Professional Documents
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Analysis of Surgical Industry of Sialkot
Analysis of Surgical Industry of Sialkot
Analysis of Surgical Industry of Sialkot
FORMULATING FRAMEWORK
DR.FRIGZ INTERNATIONAL
CREATED BY:
M. MOBASHAR ALI
ASIF MEHMOOD
MUZAMMAL HUSSAIN
1
DR. FRIGZ INTERNATIONAL
SURGICAL INSTRUMENT MANUFACTURER
GOHDHPUR, KULOWAL ROAD, SIALKOT.
Contents
PART A (INDUSTRY ANALYSIS)
SURGICAL INDUSTRY ....................................................................................................................................... 1
GROWTH: .................................................................................................................................................... 1
OVERVIEW OF SIALKOT SURGICAL INDUSTRY .................................................................................................. 1
RAW MATERIAL USED IN MANUFACTURING.................................................................................................... 2
IMPORTS OF SURGICAL INSTRUMENTS............................................................................................................ 3
EXPORT OF SURGICAL INSTRUMENTS .............................................................................................................. 4
PAKISTAN’S EXPORT IN 2004-05 ...................................................................................................................... 5
WORLD EXPORT OF SURGICAL INSTRUMENTS ................................................................................................. 6
COUNTRIES SHARES IN WORLD EXPORT .......................................................................................................... 7
ABRIDGED SUMMARY OF DUTY DRAWBACK (REBATE) RATES .......................................................................... 8
MAJOR CONSUMERS OF SURGICAL INSTRUMENTS .......................................................................................... 8
MAJOR MANUFACTURING UNITS .................................................................................................................... 9
PROCESS FLOW CHART OF SURGICAL INDUSTRY............................................................................................ 10
EXTERNAL ENVIRONMENT ANALYSIS ............................................................................................................. 11
PESTEL ....................................................................................................................................................... 11
POLITICAL, GOVERNMENTAL, & LEGAL FACTORS ....................................................................................... 11
SOCIAL, CULTURAL, & OTHER FACTORS ..................................................................................................... 11
TECHNOLOGICAL FACTORS ........................................................................................................................ 11
ECONOMIC FACTORS ................................................................................................................................. 11
Pest Impact Matrix ................................................................................................................................ 12
PORTER’S 5 FORCES ................................................................................................................................... 13
1. PORTER’S 5 MODEL ........................................................................................................................ 14
2. IMPACT ON PROFITABILITY ................................................................................................................ 15
3. STRATEGIES TO CONTROL PORTER’S 5 MODEL ADOPTED BY FRIGZ INTERNATIONAL .......................... 16
2
4. PORTER’S 5 FORCES ....................................................................................................................... 17
INTERNAL ENVIRONMENT ANALYSIS ............................................................................................................. 18
STRUCTURE ............................................................................................................................................... 18
PHYSICAL OUTLOOK............................................................................................................................... 18
DEPARTMENTS ...................................................................................................................................... 18
HIERARCHY OF THE FIRM ....................................................................................................................... 20
HUMAN ..................................................................................................................................................... 21
KNOWLEDGE ......................................................................................................................................... 21
SKILLS .................................................................................................................................................... 21
ABILITY .................................................................................................................................................. 21
PART B (FRED DAVID STRATEGY FORMULATING FRAMEWORK
INTRODUCTION............................................................................................................................................. 22
RESEARCH MODEL AND METHODOLOGY....................................................................................................... 22
STAGE 1:THE INPUT STAGE............................................................................................................................ 23
EFE (EXTERAL FACTORS EVALUATION) ....................................................................................................... 23
INTERNAL FACTOR EVALUATION (IFE) ........................................................................................................ 24
STRATEGIC GROUP MAPPING .................................................................................................................... 25
CPM MATRIX ............................................................................................................................................. 26
VERTICAL ANALYSIS OF CPM .................................................................................................................. 26
HORIZONTAL ANALYSIS OF CPM ............................................................................................................ 27
STAGE 2: MATCHING STAGE .......................................................................................................................... 28
BCG MATRIX .............................................................................................................................................. 28
IE MATRIX: ................................................................................................................................................ 29
SWOT MATRIX ........................................................................................................................................... 30
TWOS MATRIX ........................................................................................................................................... 31
SPACE MATRIX .......................................................................................................................................... 32
GRAND MATRIX ......................................................................................................................................... 34
STAGE 3: DECISION MAKING ......................................................................................................................... 35
QSPM ........................................................................................................................................................ 35
REFERENCES .................................................................................................................................................. 36
3
PART A
(INDUSTRY ANALYSIS)
4
SURGICAL INDUSTRY
Surgical industry of Pakistan holds a history of more than 100 years, when some British doctors got their
surgical instruments repaired from the skilled workers of Sialkot and that was the foundation of Sialkot
Surgical Industry. Surgical instrument manufacturing industry originated in the early 1940s in and around the
City Sialkot. The sector manufactures a wide range of medical, surgical and veterinary instruments exporting
more than 95%, which includes 60% of disposable and 40% of reusable surgical instruments, of its production
i.e. 100 million instruments annually. Its exports made to over 140 countries.
