Company objectives overview of pak electron limited

Pak Electron Limited (PEL) is one of the best manufacturer company of electrical goods in Pakistan. It was established in the year of 1956 in technical collaboration with M/s AEG of Germany. In 1978 company was taken over by Saigol Group of Companies. The company has always been participating towards the advancement and development of the engineering department in Pakistan by launching a lot of quality electrical equipments and home appliances and by producing lot of engineers skilled workers and technicians through its training programmes.

PEL has continuously introducing new products to its range. Due to this PEL has gained good target in the sales department. At the juncture the company was only manufacturing transforms and switch gears. With the Saigol in management, PEL begun expanding its product range by entering into air conditioner manufacturing.

In the year on 1981, PEL launched window Air Conditioner with the technical collaboration

of General Corporation of Japan.

In 1986-87 the company introduced refrigerator in technical collaboration with M/S Airston of Italy

.

In 2006, company had started manufacturing of Split Air Conditioner as the customer choice has shifted from window type to Split AC.

The company divided in two category

Appliances Division

Power Division

Statement Of The Problem

During the last couple of years trends in Pakistan using home appliances has changed due to rocket change in technology and new entrance of brands .PEL also introduced its Split Air Conditioner in the market. PEL electronic is facing tough time in the Split Air Conditioner their brand image is not strong in this category. Other competitor has good brand name and brand image and doing good business like Mitsubishi, Hire ,LG etc.

1.2 Vision

‘To excel in providing engineering goods and services through continuous

improvement”

Mission

To provide quality products & services to complete satisfaction of our customers and maximize returns for all stakeholders through optimal use of resources.

To focus on personal development of our employees to meet future challenges

To promote good governance, corporate values and a safe working environment with a strong sense of social responsibility

1.3 SITUATIONAL ANALYSIS

SWOT ANALYSIS

The strengths , weakness, opportunities and threats of PEL are mentioned bellow:

Strengths

Brand Name

PEL has developed a good brand image in its customer’s mind sue to high quality and low prices. The customer of PEL always prefer its home appliances like refrigerator, micro waves Owen water cooler etc. PEL is very popular company in Pakistan and every one knows about PEL products and its brand name. This is the reason that PEL is a market leader when it comes to Window AC

Good Dealer Network

Its another plus point for PEL that it has created a good dealer network in the marker.

These dealer always focus to sell PEL products, gives them a good profit margin. PEL management also gives good incentive to its dealer if we compare it to its competitors. Thats why they are so conscious about the PEL products range and always convince the customer to buy PEL products.

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Good Sales Services:

PEL provides the good after sales service to its customer which enhance the customer satisfaction. The main strength of service department is that it handles customer complaint with in 24 hours in any part of the Pakistan that give edge in increasing the customer satisfaction.

Quality Products:

PEL has also a strong position in providing superior quality products to its customer. So its give a plus point over its competitors. Due to best quality guarantee of its product after sale in more than its competitors

Market Leader inWRAC( Window Room Air Conditioner)

Its also strength of PEL that it has become market leader in window room air conditioner. Customer always gives priority to PEL in window ac so in reintroducing its split ac it could get advantage of its branding.

Strong management Team:

Having a strong management team is also PEL’s another strength.

Its employees are skilled, competent efficient and knowledge. They always corporate with the hierarchy level management in achieving of target which are assigned to them.

Distribution of Authority:

Top level management of PEL giving authority to its subordinates to for achieving the market objectives in a given time period. So each manager has authority to take quick decision to aceive the objectives in this way they manage their task in good time and react quickly.

Research and Development Department.

PEL has a good R&D department which is continuously trying to develop new features in the products. Which introduce new technology in its products minimize the cost and time. R&D department spends huge sum of money for the development of new products.

Free Customer Services:

PEL provides free customer service for one year to its customer after buying any product. Due to this customer become brand loyal.

Weakness of PEL:

Like others companies PEL has few weaknesses. If PEL overcomes these weaknesses then I could become a market leader and get a huge market share in home appliances.

Financial Problems

sometimes PEL faces the financial problems due to its stocks because its stocks are too much piled up in the stores room that become the cause of shortage of cash flow. Because when stocks in stores and production in process for all the time 24 hours a day then company faces such problems

Lack of Advertisement:

Its a second major weakness of PEL that it is not a big advertiser. But from the last couple of year it spend a considerable amount in the sector of advertisement but not up to the mark. Because now a even a small companies spend a huge amount in the advertisement sector. Then then would be able to achieve there objectives. So PEL has to invest in this field as its competitor doing and getting advantage.

