LAHORE SCHOOL OF ECONOMICS

Report on Servis Shoes

Submitted To:
Prof. F.A Fareedy

Submitted By:
Ayesha Rana
13P00008

MBA -11
Section: B
Session: 2013-15
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TABLE OF CONTENTS

Executive Summary 06
Vision & Mission.07
History of service.08
Board and management ..11
Footwear Brand and Retail.12
Service Sales Corporation13
SSC Brand Portfolio.13
Brand description.14
Shoe-Planet..24
Analysis
i.
Pest Analysis25
ii.
SWOT Analysis29
iii.
IFAS.32
iv. EFAS34
v. SFAS36
vi.
Competitor Analysis.38
vii.
Industry Analysis (Porter 5 forces model) ..40
viii.
Value Chain Model...43
ix.
Porter Generic Strategy Model.48
x.
VRIO Model.50
xi.
Positioning Map52
xii.
BCG Matrix..54
xiii.
7s Model..56

Financial Analysis.61
Business plan.80.
i.
STP..81
ii.
4 Ps.82
iii.
Strategy to Launch..85
iv. Financial Feasibility Report86
Recommendations.87
Conclusion.88
References.89

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DEDICATION
We are dedicating our work to our parents and supervisor who have played a vital role in our
study and guided us at every step with their precious ideas. No doubt that this dedication is
insufficient and we can never repay for the role which they have played in our study.

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ACKNOWLDGEMENT

In this section, we would like to take the opportunity to express our gratitude and appreciation to
everyone who have contributed their efforts and times in helping us to complete this research
project throughout the duration of time.

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First of all we are very grateful to Allah almighty that enabled us to utilize our knowledge
and skills for the preparation and completion of our project. Without Whose guidance we are
unable to complete this project on time.
We would like to express our deepest and humble gratitude to Prof F.A Fareedy and Miss
Hadia who supervised us tolerantly and patiently by providing valuable guidance, advice,
support as well as motivation from the very beginning until the completion of this research.
We are also very thankful to our parents, family and well-wishers for their moral support
without which we cant be able to do this work.

EXECUTIVE SUMMARY

Servis has a renowned name in the footwear industry. Service industry limited manufacture shoes
and Service Sales Corporation(SSC) sells the shoes. Calza, Liza, Cheetah, Don Carlos, Toz, NDure, Skooz are the brands of service sales corporation. SSC has launched a new brand for SECA named as SHOE PLANET. Service Industry Limited (SIL) is a public limited company and
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service sales corporation is private limited company. This report takes into both
companies(except shoe planet) in order to analyze all the aspects of shoe Business.
Different models are being applied to this company in order to analyze the performance and to
found out the possible weaknesses and growth opportunities for the company. Models that are
being used are as follows internal factor analysis, external factor analysis, strategic factor
analysis, competitive analysis, industry analysis, BCG model, value chain model, VRIO model,
porter generic strategies. All these models were applied to this company in order to analyze the
performance.Financial analysis as compared to competitor is being done that showed that
immediate steps needs to be taken in order to grow in future
Recommendations at the end of the reports show clear direction for the company. Company
should implement these recommendations in order to attain superior financial performance for all
the stakeholders. Company is in strong position to implement these recommendations and to
attain 70% untapped market share.

VISION

To be a market leader providing quality footwear, tire & tube and allied products. To strive for
excellence and global recognition by continuous improvement, innovation, dedication and
growth.

MISSION
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To be result oriented and profitable company by consistently improving market share,

quality diversity, presentation, reliability and customer acceptance.

To emerge as a growth oriented concern ensuring optimum return and value addition to
its shareholders.

To ensure cost consciousness in decision making and operation without compromising

the commitment to quality.

To create an efficient resource management and conducive business environment.

Evolving an effective leadership by creating a highly professional and motivated
management team fully equipped to meet any challenge.

To keep abreast with modern technology and designs to optimize production and
enhance brand image to attain international recognition for the companys products.

To set up highly ethical business standards and be a good corporate citizen, contributing
toward the development of the national economy and assisting charitable causes.

To adopt appropriate safety rules and environment friendly policies.

HISTORY OF SERVIS

The tale of "Servis" starts with a gathering of companions - youthful, vivacious, and straight
from school - who built up Service Industries over 50 years prior.
These young fellows, named Ch. Nazar Muhammad (Late), Ch. Muhammad Hussain (Late)
both from Gujrat locale and Ch. Muhammad Saeed (Late) from Gujranwala District, began
business in 1941 at a little scale in Lahore. Around then, they were just assembling handbags and

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some different sports merchandise. Inside of years their business prospered surprisingly and they
were supplying their items to each side of India at the era of Partition.
In 1954, they introduced a shoe assembling plant at modern range Gulberg, Lahore. They began
production around the same time. The business began producing different sorts of shoes. Later
administration moved the plant from Lahore to Gujrat. Service Sales Corporation (Pvt.) Ltd.
the Group's advertising organization was built up in 1959. Modesty, reasonableness, and
admiration were the qualities near to the heart of these authors and it were these qualities that
prompted exceptional achievement of the Group throughout the years.
Today, the production side of the organization has prospered into Service Industries Limited
(SIL) which has world-class shoes, tires, tubes, and rubber creation offices in Gujrat and
Muridke. SIL is additionally the main exporter of footwear. Service Sales Corporation (Pvt.) Ltd.
(SSC) is today Pakistan's driving footwear retailer which is likewise enhancing into different
organizations.
A modest endeavor of companions has developed into a Group that has any kind of effect in lives
of a large number of individuals consistently.

SERVIS GROUP

Servis Group is a standout amongst the most regarded corporate nationals of the nation and has a
rich legacy spreading over a large portion of a century.
Today the Group is Pakistan's biggest footwear maker and exporter with interest in wholesale
and retail segments. With a developing arrangement of brands and an across the country organize
that touches a large number of lives regular, Servis is one of the first brands in the nation.

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Setup in 1958, the Group is the biggest footwear maker, retailer, and exporter working in the
nation and has overall sales of more than PKR 12 billion.

SERVICE INDUSTRIES LIMITED

Service Industries Limited (SIL) is a public limited organization listed on the stock exchanges of
Pakistan. It has yearly incomes of about PKR 12 billion ($130 Million) and is the biggest
producer of footwear, tires & tubes for bikes, and has been the biggest footwear exporter of the
nation throughout the previous 10 years.
The organization utilizes more than 6,000 individuals in its offices situated in Gujrat and
Muridke and exports its items essentially to Germany, Italy, France and the UK. With an
emphasis on item quality and advancement, SIL has constructed both local and universal
acknowledgment of organization's items.
The visionary leadership and dedicated administration group has driven SIL to hold this top
position in the business Arena.

