strategic management project of pel pakistan

7/16/2019 Strategic Management Project of PEL Pakistan

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Presented To:

Mr. Ghulam Ahmad Rana

Presented By:

Waqas Sattar 1205

Bilawal Shabbir 1210Arham Javed 1215

Usman Ali 1220

Ch.Awais Zahid 1211

Bilal Nawaz 1201

Hassan Imtiaz 1225

STRATEGIC MANAGEMENT



Pak Elektron Limited (PE



• Pak Elektron was setup in 1956 as a Public Limited Company with the obje

producing transformers, switchgears, and electric motors.

• After the conclusion of joint venture agreement with AEG Saigol Group acq

COMPANY in October 1978

• The company floated its shares to the general public and was listed on Kara

Exchange (KSE) and Lahore Stock Exchange (LSE).

• In 1980, Appliances Division was established

• 1981 it started the production of Window Type Air Conditioners with the tec

collaboration of General Corporation of Japan

History of PEL



1987 the production of Refrigerators and Deep Freezers was started.

In 2006, the Company has started manufacturing of split type air conditioners o

capacities as the customer choice has shifted from window type to split type.

The product has been well received in the market. This encourages the compan

production in the coming year.

Today, PEL has become a household name. Its products are not only in great de

market but the Company has started exporting its appliances division products

PEL (Pak Elektron Limited) is the flag holder of the Saigol Group of Companie



CHIEF EXECUTIVE

Mr. Mian Naseem Saigol

BOARD OF DIRECTORS

Mr. M. Azam Saigol

Mr. Shahid Sethi

Mr. Haroon Ahmad Khan (Managing Director) Mr. M. Murad Saigol

Mr. Homaeer Waheed

Mr. Gull Nawaz (NIT Nominee)

Mr. Masood Karim Sheikh (NBP Nominee U/S 182 of Or

Mr. Tajammal H. Bukharee (NBP Nominee U/S 182 of Or

Mr. Wajahat A. Baqi (NBP Nominee U/S 182of Ord

KEY PEOPLE



The “SAIGOL GROUP” is one of the leading industrial groups in Pakistan.

Group belongs to the Saigol Family, which is an old business family and has

contributed a lot towards Pakistan’s industrial development. Saigol Group releading and forward-looking group and believes in continuous development

growth. The result is a global business activity monitored through various of

worldwide. They are serving nation in diversified business activities in the f

Textiles.

Engineering. Banking and Finance.

Fuel and Energy.

Trading.

Automobiles.

Business volume



Textile

• Azam Textile Mills Ltd. 06-Egerton Road, Lahore

• Saritow Spinning Mills Ltd. 06-Egerton Road, Lahore

Fuel & Energy

• Kohinoor Power Co. Ltd. Kohinoor Nagar, Faisalabad• Kohinoor Energy Ltd. 06-Egerton Road, Lahore

Engineering

• Pak Elektron Ltd.1 14km, Ferozepur Road, Lahore

• PEL 2 21 km, ferozepur road Qasoor

Banking & Finance

• Union Bank Ltd. 06-Egerton Road, Lahore• Union Leasing Ltd. 07-Egerton Road, Lahore

Trading

• Saritow Pakistan Ltd. 06-Egerton Road, Lahore

• Saigol Computer Ltd. 162-Shadman Colony, Lahore

Automobiles

• Kohinoor Motor Works Ltd. 07-Egerton Road, Lahore

SAIGOL GROUP OF COMPANIES



Non financial goal

To add a new product to its range in every third year for increasing the sa

To set on image as the best quality of local home appliances

To set an image the best quality of local power division product

Financial goal

To obtain a real (inflation and adjusted) growth in earning per share 10%

time.

To increase the market share of split unit to at least 20%-25%by the end

GOALS OF PEL



The objectives and mission for which the company is established are as following:

• To carry on the business or businesses of manufacturing, selling, installing, maintai

dealing in all kinds of electrical equipment.

• To carry on any business whether manufacturing or otherwise which maybe found c

undertake in connection with or in addition to any of these objectives mentioned above.

• To do all such things that are incidental for the attainment of the above objectives o

• To produce high quality and standard products.

• To produce equipment to be used in numerous projects of national importance.

• To secure a high share / quota of WAPDA’s demand for power products.

