Steeple Textile
Steeple Textile
I have
explained what each factor looks into in this article. You will have to study various
elements and then make conclusions. Treat 1 letter (factors) as 1 step.
Changes in method of production can pose as new opportunities. These can help to
improve your company’s profit margin, but these need huge initial investments.
You should understand that these technological changes can impact demand.
Advancement in technology can create new markets and new opportunities. By
monitoring the technology industry, you can capitalize more on changes.
E STANDS FOR ECONOMIC
The economic situation will change a lot of times throughout the company’s lifetime.
You have to weigh the present levels of inflation, economic growth, unemployment
and international trade. By doing so, you can carry out your strategic plan better.
For example, if the trends suggest that your country might be a victim of the
recession, you should make small changes in the capital investment plan. Changes
are also needed in product launch strategies.
E STANDS FOR ENVIRONMENTAL
The second E in STEEPLE is for the environment. All businesses impact their
environment. The impacts vary from business to business. This impact can either be
negative or positive. It is negative in cases of pollution or waste. It can be positive
when the environment gets benefits like processing and cleaning waste.
P STANDS FOR POLITICAL
Changes in the government policy make up the political factors. The changes can be
economic, social or legal. They might even be a combination of these 3. Example of
an element would be increase or decrease in tax. Your government might increase
taxes for some businesses while it reduces taxes in other areas.
Changes like these will have a direct sway on your businesses. So, try to stay up-
to-date with all the political factors. Government interventions, such as changes
in interest rate policy, can have an impact on company’s demand patterns.
L STANDS FOR LEGAL
Everyone hopes that their business goes like they wish. It is not that easy to shape a
business. The legal limits and regulations avert negative behaviors. These elements
also increase the cost in many industries.
To operate legally in the environment, it must follow the laws. The business should
focus on health, safety, employment and even competition. There are many other
factors which you should watch. To ensure compliance, you need to check on new
legal requirements.
I suggest using the concept of social responsibility to take your company to a better
ethical standing.
Business owners spend a lot of time to analyze the internal capabilities of their
company. The external factors have equal impact on the success of a
firm. STEEPLE analysis is a great way to prompt helpful discussion. It helps to
find out where your business stands within its external environment.
STEEP analysis is a similar strategic tool. STEEPLE and STEEP are almost identical
versions of each other. Their common goal is to define strategies for the future or to
understand the market. The best way to separate STEEPLE from STEEP is to say
that it is a modified version.
The framework for STEEP has gone through many alterations. Along the
way, Marketing experts have added certain factors to the analysis. They thought
STEEP analysis was not enough for some organizations. The experts felt the need
of elements like Legal and Ethical.
The legal and Ethical aspect of business is not considered in STEEP. As they
prove important for some firms, they perform STEEPLE analysis. Ethics explores
demographics in a different way. The added factors help to use the framework better
while researching the market.
STEEP analysis deals with the following questions:
How much importance does culture have in the market? What are its determinants?
What technological advances are likely to emerge and affect the market?
What are the widespread economic factors?
What are the industry’s environmental concerns?
What is the political situation of the country? How can it affect the industry?
STEEPLE will urge you to ask all the above-mentioned questions. In addition, you
will have to find answers to the below questions:
Is there any legislation which regulates the industry? Can there be any change in the
legislations for the industry?
What are the related ethical factors?
RESHAM TEXTILE
NISHAT MILLS
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P a g e
44
Because of the research and development the design and the product of Nishat is
just satisfactoryas compare to competitors in the globally and they are not
fulfilling the demand of customer.
Political instability
Political instability effects the Nishat because of the quota system the company
can be restrict bythe government to export.
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P a g e
45
The change in the lifestyle of the people affects the growing demand of
the NTMproducts. The change in the lifestyle and needs in different
demographics also affectthe demand of the customers.Due to all these
changes NTM is performing excellent for the excellence organizationas
well as for the customer.
Technological factor:
Technological advancement in all the sectors of the country has changed
the entiresocio-economic environment. Especially in the textile sector
there is a lot oftechnological development.NTM Excellent computerized
machines and devices are installed in the NTM \hasmade extension in its
present setup by installation of well advanced technologyimported from
Japan China and France.