BOARD AND MANAGEMENT

The board and management details:

Chairman

Mr.AhmadJaved

Mr.Ahmed

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Mr. Omer

CEO

Saeed
BOARD OF DIRECTORS

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FOOTWEAR BRAND & RETAILER

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Beginning its operations as a solitary retail footwear outlet, the brand today has a 450+ stores
vicinity in Pakistan, 2000+ distributions, and a developing global foot shaped impression in
Europe, Middle East, and numerous different locales of the world

Stores

450+

Dealers

2000+

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At the heart of every one of our attempts lies the soul of our countrymen. Servis and its roots are
grounded immovably in Pakistan and its people. Servis comprehend their needs, their lives and
their fantasies. Sharing in their moments both of all shapes and sizes, Servis has been their
friendly in satisfaction for more than 50 years. What's more, with dedication to consistent
advancement and uncompromising quality, Servis try to satisfy their clients with the absolute
best items and services.
Three eras associated through the string that is joy; the journey proceeds headed for 'feel great'.

SERVICE SALES CORPORATION (SSC)

Service Sales Corporation (Pvt.) Ltd. (SSC) is Pakistan's driving retailer that has set new record
norms and made new benchmarks in the retail business. The Company is at present the biggest
footwear player in Pakistan by income. With its reality class retail frameworks, element way to
deal with business and exceedingly energetic group, SSC is today heading towards turning into a
provincial retail player.
The Company maintains its footwear retail business under "Servis" brand. It has likewise settled
probably the most adored footwear brands including:
F
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NDURE

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Launched in 2008, NDURE is a late expansion to the SSC brand portfolio. It offers a stage of
meeting for the new generation. The item range involves easygoing, formal and sports' shoes for
men and ladies, concentrated on the urban way of life over a broad band of styling, running from
basic to fashion. SSC offers this brand basically concentrating on urban buyers and is in a state
of harmony with the worldwide patterns, a brand that is youthful on a basic level.

DON CARLOS

Don Carlos, the first men's mega brand in Pakistan, made its introduction in the shoe market
during an era when brand building was in its earliest stages.

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With a charming and an energizing brand identity, Don Carlos more than a time of years has
inescapably turn into men's style pioneer in the footwear business.
The brand elements fine craftsmanship and particular plans with hand-created points of interest
and cutting-edge quality.

CHEETAH

Cheetah is Pakistan's driving games and execution footwear brand. Over the course of the years,
the brand has added to a faction taking after among sportsmen and now symbolizes the
sportsman's soul. It has been supported over the course of the years by brandishing legends
including JavedMiandad, Jansher Khan, and ShahidAfridi.
Today, the brand offers cutting edge outlines for an assortment of games including Cricket,
Football, Tennis, Hiking, and Outdoor & Basketball. It has a standout amongst the most desired
accumulations of running shoes.
New activities by the brand incorporate its ladies' scope of execution game and casual shoes.
As a brand, Cheetah symbolizes energy and has no parallel on the ground!

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Cheetah is jogger shoe and has a good name in business for its sturdiness and quality. This brand
is in service portfolio since long. Cheetah is fabricated in Gujrat production line with imported
Cow leather. Cheetah has won the brand winning award in 2008.

CALZA

Calza is a brand that has its motivation established somewhere down in Pakistan and its way of
life.
It is a brand for the man who confronts difficulties of his routine life with a smile; taking a stab
at all the more, yet doesn't overlook where he has a place.
Well known film star, Moammar Rana, is the substance of the brand in its campaign "Meri
DhartiMeraCalza" (my country my Calza) that exemplifies the battles of a man who longs for
becoming showbiz royalty in existence with his roots grounded to his social qualities.
Calza item range embodies moderate shoes, shoes and shoes for throughout the day wear in
shifting climate conditions.

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LIZA

Liza is the most perceived ladies' footwear brand in Pakistan.

Essentially casual and comfort wear shoe, its wide variety caters to different events and mindsets of a lady with a happening way of life. The item range embodies slippers, sandals, and
shoes.
Lightweight, comfort and style are vital for Liza ladies and styling is to bid an easygoing way of
life with a concept of fashionable look.
Brand's late battle, "Liza: The Fun Side of Life" spins around today's lady who carries on with a
dynamic way of life. Wherever she goes, individuals get diverted by her shoes and appeal.

SKOOZ

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SKOOZ conveys enjoyable to school day with comfortable, durable and lightweight shoes.
The item range covers school shoes for young men and young ladies over a wide age band.
Throughout the years, SKOOZ has kept pace with the kids' differing interest and keeps on
offering fabulous item extend alongside difficult to overlook advancement bargains through
scratch cards, global trips, freebies, tennis balls and sweepstakes.

TOZ

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TOZ is a world fun for children. It features shoes for boys and girls with dynamic colors and
attractive styling. Additional consideration is taken in guaranteeing comfort, fit and safety in
item plan.
TOZ guarantees to open up the creative ability of children and take them into a world loaded
with excitement, experience and fun.
A brand intended to please youngsters, including shoes and joggers. Joggers are not on lines of
creation now days. However shoes are being made in enormous amount. The satisfying element
of this brand is its look, having pictures of popular cartoon characters like superman, Spiderman
and Harry Potter.

BRAND PARTNERSHIP

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SSC has additionally created brand partnerships with driving worldwide and national footwear
brands including:

B
C
A
r
T
a
n
d
SSC takes the Servis legacy forward with new retail activities and venture into new businesses.

RETAIL FORMATS
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R
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SERVIS STORE

The oldest and most widely spread arrangement inside of the Servis stores family runs with the
guardian brand name "Servis". There are more than 300+ Servis stores under this format housing
incredible variety of shoes. These stores basically offer inward brands inside of the Servis
portfolio (Don Carlos, Calza, Liza, Skooz, Toz, and Cheetah) alongside some outside brands like
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Soul Collections and Hush Puppies. These stores are a regular destination for the whole family as
they offer brands for everybody: men, ladies, and children.

SERVIS MEGASTORE

The Servis Megastore offers a genuinely remarkable shopping knowledge as it showcases the
most recent accumulations of both neighborhood and universal shoe brands. Rich in mixture and
special in presentation, Servis Megastore is composed as a way of life store that mirrors the
requests and patterns of modern living.

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SERVIS FACTORY OUTLET

Servis Factory Outlets (FOL) are the most esteem arranged of our retail organizes. These stores
offer incredible arrangements on women, men, kids and game shoes. New arrangements and
advancements are a general component, giving clients the best esteem on their buy.

FRANCHISING

Servis keeps up a strong faith in entrepreneurship as an economic driving force. By making new
open doors for the business group, Servis has helped nearby business people develop and
flourish.
The Servis Franchise Program is one such try that gives business people the chance to join forces
with the Servis and start their own business under the Servis name.

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SHOE PLANET

Shoe Planet is an interesting shoe shopping destination store, offering item quality and outline at
standard with the top worldwide brands in a drawing in shopping environment.

