ASSIGNMENT

Business Policy and Strategy

COMPANY NAME:
NISHAT MILLS LIMITED

SUBMITED BY
SOHAIL SULTAN L1F1MBAM0099
COMPANY OVERVIEW
Nishat Mills Limited is a well-known and reputable name in the textile domain particular in yarn
manufacturing. Making strides in our core business of textile, we have ventured into other diverse
business areas including Foods and Energy.

VISION STATEMENT
Original Vision Statement

To provide quality products to customers and explore new markets to promote/expand sales of the
Company through good governance and foster a sound and dynamic team, so as to achieve optimum prices
of products of the Company for sustainable and equitable growth and prosperity of the Company.

Purposed Vision Statement

Nishat Mills Company is committed that produces highest quality yarn, customer-focused, and
continuous innovation.

MISSION STATEMENT
Original Mission Statement

To transform the Company into a modern and dynamic yarn, cloth and processed cloth and finished product
manufacturing Company that is fully equipped to play a meaningful role on sustainable basis in the economy
of Pakistan. To transform the Company into a modern and dynamic power generating Company that is fully
equipped to play a meaningful role on sustainable basis in the economy of Pakistan.

Purposed Mission Statement

Our mission is to achieve Pakistan eco-efficient textile & apparel industry with Customers
Satisfaction utilizing Quality and Value, machinery, infrastructure, standardized systems,
production processes through innovative technology, teamwork and explore new markets to
promote sustainable and equitable growth and prosperity of the Company.

Source: http://nishatmillsltd.com/wp/index.php/about-2-2/
Strength and Weakness of Nishat Mills Limited

Strength:

1. Location: The major strength of Nishat is its location. The plant is situated in Faisalabad which is
renowned in the world for textile production.

2. Advanced and Technological Equipment: Nishat is using the best machinery available in the market
in its all the department, which helps Nishat to produce the world class products to meet the needs of the
customers.

3. Raw Material: As Nishat is a part of large industrial group, so it has no need to search out the raw
materials from the market even during the peak season. For example, they can produce high quality yarn.

4. Access to high quality cotton: Nishat Textiles produces yarn for its fabrics, as it has a merged spinning
unit, for its medium-end products it uses the short staple cotton. Staple cotton for a short-term period is a
category of cotton which is readily available in Pakistan and which is of a very high quality.

5. Price Comparison: Nishat has strength to produce the quality products at the lowest possible prices as
compare to their competitors.

6. Cheap Labor available: Just like in all industries in Pakistan, Nishat textiles have availability of cheap
labor at their disposal. Although workers at Nishat textile mills are paid higher than other employees in the
similar industry, their salary rate is still quite lower than what workers get globally

7. Diversified Products: Nishat Textile has built a reputation for manufacturing high quality and diverse
products and this is displayed in their product line. They have high-end products with great quality like
sheets, cases for pillow, cloth, curtains, and worn in fashion which are exported.

8. High Quality Standards: Nishat is an ISO certified company, which produce a sense of satisfaction to
its customers. Nishat also follow the ISO Standards.

9. Strong Security System: Nishat textile limited has a greater security system. There are different hidden
security cameras which capture the all moments.

10.Tremendous market positioning: Nishat textile is one of the pioneer textiles in the Pakistan so it got
the position in the mind of its customer. And being an old textile company people are loyal with it. Nishat
has a better position in the mind of its customers.

Weaknesses:

1. High cost of production: The production cost is high because of not properly utilization of its resources.

2. Centralized decision making: The decisions are made by the upper management which is weakness
of the Nishat because they have no proper idea about the situation and their decision can be not fruitful for
the company.

3. Small international market share: Although Nishat has very strong in the national wide but it has small
market share in the global textile industry due to the sound competitors like china, and Bangladesh etc.

4. Less promotional activities: The advertising and promotional cost of the Nishat textile is very low it can
take advantage for more turnouts.
5. Lack of benefits and rewards for the employees: Some facilities are provided to their employees like
Transport and medical fee etc. Nishat is not providing sufficient facilities to their employees because of
which the productivity of the employees decreases.

Opportunity:

1.Organization Can expand product lines: Currently the Nishat not dealing in knitwear they can expand
their product line by producing knitwear. They have plants and the extra cost for the production will be low
for Nishat. And they also have better market repute.

2.Organization Can reduce the cost by proper utilization of resources: If the cost of different matters
which is not utilizing properly is controlled by the Nishat management they can produce more in a few costs.
It has to develop a further systematic process for controlling and managing resources.

3.Organization Can hire more well-educated and experienced person: They can take advantages
by hiring more skilled people and they should hire young, fresh and energetic staff for their betterment.

