BALUCHISTAN WHEELS LIMITED

STRATEGIC
MANAGEMENT
 EXECUTIVE SUMMARY

The Baluchistan Wheels Limited (BWL) is the wheel manufacturing company in Pakistan. Since it
is the only wheel manufacturing company in Pakistan therefore, it is enjoying monopoly in the
wheel manufacturing industry. The purpose of this analysis is to review the appropriate
literature on firm level and then research and investigate the application of Strategic
Management processes at the Baluchistan Wheels Limited in an attempt to establish
relationship between good competitive practices and the company’s performance.

The report contains in details the following:

 Porters Five Forces Model

 External Factor Evaluation Matrix
 Competitive Profile Matrix
 Internal Factor Evaluation Matrix
 SWOT Analysis
 SWOT Matrix
 SPACE Matrix
 IEE Matrix

This reports ends up with the recommendations that company needs to adopt few policies and
changes that can ascertain more profitability & growth for the company in the future.
 INTRODUCTION

Vision & Mission

“To produce automated wheels and allied products of International Quality Standard of ISO
9002 and contribute towards national economy by import substitution, exports, taxation,
employment and consistently compensate the stakeholders through stable returns”.

The Organization
From its very inception, Baluchistan Wheels Limited has been a pioneer in the field of
manufacturing steel wheels for automobiles. It started its operation in the year 1980. The
technical partnership with GKN Sankey Limited U.K. has resulted in creating an organization
that is respected and valued worldwide for its brilliant quality and standards.

Baluchistan Wheel Limited is situated in the industrial zone of Hub, which is aprroximately 35
kilometres from Karachi on an area of 97,000 sq. meters with an estimated area of 16,000 sq.
meters utilized in industrial plant at present.

Moreover, this facility provides a broad portfolio of wheels as follows.

1. Passenger cars
2. Commercial vehicles
3. Tractors
4. Suburban Vehicles (4 x 4)
The BWL has produced over a million wheels in 2011. Furthermore, it added a new rim line
category that has further enhanced the capacity of manufacturing rims up to million wheels
every year.

History
The Baluchistan Wheels Limited (BWL) was established in 1980 by the Government of Pakistan
to manufacture wheels for the automotive industry of the country. The company was
registered as a public limited company; registered at the Karachi Stock Exchange (Guarantee)
Limited for its share trading. The basic purpose of the establishment of BWL was to increase
dependence on the local engineering industry that could meet the expectations of the
customers locally. This would ultimately result in the reduction of imports of automobile wheels
and boost our country’s economy.

The BWL is at present the only wheel manufacturing company of the country, which has been
successful in winning the hearts of local buyers but also international buyers. The company was
privatized in 1992
Products Profile
The Baluchistan Wheels Limited (BWL) manufactures the following products:

Disc Wheels for Cars, Vans, Pick-ups, 4 x 4

Disc Wheels for Commercial Vehicles

Tractor’s Rear Disc Wheels

Tractor’s Front Disc Wheels

Quality Control Policy of the Company

Management of BWL is committed;

 To continually improve and enhance the effectiveness of (QMS) Quality Management

System in a creative environment.
 To manufacture wheels and automobile parts in compliance with applicable
requirements.
 To closely monitor and improve the control on products, machinery efficiency and sales.

Quality Accreditation of the Company

ISO-9002 Certified Company

BWL is an ISO 9002certified company. All 20 clauses of ISO-9002 have been implemented. The
company’s goals is to produce automotive wheels and associated products of International
Quality Standards of ISO 9002 and contribute towards national economy by doing the
following:

1. Import substitution
2. Exports
3. Taxation
4. Create employment
5. Consistently compensate the stakeholders through stable returns.
Core Values of BWL

Continuous Improvement (KAIZEN)

Continuous improvement is inherent in BWL’s operation.

BWL encourages breakthrough ideas and implement an
environment in which state-of-the-art ideas are created,
cultivated, and developed.

Exceed Customer’s Expectations

The primary focus of BWL is its customers hence company believes in customer satisfaction
which is fulfilled by every member of the organization. Since BWL is an ISO-9002 certified
company, therefore quality is preserved, maintained and checked from the delivery of material
to the final production stage of manufacturing by accuracy inspection instruments and an
online automatic run out measuring station. Quality assurance system is supported by
laboratory equipped with the following:
1. Tensile testing
2. Hardness testing
3. Metallographic
4. Chemical testing equipment.