The surgical instrument manufacturing started in Sialkot at the turn of the 19th century, when the American
Mission Hospital in Sialkot for the first time got its scalpels and other instruments repaired from the local
artisan community of blacksmith. These craftsmen successfully replicated these imported instruments, which
were being used by the Hospitals. When Sialkot industry started exporting surgical instruments, for the
improvement of instruments British Government established the Metal Industries Development Centre
(MIDC) in 1941.
After Independence Sialkot inherited total of 17 registered surgical instruments manufacturers. In 1958
Surgical Instrument Manufacturers Association of Pakistan (SIMAP) was incorporated as representative body
of the exporters and manufacturers of surgical industry, to safeguard the interest of the Industry. Later on
many benefits to promote surgical industry had been provided to the manufacturers of surgical instruments.
GROWTH:
The exports, which were US$ 129.6 Million in 2006-07 came up to US$ 151.6 Million in 2007-2008 showing an
increase of 16.98% (by chamber of commerce Sialkot). Although exports to USA, Germany, UK, France, Italy
and UAE has been increased. The U.S.A. is top buyer of the products, over the last year and it is expected to
grow at 28% in year 2009-2010. During the period from 2000-01 to 2007-08 the surgical instrument growth
recorded by 9 per cent per annum. Currently Sialkot is producing 2,000 various surgical instruments for
worldwide exports.
5
RAW MATERIAL USED IN MANUFACTURING
Raw Material
1 Flat Rolled Stainless Steel Sheets and Strips (AISI 410 & 420)
2 Hot Rolled Stainless Steel Bars
3 Electroplating Polishes
4 Compositions and Salts
5 Grinding Belts
6 Emery Powder
7 Emery Grains
8 Electropolishing Chemicals
9 Trichloroethylene
10 Felt Mops
11 Satin Finishinhg Wheels
12 Granules and Flakes from Gloss Powder
13 Grinding Wheels
To meet the quality and standard set by the buyer of surgical instruments, this industry has to purchase
material from outside country in order to meet the standards set by the buyer. Raw material importing in this
industry has been increased by the last few years.
6
IMPORTS OF SURGICAL INSTRUMENTS
1998 32.5
1999 31.6
2000 32.9
2001 33.23
2002 36.37
7
EXPORT OF SURGICAL INSTRUMENTS
2000-01 124.137
2001-02 145.04
2002-03 149.96
2003-04 132.56
2004-05 182.87
2005-06 160.07
8
PAKISTAN S EXPORT IN 2004-05
Germany 13.7%
Italy 5.3%
UAE 4.7%
France 4.12%
Japan 2.2%
9
WORLD EXPORT OF SURGICAL INSTRUMENTS
YEAR VALUE (In US $ Billion)
1998 22.7
1999 24.6
2000 25.5
2001 28.23
2002 30.33
10
COUNTRIES SHARES IN WORLD EXPORT
COUNTRY %AGE
USA 24.71
GERMANY 12.33
NETHERLAND 7.13
MEXICO 5.89
IRELAND 5.29
UK 5.23
FRANCE 5.07
JAPAN 4.57
BELGIUM 4.07
ITALY 3.45
REST OF WORLD 22.26
11
ABRIDGED SUMMARY OF DUTY DRAWBACK (REBATE) RATES
The surgical industry of Sialkot Pakistan has urged the FBR to equalize the rate of duty drawback to 2.73%
from 0.75% on surgical and manicure to flourish this industry in the larger national interest.
