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Contents
introduction
HISTORY
Cool Industries (Pvt) Limited, was established in 1973 and grew to a leading Home
Appliances manufacturing Company in Pakistan, in a very short span of time. This
was achieved by the tireless efforts of our devoted Management, highly motivated
professionals and dedicated team work, committed to excel in the quality and
services. Cool Industries (Pvt) Limited, has highly skilled professionals,
responding rapidly to the market needs. With the most modern and high-tech CAD
manufacturing facilities, our products capture over 80% of the local market for
Refrigerators, Deep Freezers, Air Conditioners and other home appliances. The
company manufactures Refrigerators, Deep Freezers, Air Conditioners, Washing
Machines, Microwave Ovens and many other quality home appliances, with the
production ratio exceeding the overall production of Pakistan's appliances
manufacturers. Our brand name Waves is undisputed leader in the market, both in
residential and commercial sector in Pakistan. Waves are also exporting its
products to Middle East and Central Asian States including Afghanistan. Our
company is known for its commitment to the latest technological advancements in
design & manufacture. Owing to the engineering experience and skills available, the
identification and adaptation of new techniques, materials and know-how, our
production processes and products requires a minimal lead-time. This flexibility in
our production has given us distinguished edge over our competitors in the market.
We have brought into the market a 100% indigenously designed and manufactured split
air conditioning system with different innovations and choices, which has attracted
a large customer base. The company is fully committed to protecting the
environment and has been awarded a substantial grant by the World Bank to phase out
ODS (Ozone Depleting Substances) its production processes. This is an ongoing
activity and is being given all the importance it deserves for a timely and
successful competition. STRUCTURE OF ORGANIZATION: waves is fully Decentralized
hierarchy system prevails in the whole organization. OFFICE LOCATION: 9 Kilometers,
Hanjarwal, Multan Road Lahore – Pakistan.
NUMBER OF TOTAL EMPLOYEES: In seasons 1500, and out season’s are 1300
employees work in the company NATURE OF BUSINESS: Productions of Home Appliances
TYPE OF OWNER SHIP: Private Limited Company KEY PLAYES: board of director and the
administrations are the key players for
waves cool industry
Vision, mission and objective
VISION STATEMENT
Strive to accomplish the best, which seems unachievable to others, utmost
dedication, hard work, enthusiasm in leadership is the modern
MISSION STATEMENT
Aim to serve the needs of our customers and build value for our stakeholders by
continuing to remain
OBJECTIVES OF COMPANY
To provide customer a prompt, quality product and reliable services at their
doorstep. Repairing of Refrigerator, Repairing of Washing Machine, and Microwave
oven. Waves after sales service is the only service who provide the facility to
customers by meeting complaints.
External and internal assessment
PESTLE ANALYSIS:
POLITICAL ANALYSIS:
Political conditions of Pakistan have been very unstable for the past decade and
are still on the verge of decline. Almost every industry of Pakistan has faced a
striking disaster during this period. This situation has given a high rate boost to
the already present problems like energy crisis, low living standards of the
people, unavailability of basic needs and much more. Waves is working in home
appliance industry that highly depends on the energy availability, production
fulfillments, trading and transportation facilities etc. for all these issues the
present government’s policies are very uncertain and unclear. There can’t be seen
any prominent efforts by the government in resolving the energy crisis issue. This
can lead to high production costs for the home appliances industry. However, import
and export of such products has very much been encouraged by the government and has
encouraged many foreign investors to invest in this industry. But due to unstable
security conditions of Pakistan this effort is not being fruitful up to the mark.
Many already working foreign companies are trying to move out of Pakistan. One of
the basic reasons of this attitude also lies in the fact that the present
government has increased duty rates on these products. In 2009, these rates were
from 25% to 35% on air conditioners/ refrigerators, electric fans, toasters, micro
wave ovens; televisions etc while 20% to 30% rates on electric ovens/ cooking
ranges. Presently they have been much more increased. This can cause a barrier for
the new comers to enter in this industry and a difficulty for the already present
companies like waves. Other governments like that of china are also providing
manufacturing facilities at low cost. This can reduce manufacturing cost for this
industry due to cheaper labor, electricity availability and cheaper manufacturing
units. Therefore a political analysis for this industry shows that the political
environment is not so favorable for this industry to flourish.