Motivated Team of Professionals

BWL has augmented employee involvement by effective distribution of work in teams. BWL has
a firm belief that many heads are more knowledgeable than one. Mechanical and electrical
engineers work in close collaboration with each other by cross functioning of different
departments like production, sales, and marketing to minimize non-conformities and improving
production of quality wheels and rims.
Obligation to Community

BWL takes every step to protect nature and to maintain clean environment not only where it
operates but also outside its premises. BWL attempts to improve the quality of work life in the
communities in which they live and operate.

Enhancement of Customer Loyalty

BWL enhances customer loyalty by providing wheels of the finest quality that meets and
exceeds their desires. BWL believes in maintaining customer needs as its primary focus because
they know that customers define the reason of their existence.
DETAILED INTERNAL AUDIT

Marketing & Sales

The BW has always been a great investor in machinery and capital to reach the anticipated
quality level and harvest efficient production; they provide wheels to several major auto
assemblers as well as the original equipment manufacturer (OEMs) of the Pakistani automotive
industry. Presently they sell to:

Pak Suzuki Motors Co. Ltd

Indus Motors Ltd

Honda Atlas Cars

Nexus Automotives (Pvt.) Ltd

Adam Motors Co. Ltd

Karakorum Motors (Pvt) Ltd

Hinopak Motors Ltd

Gandhara Nissan Diesel Ltd

Gandhara Industries Ltd

Sindh Engineering (Pvt) Ltd

Al Ghazi Tractors Ltd

Millat Tractors Ltd

BW also exports wheels to international countries which include Germany, England, Ireland,
Italy, Thailand, Malaysia, Syria, Sudan, the United Arab Emirates, Sri Lanka and Bangladesh.

The BWL is focused to increasing its exports by contracting with OEM clients such as Toyota,
Honda, Suzuki, Dong Feng, Yuejin, Messy Fergusin, Fiat and Shanghai by using the advantage of
its competitive prices and high quality standards.

Service
The BWL provides excellent services to its clients. For the BWL every order is crucial order… The
BWL strive on providing quality products with zero tolerance for any defect. The BWL quickly
responds to any customer call for any complaints in its products. The BWL has installed state-
of-the-art plant and machinery to make sure quality control of its products. Besides, it is also
pursuing continuous process improvement which means that at every stage of production
quality is ensured so that the company achieves its objective of receiving minimal or no
complaints from its customers.

Procurement
The BWL acquires raw material from Pakistan Steel Mills and other local steel mills. Besides, it
also imports raw materials and other components required for manufacturing of wheels from
China.
Technology Development
The BWL with the assistance of Fontline Grotnes, one of the best wheels machinery
manufacturer based in Holland, has developed the latest process to produce wheel rims up to
16” diameter. For commercial vehicle wheels process improvement has been implemented
with the assistance of Deng Feng, a Chinese firm, who is the best automobile manufacturer in
China.

For quality assurance the BWL has installed latest machines for the following tests:

 Machine for online measurement of wheel run-out and low point marking of car wheels.
 Comering fatigue testing machine for car and commercial vehicles
 Radial fatigue testing machine for car and commercial vehicles

The BWL has also procured an Enterprise Resource Planning (ERP) System from the Ford
Rhodes Sidat Hyder (Chartered Accountants), which has integrated an overall internal and
external information management across the BWL, embracing the Finance, Sales, Production,
HR and Customer Relation Management (CRM). This has helped the organization in bringing:

 An integrated system without relying on periodic updates

 Common database
 Reducing cost and time
 Improving overall efficiency
Human Resource Management
The BWL has given employment to 300 people including officers and workers. The BWL believes
that its officers, staff and workforce are the backbone of its business. The management of the
BWL firmly believes in encouraging the talented and dedicated employees, who are frequently
sent for training at National and International institutions to update their professional and
technical skills. Every year the BWL sends its officers from technical and administration
departments to attend seminar and courses at various institutions to upgrade their skills.

The BWL does not have an effective performance appraisal system for its employees. The
employees of the BWL have a high turnover of 7% due to many reasons such as inequitable
system of compensation, favouritism and overall failure of strategic human resource
management in the company. The top management makes every decision leaving no room for
employee’s empowerment at middle and lower level management.