Magnificent planner shoes for men

REEVA originator shoes for ladies
IMAC originator shoes from Italy

So quit bargaining. On the off chance that you don't love it, quit wearing it. What you wear is the
thing that characterizes you.

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PEST ANALYSIS

A scan of the external macro environment in which the firm operates can be expressed in the
following factors:

Political

Economic

Social

Technological

POITICAL FACTORS

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Pakistan is having a democratic government which is labeled as a weak government, lacking

perspective and throwing the country into severe crisis. Law and order, corruption, lack of
energy is making the situation worst for the government. The instability in the political sector is

increasingly causing major issues for the industry in Pakistan. Lack of vision and trust in the
political sector is causing the country to lack behind in the growth. A strong and stable
government and political structure is required due to which the national and multinational
countries can work and can lead the country towards progress. The instable political situation is
also leading towards Law & Order issues, blasts, attacks are common in the country which is
portraying a negative image and as a result favorable conditions are not present for the industries.

The Government is encouraging export by giving rebate to increase foreign trade

activities. SIL is taking advantage of this scenario and is trying to increase exports
The Government is providing opportunities to the companies to provide benefits like oldage benefits, disability benefits, pension, etc. These benefits are to be provided under the
supervision of Social Security Ordinance. SIL is providing its employees the benefits of

social security
The company has a trade mark and a trade name that gives the company an exclusive

right by the Government policies, to use it and enter into contracts and dealings
The company is bound to follow the workers safety regulations as laid down in Workers

Safety Act
As the policy of Government is that the minimum wage paid to a worker should be Rs.

6000. SIL is following this policy although other companies in the area not following
All the tax related policies are being followed by SIL

ECONOMIC FACTORS

Economically, the country is still recovering from the financial crisis of 2007- 08. The
decrease in FDI and the transfer of industry from Pakistan to other countries are the major
obstacles in the countries way to achieve growth. High inflation and high interest rates are

26 | P a g e

decreasing the purchasing power of the consumers. The supply and consumption also decreased
due to the slink in the economy. Due to the transfer of different industries from Pakistan, it is

causing an issue of Balance of Payment, the exports are less than the imports, also due to high
currency volatility and the continuous depreciation of rupee is making the domestic products
cheaper and imported products expensive. Constant political instability and security issues are
playing a major role in de-stabilizing the economy of the country and not allowing it to fulfill its
potential. High unemployment rate is also a worrying site for the country. Large radical steps are
required so that the company can cope with the economys challenges and can lead the country
on the path of success

SIL plays an important role for economic growth by contributing to the economy of the

country
The cost of production includes wages of workers, salaries to the staff, purchases,

utilities, carriage inward and outward, etc

The company offers a variety of products for different classes of customers. For example,
good quality and a bit expensive products for high class and cheaper products for middle

and low class customers

The prices of products of SIL are very competitive that is the reason why they have huge
market share in Taiwan

The salaries and wages of the workers and management are not satisfactory so the income
distribution factor is not satisfactory
SOCIAL FACTORS

Pakistan is still shifting its social lifestyle from eastern to western style. The westernization in
the society is allowing many multinational companies to excel in the country. The country is
progressing towards equality, income sharing and decrease in criminal activities. The social and
cultural norms of Pakistan make it very viable to any change produced in the social circles. The

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society is highly adapt towards new products which provide many multinational companies to
come and offer new products and succeed here, the social factors of the country enable the

companies to export their products to other countries, the working environment hedges towards
providing better facilities to the customers

SIL is funding many NGOs and welfare organizations in Gujrat

The company is providing various opportunities of employment and also making the

workforce skillful
SIL complies with environmental rules, regulations and standards applicable to their
operations

TECHNOLOGICAL FACTORS

Technology has been immensely improvingly from past many years. A strong IT sector is
present in the country. Technological expertise is readily available in the country. There is also an
outflow of IT Professional into different countries. Massive technological advances are made in
the petrol and oil sector, but due to the instable political environment country is lacking
significantly behind technology in manufacturing sector, as major industries are shifting from
here and the growth is stagnant of the industry, as a result our exports exceed our imports.

The company is using machines that note the attendance of employeesby detecting their
finger prints already saved in the system. This machine also provides the management
with the statements showing record of each employee regarding the days of late arrival

and the leaves in the month

The company has provided the computers to the staff members to eliminate the cost of

stationery and to save the time

For cutting of leather, machines are being used that can cut the several sheets of leather

hence saving the time and cost of labor

A generator room is there to provide electricity during time of load shedding hours

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SWOT ANALYSIS

Here the Strengths Weaknesses Opportunities and Threats of the business are being reviewed
through the analysis of Financial Statements.

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STRENGTHS

Largest footwear in Pakistan

60 years experience
Old and loyal employees
Cheap articles affordable for all income segments
Geographical coverage
Variety of products
Image of durable shoes
Strong market share in sports and school shoes
Market leader brand(Exports), technology, quality
Vertical integration with SSC
Diverse product portfolio
Well established dealership network
Healthy financial position in terms of profitability, balance sheet and liquidity

WEAKNESSES

Female market penetration is weak

Low aspiration value in high income group
Weak corporate image of servis group
Distribution channel is not as efficient as BATA
Limited availability of credit to final customers
Volatile exchange market
Commodity price volatility and exchange rate fluctuations

OPPORTUNITIES

Penetration of market in female segment

Creation of innovation and customized products
Further segmentation in sports segment
Improve shopping experience at retail outlet
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Major portion of market untapped

Demand of 200 million pairs of shoes in Pakistan
Increasing trend towards brands
Emerging youth population
In a position to compete with BATA

THREATS

Tough competition in the market from local and foreign brands

Aggressive marketing strategies from other shoe manufactures
Different market segments have been targeted by competitors
Unbranded small players competing against different brands of servis
In a position to compete with BATA
Continuous high inflation affecting customer purchasing power
Depreciation of Pakistani rupee
Continuous high inflation affecting customer purchasing power

INTERNAL FACTOR ANALYSIS SUMMARY

IFAS:
Internal factors

Weight

Rating

Weighted
score

Strength
Market

leader

brand(Exports),

technology, .20

.80

quality

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Diverse product portfolio

.10

.50

Well established dealership network

.05

.05

State of the art production plants

.10

.20

of .15

.75

.10

.40

Commodity price volatility and exchange rate .10

.30

Healthy

financial

position

in

terms

profitability, balance sheet and liquidity.

Vertical integration with SSC.

Weaknesses:
fluctuations
Volatile exchange market

.10

.40

Limited availability of credit to final customers

.10

.20

1.00

3.6

This matrix shows the strengths and weakness of the company. Weight has been assigned to each
strength and weakness, which shows their importance. Along with this rates have been assigned
to each according to the level of importance (5 being the highest). By multiplying the weight
with the rating assigned, we are able to calculate the weighted score. For a company like SIL,
their biggest strength is the diverse product portfolio they have. Through this they are able to
recover from any loss they face, along with more chances of generating revenue. This is why this
strength has been assigned a rating of 5.
Moreover their profits are being financed through profit, which means. They have a healthy
financial position. Their emphasis is on providing better quality, technology and they are the
market leaders. All these strengths have been assigned weights and rating to calculate their
weighted score.