ECONOMICAL ANALYSIS:
Pakistan’s economic conditions started to drop in the early 2007 and up to 2010
they have faced a large set back due to the depressed consumer credit market, slow
progress of public sector programs, inflation, reduction in subsidies, security
threat, instability in the state and energy crisis.. The exports declined by 6% and
imports by 10%. The only thing that became a silver lining was the increment in
remittances by 22%. Shortages of energy and power do not let the boom enter into
the industrial sector so home appliance industry had to suffer. In addition the
sanction applied by IMF on different sectors creating a hurdle. This resulted in
unemployment and
services sector decline. Because of security crisis the graph of investment does
not take any surge. The beginning of declining in core inflation is a hopeful
factor but the domestic inflation is on peak. The poverty in country rise Pakistan
has the highest population growth. The largest population represents a large
potential market for goods and services yet the condition are deplorable. All these
factors have affected home appliance Sector. The buying powers of people have
declined. Due to inflation manufacturing costs have increased. The value of money
has decreased so investing in such an industry is not that much favorable
economically.
SOCIAL ANALYSIS:
Pakistan is a country where status differentiations are very much in and every
status level has its own lifestyle and buying patterns. Mainly the population of
Pakistan either belongs to lower class, middle class or elite class.
CHANGING LIFESTYLES:
Although the lifestyle of every class is changing at a fast pace, still the social
factors affecting these lifestyle are same like always. People are more money and
time oriented now. They are moving from traditional values towards western
lifestyles. Now people prefer living separately than in joint families. As family
size has decreased so more and more homes are required for each separate family and
hence more are more home appliances are needs in turn. So it overall increases
demand for home appliances products and especially for freezing unit industry.
BUYING PATTERN
In Pakistan people mostly purchase home appliances at the time of occasion like
marriages as dowry item and it has changed the sales patterns. Now the sale for
freezing unit is not seasonal but it is sold throughout the year. The availability
of different products has also affected the buying patterns
INCOME DIFFERENCES:
Home appliance industry is mostly profitable in Pakistan by either the elite class
or the middle to some extent. For elite class affording latest home appliances’
models is never a problem rather it suits their status consciousness. It is also
somehow convenient for the middle class to afford such “luxuries”. But in the lower
class, home appliance industry can’t find much potential customers.
GROWTH IN POPULATION:
Pakistan is among the top ten most populous countries of the world, increase in
population also increase in demand for the products and it also increase demand for
freezing unit industry.
TECHNOLOGICAL ANALYSIS:
The technology of this industry has taken a very positive change. Older
Refrigerators were used to be manufactured by a type of gas called Freon. Freon is
the brand name of the gas. This gas chemically is called chlorofluorocarbon or CFC.
This gas was disastrous for the environment and was said to damage the ozone layer
if leaks from refrigerators. Today's refrigerator technology is changing day by
day. Globalization has made possible to transfer things/products from one country
to other within days and this is happening because of fast mode of transportation
and communication. Modern refrigerators don't use CFC because CFCs are harmful to
the atmosphere if released. Instead they use another type of gas called HFC-134a,
also called tetrafluoroethane. HFC turns into a liquid when it is cooled to -15.9
degrees Fahrenheit (-26.6 degrees Celsius). A motor and compressor squeezes the
HFC. When it is compressed, it heats up as it is pressurized. When you pass the
compressed gas through the coils on the back or bottom of a modern refrigerator,
the warmer gas can lose its heat to the air in the room.
Some appliances includes micro processor based control that allows adaptive defrost
Certain parameters are monitored and the control software determines the moment of
defrosting. In freezing units, products are made energy efficient keeping the view
that o o o o People have to buy both refrigerators and deep freezers for capacity
purposes. Refrigerator like automatic operation for intelligent operation is a new
feature. Vitamin C technology is using for fresh food storage. Slide-out shelf for
easy food access is new trend.
Automatic problem detecting and warming system, door cooling warning system,
optimized condensing system. Water dispensers are also attached with new units.
Nowadays industry is focusing on low noise operation and low energy consumption
products.
LEGAL ENVIRONMENT
Home appliance industry is particularly looked upon legally when it comes to energy
usage, recycling methods and anti dumping. Legally this industry is bound to
consume energy and manufacture energy dependent products effectively and
efficiently. In a country like Pakistan where there is already energy crisis, a
company like waves has to take care by providing its customers with such products
that cater this problem it their own way. Moreover recycling methods are also very
important. Recently, introducing some environment friendly techniques for
refrigerators have helped this industry flourish. Law also forbids dumping in this
industry i.e. The export of a product at a price (export price) lowers than the
price it normally charges on its own home market (normal value). Dumping can harm
the domestic industry by reducing its sales volume and market shares, as well as
its sales prices. This in turn can result in decline in profitability, job losses
and, in the worst case, in the domestic industry going out of business. Therefore
it is not allowed.
