Strategic Management

Final Assignment

Submitted to:

Mr. Fahad Ali

Submitted By:

Behzad Ahmad Khan

Faaiz Ahmad

Muhammad Junaid

Huda Munawar

Safura Naz

IM|SCIENCES, Hayatabad, Peshawar

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1. Introduction

The main objective of our project is to understand Strategic Management practices practically.

For the purpose we took M. Abbas & Company as our organization. We gathered all the

required data of the organization. We started our project with the history of the organization

and the industrial background in which the company is working. After that we proceeded with

company’s vision and mission statement and to board of directors. We also included company’s

products and services in the project. To understand the internal and external environment of

the company, we used Internal Factor Evaluation Analysis and External Factor Evaluation. For

different strategies of the firm we used SWOT Analysis, SPACE Matrix, BCG Matrix and Internal-

External Matrix. In the end we approach for possible evaluating strategy using Quantitative

Strategic Planning Matrix (QSPM).

2. History of Organization

M/s M. Abbas & Co is a leading Clearing, Forwarding & Transportation Company managed by

the company’s head office based in Peshawar. The company was established and started

operations in the year 1994. Subsequently, they extended their operations to other parts of

Pakistan and established their offices in the Port city of Karachi in 1995. They started their Cross

Border transportation operations in 1995 and since then, they have been playing a leading role

by providing top quality Clearing, Forwarding and Transport services to their clients in Pakistan

and around the world. Their Major Clients include United Nations World Food Programme,

National Logistics Cell, FAO, UNDP, and several other national and International NGOs. Their

qualified, trained and professional staff offers a one-stop solution to all the needs related to

safe handling and movement of the cargo including Port clearance and transport in Pakistan

and into Afghanistan.

M. Abbas & Co. was registered in November 1994 by United Nations World Food Programme

(WFP) at Rome, after which the following tasks were achieved:

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UNITED NATIONS, WORLD FOOD PROGRAMME:

They have transported thousands of containers as well as hundreds of thousands of Tons break

bulk cargo from Port Qasim/Karachi Port to WFP warehouses in Peshawar/Quetta and to

various destinations in Pakistan & Afghanistan. They have transported almost 80% WFP cargo

that had come to Pakistan from 1994 till date.

During the earthquake period, they had transported thousands of tons of loose and

containerized cargo to earthquake effected areas in Northern Pakistan from Karachi, Peshawar,

Islamabad and Lahore etc. Similarly, during the floods of 2010 they provided support to World

food Programme all over Pakistan, as well as in 2011 floods in Pakistan.

AFGHANISTAN TRANSIT TRADE:

Due to their good reputation in the market and good working relations with various reputable

shipping lines, they were awarded various contracts of delivering cargo, arrived from all over

the world, from Karachi port to various destinations in Afghanistan. Since February 2002 till July

2007, they have actively participated in the Reconstruction of Afghanistan by delivering

Thousands of Containers and almost equal amount of Break Bulk cargo to various destinations

in the insecure and tough terrains of Afghanistan, to help Afghans establish their country.

A short cargo delivery history is given below:

IMPORT TO AFGHANISTAN: (US Military Cargo)

DESTINATION

MAERSK

LINE

P&O

NEDLLOYD

LYKES

LINES

HAPAG

LLOYD

BREAK

BULK MTN

BAGRAM 11192 4222 1659 873

CHARIKAR 10 44000

GARDEZ 75 8

2

HERAT 471 56000

JALALABAD 124

KABUL 5162 1270 648 48 189000

KANDAHAR 6816 1689 916 223

KHOST 466 152 118 187 85000

KUNDUZ 8 36000

MAZAR

SHARIF 56 33 6 67000

SHARONA 27

SPINBOLDAK 11

TOTAL 24400 7384 3355 1331 477000

EXPORT FROM AFGHANISTAN: (US Military Cargo)

ORIGIN

MAERSK

LINE

P&O

NEDLLOYD

BAGRAM 823 129

HEART 1

JALALABAD 32

KABUL 77

KANDAHAR 386 94

KHOST 91 115

SHARONA 108

3

TOTAL 1441 415

NATIONAL LOGISTICS CELL (NLC), GOVERNMENT OF PAKISTAN OFFICIAL

TRANSPORTATION

In April 2004, they started working with NLC as their registered transporters for Afghanistan.