• To produce skilled workers and technicians through its apprenticeship schemes and

engineers and technician

OBJECTIVES OF PEL

COMPANY BELIEFS



COMPANY BELIEFS

The belief of Pak Elektron Limited is the consistent attainment of quality in all facets of our op

provide consultancy services with professionalism and to the satisfaction of our clients.

COMPANY BELIEFS:

~ Excellence in all we do.

~ Ethical and moral conduct at all times and in all our relationships.

~ Innovations in all areas of our Designs as a mean of attaining and

~ Sustaining leadership.

~ Pursuit of relevant knowledge

~ Commit ourselves to the highest standards of personal and professional integrity at all tim



Number of Total Employees

There are more than 7000 Workers who are currently working in PEL all



To excel in providing engineering goods and services through con

improvement

Vision Statement



To provide quality products & services to the complete satisfaction of ou

and maximize returns for all stakeholders through optimal use of resourc

To focus on personal development of our employees to meet future challe

To promote good governance, corporate values and a safe working envirostrong sense of social responsibility.

Mission Statements



I. Core competency

II. Technology

III. Philosophy

These are the three things which are not mansion in the miss

statement of PEL.

Analysis of mission statement

PROPOSED MISSION STATEMENT



PROPOSED MISSION STATEMENT

To provide quality products & services to the complete satisfaction of our c

the Pakistan and maximize returns for all stakeholders through optimal use

To focus on personal development of our employees to meet future challen

To promote good governance, corporate values and a safe working environ

strong sense of social responsibility.

Our philosophy is to give people energy efficient and reliable products in h

Our all across distribution network make us dominant over our competitors

By using latest technology and providing innovative features in our Produc



The head office is in Gulberg Lahore and the production unit is situated a

Ferozepur Road, Lahore

And is spread over an area of 242 kanals and 15 Marlas of leasehold land

area of Kot Lakhpat, Lahore, and presently the total covered area comes t

square feet.

Factory is located on the main road where public transport is available rouhelping in easy access to the labor and customers.

LOCATION



17-Aziz Avenue, Canal Bank, Gulberg-V, Lahore

Office -14 Km, Ferozepur Road. Lahore-54760

GP.D. Box No. 1614, Lahore - Pakistan.

Tel: (+92 42) 5811951-59 (9 Lines

Fax: (+92 42) 5810156, 5822682

E-mail: [email protected]

Website Address: www.pel.com.pk

REGISTERED HEAD OFFICE

mailto:[email protected]

mailto:[email protected]



Name Percentag

Saigol Family 54.60

Financial Institutions 13.27

Insurance Companies 3.07

Joint-stock Companies 1.77

Investment Companies 0.46Modaraba Companies 0.00

Foreign Investors 0.03

General Public 26.80

Total 100.00

PATTERN OF SHARE HOLDING



O i ti l St t



Organizational Structure



PRODUCT HIERARCHY

PEL LG St t i



PEL-LG Strategic

Partnership



Pak Elektron Limited, held a press conference (April 21, 2009) to announce th

between Pak Elektron Limited & LG Electronics

An agreement in this regards was signed at the ceremony by Mr. Murad Saigol

Operations, Pak Elektron Limited & Mr. E. D. Choi, General Manager, LG ele

Liaison Office.

Mr. Saigol announced this to be the biggest partnership in the history of home

conditioners in Pakistan and this strategic alliance will expand in the times to c

PEL has been appointed the official distributor for LG Air Conditioners, Refrig

Microwave ovens, washing machines and vacuum cleaners from June 2009.

The addition of LG for Pak Elektron will now mean Pak Elektron will have tw

PEL and LG, in both the categories of home appliances and Air conditioners.

M i St t i U d T k



Main Strategies Under Taken

At corporate level



The main objective of firm to give customer’s satisfaction wi

customer satisfaction.

The PEL use grow and build strategy

At corporate level



Two way relationship with distributors

PEL has Strategy for introducing product in every 3 years



Political environment



Pakistan is facing the situation of great political instability and uncertainty

of year.

According to the economist com survey Pakistan is at the 11th number of t

countries of the world.

Due to this problem business activates in Pakistan are severely affected. Thinvestment also decreased dramatically due to current insecurity.

