Institute of Business Management

MAN405 (M-12960)

Spring 2022

Under instruction of Sir Javaid Ahmed

Muhammad Uzair Khan (25719), Maryam Adnan (26558), Saim Khan (26105), Mahnoor Sajid (26571),
Areesha Zia (26716)

Strategic Perspective of Alkaram Textiles1

Abstract:

This report emphasizes on the analysis of textile industry of Pakistan as well as it attractiveness
and proposes the strategies for Alkaram Textile. The textile industry has been contributing in
earning international incomes and in promoting domestic employment over the past fifty years.
Adequate capital, cost and performance advantage, cost management, competitive pricing,
production capabilities, low switching costs, high bargaining power, and fierce competition are
the factors which has contributed to the dynamics of the textile industry. The industry has been
affected by the macro environment factors which includes, political support, rules and
regulations, economic development, environment friendly production, and technological
advancements. Considering Alkaram, earning high market share, and strong R&D than its
competitors Gul Ahmed and Nishat are the main aspects of its competitive strategy. Moreover,
after the evaluation of textile industry and Alkaram’s internal analysis it was concluded that
Alkaram should adopt a cost leadership generic strategy in order to progress in the competitive
market. Furthermore, Alkaram’s product quality plays an important role in maintaining its
market position. Alkaram’s pret has a highly competitive position as well as rapid market growth
whereas its men clothing has a weak competitive position but high market share. Therefore,
Alkaram can adopt strategies like market penetration and development, product development,
forward and horizontal integration to grow its market share, expand in new markets, and
maintain its strong competitive position.
Key words: textile industry, Alkaram textile, Gul Ahmed, Nishat, competitive position, market
share

1
This research – was a part of our undergraduate bachelors in Business Administration’s core course ‘Strategic
Management’, at the Institute of Business Management, Spring Semester, 2022. It was personally choreographed
by Sr. Fellow Javaid Ahmed FCIM, FCMI (UK).

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 Industry Structure
Threat of New Entrants:

In the Textile Industry, firms do possess the advantage of cost and performance. The essence of
strategy formulation is dealing with competition. However, it is all too easy to see competition in
a narrow and pessimistic light. The main goal of the cost leadership strategy is to offer low-cost
products in the industry. Firm obtains cost leadership strategy through production facility
investment, experiences, and total operating cost careful monitoring and conservation
approaches. Cost-cutting measures are dependent on a variety of factors. The sources of cost
advantage vary according to the industry structure. Cost advantages come from economies of
scale and scope, as well as a cost-effective approach to raw materials and proprietary technology.
Better performances can result in high productivity and great attraction to the textile industry
customers.

Generally, the clothing industry produces fabrics that are created from the following three groups
of fibers – natural, regenerated and synthetic. Textile product mills turn raw textiles into finished
goods that aren't clothing. Household items such as carpets and rugs, towels, curtains and sheets,
cord and twine, furniture and automotive upholstery, and industrial belts and fire hoses are
manufactured in this sector. O1There are various established brand identities in the textile
industry that are operating these days in the market.

The textile industry is highly productive and involves numerous transactions involving multiple
suppliers, corporate buyers, and supply chain members. In the business-to-business context, the
cost of acquiring a new customer is significantly higher than the cost of retaining an existing one.
A supplier offering various benefits to the buyer costs the buyer high switching cost. A
relationship between the buyers and the suppliers helps in productive and flexible purchasing of
items with good accommodation that makes the buyer more comfortable in sticking to the
existing supplier, switching to other suppliers may cost him more with less benefits.

O2 Adequate amount of capital is required to enter the textile industry. Bulk purchasing of the
raw material, setting up the production machinery, converting the raw material into finished
goods and all the operations require high capital to have strong textile business base. The textile
industry will necessitate a significant investment. Apart from the rent/cost of the land, the

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operating costs of a textile manufacturing factory. The cost of equipment such as knitting
machines for knitting yarn, weaving machines for weaving thread, cloth cutting machines for
cutting cloth, and so on. Again, the cost of acquiring shop land is a concern for retailers. The
funds needed to start the inventory and keep it in stock so that it can be sold continuously.

The industry is so vast that it has a lot of distribution channel which makes it easy for the new
entrants to access the distribution channel. The diversity and variety of distribution channels
enables the ease of accessing them. Making distribution decisions in domestic marketing is
difficult; they are even more difficult in international marketing, where the channels are more
complicated and diverse. The problem of selecting the appropriate channels is simply multiplied
by the number of countries to be served. As a result, it is critical for companies bringing their
products to the global market to be able to navigate the maze of channels that are available or can
be developed in each market. The industry has various distribution channels to market their
products be it direct or indirect to attract customers.

Experience in the textile industry plays a vital role. Being good at product and market knowledge
helps you choose the best strategies for your business or firm. It mainly focuses on efficiency of
production and operations through market research. Experience in the market enhance the
knowledge that because the gas can be produced and consumed on-site, the cost of transportation
of raw materials and gaseous products is eliminated. The technology is simple and easy to use,
with very little maintenance required. There will be no problem with air pollution. In short, there
is no waste and no effluent. It also increases your knowledge about Recycling is becoming
increasingly important as the cost of water supplied to industry rises. Many textile mills in water-
stressed areas are installing water-recycling plants. Moreover, Dyes play an important role in
dyeing's cost competitiveness and absolute reproducibility. Dyes are the most expensive dyeing
raw materials. As a result, it is critical to maintain the cost associated with it by applying better
methods of dying.

Depending upon from where the new entrants are coming, it can be concluded how much efforts
or knowledge they require about the industry. Since the market is diverse but so is demand thus it
a little difficult to get the best skilled people for your firm. Differentiating the best suppliers for
better quality products is a also a task to complete with good information. Since textile industry
is vast, so are the skilled people. You need to search for material with respect to the quality and

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quantity you are looking for. In additions, suppliers will be easy to access but difficult to choose
the best one for the production of material.

Qualification in the textile field is not very difficult to obtain, concentrated focus on your field
with practical approach can help you learn a lot about the textile industry. It may be observed
that one can face difficulties in getting licenses for operating and executing their business plans
since they require proper documentations and business plan. Insurances are easy to get, there is
no such difficult in ensuring the firm, you only have to choose whom you want your company
insurance from and on what conditions it is to be settled.

Retaliation in any industry usually and mostly occurs in case of rivalry between the firms
therefore, new comers in the industry may face some sort of retaliation when entering the market
but not a strong retaliation. It is the matter of fact when a new entrant enters the market, the
existing suppliers becomes more cautious with their business but they don’t really harm or take
any kind of revenge from the new entrants. New entrants may face certain hurdles and obstacle
when entering the market but not exactly retaliation.

Bargaining Power of Buyers:

Pakistan’s textile industry has made huge contributions to its GDP, domestic, employment, and
global market. Pakistan being the head of textile sector is also the world’s fourth cotton producer
and is on third when it comes to the usage of cotton. Textile industry plays an important role in
earning international incomes and in domestic employment over the past fifty years. Textile
industry proves to be the backbone of Pakistan’s economy and there is no such substitute to this
industry. There is enough availability of un-skilled and skilled labor at low cost and raw material
which is a predominant advantage for Pakistan’s textile industry which makes it more profitable.
Cotton and Cotton related products are important for Pakistan’s industrial and agricultural sector.

Relatively, O3 there are a large number of buyers of Pakistan’s textile but during last three years
there was a slowdown in textile exports due to Covid-19 as buyers were unable to visit Pakistan
and as a result of this downturn western markets were ordering less volumes from Pakistan.
Since last year the exports have increased as in 2021-2022 (July-Jan) textile (cotton yarn) exports
increased by 41.41%. In contrast, demand for textile goods have increased in the post-covid
recovery phase which has also impacted logistics and supply chain sector of Pakistan.

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It is seen that there is a huge gap between the country’s cotton demand and the production which
led to more import of cotton. Therefore, in order to meet the demands and refrain from suffering
the losses production mills were installed which led to increased exports in November 2021 in
which China bought 44,800 bales termed as the largest buyer. India being the second largest
buyer imported around 24,300 bales.