Personnel included officers and workers, which are both technical as well as non technical. The
non-technical workers are the local people of Hub, which are hired at low wages. The technical
workers are license holders or have experience working on heavy machineries. Technical
officers include engineers and Diploma of Associate Engineers and officers doing management
work.
Company’s Infra Structure
The production facility of the BWL is spread over an area of 16,000 square meters. The BWL has
the capability to manufacture diverse range of wheels for passenger cars, commercial vehicles,
tractors and 4x4 vehicles. The company is a corresponding member of European Tyre & Rim
Technical Organization (ERTO) and its quality management system is certified by ISO-9002 by
AIB Vincotte of Belgium.

Organization Chart

The Organization chart consists of the Board of Directors at the very top which coordinate with
the Internal Audit Committee. The Chairman and the Chief Executive Officer have to report to
the Board of Directors in the Annual General Meeting, and the Board meeting to discuss the
progress of the company and its future plans.
Finance division, Supply & services department along with CEO’s secretariat report to chief
executive officer. Quality control department, administration & personnel division along with
technical division and sales department report to chief operating officer.

Board of Directors

The Baluchistan Wheels Limited has 7 members in its team of board of directors, thereby
complying with the requirements of the Companies Ordinance, 1984. Of 7 directors of the BWL
5 are full-time working directors while the remaining 2 are the nominees of the NIT , which is
the related party to the BWL.

Internal Audit Committee

The Internal Audit Committee consists of 4 key members of the Board of Directors responsible
for the function of maintaining the internal control at the BWL. The Internal Audit Committee at
the BWL is an independent body reporting directly to the Board of Directors.

Finance Department
Core function of this department involves preparation of budget, appropriation of accounts, re-
appropriations, surrender and savings, Control of expenditure and ways & means position,
Audit, Treasury administration, Administration of Taxes i.e. Sales Tax, Entertainment Tax,
Luxury Tax and Entry Tax etc. Also it provides strategic financial support for business and
operational planning.
Quality Control Department
Quality control of BWL emphasizes testing of wheel rims to uncover defects, and reporting to
management who make the decision to allow or deny the release, whereas quality assurance
attempts to improve and stabilize production, and associated processes, to avoid, or at least
minimize, issues that led to the defects in the first place.

Administration & Personnel Division

Admin & Personnel Division at BWL has aligned its strategy and action plans with the
organizational strategy, acting as a strategic partner to field and HO units in order to manage
change and conflict develop commitment to shared values, constantly and consistently align
structures, skills, staff, culture and systems to shared values.

Industrial Relations Department

This department of BWL deals with the overall labor relations. The mandate of the department
involves regulating the relationship between the employers and employees and to settle
disputes whenever differences exist. This department reviews rates of wages, hours of work
and other conditions of service of various categories of employees, review draft amendments
and new labor legislations and recommend same to government, Investigate complaints made
by workers, inspect workplaces to ensure compliance with the Labor Laws, advise and conduct
seminars to educate, employers and employees on the Labor Laws and Industrial Relations
practices and procedure conciliate in disputes between employers and trade unions, set up and
service arbitration tribunals.
Production & Planning Department
The Production department of BWL deals with the planning of the materials required for the
production of wheel rims and also with what is required to put these materials together. Issues
to consider when conducting the production planning process include future demand planning,
lead time, component availability and workforce availability.

Research & Development Department

A constant need to come with newer and better modes of production has been the hallmark of
BWL corporate philosophy. The R&D department is engaged in development of new products,
improvement and upgrading of processes. This department is equipped with CAD/CAM facilities
and CNC machines for in-house manufacturing of tooling & spare. BWL has the ability to
develop wheels to specific requirement of the customers.
 ANALYSIS OF MISSION STATEMENT

“To produce automated wheels and allied products of International Quality Standard of ISO
9002 and contribute towards national economy by import substitution, exports, taxation,
employment and consistently compensate the stakeholders through stable returns”.

