TERM PROJECT

STRATEGIC MANAGEMENT

Sapphire Group
A STRATEGIC REPORT ON ‘OPERATION’

By
Alvina Chapra
Anum Fatima
Arooj Imran

BSC-IV
Accounting and Finance

LAHORE SCHOOL OF ECONOMICS 2020

Plagiarism Report
 Table Of Contents

Basic Company History and Other details:.................................................................................4

Basic Strategy:...............................................................................................................................8
SWOT Analysis:...........................................................................................................................14
Financial Analysis:.......................................................................................................................21
Internal Factor Matrix:...............................................................................................................23
External Factor Matrix:..............................................................................................................25
Strategy Model.............................................................................................................................27
Internal External Matrix:...........................................................................................................28
New Strategies/Recommendations:............................................................................................29
Conclusion:...................................................................................................................................32
References:...................................................................................................................................33
Basic Company History and Other details:

Sapphire group first began its operations in India in the city of Calcutta. They moved to Pakistan

after partition and started their operations by setting up their first spinning unit and from that day

they have not looked back as they ventured further into the industry and became the leaders and

pioneers in the whole textile industry.

As of today, Sapphire has expanded its operations in the industry at a large scale by doing

vertical integration and now they own not just a textile group but yarn manufacturing units,

garment and fabric manufacturing units and spinning units. Sapphire group is one such group in

the whole textile industry that has the latest technology and equipments and their products are

exported worldwide at least to more than 35 countries. More than 16000 employees work under

this group and the total annual sales of Sapphire group amounts to approximately US $800

million. Sapphire group also owns assets with a worth of more than US $500 million.

Sapphire group has not only done vertical integration for its growth, but they also have

diversified into other industries to expand the scope of their growth so for this purpose they have

diversified into power generation sector and dairy sector. Sapphire electric company has a plant

in Muridke which has the capacity of producing at least 234MW of electricity. And their dairy

farms are in Manga. The dairy farm is 100 acres in size and has a herd size of 3000 with the

capacity of 10000 milking cows which amounts to 300,000 litres of milk per day.

Sapphire group one such group which recognizes that it has a responsibility of not producing

negative externalities for its society so therefore it is also actively involved in Community

service programs and recognizes that it has a responsibility towards its stakeholders. Sapphire

group owns two schools that provide primary and secondary education. One is run by the
Sapphire group itself and the other school is run by The Citizens Foundation. Both these schools

provide inexpensive good quality education to the underprivileged people in the society.

Sapphire also holds a medical camp every year in the rural areas where free checkup is provided

to patients. Sapphire has also made its contributions towards making plastic free Pakistan when

they launched their paper seed bags that can be planted after use.

Organizational Structure:

Mr. Muhammad Abdullah is the chairman of Sapphire Ltd and Mr. Nadeem Abdullah is the

Chief executive officer. They both are part of the board of the directors along with 8 other

members. Mr. Nadeem Karamat is the chairman of the audit committee and there are a total of 3

members under him. Mr. Nadeem Karamat is also the chairman of the human resource and

remuneration committee with 4 members under him. Hameed Majeed Associates Ltd is the

Shares registrar of Sapphire Ltd. Mr. Abdul Sattar is the chief financial officer of Sapphire Ltd.

Deloitte Yousuf Adil Chartered Accountants are the tax consultants and E. Y. Ford Rhodes

Chartered Accountants are the auditors of Sapphire Ltd. Its bankers include; Allied Bank

Limited, Bank Alfalah Limited, Bank Al Habib Limited, Bank Islami Pakistan Limited, Faysal

Bank Limited, Habib Bank Limited, Habib Metropolitan Bank Limited, Meezan Bank Limited,

MCB Bank Limited, National Bank of Pakistan, Soneri Bank Limited, Standard Chartered Bank

(Pakistan) Ltd, The Bank of Punjab and United Bank Limited. The legal advisors of Sapphire Ltd

are A.K Brohi and Company.