ENVIRONMENTAL ANALYSIS:
Environment of Pakistan is although certain and precise but not for business
industries. Pakistan enjoys all 4 seasons but primarily summer stays more.
Therefore home appliance industry particularly manufacturing freezing units can be
very profitable in this environment. However climatic disasters like the earthquake
of 2005 and recent flood disaster has turned this environment very unfavorable for
this industry. These disasters where on one hand have turned the lives of people
towards economic crisis have also damaged many established businesses, created
transportation problems, and hence the production costs.
MICHAEL PORTER’S FIVE FORCES MODEL:
FOREIGN BRANDS:
Foreign brands like LG, HAIER etc. are a big threat for local brands. The quality
and brand image of foreign brands is high as compared to local brands
INNOVATION:
Waves Company believed on the innovations so Waves has proudly introduced
miraculous "Cool Bank Technology” Waves Cool Bank technology facilitates not only
the consumers but also the country in its need to economize scarce energy
resources. The Cool Bank refrigerators and deep freezers consist of double back up
system, one stores electricity and other stores cooling. In case of power failure
or load shedding, Cool Bank provides internal light and cooling to maintain
temperature up to 5 hours. Contrary to Cool Bank, common refrigerators and deep
freezers loose their cooling rapidly within 20~30 minutes and food gets spoiled.
PRODUCT RANGE:
There are many products of Waves Company like refrigerators, deep freezers, air
conditioner, visi cooler, microwave ovens, washing machines and home appliances .
VERTICAL INTEGRATION:
Wave’s network of authorized dealers spread all over Pakistan. Wave’s distribution
channel is through the retailers and his outlets.
RATE (R)
3 4 4 2 2
SCORE (W*R)
.30 .36 .80 .14 .10
WEIGHTS (W)
.16 .20 .05 .05 .03 1.00 TABLE (EFE matrix)
RATE (R)
3 3 3 1 1
SCORE (W*R)
.48 .60 .15 .05 .03 3.03
Waves Cool Industry has scored 3.03 in the EFE Matrix. This score shows a good
standing of the business in the market and this Industry have a visionary
leadership to avail the opportunities and also have competency to face the threats.
INTERNAL FACTOR EVALUATION (IFE) MATRIX OF WAVES COOL INDUSTRY
Internal Factor Evaluation (IFE) matrix is a strategic management tool for auditing
or evaluating major strengths and weaknesses in functional areas of a business.IFE
matrix also provides a basis for identifying and evaluating relationships among
those areas.
RATE (R)
4 3 4 3 3 3 4 4
SCORE (W*R)
.28 .27 .36 .24 .21 .18 .36 .28
WEIGHTS (W)
.07 .06 .09 .08 .08 1.00
RATE (R)
1 2 2 1 2
SCORE (W*R)
.07 .12 .18 .08 .16 2.79
WAVES
RATING (R) W.SCORE (W*R)
PEL
RATING (R) W.SCORE (W*R)
DAWLANCE
RATING (R) W.SCORE (W*R)
2 4 3 3 3 4
4 3 2 4 4 3
4 4 3 4 4 4
1.00
3.10
3.30
3.80
TABLE (C P MATRIX)
In CPM, we compare WAVES with the PEL and DAWLANCE. We get the different rating for
both the industries and we can also evaluate the results very easily. By analyzing
these facts and figures, we can say that DAWLANCE and PEL have a better standing in
the marketing than WAVES.
Core competencies
CORE COMPETENCIES ANALYSIS:
Core competency is a specific factor that a business sees as being central to the
way it, or its employees, works. It fulfills two key criteria It is not easy for
competitors to imitate It can be leveraged widely too many products and markets.
INNOVATION:
Unique and compelling solutions valued by our customers and aligned to our brands
create competitive advantage.
CUSTOMER EXCELLENCE:
Excelling the customer expectation from the company, its brands, products and
services are a three-step process. The three steps are: Know a customer, be a
customer, Serve a customer. Knowing a customer helps us know who our customers are,
how to treat them, how we add value, and what the drivers of brand loyalty are.
