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Presented By: Rashid Raheel Bilal Ahmed Sheikh Sadia Jafri Mazher Ali Humaira Fareed
Data collected from 3 years of PEL Financial Reports All rights reserved
Industry Introduction
The industry traces its origins to the invention of the twoelement electron tube (1904) by John Ambrose Fleming, and the three-element tube (1906) by Lee De Forest. These inventions led to the development of commercial radio in the 1920s, which boosted radio sales to $300 million by the end of the decade In 1947, the electronics industry made another important advance when John Bardeen, Walter Brattain, and William Shockley invented the transistor. In the 1960s it vastly increased the amount of information that could be stored on a single silicon chip. Inaugurated a revolution in the computer industry that led to the introduction of the personal computer.
GOLDEN HANDSHAKE
PEL Group overtook the distribution of LG in Pakistan in this FY.
BODs
1. Naseem Saigol (C.E.O) 2. Azam Saigol (Chairman) 3. Muraad Saigol 4. M. Yousuf Saigol 5. Haroon Ahmed Khan (M.D) 6. Muhammad Raffi Khan 7. Neelofer Hameed 8. Tajammul H. Bukhari 9. Wajahat A. Baqai 10.Rizwan Hameed
VISION STATEMENT
MISSION STATEMENT
To provide quality products and services to the complete satisfaction of our customers and maximize returns for all stake holders through optimal use of resources To focus on personal development of our Human Resource to meet future challenges To promote good governance , corporate values and a safe working environment with a strong sense of social
INTERNAL ANALYSIS
Internal Factor Evaluation Matrix
Strength Strong brand image Dealer Network Product Quality Rank in Pakistan pioneer of home appliances Management Distribution of authority Free customer service Weakness : Financial Problem Lack of advertisement System of variation Lack of product Range Less Utilization of capacity Total Weighted Score Weight 0.10 0.10 0.10 0.08 0.06 0.08 0.05 0.06 0.08 0.06 0.05 0.05 0.13 1.00 Rating 3 3 3 4 3 3 4 3 1 2 2 2 1 Weighted Score 0.3 0.3 0.3 0.32 0.18 0.24 0.2 0.18 0 0 0 0.08 0.12 0.1 0.1 0.13 0 0 0 2.55
EXTERNAL ANALYSIS
External Factor Evaluation Matrix
Opportunities
Exploration Increase in product range Export opportunity
Threats
PEL facing tough competition Credit in market Slow growth rate in market Big fever of high credit
SWOT ANALYSIS
SWOT ANALYSIS
Strengths PEL has the following strengths and is in more competitive position in these areas than its competitors. Following are the main strong points of PEL: Strong brand image Strong dealer network Good product quality and service Number 2 in refrigerators in Pakistan Firm grip in home appliances Strong Management Distribution of Authority Free customer service
Weaknesses Like other companies PEL has some weaknesses in operating the business. If PEL overcome on these weaknesses then it can become a market leader in the home appliance. PEL lose some competitive edge in the following points: Financial Problems Lack of advertisement System variations Lack of Product range Less Utilization of capacity
Opportunities For the PEL there are more opportunities for expansion the business. If PEL realize that opportunities then it will be more fruitful and profitable for the company. Even if company does not take advantage of these opportunities then it will lose its competitive position and high profit. Its competitors will give PEL tough time to pursuing the opportunities that are adopted by them. Following are the opportunities for the PEL.
Threats PEL Company in such a competitive era has many threats as well. These threats are for the present situations and future. Company should make its policies and strategies according to these threats. So following are the main threats for the PEL:
PEL facing tough competition. Mostly companies Give High Credit in market and get current market High Credit market is big fever for the company Slow growth rate in Pakistan Instability of government Tax department
Advertising Product Quality Price Competition Management Financial Position Customer loyalty Global expansion Market shares Total weighted score
1 3 3 4 1 2 3 2
4 3 2 3 2 3 1 4
4 4 2 3 2 4 1 2
INDUSTRY LIFECYCLE
SPACE MATRIX
BCG MATRIX
high Relative Market Share Position medium 0.5 low 0.0
China 4%
Pakistan 91%
medium
0.0
GULF 5%
-.20 low
BCG MATRIX
Pakistans division of sales and profit falls in stars because PEL is using forward integration and they are penetrating the market with a huge product range and product development. The Gulf area division in currently falling in Dogs because they want high quality with a combination of Low price. The success of PEL in Gulf area is having very less chances and the BCG also says that they should now liquidate in Gulf Region. The China division is under the Question Marks because PEL is currently penetrating the market of China.
IE MATRIX (INTERNAL-EXTERNAL)
IE MATRIX (INTERNAL-EXTERNAL)
Pakistans division of sales and profit falls in the category of II because PEL is using forward integration and they are penetrating the market with a huge product range and product development. The Gulf area division in currently falling II III IV V because in actual they want high quality with a combination of Low price. The success of PEL in Gulf area is having very less chances but the IE matrix says that they should take a chance for penetrating in the market or they can liquidate from the area, Somehow it is in a confusion area. The China division is under II because PEL is currently penetrating the market of China.
FINANCIALS OF PEL
RATIO ANALYSIS
Debt Ratio
64.4%
The company fully employed capital includes 64.4% contribution of the debt/external financing.
(58.8% is the debt ratio after growth projection, reduced by 5.6%) Retention Ratio = 80.8% Dividend payout ratio = 19.2%
The company retains 80.80% profit to unappropriated Profit. The company pays 19.2% of the profits in dividend.
RATIO ANALYSIS
Current Ratio = 1.33:1
The Company have 1.33 Rs to pay its liabilities of 1 Rs, Whereas the accounting standard says that it should be 2:1
(1.52:1 is the Current Ratio after growth projection, increased by 0.19) Net working Capital = 2,159,872,000
Receivable Turnover
= 3.94 times
The company actually recovers the payments from its customers 3.94 times yearly
(Increased by 0.23 times after 20% growth of sales by last year)
RATIO ANALYSIS
Equity Multiplier =4.76 times The company assets bear 4.76 times the value of equity (This time company reduced this by 0.41 times) Cash flow Coverage Ratio = 1.51:1
This indicates the ability to make 1$ interest and principal payments from cash flows of 1.51$ (Increased by 0.01 After growth projection)
(Increased by 0.02 i.e. 1.30:1 after 20% growth of sales by last year)
RECOMMENDATIONS
Adopt a true decentralized organization setup which gives all employees to take part in decision making. The company should have a strong marketing information system to make proper forecasts. The company should announce two holidays (Saturday and Sunday) in a week. Make sure proper functioning of HR department. More allocate budget to its marketing department.
RECOMMENDATIONS
More focus on full strategy in its promotion mix. Shorten its cash conversion cycle. Should also focus on direct selling of its products to its customers. Should constantly add technology in its products and system. Should speed up its delivery process by establishing and expanding its stores in areas of high demand.
CONCLUSION
PEL has great strength and opportunities. Should take risk and go to the market. Management philosophy is the hurdle in the progress in the company. Take the advantage of todays media power to capture market. Future of PELs is very bright as it is grabbing its opportunities and has the potential to compete with challenges