Talking about the current political support to the textile industry it can be seen that the policy of
Regional Competitive Energy Tariff (RCET) which was introduced in 2018 by PTI Government
has brought economic stability by boosting the textile exports. On the other hand, the
fluctuations in the supply of electricity are yet to be resolved which causes heavy losses to the
textile industry. For example, if there is a one-minute breakdown in the spinning the work stops
for 20-25 minutes which causes 10-15% production losses.

As there is no distinguishing and unique factor among the buyers and due to the market
saturation, the bargaining power of buyers is high, substitutes are easily available, O4 buyers
have enough knowledge about the product, and the switching costs are relatively low which
makes the Pakistan textile industry more attractive and increases its profit potential. O5 There
are several brands in the market like Alkaram, Gul Ahmed, Khaadi offering similar products
with same target market therefore it is easy for the buyer to switch from one brand to another as
they are also offering more or less same quality.

Threat of Substitutes:

Firstly, it is true that the performance of substitutes is not justified by the higher prices. The
performance depends on quality of substitutes in an industry. The higher the quality of
substitutes will be, the better their performance will be regardless of higher or lower prices.

Secondly, “The customers will incur costs in switching to a substitute”. This statement is
correct. The customers will spend cost in switching to a substitute. The customer always wants
the best product and product that gives maximum benefit to them. The customers will therefore
not be reluctant in incurring cost in order to get the best product for themselves hence this
statement is true.

Thirdly, “The Customer has no real substitute”. This statement is incorrect, there are always
substitute in the textile industry and customers always have a chance and an opportunity to

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switch to those substitutes. The customers will have the substitutes on offer. Although the
substitutes in the textile industries are not that of greater quality that may attract the customers or
switch them towards the substitute products but the substitutes are always there in the textile
industry. Therefore, this statement is incorrect.

Lastly, “Your customer is not likely to substitute”. This statement is correct. O6 The
customers in this industry will not give a priority to the substitute products but will have a
greater preference over their exiting buying behavior. Switching to the substitutes may not yield
a high or greater benefit for the customers. The customers will intend to not switch to the
substitutes in the textile industry as the substitutes do not offer a greater quality or benefit for the
customers. Hence, this statement is correct.

Since firm’s products closest substitutes are locally sold unbranded clothing, so in the
contemporary sense there is no real substitute for these branded products available in the market,
which eventually makes the threat of substitutes very low. Moreover, the substitutes which are
available, they do not meet the performance of the firm’s products and therefore are not able to
compete even with the lowered prices. It is very difficult for them to switch to the substitute
products till very less substitutes entering in the industry. Moreover, because of their loyalty
towards that product segment i.e., Women Clothing. We can argue that the customers can switch
to other clothing brands in an industry but it is highly unlikely they will switch to the substitute
products.

Bargaining Power of Suppliers:

The Textile Industry of Pakistan boasts high exports as compared to its neighboring countries.
Growing by 17.3% in March, 2022 alone. Considering how vast this industry is and that it
contributes nearly 8.5% to the GDP of the country truly demonstrates its size.

O8 The sector is Pakistan’s 8th largest exporter of Textile based products within Asia. This also
ranks the country as the 4th largest producer and 3rd largest consumer of cotton. Since, the supply
exceeds the demand, Pakistan also exports most of its products to other countries.

Furthermore, it consists of 46% of the total manufacturing sector all the while providing
employment to over 40% of the labor force. Since this requires both skilled and unskilled labor,
it provides a great opportunity for further growth within the industry.

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Since there is a high number of suppliers for this industry the bargaining power of suppliers is
low since they cannot negotiate leverage when dealing with buyers. O7All inputs are standard
and since there is T2 no unique factor that distinguishes them, the suppliers are easily
replaceable.

Pakistan mostly produces its own raw cotton therefore there is a local market for it making it
easy and cheap to obtain locally. However, as the demand began to grow rather exponentially,
the country had to begin importing raw cotton from the global markets. While it produces almost
around 12 million bundles of raw cotton, it has to import around 3 million of those from global
markets internationally. With the high boom in export of goods, T3 this has presented the local
market the chance to compete at an international level and help grow the industry to unprecedent
levels.

Even though, the textile industry is massive, it only has 5% of its companies listed as public in
the stock market. Whereas, there are 423 textile industries in total within Pakistan. Due to the
abundance of raw material like natural yarns, cotton, rayon and others, Pakistan can use these
cheap raw materials to procure a beneficial impact on its cost and low operation lead time.

Suppliers for the Textile industry consists mostly of wool and cotton thread suppliers, with the
addition of dyes and design stamps finished clothes can get an appealing pattern. While the
patterns may be unique the product itself remains consistent and same. Converting raw cotton
and wool into finished clothe requires heavy machinery and expertise which is not available for
the common buyer. This means that this practice cannot be done in house and that buyers have to
rely on these brands to purchase from.

O9 The number of suppliers to choose from grants the industry an edge over the suppliers as
they cannot enter into this business that easily. The industry can therefore switch suppliers quite
easily. Since the inputs needed are standards and contain no differentiation or uniqueness
therefore, they too can be substituted and replaced.

Additionally, there is no significant influence of the cost of purchase towards the overall costs.
And because the business is important to the suppliers, this shows that the overall bargaining
power of suppliers is low, thus making the industry attractive.

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Threat of Rivalry among Competitors:

Pakistan as being in the top 10 textile manufacturers which produces quality textile exported all
over the world. As the figures of the growing textile industry is concerned, the recent reports
from the comparison of fiscal year 2020- 2021 shows massive increase in the export and
production in the textile sector of Pakistan. Pakistan has earned $6.021 billion from textile
exports in the first four months of the year 2021-2022 which is an increased number as compared
to the exports in July-October 2020 which were $4.758 billion (source: Pakistan Bureau of
Statistics).

The fluctuating demand of textile in Pakistan and also outside Pakistan also deals with the supply
of product and as well as raw materials. The textile sector faces fierce competition with India,
China, Bangladesh in terms of currency and also demand. These products mainly include cotton
as the basic element which is the power of Pakistan textile industry. According to a report in
November 17, 2021, traders reviewed a burst in demand of quality lint, the prices were raised of
the quality cotton despite the good trade volume RS16,700/maund, seed cotton Rs8,200/40kg
and official spot rate increased to 15,900/maund.

The fixed costs of textile sector include are transportation costs, labor costs, property taxes,
salaries, depreciation etc. whereas the total costs include fixed and variable both. As far as the
variable costs are concerned, there can be extra marketing costs depending upon the current
scenarios, production costs, packaging costs, commissions, CGS, raw material costs, input /
procurement, machinery costs, power costs and much more. Also considering the recent
situations, the fluctuating currency is also a prominent determinant in the variable cost field. The
inflation also adds up to the rising prices of the raw material everyday which causes the
fluctuation in purchases of bulk material.

There are more or less the same products being manufactured and supplied in the textile markets.
The competition is quite fierce among all the existing brands due to the productivity of similar
product and more or less similar brand identities. The Covid -19 pandemic has challenged the
industries drastically and due to the rising demands and ongoing trends the existing brands are in
high competition. The availability of natural fibers are now a big need and for this, China, USA,
India are in fierce competition.

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Brand identities are something which is known for keeping up with promises and word of mouth.
T2 (b) Every brand existing in the textile sector has its own identity but no significant difference
because all of them talk about trend and quality in a loop. The competitors and more specialized
in each of their respective fields because of their significance in particular areas, some are well
known for their fabrics, some known for their trendy prints and some for their prices. The sector
is very vast and that makes up to the unlimited opportunities for existing competitors to
specialize in specific fields. Many of them are good in effective and influential marketing
whereas many are good at their territory vise sales distributions and commissions or incentives.
This makes every brand in the market specialize in specific areas in addition to being diversified.

Textile sector adds up to a good proportion of economic growth of any country. This sector
offers employment opportunities, maximum GDP, revenues and much more. A well-established
sector is not easy to leave because of certain reasons. T8 The availability of material is also a
fact which makes the brands (large or small) to stay within the industry especially in the areas
where there is good quality production of in-demand textiles such as Jute, silk, cotton etc.

