INDUSTRY ANALYSIS

Pakistan cables and electronic goods industry cover only 3% in large -scale manufacturing index
(LSM INDEX). Pakistan’s consumer electronics market has grown by an annualized average of
about 13.3% or $3.3 billion (460.55 PKR billion ) by 2016, according to a newly released report by
the London-based research firm Business Monitor International. The cables and electronic goods,
defined as including computing devices, mobile handsets, home appliance and audio/visual
products such as television sets, is projected to be worth about $2 billion in 2012. This is increased
to US$3.3bn by 2016, driven by a rising population and growing affordability. The audio/visual
devices segment accounted for about 36% of Pakistan’s cable and electronic industry. As per
Euro monitor, in 2016, mere 55% of households had a washing machine, 43% had a refrigerator,
20% had a microwave oven, and 16% had a deep freezer.
Product sale of this industry have affected by trends. For example refrigerator, air condition, and
deep freezer sale higher in summer and sale affected in winter. Room heaters, water heaters and
washing dryers have high sale volume or demand in winter. In this sector we have selected
Pakistan elektron company (PEL). The major player in this sector are Dawlance, Haier, Waves,
Siemens, Microtech and Pakistan elektron (PEL). PEL have two type of direct competitors
according to their product classification. Pel’s direct competitors in Appliance division are
Dawlance, Haier, Orient and Waves. In Power division their competitors are Siemens,
Transfopower, Microtech, Alstom Grid Pakistan. In the power division PEL has a market share of
42 percent followed by Siemens at 34 percent. In home appliance, Dawlance leads the market
with nearly 50 percent market share, followed by PEL at 29 percent.
PEL uses different type of market modes in which include bus branding, cinema campaign, dealer
shop inauguration, advertising and promotional program. Pel use two types of advertising
program one is above the line (ATL) and second one is below the line (BTL). In ATL they uses print
media, news vehicles and newspapers. In BTL the uses closed circuit television, radio and
magazine. Several government regulation and current economic situation of the Pakistan hand a
great impact on this sector. Like FBR allow to import use tv and electronic goods in Pakistan it is
a threat for the electronic industry. Another affect is to increase in inflation. The prices of raw
material and labor raising day by day due to the inflation and obviously the cost of production
increases. And other impact is Pakistan currency going cheaper against dollar cause of this raw
material prices increase which we import. The political condition of Pakistan is highly uncertain
and unstable but from few years we have seen some consistency in Government policies which
encourage the foreign investors to invest in Pakistan.
Electronics industry highly effected by consumer taste for example in these days people use
mostly LED TVs if a firm produces LSD TVs their products are not accepted by the market because
in the market have more advance products consumer have use these things and move on
advance things their taste is change. In electrical goods industry, the innovation in technology or
technological advancement is the only factor that can affect the consumer taste or preferences.
If you are more advance you get more customer attention. This industry also effect by
demographic trend for example air conditioner have higher consumption in urban areas as
compare to ruler areas. On the other hand this industry mostly target middle and upper class.
Lower income class, are not able to buy the electrical goods like AC ,Refrigerator ,Microwave
oven etc. Smart electronic devices, green electronic manufacturing and energy efficient products
these are some technological trends that affect this industry.
For the competition this industry has taken flowing steps. First, having internationally
compatible products. Second, Capacity to manufacture and assemble products. Third, Remote
control feature, Affordable, Warranted products and to take care of customer appliances all
service centers have latest tools, equipment’s and machineries. This industry is highly effected
by season. In this industry have some product their sale higher in summer like air conditioner,
refrigerator and fans some other have higher sale in winter like heaters, dryer machines and
water heaters. Some products have stable sale whole year like TVs, water purifier, washing
machine and air purifiers. Economic cycles also affect the this industry for example if country
economic condition going toward peak people generate more income and their purchasing
power higher they spend money on these things. If country economic condition going toward
recession people have weak buying power they only fulfil the basic necessities. This economic
condition decrease the industry sale. Some barriers to enter this industry. High cost of
production is one of the main barrier of entering the Cable and Electrical goods industry. The
huge advertisement cost. The faraway Break Even point as it will take time to set an image in the
eyes of consumers and sell them their product. Establishing dealership network. High costs of
raw materials and other inputs (costly electricity and custom duties on imports of the said units
or raw material) and research and development. High taxes in this sector. Government laws like
Electricity Safety, Quality & Continuity Regulations 2009 (ESQCR), Electricity At Work Regulations
1989 (EAWR), and many others. This industry affected by the performance of other industries. If
banks, telecommunication, transport, oil and gas, not performing well also effect on the industry
sale and production.