This information is gathered from the customer's data base history. This way we are
better able to customize products for them and recommend the right product to solve
problems. Being a customer is important to share customer knowledge and insights,
drive actions based on customer insights, be passionate about our brands and
customer loyalty and provide a positive voice for our brands. We show empathy for
customers and seek to resolve their problems by creating consistent customer touch-
points, showrooms and customer care centers with our endeavor always being to
provide unique solutions for the customer. Our products mostly for middle class
people because we have economical prices strategy.
KEY SUCCESS FACTROS:
Waves is ahead from its competitors due to its different factors
INNOVATION:
Waves always introduce new products and designs in markets after a short period of
time to differentiate its products from competitors As during load shedding period
in Pakistan waves introduces cool bank refrigerator in Pakistan which can work 6
hours in electricity absence. The triplet refrigerator was introduce after that ice
magic and many more so these innovation keep waves ahead from competitors .
QUALITY CONTROL:
waves products are checked before dispatching and a quality control team recheck it
again randomly after packing.
SERVICE CENTER:
waves service centers are located at different locations which give them advantage
to keep in touch with their customers problems. Waves are having 17 service centers
in all major cities of Pakistan 154 franchise workshops and all over the country
with proudly having Pakistan largest Service network.
ADMINISTRATION
Waves is being administered by a collaborative effort of every department. However
the entire administration is under the supervision of a managing director M.D. He
in fact deals with the entire recruiting process while hiring the employees. Then
comes the Admin manager who takes of the payroll system and other benefits of the
employees. He uses his own points of views while deciding policies about the
reinforcement of the employees.
DECISION MAKING
The decision making at waves cool industries is highly centralized. All the policy
formation and strategy formation lies with the top management. They are authorized
for the important decision making. The operating authorities are given to the
middle management and it is bound to take work from the lower lever workforce. The
lower level workforce is only bound for the operations and tasks. However 30-40% of
the lower level decision making regarding simple operations can be done by the
lower management.
SAMPLING CHECKING
At sampling checking stage the products are checked while being manufactured and it
is assured that no product is faulty.
RANDOM CHECKING
At random checking stage the products are taken at random for an assurance check to
see whether the products are accurately manufactured or not.
DEMOGRAPHIC SEGMENTATION:
Demographic includes age, gender income levels. Waves is segmenting their market
demographically. It is providing household items like refrigerators deep freezers,
microwave ovens washing machine toasters which are mostly used by house wives
BEHAVIORALLY SEGMENTATION:
Secondly it is segmenting market on the bases of different life style of people .
refrigerators and freezers are now become necessity of everyone’s life There is a
concept of dowry in our society and people buy washing machines ,air
conditioners ,ovens and refrigerators as a dowry .
TARGET MARKET
Our target market is basically housewives and middle income families. Marketing 4
P`s: Marketing decisions generally fall into the following four controllable
categories:
PRICE:
This is how much you charge for your product or service. Varied pricing could occur
according to geography, time frame, or volume. Additionally, with a service, price
can be varied according to level of service. Waves has followed product line
pricing Where there is a range of product or services the pricing reflect the
benefits of parts of the range. Their pricing strategies are also effected by
change in any season like as the winter comes the demand of their refrigerators and
deep freezers are low.
PLACEMENT:
Distribution is about getting the products to the customer. Waves has a network of
authorized dealers spread all over Pakistan. To provide customer a prompt, quality
and reliable services at their doorstep Waves has a largest after sales service
network through out the country. By having seventeen (17) own service centers in
all major cities and one hundred and fifty-seven franchised workshops. Waves
factory is situated at 9 Kilometers, Hanjarwal, Multan Road Lahore – Pakistan they
have also braches in 14 cities of Pakistan.
PROMOTION
Waves promote its products in a great manner. They organize a general meeting with
marketing department after every moth in which they discuss the promotion
strategies. They are conducting BTL and ATL advertisements
BELOW THE LINE(BTL):
They are having BTL advertisement through bill boards, broachers, banners and
newspapers
MARKET SHARE
COOL Industry is having 45% of the market share while PEL is having a 50% of market
share and Maintains 75% ~ 80% share of Deep Freezer sold in the market. Increased
the sale of refrigerators by 40%~45%
USP’s:
Waves has a unique selling preposition .Waves is always into innovation like they
made cool bank In case of power failure or load shedding, Cool Bank provides
internal light and cooling to maintain temperature up to 5 hours. Contrary to Cool
Bank, common refrigerators and deep freezers loose their cooling rapidly within
20~30 minutes and food gets spoiled. ….and its product MAGICA freezer which freezes
food like meat, chicken, fish and also makes ice in no time. More over waves knows
the customer needs. it knows what customer wants .They are very good in after sale
service .they respond to customer with in 48 hours of installment .They also have
an online system of selling there product .There is a site of waves where they sell
there products online .
