ENTREPENUR CASE

STYLE AND TRAND:THE TRAGIC IRONY

GROUP MEMBER:UMA HANI SAEED

TAJALA MAQSOODHUMA RIAZ

UMA HANI SAEED

CASE SUMMERY Startup Decision making

› To work together Markets and operations(1992-1996)

› Applied loan for S & T with the help of Tariq family firm asset

Entering in Saudi Arabia(Al-Markaz)› In mid 1993 a Saudi acquaintance visited mushrooms› Offered partnership to them› Start small setup in Saudi Arabia› 30% share S&T,› 30 percent Saudi national investment,› two shahazad family member(live in Saudi Arabia)

invested 15% each

CONTI…

Mushroom growth› Sale increase 10%(1994)› Establish 6 shops in 4 major cities› Shahazad handle activities and establish

basic goals

TAJALA MAQSOOD

FINANCE ISSUES integrated unit finance issues

› Direct payments of almost Rs.15 million(from late 1993 to mid 1994) Exhibit 4

› Another payment of 2.5 they get from NDFC› In June project cost increased up to 37.5 million› Started construction of the factory› bought land for plant› Cost of equipment rise

CONTI… Options for the 20 mile plant of styles and

trend› (1995) need more money› Shahazad want to work with his mother› Mushrooms chain handed over to

Nadira(shahazad opinion after some time Tariq agreed)

› (1n 1995 ) they want to sell plant of 20 mile› No buyer were found› Tariq invested 15 million and become major

shareholder(69%)› Nadira invested 1.6 million(16% share)

Operations(1996 to 1999)› Shahazad had complete control of

operational and financial issues› Nadira become non working

partner(because of personal life)› Loan amount from NDFC was 30 million› Shahazad hope of rescheduling loan.› Installed dying and knitting after getting

loan from NDFC› Shahazad change the approach of limited

design› Introduce new design every two week.› Sell left over stock with exhibition

Mushrooms in 1999› Grown to 12 stores all over the county› 8 were company owned › 4 franchised› Nothing in written on franchise

agreement(because of trust on tariq)› Frances paid 250,000 to 400,000› Company get 25% from franchise revenue› Started mushroom club in 1996› 8,000 customer were member in 1998› No nation wide competition till 1999

Products› Mushroom retail outlet

Target at New born baby to 12 year Both boys and girls For main two seasons summer and winter Shahazad wife handled design

Production› Garment produce in makeshift factory› Located in shahazad home› From small begging › 1999 have 80 worker(in production and

packaging)› No accounts department› No H.R department

Al Markaz( Saudi Arabia operation)› Shahazad brother in law managed al- Markaz

import logistics› Price at Saudi Arabia 50% higher then

Pakistan› Sale took place in Sami permanent bazaar in

Saudi Arabia› good idea reasons

Less inventory Give profit Introduce Pakistani products in Saudi Arabia.

TARIQ DIED Event after Tariq death

› Tariq died of liver disease in London (April 1999)› Loan recovery of NFDC thread

The situation in July 1999› Shahazad send written notice to Nadira and

Tariq’s father to resolve loan problem› Nadira interested to buy mushroom but she

didn't purchase it because of further issues› Shahazad want to continue mushroom

HUMA RIAZ

PROBLEMS Mushroom

› Independency of stores and franchise› Nothing in written on franchise agreement› no of account department› no H.R Department› No R&D department› Delay in shipment

Style and tend› Loan from NDFC was Rs.30 million› Not generating profit› Need more money for development› Have to pay loan amount› How to pay loan› Death of Tariq› Partnership issues› Nadira did not take interest in problems› Shahazad did not have enough money to solve

problems

CAUSES Tariq and Nadira did not take interest in

company issues Lack of action on small problems All activates handling by Shahazad Undefined structure of company Lack of strong leadership Lack of planning of money execution Quick decision of integrated unit

POSSIBLE SOLUTION

Sale S&T Public shares Partnership Expansion plan defects Divestiture (opposite to investment)

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