12
MAJOR MANUFACTURING UNITS
13
PROCESS FLOW CHART OF SURGICAL INDUSTRY
INITIAL ELECTRO-
HEAT
ASSEMBLING
TREATMENT POLISHING
FILLING
14
EXTERNAL ENVIRONMENT ANALYSIS
PESTEL
POLITICAL, GOVERNMENTAL, & LEGAL FACTORS
1. Exporters of Pakistan face problem to get visa from the foreign embassies due to security issues.
2. Establishment of SIMA (Surgical Instruments Manufacturer Association) and launching of USAID (U.S.
Assistance to Pakistan).
3. Government imposed ban on the export of semi-finished to protect the surgical industry.
4. Exporters are also allowed to get raw material on duty-free basis in order to provide benefit to the
manufacture of surgical, but the rates of raw material were increasing apace which increased the cost of
production.
5. Government planning to establish “Raw Material Bank” in order to provide raw material to the
manufacturers on fixed rates.
6. Government issued funds approximately Rs. 250 million to establish the hospitals and provision of dental
units, machines etc, i.e. big opportunity for the firms to deal locally.
7. Establishment of Technical Education and Vocational Training Authority (TEVTA) to train the workers in
surgical industry.
TECHNOLOGICAL FACTORS
1. Government is going to establish Institute of Surgical Technology (IST) costing Rs. 160.459 million, to
provide surgical nursery to the surgical manufacturers.
2. IST going to provide 250 skilled and trained workers to the surgical firms in order to developed the
surgical industry.
3. Lack of skilled labor is another problem faced by the firms existing in Surgical Industry Sialkot.
4. Establishment of Dye’s manufacturer in Gujranwala is also seemed to opportunity to the Sialkot Surgical
Industry.
ECONOMIC FACTORS
1. Introduction of VAT (Value Added Tax) next fiscal year by SCCI Chairman, VAT may be done for minimum
rate of 4% to 5%, but currently no tax imposed on the imports of material by Customs.
2. The rising in the utilities cost such as electricity, telephone, gas etc. increased the cost of production.
3. The rise in the services charges of the Banks is also a drawback to the growth of surgical industry.
4. High rates on the export re-finance also added while determining the surgical industry Sialkot but it is
expected that the Government reduce rate to 3%.
5. Fluctuation in foreign exchange rates also affects the earnings of the surgical instruments exporting firms.
15
Pest Impact Matrix
Establishment of
Availability of raw
“Raw Material Fixed Rates Low cost of Material
material
Bank”
Fluctuation in
lower earnings limit profits Lower Growth Rate
Exchange Rates
Chances of
Difficult to expand Lack of opportunity of
Lack of trust winding up
business skilled workers
business
Social Factors
No goodwill of
No image of the Company is restricted by
No Brand Name their own
company foreign customers
company
16
PORTER S 5 FORCES
BARGAINING POWER OF SUPPLIER
In surgical industry the supplier of raw material are very limited. They are not able to supply the required
material according to the manufacturers. So manufacturers have to import the raw material from the other
countries that also increase the cost of manufacturing. So in this industry Supplier has strong power because
of the following factors:
1. Suppliers are limited
2. Demand is more than supply
3. Switching costs are high because manufacturers have to contact foreign suppliers of material.
BARGAINING POWER OF THE BUYER
Hence in the above discussion we try to explain that the buyers (customers) of the surgical industry major are
foreign customers. They have freedom to buy from any manufacturer. There are many other foreign
manufacturers in the market exists. They have strong bargaining power because of the following factors:
1. Switching costs are low
2. A lot of foreign manufacturers
3. Easy availability of the products
4. Importing barriers they face by their country so they prefer their home made.
5. Other low cost suppliers
RIVALRY AMONG COMPETITORS
There are a lot of competitors that exists in both inside country and outside country. They are very active
participating in the strong competition both inside the country and outside the country. In the foreign
countries surgical industries competitors are Siemens Medical Solutions, United States Surgical Corporation,
Alcon Incorporation, Boston Scientific Corporation, etc. These factors are:
1. Price war in the competitors is very enthusiastic
2. Technology improvement is so high, competitors has their own R&D departments, heavy investments
on the R&D by the Governments
3. Sialkot surgical industry has no distribution channels, even most of them doesn’t sale under their
brand name, while rivals are strong in the market.
