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Style and Trend: Strategic choice

Presented by:

Muhammd Farhan Mustafa Rasheed Nauman Rasheed Sami Suhail Taimoor Khalid Usman Ali MBA-2, Section-B

8 billion with knitwear  Average for knitwear selling price was $42 per dozen in 1992  US knitwear market.  . 50 million. 6.Quantitative Facts By 1993. textile formed about 65% of Pakistan’s total exports of Rs. estimated at around $15 billion  Quota investment alone would require Rs.

trendy and colorful  Distribution: direct selling. price competition. trade fairs and agents in Europe  . managerial and financial inefficiencies  Promotion was mainly through direct mail. high variety.Qualitative Facts High profitability in knitwear  US market deal with large orders  European market: small orders.

Issues Shortage of finance restricting Style and Trends to small units  The textile industry could not produce very fine yarns  Lead time is high in knitwear industry  Strict criteria of international buyers in selecting suppliers  Poor working capital of several units  .

Core Issue “Evaluation of integrated knitwear firm opportunity and management (all three entrepreneurs)” .

 Exhibit 8: Pakistan scores lowest in production & management dimensions relative to other competing countries  . quick ratio. total debt/total assets changed from 37.9 million in 1988.08% to 4. days receivable and days payable highlight some negativity.Exhibits Analysis Exhibit-1: current ratio.1 million in 1993 from $166.81%  Exhibit 2: knitwear textile exports have grown to $464. debt has decreased over period.

Exhibits Analysis  Exhibit-9: Pakistan has lowest value to volume ratio and thus it earns less foreign exchange with massive imports Exhibit-12: This exhibits shows increasing general trend in quota prices and suggests a great degree of volatility in prices for category 338  .

technological & management assistance Stringent/difficult to meet quality standards Short lead times. less wastage.Alternative-1 Scenario 1: 100% sales to US market in category 338 Advantages Disadvantages New potential supply channels Quantitative trade restrictions Longterm relationships. 50 million) Steady supply orders - . high working capital Large brandnames & buying houses requirements meant costs No ned to attend foreign fairs or visit buyers offices Quota investments (Rs.

Alternativ-2 50% sales to US market and 50% sales to Europe & other markets Advantages Disadvantages New potential supply channels for US Quantitative trade restrictions Longterm relationships. technological & management assistance (US) Stringent/difficult to meet quality standards Large brand names & buying houses (US) More stress No ned to attend foreign fairs or visit buyers offices Greate marketing effort in Europe & Far East Reduced quota investments Smaller & costly order Lower working capital Lower margins on European Sales Good margins in Middle East Extra 10% cost Steady supply orders Shorter delivery time for Europe .

Alternative-3 Sales to markets other than US Advantages Disadvantages More stress No ned to attend foreign fairs or visit buyers offices Greate marketing effort in Europe & Far East Low quota investment ( a million rupees) Smaller & costly order Lower working capital Lower margins on European Sales Good margins in Middle East Extra 10% cost Steady supply orders Shorter delivery time for Europe .

 Ginning sector is run by uneducated people who are not quality conscious .Decision Scenario 1: (100% sales to US market in category 338) because .  it cannot handle issues or limitations due to suppliers in germination stage to increase responsiveness for entering European and Far East markets.

producing high value items will minimize the impact of quantitative trade restrictions and quota investments  .Implementation  This option won’t create issues in terms of supply Pakistani players don’t compete in high value product category. Hence.