case study of sahaf enterprises

7/30/2019 Case Study of Sahaf Enterprises

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INTERNATIONAL BUSINESS


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PRESENTED TO:MR. USMAN GHAURI

PRESENTED BY:NOUMAN KHALIDALI MUNAZZAFUMAR NAEEM


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CASE STUDYSAHAF ENTERPRISES LIMITEDLAHORE, PAKISTAN.


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IntroductionCompany background: Sahaf Enterprise Company was

established in 1925, as a partnership toproduce hand made woollen shawls.

Sahaf Enterprises entered into carpetexport in 1969. After about 5 years of business they

become a private limited company in

1974.

In 2 years, they have emerged as groupof industries comprising Shadin Limited,Sahaf enterprises and Sahaf corporationLimited.

Within just 2 years,Shadin Limitedbecome one of the largest textile unit of

the country.

SahafEnterprises

SahafEnterprises

Limited

SahafCorporation

Limited

ShahdinLimited

SahafEnterprises

Limited

Sahaf Group ofIndustries


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IntroductionCompany background: 1979/80was the best year for Sahaf in terms of exports,

in that specific year, its exported worth was 60 millions,having 40% ofprofit ratio.

REVENUE = 60mGROSS PROFIT = 24.4m Profit gradually came down to 30 million in 1985, due to

the recession in international carpet market and the

change in the financial priorities.

Boost-up in 1986.


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IntroductionDescription of product: Hand made knotted carpets are made of imported and

original wool and cotton. Usually from New Zealand.

Ranging from 2 >< 3 to 12 >< 18 sq. ft. with finest quality.Export direction: About 60% of the exports went to the Germany, while

other 40% normally shared by Italy, Holland, Switzerland,Spain and France. 80% of the buyers are regular, while other 20% arecasual.


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IntroductionExport direction: Italy, Spain, Framce and Switzerland has same

preferences. The imports soft colours combination instandard rectangular sizes ranging from 2 >< 3 to 4 >< 6sq. ft. of thick pile, although Italy imports thin.

Germany imports thick pile, standard medium sizes (5 >< 8 and 7 >< 10). Germany had 90% demand ofRed colour, now its just40%. Holland imports large sizes with 80% ofBlue colour

domination.


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ANSOFF MODEL


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SWOT ANALYSIS


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Company backgroundSTRENGTH:

1: 61 years life span of company producinghand knotted carpets/shawls2: Knowledge and technical expertise3: Strong business links

WEAKNESS

1: No past experience of exports to USA

2: High raw material cost3: Decrease volume of sales/margin

OPPORTUNITES THREATS

1: Finance availability2: Focus on diverters


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Description of productSTRENGTH

1: Except exported cotton and wool, all othermaterial is collected and managed locally2: Varity in size and designs3: In house designing centers

WEAKNESS

1: Reliance on imported wool and cotton2: High holding cost due to different size anddesigns of carpet

OPPORTUNITES

1: New designs having element of antiquityTHREATS

1: Competitors can launch a new design


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ExportsSTRENGTH

1: 80% customers are bulk purchasers sosame designs are available in large qualities

WEAKNESS

1: Changing customers demands2: Customers strong preferences with respectto specification of carpets

OPPORTUNITES

1: Entrance in new marketsTHREATS

1: Existing and new competitors


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Carpets Production AgreementTRENGTH

1: Expertise in carpet making2: Business Links3: Availability of sub contractors due toflexible employment

WEAKNESS

1: Over reliance on the work of subcontractors2: High labor cost


1: Child labor enforcement


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In terms of BusinessSTRENGTH

1: Delivering time by air is reduced2: Good quality3: Low customers complains after sub services4: Goodwill

WEAKNESS

1: Credit Increase the risk of bad debts2: High cost



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CompetitionSTRENGTH

1: High entry Barriers2: Large market share3: High quality products of 61 years

WEAKNESS

1: High holding cost of stock

OPPORTUNITES

1: Foreign marketsTHREATS

1: Local competitors2: Foreign competitors


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Carpet DevelopmentSTRENGTH

!: Flexible employmentWEAKNESS

1: Understanding the customers actualdemands2: Output is not like as expected

OPPORTUNITES

1: New designsTHREATS


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CURRET SITUATION


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Mr. Qamar Javaid, the export director has been doingbusiness successfully since Sahaf began exporting carpets.He has contemplated the following alternatives:

1. Promote existing carpets in the US market.2. Modifying existing designs and qualities for export to theUS.3. Developing entirely new desiegns and qualities,

particularly for US.


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Formulation

The SWOT can now be used as guiding strategy formulationSTRENGTHS WEAKNESSESS

Conversion

OPPORTUNITIES THREATSConversion

M

AT

C

H

I

N

G


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Conversions Build Institutions for Children so that they continue there study.

Build Institutions of Skills & Development for strong man power.

Made contracts with locally producers of cotton and wools to

reduced the risk of too much relaying on imported raw materials. Make new distribution channels to attract new customers and to

reduce the holding cost.

Made new designs, having elements of antiquity to take Edge on

competitors.

Keep an eagle eye on customers changing demands.

Focus on short term objectives.


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Why we need to do modification? While lunching our business in any country, adaptation is

unavoidably needed, especially in carpet market.

Knowing the values and taste of the people is the basic

ingredient for a successful expansion program. Understanding the culture of the country and what people

usually prefers.

Natures.

Affordability. Psychology.

Liking of the people.


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Why we need to do modification? Carpets should be manufactured according to the

customers demands.

Distinctive improvisation in designs and patterns, would

surely catch any American eye. Americans will never say No to any leverage or to any

complementing product.

Synchronization with their lives.


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Why modification is needed?Size:US customers are mostly asking for thick pile,

standard small/medium sizes:

3 >< 54 >< 65 >< 87 >< 10Colour:US customers asks for aggressive colours

combinations, dark colours are mostly preffered.


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Why we need to do modification?


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Why we need to do modification?


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THANK YOU

case study of sahaf enterprises

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