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Along with this their weaknesses are also taken into account so that they would focus more on
how to overcome them. They face a volatile exchange market. This means that the company will
have bear the fluctuations in price. Moreover they have limited availability of credit to final
customers. All these weakness has been assigned equal weight; however the highest importance
is given to volatility in exchange market.
The weights assigned are equal to 1, and their weighted score is 3.6. This shows that the
company is in a better position in terms of its internal analysis.

EXTERNAL FACTOR ANALYSIS SUMMARY

EFSA:
External Factors

Weight

Rating

Weighted
score

Opportunities:
Demand of 200 million pairs of shoes in .15

.30

Pakistan
Increasing trend towards brands

.10

.10

Rising demand in urban areas

.10

.40

Emerging youth population

.05

.1
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In a position to compete with BATA

.20

.6

Severe country wide energy crisis

.05

.1

Adverse law and order situation

.10

.30

Continuous high inflation affecting customer .05

.2

purchasing power
Constant devaluation of Pak rupee against .05

.2

Threats:

foreign currencies
1.00

3.05

The external analysis shows the opportunity and threat the company faces and the importance
each of these is given. The biggest opportunity that SIL has is the rise in demand. This can create
more opportunities of SIL to gain market share and generate revenue. This opportunity has been
identified as the most important as it has been given a rating of 4. Rise on the population of
youngster is also generating demand for them as this young generation will be more attracted
towards having more and more shoes.
The treat for this company is the continuous high inflation which is affecting the purchasing
power of consumers. The consumers are not able to afford the products offered by SIL because
of rising prices. Hence this will have a negative effect on their company. This is why the weight
and rating assigned to this is the highest. Along with this there is risk of adverse law and order
situation. These are the political risks that the company will have to face. Moreover the constant
devaluation of rupee against foreign currency is affecting the purchasing power of consumers as
well. All these weights are equal to 1 and the weighted score is 3.05. This is less than the internal
analysis weighted core, which shows that the companys internal assessment is better than its
external. Their strengths are more as compared to the threats and weaknesses.

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STRATEGIC FACTORS ANALYSIS SUMMARY

SFAS:
Rating

Weighted

Duration

Comments

.1

Score
.40

Short-term

Rising Demand

(O) Youth Population

.15

.30

Short-term

Emerging youth

(O) State of art plants

.20

.60

Short-term

population
Huge export market

Intermediate

available
Severe Country-

Intermediate

wide crisis
Affecting Customer

Long-term

purchasing power
Good profitability

Long-term

& liquidity
Leader in quality,

Key Strategic Factors

(O)Demand in Urban

Weight

Areas

(T)Energy Crisis
(T) High Inflation
(S) Financial Position
(S)Market Leader(export)

.1
.05
.15
.2

3
4
3
4

.30
.20
.45
.80

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brand& technology
(S) Product Portfolio

.1

.50

Long-term

Diverse

(W) Commodity Prices

.1

.40

Intermediate

productportfolio
Very volatile

(W) integration with SSC

.15

.30

Intermediate

Limited availability
to final consumers

The SFAS combines the two matrices of internal factor analysis and external factor analysis. We
have chosen 10 factors from all of the internal and external factors for the strategic factor
analysis. Three factors each are chosen from the opportunities and Strength portions. While on
the other hand, two factors each are chosen from the weaknesses and threats sections. The
strategic factors selected from the opportunities section include demand in urban areas, emerging
youth population and weak transport infrastructure. These factors have been given the duration
focus of short-term. The highest scoring opportunity is the weak infrastructure in the country for
transport. Company can really gain out of this opportunity if proper strategy is developed.
The two factors from the threat section that are included in the strategic factor analysis include
poor energy situation in the country due to energy crisis and high inflation which is leading to
decrease in the buying power of the consumers. Energy crisis is the biggest threat and both
threats have been given the intermediate term duration of focus.
The three factors that are selected from the strength section include healthy financial position of
the company in terms of profits, being market leader in technology, brand and quality, and
diverse product portfolio. The biggest strength of the company is being the market leader in
terms of brand, technology and quality. All of the strengths have been given the log-term
duration of focus.

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The two factors selected from the weaknesses section include increased costs due to volatility in
the commodity prices and exchange rates and availability of the credit for the final customers.
The biggest weakness is the high costs. Both the strategies have been given the intermediate term
duration of focus.

COMPETITOR ANALYSIS

Bata

Service

Borjan

Critical
Success
Factor

Weight

Rating

Score

Rating

Score

Rating

Score

Product
Quality

0.10

0.3

0.3

0.3

Outlets

0.10

0.4

0.3

0.2
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Market
Share

0.05

0.15

0.1

0.1

Price
Financial
Position

0.10
0.15

4
3

0.4
0.45

3
3

0.3
0.45

2
2

0.2
0.3

Customer
Loyalty

0.10

0.3

0.3

0.2

Global
Expansion

0.20

0.6

0.4

0.2

Advertising
Total

0.20
1.00

0.4
3

0.4
2.25

0.2
1.7

The competitor analysis of the BATA and BORJAN shows their position with respect to
SEVICE.
This analysis is done by using key success factors and by giving each key success factor a weight
and calculating the score for each of the success factor.
Results shows that score of BATA is highest among other two competitors that shows its
relatively strong position.
Score of SERVICE device is lower by .75 and score of BORJAN is lower by 1.3.
The results can be wrong because it is based upon subjectivity.

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INDUSTRY ANALYSIS: PORTERS COMPETITIVE MODEL

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Analyzing the competitive situation of the industry through porters model we identify that the
industry is highly competitive.

THREAT OF POTENTIAL NEW ENTRANTS

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Considering the dynamics of the industry and the number of competitors prevailing in the
market, there is a high threat of new entrants because the nature of our market is such that china
is a source of cheap production so it is inevitable that there will be a sale of such articles because
of lower price and high demand and this is why local manufacturers such as Mouchi and English
shoes have entered the market with high financial investments.

DEGREE OF RIVALARY AMONG EXISTING FIRMS

There is an intense rivalry among existing firms which are in a constant battle to make money
through gaining market share. BATA,URBANSOLE,BORJAN are amongst the leading market
entities. Since this industry has a high initial fixed cost, the rivalry mainly comes from price wars
where the local manufacturers offers relatively lower prices but that comes at the cost of quality
too.
THREAT OF SUBSTITUTE PRODUCTS

There is a big threat of substitute products because all local manufacturers who have entered in
the market are producing the same product but for a different segment (price segmentation).
Substitute products in the market have basically put a cap to the return on investment.

