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Case Study of Sahaf Enterprises

Sahaf Enterprises Limited is a Pakistani company established in 1925 that produces hand-knotted carpets and woollen shawls. It entered the carpet export business in 1969. [1] The company saw strong export revenue and profits in 1979-1980 but sales declined in the 1980s due to international market recessions. [2] The company produces carpets ranging in size from 2x3 to 12x18 square feet using imported wool and cotton. Major export markets include Germany, Italy, and other European countries. [3] The company is considering expanding into the US market but recognizes modifications may be needed to designs and qualities to suit US customer preferences and tastes.

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Umer Naeem
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229 views26 pages

Case Study of Sahaf Enterprises

Sahaf Enterprises Limited is a Pakistani company established in 1925 that produces hand-knotted carpets and woollen shawls. It entered the carpet export business in 1969. [1] The company saw strong export revenue and profits in 1979-1980 but sales declined in the 1980s due to international market recessions. [2] The company produces carpets ranging in size from 2x3 to 12x18 square feet using imported wool and cotton. Major export markets include Germany, Italy, and other European countries. [3] The company is considering expanding into the US market but recognizes modifications may be needed to designs and qualities to suit US customer preferences and tastes.

Uploaded by

Umer Naeem
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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INTERNATIONAL BUSINESS

PRESENTED TO: MR. USMAN GHAURI

PRESENTED BY: NOUMAN KHALID ALI MUNAZZAF UMAR NAEEM

CASE STUDY

SAHAF ENTERPRISES LIMITED LAHORE, PAKISTAN.

Introduction
Sahaf Enterprises

Sahaf Enterprises Limited Sahaf Group of Industries Sahaf Enterprises Limited Sahaf Corporation Limited Shahdin Limited

Company background: Sahaf Enterprise Company was established in 1925, as a partnership to produce hand made woollen shawls. Sahaf Enterprises entered into carpet export in 1969. After about 5 years of business they become a private limited company in 1974. In 2 years, they have emerged as group of industries comprising Shadin Limited, Sahaf enterprises and Sahaf corporation Limited. Within just 2 years, Shadin Limited become one of the largest textile unit of the country.

Introduction
Company background: 1979/80 was the best year for Sahaf in terms of exports, in that specific year, its exported worth was 60 millions, having 40% of profit ratio. REVENUE GROSS PROFIT = 60m = 24.4m

Profit gradually came down to 30 million in 1985, due to the recession in international carpet market and the change in the financial priorities. Boost-up in 1986.

Introduction
Description of product: Hand made knotted carpets are made of imported and original wool and cotton. Usually from New Zealand. Ranging from 2 >< 3 to 12 >< 18 sq. ft. with finest quality. Export direction: About 60% of the exports went to the Germany, while other 40% normally shared by Italy, Holland, Switzerland, Spain and France. 80% of the buyers are regular, while other 20% are casual.

Introduction
Export direction: Italy, Spain, Framce and Switzerland has same preferences. The imports soft colours combination in standard rectangular sizes ranging from 2 >< 3 to 4 >< 6 sq. ft. of thick pile, although Italy imports thin. Germany imports thick pile, standard medium sizes (5 >< 8 and 7 >< 10). Germany had 90% demand of Red colour, now its just 40%. Holland imports large sizes with 80% of Blue colour domination.

ANSOFF MODEL

SWOT ANALYSIS

Company background
STRENGTH:
1: 61 years life span of company producing hand knotted carpets/shawls 2: Knowledge and technical expertise

WEAKNESS
1: No past experience of exports to USA 2: High raw material cost

3: Decrease volume of sales/margin


3: Strong business links

OPPORTUNITES

THREATS
1: Finance availability
2: Focus on diverters

Description of product
STRENGTH
1: Except exported cotton and wool, all other material is collected and managed locally 2: Varity in size and designs 3: In house designing centers

WEAKNESS
1: Reliance on imported wool and cotton 2: High holding cost due to different size and designs of carpet

OPPORTUNITES
1: New designs having element of antiquity

THREATS
1: Competitors can launch a new design

Exports
STRENGTH
1: 80% customers are bulk purchasers so same designs are available in large qualities

WEAKNESS
1: Changing customers demands 2: Customers strong preferences with respect to specification of carpets

OPPORTUNITES
1: Entrance in new markets

THREATS
1: Existing and new competitors

Carpets Production Agreement


STRENGTH
1: Expertise in carpet making 2: Business Links

WEAKNESS
1: Over reliance on the work of sub contractors

2: High labor cost


3: Availability of sub contractors due to flexible employment

OPPORTUNITES

THREATS
1: Child labor enforcement

In terms of Business
STRENGTH
1: Delivering time by air is reduced 2: Good quality 3: Low customers complains after sub services 4: Goodwill

WEAKNESS
1: Credit Increase the risk of bad debts 2: High cost

OPPORTUNITES

THREATS

Competition
STRENGTH
1: High entry Barriers 2: Large market share 3: High quality products of 61 years

WEAKNESS
1: High holding cost of stock

OPPORTUNITES
1: Foreign markets

THREATS
1: Local competitors 2: Foreign competitors

Carpet Development
STRENGTH
!: Flexible employment

WEAKNESS
1: Understanding the customers actual demands 2: Output is not like as expected

OPPORTUNITES
1: New designs

THREATS

CURRET SITUATION

Mr. Qamar Javaid, the export director has been doing business successfully since Sahaf began exporting carpets. He has contemplated the following alternatives: 1. Promote existing carpets in the US market. 2. Modifying existing designs and qualities for export to the US. 3. Developing entirely new desiegns and qualities, particularly for US.

Formulation
The SWOT can now be used as guiding strategy formulation

STRENGTHS
M A T C H I N
Conversion

WEAKNESSESS

OPPORTUNITIES
Conversion

THREATS

Conversions

Build Institutions for Children so that they continue there study. Build Institutions of Skills & Development for strong man power. Made contracts with locally producers of cotton and wools to reduced the risk of too much relaying on imported raw materials. Make new distribution channels to attract new customers and to reduce the holding cost. Made new designs, having elements of antiquity to take Edge on competitors. Keep an eagle eye on customers changing demands. Focus on short term objectives.

Why we need to do modification?


While lunching our business in any country, adaptation is unavoidably needed, especially in carpet market. Knowing the values and taste of the people is the basic ingredient for a successful expansion program. Understanding the culture of the country and what people usually prefers. Natures. Affordability. Psychology. Liking of the people.

Why we need to do modification?


Carpets should be manufactured according to the customers demands. Distinctive improvisation in designs and patterns, would surely catch any American eye. Americans will never say No to any leverage or to any complementing product. Synchronization with their lives.

Why modification is needed?


Size: US customers are mostly asking for thick pile, standard small/medium sizes:

3 >< 5 4 >< 6 5 >< 8 7 >< 10


Colour: US customers asks for aggressive colours combinations, dark colours are mostly preffered.

Why we need to do modification?

Why we need to do modification?

THANK YOU

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