4. Most Sialkot manufacturers are not actively innovating the surgical products, but competitors are
very strongly go for innovation by developing different products lines and segments.
5. Competitors are also trying to put the Pakistan Surgical Industry out of race by means of imposing
trade barriers, lowering their prices, getting new technology, etc.
6. Customer has low cost in switching to the other manufacturers which is indication of the strong
rivalry.
THREAT OF NEW ENTRANTS
Surgical Industry has potential to grow according to the SCCI, but it needs Government Support to grow. No
single individual or firm can establish a successful business, because it faces following factors in the markets:
1. Huge early investments
2. May firm bear losses in the early years of the establishment
3. Difficulty to get customers out from the existing other established firms.
4. Government also imposing Value Added Tax (VAT) on surgical goods.
5. Import rebates are going low
6. It is also expected that the Government in the coming budget will not provide any relief to the
exporters.
7. Firms that were already established have expertise and learn from its practices while remaining in the
surgical industry.
17
8. Requires technical expertise typically is needed to develop proprietary knowledge necessary to
differentiate products from others in the marketplace.
So, the above mentioned factors give an indication that the Surgical Industry has weaker threat of New
Entries to the Industry.
THREAT OF SUBSTITUTES
Surgical Industry has not adopted the rapid technological change. Sialkot Surgical is only making the
instruments used in the surgical, but it doesn’t make the equipment used in the Surgical Industry. Adaptation
of the Fess Surgical equipment is a big threat to the surgical industry.
1. PORTER S 5 MODEL
Huge early investments
Technology innovation of new products bear losses in the early years of the
with hybrid technology "Hybrid includes establishment
coated stents and impregnented dressing Difficulty to get customers out from the
existing other established firms.
introduction of the equipments rather Government also imposing Value Added Tax
instruments e.g. FESS (Functional Threat of (VAT) on surgical goods.
Endoscopic Sinus Surgery) new Import rebates are going low
entrants no any relief to the exporters.
laser technology Firms that were already established have
expertise and learn from its practices
Requires technical expertise typically is
needed to develop proprietary knowledge
necessary to differentiate products from
others in the marketplace.
Bargaining
Threat of Rivalry
among
power of
Substitues competitors supplier
18
2. IMPACT ON PROFITABILITY
THREAT/POWER
Competitive Intensity
Bargaining Power of
Supplier
Bargaining Power of
Buyer
Threat of new
entrants
Threat from
substitutes
PROFITS
19
3. STRATEGIES TO CONTROL PORTER S 5 MODEL ADOPTED BY
FRIGZ INTERNATIONAL
20
4. PORTER S 5 FORCES
QUALITY
21
INTERNAL ENVIRONMENT ANALYSIS
Internal environment is the combination of structure and human;
STRUCTURE
PHYSICAL OUTLOOK
Dr. Frigz International manufacturing unit is situated at Sialkot Godhpur Road. The outlook of the Frigz is
attractive. People worked inside the Frigz feel comfort working there in provided clean environment, proper
rooms for discussions, place for the parking, security, etc.
DEPARTMENTS
Dr. Frigz International is currently operating 5 major departments named as Quality Assurance Department,
Production Department, Quality Control Department, HR & Supply Chain Department, and Finance &
Marketing Department.
Quality Assurance Department
Dr. Frigz’s team is highly aware of the positive correlation between project quality, and customer satisfaction.
They endeavor to deliver flawless solutions through incorporating highly competitive Quality Assurance
processes and personnel in place. The Quality Assurance department at Frigz ensures that compliance with
established requirements, standards, and procedures is consistently checked through performance
monitoring, product evaluation, audits, and testing.
PRODUCTION DEPARTMENT
All our production departments are well-equipped with the latest, machinery imported from Germany and
England, and well-staffed with the expert technicians trained from our strategic joint venture network. It
includes the following departments:
22
other related processes for ensuring exact perfection before filing. For this purpose, top-quality imported
cutters are used throughout the machines with intense scrutiny on quality production.