The government decided to increase the minimum wage rate of workers fro

7000Rs which is increases the cost of production and inflation

Political environment



There are few incentive to the manufacture of Pakistan by the government

coming giants of china.

The cost of manufacturing is high due to electricity rate and overhead.

So most of the time manufacture hesitate to do manufacturing in Pakistan a

import finished goods are only assemble good in Pakistan

Economic environment



Due to global environment economic crises, Pakistan is also facing a lot of

Although Pakistan economy is not directly hit by the crises yet the econom

server in Pakistan

To resolve the power sector issue, removing subsidies and concurrent trans

international oil price changes also likely to risk a further slow down in eco

activities at least in the near future.

In Pakistan there is a strong black economy due to the circulation of black business like smuggling

Economist are expected better condition for Pakistan economy due to the

The consumer in Pakistan is spending most of their income of food and bas

life.

Economic environment

Social Environment



Now a day’s people are becoming more price conscious due to inflation an

Pakistan.

Their primary focus on food and daily use good and thus people have lesse

in electronic good.

Now consumer prefers the split air conditioner over window air conditione

ACs are considered as energy severs.

That is why window ACs are almost obsolete because of high consumption

are becoming more popular because of low electricity.

In countries like Pakistan the usage of air conditioner is great because of e

season of nearly 8 month.

The company are becoming more socially responsible these days as they h

CFC free refrigerant, anti bacterial and dust filter.

Technological environment



With the introduction of spilt air conditioner, it made the air conditioner more

and easy to install and maintain.

The efficiency of air conditioner depends upon its outer unit. The bigger is ththe more efficient will its inner unit.

In split air conditioner the rotator compressor are used which are soundless a

up in extreme situation.

Companies are introducing refrigerator with cool bank which remain working

even after switch off.

The multinational national companies are using information technology to co

communicate with in companies as well as extreme parties. The electronic m

system are used to reduce the cost of handling the inventory order.

g

Legal



Legal factors include description law employment law, and earth an

safety.

These factors can affect how a company operates, its costs, and the

demand for its products

Legal



Bargaining power of supplier



The bargaining power of supplier is low because of availabilitynumber of chine’s brand in the market.

Bargaining power of supplier

Bargaining power of buyer



The bargaining power of the buyer is high because

They have choice of different in the market

They have choice of models and features

They have choice of product in different prices

Bargaining power of buyer

Threats of substitute



Threats of substitutes high because

The gas generators and ups are the substitute of Pel’s diesel and petrol gener

The major substitute of air conditioners are Room air cooler

The room air coolers are available at are low price starting from 6000

Electric fans are also very cost effective and its major company GFC fans ,YRoyal fans

Threats of substitute

Threats of new Entrants



PEL has low level of threats of new entrants in the industry as the electronic

industry has different barrier to entry

Requires huge capital to get entry in the industry

High manufacturing costs

High advertisement cost

High cost of raw material

Threats of new Entrants

Rivalry among competitors



There is intense competition with in the industry to capture the market in

term of share of market.

The companies are introducing product with new and advance technolog

attract and capture the customers.

They are using advertisement and technology as a weapon to increase m

share in related market.

y g p



CRITICAL SUCCESS

FACTOR

Weights Rates Weighted Rate Weighted Rate WeighteDescription PEL HAIER DAWLANCE



FACTOR average

score

average score averag

score

Strong brand

name

0.25 4 1 3 0.75 4 1

Strong dealers

network

0.2 2 0.4 2 0.4 4 0.8

Product quality 0.12 3 0.36 3 0.36 3 0.36

Customer

services

0.14 4 0.56 3 0.42 3 0.56

Strong

management

0.09 2 0.18 3 0.27 2 0.18

Strong home

appliances

0.2 4 0.8 2 0.4 3 0.6

Total 1 3.32 2.6 3.5



strength weight rate Average weight score

image Strong brand 0 15 4 0 6



image Strong brand 0.15 4 0.6

Strong dealer network 0.12 3 0.36

Good product quality 0.14 4 0.56

Firm grip home appliances 0.10 4 0.4

Strong management 0.11 3 0.33

Distribution of authority 0.07 3 0.21

Free customer services 0.09 3 0.27

weakness

Financial problem 0.03 1 0.03

Lack of advertisement 0.09 1 0.09

System variation 0.07 2 0.14

Lock of product range 0.02 1 0.02

Less utilization of capacity 0.01 1 0.01

Total 1 3.02



O t iti i ht t W i ht d



Opportunities weights rates Weighted avera

score

Exploration of market 0.25 3 0.75

Increase product range 0.15 3 0.45

Export opportunity 0.17 3 0.51

Threats

Tough competition 0.12 4 0.48

Slow growth rate 0.13 3 0.39

Instable government 0.08 2 0.16

High tax rate 0.10 3 0.3

Total 1 3.04



IFE = 3.04

EFE = 3.02

The strategy for PEL to growth and build



STAR:

Star is a business unit that has large market share in fast growing industry. Suc

more investment to generate more cash. If due to more investment it will beco

become cash cow and it will reach at maturity stage.

Refrigerator of PEL is the product having high market share and high annua

Cash Cow:It is the business unit sometimes known as problem child. It has a large market share and low a

cash cow requires little investment and it generates more cash that can be used for investment p



cash cow requires little investment and it generates more cash that can be used for investment p

business units. For cash cow the strategy is called HOLD, you must preserve market

Split air conditioners is the product of PEL having high market share and low annu

Question Mark:It is the business unit that has a low market share and high annual growth. These business unit r

grow market share but if they succeeded that will become STAR. For question mark the strateg

try to make up the market share.

Washing machine and microwave oven are the products of PEL having low market

annual growth

Dog:

Dog is the business unit that has small market share as well as low annual market growth rate. A

would be unwise to invest substantial funds in SBUs in this category. Marketing strategies for d

maximize any potential profits by minimizing expenditures or to promote a differential advanta

share and the company can diverts or liquidate the dog product

Deep freezer is the product of PEL having low market share plus low annual growt



SPACE MATRIX

Financial stability

Return on investment +4



Return on investment +4

High working capital +5

Profitability +4/3

. 4.25

Industry stability

Growth rate +5

Increase in demand +5/2

. 5

Competitor advantage

Quality product -4

Market share -3/2

. -3.5

Environment stability

Unemployment -2

Advance technology -5/2

. -3.5

IS+CA

5+ (-3.5) =1.5

FS+CS

4.25+ (-3.5) =0.75



STRENGTHS – S WEAK

PEL 1. Strong brand image

2. Strong dealer network

3 Good product quality and service

1. Financial Problems

1 Lack of advertisem



3. Good product quality and service

4. Number 2 in refrigerators in Pakistan

5. Firm grip in home appliances

1. Lack of advertisem

1. System variations

1. Lack of Product ran

1. Less Utilization of c

OPPORTUNITIES – O SO STRATEGIES WO S

1. Exploration of market in Pakistan

1. Increase in product range

1. Export opportunity

1. Start a campaign to increase the product

range

( s1,s3,o2)

1. Firm should focus on international market

(s1,s2, s3,o3)

1. Increase advertisin

(w2,o1)

1. Product range to be

(w4,w5,o1,02,03)

THREATS – T ST STRATEGIES WT S

1. PEL facing tough competition.

2. Mostly companies Give High Credit in market

and get current market

3. Slow growth rate in Pakistan

4. Instability of government

5. Tax department

1. Let customers know company’s Product

Quality and Achievements. (s3,o1)

2. Provide the product in market at credit to

enhance the market share

(S2, S4, S5, T2,)

1. Use the advertiseme

2. range remove some

W4, T1)

QUANTITATIVE STRATEGIC POSITION MATMarketing Development Ma



strengths weights Attractive

score Total attractive

score Attractive sco

Product quality 0.15 4 0.6 2 Strong brand name 0.13 3 0.39 2 Strong brand image 0.19 2 0.38 3 weaknesses Financial problem 0.06 2 0.12 3 Lack of advertisement 0.04 1 0.04 1 Less utilize of capacity 0.05 2 0.10 2 opportunities Explore market 0.18 3 0.54 3 Increase product range 0.15 4 0.6 3 threats Tough competition 0.02 2 0.04 1 Slow growth 0.03 2 0.06 2

1 2 87

COMPETITOR ANALYSIS



In this modern word, it is very hard to survive in the market due to swear

competition between the companies. Every existing product in the market has substitute or similar product.