BARGAINING POWER OF BUYERS

Bargaining power of buyer is low because the consumer faces a tradeoff between price and
quality. If buyers are price conscious then they would have to make compromises on quality and
thats when the local manufacturers come in because they offer lower prices at the cost of quality.
On the other hand SIL competes on the quality.

BARGAINING POWER OF SUPPLIERS

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Bargaining power of suppliers is low because SIL has vertical integration. SIL produces goods
by itself and sells the goods through SSC. But now SSC is going towards having more and more
suppliers to meet the demand level but it has also increased the bargaining power of suppliers.

VALUE CHAIN MODEL

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FIRM INFRASTRUCTURE

SIL has wide infrastructure. The no of businesses that SIL has need big infrastructure that really
made this company competitive. As far as the production factories are concerned, it has two
factories

Mureedkay factory
Gujrat factory

Both these factories have wide area and capacity to fulfill the demand of customers in order to
generate sales. Both these factories has different department with in it.

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The infrastructure is not limited to factories,SSC that sells the company products on behalf of the
company also has wide network.

HUMAN RESOURCE

The HR department plays vital role in the prosperity of the organization. In SIL, HR department
is responsible for developing job descriptions and organizational chart and defining
responsibilities and authorities of the employees.
The HR department is responsible to provide the manpower to all other departments. When it
receives demand of the employees from the head of the department, requirements are sent to the
head office where the jobs are advertised in leading newspapers. There is much specified and
organized way to hire the person that includes advertising, screening, testing and finally
interviewing the candidate.
Moreover this department is performing following functions:

Hiring and firing of the staff members

Transfer of staff if needed and job rotation
Describe the job specification and job description
Hold and maintain the record of employees
To conduct the frequent training sessions of the employees
Prepare the ACR of the employees
Determine the additional human recourse requirement
Sort out the matters of employees
Internship of the students is also arranged by this department along with the visits of the
factory to delegations or visitors

HR is basically involved in the maters of the staff members and the matters relating to the
workers are being handled by the Industrial Relation Department.

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PROCUREMENT
This department is widely called procurement at SIL. Procurement department is the back bone
of Service Industries Limited because at each level of production raw material is needed and
there are so many items involved. Its primary responsibility is to arrange materials demanded by
the Costing Department through the estimate sheet.
After receiving the sheet it calculates the quantity of material which is really needed after
adjusting the stock and orders in hand. If sufficient stock is not available then they hunt for
appropriate supplier or vendor. After the negotiation and settlement of different terms and
conditions, then the vendor is ordered to manufacture or deliver the certain material. It also
ensures the timely supply of raw materials and parts along with the best quality at the lowest
possible price. It establishes and maintains relations with suppliers and requires them to deliver
within the lead time. Lead time is 40 days for local purchases and three months for imports. This
department is divided into two main sections:
Local Purchase:
Local purchase is further divided in to sub-sections on the basis of the type of material procured
that is leather, synthetic, leather shoe grindery, canvas shoe grindery, chemical and parts along
with general items and packing.
Foreign Purchase:
Local purchase section arranges material locally while foreign purchase section imports material
from all over the world.

Procurement Officers determine whether to negotiate new purchase orders or amend existing
orders based on the manufacturing schedule. Planning Officers review purchase orders based on

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the quantity of the order and the delivery requirements and ensure that all items ordered are
demanded through estimation sheet.

INFORMATION TECHNOLOGY
Basically there are numerous motivators of implementing management information system. This
system should be capable to provide the necessary data for decision making immediately to top
management, managers and front line managers.
The purpose of this system is:

Greater work processing

Data storage

Cost reduction

Strict control on resources

Strict control on process and production

Avoid work repetition

Base for Activity Based Costing

System manager is the head of this department with five programmers and three assistants. The
persons are appointed in the department are IT literate. This department is working as a support
system department for all the other departments so that they can perform their activities
efficiently and effectively. It undertakes to perform activities like generation of reports required
by many departments to stream line their day-to-day activities.
It is responsible to manage all the activities relating to computer systems it also corrects different
problems faced by the departments in their database. They generate the reports from the database
according to the requirement and can change the menu provided to each user for his working

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according to his needs so that he can work efficiently and effectively. They also keep the record
of the daily transaction in reliable tape to handle any emergency like loss of data due theft, fire
etc.
Previously they were working in Oracle database named as SMARTERM but now it is being
replaced by Enterprise Resource Planning which is also Oracle based.

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PORTER GENERIC STRATEGIES MODEL

SIL is a company that is a great follower of porter generic strategies. It was surprised to know
that SIL is not only implementing the one generic strategy but implementing all the generic
strategies in order to compete in the market.
SIL knows that all of the three strategies are important so what they have done, they introduce
different articles focusing on different strategies targeting different market.
That is why SIL is so competitive in the industry.

PRODUCT DIFFERENTIATION
The state of art technology of SIL made its product different from competitors.
POLY UTHIRINE sole that is manufactured by SIL gave real edge with respect to competitors.

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Secondly, the articles that are manufactured by the SIL are different and unique and are designed
by proper research.
LOW COST PROVIDER

In order to remain competitive SIL now started to focus on the low cost strategy. What they have
done they started to manufacture low price products by the local suppliers that are scattered
across Pakistan.
The purpose to manufacture goods from these suppliers is to focus on low cost.

VRIO MODEL

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Valuable:
SIL has a competitive edge of having resources that are valuable to the organization. The type of
infrastructure SIL has really adds value to the firm. Moreover, employees of the company also
gives SIL the real competitive edge in term of skills to peruse others.
Large infrastructure based on two factories, machinery and other assets adds value to the firm.
Rare:
Rarity is desired by all organizations but SIL has really got the rarity In term of its resources that
is really the reason of survival and growth of the SIL. The type of resources that SIL has is
unique in nature when we talk about the production facilities of this organization that has made
the production unique also.

Not Imitable:

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Uniqueness is what that could not be copied by the by other competitors. Bata is try from last
many years to copy the competencies of SIL but unable to do this. SIL only way to hide its core
competencies from its competitors by not outsourcing its core facilities for production.
Organization:
This level is achieved when the organization is known by everyone in the country where it
operates and employees of the company feel pride to work with the organization. Assets of the
organization also plays in order to achieve this level for the organization. SIL has got the name in
shoe industry.

POSITIONING MAP

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SERVICE SHOES

Positioning map of SIL shows the position of the company with respect to its competitors.

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The main competitors of the service are LOGO, BORJAN and BATA. The map shows the
position of each with respect to its competitors.
As far as logo is concerned its price and quality is considered as high among all its competitors.
Borjan Bata and Service almost have same prices but different in quality. Price of borjan is high
than bata and service but quality is almost same.
As far as bata and service is concerned both are at a same point having almost same quality and
price with minor difference that is why they are considered as direct competitors.