Key Success factors:

Sapphire believes that there are there are three important factors that have played a vital role in

the success of Sapphire. First is that they are constantly innovating and providing new products

to their customers. Second is that they consider their customers as if they are their partners,

meaning that they give very importance to their customers. Third is that they are continuously

adding value to their products and trying to use the resources in a more efficient manner.

In-house
Yarns

Knit Core Woven

Facilities Strengths Plants

Dyed
Yard

Core Values:

P eople
R elationship
I ntegrity
D iversity
E nvironment
Mission:

Our mission is to be recognized as premier supplier to the markets we serve by providing quality

yarns, fabrics, and other textile products to satisfy the needs of our customers. Our mission will

be accomplished through excellence in customer service, sales and manufacturing supported by

teamwork of all associates. We will continue our tradition of honesty, fairness, and integrity in

relationship with our customers, associates, shareholders, community, and stakeholders

(Sapphire Textile Mills, 2020).

It is mentioned on the site of Sapphire that their value is Pride. Pride is an acronym and it stands

for, people, relationship, integrity, diversity, and environment.

Vision:

To be one of the premier textile company recognized for leadership in technology, flexibility,

responsiveness, and quality. Our customers will share in our success through innovative

manufacturing, certifiable quality, exceptional services, and creative alliances. Structured to

maintain in depth competence and knowledge about our business, our customers, and worldwide

markets. Our workforce will be the most efficient in industry through multiple skill learning, the

fostering of learning and the fostering of teamwork and the security of the safest work

environment possible recognized as excellent citizen in the local and regional community

through our financial and human resources support and our sensitivity to the environment

(Sapphire Textile Mills, 2020).

The tagline of Sapphire is “We are leaders in the world of textile”. Sapphire group claims that

they are one of the largest manufacturers in textile industry. They also claim that they have the

largest share in annual exports in this sector. Sapphire is a large organization and slightly
automated in its process. They have modern technology which they have imported from USA,

Japan, and Europe. The main raw material which they use in the production of their goods and

services is cotton and it is bought from local sources as Pakistan produces one of the finest

cotton in the whole world. Sapphire also creates synergies with other foreign based

manufacturing firms. The finished goods of Sapphire are exported to many renowned brands

such as Primark, HnM, Target and many others.

Basic Strategy:

Sapphire has a very wide target market because of the diverse products it produces. In terms of

demographics, Sapphire targets the upper middle class and upper-class people and its age bracket

would include kids from 6 years old to adults. Sapphire is a Pakistani brand, therefore most of its

customers are from the Pakistan’s market however as Sapphire has tapped into e-commerce too

so now it ships worldwide too to all its customers. Sapphire currently makes approximately 15%

of its revenues from e-commerce, a number that it would like to take up to 30% of revenues

within the next few years, at approximately Rs1.2 billion in online revenues, Sapphire is one of

the mid-tier online retailers in the country (Pt Profit, 2019). Sapphire is expanding its target

market by tapping the online sector too. It is collaborating with the online retailers too along with

having its own e-store. Sapphire has collaborated with Daraz and Bagallery, therefore the

products of sapphire will be available at these stores too. Moreover, as Sapphire is a major

exporter too so its target market also includes the foreign brands such as Target, Walmart, Zara

and many others.

List of Operations:

The Company is involved in:

 1. Manufacturing and Sale of Yarn and Fabric

2. Finishing of Fabrics

3. Printing of Fabrics

4. Stitching of Fabrics

5. Production of Home Textile Products

The Production Plants: The company has 6 production plants all over Pakistan. 4 plants are only

involved in spinning process. Only one plant is for dyeing, printing, and home textile. Last one in

stitching.

As mentioned earlier in the report, Sapphire Group has diversified their business and they have

also ventured into Power generation and Dairy sector. They have their own electric power plant

in Muridke and they have their dairy farms in Manga.