Since then till 2007, they have transported hundreds of their containers to following

destinations inside Afghanistan.

Kabul, Kandahar, Jalalabad, Charikar & Kunduz

ATTOCK PERTROLEUM LIMITED:

They are also registered transporters of Attock Petroleum Limited, Rawalpindi for the

transportation of Bitumen to various organizations in Afghanistan. They had transported huge

quantities of Packed & Bulk Bitumen from Attock Refinery Rawalpindi to various destinations in

Afghanistan.

NGO’s CARGO:

They have transported sufficient quantities of different cargos to Afghanistan for various NGO’s.

Below is the list of some of their major clients:

Saudi Relief Committee, Jalalabad

Norwegian Church AID, Kabul

MEDAIR Canadian Food Grain, Kabul

AID Medical Int’l, Kabul

Hope World Wide, Kabul

FAO/UNDP, Afghanistan

Ministry of Water & Power, Kabul

Int’l Medical Corps, Kabul

Japan Embassy, Kabul

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UNDP Election Material

Save the Children, Kabul

UNICEF, Kabul

KARSHI KHANABAD, UZBEKISTAN:

They are the Pioneers in Pakistan to directly transporting. Containers from Karachi to Central

Asia (Uzbekistan) via land route.

COAL TRANSPORTATION:

Upon switching over to coal energy by the cement industries in Pakistan once again looking at

their market repute, the cement industries approached them for the transportation of huge

quantities of break bulk coal from Karachi port and imported mineral coal from Afghanistan to

various cement factory sites within Pakistan.

3. Industry Background

Pakistan’s logistics is an important economic sector with significant growth and investment

potential. It is also a key driver for private sector development, economic growth and

overall development. Yet there is critical inefficiencies in the country’s logistics value

chain, resulting in a 45 percent excess in export times and higher logistics costs (35-40

percent of retail price, leaving much room for improvements in the sector. A detailed analysis

of the numerous obstacles in Pakistan’s logistics processes and provides recommendations for

improvements on a sub-sector basis.

Pakistan’s weak road transportation infrastructure and services were found to be the

biggest challenge facing the industry. Road services suffer from a lack of trucking industry

regulation, which produces numerous downstream problems. Inefficiencies in the maritime

sector are also affecting Pakistan’s logistics performance. Maritime transport accounts for 91

percent of Pakistan’s international trade. This fact makes reforming and improving the sector

particularly important for Pakistani goods to reach international markets. Current regulation is

a key disincentive for potential investors, holding back global logistics operators, shipping

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companies, and other related services providers from fully developing their service in Pakistan.

This ultimately translates into higher costs for importers and exporters. Improving maritime

infrastructure and services was identified as an opportunity for critical improvement and high

impact, both in terms of facilitating trade and investment and for creating jobs. Rail road in

Pakistan is also weak to use as alternative for road transport.

In short Pakistan Logistics Industry is not in the very good form, but still there are more than

1200 companies in Pakistan that is working in the industry. Logistics Performance Index (LPI), an

indicator compiled by World Bank. LPI is the weighted average of the country scores on the

following six key dimensions: efficiency of the clearance process (i.e. speed, simplicity and

predictability of formalities) by border control agencies, including Customs; Quality of trade and

transport related infrastructure (e.g. ports, railroads, roads, information technology); Ease of

arranging competitively priced shipments; Competence and quality of logistics services (e.g.,

transport operators, customs brokers); Ability to track and trace consignments; Timeliness of

shipments in reaching destination within the scheduled or expected delivery time. This measure

indicates the relative ease and efficiency with which products can be moved into and inside a

country. In 2014 Pakistan ranked 72 in Logistics Performance Index while Germany, Netherland

and Belgium ranked 1st, 2nd and 3rd respectively.

4. Company’s Vision and Mission Statement

Vision:

Our vision is to be recognized as a leading provider of quality Clearing, Forwarding & Transport

Services Worldwide. Working in Harmony with our team and providing our clients the best

possible services. We will earn our clients satisfaction, and trust through continuous

improvement, driven by the integrity, teamwork, and innovation.

Mission Statement:

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Our Mission is to create a more efficient, more Productive, more dynamic and more successful

enterprise by implementing organization improvements that are effective and endurable.

Our commitment is to:

Bring a wide selection of products and services in the field of Clearing, Forwarding and

Transport.

