduced, in whole or in part, provided the source is duly acknowledged. The presentation should not be relied upon as professional advice.