Components

Customers

Products/Services +

Markets

Concern for Survival +

Philosophy +

Self-Concept

Concern for Public Image

Concern for Employees +

There are nine elements which involve in making a mission statement. Each good mission
statement incorporates all of these elements in it. Since a mission statement is often the most
visible and public part of the strategic management process, it is important that it include most,
if not all, of the essential components. If we take a look at the mission statement of BWL, its
emphasis is on its products i.e. wheels. They have talked a little about technology but have not
stated anything specifically about it, in a way they have talked about their employees plus given
a bit of weightage to concern for growth, survival and profitability as they have stated their
willingness to contribute towards national economy and maximize shareholders wealth which is
a very key function for any public listed company. By talking about employment, taxation,
imports substitutes and exports they have kind of maintained and enhanced their self-image by
showing concern for welfare of human beings and their employees. But as we all discussed an
effective mission statement comprises of nine components there are few components which
are missing in this mission statement, most notably their customers, they haven’t mentioned
anything about it which is very surprising because company revolves around their customers. .
They haven’t talked a great deal about their potential markets but have tried to cover it up with
prospects of booming economy by talking about imports and exports. An automated wheel
does not tell anything about technology so this aspect of mission statement is also missing. We
just can’t figure anything about BWL philosophy and self-concept so all in all there are quite a
few components which are missing in BWL mission statement and areas which they have even
covered are little vague to say the least so it’s better that BWL comes up with new mission

statement which tries to cover all the aspects of an effective mission statement.
PORTERS FIVE FORCE MODEL
Bargaining Power Of Buyers

YES MODERATE NO

1. Are there a large number of buyers relative to the number of 

firms in the business?

2. Do you have a large number of customers, each with relatively 

small purchases?

3. Does the customer face any significant costs in switching 

suppliers?

4. Does the buyer aware need a lot of important information? 

5. Is the buyer aware of the need for additional information? 

6. Your customers are not highly sensitive to price. 

7. Your product is unique to some degree or has accepted 
branding.

8. Does the customer face any significant cost in switching 

supplier?

9. Your customers businesses are profitable 

10 Is there anything that prevents your customer from taking 
your function in house?
.
TOTAL 3 2 5

The bargaining powers of buyers: LOW

Analysis
 The buyers of the BWL includes the automobile manufacturers such as the Pak Suzuki
Motors, Indus Motors, Atlas Honda Motors, Nissan Gandhara, HinoPak, to name a few.
The bargaining power of the BWL’s buyers are low because the buyers have limited
choices in the markets as they are very low number of companies which are
automobiles parts manufacturer which include wheel manufacturing also and the other
reason for the low bargaining power is that government’s ban on import of wheels from
abroad. The most important reason for low bargaining power is that there is no other
wheel manufacturing company in Pakistan which is operating on this huge level so the
BWL is enjoying monopoly in this market due to which customers have no other options.
 Imported alloy rims are now available in the market but mostly companies not import it
–fitted wheels of their cars with the stylish imported alloy rims because of the road grip
issue.
 The prices of imported alloy rims are also very high as compared to the local wheels
available in the market. So, the price sensitivity is also one of the factor for the low
bargaining power.
Bargaining Power Of Suppliers
The Bargaining Power of Suppliers is evaluated as follow:

BARGAINING POWER OF SUPPLIERS YES MODERATE NO

1. My inputs (material, labour, supplies, services etc) are 
standard rather than unique or differentiated.
2. I can switch between suppliers quickly and cheaply. 

3. My suppliers would find it difficult to enter my business or 

my customers would find it difficult to perform my
function in-house.
4. I can substitute inputs readily. 

5. I have many potential suppliers. 

6. My business is important to my suppliers. 

7. My cost of purchases has no significant influence on my 

overall costs.
Total 5 0 2

The bargaining powers of suppliers: LOW

Analysis

 The suppliers of BWL involved in the manufacturing of steel and iron sheets. There are
large numbers of suppliers who provides raw material to BWL except the major raw
material which is steel and iron.
 The major supplier of the BWL is the Pakistan Steel Mills (PSM) is the major and biggest
supplier of the BWL. BWL also imports some of their raw material from china because of
cost benefit analysis and also make small purchases from the local steel mills but the
major purchase is from PSM.
 BWL also import raw material from abroad in order to avoid the difficulty in getting
inputs from the local industry and sometimes it’s difficult for the local market to fulfill
the requirement of raw material for BWL because of huge demand factor. Hence, the
BWL has many potential suppliers.
 There is less chance that BWL’s suppliers go for forward integration because the
investment in installing the plant for the wheel manufacturing is moderate to high and
the industry also requires lot of technical expertise.
Threat Of Substitute

   
Yes No
  (+) Moderate (-)

       

1) Substitutes have performance limitations that do not

completely offset their lowest price. Or, their 
  performance is not justified by their higher price.