“Competitors are the companies that satisfy the same customer needs and wan

To explain the competition we can classify the competitors in two ways which

given below:

• Direct competitors

• Indirect competitors

DIRECT COMPETITORS



The direct competitors of PEL are Dawlance, Waves, LG, and Haier etc. The

market leader in the refrigerator and PEL is still on second number. But in wi

conditioner (WRAC) the PEL is market leader

REFRIGERATORS:

Total market sale of refrigerator in 2006 is 2924905 units. Last year sale was

These figures show 30% market growth. But this is not the exact figure of grofrom year to year.

DAWLANCE is a market leader in refrigerator with 46% share.

PEL has 38% market share

Waves has 10% market share.

6% shares are others

WINDOW AIR CONDITIONERS:



PEL is a market leader with a market share of about 60% in local manufactur

overall has 35% market shares for this product.

LG has about 32% market share and stands on number two. And rest of the m

23% marker share.

SPLIT AIR CONDITIONERS:

The main competitor of PEL in Split air conditioner is DAWLANCE. Other c

MITSUBISHI and HAIER

MICROWAVE OVEN:

In case of Microwave Oven DAWLANCE is the main competitor of PEL.

But the company claims to be the leader in this product line.

INDIRECT COMPETITORS



The indirect competitors for PEL in this industry are Samsung, Orient, Mitsub

Sabro, Nobel and others Chinese brands available in the market.

The PEL has no big threat from all these companies. But the Sabro pioneer for

introducing the split air conditioner in Pakistan.

BUSINESS DIVISIONS



PEL is organized in two business divisions:

1. Appliances Division

2. Power Division

APPLIANCES DIVISION:



PEL’s Appliances Division is the flag carrier of the Saigol Group involved in

appliances manufacturing.

Air conditioners.

Refrigerator

Deep freezers

Microwave oven

Washing machine

Generators.

PEL Air Conditioners:



PEL window-type air conditioners were introduced in 1981 in technical colla

General Corporation of Japan. Ever since their launch, PEL air conditioners h

position in the market. PEL air conditioners cooling performance has been te

approved by Copeland and ITS USA. With the shift of users preference from

split type air conditioners, PEL has started manufacturing split type air condi

PEL Refrigerators:

The manufacturing of refrigerators started in 1986-87 in technical collaborati

IAR-SILTAL of Italy. Like the air conditioner, PEL's refrigerators are also in

Today, PEL Crystal has 30% market share. Its cooling performance is tested

Danfoss, Germany and its manufacturing facility is ISO 9002 certified by SG

PEL Power Division manufacturesPOWER DIVISION



Energy meters

Transformers

Switchgears

Kiosks

Compact stations

Shunt capacitor banks

Energy meters

Generators

1. All these electrical goods are manufactured under strict quality control andwith international standards.



2. PEL is one of the major electrical equipment suppliers to Water and Power

Authority (WAPDA) and Karachi Electrical Supply Corporation (KESC), w

largest power utilities in Pakistan.

3. Over the years, PEL electrical equipment has had been used in numerous p

national importance within Pakistan.

4. In spite of stiff competition from emerging local and multinational brands,

appliances and electrical equipment's have remained in the spotlight due toinnovation.

5. Strategic partnership with multinationals of repute have enabled the PEL G

incorporate new technologies into existing product ranges, thus giving the

access to innovative, affordable and quality products



Brand Name Strengths



Strong Dealer Network

Quality Products

Best Sales Services

Market leader in WRAC

Number 2 in Refrigerators in Pakistan

Strong Management Team

Distribution of Authority

Research and Development Department

F C t S i

Brand Name:PEL has created a strong brand image in the mind of the customers thr

quality and low prices. The customers of PEL always prefer its home appliance



split AC and refrigerators, during the time of purchase. PEL is a popular compa

every one knows about the PEL products and its brand name. That’s why PEL i

when it comes to Window AC.

Strong Dealer Network:

It is also the plus point for PEL that it has developed a strong dealer network in

dealers always try to sell the PEL products to the customers because, the compa

products, gives them a high margin. The management of PEL also provides mo

their dealers than their competitors. Dealers are very conscious about the PEL p

always guide the customer in buying the PEL products.

Quality Products:

PEL is also in a strong position because it provides superior quality products to

gives an edge to company over its competitors. Due to best quality, guarantee o

is more than its competitors.



