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Report on General Tyre and rubber company.TRANSCRIPT
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THE GENERAL TYRE AND RUBBER
COMPANY OF PAKISTAN.
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Principles Of Management
Report
Presented To:-
Fauzia Kanwar
Section:-
E
Made By:-
Khushnam Jamshed Karanjia (12076)
M. Ali Polani (11390)
Syeda Madiha Ali (11659)
Kamran Qureshi (11631)
Mashkoor Husain Zaidi
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Introduction:
General Tire is part of Continental Tire North America, Inc. CTNA, based in Fort Mill, South
Carolina, is a company of Germany-based Continental AG the Corporation is one of the top
automotive suppliers worldwide today, the corporation employs approximately 150000
people at nearly 200 locations in 36. The General Tyre and Rubber Company of Pakistan
Limited was established in 1963 by general tyre USA.
The General Tyre and Rubber Company of Pakistan Limited:
(Gentipak) is Pakistans premier industry. The awareness of the GENERAL brand
name is very high. It has been constantly upgraded and boasts the latest equipment
in tyre manufacturing Gentipak has also launched a new line of passenger car tyres
of latest European designs under the brand name EURO. All the radial tyres are
tubeless and steel belted and have a full cap ply for safety and durability.Gentipak produces radial tyres for passenger cars and light trucks in rim sizes ranging
from 12 to 16. It also produces bias (cross ply) tyres for light trucks, trucks/buses
and farm (agricultural) tractors. Gentipak is the major supplier of tyres to the local
automotive and tractor assembly plants. It is currently exploring other markets as
well for export. Gentipak employs directly and indirectly approx. 1800 persons all
over the country. It has offices in three other cities of Pakistan besides having its
Head Offices in Karachi. It is selling its products in the replacement (after) market
through a network of more than 100 dealers and has a backup in the shape of sales
and technical force covering the entire territory. Gentipak is a public limited listedcompany with majority shares held by the following companies; Bibojee Services
Ltd.,Pak Kuwait Investment Company (Pvt) Ltd. National Investment Trust.
CONTINENTAL AG (Germanys # 1 tyre manufacturer).
Organization Life Cycle:
Established in 1963 by an American company GENERAL TIRE INTERNATIONALCOMPANY.(GTIC)
Production commenced in 1964. Capacity was 120,000 tyres per annum later onraised to 240,000 per annum.
GTIC sold all their shares in 1977 to Bibojee Services Ltd but, retained 10%. Technical assistance agreement was signed as well as permission was given to
continue with the Company name and use the brand name General. An
amount of royalty had to be paid annually.
Project was undertaken in 1983 to increase capacity to 600,000 tyres. New capacity was unveiled in 1985 by the then President of Pakistan.
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1987 GTIC was purchased by Continental AG of Germany. Conti became 10%owners of GTR.
During the period up to 2001 the capacity was increased to 800,000 tyres p.a. More equipment was added to produce radial passenger car tyres as well as rear
tyres for tractors.
New equipment for quality control was also added. Equipment for producing steel belted tyres was also added. Plant is continuously upgraded to maintain high quality and high output. During the last three years more equipment has been added to enhance capacity
to produce new sizes and increase production and improve quality. The annualproduction capacity is now 2 million tyres.
Equipment like new F270 mixer, second steel belt line, triplex extruder andpresses. A second tyre uniformity optimizer will soon be made available. Talks
are going on to add another F270 mixer as well as more presses. GTR has been
giving them for 2008 models.
Collaboration with Continental AG:
Continental AG is also providing Gentipak all the technology needed for productionunder a long term Technical Service Agreement (TSA) as well. Continental AG
collaborates in following ways;
Product development Process improvement Bench marking with other affiliates products Testing new products at Conti drome in hanover Selection of new designs Visit of continental experts to train and educate our employees Help with oe development process Training of employees in continental plants Assist in procurement of raw materials and equipment Assigned a full time senior executive for our production and projects.
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Relations With Main Oems:
GTR is meeting 95% of the OE demand for passenger car radials, light truck,
truck/bus and farm bias tyres. GTR has a reduced share in the replacement market
as the priority is OE at the moment
Gentipak is the major supplier of tyres to the local automotive and tractor assembly
plants. It has contracts to supply car tyres to the following companies;
Honda Atlas Cars (Pvt )Ltd Lahore:
GTR has been meeting 100% of their demand GTR has been their major supplier since 1994 when they commenced operations. Only local manufacturer that has developed tyres for Honda as per their
international specifications and standards
This tyre was checked against the tyre of a leading international brand that theyused previously and this tyre turned out to be better than that.