2) The customer will incur costs in switching to a substitute.


3) Your customer has no real substitute. 

   Total 3 0 0

The threat of substitute: very low

Analysis

 There is no substitute for wheels. The steel wheels are only manufactured by BWL
and this is the major factor that customers have no other options except of using
imported allow wheel.
 Caster wheels and spoke wheels can be taken as substitutes of BWL’s steel wheels
and theses caster wheels and plastic wheels are made up of plastic and do not have
a metal part in them, normally used in trolleys and other pulling machines.
 But these caster and spoke wheel cannot be taken as perfect substitute for wheels
because if we use these wheels in the car it will decrease the speed of the car as well
as increase the danger to turn and also the road grip issue.
 Substitute available for rollers and heavy duty cranes are air cushions now days, but
this high tech technology is very expensive and also not available in Pakistan and this
is the reason that BWL have monopoly in the market as there is no perfect
substitute.
 Now consumers preferred to substitute their old and dull looking steel wheel with a
new and fancy looking alloy wheel which comes in various designs and finishes
varying from flat matt finishes till fancy chrome finishes.
 Alloy wheel as compared to steel wheel are stronger and durable but they are
expensive also, sine the alloy wheel is stronger than the steel wheel and also the low
rate of shattering during a collision or an accident.
Threat Of New Entrants

   
Yes No
  (+) Moderate (-)

         

1)
Do large firms have a cost or performance advantage in your segment of
 
the industry?
 

2) Are there any propriety product differences in your industry?

3) Is a lot of capital needed to enter your industry? 

Are there any licenses or qualifications that are difficult to obtain?


4)

  5) Is serviceable used equipment expensive? 


6) Are there any established brand identities in your industry?

Does the newcomer to your industry face difficulty in accessing

7) distribution channels?

Can the newcomer expect strong retaliation on entering the market? 
8)

  TOTAL 3 2 3
 

The threat of new entrant: LOW

Analysis

 As there is ban on import of wheels so automobile manufacturers are left with no choice
except to purchase wheels from BWL
 As BWL has a monopoly in the market, they have all things under their control which
makes the entry of a new firm even more difficult because even if they try to do so they
face a lot of retaliation and hence threat of new entrant is low.
 The wheel manufacturing process requires extensive investment on Research and
Development and Quality Control so the new entrant needs to invest a lot of capital on
quality and research along with acquiring expertise on human resource sector so the
threat of new entrant is low.
 Since its inception BWL is enjoying monopoly in the industry and It covers wide domain
of automobile industry, which includes supply of wheels to cars (2x2), jeeps (4x4), buses,
trucks and tractors. It has attained cost and performance advantage thus causes the
threat of new entrant low.
Threat Of Rivalry
   
Yes No
  (+)  Moderate (-)

         

1 The industry is growing rapidly.


2 The industry is not cyclical with intermittent overcapacity.

Fixed costs of the business are a relatively low portion of total
3
costs. 

There are significant product differences and brand identities

4
between the competitors.

5 The competitors are diversified rather than specialized

6 It would not be hard to get out of this business because there are
no specialized skills and facilities or long term contract
  commitments, etc.

My customers would incur significant costs in switching to a
7
competitor.

8 My product is complex and requires a detailed understanding on

  the part of my customer 

9 My competitors are all of approximately the same size as I am.

  Total 3 3 3

The threat of rivalry: low or negligible

Analysis

 As BWL is the only firm in Pakistan with such a huge setup, they are only capable of
fulfilling the market demand when it comes to supplying on a huge scale.
 There are only a limited number of private importers who import wheels from
countries such as China and supply to local vendors who further sell the wheels as OEM
aftermarket parts
Overall Industry Analysis

FIVE FORCES FAVORABLE MODERATE UNFAVORABLE RESULT

1. Threat of Buyers 3 2 5 Threat of
buyer’s
Power is
low
2. Threat of Suppliers 5 0 2 Threat of
Supplier’s
Power
islow
3. Threat of Substitutes 3 0 0 Threat of
Substitute is
low
4. Threat of New Entrants 3 2 3 Threat of
New
Entrant is
low
5. Threat of Rivalry 3 3 3 Threat of
Rivalry is
low
 TOTAL 17 7 13 Overall the
industry is
attractive