BOSTON CONSULTING GROUPS GROWTH-SHARE MATRIX

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Above is the BCG of service shoes brands that shows the position of each brand with respect of
its market share and growth rate.
The diameter of the circle is calculated through
r=Square root (p*r^2)
R=total sale of the brand with respect to other brands

Cheetah is considered as a cash cow for service because its sales are highest among all brands.
All market of Afghanistan is captured through this cheetah brand.
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Don carlos also falls in Cash cow it has the second highest sales among all brands. Toz, skooz
and liza are of lowest sales among all brands and falls in question mark. SIL is doing hard work
on all three to convert them in cash cow or stars.
N-Dure is new brand by SIL and sales of SIL are growing very fast with respect to other brands.
Calzaia a brand that is really famous in labor class and it is of high quality and of lower price but
it generates a lot of revenue for the company.

7S FRAME-WORK
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Most of the firms focus on the marketing mix, which are product, price, promotion and place.
However, in todays world, where service marketing is capturing the interest of both the
consumers and the organization, a new model has been introduce that is known as McKinseys
Seven S framework it helps in analyzing, and improving the organizational effectiveness. SIL
should also apply the 7S model. The 7S model consists of strategy, Structure, Systems, Skills,
Shared Values, Style and Staff.

STRATEGY
The strategy of SIL has been to introduce new and innovative products at competitive price in
the market, which gives value for money. This is the prime reason that the company emphasizes
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a lot on research and market survey. This is why it has been termed as one of the most reputed
footwear brand in Pakistan. Within few years of it emergence it has achieved high success and
profits. The strategic objectives of SIL are to Diversify, by exploring beyond the current portfolio
and satisfy the customers. Also, they tend to diversify and extend physical reach to the
geographically untapped areas.
STRUCTURE

The Structure of SIL is decentralized and follows a functional organizational structure. There are
separate department heads for each department who take responsibility of their own department
and make decisions. The board has set up three different committees that meet every week to
discuss the core issues. The Board of Directors as repositories of the corporate powers act as a
guardian to the Company as also the protectors of shareholders interest.
MANAGEMENT COMMITTEE: The day-to-day management of affairs of the Company is
vested with the Management Committee, which is subjected to the overall superintendence and
control of the Board.
Currently it has about 5000 employees and with expansion taking place it is continuously
growing. At SIL the employees are somewhat given free hand to bring in innovative ideas.

SYSTEMS
SIL greatly emphasizes on the usage of management information system. In this age of
technology companies are more focusing on making their systems and workings more

computerized.MIS assists not only in organizing or storing of data it also helps in strategy and
decision-making and evaluation of the strategy? SIL uses all kinds of software and information
system like supply chain management and customer relation management system. Apart from
this the higher levels of hierarchy make use of Decision Support system for decision-making.
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Also SIL website contains all the information related to company, its achievements and recent
developments. SIL has one of the best MIS systems in the country to coordinate day to day
activities with its huge distribution network including depots, wholesalers and retailers as well.

SKILLS

SIL excels in the following

The company has maintained an extensive network of distributors that enables it to reach
millions of customers. That is attained through people so Human resource is important

skill of organization.
SIL factories ensure uninterrupted supply for smooth production
SIL emphasizes great on marketing and sales.

SHARED VALUES

The core values of SIL represent their corporate ideology, which guides them on day to day
basis. Their values and beliefs are:
Consumer-Centric: SIL focuses on their consumers. They aim at exceeding customer
expectations. They believe that in todays world consumer have full know-how about the
everything and thus all of their products are intensely researched and presented to consumers to
gain their satisfaction.

Innovation: This is the most important and valued belief of SIL and is being practiced
throughout all their operations. According to them they think out of the box and create a unique
brand experience.

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Integrity: they believe and maintain a transparent and fair environment and believe that all the
work should be done up to the standard. Their aim is to develop a strict and ethical environment
within the organization.
People: SIL focuses on their and give them a chance to excel in their work and increase their
competencies and skills.

STAFF
The company's people resources and how they are developed, trained, and motivated. SIL is
committed to diversity in a working environment where there is mutual trust and respect and
where everyone feels responsible for the performance and reputation of our company. It recruits,
employs and promotes employees on the sole basis of the qualifications and abilities needed for
the work to be performed. They are committed to safe and healthy working conditions for all
employees. They will not use any form of forced, compulsory or child labor. They are committed
to working with employees to develop and enhance each individuals skills and capabilities.
They respect the dignity of the individual and the right of employees to freedom of association.
They maintain good communications with employees through company based information and
consultation procedures.

STYLE

SIL follow leadership approach of top management and the company's overall operating
approach. Career development program in SIL takes in to consideration the following activities:

Provides training to the employees and reorganized its front end sales force

It has undertaken intensive training program for its employees and managers to ensure
excellence in customer service It has empowered its workforce by promoting the best
performers and bringing in new managers with fresh ideas.
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FINANCIAL ANALYSIS

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RATIO ANALYSIS AND INTERPRETATION

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Ratio analysis is the most common form of financial analysis. It is a performance indicator of the
business. It provides relative measures of the firm's conditions and operating efficiency. It
involves methods of calculating and interpreting financial ratios to analyze and monitor the
firm's performance. The basic inputs to ratio analysis are Statement of Comprehensive Income
and Statement of Financial Position items.
Ratio Analysis of Service industries Limited for recent two years is given as follows:

Liquidity Ratios
Activity Ratios
Debt Ratios
Profitability Ratios
Market Ratios

LIQUIDITY RATIOS

The liquidity of a firm is measured by its ability to meet short-term obligations as they come due.
Liquidity refers to the solvency of the firms overall financial positionthe ease with which it
can pay its bills. Because a common precursor to financial distress and bankruptcy is low or
declining liquidity, these ratios can provide early signs of cash flow problems and impending
business failure.
The two basic measures of liquidity are:
1. Current Ratio
2. Quick Ratio

CURRENT RATIO
It is one of the most commonly cited financial ratios. It measures a firms ability to meet its
short-term obligations.

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Current Ratio

Current Assets/Current Liabilities

Year

2014

Current Assets ('000)

2013

3,103,365

2,617,148

Current Liabilities ('000)

2,375,987

1,797,360

Current Ratio

1.31

1.46

Generally, higher the current ratio, the more liquid the firm is considered to be. A current ratio of
2.0 is cited as acceptable, but values acceptability depends on the industry in which the firm is
operating.

1.2

1.25

1.3

1.35

1.4

1.45

1.5

QUICK RATIO

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This is also called acid-test ratio. It is similar to the current ratio except that it excludes inventory
from current assets. Only cash, marketable securities and receivables (called Quick Assets) are
considered. The generally low liquidity of inventory results from two primary factors that is it
cannot be easily sold easily and secondly, it is typically sold on credit and converted into
accounts receivable before being converted into cash.
Quick Ratio

Current Assets-Inventory/Current Liabilities

Year

2014

2013

Liquid Assets ('000)

1,745,237

1,363,907

Current Liabilities ('000)

2,375,987

1,797,360

Quick Ratio

0.73

0.76

A quick ratio of 1.0 or greater is recommended, but it also depends on the industry in which the
firm is operating. It provides a better measure of overall liquidity only when a firms inventory
cannot be easily converted into cash.