• Filing Department
The process of filing is then carried out by foreign trained professionals in order to ensure high standard
of exactitude and precision. Heat Treatment Dr. Frigz has an in-house Heat Treatment Department
equipped with top-quality Vacuum Furnace imported from England, where qualified staff and engineers
trained by the English Suppliers are engaged in treating the instruments in order to add strength to the
steel and perfect the metallurgical composition for further processes.
• Polishing & Grinding Department
The Electro-polishing and Grinding Departments are manned by seasoned workmen using imported
Chemicals and best quality grinding wheels to ensure the best-quality finish. More than 15 halls housing
approximately 200 trained technicians are employed for this process as it is an important process for
quality finishing of any instrument.
• TC Department
Our Tungsten Carbide (T.C.) Department is installed with the best-quality induction machinery being
manned by the exceptionally well-trained experts of German Technology. The T.C. Tips and the soldering
material are imported from Germany to ensure matchless quality and precision. The department also
utilizes laser welding machinery for superior results and unbreakable strength.
• Coating Department
Our coating department is capable of providing Gold plated instruments as well as powder coated
instruments depending upon the requirements of the instruments or the customer. All coating related
raw materials are imported from European countries so that no compromise on quality can be made.
Furthermore, each coating is inspected for quality before any instrument is passed on to the next
department.
• DDJ Department
A new addition to our departments is the Diamond Dusted Jaws (DDJ) department. Here, using the latest
technology we diamond dust the jaws of those instruments which are used for holding purposes during
medical procedures. This process adds strength to the gripping quality of instruments and increases the
life of usage.
• Passivation Department
Using the top-quality imported Chemicals in our Passivation Department we boil test and passivate each
and every instrument for 24 hours before packing. If need arises, the instruments are re-passivated so as
to eliminate any chances of rusting or corrosion during the life of the instrument. Our instruments are
rust-free for life though we give guarantee for three years.
• Sandblasting Department
Using imported machines and quality materials, we sand blast the surface of instruments to achieve the
proper finishing requirements as demanded by our customers. The process is done by English trained
craftsmen and is a source of pride for the company where quality instruments are concerned.
• Etching
Currently etching on the instruments is being done in-house through a chemical-electrical process.
Stamping facilities are also available if requested by customer. The company plans to apply laser-etching
technology for its reusable grade instruments in the near future.
QUALITY CONTROL DEPARTMENT
Staffed by flight brains and equipped with the advanced test apparatus, Frigz quality control department
ensures the manufacture of reliable products by means of multistage close examination system verifying
from raw-material, in process to final packaging.
23
HR & SUPPLY CHAIN DEPARTMENT
Key areas in which Dr. Frigz HR department deal in:
• Recruitment
• Compensation
• Training & Development
• Appraisal
This department also deals in supply chain management.
MARKETING & FINANCE DEPARTMENT
This department assesses the market demand and supply, customer demand, new product requirements in
the market, and also deals with financial measures, budgets, investments.
CEO
MIAN MUHAMMAD RIAZ
In the above hierarchy of the Frigz International, strategy is made on the top level only, but daily objectives
and targets are given to the individual workers in order to:
24
1. Speed up production
2. Improve Efficiency
3. Gain operational effectiveness
4. Refrain customers by switching to the competitors.
HUMAN
Dr. Frigz International has employees currently working 900, they are provided by the medical paid by the
CEO Mian Muhammad Riaz from his own pocket. They are provided by clean environment, security, post-age
benefits, EOBI, etc. They are provided by the competitive salaries, as concluded the turnover of the
employees is very low. Workers are rewarded on the basis of the contribution he/she make. Bonuses are also
given annually.
Human has following aspects:
1. Knowledge
2. Skills
3. Ability
KNOWLEDGE
In the top management people working are knowledgeable, up to the supervisors of the company people are
knowledgeable, and they can help the company to takeout company in case of any downfall faced by the
company.
1. Supervisors of the Frigz implement different concepts they know to achieve operational effectiveness
2. Workers of the Frigz are not knowledgeable and can’t handle new technology
3. Management working have knowledge about the strategic concepts
4. Internal information system has been established to convey information
5. Workers also provided the information about importance of the shipment and where this shipment is
exported.