Conclusion
Nishat Mills Limited is one of the leading groups in Pakistan. The system, the
management style,the policies & decentralized decision making environment is
really remarkable. This report isbasically an attempt to identify the areas which
need to be improved.I
n this era of technology, the “Information” is the key to success in
the business. This means that
the successful businessman will be who will have the right information at the right
time. Thiscomment leads to the conclusion that the Information Sharing Process
should really be improved.
The overall analysis is indicating that the company’s progress has
mainly attained through
dedication of employees. The effectiveness of its management, their willingness
to takeadvantage of opportunities and face challenges of changing economic
picture, this all contributesto the very much improved and sound position of
company. This is really appreciable for thedevotion and hard work of all the
employees of the company
Introduction to Textile Industry in Pakistan
Textile Industry is one of Pakistans largest industries. It plays a vital role in contributing
to the countrys economy through its industrial production, high employment
opportunities and bringing in Foreign exchange. The industry is going through
tremendous changes with respect to globalization and many economic challenges. The
proportion of textile industry in the country’s economy along with its contribution to
exports, in terms of GDP employment, foreign exchange earnings, investment and value
added, and revenue generation altogether placed the industry as the single largest
manufacturing sector of the country. The main factor to contribute to such huge
developments in the textile industry is the production of cotton in the country,
considered as one of the Top 10 textile exporting countries of the world. Pakistan is the
fourth largest producer of cotton yarn and cloth, and third largest player in Asia with a
spinning capacity of 5% of total world production. It also ranks 2nd in the export of
yarn, 3rd in the export of cloth and contributes 3% to the total textile trade of the world.
Pakistan is fast emerging as a hub for textile and garments trade in the Asian region as it
is endowed with one of the largest textile and garment producing industries in the
world. In agriculture sector, the availability of cotton contributes a lifeline of its
economy, making textile and garment the largest industrial sector in the country.
Market Situation
Trends in the Fashion Industry in Pakistan are changing and the style mantras of the
past are now becoming obsolete. Fashion choice is now mostly based on the Fashion
Icons and celebrities present now a days, being more prone towards the western culture.
Due to growing awareness and changing market trends, businesses now carefully study
the market and are trying to bring to the customer innovative fashion; clothing that the
customers desire, clothing that is entirely based upon the customers’ needs and wants.
Bargaining power of customers: Market analysis show that roughly around 80% of the
customers of textile industry in Pakistan belong to lower and lower-middle class with a
per capita income of $1051 (as per Ministry of Finance of Pakistan), which make them
less attracted towards established brands due to their high prices.
Related & support industries: as mentioned above, Pakistan is the hub of textile
manufacturing in the world; hence there is a widespread presence of affiliate industries.
With increased government support for the textile industry, the infrastructure
supporting the textile industry is also expected to improve tremendously.
Threats of new entrants: the industry is characterized by low profit margins and is
relatively saturated; hence the threat of new entrants is low. Also, the high initial
investment required to set up a factory makes the industry relatively secure from threat
of new entrants.
Target Market
“Victory tees” targets the segment of the 15 – 33 year olds of every income strata from
the middle to the high upper class. It decides to segment its market based on “Graphics”
which would comprise of already designed t-shirts based on entirely new fashion trends,
and “Artwork”, which would be based on custom-designed t-shirts, enabling its
customers to design and create their own t-shirts on a range of fabrics and colors. Along
with individuals, the firm also plans to target organizations, NGOs, student
organizations, universities, schools and the sports sector for big orders of custom
designs.
“Victory tees” segments its target market into two distinct groups; this first group
involves customers who prefer pre-graphically designed shirts. The second group is
those who like designing their own shirts based entirely on their own imagination, in
colors and fabrics that suit them.
Graphics — This group purchases a shirt and has an existing graphic placed on the shirt.
This is the less expensive option and lends itself to low production numbers, as low as
one, since there is not the inherent expense of artwork creation.
Ages 14-32
Artwork — This segment prefers having custom artwork created and placed on their
shirt. This segment would prefer to design its own shirts in order to make a certain
fashion statement. Occasionally when the customer would not have an exact image in
mind, and thus would rely on the artist’s skills to help shape the final product. Some of
these customers would require the assistance of Victory Tee’s partner artist, while others
would have a friend or other design service providers develop the art.