Key Driving Forces

OPPORTUNITIES THREATS
Acquiring technology and new manufacturing Import of Chinese/Taiwan Wheels.
methods.
Government regulations banning imports. Consumer’s taste preference for branded
wheels such as Lenso, Advanti etc.
Untapped market for the wheels and rims of OEM such as Toyota and Honda providing
bikes and 3 wheelers (Chinese Rickshaws option to customers upgrading their steel
&Qangqi) wheels to alloy wheels imported from
Thailand
Due to devaluation of Rupee, an individual’s Growing popularity for imported wheels due
capacity to purchase imported wheel has to programs such as TopGear, Overhauling
declined. etc.
Greater demand for alloy wheels comparing People using imported wheels on individual
to typical steel wheels basis.
Investment on Research and Development
and Quality Control.
Opportunity for producing wheels for JDM
cars with varying PCD siders.
 EXTERNAL FACTOR EVALUATION MATRIX
KEY EXTERNAL FACTORS
  Weight Rating Weighted Average
Opportunities
Acquiring technology and new
1 0.08 3 0.24
manufacturing methods.
Government regulations banning
2 0.05 3 0.15
imports.
Untapped market for the wheels and
3 0.11 4 0.44
rims of bikes and 3 wheelers
Due to devaluation of Rupee, an
4 individual’s capacity to purchase 0.06 3 0.18
imported wheel has declined.
Greater demand for alloy wheels
5 0.07 3 0.21
comparing to typical steel wheels

Investment on Research and

6 0.08 4 0.32
Development and Quality Control.

Opportunity for producing wheels for

7 0.09 3 0.27
JDM cars with varying PCD siders.

Threats Weight Rating Weighted Average

 
1 Import of Chinese/Taiwan Wheels. 0.1 2 0.2
Consumer’s taste preference for
2 branded wheels such as Lenso, Advanti 0.08 2 0.16
etc.

OEM such as Toyota and Honda

providing option to customers
3 0.11 1 0.11
upgrading their steel wheels to alloy
wheels imported from Thailand

Growing popularity for imported

4 wheels due to programs such as 0.09 2 0.18
TopGear, Overhauling etc.

People using imported wheels on

5 0.08 1 0.08
individual basis.
     1   2.54
Analysis

The EFE matrix score of the BWL is 2.54 which is below the mean. This shows there is room for
improvement in BWL..

Strategy for Opportunities

• The BWL should acquire new manufacturing methods and technology by procuring
state-of-the-art machineries for the production and quality control. This would help the
BWL to produce efficiently and reduce cost.

• There is an untapped market for the 3 wheelers and bikes. The BWL should capitalize on
this opportunity by installing production line for the manufacturing of wheels for bikes
and 3 wheelers. It would help BWL capture the market share of this segment.

Strategy to Overcome Threat

• The BWL should initiate a marketing campaign to counter the threats posed by the
imported wheels from TV programs such as Top gear and Overhauling etc. so as to
create awareness about its products and increase brand equity.
 COMPETITOR PROFILE MATRIX (CPM)

BW Wheels Taiwan Market Chinese Market

FACTORS WEIGHT RATING SCORE RATING SCORE RATING SCORE

Advertising 0.11 1 0.11 2 0.22 2 0.22

Product 0.22 3 0.66 4 0.88 2 0.44

quality
Pricing 0.12 3 0.36 2 0.24 4 0.48
Financial 0.10 3 0.30 2 0.20 4 0.40
standing
Customer 0.16 3 0.48 2 0.32 3 0.48
loyalty
Global 0.14 1 0.14 2 0.28 3 0.42
expansion
Production 0.15 2 0.30 3 0.45 4 0.60
Capacity
TOTAL 1.00 2.35 2.59 3.04
Strategies

• There is a major shortfall in the Global expansion as compared to both the competitors.
Since Chinese market covers more than 25% of the global market and Taiwan accounts
about 15%. Despite BWL exporting to very few markets, it needs to increase its market
reach.

• Another Gap lies is that of Production Capacity since China and Taiwan are reaching
more markets, creating their demand and retaining customers, they account for a big
portion of the global market share. BWL comprises less than a percent as it emphasizes
more on local sales rather than global sales.