Best Sales Services:

PEL provides the after sale service to customers which increases the customers

biggest strength of services department is that it handles a complaint within 24

of the country, that helps in increasing the satisfaction level of customers.

Market leader in WRAC (Window Room Air Conditioner):

It is also strength of PEL that it is a market leader in WRAC. Costumer always

PEL in window AC market because of low price, high quality and durability.

Number Two in Refrigerators in Pakistan:

After the Dawlance refrigerators, PEL has the second position in the refrigerato

gradually coming up in refrigerator market and increasing its market share. Du

quality, innovative features and good sales services PEL is becoming the first ch

customers.

Strong Management Team:It is another plus point that PEL has a strong management. Its employees are co

skilled and knowledge. They always cooperate with the top management in ach



are assigned to them.

Distribution of Authority:

Top management of PEL delegates the power to the subordinates for achieving objectives in a specified time period. So every manager has an authority to take

achieve the goals of company. In this way they save the time and react quickly.

Research and Development Department:

PEL has a strong research and development department that is continuously try

features for the products. R&D department spends huge amount of money for thnew products.

Free Customer Service:

PEL provides free customer service for one year to its customers. The customer

products become brand loyal due to this facility.

Like other companies PEL has some weaknesses If PEL overcomes these w

Weaknesses of PEL:



Like other companies PEL has some weaknesses. If PEL overcomes these w

it can become a market leader in home appliances. PEL looses some compe

the following areas:

Financial Problems

Lack of advertisement

System variations

Lack of Product range

Less Utilization of capacity

Financial problems:

Sometimes PEL faces the financial problems because its stocks are so much piled up



creates problem of cash flow because when the stocks are not sold and the production

hours a day then the company faces such problems.

Lack of advertisement:It is a second major weakness of PEL that it is not a vigorous advertiser. Only recentl

considerable amount in advertisement, but when we look at its competitors, PEL still

sector.

System variations:

It is also the main weakness of PEL that there is a rapid change in polices of selling th

creates problems for the selling team to sell the products to the dealers because the top

requires urgent amount of money. Thus the products are sometimes sold on hard cash

prices of products that creates problems for the management.

Lack of Product Range:



Lack of Product Range:

PEL has introduced more products of consumer items but there are more nee

develop new consumer items like PEL washing Machines, Vacuum cleaner a

items.

Less utilization of capacity:

Due to lack of finance a company cannot utilize all its resources on its full ca

increases the cost of products per unit that decreases the profit margin of eac

item. Sometimes, the company cannot allocate the resources according to the

requirements of the production department, which later on becomes a problecomplete utilization of resources

Opportunities for PEL:



For PEL, there are more opportunities for expansion in business.

Following are the opportunities for the PEL.

Exploration of market in Pakistan

Increase in product range

Export opportunity

Increase in production capacity

Exploration of market in Pakistan:PEL has the opportunity to explore the market in all over the Pakistan. Even tho

introduced its products in many cities of Pakistan but there are so many places t



exploited.

Increase in Product Range:

PEL can increase its product range that will be more profitable for the companyneeds to develop new consumer items like PEL washing Machines, Vacuum cle

items.

Export opportunity:

PEL has also the opportunity to export their products in other international coun

SAUDI ARABIA, and other Arabic and African countries.

Increase in production Line:

Company can also increase its production line at the maximum level that will in

efficiency of the employees and will also reduce the total cost.

Following are the main threats for the PEL:

Threats for PEL



o ow g a e t e a t eats o t e :

Strong competition

China’s product introduction in the market

Price war

Slow growth rate in Pakistan

Instability of government

Tax department

World Trade Organization

Strong competition:

There is very strong competition in the home appliance division. Every compa



strategies for selling of the products. It reduces the profit margin of each comp

the bargaining power of the buyers who will demand higher quality of product

China’s product: China’s products are another threat for the Pakistani companies because these

cheaper than the Pakistani products. China products stress the indigenous com

quality and prices that will not be profitable in the long run.

Price war:

As there is stiff competition in the home appliance market that will cause the p

Slow growth rate in Pakistan:

There is also slow growth rate of home appliance in Pakistan that will increase

company. Although, this industry is in the growth phase, but the speed of the g

Instability of Government:

The rapid changes in governments will become a threat for the companies be



government adopts new policies for the industries. So it increasesthe uncerta

investors who want to invest heavy amounts in their new projects.