Environmental sustainability and better operations / productions are one of the major post-Covid
commitments made by the textile industries because of the massive fluctuating demand and
increased costs. To cope up with the problems of scarcity of products and make the sector more
diverse is one of the major steps to take in the upcoming years. Tech innovation in this field is
also now a compulsory action to take to keep up with the rising competition and improve
efficiency in the processes. This in turn will also introduce more opportunities for the labor to
learn new techniques and be specialized in the respective fields.

The presence of unlimited opportunities in this industry makes it easy for the customers (in either
B2B or B2C businesses) to switch to alternatives without incurring large costs. O10 This process
is higher in the B2C business as compared to the B2B business because the businesses or the
firms buy raw material in bulk from the retailers / suppliers and for that they pay huge amounts.
In such cases, when there is high rate of inflation, companies often accept the rising prices of
their suppliers in order to maintain their legacy of quality and designs. This factor is somehow
less in the case of B2C businesses due to the availability of countless options in the industry. The
prices are overall ranging in the same category for the products and this makes people switch to

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alternatives as there is not a huge difference in prices among existing firms depending on the
category of product.

Summary of Industry Structure:

Threat of New Entrants 1 2 3 4 5 6 7 8 9 10

Bargaining Power of Buyers 1 2 3 4 5 6 7 8 9 10

Threat of Substitutes 1 2 3 4 5 6 7 8 9 10

Bargaining Power of Suppliers 1 2 3 4 5 6 7 8 9 10

Rivalry Among Existing Competitors 1 2 3 4 5 6 7 8 9 10

Overall Industry Rating 1 2 3 4 5 6 7 8 9 10

The threats of new entrants is low of Alkaram Textiles, new entrants cannot enter the market
easily. Adequate capital, cost and performance advantage, high switching costs, efficient cost
management are the factors which helps the industry maintain its high barriers neglecting the
threats of the new entrants in the market. All these factors helps the textile industry maintain
their performance and standard and make it hard for the new entrants to enter the market.

Bargaining Power of buyers is slightly high due to the fact that substitutes are easily available.
They have variety of options available to buy the products from. It only remain consistent for the
quality that Alkaram offers to its customer on a competitive pricing. Our brand offers the
customer better experiences to let them stick to us but they do have variety of options to avail

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and shop from for their purchasing purpose. Uniqueness of products helps attracting the buyers
for us still they do have a vast area to explore and experience.

Threats of substitutes are low since it’s true that textile industry is a huge platform but there is no
lie in the fact that performance of any company depend upon their quality of products and
services and efficient cost management. There is a switching cost for the substitutes which
makes the buyers reluctant for incurring the cost to switch to another substitute. Other than this,
there is no such thing as real substitute everything has a value proposition in itself.

Bargaining power of suppliers is high due to better performance and good production
capabilities. Since the suppliers are innovative and providing the best product to the customers so
they have the power to bargain. The operations and functions executed by the Alkaram are
unique and different making it difficult for other brand to capture its customer and therefore it
has high bargaining power.

Rivalry among the existing competitors is slightly high, there are a lot established identities in
the textile industry that struggles to reach their goals to the fullest for this purpose they to need to
be better from their competitors all the time. Ultimately, the race of being the best creates rivalry
among the existing competitors resulting in letting down the other brand and showcasing theirs
to be the best one. Every brand tries to keep up with the trend and quality at the utmost and beat
their competitors in certain ways.

Overall the industry lies nearly at a mid-point with all its opportunities and threats and it’s
profitability factors evaluations suggests that the industry has a vast region to grow and show its
skills and capabilities. There is always a room for the industry to improve and make amendments
in its functions and operations. Ultimately, it will help the industry to progress and prosper.

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 Macro Environment

Politically, this refers to how the government can intervene in an economy through
environmental and labor laws, tariffs, trade restrictions, and tax policies. It also demonstrates
how a government can influence education and health, as well as how it affects a country's
infrastructure. There can be political impact on the threats of new entrants, the industry will not
be able to achieve success, a good reputation, or trust if it does not include the legal and political
sectors in its strategy. Political and legal sectors include the need for the company to adhere to
the government's policies and regulations in order to be considered a legal and authorized
business entity. And if it won’t be able to do so, the threats of new entrants will increase
devastatingly.

Due to the high bargaining power of buyers and demand of textile industry Pakistan’s
Government has been paying high attention towards the growth of the textile industry. They have
taken a step towards Balancing, Modernization, and Replacement (BMR) program which
provides loans to the businesses and carries several benefits as establishing textile city at Karachi
and Garment cities at Lahore, Karachi, and Faisalabad, reduction in import duties for importing
machinery and parts to 5%, providing R&D support to garment export business to 6%, reduction
in ginning presses import duties to 5%, reduction in turnover, and sales tax, and providing long
term financing for export oriented business. Therefore, the government is playing positive role in
growing Pakistan’s textile industry that will help them to meet the buyers needs and demands
and make the industry attractive and profitable.

Political aspect plays an important role in influencing the threat of substitutes. If there is an
increase in political regulations by government on textile industries such changes in operating
hours then the course of operations will have to be revised. This may not suit some of the
companies in the textile industries that may lead to closure of the companies. This will attract
newer substitutes in the textile industry and the threat of substitutes will therefore increase.

Moreover. Another aspect is regulation in the area where the company is operating. Let’s
suppose the clothing company is operating in an area which is considered to be residential then
the company will have to get relocated. This may increase serve an incentive for substitutes to
enter in the textile market at a newer area.

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The government has taken many initiatives to support the Textile Industry as it is one of the
prominent industries within Pakistan where a complete value chain exists. The sector had been
underperforming due to load shedding, power shortages and higher manufacturing costs. To
combat this, the government released an initiative to provide gas to the textile sector at lowered
prices.

The cotton production and quality were at an all-time low as the area of cotton cultivation had
decreased by 18%. This was largely due to its poor quality and contamination which led to it
fetching lower prices in the market. The Pakistani ginned bales contain around 8-10% trash
whereas on average it is supposed to be only around 2-3%. This poor quality of cotton in turn not
only increases the overall processing cost but also reduces the overall output and end product’s
quality.

In order to solve this problem, the government has decided to launch a Textile Policy 2021-25
initiative that will help increase textile exports from US 13 billion to nearly US 25.3 billion by
2025 and US 30 billion by 2030. This will be done by giving incentives, subsidies and lowering
tax rates in order to boost the textile industry furthermore.

This policy will also be replacing the old 2014-2019 policy that failed to meet its targets.
However, the All-Pakistan Textile Mills association (APTMA) is hopeful about the tariff cuts for
electricity and gas as they will help attract more investment into the sector.

The political structure of Pakistan brings up many challenges for the existing rivalry in the textile
industry. The currency is one of the major concerns and the contracts being signed with the
trades are also an effective part to deal with. As far as new laws for import, export and currency
exchange are kept in view, the rivalry might be affected to some extent but more or less all are in
the same boat.

Economic growth refers to how exchange rates, inflation rates, interest rates, and economic
growth will affect a business's ability to grow, develop, and make various decisions. For
example, if the company exports goods, exchange rates can have a significant impact on their
operations; these are factors that must be included in the company's strategic management plan if
they are to succeed. It is critical that the textile industry pay close attention to its economic
stability. The economic goal of the textile industry is analogous to an axis around which other

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objectives or goals revolve. The economic factor includes the context in which the industry
operates, i.e. the configuration of the competition in which a company operates, active product
demand, and general economic condition. Good economic stability in the market will be
favorable to the threats of new entrants.

Due to Covid-19 there was a downturn in economic growth of textile industry of Pakistan but
since 2021 July the economic condition of textile industry has been improved. We can say that
the textile industry has seen major economic growth in the pandemic 2019 where almost all
country’s ports were closed due to lockdown and Pakistan imposing a smart lockdown continued
its trade therefore many countries switched to Pakistan to buy its superior quality fabric, and
increased raw cotton exports worldwide. Buyers did not have any substitutes available hence the
bargaining power of buyers lowered down. Locally, the bargaining power of buyers remained
high as Alkaram, Gul Ahmed, Khaadi, Sana Safinaz and many other brands were offering
products with same quality and prices as it was before the pandemic.