Ages 20-35
18% are using the shirt as a form of communication for a cause or a message
Product Review
“Victory tees” is a product that targets the 15-32 year olds and is a high quality, branded
T-shirt priced at comparatively lower prices than that of its competitors. It offers its
customers a wide variety of quality designs, colors and textures. Not only this, but the
business also provides them with an opportunity to design their own T-shirts in various
colors and fabrics. This unique and differentiated offer will enable the company to build
its repute in the market and will be able to distinguish itself from other competitors.
The t-shirts at Victory Tees would be of six standard sizes: extra small, small, medium,
large, extra large and double XL.
The colors of the generic t-shirts could be varied depending upon the demand of the
design, and the colors that would be available for the artwork t-shirts (customized shirts)
would be:
Red
Yellow
Green
Blue
Pink
Grey
Black
Purple
White
The t-shirts would initially be introduced in cotton only, and considering the demand
patterns, more materials would be added to the product line later.
Each shirt from the graphic design category has an average cost of Rs. 100 and would
be priced Rs. 500, which is marginally lower than that of its competitors. The shirts in the
artwork category would cost Rs. 150, and would be sold at Rs. 700. These prices would
be charged initially in order for Victory Tees to capture the intended market share of 1-
2%, and could be raised after the success of the product.
Review of Competition
Outfitters deals in clothes almost all over Pakistan. It offers its products via retail stores.
They are the makers and the sellers of their products like shirts, tops, knitwear, jeans etc.
They also have targeted customers in Islamabad also, for that they have their outlets in
F-7 Jinnah Super Market, Blue Area and in F-11 also. Their prices are much competitive
in market. Prices starts from Rs.499 to Rs.800 maximum and during off seasons they
have their promotional offers like all stock on 25% discount which resulted in great
attraction of customers. They actually believe in varying designs to attract more
customers through providing them exclusiveness. Prompt changes in designs let them
grow very quickly in the market and in off seasons they also offer their outfits at
extremely discounted prices. They don’t encourage holding cost at all they always try to
keep their stores full with updated designs and on competitive prices.
Crossroads initially is known for its huge range of sweaters but now it enters in a big
market by expanding their range of products for unisex. Currently they have 40 outlets
in 13 cities of Pakistan. It’s an emerging brand. It has its outlet in G-6, in Super Market
and in Blue Area. Most of their Tees are sold for Rs.500 to Rs 700 and prices rise and fall
with the variation in the stuff and design. As new arrivals come in old stock tagged with
the discounted prices and promotional offers like buy two in Rs.900. they believe in
variety providing like if they produce pair of socks their aim is to ensure the availability
of sock in maximum colors.
PEST Analysis
Political Implications
Pakistan has been facing the problem of political instability since its birth in 1947. From
1947 until 2010, the governments have failed to maintain political stability in Pakistan.
There is an uncertainty in government’s structure and we all know when a ruling party
faces this sort of uncertainty they fail to do well for public. The opposite parties tend to
take advantage of the situation.
As one of the fastest growing industrial sector of Pakistan, the government is paying
high attention to the apparel industry. One measure taken is the Balancing,
Modernization and Replacement (BMR) program under which loans are provided to the
new businesses under concessionary rates. Added to it, the Chamber of Commerce
provides the following incentives.
Establishment of Textile City at Karachi and Garment Cities at Karachi, Lahore &
Faisalabad.
Reduction of turn over tax on retailers of specified textile fabrics and articles of apparel
including readymade garments or fashion wear to 1% and reduction of sales tax from
15% to 2%. Both these taxes will be their final tax liability.
Looking ahead, the apparel industry in Pakistan faces some serious challenges from the
growing political tensions and issues. The policies regarding foreign exchange, imports,
exports and investments have been consistently unpredictable due to the political
instability in the country. In short, the constantly changing regulations and instability in
the policies of the government have greatly hampered the overall apparel industry in
achieving its optimum potential.
Economic Factors
Economic stability of any country is a very essential part, which needs to be considered
when it comes to the growth of a business firm. It is like a core ingredient around which
all other factors of an organization are revolving.
The Pakistani economy is in a desperate state, and the causes are long-term, structural
fluctuations. The new Zardari government in Pakistan and especially in Islamabad has
inherited high inflation, large income inequality and a chronic lack of spending for
infrastructure.