System variations:

its also main weakness of the PEL that there is rocket change in the polices of selling the products

That creates problems for the sales department to sell the products to the dealers and agencies because the demand of the top level management. They require urgent amount of money for different operations. Due to this sales department has to sale their product on hard cash which reduce the price of the product which create the problem for the management.

Lack of Product Range:

Although PEL has introduced more products for its customer. But its not enough if we have look on its competitor like Haire, LG, Dawlance etc. because when customer become brands loyal then he like to have all home appliances of same brands so PEL has to introduced new products as well for the sale of its current products.

Working Under Capacity:

Because PEL faces financial problem that is why could not utilize its all resources on its full capacity. Due to this the cost of each unit increase and that’s why profit margin also fall and company suffer. Sometimes, the company cant utilize its resources according the requirement of the production department. Later on which become the problem for the full utilization of resources.

Opportunities for PEL:

There are more opportunities for the PEL to boost up its business Following are some of them

Exploration of Market in Pakistan:

PEL has good opportunity to enhance its business all over the Pakistan. Although PEL has launched its products in many cities of the Pakistan. But there are many city on towns are yet to be explored. Because due to this company can get advantage and increase its market share because other competitor also has not captured these cities and towns and PEL can launch its Split AC in this area and could get advantage due to exploration of market in Pakistan.

Increase in Product Range:

PEL can increase its Product range which over all increase the PEL profit. Because its requirement to develop new home appliance items for the PEL customers. Those customer who are brand loyal they want all range of product to fulfil their requirement PEL has to increae its product range due to this customer will be retained by the PEL and customer will not shift to other brands. So for the retention of the customer PEL should focus on increasing its products range.

Export Opportunity :

PEL has also opportunity to export its Split air Conditioner to other countries like UAE Saudi Arabia and other Arabic and African countries. Because its has cheaper labour rate in Pakistan and could introduce its product in foreign market with good quality and at lower price.

Increase in Production Line:

PEL can also increase its production line at the high level. Due to this PEL can increase the efficiency if its employees and will also reduce the overall cost of the product. Due to this PEL can offer its product at lower price and ca:n increase its market share.

Threats for PEL

these are the major threats for the PEL:

Strong Competition

China’s Brand

Price War

Slow Growth rate in Pakistan

Political unstable

Porters Five Forces

As market research shows that PEL has lost its competitive edge when its comes to another brand. Why this happen porters five forces.

The risk of new entry by potential competitor

Rivalry in established firms

The bargaining power of the buyer

The threat of new substitute

Direct Competitor:

The direct competitor of PEL are dawlance waves LG Haier Orient mitsubishi etc.

as the mitsubishi is market leader in the market of Pakistan

Window AC:

PEL is a market leader in Pakistan share about 60% of its local manufacturing industry. And it has overall 35% market shares for this product.

LG has 32% market share and stand second.

And all other rest of manufacturers have 23% market share.

Indirect competitors:

The indirect competitors for PEL are Mitsubishi Haier sabro Orient Samsung Nobel and also some others Chines brands. But PEL has some threat from the Mitsubishi Orient Haier because they are making very good quality Split ac in Pakistan

Risk of New Entrance :

There is a high risk of new entrance in this industry, because this is a big industry and has a lot of potential for the foreign companies. But in order to make a good brand loyalty and to be in business PEL has to do more investment .

Bargaining Power of the Buyers:

Company’s buyers are those people who buy and consume its products. If there is a lot range of brands in the market then it will effect the bargaining power of the buyers. As there are a lot of brands in the market so the bargaining power of the buyers is high.

The Bargaining Power of the Suppliers:

Suppliers bargaining powers is also a risk. But here in Pakistan market is so vast and there is a lot of suppliers in the market for the production line and can provide JIT and cheaper in price and good in quality. So there is no a such high risk of suppliers bargaining powers.

Substitute Products:

As Split AC is in declined stage of PEL and there is others brands doing good business so availability of substitute is threat but with the enhancing the quality and at low price PEL could over come there issues

Objective Setting

Following are the main objective of the PEL for its Split AC product.

To increase the Brand Image of PEL in Split AC product.

To provide the good quality of product and gain market share at least half of its main competitor by the end of next season.

Minimize the cost of Split AC to provide it at lower cost as its possible to get competitors edge.

1.4 Strategy Development:

After studying the market I suggest to use the competitive strategy to grow the business of PEL in Pakistan.

Competitive Strategy

Cost Leadership:

as the objectives of the PEL is to minimize the cost and increase the market share. So PEL should adopt this strategy to minimize its cost because the market is too vast and the behaviour of the customers to look for the cost of the product and there are a lot of competitors in the market. So to become a pioneer in the Pakistan PEL has to minimize the cost by this PEL will increase its sale and will increase the market share by the passage of time because this strategy is associated with the large number of scale of business and the market for the split ac is too big and PEL has a potential to do business on this scale because its already market leader in the Window ac.