Value Chain:

The Production Capacity:

The Sapphire Textile has different units for:

• Spinning

• Weaving
 • Finishing and Printing

• Yarn Dyeing

• Home textile Products

Supply Chain:

Innovation and Technological Adoption:

The Sapphire textile in one of the largest textile manufacturers and exporter. They have adopted

technology from USA, Japan, and Europe. The main raw material Cotton is procured locally and

specialized fibers for production needs are imported. The Sapphire group manufactures Yarn to

Finished Fabric locally in Pakistan. The Group also forms Synergies with offshore garment

manufacturing companies. The products of Group are marketed to giants of industry in Asian,

North American, and Euro Australian markets. Its Products reach 35 countries.

Quality Assurance:

The moto of Sapphire Textiles is “We buy quality, make quality, sell quality.” For quality

assurance company has adopted various measures, which include.

  Total quality from raw material to all stages of stitched Made-up production till delivery.

 Quality Lab for all types of tests in accordance with American & European testing

standards.

 Complete range of testing equipment from James H Heal, Veri Vide & Atlas is available

in lab.

 They confirm each stage of production according to IMS standards.

Managing Quality

The sapphire group has various certifications and check for the assurances of quality in the

company operations. The quality standards are manufacturing based as well as management

based. The group exports the textile products, so company has global quality implications as

well. The group has adopted the technology from USA, Japan, and Europe to increase the

quality of operations and goods produced. The Sapphire Group exports products into 35

countries around the world as mentioned above, so company has reputation. To maintain the

reputation and quality of procedures in company there are some certifications that company

has acquired, which are as follows:

• Bureau Veritas Certification for Quality Management (it is a UK based quality

standard checking certificate). Certification cycle started in July 2015. It was based

on ISO 14001:2004 standard.

• Bureau Veritas Certificate for Management System in May 2015. It was based on SA

8000: 2008 Standard.

• The “Fairtrade Certificate” in compliance with Fairtrade Standards and FLOCERT

certification requirements, awarded in Feb 2015.

• Certificate of Compliance for Fabrics, Yarns, Exporting, Weaving, and Importing by

“Control Union Certifications” in Netherlands.

• Certificate of Registration from “The Governing Board of Q.A (Quality Assurance)

International Certification Limited” for manufacturing, export and finished fabrics.

• Shirley Technologies Ltd Certificate for “Confidence in Textiles”. It is a test for the

detection of harmful substances and purity of products.

For business people Sapphire can provide certifications and accreditations that client may

require. The company’s laboratories are equipped to conduct all international ISO, ASTM

and AATCC tests. The tests include,

• Smoothness rating

• Wrinkle recovery

• Light fastness

• Crease recovery

• Color fastness

• Pilling

• Abrasion

• Flame retardancy

• Rubbing fastness

• Crocking

• Strength – tensile & tear

• Stretch & durability press rating

(Sapphire-mills, Services)
Ethics and environmentally friendly processes:

As mentioned earlier too that Sapphire is a very consumer friendly brand and it makes sure that

the actions of Sapphire are not creating any negative externality for the environment. Sapphire is

actively involved in community welfare programs. Sapphire group owns two schools that

provide primary and secondary education. One is run by the Sapphire group itself and the other

school is run by The Citizens Foundation. Both these schools provide inexpensive good quality

education to the underprivileged people in the society. Sapphire also holds a medical camp every

year in the rural areas where free checkup is provided to patients.

The company is also providing clean energy to the national grid through the means of its wind

projects located in Jhimpir, Sindh. The has also set up facilities in Jhimpir to provide clean water

to the residents and installed solar panels for the purpose of providing electricity.

Sapphire textile has also introduced Canvas bags for showing their efforts in bringing a positive

change in the environment. Now Canvas bags or paper bags are used instead of plastic bags.

These bags are made from the leftover fabric which is now recycled for this purpose. They also

introduced their famous paper seed bags that the customers could plant in soil after they have

completed their said purpose. These bags became very famous and this initiative of Sapphire for

Green Pakistan proved to set a new benchmark in the retail industry.

“The company is an active participant of United Nations Global Compact Program as they are

working in line with the 2030 vision of United Nations by following global SGDs (Sapphire

Annual Report,2020).”
SWOT Analysis:

SWOT analysis is a strategic planning technique used to help a person or organization identify its

Strengths, weaknesses, opportunities and threats for a business competition or project planning.