To satisfy the needs in clearing, forwarding and transport requirements of both

domestic and International customers.

To engage qualified staff to make sure that all arrangements and special requests are

fulfilled to the expectations of our clients.

To maintain a sustainable growth and progress of the company.

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5. Organogram

6. List of Board of Directors

Following are the Board of Directors:

1. Masaood Abbas 25% Shares

2. Shakeel Abbas 35% Shares

3. Khaleel Abbas 25% Shares

4. Sikandar Masaood 15% Shares

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MANAGING DIRECTORPESHAWAR HEAD OFFICE

DIRECTOR ADMINISTRATION/OPERATIONS

01

MANAGER KARACHI OFFICE & PORT’S

01

FIELD / WAREHOUSE STAFF

06

MANAGER PESHAWAR OFFICE

01

FIELD / WAREHOUSE STAFF

04

MANAGER QUETTA OFFICE

01

FIELD / WAREHOUSE SATFF

03

MANAGER LAHORE OFFICE

01

FIELD STAFF

04

DIRECTOR FINANCE

01

ACCOUNTANT KARACHI

01

ACCOUNTS ASSISTANT

02

ACCOUNTANT PESHAWAR

01

ACCOUNTS ASSISTANT

02

ACCOUNTANT QUETTA

01

ACCOUNTANT LAHORE

01

7. Products & Services

The services they provide are the following:

Transportation through Road and Rail.

Freight Forwarding through Road and Rail.

Custom Clearance

Other services include security, material handling and warehousing.

8. Internal Factor Evaluation (IFE)

Key Internal Factors Weight Rating Weighted Score

Internal Strengths

Freight & Cargo Safety

High Financial Ratios (187 million

annual turnover)

Strong Management Team

19 years of experience without any

complaints from clients

Pioneers in transporting containers from Karachi to Central Asia (Uzbekistan)

0.3

0.2

0.05

0.05

0.1

3

3

2

1

2

0.9

0.6

0.1

0.05

0.2

Internal Weaknesses

Limited access to International Market

No website for online recognition

Warehouse shortage

0.1

0.1

0.1

2

1

2

0.2

0.1

0.2

Total Weighted Score 1.0 2.35

9. External Factor Evaluation

Key External Factors Weight Rating Weighted Score

Opportunities

Web Development/ Internet Usage

Emerging Markets, Abroad Expansion

0.1

0.1

2

3

0.2

0.3

9

Lowering Custom Duties

Technology in Transportation

0.15

0.2

2

3

0.3

0.6

Threats

Bad Economy

Security Issues

Increasing Fuel rates

Complex Regulatory System

0.1

0.15

0.1

0.1

2

3

2

2

0.2

0.45

0.2

0.2

Total Weighted Score 1.0 2.45

10.Alternative Strategies

SWOT Analysis/ Strategies

Strengths- S

1. Freight & Cargo Safety

2. High Financial Ratios (187 million

annually turnover)

3. Strong Management Team

4. 19 years of experience without any

complaint from clients

5. Pioneers in transporting containers

from Karachi to Central Asia

(Uzbekistan)

Weaknesses- W

1. Limited access to International

Market

2. No website for online recognition

3. Warehouse shortage

Opportunities- O

1. Web Development/ Internet Usage

2. Emerging Markets, Abroad Expansion

3. Lowering Custom Duties

4. Technology in Transportation

Threats- T

1. Bad Economy

2. Security Issues

3. Increasing Fuel rates

4. Complex Regulatory System

SO Strategies

(S1, S3, S4, O2) Company can use its

WO Strategies

(W2, O1) The company need to

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reputation to enter into the

International Market

(S1, O4) Company can use transport

technology for more safety and in

time delivery

develop their website which will help

them recognize widely

(W1, O2) Opportunity in international

market by abroad expansion will

minimize the limitation of

international market

ST Strategies

(S3, S4, T4) 19 years of experience

and strong management team will

help in understanding complex

regulatory system

WT Strategies

(W3, T2) Build ware houses in

different areas of the country which

will decrease security risk

SPACE Analysis Matrix

Internal Strategic Position External Strategic Position

Competitive Advantage (CA) Industrial Attractiveness (IA)

Market Share (-2)

Quality/Safety (-2)

Clients Loyalty (-2)

Technological Know-how (-2)

Average: -2

Growth Potential (+4)

Profit Potential (+5)

Ease of entry to new markets (+3)

Required Technological Know-how

(+4)

Average: +4

Total X axis Score= +2

Financial Strength (FS) Environmental Stability (ES)

Return on Investment (+5)

Liquidity (+4)

Capital Available (+5)

Cash Flow (+4)

Average: +4.5

Rate of Inflation (-4)

Security Issues (-3)

Technological Changes (-1)

Price Range of competitors (-2)

Average: -2.5

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Total Y axis score= +2

BCG Matrix

Division M.Abbas Co.