Ansoff ‘s Matrix:

The Ansoff matrix is another tool to business strategy to growth its business.

Market Penetration:

PEL should focus on market penetration because Split AC is the new trends in the Pakistan its cheaper in consumption of electricity and has a good demand. An other reason is that there is no need to move in the other market because Pakistani market has a good potential because normally hot season remains more than 6 month and there is a good demand for Split AC.

To succeed in this market PEL has to focus on minimizing the cost by this it will attract the customer and it also has to improve its quality because there are a lot of other brands offering a good quality split ac in the market to get advantage on them it also has to focus on the quality.

1.5 Marketing Mix

Product:

The Product of PEL is Split Air Conditioner. PEL has to look on its split ac while comparing it with other competitor because its need a good quality in its compressor and Inner of its should be stylish and as its offered in market with different colours. And the filter of AC should be long life and of good quality. The remote control of PEL split AC should be in long range and there should be display on its Inner of the Split AC.

Price:

price is a major element in the marketing mix it impacts on the customer straightly.

And as far as concerned with the price PEL management sets the price after undertaking the price of its competitor. As the major population of Pakistan upfilling their standard and striving to meet their requirement. So PEL management deeply focus on portion of society during setting the price.

Promotion:

promotion is an essential part of marketing mix. Its includes advertising personal selling and sales promotion as well.

Push Strategy:

PELL should adopt this streatgy to increase their sales volume by giving some incentive plans to its dealers.

Methods of Promotion:

Following are the methods which PEL will adopt in promotion of its Split AC.

Advertisement

Personal Sales

Sales Promotion

Public Relation

Advertisement:

there are lot of channels which could be used.

By Print Media:

PEL should use the Print media as others competitor are using this channel because now a days its a very goof channel for advertisement. By publishing ads in local selling magzines.

By Electronic Media:

PEL should use electronic media as well for the promotion of its split AC. Its should bring in notice the different ethical issues and current trends in the home appliance products.

Sales Promotion:

PEL should also focus on the sales promotion by sponsor finding like its brands ambassador is Hadiqa Kiyani who is a famous pop singer, it should also used different out door activities

like

Exhibition

Road Shows

Promotions Scheme

Public Relations:

PEL should also look at the public relation with the people to get soft corner in their hearts, because public relations will enhance the good brand image of the company.

Place:

this is also a basic element of marketing mix. PEL should use the placement strategy in allocating the right place where the demand for the product would be high. It concerned with the activities which are connected to the move of product from seller to buyer, product reach to customer by various channels of distribution. PEL should eliminate and try to minimize the complexity of involving different channels and use such placement by which customer can easily access to the product.

1.6Action & Implementation :

for the advertisement of PEL Split AC PEL will take different action to implement its all planed channels.

PEL spent 50million Rupees on the promotion of its product annual. Out of which almost 30 million spent on Air Conditioner. PEL should spent half of which on the advertisement of the MAC series.

80% of its total promotion budget PKR 12016000 should be fix for the advertisement.

Budgeting for the Electronic Media

Channels for Advertisement

Rs.

PTV

1285000(10 days Package)

Geo News TV

1474000(18 days Package)

Sun multimedia Cable Network.

1085000(6months package)

NBC Cable

1075000(6month package)

World call network

1080000(6month package )

TOTAL

5999000

Allocation Responsibility to Staff.

PEL has to use the companies own staff and also has to take services of the marketing companies

like for the advertisement of PEL split AC it use some electronic media for these channels needs professional ads developer.

As far as concerned some print media channels PEL has to use its own staff to develop the commercials in the print media and pay to them for the marketing.

Scheduling and Planed Marketing Activities

Marketing activities

Time

Responsibility

Budget

Advertisement by electronic media

March to September

GEO and others channels

5999000

1.7Monitoring and control

Monitoring:

For each objectives there should be a monitoring process because its very essential part of the management. There should be a monitoring process for the PEL company to timely monitor all ongoing activities like as its an objective of the PEL to provide the low cost Split AC for this PEL has to establish such a mechanism that it should monitor the cost of the product.

An other objective of the PEL is to provide a good quality Split AC for this their should be a TQM process which has to implement and monitor as well.

Control:

Control is next to the monitoring when PEL management find any loops in the ongoing process then it has to control that issue. Sometime hurdles comes in getting objectives.

There should be checks in the each department rather than at the end of the process it safe times and also helps in minimizing the cost of product and also helps in quality control.