• Pricing strategy is satisfactory. However, Chinese Wheels industry offers lowest price to
its customers, which increases its export to the world.

• Advertising also indicates a gap, which shows that to create brand awareness amongst
the target market both the competitors advertise their products, whereas BWL focuses
more on current automotive manufacturers and assemblers and doesn’t advertise to
new markets.
 INTERNAL COMPETENCIES OF THE BWL
• The BWL is the largest and the only wheel manufacturing company of the country.

• It has also acquired an ISO certification

• It has recently introduced Enterprise Resource Planning (ERP) software. This has
integrated all functions of the BWL including Planning and Production, Human Resource,
Quality Control, Maintenance, etc. to enhance its efficiency in operations.

• The inventory turnover of the BWL is also 2 which shows twice it was able to convert its
finished goods into revenue.

• The factory of the BWL is established in the industrial city of Hub, Baluchistan, where it
has access to cheap labours.

• The BWL has also introduced state-of-the-art machinery for quality checks this would
enhance the Quality Control capability of the BWL and it would satisfy customers with
reliable products.
 INTERNAL FACTOR EVALUATION MATRIX
Internal Strength Weight Rating Weighted Score
The Sole Producer of Wheel in
1 0.2 4 0.8
the Market

2 Technology Development 0.1 4 0.4

ERP System in helping

3 0.08 3 0.24
efficiency

4 High Inventory Turnover 0.07 4 0.28

5 Higher EPS 0.04 3 0.12

6 Conforming to Quality Standard 0.1 3 0.3

Access to cheap and reliable

7 0.02 3 0.06
man power

History of minimal service

8 0.02 4 0.08
complaints
Internal Weaknesses      

1 Poor Human Resource Practice 0.1 2 0.2

2 Little product diversification 0.05 1 0.05

Increasing cost of Outbound

3 0.1 2 0.2
Logistics

Dependent on local auto

4 0.07 2 0.14
industry

Absence of promotion and

5 0.05 1 0.05
advertising
    1   2.92
Analysis

The IFE matrix shows that the BWL scores 2.92 which is higher than average. This indicates that
the internal process of the BWL is strong. However, certain changes can be made to make it
even more efficient.
 SWOT ANALYSIS

Strengths
1. The largest and sole Wheel Manufacturer currently operating in Pakistan.
2. The company has been technology development which is resulting into the Continuous
Process Improvement and has been implementing Total Quality Management in the
company successfully.
3. Enterprise Resource Planning development & audit has been the cornerstone in being
efficient.
4. Company has been experiencing higher Inventory Turnovers.
5. There has been a continuous increase in EPS over the last 2 years, showing that the
company is performing better even in recessionary period Close proximity to the
factories of the car manufacturers.
6. The ISO 9002 certification of company has paved its way to enhance its exports
7. The company is successful in accessing the cheap and reliable manpower
8. History of minimal service complaints.

Weaknesses
1. Poor Human Resource Practice
2. Little product diversification
3. Car manufacturers are located at far distances which enhances the cost of outbound
logistics
4. Dependent on local auto industry
5. Absence of promotion and advertising
6. The Company has been operating in Pakistan Only.
Opportunities
1. Acquiring technology and new manufacturing methods.
2. Government regulations banning imports
3. Untapped market for the wheels and rims of bikes and 3 wheelers.
4. Devaluation of Rupee, an individual’s capacity to purchase imported wheel has declined
5. Greater demand for alloy wheels comparing to typical steel wheels
6. Investment on Research and Development and Quality Control

Threats
1. Import of Chinese/Taiwanese Wheels
2. Consumer’s taste preference for branded wheels such as Lenso, Adventi etc.
3. OEM such as Toyota and Honda providing option to customers to upgrading their steel
wheels to alloy wheels imported from Thailand
4. People using imported wheels on individual basis.
 SWOT MATRIX

SO STRATEGIES WO STRATEGIES

1. The BWL can develop lines for producing 1. The BWL through acquisition of state-of-
wheels for bikes and 3 wheelers without art machinery and continuous efforts on
fearing any competition from local research can reduce dependency on
industry or imports. auto-industry.

2. Due to devaluation of rupee imported 2. With the acquisition of technology the

alloy wheels are becoming exclusive, the BWL can have product diversification.
BWL can build its production line and can
export alloy wheels as its ISO certificate
will enable it capture international
market.