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0.72

0.72

0.73

0.73

0.74

0.74

0.75

0.75

0.76

0.76

0.77

Interpretation:
The overall liquidity of the firm has decreased when compared with previous years liquidity. In
the current year current as well as quick ratio has shown decrease.

ACTIVITY RATIO
Activity ratios measure the speed with which various accounts are converted into sales or cash
inflows or outflows. With regard to current accounts, measures of liquidity are generally
inadequate. It is therefore important to look beyond measures of overall liquidity and to assess
the activity of specific current accounts. A number of ratios are available for measuring the
activity of the most important current accounts which include:
1.
2.
3.
4.

Inventory Turnover
Average Collection Period
Average Payment Period
Total Asset Turnover

INVENTORY TURNOVER

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Inventory turnover measures the activity or liquidity of the firms inventory.

Inventory Turnover

Cost of Goods Sold/ Inventory

Year

2014

2013

Cost of Goods Sold ('000)

8,127,972

6,086,613

Inventory ('000)

1,358,128

1,253,241

Inventory Turnover

5.98

4.86

It is meaningful only when it is compared with that of other firms in the same industry or to the
firms past inventory turnover.

AVERAGE COLLECTION PERIOD

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Average collection period, or average age of accounts receivable, is useful in evaluating credit
and collection policies.
Average Collection Period

Accounts Receivables / Average Sales per day

Year

2014

2013

Accounts Receivables ('000)

1,122,624

933,720

Average Sales per day ('000)

25812.08

21041.75

Average Collection Period(days)

43

44

It indicates the average number of days the firm takes to collect an account receivable. It is
meaningful only in relation to firms credit terms that are the number of days for which the credit
is extended.

42.4

42.6

42.8

43

43.2

43.4

43.6

43.8

44

44.2

AVERAGE PAYMENT PERIOD

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Average payment period, or average age of accounts payable, is the measure of average amount
of time needed to pay accounts payable. The difficulty in calculating this ratio stems from the
need to find annual purchases, a value not available in published financial statements.

TOTAL ASSET TURNOVER

Total asset turnover indicates the efficiency with which the firm uses its assets to generate sales.
Total Asset Turnover

Net sales / total assets

Year

2014

2013

Net Sales ('000)

9,421,408

7,680,237

Total Assets ('000)

4,542,859

3,651,368

Times per year

2.07

2.10

Generally, the higher a firms total assets turnover, the more efficiently its assets have been used.
This measure is probably of greatest interest to management, because it indicates whether the
firms operations have been financially efficient.

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2.05

2.06

2.07

2.08

2.09

2.1

2.11

Interpretation:
Firms inventory appears to be in good shape. Its inventory management seems to have improved
that is inventory turnover was 4.86 in 2013 whereas it is 5.98 for 2014. The average collection
period also shows improvement. Total assets turnover reflects a decline in the efficiency which
may be due energy crisis.

DEBT RATIO
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The debt position of a firm indicates the amount of other peoples money being used to generate
profits. In general, the more debt a firm uses in relation to its assets, the greater its financial
leverage. Financial leverage is the magnification of risk and return introduced through the use of
fixed-cost financing.
There are two general types of debt measures; measures of the degree of indebtedness and
measures of the ability to service debts. The degree of indebtedness measures the amount of debt
relative to other significant balance sheet items. It is measured as follows:

Debt ratio

Total Liabilities / total Assets

Year

2014

2013

Total Liabilities ('000)

2,843,033

2,129,284

Total Assets ('000)

4,542,859

3,651,368

Debt ratio %

62.6

58.3

The higher the ratio, the greater the firms degree of indebtedness and the more financial
leverage it has.

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56

57

58

59

60

61

62

63

TIMES INTEREST EARNED RATIO

Times Interest Earned Ratio

EBIT/Annual Interest Expenses

Year

2014

Operation Income ('000)

643,198

2013
1,074,779

Annual Interest Expenses ('000)

155,266

138,791

Times Interest Earned Ratio

4.14

7.74

A value at least 3.0 (preferably close to 5.0) is often suggested.

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Interpretation:
Firms indebtedness increased over years. At the same time the ability to pay certain fixed
charges also shows a decline which is an alarming situation. Apparently the firms increased
indebtedness caused deterioration in its ability to pay debt adequately.

PROFITABILITY RATIOS
There are many measures of profitability. These measures enable the interested people to
evaluate the firms profits.
1.
2.
3.
4.
5.
6.
7.

Gross Profit Margin

Operating Profit Margin
Net Profit Margin
Earnings per Share
Return on Total Assets
Return on Common Equity

GROSS PROFIT MARGIN

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Gross profit margin measures the percentage of each sales rupee remaining after the firm has
paid for its goods.
Gross Profit Margin

Gross Profit/Net SaleX100

Year

2014

2013

Gross Profit ('000)

1,293,436

1,593,624

Net Sale ('000)

9,421,408

7,680,237

Ratio %

13.73

20.75

10

15

20

25

OPERATING PROFIT MARGIN

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Operating profit margin measures the percentage of each sale rupee remaining after all costs and
expenses other than interest, taxes, and preferred stock dividends are deducted.
Operating Profit Margin

Operating Profit/SaleX100

Year

2014

2013

Operating Profit ('000)

665,659

1,096,413

Net Sale ('000)

9,421,408

7,680,237

Ratio %

7.1

14.3

10

12

14

16

NET PROFIT MARGIN

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Net profit margin measures the percentage of each sale rupee remaining after all costs and
expenses including interest, taxes, and preferred stock dividends have been deducted.
Net Profit Margin

Net profit/SaleX100

Year

2014

2013

Net Profit ('000)

328,105

660,826

Net Sale ('000)

9,421,408

7,680,237

Ratio %

3.48

8.60

10

EARNING PER SHARE

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EPS is generally of interest to present or prospective stockholders and management. It represents

the number of rupees earned during the period on behalf of each outstanding share of common
stock.
Earnings Per Share

Earnings

Available

for

common

stockholders/Number of shares of common stock

outstanding
2014

Year

2013

Earnings Available for common stockholders 328,105

660,826

('000)
Number

12,029

of

shares

of

common

outstanding ('000)
EPS(Rupees)

stock 12,029
27.28

54.94

10

20

30

40

50

60

RETURN ON TOTAL ASSETS

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ROA, often called Return on Investment (ROI), measures the overall effectiveness of
management in generating profits with its available assets.
Return on Total Assets

Earnings

Year

Total Assets
2014

Available for common stockholders/

2013

Earnings Available for common stockholders 328,105

660,826

('000)
Total Assets ('000)

3,651,368

4,542,859

Return on Total Assets %

7.2

18.1

10

12

14

16

18

Interpretation:
All the ratios indicate worse performance of the firm. The overall profitability decreased in 2014.