COMPETITIVE ANALYSIS
If we compared, WAVES with PEL and DAWLANCE which are our direct competitor. The
following result comes.
Customer satisfaction:
Customer’s satisfaction could be the main key source of success. Waves provides a
large number of diversified products to its customer which satisfied its customer
in every manner and also they have online feed back system. They promptly respond
toward the customer’s problem. And their after sale service centers also provides
repairing service to the customer in shortest possible time. Waves after sale
service also provide the facility to customer of lifting their units from residence
to service center and delivering within 48 hours.
Innovation:
Waves also have a huge research and development department which continuously
producing many innovative products. As compare with their competitor they have
provided many innovative products like cool bank and MAGICA
Financial strategies
Statements income statements, cash flows, balance sheet
All Amounts are in Pak Rupees and in “000”
Profits
Profits of 2009 is Rs. 260,546,000
Revenue
In 2009 revenue is Rs14, 621,612
Ratios
Amounts are in Pak Rupees and in “000”
Liquidity ratio:
Net working capital/ total asset
Net working capital = current asset- current liability
8,664,551- 6,553,832 = 2110719 2110719 / 19,070,035 0.110
Sales/ NWC
11,283,796/2110719 =5.34 Fixed asset turn over
Procurement:
Cool industry uses latest technology equipments. They have a proper an efficient
procurement department which deals with all purchasing decisions. They have
procured 80% of the raw material from foreign markets. They have also procured
parts and moulds local markets also. They have also imported CRC sheet(coal rolled
coil). They are also providing full range of their latest product on their service
centers. The procurements of WAVES are the stationary, furniture, computer systems,
the documents and other important things which are essentials for manufacturing and
other purposes.
Production:
As highly skilled professionals, With the most modern and high-tech CAD
manufacturing facilities, our products capture over 80% of the local market for
Refrigerators, Deep Freezers, Air Conditioners and other home appliances. The
company manufactures Refrigerators, Deep Freezers, Air Conditioners, Washing
Machines, Microwave Ovens and many other quality home appliances, with the
production ratio exceeding the overall production of Pakistan's appliances
manufacturers.
It aims to Reduce Wastage by 2% in Production Sections. Cool Industries (Pvt) Ltd.
has highly skilled and professional engineering and technical team coupled with the
most advance and state-of-the-art manufacturing facilities. These professional and
technical qualities enabled Cool Industries to capture a substantial share of the
market. The advance nature of our manufacturing & marketing cycle has led us to
develop the most sophisticated and highly effective, material ordering and
inventory management system saving cost and cutting financial overheads as well.
Waves have introduced complete new range of Digital micro wave ovens equipped with
CRS technology, Fashion Color electric Iron, easy & quick toaster, fine & fast
blender, twin Tub turbo contract Jet washing machine with Dryer. Waves split AC are
energy savers and provide strong cooling because of its T4 compressor.
Control procedures
CONTROL DEPARTMENTS
There are 6 major CONTROL departments in waves they are :Marketing control
Department Finance control Department Production control Department Human resource
control Department Quality control Research &Development control Department
FINANCE DEPARTMENT
The department is controlled by general Manager finance, this department is divided
into 3 sections:Finance Accounts Credit Control
Finance
Finance deals with Banks
Accounts
Accounts deal with costing system, Billing & booking transactions as well as
internal auditing.
Credit Control
This section of finance department deals with Credit and recovery procedures.
PRODUCTION DEPATMENT
This department looks after the manufacturing of products. This department is given
targets by top management to produce a specific number of products which are
ascertained by previous sales data and market conditions. This department is
responsible for quality control as well i.e. it sees there are no defects or any
shortcomings in the product. It also overseas new technologies and also remain
updated regarding any new machinery or other equipment for better product
performance.
FUNCTIONS
Recruitment Selection Training Transfer firing decisions Labor Affairs Staff
welfare