Business Policy & Strategy

Section B

Group Members

Ammar Tahir L1F19MBAM0076

Babar Yaseen Khan L1F19MBAM0095
Ragheesa Nadeem L1F19MBAM0069
Laiba Aftab L1F19MBAM0065

Presented to
Professor Abdul Waheed

Dated
January 29, 2020

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 Table of Content

Company Overview 3

EFE (External Factor Evaluation) 4

IFE (Internal Factor Evaluation) 5

McKinsey Matrix 6

Space Matrix 8

QSPM 10

Conclusion 11

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 Company Overview

History:
The story of ‘Servis’ begins with a group of friends – young, energetic, fresh from college – who established Service
Industries more than 50 years ago.

These young men, named Ch. Nazar Muhammad (Late), Ch. Muhammad Hussain (Late) both Ch. Muhammad Hussain
Late) both from Gujrat district and Ch. Muhammad Saeed (Late) from Gujranwala District, started business in 1941 at a
small scale in Lahore. At that time, they were only manufacturing handbags and some other sports goods. Within years,
their business flourished remarkably and they were supplying their products to every corner of India at the time of
Partition.

In 1954, they installed a shoe manufacturing plant at industrial area Gulberg, Lahore. This started production in the
same year. The industry started manufacturing various types of shoes. Later management shifted the factory from
Lahore to Gujrat. Service Sales Corporation (Pvt.) Ltd. the Group’s marketing company was established in 1959.
Humility, fairness, and respect were the values close to the heart of these founders and it were some values that led to
phenomenal success of the Group over the years.

Introduction:
Service Industries Limited (SIL) is a public limited company listed on the stock exchanges of Pakistan. It has annual
revenues of about PKR 18 billion. ($170 Million.), and is the largest manufacturer of footwear, tires & tubes for two-
wheeler's and has been the largest footwear exporter of the country for the last 10 years.

Vision Statement

To become a Global, World class and Diversified Company which leverages its brands and its people.

Mission Statement

 To improve the quality and services and providing maximum output to its shareholders.
 Largest network of leather products and services available in wide geographical areas.
 To provide the best products and services with the experience of 78 years in the industry.
 To create a friendly and safe environment for the employers to work and a motivating team.
 To acquire the latest technology in order to get the maximum results in production and quality.
 To work according to ethical standards and focus on green environment.

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 External Factor Evaluation (EFE)

Key External factors WEIGHTS RATES WEIGHTED

(INDUSTRY) (COMPANY) SCORE

Opportunities

Traveling and hiking products 0.08 1 0.08

Advertisement 0.15 2 0.30

Demand for sports goods 0.07 2 0.14

E-market selling 0.18 1 0.18

International exports 0.08 3 0.24

Threats

Bata & other local companies 0.10 3 0.30

Entry Barriers 0.07 1 0.07

Govt. tax policies 0.12 2 0.24

Evolution of green business 0.10 4 0.40

Animal Hunting Policies 0.05 2 0.10

1.0 2.05

Here our weighted score is 2.05, which means our Servis shoes of companies is average.

This matrix suggested working on social marketing.

 Internal Factor Evaluation (IFE)

WEIGHTS RATES WEIGHTED

Key internal factors
(INDUSTRY) (COMPANY) SCORE

Strength

Brand Image 0.15 4 0.60

Highly convenient locations 0.12 4 0.48

Financial Strength 0.10 3 0.30

Successful international expansion 0.12 3 0.36

Market Share 0.11 3 0.33

Weakness
Advertisement 0.10 2 0.20

No company App 0.08 1 0.08

No distinct product feature 0.10 2 0.20

Duplicate products availability 0.12 1 0.24

1.0 2.79

Here our weighted score is 2.79 it means our business’s internal factor evaluation is at
above average.
This matrix suggested increasing its market share and branding image.
 McKinsey Matrix
In the McKinsey Matrix, the attractiveness of a market is represented on the y-axis. Whereas the competitive
strength of the business is shown on the x-axis. The detailed picture of McKinsey is as following.