In economic aspect, the taxes imposed by government plays a significant role in effecting the
companies in textile industries. Let’s suppose, if the taxes are increased and the companies have
to pay higher taxes then this may result in increase of cost for the companies. In result many may
close down which may serve as an incentive for substitutes to enter in the textile industry. This
would hence lead to an increase in the threat for substitutes.

Apart from this, T5 the exchange rate plays an integral role in determining the threat for
substitutes. If the exchange is appreciating against the US dollar, then this makes the exports
expensive and imports cheaper. Imports getting cheaper may mean that people may import the
clothing from abroad which will reduce the demand for domestic clothing to decrease. This may
in turn lead to fall in profits for domestic textile companies and may very well lead to a closure
of the some of the companies. This may therefore lead to increase in substitutes arriving in
textile industries hence the threat of substitutes will increase.

The constant rupee devaluation and political uncertainty is damaging for the textile industry as
this means that less and less resources can be imported due to the fiscal deficit, forcing Pakistan
to boost its own cotton supply in order to meet its demands. Additionally, this would also
increase the cost of switching supplier which would increase the bargaining power of suppliers.

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The poor structure for the balance of payments as well as the recent increase in taxes and duties
due to the Covid-19 has severely affected the industry and crippled it. Hindering its overall
growth in this sector.

The textile sector is one of the most promising sectors that contribute the most in the GDP of
Pakistan’s economy. The recent economic conditions of country can lead to an increased rivalry
among the competitors because of the fact that the inflation rate is at its peak and the raw
material purchasing, procurement processes, transportation costs are increasing on a day-to-day
basis. The economic conditions currently can end up creating intense rivalry as the competitors
want to raise prices but some else would take advantage of situations and decrease prices in order
to gain the most market share or customers. Competitors might be switching up the suppliers
because of rising costs and might bring up new infrastructures, however, the drawbacks can be
that at first the textile sector of Pakistan was having an international recognition and in the recent
years the cotton exports have decreased by 21% (Dawn Reports). The industry is growing
rapidly but the fact that economic conditions currently can cause a down fall.

During the Covid – 19 pandemic situations, the rivalry has increased due to the fact that there
were major economic downturns globally and exports and imports (trade) was being impacted.
Sales were also lost due to the trade issues and that cause the infrastructure to collapse, high
adaptation of advanced processes and the ones keeping up stayed in the industry.

These social factors refer to how a society behaves culturally, how the population rate will grow,
how fashion-conscious people are in a country, how its range is distributed in a country, and the
various attitudes that people have toward their lifestyles. When social trends shift, it can have a
significant impact on the demand for a industry's products or services. Similarly, as a society's
population ages, the cost of labor rises, and businesses must adapt their management strategies to
keep up with these changes. The new entrants that are good innovators, can have an advantage
with social perspective. Keeping up with trends in markets and introducing new concepts will
help them enter the industry. And it can be unfavorable for the threats of new entrants.

Rapid changes in consumers lifestyle where consumers tend to spend more on high quality
branded products as compared to local products which increases the bargaining power of the
buyers. Over the past few years there has been increase in demand of branded clothing, in the
country like Pakistan where there are several substitutes available when it comes to textile

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industry and brands, diverse cultures have also resulted in increased bargaining power of buyers
as brands are offering traditional dresses to the buyers in similar prices and quality where there is
no differentiation.

In Social aspect, it depends on the incomes earned by the people or a change in lifestyle of the
individual. Let’s suppose the lifestyle of individuals has significantly upgraded and they have
started to earn a higher income then their demand for expensive clothes will increase. This will
result in industry being getting attractive which will hence lead to a decline in the threat of
substitutes.

The social factors involve major concerns related to the environment and health. The existing
competitors are in a continuous race to get the best results by the consumers and for that purpose
they are trying to switch towards environmentally friendly processes such as manufacturing,
testing, packaging etc. There needs to be a full check on the competitors. In Pakistan, there is a
serious check on the child labor issues. The firms not abiding by the labor laws and social
dilemmas are in serious issues and facing major backlashes due to un-ethical steps taken.

Wages are also concerned factor for the social circles to be discussed as this sector provides a
major proportion of employment and there is fierce competition in this concern that who is going
to provide proper justice to the employed ones. Firms are working on such factors to gain more
support and positive remarks in order to stay away from the negative news.

The industry should also abide by the social norms and culture of the existing market and
audience and for that, there is a high competition going on between the existing brands to
provide the best they possibly can.

Technological refers to how technology can change and includes automation, R&D activity, and
technological incentives. Technology can also have a significant impact on efficient production
levels and influence outsourcing decisions. In addition, there are some technological changes that
can affect the costs that a business must meet as well as the quality of a product or service that a
business provides. New entrants with advance technology can conquer the market and can access
the textile industry which will help them grow resulting in an unfavorable impact on the threats
of new entrants.

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Advancement in technology and latest machinery can result in high productivity which will
increase the availability of the products that will increase the bargaining power of the buyers.
Moreover, the information available online helps the consumers to know more about the brands
which makes it easy for them to switch from one brand to another offering low switching costs.

Technological aspect plays a pivotal role in determining the threat of substitutes. If the
technologies operated in companied in textile industries are advanced and up to date then this
would result in better operations and more effective working. An advanced technologies will
help the companies in textile industry to save time and money. Every organization aims to
minimize its cost and the time it spends in its operations. If the modern technologies are being
used then the new substitutes will find it difficult to enter in the textile industry and the existing
companies will have their dominance in this sector. Therefore, the threat of substitutes will be
low.

There is a race of being indulged in technology as per to use the most efficient machinery for
processes and procurement. Pakistan’s textile industry is the most heavily automated industry
and this brings up a fact of concern about the existing brands that would they be able to keep up
with the rising demand of technology and by time the competition to stay updated will get
tougher.

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External Factor Evaluation Matrix:

The ratings and weight of the opportunities for the textile industry has been done by seeing its
current economic growth and productivity. One of the opportunities is that large capital is needed
to enter in to the industry. The weighted score is 0.24 which is high if we compare it with other
opportunities. This is good prospect for the existing companies as a large amount of capital is a
barrier for new firms to enter hence existing companies can serve their customers in a much
better way.

Another opportunity is Customers are less likely to substitute. This is also a great opportunity as
this ensures that customers will be loyal to the companies in textile industry and will not be
switching. This leads to an opportunity for companies to serve their customers well. The rating is
also highest which is 0.32 which indicates the opportunity is tremendous for the company.

Other than this, suppliers can be switched between quickly and cheaply. This is an opportunity as
companies can find a better supplier quickly and at a lower cost as well that will help in
minimizing the overall cost of the business.

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Moving further, industry is growing rapidly and consistently. This is a healthy sign as growth in
industry would mean more potential in the market that attracts more investment from the
investors.

Apart from this, the business is important to the suppliers. This is a very pivotal aspect for the
business as if the supplier values the company, then company can negotiate a lot with its
suppliers which is a benefit for the company.

Furthermore, customers may incur cost in switching to a substitute. This is least likely to happen.
Customers would not be willing to the substitute product. The rating is also the lowest i.e. 0.1
that indicates the how much less important this opportunity is.

Moving further, the product can be unique and accepts branding. This is also a minor opportunity
as the overall rating is 0.6 which is quite less. However, if products are unique then it acts as an
opportunity in a way that it may attract more consumers that will help to generate more sales and
revenue.

The above-mentioned threats for the textile industry are rated and weighted on the basis of
current scenarios. The rising inflation rates and indirect taxes are the biggest threat to the
industry which can create a negative image of the industry in the international market. The
brands might have to increase their prices due to inflation and taxes which can affect their
profitability. The undifferentiated products make it easy for the consumer to switch from one
brand to another which decreases consumer loyalty towards a particular brand. Moreover, due to
the high demand of the textile products from the buyers and the consumer the supply of
demanded products is affected which is a threat to the industry as if the consumer demands will
not be met, they will switch to the other supplier as there are close substitutes available.