SKILLS
People appointed in the top management have different skills according to the tasks. For the different
departments in the Frigz International, persons appointed that have experience in those departments. Like,
for quality assurance a lawyer by education, experienced in surgical instruments for last two decades. Along
managers of the firm, supervisors are also very skilled. They assign daily tasks to the workers in order to meet
the shipment date. The daily quality control program is also implemented under the command of the skilled
workers. They are implementing Six Sigma approach, i.e. 3.4 products errors in manufacturing of 1 million
products.
ABILITY
Workers of the Frigz international are well experienced and are able to handle complex instrument
production easily because they are in the industry when they were child. Worker’s ability in Frigz
International is of high potential but they are not polishing it.
25
PART B
(FRED DAVID STRATEGY
FORMULATING FRAMEWORK)
26
FRED DAVID’S STRATEGY FORMULATING SCAFFOLD
INTRODUCTION
This document is the application of Fred’s strategy scaffold to Dr. Frigz International. It has three parts. First
part called research model and methodology i.e. understanding of methodology and techniques to determine
most appropriate strategy for the company. The second part, called the background information of Dr. Frigz
International, describing its domestic operations. Third part, called applying the strategy scaffold to Dr. Frigz
International by using model and methodology of strategy formulation.
To reach at the decision stage the first two stages must be completed. This framework is of the FRED DAVID’S
Strategic management.
27
STAGE 1:THE INPUT STAGE
EFE (EXTERAL FACTORS EVALUATION)
The EFE total weighted score for the Frigz International is 2.85 in the following table. This signifies that it is
managing threat above the 2.5 average. Since there were some serious threats, it could try to address these
issues in a more efficient and effective manner. To reduce the impact of the threats, Frigz must counteract
threats with opportunities in a manner that reduce the impact of the threats.
Creating the new products by new 0.1 3 0.3 Meet customer demand
technology
Selling under own brand name 0.1 3 0.3 make customer loyal
and entrance to new
markets
Establishment of raw material bank 0.05 3 0.15 Low cost availability
28
INTERNAL FACTOR EVALUATION (IFE)
Dr. Frigz International’s IFE total weighted score of 2.90 indicates that they are above the industry average as
whole in formulating strategies that capitalize on their strengths and minimize their weaknesses. As provided
in the following table.
STRENGTHS
every department
Job description 0.1 4 0.4
has responsibility
Quality and cost
Direct import of raw material 0.15 4 0.6
benefits
Weakness
Must train employees
employee training 0.1 3 0.3
to improve KSA
No marketing 0.1 2 0.2 planning
technology may be
low spending on R&D 0.1 3 0.3
decline
29
High
Frigz, TSK
HILBRO
Impex
Brothers,
Bashir
&Jamil Bros.
WE Brothers
QUALITY
Moderate
SMALL
VENDORS,
SELLING TO
COMPANIES
Low
PRICE
The above is the graph of the group matrix of the Surgical Instruments manufacturers. On x-axis we take the
variable price and on y-axis we take the variable quality, both are in 3 scales i.e. low, moderate, & high. Our
company as being chosen is Dr. Frigz International, so the big competitors of the Dr. Frigz International
include TSK IMPEX, Bashir &Jamil Brothers and also the WE Brothers.
CPM MATRIX
In Competitive Profile Matrix (CPM) there are nine key success factors for the Dr. Frigz International as
included in the following table. They are product quality, price competitiveness, management, management
experience, branding, customer loyalty, Advertising, market share, and Customer Service. Dr. Frigz
International has three big competitors in the aviation industry are TSK IMPEX, Bashir &Jamil Brothers, and
30
HILBRO. Dr. Frigz is seen as high quality company providing excellent products. TSK IMPEX known as the
Industry Leader. Based on the data in the CPM, Bashir &Jamil and HILBRO are the most competitive ones
followed by the TSK IMPEX and Dr. Frigz.