Indus Motor Co. Ltd Karachi:
GTR established relationship with them since 1993 when GTR gave the first radialtyre for their very first production car.
GTR are meeting 100% of their demand and have developed new sizes in thepast.
Pak Suzuki Motor Co. Ltd Karachi:
GTR has been giving them tyres since 1987. GTR supplies them 100% of theirdemand. GTR has developed a new LT radial for them for 2008 models
Millat Tractors Ltd Lahore:
GTR is meeting about 100% of their requirements of front tyres and 100% of therear tyres.
GTRs association dates back two decades.Al-Ghazi Tractor Limited:
GTR established relationship in mid-80s and supply 80% of their requirements offront and rear tractor tyres.
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(2012-2013) OEM Share:
Distinguish Features:
Technological affiliation with No.1 European tyre manufacturer Only local company with a full range of tyres for all category of vehicles Comprehensive warranty policy Field force all over the country provides warranty claim Dealer network spreads all across the country Tyres developed as per local road conditions First tyre manufacturing plan First and only to produce FORMULA III racing car tyres First and only one to produce a million tyres annually. First and only one to have sophisticated equipment First to export automotive tyres.
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Vision:
To be the leader in tyre technology by building the Companys image through quality
improvement, competitive prices, customers satisfaction and meeting social
obligations
Mission:
To offer quality products at competitive prices to our customers. To endeavor to be the market leader by enhancing market share, consistently
improving efficiency and the quality of our products.
To improve performance in all operating areas, so that profitability increasesthereby ensuring growth for the company and increasing return to thestakeholders.
To create a conducive working environment leading to enhanced productivity,job satisfaction and personal development of our employees.
To discharge its obligation to society and environment by contributing to socialwelfare and adopting environmental friendly practices and processes.
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Lt. Gen (Retd) Ali Kuli Khan Khattak
CHAIRMAN
Mohammad Shahid Hussain
Chief Executive Officer
Nasser Kamal Asif Jameel Ashraf TeliHusain Kuli
Khan
Executive
Director
Marketing &
Sales
Executive Director Corporate
Affairs / HR
Chief
Financial
Officer
Chief Operating
Officer
(Plant &
Projects)
Sarfraz A. Zahid
Muhammad
Amin Khan
Jeelani
Baig Brig (Retd) Najam uz Zafar
Group Resident
General Manager
Islamabad
General Manager - O.E &
Government Sales / CS
General
Manager
Works
General
Manager
Corporate
Services
Rashid I. Malik
Zubair
A. Mufti Mussarat Ahmed
Muhammad Arshad
Ansari
General Manager
Sales
General
Manager
Finance
Head Internal Audit
Div. Manager
Industrial
Engineering
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Objectives At GT:-
To be the leader in making tyres by through high quality tyres,satisfactory prices
within social restrictions.
Long-term Objectives :
To maintain more than 95% of Original Equipment manufacturer i.e.Toyota,Honda,Suzuki sales share in market.
To capture almost 40% share of replacement market (currently 25%) To be a Global Player.Intermediate term Objectives:
To double the export with in 2 years.Short-term Objectives:
To increase share by 5% annually in replacement market.Hierarchy of objectives at GT:-
Areas to Focus on:-
Profitability:To increase the profit of overall Organization. Market Standing:To maintain a good rank in the Market. Productivity:To raise the productivity without sacrificing On quality standards. Endorsing New Ideas:To appreciate new innovatives to boost the moral of the
subordinates.
Employee Performance: To receive a good performance from employees toincrease overall probability of goal attainment.
Planning as an important Part in reaching Objectives:-
GT believes planning as an important part in overall management process by getting
the most experienced employees to plan to organize, influence and control well and
so that to make both the long and short term objectives viable.
The Overall planning Process at GT:-
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The manager delegates responsibility among his subordinate staff and defines
standards and what is expected of the staff and then analyzes performance as per
these standards if the performance up to the mark the employees are rewarded and
these rewards in turn work as incentives for the employees to work better and have
an increased morale.