ST STRATEGIES WT STRATEGIES

1. Continuous Improvement in process by 1. Enhance investment in R&D to suit the

acquisition of latest machinery and ERP needs of the buyers opting for imported
systems will provide flanker to the BWL wheels.
to compete against imported
Chinese/Taiwanese wheels. 2. Cater to the needs of individual
customers through advertisement and
promotion.
2. The ISO certification and the cheap labor
can help BWL gain access to the foreign
 OEM Markets.

STRATEGIC POSITION AND EVALUATION (SPACE) MATRIX

FINANCIAL STRENGTH ENVIRONMENTAL STABILITY

ROI 3 Foreign Currency Rates -5
Technological
Working Capital 4 -4
Understanding
Liquidity 3 Inflation -6
Revenue Growth 3 Demand Fluctuations -4
Return on total asset 4 Competition -3
Operating profit 4 Law & Order Situation -5
Total 21 Total -27
FS Average 3.50 ES Average -4.5
COMPETITIVE ADVANTAGE INDUSTRY STRENGTH
1. Market share -2 1. Growth Potential 5
2. Product quality -2 2. Profit potential 4
3. Customer loyalty -2 3. New Technology 3
4. Ease of entry into
4. After Sales Service -3 4
market
5. Control over
Suppliers and -1 5. Financial stability 3
Distributors
6. Productivity ,
    2
Capacity Utilization
Total -10 Total 21
CA Average -2 IS Average 3.5

Calculation for SPACE

ES Average = -4.5 IS Average is = 3.5

CA Average = -2 FS Average is = 3.5

X axis: CA + IS = -2 + 3.5= 1.5

Y axis: ES + FS = -4.5 + 3= -1.5

CONSERVATIVE FS AGGRESSIVE

(1.5,-1.5)

CA IS

DEFENSIVE ES COMPETITIVE
Analysis

According to the diagram of SPACE Matrix, the company lies in the 4 TH Quadrant
that is of Competitive.

The company’s SPACE Matrix shows that it is the organization that is competing
and surviving fairly well in an unstable organization. The company is showing
promise by performing really well but the environmental instability is creating
hindrances in the way of progress.

Strategies

As the company is in the Competitive Quadrant, it should Pursue Competitive

Strategies. Following are the Competitive Strategies;

1. Backward Integration
2. Forward Integration
3. Horizontal Integration
4. Market Penetration
5. Market Development
6. Product Development:
 IEE Matrix
The IE Total Weighted Score

Strong Average Weak

3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
High I II III
3.0 to
3.99
     
Medium IV V VI
2.0 to
The EFE 2.99
Total
Weighted Baluchistan
Score   Wheels Limited  
Low VII VIII IX
1.0 to
1.99
     

Analysis

The IFE matrix of the BWL is valued at 2.93 and the EFE matrix is valued at 2.48. Therefore, in
the Internal External (IE) matrix the BWL lies in the fifth quadrant, having viable internal
position and external position.

Strategy

Since the BWL’s IEE Matrix lies in the fifth quadrant of the matrix, therefore, it can be managed
best with the ‘hold and maintain’ strategies.

 Market penetration: By increasing its customer base which can be done by advertising their
products.
 Product Development: Bringing new range of products in the marketplace that meets and
exceeds the customer demands.
RECOMMENDATIONS

1. The BWL should acquire new production method and technology by procuring state-of-
the-art machineries for the production and quality control. This would help the BWL
improve production method and reduce cost besides improving quality of its products.

2. There is an untapped market for the 3 wheelers and bikes. The BWL should capitalize on
this opportunity by installing production line for the manufacturing of wheels for bikes
and 3 wheelers. Since there has been great demand for bikes and 3 wheelers (CNG
Rickshaws and Quinqis), production of wheels for these vehicles would help BWL
capture the market share of this segment.

3. The BWL should continue to bring in improvement in its process by acquiring state-of-
the-art machineries and by imparting quality control training to its workforce.

4. The BWL should capitalize on its ERP system as this will help in enhancing overall
efficiency in the organization.

5. The BWL should adapt proper HR practices as this will help the organization plan,
attract, hire, train, retain and motivate right employees at the right time. This will
provide the BWL with quality workforce, which will eventually make the organization
attain superiority over its competitors.