4.Advanced Technology: Nishat has advanced and highly automated technology.

5.New Market Segments: Nishat can enter in new market segments easily due to its high standards and
reputation,

6.Lifestyle attitudes: Lifestyle attitudes are a major opportunity in this style-oriented world.

7.Population growth rate: Increasing population is always handy as it increases the demand as well as
the sales of the company.

8.New styles and demands: New demands and styles are considered to be an opportunity for Nishat as
it has highly skilled professional and designers.

Threats:

1.Buyer needs demands changes: Because of the research and development, the design and the product
of Nishat is just satisfactory as compare to competitors in the globally and they are not fulfilling the demand
of customer.

2.Political instability: Political instability effects the Nishat because of the quota system the company can
be restrict by the government to export.

3.Globally Economic instability: Because of the economic instability the Nishat affected a lot. Dumping
system which is rising on daily basis in the world can create many problems for the company and
any uncertainty in the world like 9/11may affect also the overall export.

4.Increased Taxes: Increasing taxes is major threat to the organization rising on daily basis in the world
can create many problems for the company and any firm.

5.Emerging competition: Emerging competition and increasing level of competitors is a significant threat
to the organization
THE BOSTON CONSULTING GROUP (BCG) MATRIX]

Spinning
Company Name 2019 (March) '000 2018 (March) '000
Nishat Mills 7249069 5011285
Gul Ahmed 7420559 5617969
ANL Nine 1908119 1365585
Kohinoor Mills 5555309 5191931
Crescent textile 5242872 4607849
Total 27375928 21794619

RMS = 7249069/7420559
Own Share/Marker Leader Share 0.97

IGR = 27375928-21794619/21794619*100
Current Year Sale-Previous Year Sale / 5,581,309/21794619
Previous Year Sale *100 0.25608*100
25.6
 Weaving
Company Name 2019 (March) '000 2018 (March) '000
Nishat Mills 10821553 9822803
Gul Ahmed 1216841 1332613
ANL Nine 6808831 6129016
Kohinoor Mills 4867229 4006494
Crescent textile 5091233 3350031
Total 28805687 24640957

RMS = 10821553/10821553
Own Share/Marker Leader Share 1

IGR = 28805687-24640957/24640957*100
Current Year Sale-Previous Year Sale / 4,164,730/24640957*100
Previous Year Sale *100 0.169016*100
16.9

Home Textile
Company Name 2019 (March) '000 2018 (March) '000
Nishat Mills 7415411 5968861
Gul Ahmed 2761769 2381104
ANL Nine 4327854 4018761
Kohinoor Mills 7841961 6315423
Crescent textile 6374773 4086959
Total 28721768 22771108

RMS = 7415411/7841961
Own Share/Marker Leader Share 0.94

IGR = 28721768-22771108/22771108*100
Current Year Sale-Previous Year Sale / 5,950,660/22771108*100
Previous Year Sale *100 0.261325*100
26.13
 Division Sales Profit Profit%
Spinning 7249069 14 0.28
Weaving 10821553 21 0.42
Home Textile 7415411 15 0.30
Total 25486033 50 100%

INTERNAL FACTOR EVALUTION (IFE) MATRIX

KEY INTERNAL Weight Rating Weighted Score
FACTORS
Strengths
Advanced and 0.12 4 0.48
Technological
Equipment
Access to high quality 0.11 4 0.44
cotton
Cheap Labor available 0.10 3 0.30
Diversified Products 0.11 4 0.44
Tremendous market 0.12 4 0.48
positioning

Weakness
High cost of production 0.10 2 0.20
Centralized decision 0.07 2 0.14
making
Less promotional 0.08 1 0.08
activities
Lack of benefits and 0.10 2 0.20
rewards for the
employees
Small international 0.09 2 0.18
market share:
Total 1.00 2.94

INTERPRETATIONS:
Nishat Mills Limited Company get Internal Factor Evolution score 2.84 (Weighted Score)
which is
COMPETITIVE PROFILE MATRIX (CPM)

CRITICAL Nishat Mills Limited Gul Ahmed CRESCENT

SUCCESS TEXTILE MILLS
FACTORS Weight Rating Weighted Rating Weighted Rating Weighted
Score Score Score
Product 0.10 4 0.40 3 0.30 2 0.20
Design
Technology 0.12 3 0.36 4 0.48 2 0.24
R&D 0.11 4 0.44 2 0.22 3 0.33
Market 0.10 2 0.20 3 0.30 4 0.40
Segmentation
Distribution 0.11 3 0.33 4 0.44 2 0.22
Promotion
Capacity 0.09 2 0.18 3 0.27 2 0.18
utilization
Persistence 0.10 4 0.40 3 0.30 2 0.20
in product
quality
Efficient 0.07 3 0.21 2 0.14 4 0.28
procurement
of raw
material
Effective 0.10 3 0.30 4 0.40 2 0.20
management
Trained 0.10 4 0.40 2 0.20 3 0.30
manpower
Total 1.00 3.22 3.05 2.55