The below table is for Servis McKinsey Matrix:

Business Unit Strength

Casual
School 1
shoes
ShoesAttractiveness
Industry
2.33

3.66

5 3.66 2.33 1

To analyze with the strategy is to build and grow

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Industry Attractiveness

Factors weights School shoes Casual shoes

ratings score ratings score
Market size 0.1 3.5 0.35 4 0.4
Expected market 0.2 3 0.6 4
growth rate 0.8
Pricing trends 0.1 3.5 0.35 4 0.4
Competition level 0.1 3 0.3 4.5 0.45
Ability to differentiate 0.2 2.5 0.5 3.5 0.7
Demand variability 0.2 1 0.2 3 0.6
EFE 0.1 1 0.1 1.5 0.15
Total 1 2.4 3.5

Competitive strength

Factors weights School shoes Casual shoes

Rating Score Rating Score
Customer loyalty 0.3 3.5 1.05 2 0.6
Prices compared to 0.2 4 2.5
competitors 0.8 0.5
Distribution strength 0.2 4.5 3
and production
capacity 0.9 0.6
Management strength 0.2 3.5 0.7 3 0.6
IFE 0.1 3.75 0.375 2.5 0.25
Total 1 3.825 2.55

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 SPACE MATRIX
Financial position (F.P)
SERVIS BATA METRO
EPS 88.66 106.6 96.00
Debt/Equity ratio 19% 30% 20.5%
Dividend 20% 30% 20%
ROI 14% 22% 10%
Liquidity 20% 35% 15%

Financial Position
EPS +5
Debt/Equity ratio +4
Dividend +5
ROI +4
Liquidity +5
23/5= +4.6
Stability position (S.P)
Inflation -2
Interest -1
Peace & Security -1
GDP -3
C.P.I -2
-9/5= -1.8
Competitive Position (C.P)
Quality -1
Brand -2
Technology -3
Distribution -2
Capacity Utilization -2
-10/5= -2
Industry Position (I.P)
Technology +4
Profitability +5
Growth +5
Competitive pressure +4
Resource Utilization +3
+26/5= +5.2

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Y-Axis = F.P +4.6

S.P -1.8

= +2.8

X-Axis = C.P -2.0

I.P +5.2

= +3.2
Strategy:
As the point is in aggressive quadrant so the company should focus on the Market Penetration and on Product
Development so they can enhance their financial position.

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 QSPM MATRIX

Market Product
Penetration Development
Key Factors Weights AS TAS AS TAS
Opportunities
Traveling and hiking products 0.08 2 0.16 3 0.24
Advertisement 0.15 4 0.60 3 0.45
Demand for sports goods 0.07 3 0.21 2 0.14
E-market selling 0.18 4 0.72 2 0.36
International exports 0.08 - - - -
Threats
Bata & other local companies 0.10 4 0.40 3 0.30
Entry Barriers 0.07 2 0.14 1 0.10
Govt. tax policies 0.12 3 0.36 2 0.24
Evolution of green business 0.10 - - - -
Animal Hunting Policies 0.05 2 0.10 4 0.20
Total 1
Strengths
Brand Image 0.15 4 0.60 3 0.45
Highly convenient locations 0.12 3 0.36 2 0.24
Financial Strength 0.10 4 0.40 3 0.30
Successful international expansion 0.12 - - - -
Market Share 0.11 - - - -
Weaknesses
Advertisement 0.10 3 0.30 2 0.20
No company App 0.08 - - - -
No distinct product feature 0.10 3 0.30 4 0.32
Duplicate products availability 0.12 1 0.12 2 0.24
1 4.77 3.78

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 SCALE
4 Very Attractive
3 Reasonable Attractive
2 Somewhat Attractive
1 Rare Attractive

Strategy:
Due to the score of Market Penetration being high, we select the strategy for the Market Penetration for the
company.

Conclusion:
Strategy suggested with all given matrices is market penetration. Rapid Penetration pricing strategy can also use
here where the price of a product is initially set low to rapidly reach a wide fraction of the market and initiate
word of mouth. In addition, with high marketing and promotions where you invest and build strategy.
However, as our intuition based on Market Penetration as we can easily see our company’s position. Market
Penetration strategy also looks at improving existing products to refresh an existing market or create new
products that the market seeks.

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