Tax department:Tax department is another major threat for the company that will restrain the

expansion. There is a most complicated tax procedure operating in the countr

hurdle in the production and smooth functioning of different companies in Pa

World trade organization:

World trade organization will give the permission in 2005 to each company oappliance to export their products after paying less duties or duty free produc

increase the pressures for the indigenous companies to reduce the prices and

quality. It will increase the competition among the foreign companies and ind

companies.



Balance Sheet

as at December 31, 2012

Note December

31, 2012 Dece

(Rupe

EQUITY AND LIABILITIES

SHARE CAPITAL & RESERVES



Authorized capital 4 2,500,000

Issued, subscribed and paid up capital 5 1,668,264

Reserves 6 164,134

Un-appropriated profits 2,075,931

3,908,329

SURPLUS ON REVALUATION OF

PROPERTY, PLANT AND

EQUIPMENT

7 3,873,505

NON CURRENT LIABILITIES

Long-term financing - secured 8 5,587,486

Liabilities against assets subject to

finance lease9 33,555

Deferred taxation 10 1,930,107

Deferred income 11 50,037

7,601,185

CURRENT LIABILITIES

Trade and other payables 12 1,692,148

Interest / mark-up accrued on loans and

other payables13 1,245,589

Short-term borrowings 14 6,815,091

Current portion of:

- long-term financing 8 40,729

- liabilities against assets subject to

finance lease9 38,218

9,831,765

CONTINGENCIES AND

COMMITMENTS 15

25,214,784

Note December

31, 2012 D

ASSETS



ASSETS

O -CURRE T ASSETS

Property, plant and equipment 16 13,811,250

Intangible assets 17 310,969

14,122,219

Long term investments 18 10,216

Long-term deposits 19 65,898

CURRENT ASSETS

Stores, spares and loose tools 20 126,792

Stock-in-trade 21 3,789,580

Trade debts - unsecured 22 5,775,681

Advances 23 527,751 Trade deposits and short-term

prepayments24 290,799

Other receivables 19,662

Other financial assets 25 11,663

Income tax refundable 258,174

Cash and bank balances 26 216,349

11,016,451

25,214,784

Profit & Loss Account

Note

ye

ende

Decemb

31, 201

(Rup



Revenue 27 20,293,9

Sales-tax and discount 28 2,524,08

Revenue - net 17,769,88

Cost of sales 29 14,126,2

Gross profit 3,643,6

Other operating income 30 36,2

3,679,88

Distribution cost 31 827,19

Administrative expenses 32 624,3

Other operating expenses 33 4,64

Finance cost 34 2,050,0

3,506,2

173,64

Share of Loss of Associate 18 (12,72

(Loss)/ Profit before taxation 160,9

Provision for taxation 35 46,24

(Loss)/ Profit for the year 114,66

Other comprehensive income

Total comprehensive (Loss)/ income for the year 114,66

Financial 2012

Sales Gross 20,294

Net Sales 17,770

Gross Profit 3,646



EBITDA 2,917

Financial Charges 2,051

Profit before Tax 161

Profit after Tax 115

EPS - Basic 0.59

Share Capital - Ordinary 1,219

Share Capital - Preference 450

Share Holders' Equity 3,908 Long Term Loans 5,621

Current Liabilities 9,832

Non-current Assets 14,198

Current Assets 11,016

Total Assets 25,215

Production Data



2012 2011 Transformers - MVA 3,967 2,029 Switchgear - Nos 1,780 1,490 Energy Meter - Nos 264,148 349,611 Air Conditioners - Tons 919 39,565 Refrigerators/Deep freezers -

Cfts 3,042,064 2,660,387

S t ti



Segmentation

Geographic Demographic Psychographi

c Behavioral

Geographic Segmentation:

PEL is doing mass market which is not limited to one county but all over the world. The ma

Pakistani market.In Pakistan,PEL is available at every city because its very famous and good p

Demographic Segmentation:

PEL divide its market on the basis of following characteristics of populationAge group:

Earlier PEL used to segments its market among people age ranges from 35-----45years.But N

the age group ranges from 25----35 years.