In the last two decades, economic depression is witnessed all over the world. This has
caused a huge sudden change in the purchasing power of the customers. Poverty level,
Foreign Direct Investment and export are on high-speed decline. Many garment
industries have been shut down today due to all these factors. With frequent price
fluctuations, garment industry is forced to increase the prices of their products which
customers are not willing to purchase.
Finally yet importantly, Pakistan depends heavily on the bilateral and multilateral
support to close its financing gap and avoid serious balance of payment stress. Due to
weak institutions and governance, economic development is slow and heightened risk
will continue to linger.
Technological Factors
Rapid changes and developments in technology have increased the competition. The
machinery used by the industries in Pakistan is obsolete and outdated. Government fails
to provide the funds and loans to the owner of garment industries hence they cannot
install new machinery, which can perform tasks in an easier and faster manner.
Power failure is another big issue which garment industry is facing these days. Long
duration electricity load shedding without any schedule; instable prices of electricity ,
per unit price of electricity rises after every few month, shortage of gas supplies in
winter, increased rated of petroleum products, lack of CNG, as well as water shortages
are some of the prominent causes of garment industry downfall in the last two or three
years.
Socio-Cultural Factors
Society and Culture are very important factors that any organization cannot ignore.
There should be a perfect match between the production and social systems in a
specific area. This match will help us in gaining high goodwill. Therefore, we need to
examine the socio-cultural environment of a country before entering its markets, in
order to know the demands and requirements of the target consumers.
Following Factors must be considered when launching a new product such as Victory
Tees:
Population Growth- Population is growing rapidly in Pakistan. There is a gap between
the demand and supply of labor, which can be exploited to take advantage of low labor
costs. The labor is usually unskilled and amateurish hence a significant amount of
money and time has to be spent on their training.
Customer Behavior is varying rapidly. People are more aware about quality issues now
hence want to spend their money on high quality products. This is the reason imported
products are much preferred over local. but inflation has caused a compromising
change in behavior of consumers from the lower class.
Age Distribution-Pakistan has the highest number youth and since Victory Tees is
targeting youth this factor can be used to increase sales and earn high profits.
Youngsters of our country are attracted highly towards the western culture and are
brand conscious thus; there is a greater chance of satisfying the needs of the targeted
customers.
SWOT Analysis
Strengths
Custom designing of the shirt will be the Unique Selling Proposition (USP) for the
business. It would help the business to gain a competitive edge over the competitors
and earn the business more customers. Also, outsourcing costs for the business are
relatively low which would eventually lead the business to sell their shirts at a relatively
low price. It would enable the customers to buy high quality shirts at a low price, and
even design their own shirts. Changing social dimensions will go a long way in helping
Victory Tees make a name for itself. Youth nowadays is innovative and evolving. They
like to experiment hence providing Victory-tees a chance to enter this market
Weaknesses
The business does not have a production department making it solely dependent on the
supplier. The business will be dependent on the supplier and in crisis situation there
might be a delay in the delivery in the products. This would further add the supplier’s
profits to the costs of the business. Also, the business does not have much initial capital
available for the business. As Victory-Tees plans to obtain a bank loan it would add to
further business risks. There are already well known brands in this industry, enjoying a
specific brand loyalty so it may prove to be very hard to penetrate the market.
Opportunities
With the recession mounting, the new brands such as Victory Tees would suffer a lot.
There won’t be many opportunities for them in the market. They have to utilize every
chance they are offered by the market. Victory Tees being a totally new product needs
to develop a new and unique formula to capture the market profitably and to establish
customer loyalty towards the brand. The formula must define product/service, target
market, capabilities required and resources to be employed, returns expected and the
level of risk allowed. The formula will help define what comes within the sphere of an
opportunity to focus on those areas and pursue those opportunities where success is
possible.
The trends that are usually followed by the youth nowadays would be targeted. The
survey was conducted to get idea about the preferences of the youth. This survey
helped us identifying the very foremost choices by the customers and idea of the
current trends in the market. The best of the best designers are hired and if the product
like Victory Tees is being offered the youth would be very interested in trying a new
local brand. The youth, specifically the innovators are being targeted as they would be
more interested in trend setting.
