Final Project of IB Part#2

8/6/2019 Final Project of IB Part#2

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FINAL PROJECT OF IB, Part2

CONTINUED...

SUBMITTED TO:

SAPPHIRE TEXTILE MILLS

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PROJECT of International Business

ON

SAPPHIRE TEXTILE MILLS LTD.


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SIR SHAHID KALIM KHAN


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Ta b le of C o n t e n t s-Continued

5) TACTICS AND STRATEGIES

Primary target selection

Product selection for primary target market

Choosing a method of market entry- Franchise or license

Selection of distribution partners and promotion

Terms and procedures

6) FINANCE/ BUDGETING

Internal sources of funding Offshore financial sources

Capital budgeting

7) INTERNATIONAL MARKETING

Marketing strategies

Marketing mix-Product, Price, Place, Promotion

Branding


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5) TACTICS AND STRATEGIES

Primary target selection:

The primary target market for Sapphire Textile Mills is clothing manufacturing textiles

making garments. There are many customers but Victor Innovatex, Inc. (Victor), ofSaint-Georges, Canada, is the current customer of us with a total requirement of 5 Tons

per day to process Knitted Dyed Fabric.

Product selection for primary target market:

Dyed Fabric, Grey Fabric, Bleach Fabric, Printed Fabric, Khaki Fabric, Organza Fabric,

Peach skin Fabric.

Choosing a method of market entry:

Sapphire Textile Mills Ltd. entered in the international market to distribute their productsby appointing their agents in the targeted markets-like Europe, who played a vital role for

selling the products of our company.

UK and Germany are the strong supporters of Pakistan in this case and both countries

have been pushing EU decision makers to ease the regulations of GSP plus schemes forthe last few months to add eligible developing countries to it. So exporting textile firm

like Sapphire textile mills has an opportunity to target the market in an efficient manner.

Selection of distribution partners and promotion:

Frontier Spinning Mills 1823 Boone Trail Road, Sanford,

NC 27330, U.S.A.

Sapphire Textile Mills created a liaison with Frontier Spinning Mills to distribute their

textile products along with the promotion of our products in North America.

Further we do participate in the trade exhibitions like Taxworld exhibition in UK, etc.


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Recommended Tactics and Strategies being adopting by Sapphire Textile Mills Ltd.

Program 1:

Sapphires nice quality products foe everyone!

Company will find out the low cost countries and will form strategic alliances with

companies in those countries. This will enable the company to minimize trade barriers

and as a result reduces its cost.

Procedure:

Need to decide the low cost countries in which strategic alliance is to be formed and aseries of procedures should be made to decide the amount of profit to be shared.

SFL needs to grow more, e.g. it can focus on the production of specialized products like

Zero Twist Yarn for increasing its exports by a large volume as this type of yarn has a

huge demand in foreign countries. It can also concentrate on the finished production likemaking Woven Fabric.

Program 2:

Power of One

Since SFL is a leader in the production of core yarn. It can take advantage of it by stating

the production of Zero Twist Yarn and after success of its knittings (e.g. T-shirts), it can

start the production Woven Fabric and by advertising its offers.

Procedure:

A set of procedures needs to be developed to ensure display of famous Core Yarn with

Zero Twist Yarn and its fine quality T-shirts with Woven Fabric in advertisements.

A series of procedures should be developed to ensure ideal display of these products.

They should advertise their products on cable through different TV channels and thoughfashion magazines for increasing its products awareness and demand in different

countries. (Corporate Strategy)

Values:

P eople Relationship

I ntegrity

D iversity


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E nvironment


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Data Collected through Questionnaire about Sources of Funding:

Sapphire group have two sources of borrowing. That is banks and financing by

private investor.

The rate of interest is both fixed and floating.

Sapphire group tackle their interest rate fluctuations by using FRA (forward rate

agreement) and interest rate swap.

Borrowing is supported by collateral security.

Sapphire group is also having covenants which help the company to better

monitor its business decisions.

Company is meeting its debt requirement through operating profit.

Company resort to debt financing rather than equity financing because its bestcost of capital.

Company goes for other sources of financing that are bank overdraft, bonds and

debentures.

Company is utilizing its borrowing for long term and short term investment.

Capital budgeting:

Capital budgeting is the process of generating, evaluating, selecting, implementing andfollowing- up on capital expenditure projects. The term Capital budgeting is used

interchangeably with capital expenditure decision, capital expenditure management &

long-term investment decision.

The following are the basic features of capital budgeting:-

Potentially large anticipated benefits

A relatively high degree of risk

A relatively long time period between the initial outlay & the anticipated return


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this step project cost is decided, funds are raised and financial closure of the project is

achieved.


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Buyers Visit:

Sometimes buyers visit are arranged to familiarize them with products, SFLisoffering for their valuable customers. These visits are crucial for the growth of the

company because they help in introducing products to others and also win a lop

of business for the company. The Marketing department frequently invites buyerto show them excellent production process and quality productions.

Free Samples:

This strategy is widely too used to boost up exports. Free samples are delivered to

customers. When new product is made, free samples are sent to loyal customer

show firms concern for them. Customer satisfaction is a important aspect because

customer is a person who gives meaning to company.

Contacts with Agents:

SSM is an export oriented organization. More than 70% of its sales constitute exports.

So to capitalize foreign market, SFL has long list of agents working in foreignmarket. This strategy is useful when company is not able to communicate with buyers;

it can hire services of agents who for commission introduce their products in market.

Relationships with distributors or agents are recognized as critical success factors so

a lot importance is paid to agents who are valuable asset of firm.

Marketing mix-Product, Price, Place, Promotion:

Steps in Marketing Planning:


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Branding :

Essence of Brand:

The constantly changing market poses new challenges to clothing enterprises, and theclients demands are also continually rising, and so it is necessary every now and again tooffer them a higher added value. This added value is a properly planned brand strategy,

the so-called branding. Firms without any distinct features, without a clear vision or

specific mission, or without permanent values, will sink in the mass of messages hitting

the market. Thus it is necessary to launch actions not only directed to distinguish a givenbrand from the competitors, but also to build a set of values and modes allowing

the company to communicate with the market in a manner which would be easily

recognizable and which would stimulate positive associations and strong reactions.

Stages of the brand building process:


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WOVENS & HOME TEXTILES OF SAPPHIRE TEXTILE LTD:

Brand RegionH & M Sweden

PVH USA

GAP USAOLD NAVY USA

OXFORD USA

AMERICAN EAGLE USA

FEDERATED USA

LEE USA/ EUROPE

ZARA EUROPE

MANGO EUROPE

LINDEX EUROPE

C & A EUROPE

CHAPS USA

MAVERIC EUROPE

HERO EUROPE

RANGLER USA/ EUROPE

JCP USA

TOMMY HILFIGER USA

MUSTANG EUROPE

OFTEN EUROPE

PULL AND BEAR EUROPE

ANN TYLER USA

BEIRHOLMS EUROPE

VF USA/ EUROPEVF-USA HONG KONG

CK USA

UFD USA

SPRINGS USA

T.J.MAX UK

TOLRA SPAIN

CROTEX ITALY

APE USA

COHEN & CHAPMAN UK


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Documents

Final Project of IB Part#2