Strengths:

 Availability of Raw Materials and Supply Chain Management:

According to Sapphire textile mills their location, Fiber sourcing and Supply chain

management is one of their biggest strength. They believe that they have a central

location as they are situated around all the garment producing countries therefore this

gives them the advantage of easy access to materials and shorter transit times and this

leads to efficient production of the goods. Sapphire has one of the largest spinning and

weaving facilities in Pakistan and along with that the abundant supply of cotton and other

raw materials leads to efficient and smooth operations of their business across the whole

supply chain.

 Board of Directors/ Governors:

Sapphire’s Board of Directors are the one who makes every decision about the company.

They decide what strategies to implement and what changes to bring. They are the back

bone of the company. Mr. Muhammad Abdullah is the chairman of Sapphire Ltd and Mr.

Nadeem Abdullah is the Chief executive officer and they both are part of the board of

directors.

 Inventory management and stability:

 Another major strength of Sapphire textiles is that they have the edge of stability. As

Sapphire is a large group and has a lot of units working under its parent name such as

finishing, weaving, yarn, garment manufacturer therefore Sapphire has the ability to stock

large items of inventory in their warehouses avoiding the problem of understocking or

over stocking. They always have inventory available whenever needed. This is one of the

reasons why Sapphire textiles is greatly trusted by its customers or clients.

 Vertical Integration:

Sapphire has vertically integrated production and this is another strength. “Vertically

integrated production means streamlined delivery, quality control at every step and

savings for you, from fiber to the mill, to the garment-makers and to you (Sapphire

Finishing Mills Ltd, 2020)”. Sapphire aims to provide the best to its customers and for

this it has the related expertise to make sure that sure its customers satisfaction remains

intact.

 Technological advancements and modern equipment:

Sapphire has the latest science and technology and modern equipments required for

efficient production. They have imported their machinery and technology from Japan and

Europe. This highly advanced machinery is used to ensure quality, standardization, and

consistency in Sapphire’s products. As stated on the Sapphire’s website that “Our state-

of-the-art testing lab, equipped with the most modern tools and staffed by a team of

highly trained scientists and technicians, is geared up to ensure each and every meter

delivered to you complies to your standards (Sapphire Finishing Mills Ltd, 2020)”.

 Financial stability:
 Sapphire Group is a big group, having multiple divisions and units therefore Sapphire

textiles have abundant financial resources. In case of any setback, there is assurity that

they will have financial stability and will not go bankrupt. Moreover, as they are a big

firm, they always have the option of bank loans as banks readily offer loans to such big

companies so they will not have the threat of any financial crisis.

 Workforce management (sales staff) and human capital:

Another strength of Sapphire Textile Mills is that their mill management and their

workforce is as efficient and advanced as their production system. They continuously

train their workforce and other management to ensure that their human capital remains

skilled and updated with the newest technologies and software’s. This leads to

consistency and quality assurance in their production. Their sales staff is also highly

trained and experienced in their respective work and they also add value to their products

of Sapphire. As mentioned on Sapphire’s website “Sapphire sales and service staff fully

understand the technical and financial aspects of fabric and clothing production, and are

available to you wherever you are and whenever you need us (Sapphire Finishing Mills

Ltd, 2020)”.

 Rising success in e-commerce:

Another strength of Sapphire in my opinion is that Sapphire textiles is very quickly

progressing in ecommerce. Sapphire has a very diverse e-store which includes products

from almost every category that Sapphire produces. Sapphire’s online sales are quite

famous and are always hyped among its customers. Moreover, Sapphire is also doing

collaborations with other online retailers such as Bagallery so that its products will also

be available on these online platforms too.

Weaknesses:

 2 Weak Product lines:

Sapphire offers a very versatile product line, that ranges from clothes, shoes jewelry to

sapphire home. Technically, it needs to market all the product lines, however for the

major focus for sapphire is apparently the clothing line. If we look at the Instagram page

for Sapphire, there is no sign of their shoe line or makeup and jewelry.