WEIGHT
RATING
RATING
RATING
RATING
SCORE
SCORE
SCORE
SCORE
Product Quality 0.20 4.00 0.80 4.00 0.80 3.00 0.60 3.00 0.60
Price Competitiveness 0.18 4.00 0.72 4.00 0.72 4.00 0.72 4.00 0.72
Branding 0.15 2.00 0.30 2.00 0.30 1.00 0.15 2.00 0.30
Management 0.10 3.00 0.30 3.00 0.30 3.00 0.30 2.00 0.20
Management Experience 0.10 2.00 0.20 3.00 0.30 2.00 0.20 2.00 0.20
Market Share 0.10 3.00 0.30 4.00 0.40 2.00 0.20 2.00 0.20
Customer Loyalty 0.08 3.00 0.24 2.00 0.16 2.00 0.16 2.00 0.16
Advertising 0.07 1.00 0.07 2.00 0.14 1.00 0.07 1.00 0.07
Customer Service 0.02 1.00 0.02 1.00 0.02 1.00 0.02 1.00 0.02
31
• Dr. Frigz is providing high quality of the products as well as TSK IMPEX, but the other two are
providing somehow low quality than the top twos
• Dr. Frigz, while remaining in the competitive world, it is offering highly competitive prices to the
customers
• Dr. Frigz is doing branding to their products and selling in their own name or tag, while other two are
also selling to the companies, after which they made their own tag on the product and sell the
products under their own brand name.
• Frigz has a good combination of management currently employed, qualified and educated, and also
giving importance to this issue.
• Frigz give importance to management experience, because it is experienced management who help
company to achieve operational effectiveness and goals, but currently it has employed well
experienced management with experience of one or two decades in top management not in
functional level.
• TSK Impex is the industry leader and Dr. Frigz is the second one, all of the rest have low market share
than these two.
• Dr. Frigz International has strong customer loyalty, customers who quitted Dr. Frigz, they face
problems in meeting the demands of the products or may compromise on quality, but Frigz is
providing continuously high quality products to the customers.
32
BCG MATRIX
For the BCG matrix we have chosen TSK IMPEX as market leader, and Dr. Frigz international has market share
of 15 % while the industry leader has a share of the 20 % so relevant market share will be 75 %. Dr. Frigz
International is a single enterprise there is no SBU it has.
25%
?
INDUSTRY SALES GROWTH
0%
-21.1% C D
-25%
In the BCG matrix Dr. Frigz international lies on the Cows, “Cash Cows”,
IE MATRIX:
SBU SALES SALES %AGE G. PROFIT PROFIT %AGE ISGR RMS IFE SCORE EFE SCORE
A 4.38 m 100.00% 1.84m 100 -21.10% 75% 2.9 2.85
33
IFE SCORE
4 3 2.9
2 1
3
2.85
Hold &
EFE SCORE
Maintain
Harvest or
Divest
Dr. Frigz International is lying in the cell number V. This means that Dr. Frigz International should follow hold
and maintain strategy.
34
SWOT MATRIX
INTERNAL
Strengths Weaknesses
1. Job Description 1. No Employee Training
2. Quality of raw material 2. No marketing
3. Human KSA 3. Lack of Distribution Channel
4. Give workers daily target 4. Low spending on R&D
5. Six Sigma Approach 5. Lack of Trust on Employee
Opportunities Threats
1. Establishment of Institutions 1. Increase in the Taxes on
for surgical improvement Imports by Government
2. Creating the New Product by 2. Rapid Technological Change
New Technology Adaptation
3. Selling under own Brand 3. Strong Brand Preferences and
4. Establishment of Raw Material Customer Loyalty
Bank 4. High rate of Export Re-
5. Supply of Disposable finance approximate 6%
Instruments
EXTERNAL
35
TWOS MATRIX
STRENGTHS & Strengths Weaknesses
WEAKNESS 1. Job Description 1. No Employee Training
(INTERNAL) 2. Quality of raw material 2. No marketing
OPPORTUNITIES 3. Human KSA 3. Lack of Distribution
& THREATS 4. Give workers daily target Channel
(EXTERNAL) 5. Six Sigma Approach 4. Low spending on R&D
5. Lack of Trust on Employee
36
SPACE MATRIX
Concerning the internal strategic position and external strategic position analysis in following table, Dr. Frigz
International in surgical industry located in the Competitive Quadrant because the directional vector appears
in the lower-right of the SPACE matrix. Based on the SPACE matrix, Dr. Frigz International should use a
competitive strategy which was competitive advantages in high-competitive industry. Thus, Dr. Frigz
International should give head to market penetration, product development, and finally joint ventures with
foreigners.