MARKET RATIOS

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20

Market ratios relate the firms market value, as measured by its current share price, to certain
accounting values. These ratios give insight into how well investors in the marketplace feel the
firm are doing in terms of risk and return. Two popular market ratios are:
1. Price/Earnings (P/E) Ratio
2. Market/Book (M/B) Ratio

PRICE/EARNING (P/E) RATIO

It is commonly used to assess the owners appraisal of share value. It measures the amount that
investors are willing to pay for each rupee of a firms earnings.
Price Earnings Ratio

Market Price Per Share/Earning Per Share

Year

2014

2013

Market Price Per Share of common stock

274.86

265.99

Earnings Per Share

27.28

54.94

P/E Ratio

10.15

4.90

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MARKET/BOOK (M/B) RATIO

It provides an assessment of how investors view the firms performance. It relates the market
value of the firms shares to their bookstrict accounting value.
Book value per share of common stock = Common stock equity/Number of shares ofcommon
stock outstanding
Market/Book (M/B) Ratio

Market Price Per Share/ Book value per share

Year

2014

2013

Market Price Per Share of common stock

274.86

265.99

Book value per share of common stock

10

10

M/B Ratio

27.48

56.59

BUSINESS PLAN

A new shoe (pump) brand for Ladies

Proposed brand name: Trendy

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This business plan is made to launch a new brand for Service sales Corporation.
As the sales of brands of SSC shows that LIZA is a not too much strong brand of SSC and its unable to
capture share of market. BCG matrix also shows that service is weak in order to capture the market of
ladies. They are just providing the selective design to the women which are not enough because of the
tough competition and growing market.
So, a brand for ladies should be launched in order to generate market share and to fill the market gap and
creating the image in the minds of the consumers that service is also a leading brand in women footwear.

WHY BRAND FOR WOMEN SHOULD BE LAUNCHED?

The reason to launch a new women brand is as follows

Service has weak brand for women that is unable to generate sales
Service is not capturing the women segment properly
Trends for women in Pakistan is evolving towards more quality and durability
Market is still untapped
Huge potential to grow in this market
SSC has abilities and infrastructure to capture this market.

SEGMENTATION

As far as segmentation is concerned segmentation is based upon the age and gender because the brand is
being launched for specifically for the office going women. Other criteria that can be used to segment this

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market is income because ultimate goal of a firm is to generate sales that can only be used if the buyer has
buying power.

TARGET MARKET

The target market is obviously women and young girls who will come under the age of 15-40 years. SSC
will provide shoes to the following

Professional (Office going) women

School and college going girls
Housewives

So, all the women who want to buy it for the purpose of latest and updated fashion , can buy it with the
full confidence.

POSITIONING
The positioning of the brand is based upon the quality and Aesthetic appeal. The final buyers are women
so brand is positioned as it is made for those women who want to look more sophisticated and at the same
time fashionable with the unique designs. Below is a statement that can be used as a slogan of this brand
Choice of women who want to look sophisticated and fashionable

PRODUCT

The product is based upon the following dimensions of quality

Comfort
Design
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Durability
Aesthetics
Softness

All of the above qualities is embedded in the product in order to make the product of good quality as well
as of good style.

PLACE

The placement of the product is not a problem as SSC has well established infrastructure of company
owned shops..
Placement of the product is of followings ways

RP
ER
TO
AD
IU
LC
T
NS
EP
TL
WAWA
OC
RE
KM
E
N
T

'

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PRICE

The price of the articles of this new brand is different for different articles. The range of the price is about
1000 to 1200 rupees depending upon the article of shoes.
The price is set between 1000 to 1200 because the brand of SSC has price that is not too high. But for
maintain the good image in the minds of the consumers and for the sake of maintaining the quality, price
is little competitive. People mostly associate the low price brand with the lower quality so thats why this
decision is taken very effectively and price is to be set according to the purchasing power of the target
market.

PROMOTION

The promotional campaign is done to stimulate the sales of the articles of shoes and also to
reduce the inventory level before new arrival or new season.
Following promotional campaign will be used to increase the sales of the shoes

Price cut before new arrival

Advertisement on television (between cartoon show)
Buzz marketing
Billboard advertisement
Placement in movies
Using a brand ambassador

Loyalty cards can also be issued in order to increase the user base.
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STRATEGY TO LAUNCH A NEW BRAND

Strategy for launching a new will be like that

DIFFERENTIATION

Differentiation strategy calls for the development of a product or service that offers unique attributes
that are valued by customers and that customers perceive to be better than or different from the products
of the competition. Already established product is failed because of not providing the unique solutions to
the target market, not providing the actually comfort and durable pumps to the women. So, my brand will
be catered that gap in order to satisfied the professional women need.

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FINANCIAL FEASIBILITY PLAN

EXPENSE
Estimated Launch expenditure
Advertisement expenditure
Production cost

30 million
5 million
increase of 20 % because of new design=
average 600 rupees

REVENUE
Expected Sales

12,000 pairs per month

Sale price
Sales revenue per month

2.0 times of cost

12,000*1200=14,400,000
14,400,000*12=172,800,000 per month

NET INCOME

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172,800,000-30,000,000-5,000,000
RS 137,800,000 in first month

DISCOUNT RATE

RS 15

NPV

91,866,666.67

All the financial are based upon subjectivity and can be changed with the passage of time as the
external situation is being changed

RECOMMENDATIONS

Make innovative design in footwear

Should capture the women market effectively

There must provide pre job and on the job training also. There must be job rotation. There
must be performance based reward system. Salary and rewards must be on performance base.

They must be permanent job for employees in SIL Because it creates loyalty

Service should recruit new talent.

As there is no I.T system in the company so they should installed the I.T system in order to
make the transparency of all the functions

Branded footwear in Pakistan is less than 30-40% and unbranded in 60-65%, so there is a
huge potential for service foe filling this gap

They should focus on the R&D in order to keep the proper check on quality

Due to the slow set-up, product reached to the quality department late so they should focus
on improving the lead time

Make polices in such a way that not effect due to change in political instability
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CONCLUSION

As we are living in the modern era and technology is evolving day by day so in order to
remain competitive service should put proper attention on the I.T system. By installing the
proper TQM system in the organization service can save themselves from lot of the claims of the
consumers on the poor quality. Quality should not be comprised as it helps to maintain the brand
loyalty. As service is a big retailer of footwear with the market share of approximately 8% and
full industry capture the 16% , so service can tap the untapped market by providing the superior
products to their consumers in order to remain competitive in the footwear competitive.

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http://www.bata.pk/
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http://www.mouchi.pk/
http://www.ssc.com/

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