Due to the rising prices of skilled labor and machinery the brands are individually threatened to
outperform than one and other and it also increases the production costs of a brand or an
industry. Moreover, due to the pandemic and the rising prices consumers might shift from
branded clothing towards local ones which will affect the overall economic growth of the
industry.

As the lowest rated in the EFE matrix is no incentives being provided to decision makers upon
analyzing the industry there is no such threat from this factor to the textile industry. Moreover, if

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no incentives will be paid to the decision makers this might become a threat and reduce the
productivity and efficiency of the industry. As the matrix rates difficulty in accessing the
distribution channel every other brand is easily accessible to the consumer due to its variety and
diversity of distribution. On the other if there is difficulty in accessing the distribution channel
the consumer might switch to another brand and it will damage the reputation and profitability of
the brand in the market. Lastly, lack of territory wise sales possesses a threat to the industry as it
minimizes sales and profit, diminishes the consumer coverage, and increases the sales expenses
etc.

Industry’s Critical Success Factors:

Alkaram textile mill is a family run business which is one of the most sustainable businesses in
the Pakistan textile industry. When it comes to marketing and advertising, a sales manager in the
firm stated that Alkaram needs to cater the audience willing to pay for good quality products.
Alkaram produces best quality products and the customers who are ready to pay for it are less.
The customer segment varies in terms of the specifications required by them; there is different
variety of customers demanding different quality of products which makes it somehow difficult
to cater all of them. Alkaram uses billboards and different social media platforms such as
Facebook, Instagram etc. to create awareness about their latest products being available for the
customers. This happens mainly with Alkaram studio which is the main source of revenue for
Alkaram mills. This helps them capture the audience they want to, the ones willing to pay more
for the good quality products. They don’t invest much in the television commercials but they do
influencer marketing which helps them raise profits and demand.

Alkaram’s market penetration is moderate as it provides quality products to the demanding

customers. There are variations in the products that are produced which include yarn, cotton,
lawn etc., these come in the category of clothing whereas bed linen is also available for sales
abroad. Alkaram penetrates into the market creating big sales with their existing products and
improving portfolios. Not only in the domestic market, but internationally also, Alkaram deals
with Walmart etc. too to expand sales.

The R&D department of Alkaram works on the environmental sustainability and processes that
enhance the brand image. Recently, there has been a lot of influence from the foreign market or
international buyers about the environmentally friendly manufacturing and products. The CSR

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(corporate social responsibility) projects of Alkaram makes it gain customer loyalty overall
(domestically and internationally). Alkaram has invested heavy amounts on this plant and are
trying their best to achieve zero-discharge policy to eliminate harmful waste disposal.

For customer service, the branding is to be done after the proper analysis of the target market. In
order to increase positive response from the customers, Alkaram is now trying to promote direct
selling by increasing their outlets, providing products at locations to increase better customer
service and interaction. They are also creating different pricing and labels to accommodate their
target market and bring up the potential target audience. They also include premium products in
their various collections and sell on premium prices.

Product quality and prices are directly proportional to each other. The improved quality results in
higher prices however, in the market; Alkaram has relatively reasonable and better rates as
compared to the competitors. The product portfolio consists of options at different prices which
accommodate every type of customer and the prices of indirect and direct selling also makes a
difference.

In 2005, famous designers were also called out to work with Alkaram which increased their
sales. Financially the company is profitable as they don’t borrow or take loans. They continue to
invest in high quality equipment and machinery to increase efficiency and bring out better
products. There can be downside at a point where Alkaram is not willing to take big risks
regarding expansion or investments whereas according to their accountants they should go for it
to improve the companies’ successes.

The market share of Alkaram textiles is large as they are now the international ecommerce
business and also are a strong brand in the domestic market. Increasing innovative techniques
and improved products leads to a better brand image and increases customer loyalty. People visit
Alkaram outlets in order to gain advantage of the prices and reasonable products.

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Competitive Profile Matrix:

Alkaram Gul Ahmed Nishat

Critical Success
Weight Rating Score Rating Score Rating Score
Factors
Advertising 0.08 3 0.24 4 0.32 2 0.16
Market Penetration 0.10 1 0.10 3 0.30 3 0.30
Customer Service 0.05 4 0.20 1 0.05 4 0.20
Store Locations 0.05 3 0.15 4 0.20 2 0.10
R&D 0.10 4 0.40 2 0.20 4 0.40
Financial Profit 0.08 2 0.16 3 0.24 2 0.16
Customer Loyalty 0.10 2 0.20 4 0.40 3 0.30
Market Share 0.18 3 0.54 4 0.72 2 0.36
Product Quality 0.06 3 0.18 2 0.12 3 0.18
Price Competitiveness 0.20 3 0.60 3 0.60 2 0.40
Totals 1.00 2.77 3.15 2.56

The results of CPM Matrix showed that Alkaram lacks behind in market penetration as compared
to its competitors. It helps us to know that customers buy more products of competitors’ brands
as compared to Alkaram. The reason for low market penetration than the competitors is that
Alkaram’s outlets are mainly located in malls whereas if we see Gul Ahmed and Nishat their
outlets can be seen in local markets where it is easily accessible for the consumers. Alkaram is a
renowned brand not only in Pakistan but also internationally but when it comes to Gul Ahmed
and Nishat Linen, they are able to reach a large number of potential customers as their products
and brand are well established and easily accessible to every customer. Being a big brand in the
market Alkaram focused on its quality and neglected focusing on product designs, store
ambiance any other important factors as said by Sumrin Ali (Director domestic and retail at
Alkaram). She continued by saying it not only affected our brand image but also our market
shares as compared to our competitors. Consumers these days demand new product designs and
are also attracted by the outlet’s ambiance too and Alkaram neglecting these factors lost its
consumers and market share too.

Consumer loyalty is another factor where Alkaram lacks behind from its competitors. Alkaram
has launched its MAK collection for attracting young generation as Gul Ahmed and Nishat were

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already targeting younger age group and teenage girls which affected Alkaram consumer loyalty
and its consumers shifted towards its competitors. As Gul Ahmed has also launched its Salt
collection in which it added T-shirts, sweaters, etc. this attracted the consumers more towards
Gul-Ahmad. Moreover, Nishat linen offering different fabric variety also helped it to gain more
consumers. Alkaram after losing its potential consumers launched its western product line but till
then it had lost its loyal consumers which affected its market share and gave the advantage to its
consumers.

The Nishat Group is a conglomerate which was founded in Pakistan containing multiple
companies inside its umbrella. It is a tough market competitor for several other companies within
the Textile Industry. Among the 3 top companies, it’s a direct competitor for Alkaram and Gul
Ahmed. Considered to be a very modern and vertically integrated company, Nishat Mills is the
flagship company for the Nishat Group. The company boasts modern technological machinery
such as a large number of spindles and Toyota air jet looms. With high exports in recent years,
this company is a very strong competitor within the textile industry.

Compared to the other two companies, it can be seen from the CPM Matrix that Nishat is an
aggressive company since it focuses a lot on its customer service and R&D department to further
its growth. Additionally, since it has created a strong brand image in the hearts of its customers,
therefore they are loyal to it allowing the company to have a greater Market Penetration. While it
does lack in certain CSFs such as Advertising and its store outlets. However, the high
competition from other companies in this sector has forced it to bear a lower market share than it
would have liked to have. However, since the company focuses more on existing customers
instead of acquiring more market share it is able to remain price competitive and generate profits.

With a huge number of associated companies, it is no doubt that Nishat Mills hosts a very strong
portfolio within this industry. Additionally, in 1996 they acquired assets of Nishat Fabrics and
Nishat Tek Limited incorporating it into their own which further empowered Nishat Mills.

Gul Ahmed has given a keen priority in marketing its clothing brands. There have been
advertisements on its Lawn summers collection. The advertisement is done in the form of
postures. This are many bill boards we see regarding the clothing collection of Gul Ahmed. Even
if we talk about its social media marketing, then it’s right up there. Gul Ahmed carries out a great
marketing campaign over different social media platforms such as on Facebook and Instagram.