MBO;As an important part in planning process at GT:-
GT uses Management By Objectives (MBO) as an essential aspect regarding the
planning process.
How GT uses MBO?
GT uses MBO by assigning different tasks to every single department and
subordinates and evaluates the performance of each department and employee in a
periodic way and offer incentives such as salary increment and other non-monetary
incentives as a reward for the completion of the task given to them.
Planning and CEO at GT:-
As all the planning process is done,the CEO,Mr Mohammad Shahid Hussain checks
the every single aspect regarding the planning process and then it is further
organized.
Decision Making at GT:-
GT gives huge importance to decision makers and strongly believes in having Market
oriented decision makers,so that they could raise their productivity and moreover
their profit by taking corrective decisions.
Group Decision Making at GT:-
GT often involves Group decision making in making decisions when the scope of the
decision is quite broad.
They uses Group decision making and only top managers are involved in makingdecisions so that they could create a high quality decision that could be
advantageous for the organization in every aspect.
Tools that lead to make good decisions at in Groups at GT:-
At times, GT uses Nominal group technique inorder to make decisions in groups.
By doing this,they believe that every individual owns the decisions being made as
everyone equally participates in making decision and so as to avoid the Groupthink.
Organizing:-
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The second function of the management is getting prepared, getting organized.
Organizing is the managerial function of arranging people and resources to work
toward a goal. Organizing plays a central role in the management process. Once
plans are created the manager's task is to see that they are carried out. Given a clear
mission, core values, objectives, and strategy, the role of organizing is to begin the
process of implementation by clarifying jobs and working relationships. It identifies
who is to do what, who is in charge of whom, and how different people and parts of
the organization relate to and work with one another.
Importance of Organizing:-
It helps an individual develop a clear picture of the tasks he or she is expected to
accomplish.
It supports planning and control activities by establishing accountability and an
appropriate line of authority.
It creates channels of communication and thus supports decision-making and
control.
It helps managers to focus task efforts such that they are logically and efficiently
related to a common goal.
Organizing at General Tyres:-
As we discussed above, the importance of organizing function can not be ignored in
any organization. In General Tyres, each of the management function has its own
significance like in any good organization. To attain organizational objectives, plans
are made, organized, influenced and controlled. In this organization as well, plans
are implemented and organized through a proper channel. Theres a proper
organizing process, by following which, the company organizes its routine as well as
one shot tasks.
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Directing
subtasks to
employees.
Reviewing
results of the
implemented
strategy
The Organizing Process at General Tyres:-
The above process is referred to as The Organizing Process. It is cycle with which
General Tyres organizes its tasks and strategies among employees. On the
completion of this cycle, the managers receive feedback from their employees on
how well the tasks were organized and further any improvement is required.
The first step is to reflect on the companys plans and objectives. It explains the fact
that the managers, before organizing tasks, consider the companys objectives and
policies and then take the initiative.
The second and third steps of the process are the establishment of major tasks and
the division of major tasks into subtasks. In this organization, the manager sets major
tasks for different departments of the company and then the managers of respective
departments divide those major tasks into subtasks in their departments.
Reflect on
companys plans
and objectives
Tasks
established by
managers
Major tasks will
be divided into
subtasks.
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The fourth step is to direct the subtasks to the employees. After managers of
different departments have divided the tasks into subtasks, they allot each employee
of their department with its share of work to be done.
The fifth and the final step of the organizing process of General Tyres is to review the
results developed from the implemented strategy. The top level managers, examine
the results of a specific major task and gather feedback from the employees in case
of any enhancement required in the process.
Organization Chart of General Tyres:-
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Departmentalization and Formal Structure in General Tyres:-
The above chart is the combined organization chart of the General Tyres. It
explains the hierarchy of different departments in the General Tyres. From the
Chairman to the Division Manager, different departmentalizations are found.
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Functional Departmentalization:-
Below the Chief Executive Officer (CEO), we can observe different
departmentalizations such as Functional Departmentalization among the CEO and
Executive Director Sales and Marketing, Executive Director Corporate Affairs/HR and
Chief Operating Officer (Plant and Projects).
Customer Departmentalization:-
Furthermore, we can see Customer Departmentalization among Group Resident
General Manager, General Manager O.E and Governmental Sales, General
Manager Works and General Manager Corporate Services. All-in-All, this combined
organized chart depicts different departmentalizations prevailing in General Tyres.