The brand has a lot of favorable circumstances as the market is already established; the
only thing needed is Market Penetration. As it is Market Penetration, the Victory Tees
would be highly receptive for the weaknesses of their competitors. Their very high price
of the products can turn out to be an advantage for the Victory Tees. Playing the right
card, the Victory Tees can win the hearts of their customers.
Lastly, the company has planned itself to be very up to date with respect to the
upcoming technology in the market. They have the latest machinery available in the
market.
Threats
As Victory Tees would be entering an already established market, the biggest threat to it
would be the already established brands of the T-shirts. Keeping PEST analysis in mind,
Pakistan is going through the worst phase in its history as the economic and political
conditions are exceedingly unstable. The country is going into deep recession with every
coming day.
It’s a very big advantage that the market is already established, but ever-changing
market trends and in a country like Pakistan, it can also be the biggest threat. Market
changes could be like always decreasing income levels of the costumers leading to
decreased purchasing power, their needs and priorities changing with the rising
inflation, Competitor’s moves and demographic changes. Technological changes can
also affect the company as it is the most expensive department of a company and
implementing new technologies every now and then can make the offerings obsolete.
Right now, the main competition would be by the brands like Outfitters, River Stone,
Stone Age and Cross Roads. And these competitors are offering best quality at a pretty
high price they have a very well established brand loyalty so for breaking into this
market Victory Tees should offer the best quality at a reasonable price. As in fashion
world, the trends and designs keep on changing from time to time, appropriate steps
should be taken to make the brand a real success by offering latest designs and trends
set by competitors should be kept in mind.
Objectives
The objective of Victory Tees is to open at least one more outlet within two years of its
launch in the Islamabad market and to capture a sizeable market share within the same
period.
The market for branded t-shirts within the medium price range in Islamabad is
comparatively smaller than that in Lahore or Karachi in terms of sales, and it is in this
market that Victory Tees should be able to achieve 1 – 2% of the total market sales
within the first two years of operations. With the expected level of popularity, the brand
would be able to attract enough sales to achieve this target. Another target would be
more material in nature: the opening of at least one additional outlet within two years of
the launch of the initial one.
Issues
In relation to the launch of a new brand in an existing market, one major issue that
could arise would be that of marketing. There are a number of large players in the
market and thus Victory Tees would not only have to inform its customers of its
existence, but would also have to persuade them to shift from its competitors to this
brand.
As Victory Tees is a new venture, a critical issue would be that of the initial capital. This
capital would be raised primarily through one source, that being the owner’s own
investment. The owner of this venture would invest Rs. 10,00,000 (Rs. 1 million) as the
initial capital.
Since Jinnah Supermarket is a haven for the nouveau riche, as well as the young elite, it
is planned to establish the first Sale Point of Victory Tees in Jinnah Supermarket,
Islamabad.
High property prices in Jinnah Supermarket may be a limiting factor in starting this sale
point, but considering the potential of establishing the brand name in future, it is a risk
worth taking, and this is why establishing the first sale point in this high profile location
has been planned.
Outsourcing issues: Outsourcing the production of Victory Tees T-Shirts is one of the
most important steps leading to the success of this product. Selection of the production
source requires exhaustive and meticulous market research to enable the selection of a
manufacturer who provides not only high quality, durability and attractive T-shirts, but
should also be affordable, easy to negotiate and prompt on delivery promises.
Unfortunately the market is teeming with so called manufacturers who will claim to be
established manufacturers, but are actually just agents who will sub-contract the work to
others, and make their own commission. Such “manufacturers” have no control of the
quality which will be produced, since they will be jumping between various low-cost
manufacturers, while on the other hand will not be able to maintain their promises on
dates of delivery, since they themselves will be at the mercy of the actual manufacturers.
So, it is important to actually visit the manufacturing facility whether Victory Tees T-
Shirts are to be manufactured. In this age of fraud, it is essential to verify that the person
with whom negotiations are being carried out, are the actual owners of the premises,
and will be able to produce the required quality of T-shirts on the premises.
It is essential to negotiate each and every aspect of the production of the T-shirts right
from the quality, source and weightage of the yarn to be used, to the density of the
weave, to the fastness and quality of color, and of course the quality of finishing of the
product. Every little minute detail must be worked out, and agreed upon in writing in
the form of a contract.