INTERPRETATIONS:
Nishat Mills Limited Company is one the leading company as compare to the Gul Ahmed
and Crescent Textile Mills. In this Competitive Profile Matrix (CPM) shows that Nishat
Mills Limited is aggressive as compared to Gul Ahmed and Crescent Textile Mills.
Nishat Mills Limited is leading in textile sector in Product design, Research development,
Persistence in product quality and last Trained manpower. More over Gul Ahmed performing
better in some factor which are like Technology, Distribution promotion and Effective
management. Last company which we take as competitor Crescent Textile Mills also leading in
two such factor like Marketing Segmentation and Efficient procurement of raw material.
The point is where Nishat Mills Limited need to improve like Market segmentation and Capacity
Utilization that reason we give 2 point so that they improve in these parts and get better
performance.
EXTERNAL FACTOR EVALUATION (EFE) MATRIX

KEY EXTERNAL Weight Rating Weighted Score

FACTORS
OPPORTUNITY
Organization Can 0.10 4 0.40
expand product lines
Proper Utilization 0.11 3 0.33
of Resources
Advanced Technology 0.09 4 0.36
New Market Segments 0.11 3 0.33
Population growth rate 0.09 3 0.27

THREATS
Buyer needs demands 0.11 3 0.33
changes
Political instability 0.10 3 0.30
Globally Economic 0.09 2 0.18
instability
Increased Taxes 0.11 4 0.44
Emerging competition 0.09 3 0.27
Total 1.00 3.21

INTERPRETATIONS:
Nishat Mills Limited Company get External Factor Evaluation score 3.21 (Weighted
Score) which is indicating that company utilizing opportunity in good way and also paying
attention toward threats.
3.21 (Weighted Score) is above the average which means company is going well and
also aggressive position which should show little moderate. Company need to go for
penetration rather than diversification also need to achieve new market in local also
foreign market.
SPACE Matrix

Financial Position Rating Economic Position Rating

Leverage 4 Rate of inflation -3

Net Income 6 Technological Upgrade -3

Earnings Per Share 5 Competitive Pressure -3

Return on Investment 5 Risk Involve in -2
Business
Stock Efficiency 4 Government Polices -3
Total 24 Total -14
Average 4.8 Average -2.8
Y-Axis 4.8 - 2.8 = 2

Competitive Position Rating Industrial Position Rating

Market Share -1 Growth Potential 5
Product Quality -2 Financial Stability 3
Customer Loyalty -3 Resource Utilization 3
Technological -3 Profit Potential 2
knowledge
Brand Image -2 Taxation 3
Total -11 Total 16
Average -2.2 Average 3.2
X-Axis -2.2 – 3.2 = 1
Directional vector point is :( 2, 1)
INTERPRETATIONS:
If we have to know about Financial, Economic, Competitive and Industrial Position or
evaluating purpose then we have to compare our company with industry average and that
why we have to build a Space Matrix.
 Leverage (Debt to equity ratio and Debt to total asset ratio) use by NML (Nishat
Mills Limited) is particularly Average to other comparable Industry average so
that’s reason we rank at 4 point.
  Net Income of NML (Nishat Mills Limited) comparable to other textile industry NML
is leading now a days so its income also high at point so we give it point 6.
 Earnings Per Share and Return on Investment EPS is at 11.77 (31 March 2019)
and return on investment is at 7.31% which is good and also compared with other
so that’s reason we give 5 at ranked
 Product quality and customer loyalty in all industry customer can’t be loyal to any
particular brand its taste and perception about brand can be change so we give
them -2 and -3 which average and strong.
 NML have new and advance technology with latest machinery so its position in
rank should be -2.
 Industry is less financial stable as well as most of the companies are producing
very below then their capacity that’s why they are ranked at 3.

INTERPRETATIONS:
Calculation that we have now the score of our company is about +2 at Y-axis and +1 on
X-axis. Vector Mark shows that we should go for Aggressive Strategy and financial
position is dominating factor and half of it represent industry position.
NML (Nishat Mills Limited) should capture new market by opening new outlets and give
better service to its local customer. NML (Nishat Mills Limited) can focus on this type of
strategy like Backward, forward, horizontal Integrations, Market penetration, Market
development, Product development, Diversification (related or unrelated).