 Highly Competitive Industry:

Textile Industry is a very competitive industry as there are so many players in this

industry and everyone has a strong position in the market. Other players have also

diversified in other business like Sapphire. The competition is very high and due to this

Sapphire needs to be very diligent so that their any mistake does not gives their

competitor a chance to eat up their sales.

 Less cost control

Some of the items of Sapphire are slightly higher priced then their competitors for

example their western range and Pret range. They are slightly over priced and this states

that they have less cost control. They need to bring their prices in line with their

competitors so that the customers do not switch to other brands.

 Not catering to specialized orders

The plants of Sapphire Textiles are built to run the large lots. The large lots are preferred

because they are efficient for production and manufacturing processes. The company can
 start to produce order for small lots for special orders by focusing on the cost inefficiency

of operations and management of wastages during manufacturing process.

 Design Stagnation

Design is one of the biggest impediments in the export oriented textile and apparel

industry, as they are mostly copy cads. The Sapphire textiles has also the option to

innovate the designs at the Source Base to have a competitive edge in international

market. In Pakistan there is also a huge problem related to R&D and innovations that

should derive the design enhancements. The Sapphire Textiles also need to meet the

requirements of buyer’s designs and also needs to release new effective designs because

it has been observed that the designs Sapphire has been introducing since some time are

the same old and repetitive There is stagnation in their designs.

The company achieve this through hiring professional designers for unique and latest

developments in the market.

Opportunities

 Brand recognition

Sapphire textile mills have a good reputation globally and domestically which adds to a

positive in its position.

 International trade opportunities because of COVID-19

Due to extreme rise in cases of global viral pandemic, corona, in India and China, big

companies started giving their orders to Pakistan instead of them. This is a huge

opportunity for Pakistani industry to show their capabilities and make permanent clients.
  Improvements in government policies

Government is planning on providing necessary support for branding, grading, labelling

and other such activities that will add to value of textile industries

 Opportunities in backward integration; make own cotton

Supply of cotton is Pakistan is not of very good quality. At times we fail at providing with

good quality raw material which can obviously effect the quality of final product.

Sapphire has an opportunity to use backward integration and produce their own cotton.

This way they can keep the quality in check, and it will be cost effective for the company.

 Opportunities in Australian markets

Sapphire has a potential to expand in Australian market. That market is still untouched for

the brand. They have many options including exporting raw material or opening a retail

store in the market or starting their online store there.

 Foreign exchange rate, interest rate at 7% lock it down

The currency of Pakistan has dropped during recent times. Interest rate for foreign

exchange has also dropped down to 7%. The economy has an opportunity to lock down

the interests at current rate so textile industry can work on a less interest rate in future

even if it increases.

Threats

 Unstable government policies

 Pakistan is an unstable company politically and economically. Government laws are not

stable in themselves. Government keep changing laws every now and then, which is why

it is harder for companies to keep up with ever changing laws.

 Non-compliance of standards with importing companies EU America

Pakistani companies do not comply with international standards of importing companies

and therefore this is a barrier when it comes to import.

 Terrorism and security problems for foreigners

Due to some incidents in past, Pakistan has lost its reputation as a peaceful company. In

past few years, the constant terrorist attack, bombarding, murders and our inability to deal

with the issue has made people afraid of visiting the company. This is a potential threat

for the company since it is a barrier for imports.

 Uncompetitive exports and COP fluctuations

A multitude of costs that is imposed on exporters, is raising the cost of production which

is rendering our exports uncompetitive.

 Unstable supply of energy and utility

Load shedding of gas and electricity has been a major problem in the country since past

few years. This has not only effected people personally, but also industries on a whole.