Scalar Relationships or Gangplank in General Tyres:-
Chief ExecutiveOfficer
Executive DirectorSales andMarketing
Executive DirectorCorporateAffairs/HR
Chief OperatingOfficer (Plant and
Projects)
Group ResidentGeneral Manager
Islamabad
General ManagerGovernmental
Sales
General ManagerWorks
General ManagerCorporateServices
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In General Tyres, the chain of command or scalar relationships is not practiced.
Instead, the organization uses gangplank or organizational bridges for collaboration.
Likewise, if in this organization, General Manager Sales need information from
General Manager Finance, he can directly approach him. He doesnt have to follow
the chain of command.
Span of Management:-
General Tyres enjoys smaller Span of Management. Due to the tall organization
chart, its span of management is relatively small than other organizations. Small
spans of management are usually more successful that those having larger spans of
management.
Authority and Responsibility:-
The above organizational chart depicts authority and responsibility in General Tyres.The Chairman holds most authority and responsibility in General Tyres whereas; the
CEO and Executive Directors that are close to the chairman possess relatively less
authority and responsibility. The lower the position of the personnel in the
organization chart, the lower is the authority and responsibility of that designation in
General Tyres.
Delegation in General Tyres:-
In General Tyres, the main authority of delegation holds with the CEO. The Chief
Executive Officer (CEO) assigns duties to the Executive Directors and General
Managers and provides them the authority to delegate those tasks to their
subordinates and make provisions for carrying out those tasks successfully. After
delegating tasks to their subordinates, the managers in General Tyres focus on the
following points:
The managers trust their employees and make sure they carry out their tasks in thebest interest of the organization
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They make sure that the employees personal interests do not overcome the
organizations interests.
They provide their subordinates with little authority so that they can feel confident
and secure about their task accomplishment.
Centralization or Decentralization:-
According to our survey, there neither exists complete Centralization nor
Decentralization in General Tyres. It has decentralization in certain departments and
centralization on others depending upon the department.
Decentralized Organization. Centralized Organization.
VARIOUS DEGREES OF DELEGATION
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GENERAL TYRE and Rubber Company strives to deliver results, perform to the
highest standards, develop people, provide quality customer service and actively
pursue consistent improvements. A firm foundation based on performance enables
them to deliver strong returns and value growth for their shareholders, greater and
better choices for their customers and improvements and opportunities for their
employees, their commitment to performance at every level continues to be both
the challenge and aspiration.
COMPANY VALUES
General Business Principles
1. Business Integrity.
General Tyre insists on honesty, integrity and fairness in all aspects of its business
and expects the same in its relationships with all those with whom it does business.The direct or indirect offer, payment, soliciting and acceptance of bribes in any form
are unacceptable practices. Employees must avoid conflicts of interest between their
private financial activities and their part in the conduct of company business. All
business transactions on behalf of the company must be reflected accurately and
fairly in the accounts of the company in accordance with established procedures and
be subject to audit.
2. Health, Safety and the Environment
Consistent with its commitment to contribute to sustainable development, GeneralTyre has a systematic approach to health, safety and environmental management in
order to achieve continuous performance improvement.
3. Competition.
General Tyre supports free enterprise. It seeks to compete fairly and ethically and
within the framework of applicable competition laws; the company will not prevent
others from competing freely with it.
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4. Communication
General Tyre has comprehensive corporate information programs and provides full
relevant information about its activities to legitimately interested parties, subject to
any overriding considerations of business confidentiality and cost.
FOCUSING ON SERVICE AND QUALITY
General Tyre is committed to the delivery of top quality rubber and tyre , right
quantity and superior service wherever it operates
IMPROVING PEOPLE SKILLS
Evaluation of employees is performed through an evaluation record of all the
employees and is maintained throughout the time they work for GT. Thus the
company tends to have staff of a good standard.
Structured Training Programs have been rolled out to improve the skill and
knowledge level of employees so that they are able to work effectively in their
assignments. These include personal development course so that employees canget the best out of their professional and personal lives.
The company believes in stimulating innovation and change. General Tyre fosters
innovation and masters the art of innovation. The company maintains flexibility,
continually improves quality. This is the reason that the company has proved itself as
successful.