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Either its winters or its summer, Gul Ahmed always makes sure its advertising campaign is right
up there. Successful product innovations: Gul Ahmad had introduced some new products in the
recent past. One of the successful innovations in recent past by Gul Ahmad is a new pret
collection titled “Digital Dreams-Nautica". In this brand, the clothing has elements of maritime
and marine life elements. Other than this, Gul Ahmed has also introduced formal shirts and T-
Shirts for men as well. When it was started, its target market was only women but now it has
diversified its product range and has begun to target men segment as well. IT structure: IT
structure is an aspect that Gul Ahmed is average at. There are many takeaways such as Gul
Ahmad uses its IT system to gain maximum knowledge about its customers so that demands of
customers can be met. However, Gul Ahmed does not use its IT system effectively to get the
customer feedback once the sales are made. Brand reputation: Gul Ahmed is regarded as the
leading textile company and has been leading in the industry for well over a decade. Gul Ahmed
has a great brand reputation. Due to its well-established brand quality, Gul Ahmed has been able
to build up the trust of its customers. Due to this trust, the brand image and reputation of its
brands is significantly high. Profit margins: if we talk about the profit margins of Gul Ahmed
over the period of years, the net profit margin has decreased quite a bit. If we talk about 2019,
then its net profit to sales margin 6.3% and if we talk about 2021 then its net profit to sales has
decreased to 5.94%. One of the main reasons of this was the arrival COVID 19. Due to this
pandemic, the sales of Gul Ahmed decreased due to which net profit to sales margin decreased as
well. Social programs: Green Company was introduced by Gul Ahmed to make sure more trees
were planted and ensure sustainable lifestyle. Effluent Treatment Plant was also installed in May
2007. Apart from this, Gul Ahmed Treated 1 million gallons per day of waste water within
NEQS limits. Moreover, Gul Ahmad has also many on-going projects to recycle waste water.
This will help to overcome the problem of water shortage. Strong Distribution Network:
Distribution channels are different for Local and Export orders, Gul-Ahmed has own transport
for the distribution to the retail outlets in Karachi. This ensures significant cost is saved because
of the fact Gul Ahmed does not need to outsource the transportation services. Customer Loyalty:
Over the period of last 10 years, Gul Ahmad has really served the customers in a right way. Be it
introducing new range of products or maintaining a high quality in the industry, Gul Ahmed has
not just been able to win its customers but also has been able to retain them. This has resulted in

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great customer loyalty and has led Gul Ahmed in becoming the largest textile firm in the
industry.

Internal Competencies:
S1 Alkaram Textiles which rates the highest in customer service in the success factors. Through
its customer service, Alkaram has the advantage of making a strong customer base and acquiring
more and more customers in the industry. Gul Ahmed is low at its customer service which makes
it’s an opportunity for Alkaram to get high customers. S2 Alkaram R&D gives it power over its
competitors. It plays a vital role in a company’s growth as a good research and development
department they keep up with the trend. They have good knowledge and information about the
market. Gul Ahmed also lack behind in its research and development sector. S3 Advertising of
Alkaram and the strategies it applies on advertising the brand is essential for it. Advertising helps
the company a lot in capturing the market and getting attention of the people. It also helps
Alkaram to market its products well. Nishat lacks its Advertising implementation and is weak
there whereas Gul Ahmed is a good company at its advertising. S4 Alkaram’s store locations are
also vital, it has its stores on main locations which is very beneficial for their business. The
running market places has Alkaram stores there. Gul Ahmed’s store locations are on the best
locations. Nishat is poor at the selection of it’s store location. S5High market share is also an
advantage for Alkaram. It has high sales generating greater industry revenue which helps it in
capturing the industry well. Gul Ahmed is comparatively low at the market share. S6 Good
quality is the foremost initial important thing for a company to maintain and get customers.
Alkaram has the valued quality products. Customers stick to the brand with good quality
products which are reliable. Gul Ahmed’s product quality is estimated to be comparatively low.
It also gives an advantage to Alkaram to progress in their product quality more and acquire the
market. S7 The price competitiveness of Alkaram, offering the best prices for its products and
services enabling a vast range of customers to shop from them. Managing the price with respect
to its competitors and attracting more customer market.

W1Alkaram focusing more on the quality of the product as its competitors focused on the product
design. With the rapid changes in the fashion and styles consumers demand also changes with it.
Consumers nowadays are not only attracted towards product quality but by several factors such
as product design, store ambiance, presentation, outlook etc. In order to overcome this weakness

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Alkaram needs to re-build its strategies focusing more towards product design attracting younger
age group as it is already catering the demands of adult age group. Moreover, it also needs to
focus on store ambiance in order to attract more consumers as people these days are attracted
towards how the brand represents itself. W2 Alkaram is charging relatively lower prices than its
competitors and providing high quality fabric. Alkaram is a price competitive brand but still is
earning less profits than its competitors Gul Ahmed and Nishat. Therefore, in order to earn high
profits Alkaram should start charging slightly higher prices which are not more than its
competitors but close to them. W3 Alkaram has low market penetration as compared to its
competitors Gul Ahmed and Nishat as they have stepped into the untapped market where Gul
Ahmed is offering western wear, bedsheets collection, etc. and Nishat linen offers jewelry,
accessories, etc. On the other hand, Alkaram has its bed collection mostly internationally.
Therefore, Alkaram should tap into the different product lines in order to maximize its market
penetration and gain competitive advantage. W4Alkaram customer loyalty has been affected due
to its limited product range. For instance, Alkaram is focused towards producing eastern clothing
whereas its competitors have moved on to producing western collection too which has shifted the
consumer preferences towards the competitors. Moreover, not only evolving in product range
would make any difference but Alkaram should make strategies to evolve its consumer
experience at its outlet too. Therefore, Alkaram should offer its customers with variety of
clothing lines, adding accessories, and fragrances, etc. W5Alkaram does not focuses on territory
sales strategies as it does not have any individual sales person catering a specific group of
consumers. Adopting the territory sales strategy can help Alkaram to cover the whole market
properly, increased customer satisfaction, high sales and productivity margins, etc. Therefore,
Alkaram should opt for territory sales in order to cater its consumer demands and provide
efficient customer service.

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Value Chain Analysis:

Firm infrastructure:
S1: highly responsive and effective system
S5: high market share
HRM:
-
Tech development:
S2: advanced R & D (CSR)
Procurement:
W2: high raw material prices, low selling prices
MARGIN
Inbound Operations: Outbound Marketing and Services:
logistics: W1: Lack of logistics: sales: S7: favorable prices
S6: good focus on S4: strong S3: powerful for customers
quality raw product design direct and influencer W4: limited product
material indirect marketing range
purchase and selling for W3: low
timely easy penetration
manufactured availability W5: no focus on
of products territory vise
sales

Internal Evaluation Factor Matrix:

Strengths Weight Rating Weighted Score

1 Highly responsive and effective infrastructure 0.06 2 0.12
2 Advanced R&D (CSR) 0.15 4 0.60
3 High engagement via influencer marketing 0.08 3 0.24
4 Direct and indirect selling for availability of products 0.07 2 0.14
5 High market share 0.09 4 0.36
6 High quality material purchase / timely manufactured 0.07 1 0.07
7 Customer centric prices / affordable range 0.08 2 0.16
Weaknesses Powerful Rating Weighted Score
1 Lack of innovative products 0.04 2 0.08
2 Costly raw material 0.15 3 0.45
3 Low market penetration 0.08 2 0.16
4 Limited product range 0.06 1 0.06
5 Less territory vise sales 0.07 2 0.14
Total IFE Score 1.00 0 2.58

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Alkaram being a big name has strengths and weaknesses highlighted above in the sections of
IFE. Currently Alkaram is working at a large scale on the research and development section to
maintain sustainability and environmentally friendly manufacturing. The process didn’t end here,
they are also working on zero-waste phenomenon where they will make sure that there are no
harmful or waste products discarded and the costs are well utilized to ensure efficiency of
processes.

