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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

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

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

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)” .

debt has decreased over period.  Exhibit 8: Pakistan scores lowest in production & management dimensions relative to other competing countries  . total debt/total assets changed from 37. days receivable and days payable highlight some negativity.1 million in 1993 from $166.81%  Exhibit 2: knitwear textile exports have grown to $464. quick ratio.Exhibits Analysis Exhibit-1: current ratio.9 million in 1988.08% to 4.

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.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. less wastage.

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 .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.

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 .

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

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