Many people had to shut down their factories due to these issues. These problems are also

causing hindrance inn production for textile mills like sapphire

Financial Analysis:

Sapphire’s annual turnover amounted to 34, 252.75 million rupees in 2019 and this amount has

continuously improved from 2014 to 2019. In 2014 the amount of turnover was 25,411.30

million rupees. This is reflected in sales to total assets ratio which has improved over the years

and in 2019 it was 0.77 times stating that the company was able to improve its ability to use its

assets to generate turnover however ideal ratio would be higher than 1 here.
Sapphire’s total assets value also improved over the years which was 44,211.79 million rupees,

stating that the company has acquired and built their assets over the years. Sapphire’s Share

capital has stayed the same over the last six years which amounts to 200.83 million rupees

however the shareholders equity kept fluctuating. If we talk about the profitability, then the

Sapphire’s profitability has improved over the years. Sapphire’s Profit after tax ratio was 7.47 %

which was higher than the last year.

Sapphire’s debt to equity ratio was 0.75 times in year 2019 and it was lower than 1 in all

preceding years which means that Sapphire is not a risky business to invest in since it is not

dependent on debts or other similar instruments for financing their capital.

Internal Factor Matrix:

IFE Matrix for Sapphire Ltd

Key Internal Factors Weight Rating Weighted

Score
Strengths
1. Availability of Raw Materials and Supply 0.11 4 0.44

Chain Management
2. Board of Directors/ governors 0.05 3 0.15
3. Inventory management and stability 0.06 3 0.18
4. Vertical Integration 0.12 4 0.48
5. Technological advancements and modern 0.08 4 0.32
 equipment
6. Financial stability 0.09 4 0.36
7. Workforce management (sales staff) and 0.08 4 0.32

human capital
8. Rising success in e-commerce 0.11 4 0.44
Weaknesses
9. 2 weak product lines 0.09 1 0.09
10. Highly competitive industry 0.05 2 0.10
11. Less cost control 0.06 2 0.12
12. Not catering to specialized orders 0.07 1 0.07
13. Design Stagnation 0.03 2 0.06
Total 1 3.13

Our score is of 3.13 which indicates that the score is above than average. In Internal evaluation a

low score indicates that the company is weak against its competitors. But we have more than

average score so we can say that Sapphire holds a strong position in front of its competitors and

has a strong internal position.

 External Factor Matrix:

EFE MATRIX

WEIGHTED
KEY EXTERNAL FACTORS WEIGHT RATING SCORE
OPPORTUNITIES
1. Unstable government policies 0.02 1 0.02
2. Non-compliance of standards with
importing companies EU America 0.03 2 0.06
3. Terrorism and security problems for
0.03
foreigners 2 0.06
4. Uncompetitive exports and COP
fluctuations 0.15
3 0.45
5. Unstable supply of energy and utility
0.14
2 0.28

THREATS

0.05
1. Brand recognition 1 0.05
2. International trade opportunities because of
0.14
COVID-19 4 0.56

0.08
3. Improvements in government policies 4 0.34

4. Opportunities in backward integration; 0.1

make own cotton 3 0.3
5. Foreign exchange rate, interest rate at 7% 0.17
lock it down 4 0.68
6. Opportunities in Australian markets 0.08 4 0.34
TOTAL 1 3.14

In external evaluation a low total score indicates that company’s strategies aren’t well designed

to meet the opportunities and defend against threats. Our score is 3.14 which means that

Sapphire’s strategies are well designed to meet opportunities and defend against threats.
 Strategy Model

SO Strategies
1 Improvise with social media marketing and awareness (S5, O3)
2 Training provided at all staff levels for procurement of SOP's and eco-friendly systems (S8, O7)

ST Strategies
1 Ensure that workers follow SOPs when handling export materials (S8,T1)
2 Offering specialized services to customers will increase buying parity - Goodwill (S4,T5)

WO Strategies
1 Suppliers can be given relaxation in payment deadlines because of increased taxes (W3,O3)
2 Potential customers can shop online to reduce mass gatherings (W2,W3,,O3)

WT Strategies
1 Extensive marketing strategies to be adopted for keeping up with fluctuating seasonal trends (W1,T5)
2 Tap into different market segments to compete better (W3, T2, T3)
Internal External Matrix:
4 3 2 1