Being the competitor of two major brands Alkaram has high market share and this brings
Alkaram advantages like strong customer base and investments overall. Weaknesses here can be
addressed as a factor of rising inflation and economic conditions of the country. The raw material
prices are rising day by day and the trade is also being affected, adding on to that, the labor is
also not efficient enough. Suppliers demand high rates and it’s not easy to switch suppliers when
company has a high market share and is well-known for the quality of product.

Alkaram outlets are mostly available in areas where the products are not easily affordable by
customers. The segment in those locations is mostly of low-income group whereas there are also
been outlets now available in the urban sectors where the sales are high but also is the
competition.

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Generic Strategy:

Alkaram Textile

Generic strategies comprise on two factors:

• Cost Leadership.
• Differentiation.

Having followed an evaluation of the industry analysis as well as the company's internal
analysis, several inferences were drawn that were used to determine which generic strategy
Alkaram should pursue. It is concluded that Alkaram should follow the cost differentiation
strategy as it exhibits more advantages as compared to other strategies. Alkaram need to adopt
this generic strategy and should create uniquely desirable products and services with efficient
cost management. Alkaram require its focus on the skilled workforce, low-cost raw materials,
controlled costs, and efficient operations to provide the most value to customers. This strategy
can help the company grow well in the industry capturing high market share and being
beneficial. The operations of Alkaram needs to focus on managing their cost structure, they have
to maintain their quality standards of their product and services along with efficiently
implementing cost leadership with high production and value proposition.

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Looking at the competitors, they might focus more on the differentiation strategy which indeed is
a good strategy but for differentiation purpose in such a vast industry the cost also fluctuates
higher. Differentiation in the textile industry requires more and more knowledge about the
product and innovations, the competitors need to be well addressed about the market trends and
must have insights about the customer’s behavior. This will be an effective strategy but on the
same page it is the core objective of every company to be different as much they can what is
more important is the fact that how effectively Alkaram manages its resources to give the best
output by efficient cost leadership.
Alkaram has an advantage of being unique by being a cost leadership in the industry, it already
has a good customer base and has already capture a huge market through its quality products and
customer services. All Alkaram needs to focus on now is implementing the cost leadership
generic strategy to progress in the market and the industry. This will provide a competitive
advantage to Alkaram over Gul Ahmed and Nishat Mills.

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Strengths, Weaknesses, Opportunities, Threats Analysis:
SO (Strengths – Opportunities) Strategies
1. As there are large number of buyers in the industry as compared to firms Alkaram
being high at customer service can build strong consumer base. (03, S1)
2. Consumer is less likely to substitute as Alkaram is offering best prices and is more
price competitive than its competitors which leads towards enjoying high market share
in the industry as compare to the competitors. (O6, S7, S5)

ST (Strengths – Threats) Strategies

1. Due to the higher price’s consumers are being repulsive therefore Alkaram’s good
product quality can help it to attract more consumers. (T5, S6)
2. Difficulty in assessing the distribution channels can be solved as Alkaram has its stores
in the running market places which can help the consumers to easily find the stores.
(T7, S4)

WO (Weaknesses – Opportunities) Strategies

1. Consumers can incur costs in switching the brand therefore Alkaram can charge
slightly higher prices than its competitors as it offers best quality products. (O10, W2)
2. Consumer loyalty can be gained back through producing/introducing unique product
lines. (W4, O5)

WT (Weaknesses – Threats) Strategies

1. Unique and differentiated products can maximize Alkaram’s market penetration and it
can gain competitive advantage. (T2, W3)
2. Increased territory wise sales can help Alkaram to service its customers efficiently, and
cover the market properly which can result in higher sales and profit margins. (T8, W5)

Customer service plays an important role in retaining customers and extracting value from them.
A good customer service helps in building the brand image in the minds of the customers. There
is a huge demand of textile industry with infinite buyers and limited firms. Alkaram leads in
satisfying its customers through its customer service which gives it a competitive advantage over
its competitors. In the market where similar and undifferentiated products are being
manufactured Alkaram stands out and value its customers. Therefore, Alkaram has this

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opportunity to make its consumer base stronger and attract more consumer by enhancing its
customer service more.

Alkaram being a price competitive brand offer best prices than its competitors. Price
competitiveness results in gaining more market share and attracting more customers in the
competitive market. Alkaram stands out for offering lower prices with best quality than its
competitors. This gives Alkaram an opportunity to make a loyal consumer base where consumers
would not switch to the substitutes offering similar products. Following the same pattern might
help Alkaram to reduce the cost of production and an increase in efficient production.

Alkaram is renowned for its product quality which has satisfied its customers for years. Whereas,
product quality is not the only factor consumers consider while making a purchase decision.
Consumers look for prices, substitutes, product design, etc. Alkaram has this opportunity to
increase its sales through attracting the customers with lower prices as consumers look for
renowned brand, low prices, and product quality.

Alkaram has placed its stores in the running markets where it is easy for the consumer to access
Alkaram products. The threat for the industry is difficulty in accessing the distribution channels
in this case Alkaram stands out and offer its consumers an easy access to the outlets. Through
this Alkaram’s brand image can strengthen through the word-of-mouth from its potential
consumers.

Alkaram offers best quality with low prices in the market whereas its competitors Gul Ahmed
and Nishat offers high prices that proves to be an advantage for Alkaram. Therefore, Alkaram
can charge slightly higher prices than it is charging currently because consumers may incur costs
in switching the brand as they are already paying a lot for the competitors so they will also pay
high prices for Alkaram if it will change its pricing strategy. Thus, these amendments might
result in earning more profits, increased market share, and strong brand image for Alkaram.

Currently, Alkaram has not invested much in introducing new product lines like western
clothing, bed sheets, and accessories. Gul Ahmed and Nishat are offering customers more like
bed sheets, accessories, western collections, jewelry, etc. this has caused a shift in consumer
loyalty towards Alkaram as nowadays young generation prefers western clothing than eastern.
Therefore, Alkaram can gain an opportunity from this weakness through gaining its consumers

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back by tapping into this market by making its potential customers attracted towards the brand
and existing customers more satisfied.

Alkaram is focused on producing limited product range which has limited its market penetration.
This is a threat to the brand as it can reduce the profits of the brand and affect the consumer base.
Therefore, Alkaram should tap into the untapped area and produce unique and differentiated
products than the competitors in order to penetrate itself in the market like its competitors. For
instance, it can introduce its fragrance line, accessories, etc. This will help Alkaram to gain large
market shares and increase its consumers.

Alkaram holds a positive brand image not only in the market but also in the minds of the
customers. Customers expects the brands to value them and Alkaram being a big brand ensures
that its consumer are being valued and taken care of their needs and demands. Therefore, if
Alkaram focuses on opting territory sales strategy this will help them to utilize the most from
their salespeople, provide efficient services to the individual consumers, control their selling
expenses, etc. This will result in improved customer relations, reduced selling costs, compete
with the competitors in the market, gain more market share, covering large area of the market,
and earning higher profits.

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Strategic position and action evaluation:

Gul Ahmed
3
Nishat
1
Alkaram
-7 -5 -3 -1 -1 1 3 5 7

-3

-5

-7

External
Internal Analysis: Analysis:
Financial Position (FP) Stability Position (SP)
Return on Investment (ROI) 3 Rate of Inflation -4
Leverage 2 Technological Changes -3
Liquidity 2 Price Elasticity of Demand -1
Working Capital 4 Competitive Pressure -5
Cash Flow 4 Barriers to Entry into Market -4
Financial Position (FP) Average 3 Stability Position (SP) Average -3.4

External
Internal Analysis: Analysis:
Competitive Position (CP) Industry Position (IP)
Market Share -2 Growth Potential 6
Product
Quality -1 Financial Stability 5
Customer
Loyalty -2 Ease of Entry into Market 2
Technological know-how -3 Resource Utilization 3
Control over Suppliers and Distributors -1 Profit Potential 4

Competitive Position (CP) Average -1.8 Industry Position (IP) Average 4

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This four-quadrant framework for Alkaram demonstrates whether its implemented strategy is
aggressive, competitive, defensive or conservative. Thus, the strategies implemented show us if
they are capable of generating the highest return on investment. Additionally, this map is used
for strategic resource allocation decisions. With the Axis representing two internal and two
external dimensions within the industry.

