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Industrial Report
Industrial Analysis of Khadi Crafts Development Company Organizational Based Learning Report
Quba Mushtaq
0708-BH-AM-11
Table of Contents
Introduction .......................................................................................................................................................... 2 Overview of Textile industry in Pakistan: ............................................................................................................. 2 An Overview of Khadi Crafts Dvelopment Company: ........................................................................................... 3 Vision statement:.............................................................................................................................................. 4 Mission statement: ........................................................................................................................................... 4 SWOT ANALYSIS: ................................................................................................................................................... 5 STRENGHTS: ...................................................................................................................................................... 6 WEAKNESSES: ................................................................................................................................................... 6 OPPORTUNITES: ................................................................................................................................................ 7 THREATS: .......................................................................................................................................................... 7 Recommended Strategies................................................................................................................................. 7 Porters Five Forces............................................................................................................................................... 8 Threat of substitute products: .......................................................................................................................... 8 Threat of new entrants: .................................................................................................................................... 8 Competitive Rivalry........................................................................................................................................... 8 Power of Buyers................................................................................................................................................ 8 Power of supplier.............................................................................................................................................. 9 PEST Analysis......................................................................................................................................................... 9 Political Factor .................................................................................................................................................. 9 Economical Factor ............................................................................................................................................ 9 Social Factor...................................................................................................................................................... 9 Technological Factor ......................................................................................................................................... 9 Conclusion........................................................................................................................................................... 10
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In this sector, All Pakistan Textile Mills Association is regarded as the chief organization which is responsible to define rules and regulations. Following tables shows the total contribution of textile sector to the economy of Pakistan in the year 2011-12
52% Of total exports (US $ 12.36 billion) 46% Of total manufacturing 40% Of the total labor force 8.5% Of total GDP
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Vision statement:
To be one of the most textile company which follows and supports sustainable environment friendly processes, practices high level of integrity and fairness in dealing with stakeholders.
Mission statement:
Our quest is to become the most admired group by all our stakeholders i.e., Customers, Employees, Shareholders and Society at large. We shall pursue world- class standards in our People, Products, Processes and Performance. We seek quantum growth to lead in the International and domestic market. And enhance our international presence by encouraging Innovation and nurturing Intellectual Processing. We will be always conscious of the path we take to ensure highest ethical and moral compliance even as we remain totally focused on our goals.
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SWOT ANALYSIS:
Khadi Crafts Development Company certainly has some strength, they can bank upon, some weaknesses, they must look upon, some opportunities which they can take advantage off and some threats which they must never over look. A SWOT analysis of Khadi Crafts Development Company is illustrated below:
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STRENGHTS:
The manufacturing and production capacity of Khadi Craft is matchless comprising of 700 looms of weaving, yarn dying, sectional/manual traditional warping and textile laboratory, more than 1000 industrial sewing machines and approx.. 4000 artisans. The products of Khadi are capable of meeting the international standards. This situation creates a competitive edge our rival companies producing handmade crafts. Khadi Crafts Development Company has its own training center which offers training to the workforce, building skills and renewing abilities and talents. The product range of Khadi Crafts Development Company is quite diversified and variable which include cotton furnishing, home textiles, women wear etc. It has also launched a sub brand, Lolita Agoshtay, exclusively for women which cater the needs of the working women of modern world Khadi Crafts Development Company has average price range which postulates that it is not only for the higher class but a middle class person can also go for it.
WEAKNESSES:
Khadi Crafts is suffering from weak system of transferring data which is a sole requirement of the modern world. Besides the excellent production system it lacks the adequate information system for example experts and knowledge based systems and online sales management, as these processes are being operated by different companies and it creates customers easiness The employees in Khadi Crafts are less motivated, they hardly get any facility to train themselves which keep them away from learning new aptitudes and skills of the modern age
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The work environment of Khadi is quite hostile, the main hurdle in the smooth running of the system.
