Case Study

TO : Shareholders
From : CEO, ABC Textile Group Of Companies
Subject : Industry general analysis
Date: 02 Dec, 2016
 Company background
Our company relates to textile industry, textile referred to only to fabrics made by
weaving yarn on a loom. Today, the textile industry includes knitted goods, braids and
other fabrics that are made from fibers, yarns, and other material. Textile may be made
from natural products, such as cotton, linen, wool and mohair or from synthetic material
such as polyester, nylon and rayon.
 Historical direction and performance of the focal firm.
Fabric production was mechanized with machines powered by waterwheel and steam
engines. Production shifted from small cottage based production to mass production
based on assembly line organization, due to increase demand of user of products. As
per fashion new designs are introduced into the markets, on basis of innovation, moved
to modern process of production.
On the basis demand, our company increase production to fulfill the need of markets.
We achieved the production targets without any defective goods. Our company captured
market share by 10%, it reached to 45% nationally. Our export increased by 10% as per
last year.
 State critical incidents that may have bearing to the occurrence of the problem in
the case.
Some major incident took place in last year; Our Company faced huge problems such
as:
 Shortage of Manpower
 Shortage of Direct raw Material, this was due to rain.
 Emery Crises ( Gas and Power), etc
 Show how these critical facts lead to a particular focus for you analysis
Due to Shortage of human resource our targets could not achieve, main reason behind
the shortage of resource was our competitor, who was giving the more wages and
overtimes to their director labor, etc.
Direct material is short in the market, due heavy rain that hit heavy loss to cotton crops
and other related crops in the last year in Punjab and Sindh.
due to shortages these factors cost of Product is increased, we losing the market shares
as well as profitability.
 Situational Analysis
First of all I will define general environment “The factors and condition that generally
affect everyone in an industry or market”. Here are Factors define bellow:
 Technology
Development in technology affects all affect of business. Technological
development can result in new product and services, methods of production and
services provision, and organization structure to exploit technology.
 Demographic Trends
It relate totally to the birth and death rate, average age. The HR policy and
marketing strategies depend upon demographic trend.
 Economic Trends
A business can be affected by national and international economic factors such
as:
Inflation and unemployment, interest rate, exchange rate, tax level, international
trend.
 Political/Legal Environment
Many areas at business are subject to government policy and legal regulation.
Political stability in a country can also affect the macroeconomic environment,
such as:
Health and safety, tax trade regulation, etc
 Socio-Cultural Environment
It is combination major two which are the demographic and cultural environment,
in cultural, what does society wear, eat, celebrate etc.
 Global Environment
 Industry Analysis
Refer to in depth examination of key factors within a corporation’s task environment. The
natural, social, and environment must be monitored to detect strategic factors that are
likely in future to have a strong impact on corporate success or failure. Followings
factors are includes in Industry analysis:
 Shareholders
 Government
 Suppliers
 Competitors
 Trade association
 Customers
 Special interest Groups
 Communities
 SWOT Analysis
Corporate appraisal is a quantitative and qualitative review of internal strengths
and weakness and their relationship with external threats and opportunities.
Strengths and weakness relates to Organization itself, where as Opportunities
and threats exist in the business markets in which the organization operates.
 Central problem of the case

As our textile industry, we are facing one of largest issue at the global level that is
weather. Nowadays, it is global issue many countries are facing such problems.
Especially for us, basic raw which is not available in the market because weather, which
is affected by rain, cotton crops is severely damages.
One of second issue is that, the farmers are going to change the habit of cultivating the
crop from cotton to others. That will direct affect our production. Therefore our
production’s cost will grow that will affect our profitblity.
 Proposed alternatives and its evaluation

There are many alternatives that can be resolve the issue, one of best alternative looks
to me as under:
 Government should provide Water at proper time so that famer can cultivate their
crops soon as possible before season of rains, to take this action from State
heavy loss can be avoided
 Financial assessment or zero rated interest loans should provide to farmer so
that they can survive. When do they face loss, get mood change on another
options whatever options are available for them.
 To avoid such activates which creates pillars of global warming, it is one toughest
issue on which UNO works. They are conducting schemes regarding continues
weather changing at international level.
 Alternative Choice
One of the best and reasonable alternatives is financial assessment, which is cheaper
for the farmer, if the government give zero rate interest, by this way country can fulfill
external as well as internal demand of Cotton and other related agricultural crops.
Government may provide the Tube well system through which farmer can fulfill the water
need; this will be beneficial for the famer because he would be never worried about the
water.
Advantages:
 Production of Cotton can be achieved through Tube well if Government provides
financial assessment to farmers.
 Farmer can achieve positive return as before.
 Increase national revenue because cultivation area will utilize entirely.
Dis Advantages:
 Farmer will have to bear fuel charges that will increase the cost of production, it
is possible that return of farmer may decrease, which is not bearable to farmer.
 If Loan is provided in installment basis, in interval farmer may face trouble to
receive the remaining installments. This will be serious issue for the farmer.
 Government policies may change, it is custom that every new government brings
new policies and removes former government policies, in this regard Farmer will
suffer.
 Recommendation
It will be better that textile industry sector take initiate of financial assessment for the
farmers. If they cannot then should force to government to support the farmer in term
financially and provide assessment in fertiliser and poison and also reduce the direct and
indirect taxes from agricultural point of view.
 PLAN OF ACTION
Government should create separate department, which will handle all the issue
regarding financial assessment. The proper books of Accounts maintained. Best source
will be Zarae Trakiyate Bank. This will issue the loan to farmers and also maintained the
record.
Name
Designation
Signature:______________

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TO : Shareholders

From : CEO, ABC Textile Group Of Companies

Subject : Industry general analysis

Date: 02 Dec, 2016

 Historical direction and performance of the focal firm.

 Central problem of the case

 Proposed alternatives and its evaluation

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