I,II & IV I
Grow II
and Build III Backward, Forward
3 horizontal integration,
Market penetration, Market
development, Product
EFE Development
IV V VI
3.14
III, V & VII 2 Hold and Maintain Market penetration, Product
development
VI, VIII & IX Harvest
VII or Divesture
VIII IX Retrenchment and
Divestiture
1
EFE IFE 3.14
3.13
IFE 3.13

New Strategies/Recommendations:

1. Backward Integration
Interpretation:
It is recommended for Sapphire to
grasps and preserve the techniques It has been observed that despite the fact that Pakistan
to hold and maintain its market
position. It should focus on is an agrarian country and produces one of the finest
advancements and market
infiltration. That can be done by cotton in the whole world, it still has to face shortages
improving the quality of overall
experience that their customers and imports cotton from foreign countries. This can
face to ensure high standard
services.
disrupt the production and can delay the orders. Sapphire needs to do backward integration

and start producing its own cotton. In this way Sapphire will have its own raw materials and

the threat of exploitation at the hands of suppliers will be eliminated. Sapphire can also start

exporting the cotton that it will produce and can generate more revenue through this way.

2. Market Development

Sapphire does not have a proper international presence like its competitors does. Khaadi and

Nishat have their outlets in foreign countires like UAE, UK and Australia. Sapphire does not

have any outlets. Though Sapphire does provide international delivery but only through

online means and it does not have physical presence in these counties which is very

important to gain customers attention. Face to face customer interaction is very important

considering the nature of the business Sapphire is involved in. Sapphire needs to expand their

market and therefore it is advised that Sapphire opens new outlets in foreign countries

starting from UAE.

3. Use competitive pricing strategy

It will benefit if Sapphire uses cost plus pricing after conducting cost and benefit analysis. It

will not only cover all the costs but also garner a reasonable profit to use in the next

production cycle or any other investment.

4. Market penetration strategies:

Sapphire’s home textiles have a potential of market growth. Strategies like advertising and

promotions and product development strategies like adding new products should be adopted.

5. Divest in Dual FX
 Demand for this fabric is very low in Pakistan as it is used to produce swimwear mostly.

Sapphire should divest in this fabric and instead use alternative materials like Nylon and Bi

stretch.

6. Customer relationship management system:

A system needs to be implemented to attract and retain more customers. An integrated

software to monitor and analyze customer information will help Sapphire in increasing its

sales.

Conclusion:

 Sapphire has a good working relationship with its suppliers and all of the deals are

conducted on verbal agreements. It would be beneficial for Sapphire to have written

terms so that it will be easier for both the parties to have proof of transactions.
  Sapphire has multiple plants to produce raw materials but they are still importing samples

of yarns and fabrics locally and internationally. It would be better if factories are put up

to their maximum capacity and used to produce the raw material required for the entire

production process. This will reduce cost of production and minimize delays.

 Sapphire textile can introduce a hybrid of straight rebuy and modified rebuy to reduce

risk exposure and cost of production. Using straight rebuy only means that there are no

post purchase evaluations and same order is repeated every time. Using a hybrid,

Sapphire can get a high quality product at a lower price

 Sapphire textile can introduce a hybrid of straight rebuy and modified rebuy to reduce

risk exposure and cost of production. Using straight rebuy only means that there are no

post purchase evaluations and same order is repeated every time. Using a hybrid,

Sapphire can get a high quality product at a lower price

 Sapphire textile can introduce a hybrid of straight rebuy and modified rebuy to reduce

risk exposure and cost of production. Using straight rebuy only means that there are no

post purchase evaluations and same order is repeated every time. Using a hybrid,

Sapphire can get a high quality product at a lower price

References:

Annual Report. (2020) [ CITATION htt \l 1033 ]

Annual Report (2019)

(Pt Profit. (2019, September 23). After years of expanding its retail footprint, Sapphire turns
online.

Sapphire Textile Mills. (2020). Mission.

Sapphire Finishing Mills. (2020).

Sapphire-Textiles, (Weaving)