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M.

Hannan Sarwar
Shuja Ahmad
Safwan Mehmood
Abdul Manan
Assignment

15221011
15121003
15121025
15121010
Strategic Management

Industry
The manufacturing or technically productive enterprises in a particular field, country, region,
or economy viewed collectively, or one of these individually. A single industry is often named
after its principal product; for example, the Fan industry.

Fan Industry
The fan industry is one of the oldest industry of Pakistan. The fan industry of Pakistan is mainly
located in four cities that are Gujrat, Gujranwala, Lahore and Karachi. The average production of
this industry is 10 million fans per year that have the value of Rs. 18 billion. There are different
types of fans that are available in the market for example Pedestals, brackets, mist fans and
ceiling etc.

Porter five forces


Porter five forces analysis is a framework that attempts to analyze the level of competition within
an industry and business strategy development. It draws upon industrial organization (IO)
economics to derive five forces that determine the competitive intensity and therefore
attractiveness of an Industry. (Exhibit 1). We took data from both primary and secondary
sources. Primary source was our visit to Al meraj fans.
Bargaining power of Supplier
The bargaining power of supplier is low because there are many suppliers in the local market that
supplies the raw material of the fans. Mostly large companies have their own supplier firms
because they feel that having own supplier company can reduce the cost. But small companies
buy their raw materials from the local suppliers. Switching of suppliers is also high because if
one supplier increases the price of raw material the manufacturer of fan will switch to a supplier

who provides the same material in relatively low price. Al meraj fans buys their raw materials
from both local and international market.
Bargaining power of Buyers
Bargaining power of buyer is high because there are many competitors providing large range of
fans. People are more tend to switch between brands because people are more quality conscious
and if they dont find required quality in a brand they will switch over to other brand on the basis
of word of mouth. Brand identity impact on quality/performance is high because people believe
much on word of mouth in the market.
Threats of Potential Entry
The entry of the new company is quite easy as there are many local manufacturers that entered
market. The reasons are that the cost of startup is not much high and a person having a normal
investment can start this business. Also the suppliers are too much in the market due to that the
price of raw material is quite negotiable.
Threats of Substitute
Threat of substitutes are relatively low because the substitutes of fan are Air conditioner, Chillers
and coolers etc. These products are expensive than fans and also they consume more electricity
than fans so switching between fan and its alternatives relatively low in Pakistani market.

Industry Rivalry
Intensity of rivalry is high in fans as there is because a lot of local companies are also emerging
in the market due to which the competition is increasing day by day and also demand of fans also
increases in summer seasons. Al meraj fans high rivalry is causing them to lose profitability
though the suppliers give them advantage over cost. There is no threat from substitute but still
buyer find alternative as they have bargaining power.
Industry is unattractive because there is high ratio of high bargaining power buyer, easy entry
and high industrial rivalry. Al meraj fans has good position in market and they are doing
profitable business so Al meraj fans is attractive company.

Exhibit 1