WORKING ENVIRONMENT
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Friendly atmosphere
It is believed that commercial success depends on the full commitment of
employees. General Tyre is successful in maintaining a friendly and comfortable
environment for its employees. For example there is no discrimination between top
line managers and first line managers they call each other by their first names.
Interaction on a personal level
General Tyre recognizes that open communication is essential. As in General Tyrethe cafeterias are merged where interaction on a more personal level is easy.
Employees get the chance to know each other better. Even with customers they
have arranged two customer interaction days, which were recently organized to
promote the development of a friendly relation between the company and its
customers by mutual discussion of business issues.
Employees at GT also have the opportunity to have a senior leader as their Mentor.
The mentor can be any one at a top level of the hierarchy and the employee has the
right to choose their own mentor. A Mentor serves as an idealistic figure to the
employee and informal relationship with the mentor is initiated. The job of the
mentor is to help the employees with all their situations based on their experience
and achievements.
Discipline
Discipline is same for all levels of management. They have fixed amount of leaves,
employees attendance are recorded and maintained. Respect for top level
management is there, middle managers for example dont leave before their top
level.
They have found success lies in pulling together teams of people with different
perspectives and different ways of approaching problems, people who nevertheless
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share a set of core values about how to deliver results today that will endure
tomorrow.
Learning & Development
At General Tyre, they help their people realize their potential and fulfill their
ambitions by helping them shape their own, individual career paths. From cross-
business assignments to structured learning courses, they provide the tools needed
for their people to develop world-class analytical, leadership, management and
relationship-building skills
Work-Life-Balance
Because they believe that professional and personal success needn't be mutually
exclusive, they provide programs that help their employees to strike a balance
between the demands of work and life outside the office. They seek to build and
maintain a culture of learning and innovations in which employees can fulfill their
potential whilst meeting the most challenging targets - and have fun at the same
time! It is a culture where they encourage their leaders to inspire others through
personal example, and where the Company core values can prosper.
BASIC MOTIVATIONAL CONCEPTS
Leadership, Commitment, and Accountability for Change
Business leaders, down to first line supervisors, demonstrate active leadership,
Knowledge of business imperative, desired behaviors, is routinely involved in the
creation of an environment that inherently promotes and encourages inclusion.
Leaders are accountable for achievement of goals and results.
Standard Development and Governance
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The Group has a written Standard, which speaks to intent, business rationale,
expected outcomes and behaviors. Their aim is to monitor, and ensure aggressive
action towards achievement of stated goals and targets. Standard and process are
widely understood by all employees. This also focuses on the development of the
employees and aims at maintaining the quality of their employees for which variouscourses of actions are taken.
Supporting Systems and Resources
General Tyre believes in providing support and adequate resources (time, people,
and money) and systems in order to accelerate and support progress through
individual, behavioral and systemic change. Linkage and sharing of resources across
the business is encouraged for purposes of realizing greatest efficiency, value, andquality
HR Systems Integration
Key HR processes and plans incorporate principles and objectives, which encourage
and support broader diversity and inclusion. Examples of process and plans include
talent review, Performance Management and Ranking, employee benefits, data
gathering and reporting, etc.
Monitoring Performance, Communicating Results, and Continuous Learning
Business and Group performance is monitored, measured and honestly
communicated quarterly to all the employees.
INCENTIVES & REWARDS
Facilities to Employees
The companies always tries to promote the talent and knowledge its employees
pertain, the salary schedule is basically 90% fixed and has a 10% variable ratio as
well. The hierarchical grade matters in determining the pay scale. At a certain higher
level company maintained cars and medical facilities are also provided.
Increased productivity
Employees who feel respected, valued and connected develop stronger relationships
and become more involved in their work. This in turn leads to enhanced teamwork,
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increased innovation and productivity, lower staff turnover, lower absenteeism and
reduced costs
The company has concentrated lot of efforts in quality improvement and customer
service and has consistently strived to satisfy employees by providing them
tremendous incentives and giving them enabling working environment
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Controlling
Controlling means managers develop standards, compare performance against them
and ensure corrective actions are taken.
The controlling function is the regulatory element, allowing managers to use various
ways to monitor performance and take corrective actions.