OPPORTUNITES:
Now a days people are returning to their culture which gives an edge to Khadi Crafts Development Company which solely demonstrates the traditions and culture of Pakistan As Khadi Crafts Development Company is a government based company/project so more funds can be allocated for the up-gradation of the project. Khadi Crafts can also get advantage, by rising their production, because of the markets lost by Chinese producers because of the wage pressure which is accelerating day by day.
THREATS:
Energy crisis is the foremost threat to Khadi Crafts Development Company as the manufacturing unit of Khadi Crafts are in rural areas of Multan which is suffering from shortage of Gas and Electricity. The raw materials especially cotton is being expensive with the passage of time. The rising prices of raw material can affect the cost of production severely. The competition level is expanding, for example several of companies are established producing handmade products like Aik Hunar Aik Nagar (AHAN), and so people can move towards other companies.
Recommended Strategies
With the average price range Khadi Crafts can attract more and more customers leaving behind the competitors. The training school should offer training to the employees to motivate them and to enhance their skills and aptitude. The production and manufacturing capacity of Khadi Crafts is matchless, with the help of that much capacity, Khadi Crafts can get advantage of the lost market of china, by producing more and more apparels with low wage rate.
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Competitive Rivalry
As already been stated that the industry where Khadi Crafts is operating is highly competitive therefore, there is always a war between brands in terms of Quality, Availability, Price and Promotion. Khadi Crafts is also affected by this scenario.
Power of Buyers
Bargaining power of buyers is high because of the fact that there are many other products looking similar to the Khadis which are available in the market at lower cost. Khadi can lose price conscious consumers.
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Power of supplier
As Khadi Crafts has its own manufacturing units of products they sell so, they are affected by only suppliers of cotton. That effect is very minimal so we can assume that in case of Khadi, Bargaining power of suppliers in negligible.
PEST Analysis
Political, economic, social and technological variables (the PEST factors) have great influence upon any business decision in a given business environment. It is a strategic planning tool for evaluating the various factors in a potential business environment to estimate its suitability for the organization. Therefore, let's take a look at how these variables affect Khadi Crafts.
Political Factor
Government regulations regarding Employment laws, Environmental variables and Trade and Tariff restrictions effect Khadi greatly because it has its own Manufacturing Plant and a significant role in exports. Moreover, Political instability is the universal affecter of all the industries in Pakistan.
Economical Factor
As the buying power of people is deteriorating and the inflation rate is going up, it is becoming difficult for Khadi to cope with the increasing needs and demand of consumers in such a way that it could make its products available for every sector of the society.
Social Factor
It is very important for an organization to work in accordance with social compliance which can affect the companys reputation and public image. Moreover, Khadi is affected by Population growth and Consumer buying behavior in a positive way because more persons born are now tilting towards brand consciousness.
Technological Factor
Khadi is positively affected by technological changes in a way that for achieving business success through efficiency, effectiveness and competitiveness there is innovation and modern
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technology available. Khadi can benefit from the better technology for its production and marketing strategies.
Conclusion
By analyzing SWOT, PEST factors and Porters five forces model of Khadi Crafts Development Company, we can come to a number of conclusions. But one thing is clear that Khadi is in its growth stage of business cycle. It is working hard for carving its feet in the competitive industry of Textile by adopting innovative culture and introducing new brands in the market to cope with the growing needs of consumers. Khadi has many strength and opportunities. By combining them, it can surely overcome the deficiencies pertaining to weaknesses and threats. By analyzing the PEST variables, we come to know that Khadi has much strong in terms of image in the industry and business structure. It is operating in such an industry which is little influenced by PEST factors.
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REFERENCES
www.fibre2fashion.com All Pakistan textile mills association. (www.aptma.org.pk) Industrial information network (www.iin.com.pk) Textile is the backbone of Pakistan, Siddique, Dr. Rizwan Shaheen, Iffat Akbar, Waseem Malik, Maham Asif www.khadicrafts.com
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