Alkaram falls at (0.4, 2.2) points in the space matrix above. This indicates that while it’s not as
aggressive as its competitors yet it still remains highly competitive in a moderately growing
industry.

Market Penetration can be improved if Alkaram started to focus more on the ecommerce aspect
of the business and reached out to customers via that channel. Additionally, they could also
improve on their existing export products while increasing international awareness of their
services.

In order to have access to high quality cotton buds’ production, Alkaram should facilitate or
acquire cotton farms so that it can have a consistent source for its raw materials. Further allowing
them to expand into untapped markets such as seasonal wears.

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BCG Matrix:

This matrix, like all analytical techniques in strategic planning, has its limitations. The matrix has no
temporal qualities, but rather is a snapshot at a given point in time.

Relative Market Share Position

High1.0 Low0.0
High 0.20
Star Question mark

Industry
growth Pret Women Clothing Men Clothing
rate

Low -0.20

Cash Dog
Cows s

If we talk about Alkaram Pret which is a
women clothing brand, then this lies in
Stars Category. The Market Share as
well as Industry growth are high which
shows pret is the most successful
brand of ALkaram.
If we talk about Alkaram Men clothing,
then his lies in question mark. The
overall industry growth rate is high
whereas the relative market share is
low.

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 Grand Strategy:
Grand strategy matrix helps in developing different strategies and alternatives for an
organization. It consists of four strategy quadrants and is based on two dimensions:

1. Competitive Position (X-axis), 2) Market Growth (Y-axis)

Rapid Market
Growth

Quadrant II Quadrant I

Alkaram Alkaram
men pret
Weak Competitive Strong Competitive
Position Position

Quadrant III Quadrant IV

Slow Market
Growth

AlkaramPret lies in the quadrant one of the grand strategy matrixes which shows that it has
highly competitive position as well as rapid market growth. In this case Alkaram should adopt
strategies like market penetration, market development, and product development, etc. It should
diversify its product lines in terms of introducing accessories, fragrances range, etc. Moreover, it
can also use forward integration where it can acquire the supplier companies which will reduce
its production costs and enhance the efficiency of the production. Through adopting these
strategies Alkaram would be able to earn more profits and make its competitive position stronger
in the market.

Alkaram men clothing lies in the second quadrant which shows that it has rapid market growth
but weak competitive position. This shows that they are able to grow faster in the market but are

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unable to compete with the competitors in this situation due to the inefficient strategies they
might have adopted. In order to improve their competitive position in men’s clothing Alkaram
needs to evaluate why they are incompetent in this category and what needs to be done. Alkaram
can use the horizontal integration strategy as it can merge with Gul Ahmed men’s collection
which will help it to grow its market share, size, and expand into new markets with diversified
product offerings that will reduce its competition with Gul Ahmed.

QSPM:
Availability of Main
Product
Outlets in Central
Diversification
City
Strengths Weight AS TAS AS TAS
1 Highly responsive and effective infrastructure. S1 0.06 3 0.18 2 0.12
2 Advanced R&D (CSR). S2 0.15 0 0.00 0 0.00
3 High engagement via influencer marketing. S3 0.08 4 0.32 3 0.24
4 Direct and indirect selling for availability of products. S4 0.07 4 0.28 2 0.14
5 High market share. S5 0.09 3 0.27 4 0.36
6 High quality material purchase / timely manufactured. S6 0.07 0 0.00 0 0.00
7 Customer centric prices / affordable range. S7 0.08 2 0.16 3 0.24

Availability of Main
Product
Outlets in Central
Diversification
City
Weaknesses Weight AS TAS AS TAS
1 Lack of innovative products. W1 0.04 1 0.04 3 0.12
2 Costly raw material. W2 0.15 0 0.00 0 0.00
3 Low market penetration. W3 0.08 2 0.16 3 0.24
4 Limited product range. W4 0.06 1 0.06 3 0.18
5 Less territory vise sales. W5 0.07 3 0.21 1 0.07

Availability of Main
Product
Outlets in Central
Diversification
City
Opportunities Weight AS TAS AS TAS
1 There are proprietary product differences and established brand 0.06 3 0.18 4 0.24
identities. O1
2 Large Capital is needed to enter the industry. O2 0.06 0 0.00 0 0.00
3 There are large number of buyers relative to number of firms 0.09 4 0.36 2 0.18
within the industry. O3
4 The buyer requires a lot of important information. O4 0.03 3 0.09 2 0.06

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5 The product can be unique and accepts branding. O5 0.08 2 0.16 3 0.24
6 The customer is less likely to substitute. O6 0.07 3 0.21 4 0.28
7 Suppliers can be switched between quickly and cheaply. O7 0.02 0 0.00 0 0.00
8 Industry is growing rapidly and consistently. O8 0.01 2 0.02 4 0.04
9 The business is important to the suppliers. O9 0.07 0 0.00 0 0.00
10 The customer may incur costs in switching to a substitute. O10 0.01 3 0.03 2 0.02

Availability of Main
Product
Outlets in Central
Diversification
City
Threats Weight AS TAS AS TAS
1 Rising inflation rates and indirect taxes. T1 0.10 1 0.10 2 0.20
2 Similar/Undifferentiated products. T2 0.07 1 0.07 3 0.21
3 Lack of supply of demanded products. T3 0.08 4 0.32 2 0.16
4 Rising cost for skilled labor, efficient machinery etc. T4 0.06 2 0.12 1 0.06
5 Repulsion of customers due to high prices. T5 0.07 0 0.00 0 0.00
6 No incentives being provided to decision makers. T6 0.03 0 0.00 0 0.00
7 Difficulty in assessing distribution channels. T7 0.06 3 0.18 2 0.12
8 Lack of territory wise sales. T8 0.03 4 0.12 1 0.03
TOTALS 2.80 2.75

Considering the multiple strategies that are showcased in the above modules, we concurred that
the Availability of Main Outlets in Central City and Product Diversification were two of the best
strategies that Alkaram could employ in order to further boost their market penetration and sales.
As both of the scores have minor difference of 0.05, we conclude that either of the strategies can
be implemented by Alkaram to yield effective results that would help them acquire more market
share from competitors considering the trendy market and current situation.

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Strategic Implementation:

STRATEGIC KEY PERFORMANCE INITIATIVES

OBJECTIVES INDICATORS
Increase overall profits Increase in profit margins Increase overall profits
Attract more investors Increase in capital by either increasing the
to invest in Alkaram employed price of Alkaram
clothing or by increasing
FINANCIAL

Decrease overall costs the sales of the clothes.

Decrease in cost ratio
In this way, the overall
profits can be increased
and costs can be
effectively managed.
Attract more potential Larger market share An increase in advertising
customers and marketing campaigns
will help to increase and
Identify and satisfy attract more customers to
Meeting the benchmarks of
customer needs Alkaram. Effective
customer needs
CUSTOMER

Provide after sales marketing campaigns such

Customer retention rate as social media marketing
service
on Facebook or on
Instagram can help to
cater a larger customer
base.
Give great priority to Overcoming the un expectable Coordination with
INTERNAL

contingency planning problems finance department of

PROCESSE

Target a new Alkaram would help to

customer segment Increase in customer base
get large sum of money
which should be used to
Install modern
Quality and pace of work buy modern equipment’s.
S

technologies to improve
the quality of work increases
A meaningful work
Employee retention rate
Provide training to the environment can be
employees provided by offering more
incentives to the
LEARNING

A meaningful working employees and ensuring

Employee productivity fairness and equity at the
environment for the
employees place of work.

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APPENDIX:

Annexure 1:

Threat of New Entrants:

Bargaining Power of Buyers:

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Threat of Substitutes:

Bargaining Power of Suppliers:

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Threat of Rivalry Among Competitors:

Overall Industry Rating:

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