Steps in Control Process:
Determine Areas Of Control:
Managers must first determine which areas to control. As it is not possible
to control every aspect of the organization and if the manager keeps a check on the
employees all the time, this might de moralize and underestimate them, make them
feel that their managers do not trust them. The General Tyre Companys main areas
of control are the production line. They have various check points of quality at
specific intervals along the entire production line.
Establish Standards:
In Control process, standards are essential as they set out specific criteria
for evaluating performance and employee behavior. In General Tyre Company, the
General Manager of the Sales Department, has to maintain 95% of the OEM (Original
Equipment Manufacturer) market so he assigns different percentage of sales figure
to his subordinates and they have to reach the standard set by The General Manager
in time.
Measuring Performance:
Once the standards are set, the next step is measuring performance. The
General Tyre Company, measures the performance of the employees with the helpof Key Performance Indicators which are made for departments and for individuals
separately.
Key Performance Indicators Include:
Jobs/ objectives assigned to each employee or department.
The time employee or department takes to complete the job/ task.
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Time and motion studies take place- measurement of work done in relation to time
taken to achieve a goal or complete a task.
The time employee or department checked in to work (what time he comes, leaves,
overtime etc.)
Compare Performance against Standards:
After the performance is measured, they compare the performance
against standards. In General Tyre Company, the comparison of performance against
standard is done by a practice called wandering around, the manager walks around
work areas, observing conditions and ranking the performance of the employees.
Recognize Positive Performance:
In General Tyre, when the performance of an employee meets or exceeds
standards, managers acknowledge the performance and incentives are given as
rewards for performing well and reaching the set goals by the managers, which
might be reaching particular sales figure or production department or reaching a
particular production level.
Take Corrective Action as Needed:
When standards are not met by the employees, managers asses the reason
behind it and take corrective actions by checking the standards if they are in
accordance to the conditions and measure performance to see if they are realistic.
For example, if the standards are not met they might higher more skilled employees
to meet the standards.
Q- Why Controlling is essential?
Control can help managers avoid certain problems which might include;
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Coping with Uncertainty:
There might arise a time, when a company, has to face certain unpredictable
situations and they might not go as planned. In General Tyre, if certain OEM (Honda,
Suzuki etc.) suddenly stop or reduce their production for that unpredictable
situation, they have an alternative market i.e replacement market/ after sales, they
divert their production towards the after sales market by focusing on dealer network
and coming out with various schemes.
Detecting Irregularities:
Control helps delegating irregularities such as poor quality, staff turn over
etc. In General Tyre Company, manager keeps quality check in production line at
various intervals by enforcing strict quality standards and ensuring inspections.
Handling Complex Situations:
Recently, people started preferring Chinese tyres as they cost less as
compared to the original tyres. The General Tyre Company, to get back their
customers and market control, started with a process called the positioning matrix
i.e price on Y- axis and Quality on X-axis and the equilibrium of the two is the price
they set. With various services they find out their position in the market as
comparison to the competition to know where they stand on quality and customer
perception and then set prices of product.
Excess of Demand:
Another uncertainty that may arise is excess of demand. In the case that General
Tyre does a proper forecasting which is carried out by the marketing department and
sent to production department to avoid shortage and excess inventory.
Major Issues Faced By General Tyres Ltd.
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Smuggling:
Tyres from other countries are smuggled into Pakistan. The t axes arent paid on the
smuggled tyres because they are brought into Pakistan illegally due to which these
tyres are cheap as compared to General Tyres.
Under-Invoicing:
The bills of the imported tyres are made at a lower rate so that the taxes are
imposed or calculated at a lower price.
Chinese Tyres:
These tyres are sold at a lower price as compared to General Tyres but they are not
long lasting and of far lower quality as compared to General Tyres, but people buy
Chinese tyres due to the low prices.
Recommendations:
Company is in talks with Government to try and stop illegal smuggling of tyres.
Under Invoicing:- The Government is being asked to set the right ITP (Import Trade
Price) themselves for these tyres.
Chinese Tyres:- We put our tyres against Chinese tyres in performance test to
compare the quality and performance of the tyres and the results clearly show the
poor quality of Chinese tyres. We are working on creating awareness in the
consumers that Chinese tyres although cost cheaper are not only of a below par
quality but they may be dangerous too, just imagine if a tyre was to burst while on
the highway at high speeds.