Revenue

Murad & Co

Revenue

Iqbal Transp.

Revenue

Industry

Sales 2012

Industry

Sales 2013

Road Transp. 1,37,201,700 85,000,000 73,000,000 3,05,000,000 3,43,000,000

Rail Transp. 50,000,000 30,000,000 25,000,000 1,00,000,000 1,02,000,000

Total 1,87,201,700 1,15,000,000 98,000,000 4,05,000,000 4,65,000,000

Road Growth 12% Relative

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FS

+1 +2 +3 +4 +5 +6

-6

-5

-4

-3

-2

-1

-6 -5 -4 -3 -2 -1

+6

+5

+4

+3

+2

+1

IACA

ES

Aggressive StrategyConservitive Strategy

Defencive Strategy Competitive Strategy

Rate

Rail Growth 2%

Market

Share (Rail)

Road

0.81

0.42

Internal-External Matrix

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?

Cash Cows

Stars Question Mark

Dogs

Maeket

Growth

Relative

Market

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

24%

0.00.30.60.91.21.51.82.12.42.73.0

IFE Total Weighted Score Weak 1.0-1.99Average 2.0-2.99Strong 3.0-4.0

I II III

IV V VI

VII VIII IX

Grand Strategy Matrix

As the company vector lies in the aggressive strategy quadrant. The company proposed strategies will be Market Penetration, Market Development, Horizontal and Vertical Integration and Diversification.

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EFE Total Weighted Score

High 3.0-4.0

Medium 2.0-2.99

Low 1.0-1.99

Grow & Build

Hold & Maintain

Harvest or Divest

11.Best Alternative Strategy (QSPM)

Key Factors

Alternative Strategy 1Entry International Market

Alternative Strategy 2Web Development

Weight Attractiveness Score

Total Attractiveness Score

Weight Attractiveness Score

Total Attractiveness Score

Strengths Freight & Cargo

Safety

High Financial Ratios

(187 million annually

turnover)

Strong Management

Team

19 years of

experience without

any complaint from

clients

Pioneers in transporting containers from Karachi to Central Asia (Uzbekistan)

Weaknesses Limited access to

International Market

No website for online

recognition

Warehouse shortage

0.3

0.2

0.05

0.05

0.1

0.1

0.1

0.1

3

2

3

2

1

-

3

2

0.9

0.4

0.15

0.1

0.1

0.3

0.2

0.3

0.2

0.05

0.05

0.1

0.1

0.1

0.1

-

3

2

1

-

2

3

2

-

0.6

0.1

0.05

-

0.2

0.3

0.2Total Weights 1.0 1.0

Opportunities Web Development/ 0.1 3 0.3 0.1 4 0.4

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Internet Usage

Emerging Markets,

Abroad Expansion

Lowering Custom

Duties

Technology in Transportation

Threats Bad Economy

Security Issues

Increasing Fuel rates

Complex Regulatory System

0.1

0.15

0.2

0.1

0.15

0.1

0.1

4

3

3

2

3

2

1

0.4

0.45

0.6

0.2

0.45

0.2

0.1

0.1

0.15

0.2

0.1

0.15

0.1

0.1

3

-

-

2

-

-

2

0.3

0.2

0.2Sum of Total Attractiveness Score

4.85 2.55

12.Conclusion

The work we have done helped us in understanding the Strategic Management practices. With the help of IFE Matrix we audited and evaluated the internal strengths and weaknesses of the company. IFE also helped us in identifying relationships. EFE helped us in assessing current business condition by visualizing external opportunities and threats of the company. Both combine helped in strategy formulation for the company. Further in the study we approached alternative strategy formulation in which we used SWOT Analysis, SPACE Matrix, IE Matrix, BCG Matrix and Grand Strategy Matrix.

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