Gender group:

For the segmentation, the company is recently focusing on young graduate girls and the latest

fact in which famous singer Hadiqa is representing young college girl.

Psychographic Segmentation:



Income group:

PEL is offering its several products to different income groups of society

• In case of Generators, company focuses on elite class.• In case of refrigerators, split air conditioners, washing machines, deep

• Televisions Company focus on middle class.

• In case of Microwave oven, the company focuses on elite and middle

Behavioral Segmentation:

We provide a quality product for our customers. It is purely base on local dem

needs, and we sure that our product will be appreciated by that people who ar

conscious.

MARKETING MIX



I. PRODUCT

II. PRICEIII. PLACE

IV. PROMOTION

Productroduct is a thing that satisfies customer demands. Pel Company is very much conscious to

hich satisfy the customer needs.



ompany makes the product:

According to the needs of the customer.

What kind of size and model they want.

What kind of features and functions they want.What kind of packaging they want.

Price

rice is very much important because its attracts the customer in first look.Pel company is

bout price.

ompany sets the prices of the products by

Analyzing the market situation.

Actual cost of the product

Marketing expenses of the product.

Profit margin of the company.

Comparison to other home appliances.

Settin deal with dealers.

PlacePlace plays a very important role for any company’s product. If the product is n

company will suffer from loss.



Company places its product:

• According to the requirement of customer and market.

• In more populated area of the city.

• Against competitors products.

• More convenient to the customers.

Promotion

Once company makes the product, it needs promotion for the awareness of the a company will not arrange for promotion a products can’t succeed.

Pel Company promotes its product through:

• Bill boards • Internet

• News paper • Brushers

• Television



Department Control

Finance department:



Finance department provide money for the working

organization. Pel Company’s department borrows loan mainly from national

settle terms and conditioned of the interest and time period of returning the loWhen the sale is made the company firstly return the loan with interest.

Human resource department:

Human resource department of the Pel Compa

much conscious of hiring the employees for the company. The standards he shiring the new people. HRM department of the company mainly makes the e

recruitment .this is usually done through news paper web sites extra.HRM de

also set salaries, packages and TA, DA allowances.

Marketing department:

Marketing department is the back bone of any firm m



Marketing department is the back bone of any firm. m

department generally analyze the needs and wants of the customer. Then this d

about the customer needs to the company which in tern launches the products

needs of the customers. Marketing department is responsible for making stronthe products.

Sales department:

Sales department is responsible for making sales of the pro

department generally takes orders from the market, gives information to the crdepartment. Area credit control department gives information to the head offic

discuss situation with the finance department and then at last finance departme

to area credit control department to settle term and conditions with dealers.

Customer service center department:

This department is very much important for



p y p

because its makes the good will of the company. Its provide services to the cust

their clams and makes the customer loyal. Its also gives the feed back to the hea

the required spare parts.

Production department:

Production department is involved only producing the pr

department purchases raw material from the suppliers. Then passes the raw matdyes machines. Modeling machines etc…from the assembly line according to th

of the products.

I F Wh Sh ld



In Future What Should

PEL To Do

• Increase Utilization of capacity:

PEL could not make the freezer as they target. They have enough capacity to



or lack of utilization of capacity they fail to meet their targets.

• Lack of advertisement:Other competitor companies have good marketing and advertising campaigns

that near the PEL there is a great sign board of Waves.

• System variations

PEL should have to adopt the one system. As they are changing the system tovery good but they have to train their employee as well. Training procedure m

There should be the presentation to all workers.

Lack of Product range:

They should have to increase their product range as their new competitor SAM

appliances has a lot of product range so they also have to increase their product



• To gain more competitive advantage over their competitors, PEL has to

distribution network

• The company must give more incentives to the dealers so that they rema

company and promote the products.

• PEL should open its internship programs on frequent basis so more and

get the chance to work as an internee in such a huge institute and get their relevexperience.

• Introduction of seasonal schemes can help to boost sales

Too much favoritism in PEL so there should be control and merit



Too much favoritism in PEL so there should be control and merit

should be followed.

There is no rotation of job work so one person is limited to his work.

PEL more focus should be on electronic media to get competitive

advantage over the competitors.

They have to increase their advertising expenditures

strategic management project of pel pakistan

Documents