37
The two score on the x-axis are added (IS+CA= 4.2-3.0= 1.2) and the resultant point is pointed on the x-axis.
Similarly two scores on the y-axis are added (FS + ES = 2.8 – 3.8 = -0.1) and the resultant point is plotted on Y.
The intersection of the new xy points is drawn and a directional vector is drawn.
FS
Conservative Aggressive
6
5
4
3
2
1
CA IS
-6 -5 -4 -3 -2 -1 1 2 3 4 5 6
-1
-2
-3
-4
-5
-6
Defensive Competitive
ES
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GRAND MATRIX
RAPID MARKET GROWTH
WEAK STRONG
COMPETITIVE COMPETITIVE
POSITION POSITION
QUADRANT IV
1.Concentric Diversification
2.Horizontal Diversification
3.Conglomerate Diversification
4.Joint Ventures
Dr. Frigz International is financially strong and is in situation to compete at high level of competition, but the
industry growth rate is low or Dr. Frigz in a slow growth industry. Dr. Frigz has ability to launch diversified
programs into more promising growth areas. Dr. Frigz International can go for concentric diversification,
Horizontal diversification, Conglomerate Diversification, or can go for joint ventures.
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STAGE 3: DECISION MAKING
QSPM
QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)
Strategic Alternatives
1 2
Joint Joint
Ventures Ventures in
European
in USA Community
Key Success Factors Weight AS TAS AS TAS
OPPORTUNITIES
Establishment of Institutions for surgical improvements 0.15 3 0.45 3 0.45
Extension of Distribution channels 0.1 3 0.3 4 0.4
Selling under own brand 0.1 3 0.3 4 0.4
Establishment of raw material bank 0.05 3 0.15 4 0.2
Supply of disposable instruments 0.1 4 0.4 4 0.4
THREATS
Increase the taxes on imports of government 0.1 1 0.1 1 0.1
Rapid technological change adaptation 0.15 1 0.15 1 0.15
Competitive distributive channels 0.1 1 0.1 1 0.1
Strong brand preference and costumer loyalty 0.1 1 0.1 1 0.1
High rates of export re-finance approx. 6% 0.05 2 0.1 1 0.05
STRENGTHS 1.0
Job description 0.1 4 0.4 4 0.4
Quality of raw material 0.15 4 0.6 4 0.6
human KSA 0.1 4 0.4 4 0.4
give workers daily targets 0.1 4 0.4 4 0.4
six sigma approach 0.1 4 0.4 4 0.4
WEAKNESSES
employee training 0.1 3 0.3 4 0.4
No marketing 0.1 4 0.4 4 0.4
low spending on R&D 0.1 3 0.3 4 0.4
lack of distribution channel 0.05 1 0.05 1 0.05
lack of trust at employee 0.1 3 0.3 3 0.3
Total 1.0 5.70 5.85
So we recommend Dr. Frigz International to go for the Joint Ventures in the European Community, for the
sake of earning profits and to become in the STAR block of the BCG and also in other matrix.
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REFERENCES
1. www.thefinancialdaily.com
2. www.dawn.com
3. www.books.google.com
4. www.simap.com.pk
5. www.tdap.gov.pk
6. www.smeda.gov.pk
7. www.financialnews.com
8. www.sialkotweb.com
9. www.dailytimes.com.pk/default.asp?page=2009\11\26\story_26-11-2009_pg5_1
10. www.thenews.com.pk/daily_detail.asp?id=163307
11. www.opfblog.com/1100/sialkot-airport-to-raise-exports-to-2b-sbp-chief/
12. http://cmer.lums.edu.pk/upload/Sialkot_enterprenurial_Spirit.pdf
13. www.onepakistan.com/news/local/23926-Surgical-industry-urges-FBR-equalize-rate.html
14. www.pgbf.com.pk
15. http://www.tradeboss.com/default.cgi/action/viewcompanies/companyid/311166/
16. http://www.defence.pk/forums/economy-development/1049-pakistan-economy-news-updates-
archive-91.html
17. www.frigzinternational.com
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