Production of shirts and printing of designs: Once a reliable manufacturer has been
selected, and all details worked out, it’s not enough to sit back, relax, and wait for the
finished product. One must be actively involved in step by step checking of the T-shorts
while they are being prepared, right until the final product is in your hands.
Designs: The young generation of Pakistan is one of the trendiest set of youngsters in
the world. Having access to both Western and Eastern designs, their choices are not
limited to anything which is the “going” or “hot” fad or fashion, but have a vast array of
design possibilities to be attracted to. Hence Victory Tees T-Shirts have to be designed
keeping this clientele in mind. Designers will be selected not on the basis of old and
outdated experience, but in fact trendy young designers will be invited to contribute
their designs by open competition. The selected designs will be awarded prizes either in
the form of cash, or some other youthful incentives, like mobile phones laptops etc.
In addition to this, perhaps one of the most striking features of Victory Tees T-Shirts is
that clients will have an opportunity to design their own T-shirts, as well as customize
pre-selected designs with their names, signatures, messages, logos, photographs, or any
graphics that they would like to have on their shirts. This sort of feature has been
available with limited resources, and has mainly been in the form of a clients
photograph taken in black and white and transferred onto a T-shirt or vest through an
iron on label. This not only lacks quality and durability, but limits the imagination only to
what a camera can photograph in black and white.
MARKETING STRATEGY
Victory Tees T-Shirts is a novel innovation which will undoubtedly create a stir in the
fashion market of Pakistan. Not only is the idea completely novel and expected to be a
hit, but it the requirement of the local youth of today.
The main thrust of the marketing strategy will be based on product differentiation.
Victory Tees T-Shirts is different from any other competitor in the market, since there is
no other shop or outlet of branded T-shirts which offers the facility of self designing of
T-Shirts. Not only this, but customers will be guided by professionally trained staff to
design their own T-shirts, or have them designed according to their needs, taste, liking,
and above all, the latest trends in the market.
People will pay hundreds of thousands of rupees to obtain car number plated reading
“1” or just having their family name on a car, like “Malik 1” etc. The same concept
essentially applies to providing high quality, top of the range T-shirts, but with the
wearers own personal fancy depicted on it.
However complacency in penetrating the market will not be permitted. Despite having
an undeniable edge in terms of all the parameters required for a successful product,
Victory Tees T-Shirts will still be actively and aggressively marketed maintaining a
ground realty position. No stone will be left unturned until Victory Tees T-Shirts
becomes a house-hold name, and an undisputed leader in the field of T-shirts in
Pakistan, and abroad.
Positioning
As has been envisaged that Victory Tees T-Shirts will become a brand leader in
customized T-shirts, not only in Islamabad, where it will be launched, but throughout
the country, and possibly globally too. Using product differentiation, we are banking on
a new idea of customization of T shirt designs and marketing will focus on the
projection of this feature. How we position ourselves in the market will depend not only
on successful marketing of the product, but also on the quality and desirability, which in
themselves should be strong marketing features. Any marketing campaign, if not
supported by an equally strong product in terms of quality, affordability and popularity,
will soon become ineffective.
The entire concept of Victory Tees T-Shirts is being promoted to become a brand leader,
and not just another frog in the pond!
Product Strategy
Initially it is planned to launch the product, as per product review. However a wider
range of colors, fabrics and designs will be introduced with the passage of time. Once
an exhaustive range of T-shirts has been established, other matching and
complementary apparel will also be introduced, such as fleece lined jackets, sleeveless
and sleeved jackets and casual coats, and designer tops.
As the launch of Victory Tees T-Shirts will be in early summer / late spring, it is planned
to launch Victory Tees T-Shirts in pure, high quality combed cotton, in a range of
summery colors and designs. This, coupled with the facility of client customized designs,
should take Victory Tees T-Shirts to the number one position in a short period of time.
However with change in weather and climate, Victory Tees T-Shirts will have the
adaptability to change the fabric, design and color schemes to be in vogue with the
weather and climate, and the location. So, when the product will be expanded into
different cities of Pakistan, it is envisaged to have different types of materials, fabric,
stitching and design to suit different environments, climates and seasons in the different
major cities of Pakistan.